[Congressional Record Volume 145, Number 58 (Tuesday, April 27, 1999)]
[Senate]
[Pages S4257-S4284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. BENNETT (for himself, Mr. Mack, Mr. Murkowski, and Mr. 
        Santorum):
  S. 881. A bill to ensure confidentiality with respect to medical 
records and health care-related information, and for other purposes; to 
the Committee on Health, Education, Labor, and Pensions.


             the medical information protection act of 1999

  Mr. BENNETT. Mr. President, I rise today to introduce the Medical 
Information Protection Act of 1999. Trying to find the right balance 
between legitimate uses of health care data and the need for privacy 
has been a very difficult road to go down; however, I feel that great 
progress has been made and that the legislation that I am introducing 
strikes the right balance between the desire the patient has for 
increased confidentiality and the need our health care system has for 
information that will enable it to provide a higher quality of care. I 
am pleased that Senators Mack, Murkowski and Santorum have joined me as 
co-sponsors of this legislation and I am hopeful that a number of other 
senators will soon join us as well. In addition, I am pleased to 
include in the record a list of groups that have come out in support of 
this legislation. I am grateful for the many comments and suggestions I 
have received from a wide variety of organizations and individuals.
  Most of us wrongly assume that our personal health information is 
protected under federal law. It is not. Federal law protects the 
confidentiality of our video rental records, and federal law ensures us 
access to information about us such as our credit history. However, 
there is no current federal law which will protect the confidentiality 
of our medical information against unauthorized use and ensure us 
access to that same sensitive information about us. This is a 
circumstance that I believe should and must change.
  At this time, the only protection of an individual's personal medical 
information is under state law. These state laws, where they exist, are 
incomplete, inconsistent and in most cases inadequate. At last check, 
there were approximately 35 states with 35 unique laws governing the 
use and disclosure of medical information. Even in those states where 
there are existing laws, there is no penalty for releasing and 
disseminating the most private information about our health and the 
health care we have received.

  As our health care delivery systems continue to expand across state 
lines, efficiency, research advances and the delivery of the highest 
quality of care possible depend upon the flow of information. This year 
alone, a large number of states have either considered passing new 
legislation or have attempted to modify existing laws. As states act to 
meet the concerns of their residents, the patchwork of state laws 
become ever more complex. If this trend continues, the high quality 
care and research breakthroughs we have come to expect and demand from 
our health care system would be jeopardized because health care 
organizations would be forced to track and comply with multiple, 
conflicting and increasingly complex state laws.
  Clearly, in today's world, health information must be permitted to 
flow across state lines if we are to expect the highest level of health 
care. For example, in Utah, Intermountain Health Care (IHC), the 
largest care provider based in my state also provides care in four 
other western states. IHC currently maintains secure databases of 
patient information which each of its member facilities in Utah, 
Nevada, Idaho and Wyoming draw upon to provide and improve care. 
Requiring them to comply with multiple state laws does not add to the 
quality of health care they provide, but does add to the cost of health 
care they provide. Many IHC patients live in one state yet their 
closest hospital, clinic or physicians office is in another state. I am 
sure this example appears throughout the country in one form or another 
given the consolidation of the health care industry and the large 
percentage of us who live near state lines.
  In addition, we are seeing an emergence of telemedicine and health 
care services over the internet that adds another degree of complexity 
to this entire circumstance. Technology is not only improving the 
quality of care and improving patient access to services, it is also 
making the need for one strong federal law more critical. The majority 
of providers, insurers, health care professionals, researchers and 
patients agree that there is an increasingly urgent need for uniformity 
in our laws that govern access to and disclosure of personal health 
information.
  Mr. President, I remind my colleagues that if we do not act by August 
of 1999 the Health Insurance Portability and Accountability Act of 1996 
(HIPAA) requires the Secretary of Health and Human Services (HHS) to 
put in to place regulations governing health information in an 
electronic format. Thus, we could have a circumstance where paper based 
records and electronic based records are treated differently. I do not 
believe Congress wants to protect one form of medical records and not 
another, and I do not think that we should permit the Secretary of 
Health and Human Services to implement regulations without further 
direction from the Congress. Congress should not neglect its 
responsibility and duty to legislate and provide appropriate direction 
to the executive branch. I urge my colleagues to work with me to pass 
legislation that would give HHS clear direction and provide each 
American with greater protection of their health information.
  Mr. President, I ask unanimous consent that the bill and a list of 
groups supporting this legislation be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 881

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medical 
     Information Protection Act of 1999''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.

                      TITLE I--INDIVIDUAL'S RIGHTS

 Subtitle A--Review of Protected Health Information by Subjects of the 
                              Information

Sec. 101. Inspection and copying of protected health information.
Sec. 102. Amendment of protected health information.
Sec. 103. Notice of confidentiality practices.

                Subtitle B--Establishment of Safeguards

Sec. 111. Establishment of safeguards.
Sec. 112. Accounting for disclosures.

              TITLE II--RESTRICTIONS ON USE AND DISCLOSURE

Sec. 201. General rules regarding use and disclosure.

[[Page S4258]]

Sec. 202. Procurement of authorizations for use and disclosure of 
              protected health information for treatment, payment, and 
              health care operations.
Sec. 203. Authorizations for use or disclosure of protected health 
              information other than for treatment, payment, and health 
              care operations.
Sec. 204. Next of kin and directory information.
Sec. 205. Emergency circumstances.
Sec. 206. Oversight.
Sec. 207. Public health.
Sec. 208. Health research.
Sec. 209. Disclosure in civil, judicial, and administrative procedures.
Sec. 210. Disclosure for law enforcement purposes.
Sec. 211. Payment card and electronic payment transaction. 
Sec. 212. Individual representatives.
Sec. 213. No liability for permissible disclosures.
Sec. 214. Sale of business, mergers, etc.

                          TITLE III--SANCTIONS

                    Subtitle A--Criminal Provisions

Sec. 301. Wrongful disclosure of protected health information.

                      Subtitle B--Civil Sanctions

Sec. 311. Civil penalty violation.
Sec. 312. Procedures for imposition of penalties.
Sec. 313. Enforcement by State insurance commissioners.

                        TITLE IV--MISCELLANEOUS

Sec. 401. Relationship to other laws.
Sec. 402. Conforming amendment.
Sec. 403. Study by Institute of Medicine.
Sec. 405. Effective date.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) individuals have a right of confidentiality with 
     respect to their personal health information and records;
       (2) with respect to information about medical care and 
     health status, the traditional right of confidentiality is at 
     risk;
       (3) an erosion of the right of confidentiality may reduce 
     the willingness of patients to confide in physicians and 
     other practitioners, thus jeopardizing quality health care;
       (4) an individual's confidentiality right means that an 
     individual's consent is needed to disclose his or her 
     protected health information, except in limited circumstances 
     required by the public interest;
       (5) any disclosure of protected health information should 
     be limited to that information or portion of the medical 
     record necessary to fulfill the purpose of the disclosure;
       (6) the availability of timely and accurate personal health 
     data for the delivery of health care services throughout the 
     Nation is needed;
       (7) personal health care data is essential for medical 
     research;
       (8) public health uses of personal health data are critical 
     to both personal health as well as public health; and
       (9) confidentiality of an individual's health information 
     must be assured without jeopardizing the pursuit of clinical 
     and epidemiological research undertaken to improve health 
     care and health outcomes and to assure the quality and 
     efficiency of health care.

     SEC. 3. PURPOSES.

       The purpose of this Act is to--
       (1) establish strong and effective mechanisms to protect 
     against the unauthorized and inappropriate disclosure of 
     protected health information that is created or maintained as 
     part of health care treatment, diagnosis, enrollment, 
     payment, plan administration, testing, or research processes;
       (2) promote the efficiency and security of the health 
     information infrastructure so that members of the health care 
     community may more effectively exchange and transfer health 
     information in a manner that will ensure the confidentiality 
     of protected health information without impeding the delivery 
     of high quality health care; and
       (3) establish strong and effective remedies for violations 
     of this Act.

     SEC. 4. DEFINITIONS.

       As used in this Act:
       (1) Accrediting body.--The term ``accrediting body'' means 
     a national body, committee, organization, or institution 
     (such as the Joint Commission on Accreditation of Health Care 
     Organizations or the National Committee for Quality 
     Assurance) that has been authorized by law or is recognized 
     by a health care regulating authority as an accrediting 
     entity or any other entity that has been similarly authorized 
     or recognized by law to perform specific accreditation, 
     licensing or credentialing activities.
       (2) Agent.--The term ``agent'' means a person, including a 
     contractor, who represents and acts for another under the 
     contract or relation of agency, or whose function is to bring 
     about, modify, effect, accept performance of, or terminate 
     contractual obligations between the principal and a third 
     person.
       (3) Common rule.--The term ``common rule'' means the 
     Federal policy for protection of human subjects from research 
     risks originally published as 56 Federal Register 28.025 
     (1991) as adopted and implemented by a Federal department or 
     agency.
       (4) Disclose and disclosure.--
       (A) Disclose.--The term ``disclose'' means to release, 
     transfer, provide access to, or otherwise divulge protected 
     health information to any person other than the individual 
     who is the subject of such information.
       (B) Disclosure.--
       (i) In general.--The term ``disclosure'' refers to a 
     release, transfer, provision for access to, or communication 
     of information as described in subparagraph (A).
       (ii) Use.--The use of protected health information by an 
     authorized person and its agents shall not be considered a 
     disclosure for purposes of this Act if the use is consistent 
     with the purposes for which the information was lawfully 
     obtained. Using or providing access to health information in 
     the form of nonidentifiable health information shall not be 
     construed as a disclosure of protected health information.
       (5) Employer.--The term ``employer'' has the meaning given 
     such term under section 3(5) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1002(5)), except that 
     such term shall include only employers of two or more 
     employees.
       (6) Health care.--The term ``health care'' means--
       (A) preventive, diagnostic, therapeutic, rehabilitative, 
     maintenance, or palliative care, including appropriate 
     assistance with disease or symptom management and 
     maintenance, counseling, assessment, service, or procedure--
       (i) with respect to the physical or mental condition of an 
     individual; or
       (ii) affecting the structure or function of the human body 
     or any part of the human body, including the banking of 
     blood, sperm, organs, or any other tissue; or
       (B) pursuant to a prescription or medical order any sale or 
     dispensing of a drug, device, equipment, or other health care 
     related item to an individual, or for the use of an 
     individual.
       (7) Health care operations.--The term ``health care 
     operations'' means services provided by or on behalf of a 
     health plan or health care provider for the purpose of 
     carrying out the management functions of a health care 
     provider or health plan, or implementing the terms of a 
     contract for health plan benefits, including--
       (A) coordinating health care, including health care 
     management of the individual through risk assessment and case 
     management;
       (B) conducting quality assessment and improvement 
     activities, including outcomes evaluation, clinical guideline 
     development, and improvement;
       (C) reviewing the competence or qualifications of health 
     care professionals, evaluating provider performance, and 
     conducting health care education, accreditation, 
     certification, licensing, or credentialing activities;
       (D) carrying out utilization review activities, including 
     precertification and preauthorization of services, and health 
     plan rating and insurance activities, including underwriting, 
     experience rating and reinsurance; and
       (E) conducting or arranging for auditing services, 
     including fraud detection and compliance programs.
       (8) Health care provider.--The term ``health care 
     provider'' means a person, who with respect to a specific 
     item of protected health information, receives, creates, 
     uses, maintains, or discloses the information while acting in 
     whole or in part in the capacity of--
       (A) a person who is licensed, certified, registered, or 
     otherwise authorized by Federal or State law to provide an 
     item or service that constitutes health care in the ordinary 
     course of business, or practice of a profession;
       (B) a Federal, State, employer sponsored or other privately 
     sponsored program that directly provides items or services 
     that constitute health care to beneficiaries; or
       (C) an officer or employee of a person described in 
     subparagraph (A) or (B).
       (9) Health oversight agency.--The term ``health oversight 
     agency'' means a person who, with respect to a specific item 
     of protected health information, receives, creates, uses, 
     maintains, or discloses the information while acting in whole 
     or in part in the capacity of--
       (A) a person who performs or oversees the performance of an 
     assessment, evaluation, determination, or investigation, 
     relating to the licensing, accreditation, certification, or 
     credentialing of health care providers; or
       (B) a person who--
       (i) performs or oversees the performance of an audit, 
     assessment, evaluation, determination, or investigation 
     relating to the effectiveness of, compliance with, or 
     applicability of, legal, fiscal, medical, or scientific 
     standards or aspects of performance related to the delivery 
     of health care; and
       (ii) is a public agency, acting on behalf of a public 
     agency, acting pursuant to a requirement of a public agency, 
     or carrying out activities under a Federal or State law 
     governing the assessment, evaluation, determination, 
     investigation, or prosecution described in subparagraph (A).
       (10) Health plan.--The term ``health plan'' means any 
     health insurance issuer, health insurance plan, including any 
     hospital or medical service plan, dental or other health 
     service plan or health maintenance organization plan, 
     provider sponsored organization, or other program providing 
     or arranging for the provision of health benefits. Such term 
     does not include any policy, plan or program to the extent 
     that it provides, arranges or administers health benefits 
     pursuant to a program of workers compensation or automobile 
     insurance.

[[Page S4259]]

       (11) Health research and health researcher.--
       (A) Health research.--The term ``health research'' means a 
     systematic investigation of health (including basic 
     biological processes and structures), health care, or its 
     delivery and financing, including research development, 
     testing and evaluation, designed to develop or contribute to 
     generalizable knowledge concerning human health, health care, 
     or health care delivery.
       (B) Health researcher.--The term ``health researcher'' 
     means a person involved in health research, or an officer, 
     employee, or agent of such person.
       (12) Key.--The term ``key'' means a method or procedure 
     used to transform nonidentifiable health information that is 
     in a coded or encrypted form into protected health 
     information.
       (13) Law enforcement inquiry.--The term ``law enforcement 
     inquiry'' means a lawful investigation or official proceeding 
     inquiring into a violation of, or failure to comply with, any 
     criminal or civil statute or any regulation, rule, or order 
     issued pursuant to such a statute.
       (14) Life insurer.--The term ``life insurer'' means life 
     insurance company as defined in section 816 of the Internal 
     Revenue Code of 1986 .
       (15) Nonidentifiable health information.--The term 
     ``nonidentifiable health information'' means protected health 
     information from which personal identifiers, that directly 
     reveal the identity of the individual who is the subject of 
     such information or provide a direct means of identifying the 
     individual (such as name, address, and social security 
     number), have been removed, encrypted, or replaced with a 
     code, such that the identity of the individual is not evident 
     without (in the case of encrypted or coded information) use 
     of key.
       (16) Originating provider.--The term ``originating 
     provider'' means a health care provider who initiates a 
     treatment episode, such as prescribing a drug, ordering a 
     diagnostic test, or admitting an individual to a health care 
     facility. A hospital or nursing facility is the originating 
     provider with respect to protected health information created 
     or received as part of inpatient or outpatient treatment 
     provided in such settings.
       (17) Payment.--The term ``payment'' means--
       (A) the activities undertaken by--
       (i) or on behalf of a health plan to determine its 
     responsibility for coverage under the plan; or
       (ii) a health care provider to obtain payment for items or 
     services provided to an individual, provided under a health 
     plan, or provided based on a determination by the health plan 
     of responsibility for coverage under the plan; and
       (B) activities undertaken as described in subparagraph (A) 
     including--
       (i) billing, claims management, medical data processing, 
     other administrative services, and actual payment;
       (ii) determinations of coverage or adjudication of health 
     benefit or subrogation claims; and
       (iii) review of health care services with respect to 
     coverage under a health plan or justification of charges.
       (18) Person.--The term ``person'' means a government, 
     governmental subdivision, agency or authority; corporation; 
     company; association; firm; partnership; society; estate; 
     trust; joint venture; individual; individual representative; 
     tribal government; and any other legal entity.
       (19) Protected health information.--The term ``protected 
     health information'' with respect to the individual who is 
     the subject of such information means any information which 
     identifies such individual, whether oral or recorded in any 
     form or medium, that--
       (A) is created or received by a health care provider, 
     health plan, health oversight agency, public health 
     authority, employer, life insurer, school or university;
       (B) relates to the past, present, or future physical or 
     mental health or condition of an individual (including 
     individual cells and their components);
       (C) is derived from--
       (i) the provision of health care to the individual; or
       (ii) payment for the provision of health care to the 
     individual; and
       (D) is not nonidentifiable health information.
       (20) Public health authority.--The term ``public health 
     authority'' means an authority or instrumentality of the 
     United States, a tribal government, a State, or a political 
     subdivision of a State that is--
       (A) primarily responsible for health or welfare matters; 
     and
       (B) primarily engaged in activities such as incidence 
     reporting, public health surveillance, and investigation or 
     intervention.
       (21) School or university.--The term ``school or 
     university'' means an institution or place accredited or 
     licensed for purposes of providing for instruction or 
     education, including an elementary school, secondary school, 
     or institution of higher learning, a college, or an 
     assemblage of colleges united under one corporate 
     organization or government.
       (22) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (23) Signed.--The term ``signed'' refers to documentation 
     of assent in any medium, whether ink, digital or biometric 
     signatures, or recorded oral authorizations.
       (24) State.--The term ``State'' includes the District of 
     Columbia, Puerto Rico, the Virgin Islands, Guam, American 
     Samoa, and the Northern Mariana Islands.
       (25) Treatment.--The term ``treatment'' means the provision 
     of health care by a health care provider.
       (26) Writing and written.--
       (A) Writing.--The term ``writing'' means any form of 
     documentation, whether paper, electronic, digital, biometric 
     or tape recorded.
       (B) Written.--The term ``written'' includes paper, 
     electronic, digital, biometric and tape-recorded formats.

                      TITLE I--INDIVIDUAL'S RIGHTS

 Subtitle A--Review of Protected Health Information by Subjects of the 
                              Information

     SEC. 101. INSPECTION AND COPYING OF PROTECTED HEALTH 
                   INFORMATION.

       (a) General Rules.--
       (1) Compliance with section.--At the request of an 
     individual who is the subject of protected health information 
     and except as provided in subsection (c), a health care 
     provider, a health plan, employer, life insurer, school, or 
     university shall arrange for inspection or copying of 
     protected health information concerning the individual, 
     including records created under section 102, as provided for 
     in this section.
       (2) Availability of information through originating 
     provider.--Protected health information that is created or 
     received by a health plan or health care provider as part of 
     treatment or payment shall be made available for inspection 
     or copying as provided for in this title through the 
     originating provider.
       (3) Other entities.--An employer, life insurer, school, or 
     university that creates or receives protected health 
     information in performing any function other than providing 
     treatment, payment, or health care operations with respect to 
     the individual who is the subject of such information, shall 
     make such information available for inspection or copying as 
     provided for in this title, or through any provider 
     designated by the individual.
       (4) Procedures.--The person providing access to information 
     under this title may set forth appropriate procedures to be 
     followed for such inspection or copying and may require an 
     individual to pay reasonable costs associated with such 
     inspection or copying.
       (b) Special Circumstances.--If an originating provider, its 
     agent, or contractor no longer maintains the protected health 
     information sought by an individual pursuant to subsection 
     (a), a health plan or another health care provider that 
     maintains such information shall arrange for inspection or 
     copying.
       (c) Exceptions.--Unless ordered by a court of competent 
     jurisdiction, a person acting pursuant to subsection (a) or 
     (b) is not required to permit the inspection or copying of 
     protected health information if any of the following 
     conditions are met:
       (1) Endangerment to life or safety.--The person determines 
     that the disclosure of the information could reasonably be 
     expected to endanger the life or physical safety of any 
     individual.
       (2) Confidential source.--The information identifies, or 
     could reasonably lead to the identification of, a person who 
     provided information under a promise of confidentiality to a 
     health care provider concerning the individual who is the 
     subject of the information.
       (3) Information compiled in anticipation of or in 
     connection with a fraud investigation or litigation.--The 
     information is compiled principally--
       (A) in anticipation of or in connection with a fraud 
     investigation, an investigation of material misrepresentation 
     in connection with an insurance policy, a civil, criminal, or 
     administrative action or proceeding; or
       (B) for use in such action or proceeding.
       (4) Investigational information.--The protected health 
     information was created, received or maintained by a health 
     researcher as provided in section 208.
       (d) Denial of a Request for Inspection or Copying.--If a 
     person described in subsection (a) or (b) denies a request 
     for inspection or copying pursuant to subsection (c), the 
     person shall inform the individual in writing of--
       (1) the reasons for the denial of the request for 
     inspection or copying;
       (2) the availability of procedures for further review of 
     the denial; and
       (3) the individual's right to file with the person a 
     concise statement setting forth the request for inspection or 
     copying.
       (e) Statement Regarding Request.--If an individual has 
     filed a statement under subsection (d)(3), the person in any 
     subsequent disclosure of the portion of the information 
     requested under subsection (a) or (b)--
       (1) shall include a notation concerning the individual's 
     statement; and
       (2) may include a concise statement of the reasons for 
     denying the request for inspection or copying.
       (f) Inspection and Copying of Segregable Portion.--A person 
     described in subsection (a) or (b) shall permit the 
     inspection and copying of any reasonably segregable portion 
     of a record after deletion of any portion that is exempt 
     under subsection (c).
       (g) Deadline.--A person described in subsection (a) or (b) 
     shall comply with or deny, in accordance with subsection (d), 
     a request for inspection or copying of protected health 
     information under this section not later than 60 days after 
     the date on which the person receives the request.

[[Page S4260]]

       (h) Rules of Construction.--
       (1) Agents.--An agent of a person described in subsection 
     (a) or (b) shall not be required to provide for the 
     inspection and copying of protected health information, 
     except where--
       (A) the protected health information is retained by the 
     agent; and
       (B) the agent has been asked in writing by the person 
     involved to fulfill the requirements of this section.
       (2) No requirement for hearing.--This section shall not be 
     construed to require a person described in subsection (a) or 
     (b) to conduct a formal, informal, or other hearing or 
     proceeding concerning a request for inspection or copying of 
     protected health information.

     SEC. 102. AMENDMENT OF PROTECTED HEALTH INFORMATION.

       (a) Right to amend.--
       (1) In general.--Protected health information shall be 
     subject to amendment as provided for in this section.
       (2) Compliance with request.--Except as provided in 
     subsection (c), not later than 45 days after the date on 
     which an originating provider, employer, life insurer, 
     school, or university receives from an individual a request 
     in writing to amend protected health information, such person 
     shall--
       (A) make the amendment requested;
       (B) inform the individual of the amendment that has been 
     made; and
       (C) inform any person identified by the individual in the 
     request for amendment and--
       (i) who is not an officer, employee, or agent of the 
     person; and
       (ii) to whom the unamended portion of the information was 
     disclosed within the previous year by sending a notice to the 
     individual's last known address that there has been a 
     substantive amendment to the protected health information of 
     such individual.
       (b) Request of Originating Providers.--
       (1) In general.--Protected health information that is 
     created or received by a health plan or health care provider 
     as part of treatment or payment shall be subject to amendment 
     as provided for in this section upon a written request made 
     to the originating provider.
       (2) Special circumstances.--If an originating provider, its 
     agent, or contractor no longer maintains the protected health 
     information sought to be amended by an individual pursuant to 
     paragraph (1), a health plan or another health care provider 
     that maintains such information may arrange for amendment 
     consistent with this section.
       (c) Refusal To Amend.--If a person described in subsection 
     (a)(2) refuses to make the amendment requested under such 
     subsection, the person shall inform the individual in writing 
     of--
       (1) the reasons for the refusal to make the amendment;
       (2) the availability of procedures for further review of 
     the refusal; and
       (3) the procedures by which the individual may file with 
     the person a concise statement setting forth the requested 
     amendment and the individual's reasons for disagreeing with 
     the refusal.
       (d) Statement of Disagreement.--If an individual has filed 
     a statement of disagreement under subsection (c)(3), the 
     person involved, in any subsequent disclosure of the disputed 
     portion of the information--
       (1) shall include a notation concerning the individual's 
     statement; and
       (2) may include a concise statement of the reasons for not 
     making the requested amendment.
       (e) Rules Governing Agents.--The agent of a person 
     described in subsection (a)(2) shall not be required to make 
     amendments to protected health information, except where--
       (1) the protected health information is retained by the 
     agent; and
       (2) the agent has been asked in writing by such person to 
     fulfill the requirements of this section.
       (f) Repeated Requests for Amendments.--If a person 
     described in subsection (a)(2) receives a request for an 
     amendment of information as provided for in such subsection 
     and a statement of disagreement has been filed pursuant to 
     subsection (d), the person shall inform the individual of 
     such filing and shall not be required to carry out the 
     procedures required under this section.
       (g) Rules of Construction.--This section shall not be 
     construed to--
       (1) require that a person described in subsection (a)(2) 
     conduct a formal, informal, or other hearing or proceeding 
     concerning a request for an amendment to protected health 
     information;
       (2) require a provider to amend an individual's protected 
     health information as to the type, duration, or quality of 
     treatment the individual believes he or she should have been 
     provided; or
       (3) permit any deletions or alterations of the original 
     information.

     SEC. 103. NOTICE OF CONFIDENTIALITY PRACTICES.

       (a) Preparation of Written Notice.--A health care provider, 
     health plan, health oversight agency, public health 
     authority, employer, life insurer, health researcher, school, 
     or university shall post or provide, in writing and in a 
     clear and conspicuous manner, notice of the person's 
     confidentiality practices, that shall include--
       (1) a description of an individual's rights with respect to 
     protected health information;
       (2) the uses and disclosures of protected health 
     information authorized under this Act;
       (3) the procedures for authorizing disclosures of protected 
     health information and for revoking such authorizations;
       (4) the procedures established by the person for the 
     exercise of the individual's rights; and
       (5) the right to obtain a copy of the notice of the 
     confidentiality practices required under this Act.
       (b) Model Notice.--The Secretary, after notice and 
     opportunity for public comment, shall develop and disseminate 
     model notices of confidentiality practices, using the advice 
     of the National Committee on Vital Health Statistics, for use 
     under this section. Use of the model notice shall serve as an 
     absolute defense against claims of receiving inappropriate 
     notice.

                Subtitle B--Establishment of Safeguards

     SEC. 111. ESTABLISHMENT OF SAFEGUARDS.

       (a) In General.--A health care provider, health plan, 
     health oversight agency, public health authority, employer, 
     life insurer, health researcher, law enforcement official, 
     school, or university shall establish and maintain 
     appropriate administrative, technical, and physical 
     safeguards to protect the confidentiality, security, 
     accuracy, and integrity of protected health information 
     created, received, obtained, maintained, used, transmitted, 
     or disposed of by such person.
       (b) Fundamental Safeguards.--The safeguards established 
     pursuant to subsection (a) shall address the following 
     factors:
       (1) The purpose for which protected health information is 
     needed and whether that purpose can be accomplished with 
     nonidentifiable health information.
       (2) Appropriate procedures for maintaining the security of 
     protected health information and assuring the appropriate use 
     of any key used in creating nonidentifiable health 
     information.
       (3) The categories of personnel who will have access to 
     protected health information and appropriate training, 
     supervision and sanctioning of such personnel with respect to 
     their use of protected health information and adherence to 
     established safeguards.
       (4) Appropriate limitations on access to individual 
     identifiers.
       (5) Appropriate mechanisms for limiting disclosures of 
     protected information to the information necessary to respond 
     to the request for disclosure.
       (6) Procedures for handling requests for protected health 
     information by persons other than the individual who is the 
     subject of such information, including relatives and 
     affiliates of such individual, law enforcement officials, 
     parties in civil litigation, health care providers, and 
     health plans.

     SEC. 112. ACCOUNTING FOR DISCLOSURES.

       (a) In General.--A health care provider, health plan, 
     health oversight agency, public health authority, employer, 
     life insurer, health researcher, law enforcement official, 
     school, or university shall establish and maintain a process 
     for documenting the disclosure of protected health 
     information by any such person through the recording of the 
     name and address of the recipient of the information, or 
     through the recording of another mean of contacting the 
     recipient, and the purpose of the disclosure.
       (b) Record of Disclosure.--A record (or other means of 
     documentation) established under subsection (a) shall be 
     maintained for not less than 7 years.
       (c) Identification of Disclosed Information as Protected 
     Health Information.--Except as otherwise provided in this 
     title, protected health information shall be clearly 
     identified as protected health information that is subject to 
     this Act.

              TITLE II--RESTRICTIONS ON USE AND DISCLOSURE

     SEC. 201. GENERAL RULES REGARDING USE AND DISCLOSURE.

       (a) Disclosure Prohibited.--A health care provider, health 
     plan, health oversight agency, public health authority, 
     employer, life insurer, health researcher, law enforcement 
     official, school, or university, or any agents of such a 
     person, may not disclose protected health information except 
     as authorized under this Act or as authorized by the 
     individual who is the subject of such information.
       (b) Applicability to Agents.--
       (1) In general.--A person described in subsection (a) may 
     use an agent, including a contractor, to carry out an 
     otherwise lawful activity using protected health information 
     maintained by such person if the person specifies the 
     activities for which the agent is authorized to use such 
     protected health information and prohibits the agent from 
     using or disclosing protected health information for purposes 
     other than carrying out the specified activities.
       (2) Limitation on liability.--Notwithstanding any other 
     provision of this Act, a person who has limited the 
     activities of an agent as provided for in paragraph (1), 
     shall not be liable for the actions or disclosures of the 
     agent that are not in fulfillment of those activities.
       (3) Limitations on agents.--An agent who receives protected 
     health information from a person described in subsection (a) 
     shall, in its own right, be subject to the applicable 
     provisions of this Act.
       (c) Applicability to Employers.--
       (1) In general.--An employer may use an employee or agent 
     to create, receive, or maintain protected health information 
     in order to carry out an otherwise lawful activity so long 
     as--

[[Page S4261]]

       (A) the disclosure of the protected employee health 
     information within the entity is compatible with the purpose 
     for which the information was obtained and limited to 
     information necessary to accomplish the purpose of the 
     disclosure; and
       (B) the employer prohibits the release, transfer or 
     communication of the protected health information to 
     officers, employees, or agents responsible for hiring, 
     promotion, and making work assignment decisions with respect 
     to the subject of the information.
       (2) Determination.--For purposes of paragraph (1)(A), the 
     determination of what constitutes information necessary to 
     accomplish the purpose for which the information is obtained 
     shall be made by a health care provider, except in situations 
     involving payment for health plan operations undertaken by 
     the employer.
       (d) Creation of Nonidentifiable Health Information.--A 
     person described in subsection (a) may use protected health 
     information for the purpose of creating nonidentifiable 
     health information.
       (e) Individual Authorization.--To be valid, an 
     authorization to disclose protected health information under 
     this title shall--
       (1) identify the individual who is the subject of the 
     protected health information;
       (2) describe the nature of the information to be disclosed;
       (3) identify the type of person to whom the information is 
     to be disclosed;
       (4) describe the purpose of the disclosure;
       (5) be subject to revocation by the individual and indicate 
     that the authorization is valid until revocation by the 
     individual; and
       (6) be in writing, dated, and signed by the individual, a 
     family member or other authorized representative.
       (f) Manipulation of Nonidentifiable Health Information.--
     Any person who manipulates nonidentifiable health information 
     in order to identify an individual, or uses a key to identify 
     an individual without authorization, is deemed to have 
     disclosed protected health information.

     SEC. 202. PROCUREMENT OF AUTHORIZATIONS FOR USE AND 
                   DISCLOSURE OF PROTECTED HEALTH INFORMATION FOR 
                   TREATMENT, PAYMENT, AND HEALTH CARE OPERATIONS.

       (a) Authorizations.--
       (1) In general.--With respect to each individual, a single 
     authorization that substantially complies with section 201(e) 
     must be secured to permit the use and disclosure of protected 
     health information concerning such individual for treatment, 
     payment, and health care operations, as provided for in this 
     subsection.
       (2) Employers.--Every employer offering a health plan to 
     its employees shall, at the time of, and as a condition of 
     enrollment in the health plan, obtain a signed, written 
     authorization that is a legal, informed authorization 
     concerning the use and disclosure of protected health 
     information for treatment, payment, and health care 
     operations with respect to each individual who is eligible to 
     receive care under the health plan.
       (3) Health plans.--Every health plan offering enrollment to 
     individuals or non-employer groups shall, at the time of, and 
     as a condition of enrollment in the health plan, obtain a 
     signed, written authorization that is a legal, informed 
     authorization concerning the use and disclosure of protected 
     health information for treatment, payment, and health care 
     operations, with respect to each individual who is eligible 
     to receive care under the plan.
       (4) Uninsured.--An originating provider providing health 
     care to an uninsured individual, shall obtain a signed, 
     written authorization to use and disclose protected health 
     information with respect to such individual for treatment, 
     payment, and health care operations of such provider, and in 
     arranging for treatment and payment from other providers.
       (5) Providers.--Any health care provider providing health 
     care to an individual may, in connection with providing such 
     care, obtain a signed, written authorization that is a legal, 
     informed authorization concerning the use and disclosure of 
     protected health information with respect to such individual 
     for treatment, payment, and health care operations of such 
     provider.
       (b) Revocation of Authorization.--
       (1) In general.--An individual may revoke an authorization 
     under this section at any time, by sending written notice to 
     the person who obtained such authorization, unless the 
     disclosure that is the subject of the authorization is 
     required to complete a course of treatment, effectuate 
     payment, or conduct health care operations for health care 
     that has been provided to the individual.
       (2) Health plans.--With respect to a health plan, the 
     authorization of an individual is deemed to be revoked at the 
     time of the cancellation or non-renewal of enrollment in the 
     health plan, except as may be necessary to conduct health 
     care operations and complete payment requirements related to 
     the individual's period of enrollment.
       (3) Termination of plan.--With respect to the revocation of 
     an authorization under this section by an enrollee in a 
     health plan, the health plan may terminate the coverage of 
     such enrollee under such plan if the health plan determines 
     that the revocation has resulted in the inability of the plan 
     to provide care for the enrollee or conduct health care 
     operations.
       (c) Record of Individual's Authorizations and 
     Revocations.--Each person who obtains or is required to 
     obtain an authorization under this section shall maintain a 
     record for a period of 7 years of each such authorization of 
     an individual and revocation thereof.
       (d) Model Authorizations.--The Secretary, after notice and 
     opportunity for public comment, shall develop and disseminate 
     model written authorizations of the type described in 
     subsection (a). The Secretary shall consult with the National 
     Committee on Vital and Health Statistics in developing such 
     authorizations. An authorization obtained on a model 
     authorization form developed by the Secretary pursuant to the 
     preceding sentence shall be deemed to meet the authorization 
     requirements of this section.
       (e) Rules of Construction.--
       (1) Single authorizations.--An employer or health plan 
     shall be deemed to meet the requirements of subsection (a) 
     with respect to a spouse, child, or other eligible dependent 
     if, at the time of enrollment, a single authorization under 
     subsection (a) is obtained from the employee or other 
     individual who accepts responsibility for health plan 
     enrollment.
       (2) Requirement for separate authorization.--An 
     authorization for the disclosure of protected health 
     information for treatment, payment, and health care 
     operations shall not directly or indirectly authorize the 
     disclosure of such information for any other purpose. Any 
     other such disclosures shall require a separate authorization 
     under section 203.

     SEC. 203. AUTHORIZATIONS FOR USE OR DISCLOSURE OF PROTECTED 
                   HEALTH INFORMATION OTHER THAN FOR TREATMENT, 
                   PAYMENT, AND HEALTH CARE OPERATIONS.

       (a) In General.--An individual who is the subject of 
     protected health information may authorize any person to 
     disclose or use such information for any purpose. An 
     authorization under this section shall not be valid if the 
     signing of such authorization by the individual is a 
     prerequisite for the signing of an authorization under 
     section 202.
       (b) Written Authorizations.--A person may disclose and use 
     protected health information, for purposes other than those 
     authorized under section 202, pursuant to a written 
     authorization signed by the individual who is the subject of 
     the information that meets the requirements of section 
     201(e). An authorization under this section shall be separate 
     from any authorization provided under section 202.
       (c) Limitation on Authorizations.--
       (1) In general.--Notwithstanding any other provision of 
     Federal law, life insurers, and any other entity that offers 
     disability income or long term care insurance under the laws 
     of any State, shall meet the requirements of section 201(a) 
     with respect to an individual for purposes of life, 
     disability income or long term care insurance, by obtaining 
     the authorization of the individual under this section.
       (2) During period of coverage.--Notwithstanding paragraph 
     (1), an authorization obtained in the ordinary course of 
     business in connection with life, disability income or long-
     term care insurance under this section shall remain in effect 
     during the term of the individual's insurance coverage and as 
     may be necessary to enable the issuer to meet its obligations 
     with respect to such individual under the terms of the 
     policy, plan or program.
       (3) Other authorizations.--An authorization obtained from 
     an individual in connection with an application that does not 
     result in coverage with respect to such individual shall 
     expire the earlier of the date specified in the individual's 
     authorization or the effective date of any revocation under 
     subsection (d).
       (d) Revocation or Amendment of Authorization.--
       (1) In general.--Except as otherwise provided for in this 
     section, an individual may revoke or amend an authorization 
     described in this section by providing written notice to the 
     person who obtained such authorization unless the disclosure 
     that is the subject of the authorization is related to the 
     evaluation of an application for life, disability income or 
     long-term care insurance coverage or a claim for life, 
     disability income or long-term care insurance benefits.
       (2) Notice of revocation.--A person that discloses 
     protected health information pursuant to an authorization 
     that has been revoked under paragraph (1) shall not be 
     subject to any liability or penalty under this title if that 
     person had no actual notice of the revocation.
       (e) Disclosure for Purpose Only.--A recipient of protected 
     health information pursuant to an authorization under 
     subsection (b) may disclose such information only to carry 
     out the purposes for which the information was authorized to 
     be disclosed.
       (f) Model Authorizations.--
       (1) In general.--The Secretary, after notice and 
     opportunity for public comment, shall develop and disseminate 
     model written authorizations of the type described in 
     subsection (b). The Secretary shall consult with the National 
     Committee on Vital and Health Statistics in developing such 
     authorizations.
       (2) Authority of insurance commissioner.--Notwithstanding 
     paragraph (1), the insurance commissioner of the State of 
     domicile of a life insurer may exercise exclusive authority 
     in developing and disseminating model written authorizations 
     for purposes of subsection (c).
       (3) Compliance with requirements.--An authorization 
     obtained using a model authorization promulgated under this 
     subsection shall be deemed to meet the authorization 
     requirements of this section.

[[Page S4262]]

       (g) Authorizations for Research.--This section applies to 
     health research only where such research is not governed by 
     section 208.

     SEC. 204. NEXT OF KIN AND DIRECTORY INFORMATION.

       (a) Next of Kin.--A health care provider, or a person who 
     receives protected health information under section 205, may 
     disclose protected health information regarding an individual 
     to the individual's spouse, parent, child, sister, brother, 
     next of kin, or to another person whom the individual has 
     identified, if--
       (1) the individual who is the subject of the information--
       (A) has been notified of the individual's right to object 
     to such disclosure and the individual has not objected to the 
     disclosure; or
       (B) is in a physical or mental condition such that the 
     individual is not capable of objecting, and there are no 
     prior indications that the individual would object;
       (2) the information disclosed relates to health care 
     currently being provided to that individual; and
       (3) the disclosure of the protected health information is 
     consistent with good medical or professional practice.
       (b) Directory Information.--
       (1) Disclosure.--
       (A) In general.--Except as provided in paragraph (2), a 
     person described in subsection (a) may disclose the 
     information described in subparagraph (B) to any person if 
     the individual who is the subject of the information--
       (i) has been notified of the individual's right to object 
     and the individual has not objected to the disclosure; or
       (ii) is in a physical or mental condition such that the 
     individual is not capable of objecting, the individual's next 
     of kin has not objected, and there are no prior indications 
     that the individual would object.
       (B) Information.--Information described in this 
     subparagraph is information that consists only of 1 or more 
     of the following items:
       (i) The name of the individual who is the subject of the 
     information.
       (ii) The general health status of the individual, described 
     as critical, poor, fair, stable, or satisfactory or in terms 
     denoting similar conditions.
       (iii) The location of the individual on premises controlled 
     by a provider.
       (2) Exception.--
       (A) Location.--Paragraph (1)(B)(iii) shall not apply if 
     disclosure of the location of the individual would reveal 
     specific information about the physical or mental condition 
     of the individual, unless the individual expressly authorizes 
     such disclosure.
       (B) Directory or next of kin information.--A disclosure may 
     not be made under this section if the health care provider 
     involved has reason to believe that the disclosure of 
     directory or next of kin information could lead to the 
     physical or mental harm of the individual, unless the 
     individual expressly authorizes such disclosure.

     SEC. 205. EMERGENCY CIRCUMSTANCES.

       Any person who creates or receives protected health 
     information under this title may disclose protected health 
     information in emergency circumstances when necessary to 
     protect the health or safety of the individual who is the 
     subject of such information from serious, imminent harm. No 
     disclosure made in the good faith belief that the disclosure 
     was necessary to protect the health or safety of an 
     individual from serious, imminent harm shall be in violation 
     of, or punishable under, this Act.

     SEC. 206. OVERSIGHT.

       (a) In General.--Any person may disclose protected health 
     information to an accrediting body or public health 
     authority, a health oversight agency, or a State insurance 
     department, for purposes of an oversight function authorized 
     by law.
       (b) Protection from Further Disclosure.--Protected health 
     information this is disclosed under this section shall not be 
     further disclosed by an accrediting body or public health 
     authority, a health oversight agency, a State insurance 
     department, or their agents for any purpose unrelated to the 
     authorized oversight function. Notwithstanding any other 
     provision of law, protected health information disclosed 
     under this section shall be protected from further disclosure 
     by an accrediting body or public health authority, a health 
     oversight agency, a State insurance department, or their 
     agents pursuant to a subpoena, discovery request, 
     introduction as evidence, testimony, or otherwise.
       (c) Authorization by a Supervisor.--For purposes of this 
     section, the individual with authority to authorize the 
     oversight function involved shall provide to the person 
     described in subsection (a) a statement that the protected 
     health information is being sought for a legally authorized 
     oversight function.
       (d) Use in Action Against Individuals.--Protected health 
     information about an individual that is disclosed under this 
     section may not be used by the recipient in, or disclosed by 
     the recipient to any person for use in, an administrative, 
     civil, or criminal action or investigation directed against 
     the individual who is the subject of the protected health 
     information unless the action or investigation arises out of 
     and is directly related to--
       (1) the receipt of health care or payment for health care; 
     or
       (2) a fraudulent claim related to health care, or a 
     fraudulent or material misrepresentation of the health of the 
     individual.

     SEC. 207. PUBLIC HEALTH.

       (a) In General.--A health care provider, health plan, 
     public health authority, health researcher, employer, life 
     insurer, law enforcement official, school, or university may 
     disclose protected health information to a public health 
     authority or other person authorized by law for use in a 
     legally authorized--
       (1) disease or injury report;
       (2) public health surveillance;
       (3) public health investigation or intervention;
       (4) vital statistics report, such as birth or death 
     information;
       (5) report of abuse or neglect information about any 
     individual; or
       (6) report of information concerning a communicable disease 
     status.
       (b) Identification of Deceased Individual.--Any person may 
     disclose protected health information if such disclosure is 
     necessary to assist in the identification or safe handling of 
     a deceased individual.
       (c) Requirement To Release Protected Health Information to 
     Coroners and Medical Examiners.--
       (1) In general.--When a Coroner or a Medical Examiner, or 
     the duly appointed deputy of a Coroner or Medical Examiner, 
     seeks protected health information for the purpose of inquiry 
     into and determination of, the cause, manner, and 
     circumstances of a death, the health care provider, health 
     plan, health oversight agency, public health authority, 
     employer, life insurer, health researcher, law enforcement 
     official, school, or university involved shall provide the 
     protected health information to the Coroner or Medical 
     Examiner or to the duly appointed deputy without undue delay.
       (2) Production of additional information.--If a Coroner or 
     Medical Examiner, or the duly appointed deputy of a Coroner 
     or Medical Examiner, receives health information from a 
     person referred to in paragraph (1), such health information 
     shall remain as protected health information unless the 
     health information is attached to or otherwise made a part of 
     a Coroner's or Medical Examiner's official report, in which 
     case it shall no longer be protected.
       (3) Exemption.--Health information attached to or otherwise 
     made a part of a Coroner's or Medical Examiner's official 
     report, shall be exempt from the provisions of this Act.

     SEC. 208. HEALTH RESEARCH.

       (a) In General.--A person lawfully in possession of 
     protected health information may disclose such information to 
     a health researcher under any of the following arrangements:
       (1) Research governed by the common rule.--A person 
     identified in subsection (a) may disclose protected health 
     information to a health researcher if the research project 
     has been approved by an institutional review board pursuant 
     to the requirements of the common rule as implemented by a 
     Federal agency.
       (2) Analyses of health care records and medical archives.--
     A person identified in subsection (a) may disclose protected 
     health information to a health researcher if--
       (A) consistent with the safeguards established pursuant to 
     section 111 and the person's policies and procedures 
     established under this section, the health research has been 
     reviewed by a board, committee, or other group formally 
     designated by such person to review research programs;
       (B) the health research involves analysis of protected 
     health information previously created or collected by the 
     person;
       (C) the person that maintains the protected health 
     information to be used in the analyses has in place a written 
     policy and procedure to assure the security and 
     confidentiality of protected health information and to 
     specify permissible and impermissible uses of such 
     information for health research;
       (D) the person that maintains the protected health 
     information to be used in the analyses enters into a written 
     agreement with the recipient health researcher that specifies 
     the permissible and impermissible uses of the protected 
     health information and provides notice to the researcher that 
     any misuse or further disclosure of the information to other 
     persons is prohibited and may provide a basis for action 
     against the health researcher under this Act; and
       (E) the person keeps a record of health researchers to whom 
     protected health information has been disclosed.
       (3) Safety and efficacy reports.--A person may disclose 
     protected health information to a manufacturer of a drug, 
     biologic or medical device, in connection with any monitoring 
     activity or reports made to such manufacturer for use in 
     verifying the safety or efficacy of such manufacturer's 
     approved product in special populations or for long term use.
       (b) Oversight.--On the advice of the National Committee on 
     Vital and Health Statistics, the Secretary shall report to 
     the Congress not later than 18 months after the effective 
     date of this section concerning the adequacy of the policies 
     and procedures implemented pursuant to subsection (a)(2) for 
     protecting the confidentiality of protected health 
     information while promoting its use in research concerning 
     health care outcomes, the epidemiology and etiology of 
     diseases and conditions and the safety, efficacy and cost 
     effectiveness of health care interventions. Based on the 
     conclusions of such report, the Secretary may promulgate 
     model

[[Page S4263]]

     language for written agreements deemed to comply with 
     subsection (a)(2)(C).
       (c) Statutory Assurance of Confidentiality.--
       (1) In general.--Protected health information obtained by a 
     health researcher pursuant to this section shall be used and 
     maintained in confidence, consistent with the confidentiality 
     practices established by the health researcher pursuant to 
     section 111.
       (2) Limitation on compelled disclosure.--A health 
     researcher may not be compelled in any Federal, State, or 
     local civil, criminal, administrative, legislative, or other 
     proceeding to disclose protected health information created, 
     maintained or received under this section. Nothing in this 
     paragraph shall be construed to prevent an audit or lawful 
     investigation pursuant to the authority of a Federal 
     department or agency, of a research project conducted, 
     supported or subject to regulation by such department or 
     agency.
       (3) Limitation on further use or disclosure.--
     Notwithstanding any other provision of law, information 
     disclosed by a health researcher to a Federal department or 
     agency under this subsection may not be further used or 
     disclosed by the department or agency for a purpose unrelated 
     to the department's or agency's oversight or investigation.

     SEC. 209. DISCLOSURE IN CIVIL, JUDICIAL, AND ADMINISTRATIVE 
                   PROCEDURES.

       (a) In General.--A health care provider, health plan, 
     public health authority, employer, life insurer, law 
     enforcement official, school, or university may disclose 
     protected health information pursuant to a discovery request 
     or subpoena in a civil action brought in a Federal or State 
     court or a request or subpoena related to a Federal or State 
     administrative proceeding if such discovery request or 
     subpoena is made through or pursuant to a court order as 
     provided for in subsection (b).
       (b) Court Orders.--
       (1) Standard for issuance.--In considering a request for a 
     court order regarding the disclosure of protected health 
     information under subsection (a), the court shall issue such 
     order if the court determines that without the disclosure of 
     such information, the person requesting the order would be 
     impaired from establishing a claim or defense.
       (2) Requirements.--An order issued under paragraph (1) 
     shall--
       (A) provide that the protected health information involved 
     is subject to court protection;
       (B) specify to whom the information may be disclosed;
       (C) specify that such information may not otherwise be 
     disclosed or used; and
       (D) meet any other requirements that the court determines 
     are needed to protect the confidentiality of the information.
       (c) Applicability.--This section shall not apply in a case 
     in which the protected health information sought under such 
     discovery request or subpoena relates to a party to the 
     litigation or an individual whose medical condition is at 
     issue.
       (d) Effect of Section.--This section shall not be construed 
     to supersede any grounds that may apply under Federal or 
     State law for objecting to turning over the protected health 
     information.

     SEC. 210. DISCLOSURE FOR LAW ENFORCEMENT PURPOSES.

       A person who receives protected health information pursuant 
     to sections 202 through 207, may disclose such information to 
     a State or Federal law enforcement agency if such disclosure 
     is pursuant to--
       (1) a subpoena issued under the authority of a grand jury;
       (2) an administrative or judicial subpoena or summons;
       (3) a warrant issued upon a showing of probable cause;
       (4) a Federal or State law requiring the reporting of 
     specific medical information to law enforcement authorities;
       (5) a written consent or waiver of privilege by an 
     individual allowing access to the individual's protected 
     health information; or
       (6) by other court order.

     SEC. 211. PAYMENT CARD AND ELECTRONIC PAYMENT TRANSACTION.

       (a) Payment for Health Care Through Card or Electronic 
     Means.--If an individual pays for health care by presenting a 
     debit, credit, or other payment card or account number, or by 
     any other payment means, the person receiving the payment may 
     disclose to a person described in subsection (b) only such 
     protected health information about the individual as is 
     necessary in connection with activities described in 
     subsection (b), including the processing of the payment 
     transaction or the billing or collection of amounts charged 
     to, debited from, or otherwise paid by, the individual using 
     the card, number, or other means.
       (b) Transaction Processing.--A person who is a debit, 
     credit, or other payment card issuer, a payment system 
     operator, a financial institution participant in a payment 
     system or is an entity assisting such an issuer, operator, or 
     participant in connection with activities described in this 
     subsection, may use or disclose protected health information 
     about an individual in connection with--
       (1) the authorization, settlement, billing, processing, 
     clearing, transferring, reconciling, or collection of amounts 
     charged, debited or otherwise paid using a debit, credit, or 
     other payment card or account number, or by other payment 
     means;
       (2) the transfer of receivables, accounts, or interest 
     therein;
       (3) the audit of the debit, credit, or other payment 
     information;
       (4) compliance with Federal, State, or local law;
       (5) compliance with a properly authorized civil, criminal, 
     or regulatory investigation by Federal, State, or local 
     authorities as governed by the requirements of this section; 
     or
       (6) fraud protection, risk control, resolving customer 
     disputes or inquiries, communicating with the person to whom 
     the information relates, or reporting to consumer reporting 
     agencies.
       (c) Specific Prohibitions.--A person described in 
     subsection (b) may not disclose protected health information 
     for any purpose that is not described in subsection (b). 
     Notwithstanding any other provision of law, any health care 
     provider, health plan, health oversight agency, health 
     researcher, employer, life insurer, school or university who 
     makes a good faith disclosure of protected health information 
     to an entity and for the purposes described in subsection (b) 
     shall not be liable for subsequent disclosures by such 
     entity.
       (d) Scope.--
       (1) In general.--The use of protected health information by 
     a person described in subsection (b) and its agents shall not 
     be considered a disclosure for purposes of this Act, so long 
     as the use involved is consistent with the activities 
     authorized in subsection (b) or other purposes for which the 
     information was lawfully obtained.
       (2) Regulated institutions.--A person who is subject to 
     enforcement pursuant to section 8 of the Federal Deposit 
     Insurance Act or who is a Federal credit union or State 
     credit union as defined in the Federal Credit Union Act or 
     who is registered pursuant to the Securities and Exchange 
     Act, or who is an entity assisting such a person--
       (A) shall not be subject to this Act to the extent that 
     such person or entity is described in subsection (b) and to 
     the extent that such person or entity is engaged in 
     activities authorized in that subsection; and
       (B) shall be subject to enforcement exclusively under 
     section 8 of the Federal Deposit Insurance Act, the Federal 
     Credit Union Act, or the Securities and Exchange Act, as 
     applicable, to the extent that such person or entity is 
     engaged in activities other than those permitted under 
     subsection (b).
       (3) Rule of Construction.--Nothing in this subsection shall 
     be construed to exempt entities described in paragraph (2) 
     from the prohibition set forth in subsection (c).

     SEC. 212. INDIVIDUAL REPRESENTATIVES.

       (a) In General.--Except as provided in subsections (b) and 
     (c), a person who is authorized by law (based on grounds 
     other than the individual being a minor), or by an instrument 
     recognized under law, to act as an agent, attorney, proxy, or 
     other legal representative of a protected individual, may, to 
     the extent so authorized, exercise and discharge the rights 
     of the individual under this Act.
       (b) Health Care Power of Attorney.--A person who is 
     authorized by law (based on grounds other than being a 
     minor), or by an instrument recognized under law, to make 
     decisions about the provision of health care to an individual 
     who is incapacitated, may exercise and discharge the rights 
     of the individual under this Act to the extent necessary to 
     effectuate the terms or purposes of the grant of authority.
       (c) No Court Declaration.--If a health care provider 
     determines that an individual, who has not been declared to 
     be legally incompetent, suffers from a medical condition that 
     prevents the individual from acting knowingly or effectively 
     on the individual's own behalf, the right of the individual 
     to authorize disclosure under this Act may be exercised and 
     discharged in the best interest of the individual by--
       (1) a person described in subsection (b) with respect to 
     the individual;
       (2) a person described in subsection (a) with respect to 
     the individual, but only if a person described in paragraph 
     (1) cannot be contacted after a reasonable effort;
       (3) the next of kin of the individual, but only if a person 
     described in paragraph (1) or (2) cannot be contacted after a 
     reasonable effort; or
       (4) the health care provider, but only if a person 
     described in paragraph (1), (2), or (3) cannot be contacted 
     after a reasonable effort.
       (d) Application to Deceased Individuals.--The provisions of 
     this Act shall continue to prevent disclosure of protected 
     health information concerning a deceased individual.
       (e) Exercise of Rights on Behalf of a Deceased 
     Individual.--
       (1) In general.--A person who is authorized by law or by an 
     instrument recognized under law, to act as an executor of the 
     estate of a deceased individual, or otherwise to exercise the 
     rights of the deceased individual, may, to the extent so 
     authorized, exercise and discharge the rights of such 
     deceased individual under this Act for a period of 2 years 
     following the death of such individual. If no such designee 
     has been authorized, the rights of the deceased individual 
     may be exercised as provided for in subsection (c).
       (2) Insured individuals.--In the case of an individual who 
     is deceased and who was the insured under an insurance policy 
     or policies, the right to authorize disclosure of protected 
     health information may be exercised by the beneficiary or 
     beneficiaries of such insurance policy or policies.

[[Page S4264]]

       (f) Rights of Minors.--The rights of minors under this Act 
     shall be exercised by a parent, the minor or other person as 
     provided under applicable state law.

     SEC. 213. NO LIABILITY FOR PERMISSIBLE DISCLOSURES.

       A health care provider, health plan, health oversight 
     agency, health researcher, employer, life insurer, school, or 
     university, or an agent of any such person, that makes a 
     disclosure of protected health information about an 
     individual that is permitted by this Act shall not be liable 
     to the individual for such disclosure under common law.

     SEC. 214. SALE OF BUSINESS, MERGERS, ETC.

       (a) In General.--A health care provider, health plan, 
     health oversight agency, employer, life insurer, school, or 
     university may disclose protected health information to a 
     person or persons for purposes of enabling business decisions 
     to be made about or in connection with the purchase, 
     transfer, merger, or sale of a business or businesses.
       (b) No Further Use or Disclosure.--A person or persons who 
     receive protected health information under this section shall 
     make no further use or disclosure of such information unless 
     otherwise authorized under this Act.

                          TITLE III--SANCTIONS

                    Subtitle A--Criminal Provisions

     SEC. 301. WRONGFUL DISCLOSURE OF PROTECTED HEALTH 
                   INFORMATION.

       (a) In General.--Part I of title 18, United States Code, is 
     amended by adding at the end the following:

   ``CHAPTER 124--WRONGFUL DISCLOSURE OF PROTECTED HEALTH INFORMATION

     ``SEC. 2801. WRONGFUL DISCLOSURE OF PROTECTED HEALTH 
                   INFORMATION.

       ``(a) Offense.--The penalties described in subsection (b) 
     shall apply to a person that knowingly and intentionally--
       ``(1) obtains protected health information relating to an 
     individual from a health care provider, health plan, health 
     oversight agency, public health authority, employer, life 
     insurer, health researcher, law enforcement official, school, 
     or university except as provided in title II of the Medical 
     Information Protection Act of 1999; or
       ``(2) discloses protected health information to another 
     person in a manner other than that which is permitted under 
     title II of the Medical Information Protection Act of 1999.
       ``(b) Penalties.--A person described in subsection (a) 
     shall--
       ``(1) be fined not more than $50,000, imprisoned not more 
     than 1 year, or both;
       ``(2) if the offense is committed under false pretenses, be 
     fined not more than $100,000, imprisoned not more than 5 
     years, or both; or
       ``(3) if the offense is committed with the intent to sell, 
     transfer, or use protected health information for monetary 
     gain or malicious harm, be fined not more than $250,000, 
     imprisoned not more than 10 years, or both.
       ``(c) Subsequent Offenses.--In the case of a person 
     described in subsection (a), the maximum penalties described 
     in subsection (b) shall be doubled for every subsequent 
     conviction for an offense arising out of a violation or 
     violations related to a set of circumstances that are 
     different from those involved in the previous violation or 
     set of related violations described in such subsection 
     (a).''.
       (b) Clerical Amendment.--The table of chapters for part I 
     of title 18, United States Code, is amended by inserting 
     after the item relating to chapter 123 the following new 
     item:

``124. Wrongful disclosure of protected health information..2801''.....

                      Subtitle B--Civil Sanctions

     SEC. 311. CIVIL PENALTY VIOLATION.

       A person who the Secretary, in consultation with the 
     Attorney General, determines has substantially and materially 
     failed to comply with this Act shall be subject, in addition 
     to any other penalties that may be prescribed by law--
       (1) in a case in which the violation relates to title I, to 
     a civil penalty of not more than $500 for each such 
     violation, but not to exceed $5,000 in the aggregate for 
     multiple violations arising from the same failure to comply 
     with the Act;
       (2) in a case in which the violation relates to title II, 
     to a civil penalty of not more than $10,000 for each such 
     violation, but not to exceed $50,000 in the aggregate for 
     multiple violations arising from the same failure to comply 
     with the Act; or
       (3) in a case in which the Secretary finds that such 
     violations have occurred with such frequency as to constitute 
     a general business practice, to a civil penalty of not more 
     than $100,000.

     SEC. 312. PROCEDURES FOR IMPOSITION OF PENALTIES.

       (a) Initiation of Proceedings.--
       (1) In general.--The Secretary, in consultation with the 
     Attorney General, may initiate a proceeding to determine 
     whether to impose a civil money penalty under section 311. 
     The Secretary may not initiate an action under this section 
     with respect to any violation described in section 311 after 
     the expiration of the 6-year period beginning on the date on 
     which such violation was alleged to have occurred. The 
     Secretary may initiate an action under this section by 
     serving notice of the action in any manner authorized by Rule 
     4 of the Federal Rules of Civil Procedure.
       (2) Notice and opportunity for hearing.--The Secretary 
     shall not make a determination adverse to any person under 
     paragraph (1) until the person has been given written notice 
     and an opportunity for the determination to be made on the 
     record after a hearing at which the person is entitled to be 
     represented by counsel, to present witnesses, and to cross-
     examine witnesses against the person.
       (3) Sanctions for failure to comply.--The official 
     conducting a hearing under this section may sanction a 
     person, including any party or attorney, for failing to 
     comply with an order or procedure, failing to defend an 
     action, or other misconduct as would interfere with the 
     speedy, orderly, or fair conduct of the hearing. Such 
     sanction shall reasonably relate to the severity and nature 
     of the failure or misconduct. Such sanction may include--
       (A) in the case of refusal to provide or permit discovery, 
     drawing negative factual inferences or treating such refusal 
     as an admission by deeming the matter, or certain facts, to 
     be established;
       (B) prohibiting a party from introducing certain evidence 
     or otherwise supporting a particular claim or defense;
       (C) striking pleadings, in whole or in part;
       (D) staying the proceedings;
       (E) dismissal of the action;
       (F) entering a default judgment;
       (G) ordering the party or attorney to pay attorneys' fees 
     and other costs caused by the failure or misconduct; and
       (H) refusing to consider any motion or other action which 
     is not filed in a timely manner.
       (b) Scope of Penalty.--In determining the amount or scope 
     of any penalty imposed pursuant to section 311, the Secretary 
     shall take into account--
       (1) the nature of claims and the circumstances under which 
     they were presented;
       (2) the degree of culpability, history of prior offenses, 
     and financial condition of the person presenting the claims;
       (3) evidence of good faith endeavor to protect the 
     confidentiality of protected health information; and
       (4) such other matters as justice may require.
       (c) Review of Determination.--
       (1) In general.--Any person adversely affected by a 
     determination of the Secretary under this section may obtain 
     a review of such determination in the United States Court of 
     Appeals for the circuit in which the person resides, or in 
     which the claim was presented, by filing in such court 
     (within 60 days following the date the person is notified of 
     the determination of the Secretary) a written petition 
     requesting that the determination be modified or set aside.
       (2) Filing of record.--A copy of the petition filed under 
     paragraph (1) shall be forthwith transmitted by the clerk of 
     the court to the Secretary, and thereupon the Secretary shall 
     file in the Court the record in the proceeding as provided in 
     section 2112 of title 28, United States Code. Upon such 
     filing, the court shall have jurisdiction of the proceeding 
     and of the question determined therein, and shall have the 
     power to make and enter upon the pleadings, testimony, and 
     proceedings set forth in such record a decree affirming, 
     modifying, remanding for further consideration, or setting 
     aside, in whole or in part, the determination of the 
     Secretary and enforcing the same to the extent that such 
     order is affirmed or modified.
       (3) Consideration of objections.--No objection that has not 
     been raised before the Secretary with respect to a 
     determination described in paragraph (1) shall be considered 
     by the court, unless the failure or neglect to raise such 
     objection shall be excused because of extraordinary 
     circumstances.
       (4) Findings.--The findings of the Secretary with respect 
     to questions of fact in an action under this subsection, if 
     supported by substantial evidence on the record considered as 
     a whole, shall be conclusive. If any party shall apply to the 
     court for leave to adduce additional evidence and shall show 
     to the satisfaction of the court that such additional 
     evidence is material and that there were reasonable grounds 
     for the failure to adduce such evidence in the hearing before 
     the Secretary, the court may order such additional evidence 
     to be taken before the Secretary and to be made a part of the 
     record. The Secretary may modify findings as to the facts, or 
     make new findings, by reason of additional evidence so taken 
     and filed, and shall file with the court such modified or new 
     findings, and such findings with respect to questions of 
     fact, if supported by substantial evidence on the record 
     considered as a whole, and the recommendations of the 
     Secretary, if any, for the modification or setting aside of 
     the original order, shall be conclusive.
       (5) Exclusive jurisdiction.--Upon the filing of the record 
     with the court under paragraph (2), the jurisdiction of the 
     court shall be exclusive and its judgment and decree shall be 
     final, except that the same shall be subject to review by the 
     Supreme Court of the United States, as provided for in 
     section 1254 of title 28, United States Code.
       (d) Recovery of Penalties.--
       (1) In general.--Civil money penalties imposed under this 
     subtitle may be compromised by the Secretary and may be 
     recovered in a civil action in the name of the United States 
     brought in United States district court for the district 
     where the claim was presented, or where the claimant resides, 
     as determined by the Secretary. Amounts recovered under this 
     section shall be paid to the Secretary and deposited as

[[Page S4265]]

     miscellaneous receipts of the Treasury of the United States.
       (2) Deduction from amounts owing.--The amount of any 
     penalty, when finally determined under this section, or the 
     amount agreed upon in compromise under paragraph (1), may be 
     deducted from any sum then or later owing by the United 
     States or a State to the person against whom the penalty has 
     been assessed.
       (e) Determination Final.--A determination by the Secretary 
     to impose a penalty under section 311 shall be final upon the 
     expiration of the 60-day period referred to in subsection 
     (c)(1). Matters that were raised or that could have been 
     raised in a hearing before the Secretary or in an appeal 
     pursuant to subsection (c) may not be raised as a defense to 
     a civil action by the United States to collect a penalty 
     under section 311.
       (f) Subpoena Authority.--
       (1) In general.--For the purpose of any hearing, 
     investigation, or other proceeding authorized or directed 
     under this section, or relative to any other matter within 
     the jurisdiction of the Attorney General hereunder, the 
     Attorney General, acting through the Secretary shall have the 
     power to issue subpoenas requiring the attendance and 
     testimony of witnesses and the production of any evidence 
     that relates to any matter under investigation or in question 
     before the Secretary. Such attendance of witnesses and 
     production of evidence at the designated place of such 
     hearing, investigation, or other proceeding may be required 
     from any place in the United States or in any Territory or 
     possession thereof.
       (2) Service.--Subpoenas of the Secretary under paragraph 
     (1) shall be served by anyone authorized by the Secretary by 
     delivering a copy thereof to the individual named therein.
       (3) Proof of service.--A verified return by the individual 
     serving the subpoena under this subsection setting forth the 
     manner of service shall be proof of service.
       (4) Fees.--Witnesses subpoenaed under this subsection shall 
     be paid the same fees and mileage as are paid witnesses in 
     the district court of the United States.
       (5) Refusal to obey.--In case of contumacy by, or refusal 
     to obey a subpoenaed duly served upon, any person, any 
     district court of the United States for the judicial district 
     in which such person charged with contumacy or refusal to 
     obey is found or resides or transacts business, upon 
     application by the Secretary, shall have jurisdiction to 
     issue an order requiring such person to appear and give 
     testimony, or to appear and produce evidence, or both. Any 
     failure to obey such order of the court may be punished by 
     the court as contempt thereof.
       (g) Injunctive Relief.--Whenever the Secretary has reason 
     to believe that any person has engaged, is engaging, or is 
     about to engage in any activity which makes the person 
     subject to a civil monetary penalty under section 311, the 
     Secretary may bring an action in an appropriate district 
     court of the United States (or, if applicable, a United 
     States court of any territory) to enjoin such activity, or to 
     enjoin the person from concealing, removing, encumbering, or 
     disposing of assets which may be required in order to pay a 
     civil monetary penalty if any such penalty were to be imposed 
     or to seek other appropriate relief.
       (h) Agency.--A principal is liable for penalties under 
     section 311 for the actions of the principal's agent acting 
     within the scope of the agency.

     SEC. 313. ENFORCEMENT BY STATE INSURANCE COMMISSIONERS.

       (a) State Penalties.--Subject to section 401, and 
     notwithstanding any other provision of this title, the 
     insurance commissioner of the State of residence of an 
     insured under a life, disability income or long-term care 
     insurance policy may exercise exclusive authority to impose 
     any penalties on a life insurer for violations of this Act in 
     connection with life, disability income or long-term care 
     insurance pursuant to the administrative procedures provided 
     under that State's insurance laws.
       (b) Fail-Safe Federal Authority.--In the case of a State 
     that fails to substantially enforce the requirements of title 
     I or title II of this Act with respect to life insurers 
     regulated by such State, the provisions of this title shall 
     apply with respect to a life insurer in the same way that 
     they apply to other persons subject to the Act.

                        TITLE IV--MISCELLANEOUS

     SEC. 401. RELATIONSHIP TO OTHER LAWS.

       (a) State and Federal Law.--Except as provided in this 
     section, the provisions of this Act shall preempt any State 
     law that relates to matters covered by this Act. Nothing in 
     this Act shall be construed to preempt, modify, repeal or 
     affect the interpretation of a provision of Federal or State 
     law that relates to the disclosure of protected health 
     information or any other information about a minor to a 
     parent or guardian of such minor. This Act shall not be 
     construed as repealing, explicitly or implicitly, other 
     Federal laws or regulations relating to protected health 
     information or relating to an individual's access to 
     protected health information or health care services.
       (b) Privileges.--Nothing in this title shall be construed 
     to preempt or modify any provisions of State statutory or 
     common law to the extent that such law concerns a privilege 
     of a witness or person in a court of that State. This title 
     shall not be construed to supersede or modify any provision 
     of Federal statutory or common law to the extent such law 
     concerns a privilege of a witness or person in a court of the 
     United States. Authorizations pursuant to sections 202 and 
     203 shall not be construed as a waiver of any such privilege.
       (c) Reports Concerning Federal Privacy Act.--Not later than 
     1 year after the date of enactment of this Act, the head of 
     each Federal agency shall prepare and submit to Congress a 
     report concerning the effect of this Act on each such agency. 
     Such reports shall include recommendations for legislation to 
     address concerns relating to the Federal Privacy Act.
       (d) Application to Certain Federal Agencies.--
       (1) Department of defense.--
       (A) Exceptions.--The Secretary of Defense may, by 
     regulation, establish exceptions to the disclosure 
     requirements of this Act to the extent such Secretary 
     determines that disclosure of protected health information 
     relating to members of the armed forces from systems of 
     records operated by the Department of Defense is necessary 
     under circumstances different from those permitted under this 
     Act for the proper conduct of national defense functions by 
     members of the armed forces.
       (B) Application to civilian employees.--The Secretary of 
     Defense may, by regulation, establish for civilian employees 
     of the Department of Defense and employees of Department of 
     Defense contractors, limitations on the right of such persons 
     to revoke or amend authorizations for disclosures under 
     section 203 when such authorizations were provided by such 
     employees as a condition of employment and the disclosure is 
     determined necessary by the Secretary of Defense to the 
     proper conduct of national defense functions by such 
     employees.
       (2) Department of transportation.--
       (A) Exceptions.--The Secretary of Transportation may, with 
     respect to members of the Coast Guard, exercise the same 
     powers as the Secretary of Defense may exercise under 
     paragraph (1)(A).
       (B) Application to civilian employees.--The Secretary of 
     Transportation may, with respect to civilian employees of the 
     Coast Guard and Coast Guard contractors, exercise the same 
     powers as the Secretary of Defense may exercise under 
     paragraph (1)(B).
       (3) Department of veterans affairs.--The limitations on use 
     and disclosure of protected health information under this Act 
     shall not be construed to prevent any exchange of such 
     information within and among components of the Department of 
     Veterans Affairs that determine eligibility for or 
     entitlement to, or that provide, benefits under laws 
     administered by the Secretary of Veteran Affairs.

     SEC. 402. CONFORMING AMENDMENT.

       Section 1171(6) of the Social Security Act (42 U.S.C. 
     1320d(6)) is amended to read as follows:
       ``(6) Individually identifiable health information.--The 
     term `individually identifiable health information' has the 
     same meaning given the term `protected health information' by 
     section 4 of the Medical Information Protection Act of 
     1999.''.

     SEC. 403. STUDY BY INSTITUTE OF MEDICINE.

       Not later than 2 years after the date of enactment of this 
     Act, the National Research Council in conjunction with the 
     Institute of Medicine of the National Academy of Sciences 
     shall conduct a study to examine research issues relating to 
     protected health information, such as the quality and 
     uniformity of institutional review boards and their practices 
     with respect to data management for both researchers and 
     institutional review boards, as well as current and proposed 
     protection of health information in relation to the 
     legitimate needs of law enforcement. The Council shall 
     prepare and submit to Congress a report concerning the 
     results of such study.

     SEC. 405. EFFECTIVE DATE.

       (a) Effective Date.--Except as provided in subsection (b), 
     this Act shall take effect on the date that is 12 months 
     after the date on which regulations are promulgated as 
     required under subsection (c).
       (b) Applicability.--The provisions of this Act shall only 
     apply to protected health information collected and disclosed 
     12 months after the date on which regulations are promulgated 
     as required under subsection (c).
       (c) Regulations.--Not later than 12 months after the date 
     of enactment of this Act, the Secretary shall, in 
     consultation with the National Committee on Vital and Health 
     Statistics, promulgate regulations implementing this Act.
       (d) Exception.--If, not later than 18 months after the date 
     of enactment of this Act, the Secretary has not promulgated 
     the regulations required under subsection (c), the effective 
     date for purposes of subsections (a) and (b) shall be the 
     date that is 30 months after the date of enactment of this 
     Act or 12 months after the promulgation of such regulations, 
     whichever is earlier.
                                  ____


    Groups Supporting the Medical Information Protection Act of 1999

       American Medical Informatics Association (AMIA).
       Joint Healthcare Information Technology Alliance (JHITA).
       Intermountain Health Care (IHC).
       Premier Institute.
       Association of American Medical Colleges (AAMC).
       American Health Information Management Association (AHIMA).
       Healthcare Leadership Council (HLC).
       Federation of American Health Systems.

[[Page S4266]]

       National Association of Chain Drug Stores (NACDS).
       PCS Health Systems.
       Academy of Managed Care Pharmacy.
       Genentech.
       Baxter Healthcare Corporation.
       Biotechnology Industry Organization (BIO).
       Eli Lilly and Co.
       Pan Am and Wausau Insurance.
       SmithKline Beecham.
       Leukemia Society of America.
       Kidney Cancer Foundation.
       Mutual of Omaha.
       American Hospital Association (AHA).
       American Association of Health Plans (AAHP).
       Cleveland Clinic Foundation.
       First Health Group Corporation.
       Health Insurance Association of America (HIAA).
       Knoll Pharmaceuticals Co.
       Lahey Clinic.
       Mayo Foundation.
       Pharmaceutical Research and Manufacturers Association 
     (PhRMA).
       American Society of Consultant Pharmacists.
       Association for Electronic Health Care Transactions.
       CIGNA.
       Cleveland Clinic Foundation.
       Express Scripts/ValueRx.
       First Health Group Corporation.
       Food Marketing Institute.
       Humana, Inc.
       Knoll Pharmaceuticals.
       National Association of Manufacturers.
       Pharmaceutical Care Management Association.
       VHA Inc.
       WellPoint Networks, Inc.
       Blue Cross Blue Shield Association.
       American Association of Occupational Health Nurses.
       Merck & Co., Inc.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself, Mr. Hagel, Mr. Byrd, Mr. Craig, 
        Mr. Roberts, Mr. Grams, Mr. Hutchinson, and Mr. Enzi):
  S. 882. A bill to strengthen provisions in the Energy Policy Act of 
1992 and the Federal Nonnuclear Energy Research and Development Act of 
1974 with respect to potential Climate Change; to the Committee on 
Energy and Natural Resources.


                 energy and climate policy act of 1999

  Mr. MURKOWSKI. Mr. President, today I rise to introduce legislation 
cosponsored by Senator Hagel, who is here, Senator Byrd, Senator Craig, 
Senator Roberts, Senator Grams, Senator Hutchinson, Senator Enzi, and, 
of course, Senator Hagel.
  This is a bill that deals with the issue of the potential climate 
change that we have heard so much about in this body over the last 
several months.
  Our specific bill would do three things, Mr. President. First, the 
bill would create a new $2 billion research, development, and 
demonstration program designed to develop and enhance new technology to 
help stabilize greenhouse gas concentrations in the atmosphere.
  This would be a cost-shared partnership with industry to spur 
innovation and technology so that we can use this technology and have 
it deployed in the United States, as well as have it exported around 
the world. Think about the tremendous advancements that have been made 
in technology in the last decade, Mr. President. Apply the same basis 
of need for that technology to be used to reduce greenhouse gases and 
address climate change. The necessity of doing this, Mr. President, is 
obvious.
  We have seen discussed and examined the costs of Kyoto. The cost of 
complying with Kyoto is estimated to be up to $338 billion in lost 
gross domestic product by the year 2010. That equates to $3,068 per 
household by that year. So it is a substantial investment and deserves 
our attention now.
  Our bill would improve the provisions in existing law which promote 
voluntary reductions in greenhouse gas emissions. Our emphasis remains 
on encouraging voluntary action and not creating new regulatory 
burdens.
  Finally, our bill would establish greater accountability and 
responsibility for climate change and related matters within the 
Department of Energy by establishing a statutory office of global 
climate change. Somebody needs to be accountable in the Department of 
Energy for policies in this area. While the Secretary is ultimately 
accountable, we want to see greater program direction and focus in this 
area. It is justified, Mr. President, when we think of the costs 
associated with meeting the demands and requirements of Kyoto. We can 
do this and achieve this through technology, and it is an investment 
well spent.
  Now, there are other commonsense approaches we continue to work on 
that we or others will later propose in separate bills or as amendments 
to this bill as we get into the debate. For example, we would like to 
protect the U.S. Global Climate Change Research Program from politics 
and ensure that it is conducting high-quality, merit-based, peer-
reviewed science; we would like to remove regulatory obstacles that 
stand in the way of voluntary greenhouse gas emissions reduction; we 
would like to promote voluntary agricultural management practices that 
sequester, or trap, additional carbon dioxide in biomass and soils; we 
would like to promote forest management practices that sequester 
carbon. Mr. President, we encourage the growth of more trees.
  We would like to promote U.S. exports of clean technologies to 
nations such as China and India, who are belching greenhouse gases and 
choking on their own pollutants. For this to be a global approach to a 
global issue, the developing countries must be engaged in the 
solution--unlike Kyoto, where there is a mandate that developing 
countries simply get a free ride. The recognition is--if you buy that 
logic--there is no net gain, no substantial decrease in emissions. 
Under our proposal, the technology would be applicable to the 
developing nations, so there would be a substantial net decrease in 
greenhouse gases.
  Where sensible and cost effective, we would like to pursue possible 
changes to the Tax Code to promote certain activities or practices 
designed to reduce, sequester, or avoid greenhouse gas emissions.
  These are all approaches that we plan to pursue, in a bipartisan 
manner, to address the issue of greenhouse gas emissions and potential 
climate change, because we believe the potential threat of human-
induced climate change will best be solved on a global basis, and 
solved with technology and American innovation over the long term.
  This is the reason we are engaging the developing nations to come 
aboard--by getting new technology into the marketplace, get it out 
there and installed and reduce emissions.
  Compare our approach with that taken by the Kyoto protocol, which 
gives developing nations a free ride. Kyoto explicitly ignores the 
provision of the Byrd-Hagel resolution, which passed this Senate 95 to 
0 in 1997.

  We are, of course, a body of advice and consent. We gave the 
administration our advice 95 to 0, so they shouldn't expect our 
consent. Ninety-five Senators, Mr. President, rarely agree on anything. 
As a consequence, I think we have spoken relative to the merits of the 
treaty that was brought before us.
  Although the President may seek short-term political gain in simply 
signing a treaty that imposes burdens long after his watch is over--and 
that is the applicability of these targets--these targets will come 
long after the current administration is gone. So it is very easy to 
set these targets, because this administration won't be held 
accountable. If the President chooses to ignore our advice, then I 
don't think he should expect our consent. That is kind of where we are 
now.
  If we recall the Byrd-Hagel resolution, it said that all nations must 
be included in emission targets and that serious economic harm must not 
result--serious economic harm. But what serious economic harm? Mr. 
President, I suggest that a cost to this Nation of $338 billion in lost 
GDP in the year 2010 is significant economic harm.
  Yet the Kyoto proposal does not include all nations. Only 35 
industrial nations are subject to emission limits, even though the 134 
developing nations will surpass them in emissions by the year 2015. 
Moreover, the Kyoto protocol's regulatory approach requires legally 
binding quantified emissions reductions of 7 percent below 1990 levels 
by the years 2008-2012. That is roughly a 40-percent decrease in 
emissions from our current baseline. We simply can't get there from 
here without endangering energy supply, reliability, or our economy.
  According to the economic analysis of the Department of Energy's 
Energy Information Administration, if we were to adopt Kyoto, here is 
what American consumers could face in the year 2010:

[[Page S4267]]

  53 percent higher gasoline prices;
  86 percent higher electric prices;
  Upward pressure on interest rates;
  New inflationary pressures.
  There goes your surplus.
  At a recent hearing of the Energy and Natural Resources Committee, 
one witness testified that the economic downturn accompanying the Kyoto 
implementation would depress tax revenues, erase the surplus we have 
earmarked to shore up Social Security, and reduce the public debt.
  With the Kyoto approach, we say goodbye to the budget surplus, 
goodbye to the hopes of saving Social Security, and goodbye to the 
economic prosperity in this country today.
  What do we get for enduring this economic pain? Do we stabilize the 
greenhouse gas concentrations in the atmosphere under Kyoto? The answer 
is clearly no. Do we even reduce global greenhouse gas emissions? No, 
because any reductions by the 35 developed nations and the parties to 
the treaty would be overwhelmed by the growing emissions from the 134 
nations that aren't covered by the Kyoto emissions limit.
  That is what is wrong with Kyoto. Make no mistake about it, Mr. 
President, the Kyoto protocol is an expensive, short-term, narrowly 
applied regulatory approach that will erode U.S. sovereignty, punish 
U.S. consumers, and do nothing to enhance the global environment.
  We are, with this bill and others that will follow, charting a 
different, a new, a progressive course. Ours is a long-term, 
technology-based, global effort. If human-induced greenhouse gas 
emissions are indeed changing the climate for the worse--and there 
remains substantial scientific uncertainty at this point--then we 
should act in a prudent manner to reduce, sequester, or avoid those 
emissions through technology.
  I would like to address criticisms leveled by the administration 
about our bill that are based, I hope, on a misunderstanding.
  A recent administration ``fact sheet,'' after recognizing that there 
are ``positive features'' in the bill, and noting that it ``makes 
improvements to current law'' regarding voluntary efforts to curtail 
emissions, goes on to incorrectly erroneously state that our bill 
``rolls back energy efficiency and clean energy programs with a long 
history of bipartisan support.''
  The administration ``fact sheet'' is incorrect. Our bill does not 
roll back funding for renewable energy or energy efficiency. Instead, 
it authorizes $200 million per year in new money; it does not 
deauthorize any existing programs.
  With that clarification, it would be my hope that the administration 
would support our bill and join us in a prudent, common sense approach 
to greenhouse gas emissions and climate.
  Mr. President, I think I had 20 minutes under special orders this 
morning.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. MURKOWSKI. I ask that the remainder of my time be available to my 
cosponsor, Senator Hagel.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Nebraska.
  Mr. MURKOWSKI. I thank the Chair. I thank my colleagues.
  Mr. HAGEL. Thank you, Mr. President. I thank as well Senator 
Murkowski.
  Mr. President, I rise this morning to join my colleague and friend, 
the distinguished chairman of the Senate Energy and Natural Resources 
Committee, and the senior Senator from West Virginia, Senator Byrd, and 
other colleagues in introducing the Energy and Climate Policy Act of 
1999. We offer this legislation because we believe it is time that 
Congress take a new, bipartisan approach to dealing with the issue of 
global climate change.
  This legislation turns the debate away from unachievable, U.N.-
mandated, arbitrary, short-term targets and timetables as dictated by 
the Kyoto protocol toward a long-term strategy that focuses on sound 
science, increased research and development, incentives for voluntary 
action, and public-private technological initiatives that are market 
driven and technology based.
  Twenty-first century technologies, American ingenuity, and public-
private cooperation--not U.N.-mandated energy rationing--should be, in 
fact, the focus of climate change efforts in the Congress. I hope 
Members on both sides of the aisle will join this effort.
  Mr. President, this has never been a debate about who is for or 
against the environment. This has never been a partisan issue. I have 
not met one Member of the Senate--Republican or Democrat--who wants to 
leave their children a dirty and uninhabitable environment. We all 
agree that we have a responsibility to protect our environment. What 
this debate should be about is bringing some common sense--common 
sense--to this issue.
  This bill that we are introducing today--the Energy and Climate 
Policy Act--brings some common sense to the issue of climate change.
  Senator Murkowski laid out a number of the more specific parts of our 
bill--accountability for one. We put this responsibility in the 
Department of Energy where there is someone ``in charge.''
  Presently we have accountability for global climate change spread 
throughout the Government. It is in the White House. It is in the EPA. 
It is in the Departments of Commerce, Agriculture, Interior, and 
Energy. All of these organizations have their tentacles wrapped around 
this issue. So with this, we will focus on accountability, 
responsibility. Let's get the job done.
  Second, this bill moves the current focus of climate change policy 
away from short-term, draconian energy rationing and cost increases 
mandated by the United Nations Kyoto protocol toward a long-term 
domestic commitment to research and development. As Senator Murkowski 
pointed out, it adds significant Government funding in a private-public 
enterprise over the next 10 years. It focuses on real science, sound 
science.
  Third, this bill continues Congress' commitment to supporting 
voluntary energy efforts to reduce, sequester, or avoid manmade 
greenhouse gas emissions. It does so by strengthening current law--not 
by creating new international, bureaucratic, governmental regimes in 
which we will all be accountable.
  In short, among other things this bill does, we look at the entire 
picture--the consequences of our actions. That means including 
activities that naturally lower the levels of greenhouse gas emissions.
  This bill also addresses the issue of whether such voluntary efforts 
are ``real and verifiable''--Who enforces these kinds of mandates?--the 
role of agriculture, the role of industry, business, labor, and long-
term standard of living consequences: How competitive are our products 
in the world markets?--market driven, technology based. We build on 
what is already the foundation of this great, free land and this great, 
free market economy.
  This bill also allows all of our enterprises in this country to plan 
for the future and build commitments into outyear planning and 
investment decisions. Kyoto doesn't talk about that. Who finances these 
efforts?
  This is the best way to deal with the issue of climate change: a 
long-term commitment based on American ingenuity, exports, scientific 
certainty, 21st century technology, and market principles.
  By doing these things we can walk away from the disastrous path that 
this administration and the Kyoto protocol would lead us and focus our 
efforts instead on a positive, bipartisan, achievable commonsense 
approach.
  I hope my colleagues will take a look at what we are introducing 
today. It is a bipartisan bill. It does make sense. I look forward to 
working with the Presiding Officer and others this year and into next 
year in crafting something that is achievable and workable and good for 
this country.
  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. 882

       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 ``Energy and Climate Policy 
     Act of 1999.''

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) Although there are significant uncertainties 
     surrounding the science of climate

[[Page S4268]]

     change, human activities may contribute to increasing global 
     concentrations of greenhouse gases in the atmosphere, which 
     in turn may ultimately contribute to global climate change 
     beyond that resulting from natural variability;
       (2) the characteristics of greenhouse gases and the 
     physical nature of the climate system require that any 
     stabilization of atmospheric greenhouse gas concentrations 
     must be a long-term effort undertaken on a global basis;
       (3) since developing countries will constitute the major 
     source of greenhouse gas emissions early in the 21st century, 
     all nations must share in an effective international response 
     to potential climate change;
       (4) environmental progress and economic prosperity are 
     interrelated;
       (5) effective greenhouse gas management efforts depend on 
     the development of long-term, cost-effective technologies and 
     practices that can be developed, refined, and deployed 
     commercially in an orderly manner in the United States and 
     around the world;
       (6) in its present form as signed by the Administration, 
     the Kyoto Protocol to the United Nations Framework Convention 
     on Climate Change fails to meet the minimum conditions of 
     Senate Resolution 98, 105th Congress, which was adopted by 
     the Senate on July 25 1997 by a vote of 95-0;
       (7) The President has not submitted the Kyoto Protocol to 
     the Senate for debate and advice and consent to ratification 
     under Article II, Section 2, clause 2 of the United States 
     Constitution and has indicated that the Administration has no 
     intention to do so in the foreseeable future, or to implement 
     any portion of the Kyoto Protocol prior to its ratification 
     in the Senate.
       (b) Purpose.--The purpose of this Act is to strengthen 
     provisions of the Energy Policy Act of 1992 (42 U.S.C. 13381 
     et seq.) and the Federal Nonnuclear Energy Research and 
     Development Act of 1974 (42 U.S.C. 5901 et seq.) to--
       (1) further promote voluntary efforts to reduce or avoid 
     greenhouse gas emissions and improve energy efficiency;
       (2) focus Department of Energy efforts in this area; and
       (3) authorize and undertake a long-term research, 
     development, and demonstration program to--
       (A) develop new and enhance existing technologies that 
     reduce or avoid anthropogenic emissions of greenhouse gases;
       (B) develop new technologies that could remove and 
     sequester greenhouse gases from emissions streams; and
       (C) develop new technologies and practices to remove and 
     sequester greenhouse gases from the atmosphere.

     SEC. 3. OFFICE OF GLOBAL CLIMATE CHANGE.

       Section 1603 of the Energy Policy Act of 1992 (42 U.S.C. 
     13383) is amended--
       (1) in the section heading, by striking ``DIRECTOR OF 
     CLIMATE PROTECTION'' and inserting ``OFFICE OF GLOBAL CLIMATE 
     CHANGE''; and
       (2) by striking the first sentence and inserting the 
     following:
       ``(a) Establishment.--There is established by this Act in 
     the Department of Energy an Office of Global Climate Change.
       ``(b) Function.--The Office shall serve as a focal point 
     for coordinating for the Secretary and Congress all 
     departmental issues and policies regarding climate change and 
     related matters.
       ``(c) Director.--The Secretary shall appoint a director of 
     the Office, who--
       ``(1) shall be compensated at no less than level IV of the 
     Executive Schedule;
       ``(2) shall report to the Secretary; and
       ``(3) at the request of the Committees of the Senate and 
     House of Representatives with appropriation and legislative 
     jurisdiction over programs and activities of the Department 
     of Energy, shall report to Congress on the activities of the 
     Office.'';
       (3) in the second sentence, by striking ``The Director'' 
     and inserting the following:
       ``(d) Duties.--The Director''; and
       (4) in subsection (c) (as designated by paragraph (2)), by 
     striking paragraphs (2) and (3) and inserting the following:
       ``(2) participate, in cooperation with other federal 
     agencies, in the development and monitoring of domestic and 
     international policies for their effects of any kind on 
     climate change globally and domestically and on the 
     generation, reduction, avoidance, and sequestration of 
     greenhouse gases;
       ``(3) develop and implement a balanced, scientifically 
     sound, nonadvocacy educational and informative public 
     awareness program on--
       ``(A) potential global climate change, including any known 
     adverse and beneficial effects on the United States and the 
     economy of the United States and the world economy, taking 
     into consideration whether those effects are known or 
     expected to be temporary, long-term, or permanent; and
       ``(B) voluntary means and measures to mitigate or minimize 
     significantly adverse effects and, where appropriate, to 
     adapt, to the greatest extent practicable, to climate change;
       ``(4) provide, consistent with applicable provisions of law 
     (including section 1605 (b)(3)), public access to all 
     information on climate change, effects of climate change, and 
     adaptation to climate change;
       ``(5) promote and cooperate in the research, development, 
     demonstration, and diffusion of environmentally sound, cost-
     effective and commercially practicable technologies, 
     practices and processes that avoid, sequester, control, or 
     reduce anthropogenic emissions of greenhouse gases not 
     controlled by the Montreal Protocol for all relevant economic 
     sectors, including, where appropriate, the transfer of 
     environmentally sound, cost-effective and commercially 
     practicable technologies, practices, and processes developed 
     with Federal funds by the Department of Energy or any of its 
     facilities and laboratories to interested persons in the 
     United State and to developing country Parties to the United 
     Nations Framework Convention on Climate Change, and Parties 
     thereto with economies in transition to market-based 
     economies, consistent with, and subject to, any applicable 
     Federal law, including patent and intellectual property laws, 
     and any applicable contracts, and taking into consideration 
     the provisions and purposes of section 1608; and
       ``(6) have the authority to participate in the planning 
     activities of relevant Department of Energy programs.''.

     SEC. 4. NATIONAL INVENTORY AND VOLUNTARY REPORTING OF 
                   GREENHOUSE GASES.

       (a) Section 1605 of the Energy Policy Act of 1992 (42 
     U.S.C. 13385) is amended--
       (1) by amending the second sentence of subsection (a) to 
     read as follows: ``The Administrator of the Energy 
     Information Administration shall annually update and analyze 
     such inventory using available data, including beginning in 
     calendar year 2001, information collected as a result of 
     voluntary reporting under subsection (b). The inventory shall 
     identify for calendar year 2001 and thereafter the amount of 
     emissions reductions attributed to those reported under 
     subsection (b).''
       (2) by amending subsection (b)(1)(B) and (C) to read as 
     follows:
       ``(B) annual reductions or avoidance of greenhouse gas 
     emissions and sequestration and carbon fixation achieved 
     through any measures, including agricultural activities, 
     cogeneration, appliance efficiency, energy efficiency, 
     forestry activities that increase carbon sequestration stocks 
     (including the use of forest products), fuel switching, 
     management of grasslands and drylands, manufacture or use of 
     vehicles with reduced greenhouse gas emissions, methane 
     recovery, ocean seeding, use of renewable energy, 
     chlorofluourocarbon capture and replacement, and power plant 
     heat rate improvement; and''
       ``(C) reductions in, or avoidance of, greenhouse gas 
     emissions achieved as a result of voluntary activities 
     domestically, or internationally, plant or facility closings, 
     and State or Federal requirements.''
       (3) by striking in the first sentence of subsection (b)(2) 
     the word ``entities'' and inserting ``persons or entities'' 
     and in the second sentence of such subsection, by inserting 
     after ``Persons'' the words ``or entities'';
       (4) by inserting in the second sentence of subsection 
     (b)(4) the words ``persons or'' before ``entity''; and
       (5) by adding after subsection (b)(4) the following new 
     paragraphs--
       ``(5) Recognition of Voluntary Reductions or Avoided 
     Emissions of Greenhouse Gases.--In order to encourage and 
     facilitate new and increased voluntary efforts on a 
     continuing basis, particularly by persons and entities in the 
     private sector, to reduce global emissions of greenhouse 
     gases, including voluntary efforts to limit, control, 
     sequester, and avoid such emissions, the Secretary shall 
     promptly develop and establish, after an opportunity for 
     public comment of at least 60 days, a program of giving 
     annual public recognition, beginning not later than January 
     31, 2001, to all reporting persons and entities 
     demonstrating, pursuant to the voluntary collections and 
     reporting guidelines issued under this section, voluntarily 
     achieved greenhouse gases reductions, including such 
     information reported prior to the enactment of this 
     paragraph. Such recognition shall be based on the information 
     certified, subject to 18 U.S.C. 1001, by such persons or 
     entities for accuracy as provided in paragraph 2 of this 
     subsection. At a minimum such recognition shall annually be 
     published in the Federal Register.
       ``(6) Changes in Guidelines To Improve Accuracy and 
     Reliability.--The Secretary of Energy, through the 
     Administrator of the Energy Information Administration, shall 
     conduct a review, which shall include an opportunity for 
     public comment, of what, if any, changes should be made to 
     the guidelines established under this section regarding the 
     accuracy and reliability of greenhouse gas reductions and 
     related information reported under this section. Any such 
     review shall give considerable weight to the voluntary nature 
     of this section and to the purpose of encouraging voluntary 
     greenhouse gas emission reductions by the private sector. 
     Changes to be reviewed shall include the need for, and the 
     appropriateness of--
       ``(A) a random or other verification process using the 
     authorities available to the Administrator under other 
     provisions of law;
       ``(B) a range of reference cases for reporting of project-
     based activities in sectors, including, but not limited to, 
     the measures specified in subparagraph (1)(B) of this 
     subsection, and the inclusion of benchmark and default 
     methodologies for use in the reference cases for `greenfield' 
     projects; and
       ``(C) provisions to address the possibility of reporting, 
     inadvertently or otherwise, of some or all of the same 
     greenhouse gas emissions reductions by more than one 
     reporting entity or person and to make corrections where 
     necessary.

     The review should consider the costs and benefits of any such 
     changes, the impacts on

[[Page S4269]]

     encouraging participation in this section, including by 
     farmers and small businesses, and the need to avoid creating 
     undue economic advantages or disadvantages for persons or 
     entities of the private sector. The review should provide, 
     where appropriate, a range of reasonable options that are 
     consistent with the voluntary nature of this section and that 
     will help further the purposes of this section. The review 
     should be available in draft form for public comment of at 
     least 45 days before it is submitted to the Committee on 
     Energy and Natural Resources of the Senate and the Committee 
     on Commerce of the House of Representatives. Such submittal 
     should be made by December 31, 2000. If the Secretary, in 
     consultation with the Administrator, finds, based on the 
     study results, that such changes are likely to be beneficial 
     and cost effective in improving the accuracy and reliability 
     of reported greenhouse gas reductions and related 
     information, are consistent with the voluntary nature of this 
     section, and furthers the purposes of this section, the 
     Secretary shall propose and promulgate, consistent with such 
     finding, such guidelines, together with such findings. In 
     carrying out the provisions of this paragraph, the Secretary 
     shall consult with the Secretary of Agriculture and the 
     Administrator of the Small Business Administration to 
     facilitate greater participation by small business and 
     farmers in this subsection for the purpose of addressing 
     greenhouse gas emission reductions and reporting such 
     reductions.''
       (6) in subsection (c), by inserting ``the Secretary of the 
     Department of Agriculture, the Secretary of the Department of 
     Commerce, the Administrator of the Energy Information 
     Administration, and'' before ``the Administrator''.
       (b) The Secretary shall revise, after opportunity for 
     public comment, the guidelines issued under section 1605(b) 
     of the Energy Policy Act of 1992 to reflect the amendments 
     made to such section 1605(b) by subsection (a)(2) through (4) 
     of this section not later than 18 months after the date of 
     enactment of this Act. Such revised guidelines shall specify 
     their effective date.
       (c) The provisions of subsection (a)(5) and (6) of this 
     section shall be effective on the date of enactment of this 
     Act.

     SEC. 5. CLIMATE TECHNOLOGY RESEARCH, DEVELOPMENT AND 
                   DEMONSTRATION PROGRAM.

       Subtitle B of title XXI of the Energy Policy Act of 1992 
     (42 U.S.C. 13471) is amended by adding the following new 
     subsection--

     ``SEC. 2120. CLIMATE TECHNOLOGY RESEARCH, DEVELOPMENT AND 
                   DEMONSTRATION PROGRAM.

       ``(a) Purpose.--The purpose of this section is to direct 
     the Secretary to further the goals of development and 
     commercialization of technologies, through widespread 
     application and utilization of which will assist in 
     stabilizing global concentrations of greenhouse gases, by the 
     conduct of a long-term research, development, and 
     demonstration program undertaken with selected industry 
     participants or consortia.
       ``(b) Program.--The Secretary, in consultation with the 
     Advisory Board established under section 2302, shall 
     establish a long-term Climate Technology Research, 
     Development, and Demonstration Program, in accordance with 
     sections 3001 and 3002.
       ``(c) Program Objectives.--The program shall foster--
       ``(1) development of new technologies and the enhancement 
     of existing technologies that reduce or avoid anthropogenic 
     emissions of greenhouse gases and improve energy efficiency;
       ``(2) development of new technologies that are able to 
     remove and sequester greenhouse gases from emissions streams; 
     and
       ``(3) development of new technologies and practices to 
     remove and sequester greenhouse gases from the atmosphere.
       ``(d) Program Plan.--
       ``(1) Initial plan.--Not later than 180 days after the date 
     of enactment of this section, the Secretary, in consultation 
     with appropriate representatives of industry, institutions of 
     higher education, Department of Energy national laboratories, 
     and professional and technical societies, shall prepare and 
     submit to the Congress a 10-year program plan to guide 
     activities under this section.
       ``(2) Biennial update.--The Secretary shall biennially 
     update and resubmit the program plan to the Congress.
       ``(e) Proposals.--
       ``(1) Solicitation.--Not later than one year after the date 
     of submittal of the 10-year program plan, and consistent with 
     section 3001 and 3002, the Secretary shall solicit proposals 
     for conducting activities consistent with the 10-year program 
     plan and select one or more proposals not later than 180 days 
     after such solicitation.
       ``(2) Qualifications.--In order for a proposal to be 
     considered by the Secretary, an applicant shall provide 
     evidence that the applicant has in existence--
       ``(A) the technical capability to enable it to make use of 
     existing research support and facilities in carrying out its 
     research objectives;
       ``(B) a multi-disciplinary research staff experienced in--
       ``(i) energy generation, transmission, distribution and 
     end-use technologies; or
       ``(ii) technologies or practices able to sequester, avoid, 
     or capture greenhouse gas emissions; or
       ``(iii) other directly related technologies or practices;
       ``(C) access to facilities and equipment to enable the 
     conduct of laboratory-scale testing or demonstration of 
     technologies or related processes undertaken through the 
     program.
       ``(3) Proposal criteria.--Each proposal shall--
       ``(A) demonstrate the support of the relevant industry by 
     describing--
       ``(i) how the relevant industry has participated in 
     deciding what research activities will be undertaken;
       ``(ii) how the relevant industry will participate in the 
     evaluation of the applicant's progress in research and 
     development activities; and
       ``(iii) the extent to which industry funds are committed to 
     the applicant's submission;
       ``(B) have a commitment for matching funds from non-Federal 
     sources, which shall consist of--
       ``(i) cash; or
       ``(ii) as determined by the Secretary, the fair market 
     value of equipment, services, materials, appropriate 
     technology transfer activities, and other assets directly 
     related to the proposal's cost;
       ``(C) include a single-year and multi-year management plan 
     that outline how the research and development activities will 
     be administered and carried out;
       ``(D) state the annual cost of the proposal and a breakdown 
     of those costs; and
       ``(E) describe the technology transfer mechanisms that the 
     applicant will use to make available research results to 
     industry and to other researchers.
       ``(4) Contents of proposals.--A proposal under this 
     subsection shall include--
       ``(A) an explanation of how the proposal will expedite the 
     research, development, demonstration, and commercialization 
     of technologies capable of--
       ``(i) reducing or avoiding anthropogenic emissions of 
     greenhouse gases;
       ``(ii) removing and sequestering greenhouse gases from 
     emissions streams; or
       ``(iii) removing and sequestering greenhouse gases from the 
     atmosphere.
       ``(B) evidence of consideration of whether the unique 
     capabilities of Department of Energy national laboratories 
     warrant collaboration with those laboratories, and the extent 
     of the collaboration proposed;
       ``(C) a description of the extent to which the proposal 
     includes collaboration with relevant industry or other groups 
     or organizations;
       ``(D) evidence of the ability of the applicant to undertake 
     and complete the proposed project;
       ``(E) evidence of applicant's ability to successfully 
     introduce the technology into commerce, as demonstrated by 
     past experience and current relationships with industry; and
       ``(F) a demonstration of continued financial commitment 
     during the entire term of the proposal from all industrial 
     sectors involved in the technology development.
       ``(f) Selection of Proposals.--From the proposals 
     submitted, the Secretary shall select for funding one or more 
     proposals that--
       ``(1) will best result in carrying out needed research, 
     development, and demonstration related to technologies able 
     to assist in the stabilization of lobal greenhouse gas 
     concentrations through one or more of the following 
     approaches--
       ``(A) improvement in the performance of fossil-fueled 
     energy technologies;
       ``(B) development of greenhouse gas capture and 
     sequestration technologies and processes;
       ``(C) cost reduction and acceleration of deployment of 
     renewable resource and distributed generation technologies;
       ``(D) development of an advanced nuclear generation design; 
     and
       ``(E) improvement in the efficiency of electrical 
     generation, transmission, distribution, and end use;''
       ``(F) design and use of--
       ``(i) closed-loop multi-stage industrial processes that 
     minimize raw material consumption and waste streams;
       ``(ii) advanced co-production systems (such as coal-based 
     chemical processing and biomass fuel processing); and
       ``(iii) recycling and industrial-ecology programs 
     integrating energy efficiency.
       ``(2) represent research and development in specific areas 
     identified in the program plan developed biennially by the 
     Secretary and submitted to Congress under subsection (c);
       ``(3) demonstrate strong industry support;
       ``(4) ensure the timely transfer of technology to industry; 
     and
       ``(5) otherwise best carry out this section.
       ``(g) Annual Progress Reports.--The Director of the Office 
     of Science and Technology, in consultation with the Director 
     of the Office of Management and Budget, shall prepare and 
     submit an annual report to Congress that--
       ``(1) certifies that the program objectives are adequately 
     focused, peer-reviewed and merit-reviewed, and not 
     unnecessarily duplicative with the science and technology 
     research being conducted by other Federal agencies and 
     agents, and
       ``(2) state whether the program as conducted in the prior 
     year addresses an adequate breadth and range of technologies 
     and solutions to address anthropogenic climate change, 
     including--
       ``(A) capture and sequestration of greenhouse gas 
     emissions;
       ``(B) development of photovoltaic, high-efficiency coal, 
     advanced nuclear, and fuel cell generation technologies;
       ``(C) cost reduction and acceleration of deployment of 
     renewable resource and distrbuted generation technologies; 
     and
       ``(D) improvement in the efficiency of electrical 
     generation, transmission, distribution, and end use;

[[Page S4270]]

       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $200,000,000 for each of fiscal years 2001 through 2010, to 
     remain available until expended. This authorization is 
     supplemental to existing authorities and shall not be 
     construed as a cap on the Department of Energy's Research, 
     Development and Demonstration programs''.

     SEC. 6. COMPREHENSIVE PLAN AND IMPLEMENTING PROGRAM FOR 
                   ENERGY RESEARCH, DEVELOPMENT, AND 
                   DEMONSTRATION.

       Section 6 of the Federal Nonnuclear Energy Research and 
     Development Act of 1974 (42 U.S.C. 5905) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3) by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) solutions to the effective management of greenhouse 
     gas emissions in the long term by the development of 
     technologies and practices designed to--
       ``(A) reduce or avoid anthropogenic emissions of greenhouse 
     gases;
       ``(B) remove and sequester greenhouse gases from emissions 
     streams; and
       ``(C) remove and sequester greenhouse gases from the 
     atmosphere.''; and
       (2) in subsection (b)--
       (A) in paragraph (2), by striking ``subdivision (a)(1) 
     through (3)'' and inserting ``paragraphs (1) through (4) of 
     subsection (a); and
       (B) in paragraph (3)--
       (i) in subparagraph (R), by striking ``and'' at the end;
       (ii) in subparagraph (S), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(T) to pursue a long-term climate technology strategy 
     designed to demonstrate a variety of technologies by which 
     stabilization of greenhouse gases might be best achieved, 
     including--
       ``(i) the accelerated commercial demonstration of low-cost 
     and high efficiency photovoltaic power systems;
       ``(ii) advanced clean coal technology;
       ``(iii) advanced nuclear power plant designs;
       ``(iv) fuel cell technology development for cost-effective 
     application in residential, industrial and transportation 
     applications;
       ``(v) low cost carbon sequestration practices and 
     technologies including biotechnology, tree physiology, soil 
     productivity and remote sensing;
       ``(vi) hydro and other renewables;
       ``(vii) electrical generation, transmission and 
     distribution technologies and end use technologies; and
       ``(viii) bio-energy technology.''

     SEC. 7. DEFINITIONS.

       For the purpose of this Act and the provisions of the 
     Energy Policy Act of 1992 (42 U.S.C. 13381, et seq.) and the 
     provisions of the Federal Nonnuclear Energy Research and 
     Development Act of 1974 (42 U.S.C. 5901, et seq.) which 
     statutes are amended by this Act, these terms are defined as 
     follows:
       ``(1) Agricultural activity.--The term `agricultural 
     activity' means livestock production, cropland cultivation, 
     biogas recovery and nutrient management.
       ``(2) Climate change.--The term `climate change' means a 
     change of climate which is attributed directly or indirectly 
     to human activity which is in addition to natural climate 
     variability observed over comparable time periods.
       ``(3) Climate system.--The term `climate system' means the 
     totality of the atmosphere, hydrosphere, biosphere and 
     geosphere and their interactions.
       ``(4) Greenhouse gases.--The term `greenhouse gases' means 
     those gaseous constituents of the atmosphere, both natural 
     and anthropogenic, that absorb and re-emit infrared 
     radiation.
       ``(5) Greenhouse gas reduction.--The term `greenhouse gas 
     reduction' means 1 metric ton of greenhouse gas (expressed in 
     terms of carbon dioxide equivalent) that is voluntarily 
     certified to have been achieved under section 1605 of the 
     Energy Policy Act of 1992 (42 U.S.C. 13385).
       ``(6) Greenhouse gas sequestration.--The term `greenhouse 
     gas sequestration' means extracting one or more greenhouse 
     gases from the atmosphere or an emissions stream through a 
     technological process designed to extract and isolate those 
     gases from the atmosphere or an emissions stream; or the 
     natural process of photosynthesis that extracts carbon 
     dioxide from the atmosphere and stores it as carbon in trees, 
     roots, stems, soil, foliage, or durable wood products.
       ``(7) Forest products.--The term `forest products' means 
     all products or goods manufactured from trees.
       (8) Forestry activity.--
       ``(A) In general.--The term `forestry activity' means any 
     ownership or management action that has a discernible impact 
     on the use and productivity of forests.
       ``(B) Inclusions.--Forestry activities include, but are not 
     limited to, the establishment of trees on an area not 
     previously forested, the establishment of trees on an area 
     previously forested if a net carbon benefit can be 
     demonstrated, enhanced forest management (e.g., thinning, 
     stand improvement, fire protection, weed control, nutrient 
     application, pest management, other silvicultural practices), 
     forest protection or conservation if a net carbon benefit can 
     be demonstrated, and biomass energy (using wood, grass or 
     other biomass in lieu of fossil fuel).
       ``(C) Exclusions.--The term `forest activity' does not 
     include a land use change associated with--
       ``(i) an act of war; or
       ``(ii) an act of nature, including floods, storms, 
     earthquakes, fires, hurricanes, and tornadoes.
       ``(9) Management of grasslands and drylands.--The term 
     `management of grasslands and drylands' means seeding, 
     cultivation, and nutrient management.
       ``(10) Ocean seeding.--The term `ocean seeding' means 
     adding nutrients to oceans to enhance the biological fixation 
     of carbon dioxide.''.

  Mr. BYRD. Mr. President, I join with my distinguished colleagues, 
Senators Murkowski, Hagel, Craig, Hutchinson, Grams, and Roberts, in 
cosponsoring the Energy and Climate Policy Act of 1999 which was 
introduced earlier today. The legislation provided in this bill is one 
of a number of options that the U.S. could undertake to improve energy 
efficiency and security and reduce greenhouse gas emissions. While the 
complex issue of climate change will not be solved by a single bill or 
action, this legislaiton provides additional funding for research and 
development for important programs that I have long supported, like 
clean coal technologies, an American-developed initiative. The bill 
would also take steps to coordinate and implement energy efficiency 
research as well as begin the process of better reporting greehouse gas 
reductions at the Department of Energy.
  If substantial steps are going to be taken globally to reduce 
greenhouse gas emissions, we must accelerate the development and 
commercialization of new technologies, anticipate changing conditions, 
and encourage public/private partnerships. Both developing and 
industrialized nations must find ways to tackle this complex and multi-
faceted problem. There is no single answer--there is no one silver 
bullet to fix this issue.
  Any viable climate change policy must include efforts to develop 
cleaner and more efficient fossil fuel-based energy production in order 
to meet growing energy needs. Clean coal technologies must be a part of 
that solution. When one examines the increase in global greenhouse gas 
emissions over the next several decades, the utilization of clean coal 
technologies is essential. Nations that are serious about reducing 
greenhouse gas emissions in the long term, especially many of the 
largest developing nations like China, cannot ignore clean coal 
technologies.
  In 1984, I proposed, and the Congress adopted, a $750 million Clean 
Coal Technology program. Originally, the program was designed to 
achieve long-term, real reductions in acid rain. Since then, the 
program has expanded, thanks to a joint government-industry investment 
of more than $6 billion. This investment has led to 40 first-of-a-kind 
projects in 18 states, including an array of high-technology ideas that 
can spearhead a new era of clean, efficient power plants which will 
continue to burn our nation's abundant coal resources. Much useful 
technology has resulted from this synergy of effort between government 
and private investment by incorporating leading-edge federal 
laboratories and practical business applications. More needs to be 
done, and the Energy and Climate Policy Act of 1999 seeks to fuel this 
synergy by encouraging more public-private projects in all areas of 
energy production and use. This boost will help to move ideas into 
reality.

  It is critical that the U.S. find better ways to use our own energy 
resources by encouraging more research and development. These 
initiatives have both environmental and economic benefits. This bill 
provides an additional $200 million per year for ten years for 
research, development, and demonstration programs through competitive 
grants. It would also take further steps to coordinate and implement 
energy research and development. These programs build upon the many 
voluntary efforts that government at all levels and industry have 
already undertaken to improve energy use as well as to reduce, avoid, 
or sequester greenhouse gas emissions. All sectors of the economy 
should be able to benefit from these programs.
  In addition to its many benefits at home, the clean coal technology 
program can also provide an economically beneficial and environmentally 
sound solution in the international market. According to the coal 
industry, coal production will continue to increase

[[Page S4271]]

worldwide. Coal can be a cost-competitive source of fuel for 
electricity generation, but, like other fossil fuels, it will require 
improvements in its environmental credentials. Developing nations are 
currently searching for cost-effective ways to upgrade their older, 
higher-polluting power plants and to expand their power production 
capacity. These nations can learn from our experiences and utilize our 
new technologies to combat these problems. I note that during the 
recent visit of Chinese Premier Zhu Rongji, the U.S. and China both 
agreed that more should be done to employ clean coal technologies.
  After 2015, China is expected to surpass the U.S. as the world's 
largest emitter of greenhouse gases. Global warming is a global 
problem. It is not just an American problem. It is not just a European 
problem. And as such, it requires a global solution. Industrialized 
nations' efforts to reduce our own greenhouse gas emissions will be for 
naught unless reductions are also made by nations like China and India. 
Coal will continue to be a major source of their energy production; 
therefore, clean coal technologies are essential to their responsible 
growth. The U.S. must support further efforts to encourage clean coal 
and other energy efficient technologies and to take them from the 
drawing board to the marketplace. Funding for these programs is 
pointless unless our government works in conjunction with the private 
sector to break down market barriers and prove the viability of such 
programs in the global market.
  Research, development, and demonstration programs provide numerous 
benefits to improve air quality standards, increase our energy 
efficiency, and reduce greenhouse gases. While the intent of this bill 
is independent of the Kyoto Protocol, this legislation, in addition to 
its many other benefits, could help the U.S. in addressing climate 
change challenges that might result from the implementation of any 
future treaty.
  In its present form, the Kyoto Protocol does not meet the conditions 
outlined in S. Res. 98, which passed the Senate on July 25, 1997; 
namely, it must include developing country participation as well as 
provide sufficient detail to explain the economic impact of such an 
agreement for the United States. I recognize that the Protocol is a 
work in progress. The international negotiations to bring it into 
compliance with S. Res. 98 will require perseverance and patience and 
are part of a long-term effort to address global climate change. The 
Administration has not submitted the Kyoto Protocol to the Senate for 
its advice and consent and has indicated it has no intention of doing 
so in the foreseeable future. the Administration has indicated that it 
needs at least two additional years to complete negotiations on the 
Buenos Aires Action Plan which includes negotiating major aspects of 
the Protocol such as developing country participation, emissions 
trading, the Clean Development Mechanism, and forest and soil sinks. 
The Administration has also pledged not to implement any portion of the 
Kyoto Protocol prior to its advice and consent in the Senate. I hope 
that that pledge will continue to be honored.
  Over the last year and a half, a number of economic studies have been 
completed, but we have yet to see a comprehensive analysis of the Kyoto 
Protocol. I remain firmly convinced that it is critical that the United 
States knows in some detail the probable costs and benefits of the 
specific actions proposed to address global climate change.
  In summary, improved resource use, energy efficiency and security, 
and global climate change will all be critical issues for every nation 
in the new millennium. Market-based solutions and research and 
development funding will play a vital role in addressing these issues. 
By cosponsoring the Energy and Climate Policy Act of 1999, I hope that 
U.S. firms can receive additional funding to help increase research and 
development for important new technologies. These initiatives, in 
addition to other market-based solutions, could provide vehicles for 
real improvements in energy efficiency as well as reductions in 
greenhouse gas emissions, and an important marketable solution for 
global participation in such reductions.
  Mr. CRAIG. Mr. President, I rise today to join with my distinguished 
colleagues, Senators Murkowski, Hagel, Byrd, and others, in introducing 
the Energy and Climate Policy Act of 1999. I commend Chairman Murkowski 
and Senators Hagel and Byrd for their leadership on this very important 
legislation.
  Sufficient scientific information and public interest exist to 
justify the encouragement and acknowledgment of responsible actions by 
private entities to reduce greenhouse gas emissions, even though all 
scientific, technological, economic, and public policy questions have 
not yet been resolved.
  The global climate issue presents profound questions in these areas 
that require comprehensive, integrated resolution. Current scientific 
research, experimentation, and data collection are not adequately 
coordinated or focused on answering key questions within the United 
States, as well as internationally.
  Moreover, public access to scientific, economic, and public policy 
information is severely limited. The public's right to know is not 
being satisfied. Open and balanced discussion leading to public support 
for best approaches to climate policy resolution is urgently needed.
  This measure does not depend on future regulatory mandates, an 
approach preferred by the current Administration to reduce greenhouse 
gas emissions. It also provides a valid alternative to S. 547, the 
Credit for Voluntary Reductions Act, introduced recently by my friends 
and colleague Senator John Chafee. The key difference between Senator 
Chafee's bill and our bill is that our bill is not dependent on the 
Kyoto protocol or any other regulatory mandate.
  It is my belief, Mr. President, that voluntary measures should be 
encouraged through incentives rather than in anticipation of future 
domestic or international regulatory mandates.
  Mr. President, I am also very concerned about the Administration's 
strong desire to drastically cut carbon and its seeming willingness to 
do so by whatever regulatory measure available. Demonstrative evidence 
of the Administration's thinking on this issue is contained in the 
April 10, 1998, EPA General Counsel memo to Carol Browner, describing 
EPA's authority to regulate carbon dioxide under the Clean Air Act.
  This memo, in my opinion, clearly overstates EPA's authority to 
regulate pollutants under the Clean Air Act. Moreover, this memo is 
indicative of the Administration's penchant for finding regulatory 
fixes for problems. Its allies in this campaign are those in the 
international community who are either indifferent to, or against our 
economic interests. we all know, or should know, that at this moment in 
history, when you cap carbon you cap economic growth.

  We need a whole new paradigm for handling this serious political 
issue. People care about it on all sides, and now Congress will be 
involved in this issue during this session. Let's get serious about the 
science and fully inform the American people so that whatever the 
outcome, they'll know that their government was working for them and 
not against their important economic interests.
  Let's force the current Administration to stop politicizing science 
and get to the point where the issue is confidently understood. There 
is simply no compelling reason for our government at this time to force 
Americans to take preventive measures of uncertain competence against a 
problem that may or may not lie in the earth's future.
  It is for these reasons that I, along with Senators Murkowski, Hagel, 
and others, are continuing to work on the next step in this very 
important response to the climate change issue--a more comprehensive 
proposal that will include provisions that address:
  (1) Policy mechanisms for assessing the effects of greenhouse gas 
emissions;
  (2) Accelerated development and deployment of climate response 
technology;
  (3) International deployment of technology to mitigate climate 
change;
  (4) The advancement of climate science; and
  (5) Improving public access to government information on the broad 
spectrum of scientific opinion on the causes and effects of climate 
change.

[[Page S4272]]

  Mr. President, significant green-house gas emission reductions can be 
achieved through voluntary measures that are warranted even as we 
answer yet unresolved key questions about the global and regional 
climates.
  What is required now is an approach that will encourage public 
support for appropriate action. I believe this bill paves the way for 
such public support, and, by reasonably addressing the important 
economic and political issues associated with the current climate 
change debate, sets the proper tone for future discourse that will 
ultimately lead to a safe and economically prudent resolution of this 
highly charged issue.
  Mr. GRAMS. Mr. President, I rise today to support the efforts of 
Senator Murkowski and Senator Hagel by cosponsoring the Energy and 
Climate Policy Act of 1999.
  This legislation marks a turning point in how we address the 
potential problems associated with global climate change.
  It addresses these potential problems not by mandating draconian 
reductions in energy use and hiking energy taxes, but by providing 
America's businesses and innovators with the tools they need to make 
long-term, substantive carbon dioxide emissions reductions.
  One of the problems with the administration's support of the Kyoto 
Protocol is that while they have already agreed to legally-binding 
greenhouse gas emissions reductions, the GAO found last year that the 
administration does not have quantitative performance goals for the 
money they intend to spend on their intiatives.
  In other words, the administration has agreed to a treaty with 
legally-binding reductions and they clearly want to spend a lot of 
money to reach those limits--but they don't have any idea how much of 
an impact all of their spending will have on emissions reductions.
  This legislation says ``let's take a different road.'' The Murkowski-
Hagel bill will establish a new research, development and demonstration 
program that promotes technologies and practices which allow energy 
users to avoid or reduce greenhouse gas emissions.
  Those technologies include alternative energy technologies, energy 
efficiency technologies, and technologies that take current energy 
production processes and make them better and more efficient.
  The bill will also promote technologies that remove and sequester 
greenhouse gases from the atmosphere and emissions streams.
  This bill is aimed at involving the private sector in our 
decisionmaking processes and bringing them to the table as well. It is 
aimed at putting American ingenuity to work whether it be in the home, 
at the business, or out on the farm. The Murkowski-Hagel bill simply 
says that we recognize our responsibility to reduce or sequester 
greenhouse gas emissions and we are taking substantive, long-term steps 
to that rising challenge.
  The Murkowski-Hagel bill does not start from the premise that we are 
to blame for the theoretical impacts of global warming. It doesn't 
attempt to punish American businesses by forcing them to reduce their 
energy consumption or by bankrupting them through higher energy prices. 
This bill does not accept the long-held beltway view that Washington 
knows best. It recognizes that American businesses and individuals can 
do tremendous things when they are challenged to do better and when 
Government is their partner rather than their adversary.
  I sincerely hope that all Members of the Senate can support this 
piece of legislation so that it can pass into law as soon as possible. 
I look forward to continuing to work with Senators Murkowski and Hagel 
and others interested to continue our efforts to both protect the 
environment and strengthen the American economy as we enter into the 
21st century.
  While I am here this morning, I would like to renew my request to 
President Clinton that he submit the recently signed Kyoto Protocol to 
the Senate for ratification. Mr. President, the United States Senate 
has clearly expressed its interest in this matter and its opposition to 
any attempts to implement the Treaty prior to Senate advice and 
consent.
  In the 105th Congress, the Senate undertook a number of activities 
which illustrated these concerns. First, S. Res. 98 unanimously 
expressed the Senate's position on both the projected economic impacts 
of the Treaty and the participation of developing nations.
  Second, in a series of measures, including the FY99 Energy and Water 
Appropriations Bill, the FY99 Department of Defense Appropriations 
Bill, the Strom Thurmond National Defense Authorization Act, and the 
FY99 VA, HUD, and Independent Agencies Appropriations Act, the Senate 
expressed its concern with any attempts at premature implementation and 
Administration actions which advance the provisions of the Treaty prior 
to Senate advice and consent. It is my understanding that the 
Administration has largely ignored the provisions of those pieces of 
legislation.
  While President Clinton has long maintained that he will not submit 
the Treaty to the Senate prior to obtaining ``meaningful'' developing 
nation participation, his recent actions clearly demonstrate that he 
will not withdraw U.S. support, regardless of what the final agreement 
may be.
  By signing the Treaty on November 12, 1998, while allowing an 
additional two years for continued negotiations on elements critical to 
the Treaty's impact on our nation, he has predetermined the outcome and 
weakened our nation's negotiating position. And despite the Senate's 
unanimous framework provided within S. Res. 98, there has been little 
substantive progress towards obtaining any ``meaningful'' participation 
among developing nations.
  I can only conclude that the Administration's premature signing of 
this Treaty was based on political considerations that should never 
have been factored into such an important decision. Under no 
circumstances should a Treaty be signed until we agree with its 
principals. Just briefly, as I conclude, once a Treaty has been signed 
by the United States, it should immediately be sent to the Congress for 
ratification, not used for political purposes.
  So again, I strongly urge the President to submit the Kyoto Protocol, 
which he has already signed, to the Senate for ratification. If he 
believes it is important enough to sign and to implement through 
backdoor tactics, then he should also believe it is important enough to 
for Congress, the people's voice, to have an opportunity to review it, 
debate it, and vote on its ratification.
  I believe the Senate must have the opportunity to examine the Treaty 
now and debate it openly before the American people.
                                 ______
                                 
      By Mr. BIDEN:
  S. 883. A bill to authorize the Attorney General to reschedule 
certain drugs that pose an imminent danger to public safety, and to 
provide for the rescheduling of the date-rape drug and the 
classification of a certain ``club'' drug; to the Committee on the 
Judiciary.


                 the new drugs of the 1990s control act

  Mr. BIDEN. Mr. President, the best time to target a new drug with 
uncompromising enforcement pressure is before abuse of that drug has 
overwhelmed our communities.
  That is why I introduced legislation in previous Congresses to place 
tight federal controls on the date rape drug Rohpynol--also known as 
Roofies--which was becoming known as the Quaalude of the Nineties as 
its popularity spreads throughout the United States.
  My bill would have shifted Rohpynol to schedule 1 of the Federal 
Controlled Substances Act. Rescheduling is important for three simple 
reasons:
  First, Federal re-scheduling triggers increases in State drug law 
penalties, and since we all know that more than 95 percent of all drug 
cases are prosecuted at the State level, not by the Federal Government, 
it is vitally important that we re-schedule.
  Second, Federal re-scheduling to schedule 1 triggers the toughest 
Federal penalties--up to a year in prison and at least a $1,000 fine 
for a first offense of simple possession.
  And, third, re-scheduling has proven to work. In 1984, I worked to 
reschedule Quaaludes, Congress passed the law, and the Quaalude 
epidemic was greatly reduced. And, in 1990, I worked to re-schedule 
steroids, Congress passed the law, and again a drug epidemic that had 
been on the rise was reversed.

[[Page S4273]]

  Despite evidence of a growing Rohpynol epidemic, some argued that my 
efforts to reschedule the drug by legislation were premature. 
Accordingly, I agreed to hold off on legislative action and wait for a 
Drug Enforcement Administration decision on whether to schedule the 
drug through the lengthy and cumbersome administrative process.
  As I predicted, the DEA report on Rohpynol--handed down in November--
correctly concludes that despite the rapid spread of Rohpynol 
throughout the country, DEA cannot re-schedule Rohpynol by rulemaking 
at this time.
  The report notes, however, that Congress is not bound by the 
bureaucratic re-scheduling process the DEA must follow. Congress can--
and in my view should--pass legislation to reschedule Rohpynol.
  Sepcifically the report states: ``This inability to reschedule 
[Rohpynol] administratively * * * does not affect Congress' ability to 
place [the drug] in schedule 1 through the legislative process''--as we 
did with Quaaludes in 1984 and Anabolic Steroids in 1990.
  Let me also note that the DEA report confirmed a number of facts 
about the extent of the Rohpynol problem:
  DEA found more than 4,000 documented cases--in 36 States--of sale or 
possession of the drug, which is not marketed in the United States and 
must be smuggled in.
  ``In spite of DEA's inability to reschedule [Rohpynol] through 
administrative proceedings, DEA remains very concerned about the 
abuse'' of the drug.
  ``Middle and high school students have been known to use [Rohpynol] 
as an alternative to alcohol to achieve an intoxicated state during 
school hours. [The drug] is much more difficult to detect than alcohol, 
which produces a characteristic odor.''
  ``DEA is extremely concerned about the use of [Rohpynol] in the 
commission of sexual assaults.''
  ``The number of sexual assaults in which [Rohpynol] is used may be 
underreported''--because the drug's effects often cause rape victims to 
be unable to remember details of their assaults and because rape crisis 
centers, hospitals, and law enforcement have only recently become aware 
that Rohpynol can be used to facilitate sex crimes.
  Nonetheless, ``DEA is aware of at least 5 individuals who have been 
convicted of rape in which the evidence suggests that [the Rohypnol 
drug] was used to incapacitate the victim.'' ``The actual number of 
sexual assault cases involving [the drug] is not known. It is difficult 
to obtain evidence that [the Rohypnol drug] was used in an assault.''
  I would also note that my efforts to re-schedule this drug have 
already had beneficial results: The manufacturer of Rohypnol recently 
announced that it had developed a new formula to minimize the potential 
for abuse of the drug in sexual assaults.
  This is an important step. But pills produced under the old Rohypnol 
formula are still in circulation, and pills made by other manufacturers 
can still be smuggled in. Furthermore, the new formula will not prevent 
kids from continuing to ingest this dangerous drug voluntarily for a 
cheap high.
  In short, stricter, Federal controls remain necessary; and DEA is 
powerless to respond to Rohypnol abuse until the problem gets even 
worse.
  Therefore, I am reintroducing my bill to re-schedule Rohypnol in 
schedule 1 of the Controlled Substances Act. I urge my colleagues to 
support this effort to take action against this dangerous drug now, 
rather than waiting for the problem to develop into an epidemic.
  My bill also places ``Special K''--ketamine hydrochloride--a 
dangerous hallucinogen very similar to PCP, on schedule III of the 
Controlled Substances Act. Despite Special K's rising popularity as a 
``club drug'' of choice among kids, the drug is not even illegal in 
most States. This has crippled State authorities' ability to fight 
ketamine abuse.
  For example, in Federal 1997, two men accused of stealing ketamine 
from a Ville Platte, Louisiana veterinary clinic and cooking the drug 
into a powder could not be prosecuted under State drug control laws 
because ketamine is not listed as a Federal controlled substance.
  Similarly, a New Jersey youth recently found to be possessing and 
distributing ketamine could be charged with only a disorderly persons 
offense.
  Prosecutors are trying to combat increased Ketamine use by seeking 
lengthy prison terms for possession of the drugs--like marijuana--that 
users mix with Ketamine, but if it is just Special K, there's nothing 
they can do about it.
  I am convinced that scheduling Ketamine will help our effort to fight 
the spread of this dangerous drug by triggering increases in State drug 
law penalties.
  Without Federal scheduling, many States will not be able to address 
the Ketamine problem until it is too late and Special K has already 
infiltrated their communities.
  Medical professions who use Ketamine--including the American 
Veterinary Medical Association and the American Association of Nurse 
Anesthetists--support scheduling, having determined that it will 
accomplish our goal of ``preventing the diversion and unauthorized use 
of Ketamine'' while allowing ``continued, responsible use'' of the drug 
for legitimate purposes. [Letter from Mary Beth Leininger, D.V.M., 
President of the American Veterinary Medical Association]
  And the largest manufacturer of Ketamine has concluded that ``moving 
the product to schedule III classification is in the best interest of 
the veterinary industry and the public.'' [Letter from E. Thomas 
Corcoran, President of Fort Dodge Animal Health, a Division of American 
Home Products Corporation].
  Scheduling Ketamine will give State authorities the tools they 
desperately need to fight its abuse by young people--and end the legal 
anomaly that leaves those who sell Ketamine to our children beyond the 
reach of the law--even when they are caught ``red-handed.'' I urge my 
colleagues to support this legislation.
  In addition to raising controls on Rohypnol and Ketamine, the 
legislation I am introducing today would increase the ability of the 
Attorney General to respond to new drug emergencies in the future.
  Our Federal drug control laws currently allow the Attorney General 
limited authority to respond to certain new drugs on an emergency 
basis--by temporarily subjecting them the strictest Federal control 
while the extensive administrative procedure for permanent scheduling 
proceeds.
  But the Attorney General has not been able to use this authority to 
respond to the Rohypnol and Special K emergencies--because she does not 
have authority to--move drugs from one schedule to another, or to 
schedule drugs that the Food and Drug Administration has allowed 
companies to research but not to sell.
  This amendment would grant the administration this important 
authority by--authorizing the Attorney General to move a scheduled 
drug--like Rohypnol--to schedule I in an Emergency; by applying 
emergency rescheduling authority to ``investigational new drugs''--like 
Special K--that the Food and Drug Administration has approved for 
research purposes only, but not for marketing.
  And by providing that a rescheduling drug remains on the temporary 
schedule until the administrative proceedings reach a final conclusion 
on whether to schedule. This legislation would give the Attorney 
General the necessary tools to respond quickly when evidence appears 
that a drug is being abused. I urge my colleagues to support the bill.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 883

       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 ``New Drugs of the 1990's 
     Control Act''.

     SEC. 2. ATTORNEY GENERAL AUTHORITY TO RESCHEDULE CERTAIN 
                   DRUGS POSING IMMINENT DANGER TO PUBLIC SAFETY.

       Section 201(h) of the Controlled Substances Act (21 U.S.C. 
     811(h)) is amended--
       (1) by striking paragraph (1) and inserting the following: 
     ``(1) If the Attorney General determines that the scheduling 
     of a substance, or the rescheduling of a scheduled

[[Page S4274]]

     substance, on a temporary basis is necessary to avoid an 
     imminent hazard to the public safety, the Attorney General 
     may, by order and without regard to the requirements of 
     subsection (b) relating to the Secretary of Health and Human 
     Services, schedule the substance--
       ``(A) in schedule I if no exemption or approval is in 
     effect for the substance under section 355; or
       ``(B) in schedule II if the substance is not listed in 
     schedule I;''; and
       (2) in paragraph (2)--
       (A) by inserting ``or rescheduling'' after ``scheduling'' 
     each place it appears; and
       (B) by striking ``for up to six months'' and inserting 
     ``until a final order becomes effective''.

     SEC. 3. RESCHEDULING OF DATE-RAPE DRUG.

       Notwithstanding section 201 or subsection (a) or (b) of 
     section 202 of the Controlled Substances Act (21 U.S.C. 811; 
     812(a); 812(b)) respecting the scheduling of controlled 
     substances, the Attorney General shall, by order, transfer 
     flunitrazepam from schedule IV of such Act to schedule I of 
     such Act.

     SEC. 4. CLASSIFICATION OF THE ``CLUB'' DRUG ``SPECIAL K''.

       Notwithstanding section 201 or subsection (a) or (b) of 
     section 202 of the Controlled Substances Act (21 U.S.C. 811; 
     812(a); 812(b)) respecting the scheduling of controlled 
     substances, the Attorney General shall, by order, add 
     ketamine hydrochloride to schedule III of such Act.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Torricelli, and Mr. 
        Hutchinson):
  S. 884. A bill to establish the National Military Museum Foundation, 
and for other purposes; to the Committee on Armed Services.


                NATIONAL MILITARY MUSEUM FOUNDATION ACT

  Mr. SARBANES. Mr. President, today I am introducing on behalf of 
myself, Mr. Hutchinson, and Mr. Torricelli, legislation to create a 
National Military Museum Foundation. The purpose of this legislation is 
to encourage and facilitate private-sector support in the effort to 
preserve, interpret and display the important role the military has 
played in the history of our nation. This legislation is, in my 
judgment, crucial at this particular moment in history, when we are on 
the verge of jeopardizing two-centuries worth of military artifacts and 
negating the possibility of such collections in the future.
  It has been the long-standing tradition of the U.S. Department of War 
and its successor, the Department of Defense, to preserve our historic 
military artifacts. Since the days of the revolution to the conflict in 
Bosnia, Americans have been proud of the role that our military has had 
in safeguarding our democracy, and we have tried to ensure that future 
generations will know that role. Over the years we have accumulated a 
priceless collection of military artifacts from every period of 
American history and every technological era. The collection includes 
flags, uniforms, weapons, paintings and historic records as well as 
full-size tanks, ships and aircraft which document history and provide 
provenance for our nation and armed services.
  In recent years, however, the dedicated individuals who identify, 
interpret, catalog and showcase those artifacts have found themselves 
shortchanged and shorthanded. With financial resources diminishing, not 
only are we cheating ourselves out of the military treasures currently 
warehoused out of public sight, but we are in danger of lacking the 
funds to update our collections with new items.
  ``A morsel of genuine history,'' wrote Thomas Jefferson to John Adams 
in 1817, ``is a thing so rare as to be always valuable.'' Mr. 
President, today, significant pieces of our military history are being 
lost, shoved into basements, or subject to decay. With each year also 
comes less funding, and our artifacts are multiplying at a pace that 
exceeds the capabilities of those who are trying to preserve them. 
Since 1990 alone, the services have closed 21 military museums and at 
least eight more are expected to close in the next few years.
  We cannot let this proceed any further. Military museums are vital to 
documenting our history, educating our citizenry and advancing our 
technology. More than 86 museums in 31 states and the District of 
Columbia daily instill Americans from veterans to new recruits to 
elementary school students with a sense of the sacred responsibility 
that military servicemen bear to defend the values that have made this 
country great.
  Military museums teach our servicemen the history of their units, 
enhancing their understanding both of the team of which they are a part 
and the significance of the service they have pledged to perform. And 
when a museum makes history come alive to young children, those 
children learn for themselves that what this country stands for and the 
sacrifices that have been made to preserve the freedoms we often take 
for granted.
  Many of our servicemen have learned their military history through 
these artifacts rather than textbooks, and many of our technological 
advances have come as a direct result of these artifacts. The ship 
models and ordinances at U.S. Naval Academy Museum in Annapolis, MD, 
for example, have been used by the Academy's Departments of Gunnery and 
Seamanship. It has also been reported that a study of an existing 
missile system, preserved in an Army museum, saves the Strategic 
Defense Initiative $25 million in research and analysis costs. These 
museums serve as laboratories where engineers can learn from the 
lessons of the past without going through the same trial and error 
process as their predecessors.
  Yet without adequate funding, these benefits will be lost forever. 
According to a 1994 study conducted by the Advisory Council on Historic 
Preservation entitled, ``Defense Department Compliance with the 
National Historic Preservation Act,'' the Department of Defense's 
management of these resources has been ``mediocre,'' with the cause 
attributed to ``inadequate staffing and funding.''
  More than 80 percent of the museums studied said their survival 
relies heavily on outside funding. When asked about their greatest 
needs, the response was nearly always staff and money. And those 
museums that reported sufficient staffing from volunteers nevertheless 
said that the dearth of funds for restoration and construction 
paralyzed them from fully utilizing the available labor.
  According to the study, money is so tight that brochures and 
pamphlets are often unaffordable, leaving visitors with no explanations 
about the objects that have come to see. A young child might be duly 
impressed by the sight of a stern-faced general, but the historical 
lesson is greatly diminished if the child is not told the significance 
of the event portrayed or why the general looked so grim that day.
  Perhaps most distressing, the study reported ``substantial 
collections of rare or unique historical military vehicles and 
equipment that are unmaintained and largely unprotected due to lack of 
funds and available expertise.'' In addition, the museums were found to 
be struggling so much with the care of items already in house, that 
they were unable to accept new ones. With a new class of military 
artifacts from the Vietnam and Gulf Wars soon to be retired, one 
wonders whether those artifacts will be preserved. If we do not take 
action to save what we have and acquire what we don't, future 
generations will see these pockets of negligence as blank pages in the 
living history books that these museums truly are.

  Only a Foundation can address these problems. The alternate 
solution--to press the services to devote more money to these 
institutions--is implausible in this budgetary climate. The Secretary 
of Defense must place his highest priority on the readiness of our 
forces. Closely allied to that priority is the effort to improve the 
quality of life for our citizens on active duty. And, as aging 
equipment faces obsolescence, the Secretary has indicated that the 
future will bring an increased emphasis on replacing weapons systems. 
By all realistic assumptions, the amount of funds appropriated for 
museums is likely to continue downward.
  My bill recognizes the growing need for a reliable source of funding 
aside from federal appropriations. A National Military Museum 
Foundation would provide an accessible venue for individuals, 
corporations or other private sources to support the preservation of 
our priceless military artifacts and records. A National Military 
Museum Foundation could also play an important role in surveying those 
artifacts that we know to exist. Currently, these is no museum 
oversight or coordination of museum activities on the DOD level. A 
wide-ranging Foundation survey would therefore not only eliminate 
duplication, but would most likely discover gaps in our collections 
that must be filled before it is too late.

[[Page S4275]]

  Under the proposed legislation, the Secretary of Defense would 
appoint the Foundation's Board of Directors and provide basic 
administrative support. To launch the Foundation, the legislation 
authorizes an initial appropriation of $1 million. It is anticipated 
that the Foundation would be self sufficient after the first year. This 
is a small price to pay to save some of our most precious treasures.
  This legislation is modeled on legislation that established similar 
foundations, such as the National Park Foundation and the National Fish 
and Wildlife Foundation, both of which have succeeded in raising 
private-sector support for conservation programs. My bill is not 
intended to supplant existing Federal funding or other foundation 
efforts that may be underway, but rather to supplement those efforts.
  The premise for establishing a national foundation is, in part, to 
elevate the level of fund raising beyond the local level, supplementing 
those efforts by seeking donations from potentially large donors. I 
also want to emphasize the inclusiveness of the Foundation, which will 
represent all the branches of our armed services.
  Mr. President, statistics reveal that foundations established without 
the mandate of a federal statute and the backing of an established 
agency seldom succeed. With ever-diminishing federal funds, we cannot 
expect the Department to put our military museums ahead of national 
security. Truly, an outside source committed to sustaining our museums 
is imperative. I urge my colleagues to support this important 
legislation.
                                 ______
                                 
      By Mr. BIDEN:
  S. 885. A bill to amend the Public Health Service Act and the Federal 
Food, Drug, and Cosmetic Act to provide incentives for the development 
of drugs for the treatment of addiction to illegal drugs, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.


            the new medicines to treat addiction act of 1999

  Mr. BIDEN. Mr. President, today I am introducing the New Medicines to 
Treat Addiction Act of 1999, legislation that builds upon my efforts in 
previous Congresses to promote research into and development of new 
medicines to treat the ravages of hard core drug addiction.
  Since the first call to arms against illegal drugs, we have learned 
just how insidious hard-core drug addiction is, even as the ravages of 
substance abuse--on both the addict and the addict's victims--have 
become ever more apparent. The frustration in dealing with a seemingly 
intractable national problem is palpable, most noticeably in the heated 
rhetoric as politicians blame each other for the failure to find a 
cure. What gets lost underneath the noise is the recognition that we 
have not done everything we can to fight this problem and that, like 
all serious ills, we must take incremental steps one at a time, and 
refuse to be overwhelmed by the big picture.
  Throughout my tenure as chairman of the Senate Judiciary Committee, I 
called for a multifaceted strategy to combat drug abuse. One of the 
specific steps I advocated was the creation of incentives to encourage 
the private sector to develop medicines that treat addiction, an area 
where promising research has not led--as one would normally expect--to 
production of medicines. The bill I am introducing today, the New 
Medicines To Treat Addiction Act of 1999, will hopefully change that. 
It takes focused aim at one segment of the drug-abusing population--
hardcore addicts, namely users of cocaine and heroin--in part because 
these addicts are so difficult to treat with traditional methods, and 
in part because this population commits such a large percentage of 
drug-related crime.

  In December, 1989, I commissioned a Judiciary Committee report, 
``Pharmacotherapy: A Strategy for the 1990's.'' In that report, I posed 
the question, ``If drug use is an epidemic, are we doing enough to find 
a medical `cure' for this disease?'' The report gave the answer ``No.'' 
Unfortunately, now a decade later, the answer remains the same. 
Developing new medicines for the treatment of addiction should be among 
our highest medical research priorities as a nation. Until we take this 
modest step, we cannot claim to have done everything reasonable to 
address the problem, and we should not become so frustrated that we 
effectively throw up our hands and do nothing.
  Recent medical advances have increased the possibility of developing 
medications to treat drug addiction. These advances include a 
heightened understanding of the physiologist and psychological 
characteristics of drug addiction and a greater base of neuroscientific 
research.
  One example of this promising research is the recent development of a 
compound that has been proven to immunize laboratory animals against 
the effects of cocaine. The compound works like a vaccine by 
stimulating the immune system to develop an antibody that blocks 
cocaine from entering the brain. Researchers funded through the 
National Institute of Drug Abuse believe that this advance may open a 
whole new avenue for combating addiction.
  Despite this progress, we still do not have a medication to treat 
cocaine addiction or drugs to treat many other forms of substance 
abuse, because the private sector is unsure of the wisdom of making the 
necessary investment in the production and marketing of such medicines.
  Privarte industry has not aggressively developed pharmacotherapies 
for a variety of reasons, including a small customer base, difficulties 
distributing medication to the target population, and fear of being 
associated with substance abusers. We need to create financial 
incentives to encourage pharmaceutical companies to develop and market 
these treatments. And we need to develop a new partnership between 
private industry and the public sector in order to encourage the active 
marketing and distribution of new medicines so they are accessible to 
all addicts in need of treatment.
  While pharmacotherapies alone are not a ``magic bullet'' that will 
solve our national substance abuse problem, they have the potential to 
fill a gap in current treatment regimens. The disease of addiction 
occurs for many reasons, including a variety of personal problems which 
pharmaco therapy cannot address. Still, by providing a treatment 
regimen for drug abusers who are not helped by traditional methods, 
pharmacotherapy holds substantial promise for reducing the crime and 
health crisis that drug abuse is causing in the United States.

  The New Medicines To Treat Addiction Act of 1999 would encourage and 
support the development of medicines to treat drug addiction in three 
ways.
  It reauthorizes and increases funding for Medications Development 
Program at the National Institute of Health, which for years has been 
at the forefront of research into drug addition.
  The bill also creates two new incentives for private sector companies 
to undertake the difficult but important task of developing medicines 
to treat addiction.
  First, the bill would provide additional patient protections for 
companies that develop drugs to treat substance abuse. Under the bill, 
pharmacotherapies could be designated `orphan drugs' and qualify for an 
exclusive seven-year patent to treat specific addiction. These 
extraordinary patent rights would greatly enhance the market value of 
pharmacotherapies and provide a financial reward for companies that 
invest in the search to cure drug addiction. This provision was 
contained in a bill introduced by Senator Kennedy and me in 1990, but 
was never acted on by Congress.
  Second, the bill would establish a substantial monetary reward for 
companies that develop drugs to treat cocaine and heroin addiction but 
shift the responsibility for marketing and distributing such drugs to 
the government. This approach would create a financial incentive for 
drug companies to invest in research and development but enable them to 
avoid any stigma associated with distributing medicine to substance 
abusers.
  The bill would require the National Academy of Sciences to develop 
strict guidelines for evaluating whether a drug effectively treats 
cocaine or heroin addiction. If a drug meets these guidelines and is 
approved by the Food and Drug Administration, then the government must 
purchase the patent rights for the drug from the company that developed 
it. The purchase rights for the patent rights is established by

[[Page S4276]]

law: $100 million for a drug to treat cocaine addiction and $50 million 
for a drug to treat heroin addiction. Once the government has purchased 
the patent rights, then it is responsible for producing the drug and 
distributing it to clinics, hospitals, state and local governments, and 
any other entities qualified to operate drug treatment programs.
  This joint public/private endeavor will correct the market 
inefficiencies that have thus far prevented the development of drugs to 
treat addiction and require the government to take on the 
responsibilities that industry is unwilling or unable to perform.
  America's drug problems is reduced each and every time a drug abuser 
quits his or her habit. Fewer drug addicts mean fewer crimes, fewer 
hospital admissions, fewer drug-addicted babies and fewer neglected 
children. The benefits to our country of developing new treatment 
options such as pharmacotherapies are manifold. Each dollar we spend on 
advancing options in this area can save us ten or twenty times as much 
in years to come. The question isn't ``Can we afford to pursue a 
pharmacotherapy strategy?'' but rather, ``Can we afford not to?''
  Congress has long neglected to adopt measures I have proposed to 
speed the approval of and encourage greater private sector interest in 
pharmaco therapy. We cannot let another Congress conclude without 
rectifying our past negligence on this issue. I urge my colleagues to 
join me in promoting an important, and potentially ground breaking, 
approach to addressing one of our Nation's most serious domestic 
challenges.
  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 printed in the Record, 
as follows:

                                 S. 885

       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 ``New Medications to Treat 
     Addiction Act of 1999''.

                   TITLE I--PHARMACOTHERAPY RESEARCH

     SEC. 101. REAUTHORIZATION FOR MEDICATION DEVELOPMENT PROGRAM.

       Section 464P(e) of the Public Health Service Act (42 U.S.C. 
     285o-4(e)) is amended to read as follows:
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section such sums as may 
     be necessary for each of the fiscal years 2000 through 2002 
     of which the following amount may be appropriated from the 
     Violent Crime Reduction Trust Fund:
       ``(1) $100,000,000 for fiscal year 2001; and
       ``(2) $100,000,000 for fiscal year 2002.''.

           TITLE II--PATENT PROTECTIONS FOR PHARMACOTHERAPIES

     SEC. 201. RECOMMENDATION FOR INVESTIGATION OF DRUGS.

       Section 525(a) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 360aa(a)) is amended--
       (1) in the first sentence, by striking ``States'' and 
     inserting ``States, or for treatment of an addiction to 
     illegal drugs,'';
       (2) in the second sentence, by striking ``States'' and 
     inserting ``States, or for treatment of an addiction to 
     illegal drugs''; and
       (3) by striking ``such disease or condition'' each place it 
     appears and inserting ``such disease or condition, or 
     treatment of such addiction,''.

     SEC. 202. DESIGNATION OF DRUGS.

       Section 526(a) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 360bb(a)) is amended--
       (1) in paragraph (1)--
       (A) by inserting before the period in the first sentence 
     the following: ``, or for treatment of an addiction to 
     illegal drugs'';
       (B) in the third sentence, by striking ``rare disease or 
     condition'' and inserting ``rare disease or condition, or for 
     treatment of an addiction to illegal drugs,'';
       (C) by striking ``such disease or condition,'' and 
     inserting ``such disease or condition, or treatment of such 
     addiction,''; and
       (D) by striking ``such disease or condition.'' and 
     inserting ``such disease or condition, or treatment of such 
     addiction.''; and
       (2) in paragraph (2)--
       (A) by striking ``(2) For'' and inserting ``(2)(A) For'';
       (B) by striking ``(A) affects'' and inserting ``(i) 
     affects'';
       (C) by striking ``(B) affects'' and inserting ``(ii) 
     affects''; and
       (D) by adding at the end the following:
       ``(B) For purposes of this subchapter, the term `treatment 
     of an addiction to illegal drugs' means treatment by any 
     pharmacological agent or medication that--
       ``(i) reduces the craving for an illegal drug for an 
     individual who--
       ``(I) habitually uses the illegal drug in a manner that 
     endangers the public health, safety, or welfare; or
       ``(II) is so addicted to the use of the illegal drug that 
     the individual is not able to control the addiction through 
     the exercise of self-control;
       ``(ii) blocks the behavioral and physiological effects of 
     an illegal drug for an individual described in clause (i);
       ``(iii) safely serves as a replacement therapy for the 
     treatment of abuse of an illegal drug for an individual 
     described in clause (i);
       ``(iv) moderates or eliminates the process of withdrawal 
     from an illegal drug for an individual described in clause 
     (i);
       ``(v) blocks or reverses the toxic effect of an illegal 
     drug on an individual described in clause (i); or
       ``(vi) prevents, where possible, the initiation of abuse of 
     an illegal drug in individuals at high risk.
       ``(C) The term `illegal drug' means a controlled substance 
     identified under schedules I, II, III, IV, and V in section 
     202(c) of the Controlled Substances Act (21 U.S.C. 
     812(c)).''.

     SEC. 203. PROTECTION FOR DRUGS.

       Section 527 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 360cc) is amended--
       (1) in subsection (a), by striking ``rare disease or 
     condition,'' and inserting ``rare disease or condition, or 
     for treatment of an addiction to illegal drugs,'';
       (2) in subsection (b), by striking ``rare disease or 
     condition'' and inserting ``rare disease or condition, or for 
     treatment of an addiction to illegal drugs,'';
       (3) by striking ``such disease or condition'' each place it 
     appears and inserting ``such disease or condition, or 
     treatment of such addiction,''; and
       (4) in subsection (b)(1), by striking ``the disease or 
     condition'' and inserting ``the disease, condition, or 
     addiction''.

     SEC. 204. OPEN PROTOCOLS FOR INVESTIGATIONS OF DRUGS.

       Section 528 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 360dd) is amended--
       (1) by striking ``rare disease or condition'' and inserting 
     ``rare disease or condition, or for treatment of an addiction 
     to illegal drugs,''; and
       (2) by striking ``the disease or condition'' each place it 
     appears and inserting ``the disease, condition, or 
     addiction''.

     SEC. 205. CONFORMING AMENDMENTS.

       (a) Subchapter Heading.--The subchapter heading of 
     subchapter B of chapter V of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 360aa et seq.) is amended by striking 
     ``Conditions'' and inserting ``Conditions, or for Treatment 
     of an Addiction''.
       (b) Section Headings.--The section heading of sections 525 
     through 528 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 360aa through 360dd) are amended by striking 
     ``conditions'' and inserting ``conditions, or for treatment 
     of an addiction''.
       (c) Fees.--Section 736(a)(1)(E) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 379h(a)(1)(E)) is amended--
       (1) in the subparagraph heading, by striking ``orphan'';
       (2) by striking ``for a rare disease or condition'' each 
     place it appears and inserting ``for a rare disease or 
     condition, or for treatment of an addiction to illegal 
     drugs,''; and
       (3) in the first sentence, by striking ``rare disease or 
     condition.'' and inserting ``rare disease or condition, or 
     other than for treatment of an addiction to illegal drugs, 
     respectively.''.

 TITLE III--ENCOURAGING PRIVATE SECTOR DEVELOPMENT OF PHARMACOTHERAPIES

     SEC. 301. DEVELOPMENT, MANUFACTURE, AND PROCUREMENT OF DRUGS 
                   FOR THE TREATMENT OF ADDICTION TO ILLEGAL 
                   DRUGS.

       Chapter V of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 351 et seq.) is amended by adding at the end the 
     following:

        ``Subchapter F--Drugs for Cocaine and Heroin Addictions

     ``SEC. 571. CRITERIA FOR AN ACCEPTABLE DRUG TREATMENT FOR 
                   COCAINE AND HEROIN ADDICTIONS.

       ``(a) In General.--Subject to subsections (b) and (c), the 
     Secretary shall, in cooperation with the Institute of 
     Medicine of the National Academy of Sciences, establish 
     criteria for an acceptable drug for the treatment of an 
     addiction to cocaine and for an acceptable drug for the 
     treatment of an addiction to heroin. The criteria shall be 
     used by the Secretary in making a contract, or entering into 
     a licensing agreement, under section 572.
       ``(b) Requirements.--The criteria established under 
     subsection (a) for a drug shall include requirements--
       ``(1) that the application to use the drug for the 
     treatment of addiction to cocaine or heroin was filed and 
     approved by the Secretary under this Act after the date of 
     enactment of this section;
       ``(2) that a performance based test on the drug--
       ``(A) has been conducted through the use of a randomly 
     selected test group that received the drug as a treatment and 
     a randomly selected control group that received a placebo; 
     and
       ``(B) has compared the long term differences in the 
     addiction levels of control group participants and test group 
     participants;
       ``(3) that the performance based test conducted under 
     paragraph (2) demonstrates that the drug is effective through 
     evidence that--
       ``(A) a significant number of the participants in the test 
     who have an addiction to cocaine or heroin are willing to 
     take the drug for the addiction;

[[Page S4277]]

       ``(B) a significant number of the participants in the test 
     who have an addiction to cocaine or heroin and who were 
     provided the drug for the addiction during the test are 
     willing to continue taking the drug as long as necessary for 
     the treatment of the addiction; and
       ``(C) a significant number of the participants in the test 
     who were provided the drug for the period of time required 
     for the treatment of the addiction refrained from the use of 
     cocaine or heroin, after the date of the initial 
     administration of the drug on the participants, for a 
     significantly longer period than the average period of 
     refraining from such use under currently available treatments 
     (as of the date of the application described in paragraph 
     (1)); and
       ``(4) that the drug shall have a reasonable cost of 
     production.
       ``(c) Review and Publication of Criteria.--The criteria 
     established under subsection (a) shall, prior to the 
     publication and application of such criteria, be submitted 
     for review to the Committee on the Judiciary, and the 
     Committee on Education and the Workplace, of the House of 
     Representatives, and the Committee on the Judiciary, and the 
     Committee on Health, Education, Labor, and Pensions, of the 
     Senate. Not later than 90 days after notifying each of the 
     committees, the Secretary shall publish the criteria in the 
     Federal Register.

     ``SEC. 572. PURCHASE OF PATENT RIGHTS FOR DRUG DEVELOPMENT.

       ``(a) Application.--
       ``(1) In general.--The patent owner of a drug to treat an 
     addiction to cocaine or heroin, may submit an application to 
     the Secretary--
       ``(A) to enter into a contract with the Secretary to sell 
     to the Secretary the patent rights of the owner relating to 
     the drug; or
       ``(B) in the case in which the drug is approved under 
     section 505 by the Secretary for more than 1 indication, to 
     enter into an exclusive licensing agreement with the 
     Secretary for the manufacture and distribution of the drug to 
     treat an addiction to cocaine or heroin.
       ``(2) Requirements.--An application described in paragraph 
     (1) shall be submitted at such time and in such manner, and 
     accompanied by such information, as the Secretary may 
     require.
       ``(b) Contract and Licensing Agreements.--
       ``(1) Requirements.--The Secretary may enter into a 
     contract or a licensing agreement described in subsection (a) 
     with a patent owner who has submitted an application in 
     accordance with subsection (a) if the drug covered under the 
     contract or licensing agreement meets the criteria 
     established by the Secretary under section 571(a).
       ``(2) Special rule.--The Secretary may, under paragraph 
     (1), enter into--
       ``(A) not more than 1 contract or exclusive licensing 
     agreement relating to a drug for the treatment of an 
     addiction to cocaine; and
       ``(B) not more than 1 contract or licensing agreement 
     relating to a drug for the treatment of an addiction to 
     heroin.
       ``(3) Coverage.--A contract or licensing agreement 
     described in subparagraph (A) or (B) of paragraph (2) shall 
     cover not more than 1 drug.
       ``(4) Purchase amount.--Subject to amounts provided in 
     advance in appropriations Acts--
       ``(A) the amount to be paid to a patent owner who has 
     entered into a contract or licensing agreement under this 
     subsection relating to a drug to treat an addiction to 
     cocaine shall not exceed $100,000,000; and
       ``(B) the amount to be paid to a patent owner who has 
     entered into a contract or licensing agreement under this 
     subsection relating to a drug to treat an addiction to heroin 
     shall not exceed $50,000,000.
       ``(c) Transfer of Rights Under Contracts and Licensing 
     Agreement.--
       ``(1) Contracts.--A contract under subsection (b)(1) to 
     purchase the patent rights relating to a drug to treat 
     cocaine or heroin addiction shall transfer to the Secretary--
       ``(A) the exclusive right to make, use, or sell the 
     patented drug within the United States for the term of the 
     patent;
       ``(B) any foreign patent rights held by the patent owner 
     with respect to the drug;
       ``(C) any patent rights relating to the process of 
     manufacturing the drug; and
       ``(D) any trade secret or confidential business information 
     relating to the development of the drug, process for 
     manufacturing the drug, and therapeutic effects of the drug.
       ``(2) Licensing agreements.--A licensing agreement under 
     subsection (b)(1) to purchase an exclusive license relating 
     to manufacture and distribution of a drug to treat an 
     addiction to cocaine or heroin shall transfer to the 
     Secretary--
       ``(A) the exclusive right to make, use, or sell the 
     patented drug for the purpose of treating an addiction to 
     cocaine or heroin within the United States for the term of 
     the patent;
       ``(B) the right to use any patented processes relating to 
     manufacturing the drug; and
       ``(C) any trade secret or confidential business information 
     relating to the development of the drug, process for 
     manufacturing the drug, and therapeutic effects of the drug 
     relating to use of the drug to treat an addiction to cocaine 
     or heroin.

     ``SEC. 573. PLAN FOR MANUFACTURE AND DEVELOPMENT.

       ``(a) In General.--Not later than 90 days after the date on 
     which the Secretary purchases the patent rights of a patent 
     owner, or enters into a licensing agreement with a patent 
     owner, under section 572, relating to a drug under section 
     571, the Secretary shall develop a plan for the manufacture 
     and distribution of the drug.
       ``(b) Plan Requirements.--The plan shall set forth--
       ``(1) procedures for the Secretary to enter into licensing 
     agreements with private entities for the manufacture and the 
     distribution of the drug;
       ``(2) procedures for making the drug available to nonprofit 
     entities and private entities to use in the treatment of a 
     cocaine or heroin addiction;
       ``(3) a system to establish the sale price for the drug; 
     and
       ``(4) policies and procedures with respect to the use of 
     Federal funds by State and local governments or nonprofit 
     entities to purchase the drug from the Secretary.
       ``(c) Applicability of Procurement and Licensing Laws.--
     Federal law relating to procurements and licensing agreements 
     by the Federal Government shall be applicable to procurements 
     and licenses covered under the plan described in subsection 
     (a).
       ``(d) Review of Plan.--
       ``(1) In general.--Upon completion of the plan under 
     subsection (a), the Secretary shall notify the Committee on 
     the Judiciary, and the Committee on Education and the 
     Workplace, of the House of Representatives, and the Committee 
     on the Judiciary, and the Committee on Health, Education, 
     Labor, and Pensions, of the Senate, of the development of the 
     plan and publish the plan in the Federal Register. The 
     Secretary shall provide an opportunity for public comment on 
     the plan for a period of not more than 30 days after the date 
     of the publication of the plan in the Federal Register.
       ``(2) Final plan.--Not later than 60 days after the date of 
     the expiration of the comment period described in paragraph 
     (1), the Secretary shall publish in the Federal Register a 
     final plan described in subsection (a). The implementation of 
     the plan shall begin on the date of the publication of the 
     final plan.
       ``(e) Construction.--The development, publication, or 
     implementation of the plan, or any other agency action with 
     respect to the plan, shall not be considered agency action 
     subject to judicial review. No official or court of the 
     United States shall have power or jurisdiction to review the 
     decision of the Secretary on any question of law or fact 
     relating to any agency action with respect to the plan.
       ``(f) Regulations.--The Secretary may promulgate 
     regulations to carry out this section.

     ``SEC. 574. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     subchapter, such sums as may be necessary in each of fiscal 
     years 2000 through 2002.''.
                                 ______
                                 
      By Mr. SHELBY:
  S. 887. A bill to establish a moratorium on the Foreign Visitors 
Program at the Department of Energy nuclear laboratories, and for other 
purposes; to the Committee on Armed Services.


department of energy sensitive country foreign visitors moratorium act 
                                of 1999

  Mr. SHELBY. Mr. President, today I am introducing a bill to impose a 
moratorium on the foreign visitors program at the Department of 
Energy's (DOE) nuclear laboratories. The bill prohibits the Secretary 
of Energy from admitting any person from a ``sensitive country'' to our 
national laboratories, unless the Secretary of Energy personally 
certifies to the Congress that the visit is necessary for the national 
security of the United States.
  A ``sensitive country'' is a country that is considered dangerous to 
the United States and that may want to acquire our nuclear weapons 
secrets.
  Mr. President, the Senate Intelligence Committee has been critical of 
the Department of Energy's counterintelligence program for nearly ten 
years. Beginning in 1990, we identified serious shortfalls in funding 
and personnel dedicated to protecting our nation's nuclear secrets. 
Year after year, the Committee has provided additional funds and 
directed many reviews and studies in an effort to persuade the 
Department of Energy to take action. Unfortunately, this and prior 
administrations failed to heed our warnings. Consequently, a serious 
espionage threat at our national labs has gone virtually unabated and 
it appears that our nuclear weapons program may have suffered extremely 
grave damage.
  Now, the administration has finally begun to take affirmative steps 
to address this problem. While I welcome their efforts, I am 
disappointed that it took a some bad press to motivate them rather than 
a known threat to our national security. Nevertheless, the Department 
of Energy has begun the process of repairing the damage caused by years 
of neglect, but it will take time to make the necessary changes. In 
fact, it may take years.

[[Page S4278]]

  In the interim, we must take steps to ensure the integrity of our 
national labs. I understand that a moratorium on the foreign visitors 
program may be perceived as a draconian measure. Until the Department 
fully implements a comprehensive and sustained counterintelligence 
program, however, I believe that we must err on the side of caution. 
The stakes are too high.
  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. 887

       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 ``Department of Energy 
     Sensitive Country Foreign Visitors Moratorium Act of 1999''.

     SEC. 2. MORATORIUM ON FOREIGN VISITORS PROGRAM.

       (a) Moratorium.--The Secretary of Energy may not admit to 
     any facility of a national laboratory any individual who is a 
     citizen of a nation that is named on the current Department 
     of Energy sensitive countries list.
       (b) Waiver Authority.--(1) The Secretary of Energy may 
     waive the prohibition in subsection (a) on a case-by-case 
     basis with respect to specific individuals whose admission to 
     a national laboratory is determined by the Secretary to be 
     necessary for the national security of the United States.
       (2) Before any such waiver takes effect, the Secretary 
     shall submit to the Committee on Armed Services and the 
     Select Committee on Intelligence of the Senate and the 
     Committee on Armed Services and the Permanent Select 
     Committee on Intelligence of the House of Representatives a 
     report in writing providing notice of the proposed waiver. 
     The report shall identify each individual for whom such a 
     waiver is proposed and, with respect to each such individual, 
     provide a detailed justification for the waiver and the 
     Secretary's certification that the admission of that 
     individual to a national laboratory is necessary for the 
     national security of the United States.
       (3)(A) A waiver under paragraph (1) may not take effect 
     until a period of 10 days of continuous session of Congress 
     has expired after the date of the submission of the report 
     under paragraph (2) providing notice of that waiver.
       (B) For purposes of subparagraph (A)--
       (i) the continuity of a session of Congress is broken only 
     by an adjournment of the Congress sine die; and
       (ii) there shall be excluded from the computation of the 
     10-day period specified in that subparagraph Saturdays, 
     Sundays, legal public holidays, and any day on which either 
     House of Congress in not in session because of adjournment of 
     more than three days to a day certain.
       (4) The authority of the Secretary under paragraph (1) may 
     not be delegated.

     SEC. 3. BACKGROUND CHECKS ON ALL FOREIGN VISITORS TO NATIONAL 
                   LABORATORIES.

       Before an individual who is a citizen of a foreign nation 
     is allowed to enter a national laboratory, the Secretary of 
     Energy shall require that a security clearance investigation 
     (known as a ``background check'') be carried out on that 
     individual.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) The term ``national laboratory'' means any of the 
     following:
       (A) The Lawrence Livermore National Laboratory, Livermore, 
     California.
       (B) The Los Alamos National Laboratory, Los Alamos, New 
     Mexico.
       (C) The Sandia National Laboratories, Albuquerque, New 
     Mexico.
       (2) The term ``sensitive countries list'' means the list 
     prescribed by the Secretary of Energy known as the Department 
     of Energy List of Sensitive Countries.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself, Mr. Akaka, Mr. Stevens, and Mr. 
        Inouye):
  S. 888. A bill to amend the Internal Revenue Code of 1986 to modify 
the air transportation tax changes made by the Taxpayer Relief Act of 
1977; to the Committee on Finance.


      Air passenger taxes on flights to and from alaska and hawaii

  Mr. MURKOWSKI. Mr. President, today, along with Mr. Akaka, Mr. 
Stevens, and Mr. Inouye, I am introducing legislation that will provide 
a measure of relief to the citizens of Alaska and Hawaii who must rely 
on air transport far more than citizens in the lower 48.
  When Congress adopted the balanced budget legislation in 1997, one of 
the provisions of the tax bill re-wrote the formula for calculating the 
air passenger tax for domestic and international flights. As part of 
this formula change, Congress adopted a per passenger, per segment fee 
which disproportionately penalizes travelers to and from Alaska and 
Hawaii who have no choice but to travel by air.
  The legislation we are introducing today would reinstate the prior 
law 10 percent tax formula for flights to and from our states. In 
addition, the $6 international departure fees that are imposed on such 
flights would be retained at the current level and would not be 
indexed. I see no reason why passengers flying to and from our states 
must face a guaranteed increase in tax every year because of inflation. 
We don't index tobacco taxes, we don't index fuel taxes; why should 
government automatically gain additional revenue from air passengers 
simply because of inflation?
  Mr. President, this legislation requires that intrastate Alaska and 
Hawaii flights will be subject to a flat 10 percent tax if such flights 
do not originate or terminate at a rural airport in our states. In 
addition, the definition of a rural airport is expanded to include 
airports within 75 miles of each other where no roads connect the 
communities. This provision not only benefits Alaska, but many island 
communities throughout the United States. In many towns in Alaska, air 
transport is the only viable means of transportation from one community 
to another. There is no reason these airports should be denied the 
benefit of the special rural airport tax rate simply because our state 
does not have the transportation infrastructure or geographic 
definition that exists in most of the lower 48.
  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. 888

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

     SECTION 1. MODIFICATIONS TO AIR TRANSPORTATION TAX CHANGES 
                   MADE BY TAXPAYER RELIEF ACT OF 1997.

       (a) Elimination of Inflation Adjustment for Tax on Certain 
     Use of International Travel Facilities.--Section 4261(e)(4) 
     of the Internal Revenue Code of 1986 (relating to inflation 
     adjustment of dollar rates of tax) is amended--
       (1) in subparagraph (A), by striking ``each dollar amount 
     contained in subsection (c)'' and inserting ``the $12.00 
     amount contained in subsection (c)(1)'', and
       (2) in subparagraph (B)(ii), by striking ``the dollar 
     amounts contained in subsection (c)'' and inserting ``the 
     $12.00 amount contained in subsection (c)(1)''.
       (b) Modification of Rural Airport Definition.--Clauses (i) 
     and (ii) of section 4261(e)(1)(B) of the Internal Revenue 
     Code of 1986 (defining rural airport) are amended to read as 
     follows:
       ``(i) there were fewer than 100,000 commercial passengers 
     departing by air during the second preceding calendar year 
     from such airport and such airport--

       ``(I) is not located within 75 miles of another airport 
     which is not described in this clause, or
       ``(II) is receiving essential air service subsidies as of 
     August 5, 1997, or

       ``(ii) such airport is not connected by paved roads to 
     another airport.''
       (c) Imposition of Ticket Tax on Segments to and from Alaska 
     or Hawaii or Within Alaska or Hawaii at Rate in Effect Before 
     the Taxpayer Relief Act of 1997.--Section 4261(e) of the 
     Internal Revenue Code of 1986 (relating to special rules) is 
     amended by adding at the end the following:
       ``(6) Segments to and from alaska or hawaii or within 
     alaska or hawaii.--Except with respect to any domestic 
     segment described in paragraph (1), in the case of 
     transportation involving 1 or more domestic segments at least 
     1 of which begins or ends in Alaska or Hawaii or in the case 
     of a domestic segment beginning and ending in Alaska or 
     Hawaii--
       ``(A) subsection (a) shall be applied by substituting ``10 
     percent'' for the otherwise applicable percentage, and
       ``(B) the tax imposed by subsection (b)(1) shall not 
     apply.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect 7 days after the date of the enactment of 
     this Act.
                                 ______
                                 
      By Mrs. HUTCHISON (for herself, Mr. Santorum, and Mr. Cochran):
  S. 889. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax credit for investment necessary to revitalize communities within 
the United States, and for other purposes; to the Committee on Finance.


               commercial revitalization tax act of 1999

  Mrs. HUTCHISON. Mr. President, today I am pleased to introduce, along 
with Mr. Santorum, and Mr. Cochran, the Commercial Revitalization Tax 
Credit Act of 1999. This bill is identical to the bipartisan and widely 
supported legislation I sponsored during the last session of Congress.
  This measure will create jobs, expand economic activity, and 
revitalize the

[[Page S4279]]

physical structure and value of residential and commercial buildings in 
America's most distressed urban and rural communities.
  The bill provides a targeted tax credit to businesses to help defray 
the cost of construction, expansion, and renovation in these areas, and 
in the process will generate billions in privately based economic 
activity in those areas that need the most help in our country.
  As we continue to look for ways to combat the decay of our inner 
cities and to raise the standard of living in many of our rural areas, 
I believe, and numerous studies demonstrate, that reversing the 
physical deterioration in America's cities has numerous and far 
reaching economic benefits. Revitalization in decaying neighborhoods 
lifts the hopes and expectations of the residents of those areas that 
economic growth and opportunity is coming their way. Indeed, one of the 
key recommendations of a top-to-bottom review of law enforcement in 
this city, our Nation's Capital, was to improve the many abandoned 
buildings in Washington, D.C. that create an atmosphere conducive to 
crime and despair.
  The Commercial Revitalization Tax Credit Act will build upon the 
empowerment zone/enterprise community program that is now unfolding 
over 100 communities in the United States. Texas has five of these 
specially designated areas: Houston, Dallas, El Paso, San Antonio, and 
Waco, as well as one rural zone in the Rio Grande valley covering four 
counties. Not only will these cities qualify for the credit under my 
bill, but so will the 400 communities in the United States that sought 
such designation but were not selected. State-established enterprise 
zones and other specifically designated revitalization districts 
established by State and local governments will also be able to 
participate. In all, over 1,000 areas will qualify for this credit 
nationwide.
  Our bill contains the following principle features: A tax credit that 
may be applied to construction amounting to at least 25 percent of the 
basis of the property, in designated revitalization areas; qualified 
investors could choose a one-time 20-percent tax credit against the 
cost of new construction or rehabilitation. Alternatively, a business 
owner could take a five percent credit each year over a 10-year period. 
Tax credits would be allocated to each state, according to a formula, 
with States and localities determining the priority of the projects. In 
all, $1.5 billion in tax credits would be allocated under this tax 
bill.
  Mr. President, with a minimum level of bureaucratic involvement and 
through a proven tax mechanism, this initiative will make a significant 
difference in the lives of thousands of families in need and for the 
economies of hundreds of distressed urban and rural communities across 
this Nation.
  I hope my colleagues will join me in supporting this sound and 
effective pro-growth initiative.
                                 ______
                                 
      By Mr. WELLSTONE (for himself, Mr. Robb, and Mr. Feingold):
  S. 890. A bill to facilitate the naturalization of aliens who served 
with special guerrilla units or irregular forces in Laos; to the 
Committee on the Judiciary.


               hmong veterans' naturalization act of 1999

  Mr. FEINGOLD. Mr. President, I am pleased to rise today as an 
original cosponsor of the Hmong Veterans Naturalization Act of 1999. I 
commend the Senator from Minnesota [Mr. Wellstone] and our colleague in 
the House of Representatives, Congressman Vento, for their commitment 
to this important issue.
  I honor the service of the Lao and Hmong veterans to the United 
States, and appreciate the great personal risk they faced when they 
chose to help this country. I am pleased that many of them have chosen 
to make the United States, and my home state of Wisconsin, their 
adopted homeland.
  In my view, Mr. President, this bill, which would expedite the 
naturalization process for 45,000 Lao and Hmong veterans and their 
spouses, is the least we can for the help repay the huge debt we owe 
these brave individuals. I have had the opportunity to meet many Lao 
and Hmong veterans and their families as I travel throughout Wisconsin. 
I am struck by the profound importance they place on becoming citizens 
of the United States. This bill would help them reach that goal.
                                 ______
                                 
      By Mr. SCHUMER:
  S. 891 A bill to amend section 922(x) of title 18, United States 
Code, to prohibit the transfer to and possession of handguns, 
semiautomatic assault weapons, and large capacity ammunition feeding 
devices by individuals who are less than 21 years of age, and for other 
purposes; to the Committee on the Judiciary.


                 The Juvenile Gun Loophole Closure Act

  Mr. SCHUMER. Mr. President, I am introducing legislation today to 
close what I believe is a major loophole in our federal gun laws--a 
loophole which permits 18-20 year-olds to possess handguns, 
semiautomatic assault weapons, and large capacity ammunition feeding 
devices.
  Firearms trace data collected as part of the Youth Crime Gun 
Interdiction Initiative (YCGII) paint a disturbing picture of crime gun 
activity by persons under 21. In the most recent YCGII Trace Analysis 
Report, the age of the possessor was known for 32,653, or 42.8 percent, 
of the 72,260 crime guns traced. Of these 32,563 guns, approximately 
4,840, or 14.8 percent, were recovered from 18-20 year-olds. Indeed, 
the most frequent age of crime gun possession was 19 years of age, and 
the second most frequent was 18 years of age.
  At the same time, according to the 1997 Uniform Crime Reports, the 
most frequent age arrested for murder was 18 years of age, and the 
second most frequent was 19 years of age. Those aged 18-20 accounted 
for 22 percent of all arrest for murder in 1997.
  There are indications that the 18-year old girlfriend of one of the 
two gunmen involved in the tragic Littleton, Colorado school shooting 
purchased at least two of the firearms used in the attack. Handgun 
possession by persons 18 or over is not forbidden by Colorado law.
  The 1968 Gun Control Act prevents federally licensed gun dealers from 
selling handguns to anyone under the age of 21. This ban does not apply 
to sales of handguns by unlicensed persons, however. Federal law only 
stops such persons from selling handguns to anyone under the age of 
18--thus neglecting to ban sales to the 18-20 year-olds who account for 
such a significant portion of crime gun traces and murders. In another 
inexplicable oversight, federal law also fails to ban private sales of 
semiautomatic assault weapons and high-capacity ammunition feeding 
devices to persons even under the age of 18.
  My bill would correct these flaws in our federal gun laws. It would 
ban sales by unlicensed individuals of handguns, semiautomatic assault 
weapons, and large capacity ammunition feeding divides to persons under 
the age of 21. Indeed, it would ban possession of these deadly weapons 
by persons under 21, with exceptions made for young persons who are 
members of the Armed Forces or National Guard or use these firearms in 
self-defense against an intruder to their residences.
  This is a common-sense measure that will keep guns out of the hands 
of those most likely to use guns irresponsibly and dangerously. I urge 
the Senate to pass this bill into law soon. I ask unanimous consent 
that the text of my bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 891

       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 ``Juvenile Gun Loophole 
     Closure Act''.

     SEC. 2. PROHIBITION ON TRANSFER TO AND POSSESSION OF 
                   HANDGUNS, SEMIAUTOMATIC ASSAULT WEAPONS, AND 
                   LARGE CAPACITY AMMUNITION FEEDING DEVICES BY 
                   INDIVIDUALS LESS THAN 21 YEARS OF AGE.

       Section 922(x) of title 18, United States Code, is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``or'' at the end;
       (B) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and
       (C) by adding at the end the following:
       ``(C) a semiautomatic assault weapon; or
       ``(D) a large capacity ammunition feeding device.'';
       (2) in paragraph (2)--
       (A) in subparagraph (A), by striking ``or'' at the end;
       (B) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and

[[Page S4280]]

       (C) by adding at the end the following:
       ``(C) a semiautomatic assault weapon; or
       ``(D) a large capacity ammunition feeding device.'';
       (3) in paragraph (3)--
       (A) in subparagraph (B), by inserting ``, semiautomatic 
     assault weapon, or large capacity ammunition feeding device'' 
     after ``handgun''; and
       (B) in subparagraph (D), by striking ``or ammunition'' and 
     inserting ``, ammunition, semiautomatic assault weapon, or 
     large capacity ammunition feeding device''; and
       (4) in paragraph (5), by striking ``18'' and inserting 
     ``21''.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Baucus, Mr. Mack, Mr. Bryan, Mr. 
        Murkowski, and Mr. Breaux):
  S. 892. A bill to amend the Internal Revenue Code of 1986 to 
permanently extend the subpart F exemption for active financing income; 
to the Committee on Finance.


                Subpart F Exception for Active Financing

  Mr. HATCH. Mr. President, I am today introducing legislation on 
behalf of myself, Mr. Baucus. Mr. Mack, Mr. Bryan, Mr. Murkowski, and 
Mr. Breaux. This bill would permanently extend the exclusion from 
Subpart F for active financing income earned on business operations 
overseas. This legislation permits American financial services firms 
doing business abroad to defer U.S. tax on their earnings from their 
foreign financial services operations until such earnings are returned 
to the U.S. parent company.

  The permanent extension of this provision is particularly important 
in today's global marketplace. Over the last few years the financial 
services industry has seen technological and global changes that have 
changed the very nature of the way these corporations do business both 
here and abroad. The U.S. financial industry is a global leader and 
plays a pivotal role in maintaining confidence in the international 
marketplace. It is essential that our tax laws adapt to the fast-paced 
and ever-changing business environment of today.
  The bill we are introducing today would provide a consistent, 
equitable, and stable international tax regime for this important 
component of our economy. A permanent extension of this provision will 
give American companies much deserved stability. The current ``on-
again, off-again'' system of annual extension limits the ability of 
U.S.-based firms to compete fully in the marketplace and interferes 
with their decision making and long-term planning. The activities that 
give rise to this income are long-range in nature, not easily stopped 
and started on a year-to-year basis. Permanency is the only thing that 
makes sense. After all, the vast majority of the provisions in the tax 
code are permanent; it is only a select few that are subjected to this 
annual cycle of extensions.
  This legislation will give U.S. based financial services companies 
consistency and stability. The permanent extension of this exclusion 
from Subpart F provides tax rules that ensure that the U.S. financial 
services industry is on an equal competitive footing with their foreign 
based competitors and, just as importantly, provides tax treatment that 
is consistent with the tax treatment accorded most other U.S. 
companies.
  This legislation provides the U.S. financial services industry the 
certainty that they will be able to compete with their foreign 
competitors now and into the 21st century. This is important to our 
future economic growth and continued global leadership of American 
companies in the financial services industry.
  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. 892

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

     SECTION 1. PERMANENT SUBPART F EXEMPTION FOR ACTIVE FINANCING 
                   INCOME.

       (a) Banking, Financing, or Similar Businesses.--Subsection 
     (h) of section 954 of the Internal Revenue Code of 1986 
     (relating to special rule for income derived in the active 
     conduct of banking, financing, or similar businesses) is 
     amended by striking paragraph (9).
       (b) Insurance Businesses.--Subsection (a) of section 953 of 
     such Code (defining insurance income) is amended by striking 
     paragraph (10) and by redesignating paragraph (11) as 
     paragraph (10).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of a foreign corporation 
     beginning after December 31, 1998, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of such foreign corporation end.

  Mr. BAUCUS. Mr. President, today I am pleased to join my colleague 
Senator Hatch in introducing legislation to permanently extend the 
exception from Subpart F for active financing income earned on overseas 
business.
  United States companies doing business abroad are generally allowed 
to pay U.S. tax on the earnings from the active operations of their 
foreign subsidiaries when these earnings are returned to the U.S. 
parent company. Until recently, U.S.-based finance companies such as 
insurance companies and brokers, banks, securities dealers, and other 
financial services firms, have not been afforded similar treatment. The 
current law provision that is intended to afford America's financial 
services industry parity with other segments of the U.S. economy 
expires at the end of 1999. Our legislation, intended to keep the U.S. 
financial services industry on an equal footing with foreign-based 
competitors, would make this provision permanent.
  The financial services sector is the fastest growing component of the 
U.S. trade in services surplus (which is expected to exceed $80 billion 
this year). It is therefore very important that Congress act to 
maintain a tax structure that does not hinder the competitive efforts 
of the U.S. financial services industry. That would be the case if the 
active financing exception to Subpart F were permitted to expire.
  The growing interdependence of world financial markets has 
highlighted the urgent need to rationalize U.S. tax rules that 
undermine the ability of American financial services industries to 
compete in the international arena. It is important to ensure that the 
U.S. tax treatment of worldwide income does not encourage avoidance of 
U.S. tax through the sheltering of income in foreign tax havens. 
However, I believe it is possible to adequately protect the federal 
fisc without jeopardizing the international expansion and 
competitiveness of U.S.-based financial services companies, including 
finance and credit entities, commercial banks, securities firms, and 
insurance companies.
  This active financing provision is particularly important today. The 
U.S. financial services industry is second to none, and plays a pivotal 
role in maintaining confidence in the international marketplace. 
Through our network of tax treaties, we have made tremendous progress 
in negotiating new foreign markets for this industry in recent years. 
Our tax laws should complement, rather than undermine, this trade 
effort.
  As is the case with other tax provisions such as the Research and 
Development tax credit, the temporary nature of the U.S. active 
financing exception denies U.S. companies the certainty enjoyed by 
their foreign competitors. U.S. companies need to know the tax 
consequences of their business operations. Over the last two years, 
U.S. companies have implemented numerous system changes in order to 
comply with two very different versions of the active financing law, 
and are unable to take appropriate strategic action if the tax law is 
not stable.
  I ask my colleagues to join me in supporting this legislation, and 
provide a consistent, equitable, and stable international tax regime 
for the U.S. financial services industry.
                                 ______
                                 
      By Mr. GORTON (for himself and Mrs. Murray):
  S. 893. A bill to amend title 46, United States Code, to provide 
equitable treatment with respect to State and local income taxes for 
certain individuals who perform duties on vessels; to the Committee on 
Commerce, Science, and Transportation.


                 transportation worker tax fairness act

  Mr. GORTON. Mr. President, I rise today to introduce the 
Transportation Worker Tax Fairness Act. This legislation will ensure 
that transportation workers who toil away on our nation's waterways 
receive the same tax treatment afforded their peers who work on the 
nation's highways, railroads, or navigate the skies.

  Truck drivers, railroad personnel, and airline personnel are 
currently

[[Page S4281]]

covered by the Interstate Commerce Act, which exempts their income from 
double taxation. Water carriers, who work on tugboats or ships, were 
not included in the original legislation. This treatment is patently 
unfair. The Transportation Worker Tax Fairness Act will rectify this 
situation by extending the same tax treatment to personnel who work on 
the navigable waters of more than one state.
  Mr. President, this legislation will have no impact on the federal 
treasury. This measure simply allows those who work our navigable 
waterways protection from double taxation.
  This matter came to my attention through a series of constituent 
letters from Columbia River tug boat operators who are currently facing 
taxation from Oregon as well as Washington state. I am committed to 
pursuing this avenue of relief for my constituents, as well as hard 
working tug boat operators across the nation.
  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. 893

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

     SECTION 1. AMENDMENT OF CHAPTER 111 OF TITLE 46, UNITED 
                   STATES CODE.

       Section 11108 of title 46, United States Code, is amended--
       (1) by inserting ``(a) Withholding.--'' before ``Wages''; 
     and
       (2) by adding at the end the following:
       ``(b) Liability.--
       ``(1) Limitation on jurisdiction to tax.--An individual to 
     whom this subsection applies is not subject to the income tax 
     laws of a State or political subdivision of a State, other 
     than the State and political subdivision in which the 
     individual resides, with respect to compensation for the 
     performance of duties described in paragraph (2).
       ``(2) Application.--This subsection applies to an 
     individual--
       ``(A) engaged on a vessel to perform assigned duties in 
     more than one State as a pilot licensed under section 7101 of 
     this title or licensed or authorized under the laws of a 
     State; or
       ``(B) who performs regularly-assigned duties while engaged 
     as a master, officer, or crewman on a vessel operating on the 
     navigable waters of more than one State.''.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Leahy, Mr. Specter, Mr. 
        Cochran, Mr. Moynihan, Mr. Sessions, Ms. Snowe, Mr. Lott, Ms. 
        Landrieu, Ms. Collins, Mr. Kennedy, Mr. Schumer, Mr. Shelby, 
        Ms. Mikulski, Mr. Hollings, Mr. Hutchinson, Mr. Dodd, Mr. 
        Breaux, Mr. Thurmond, Mr. Chafee, Mr. Smith of New Hampshire, 
        Mr. Sarbanes, Mr. Coverdell, Mr. Cleland, Mr. Gregg, Mr. Reed, 
        Mr. Kerry, Mr. Helms, Mr. Byrd, Mr. Torricelli, Mr. Edwards, 
        Mr. Lieberman, Mr. Ashcroft, Mr. Rockefeller, Mrs. Lincoln, Mr. 
        Biden, Mr. Frist, Mr. Bond, and Mr. Thompson):
  S.J. Res. 22. A joint resolution to reauthorize, and modify the 
conditions for, the consent of Congress to the Northeast Interstate 
Dairy Compact and to grant the consent of Congress to the Southern 
Dairy Compact; read the first time.


re-authorization of the northeast dairy compact and ratification of the 
                         southern dairy compact

  Mr. JEFFORDS. Mr. President, I rise today to introduce legislation to 
make permanent the Northeast Interstate Dairy Compact and to ratify a 
Southern Dairy Compact. I am so pleased to be joined by 38 of my 
colleagues as original cosponsors of this important legislation.
  In 1996, Senator Leahy and I fought an uphill battle and secured 
eleventh hour passage of this landmark legislation. We were met with 
resistance in every step of the legislative process, yet we succeeded 
in passing the Compact as a three-year pilot program.
  The Northeast Compact has a proven record of effectiveness. All eyes 
have been on New England since the compact became law. The Compact has 
been studied, audited, and sued--but has always come through with a 
clean bill of health. Because of the success of the Compact it has 
served as a model for the entire country. Since the Northeast Compact 
was approved by Congress as part of the 1996 Farm Bill, it has been 
extremely successful in balancing the interests of processors, 
retailers, consumers, and dairy farmers by helping to maintain milk 
price stability.
  The 1996 Farm Bill authorized the Dairy Compact for three years and 
was originally due to expire in April of 1999. Senator Leahy and I, 
during the 1999 Omnibus Appropriations bill, included language that 
extended the life of the Compact for six additional months. The Compact 
will expire on October 1, 1999, unless congressional action is taken.
  Mr. President, in addition to the six New England states, 23 states 
have either passed or are considering legislation for dairy compacts 
that would help both farmers and consumers in their states. During the 
past year Alabama, Arkansas, Kentucky, Louisiana, Mississippi, North 
Carolina, South Carolina, Tennessee, Virginia and West Virginia have 
passed legislation to form a Southern Dairy Compact. Florida, Georgia, 
Missouri, Oklahoma, Texas and Kansas are also considering joining the 
Southern Compact. The Oregon legislature is in the process of 
developing a Pacific Northwest Dairy Compact as well.
  New Jersey, Maryland and New York have passed state legislation 
enabling them to join the Northeast Dairy Compact. Delaware, 
Pennsylvania and Ohio may also join if passed in their states. These 
states have recognized how dairy compacts can help provide stability to 
the price paid to dairy farmers for the milk they produce, while 
protecting the interests of consumers and processors. The Dairy Compact 
Commission that was established by the 1996 Compact legislation is made 
up of 26 members from the six New England states. The members, which 
are appointed by each state's governors, consist of consumers, 
processors, farmers and other state representatives.

  The legislation being introduced today, establishes that the dairy 
compacts may regulate only fluid milk, or Class I milk. It ensure that 
the dairy compacts compensate the Commodity Credit Corporation for the 
cost of any purchases of milk by the corporation that result from the 
operation of the compacts. In addition, the legislation exempts the 
Woman, Infant and Children (WIC) program from any costs related to the 
dairy compacts. More importantly, the Daily Compact operates at no 
costs to the federal government.
  A 1998 report by the Office of Management and Budget (OMB) on the 
economic effects of the Dairy Compact illustrates the Compact's 
success. The OMB reported that during the first six months of the 
Compact, consumer prices for milk within the Compact region were five 
cents lower than retail store prices in the rest of the nation. OMB 
concluded that the Compact added no federal costs to nutrition programs 
during this time, and that the Compact did not adversely affect farmers 
outside the Compact region.
  Helping farmers protect their resources and receive a fair price for 
their products in vital to Vermont's economic base and, indeed, its 
very heritage as a state. Establishing a fair price for dairy farmers 
has been an on-going battle throughout my time on Capitol Hill. Few 
initiatives in my long memory have sparked such a vigorous policy 
debate as the Northeast Dairy Compact. I am so pleased and proud at how 
industry and government leaders from throughout Vermont and the New 
England region pulled together to pass the Compact. I am also impressed 
by the tremendous coalition of support for permanent authorization of 
the Northeast and Southern Dairy Compacts.
  The adoption of the Northeast Compact in 1996 simply could not have 
happened in Congress without the help and dedicated work for the 
veritable army of Compact supporters from throughout Vermont and the 
country. This year, our legislation again is supported by Governors, 
State legislators, consumers and farmers from throughout the country.
  Mr. President, on March 5, 1999, the Basic Formula Price (BFP) paid 
to farmers dropped from $16.27 to $10.27, the largest month to month 
drop in history, bringing the lowest milk price in about 20 years to 
dairy farmers. In the beginning of April the full impact to farmers was 
$7.07 per hundredweight loss from December of 1998's BFP. This drop in 
price will have a severe negative impact on dairy producers from 
throughout the country. In New England, the Dairy Compact that 
currently

[[Page S4282]]

exists will help cushion the price collapse, with no cost to the 
federal government.
  Farmers from throughout Vermont and New England have praised the 
Compact for helping maintain a stable price. ``Without the Northeast 
Dairy Compact, we would be in real trouble, the price drop would put a 
lot of people of out business.'' Simply it's a blessing--no, that's an 
understatement--it's a lifesaver''.
  Mr. President, earlier today, I joined several of my Senate and House 
colleagues on the Capitol lawn to announce the introduction of this 
important legislation. I was so pleased to see the support and interest 
for this bill. I urge my colleagues to support this legislation. Give 
the states their right to join together to help protect their farmers 
and consumers by supporting this bill.
  Mr. LEAHY. Mr. President, I am proud to continue my support for dairy 
farmers by introducing legislation which will make permanent the 
Northeast Interstate Dairy Compact and will authorize the Southern 
Interstate Dairy Compact.
  The Northeast Interstate Dairy Compact has proven itself to be a 
successful and enduring partnership between dairy farmers and consumers 
throughout New England, and we want to make sure that this partnership 
continues.
  The Northeast Dairy Compact has done exactly what it was established 
to do: stabilize fluctuating dairy prices and keep New England dairy 
farmers in business. The Compact provides the perfect safety net for 
dairy farmers. When milk prices are high, dairy farmers receive no 
benefits. When milk prices are low, the Compact takes effect, providing 
temporary benefits to dairy farmers. Yet the Compact costs taxpayers 
nothing. I don't need to tell you that a zero cost is very unusual 
among farm programs.
  The Compact makes a big difference in the lives of dairy farmers in 
New England. Since the Compact went into effect one and a half years 
ago, the attrition rate for farms has declined throughout New England. 
In fact, the Vermont Department of Agriculture recently announced that 
since July of last year, there has actually been an increase in farms 
in Vermont. Just a few years ago, an increase in the number of farms 
would have been unfathomable. Solid dairy prices coupled with the 
safety net of the Dairy Compact have caused a rebound in the dairy 
industry in New England. We can achieve similar success in the South 
with a Southern Dairy Compact.
  Many of our allies from the South have watched the Northeast Dairy 
Compact survive several legal and political challenges. They have 
watched milk sales continue without interruption. They have seen the 
participation in the WIC nutrition program rise because of help from 
the compact. And, most important, they see how the compact provides a 
modest but crucial safety net for struggling farmers. They, too, want 
the same for their farmers and their farmers deserve the opportunity to 
create their own regional compact.
  Compacts are state-initiated, state-ratified and state-supported 
voluntary programs. And the need for regional compacts has never been 
greater. Low dairy prices coupled with a disastrous decision on federal 
milk marketing reform have made the compact more important to us now 
than ever before. Our legislation is a huge step toward ensuring that 
the safety net of the Compact will continue.
  The fight to continue the Northeast Compact and create the Southern 
Compact, however, will be tough. Opponents of regional compacts--large 
and wealthy milk manufacturers, represented by groups such as the 
International Dairy Foods Association--will again throw millions of 
dollars into an all-out campaign to stop the compacts. And they will 
say anything to stop it.
  Some of the most common anti-Compact rhetoric that I have heard 
suggests that the Compact creates a barrier for trade between states 
within the Compact and states outside of it. On the contrary, as 
reported by the Office of Management and Budget, the Northeast Dairy 
Compact has in fact prompted an increase in interstate dairy sales--
particularly for milk coming into New England.
  Another common anti-Compact argument concerns the impact of the 
Compact on consumers. However, New England retail milk prices under the 
Dairy Compact continue to be lower on average than the rest of the 
nation.
  Processor groups who are opposed to dairy compacts simply want milk 
as cheap as they can get it to boost their enormous profits to record 
levels, regardless of the impact on farmers. But at some point if a lot 
of dairy farmers go out of business, IDFA and others might regret what 
they have caused.
  Make no mistake--I do believe that dairy processors deserve to make 
their fair share of income. However, the farmers that produce the milk 
deserve to make a fair living. And a fair living is what dairy compacts 
provide for farmers.
  Compacts have been consumer tested and farmer approved, and I look 
forward to making them a permanent part of our dairy industry.
  Mr. SPECTER. Mr. President, I join today with my colleagues from 
Vermont, Senators Jeffords and Leahy, in introducing legislation to 
reauthorize the Northeast Dairy Compact and to authorize a Southern 
Dairy Compact.
  This legislation will create a much needed safety net for dairy 
farmers and will bring greater stability to the prices paid monthly to 
these farmers. The fill authorizes an Interstate Compact Commission to 
take such steps as necessary to assure consumers of an adequate local 
supply of fresh fluid milk and to assure the continued viability of 
dairy farming within the compact region. Specifically, states that 
choose to join the compact would enter into a voluntary agreement to 
create a minimum price for milk within the compact region. This price 
would take into account the regional differences in the costs of 
production for milk, thereby providing dairy farmers with a fair and 
equitable price for their product.
  This bill would authorize Pennsylvania, New Jersey, Delaware, New 
York, Maryland, and Ohio to join the existing Northeast Interstate 
Dairy Compact. New York, New Jersey, and Maryland have already agreed 
to join and the Pennsylvania State Legislature is currently considering 
compact legislation. Further, it would authorize states in the southern 
part of the country to form a similar compact to provide price 
stability in this region.
  In order to ensure that this legislation does not provide a negative 
impact to low-income nutrition programs that use a large quantity of 
dairy products each year, the bill ensures that the Women, Infants and 
Children (WIC) program and the School Lunch program will not be 
required to pay higher prices for milk as a result of any action taken 
by the Compact Commission.
  Over the past several years, I have worked closely with my colleagues 
in the Senate in order to provide a more equitable price for our 
nation's milk producers. I supported amendments to the Farm Bills of 
1981 and 1985, the Emergency Supplemental Appropriations Bill of 1991, 
the Budget Resolution of 1995 and the most recent Farm Bill in 1996 in 
an effort to insure that dairy farmers receive a fair price. As a 
member of the U.S. Senate Agriculture Appropriations Subcommittee, I 
have worked to ensure that dairy programs have received the maximum 
possible funding. In the past four years alone, I have worked to obtain 
almost $1.1 million for dairy research conducted at Penn State 
University. I have also been a leading supporter of the Dairy Export 
Incentive Program which facilitates the development of an international 
market for United States dairy products.
  In recent years, however, dairy farmers have faced the dual problems 
of a record high cost of feed grain and a record drop in the Basic 
Formula Price paid for dairy products. Prices have fluctuated greatly 
over the past several years, setting new record highs and lows, thereby 
making any long-term planning impossible for farmers. Most recently, 
after reaching an all time high in December of 1998, the Basic Formula 
Price for milk dropped $5.72 per hundredweight to a price of $11.62 for 
March 1999. These economic conditions have placed our nation's dairy 
farmers in an all but impossible position. In order to hear the 
problems that dairy farmers are facing first hand, I asked Secretary of 
Agriculture Dan Glickman to accompany me to northeastern Pennsylvania 
on February 10, 1997. We met a crowd of approximately 750 angry farmers 
who

[[Page S4283]]

rightfully complained about the dramatic fluctuations in the price of 
milk.
  Upon our return to Washington, in an attempt to bring greater 
stability to the dairy market, I introduced a Sense of the Senate 
Resolution on February 13, 1997 which passed by a vote of 83-15. The 
Resolution stated that the Secretary of Agriculture should consider 
acting immediately to replace the National Cheese Exchange as a factor 
to be considered in setting the Basic Formula Price for Dairy. I 
successfully attached an amendment to the 1997 Supplemental 
Appropriations Act which required the Department of Agriculture to 
replace the National Cheese Exchange, which had proven to be an 
unreliable source of price information, with a systematic national 
survey of cheese producers. As a result of this legislation, the Basic 
Formula Price increased from $12.46 in February of 1997 to $13.32 in 
February of 1998, which represented an increase of .86 cents per 
hundredweight over the course of the year.
  Unfortunately, this action alone was not sufficient to bring long-
term stability to the dairy market. Consequently, on April 17, 1997, I 
introduced legislation to require the Secretary of Agriculture to use 
the price of feed grains and other cash expenses in determining the 
basic formula price for milk. Further, on September 9, 1997, I joined 
with Senator Feingold of Wisconsin in introducing S. Res. 119, which 
urged the Secretary of Agriculture to set a temporary minimum milk 
price that was equitable to all milk procedures nationwide and provided 
price relief to economically stressed milk producers.
  When we began to see some momentum on the national level to reform 
the current milk pricing system, we were stopped by a Federal District 
Court, which in December of 1997 ordered the USDA to scrap the price 
differentials in the current milk pricing formula. This change would 
have had a major negative impact on the dairy farmers in Pennsylvania. 
In reaction to this decision, on December 4, 1997, I wrote to the 
federal judge, asking him to stay his decision striking down the 
current Class I dairy pricing formula pending appellate review. Sixty-
five Congressman and twenty other Senators signed onto my letter and on 
December 5, 1997, the Judge granted the requested stay.
  After this short victory, we received further bad news earlier this 
year, when Secretary Glickman released a new rule for setting the Basic 
Formula Price for dairy. While better than the proposed rule released 
last year, this new pricing formula will compound the already dire 
economic position of dairy farmers by removing an additional $196 
million each year from the dairy industry nationwide.
  Our nation's farmers are some of the hardest working and most 
dedicated individuals in America. In the past several years, I have 
visited numerous small dairy farms in Pennsylvania. I have seen these 
hard working men and women who have dedicated their lives to their 
farms. The recent drop in dairy prices is an issue that directly 
affects all of us. We have a duty to ensure that our nation's dairy 
farmers receive a fair price for their milk. If we do nothing, many 
small dairy farmers will be forced to sell their farms and leave the 
agriculture industry. This will not only impact the lives of these 
farmers, but will also have a significant negative impact on the rural 
economies that depend on the dairy industry for support. Further, the 
large-scale departure of small dairy farmers from agriculture could 
place our nation's steady supply of fresh fluid milk in jeopardy, 
thereby affecting every American.
  We must recognize the importance of this problem and take prompt 
action. I urge my colleagues to cosponsor this legislation as we 
continue to work in Congress to bring greater stability to our nation's 
dairy industry.
  Ms. COLLINS. Mr. President, I rise today as a cosponsor of a Joint 
Resolution to reauthorize the Northeast Interstate Dairy Compact. I am 
proud to give my support to this measure and do so without hesitation 
because the New England Dairy Compact is a proven success that is 
critical to the survival of dairy farmers in Maine and New England.
  First approved by Congress in the 1996 Farm Bill, the New England 
Dairy Compact already has a proven track record of quantifiable 
benefits to both consumers and farmers. The Compact works by simply 
evening out the peaks and valleys in fluid milk prices, providing 
stability to the cost of milk and ensuring a supply of fresh, 
wholesome, local milk.
  Over the past eight months, in particular, the Compact has proven its 
worth. As prices climbed and farmers were receiving a sustainable price 
for milk, the Compact turned off, when prices dropped, the Compact was 
again triggered. The Compact simply softened and slowed the blow to 
farmers of an abrupt and dramatic drop in the volatile fluid milk 
market.
  It is important to reiterate that consumers also benefit from the 
Compact. Not only does the Compact stabilize prices, thus avoiding 
dramatic fluctuation in the retail cost of milk, it also guarantees 
that the consumer is assured the availability of a supply of fresh, 
local milk. We've known for a long time that dairy products are an 
important part of a healthy diet, but recent studies are proving that 
dairy products provide a host of new nutritional benefits. Just as we 
are learning of the tremendous health benefits of dairy foods, however, 
milk consumption, especially among young people, is dropping. It is a 
crucial, common-sense, first step to reverse this trend, for milk to be 
available and consistently affordable for young families.
  Finally, the Compact, while providing clear benefits to dairy 
producers and consumers in the Northeast, has proven it does not harm 
farmers or taxpayers from outside the region. A 1998 report by the 
Office of Management and Budget showed that, during the first six-
months of the Compact, it did not adversely impact farmers from outside 
the Compact region and added no federal costs to nutrition programs. In 
fact, this legislation specifically excepts the Women, Infants and 
Children (WIC) program from any costs related to the Compact.
  I would like to thank the Senators from Vermont for their leadership 
on this critical issue. I look forward to working with them to see this 
important resolution passed.
  Ms. SNOWE. Mr. President, I rise today as a cosponsor of the Senate 
Joint Resolution not only in support of the reauthorization and 
modifications for the very successful Northeast Interstate Dairy 
Compact, but also to grant the consent of Congress for the formation of 
the Southern Dairy Compact. This issue is really a state rights issue 
more than anything else, Mr. President. Quite simply, it addresses the 
needs of states in two different areas of the country, one in the North 
and one in the South, who wish to work together within their regions 
for two different and totally independent dairy compacts--in the 
Northeast to continue and modify their current Compact, and in the 
Southeast where 10 states wish to work closely together--to form a 
compact for determining fair prices for locally produced supplies of 
fresh milk.
  As recently as last September, the Congress sanctioned another 
interstate compact, one that allows states to set regional prices for a 
commodity. In passing the Texas Compact for the storage of low-level 
radioactive waste, the states of Texas, Maine and Vermont were given 
permission to jointly manage and dispose of their low level waste--and 
are free to set any price they wish for the disposal of the waste. 
Congress has now approved ten such compacts involving 45 states.
  All we are doing here is continuing another states rights activity--
dairy compacting, an idea whose time has now come throughout different 
regions of the country. Currently, New Jersey and Maryland have passed 
Dairy Compact legislation seeking to join the Northeast Compact. In 
addition. Delaware, New York, Pennsylvania, and Ohio have expressed 
interest in joining. A state may join the Compact if they are 
contiguous to a participating state and Congress approves its entry, 
and we are asking for Congressional approval to extend this right also 
to New York, New Jersey, and Maryland.
  The Northeast Dairy Compact currently encompasses all New England 
states and builds on the existing Federal milk marketing order program 
for Class I, or fluid, milk, and only applies to fluid milk sold on 
grocery store shelves. As you may know, a federal milk marketing order 
is a regulation that already sets a minimum milk price in different 
areas around the

[[Page S4284]]

country, of which the Northeast region is one, and is voluntarily 
initiated and approved by a majority of producers in each milk 
marketing order area, which places requirements on the first buyers or 
handlers of milk from dairy farmers.
  Currently, the Northeast Interstate Dairy Compact allows the New 
England milk marketing order region to add a small increment to the 
Federal order price for that region, which is the floor price, so only 
the consumers and the processors in the New England region pay to 
support the minimum price to provide for a fairer return to the area's 
family dairy farms and to protect a way of life important to the people 
of the Northeast.
  Mr. President, the Northeast Interstate Dairy Compact has provided 
the very safety net that we had hoped for when the Compact passed as 
part of the Freedom to Farm Act, the omnibus farm bill, of 1996. The 
Dairy Compact has helped farmers maintain a stable price for fluid milk 
during times of volatile swings in farm milk prices. In the spring and 
summer months of 1997 and 1998, for instance, when milk prices 
throughout most U.S. markets dropped at least 20 cents a gallon while 
consumer prices remained constant, the payments to Northeast Interstate 
Compact dairy farmers remained above the federal milk marketing prices 
for Class I fluid milk because of the Dairy Compact--and, I might add, 
at no expense to the federal government. The costs to operate the Dairy 
Compact are borne entirely by the farmers and processors of the Compact 
region.
  Also, in considering what has happened to the number of dairy farms 
staying in business since the formation of the Dairy Compact, it is now 
known that throughout New England, there has been a decline in the loss 
of dairy farmers since the Compact started. This is a clear 
demonstration that, with the Northeast Interstate Dairy Compact, the 
dairy producers were provided a safety net--and when there has been a 
rise in the federal milk marketing prices for Class I fluid milk, the 
Compact has automatically shut itself off from the pricing process.
  Mr. President, over ninety seven percent of the fluid milk market in 
New England is self contained within the area, and fluid milk markets 
are local due to the demand for freshness and because of high 
transportation costs, so any complaints raised in other areas about 
unfair competition are a bit disingenuous. In addition, the Compact 
requires the compact commission to take such action as necessary to 
ensure that a minimum price set by the commission for the region does 
not create an incentive for producers to generate additional supplies 
of milk. No other region should feel threatened by our Northeast Dairy 
Compact for fluid milk produced and sold mainly at home.
  It should be noted that, in the farm bill conference in 1996, the 
U.S. Secretary of Agriculture was required to review the dairy compact 
legislation before implementation to determine if there was 
``compelling public interest'' for the Compact within the Compact 
region. On August 9, 1996, and only after a public comment period, 
Secretary Glickman authorized the implementation of the Northeast 
Interstate Dairy Compact, finding that it was indeed in the compelling 
public interest to do so.
  In addition, the Agriculture Appropriations Act for FY1998 directed 
the Office of Management and Budget (OMB) to study the economic effects 
of the Compact and especially its effects on the federal food and 
nutrition programs, such as the Womens, Infants and Children program. 
Key findings of the OMB study released in February of 1998, showed 
that, for the first six months of the Compact, New England retail milk 
prices were five cents per gallon lower than retail milk prices 
nationally. Also, the Compact did not add any costs to federal 
nutrition programs like the WIC program and the school breakfast and 
lunch programs. The GAO study also stated that the Compact economically 
benefitted the dairy producers, increasing their income from milk sales 
by about six percent, with no adverse affects to dairy farmers outside 
the Compact region.
  Mr. President, the consumers in the Northeast Compact area, and now 
other areas around the country, are showing their willingness to pay 
more for their milk if the additional money is going directly to the 
dairy farmer. Environmental organizations have also supported dairy 
compacting as compacts help to preserve dwindling agricultural land and 
open spaces that help combat urban sprawl.
  I ask for the support of my colleagues for the reauthorization of the 
Northeast Compact and the ratification of the Southern Compact.
  Mr. SCHUMER. Mr. President, I am proud to join with 35 of my fellow 
Senators to introduce legislation to re-authorize the Northeast Dairy 
Compact and extend it to New York State. This legislation is vital to 
the Northeast Region and it will strengthen the economy of upstate New 
York.
  The Compact may add a couple of cents to the consumer price of milk 
during months when the retail price of milk falls below a federally set 
minimum price, but it is a small price to pay to preserve the family 
dairy farm in rural New York.
  The purpose of the Compact is to stabilize dairy prices and therefore 
enable small dairy farmers to budget their expenditures and plan for 
the future. The Northeastern Dairy Compact works by ensuring a minimum 
retail price for milk producers. The price paid to farmers for milk has 
fallen from $2.77 in 1960 to $1.36 in 1997. These low milk prices have 
forced many small farmers into insolvency over the years and have put 
the entire concept of family farms in peril.
  The Northeast Dairy Compact will preserve the American tradition of 
local family farms in every region. I believe that this is a tiny price 
to pay to keep local farmers in business, and keep New York State's 
rural identity intact.

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