Congressional Record, Volume 147 Issue 7 (Monday, January 22, 2001)

[Congressional Record Volume 147, Number 7 (Monday, January 22, 2001)]
[Senate]
[Pages S101-S419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Dodd, Mr. Bingaman,
Mrs. Murray, Mr. Wellstone, Mr. Dorgan, Ms. Mikulski, Mr.
Levin, Mrs. Clinton, Mr. Schumer, Mr. Rockefeller, Mr. Johnson,
Mr. Corzine, Mr. Biden, Mr. Kerry, and Mr. Reed):
S. 6. A bill to amend the Public Health Service Act, the Employee
Retirement Income Security Act of 1974, and the Internal Revenue Code
of 1986 to protect consumers in managed care plans and other health
coverage; to the Committee on Health, Education, Labor, and Pensions.

patients' bill of rights act

Mr. DASCHLE. 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. 6

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 ``Patients'
Bill of Rights Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--IMPROVING MANAGED CARE

Subtitle A--Grievance and Appeals

Sec. 101. Utilization review activities.
Sec. 102. Internal appeals procedures.
Sec. 103. External appeals procedures.
Sec. 104. Establishment of a grievance process.

Subtitle B--Access to Care

Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Access to specialty care.
Sec. 115. Access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical
trials.

Subtitle C--Access to Information

Sec. 121. Patient access to information.

Subtitle D--Protecting the Doctor-Patient Relationship

Sec. 131. Prohibition of interference with certain medical
communications.
Sec. 132. Prohibition of discrimination against providers based on
licensure.
Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of claims.
Sec. 135. Protection for patient advocacy.

Subtitle E--Definitions

Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.

[[Page S102]]

Sec. 153. Exclusions.
Sec. 154. Coverage of limited scope plans.
Sec. 155. Regulations.

TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to group health plans and group health insurance
coverage.
Sec. 202. Application to individual health insurance coverage.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974

Sec. 301. Application of patient protection standards to group health
plans and group health insurance coverage under the
Employee Retirement Income Security Act of 1974.
Sec. 302. ERISA preemption not to apply to certain actions involving
health insurance policyholders.
Sec. 303. Limitations on actions.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE
CODE OF 1986

Sec. 401. Amendments to the Internal Revenue Code of 1986.

TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.

TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 601. Health care paperwork simplification.
Sec. 602. No impact on social security trust fund.

TITLE I--IMPROVING MANAGED CARE

Subtitle A--Grievance and Appeals

SEC. 101. UTILIZATION REVIEW ACTIVITIES.

(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health
insurance issuer that provides health insurance coverage,
shall conduct utilization review activities in connection
with the provision of benefits under such plan or coverage
only in accordance with a utilization review program that
meets the requirements of this section.
(2) Use of outside agents.--Nothing in this section shall
be construed as preventing a group health plan or health
insurance issuer from arranging through a contract or
otherwise for persons or entities to conduct utilization
review activities on behalf of the plan or issuer, so long as
such activities are conducted in accordance with a
utilization review program that meets the requirements of
this section.
(3) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or
evaluate the use or coverage, clinical necessity,
appropriateness, efficacy, or efficiency of health care
services, procedures or settings, and includes prospective
review, concurrent review, second opinions, case management,
discharge planning, or retrospective review.
(b) Written Policies and Criteria.--
(1) Written policies.--A utilization review program shall
be conducted consistent with written policies and procedures
that govern all aspects of the program.
(2) Use of written criteria.--
(A) In general.--Such a program shall utilize written
clinical review criteria developed with input from a range of
appropriate actively practicing health care professionals, as
determined by the plan, pursuant to the program. Such
criteria shall include written clinical review criteria that
are based on valid clinical evidence where available and that
are directed specifically at meeting the needs of at-risk
populations and covered individuals with chronic conditions
or severe illnesses, including gender-specific criteria and
pediatric-specific criteria where available and appropriate.
(B) Continuing use of standards in retrospective review.--
If a health care service has been specifically pre-authorized
or approved for an enrollee under such a program, the program
shall not, pursuant to retrospective review, revise or modify
the specific standards, criteria, or procedures used for the
utilization review for procedures, treatment, and services
delivered to the enrollee during the same course of
treatment.
(C) Review of sample of claims denials.--Such a program
shall provide for an evaluation of the clinical
appropriateness of at least a sample of denials of claims for
benefits.
(c) Conduct of Program Activities.--
(1) Administration by health care professionals.--A
utilization review program shall be administered by qualified
health care professionals who shall oversee review decisions.
(2) Use of qualified, independent personnel.--
(A) In general.--A utilization review program shall provide
for the conduct of utilization review activities only through
personnel who are qualified and have received appropriate
training in the conduct of such activities under the program.
(B) Prohibition of contingent compensation arrangements.--
Such a program shall not, with respect to utilization review
activities, permit or provide compensation or anything of
value to its employees, agents, or contractors in a manner
that encourages denials of claims for benefits.
(C) Prohibition of conflicts.--Such a program shall not
permit a health care professional who is providing health
care services to an individual to perform utilization review
activities in connection with the health care services being
provided to the individual.
(3) Accessibility of review.--Such a program shall provide
that appropriate personnel performing utilization review
activities under the program, including the utilization
review administrator, are reasonably accessible by toll-free
telephone during normal business hours to discuss patient
care and allow response to telephone requests, and that
appropriate provision is made to receive and respond promptly
to calls received during other hours.
(4) Limits on frequency.--Such a program shall not provide
for the performance of utilization review activities with
respect to a class of services furnished to an individual
more frequently than is reasonably required to assess whether
the services under review are medically necessary or
appropriate.
(d) Deadline for Determinations.--
(1) Prior authorization services.--
(A) In general.--Except as provided in paragraph (2), in
the case of a utilization review activity involving the prior
authorization of health care items and services for an
individual, the utilization review program shall make a
determination concerning such authorization, and provide
notice of the determination to the individual or the
individual's designee and the individual's health care
provider by telephone and in printed form, as soon as
possible in accordance with the medical exigencies of the
case, and in no event later than the deadline specified in
subparagraph (B).
(B) Deadline.--
(i) In general.--Subject to clauses (ii) and (iii), the
deadline specified in this subparagraph is 14 days after the
date of receipt of the request for prior authorization.
(ii) Extension permitted where notice of additional
information required.--If a utilization review program--

(I) receives a request for a prior authorization;
(II) determines that additional information is necessary to
complete the review and make the determination on the
request; and
(III) notifies the requester, not later than five business
days after the date of receiving the request, of the need for
such specified additional information,

the deadline specified in this subparagraph is 14 days after
the date the program receives the specified additional
information, but in no case later than 28 days after the date
of receipt of the request for the prior authorization. This
clause shall not apply if the deadline is specified in clause
(iii).
(iii) Expedited cases.--In the case of a situation
described in section 102(c)(1)(A), the deadline specified in
this subparagraph is 72 hours after the time of the request
for prior authorization.
(2) Ongoing care.--
(A) Concurrent review.--
(i) In general.--Subject to subparagraph (B), in the case
of a concurrent review of ongoing care (including
hospitalization), which results in a termination or reduction
of such care, the plan must provide by telephone and in
printed form notice of the concurrent review determination to
the individual or the individual's designee and the
individual's health care provider as soon as possible in
accordance with the medical exigencies of the case, with
sufficient time prior to the termination or reduction to
allow for an appeal under section 102(c)(1)(A) to be
completed before the termination or reduction takes effect.
(ii) Contents of notice.--Such notice shall include, with
respect to ongoing health care items and services, the number
of ongoing services approved, the new total of approved
services, the date of onset of services, and the next review
date, if any, as well as a statement of the individual's
rights to further appeal.
(B) Exception.--Subparagraph (A) shall not be interpreted
as requiring plans or issuers to provide coverage of care
that would exceed the coverage limitations for such care.
(3) Previously provided services.--In the case of a
utilization review activity involving retrospective review of
health care services previously provided for an individual,
the utilization review program shall make a determination
concerning such services, and provide notice of the
determination to the individual or the individual's designee
and the individual's health care provider by telephone and in
printed form, within 30 days of the date of receipt of
information that is reasonably necessary to make such
determination, but in no case later than 60 days after the
date of receipt of the claim for benefits.
(4) Failure to meet deadline.--In a case in which a group
health plan or health insurance issuer fails to make a
determination on a claim for benefit under paragraph (1),
(2)(A), or (3) by the applicable deadline established under
the respective paragraph, the failure shall be treated under
this subtitle as a denial of the claim as of the date of the
deadline.
(5) Reference to special rules for emergency services,
maintenance care, and post-stabilization care.--For waiver of
prior authorization requirements in certain cases involving
emergency services and maintenance care and post-
stabilization care, see subsections (a)(1) and (b) of section
113, respectively.

[[Page S103]]

(e) Notice of Denials of Claims for Benefits.--
(1) In general.--Notice of a denial of claims for benefits
under a utilization review program shall be provided in
printed form and written in a manner calculated to be
understood by the participant, beneficiary, or enrollee and
shall include--
(A) the reasons for the denial (including the clinical
rationale);
(B) instructions on how to initiate an appeal under section
102; and
(C) notice of the availability, upon request of the
individual (or the individual's designee) of the clinical
review criteria relied upon to make such denial.
(2) Specification of any additional information.--Such a
notice shall also specify what (if any) additional necessary
information must be provided to, or obtained by, the person
making the denial in order to make a decision on such an
appeal.
(f) Claim for Benefits and Denial of Claim for Benefits
Defined.--For purposes of this subtitle:
(1) Claim for benefits.--The term ``claim for benefits''
means any request for coverage (including authorization of
coverage), for eligibility, or for payment in whole or in
part, for an item or service under a group health plan or
health insurance coverage.
(2) Denial of claim for benefits.--The term ``denial''
means, with respect to a claim for benefits, a denial, or a
failure to act on a timely basis upon, in whole or in part,
the claim for benefits and includes a failure to provide
benefits (including items and services) required to be
provided under this title.

SEC. 102. INTERNAL APPEALS PROCEDURES.

(a) Right of Review.--
(1) In general.--Each group health plan, and each health
insurance issuer offering health insurance coverage--
(A) shall provide adequate notice in writing to any
participant or beneficiary under such plan, or enrollee under
such coverage, whose claim for benefits under the plan or
coverage has been denied (within the meaning of section
101(f)(2)), setting forth the specific reasons for such
denial of claim for benefits and rights to any further review
or appeal, written in a manner calculated to be understood by
the participant, beneficiary, or enrollee; and
(B) shall afford such a participant, beneficiary, or
enrollee (and any provider or other person acting on behalf
of such an individual with the individual's consent or
without such consent if the individual is medically unable to
provide such consent) who is dissatisfied with such a denial
of claim for benefits a reasonable opportunity (of not less
than 180 days) to request and obtain a full and fair review
by a named fiduciary (with respect to such plan) or named
appropriate individual (with respect to such coverage) of the
decision denying the claim.
(2) Treatment of oral requests.--The request for review
under paragraph (1)(B) may be made orally, but, in the case
of an oral request, shall be followed by a request in
writing.
(b) Internal Review Process.--
(1) Conduct of review.--
(A) In general.--A review of a denial of claim under this
section shall be made by an individual who--
(i) in a case involving medical judgment, shall be a
physician or, in the case of limited scope coverage (as
defined in subparagraph (B)), shall be an appropriate
specialist;
(ii) has been selected by the plan or issuer; and
(iii) did not make the initial denial in the internally
appealable decision.
(B) Limited scope coverage defined.--For purposes of
subparagraph (A), the term ``limited scope coverage'' means a
group health plan or health insurance coverage the only
benefits under which are for benefits described in section
2791(c)(2)(A) of the Public Health Service Act (42 U.S.C.
300gg-91(c)(2)).
(2) Time limits for internal reviews.--
(A) In general.--Having received such a request for review
of a denial of claim, the plan or issuer shall, in accordance
with the medical exigencies of the case but not later than
the deadline specified in subparagraph (B), complete the
review on the denial and transmit to the participant,
beneficiary, enrollee, or other person involved a decision
that affirms, reverses, or modifies the denial. If the
decision does not reverse the denial, the plan or issuer
shall transmit, in printed form, a notice that sets forth the
grounds for such decision and that includes a description of
rights to any further appeal. Such decision shall be treated
as the final decision of the plan. Failure to issue such a
decision by such deadline shall be treated as a final
decision affirming the denial of claim.
(B) Deadline.--
(i) In general.--Subject to clauses (ii) and (iii), the
deadline specified in this subparagraph is 14 days after the
date of receipt of the request for internal review.
(ii) Extension permitted where notice of additional
information required.--If a group health plan or health
insurance issuer--

(I) receives a request for internal review;
(II) determines that additional information is necessary to
complete the review and make the determination on the
request; and
(III) notifies the requester, not later than five business
days after the date of receiving the request, of the need for
such specified additional information,

the deadline specified in this subparagraph is 14 days after
the date the plan or issuer receives the specified additional
information, but in no case later than 28 days after the date
of receipt of the request for the internal review. This
clause shall not apply if the deadline is specified in clause
(iii).
(iii) Expedited cases.--In the case of a situation
described in subsection (c)(1)(A), the deadline specified in
this subparagraph is 72 hours after the time of the request
for review.
(c) Expedited Review Process.--
(1) In general.--A group health plan, and a health
insurance issuer, shall establish procedures in writing for
the expedited consideration of requests for review under
subsection (b) in situations--
(A) in which the application of the normal timeframe for
making a determination could seriously jeopardize the life or
health of the participant, beneficiary, or enrollee or such
an individual's ability to regain maximum function; or
(B) described in section 101(d)(2) (relating to requests
for continuation of ongoing care which would otherwise be
reduced or terminated).
(2) Process.--Under such procedures--
(A) the request for expedited review may be submitted
orally or in writing by an individual or provider who is
otherwise entitled to request the review;
(B) all necessary information, including the plan's or
issuer's decision, shall be transmitted between the plan or
issuer and the requester by telephone, facsimile, or other
similarly expeditious available method; and
(C) the plan or issuer shall expedite the review in the
case of any of the situations described in subparagraph (A)
or (B) of paragraph (1).
(3) Deadline for decision.--The decision on the expedited
review must be made and communicated to the parties as soon
as possible in accordance with the medical exigencies of the
case, and in no event later than 72 hours after the time of
receipt of the request for expedited review, except that in a
case described in paragraph (1)(B), the decision must be made
before the end of the approved period of care.
(d) Waiver of Process.--A plan or issuer may waive its
rights for an internal review under subsection (b). In such
case the participant, beneficiary, or enrollee involved (and
any designee or provider involved) shall be relieved of any
obligation to complete the review involved and may, at the
option of such participant, beneficiary, enrollee, designee,
or provider, proceed directly to seek further appeal through
any applicable external appeals process.

SEC. 103. EXTERNAL APPEALS PROCEDURES.

(a) Right to External Appeal.--
(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
provide for an external appeals process that meets the
requirements of this section in the case of an externally
appealable decision described in paragraph (2), for which a
timely appeal is made either by the plan or issuer or by the
participant, beneficiary, or enrollee (and any provider or
other person acting on behalf of such an individual with the
individual's consent or without such consent if such an
individual is medically unable to provide such consent). The
appropriate Secretary shall establish standards to carry out
such requirements.
(2) Externally appealable decision defined.--
(A) In general.--For purposes of this section, the term
``externally appealable decision'' means a denial of claim
for benefits (as defined in section 101(f)(2))--
(i) that is based in whole or in part on a decision that
the item or service is not medically necessary or appropriate
or is investigational or experimental; or
(ii) in which the decision as to whether a benefit is
covered involves a medical judgment.
(B) Inclusion.--Such term also includes a failure to meet
an applicable deadline for internal review under section 102.
(C) Exclusions.--Such term does not include--
(i) specific exclusions or express limitations on the
amount, duration, or scope of coverage that do not involve
medical judgment; or
(ii) a decision regarding whether an individual is a
participant, beneficiary, or enrollee under the plan or
coverage.
(3) Exhaustion of internal review process.--Except as
provided under section 102(d), a plan or issuer may condition
the use of an external appeal process in the case of an
externally appealable decision upon a final decision in an
internal review under section 102, but only if the decision
is made in a timely basis consistent with the deadlines
provided under this subtitle.
(4) Filing fee requirement.--
(A) In general.--Subject to subparagraph (B), a plan or
issuer may condition the use of an external appeal process
upon payment to the plan or issuer of a filing fee that does
not exceed $25.
(B) Exception for indigency.--The plan or issuer may not
require payment of the filing fee in the case of an
individual participant, beneficiary, or enrollee who
certifies (in a form and manner specified in guidelines
established by the Secretary of Health and Human Services)
that the individual is indigent (as defined in such
guidelines).
(C) Refunding fee in case of successful appeals.--The plan
or issuer shall refund payment of the filing fee under this
paragraph if the recommendation of the external

[[Page S104]]

appeal entity is to reverse or modify the denial of a claim
for benefits which is the subject of the appeal.
(b) General Elements of External Appeals Process.--
(1) Contract with qualified external appeal entity.--
(A) Contract requirement.--Except as provided in
subparagraph (D), the external appeal process under this
section of a plan or issuer shall be conducted under a
contract between the plan or issuer and one or more qualified
external appeal entities (as defined in subsection (c)).
(B) Limitation on plan or issuer selection.--
(i) In general.--The applicable authority shall implement
procedures--

(I) to assure that the selection process among qualified
external appeal entities will not create any incentives for
external appeal entities to make a decision in a biased
manner; and
(II) for auditing a sample of decisions by such entities to
assure that no such decisions are made in a biased manner.

(ii) Limitation on ability to influence selection.--No
selection process established by the applicable authority
under this subsection shall provide the participant,
beneficiary, or enrollee or the plan or issuer with the
ability to determine or influence the selection of a
qualified external appeal entity to review the appeal of the
participant, beneficiary, or enrollee.
(C) Other terms and conditions.--The terms and conditions
of a contract under this paragraph shall be consistent with
the standards the appropriate Secretary shall establish to
assure there is no real or apparent conflict of interest in
the conduct of external appeal activities. Such contract
shall provide that all costs of the process (except those
incurred by the participant, beneficiary, enrollee, or
treating professional in support of the appeal) shall be paid
by the plan or issuer, and not by the participant,
beneficiary, or enrollee. The previous sentence shall not be
construed as applying to the imposition of a filing fee under
subsection (a)(4).
(D) State authority with respect qualified external appeal
entity for health insurance issuers.--With respect to health
insurance issuers offering health insurance coverage in a
State, the State may provide for external review activities
to be conducted by a qualified external appeal entity that is
designated by the State or that is selected by the State in a
manner determined by the State to assure an unbiased
determination.
(2) Elements of process.--An external appeal process shall
be conducted consistent with standards established by the
appropriate Secretary that include at least the following:
(A) Fair and de novo determination.--The process shall
provide for a fair, de novo determination. However, nothing
in this paragraph shall be construed as providing for
coverage of items and services for which benefits are
specifically excluded under the plan or coverage.
(B) Standard of review.--An external appeal entity shall
determine whether the plan's or issuer's decision is in
accordance with the medical needs of the patient involved (as
determined by the entity) taking into account, as of the time
of the entity's determination, the patient's medical
condition and any relevant and reliable evidence the entity
obtains under subparagraph (D). If the entity determines the
decision is in accordance with such needs, the entity shall
affirm the decision and to the extent that the entity
determines the decision is not in accordance with such needs,
the entity shall reverse or modify the decision.
(C) Consideration of plan or coverage definitions.--In
making such determination, the external appeal entity shall
consider (but not be bound by) any language in the plan or
coverage document relating to the definitions of the terms
medical necessity, medically necessary or appropriate, or
experimental, investigational, or related terms.
(D) Evidence.--
(i) In general.--An external appeal entity shall include,
among the evidence taken into consideration--

(I) the decision made by the plan or issuer upon internal
review under section 102 and any guidelines or standards used
by the plan or issuer in reaching such decision;
(II) any personal health and medical information supplied
with respect to the individual whose denial of claim for
benefits has been appealed; and
(III) the opinion of the individual's treating physician or
health care professional.

(ii) Additional evidence.--Such entity may also take into
consideration but not be limited to the following evidence
(to the extent available):

(I) The results of studies that meet professionally
recognized standards of validity and replicability or that
have been published in peer-reviewed journals.
(II) The results of professional consensus conferences
conducted or financed in whole or in part by one or more
Government agencies.
(III) Practice and treatment guidelines prepared or
financed in whole or in part by Government agencies.
(IV) Government-issued coverage and treatment policies.
(V) Community standard of care and generally accepted
principles of professional medical practice.
(VI) To the extent that the entity determines it to be free
of any conflict of interest, the opinions of individuals who
are qualified as experts in one or more fields of health care
which are directly related to the matters under appeal.
(VII) To the extent that the entity determines it to be
free of any conflict of interest, the results of peer reviews
conducted by the plan or issuer involved.

(E) Determination concerning externally appealable
decisions.--A qualified external appeal entity shall
determine--
(i) whether a denial of claim for benefits is an externally
appealable decision (within the meaning of subsection
(a)(2));
(ii) whether an externally appealable decision involves an
expedited appeal; and
(iii) for purposes of initiating an external review,
whether the internal review process has been completed.
(F) Opportunity to submit evidence.--Each party to an
externally appealable decision may submit evidence related to
the issues in dispute.
(G) Provision of information.--The plan or issuer involved
shall provide timely access to the external appeal entity to
information and to provisions of the plan or health insurance
coverage relating to the matter of the externally appealable
decision, as determined by the entity.
(H) Timely decisions.--A determination by the external
appeal entity on the decision shall--
(i) be made orally or in writing and, if it is made orally,
shall be supplied to the parties in writing as soon as
possible;
(ii) be made in accordance with the medical exigencies of
the case involved, but in no event later than 21 days after
the date (or, in the case of an expedited appeal, 72 hours
after the time) of requesting an external appeal of the
decision;
(iii) state, in layperson's language, the basis for the
determination, including, if relevant, any basis in the terms
or conditions of the plan or coverage; and
(iv) inform the participant, beneficiary, or enrollee of
the individual's rights (including any limitation on such
rights) to seek further review by the courts (or other
process) of the external appeal determination.
(I) Compliance with determination.--If the external appeal
entity reverses or modifies the denial of a claim for
benefits, the plan or issuer shall--
(i) upon the receipt of the determination, authorize
benefits in accordance with such determination;
(ii) take such actions as may be necessary to provide
benefits (including items or services) in a timely manner
consistent with such determination; and
(iii) submit information to the entity documenting
compliance with the entity's determination and this
subparagraph.
(c) Qualifications of External Appeal Entities.--
(1) In general.--For purposes of this section, the term
``qualified external appeal entity'' means, in relation to a
plan or issuer, an entity that is certified under paragraph
(2) as meeting the following requirements:
(A) The entity meets the independence requirements of
paragraph (3).
(B) The entity conducts external appeal activities through
a panel of not fewer than three clinical peers.
(C) The entity has sufficient medical, legal, and other
expertise and sufficient staffing to conduct external appeal
activities for the plan or issuer on a timely basis
consistent with subsection (b)(2)(G).
(D) The entity meets such other requirements as the
appropriate Secretary may impose.
(2) Initial certification of external appeal entities.--
(A) In general.--In order to be treated as a qualified
external appeal entity with respect to--
(i) a group health plan, the entity must be certified (and,
in accordance with subparagraph (B), periodically
recertified) as meeting the requirements of paragraph (1)--

(I) by the Secretary of Labor;
(II) under a process recognized or approved by the
Secretary of Labor; or

(III) to the extent provided in subparagraph (C)(i), by a
qualified private standard-setting organization (certified
under such subparagraph); or

(ii) a health insurance issuer operating in a State, the
entity must be certified (and, in accordance with
subparagraph (B), periodically recertified) as meeting such
requirements--

(I) by the applicable State authority (or under a process
recognized or approved by such authority); or
(II) if the State has not established a certification and
recertification process for such entities, by the Secretary
of Health and Human Services, under a process recognized or
approved by such Secretary, or to the extent provided in
subparagraph (C)(ii), by a qualified private standard-setting
organization (certified under such subparagraph).

(B) Recertification process.--The appropriate Secretary
shall develop standards for the recertification of external
appeal entities. Such standards shall include a review of--
(i) the number of cases reviewed;
(ii) a summary of the disposition of those cases;
(iii) the length of time in making determinations on those
cases;

[[Page S105]]

(iv) updated information of what was required to be
submitted as a condition of certification for the entity's
performance of external appeal activities; and
(v) such information as may be necessary to assure the
independence of the entity from the plans or issuers for
which external appeal activities are being conducted.
(C) Certification of qualified private standard-setting
organizations.--
(i) For external reviews under group health plans.--For
purposes of subparagraph (A)(i)(III), the Secretary of Labor
may provide for a process for certification (and periodic
recertification) of qualified private standard-setting
organizations which provide for certification of external
review entities. Such an organization shall only be certified
if the organization does not certify an external review
entity unless it meets standards required for certification
of such an entity by such Secretary under subparagraph
(A)(i)(I).
(ii) For external reviews of health insurance issuers.--For
purposes of subparagraph (A)(ii)(II), the Secretary of Health
and Human Services may provide for a process for
certification (and periodic recertification) of qualified
private standard-setting organizations which provide for
certification of external review entities. Such an
organization shall only be certified if the organization does
not certify an external review entity unless it meets
standards required for certification of such an entity by
such Secretary under subparagraph (A)(ii)(II).
(D) Requirement of sufficient number of certified
entities.--The appropriate Secretary shall certify and
recertify a sufficient number of external appeal entities
under this paragraph to ensure the timely and efficient
provision of external review services.
(3) Independence requirements.--
(A) In general.--A clinical peer or other entity meets the
independence requirements of this paragraph if--
(i) the peer or entity does not have a familial, financial,
or professional relationship with any related party;
(ii) any compensation received by such peer or entity in
connection with the external review is reasonable and not
contingent on any decision rendered by the peer or entity;
(iii) except as provided in paragraph (4), the plan and the
issuer have no recourse against the peer or entity in
connection with the external review; and
(iv) the peer or entity does not otherwise have a conflict
of interest with a related party as determined under any
regulations which the Secretary may prescribe.
(B) Related party.--For purposes of this paragraph, the
term ``related party'' means--
(i) with respect to--

(I) a group health plan or health insurance coverage
offered in connection with such a plan, the plan or the
health insurance issuer offering such coverage; or
(II) individual health insurance coverage, the health
insurance issuer offering such coverage,

or any plan sponsor, fiduciary, officer, director, or
management employee of such plan or issuer;
(ii) the health care professional that provided the health
care involved in the coverage decision;
(iii) the institution at which the health care involved in
the coverage decision is provided;
(iv) the manufacturer of any drug or other item that was
included in the health care involved in the coverage
decision; or
(v) any other party determined under any regulations which
the Secretary may prescribe to have a substantial interest in
the coverage decision.
(4) Limitation on liability of reviewers.--No qualified
external appeal entity having a contract with a plan or
issuer under this part and no person who is employed by any
such entity or who furnishes professional services to such
entity, shall be held by reason of the performance of
any duty, function, or activity required or authorized
pursuant to this section, to have violated any criminal
law, or to be civilly liable under any law of the United
States or of any State (or political subdivision thereof)
if due care was exercised in the performance of such duty,
function, or activity and there was no actual malice or
gross misconduct in the performance of such duty,
function, or activity.
(d) External Appeal Determination Binding on Plan.--The
determination by an external appeal entity under this section
is binding on the plan and issuer involved in the
determination.
(e) Penalties Against Authorized Officials for Refusing to
Authorize the Determination of an External Review Entity.--
(1) Monetary penalties.--In any case in which the
determination of an external review entity is not followed by
a group health plan, or by a health insurance issuer offering
health insurance coverage, any person who, acting in the
capacity of authorizing the benefit, causes such refusal may,
in the discretion in a court of competent jurisdiction, be
liable to an aggrieved participant, beneficiary, or enrollee
for a civil penalty in an amount of up to $1,000 a day from
the date on which the determination was transmitted to the
plan or issuer by the external review entity until the date
the refusal to provide the benefit is corrected.
(2) Cease and desist order and order of attorney's fees.--
In any action described in paragraph (1) brought by a
participant, beneficiary, or enrollee with respect to a group
health plan, or a health insurance issuer offering health
insurance coverage, in which a plaintiff alleges that a
person referred to in such paragraph has taken an action
resulting in a refusal of a benefit determined by an external
appeal entity in violation of such terms of the plan,
coverage, or this subtitle, or has failed to take an action
for which such person is responsible under the plan,
coverage, or this title and which is necessary under the plan
or coverage for authorizing a benefit, the court shall cause
to be served on the defendant an order requiring the
defendant--
(A) to cease and desist from the alleged action or failure
to act; and
(B) to pay to the plaintiff a reasonable attorney's fee and
other reasonable costs relating to the prosecution of the
action on the charges on which the plaintiff prevails.
(3) Additional civil penalties.--
(A) In general.--In addition to any penalty imposed under
paragraph (1) or (2), the appropriate Secretary may assess a
civil penalty against a person acting in the capacity of
authorizing a benefit determined by an external review entity
for one or more group health plans, or health insurance
issuers offering health insurance coverage, for--
(i) any pattern or practice of repeated refusal to
authorize a benefit determined by an external appeal entity
in violation of the terms of such a plan, coverage, or this
title; or
(ii) any pattern or practice of repeated violations of the
requirements of this section with respect to such plan or
plans or coverage.
(B) Standard of proof and amount of penalty.--Such penalty
shall be payable only upon proof by clear and convincing
evidence of such pattern or practice and shall be in an
amount not to exceed the lesser of--
(i) 25 percent of the aggregate value of benefits shown by
the appropriate Secretary to have not been provided, or
unlawfully delayed, in violation of this section under such
pattern or practice; or
(ii) $500,000.
(4) Removal and disqualification.--Any person acting in the
capacity of authorizing benefits who has engaged in any such
pattern or practice described in paragraph (3)(A) with
respect to a plan or coverage, upon the petition of the
appropriate Secretary, may be removed by the court from such
position, and from any other involvement, with respect to
such a plan or coverage, and may be precluded from returning
to any such position or involvement for a period determined
by the court.
(f) Protection of Legal Rights.--Nothing in this subtitle
shall be construed as altering or eliminating any cause of
action or legal rights or remedies of participants,
beneficiaries, enrollees, and others under State or Federal
law (including sections 502 and 503 of the Employee
Retirement Income Security Act of 1974), including the right
to file judicial actions to enforce rights.

SEC. 104. ESTABLISHMENT OF A GRIEVANCE PROCESS.

(a) Establishment of Grievance System.--
(1) In general.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall establish and maintain a system to
provide for the presentation and resolution of oral and
written grievances brought by individuals who are
participants, beneficiaries, or enrollees, or health care
providers or other individuals acting on behalf of an
individual and with the individual's consent or without such
consent if the individual is medically unable to provide such
consent, regarding any aspect of the plan's or issuer's
services.
(2) Grievance defined.--In this section, the term
``grievance'' means any question, complaint, or concern
brought by a participant, beneficiary or enrollee that is not
a claim for benefits (as defined in section 101(f)(1)).
(b) Grievance System.--Such system shall include the
following components with respect to individuals who are
participants, beneficiaries, or enrollees:
(1) Written notification to all such individuals and
providers of the telephone numbers and business addresses of
the plan or issuer personnel responsible for resolution of
grievances and appeals.
(2) A system to record and document, over a period of at
least three previous years, all grievances and appeals made
and their status.
(3) A process providing for timely processing and
resolution of grievances.
(4) Procedures for follow-up action, including the methods
to inform the person making the grievance of the resolution
of the grievance.
Grievances are not subject to appeal under the previous
provisions of this subtitle.

Subtitle B--Access to Care

SEC. 111. CONSUMER CHOICE OPTION.

(a) In General.--If--
(1) a health insurance issuer providing health insurance
coverage in connection with a group health plan offers to
enrollees health insurance coverage which provides for
coverage of services only if such services are furnished
through health care professionals and providers who are
members of a network of health care professionals and
providers who have entered into a contract with the issuer to
provide such services, or
(2) a group health plan offers to participants or
beneficiaries health benefits which

[[Page S106]]

provide for coverage of services only if such services are
furnished through health care professionals and providers who
are members of a network of health care professionals and
providers who have entered into a contract with the plan to
provide such services,

then the issuer or plan shall also offer or arrange to be
offered to such enrollees, participants, or beneficiaries (at
the time of enrollment and during an annual open season as
provided under subsection (c)) the option of health insurance
coverage or health benefits which provide for coverage of
such services which are not furnished through health care
professionals and providers who are members of such a network
unless such enrollees, participants, or beneficiaries are
offered such non-network coverage through another group
health plan or through another health insurance issuer in the
group market.
(b) Additional Costs.--The amount of any additional premium
charged by the health insurance issuer or group health plan
for the additional cost of the creation and maintenance of
the option described in subsection (a) and the amount of any
additional cost sharing imposed under such option shall be
borne by the enrollee, participant, or beneficiary unless it
is paid by the health plan sponsor or group health plan
through agreement with the health insurance issuer.
(c) Open Season.--An enrollee, participant, or beneficiary,
may change to the offering provided under this section only
during a time period determined by the health insurance
issuer or group health plan. Such time period shall occur at
least annually.

SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.

(a) Primary Care.--If a group health plan, or a health
insurance issuer that offers health insurance coverage,
requires or provides for designation by a participant,
beneficiary, or enrollee of a participating primary care
provider, then the plan or issuer shall permit each
participant, beneficiary, and enrollee to designate any
participating primary care provider who is available to
accept such individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), a group health
plan and a health insurance issuer that offers health
insurance coverage shall permit each participant,
beneficiary, or enrollee to receive medically necessary or
appropriate specialty care, pursuant to appropriate referral
procedures, from any qualified participating health care
professional who is available to accept such individual for
such care.
(2) Limitation.--Paragraph (1) shall not apply to specialty
care if the plan or issuer clearly informs participants,
beneficiaries, and enrollees of the limitations on choice of
participating health care professionals with respect to such
care.
(3) Construction.--Nothing in this subsection shall be
construed as affecting the application of section 114
(relating to access to specialty care).

SEC. 113. ACCESS TO EMERGENCY CARE.

(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides any benefits with respect to services in an
emergency department of a hospital, the plan or issuer shall
cover emergency services (as defined in paragraph (2)(B))--
(A) without the need for any prior authorization
determination;
(B) whether or not the health care provider furnishing such
services is a participating provider with respect to such
services;
(C) in a manner so that, if such services are provided to a
participant, beneficiary, or enrollee--
(i) by a nonparticipating health care provider with or
without prior authorization; or
(ii) by a participating health care provider without prior
authorization,
the participant, beneficiary, or enrollee is not liable for
amounts that exceed the amounts of liability that would be
incurred if the services were provided by a participating
health care provider with prior authorization; and
(D) without regard to any other term or condition of such
coverage (other than exclusion or coordination of benefits,
or an affiliation or waiting period, permitted under section
2701 of the Public Health Service Act, section 701 of the
Employee Retirement Income Security Act of 1974, or section
9801 of the Internal Revenue Code of 1986, and other than
applicable cost-sharing).
(2) Definitions.--In this section:
(A) Emergency medical condition based on prudent layperson
standard.--The term ``emergency medical condition'' means a
medical condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a
prudent layperson, who possesses an average knowledge of
health and medicine, could reasonably expect the absence of
immediate medical attention to result in a condition
described in clause (i), (ii), or (iii) of section
1867(e)(1)(A) of the Social Security Act.
(B) Emergency services.--The term ``emergency services''
means--
(i) a medical screening examination (as required under
section 1867 of the Social Security Act) that is within the
capability of the emergency department of a hospital,
including ancillary services routinely available to the
emergency department to evaluate an emergency medical
condition (as defined in subparagraph (A)); and
(ii) within the capabilities of the staff and facilities
available at the hospital, such further medical examination
and treatment as are required under section 1867 of such Act
to stabilize the patient.
(C) Stabilize.--The term ``to stabilize'' means, with
respect to an emergency medical condition, to provide such
medical treatment of the condition as may be necessary to
assure, within reasonable medical probability, that no
material deterioration of the condition is likely to result
from or occur during the transfer of the individual from a
facility.
(b) Reimbursement for Maintenance Care and Post-
Stabilization Care.--In the case of services (other than
emergency services) for which benefits are available under a
group health plan, or under health insurance coverage offered
by a health insurance issuer, the plan or issuer shall
provide for reimbursement with respect to such services
provided to a participant, beneficiary, or enrollee other
than through a participating health care provider in a manner
consistent with subsection (a)(1)(C) (and shall otherwise
comply with the guidelines established under section
1852(d)(2) of the Social Security Act), if the services are
maintenance care or post-stabilization care covered under
such guidelines.

SEC. 114. ACCESS TO SPECIALTY CARE.

(a) Specialty Care for Covered Services.--
(1) In general.--If--
(A) an individual is a participant or beneficiary under a
group health plan or an enrollee who is covered under health
insurance coverage offered by a health insurance issuer;
(B) the individual has a condition or disease of sufficient
seriousness and complexity to require treatment by a
specialist; and
(C) benefits for such treatment are provided under the plan
or coverage,
the plan or issuer shall make or provide for a referral to a
specialist who is available and accessible to provide the
treatment for such condition or disease.
(2) Specialist defined.--For purposes of this subsection,
the term ``specialist'' means, with respect to a condition, a
health care practitioner, facility, or center that has
adequate expertise through appropriate training and
experience (including, in the case of a child, appropriate
pediatric expertise) to provide high quality care in treating
the condition.
(3) Care under referral.--A group health plan or health
insurance issuer may require that the care provided to an
individual pursuant to such referral under paragraph (1) be--
(A) pursuant to a treatment plan, only if the treatment
plan is developed by the specialist and approved by the plan
or issuer, in consultation with the designated primary care
provider or specialist and the individual (or the
individual's designee); and
(B) in accordance with applicable quality assurance and
utilization review standards of the plan or issuer.
Nothing in this subsection shall be construed as preventing
such a treatment plan for an individual from requiring a
specialist to provide the primary care provider with regular
updates on the specialty care provided, as well as all
necessary medical information.
(4) Referrals to participating providers.--A group health
plan or health insurance issuer is not required under
paragraph (1) to provide for a referral to a specialist that
is not a participating provider, unless the plan or issuer
does not have an appropriate specialist that is available and
accessible to treat the individual's condition and that is a
participating provider with respect to such treatment.
(5) Treatment of nonparticipating providers.--If a plan or
issuer refers an individual to a nonparticipating specialist
pursuant to paragraph (1), services provided pursuant to the
approved treatment plan (if any) shall be provided at no
additional cost to the individual beyond what the individual
would otherwise pay for services received by such a
specialist that is a participating provider.
(b) Specialists as Gatekeeper for Treatment of Ongoing
Special Conditions.--
(1) In general.--A group health plan, or a health insurance
issuer, in connection with the provision of health insurance
coverage, shall have a procedure by which an individual who
is a participant, beneficiary, or enrollee and who has an
ongoing special condition (as defined in paragraph (3)) may
request and receive a referral to a specialist for such
condition who shall be responsible for and capable of
providing and coordinating the individual's care with respect
to the condition. Under such procedures if such an
individual's care would most appropriately be coordinated by
such a specialist, such plan or issuer shall refer the
individual to such specialist.
(2) Treatment for related referrals.--Such specialists
shall be permitted to treat the individual without a referral
from the individual's primary care provider and may authorize
such referrals, procedures, tests, and other medical services
as the individual's primary care provider would otherwise be
permitted to provide or authorize, subject to the terms of
the treatment (referred to in subsection (a)(3)(A)) with
respect to the ongoing special condition.
(3) Ongoing special condition defined.--In this subsection,
the term ``ongoing special condition'' means a condition or
disease that--
(A) is life-threatening, degenerative, or disabling; and

[[Page S107]]

(B) requires specialized medical care over a prolonged
period of time.
(4) Terms of referral.--The provisions of paragraphs (3)
through (5) of subsection (a) apply with respect to referrals
under paragraph (1) of this subsection in the same manner as
they apply to referrals under subsection (a)(1).
(c) Standing Referrals.--
(1) In general.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall have a procedure by which an
individual who is a participant, beneficiary, or enrollee and
who has a condition that requires ongoing care from a
specialist may receive a standing referral to such specialist
for treatment of such condition. If the plan or issuer, or if
the primary care provider in consultation with the medical
director of the plan or issuer and the specialist (if any),
determines that such a standing referral is appropriate, the
plan or issuer shall make such a referral to such a
specialist if the individual so desires.
(2) Terms of referral.--The provisions of paragraphs (3)
through (5) of subsection (a) apply with respect to referrals
under paragraph (1) of this subsection in the same manner as
they apply to referrals under subsection (a)(1).

SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

(a) In General.--If a group health plan, or a health
insurance issuer in connection with the provision of health
insurance coverage, requires or provides for a participant,
beneficiary, or enrollee to designate a participating primary
care health care professional, the plan or issuer--
(1) may not require authorization or a referral by the
individual's primary care health care professional or
otherwise for coverage of gynecological care (including
preventive women's health examinations) and pregnancy-related
services provided by a participating health care
professional, including a physician, who specializes in
obstetrics and gynecology to the extent such care is
otherwise covered; and
(2) shall treat the ordering of other obstetrical or
gynecological care by such a participating professional as
the authorization of the primary care health care
professional with respect to such care under the plan or
coverage.
(b) Construction.--Nothing in subsection (a) shall be
construed to--
(1) waive any exclusions of coverage under the terms of the
plan or health insurance coverage with respect to coverage of
obstetrical or gynecological care; or
(2) preclude the group health plan or health insurance
issuer involved from requiring that the obstetrical or
gynecological provider notify the primary care health care
professional or the plan or issuer of treatment decisions.

SEC. 116. ACCESS TO PEDIATRIC CARE.

(a) Pediatric Care.--If a group health plan, or a health
insurance issuer in connection with the provision of health
insurance coverage, requires or provides for an enrollee to
designate a participating primary care provider for a child
of such enrollee, the plan or issuer shall permit the
enrollee to designate a physician who specializes in
pediatrics as the child's primary care provider.
(b) Construction.--Nothing in subsection (a) shall be
construed to waive any exclusions of coverage under the terms
of the plan or health insurance coverage with respect to
coverage of pediatric care.

SEC. 117. CONTINUITY OF CARE.

(a) In General.--
(1) Termination of provider.--If a contract between a group
health plan, or a health insurance issuer in connection with
the provision of health insurance coverage, and a health care
provider is terminated (as defined in paragraph (3)(B)), or
benefits or coverage provided by a health care provider are
terminated because of a change in the terms of provider
participation in a group health plan, and an individual who
is a participant, beneficiary, or enrollee in the plan or
coverage is undergoing treatment from the provider for an
ongoing special condition (as defined in paragraph (3)(A)) at
the time of such termination, the plan or issuer shall--
(A) notify the individual on a timely basis of such
termination and of the right to elect continuation of
coverage of treatment by the provider under this section; and
(B) subject to subsection (c), permit the individual to
elect to continue to be covered with respect to treatment by
the provider of such condition during a transitional period
(provided under subsection (b)).
(2) Treatment of termination of contract with health
insurance issuer.--If a contract for the provision of health
insurance coverage between a group health plan and a health
insurance issuer is terminated and, as a result of such
termination, coverage of services of a health care provider
is terminated with respect to an individual, the provisions
of paragraph (1) (and the succeeding provisions of this
section) shall apply under the plan in the same manner as if
there had been a contract between the plan and the provider
that had been terminated, but only with respect to benefits
that are covered under the plan after the contract
termination.
(3) Definitions.--For purposes of this section:
(A) Ongoing special condition.--The term ``ongoing special
condition'' has the meaning given such term in section
114(b)(3), and also includes pregnancy.
(B) Termination.--The term ``terminated'' includes, with
respect to a contract, the expiration or nonrenewal of the
contract, but does not include a termination of the contract
by the plan or issuer for failure to meet applicable
quality standards or for fraud.
(b) Transitional Period.--
(1) In general.--Except as provided in paragraphs (2)
through (4), the transitional period under this subsection
shall extend up to 90 days (as determined by the treating
health care professional) after the date of the notice
described in subsection (a)(1)(A) of the provider's
termination.
(2) Scheduled surgery and organ transplantation.--If
surgery or organ transplantation was scheduled for an
individual before the date of the announcement of the
termination of the provider status under subsection (a)(1)(A)
or if the individual on such date was on an established
waiting list or otherwise scheduled to have such surgery or
transplantation, the transitional period under this
subsection with respect to the surgery or transplantation
shall extend beyond the period under paragraph (1) and until
the date of discharge of the individual after completion of
the surgery or transplantation.
(3) Pregnancy.--If--
(A) a participant, beneficiary, or enrollee was determined
to be pregnant at the time of a provider's termination of
participation; and
(B) the provider was treating the pregnancy before date of
the termination,
the transitional period under this subsection with respect to
provider's treatment of the pregnancy shall extend through
the provision of post-partum care directly related to the
delivery.
(4) Terminal illness.--If--
(A) a participant, beneficiary, or enrollee was determined
to be terminally ill (as determined under section
1861(dd)(3)(A) of the Social Security Act) at the time of a
provider's termination of participation; and
(B) the provider was treating the terminal illness before
the date of termination,
the transitional period under this subsection shall extend
for the remainder of the individual's life for care directly
related to the treatment of the terminal illness or its
medical manifestations.
(c) Permissible Terms and Conditions.--A group health plan
or health insurance issuer may condition coverage of
continued treatment by a provider under subsection (a)(1)(B)
upon the individual notifying the plan of the election of
continued coverage and upon the provider agreeing to the
following terms and conditions:
(1) The provider agrees to accept reimbursement from the
plan or issuer and individual involved (with respect to cost-
sharing) at the rates applicable prior to the start of the
transitional period as payment in full (or, in the case
described in subsection (a)(2), at the rates applicable under
the replacement plan or issuer after the date of the
termination of the contract with the health insurance issuer)
and not to impose cost-sharing with respect to the individual
in an amount that would exceed the cost-sharing that could
have been imposed if the contract referred to in subsection
(a)(1) had not been terminated.
(2) The provider agrees to adhere to the quality assurance
standards of the plan or issuer responsible for payment under
paragraph (1) and to provide to such plan or issuer necessary
medical information related to the care provided.
(3) The provider agrees otherwise to adhere to such plan's
or issuer's policies and procedures, including procedures
regarding referrals and obtaining prior authorization and
providing services pursuant to a treatment plan (if any)
approved by the plan or issuer.
(d) Construction.--Nothing in this section shall be
construed to require the coverage of benefits which would not
have been covered if the provider involved remained a
participating provider.

SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

(a) In General.--To the extent that a group health plan, or
health insurance coverage offered by a health insurance
issuer, provides coverage for benefits with respect to
prescription drugs, and limits such coverage to drugs
included in a formulary, the plan or issuer shall--
(1) ensure the participation of physicians and pharmacists
in developing and reviewing such formulary;
(2) provide for disclosure of the formulary to providers;
and
(3) in accordance with the applicable quality assurance and
utilization review standards of the plan or issuer, provide
for exceptions from the formulary limitation when a non-
formulary alternative is medically necessary and appropriate
and, in the case of such an exception, apply the same cost-
sharing requirements that would have applied in the case of a
drug covered under the formulary.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (or health insurance
coverage offered in connection with such a plan) that
provides any coverage of prescription drugs or medical
devices shall not deny coverage of such a drug or device on
the basis that the use is investigational, if the use--
(A) in the case of a prescription drug--
(i) is included in the labeling authorized by the
application in effect for the drug pursuant to subsection (b)
or (j) of section 505 of the Federal Food, Drug, and Cosmetic
Act,

[[Page S108]]

without regard to any postmarketing requirements that may
apply under such Act; or
(ii) is included in the labeling authorized by the
application in effect for the drug under section 351 of the
Public Health Service Act, without regard to any
postmarketing requirements that may apply pursuant to such
section; or
(B) in the case of a medical device, is included in the
labeling authorized by a regulation under subsection (d) or
(3) of section 513 of the Federal Food, Drug, and Cosmetic
Act, an order under subsection (f) of such section, or an
application approved under section 515 of such Act, without
regard to any postmarketing requirements that may apply under
such Act.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a group health plan (or health
insurance coverage offered in connection with such a plan) to
provide any coverage of prescription drugs or medical
devices.

SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED
CLINICAL TRIALS.

(a) Coverage.--
(1) In general.--If a group health plan, or health
insurance issuer that is providing health insurance coverage,
provides coverage to a qualified individual (as defined in
subsection (b)), the plan or issuer--
(A) may not deny the individual participation in the
clinical trial referred to in subsection (b)(2);
(B) subject to subsection (c), may not deny (or limit or
impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection
with participation in the trial; and
(C) may not discriminate against the individual on the
basis of the enrollee's participation in such trial.
(2) Exclusion of certain costs.--For purposes of paragraph
(1)(B), routine patient costs do not include the cost of the
tests or measurements conducted primarily for the purpose of
the clinical trial involved.
(3) Use of in-network providers.--If one or more
participating providers is participating in a clinical trial,
nothing in paragraph (1) shall be construed as preventing
a plan or issuer from requiring that a qualified
individual participate in the trial through such a
participating provider if the provider will accept the
individual as a participant in the trial.
(b) Qualified Individual Defined.--For purposes of
subsection (a), the term ``qualified individual'' means an
individual who is a participant or beneficiary in a group
health plan, or who is an enrollee under health insurance
coverage, and who meets the following conditions:
(1)(A) The individual has a life-threatening or serious
illness for which no standard treatment is effective.
(B) The individual is eligible to participate in an
approved clinical trial according to the trial protocol with
respect to treatment of such illness.
(C) The individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual.
(2) Either--
(A) the referring physician is a participating health care
professional and has concluded that the individual's
participation in such trial would be appropriate based upon
the individual meeting the conditions described in paragraph
(1); or
(B) the participant, beneficiary, or enrollee provides
medical and scientific information establishing that the
individual's participation in such trial would be appropriate
based upon the individual meeting the conditions described in
paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan or
health insurance issuer shall provide for payment for routine
patient costs described in subsection (a)(2) but is not
required to pay for costs of items and services that are
reasonably expected (as determined by the Secretary) to be
paid for by the sponsors of an approved clinical trial.
(2) Payment rate.--In the case of covered items and
services provided by--
(A) a participating provider, the payment rate shall be at
the agreed upon rate; or
(B) a nonparticipating provider, the payment rate shall be
at the rate the plan or issuer would normally pay for
comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation approved and funded (which may include funding
through in-kind contributions) by one or more of the
following:
(A) The National Institutes of Health.
(B) A cooperative group or center of the National
Institutes of Health.
(C) Either of the following if the conditions described in
paragraph (2) are met:
(i) The Department of Veterans Affairs.
(ii) The Department of Defense.
(2) Conditions for departments.--The conditions described
in this paragraph, for a study or investigation conducted by
a Department, are that the study or investigation has been
reviewed and approved through a system of peer review that
the Secretary determines--
(A) to be comparable to the system of peer review of
studies and investigations used by the National Institutes of
Health; and
(B) assures unbiased review of the highest scientific
standards by qualified individuals who have no interest in
the outcome of the review.
(e) Construction.--Nothing in this section shall be
construed to limit a plan's or issuer's coverage with respect
to clinical trials.

Subtitle C--Access to Information

SEC. 121. PATIENT ACCESS TO INFORMATION.

(a) Disclosure Requirement.--
(1) Group health plans.--A group health plan shall--
(A) provide to participants and beneficiaries at the time
of initial coverage under the plan (or the effective date of
this section, in the case of individuals who are participants
or beneficiaries as of such date), and at least annually
thereafter, the information described in subsection (b) in
printed form;
(B) provide to participants and beneficiaries, within a
reasonable period (as specified by the appropriate Secretary)
before or after the date of significant changes in the
information described in subsection (b), information in
printed form on such significant changes; and
(C) upon request, make available to participants and
beneficiaries, the applicable authority, and prospective
participants and beneficiaries, the information described in
subsection (b) or (c) in printed form.
(2) Health insurance issuers.--A health insurance issuer in
connection with the provision of health insurance coverage
shall--
(A) provide to individuals enrolled under such coverage at
the time of enrollment, and at least annually thereafter, the
information described in subsection (b) in printed form;
(B) provide to enrollees, within a reasonable period (as
specified by the appropriate Secretary) before or after the
date of significant changes in the information described in
subsection (b), information in printed form on such
significant changes; and
(C) upon request, make available to the applicable
authority, to individuals who are prospective enrollees, and
to the public the information described in subsection (b) or
(c) in printed form.
(b) Information Provided.--The information described in
this subsection with respect to a group health plan or health
insurance coverage offered by a health insurance issuer
includes the following:
(1) Service area.--The service area of the plan or issuer.
(2) Benefits.--Benefits offered under the plan or coverage,
including--
(A) covered benefits, including benefit limits and coverage
exclusions;
(B) cost sharing, such as deductibles, coinsurance, and
copayment amounts, including any liability for balance
billing, any maximum limitations on out of pocket expenses,
and the maximum out of pocket costs for services that are
provided by nonparticipating providers or that are furnished
without meeting the applicable utilization review
requirements;
(C) the extent to which benefits may be obtained from
nonparticipating providers;
(D) the extent to which a participant, beneficiary, or
enrollee may select from among participating providers and
the types of providers participating in the plan or issuer
network;
(E) process for determining experimental coverage; and
(F) use of a prescription drug formulary.
(3) Access.--A description of the following:
(A) The number, mix, and distribution of providers under
the plan or coverage.
(B) Out-of-network coverage (if any) provided by the plan
or coverage.
(C) Any point-of-service option (including any supplemental
premium or cost-sharing for such option).
(D) The procedures for participants, beneficiaries, and
enrollees to select, access, and change participating primary
and specialty providers.
(E) The rights and procedures for obtaining referrals
(including standing referrals) to participating and
nonparticipating providers.
(F) The name, address, and telephone number of
participating health care providers and an indication of
whether each such provider is available to accept new
patients.
(G) Any limitations imposed on the selection of qualifying
participating health care providers, including any
limitations imposed under section 112(b)(2).
(H) How the plan or issuer addresses the needs of
participants, beneficiaries, and enrollees and others who do
not speak English or who have other special communications
needs in accessing providers under the plan or coverage,
including the provision of information described in this
subsection and subsection (c) to such individuals.
(4) Out-of-area coverage.--Out-of-area coverage provided by
the plan or issuer.
(5) Emergency coverage.--Coverage of emergency services,
including--
(A) the appropriate use of emergency services, including
use of the 911 telephone system or its local equivalent in
emergency situations and an explanation of what constitutes
an emergency situation;
(B) the process and procedures of the plan or issuer for
obtaining emergency services; and
(C) the locations of (i) emergency departments, and (ii)
other settings, in which plan physicians and hospitals
provide emergency services and post-stabilization care.
(6) Percentage of premiums used for benefits (loss-
ratios).--In the case of health insurance coverage only (and
not with respect to group health plans that do not provide
coverage through health insurance coverage), a description of
the overall loss-ratio for the coverage (as defined in
accordance

[[Page S109]]

with rules established or recognized by the Secretary of
Health and Human Services).
(7) Prior authorization rules.--Rules regarding prior
authorization or other review requirements that could result
in noncoverage or nonpayment.
(8) Grievance and appeals procedures.--All appeal or
grievance rights and procedures under the plan or coverage,
including the method for filing grievances and the time
frames and circumstances for acting on grievances and
appeals, who is the applicable authority with respect to the
plan or issuer.
(9) Quality assurance.--Any information made public by an
accrediting organization in the process of accreditation of
the plan or issuer or any additional quality indicators the
plan or issuer makes available.
(10) Information on issuer.--Notice of appropriate mailing
addresses and telephone numbers to be used by participants,
beneficiaries, and enrollees in seeking information or
authorization for treatment.
(11) Notice of requirements.--Notice of the requirements of
this title.
(12) Availability of information on request.--Notice that
the information described in subsection (c) is available upon
request.
(c) Information Made Available Upon Request.--The
information described in this subsection is the following:
(1) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
time frames, and appeal rights) under any utilization review
program under section 101, including under any drug formulary
program under section 118.
(2) Grievance and appeals information.--Information on the
number of grievances and appeals and on the disposition in
the aggregate of such matters.
(3) Method of physician compensation.--A general
description by category (including salary, fee-for-service,
capitation, and such other categories as may be specified in
regulations of the Secretary) of the applicable method by
which a specified prospective or treating health care
professional is (or would be) compensated in connection with
the provision of health care under the plan or coverage.
(4) Specific information on credentials of participating
providers.--In the case of each participating provider, a
description of the credentials of the provider.
(5) Formulary restrictions.--A description of the nature of
any drug formula restrictions.
(6) Participating provider list.--A list of current
participating health care providers.
(d) Construction.--Nothing in this section shall be
construed as requiring public disclosure of individual
contracts or financial arrangements between a group health
plan or health insurance issuer and any provider.

Subtitle D--Protecting the Doctor-Patient Relationship

SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.

(a) General Rule.--The provisions of any contract or
agreement, or the operation of any contract or agreement,
between a group health plan or health insurance issuer in
relation to health insurance coverage (including any
partnership, association, or other organization that enters
into or administers such a contract or agreement) and a
health care provider (or group of health care providers)
shall not prohibit or otherwise restrict a health care
professional from advising such a participant, beneficiary,
or enrollee who is a patient of the professional about the
health status of the individual or medical care or treatment
for the individual's condition or disease, regardless of
whether benefits for such care or treatment are provided
under the plan or coverage, if the professional is acting
within the lawful scope of practice.
(b) Nullification.--Any contract provision or agreement
that restricts or prohibits medical communications in
violation of subsection (a) shall be null and void.

SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS
BASED ON LICENSURE.

(a) In General.--A group health plan and a health insurance
issuer offering health insurance coverage shall not
discriminate with respect to participation or indemnification
as to any provider who is acting within the scope of the
provider's license or certification under applicable State
law, solely on the basis of such license or certification.
(b) Construction.--Subsection (a) shall not be construed--
(1) as requiring the coverage under a group health plan or
health insurance coverage of particular benefits or services
or to prohibit a plan or issuer from including providers only
to the extent necessary to meet the needs of the plan's or
issuer's participants, beneficiaries, or enrollees or from
establishing any measure designed to maintain quality and
control costs consistent with the responsibilities of the
plan or issuer;
(2) to override any State licensure or scope-of-practice
law; or
(3) as requiring a plan or issuer that offers network
coverage to include for participation every willing provider
who meets the terms and conditions of the plan or issuer.

SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE
ARRANGEMENTS.

(a) In General.--A group health plan and a health insurance
issuer offering health insurance coverage may not operate any
physician incentive plan (as defined in subparagraph (B) of
section 1876(i)(8) of the Social Security Act) unless the
requirements described in clauses (i), (ii)(I), and (iii) of
subparagraph (A) of such section are met with respect to such
a plan.
(b) Application.--For purposes of carrying out paragraph
(1), any reference in section 1876(i)(8) of the Social
Security Act to the Secretary, an eligible organization, or
an individual enrolled with the organization shall be treated
as a reference to the applicable authority, a group health
plan or health insurance issuer, respectively, and a
participant, beneficiary, or enrollee with the plan or
organization, respectively.
(c) Construction.--Nothing in this section shall be
construed as prohibiting all capitation and similar
arrangements or all provider discount arrangements.

SEC. 134. PAYMENT OF CLAIMS.

A group health plan, and a health insurance issuer offering
group health insurance coverage, shall provide for prompt
payment of claims submitted for health care services or
supplies furnished to a participant, beneficiary, or enrollee
with respect to benefits covered by the plan or issuer, in a
manner consistent with the provisions of sections 1816(c)(2)
and 1842(c)(2) of the Social Security Act (42 U.S.C.
1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for
purposes of this section, subparagraph (C) of section
1816(c)(2) of the Social Security Act shall be treated as
applying to claims received from a participant, beneficiary,
or enrollee as well as claims referred to in such
subparagraph.

SEC. 135. PROTECTION FOR PATIENT ADVOCACY.

(a) Protection for Use of Utilization Review and Grievance
Process.--A group health plan, and a health insurance issuer
with respect to the provision of health insurance coverage,
may not retaliate against a participant, beneficiary,
enrollee, or health care provider based on the participant's,
beneficiary's, enrollee's or provider's use of, or
participation in, a utilization review process or a grievance
process of the plan or issuer (including an internal or
external review or appeal process) under this title.
(b) Protection for Quality Advocacy by Health Care
Professionals.--
(1) In general.--A group health plan or health insurance
issuer may not retaliate or discriminate against a protected
health care professional because the professional in good
faith--
(A) discloses information relating to the care, services,
or conditions affecting one or more participants,
beneficiaries, or enrollees of the plan or issuer to an
appropriate public regulatory agency, an appropriate private
accreditation body, or appropriate management personnel of
the plan or issuer; or
(B) initiates, cooperates, or otherwise participates in an
investigation or proceeding by such an agency with respect to
such care, services, or conditions.

If an institutional health care provider is a participating
provider with such a plan or issuer or otherwise receives
payments for benefits provided by such a plan or issuer, the
provisions of the previous sentence shall apply to the
provider in relation to care, services, or conditions
affecting one or more patients within an institutional health
care provider in the same manner as they apply to the plan or
issuer in relation to care, services, or conditions provided
to one or more participants, beneficiaries, or enrollees; and
for purposes of applying this sentence, any reference to a
plan or issuer is deemed a reference to the institutional
health care provider.
(2) Good faith action.--For purposes of paragraph (1), a
protected health care professional is considered to be acting
in good faith with respect to disclosure of information or
participation if, with respect to the information disclosed
as part of the action--
(A) the disclosure is made on the basis of personal
knowledge and is consistent with that degree of learning and
skill ordinarily possessed by health care professionals with
the same licensure or certification and the same experience;
(B) the professional reasonably believes the information to
be true;
(C) the information evidences either a violation of a law,
rule, or regulation, of an applicable accreditation standard,
or of a generally recognized professional or clinical
standard or that a patient is in imminent hazard of loss of
life or serious injury; and
(D) subject to subparagraphs (B) and (C) of paragraph (3),
the professional has followed reasonable internal procedures
of the plan, issuer, or institutional health care provider
established for the purpose of addressing quality concerns
before making the disclosure.
(3) Exception and special rule.--
(A) General exception.--Paragraph (1) does not protect
disclosures that would violate Federal or State law or
diminish or impair the rights of any person to the continued
protection of confidentiality of communications provided by
such law.
(B) Notice of internal procedures.--Subparagraph (D) of
paragraph (2) shall not apply unless the internal procedures
involved are reasonably expected to be known to the health
care professional involved. For purposes of this
subparagraph, a health care professional is reasonably
expected to know of internal procedures if those procedures
have been made available to the professional through
distribution or posting.
(C) Internal procedure exception.--Subparagraph (D) of
paragraph (2) also shall not apply if--

[[Page S110]]

(i) the disclosure relates to an imminent hazard of loss of
life or serious injury to a patient;
(ii) the disclosure is made to an appropriate private
accreditation body pursuant to disclosure procedures
established by the body; or
(iii) the disclosure is in response to an inquiry made in
an investigation or proceeding of an appropriate public
regulatory agency and the information disclosed is limited to
the scope of the investigation or proceeding.
(4) Additional considerations.--It shall not be a violation
of paragraph (1) to take an adverse action against a
protected health care professional if the plan, issuer, or
provider taking the adverse action involved demonstrates that
it would have taken the same adverse action even in the
absence of the activities protected under such paragraph.
(5) Notice.--A group health plan, health insurance issuer,
and institutional health care provider shall post a notice,
to be provided or approved by the Secretary of Labor, setting
forth excerpts from, or summaries of, the pertinent
provisions of this subsection and information pertaining to
enforcement of such provisions.
(6) Constructions.--
(A) Determinations of coverage.--Nothing in this subsection
shall be construed to prohibit a plan or issuer from making a
determination not to pay for a particular medical treatment
or service or the services of a type of health care
professional.
(B) Enforcement of peer review protocols and internal
procedures.--Nothing in this subsection shall be construed to
prohibit a plan, issuer, or provider from establishing and
enforcing reasonable peer review or utilization review
protocols or determining whether a protected health care
professional has complied with those protocols or from
establishing and enforcing internal procedures for the
purpose of addressing quality concerns.
(C) Relation to other rights.--Nothing in this subsection
shall be construed to abridge rights of participants,
beneficiaries, enrollees, and protected health care
professionals under other applicable Federal or State laws.
(7) Protected health care professional defined.--For
purposes of this subsection, the term ``protected health care
professional'' means an individual who is a licensed or
certified health care professional and who--
(A) with respect to a group health plan or health insurance
issuer, is an employee of the plan or issuer or has a
contract with the plan or issuer for provision of services
for which benefits are available under the plan or issuer; or
(B) with respect to an institutional health care provider,
is an employee of the provider or has a contract or other
arrangement with the provider respecting the provision of
health care services.

Subtitle E--Definitions

SEC. 151. DEFINITIONS.

(a) Incorporation of General Definitions.--Except as
otherwise provided, the provisions of section 2791 of the
Public Health Service Act shall apply for purposes of this
title in the same manner as they apply for purposes of title
XXVII of such Act.
(b) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Health and Human
Services, in consultation with the Secretary of Labor and the
term ``appropriate Secretary'' means the Secretary of Health
and Human Services in relation to carrying out this title
under sections 2706 and 2751 of the Public Health Service Act
and the Secretary of Labor in relation to carrying out this
title under section 713 of the Employee Retirement Income
Security Act of 1974.
(c) Additional Definitions.--For purposes of this title:
(1) Actively practicing.--The term ``actively practicing''
means, with respect to a physician or other health care
professional, such a physician or professional who provides
professional services to individual patients on average at
least two full days per week.
(2) Applicable authority.--The term ``applicable
authority'' means--
(A) in the case of a group health plan, the Secretary of
Health and Human Services and the Secretary of Labor; and
(B) in the case of a health insurance issuer with respect
to a specific provision of this title, the applicable State
authority (as defined in section 2791(d) of the Public Health
Service Act), or the Secretary of Health and Human Services,
if such Secretary is enforcing such provision under section
2722(a)(2) or 2761(a)(2) of the Public Health Service Act.
(3) Clinical peer.--The term ``clinical peer'' means, with
respect to a review or appeal, an actively practicing
physician (allopathic or osteopathic) or other actively
practicing health care professional who holds a nonrestricted
license, and who is appropriately credentialed in the same or
similar specialty or subspecialty (as appropriate) as
typically handles the medical condition, procedure, or
treatment under review or appeal and includes a pediatric
specialist where appropriate; except that only a physician
(allopathic or osteopathic) may be a clinical peer with
respect to the review or appeal of treatment recommended or
rendered by a physician.
(4) Enrollee.--The term ``enrollee'' means, with respect to
health insurance coverage offered by a health insurance
issuer, an individual enrolled with the issuer to receive
such coverage.
(5) Group health plan.--The term ``group health plan'' has
the meaning given such term in section 733(a) of the Employee
Retirement Income Security Act of 1974 and in section
2791(a)(1) of the Public Health Service Act.
(6) Health care professional.--The term ``health care
professional'' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.
(7) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional or other facility
or agency that provides health care services and that is
licensed, accredited, or certified to provide health care
items and services under applicable State law.
(8) Network.--The term ``network'' means, with respect to a
group health plan or health insurance issuer offering health
insurance coverage, the participating health care
professionals and providers through whom the plan or issuer
provides health care items and services to participants,
beneficiaries, or enrollees.
(9) Nonparticipating.--The term ``nonparticipating'' means,
with respect to a health care provider that provides health
care items and services to a participant, beneficiary, or
enrollee under group health plan or health insurance
coverage, a health care provider that is not a participating
health care provider with respect to such items and services.
(10) Participating.--The term ``participating'' means, with
respect to a health care provider that provides health care
items and services to a participant, beneficiary, or enrollee
under group health plan or health insurance coverage offered
by a health insurance issuer, a health care provider that
furnishes such items and services under a contract or other
arrangement with the plan or issuer.
(11) Prior authorization.--The term ``prior authorization''
means the process of obtaining prior approval from a health
insurance issuer or group health plan for the provision or
coverage of medical services.

SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

(a) Continued Applicability of State Law With Respect to
Health Insurance Issuers.--
(1) In general.--Subject to paragraph (2), this title shall
not be construed to supersede any provision of State law
which establishes, implements, or continues in effect any
standard or requirement solely relating to health insurance
issuers (in connection with group health insurance coverage
or otherwise) except to the extent that such standard or
requirement prevents the application of a requirement of this
title.
(2) Continued preemption with respect to group health
plans.--Nothing in this title shall be construed to affect or
modify the provisions of section 514 of the Employee
Retirement Income Security Act of 1974 with respect to group
health plans.
(b) Definitions.--For purposes of this section:
(1) State law.--The term ``State law'' includes all laws,
decisions, rules, regulations, or other State action having
the effect of law, of any State. A law of the United States
applicable only to the District of Columbia shall be treated
as a State law rather than a law of the United States.
(2) State.--The term ``State'' includes a State, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, any political
subdivisions of such, or any agency or instrumentality of
such.

SEC. 153. EXCLUSIONS.

(a) No Benefit Requirements.--Nothing in this title shall
be construed to require a group health plan or a health
insurance issuer offering health insurance coverage to
include specific items and services under the terms of such a
plan or coverage, other than those that are provided for
under the terms of such plan or coverage.
(b) Exclusion From Access to Care Managed Care Provisions
for Fee-for-Service Coverage.--
(1) In general.--The provisions of sections 111 through 117
shall not apply to a group health plan or health insurance
coverage if the only coverage offered under the plan or
coverage is fee-for-service coverage (as defined in paragraph
(2)).
(2) Fee-for-service coverage defined.--For purposes of this
subsection, the term ``fee-for-service coverage'' means
coverage under a group health plan or health insurance
coverage that--
(A) reimburses hospitals, health professionals, and other
providers on the basis of a rate determined by the plan or
issuer on a fee-for-service basis without placing the
provider at financial risk;
(B) does not vary reimbursement for such a provider based
on an agreement to contract terms and conditions or the
utilization of health care items or services relating to such
provider;
(C) does not restrict the selection of providers among
those who are lawfully authorized to provide the covered
services and agree to accept the terms and conditions of
payment established under the plan or by the issuer; and

[[Page S111]]

(D) for which the plan or issuer does not require prior
authorization before providing coverage for any services.

SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.

Only for purposes of applying the requirements of this
title under sections 2707 and 2753 of the Public Health
Service Act and section 714 of the Employee Retirement Income
Security Act of 1974, section 2791(c)(2)(A), and section
733(c)(2)(A) of the Employee Retirement Income Security Act
of 1974 shall be deemed not to apply.

SEC. 155. REGULATIONS.

The Secretaries of Health and Human Services and Labor
shall issue such regulations as may be necessary or
appropriate to carry out this title. Such regulations shall
be issued consistent with section 104 of Health Insurance
Portability and Accountability Act of 1996. Such Secretaries
may promulgate any interim final rules as the Secretaries
determine are appropriate to carry out this title.

TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT

SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH
INSURANCE COVERAGE.

(a) In General.--Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at the end the
following new section:

``SEC. 2707. PATIENT PROTECTION STANDARDS.

``(a) In General.--Each group health plan shall comply with
patient protection requirements under title I of the
Patients' Bill of Rights Act, and each health insurance
issuer shall comply with patient protection requirements
under such title with respect to group health insurance
coverage it offers, and such requirements shall be deemed to
be incorporated into this subsection.
``(b) Notice.--A group health plan shall comply with the
notice requirement under section 711(d) of the Employee
Retirement Income Security Act of 1974 with respect to the
requirements referred to in subsection (a) and a health
insurance issuer shall comply with such notice requirement as
if such section applied to such issuer and such issuer were a
group health plan.''.
(b) Conforming Amendment.--Section 2721(b)(2)(A) of such
Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting
``(other than section 2707)'' after ``requirements of such
subparts''.

SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE
COVERAGE.

Part B of title XXVII of the Public Health Service Act is
amended by inserting after section 2752 the following new
section:

``SEC. 2753. PATIENT PROTECTION STANDARDS.

``(a) In General.--Each health insurance issuer shall
comply with patient protection requirements under title I of
the Patients' Bill of Rights Act with respect to individual
health insurance coverage it offers, and such requirements
shall be deemed to be incorporated into this subsection.
``(b) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 711(d)
of the Employee Retirement Income Security Act of 1974 with
respect to the requirements of such title as if such section
applied to such issuer and such issuer were a group health
plan.''.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974

SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO
GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.

Subpart B of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 is amended by
adding at the end the following new section:

``SEC. 714. PATIENT PROTECTION STANDARDS.

``(a) In General.--Subject to subsection (b), a group
health plan (and a health insurance issuer offering group
health insurance coverage in connection with such a plan)
shall comply with the requirements of title I of the
Patients' Bill of Rights Act (as in effect as of the date
of the enactment of such Act), and such requirements shall
be deemed to be incorporated into this subsection.
``(b) Plan Satisfaction of Certain Requirements.--
``(1) Satisfaction of certain requirements through
insurance.--For purposes of subsection (a), insofar as a
group health plan provides benefits in the form of health
insurance coverage through a health insurance issuer, the
plan shall be treated as meeting the following requirements
of title I of the Patients' Bill of Rights Act with respect
to such benefits and not be considered as failing to meet
such requirements because of a failure of the issuer to meet
such requirements so long as the plan sponsor or its
representatives did not cause such failure by the issuer:
``(A) Section 112 (relating to choice of providers).
``(B) Section 113 (relating to access to emergency care).
``(C) Section 114 (relating to access to specialty care).
``(D) Section 115 (relating to access to obstetrical and
gynecological care).
``(E) Section 116 (relating to access to pediatric care).
``(F) Section 117(a)(1) (relating to continuity in case of
termination of provider contract) and section 117(a)(2)
(relating to continuity in case of termination of issuer
contract), but only insofar as a replacement issuer assumes
the obligation for continuity of care.
``(G) Section 118 (relating to access to needed
prescription drugs).
``(H) Section 119 (relating to coverage for individuals
participating in approved clinical trials.)
``(I) Section 134 (relating to payment of claims).
``(2) Information.--With respect to information required to
be provided or made available under section 121, in the case
of a group health plan that provides benefits in the form of
health insurance coverage through a health insurance issuer,
the Secretary shall determine the circumstances under which
the plan is not required to provide or make available the
information (and is not liable for the issuer's failure to
provide or make available the information), if the issuer is
obligated to provide and make available (or provides and
makes available) such information.
``(3) Grievance and internal appeals.--With respect to the
internal appeals process and the grievance system required to
be established under sections 102 and 104, in the case of a
group health plan that provides benefits in the form of
health insurance coverage through a health insurance issuer,
the Secretary shall determine the circumstances under which
the plan is not required to provide for such process and
system (and is not liable for the issuer's failure to provide
for such process and system), if the issuer is obligated to
provide for (and provides for) such process and system.
``(4) External appeals.--Pursuant to rules of the
Secretary, insofar as a group health plan enters into a
contract with a qualified external appeal entity for the
conduct of external appeal activities in accordance with
section 103, the plan shall be treated as meeting the
requirement of such section and is not liable for the
entity's failure to meet any requirements under such section.
``(5) Application to prohibitions.--Pursuant to rules of
the Secretary, if a health insurance issuer offers health
insurance coverage in connection with a group health plan and
takes an action in violation of any of the following
sections, the group health plan shall not be liable for such
violation unless the plan caused such violation:
``(A) Section 131 (relating to prohibition of interference
with certain medical communications).
``(B) Section 132 (relating to prohibition of
discrimination against providers based on licensure).
``(C) Section 133 (relating to prohibition against improper
incentive arrangements).
``(D) Section 135 (relating to protection for patient
advocacy).
``(6) Construction.--Nothing in this subsection shall be
construed to affect or modify the responsibilities of the
fiduciaries of a group health plan under part 4 of subtitle
B.
``(7) Application to certain prohibitions against
retaliation.--With respect to compliance with the
requirements of section 135(b)(1) of the Patients' Bill of
Rights Act, for purposes of this subtitle the term `group
health plan' is deemed to include a reference to an
institutional health care provider.
``(c) Enforcement of Certain Requirements.--
``(1) Complaints.--Any protected health care professional
who believes that the professional has been retaliated or
discriminated against in violation of section 135(b)(1) of
the Patients' Bill of Rights Act may file with the Secretary
a complaint within 180 days of the date of the alleged
retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such
complaints and shall determine if a violation of such section
has occurred and, if so, shall issue an order to ensure that
the protected health care professional does not suffer any
loss of position, pay, or benefits in relation to the plan,
issuer, or provider involved, as a result of the violation
found by the Secretary.
``(d) Conforming Regulations.--The Secretary may issue
regulations to coordinate the requirements on group health
plans under this section with the requirements imposed under
the other provisions of this title.''.
(b) Satisfaction of ERISA Claims Procedure Requirement.--
Section 503 of such Act (29 U.S.C. 1133) is amended by
inserting ``(a)'' after ``Sec. 503.'' and by adding at the
end the following new subsection:
``(b) In the case of a group health plan (as defined in
section 733) compliance with the requirements of subtitle A
of title I of the Patients Bill of Rights Act in the case of
a claims denial shall be deemed compliance with subsection
(a) with respect to such claims denial.''.
(c) Conforming Amendments.--(1) Section 732(a) of such Act
(29 U.S.C. 1185(a)) is amended by striking ``section 711''
and inserting ``sections 711 and 714''.
(2) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 713
the following new item:

``Sec. 714. Patient protection standards.''.

[[Page S112]]

(3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is
amended by inserting ``(other than section 135(b))'' after
``part 7''.

SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN ACTIONS
INVOLVING HEALTH INSURANCE POLICYHOLDERS.

(a) In General.--Section 514 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1144) (as amended by
section 301(b)) is amended further by adding at the end the
following subsections:
``(f) Preemption Not To Apply to Certain Actions Arising
Out of Provision of Health Benefits.--
``(1) Non-preemption of certain causes of action.--
``(A) In general.--Except as provided in this subsection,
nothing in this title shall be construed to invalidate,
impair, or supersede any cause of action by a participant or
beneficiary (or the estate of a participant or beneficiary)
under State law to recover damages resulting from personal
injury or for wrongful death against any person--
``(i) in connection with the provision of insurance,
administrative services, or medical services by such person
to or for a group health plan as defined in section 733), or
``(ii) that arises out of the arrangement by such person
for the provision of such insurance, administrative services,
or medical services by other persons.
``(B) Limitation on punitive damages.--
``(i) In general.--No person shall be liable for any
punitive, exemplary, or similar damages in the case of a
cause of action brought under subparagraph (A) if--

``(I) it relates to an externally appealable decision (as
defined in subsection (a)(2) of section 103 of the Patients'
Bill of Rights Act);
``(II) an external appeal with respect to such decision was
completed under such section 103;
``(III) in the case such external appeal was initiated by
the plan or issuer filing the request for the external
appeal, the request was filed on a timely basis before the
date the action was brought or, if later, within 30 days
after the date the externally appealable decision was made;
and
``(IV) the plan or issuer complied with the determination
of the external appeal entity upon receipt of the
determination of the external appeal entity.

The provisions of this clause supersede any State law or
common law to the contrary.
``(ii) Exception.--Clause (i) shall not apply with respect
to damages in the case of a cause of action for wrongful
death if the applicable State law provides (or has been
construed to provide) for damages in such a cause of action
which are only punitive or exemplary in nature.
``(C) Personal injury defined.--For purposes of this
subsection, the term `personal injury' means a physical
injury and includes an injury arising out of the treatment
(or failure to treat) a mental illness or disease.
``(2) Exception for group health plans, employers, and
other plan sponsors.--
``(A) In general.--Subject to subparagraph (B), paragraph
(1) does not authorize--
``(i) any cause of action against a group health plan or an
employer or other plan sponsor maintaining the plan (or
against an employee of such a plan, employer, or sponsor
acting within the scope of employment), or
``(ii) a right of recovery, indemnity, or contribution by a
person against a group health plan or an employer or other
plan sponsor (or such an employee) for damages assessed
against the person pursuant to a cause of action under
paragraph (1).
``(B) Special rule.--Subparagraph (A) shall not preclude
any cause of action described in paragraph (1) against group
health plan or an employer or other plan sponsor (or against
an employee of such a plan, employer, or sponsor acting
within the scope of employment) if--
``(i) such action is based on the exercise by the plan,
employer, or sponsor (or employee) of discretionary authority
to make a decision on a claim for benefits covered under the
plan or health insurance coverage in the case at issue; and
``(ii) the exercise by the plan, employer, or sponsor (or
employee) of such authority resulted in personal injury or
wrongful death.
``(C) Exception.--The exercise of discretionary authority
described in subparagraph (B)(i) shall not be construed to
include--
``(i) the decision to include or exclude from the plan any
specific benefit;
``(ii) any decision to provide extra-contractual benefits;
or
``(iii) any decision not to consider the provision of a
benefit while internal or external review is being conducted.
``(3) Futility of exhaustion.--An individual bringing an
action under this subsection is required to exhaust
administrative processes under sections 102 and 103 of the
Patients' Bill of Rights Act, unless the injury to or death
of such individual has occurred before the completion of such
processes.
``(4) Construction.--Nothing in this subsection shall be
construed as--
``(A) permitting a cause of action under State law for the
failure to provide an item or service which is specifically
excluded under the group health plan involved;
``(B) as preempting a State law which requires an affidavit
or certificate of merit in a civil action; or
``(C) permitting a cause of action or remedy under State
law in connection with the provision or arrangement of
excepted benefits (as defined in section 733(c)), other than
those described in section 733(c)(2)(A).
``(g) Rules of Construction Relating to Health Care.--
Nothing in this title shall be construed as--
``(1) permitting the application of State laws that are
otherwise superseded by this title and that mandate the
provision of specific benefits by a group health plan (as
defined in section 733(a)) or a multiple employer welfare
arrangement (as defined in section 3(40)), or
``(2) affecting any State law which regulates the practice
of medicine or provision of medical care, or affecting any
action based upon such a State law.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to acts and omissions occurring on or after the
date of enactment of this Act, from which a cause of action
arises.

SEC. 303. LIMITATIONS ON ACTIONS.

Section 502 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132) is amended further by adding at the
end the following new subsection:
``(n)(1) Except as provided in this subsection, no action
may be brought under subsection (a)(1)(B), (a)(2), or (a)(3)
by a participant or beneficiary seeking relief based on the
application of any provision in section 101, subtitle B, or
subtitle D of title I of the Patients' Bill of Rights Act (as
incorporated under section 714).
``(2) An action may be brought under subsection (a)(1)(B),
(a)(2), or (a)(3) by a participant or beneficiary seeking
relief based on the application of section 101, 113, 114,
115, 116, 117, 119, or 118(3) of the Patients' Bill of Rights
Act (as incorporated under section 714) to the individual
circumstances of that participant or beneficiary, except
that--
``(A) such an action may not be brought or maintained as a
class action; and
``(B) in such an action, relief may only provide for the
provision of (or payment of) benefits, items, or services
denied to the individual participant or beneficiary involved
(and for attorney's fees and the costs of the action, at the
discretion of the court) and shall not provide for any other
relief to the participant or beneficiary or for any relief to
any other person.
``(3) Nothing in this subsection shall be construed as
affecting any action brought by the Secretary.''.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE
CODE OF 1986

SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

Subchapter B of chapter 100 of the Internal Revenue Code of
1986 is amended--
(1) in the table of sections, by inserting after the item
relating to section 9812 the following new item:

``Sec. 9813. Standard relating to patient freedom of choice.'';

and
(2) by inserting after section 9812 the following:

``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

``A group health plan shall comply with the requirements of
title I of the Patients' Bill of Rights Act (as in effect as
of the date of the enactment of such Act), and such
requirements shall be deemed to be incorporated into this
section.''.

TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

SEC. 501. EFFECTIVE DATES.

(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2), the amendments
made by sections 201(a), 301, 303, and 401 (and title I
insofar as it relates to such sections) shall apply with
respect to group health plans, and health insurance coverage
offered in connection with group health plans, for plan years
beginning on or after January 1, 2002 (in this section
referred to as the ``general effective date'') and also shall
apply to portions of plan years occurring on and after such
date.
(2) Treatment of collective bargaining agreements.--In the
case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
sections 201(a), 301, 303, and 401 (and title I insofar as it
relates to such sections) shall not apply to plan years
beginning before the later of--
(A) the date on which the last collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act); or
(B) the general effective date.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by this Act shall not be treated as a
termination of such collective bargaining agreement.
(b) Individual Health Insurance Coverage.--The amendments
made by section 202 shall apply with respect to individual
health insurance coverage offered, sold, issued, renewed, in
effect, or operated in the individual market on or after the
general effective date.

SEC. 502. COORDINATION IN IMPLEMENTATION.

The Secretary of Labor, the Secretary of Health and Human
Services, and the Secretary of the Treasury shall ensure,
through

[[Page S113]]

the execution of an interagency memorandum of understanding
among such Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under the provisions of this
Act (and the amendments made thereby) are administered so as
to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.

TITLE VI--MISCELLANEOUS PROVISIONS

SEC. 601. HEALTH CARE PAPERWORK SIMPLIFICATION.

(a) Establishment of Panel.--
(1) Establishment.--There is established a panel to be
known as the Health Care Panel to Devise a Uniform
Explanation of Benefits (in this section referred to as the
``Panel'').
(2) Duties of panel.--
(A) In general.--The Panel shall devise a single form for
use by third-party health care payers for the remittance of
claims to providers.
(B) Definition.--For purposes of this section, the term
``third-party health care payer'' means any entity that
contractually pays health care bills for an individual.
(3) Membership.--
(A) Size and composition.--The Secretary of Health and
Human Services shall determine the number of members and the
composition of the Panel. Such Panel shall include equal
numbers of representatives of private insurance
organizations, consumer groups, State insurance
commissioners, State medical societies, State hospital
associations, and State medical specialty societies.
(B) Terms of appointment.--The members of the Panel shall
serve for the life of the Panel.
(C) Vacancies.--A vacancy in the Panel shall not affect the
power of the remaining members to execute the duties of the
Panel, but any such vacancy shall be filled in the same
manner in which the original appointment was made.
(4) Procedures.--
(A) Meetings.--The Panel shall meet at the call of a
majority of its members.
(B) First meeting.--The Panel shall convene not later than
60 days after the date of the enactment of the Patients' Bill
of Rights Act.
(C) Quorum.--A quorum shall consist of a majority of the
members of the Panel.
(D) Hearings.--For the purpose of carrying out its duties,
the Panel may hold such hearings and undertake such other
activities as the Panel determines to be necessary to carry
out its duties.
(5) Administration.--
(A) Compensation.--Except as provided in subparagraph (B),
members of the Panel shall receive no additional pay,
allowances, or benefits by reason of their service on the
Panel.
(B) Travel expenses and per diem.--Each member of the Panel
who is not an officer or employee of the Federal Government
shall receive travel expenses and per diem in lieu of
subsistence in accordance with sections 5702 and 5703 of
title 5, United States Code.
(C) Contract authority.--The Panel may contract with and
compensate Government and private agencies or persons for
items and services, without regard to section 3709 of the
Revised Statutes (41 U.S.C. 5).
(D) Use of mails.--The Panel may use the United States
mails in the same manner and under the same conditions as
Federal agencies and shall, for purposes of the frank, be
considered a commission of Congress as described in
section 3215 of title 39, United States Code.
(E) Administrative support services.--Upon the request of
the Panel, the Secretary of Health and Human Services shall
provide to the Panel on a reimbursable basis such
administrative support services as the Panel may request.
(6) Submission of form.--Not later than 2 years after the
first meeting, the Panel shall submit a form to the Secretary
of Health and Human Services for use by third-party health
care payers.
(7) Termination.--The Panel shall terminate on the day
after submitting the form under paragraph (6).
(b) Requirement for Use of Form by Third-Party Care
Payers.--A third-party health care payer shall be required to
use the form devised under subsection (a) for plan years
beginning on or after 5 years following the date of the
enactment of this Act.

SEC. 602. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

(a) In General.--Nothing in this Act (or an amendment made
by this Act) shall be construed to alter or amend the Social
Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of
this Act has a negative impact on the income and balances of
the trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer,
not less frequently than quarterly, from the general revenues
of the Federal Government an amount sufficient so as to
ensure that the income and balances of such trust funds are
not reduced as a result of the enactment of such Act.
______

By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Dodd, Mr. Bingaman,
Mrs. Murray, Mr. Wellstone, Mr. Dorgan, Ms. Mikulski, Mr.
Levin, Mrs. Clinton, Mr. Schumer, Mr. Rockefeller, Mr. Johnson,
Mr. Corzine, Mr. Biden, Mr. Kerry, and Mr. Reed)
S. 7. A bill to improve public education for all children and support
lifelong learning; to the Committee on Health, Education, Labor, and
Pensions.

educational excellence for all learners act of 2001

Mr. DASCHLE. 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.7

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
``Educational Excellence for All Learners Act of 2001''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. References.

TITLE I--HOLDING SCHOOLS ACCOUNTABLE

Sec. 100. Short title.

Subtitle A--Helping Disadvantaged Children

Sec. 101. Reservations for accountability.
Sec. 102. Improved accountability.
Sec. 103. Comprehensive school reform.

Subtitle B--Teachers

Sec. 121. State applications.

Subtitle C--Innovative Education

Sec. 131. Requirements for State plans.
Sec. 132. Performance objectives.
Sec. 133. Report cards.
Sec. 134. Additional accountability provisions.

TITLE II--CLOSING THE ACHIEVEMENT GAP

Subtitle A--Reauthorization of Programs

Sec. 201. Authorization of appropriations.

Subtitle B--Options: Opportunities to Improve our Nation's Schools

Sec. 211. Options: Opportunities to Improve our Nation's Schools.

Subtitle C--Parental Involvement

Sec. 221. State plans.
Sec. 222. Parental assistance.

TITLE III--NATIONAL PRIORITIES WITH PROVEN EFFECTIVENESS

Subtitle A--Qualified Teacher in Every Classroom

Sec. 301. Teacher quality.

Subtitle B--Safe, Healthy Schools and Communities

Chapter 1--Grants for School Renovation

Sec. 311. Grants for school renovation.
Sec. 312. Charter school credit enhancement initiative.

Chapter 2--School Construction

Sec. 321. Short title.
Sec. 322. Expansion of incentives for public schools.
Sec. 323. Application of certain labor standards on construction
projects financed under public school modernization
program.
Sec. 324. Employment and training activities relating to construction
or reconstruction of public school facilities.
Sec. 325. Indian school construction.

Chapter 3--21st Century Community Learning Centers

Sec. 331. Reauthorization.

Chapter 4--Enhancement of Basic Learning Skills

Sec. 341. Reducing class size.
Sec. 342. Reading excellence.
Sec. 343. Tutorial assistance grants.

Chapter 5--Integration of Technology into the Classroom

Sec. 351. Short title.
Sec. 352. Local applications for school technology resource grants.
Sec. 353. Teacher preparation.
Sec. 354. Professional development.

TITLE IV--INDIVIDUALS WITH DISABILITIES EDUCATION ACT

Sec. 401. Full funding of IDEA.

TITLE V--MAKING HIGHER EDUCATION MORE AFFORDABLE

Sec. 501. Increase in maximum Pell grant.
Sec. 502. Deduction for higher education expenses.

SEC. 2. REFERENCES.

Except as otherwise expressly provided, whenever in this
Act an amendment or repeal is expressed in terms of an
amendment

[[Page S114]]

to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other
provision of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 6301 et seq.).

TITLE I--HOLDING SCHOOLS ACCOUNTABLE

SEC. 100. SHORT TITLE.

This title may be cited as the ``School Improvement
Accountability Act''.

Subtitle A--Helping Disadvantaged Children

SEC. 101. RESERVATIONS FOR ACCOUNTABILITY.

Section 1003 (20 U.S.C. 6303) is amended to read as
follows:

``SEC. 1003. RESERVATION FOR ACCOUNTABILITY AND SCHOOL
IMPROVEMENT.

``(a) State Reservation.--
``(1) In general.--Each State educational agency shall
reserve 3 percent of the amount the agency receives under
part A for each of fiscal years 2002 and 2003, and 5 percent
of that amount for each of fiscal years 2004 through 2006, to
carry out paragraph (2) and to carry out its responsibilities
under sections 1116 and 1117, including carrying out its
statewide system of technical assistance and providing
support for local educational agencies.
``(2) Local educational agencies.--Of the amount reserved
under paragraph (1) for any fiscal year, the State
educational agency shall allocate at least 80 percent
directly to local educational agencies. In making allocations
under this paragraph, the State educational agency shall give
first priority to agencies, and agencies serving schools,
identified for corrective action or improvement under section
1116(c).
``(3) Use of funds.--Each local educational agency
receiving an allotment under paragraph (2) shall use the
allotment to--
``(A) carry out corrective action, as defined in section
1116(c)(5)(A), in those schools; or
``(B) achieve substantial improvement in the performance of
those schools.
``(b) National Activities.--From the total amount
appropriated for any fiscal year to carry out this title, the
Secretary may reserve not more than 0.30 percent to conduct
evaluations and studies and to collect data.''.

SEC. 102. IMPROVED ACCOUNTABILITY.

(a) State Plans.--Section 1111(b) (20 U.S.C. 6311(b)) is
amended--
(1) in the subsection heading, by striking ``and
Assessments'' and inserting ``, Assessments, and
Accountability'';
(2) by amending paragraph (2) to read as follows:
``(2) Adequate yearly progress.--(A) Each State plan shall
specify what constitutes adequate yearly progress in student
achievement, under the State's accountability system
described in paragraph (4), for each school and each local
educational agency receiving funds under this part, and for
the State.
``(B) The specification of adequate yearly progress in the
State plan for schools--
``(i) shall be based primarily on the standards described
in paragraph (1) and the valid and reliable assessments
aligned to State standards described in paragraph (3);
``(ii) shall include specific numerical adequate yearly
progress requirements in each subject and grade included in
the State assessments at least for each of the assessments
required under paragraph (3) and shall base the numerical
goal required for each group of students specified in clause
(iv) upon a timeline that ensures all students meet or exceed
the proficient level of performance on the assessments
required by this section within 10 years after the effective
date of the School Improvement Accountability Act;
``(iii) shall include other academic indicators, such as
school completion or dropout rates, with the data for all
such academic indicators disaggregated as required by clause
(iv), but the inclusion of such indicators shall not decrease
the number of schools or local educational agencies that
would be subject to identification for improvement or
corrective action if the indicators were not included;
``(iv) shall compare separately data for the State as a
whole, for each local educational agency, and for each
school, regarding the performance and progress of students,
disaggregated by each major ethnic and racial group, by
English proficiency status, and by economically disadvantaged
students as compared with students who are not economically
disadvantaged (except that such disaggregation shall not be
required in a case in which the number of students in a
category would be insufficient to yield statistically
reliable information or the results would reveal individually
identifiable information about individual students); and
``(v) shall compare the proportion of students at the
basic, proficient, and advanced levels of performance in a
grade for a year with the proportion of students at each of
the 3 levels in the same grade in the previous year.
``(C)(i) Adequate yearly progress for a local educational
agency shall be based upon both--
``(I) the number or percentage of schools identified for
school improvement or corrective action; and
``(II) the progress of the local educational agency in
reducing the number or length of time schools are identified
for school improvement or corrective action.
``(ii) The State plan shall provide that each local
educational agency shall ensure that, not later than the end
of the fourth academic year after the effective date of the
School Improvement Accountability Act, the percentage of
schools making adequate yearly progress among schools whose
concentrations of poor children are greater than the average
concentration of such children served by the local
educational agency shall not be less than the percentage of
schools making adequate yearly progress among schools whose
concentrations of poor children are less than the average
concentration of such children served by the local
educational agency.
``(D)(i) Adequate yearly progress for a State shall be
based upon both--
``(I) the number or percentage of local educational
agencies identified for improvement or corrective action; and
``(II) the progress of the State in reducing the number or
length of time local educational agencies are identified for
improvement or corrective action.
``(ii) The State plan shall provide that the State shall
ensure that, not later than the end of the fourth academic
year after the effective date of the School Improvement
Accountability Act, the percentage of local educational
agencies making adequate yearly progress among local
educational agencies whose concentrations of poor children
are greater than the State average of such concentrations
shall not be less than the percentage of local educational
agencies making adequate yearly progress among local
educational agencies whose concentrations of poor children
are less than the State average.'';
(3) in paragraph (3)--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``developed or adopted'' and inserting ``in
place''; and
(ii) by inserting ``, not later than the school year 2000-
2001,'' after ``will be used'';
(B) by redesignating subparagraphs (G), (H), and (I) as
subparagraphs (H), (I), and (J);
(C) in subparagraph (F)--
(i) in clause (ii), by striking ``and'' after the
semicolon; and
(ii) by adding at the end the following:
``(iv) the use of assessments written in Spanish for the
assessment of Spanish-speaking students with limited English
proficiency, if Spanish-language assessments are more likely
than English language assessments to yield accurate and
reliable information regarding what those students know and
can do in content areas other than English; and
``(v) notwithstanding clauses (iii) and (iv), the
assessment (using tests written in English) of reading or
language arts of any student who has attended school in the
United States (not including Puerto Rico) for 3 or more
consecutive years, for purposes of school accountability;'';
(D) by inserting after subparagraph (F) the following:
``(G) result in a report from each local educational agency
that indicates the number and percentage of students excluded
from each assessment at each school, including, where
statistically sound, data disaggregated in accordance with
subparagraph (J), except that a local educational agency
shall be prohibited from providing such information if
providing the information would reveal the identity of any
individual student.''; and
(E) by amending subparagraph (I) (as so redesignated) to
read as follows:
``(I) provide individual student interpretive and
descriptive reports, which shall include scores and other
information on the attainment of student performance
standards that reflect the quality of daily instruction and
learning such as measures of student coursework over time,
student attendance rates, student dropout rates, and rates of
student participation in advanced level courses; and``;
(4) by striking paragraph (7);
(5) by redesignating paragraphs (4), (5), (6), and (8) as
paragraphs (8), (9), (10), and (11), respectively;
(6) by inserting after paragraph (3) the following:
``(4) Accountability.--(A) Each State plan shall
demonstrate that the State has developed and is implementing
a statewide accountability system that is or will be
effective in substantially increasing the numbers and
percentages of all students, including the lowest performing
students, economically disadvantaged students, and students
with limited proficiency in English, who meet the State's
proficient and advanced levels of performance within 10 years
after the date of enactment of the School Improvement
Accountability Act. The State accountability system shall--
``(i) be the same accountability system the State uses for
all schools or all local educational agencies in the State,
if the State has an accountability system for all schools or
all local educational agencies in the State;
``(ii) hold local educational agencies and schools
accountable for student achievement in at least reading and
mathematics and in any other subject that the State may
choose; and
``(iii) identify schools and local educational agencies for
improvement or corrective action based upon failure to make
adequate yearly progress as defined in the State plan
pursuant to paragraph (2).
``(B) The accountability system described in subparagraph
(A) and described in the State plan shall also include a
procedure for identifying for improvement a school or local
educational agency, intervening in that

[[Page S115]]

school or agency, and (if that intervention is not effective)
implementing a corrective action not later than 3 years after
first identifying such agency or school, that--
``(i) complies with sections 1116 and 1117, including the
provision of technical assistance, professional development,
and other capacity-building as needed, to ensure that schools
and local educational agencies so identified have the
resources, skills, and knowledge needed to carry out their
obligations under sections 1114 and 1115 and to meet the
requirements for adequate yearly progress described in
paragraph (2); and
``(ii) includes rigorous criteria for identifying those
agencies and schools based upon failure to make adequate
yearly progress in student achievement in accordance with
paragraph (2).
``(5) Public notice and comment.--Each State plan shall
contain assurances that--
``(A) in developing the State plan provisions relating to
adequate yearly progress, the State diligently sought public
comment from a range of institutions and individuals in the
State with an interest in improved student achievement; and
``(B) the State will continue to make a substantial effort
to ensure that information regarding this part is widely
known and understood by citizens, parents, teachers, and
school administrators throughout the State, and is provided
in a widely read or distributed medium.
``(6) Annual review.--The State plan shall provide an
assurance that the State will annually submit to the
Secretary information, as part of the State's consolidated
plan under section 14302, on the extent to which schools and
local educational agencies are making adequate yearly
progress, including the number and names of schools and local
educational agencies identified for improvement and
corrective action under section 1116, the steps taken to
address the performance problems of such schools and local
educational agencies, and the number and names of schools
that are no longer so identified, for purposes of determining
State and local compliance with section 1116.
``(7) Penalties.--(A) The State plan shall provide that, if
the State fails to meet the deadlines described in paragraphs
(1)(C) and (10) for demonstrating that the State has in place
high-quality State content and student performance standards
and aligned assessments, or if the State fails to establish a
system for measuring and monitoring adequate yearly progress,
for a fiscal year, including having the ability to
disaggregate student achievement data for the assessments as
required under this section at the State, local educational
agency, and school levels, then the State shall be ineligible
to reserve a greater amount of administrative funds under
section 1003 for the succeeding fiscal year than the State
reserved for such purposes for the fiscal year preceding the
fiscal year in which the failure occurred.
``(B)(i) The State plan shall provide that, except as
described in clause (ii), if the State fails to meet the
deadlines described in paragraphs (1)(C) and (10) for a
fiscal year, then the Secretary may withhold funds made
available under this part for administrative expenses for the
succeeding fiscal year in such amount as the Secretary
determines appropriate.
``(ii) The State plan shall provide that, if the State
fails to meet the deadlines described in paragraphs (1)(C)
and (10) for the succeeding fiscal year or a subsequent
fiscal year, the Secretary shall withhold not less than \1/5\
of the funds made available under this part for
administrative expenses for the fiscal year.
``(C) The State plan shall provide that, if the State has
not developed challenging State assessments that are aligned
to challenging State content standards in at least
mathematics and reading or language arts by school year 2000-
2001, the State shall not be eligible for designation as an
Ed-Flex Partnership State under the Education Flexibility
Partnership Act of 1999 until the State develops such
assessments, and the State shall be subject to such other
penalties as are provided in this Act for failure to develop
the assessments.''; and
(7) by adding at the end the following:
``(12) School reports.--The State plan shall provide that
individual school reports publicized and disseminated under
section 1116(a)(2) shall include information on the total
number of students excluded from each assessment at each
school, including, where statistically sound, data
disaggregated in accordance with paragraph (3)(J), and shall
include information on why such students were excluded from
the assessment. In issuing this report, a local educational
agency may not provide any information that would violate the
privacy or reveal the identity of any individual student.''.
(b) Assurances.--Section 1112(c)(1) (20 U.S.C. 6312(c)(1))
is amended--
(1) in subparagraph (G), by striking ``; and'' and
inserting a semicolon;
(2) in subparagraph (H), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following:
``(I) ensure, through incentives for voluntary transfers,
the provision of professional development, and recruitment
programs, that low-income students and minority students are
not taught at higher rates than other students by
unqualified, out-of-field, or inexperienced teachers.''.
(c) Assessment and Improvement.--Section 1116 (20 U.S.C.
6317) is amended--
(1) by amending subsection (a) to read as follows:
``(a) State and Local Review.--
``(1) In general.--Each local educational agency receiving
funds under this part shall use the State assessments and
other academic indicators described in the State plan or in a
State-approved local educational agency plan to review
annually the progress of each school served under this part
by the agency to determine whether the school is making the
adequate yearly progress specified in section 1111(b)(2)
toward enabling all students to meet the State's student
performance standards described in the State plan.
``(2) Publication and dissemination; results.--Each local
educational agency receiving funds under this part shall--
``(A) publicize and disseminate in individual school
reports that include statistically sound results
disaggregated in the same manner as results are disaggregated
under section 1111(b)(3)(J), to teachers and other staff,
parents, students, and the community, the results of the
annual review under paragraph (1) and (if not already
included in the review), graduation rates, attendance rates,
retention rates, and rates of participation in advanced level
courses, for all schools served under this part; and
``(B) provide the results of the annual review to schools
served by the agency under this part so that the schools can
continually refine their programs of instruction to help all
students served under this part in those schools to meet the
State's student performance standards.'';
(2) in subsection (c)--
(A) by amending paragraph (1) to read as follows:
``(1) In general.--(A) A local educational agency shall
identify for school improvement any school served under this
part that--
``(i) for 2 consecutive years failed to make adequate
yearly progress as defined in the State's plan under section
1111, except that in the case of a school participating in a
targeted assistance program under section 1115, a local
educational agency may review the progress of only those
students in such school who are served under this part; or
``(ii) was identified for school improvement under this
section on the day preceding the date of enactment of the
School Improvement Accountability Act.
``(B) The 2-year period described in subparagraph (A)(i)
shall include any continuous period of time immediately
preceding the date of the enactment of such Act, during which
a school did not make adequate yearly progress as defined in
the State's plan, as such plan was in effect on the day
preceding the date of enactment.'';
(B) by amending paragraph (2) to read as follows:
``(2) Requirements.--(A)(i) Each school identified under
paragraph (1)(A) shall promptly notify a parent of each
student enrolled in the school that the school was identified
for improvement by the local educational agency and provide
with the notification--
``(I) the reasons for such identification; and
``(II) information about opportunities for parents to
participate in the school improvement process.
``(ii) The notification under this subparagraph shall be in
a format and, to the extent practicable, in a language, that
the parents can understand.
``(B)(i) Before identifying a school for school improvement
under paragraph (1)(A), the local educational agency shall
inform the school that the agency proposes to identify the
school for school improvement and provide the school with an
opportunity to review the school-level data, including
assessment data, upon which the proposed determination
regarding identification is based.
``(ii) If the school believes that the proposed
identification is in error for statistical or other
substantive reasons, the school may provide supporting
evidence to the local educational agency during the review
period, and the agency shall consider such evidence before
making a final determination regarding identification.
``(iii) The review period under this subparagraph shall not
exceed 30 days. At the end of the period, the agency shall
make public a final determination regarding indentification
of the school.
``(C) Each school identified under paragraph (1)(A) shall,
within 3 months after being so identified, and in
consultation with parents, the local educational agency, and
the school support team or other outside experts, develop or
revise a school plan that--
``(i) addresses the fundamental teaching and learning needs
in the school;
``(ii) describes the specific achievement problems to be
solved;
``(iii) includes the strategies, supported by valid and
reliable evidence of effectiveness, with specific goals and
objectives, that have the greatest likelihood of improving
the performance of participating students in meeting the
State's student performance standards;
``(iv) explains how those strategies will work to address
the achievement problems identified under clause (ii),
including providing a summary of evaluation-based evidence of
student achievement after implementation of those strategies
in other schools;
``(v) addresses the need for high-quality staff by ensuring
that all new teachers in the school in programs supported
with funds provided under this part are fully qualified;

[[Page S116]]

``(vi) addresses the professional development needs of the
instructional staff of the school by describing a plan for
spending a minimum of 10 percent of the funds received by the
school under this part on professional development that--
``(I) does not supplant professional development services
that the instructional staff would otherwise receive; and
``(II) is designed to increase the content knowledge of
teachers, build teachers' capacity to align classroom
instruction with challenging content standards, and bring all
students in the school to proficient or advanced levels of
performance;
``(vii) identifies specific goals and objectives the school
will undertake for making adequate yearly progress, including
specific numerical performance goals and targets that are
high enough to ensure that all groups of students specified
in section 1111(b)(2)(B)(iv) meet or exceed the proficient
levels of performance in each subject area within 10 years
after the date of enactment of the School Improvement
Accountability Act; and
``(viii) specifies the responsibilities of the school and
the local educational agency, including how the local
educational agency will hold the school accountable for, and
assist the school in, meeting the school's obligations to
provide enriched and accelerated curricula, effective
instructional methods, highly qualified professional
development, and timely and effective individual assistance,
in partnership with parents.
``(D)(i) The school shall submit the plan (including a
revised plan) to the local educational agency for approval.
``(ii) The local educational agency shall promptly subject
the plan to a peer review process, work with the school to
revise the plan as necessary, and approve the plan.
``(iii) The school shall implement the plan as soon as the
plan is approved.'';
(C) by amending paragraph (4) to read as follows:
``(4) Technical assistance.--(A) For each school identified
for school improvement under paragraph (1)(A), the local
educational agency shall provide technical assistance as the
school develops and implements the school's plan.
``(B) Such technical assistance--
``(i) shall include information on effective methods and
instructional strategies that are supported by valid and
reliable evidence of effectiveness;
``(ii) shall be designed to strengthen the core academic
program for the students served under this part, address
specific elements of student performance problems, and
address problems, if any, in implementing the parental
involvement requirements in section 1118, implementing the
professional development provisions in section 1119, and
carrying out the responsibilities of the school and local
educational agency under the plan; and
``(iii) may be provided directly by the local educational
agency, through mechanisms authorized under section 1117, or
(with the local educational agency's approval) by an
institution of higher education whose teacher preparation
program is not identified as low performing by its State and
that is in full compliance with the requirements of section
207 of the Higher Education Act of 1965, a private nonprofit
organization, an educational service agency, a comprehensive
regional assistance center under part A of title XIII, or
other entities with experience in helping schools improve
achievement.
``(C) Technical assistance provided under this section by
the local educational agency or an entity approved by such
agency shall be supported by valid and reliable evidence of
effectiveness.'';
(D) by amending paragraph (5) to read as follows:
``(5) Corrective action.--In order to help students served
under this part meet challenging State standards, each local
educational agency shall implement a system of corrective
action in accordance with the following:
``(A) In this paragraph, the term `corrective action' means
action, consistent with State and local law, that--
``(i) substantially and directly responds to the consistent
academic failure that caused the local educational agency to
take such action and to any underlying staffing, curricular,
or other problems in the school involved; and
``(ii) is designed to substantially increase the likelihood
that students will perform at the proficient and advanced
performance levels.
``(B) After providing technical assistance under paragraph
(4), the local educational agency--
``(i) may take corrective action at any time with respect
to a school that has been identified under paragraph (1)(A);
``(ii) shall take corrective action with respect to any
school that fails to make adequate yearly progress, as
defined by the State, for 2 consecutive years following the
school's identification under paragraph (1)(A), at the end of
the second year; and
``(iii) shall continue to provide technical assistance
while instituting any corrective action under clause (i) or
(ii).
``(C) In the case of a school described in subparagraph
(B)(ii), the local educational agency--
``(i) shall take corrective action that changes the
school's administration or governance by--

``(I) instituting and fully implementing a new curriculum,
including providing appropriate professional development for
all relevant staff, that is supported by valid and reliable
evidence of effectiveness and offers substantial promise of
improving educational achievement for low-performing
students;
``(II) restructuring the school, such as by creating
schools within schools or other small learning environments,
or making alternative governance arrangements (such as the
creation of a public charter school);
``(III) redesigning the school by reconstituting all or
part of the school staff;
``(IV) eliminating the use of noncredentialed teachers; or
``(V) closing the school;

``(ii) shall provide professional development for all
relevant staff, that is supported by valid and reliable
evidence of effectiveness and that offers substantial promise
of improving student educational achievement and is directly
related to the content area in which each teacher is
providing instruction and the State's content and performance
standards in that content area; and
``(iii) may defer, reduce, or withhold funds provided to
carry out this title.
``(D)(i) When a local educational agency has identified a
school for corrective action under subparagraph (B)(ii), the
agency shall provide all students enrolled in the school with
the option to transfer to another public school that is
within the area served by the local educational agency that
has not been identified for school improvement and provide
such students with transportation (or the costs of
transportation) to such school, subject to the following
requirements:
``(I) Such transfer must be consistent with State or local
law.
``(II) If the local educational agency cannot accommodate
the request of every student from the identified school, the
agency shall permit as many students as possible to transfer,
with such students being selected at random on a
nondiscriminatory and equitable basis.
``(III) The local educational agency may use not more than
10 percent of the funds the local educational agency receives
through the State reservation under section 1003(a)(2) to
provide transportation to students whose parents choose to
transfer the students to a different school under this
subparagraph.
``(ii) If all public schools served by the local
educational agency are identified for corrective action, the
agency shall, to the extent practicable, establish a
cooperative agreement with another local educational agency
in the area to enable students served by the agency to
transfer to a school served by that other agency.
``(E) A local educational agency may delay, for a period
not to exceed 1 year, implementation of corrective action if
the failure to make adequate yearly progress was justified
due to exceptional or uncontrollable circumstances such as a
natural disaster or a precipitous and unforeseen decline in
the financial resources of the local educational agency or
school.
``(F) The local educational agency shall publish and
disseminate to parents and the public in a format and, to the
extent practicable, in a language the parents and the public
can understand, through such means as the Internet, the
media, and public agencies, information on any corrective
action the agency takes under this paragraph.
``(G)(i) Before taking corrective action with respect to
any school under this paragraph, the local educational agency
shall inform the school that the agency proposes to take
corrective action and provide the school with an opportunity
to review the school-level data, including assessment data,
upon which the proposed determination regarding corrective
action is based.
``(ii) If the school believes that the proposed
determination is in error for statistical or other
substantive reasons, the school may provide supporting
evidence to the local educational agency during the review
period, and the agency shall consider such evidence before
making a final determination regarding corrective action.
``(iii) The review period under this subparagraph shall not
exceed 45 days. At the end of the period, the local
educational agency shall make public a final determination
regarding corrective action for the school.'';
(E) by amending paragraph (6) to read as follows:
``(6) State educational agency responsibilities.--If a
State educational agency determines that a local educational
agency failed to carry out its responsibilities under this
section, the State educational agency shall take such action
as the agency finds necessary, consistent with this section,
to improve the affected schools and to ensure that the local
educational agency carries out its responsibilities under
this section.''; and
(F) by amending paragraph (7) to read as follows:
``(7) Waivers.--The State educational agency shall review
any waivers that have previously been approved for a school
identified for improvement or corrective action, and shall
terminate any waiver approved by the State, under the
Educational Flexibility Partnership Act of 1999, if the State
determines, after notice and an opportunity for a hearing,
that the waiver is not helping such school make adequate
yearly progress toward meeting the goals, objectives, and
performance targets in the school's improvement plan.''; and
(3) by amending subsection (d) to read as follows:
``(d) State Review and Local Educational Agency
Improvement.--

[[Page S117]]

``(1) In general.--A State educational agency shall
annually review the progress of each local educational agency
receiving funds under this part to determine whether schools
receiving assistance under this part are making adequate
yearly progress as defined in section 1111(b)(2) toward
meeting the State's student performance standards.
``(2) Identification of local educational agency for
improvement.--A State educational agency shall identify for
improvement any local educational agency that--
``(A) for 2 consecutive years failed to make adequate
yearly progress as defined in the State's plan under section
1111(b)(2); or
``(B) was identified for improvement under this section as
this section was in effect on the day preceding the date of
enactment of the School Improvement Accountability Act.
``(3) Transition.--The 2-year period described in paragraph
(2)(A) shall include any continuous period of time
immediately preceding the date of enactment of such Act,
during which a local educational agency did not make adequate
yearly progress as defined in the State's plan, as such plan
was in effect on the day preceding the date of enactment.
``(4) Targeted assistance schools.--For purposes of
reviewing the progress of targeted assistance schools served
by a local educational agency, a State educational agency may
choose to review the progress of only the students in such
schools who are served under this part.
``(5) Opportunity to review and present evidence.--(A)
Before identifying a local educational agency for improvement
under paragraph (2), a State educational agency shall inform
the local educational agency that the State educational
agency proposes to identify the local educational agency for
improvement and provide the local educational agency with an
opportunity to review the local educational agency data,
including assessment data, upon which the proposed
determination regarding identification is based.
``(B) If the local educational agency believes that the
proposed identification is in error for statistical or other
substantive reasons, the agency may provide supporting
evidence to the State educational agency during the review
period, and the agency shall consider such evidence before
making a final determination regarding identification.
``(C) The review period under this paragraph shall not
exceed 30 days. At the end of the period, the State shall
make public a final determination regarding identification of
the local educational agency.
``(6) Notification to parents.--(A) The local educational
agency shall promptly notify a parent of each student
enrolled in a school served by a local educational agency
identified for improvement that the agency was identified for
improvement and provide with the notification--
(i) the reasons for the agency's identification; and
(ii) information about opportunities for parents to
participate in upgrading the quality of the local educational
agency.
``(B) The notification under this paragraph shall be in a
format and, to the extent practicable, in a language, that
the parents can understand.
``(7) Local educational agency revisions.--(A) Each local
educational agency identified under paragraph (2) shall, not
later than 3 months after being so identified, develop or
revise a local educational agency plan and annual academic
achievement goals, in consultation with parents, school
staff, and others.
``(B) Achievement goals.--The annual academic achievement
goals shall be sufficiently high to ensure that all students
within the jurisdiction involved, including the lowest
performing students, economically disadvantaged students,
students of different races and ethnicities, and students
with limited English proficiency will meet or exceed the
proficient level of performance on the assessments required
by section 1111 within 10 years after the date of enactment
of the School Improvement Accountability Act.
``(C) The plan shall--
``(i) address the fundamental teaching and learning needs
in the schools served by that agency, and the specific
academic problems of low-performing students, including
stating a determination of why the local educational agency's
prior plan, if any, failed to bring about increased
achievement;
``(ii) incorporate strategies that are supported by valid
and reliable evidence of effectiveness and that strengthen
the core academic program in the local educational agency;
``(iii) identify specific annual academic achievement goals
and objectives that will--
``(I) have the greatest likelihood of improving the
performance of participating students in meeting the State's
student performance standards; and
``(II) include specific numerical performance goals and
targets for each of the groups of students for which data are
disaggregated pursuant to section 1111(b)(2)(B)(iv);
``(iv) address the professional development needs of the
instructional staff of the schools by describing a plan for
spending a minimum of 10 percent of the funds received by the
schools under this part on professional development that--
``(I) does not supplant professional development services
that the instructional staff would otherwise receive; and
``(II) is designed to increase the content knowledge of
teachers, build teachers' capacity to align classroom
instruction with challenging content standards, and bring all
students in the schools to proficient or advanced levels of
performance;
``(v) identify measures the local educational agency will
undertake to make adequate yearly progress;
``(vi) identify how, pursuant to paragraph (6), the local
educational agency will provide written notification to
parents in a format and, to the extent practicable, in a
language the parents can understand;
``(vii) specify the responsibilities of the State
educational agency and the local educational agency under the
plan; and
``(viii) include strategies to promote effective parental
involvement in the schools.
``(D) The local educational agency shall submit the plan
(including a revised plan) to the State educational agency
for approval. The State educational agency shall, within 60
days after submission of the plan, subject the plan to a peer
review process, work with the local educational agency to
revise the plan as necessary, and approve the plan.
``(E) The local educational agency shall implement the plan
(including a revised plan) as soon as the plan is approved.
``(8) State educational agency responsibility.--(A) For
each local educational agency identified under paragraph (2),
the State educational agency (or an entity authorized by the
agency) shall provide technical or other assistance, if
requested, as authorized under section 1117, to better enable
the local educational agency--
``(i) to develop and implement the local educational agency
plan as approved by the State educational agency consistent
with the requirements of this section; and
``(ii) to work with schools identified for improvement.
``(B) Technical assistance provided under this section by
the State educational agency or an entity authorized by the
agency shall be supported by valid and reliable evidence of
effectiveness.
``(9) Corrective action.--In order to help students served
under this part meet challenging State standards, each State
educational agency shall implement a system of corrective
action in accordance with the following:
``(A) In this paragraph, the term `corrective action' means
action, consistent with State law, that--
``(i) substantially and directly responds to the consistent
academic failure that caused the State educational agency to
take such action and to any underlying staffing, curricular,
or other problems in the schools involved; and
``(ii) is designed to substantially increase the likelihood
that students served under this part will perform at the
proficient and advanced performance levels.
``(B) After providing technical assistance under paragraph
(8) and subject to subparagraph (D), the State educational
agency--
``(i) may take corrective action at any time with respect
to a local educational agency that has been identified under
paragraph (2);
``(ii) shall take corrective action with respect to any
local educational agency that fails to make adequate yearly
progress, as defined by the State, for 3 consecutive years
following the agency's identification under paragraph (2), at
the end of the third year; and
``(iii) shall continue to provide technical assistance
while instituting any corrective action under clause (i) or
(ii).
``(C) In the case of a local educational agency described
in subparagraph (B)(ii), the State educational agency shall
take at least 1 of the following corrective actions:
``(i) Withholding funds from the local educational agency.
``(ii) Reconstituting school district personnel.
``(iii) Removing particular schools from the jurisdiction
of the local educational agency and establishing alternative
arrangements for public governance and supervision of the
schools.
``(iv) Appointing, through the State educational agency, a
receiver or trustee to administer the affairs of the local
educational agency in place of the superintendent and school
board.
``(v) Abolishing or restructuring the local educational
agency.
``(D) When a State educational agency has identified a
local educational agency for corrective action under
subparagraph (B)(ii), the State educational agency shall
provide all students enrolled in a school served by the local
educational agency with a plan to transfer to a higher
performing public school served by another local educational
agency and shall provide such students with transportation
(or the costs of transportation) to such schools, subject to
the following requirements:
``(i) The provision of the transfer shall be done in
conjunction with at least 1 additional action described in
this paragraph.
``(ii) If the State educational agency cannot accommodate
the request of every student from the schools served by the
agency, the agency shall permit as many students as possible
to transfer, with such students being selected at random on a
nondiscriminatory and equitable basis.
``(iii) The State educational agency may use not more than
10 percent of the funds the agency receives through the State
reservation under section 1003(a)(2) to provide
transportation to students whose parents choose to transfer
their child to a different school under this subparagraph.

[[Page S118]]

``(E) Prior to implementing any corrective action under
this paragraph, the State educational agency shall provide
due process and a hearing to the affected local educational
agency, if State law provides for such process and hearing.
The hearing shall take place not later than 45 days following
the decision to implement the corrective action.
``(F) The State educational agency shall publish and
disseminate to parents and the public in a format and, to the
extent practicable, in a language the parents and the public
can understand, through such means as the Internet, the
media, and public agencies, information on any corrective
action the agency takes under this paragraph.
``(G) A State educational agency may delay, for a period
not to exceed 1 year, implementation of corrective action if
the failure to make adequate yearly progress was justified
due to exceptional or uncontrollable circumstances such as a
natural disaster or a precipitous and unforeseen decline in
the financial resources of the local educational agency.
``(10) Waivers.--The State educational agency shall review
any waivers that have previously been approved for a local
educational agency identified for improvement or corrective
action, and shall terminate any waiver approved by the State,
under the Educational Flexibility Partnership Act of 1999, if
the State determines, after notice and an opportunity for a
hearing, that the waiver is not helping such agency make
adequate yearly progress toward meeting the goals,
objectives, and performance targets in the agency's
improvement plan.''.
(d) State Assistance for School Support and Improvement.--
Section 1117(a) (20 U.S.C. 6318(a)) is amended to read as
follows:
``(a) System for Support.--
``(1) In general.--Each State educational agency shall
establish a statewide system of intensive and sustained
support and improvement for local educational agencies and
schools receiving funds under this part, in order to increase
the opportunity for all students served by those agencies and
schools to meet the State's content standards and student
performance standards.
``(2) Priorities.--In carrying out this section, a State
educational agency shall--
``(A) provide support and assistance to local educational
agencies and schools identified for corrective action under
section 1116;
``(B) provide support and assistance to other local
educational agencies and schools identified for improvement
under section 1116; and
``(C) provide support and assistance to each school
receiving funds under this part in which the number of
students in poverty equals or exceeds 75 percent of the total
number of students enrolled in such school.
``(3) Approaches.--In order to achieve the objectives of
this subsection, each statewide system shall provide
technical assistance and support through approaches such as--
``(A) use of school support teams, composed of individuals
who are knowledgeable about research on and practice of
teaching and learning, particularly about strategies for
improving educational results for low-achieving students;
``(B) the designation and use of `Distinguished Educators',
chosen from schools served under this part that have been
especially successful in improving academic achievement;
``(C) assisting local educational agencies or schools to
implement research-based comprehensive school reform models;
and
``(D) use of a peer review process designed to increase the
capacity of local educational agencies and schools to develop
high-quality school improvement plans.
``(4) Funds.--Each State educational agency--
``(A) shall use funds reserved under section 1003(a)(1),
but not used under section 1003(a)(2) and funds appropriated
under section 1002(f) to carry out this section; and
``(B) may use State administrative funds authorized for
such purpose.
``(5) Alternatives.--The State educational agency may
devise additional approaches to providing the assistance
described in subparagraphs (A) and (B) of paragraph (3),
other than the provision of assistance under the statewide
system, such as providing assistance through institutions of
higher education, educational service agencies, or other
local consortia. The State educational agency may seek
approval from the Secretary to use funds made available under
section 1003 for such approaches as part of the State
plan.''.
(e) Conforming Amendments.--The 1965 (20 U.S.C. 6301 et
seq.) is amended--
(1) in section 1111(b)(1)(C) (20 U.S.C. 6311(b)(1)(C)), by
striking ``paragraph (6)'' and inserting ``paragraph (10)'';
(2) in section 1112(c)(1)(D) (20 U.S.C. 6312(c)(1)(D)), by
striking ``section 1116(c)(4)'' and inserting ``section
1116(c)(5)'';
(3) in section 1117(c)(2)(A) (20 U.S.C. 6318(c)(2)(A)), by
striking ``section 1111(b)(2)(A)(i)'' and inserting ``section
1111(b)(2)(A)'';
(4) in section 1118(c)(4)(B) (20 U.S.C. 6319(c)(4)(B)), by
striking ``school performance profiles required under section
1116(a)(3)'' and inserting ``individual school reports
required under section 1116(a)(2)(A)'';
(5) in section 1118(e)(1) (20 U.S.C. 6319(e)(1)), by
striking ``section 1111(b)(8)'' and inserting ``section
1111(b)(11)''; and
(6) in section 1119(h)(3) (20 U.S.C. 6320(h)(3)), by
striking ``section 1116(d)(6)'' and inserting ``section
1116(d)(9)''.

SEC. 103. COMPREHENSIVE SCHOOL REFORM.

Title I (20 U.S.C. 6301 et seq.) is amended--
(1) by redesignating part F as part G; and
(2) by inserting after part E the following:

``PART F--COMPREHENSIVE SCHOOL REFORM

``SEC. 1551. PURPOSE.

``The purpose of this part is to provide financial
incentives for schools to develop comprehensive school
reforms based upon promising and effective practices and
research-based programs that emphasize basic academics and
parental involvement so that all children can meet
challenging State content and student performance standards.

``SEC. 1552. PROGRAM AUTHORIZATION.

``(a) Program Authorized.--
``(1) In general.--The Secretary may award grants to State
educational agencies, from allotments under paragraph (2), to
enable the State educational agencies to award subgrants to
local educational agencies to carry out the purpose described
in section 1551.
``(2) Allotments.--
``(A) Reservations.--Of the amount appropriated under
section 1558 for a fiscal year, the Secretary may reserve--
``(i) not more than 1 percent to provide assistance to
schools supported by the Bureau of Indian Affairs and in the
United States Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands according to
their respective needs for assistance under this part; and
``(ii) not more than 1 percent to conduct national
evaluation activities described in section 1557.
``(B) In general.--Of the amount appropriated under section
1558 that remains after making the reservation under
subparagraph (A) for a fiscal year, the Secretary shall allot
to each State for the fiscal year an amount that bears the
same ratio to the remainder for that fiscal year as the
amount made available under section 1124 to the State for the
preceding fiscal year bears to the total amount made
available under section 1124 to all States for the preceding
fiscal year.
``(C) Reallotment.--If a State does not apply for funds
under this part, the Secretary shall reallot such funds to
other States in proportion to the amount allotted to such
other States under subparagraph (B).

``SEC. 1553. STATE APPLICATIONS.

``(a) In General.--Each State educational agency that
desires to receive a grant under this part shall submit
an application to the Secretary at such time, in such
manner, and containing such information as the Secretary
may reasonably require.
``(b) Contents.--Each such application shall describe--
``(1) the process and selection criteria by which the State
educational agency, using expert review, will select local
educational agencies to receive subgrants under this part;
``(2) how the State educational agency will ensure that
only comprehensive school reforms that are based upon
promising and effective practices and research-based programs
receive funds under this part;
``(3) how the State educational agency will disseminate
information on comprehensive school reforms that are based
upon promising and effective practices and research-based
programs;
``(4) how the State educational agency will evaluate the
implementation of such reforms and measure the extent to
which the reforms have resulted in increased student academic
performance; and
``(5) how the State educational agency will make available
technical assistance to a local educational agency in
evaluating, developing, and implementing comprehensive school
reform.

``SEC. 1554. STATE USE OF FUNDS.

``(a) In General.--Except as provided in subsection (e), a
State educational agency that receives a grant under this
part shall use the grant funds to award subgrants, on a
competitive basis, to local educational agencies (including
consortia of local educational agencies) in the State that
receive funds under part A.
``(b) Subgrant Requirements.--A subgrant to a local
educational agency shall be--
``(1) of sufficient size and scope to support the initial
costs for the particular comprehensive school reform plan
selected or designed by each school identified in the
application of the local educational agency;
``(2) in an amount not less than $50,000 for each
participating school; and
``(3) renewable for 2 additional 1-year periods after the
initial 1-year grant is made, if the participating school is
making substantial progress in the implementation of reforms.
``(c) Priority.--A State educational agency, in awarding
subgrants under this part, shall give priority to local
educational agencies that--
``(1) plan to use the funds in schools identified for
improvement or corrective action under section 1116(c); and
``(2) demonstrate a commitment to assist schools with
budget allocation, professional development, and other
strategies necessary to ensure that comprehensive school
reforms are properly implemented and are sustained in the
future.
``(d) Grant Consideration.--In awarding subgrants under
this part, the State educational agency shall take into
consideration the equitable distribution of subgrants

[[Page S119]]

to different geographic regions within the State, including
urban and rural areas, and to schools serving elementary
school and secondary school students.
``(e) Administrative Costs.--A State educational agency
that receives a grant under this part may reserve not more
than 5 percent of the grant funds for administrative,
evaluation, and technical assistance expenses.
``(f) Supplement.--Funds made available under this part
shall be used to supplement, and not supplant, any other
Federal, State, or local funds that would otherwise be
available to carry out the activities assisted under this
part.
``(g) Reporting.--Each State educational agency that
receives a grant under this part shall provide to the
Secretary such information as the Secretary may require,
including the names of local educational agencies and schools
receiving assistance under this part, the amount of the
assistance, and a description of the comprehensive school
reform model selected and used.

``SEC. 1555. LOCAL APPLICATIONS.

``(a) In General.--Each local educational agency desiring a
subgrant under this part shall submit an application to the
State educational agency at such time, in such manner, and
containing such information as the State educational agency
may reasonably require.
``(b) Contents.--Each such application shall--
``(1) identify the schools, that are eligible for
assistance under part A, that plan to implement a
comprehensive school reform program and include the projected
costs of such program;
``(2) describe the promising and effective practices and
research-based programs that such schools will implement;
``(3) describe how the local educational agency will
provide technical assistance and support for the effective
implementation of the promising and effective practices and
research-based school reforms selected by such schools; and
``(4) describe how the local educational agency will
evaluate the implementation of such reforms and measure the
results achieved in improving student academic performance.

``SEC. 1556. LOCAL USE OF FUNDS.

``(a) Use of Funds.--A local educational agency that
receives a subgrant under this part shall provide the
subgrant funds to schools, that are eligible for assistance
under part A and served by the agency, to enable the schools
to implement a comprehensive school reform program for--
``(1) employing innovative strategies for student learning,
teaching, and school management that are based upon promising
and effective practices and research-based programs and have
been replicated successfully in schools with diverse
characteristics;
``(2) integrating a comprehensive design for effective
school functioning, including instruction, assessment,
classroom management, professional development, parental
involvement, and school management, that aligns the school's
curriculum, technology, and professional development into a
comprehensive reform plan for schoolwide change designed to
enable all students to meet challenging State content and
student performance standards and addresses needs identified
through a school needs assessment;
``(3) providing high quality and continuous teacher and
staff professional development;
``(4) including measurable goals for student performance;
``(5) providing support to teachers, principals,
administrators, and other school personnel staff;
``(6) including meaningful community and parental
involvement initiatives that will strengthen school
improvement activities;
``(7) using high quality external technical support and
assistance from an entity that has experience and expertise
in schoolwide reform and improvement, which may include an
institution of higher education;
``(8) evaluating school reform implementation and student
performance; and
``(9) identifying other resources, including Federal,
State, local, and private resources, that will be used to
coordinate services supporting and sustaining the school
reform effort.
``(b) Special Rule.--A school that receives funds to
develop a comprehensive school reform program shall not be
limited to using the approaches identified or developed by
the Secretary, but may develop the school's own comprehensive
school reform programs for schoolwide change as described in
subsection (a).

``SEC. 1557. NATIONAL EVALUATION AND REPORTS.

``(a) In General.--The Secretary shall develop a plan for a
national evaluation of the programs assisted under this part.
``(b) Evaluation.--The national evaluation shall--
``(1) evaluate the implementation and results achieved by
schools after 3 years of implementing comprehensive school
reforms; and
``(2) assess the effectiveness of comprehensive school
reforms in schools with diverse characteristics.
``(c) Reports.--Prior to the completion of the national
evaluation, the Secretary shall submit an interim report
describing implementation activities for the Comprehensive
School Reform Program to the Committee on Education and the
Workforce, and the Committee on Appropriations, of the House
of Representatives, and the Committee on Health, Education,
Labor, and Pensions, and the Committee on Appropriations, of
the Senate.

``SEC. 1558. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this
part $500,000,000 for fiscal year 2002 and such sums as may
be necessary for each of the 4 succeeding fiscal years.''.

Subtitle B--Teachers

SEC. 121. STATE APPLICATIONS.

(a) Contents of State Plan.--Section 2205(b)(2) (20 U.S.C.
6645(b)(2)) is amended--
(1) by amending subparagraph (N) to read as follows:
``(N) set specific annual, quantifiable, and measurable
performance goals to increase the percentage of teachers
participating in sustained professional development
activities, reduce the beginning teacher attrition rate, and
reduce the percentage of teachers who are not certified or
licensed, and the percentage who are out-of-field
teachers;'';
(2) by redesignating subparagraph (O) as subparagraph (P);
and
(3) by inserting after subparagraph (N) the following:
``(O) describe how the State will ensure that all teachers
in the State will be fully qualified not later than December
1, 2005; and''.
(b) State and Local Activities.--Part B of title II (20
U.S.C. 6641 et seq.) is amended--
(1) by redesignating section 2211 as section 2215;
(2) by inserting after section 2210 the following:

``SEC. 2211. LOCAL CONTINUATION OF FUNDING.

``(a) Agencies.--If a local educational agency applies for
funds from a State under this part for a fourth or subsequent
fiscal year, the agency may not receive the funds for that
fiscal year unless the State determines that the agency has
demonstrated that, in carrying out activities under this part
during the past fiscal year, the agency has annual numerical
performance objectives consisting of--
``(1) improved student performance for all groups
identified in section 1111;
``(2) an increased percentage of teachers participating in
sustained professional development activities;
``(3) a reduction in the beginning teacher attrition rate
for the agency; and
``(4) a reduction in the percentage of teachers who are not
certified or licensed, and the percentage who are out-of-
field teachers, for the agency.
``(b) Schools.--If a local educational agency applies for
funds under this part on behalf of a school for a fourth or
subsequent fiscal year (including applying for funds as part
of a partnership), the agency may not receive the funds for
the school for that fiscal year unless the State determines
that the school has demonstrated that, in carrying out
activities under this part during the past fiscal year, the
school has met the requirements of paragraphs (1) through (4)
of subsection (a).

``SEC. 2212. INFORMATION AND NOTICE TO PARENTS.

``(a) Parents' Right To Know Information.--
``(1) In general.--A local educational agency that receives
funds under this title shall provide, on request, in an
understandable and uniform format, to any parent of a student
attending any school served by the agency, information
regarding the professional qualifications of each of the
student's classroom teachers.
``(2) Contents.--The agency shall provide, at a minimum,
information on--
``(A) whether the teacher has met State certification or
licensing criteria for the academic subjects and grade levels
in which the teacher teaches the student;
``(B) whether the teacher is teaching with emergency or
other provisional credentials, due to which any State
certification or licensing criteria have been waived; and
``(C) the academic qualifications of the teacher in the
academic subjects and grade levels in which the teacher
teaches.
``(b) Notice.--In addition to providing the information
described in subsection (a), if a school that receives funds
under this title assigns a student to a teacher who is not a
fully qualified teacher or assigns a student, for 2 or more
consecutive weeks, to a substitute teacher who is not a fully
qualified teacher, the school shall provide notice of the
assignment to a parent of the student, not later than 15
school days after the assignment.

``SEC. 2213. GENERAL ACCOUNTING OFFICE STUDY.

``Not later than September 30, 2005, the Comptroller
General of the United States shall prepare and submit to the
Committee on Education and the Workforce of the House of
Representatives and the Committee on Health, Education,
Labor, and Pensions of the Senate a study setting forth
information regarding the progress of States' compliance in
increasing the percentage of fully qualified teachers for
fiscal years 2001 through 2004.

``SEC. 2214. DEFINITION OF FULLY QUALIFIED.

``(a) In General.--In this part, the term `fully
qualified', used with respect to a teacher, means a teacher
who--
``(1)(A) has demonstrated the subject matter knowledge,
teaching knowledge, and teaching skill necessary to teach
effectively in the academic subject in which the teacher
teaches, according to the criteria described in subsections
(b) and (c); and

[[Page S120]]

``(B) is not a teacher for whom State certification or
licensing requirements have been waived or who is teaching
under an emergency or other provisional credential; or
``(2) meets the standards set by the National Board for
Professional Teaching Standards.
``(b) Elementary School.--For purposes of making the
demonstration described in subsection (a)(1), each teacher
who teaches elementary school students (other than middle
school students) shall, at a minimum--
``(1) have State certification (which may include
certification obtained through an alternative route) or a
State license to teach; and
``(2) hold a bachelor's degree and demonstrate the subject
matter knowledge, teaching knowledge, and teaching skill
required to teach effectively in reading, writing,
mathematics, social studies, science, and other elements of a
liberal arts education.
``(c) Middle School and Secondary School.--For purposes of
making the demonstration described in subsection (a)(1), each
teacher who teaches middle school students or secondary
school students shall, at a minimum--
``(1) have State certification (which may include
certification obtained through an alternative route) or a
State license to teach; and
``(2) hold a bachelor's degree or higher degree and
demonstrate a high level of competence in all academic
subjects in which the teacher teaches through--
``(A) achievement of a high level of performance on
rigorous academic subject area tests;
``(B) completion of an academic major (or courses totaling
an equivalent number of credit hours) in each of the academic
subjects in which the teacher teaches; or
``(C) in the case of teachers hired before the date of
enactment of the School Improvement Accountability Act,
completion of appropriate coursework for mastery of the
academic subjects in which the teacher teaches.''; and
(3) by amending section 2215 (as so redesignated)--
(A) in subsection (a)(3), by adding after ``agency'' the
following: ``for which at least 40 percent of the students
served by the agency are eligible for free or reduced price
lunches under the Richard B. Russell National School Lunch
Act''; and
(B) by inserting after subsection (a)(4) the following:
``(5) Reporting requirements.--Each institution of higher
education receiving assistance under paragraph (1) shall
fully comply with all reporting requirements of title II of
the Higher Education Act of 1965.''.
(c) Conforming Amendments.--The Act (20 U.S.C. 6301 et
seq.) is amended--
(1) in section 2203(2) (20 U.S.C. 6643(2)), by striking
``section 2211'' and inserting ``section 2215''; and
(2) in section 2205(c)(2) (20 U.S.C. 6645(c)(2)), by
striking ``section 2211'' and inserting ``section 2215''.

Subtitle C--Innovative Education

SEC. 131. REQUIREMENTS FOR STATE PLANS.

Part B of title VI (20 U.S.C. 7331 et seq.) is amended by
adding at the end the following:

``SEC. 6203. REQUIREMENTS FOR STATE PLANS.

``(a) State Plans.--In addition to requirements relating to
State applications under this part, the State educational
agency for each State desiring a grant under this title shall
submit a State plan that meets the requirements of this
section to the Secretary at such time, in such manner, and
accompanied by such information as the Secretary may require.
``(b) Consolidated Plan.--A State plan submitted under
subsection (a) may be submitted as part of a consolidated
plan under section 14302, and as part of a State application
described in section 6202.
``(c) Contents.--Each plan submitted under subsection (a)
shall--
``(1) describe how the funds made available through the
grant will be used to increase student academic performance;
``(2) describe annual, quantifiable, and measurable
performance goals that will be used to measure the impact of
those funds on student performance;
``(3) describe the methods the State will use to measure
the annual impact of programs described in the plan and the
extent to which such goals are aligned with State standards;
``(4) certify that the State has in place the standards and
assessments required under section 1111;
``(5) certify that the State educational agency has a
system, as required under section 1111, for--
``(A) holding each local educational agency and school
accountable for adequate yearly progress (as described in
section 1111(b)(2));
``(B) identifying local educational agencies and schools
for improvement and corrective action (as required in
sections 1116 and 1117);
``(C) assisting local educational agencies and schools that
are identified for improvement with the development of
improvement plans; and
``(D) providing technical assistance, professional
development, and other capacity building as needed to get
such agencies and schools out of improvement status;
``(6) certify that the State educational agency will use
the disaggregated results of student assessments required
under section 1111(b)(3), and other measures or indicators
available, to review annually the progress of each local
educational agency and school served under this title to
determine whether each such agency and school is making
adequate yearly progress as required under section
1111(b)(2);
``(7) certify that the State educational agency will take
action against a local educational agency that is identified
for corrective action and receiving funds under this title;
``(8) describe what, if any, State and other non-Federal
resources will be provided to local educational agencies and
schools served under this title to carry out activities
consistent with this title; and
``(9) certify that the State educational agency has a
system to hold local educational agencies accountable for
meeting the annual performance goals required under paragraph
(2).
``(d) Approval.--The Secretary, using a peer review
process, shall approve a State plan submitted under this
section if the State plan meets the requirements of this
section.
``(e) Duration of the Plan.--Each State plan shall remain
in effect for the duration of the State's participation under
this title.
``(f) Requirement.--A State shall not be eligible to
receive funds under this title unless the State has
established the standards and assessments required under
section 1111.
``(g) Public Review.--Each State educational agency will
make publicly available the plan approved under subsection
(d).

``SEC. 6204. SANCTIONS.

``(a) Third Fiscal Year.--If a State receiving grant funds
under this title fails to meet performance goals established
under section 6203(c)(2) by the end of the third fiscal year
for which the State receives such grant funds, the Secretary
shall reduce by 50 percent the amount the State is entitled
to receive for administrative expenses under this title.
``(b) Fourth Fiscal Year.--If the State fails to meet such
performance goals by the end of the fourth fiscal year for
which the State receives grant funds under this title, the
Secretary shall reduce the total amount the State receives
under this title by 20 percent.
``(c) Technical Assistance.--The Secretary shall provide
technical assistance, at the request of a State subjected to
sanctions under subsection (a) or (b).
``(d) Local Sanctions.--
``(1) In general.--Each State receiving assistance under
this title shall develop a system to hold local educational
agencies accountable for meeting the adequate yearly progress
requirements established under part A of title I and the
performance goals established under this title.
``(2) Sanctions.--A system developed under paragraph (1)
shall include a mechanism for sanctioning local educational
agencies for failure to meet such performance goals and
adequate yearly progress levels.

``SEC. 6205. STATE REPORTS.

``Each State educational agency or Chief Executive Officer
of a State receiving funds under this title shall annually
publish and disseminate to the public in a format and, to the
extent practicable, in a language that the public can
understand, a report on--
``(1) the use of such funds;
``(2) the impact of programs conducted with such funds and
an assessment of such programs' effectiveness; and
``(3) the progress of the State toward attaining the
performance goals established under section 6203(c)(2), and
the extent to which the programs have increased student
achievement.

``SEC. 6206. STANDARDS; ASSESSMENTS ENHANCEMENT.

``Each State educational agency receiving a grant under
this title may use such grant funds, consistent with section
6201(a)(1)(C), to--
``(1) establish high quality, internationally competitive
content and student performance standards and strategies that
all students will be expected to meet;
``(2) provide for the establishment of high quality,
rigorous assessments that include multiple measures and
demonstrate comprehensive knowledge; or
``(3) develop and implement value-added assessments.''.

SEC. 132. PERFORMANCE OBJECTIVES.

Title VII (20 U.S.C. 7401 et seq.) is amended by inserting
after section 7105 the following:

``SEC. 7106. PERFORMANCE OBJECTIVES.

``(a) In General.--Each State educational agency or local
educational agency receiving a grant under this part shall
develop annual numerical performance objectives that are age-
appropriate and developmentally-appropriate with respect to
helping limited English proficient students become proficient
in English and improve overall academic performance based
upon State and local content and performance standards. The
objectives shall include incremental percentage increases for
each fiscal year a State educational agency or local
educational agency receives a grant under this title,
including increases from the preceding fiscal year in the
number of limited English proficient students demonstrating
an increase in performance on annual assessments concerning
reading, writing, speaking, and listening comprehension.
``(b) Accountability.--Each State educational agency or
local educational agency receiving a grant under this title
shall be held accountable for meeting the annual numerical
performance objectives under this

[[Page S121]]

title and the adequate yearly progress levels for limited
English proficient students under clauses (ii) and (iv) of
section 1111(b)(2)(B). Any State educational agency or local
educational agency that fails to meet the annual performance
objectives shall be subject to sanctions described in section
14515.
``(c) Parental Notification.--
``(1) In general.--Each State educational agency or local
educational agency shall notify a parent of a student who is
participating in a language instruction educational program
under this title, in a manner and form understandable to the
parent, including, if necessary and to the extent feasible,
in the native language of the parent, of--
``(A) the student's level of English proficiency, how such
level was assessed, the status of the student's academic
achievement, and the implications of the student's
educational strengths and needs for age-appropriate and
grade-appropriate academic attainment, promotion, and
graduation;
``(B) what programs are available to meet the student's
educational strengths and needs, and how such programs differ
in content and instructional goals from other language
instruction educational programs and, in the case of a
student with a disability, how such available programs meet
the objectives of the individualized education program of
such a student; and
``(C) the instructional goals of the language instruction
educational program, and how the program will specifically
help the limited English proficient student learn English and
meet State and local content and performance standards,
including--
``(i) the characteristics, benefits, and past academic
results of the language instruction educational program and
of instructional alternatives; and
``(ii) the reasons the student was identified as being in
need of a language instruction educational program.
``(2) Option to decline.--Each parent described in
paragraph (1) shall also be informed that the parent has the
option of declining the enrollment of a student in a language
instruction educational program, and shall be given an
opportunity to decline such enrollment if the parent so
chooses.
``(3) Special rule.--A student shall not be admitted to, or
excluded from, any federally assisted language instruction
educational program solely on the basis of a surname or
language-minority status.''.

SEC. 133. REPORT CARDS.

Title XIV (20 U.S.C. 8801 et seq.) is amended by adding at
the end the following:

``PART I--REPORT CARDS

``SEC. 14901. REPORT CARDS.

``(a) Grants Authorized.--The Secretary shall award a
grant, from allotments under subsection (b), to each State
having a State report card meeting the requirements described
in subsection (e), to enable the State, and local educational
agencies and schools in the State, annually to publish report
cards for each elementary school and secondary school that
receives funding under this Act and is served by the State.
``(b) Reservations and Allotments.--
``(1) Reservations.--From the amount appropriated under
subsection (j) to carry out this part for each fiscal year,
the Secretary shall reserve--
``(A) \1/2\ of 1 percent of such amount for payments to the
Secretary of the Interior for activities approved by the
Secretary of Education, consistent with this part, in schools
operated or supported by the Bureau of Indian Affairs, on the
basis of their respective needs for assistance under this
part; and
``(B) \1/2\ of 1 percent of such amount for payments to
outlying areas, to be allotted in accordance with their
respective needs for assistance under this part, as
determined by the Secretary, for activities approved by the
Secretary, consistent with this part.
``(2) State allotments.--From the amount appropriated under
subsection (j) for a fiscal year and remaining after the
Secretary makes reservations under paragraph (1), the
Secretary shall allot to each State having a State report
card meeting the requirements described in subsection (e) an
amount that bears the same relationship to the remainder as
the number of public school students enrolled in elementary
schools and secondary schools in the State bears to the
number of such students so enrolled in all States.
``(c) State Reservation of Funds.--Each State educational
agency receiving a grant under subsection (a) may reserve--
``(1) not more than 10 percent of the grant funds to carry
out activities described in subsections (e) and (g)(2) for
fiscal year 2002; and
``(2) not more than 5 percent of the grant funds to carry
out activities described in subsections (e) and (g)(2) for
fiscal year 2003 and each of the 3 succeeding fiscal years.
``(d) Within-State Allocations.--Each State educational
agency receiving a grant under subsection (a) shall allocate
the grant funds that remain after making the reservation
described in subsection (c) to each local educational agency
in the State in an amount that bears the same relationship to
the remainder as the number of public school students
enrolled in elementary schools and secondary schools served
by the local educational agency bears to the number of such
students served by local educational agencies within the
State.
``(e) Annual State Report Card.--
``(1) Report cards required.--Not later than the beginning
of the 2002-2003 school year, a State that receives
assistance under this Act shall prepare and disseminate an
annual report card for parents, the general public, teachers,
and the Secretary, with respect to all elementary schools and
secondary schools within the State.
``(2) Required information.--Each State described in
paragraph (1), at a minimum, shall include in the annual
State report card information regarding--
``(A) student performance on statewide assessments for the
year for which the annual State report card is prepared and
the preceding year, in at least English language arts and
mathematics, including--
``(i) a comparison of the proportions of students who
performed at the basic, proficient, and advanced levels in
each subject area, for each grade level for which assessments
are required under title I for the year for which the report
card is prepared, with proportions in each of the same 3
levels in each subject area at the same grade levels in the
preceding school year;
``(ii) a statement on the most recent 3-year trend in the
percentage of students performing at the basic, proficient,
and advanced levels in each subject area, for each grade
level for which assessments are required under title I; and
``(iii) a statement of the percentage of students not
tested and a listing of categories of the reasons why such
students were not tested;
``(B) student retention rates in each grade, the number of
students completing advanced placement courses, annual school
dropout rates as calculated by procedures conforming with the
National Center for Education Statistics Common Core of Data,
and 4-year graduation rates; and
``(C) the professional qualifications of teachers in the
aggregate, including the percentage of teachers teaching with
emergency or provisional credentials, the percentage of class
sections not taught by fully qualified teachers, and the
percentage of teachers who are fully qualified.
``(3) Student data.--Student data in each report card shall
contain disaggregated results for the following categories:
``(A) Racial and ethnic groups.
``(B) Gender groups.
``(C) Economically disadvantaged students, as compared with
students who are not economically disadvantaged.
``(D) Students with limited English proficiency, as
compared with students who are proficient in English.
``(E) Migrant status groups.
``(F) Students with disabilities, as compared with students
who are not disabled.
``(4) Optional information.--A State may include in the
State annual report card any other information the State
determines appropriate to reflect school quality and school
achievement, including by grade level information on the
following:
``(A) Average class size.
``(B) School safety, such as the incidence of school
violence and drug and alcohol abuse.
``(C) The incidence of student suspensions and expulsions.
``(D) Student access to technology, including the number of
computers for educational purposes, the number of computers
per classroom, and the number of computers connected to the
Internet.
``(E) Parental involvement, as determined by such measures
as the extent of parental participation in schools, parental
involvement activities, and extended learning time programs,
such as after-school and summer programs.
``(f) Local Educational Agency and School Report Cards.--
``(1) In general.--The State shall ensure that each local
educational agency, elementary school, and secondary school
in the State, collects appropriate data and publishes an
annual report card consistent with this subsection.
``(2) Required information.--Each local educational agency,
elementary school, and secondary school described in
paragraph (1), at a minimum, shall include in its annual
report card--
``(A) the information described in paragraphs (2) and (3)
of subsection (e) for each local educational agency and
school;
``(B) in the case of a local educational agency--
``(i) information regarding the number and percentage of
schools served by the local educational agency that are
identified for school improvement, including schools
identified under section 1116;
``(ii) information on the most recent 3-year trend in the
number and percentage of elementary schools and secondary
schools served by the local educational agency that are
identified for school improvement; and
``(iii) information on how students in the schools served
by the local educational agency performed on the statewide
assessment compared with students in the State as a whole;
``(C) in the case of an elementary school or a secondary
school--
``(i) information regarding whether the school has been
identified for school improvement;
``(ii) information on how the school's students performed
on the statewide assessment compared with students in schools
served by the same local educational agency and with all
students in the State; and
``(iii) information about the enrollment of students
compared with the rated capacity of the schools; and

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``(D) other appropriate information, regardless of whether
the information is included in the annual State report.
``(g) Dissemination and Accessibility of Report Cards.--
``(1) Report card format.--Annual report cards under this
part shall be--
``(A) concise; and
``(B) presented in a format and manner that parents can
understand, including, to the extent practicable, in a
language the parents can understand.
``(2) State report cards.--State annual report cards under
subsection (e) shall be disseminated to all elementary
schools, secondary schools, and local educational agencies in
the State, and made broadly available to the public through
means such as posting on the Internet and distribution to the
media, and through public agencies.
``(3) Local report cards.--Local educational agency report
cards under subsection (f) shall be disseminated to all
elementary schools and secondary schools served by the local
educational agency and to parents of students attending such
schools, and made broadly available to the public through
means such as posting on the Internet and distribution to the
media, and through public agencies.
``(4) School report cards.--Elementary school and secondary
school report cards under subsection (f) shall be
disseminated to parents of students attending that school,
and made broadly available to the public through means such
as posting on the Internet and distribution to the media, and
through public agencies.
``(h) Coordination of State Plan Content.--A State shall
include in its plan under part A of title I or part B of
title II, an assurance that the State has in effect a policy
that meets the requirements of this section.
``(i) Privacy.--Information collected under this section
shall be collected and disseminated in a manner that protects
the privacy of individuals.
``(j) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this part
$5,000,000 for fiscal year 2002 and such sums as may be
necessary for each of the 4 succeeding fiscal years.

``PART J--ADDITIONAL PERFORMANCE AND ACCOUNTABILITY PROVISIONS

``SEC. 14911. REWARDING HIGH PERFORMANCE.

``(a) State Rewards.--
``(1) In general.--From amounts appropriated under
subsection (d), the Secretary shall make awards to States
that--
``(A) for 3 consecutive years have--
``(i) exceeded the State performance goals and objectives
established for any title under this Act;
``(ii) exceeded the adequate yearly progress levels
established under section 1111(b)(2);
``(iii) significantly narrowed the gaps between minority
and nonminority students, and between economically
disadvantaged students and students who are not economically
disadvantaged;
``(iv) raised all students to the proficient standard level
prior to 10 years after the date of enactment of the School
Improvement Accountability Act; or
``(v) significantly increased the percentage of core
classes being taught by fully qualified teachers, in schools
receiving funds under part A of title I; or
``(B) by not later than fiscal year 2005, ensure that all
teachers teaching in the State public elementary schools and
secondary schools are fully qualified.
``(2) State use of funds.--
``(A) Demonstration sites.--Each State receiving an award
under paragraph (1) shall use a portion of the award funds
that are not distributed under subsection (b) to establish
demonstration sites with respect to high-performing schools
(based upon achievement, or performance levels and adequate
yearly progress) in order to help low-performing schools.
``(B) Improvement of performance.--Each State receiving an
award under paragraph (1) shall use the portion of the award
funds that are not used pursuant to subparagraph (A) or (C)
and are not distributed under subsection (b) for the purpose
of improving the level of performance of all elementary
school and secondary school students in the State, based upon
State content and performance standards.
``(C) Reservation for administrative expenses.--Each State
receiving an award under paragraph (1) may set aside not more
than \1/2\ of 1 percent of the award funds for the planning
and administrative costs of carrying out this section,
including the costs of distributing awards to local
educational agencies.
``(b) Local Educational Agency Awards.--
``(1) In general.--Each State receiving an award under
subsection (a)(1) shall distribute 80 percent of the award
funds to local educational agencies in the State that--
``(A) for 3 consecutive years have--
``(i) exceeded the State-established local educational
agency performance goals and objectives established for any
title under this Act;
``(ii) exceeded the adequate yearly progress levels
established under section 1111(b)(2);
``(iii) significantly narrowed the gaps between minority
and nonminority students, and between economically
disadvantaged students and students who are not economically
disadvantaged;
``(iv) raised all students enrolled in schools served by
the local educational agency to the proficient standard level
prior to 10 years from the date of enactment of the School
Improvement Accountability Act; or
``(v) significantly increased the percentage of core
classes being taught by fully qualified teachers, in schools
receiving funds under part A of title I;
``(B) not later than December 31, 2005, ensure that all
teachers teaching in the elementary schools and secondary
schools served by the local educational agency are fully
qualified; or
``(C) have attained consistently high achievement in
another area that the State determines appropriate to reward.
``(2) School-based performance awards.--A local educational
agency shall use funds made available under paragraph (1) for
activities described in subsection (c) such as school-based
performance awards.
``(3) Reservation for administrative expenses.--Each local
educational agency receiving an award under paragraph (1) may
set aside not more than \1/2\ of 1 percent of the award funds
for the planning and administrative costs of carrying out
this section, including the costs of distributing awards to
eligible elementary schools and secondary schools, teachers,
and principals.
``(c) School Rewards.--Each local educational agency
receiving an award under subsection (b) shall consult with
teachers and principals to develop a reward system, and shall
use the award funds--
``(1) to reward individual schools that demonstrate high
performance with respect to--
``(A) increasing the academic achievement of all students;
``(B) narrowing the academic achievement gap described in
section 1111(b)(2)(B)(iv);
``(C) improving teacher quality;
``(D) increasing high-quality professional development for
teachers, principals, and administrators; or
``(E) improving the English proficiency of limited English
proficient students;
``(2) to reward collaborative teams of teachers, or teams
of teachers and principals, that--
``(A) significantly increase the annual performance of low-
performing students; or
``(B) significantly improve in a fiscal year the English
proficiency of limited English proficient students;
``(3) to reward principals who successfully raise the
performance of a substantial number of low-performing
students to high academic levels;
``(4) to develop or implement school district-wide programs
or policies to increase the level of student performance on
State assessments that are aligned with State content
standards; and
``(5) to reward schools for consistently high achievement
in another area that the local educational agency determines
appropriate to reward.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$200,000,000 for fiscal year 2002, and such sums as may be
necessary for each of the 4 succeeding fiscal years.
``(e) Definition.--The term `low-performing student' means
a student who is below a basic State standard level.''.

SEC. 134. ADDITIONAL ACCOUNTABILITY PROVISIONS.

Part E of title XIV (20 U.S.C. 8891 et seq.) is amended by
adding at the end the following:

``SEC. 14515. ADDITIONAL ACCOUNTABILITY PROVISIONS.

``(a) In General.--Notwithstanding any other provision of
this Act, a recipient of funds provided for a fiscal year
under part A of title I, part A or C of title III, part A of
title IV, part A of title V, or title VII, shall include--
(1) in the plans or applications required under such part
or title--
(A) the methods the recipient will use to measure the
annual impact of each program funded in whole or in part with
funds provided under such part or title and, if applicable,
the extent to which each such program will increase student
academic achievement;
(B) the annual, quantifiable, and measurable performance
goals and objectives for each such program, and the extent to
which, if applicable, the program's performance goals and
objectives align with State content standards and State
student performance standards established under section
1111(b)(1)(A); and
(C) if the recipient is a local educational agency,
assurances that the local educational agency consulted, at a
minimum, with parents, school board members, teachers,
administrators, business partners, education organizations,
and community groups to develop the plan or application
submitted and that such consultation will continue on a
regular basis; and
``(2) in the reports required under such part or title, a
report for the preceding fiscal year regarding how the plan
or application submitted for such fiscal year under such part
or title was implemented, the recipient's progress toward
attaining the performance goals and objectives identified in
the plan or application for such year, and, if applicable,
the extent to which programs funded in whole or in part with
funds provided under such part or title increased student
achievement.
``(b) Penalties.--If a recipient of funds under a part or
title described in subsection (a) fails to meet the
performance goals and objectives of the part or title for 3
consecutive fiscal years, the Secretary shall--
``(1) withhold not less than 50 percent of the funds made
available under the relevant

[[Page S123]]

program for administrative expenses for the succeeding fiscal
year, and for each consecutive fiscal year until the
recipient meets such performance goals and objectives; and
``(2) in the case of--
``(A) a competitive grant (as determined by the Secretary),
consider the recipient ineligible for grants under the part
or title until the recipient meets such performance goals and
objectives; and
``(B) a formula grant (as determined by the Secretary),
withhold not less than 20 percent of the total amount of
funds provided under title VI for the succeeding fiscal year
and each consecutive fiscal year until the recipient meets
such goals and objectives.
``(c) Other Penalties.--A State that has not met the
requirements of subsection (a)(1)(B) with respect to a fiscal
year--
``(1) shall not be eligible for designation as an Ed-Flex
Partnership State under the Education Flexibility Partnership
Act of 1999 until the State meets the requirements of
subsection (a)(1)(B); and
``(2) shall be subject to such other penalties as are
provided in this Act for failure to meet the requirements of
subsection (a)(1)(B).
``(d) Special Rule for Secretary Awards.--
``(1) In general.--Notwithstanding any other provision of
this Act, a recipient of funds provided under a direct award
made by the Secretary, or a contract or cooperative agreement
entered into with the Secretary, for a program shall include
the following information in any application or plan required
for such program:
``(A) How funds provided under the program will be used and
how such use will increase student academic achievement.
``(B) The goals and objectives to be met, including goals
for dissemination and use of the information or materials
produced, where applicable.
``(C) If the grant requires dissemination of information or
materials, how the recipient will track and report annually
to the Secretary--
``(i) the successful dissemination of information or
materials produced;
``(ii) where information or materials produced are being
used; and
``(iii) the impact of such use and, if applicable, the
extent to which such use increased student academic
achievement or contributed to the stated goal of the program.
``(2) Requirement.--If no application or plan is required
under a program described in paragraph (1), the Secretary
shall require the recipient of funds to submit a plan
containing the information required under paragraph (1).
``(3) Failure to achieve goals and objectives.--
``(A) In general.--The Secretary shall evaluate the
information submitted under this subsection to determine
whether the recipient has met the goals and objectives
described in paragraph (1)(B), where applicable, assess the
magnitude of dissemination described in paragraph (1)(C),
and, where applicable, assess the effectiveness of the
activity funded in raising student academic achievement in
places where information or materials produced with such
funds are used.
``(B) Ineligibility.--The Secretary shall consider the
recipient ineligible for grants, contracts, or cooperative
agreements under the program described in paragraph (1) if--
``(i) the goals and objectives described in paragraph
(1)(B) have not been met;
``(ii) where applicable, the dissemination has not been of
a magnitude to ensure goals and objectives are being
addressed; and
``(iii) where applicable, the information or materials
produced have not made a significant impact on raising
student achievement in places where such information or
materials are used.''.

TITLE II--CLOSING THE ACHIEVEMENT GAP

Subtitle A--Reauthorization of Programs

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--Section 1002(a) (20 U.S.C. 6302(a)) is
amended by striking ``appropriated $7,400,000,000 for fiscal
year 1995'' and all that follows through the period and
inserting the following: ``appropriated--
``(1) $11,000,000,000 for fiscal year 2002;
``(2) $13,000,000,000 for fiscal year 2003;
``(3) $15,000,000,000 for fiscal year 2004;
``(4) $15,000,000,000 for fiscal year 2005; and
``(5) $15,000,000,000 for fiscal year 2006.''.
(b) Review of Allocations.--The Secretary of Education
shall annually review the manner in which funds are allocated
under title I of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6301 et seq.) to ensure that local
education agencies with the highest need are receiving funds
in proportion to that need as compared to other local
education agencies.

Subtitle B--Options: Opportunities to Improve our Nation's Schools

SEC. 211. OPTIONS: OPPORTUNITIES TO IMPROVE OUR NATION'S
SCHOOLS.

Title V (20 U.S.C. 7201 et seq.) is amended by adding at
the end the following:

``PART D--OPTIONS: OPPORTUNITIES TO IMPROVE OUR NATION'S SCHOOLS

``SEC. 5401. PURPOSE.

``It is the purpose of this part to identify and support
innovative approaches to high-quality public school choice by
providing financial assistance for the demonstration,
development, implementation, and evaluation of, and the
dissemination of information about, public school choice
programs that stimulate educational innovation for all public
schools and contribute to standards-based school reform
efforts.

``SEC. 5402. GRANTS.

``(a) In General.--From funds appropriated under section
5405(a) and not reserved under section 5405(b), the Secretary
is authorized to make grants to State and local educational
agencies to support programs that promote innovative
approaches to high-quality public school choice.
``(b) Duration.--A grant under this part shall not be
awarded for a period that exceeds 3 years.

``SEC. 5403. USES OF FUNDS.

``(a) Uses of Funds.--
``(1) In general.--Funds under this part may be used to
demonstrate, develop, implement, and evaluate, and to
disseminate information about, innovative approaches to
broaden public elementary school and secondary school choice,
including the design and development of new public school
choice options, the development of new strategies for
overcoming barriers to effective public school choice, and
the design and development of public school choice systems
that promote high standards for all students and the
continuous improvement of all such public schools.
``(2) Examples.--The approaches described in paragraph (1)
at the school, school district, and State levels may
include--
``(A) inter school district approaches to public school
choice, including approaches that increase equal access to
high-quality educational programs and diversity in schools;
``(B) public elementary and secondary programs that involve
partnerships with institutions of higher education and that
are located on the campuses of the institutions;
``(C) programs that allow students in public secondary
schools to enroll in postsecondary courses and to receive
both secondary and postsecondary academic credit;
``(D) worksite satellite schools, in which State or local
educational agencies form partnerships with public or private
employers, to create public schools at parents' places of
employment; and
``(E) approaches to school desegregation that provide
students and parents choice through strategies other than
magnet schools.
``(b) Limitations.--Funds under this part--
``(1) shall supplement, and not supplant, non-Federal funds
expended for existing programs;
``(2) may be used for providing transportation services or
costs, except that not more than 10 percent of the funds
received under this part may be used by the local educational
agency to provide such services or costs;
``(3) may be used for improving low performing schools that
lose students as a result of school choice plans, except that
not more than 10 percent of the funds under this part may be
used by the local educational agency for the improvement of
low performing schools; and
``(4) shall not be used to fund programs that are
authorized under part C, D, or E.

``SEC. 5404. GRANT APPLICATION; PRIORITIES.

``(a) Application Required.--A State or local educational
agency desiring to receive a grant under this part shall
submit an application to the Secretary in such form and
containing such information as the Secretary may require.
``(b) Application Contents.--Each application shall
include--
``(1) a description of the program for which funds are
sought and the goals for such program;
``(2) a description of how the program funded under this
part will be coordinated with, and will complement and
enhance, programs under other related Federal and non-Federal
programs;
``(3) if the program includes partners, the name of each
partner and a description of the partner's responsibilities;
and
``(4) a description of the policies and procedures the
agency will use to ensure--
``(A) that priority is provided to parents of students
attending schools identified for school improvement under
section 1116 in exercising choice among schools;
``(B) that priority is provided to parents of students who
want to stay enrolled at a school;
``(C) the agency's accountability for results, including
the agency's goals and performance indicators;
``(D) that the program is open and accessible to, and will
promote high academic standards for, all students regardless
of the achievement level or disability of the students and
the family income of the families of the students;
``(E) that all parents are provided with easily
comprehensible information about various school options,
including information on instructional approaches at
different schools, resources, and transportation that will be
provided at or for the schools on an annual basis;
``(F) that all parents are given timely notice about
opportunities to choose which school their child will attend
the following year and the period during which the choice may
be made;
``(G) that limitations on transfers between schools only
occur because of facilities constraints, statutory class size
limits, and local efforts to ensure that schools reflect the
diversity of the communities in which the schools are
located;

[[Page S124]]

``(H) that a lottery or other random system be established
for parents of students wishing to attend a school that
cannot receive all students wishing to attend; and
``(I) that the program is carried out in a manner
consistent with Federal law, including court orders, such as
desegregation orders, issued to enforce Federal law.
``(c) Priorities.--
``(1) In general.--The Secretary shall give a priority to
applications for programs that will serve high-poverty local
educational agencies.
``(2) Permissive.--The Secretary may give a priority to
applications demonstrating that the State or local
educational agency will carry out the agency's program in
partnership with one or more public or private agencies,
organizations, or institutions, including institutions of
higher education and public or private employers.

``SEC. 5405. AUTHORIZATION OF APPROPRIATIONS; RESERVATION;
EVALUATIONS.

``(a) Authorization of Appropriations.--For the purpose of
carrying out this part, there are authorized to be
appropriated $100,000,000 for each of fiscal years 2002
through 2006.
``(b) Reservation for Evaluation, Technical Assistance, and
Dissemination.--From the amount appropriated under subsection
(a) for any fiscal year, the Secretary may reserve not more
than 5 percent to carry out evaluations under subsection (c),
to provide technical assistance, and to disseminate
information.
``(c) Evaluations.--The Secretary may use funds reserved
under subsection (b) to carry out one or more evaluations of
programs assisted under this part, which, at a minimum, shall
address--
``(1) how, and the extent to which, the programs supported
with funds under this part promote educational equity and
excellence; and
``(2) the extent to which public schools of choice
supported with funds under this part are--
``(A) held accountable to the public;
``(B) effective in improving public education; and
``(C) open and accessible to all students.''.

Subtitle C--Parental Involvement

SEC. 221. STATE PLANS.

Section 1111 (20 U.S.C. 6311) is amended--
(1) by redesignating subsections (d) through (g) as
subsections (e) through (h), respectively; and
(2) by inserting after subsection (c) the following:
``(d) Parental Involvement.--Each State plan shall
demonstrate that the State will support, in collaboration
with the regional educational laboratories, the collection
and dissemination to local educational agencies and schools
of effective parental involvement practices. Such practices
shall--
``(1) be based on the most current research on effective
parental involvement that fosters achievement to high
standards for all children; and
``(2) be geared toward lowering barriers to greater
participation in school planning, review, and improvement
experienced by parents.''.

SEC. 222. PARENTAL ASSISTANCE.

Part D of title I (20 U.S.C. 6421 et seq.) is amended to
read as follows:

``PART D--PARENTAL ASSISTANCE AND CHILD OPPORTUNITY

``Subpart I--Parental Assistance''.

``SEC. 1401. PARENTAL INFORMATION AND RESOURCE CENTERS.

``(a) Purpose.--The purpose of this part is--
``(1) to provide leadership, technical assistance, and
financial support to nonprofit organizations and local
educational agencies to help the organizations and agencies
implement successful and effective parental involvement
policies, programs, and activities that lead to improvements
in student performance;
``(2) to strengthen partnerships among parents (including
parents of preschool age children), teachers, principals,
administrators, and other school personnel in meeting the
educational needs of children;
``(3) to develop and strengthen the relationship between
parents and the school;
``(4) to further the developmental progress primarily of
children assisted under this part; and
``(5) to coordinate activities funded under this part with
parental involvement initiatives funded under section 1118
and other provisions of this Act.
``(b) Grants Authorized.--
``(1) In general.--The Secretary is authorized to award
grants in each fiscal year to nonprofit organizations, and
nonprofit organizations in consortia with local educational
agencies, to establish school-linked or school-based parental
information and resource centers that provide training,
information, and support to--
``(A) parents of children enrolled in elementary schools
and secondary schools;
``(B) individuals who work with the parents described in
subparagraph (A); and
``(C) State educational agencies, local educational
agencies, schools, organizations that support family-school
partnerships (such as parent-teacher associations), and other
organizations that carry out parent education and family
involvement programs.
``(2) Award rule.--In awarding grants under this part, the
Secretary shall ensure that such grants are distributed in
all geographic regions of the United States.

``SEC. 1402. APPLICATIONS.

``(a) Grants Applications.--
``(1) In general.--Each nonprofit organization or nonprofit
organization in consortium with a local educational agency
that desires a grant under this part shall submit an
application to the Secretary at such time and in such manner
as the Secretary shall require.
``(2) Contents.--Each application submitted under paragraph
(1), at a minimum, shall include assurances that the
organization or consortium will--
``(A)(i) be governed by a board of directors the membership
of which includes parents; or
``(ii) be an organization or consortium that represents the
interests of parents;
``(B) establish a special advisory committee the membership
of which includes--
``(i) parents described in section 1401(b)(1)(A);
``(ii) representatives of education professionals with
expertise in improving services for disadvantaged children;
and
``(iii) representatives of local elementary schools and
secondary schools who may include students and
representatives from local youth organizations;
``(C) use at least \1/2\ of the funds provided under this
part in each fiscal year to serve areas with high
concentrations of low-income families in order to serve
parents who are severely educationally or economically
disadvantaged;
``(D) operate a center of sufficient size, scope, and
quality to ensure that the center is adequate to serve the
parents in the area;
``(E) serve both urban and rural areas;
``(F) design a center that meets the unique training,
information, and support needs of parents described in
section 1401(b)(1)(A), particularly such parents who are
educationally or economically disadvantaged;
``(G) demonstrate the capacity and expertise to conduct the
effective training, information and support activities for
which assistance is sought;
``(H) network with--
``(i) local educational agencies and schools;
``(ii) parents of children enrolled in elementary schools
and secondary schools;
``(iii) parent training and information centers assisted
under section 682 of the Individuals with Disabilities
Education Act;
``(iv) clearinghouses; and
``(v) other organizations and agencies;
``(I) focus on serving parents described in section
1401(b)(1)(A) who are parents of low-income, minority, and
limited English proficient, children;
``(J) use part of the funds received under this part to
establish, expand, or operate Parents as Teachers programs or
Home Instruction for Preschool Youngsters programs;
``(K) provide assistance to parents in such areas as
understanding State and local standards and measures of
student and school performance; and
``(L) work with State and local educational agencies to
determine parental needs and delivery of services.
``(b) Grant Renewal.--For each fiscal year after the first
fiscal year an organization or consortium receives assistance
under this part, the organization or consortium shall
demonstrate in the application submitted for such fiscal year
after the first fiscal year that a portion of the services
provided by the organization or consortium is supported
through non-Federal contributions, which contributions may be
in cash or in kind.

``SEC. 1403. USES OF FUNDS.

``(a) In General.--Grant funds received under this part
shall be used--
``(1) to assist parents in participating effectively in
their children's education and to help their children meet
State and local standards, such as assisting parents--
``(A) to engage in activities that will improve student
performance, including understanding the accountability
systems in place within their State educational agency and
local educational agency and understanding their children's
educational performance in comparison to State and local
standards;
``(B) to provide followup support for their children's
educational achievement;
``(C) to communicate effectively with teachers, principals,
counselors, administrators, and other school personnel;
``(D) to become active participants in the development,
implementation, and review of school-parent compacts, parent
involvement policies, and school planning and improvement;
``(E) to participate in the design and provision of
assistance to students who are not making adequate
educational progress;
``(F) to participate in State and local decisionmaking; and
``(G) to train other parents;
``(2) to obtain information about the range of options,
programs, services, and resources available at the national,
State, and local levels to assist parents and school
personnel who work with parents;
``(3) to help the parents learn and use the technology
applied in their children's education;
``(4) to plan, implement, and fund activities for parents
that coordinate the education of their children with other
Federal programs that serve their children or their families;
and
``(5) to provide support for State or local educational
personnel if the participation of such personnel will further
the activities assisted under the grant.

[[Page S125]]

``(b) Permissive Activities.--Grant funds received under
this part may be used to assist schools with activities such
as--
``(1) developing and implementing their plans or activities
under sections 1118 and 1119; and
``(2) developing and implementing school improvement plans,
including addressing problems that develop in the
implementation of sections 1118 and 1119.
``(3) providing information about assessment and individual
results to parents in a manner and a language the family can
understand;
``(4) coordinating the efforts of Federal, State, and local
parent education and family involvement initiatives; and
``(5) providing training, information, and support to--
``(A) State educational agencies;
``(B) local educational agencies and schools, especially
those local educational agencies and schools that are low
performing; and
``(C) organizations that support family-school
partnerships.
``(c) Grandfather Clause.--The Secretary shall use funds
made available under this part to continue to make grant or
contract payments to each entity that was awarded a multiyear
grant or contract under title IV of the Goals 2000: Educate
America Act (as such title was in effect on the day before
the date of enactment of the Educational Excellence for All
Learners Act of 2001) for the duration of the grant or
contract award.

``SEC. 1403A. LOCAL FAMILY INFORMATION CENTERS.

``(a) Centers Authorized.--The Secretary shall award grants
to, and enter into contracts and cooperative agreements with,
local nonprofit parent organizations to enable the
organizations to support local family information centers
that help ensure that parents of students in schools assisted
under part A have the training, information, and support the
parents need to enable the parents to participate effectively
in helping their children to meet challenging State
standards.
``(b) Definition of Local Nonprofit Parent Organization.--
In this section, the term `local nonprofit parent
organization' means a private nonprofit organization (other
than an institution of higher education) that--
``(1) has a demonstrated record of working with low-income
individuals and parents;
``(2)(A) has a board of directors the majority of whom are
parents of students in schools that are assisted under part A
and located in the geographic area to be served by the
center; or
``(B) has a special governing committee to direct and
implement the center, a majority of the members of whom are
parents of students in schools assisted under part A; and
``(3) is located in a community with schools that receive
funds under part A, and is accessible to the families of
students in those schools.
``(c) Required Center Activities.--Each center assisted
under this section shall be exempt from the uses of funds
requirements under section 1403 and shall instead--
``(1) provide training, information, and support that meets
the needs of parents of children in schools assisted under
part A who are served through the grant, contract, or
cooperative agreement, particularly underserved parents, low-
income parents, parents of students with limited English
proficiency, parents of students with disabilities, and
parents of students in schools identified for school
improvement or corrective action under section 1116(c);
``(2) help families of students enrolled in a school
assisted under part A to understand and participate in all of
the provisions of this Act designed to improve the
achievement of students in the school;
``(3) provide information in a language and form that
parents understand, including taking steps to ensure that
underserved parents, low-income parents, parents with limited
English proficiency, parents of students with disabilities,
or parents of students in schools identified for school
improvement or corrective action, are effectively informed
and assisted;
``(4) assist parents to--
``(A) understand what their child's school is doing to
enable students at the school to meet the State and local
standards, including understanding the curriculum and
instructional methods the school is using to help the
students meet the standards;
``(B) better understand their child's educational needs,
where their child stands with respect to State standards, how
the school is addressing the child's education needs, and how
they can work with their child to increase the child's
academic achievement;
``(C) participate in the decisionmaking processes at the
school, school district, and State levels;
``(D) understand and benefit from the provisions of other
Federal education programs; and
``(E) understand public school choice options available in
the local community, including magnet schools, charter
schools, and alternative schools;
``(5) be designed to meet the specific needs of families
who experience significant isolation from available sources
of information and support; and
``(6) report annually to the Secretary regarding measures,
determined by the Secretary, that indicate the program's
effectiveness in reaching underserved parents and developing
meaningful parent involvement in schools assisted under part
A.
``(c) Application Requirements.--Each local nonprofit
parent organization desiring assistance under this section
shall submit to the Secretary an application (in place of the
application required under section 1402) at such time, in
such manner, and accompanied by such information as the
Secretary may require. Each such application shall--
``(1) describe how the organization will use the assistance
to help families under this section;
``(2) describe what steps the organization has taken to
meet with school district or school personnel in the
geographic area to be served by the center in order to inform
the personnel of the plan and application for the assistance;
and
``(3) identify with specificity the special efforts that
the organization will take--
``(A) to ensure that the needs for training, information,
and support for parents of students in schools assisted under
part A, particularly underserved parents, low-income parents,
parents with limited English proficiency, parents of students
with disabilities, and parents of students in schools
identified for school improvement or corrective action, are
effectively met; and
``(B) to work with community-based organizations.
``(d) Distribution of Funds.--
``(1) Allocation of funds.--The Secretary shall make at
least 2 awards of assistance under this section to a local
nonprofit parent organization in each State, unless the
Secretary does not receive at least 2 applications from such
organizations in a State of sufficient quality to warrant
providing the assistance in the State.
``(2) Selection requirement for local family information
centers.--
``(A) In general.--The Secretary shall select local
nonprofit parent organizations in a State to receive
assistance under this section in a manner that ensures the
provision of the most effective assistance to low-income
parents of students in schools assisted under part A.
``(B) Priority.--The Secretary shall give priority to--
``(i) non-profit parent organizations that are located in
rural and urban areas in the State where the percentage of
students from families at or below the poverty line is
greater than the median, as determined by the State; and
``(ii) areas with high school dropout rates, high
percentages of limited English proficient students, or
schools identified for school improvement or corrective
action under section 1116(c).

``SEC. 1404. TECHNICAL ASSISTANCE.

``The Secretary shall provide technical assistance, by
grant or contract, for the establishment, development, and
coordination of parent training, information, and support
programs and parental information and resource centers.

``SEC. 1405. REPORTS.

``(a) Information.--Each organization or consortium
receiving assistance under this part shall submit to the
Secretary, on an annual basis, information concerning the
parental information and resource centers assisted under this
part, including--
``(1) the number of parents (including the number of
minority and limited English proficient parents) who receive
information and training;
``(2) the types and modes of training, information, and
support provided under this part;
``(3) the strategies used to reach and serve parents of
minority and limited English proficient children, parents
with limited literacy skills, and other parents in need of
the services provided under this part;
``(4) the parental involvement policies and practices used
by the center and an evaluation of whether such policies and
practices are effective in improving home-school
communication, student achievement, student and school
performance, and parental involvement in school planning,
review, and improvement; and
``(5) the effectiveness of the activities that local
educational agencies and schools are carrying out with regard
to parental involvement and other activities assisted under
this Act that lead to improved student achievement and
improved student and school performance.
``(b) Dissemination.--The Secretary annually shall
disseminate, widely to the public and to Congress, the
information that each organization or consortium submits
under subsection (a) to the Secretary.

``SEC. 1406. GENERAL PROVISIONS.

``Notwithstanding any other provision of this part--
``(1) no person, including a parent who educates a child at
home, a public school parent, or a private school parent,
shall be required to participate in any program of parent
education or developmental screening pursuant to the
provisions of this part; and
``(2) no program or center assisted under this part shall
take any action that infringes in any manner on the right of
a parent to direct the education of their children.''.

TITLE III--NATIONAL PRIORITIES WITH PROVEN EFFECTIVENESS

Subtitle A--Qualified Teacher in Every Classroom

SEC. 301. TEACHER QUALITY.

(a) In General.--Title II (20 U.S.C. 6601 et seq.) is
amended by striking the title heading and all that follows
through the end of part A and inserting the following:

[[Page S126]]

``TITLE II--QUALIFIED TEACHER IN EVERY CLASSROOM

``PART A--TEACHER QUALITY

``SEC. 2001. PURPOSES.

``The purposes of this part are the following:
``(1) To improve student achievement in order to help every
student meet State content and student performance standards.
``(2) To--
``(A) enable States, local educational agencies, and
schools to improve the quality and success of the teaching
force by providing all teachers, including beginning and
veteran teachers, with the support those teachers need to
succeed and stay in teaching, by providing professional
development and mentoring programs for teachers, by offering
incentives for additional qualified individuals to go into
teaching, by reducing out-of-field placement of teachers, and
by reducing the number of teachers with emergency
credentials; and
``(B) hold the States, agencies, and schools accountable
for such improvements.
``(3) To support State and local efforts to recruit
qualified teachers to address teacher shortages, particularly
in communities with the greatest need.
``(4) To ensure that underqualified and inexperienced
teachers do not teach higher percentages of low-income
students and minority students than other students.

``SEC. 2002. DEFINITIONS.

``In this part:
``(1) Beginning teacher.--The term `beginning teacher'
means a fully qualified teacher who has taught for 3 years or
less.
``(2) Core academic subjects.--The term `core academic
subjects' means--
``(A) mathematics;
``(B) science;
``(C) reading (or language arts) and English;
``(D) social studies (consisting of history, civics,
government, geography, and economics);
``(E) foreign languages; and
``(F) fine arts (consisting of music, dance, drama, and the
visual arts).
``(3) Covered recruitment.--The term `covered recruitment'
means activities described in section 2017(c).
``(4) Fully qualified.--
``(A) In general.--The term `fully qualified', used with
respect to a teacher, means a teacher who--
``(i)(I) is certified or licensed and has demonstrated the
academic subject knowledge, teaching knowledge, and teaching
skills necessary to teach effectively in the academic subject
in which the teacher teaches, according to the standards
described in subparagraph (B) or (C), as appropriate; and
``(II) shall not be a teacher for whom State certification
or licensing requirements have been waived or who is teaching
under an emergency; or
``(ii) meets the standards of the National Board for
Professional Teaching Standards.
``(B) Elementary school instructional staff.--For purposes
of complying with subparagraph (A)(i), each elementary school
teacher (other than a middle school teacher) in the State
shall, at a minimum--
``(i) have State certification or a State license to teach
(which may include certification or licensing obtained
through alternative routes); and
``(ii) hold a bachelor's degree and demonstrate the
academic subject knowledge, teaching knowledge, and teaching
skills required to teach effectively in reading, writing,
mathematics, social studies, science, and other academic
subjects.
``(C) Middle school and secondary school instructional
staff.--For purposes of complying with subparagraph (A)(i),
each middle school or secondary school teacher in the State
shall, at a minimum--
``(i) have State certification or a State license to teach
(which may include certification or licensing obtained
through alternative routes); and
``(ii) hold a bachelor's degree or higher degree and
demonstrate a high level of competence in all academic
subjects in which the teacher teaches through--

``(I) achievement of a high level of performance on
rigorous academic subject tests;
``(II) completion of an academic major (or courses totaling
an equivalent number of credit hours) in each of the academic
subjects in which the teacher teaches; or
``(III) for a teacher hired prior to the date of enactment
of the Educational Opportunities Act, completion of
appropriate coursework for mastery of such academic subjects.

``(5) High-poverty.--The term `high-poverty', used with
respect to a school, means a school that serves a high number
or percentage of children from families with incomes below
the poverty line, as determined by the State in which the
school is located.
``(6) High-poverty local educational agency.--The term
`high-poverty local educational agency' means a local
educational agency for which the number of children served by
the agency who are age 5 through 17, and from families with
incomes below the poverty line--
``(A) is not less than 20 percent of the number of all
children served by the agency; or
``(B) is more than 10,000.
``(7) Institution of higher education.--The term
`institution of higher education'--
``(A) has the meaning given the term in section 101(a) of
the Higher Education Act of 1965; and
``(B) if such an institution prepares teachers and receives
Federal funds, means such an institution that--
``(i) is in full compliance with the requirements of
section 207 of the Higher Education Act of 1965; and
``(ii) does not have a teacher preparation program
identified by a State as low-performing.
``(8) Low-performing school.--The term `low-performing
school' means--
``(A) a school identified by a local educational agency for
school improvement under section 1116(c); or
``(B) a school in which the great majority of students, as
determined by the State in which the school is located, fail
to meet State student performance standards based on
assessments the local educational agency is using under part
A of title I.
``(9) Mentoring.--The term `mentoring' means activities
that--
``(A) consist of structured guidance and regular and
ongoing support for beginning teachers, that--
``(i) is designed to help the teachers continue to improve
their practice of teaching and to develop their instructional
skills; and
``(ii)(I) as part of a multiyear, developmental induction
process;
``(II) involves the assistance of a mentor teacher and
other appropriate individuals from a school, local
educational agency, or institution of higher education; and
``(III) may include coaching, classroom observation, team
teaching, and reduced teaching loads; and
``(B) may include the establishment of a partnership by a
local educational agency with an institution of higher
education, another local educational agency, teacher
organization, or another organization, for the purpose of
carrying out the activities described in subparagraph (A).
``(10) Mentor teacher.--The term `mentor teacher' means a
fully qualified teacher who--
``(A) is a highly competent classroom teacher who is
formally selected and trained to work effectively with
beginning teachers (including corps members described in
section 2018);
``(B) is full-time, and is assigned and qualified to teach
in the content area or grade level in which a beginning
teacher (including a corps member described in section 2018),
to whom the teacher provides mentoring, intends to teach;
``(C) has been consistently effective in helping diverse
groups of students make substantial achievement gains; and
``(D) has been selected to provide mentoring through a peer
review process that uses, as the primary selection criterion
for the process, the teacher's ability to help students
achieve academic gains.
``(11) Poverty line.--The term `poverty line' means the
income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance
with section 673(2) of the Community Services Block Grant Act
(42 U.S.C. 9902(2))) applicable to a family of the size
involved.
``(12) Professional development.--The term `professional
development' means activities that are--
``(A)(i) an integral part of broad schoolwide and
districtwide educational improvement plans and enhance the
ability of teachers and other staff to help all students,
including females, students with disabilities, students with
limited English proficiency, and students who have economic
and educational disadvantages, meet high State and local
content and student performance standards;
``(ii) sustained, intensive, school-embedded, tied to State
standards, and of high quality and sufficient duration to
have a positive and lasting impact on classroom instruction
(not one-time workshops); and
``(iii) based on the best available research on teaching
and learning; and
``(B) described in subparagraphs (A) through (F) of section
2017(a)(1).
``(13) Recruitment activities.--The term `recruitment
activities' means activities carried out through a teacher
corps program as described in section 2018 to attract highly
qualified individuals, including individuals taking
nontraditional routes to teaching, to enter teaching and
support the individuals during necessary certification and
licensure activities.
``(14) Recruitment partnership.--The term `recruitment
partnership' means a partnership described in section
2015(b)(2).

``SEC. 2003. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this
part--
``(1) $2,000,000,000 for fiscal year 2001, of which--
``(A) $1,730,000,000 shall be made available to carry out
subpart 1; and
``(B) $270,000,000 shall be made available to carry out
subpart 2, of which--
``(i) $120,000,000 shall be made available to carry out
chapter 1 of subpart 2;
``(ii) $25,000,000 shall be made available to carry out
chapter 2 of subpart 2;
``(iii) $75,000,000 shall be made available to carry out
chapter 3 of subpart 2; and
``(iv) $50,000,000 shall be made available to carry out
chapter 4 of subpart 2; and
``(2) such sums as may be necessary for each of fiscal
years 2002 through 2005.

[[Page S127]]

``Subpart 1--Grants to States and Local Educational Agencies

``Chapter 1--Grants and Activities

``SEC. 2011. ALLOTMENTS TO STATES.

``(a) In General.--The Secretary is authorized to make
grants to eligible State educational agencies for the
improvement of teaching and learning through sustained and
intensive high-quality professional development, mentoring,
and recruitment activities (and covered recruitment, at the
election of a local educational agency) at the State and
local levels. Each grant shall consist of the allotment
determined for the State under subsection (b).
``(b) Determination of Amount of Allotment.--
``(1) Reservation of funds.--
``(A) In general.--From the total amount made available to
carry out this subpart under section 2003(1) for any fiscal
year, the Secretary shall reserve--
``(i) \1/2\ of 1 percent for allotments for the outlying
areas to be distributed among those outlying areas on the
basis of their relative need, as determined by the Secretary,
for professional development and mentoring and recruitment
activities carried out in accordance with the purposes of
this part; and
``(ii) \1/2\ of 1 percent for the Secretary of the Interior
for programs carried out in accordance with the purposes of
this part to provide professional development and mentoring
and recruitment activities for teachers and other staff in
schools operated or funded by the Bureau of Indian Affairs.
``(B) Limitation.--Notwithstanding subparagraph (A), the
Secretary shall not reserve, for either the outlying areas
under subparagraph (A)(i) or the schools operated or funded
by the Bureau of Indian Affairs under subparagraph (A)(ii),
more than the amount reserved for those areas or schools for
fiscal year 2000 under the authority described in paragraph
(2)(A)(i).
``(2) State allotments.--
``(A) Hold harmless.--
``(i) In general.--Subject to subparagraph (B), from the
total amount made available to carry out this subpart for any
fiscal year and not reserved under paragraph (1), the
Secretary shall allot to each of the 50 States, the District
of Columbia, and the Commonwealth of Puerto Rico an amount
equal to the amount that the State received for fiscal year
2000 under section 2202(b) of this Act (as in effect on the
day before the date of enactment of the Educational
Opportunities Act).
``(ii) Ratable reduction.--If the total amount made
available to carry out this subpart for any fiscal year and
not reserved under paragraph (1) is insufficient to pay the
full amounts that all States are eligible to receive under
clause (i) for any fiscal year, the Secretary shall ratably
reduce such amounts for such fiscal year.
``(B) Allotment of additional funds.--
``(i) In general.--Subject to clause (ii), for any fiscal
year for which the total amount made available to carry out
this subpart and not reserved under paragraph (1) exceeds the
total amount made available to the 50 States, the District of
Columbia, and the Commonwealth of Puerto Rico for fiscal year
2000 under the authority described in subparagraph (A)(i),
the Secretary shall allot to each of those States the sum
of--

``(I) an amount that bears the same relationship to 40
percent of the excess amount as the number of individuals age
5 through 17 in the State, as determined by the Secretary on
the basis of the most recent satisfactory data, bears to the
number of those individuals in all such States, as so
determined; and
``(II) an amount that bears the same relationship to 60
percent of the excess amount as the number of individuals age
5 through 17 from families with incomes below the poverty
line in the State, as determined by the Secretary on the
basis of the most recent satisfactory data, bears to the
number of those individuals in all such States, as so
determined.

``(ii) Exception.--No State receiving an allotment under
clause (i) may receive less than \1/2\ of 1 percent of the
total excess amount allotted under clause (i) for a fiscal
year.
``(3) Reallotment.--If any State described in paragraph (2)
does not apply for an allotment under paragraph (2) for any
fiscal year, the Secretary shall reallot such amount to the
remaining such States in accordance with paragraph (2).

``SEC. 2012. STATE APPLICATIONS.

``(a) Applications Required.--
``(1) In general.--Each State desiring to receive a grant
under this subpart shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may reasonably require.
``(2) Development.--The State educational agency shall
develop the State application--
``(A) in consultation with the State agency for higher
education, community-based and other nonprofit organizations,
and institutions of higher education; and
``(B) with the extensive participation of teachers, teacher
educators, school administrators, and content specialists.
``(b) Contents.--Each such application shall include--
``(1) a description of the State's shortages of fully
qualified teachers relating to high-poverty school districts
and high-need academic subjects (as such districts or
subjects are determined by the State);
``(2) an assessment of the need for professional
development for veteran teachers in the State and the need
for strong mentoring programs for beginning teachers that
is--
``(A) developed with the involvement of teachers; and
``(B) based on student achievement data in the core
academic subjects and other indicators of the need for
professional development and mentoring programs;
``(3) a description of how the State educational agency
will use funds made available under this part to improve the
quality of the State's teaching force, eliminate the use of
out-of-field placement of teachers, and eliminate the use of
teachers hired with emergency or other provisional
credentials by setting numerical, annual improvement goals,
and meet the requirements of this section;
``(4) a description of how the State educational agency
will align activities assisted under this subpart with State
content and student performance standards, and State
assessments by setting numerical, annual improvement goals;
``(5) a description of how the State educational agency
will coordinate activities funded under this subpart with
professional development and mentoring and recruitment
activities that are supported with funds from other relevant
Federal and non-Federal programs;
``(6) a plan, developed with the extensive participation of
teachers, for addressing long-term teacher recruitment,
retention, and professional development and mentoring needs,
which may include--
``(A) providing technical assistance to help school
districts reform hiring and employment practices to improve
the recruitment and retention of fully qualified teachers,
especially with respect to high-poverty schools; or
``(B) establishing State or regional partnerships to
address teacher shortages;
``(7) a description of how the State educational agency
will assist local educational agencies in implementing
effective and sustained professional development and
mentoring activities and high-quality recruitment activities
under this part;
``(8) an assurance that the State will consistently monitor
the progress of each local educational agency and school in
the State in achieving the goals specified in the information
submitted under paragraphs (1) through (7);
``(9) a description of how the State educational agency
will work with recipients of grants awarded for recruitment
activities under section 2015(b) to ensure that recruits who
successfully complete a teacher corps program will be
certified or licensed; and
``(10) the assurances and description referred to in
section 2021.
``(c) Approval.--The Secretary shall, using a peer-review
process, approve a State application if the application meets
the requirements of this section and holds reasonable promise
of achieving the purposes of this part.

``SEC. 2013. STATE USE OF FUNDS.

``(a) In General.--Of the funds allotted to a State under
section 2011 for a fiscal year--
``(1) not more than 6 percent shall be used by the State
educational agency to carry out State activities described in
section 2014, or for the administration of this subpart
(other than the administration of section 2019 but including
the administration of State activities under chapter 2),
except that not more than 3 percent of the allotted funds may
be used for the administration of this subpart;
``(2) 60 percent shall be used by the State educational
agency to provide grants to local educational agencies under
section 2015(a) for professional development and mentoring
(except as provided in section 2017(c));
``(3) 30 percent shall be used by the State educational
agency--
``(A) except as provided in subparagraph (B), to provide
grants to recruitment partnerships under section 2015(b) for
recruitment activities; or
``(B) if the State educational agency determines that all
elementary school and secondary school teachers in the State
that are teaching core academic subjects are fully qualified,
to provide the grants described in paragraph (2); and
``(4) 4 percent (or 4 percent of the amount the State would
have been allotted if the appropriation for this subpart were
$1,730,000,000, whichever is greater) shall be used by the
State agency for higher education to provide grants to
partnerships under section 2019.
``(b) Priority for Professional Development and Mentoring
in Mathematics and Science.--
``(1) Priority.--
``(A) Appropriations of not more than $300,000,000.--Except
as provided in section 2017(c), for any fiscal year for which
the appropriation for this subpart is $300,000,000 or less,
each State educational agency that receives funds under this
subpart, working jointly with the State agency for higher
education, shall ensure that all funds received under this
subpart are used for--
``(i) professional development and mentoring in mathematics
and science that is aligned with State content and student
performance standards; and
``(ii) recruitment activities to attract fully qualified
math and science teachers to high-poverty schools.
``(B) Appropriation of more than $300,000,000.--Except as
provided in section 2017(c), for any fiscal year for which
the appropriation for this subpart is greater than
$300,000,000, the State educational agency

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and the State agency for higher education shall jointly
ensure that the total amount of funds that the agencies
receive under this subpart and that the agencies use for
activities described in subparagraph (A) is at least as great
as the allotment the State would have received if that
appropriation had been $300,000,000.
``(2) Interdisciplinary activities.--A State may use funds
received under this subpart for activities that focus on more
than 1 core academic subject, and apply the funds toward
meeting the requirements of paragraph (1), if the activities
include a strong focus on improving instruction in
mathematics or science.
``(3) Additional funds.--Except as provided in section
2017(c), each State educational agency that receives funds
under this subpart and the State agency for higher education
shall jointly ensure that any portion of the funds that
exceeds the amount required by paragraph (1) to be spent on
activities described in paragraph (1)(A) is used to provide--
``(A) professional development and mentoring in 1 or more
of the core academic subjects that is aligned with State
content and student performance standards; and
``(B) recruitment activities involving teachers of 1 or
more of the core academic subjects.

``SEC. 2014. STATE LEVEL ACTIVITIES.

``(a) Activities.--Each State educational agency that
receives a grant described in section 2011 shall use the
funds made available under section 2013(a)(1) to carry out
statewide strategies and activities to improve teacher
quality, including--
``(1) establishing, expanding, or improving alternative
routes to State certification or licensing of teachers, for
highly qualified individuals with a baccalaureate degree,
mid-career professionals from other occupations, or
paraprofessionals, that are at least as rigorous as the
State's standards for initial certification or licensing of
teachers;
``(2) developing or improving evaluation systems to
evaluate the effectiveness of professional development and
mentoring and recruitment activities in improving teacher
quality, skills, and content knowledge, and the impact of the
professional development and mentoring and recruitment
activities on increasing student academic achievement and
student performance with performance measures drawn from
assessments that objectively measure student achievement
against State performance standards;
``(3) funding projects to promote reciprocity of teacher
certification or licensure between or among States;
``(4) providing assistance to local educational agencies to
reduce out-of-field placements and the use of emergency
credentials;
``(5) supporting certification by the National Board for
Professional Teaching Standards of teachers who are teaching
or will teach in high-poverty schools;
``(6) providing assistance to local educational agencies in
implementing effective programs of recruitment activities,
and professional development and mentoring, including
supporting efforts to encourage and train teachers to become
mentor teachers;
``(7) increasing the rigor and quality of State
certification and licensure tests for individuals entering
the field of teaching, including subject matter tests for
elementary, middle and secondary school teachers; and
``(8) implementing teacher recognition programs.
``(b) Coordination.--A State that receives a grant to carry
out this subpart and a grant under section 202 of the Higher
Education Act of 1965 shall coordinate the activities carried
out under this section and the activities carried out under
that section 202.

``SEC. 2015. GRANTS TO LOCAL EDUCATIONAL AGENCIES.

``(a) Grants for Professional Development and Mentoring
Activities.--
``(1) In general.--The State educational agency of a State
that receives a grant described in section 2011 shall use the
funds made available under section 2013(a)(2) (and any funds
made available under section 2013(a)(3)(B)) to make grants to
eligible local educational agencies, from allocations made
under paragraph (2), to carry out the activities described in
section 2017(a) (except as provided in section 2017(c)).
``(2) Allocations.--The State educational agency shall
allocate to each eligible local educational agency the sum
of--
``(A) an amount that bears the same relationship to 20
percent of the funds described in paragraph (1) as the number
of individuals enrolled in public and private nonprofit
elementary schools and secondary schools in the geographic
area served by the agency bears to the number of those
individuals in the geographic areas served by all the local
educational agencies in the State; and
``(B) an amount that bears the same relationship to 80
percent of the funds as the number of individuals age 5
through 17 from families with incomes below the poverty line,
in the geographic area served by the agency, as determined by
the Secretary on the basis of the most recent satisfactory
data, bears to the number of those individuals in the
geographic areas served by all the local educational agencies
in the State, as so determined.
``(3) Eligibility.--To be eligible to receive a grant from
a State educational agency under this subsection, a local
educational agency shall serve schools that include--
``(A) high-poverty schools;
``(B) schools that need support for improving teacher
quality based on low achievement of students served;
``(C) schools that have low teacher retention rates;
``(D) schools that need to improve or expand the knowledge
and skills of new and veteran teachers in high-priority
content areas;
``(E) schools that have high out-of-field placement rates;
or
``(F) high-poverty schools that have been identified for
improvement in accordance with section 1116.
``(4) Equitable geographic distribution.--A State
educational agency shall ensure an equitable distribution of
grants under this subsection among eligible local educational
agencies serving urban and rural areas.
``(b) Grants for Recruitment Activities.--
``(1) In general.--The State educational agency of a State
that receives a grant under section 2011 shall use the funds
made available under section 2013(a)(3)(A) to make grants to
eligible recruitment partnerships, on a competitive basis, to
carry out the recruitment activities and meet requirements
described in section 2017(b).
``(2) Eligibility.--
``(A) In general.--To be eligible to receive a grant from a
State educational agency under this subsection, a recruitment
partnership--
``(i) shall include an eligible local educational agency,
or a consortium of eligible local educational agencies;
``(ii) shall include an institution of higher education, a
tribal college, or a community college; and
``(iii) may include other members, such as a nonprofit
organization or professional education organization.
``(B) Eligible local educational agency.--In subparagraph
(A), the term `eligible local educational agency' means a
local educational agency that receives assistance under part
A of title I, and meets any additional eligibility criteria
that the appropriate State educational agency may establish.
``(3) Equitable geographic distribution.--A State
educational agency shall ensure an equitable distribution of
grants under this subsection among eligible recruitment
partnerships serving urban and rural areas.

``SEC. 2016. LOCAL APPLICATIONS.

``(a) In General.--A local educational agency or a
recruitment partnership seeking to receive a grant from a
State under section 2015 to carry out activities described in
section 2017 shall submit an application to the State at such
time, in such manner, and containing such information as the
State may reasonably require.
``(b) Contents Relating to Professional Development and
Mentoring Activities.--If the local educational agency seeks
a grant under section 2015(a) to carry out activities
described in section 2017(a), the local application described
in subsection (a) shall include, at a minimum, the following:
``(1) A description of how the local educational agency
intends to use the funds provided through the grant to carry
out activities that meet requirements described in section
2017(a).
``(2) An assurance that the local educational agency will
target the funds to high-poverty, low-performing schools
served by the local educational agency that--
``(A) have the lowest proportions of qualified teachers;
``(B) are identified for school improvement and corrective
action under section 1116; or
``(C) are identified for school improvement in accordance
with other measures of school quality as determined and
documented by the local educational agency.
``(3) A description of how the local educational agency
will coordinate professional development and mentoring
activities described in section 2017(a) with professional
development and mentoring activities provided through other
Federal, State, and local programs, including programs
authorized under--
``(A) titles I, IV, and V, and part A of title VII; and
``(B) where applicable, the Individuals with Disabilities
Education Act, the Carl D. Perkins Vocational and Technical
Education Act of 1998, and title II of the Higher Education
Act of 1965.
``(4) A description of how the local educational agency
will integrate funds received to carry out activities
described in section 2017(a) with funds received under title
V that are used for professional development and mentoring in
order to carry out professional development and mentoring
activities that--
``(A) train teachers, paraprofessionals, counselors, pupil
services personnel, administrators, and other school staff,
including school library media specialists, in how to use
technology to improve learning and teaching; and
``(B) take into special consideration the different
learning needs for, and exposures to, technology for all
students, including females, students with disabilities,
students with limited English proficiency, and students who
have economic and educational disadvantages.
``(5) A description of how the local application was
developed with extensive participation of teachers,
paraprofessionals, principals, and parents.

[[Page S129]]

``(6) A description of how the professional development and
mentoring activities described in section 2017(a) will
address the ongoing professional development and mentoring of
teachers, paraprofessionals, counselors, pupil services
personnel, administrators, and other school staff, including
school library media specialists.
``(7) A description of how the professional development and
mentoring activities described in section 2017(a) will have a
substantial, measurable, and positive impact on student
achievement and how the activities will be used as part of a
broader strategy to eliminate the achievement gap that
separates low-income and minority student from other
students.
``(8) A description of how the local educational agency
will address the needs of teachers of students with
disabilities, students with limited English proficiency, and
other students with special needs.
``(9) A description of how the local educational agency
will provide training to teachers to enable the teachers to
work with parents, involve parents in their child's
education, and encourage parents to become collaborators with
schools in promoting their child's education.
``(10) The assurances and description referred to in
section 2023, with respect to professional development and
mentoring activities.
``(c) Development and Contents Relating to Recruitment
Activities.--If an eligible local educational agency (as
defined in section 2015(b)) seeks a grant under section
2015(b) to carry out activities described in section
2017(b)--
``(1) the eligible local educational agency shall enter
into a recruitment partnership, which shall jointly prepare
and submit the local application described in subsection (a);
and
``(2) at a minimum, the application shall include--
``(A) a description of how the recruitment partnership will
meet the teacher corps program requirements described in
section 2018;
``(B) a description of the individual and collective
responsibilities of members of the recruitment partnership in
meeting the requirements and goals of a teacher corps program
described in section 2018;
``(C) information demonstrating that the State agency
responsible for teacher licensure or certification in the
State in which a recruitment partnership is established
will--
``(i) ensure that a corps member who successfully completes
a teacher corps program will have the academic requirements
necessary for initial certification or licensure as a teacher
in the State; and
``(ii) work with the recruitment partnership to ensure the
partnership uses high-quality methods and establishes high-
quality requirements concerning alternative routes to
certification or licensing, in order to meet State
requirements for certification or licensure; and
``(D) the assurances and description referred to in section
2023, with respect to recruitment activities.
``(d) Contents Relating to Covered Recruitment.--If the
local educational agency seeks a grant under section 2015(a)
to carry out activities described in section 2017(c), the
local application described in subsection (a) shall include,
at a minimum, a description of the activities and the manner
in which the activities will contribute to accomplishing the
objectives of section 2023, and how the activities are in
compliance with the requirements of this Act.
``(e) Approval.--A State educational agency shall approve a
local educational agency's or recruitment partnership's
application under this section only if the State educational
agency determines that the application is of high quality and
holds reasonable promise of achieving the purposes of this
part.

``SEC. 2017. LOCAL ACTIVITIES.

``(a) Professional Development and Mentoring Activities.--
Except as provided in subsection (c), each local educational
agency receiving a grant under section 2015(a) shall use the
funds made available through the grant to carry out
activities (and only activities) that--
``(1) are professional development activities (as defined
in section 2002(12)(A)) that--
``(A) improve teacher knowledge of--
``(i) 1 or more of the core academic subjects;
``(ii) effective instructional strategies, methods, and
skills for improving student achievement in core academic
subjects, including strategies for identifying and
eliminating gender and racial bias;
``(iii) the use of data and assessments to inform teachers
about and thereby help teachers to improve classroom
practice; and
``(iv) innovative instructional methodologies designed to
meet the diverse learning needs of individual students,
including methodologies that integrate academic and technical
skills and applied learning (such as service learning),
methodologies for interactive and interdisciplinary team
teaching, and other alternative teaching strategies, such as
strategies for experiential learning, career-related
education, and environmental education, that integrate real
world applications into the core academic subjects;
``(B) provide teachers and paraprofessionals (and other
staff as appropriate) with information on recent research
findings on how children learn to read and with staff
development on research-based instructional strategies for
the teaching of reading;
``(C) replicate effective instructional practices that
involve collaborative groups of teachers and administrators
from the same school or district, using strategies such as--
``(i) provision of dedicated time for collaborative lesson
planning and curriculum development meetings;
``(ii) provision of collaborative professional development
experiences for veteran teachers based on the standards in
the core academic subjects of the National Board for
Professional Teaching Standards;
``(iii) consultation with exemplary teachers;
``(iv) provision of short-term and long-term visits to
classrooms and schools;
``(v) participation of teams of teachers in summer
institutes and summer immersion activities that are focused
on preparing teachers to enable all students to meet high
standards in 1 or more of the core academic subjects; and
``(vi) establishment and maintenance of local professional
networks that provide a forum for interaction among teachers
and administrators and that allow for the exchange of
information on advances in content knowledge and teaching
skills;
``(D) provide for the participation of paraprofessionals,
pupil services personnel, and other school staff;
``(E) include strategies for fostering meaningful parental
involvement and relations with parents to encourage parents
to become collaborators in their children's education, for
improving classroom management and discipline, and for
integrating technology into a curriculum;
``(F) as a whole, are regularly evaluated for their impact
on increased teacher effectiveness and improved student
achievement, with the findings of the evaluations used to
improve the quality of activities described in this
paragraph;
``(G) include, to the extent practicable, the establishment
of a partnership with an institution of higher education,
another local educational agency, a teacher organization, or
another organization, for the purpose of carrying out
activities described in this paragraph; and
``(H) include ongoing and school-based support for
activities described in this paragraph, such as support for
peer review, coaching, or study groups, and the provision of
release time as needed for the activities;
``(2) are mentoring activities; and
``(3) include local activities carried out under chapter 2.
``(b) Recruitment Activities.--Each recruitment partnership
receiving a grant under section 2015(b) shall use the funds
made available through the grant to carry out recruitment
activities (and only recruitment activities) described in
section 2018.
``(c) Covered Recruitment.--A local educational agency
receiving a grant under section 2015(a) for a fiscal year may
elect to use a portion of the funds made available through
the grant, but not more than the agency's share of 10 percent
of the funds allotted to the State involved under section
2011 for the fiscal year, to carry out recruitment (including
recruitment through the use of signing bonuses and other
financial incentives) and hiring of fully qualified teachers.

``SEC. 2018. RECRUITMENT ACTIVITIES THROUGH A TEACHER CORPS
PROGRAM.

``(a) Teacher Corps Program Requirements.--
``(1) Recruitment.--A recruitment partnership that receives
a grant under section 2015(b) shall broadly recruit and
screen for a teacher corps a highly qualified pool of
candidates who demonstrate the potential to become effective
teachers. Each candidate shall meet--
``(A) standards to ensure that--
``(i) each corps member possesses appropriate, high-level
credentials and presents the likelihood of becoming an
effective teacher; and
``(ii) each group of corps members includes people who have
expertise in academic subjects and otherwise meet the
specific needs of the district to be served; and
``(B) any additional standard that the recruitment
partnership establishes to enhance the quality and diversity
of candidates and to meet the academic and grade level needs
of the partnership.
``(2) Required curriculum and placement.--Members of the
recruitment partnership shall work together to plan and
develop a program that includes--
``(A) a rigorous curriculum that includes a preservice
training program (incorporating innovative approaches to
preservice training, such as distance learning), for a period
not to exceed 1 year, that provides corps members with the
skills and knowledge necessary to become effective teachers,
by--
``(i) requiring completed course work in basic areas of
teaching, such as principles of learning and child
development, effective teaching strategies, assessments, and
classroom management, and in the pedagogy related to the
academic subjects in which a corps member intends to teach;
``(ii) providing extensive preparation in the pedagogy of
reading to corps members, including preparation components
that focus on--

``(I) understanding the psychology of reading, and human
growth and development;
``(II) understanding the structure of the English language;
and
``(III) learning and applying the best teaching methods to
all aspects of reading instruction;

``(iii) providing training in the use of technology as a
tool to enhance a corps member's

[[Page S130]]

effectiveness as a teacher and improve the achievement of the
corps member's students; and
``(iv) focusing on the teaching skills and knowledge that
corps members need to enable all students to meet the State's
highest challenging content and student performance
standards;
``(B) placement of a corps member with the local
educational agency participating in the recruitment
partnership, in a teaching internship that--
``(i) includes intensive mentoring;
``(ii) provides a reduced teaching load; and
``(iii) provides regular opportunities for the corps member
to co-teach with a mentor teacher, observe other teachers,
and be observed and coached by other teachers;
``(C) individualized inservice training over the course of
the corps member's first 2 years of full-time teaching that
provides--
``(i) high-quality professional development, coordinated
jointly by members of the recruitment partnership, and the
course work necessary to provide additional or supplementary
knowledge to meet the specific needs of the corps member; and
``(ii) ongoing mentoring by a teacher who meets the
criteria for a mentor teacher described in paragraph (4)(B),
including the requirements of section 2002(10); and
``(D) collaboration between the recruitment partnership,
and local community student and parent groups, to assist
corps members in enhancing their understanding of the
community in which the members are placed.
``(3) Evaluation.--A recruitment partnership shall evaluate
a corps member's progress in course study and classroom
practice at regular intervals. Each recruitment partnership
shall have a formal process to identify corps members who
seem unlikely to become effective teachers and terminate
their participation in the program.
``(4) Mentor teachers.--
``(A) In general.--A recruitment partnership shall develop
a plan for the program, which shall include strategies for
identifying, recruiting, training, and providing ongoing
support to individuals who will serve as mentor teachers to
corps members.
``(B) Mentor teacher requirements.--The plan described in
subparagraph (A) shall specify the criteria that the
recruitment partnership will use to identify and select
mentor teachers and, at a minimum, shall--
``(i) require a mentor teacher to meet the requirements of
section 2002(10); and
``(ii) require that consideration be given to teachers with
national board certification.
``(C) Compensation.--The plan shall specify the
compensation--
``(i) for mentor teachers, including monetary compensation,
release time, or a reduced work load to ensure that mentor
teachers can provide ongoing support for corps members; and
``(ii) for corps members, including salary levels and the
stipends, if any, that will be provided during a corps
member's preservice training.
``(5) Assurances.--The plan shall include assurances that--
``(A) a corps member will be assigned to teach only
academic subjects and grade levels for which the member is
fully qualified;
``(B) corps members, to the extent practicable, will be
placed in schools with teams of corps members; and
``(C) every mentor teacher will be provided sufficient time
to meet the needs of the corps members assigned to the mentor
teacher.
``(b) Corps Member Qualifications.--
``(1) Candidates intending to teach in elementary
schools.--At a minimum, to be accepted by a teacher corps
program, a candidate who intends to teach at the elementary
school level shall--
``(A) have a bachelor's degree;
``(B) possess an outstanding commitment to working with
children and youth;
``(C) possess a strong professional or postsecondary record
of achievement; and
``(D) pass all basic skills and subject matter tests
required by the State for teacher certification or licensure.
``(2) Candidates intending to teach in secondary schools.--
At a minimum, to be accepted by a teacher corps program, a
candidate who intends to teach at the secondary school level
shall--
``(A) meet the requirements described in paragraph (1); and
``(B)(i) possess at least an academic major or
postsecondary degree in each academic subject in which the
candidate intends to teach; or
``(ii) if the candidate did not major or earn a
postsecondary degree in an academic subject in which the
candidate intends to teach, have completed a rigorous course
of instruction in that subject that is equivalent to having
majored in the subject.
``(3) Special rule.--Notwithstanding paragraph (2)(B), the
recruitment partnership may consider the candidate to be an
eligible corps member and accept the candidate for a teacher
corps program if the candidate has worked successfully and
directly in a field and in a position that provided the
candidate with direct and substantive knowledge in the
academic subject in which the candidate intends to teach.
``(c) Three-Year Commitment to Teaching in Eligible
Districts.--
``(1) In general.--In return for acceptance to a teacher
corps program, a corps member shall commit to 3 years of
full-time teaching in a school or district served by a local
educational agency participating in a recruitment partnership
receiving funds under this subpart.
``(2) Reimbursement.--
``(A) In general.--If a corps member leaves the school
district to which the corps member has been assigned prior to
the end of the 3-year period described in paragraph (1), the
corps member shall be required to reimburse the Secretary for
the amount of the Federal share of the cost of the corps
member's participation in the teacher corps program.
``(B) Partnership claims.--A recruitment partnership that
provides a teacher corps program to a corps member who leaves
the school district, as discussed in subparagraph (A), may
submit a claim to the corps member requiring the corps member
to reimburse the recruitment partnership for the amount of
the partnership's share of the cost described in subparagraph
(A).
``(C) Reduction.--Reimbursements required under this
paragraph may be reduced proportionally based on the amount
of time a corps member remained in the teacher corps program
beyond the corps member's initial 2 years of service.
``(D) Waiver.--The Secretary may waive reimbursements
required under subparagraph (A) in the case of severe
hardship to a corps member who leaves the school district, as
described in subparagraph (A).
``(d) Federal Share; Non-Federal Share.--
``(1) Payment of federal share.--The Secretary shall pay to
each recruitment partnership carrying out a teacher corps
program under this section the Federal share of the cost of
the activities described in the partnership's application
under section 2016(c).
``(2) Non-federal share.--A recruitment partnership's share
of the cost of the activities described in the partnership's
application under section 2016(c)--
``(A) may be provided in cash or in kind, fairly evaluated,
including plant, equipment, or services; and
``(B)(i) for the first year for which the partnership
receives assistance under this subpart, shall be not less
than 10 percent;
``(ii) for the second such year, shall be not less than 20
percent;
``(iii) for the third year such year, shall be not less
than 30 percent;
``(iv) for the fourth such year, shall be not less than 40
percent; and
``(v) for the fifth such year, shall be not less than 50
percent.

``SEC. 2019. GRANTS TO PARTNERSHIPS OF INSTITUTIONS OF HIGHER
EDUCATION AND LOCAL EDUCATIONAL AGENCIES.

``(a) Administration.--A State agency for higher education
may use, from the funds made available to the agency under
section 2013(a)(4) for any fiscal year, not more than 3\1/3\
percent for the expenses of the agency in administering this
section, including conducting evaluations of activities on
the performance measures described in section 2014(a)(2).
``(b) Grants to Partnerships.--
``(1) In general.--The State agency for higher education
shall use the remainder of the funds, in cooperation with the
State educational agency, to make grants to (including
entering into contracts or cooperative agreements with)
partnerships of--
``(A) institutions of higher education that are in full
compliance with all reporting requirements of title II of the
Higher Education Act of 1965 or nonprofit organizations of
demonstrated effectiveness in providing professional
development and mentoring in the core academic subjects; and
``(B) eligible local educational agencies (as defined in
section 2015(b)(2)),
to carry out activities (and only activities) described in
subsection (e).
``(2) Size; duration.--Each grant made under this section
shall be--
``(A) in a sufficient amount to carry out the objectives of
this section effectively; and
``(B) for a period of 3 years, which the State agency for
higher education may extend for an additional 2 years if the
agency determines that the partnership is making substantial
progress toward meeting the specific goals set out in the
written agreement required in subsection (c) and on the
performance measures described in section 2014(a)(2).
``(3) Applications.--To be eligible to receive a grant
under this section, a partnership shall submit an application
to the State agency for higher education at such time, in
such manner, and containing such information as the agency
may reasonably require.
``(4) Award process and basis.--The State agency for higher
education shall make the grants on a competitive basis, using
a peer review process.
``(5) Priority.--In making the grants, the State agency for
higher education shall give priority to partnerships
submitting applications for projects that focus on mentoring
programs for beginning teachers.
``(6) Considerations.--In making such a grant for a
partnership, the State agency for higher education shall
consider--
``(A) the need of the local educational agency involved for
the professional development and mentoring activities
proposed in the application;
``(B) the quality of the program proposed in the
application and the likelihood of success of the program in
improving classroom instruction and student academic
achievement; and

[[Page S131]]

``(C) such other criteria as the agency finds to be
appropriate.
``(c) Agreements.--
``(1) In general.--No partnership may receive a grant under
this section unless the institution of higher education or
nonprofit organization involved enters into a written
agreement with at least 1 eligible local educational agency
(as defined in section 2015(b)(2)) to provide professional
development and mentoring for elementary and secondary school
teachers in the schools served by that agency in the core
academic subjects.
``(2) Goals.--Each such agreement shall identify specific
measurable annual goals concerning how the professional
development and mentoring that the partnership provides will
enhance the ability of the teachers to prepare all students
to meet challenging State and local content and student
performance standards.
``(d) Joint Efforts Within Institutions of Higher
Education.--Each professional development and mentoring
activity assisted under this section by a partnership
containing an institution of higher education shall involve
the joint effort of the institution of higher education's
school or department of education and the schools or
departments of the institution in the specific disciplines in
which the professional development and mentoring will be
provided.
``(e) Uses of Funds.--A partnership that receives funds
under this section shall use the funds for activities (and
only for activities) that consist of--
``(1) professional development and mentoring in the core
academic subjects, aligned with State or local content
standards, for teams of teachers from a school or school
district and, where appropriate, administrators and
paraprofessionals;
``(2) research-based professional development and mentoring
programs to assist beginning teachers, which may include--
``(A) mentoring and coaching by trained mentor teachers
that lasts at least 2 years;
``(B) team teaching with veteran teachers who have a
consistent record of helping their students make substantial
academic gains;
``(C) provision of time for observation of, and
consultation with, veteran teachers;
``(D) provision of reduced teaching loads; and
``(E) provision of additional time for preparation;
``(3) the provision of technical assistance to school and
agency staff for planning, implementing, and evaluating
professional development and mentoring;
``(4) the provision of training for teachers to help the
teachers develop the skills necessary to work most
effectively with parents; and
``(5) in appropriate cases, the provision of training to
address areas of teacher and administrator shortages.
``(f) Coordination.--Any partnership that carries out
professional development and mentoring activities under this
section shall coordinate the activities with activities
carried out under title II of the Higher Education Act of
1965, if a local educational agency or institution of higher
education in the partnership is participating in programs
funded under that title.
``(g) Annual Reports.--
``(1) In general.--Beginning with fiscal year 2002, each
partnership that receives a grant under this section shall
prepare and submit to the appropriate State agency for higher
education, by a date set by that agency, an annual report on
the progress of the partnership on the performance measures
described in section 2014(a)(2).
``(2) Contents.--Each such report shall--
``(A) include a copy of each written agreement required by
subsection (c) that is entered into by the partnership; and
``(B) describe how the members of the partnership have
collaborated to achieve the specific goals set out in the
agreement, and the results of that collaboration.
``(3) Copy.--The State agency for higher education shall
provide the State educational agency with a copy of each such
report.

``Chapter 2--Accountability

``SEC. 2021. STATE APPLICATION ACCOUNTABILITY PROVISIONS.

``(a) Assurances.--Each State application submitted under
section 2012 shall contain assurances that--
``(1) beginning on the date of enactment of the Educational
Opportunities Act, no school in the State that is served
under this subpart will use funds received under this subpart
to hire a teacher who is not a fully qualified teacher; and
``(2) not later than 4 years after the date of enactment of
the Educational Opportunities Act, each teacher in the State
who provides services to students served under this subpart
shall be a fully qualified teacher.
``(b) Withholding.--If a State fails to meet the
requirements described in subsection (a)(2) for a fiscal year
in which the requirements apply--
``(1) the Secretary shall withhold, for the following
fiscal year, a portion of the funds that would otherwise be
available to the State under section 2013(a)(1) for the
administration of this subpart; and
``(2) the State shall be subject to such other penalties as
are provided by law for a violation of this Act.
``(c) Assistance by State Educational Agency.--Each State
application submitted under section 2012 shall describe how
the State educational agency will help each local educational
agency and school in the State develop the capacity to comply
with the requirements of this section.

``SEC. 2022. STATE REPORTS.

``(a) Report to Secretary.--
``(1) In General.--Each State that receives funds under
this subpart shall annually prepare and submit to the
Secretary a report containing--
``(A) information on the activities of the State under this
subpart, including statewide information, and information on
the activities of each grant recipient in the State;
``(B) information on the effectiveness of the activities,
and the progress of recipients of grants under this subpart,
on performance measures, including measures described in
section 2014(a)(2) and goals described in paragraphs (3) and
(4) of section 2012(b); and
``(C) such other information as the Secretary may
reasonably require.
``(2) Deadlines.--The State shall submit the reports
described in paragraph (1) by such deadlines as the Secretary
may establish.
``(b) Public Accountability.--
``(1) In general.--Each State that receives funds under
this subpart--
``(A) in the event the State provides public State report
cards on education, shall include in such report cards--
``(i) the percentage of middle school and other secondary
school classes in core academic subjects that are taught by
out-of-field teachers;
``(ii) the percentage of middle school, other elementary
school, and other secondary school classes taught by
individuals holding only emergency credentials, or for whom
any State certification or licensing standards for teachers
have been waived;
``(iii) the average statewide class size; or
``(B) in the event the State provides no such report card,
shall disseminate to the public the information described in
clauses (i) through (iii) of subparagraph (A) through other
means.
``(2) Public availability.--Such information shall be made
widely available to the public, including parents and
students, throughout the State.
``(c) General Accounting Office.--Not later than September
30, 2004, the Comptroller General of the United States
shall--
``(1) conduct a study of the progress of the States in
increasing the percentage of teachers who are fully qualified
teachers for fiscal years 2001 through 2003; and
``(2) prepare and submit to the Committee on Education and
Workforce of the House of Representatives and the Committee
on Health, Education, Labor, and Pensions of the Senate a
report containing the results of the study.

``SEC. 2023. LOCAL APPLICATION ACCOUNTABILITY PROVISIONS.

``Each local application submitted under section 2016 shall
contain assurances that--
``(1) the agency will not hire a teacher with funds made
available to the agency under this subpart, unless the
teacher is a fully qualified teacher;
``(2) the local educational agency and schools served by
the agency will work to ensure, through voluntary agreements
and incentive programs, that elementary school and secondary
school teachers in high-poverty schools served by the local
educational agency will be at least as well qualified, in
terms of experience and credentials, as the instructional
staff in schools served by the same local educational agency
that are not high-poverty schools;
``(3) any teacher who receives certification from the
National Board for Professional Teaching Standards will be
considered fully qualified to teach, in the academic subjects
in which the teacher is certified, in high-poverty schools in
any school district or community served by the local
educational agency; and
``(4) the agency will--
``(A) make available, on request and in an understandable
and uniform format, to any parent of a student attending any
school served by the local educational agency, information
regarding the professional qualifications of the student's
classroom teachers with regard to--
``(i) whether the teacher has met State certification or
licensing criteria for the academic subjects and grade level
in which the teacher teaches the student;
``(ii) whether the teacher is teaching with emergency or
whether any State certification or licensing standard has
been waived for the teacher; and
``(iii) the academic qualifications of the teacher in the
academic subjects and grade levels in which the teacher
teaches; and
``(B) inform parents that the parents are entitled to
receive the information upon request.

``SEC. 2024. LOCAL CONTINUATION OF FUNDING.

``(a) Agencies.--If a local educational agency applies for
funds under this subpart for a 4th or subsequent fiscal year
(including applying for funds as part of a partnership), the
agency may receive the funds for that fiscal year only if the
State determines that the agency has demonstrated that the
agency, in carrying out activities under this subpart during
the past fiscal year, has met annual numerical performance
objectives for--
``(1) improved student performance for all groups described
in section 1111(b)(2);
``(2) increased participation in sustained professional
development and mentoring programs;
``(3) reduced the beginning teacher attrition rate for the
agency; and

[[Page S132]]

``(4) reduced the number of teachers who are not certified
or licensed, and the number who are out-of-field teachers,
for the agency.
``(b) Schools.--If a local educational agency applies for
funds under this subpart on behalf of a school for a 4th or
subsequent fiscal year (including applying for funds as part
of a partnership), the agency may receive the funds for the
school for that fiscal year only if the State determines that
the school has demonstrated that the school, in carrying out
activities under this subpart during the past fiscal year,
has met the requirements of paragraphs (1) through (4) of
subsection (a).
``(c) Recruitment Partnerships.--
``(1) In general.--If not more than 90 percent of the
graduates of a teacher corps program assisted under this
subpart for a fiscal year pass applicable State or local
initial teacher licensing or certification examinations, the
recruitment partnership providing the teacher corps program
shall be ineligible to receive grant funds for the succeeding
fiscal year.
``(2) Waiver.--The State in which the partnership is
located may waive the requirement described in paragraph (1)
for a recruitment partnership serving a school district that
has special circumstances, such as a district with a small
number of corps members.

``SEC. 2025. LOCAL REPORTS.

``(a) In General.--Each local educational agency that
receives funds under this subpart (including funds received
through a partnership) shall prepare, make publicly
available, and submit to the State educational agency, every
year, beginning in fiscal year 2002, a report on the
activities of the agency under this subpart, in such form and
containing such information as the State educational agency
may reasonably require.
``(b) Contents.--The report shall contain, at a minimum--
``(1) information on progress throughout the schools served
by the local educational agency on the performance measures
described in section 2014(a)(2) and goals described in
paragraphs (3) and (4) of section 2012(b);
``(2) information on progress throughout the schools served
by the local educational agency toward achieving the
objectives of, and carrying out the activities described in,
this subpart;
``(3) data on the progress described in paragraphs (1) and
(2), disaggregated by school poverty level, as defined by the
State; and
``(4) a description of the methodology used to gather the
information and data described in paragraphs (1) through (3).

``Subpart 2--National Activities for the Improvement of Teaching and
School Leadership

``Chapter 1--National Activities and Clearinghouse

``SEC. 2031. PROGRAM AUTHORIZED.

``(a) In General.--The Secretary is authorized to make
grants to, and to enter into contracts and cooperative
agreements with, local educational agencies, educational
service agencies, State educational agencies, State agencies
for higher education, institutions of higher education, and
other public and private nonprofit agencies, organizations,
and institutions to carry out subsection (b).
``(b) Activities.--In making the grants, and entering into
the contracts and cooperative agreements, the Secretary--
``(1) may support activities of national significance that
are not supported through other sources and that the
Secretary determines will contribute to the improvement of
teaching and school leadership in the Nation's schools, such
as--
``(A) supporting collaborative efforts by States, or
consortia of States, to review and measure the quality,
rigor, and alignment of State standards and assessments;
``(B) supporting State and local efforts to develop
curricula aligned with State standards and assessments;
``(C) supporting collaborative efforts by States, or
consortia of States, to review and measure the quality and
rigor of standards for entry into the field of teaching,
including the alignment of such standards with State
standards for students in elementary school and secondary
school, and the alignment of initial teacher licensing and
certification assessments with State standards for entry into
the field of teaching;
``(D) supporting the development of models, at the State
and local levels, of innovative compensation systems that--
``(i) provide incentives for talented individuals who have
a strong knowledge of academic content to enter teaching; and
``(ii) reward veteran teachers who acquire new knowledge
and skills that are needed in the schools and districts in
which the teachers teach; and
``(E) supporting collaborative efforts by States, or
consortia of States, to develop performance-based systems for
assessing content knowledge and teaching skills of teachers
prior to initial certification or licensure of the teachers;
``(2) may support activities of national significance that
the Secretary determines will contribute to the recruitment
and retention of highly qualified teachers and principals in
schools served by high-poverty local educational agencies,
such as--
``(A) the development and implementation of a national
teacher recruitment clearinghouse and job bank, which shall
be coordinated and, to the extent feasible, integrated with
the America's Job Bank administered by the Secretary of
Labor, to--
``(i) disseminate information and resources nationwide on
entering the teaching profession, to persons interested in
becoming teachers;
``(ii) serve as a national resource center regarding
effective practices for teacher professional development and
mentoring, recruitment, and retention;
``(iii) link prospective teachers to local educational
agencies and training resources;
``(iv) provide information and technical assistance to
prospective teachers about certification and licensing and
other State and local requirements related to teaching; and
``(v) provide data projections concerning teacher and
administrator supply and demand and available teaching and
administrator opportunities;
``(B) the development and implementation, or expansion, of
programs that recruit talented individuals to become
principals, including such programs that employ alternative
routes to State certification or licensing that are at least
as rigorous as the State's standards for initial
certification or licensing of teachers, and that prepare both
new and experienced principals to serve as instructional
leaders, which may include the creation and operation of a
national center or regional centers for the preparation and
support of principals as leaders of school reform;
``(C) efforts to increase the portability of teacher
pensions and reciprocity of teaching credentials across State
lines;
``(D) research, evaluation, and dissemination activities
related to effective strategies for increasing the
portability of teachers' credited years of experience across
State and school district lines;
``(E) the development and implementation of national or
regional programs to--
``(i) recruit highly talented individuals to become
teachers, through alternative routes to certification or
licensing that are at least as rigorous as the State's
standards for initial certification or licensing of teachers,
in schools served by high-poverty local educational agencies;
and
``(ii) help retain the individuals for more than 3 years as
classroom teachers in schools served by the local educational
agencies; and
``(F) the establishment of partnerships of high-poverty
local educational agencies, teacher organizations, and local
businesses, in order to help the agencies attract and retain
high-quality teachers and principals through provision of
increased pay, combined with reforms to raise teacher
performance including use of regular, rigorous peer
evaluations and (where appropriate) student evaluations of
every teacher;
``(3) may support the National Board for Professional
Teaching Standards;
``(4)(A) shall carry out a national evaluation, not sooner
than 3 years and not later than 4 years after the date of
enactment of the Educational Opportunities Act, of the effect
of activities carried out under this title, including an
assessment of changes in instructional practice and objective
measures of student achievement; and
``(B) shall submit a report containing the results of the
evaluation to Congress; and
``(5) shall annually submit to Congress a report on the
information contained in the State reports described in
section 2022.

``SEC. 2032. EISENHOWER NATIONAL CLEARINGHOUSE FOR
MATHEMATICS AND SCIENCE EDUCATION.

``(a) Establishment of Clearinghouse.--The Secretary shall
award a grant or contract, on a competitive basis, to an
entity to establish and operate an Eisenhower National
Clearinghouse for Mathematics and Science Education (referred
to in this section as `the Clearinghouse').
``(b) Authorized Activities.--
``(1) Application and award basis.--
``(A) In general.--An entity desiring to establish and
operate the Clearinghouse shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may reasonably require.
``(B) Peer review.--The Secretary shall establish a peer
review panel to make recommendations on the recipient of the
award for the Clearinghouse.
``(C) Basis.--The Secretary shall make the award for the
Clearinghouse on the basis of merit.
``(2) Duration.--The Secretary shall award the grant or
contract for the Clearinghouse for a period of 5 years.
``(3) Activities.--The award recipient shall use the award
funds to--
``(A) maintain a permanent collection of such mathematics
and science education instructional materials and programs
for elementary schools and secondary schools as the Secretary
finds appropriate, and give priority to maintaining such
materials and programs that have been identified as promising
or exemplary, through a systematic approach such as the use
of expert panels required under the Educational Research,
Development, Dissemination, and Improvement Act of 1994;
``(B) disseminate the materials and programs described in
subparagraph (A) to the public, State educational agencies,
local educational agencies, and schools (particularly high-
poverty, low-performing schools), including dissemination
through the maintenance of an interactive national electronic
information management and retrieval system accessible
through the World Wide Web and other advanced communications
technologies;

[[Page S133]]

``(C) coordinate activities with entities operating other
databases containing mathematics and science curriculum and
instructional materials, including Federal, non-Federal, and,
where feasible, international databases;
``(D) using not more than 10 percent of the amount awarded
under this section for any fiscal year, participate in
collaborative meetings of representatives of the
Clearinghouse and regional mathematics and science education
consortia to--
``(i) discuss issues of common interest and concern;
``(ii) foster effective collaboration and cooperation in
acquiring and distributing instructional materials and
programs; and
``(iii) coordinate and enhance computer network access to
the Clearinghouse and the resources of the regional
consortia;
``(E) support the development and dissemination of model
professional development and mentoring materials for
mathematics and science education;
``(F) contribute materials or information, as appropriate,
to other national repositories or networks; and
``(G) gather qualitative and evaluative data on submissions
to the Clearinghouse, and disseminate that data widely,
including through the use of electronic dissemination
networks.
``(4) Submission to clearinghouse.--Each Federal agency or
department that develops mathematics or science education
instructional materials or programs, including the National
Science Foundation and the Department, shall submit copies of
that materials or those programs to the Clearinghouse.
``(5) Steering committee.--The Secretary may appoint a
steering committee to recommend policies and activities for
the Clearinghouse.
``(6) Application of copyright laws.--
``(A) Construction.--Nothing in this section shall be
construed to allow the use or copying, in any medium, of any
material collected by the Clearinghouse that is protected
under the copyright laws of the United States unless the
Clearinghouse obtains the permission of the owner of the
copyright.
``(B) Compliance.--In carrying out this section, the
Clearinghouse shall ensure compliance with title 17, United
States Code.

``Chapter 2--Transition to Teaching

``SEC. 2041. PURPOSE.

``The purpose of this chapter is to address the need of
high-poverty local educational agencies for highly qualified
teachers in particular academic subjects, such as
mathematics, science, foreign languages, bilingual education,
and special education needed by the agencies, by--
``(1) continuing and enhancing the Troops to Teachers model
for recruiting and supporting the placement of such teachers;
and
``(2) recruiting, preparing, placing, and supporting
career-changing professionals who have knowledge and
experience that will help the professionals become such
teachers.

``SEC. 2042. DEFINITIONS.

``In this chapter:
``(1) Program participant.--The term `program participant'
means a career-changing professional who--
``(A) demonstrates interest in, and commitment to, becoming
a teacher; and
``(B) has knowledge and experience that is relevant to
teaching a high-need academic subject for a high-poverty
local educational agency.
``(2) Secretary.--The term `Secretary' means the Secretary
of Education, except as otherwise determined in accordance
with the agreements described in section 2043(b).

``SEC. 2043. PROGRAM AUTHORIZED.

``(a) Authority.--Subject to subsection (b), using funds
made available to carry out this chapter under section
2003(2)(A) for each fiscal year, the Secretary may award
grants, contracts, or cooperative agreements to institutions
of higher education and public and private nonprofit agencies
or organizations to carry out programs authorized under this
chapter.
``(b) Implementation.--
``(1) Consultation.--Before making awards under subsection
(a) for any fiscal year, the Secretary of Education shall--
``(A) consult with the Secretary of Defense and the
Secretary of Transportation regarding the appropriate amount
of funding needed to carry out this chapter; and
``(B) upon agreement, transfer that amount to the
Department of Defense to carry out this chapter.
``(2) Agreement.--The Secretary of Education may enter into
a written agreement with the Secretary of Defense and the
Secretary of Transportation, or take such other steps as the
Secretary of Education determines are appropriate, to ensure
effective implementation of this chapter.

``SEC. 2044. APPLICATION.

``Each entity that desires an award under section 2043(a)
shall submit an application to the Secretary at such time, in
such manner, and containing such information as the Secretary
may require, including--
``(1) a description of the target group of career-changing
professionals on which the entity will focus in carrying out
a program under this chapter, including a description of the
characteristics of that target group that shows how the
knowledge and experience of the members of the group are
relevant to meeting the purpose of this chapter;
``(2) a description of how the entity will identify and
recruit program participants;
``(3) a description of the training that program
participants will receive and how that training will relate
to their certification or licensing as teachers;
``(4) a description of how the entity will ensure that
program participants are placed with, and teach for, high-
poverty local educational agencies;
``(5) a description of the teacher induction services
(which may be provided through induction programs in
existence on the date of submission of the application) the
program participants will receive throughout at least their
first year of teaching;
``(6) a description of how the entity will collaborate, as
needed, with other institutions, agencies, or organizations
to recruit, train, place, and support program participants
under this chapter, including evidence of the commitment of
the institutions, agencies, or organizations to the entity's
program;
``(7) a description of how the entity will evaluate the
progress and effectiveness of the entity's program, including
a description of--
``(A) the program's goals and objectives;
``(B) the performance indicators the entity will use to
measure the program's progress; and
``(C) the outcome measures that the entity will use to
determine the program's effectiveness; and
``(8) an assurance that the entity will provide to the
Secretary such information as the Secretary determines to be
necessary to determine the overall effectiveness of programs
carried out under this chapter.

``SEC. 2045. USES OF FUNDS AND PERIOD OF SERVICE.

``(a) Authorized Activities.--Funds made available under
this chapter may be used for--
``(1) recruiting program participants, including informing
individuals who are potential participants of opportunities
available under the program and putting the individuals in
contact with other institutions, agencies, or organizations
that would train, place, and support the individuals;
``(2) providing training stipends and other financial
incentives for program participants, such as paying for
moving expenses, not to exceed $5,000, in the aggregate, per
participant;
``(3) assisting institutions of higher education or other
providers of teacher training to tailor their training to
meet the particular needs of professionals who are changing
their careers to teaching;
``(4) providing placement activities, including identifying
high-poverty local educational agencies with needs for the
particular skills and characteristics of the newly trained
program participants and assisting the participants to obtain
employment with the local educational agencies; and
``(5) providing post-placement induction or support
activities for program participants.
``(b) Period of Service.--A program participant in a
program under carried out under this chapter who completes
the participant's training shall serve in a high-poverty
local educational agency for at least 3 years.
``(c) Repayment.--The Secretary shall establish such
requirements as the Secretary determines to be appropriate to
ensure that program participants who receive a training
stipend or other financial incentive under subsection (a)(2),
but fail to complete their service obligation under
subsection (b), repay all or a portion of such stipend or
other incentive.

``SEC. 2046. EQUITABLE DISTRIBUTION.

``To the extent practicable, the Secretary shall make
awards under this chapter that support programs in different
geographic regions of the Nation.

``Chapter 3--Hometown Teachers

``SEC. 2051. PURPOSE.

``The purpose of this chapter is to support the efforts of
high-need local educational agencies to develop and implement
comprehensive approaches to recruiting and retaining highly
qualified teachers, including recruiting such teachers
through Hometown Teacher programs that carry out long-term
strategies to expand the capacity of the communities served
by the agencies to produce local teachers.

``SEC. 2052. DEFINITION.

``The term `high-need local educational agency' means a
local educational agency that serves an elementary school or
secondary school located in an area in which there is--
``(1) a high percentage (as determined by the State in
which the agency is located) of individuals from families
with incomes below the poverty line;
``(2) a high percentage (as determined by the State in
which the agency is located) of secondary school teachers not
teaching in the core academic subjects in which the teachers
were trained to teach; or
``(3) a high percentage (as determined by the State in
which the agency is located) of elementary school and
secondary school teachers who are not fully qualified
teachers.

``SEC. 2053. PROGRAM AUTHORIZED.

``From funds made available to carry out this chapter under
section 2003(2)(B) for each fiscal year, the Secretary may
award grants to high-need local educational agencies to carry
out Hometown Teacher programs and other activities described
in this chapter.

``SEC. 2054. APPLICATIONS.

``Each high-need local educational agency that desires to
receive a grant under section

[[Page S134]]

2053 shall submit an application to the Secretary at such
time, in such manner, and containing such information as the
Secretary may require, including--
``(1) a description of the local educational agency's
assessment of the agency's needs for teachers, such as the
agency's projected shortage of qualified teachers and the
percentage of teachers serving the agency who lack
certification or licensure or who are teaching out of field;
``(2) a description of a Hometown Teacher program that the
local educational agency plans to develop and implement with
the funds made available through the grant, including a
description of--
``(A) strategies the agency will use to--
``(i) encourage secondary school and middle school students
in schools served by the local educational agency to consider
pursuing careers in the teaching profession; and
``(ii) provide support at the undergraduate level to those
students who intend to become teachers; and
``(B) the agency's plans to streamline the hiring timelines
in the hiring policies and practices of the agency for
participants in the Hometown Teacher program;
``(3) a description of the long-term strategies that the
agency will use, if any, to reduce the agency's teacher
attrition rate, including providing mentoring programs and
making efforts to raise teacher salaries and create more
desirable working conditions for teachers;
``(4) a description of the agency's strategy for ensuring
that all secondary school teachers and middle school teachers
in the school district are fully certified or licensed in an
academic subject and are teaching the majority of their
classes in the subject in which the teachers are certified or
licensed;
``(5) a description of the short-term strategies the agency
will use, if any, to address the agency's teacher shortage
problem, including the strategies the agency will use to
ensure that the teachers that the local educational agency is
targeting for employment are fully certified or licensed;
``(6) a description of the agency's long-term plan for
ensuring that the agency's teachers have opportunities for
sustained, high-quality professional development;
``(7) a description of the ways in which the activities
proposed to be carried out through the grant are part of the
agency's overall plan for improving the quality of teaching
and student achievement;
``(8) a description of how the agency will collaborate, as
needed, with other institutions, agencies, or organizations
to develop and implement the strategies the agency proposes
in the application, including evidence of the commitment of
the institutions, agencies, or organizations to the agency's
activities;
``(9) a description of the strategies the agency will use
to coordinate activities funded under the program carried out
under this chapter with activities funded through other
Federal programs that address teacher shortages, including
programs carried out through grants to local educational
agencies under title I or this title, including chapter 2,
if the applicant receives funds from the programs;
``(10) a description of how the agency will evaluate the
progress and effectiveness of the Hometown Teacher program,
including a description of--
``(A) the agency's goals and objectives for the program;
``(B) the performance indicators that the agency will use
to measure the program's effectiveness; and
``(C) the measurable outcome measures, such as increased
percentages of fully certified or licensed teachers, that the
agency will use to determine the program's effectiveness; and
``(11) an assurance that the agency will provide to the
Secretary such information as the Secretary determines to be
necessary to determine the overall effectiveness of programs
carried out under this chapter.

``SEC. 2055. PRIORITY.

``In awarding grants under this chapter, the Secretary may
give priority to agencies submitting applications that--
``(1) focus on increasing the percentage of qualified
teachers in particular teaching fields, such as mathematics,
science, and bilingual education; and
``(2) focus on recruiting qualified teachers for certain
types of communities, such as urban and rural communities.

``SEC. 2056. USE OF FUNDS.

``(a) Mandatory Use of Funds.--A local educational agency
that receives a grant under this chapter shall use the funds
made available through the grant to develop and implement
long-term strategies to address the agency's teacher
shortage, including carrying out Hometown Teacher programs
such as the programs described in section 2051.
``(b) Permissible Use of Funds.--A local educational agency
that receives a grant under this chapter may use the funds
made available through the grant to--
``(1) develop and implement strategies to reduce the local
educational agency's teacher attrition rate, including
providing mentoring programs, increasing teacher salaries,
and creating more desirable working conditions for teachers;
and
``(2) develop and implement short-term strategies to
address the agency's teacher shortage, including providing
scholarships to undergraduates who agree to teach in the
school district served by the agency for a certain number of
years, providing signing bonuses for teachers, and
implementing streamlined hiring practices.
``(c) Supplement, Not Supplant.--Funds made available under
this chapter shall be used to supplement, and shall not
supplant, State and local funds expended to carry out
programs and activities authorized under this chapter.

``SEC. 2057. SERVICE REQUIREMENTS.

``(a) In General.--The Secretary shall establish such
requirements as the Secretary finds to be necessary to ensure
that a recipient of a scholarship under this chapter who
completes a teacher education program subsequently--
``(1) teaches in a school district served by a high-need
local educational agency, for a period of time equivalent to
the period for which the recipient received the scholarship;
or
``(2) repays the amount of the funds provided through the
scholarship.
``(b) Use of Repaid Funds.--The Secretary shall deposit any
such repaid funds in an account, and use the funds to carry
out additional activities under this chapter.

``Chapter 4--Early Childhood Educator Professional Development

``SEC. 2061. PURPOSE.

``In support of the national effort to attain the first of
America's Education Goals, the purpose of this chapter is to
enhance the school readiness of young children, particularly
disadvantaged young children, and to prevent them from
encountering reading difficulties once they enter school, by
improving the knowledge and skills of early childhood
educators who work in communities that have high
concentrations of children living in poverty.

``SEC. 2062. PROGRAM AUTHORIZED.

``(a) Grants to Partnerships.--The Secretary shall carry
out the purpose of this chapter by awarding grants, on a
competitive basis, to partnerships consisting of--
``(1)(A) one or more institutions of higher education that
provide professional development for early childhood
educators who work with children from low-income families in
high-need communities; or
``(B) another public or private, nonprofit entity that
provides such professional development;
``(2) one or more public agencies (including local
educational agencies, State educational agencies, State human
services agencies, and State and local agencies administering
programs under the Child Care and Development Block Grant Act
of 1990), Head Start agencies, or private, nonprofit
organizations; and
``(3) to the extent feasible, an entity with demonstrated
experience in providing violence prevention education
training to educators in early childhood education programs.
``(b) Priority.--In awarding grants under this chapter, the
Secretary shall give priority to partnerships that include 1
or more local educational agencies which operate early
childhood education programs for children from low-income
families in high-need communities.
``(c) Duration and Number of Grants.--
``(1) Duration.--Each grant under this chapter shall be
awarded for not more than 4 years.
``(2) Number.--No partnership may receive more than 1 grant
under this chapter.

``SEC. 2063. APPLICATIONS.

``(a) Applications Required.--Any partnership that desires
to receive a grant under this chapter shall submit an
application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require.
``(b) Contents.--Each such application shall include--
``(1) a description of the high-need community to be served
by the project, including such demographic and socioeconomic
information as the Secretary may request;
``(2) information on the quality of the early childhood
educator professional development program currently conducted
by the institution of higher education or other provider in
the partnership;
``(3) the results of the assessment that the entities in
the partnership have undertaken to determine the most
critical professional development needs of the early
childhood educators to be served by the partnership and in
the broader community, and a description of how the proposed
project will address those needs;
``(4) a description of how the proposed project will be
carried out, including--
``(A) how individuals will be selected to participate;
``(B) the types of research-based professional development
activities that will be carried out;
``(C) how research on effective professional development
and on adult learning will be used to design and deliver
project activities;
``(D) how the project will coordinate with and build on,
and will not supplant or duplicate, early childhood education
professional development activities that exist in the
community;
``(E) how the project will train early childhood educators
to provide services that are based on developmentally
appropriate practices and the best available research on
child, language, and literacy development and on early
childhood pedagogy;
``(F) how the program will train early childhood educators
to meet the diverse educational needs of children in the
community, including children who have limited English

[[Page S135]]

proficiency, disabilities, or other special needs; and
``(G) how the project will train early childhood educators
in identifying and preventing behavioral problems or violent
behavior in children;
``(5) a description of--
``(A) the specific objectives that the partnership will
seek to attain through the project, and how the partnership
will measure progress toward attainment of those objectives;
and
``(B) how the objectives and the measurement activities
align with the performance indicators established by the
Secretary under section 2066(a);
``(6) a description of the partnership's plan for
institutionalizing the activities carried out under the
project, so that the activities continue once Federal funding
ceases;
``(7) an assurance that, where applicable, the project will
provide appropriate professional development to volunteer
staff, as well as to paid staff; and
``(8) an assurance that, in developing its application and
in carrying out its project, the partnership has consulted
with, and will consult with, relevant agencies and early
childhood educator organizations described in section
2062(a)(2) that are not members of the partnership.

``SEC. 2064. SELECTION OF GRANTEES.

``(a) Criteria.--The Secretary shall select partnerships to
receive funding on the basis of the community's need for
assistance and the quality of the applications.
``(b) Geographic Distribution.--In selecting partnerships,
the Secretary shall seek to ensure that communities in
different regions of the Nation, as well as both urban and
rural communities, are served.

``SEC. 2065. USES OF FUNDS.

``(a) In General.--Each partnership receiving a grant under
this chapter shall use the grant funds to carry out
activities that will improve the knowledge and skills of
early childhood educators who are working in early childhood
programs that are located in high-need communities and serve
concentrations of children from low-income families.
``(b) Allowable Activities.--Such activities may include--
``(1) professional development for individuals working as
early childhood educators, particularly to familiarize those
individuals with the application of recent research on child,
language, and literacy development and on early childhood
pedagogy;
``(2) professional development for early childhood
educators in working with parents, based on the best current
research on child, language, and literacy development and
parent involvement, so that the educators can prepare their
children to succeed in school;
``(3) professional development for early childhood
educators to work with children who have limited English
proficiency, disabilities, and other special needs;
``(4) professional development to train early childhood
educators in identifying and preventing behavioral problems
or violent behavior in children;
``(5) activities that assist and support early childhood
educators during their first three years in the field;
``(6) development and implementation of early childhood
educator professional development programs that make use of
distance learning and other technologies;
``(7) professional development activities related to the
selection and use of research-based diagnostic assessments to
improve teaching and learning; and
``(8) data collection, evaluation, and reporting needed to
meet the requirements of this chapter relating to
accountability.

``SEC. 2066. ACCOUNTABILITY.

``(a) Performance Indicators.--Simultaneously with the
publication of any application notice for grants under this
chapter, the Secretary shall announce performance indicators
for this chapter, which shall be designed to measure--
``(1) the quality and assessability of the professional
development provided;
``(2) the impact of that professional development on the
early childhood education provided by the individuals who are
trained; and
``(3) such other measures of program impact as the
Secretary determines appropriate.
``(b) Annual Reports; Termination.--
``(1) Annual reports.--Each partnership receiving a grant
under this chapter shall report annually to the Secretary on
the partnership's progress against the performance
indicators.
``(2) Termination.--The Secretary may terminate a grant
under this chapter at any time if the Secretary determines
that the partnership is not making satisfactory progress
against the indicators.

``SEC. 2067. COST-SHARING.

``(a) In General.--Each partnership shall provide, from
other sources, which may include other Federal sources--
``(1) at least 50 percent of the total cost of its project
for the grant period; and
``(2) at least 20 percent of the project cost in each year.
``(b) Acceptable Contributions.--A partnership may meet the
requirement of subsection (a) through cash or in-kind
contributions, fairly valued.
``(c) Waivers.--The Secretary may waive or modify the
requirements of subsection (a) in cases of demonstrated
financial hardship.

``SEC. 2068. FEDERAL COORDINATION.

``The Secretary and the Secretary of Health and Human
Services shall coordinate activities under this chapter and
other early childhood programs administered by the two
Secretaries.

``SEC. 2069. DEFINITIONS.

``In this chapter:
``(1) High-need community.--
``(A) In general.--The term `high-need community' means--
``(i) a municipality, or a portion of a municipality, in
which at least 50 percent of the children are from low-income
families; or
``(ii) a municipality that is one of the 10 percent of
municipalities within the State having the greatest numbers
of such children.
``(B) Determination.--In determining which communities are
described in subparagraph (A), the Secretary shall use such
data as the Secretary determines are most accurate and
appropriate.
``(2) Low-income family.--The term `low-income family'
means a family with an income below the poverty line (as
defined by the Office of Management and Budget and revised
annually in accordance with section 673(2) of the Community
Services Block Grant Act) applicable to a family of the size
involved for the most recent fiscal year for which
satisfactory data are available.
``(3) Early childhood educator.--The term `early childhood
educator' means a person who provides care and education to
children at any age from birth through kindergarten.''.
(b) Conforming Amendment.--The Troops-to-Teachers Program
Act of 1999 (20 U.S.C. 9301 et seq.) is repealed.

Subtitle B--Safe, Healthy Schools and Communities

CHAPTER 1--GRANTS FOR SCHOOL RENOVATION

SEC. 311. GRANTS FOR SCHOOL RENOVATION.

Title X (20 U.S.C. 8001 et seq.) is amended by adding at
the end the following:

``PART L--SCHOOL RENOVATION

``SEC. 10995. GRANTS FOR SCHOOL RENOVATION.

``(a) In General.--
``(1) Allocation of funds.--Of the amount appropriated for
each fiscal year under subsection (k), the Secretary of
Education shall allocate--
``(A) 6.0 percent of such amount for grants to impacted
local educational agencies (as defined in paragraph (3)) for
school repair, renovation, and construction;
``(B) 0.25 percent of such amount for grants to outlying
areas for school repair and renovation in high-need schools
and communities, allocated on such basis, and subject to such
terms and conditions, as the Secretary determines
appropriate;
``(C) 2 percent of such amount for grants to public
entities, private nonprofit entities, and consortia of such
entities, for use in accordance with subpart 2 of part C of
this title X; and
``(D) the remainder to State educational agencies in
proportion to the amount each State received under part A of
title I for fiscal year 2001, except that no State shall
receive less than 0.5 percent of the amount allocated under
this subparagraph.
``(2) Determination of grant amount.--
``(A) Determination of weighted student units.--For
purposes of computing the grant amounts under paragraph
(1)(A) for fiscal year 2001, the Secretary shall determine
the results obtained by the computation made under section
8003 with respect to children described in subsection
(a)(1)(C) of such section and computed under subsection
(a)(2)(B) of such section for such year--
``(i) for each impacted local educational agency that
receives funds under this section; and
``(ii) for all such agencies together.
``(B) Computation of payment.--For fiscal year 2002, the
Secretary shall calculate the amount of a grant to an
impacted local educational agency by--
``(i) dividing the amount described in paragraph (1)(A) by
the results of the computation described in subparagraph
(A)(ii); and
``(ii) multiplying the number derived under clause (i) by
the results of the computation described in subparagraph
(A)(i) for such agency.
``(3) Definition.--For purposes of this section, the term
`impacted local educational agency' means, for fiscal year
2001--
``(A) a local educational agency that receives a basic
support payment under section 8003(b) for such fiscal year;
and
``(B) with respect to which the number of children
determined under section 8003(a)(1)(C) for the preceding
school year constitutes at least 50 percent of the total
student enrollment in the schools of the agency during such
school year.
``(b) Within-State Allocations.--
``(1) Administrative costs.--
``(A) State educational agency administration.--Except as
provided in subparagraph (B), each State educational agency
may reserve not more than 1 percent of its allocation under
subsection (a)(1)(D) for the purpose of administering the
distribution of grants under this subsection.
``(B) State entity administration.--If the State
educational agency transfers funds to a State entity
described in paragraph (2)(A), the agency shall transfer to
such entity 0.75 of the amount reserved under this paragraph

[[Page S136]]

for the purpose of administering the distribution of grants
under this subsection.
``(2) Reservation for competitive school repair and
renovation grants to local educational agencies.--
``(A) In general.--Subject to the reservation under
paragraph (1), of the funds allocated to a State educational
agency under subsection (a)(1)(D), the State educational
agency shall distribute 75 percent of such funds to local
educational agencies or, if such State educational agency is
not responsible for the financing of education facilities,
the agency shall transfer such funds to the State entity
responsible for the financing of education facilities
(referred to in this section as the `State entity') for
distribution by such entity to local educational agencies in
accordance with this paragraph, to be used, consistent with
subsection (c), for school repair and renovation.
``(B) Competitive grants to local educational agencies.--
``(i) In general.--The State educational agency or State
entity shall carry out a program of competitive grants to
local educational agencies for the purpose described in
subparagraph (A). Of the total amount available for
distribution to such agencies under this paragraph, the State
educational agency or State entity, shall, in carrying out
the competition--

``(I) award to high poverty local educational agencies
described in clause (ii), in the aggregate, at least an
amount which bears the same relationship to such total amount
as the aggregate amount such local educational agencies
received under part A of title I for fiscal year 2002 bears
to the aggregate amount received for such fiscal year under
such part by all local educational agencies in the State;
``(II) award to rural local educational agencies in the
State, in the aggregate, at least an amount which bears the
same relationship to such total amount as the aggregate
amount such rural local educational agencies received under
part A of title I for fiscal year 2001 bears to the aggregate
amount received for such fiscal year under such part by all
local educational agencies in the State; and
``(III) award the remaining funds to local educational
agencies not receiving an award under subclause (I) or (II),
including high poverty and rural local educational agencies
that did not receive such an award.

``(ii) High poverty local educational agencies.--A local
educational agency is described in this clause if--

``(I) the percentage described in subparagraph (C)(i) with
respect to the agency is 30 percent or greater; or
``(II) the number of children described in such
subparagraph with respect to the agency is at least 10,000.

``(C) Criteria for awarding grants.--In awarding
competitive grants under this paragraph, a State educational
agency or State entity shall take into account the following
criteria:
``(i) The percentage of poor children 5 to 17 years of age,
inclusive, in a local educational agency.
``(ii) The need of a local educational agency for school
repair and renovation, as demonstrated by the condition of
its public school facilities.
``(iii) The fiscal capacity of a local educational agency
to meet its needs for repair and renovation of public school
facilities without assistance under this section, including
its ability to raise funds through the use of local bonding
capacity and otherwise.
``(iv) In the case of a local educational agency that
proposes to fund a repair or renovation project for a charter
school or schools, the extent to which the school or schools
have access to funding for the project through the financing
methods available to other public schools or local
educational agencies in the State.
``(v) The likelihood that the local educational agency will
maintain, in good condition, any facility whose repair or
renovation is assisted under this section.
``(D) Possible matching requirement.--
``(i) In general.--A State educational agency or State
entity may require local educational agencies to match funds
awarded under this subsection.
``(ii) Match amount.--The amount of a match described in
clause (i) may be established by using a sliding scale that
takes into account the relative poverty of the population
served by the local educational agency.
``(3) Reservation for competitive idea or technology grants
to local educational agencies.--
``(A) In general.--Subject to the reservation under
paragraph (1), of the funds allocated to a State educational
agency under subsection (a)(1)(D), the State educational
agency shall distribute 25 percent of such funds to local
educational agencies through competitive grant processes, to
be used for the following:
``(i) To carry out activities under part B of the
Individuals with Disabilities Education Act (20 U.S.C. 1411
et seq.).
``(ii) For technology activities that are carried out in
connection with school repair and renovation, including--

``(I) wiring;
``(II) acquiring hardware and software;
``(III) acquiring connectivity linkages and resources; and
``(IV) acquiring microwave, fiber optics, cable, and
satellite transmission equipment.

``(B) Criteria for awarding idea grants.--In awarding
competitive grants under subparagraph (A) to be used to carry
out activities under part B of the Individuals with
Disabilities Education Act (20 U.S.C. 1411 et seq.), a State
educational agency shall take into account the following
criteria:
``(i) The need of a local educational agency for additional
funds for a student whose individually allocable cost for
expenses related to the Individuals with Disabilities
Education Act substantially exceeds the State's average per-
pupil expenditure (as defined in section 14101(2)).
``(ii) The need of a local educational agency for
additional funds for special education and related services
under part B of the Individuals with Disabilities Education
Act (20 U.S.C. 1411 et seq.).
``(iii) The need of a local educational agency for
additional funds for assistive technology devices (as defined
in section 602 of the Individuals with Disabilities Education
Act (20 U.S.C. 1401)) or assistive technology services (as so
defined) for children being served under part B of the
Individuals with Disabilities Education Act (20 U.S.C. 1411
et seq.).
``(iv) The need of a local educational agency for
additional funds for activities under part B of the
Individuals with Disabilities Education Act (20 U.S.C. 1411
et seq.) in order for children with disabilities to make
progress toward meeting the performance goals and indicators
established by the State under section 612(a)(16) of such Act
(20 U.S.C. 1412).
``(C) Criteria for awarding technology grants.--In awarding
competitive grants under subparagraph (A) to be used for
technology activities that are carried out in connection with
school repair and renovation, a State educational agency
shall take into account the need of a local educational
agency for additional funds for such activities, including
the need for the activities described in subclauses (I)
through (IV) of subparagraph (A)(ii).
``(c) Rules Applicable to School Repair and Renovation.--
With respect to funds made available under this section that
are used for school repair and renovation, the following
rules shall apply:
``(1) Permissible uses of funds.--School repair and
renovation shall be limited to one or more of the following:
``(A) Emergency repairs or renovations to public school
facilities only to ensure the health and safety of students
and staff, including--
``(i) repairing, replacing, or installing roofs, electrical
wiring, plumbing systems, or sewage systems;
``(ii) repairing, replacing, or installing heating,
ventilation, or air conditioning systems (including
insulation); and
``(iii) bringing public schools into compliance with fire
and safety codes.
``(B) School facilities modifications necessary to render
public school facilities accessible in order to comply with
the Americans with Disabilities Act of 1990 (42 U.S.C. 12101
et seq.).
``(C) School facilities modifications necessary to render
public school facilities accessible in order to comply with
section 504 of the Rehabilitation Act of 1973 (29 U.S.C.
794).
``(D) Asbestos abatement or removal from public school
facilities.
``(E) Renovation, repair, and acquisition needs related to
the building infrastructure of a charter school.
``(2) Impermissible uses of funds.--No funds received under
this section may be used for--
``(A) payment of maintenance costs in connection with any
projects constructed in whole or part with Federal funds
provided under this section;
``(B) the construction of new facilities, except for
facilities for an impacted local educational agency (as
defined in subsection (a)(3)); or
``(C) stadiums or other facilities primarily used for
athletic contests or exhibitions or other events for which
admission is charged to the general public.
``(3) Charter schools.--A public charter school that
constitutes a local educational agency under State law shall
be eligible for assistance under the same terms and
conditions as any other local educational agency (as defined
in section 14101(18)).
``(4) Supplement, not supplant.--Excluding the uses
described in subparagraphs (B) and (C) of paragraph (1), a
local educational agency shall use Federal funds subject to
this subsection only to supplement the amount of funds that
would, in the absence of such Federal funds, be made
available from non-Federal sources for school repair and
renovation.
``(d) Special Rule.--Each local educational agency that
receives funds under this section shall ensure that, if it
carries out repair or renovation through a contract, any such
contract process ensures the maximum number of qualified
bidders, including small, minority, and women-owned
businesses, through full and open competition.
``(e) Public Comment.--Each local educational agency
receiving funds under paragraph (2) or (3) of subsection
(b)--
``(1) shall provide parents, educators, and all other
interested members of the community the opportunity to
consult on the use of funds received under such paragraph;
``(2) shall provide the public with adequate and efficient
notice of the opportunity described in paragraph (1) in a
widely read and distributed medium; and

[[Page S137]]

``(3) shall provide the opportunity described in paragraph
(1) in accordance with any applicable State and local law
specifying how the comments may be received and how the
comments may be reviewed by any member of the public.
``(f) Reporting.--
``(1) Local reporting.--Each local educational agency
receiving funds under subsection (a)(1)(D) shall submit a
report to the State educational agency, at such time as the
State educational agency may require, describing the use of
such funds for--
``(A) school repair and renovation (and construction, in
the case of an impacted local educational agency (as defined
in subsection (a)(3)));
``(B) activities under part B of the Individuals with
Disabilities Education Act (20 U.S.C. 1411 et seq.); and
``(C) technology activities that are carried out in
connection with school repair and renovation, including the
activities described in subclauses (I) through (IV) of
subsection (b)(3)(A)(ii).
``(2) State reporting.--Each State educational agency shall
submit to the Secretary of Education, not later than December
31, 2003, a report on the use of funds received under
subsection (a)(1)(D) by local educational agencies for--
``(A) school repair and renovation (and construction, in
the case of an impacted local educational agency (as defined
in subsection (a)(3)));
``(B) activities under part B of the Individuals with
Disabilities Education Act (20 U.S.C. 1411 et seq.); and
``(C) technology activities that are carried out in
connection with school repair and renovation, including the
activities described in subclauses (I) through (IV) of
subsection (b)(3)(A)(ii).
``(3) Additional reports.--Each entity receiving funds
allocated under subsection (a)(1) (A) of (B) shall submit to
the Secretary, not later than December 31, 2003, a report on
its uses of funds under this section, in such form and
containing such information as the Secretary may require.
``(g) Applicability of Part B of IDEA.--If a local
educational agency uses funds received under this section to
carry out activities under part B of the Individuals with
Disabilities Education Act (20 U.S.C. 1411 et seq.), such
part (including provisions respecting the participation of
private school children), and any other provision of law that
applies to such part, shall apply to such use.
``(h) Reallocation.--If a State educational agency does not
apply for an allocation of funds under subsection (a)(1)(D)
for fiscal year 2002, or does not use its entire allocation
for such fiscal year, the Secretary may reallocate the amount
of the State educational agency's allocation (or the
remainder thereof, as the case may be) to the remaining State
educational agencies in accordance with subsection (a)(1)(D).
``(i) Participation of Private Schools.--
``(1) In general.--Section 6402 shall apply to subsection
(b)(2) in the same manner as it applies to activities under
title VI, except that--
``(A) such section shall not apply with respect to the
title to any real property renovated or repaired with
assistance provided under this section;
``(B) the term `services' as used in section 6402 with
respect to funds under this section shall be provided only to
private, nonprofit elementary or secondary schools with a
rate of child poverty of at least 40 percent and may include
for purposes of subsection (b)(2) only--
``(i) modifications of school facilities necessary to meet
the standards applicable to public schools under the
Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.);
``(ii) modifications of school facilities necessary to meet
the standards applicable to public schools under section 504
of the Rehabilitation Act of 1973 (29 U.S.C. 794); and
``(iii) asbestos abatement or removal from school
facilities; and
``(C) notwithstanding the requirements of section 6402(b),
expenditures for services provided using funds made available
under subsection (b)(2) shall be considered equal for
purposes of such section if the per-pupil expenditures for
services described in subparagraph (B) for students enrolled
in private nonprofit elementary and secondary schools that
have child poverty rates of at least 40 percent are
consistent with the per-pupil expenditures under this section
for children enrolled in the public schools in the school
district of the local educational agency receiving funds
under this section.
``(2) Remaining funds.--If the expenditure for services
described in paragraph (1)(B) is less than the amount
calculated under paragraph (1)(C) because of insufficient
need for such services, the remainder shall be available to
the local educational agency for renovation and repair of
public school facilities.
``(3) Application.--If any provision of this section, or
the application thereof, to any person or circumstances is
judicially determined to be invalid, the provisions of the
remainder of the section and the application to other persons
or circumstances shall not be affected thereby.
``(j) Definitions.--For purposes of this section:
``(1) Charter school.--The term `charter school' has the
meaning given such term in section 10310(1).
``(2) Poor children and child poverty.--The terms `poor
children' and `child poverty' refer to children 5 to 17 years
of age, inclusive, who are from families with incomes below
the poverty line (as defined by the Office of Management and
Budget and revised annually in accordance with section 673(2)
of the Community Services Block Grant (42 U.S.C. 9902(2))
applicable to a family of the size involved for the most
recent fiscal year for which data satisfactory to the
Secretary are available.
``(3) Rural local educational agency.--The term `rural
local educational agency' means a local educational agency
that the State determines is located in a rural area using
objective data and a commonly employed definition of the term
`rural'.
``(4) State.--The term `State' means each of the 50 states,
the District of Columbia, and the Commonwealth of Puerto
Rico.
``(k) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section, $1,600,000,000
for fiscal year 2002, and such sums as may be necessary for
each of fiscal years 2003 through 2006.''.

SEC. 312. CHARTER SCHOOL CREDIT ENHANCEMENT INITIATIVE.

Section 10331, as added by section 322 of the Departments
of Labor, Health and Human Services, and Education, and
Related Agencies Appropriations Act, 2001 (as enacted into
law by section 1(a)(1) of Public Law 106-554) is amended by
inserting before the period the following: ``, and such sums
as may be necessary for each of fiscal years 2002 through
2006''.

CHAPTER 2--SCHOOL CONSTRUCTION

SEC. 321. SHORT TITLE.

This chapter may be cited as the ``America's Better
Classrooms Act of 2001''.

SEC. 322. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

(a) In General.--Chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
subchapter:

``Subchapter X--Public School Modernization Provisions

``Sec. 1400F. Credit to holders of qualified public school
modernization bonds.
``Sec. 1400G. Qualified school construction bonds.
``Sec. 1400H. Qualified zone academy bonds.

``SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL
MODERNIZATION BONDS.

``(a) Allowance of Credit.--In the case of a taxpayer who
holds a qualified public school modernization bond on a
credit allowance date of such bond which occurs during the
taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for such taxable year an amount
equal to the sum of the credits determined under subsection
(b) with respect to credit allowance dates during such year
on which the taxpayer holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance
date for a qualified public school modernization bond is 25
percent of the annual credit determined with respect to such
bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified public school modernization bond is
the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(1), the applicable credit rate with respect to an issue is
the rate equal to an average market yield (as of the day
before the date of issuance of the issue) on outstanding
long-term corporate debt obligations (determined under
regulations prescribed by the Secretary).
``(4) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period
ending on a credit allowance date, the amount of the credit
determined under this subsection with respect to such credit
allowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-month
period during which the bond is outstanding. A similar rule
shall apply when the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under part IV of
subchapter A (other than subpart C thereof, relating to
refundable credits).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such taxable year.
``(d) Qualified Public School Modernization Bond; Credit
Allowance Date.--For purposes of this section--
``(1) Qualified public school modernization bond.--The term
`qualified public school modernization bond' means--
``(A) a qualified zone academy bond, and
``(B) a qualified school construction bond.
``(2) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and

[[Page S138]]

``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(e) Other Definitions.--For purposes of this subchapter--
``(1) Local educational agency.--The term `local
educational agency' has the meaning given to such term by
section 14101 of the Elementary and Secondary Education Act
of 1965. Such term includes the local educational agency that
serves the District of Columbia but does not include any
other State agency.
``(2) Bond.--The term `bond' includes any obligation.
``(3) State.--The term `State' includes the District of
Columbia and any possession of the United States.
``(4) Public school facility.--The term `public school
facility' shall not include--
``(A) any stadium or other facility primarily used for
athletic contests or exhibitions or other events for which
admission is charged to the general public, or
``(B) any facility which is not owned by a State or local
government or any agency or instrumentality of a State or
local government.
``(f) Credit Included in Gross Income.--Gross income
includes the amount of the credit allowed to the taxpayer
under this section (determined without regard to subsection
(c)) and the amount so included shall be treated as interest
income.
``(g) Bonds Held by Regulated Investment Companies.--If any
qualified public school modernization bond is held by a
regulated investment company, the credit determined under
subsection (a) shall be allowed to shareholders of such
company under procedures prescribed by the Secretary.
``(h) Credits May Be Stripped.--Under regulations
prescribed by the Secretary--
``(1) In general.--There may be a separation (including at
issuance) of the ownership of a qualified public school
modernization bond and the entitlement to the credit under
this section with respect to such bond. In case of any such
separation, the credit under this section shall be allowed to
the person who on the credit allowance date holds the
instrument evidencing the entitlement to the credit and not
to the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation
described in paragraph (1), the rules of section 1286 shall
apply to the qualified public school modernization bond as if
it were a stripped bond and to the credit under this section
as if it were a stripped coupon.
``(i) Treatment for Estimated Tax Purposes.--Solely for
purposes of sections 6654 and 6655, the credit allowed by
this section to a taxpayer by reason of holding a qualified
public school modernization bonds on a credit allowance date
shall be treated as if it were a payment of estimated tax
made by the taxpayer on such date.
``(j) Credit May Be Transferred.--Nothing in any law or
rule of law shall be construed to limit the transferability
of the credit allowed by this section through sale and
repurchase agreements.
``(k) Reporting.--Issuers of qualified public school
modernization bonds shall submit reports similar to the
reports required under section 149(e).
``(l) Termination.--This section shall not apply to any
bond issued after September 30, 2006.

``SEC. 1400G. QUALIFIED SCHOOL CONSTRUCTION BONDS.

``(a) Qualified School Construction Bond.--For purposes of
this subchapter, the term `qualified school construction
bond' means any bond issued as part of an issue if--
``(1) 95 percent or more of the proceeds of such issue are
to be used for the construction, rehabilitation, or repair of
a public school facility or for the acquisition of land on
which such a facility is to be constructed with part of the
proceeds of such issue,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such school is located,
``(3) the issuer designates such bond for purposes of this
section, and
``(4) the term of each bond which is part of such issue
does not exceed 15 years.
``(b) Limitation on Amount of Bonds Designated.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a) by
any issuer shall not exceed the sum of--
``(1) the limitation amount allocated under subsection (d)
for such calendar year to such issuer, and
``(2) if such issuer is a large local educational agency
(as defined in subsection (e)(4)) or is issuing on behalf of
such an agency, the limitation amount allocated under
subsection (e) for such calendar year to such agency.
``(c) National Limitation on Amount of Bonds Designated.--
There is a national qualified school construction bond
limitation for each calendar year. Such limitation is--
``(1) $11,000,000,000 for 2002,
``(2) $11,000,000,000 for 2003, and
``(3) except as provided in subsection (f), zero after
2003.
``(d) 60 Percent of Limitation Allocated Among States.--
``(1) In general.--60 percent of the limitation applicable
under subsection (c) for any calendar year shall be allocated
by the Secretary among the States in proportion to the
respective numbers of children in each State who have
attained age 5 but not age 18 for the most recent fiscal year
ending before such calendar year. The limitation amount
allocated to a State under the preceding sentence shall be
allocated by the State to issuers within such State and such
allocations may be made only if there is an approved State
application.
``(2) Minimum allocations to states.--
``(A) In general.--The Secretary shall adjust the
allocations under this subsection for any calendar year for
each State to the extent necessary to ensure that the sum
of--
``(i) the amount allocated to such State under this
subsection for such year, and
``(ii) the aggregate amounts allocated under subsection (e)
to large local educational agencies in such State for such
year,
is not less than an amount equal to such State's minimum
percentage of the amount to be allocated under paragraph (1)
for the calendar year.
``(B) Minimum percentage.--A State's minimum percentage for
any calendar year is the minimum percentage described in
section 1124(d) of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6334(d)) for such State for the most
recent fiscal year ending before such calendar year.
``(3) Allocations to certain possessions.--The amount to be
allocated under paragraph (1) to any possession of the United
States other than Puerto Rico shall be the amount which would
have been allocated if all allocations under paragraph (1)
were made on the basis of respective populations of
individuals below the poverty line (as defined by the Office
of Management and Budget). In making other allocations, the
amount to be allocated under paragraph (1) shall be reduced
by the aggregate amount allocated under this paragraph to
possessions of the United States.
``(4) Allocations for indian schools.--The provisions of
section 1400J shall apply with respect to the construction,
rehabilitation, and repair of schools funded by the Bureau of
Indian Affairs. No funds may be allocated under this section
for such schools.
``(5) Approved state application.--For purposes of
paragraph (1), the term `approved State application' means an
application which is approved by the Secretary of Education
and which includes--
``(A) the results of a recent publicly-available survey
(undertaken by the State with the involvement of local
education officials, members of the public, and experts in
school construction and management) of such State's needs for
public school facilities, including descriptions of--
``(i) health and safety problems at such facilities,
``(ii) the capacity of public schools in the State to house
projected enrollments, and
``(iii) the extent to which the public schools in the State
offer the physical infrastructure needed to provide a high-
quality education to all students, and
``(B) a description of how the State will allocate to local
educational agencies, or otherwise use, its allocation under
this subsection to address the needs identified under
subparagraph (A), including a description of how it will--
``(i) ensure that the needs of both rural and urban areas
will be recognized,
``(ii) give highest priority to localities with the
greatest needs, as demonstrated by inadequate school
facilities coupled with a low level of resources to meet
those needs,
``(iii) use its allocation under this subsection to assist
localities that lack the fiscal capacity to issue bonds on
their own, and
``(iv) ensure that its allocation under this subsection is
used only to supplement, and not supplant, the amount of
school construction, rehabilitation, and repair in the State
that would have occurred in the absence of such allocation.
Any allocation under paragraph (1) by a State shall be
binding if such State reasonably determined that the
allocation was in accordance with the plan approved under
this paragraph.
``(e) 40 Percent of Limitation Allocated Among Largest
School Districts.--
``(1) In general.--40 percent of the limitation applicable
under subsection (c) for any calendar year shall be allocated
under paragraph (2) by the Secretary among local
educational agencies which are large local educational
agencies for such year. No qualified school construction
bond may be issued by reason of an allocation to a large
local educational agency under the preceding sentence
unless such agency has an approved local application.
``(2) Allocation formula.--The amount to be allocated under
paragraph (1) for any calendar year shall be allocated among
large local educational agencies in proportion to the
respective amounts each such agency received for Basic Grants
under subpart 2 of part A of title I of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for
the most recent fiscal year ending before such calendar year.
``(3) Allocation of unused limitation to state.--The amount
allocated under this subsection to a large local educational
agency for any calendar year may be reallocated by such
agency to the State in which such agency is located for such
calendar year. Any amount reallocated to a State under the
preceding sentence may be allocated as provided in subsection
(d)(1).
``(4) Large local educational agency.--For purposes of this
section, the term `large local educational agency' means,
with respect to a calendar year, any local educational agency
if such agency is--

[[Page S139]]

``(A) among the 100 local educational agencies with the
largest numbers of children aged 5 through 17 from families
living below the poverty level, as determined by the
Secretary using the most recent data available from the
Department of Commerce that are satisfactory to the
Secretary, or
``(B) 1 of not more than 25 local educational agencies
(other than those described in subparagraph (A)) that the
Secretary of Education determines (based on the most recent
data available satisfactory to the Secretary) are in
particular need of assistance, based on a low level of
resources for school construction, a high level of enrollment
growth, or such other factors as the Secretary deems
appropriate.
``(5) Approved local application.--For purposes of
paragraph (1), the term `approved local application' means an
application which is approved by the Secretary of Education
and which includes--
``(A) the results of a recent publicly-available survey
(undertaken by the local educational agency or the State with
the involvement of school officials, members of the public,
and experts in school construction and management) of such
agency's needs for public school facilities, including
descriptions of--
``(i) the overall condition of the local educational
agency's school facilities, including health and safety
problems,
``(ii) the capacity of the agency's schools to house
projected enrollments, and
``(iii) the extent to which the agency's schools offer the
physical infrastructure needed to provide a high-quality
education to all students,
``(B) a description of how the local educational agency
will use its allocation under this subsection to address the
needs identified under subparagraph (A), and
``(C) a description of how the local educational agency
will ensure that its allocation under this subsection is used
only to supplement, and not supplant, the amount of school
construction, rehabilitation, or repair in the locality that
would have occurred in the absence of such allocation.
A rule similar to the rule of the last sentence of subsection
(d)(6) shall apply for purposes of this paragraph.
``(f) Carryover of Unused Limitation.--If for any calendar
year--
``(1) the amount allocated under subsection (d) to any
State, exceeds
``(2) the amount of bonds issued during such year which are
designated under subsection (a) pursuant to such allocation,
the limitation amount under such subsection for such State
for the following calendar year shall be increased by the
amount of such excess. A similar rule shall apply to the
amounts allocated under subsection (d)(5) or (e).
``(g) Special Rules Relating to Arbitrage.--
``(1) In general.--A bond shall not be treated as failing
to meet the requirement of subsection (a)(1) solely by reason
of the fact that the proceeds of the issue of which such bond
is a part are invested for a temporary period (but not more
than 36 months) until such proceeds are needed for the
purpose for which such issue was issued.
``(2) Binding commitment requirement.--Paragraph (1) shall
apply to an issue only if, as of the date of issuance, there
is a reasonable expectation that--
``(A) at least 10 percent of the proceeds of the issue will
be spent within the 6-month period beginning on such date for
the purpose for which such issue was issued, and
``(B) the remaining proceeds of the issue will be spent
with due diligence for such purpose.
``(3) Earnings on proceeds.--Any earnings on proceeds
during the temporary period shall be treated as proceeds of
the issue for purposes of applying subsection (a)(1) and
paragraph (1) of this subsection.

``SEC. 1400H. QUALIFIED ZONE ACADEMY BONDS.

``(a) Qualified Zone Academy Bond.--For purposes of this
subchapter--
``(1) In general.--The term `qualified zone academy bond'
means any bond issued as part of an issue if--
``(A) 95 percent or more of the proceeds of such issue are
to be used for a qualified purpose with respect to a
qualified zone academy established by a local educational
agency,
``(B) the bond is issued by a State or local government
within the jurisdiction of which such academy is located,
``(C) the issuer--
``(i) designates such bond for purposes of this section,
``(ii) certifies that it has written assurances that the
private business contribution requirement of paragraph (2)
will be met with respect to such academy, and
``(iii) certifies that it has the written approval of the
local educational agency for such bond issuance, and
``(D) the term of each bond which is part of such issue
does not exceed 15 years.
Rules similar to the rules of section 1400G(g) shall apply
for purposes of paragraph (1).
``(2) Private business contribution requirement.--
``(A) In general.--For purposes of paragraph (1), the
private business contribution requirement of this paragraph
is met with respect to any issue if the local educational
agency that established the qualified zone academy has
written commitments from private entities to make
qualified contributions having a present value (as of the
date of issuance of the issue) of not less than 10 percent
of the proceeds of the issue.
``(B) Qualified contributions.--For purposes of
subparagraph (A), the term `qualified contribution' means any
contribution (of a type and quality acceptable to the local
educational agency) of--
``(i) equipment for use in the qualified zone academy
(including state-of-the-art technology and vocational
equipment),
``(ii) technical assistance in developing curriculum or in
training teachers in order to promote appropriate market
driven technology in the classroom,
``(iii) services of employees as volunteer mentors,
``(iv) internships, field trips, or other educational
opportunities outside the academy for students, or
``(v) any other property or service specified by the local
educational agency.
``(3) Qualified zone academy.--The term `qualified zone
academy' means any public school (or academic program within
a public school) which is established by and operated under
the supervision of a local educational agency to provide
education or training below the postsecondary level if--
``(A) such public school or program (as the case may be) is
designed in cooperation with business to enhance the academic
curriculum, increase graduation and employment rates, and
better prepare students for the rigors of college and the
increasingly complex workforce,
``(B) students in such public school or program (as the
case may be) will be subject to the same academic standards
and assessments as other students educated by the local
educational agency,
``(C) the comprehensive education plan of such public
school or program is approved by the local educational
agency, and
``(D)(i) such public school is located in an empowerment
zone or enterprise community (including any such zone or
community designated after the date of the enactment of this
section), or
``(ii) there is a reasonable expectation (as of the date of
issuance of the bonds) that at least 35 percent of the
students attending such school or participating in such
program (as the case may be) will be eligible for free or
reduced-cost lunches under the school lunch program
established under the National School Lunch Act.
``(4) Qualified purpose.--The term `qualified purpose'
means, with respect to any qualified zone academy--
``(A) constructing, rehabilitating, or repairing the public
school facility in which the academy is established,
``(B) acquiring the land on which such facility is to be
constructed with part of the proceeds of such issue,
``(C) providing equipment for use at such academy,
``(D) developing course materials for education to be
provided at such academy, and
``(E) training teachers and other school personnel in such
academy.
``(b) Limitations on Amount of Bonds Designated.--
``(1) In general.--There is a national zone academy bond
limitation for each calendar year. Such limitation is--
``(A) $400,000,000 for 1999,
``(B) $400,000,000 for 2000,
``(C) $400,000,000 for 2001,
``(D) $1,400,000,000 for 2002,
``(E) $1,400,000,000 for 2003, and
``(F) except as provided in paragraph (3), zero after 2003.
``(2) Allocation of limitation.--
``(A) Allocation among states.--
``(i) 1999, 2000, and 2001 limitations.--The national zone
academy bond limitations for calendar years 1999, 2000, and
2001 shall be allocated by the Secretary among the States on
the basis of their respective populations of individuals
below the poverty line (as defined by the Office of
Management and Budget).
``(ii) Limitation after 2001.--The national zone academy
bond limitation for any calendar year after 2001 shall be
allocated by the Secretary among the States in proportion to
the respective amounts each such State received for Basic
Grants under subpart 2 of part A of title I of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.)
for the most recent fiscal year ending before such calendar
year.
``(B) Allocation to local educational agencies.--The
limitation amount allocated to a State under subparagraph (A)
shall be allocated by the State to qualified zone academies
within such State.
``(C) Designation subject to limitation amount.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a)
with respect to any qualified zone academy shall not exceed
the limitation amount allocated to such academy under
subparagraph (B) for such calendar year.
``(3) Carryover of unused limitation.--If for any calendar
year--
``(A) the limitation amount under this subsection for any
State, exceeds
``(B) the amount of bonds issued during such year which are
designated under subsection (a) (or the corresponding
provisions of prior law) with respect to qualified zone
academies within such State,
the limitation amount under this subsection for such State
for the following calendar year shall be increased by the
amount of such excess.''
(b) Reporting.--Subsection (d) of section 6049 of such Code
(relating to returns regarding payments of interest) is
amended by adding at the end the following new paragraph:

[[Page S140]]

``(8) Reporting of credit on qualified public school
modernization bonds.--
``(A) In general.--For purposes of subsection (a), the term
`interest' includes amounts includible in gross income under
section 1400F(f) and such amounts shall be treated as paid on
the credit allowance date (as defined in section
1400F(d)(2)).
``(B) Reporting to corporations, etc.--Except as otherwise
provided in regulations, in the case of any interest
described in subparagraph (A) of this paragraph, subsection
(b)(4) of this section shall be applied without regard to
subparagraphs (A), (H), (I), (J), (K), and (L)(i).
``(C) Regulatory authority.--The Secretary may prescribe
such regulations as are necessary or appropriate to carry out
the purposes of this paragraph, including regulations which
require more frequent or more detailed reporting.''
(c) Conforming Amendments.--
(1) Subchapter U of chapter 1 of such Code is amended by
striking part IV, by redesignating part V as part IV, and by
redesignating section 1397F as section 1397E.
(2) The table of subchapters for chapter 1 of such Code is
amended by adding at the end the following new item:

``Subchapter X. Public school modernization provisions.''

(3) The table of parts of subchapter U of chapter 1 of such
Code is amended by striking the last 2 items and inserting
the following item:

``Part IV. Regulations.''

(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to obligations issued after December 31, 2001.
(2) Repeal of restriction on zone academy bond holders.--In
the case of bonds to which section 1397E of the Internal
Revenue Code of 1986 (as in effect before the date of the
enactment of this Act) applies, the limitation of such
section to eligible taxpayers (as defined in subsection
(d)(6) of such section) shall not apply after the date of
the enactment of this Act.

SEC. 323. APPLICATION OF CERTAIN LABOR STANDARDS ON
CONSTRUCTION PROJECTS FINANCED UNDER PUBLIC
SCHOOL MODERNIZATION PROGRAM.

Section 439 of the General Education Provisions Act
(relating to labor standards) is amended--
(1) by inserting ``(a)'' before ``All laborers and
mechanics'', and
(2) by adding at the end the following:
``(b)(1) For purposes of this section, the term `applicable
program' also includes the qualified zone academy bond
provisions enacted by section 226 of the Taxpayer Relief Act
of 1997 and the program established by section 322 of the
America's Better Classroom Act of 2001.
``(2) A State or local government participating in a
program described in paragraph (1) shall--
``(A) in the awarding of contracts, give priority to
contractors with substantial numbers of employees residing in
the local education area to be served by the school being
constructed; and
``(B) include in the construction contract for such school
a requirement that the contractor give priority in hiring new
workers to individuals residing in such local education area.
``(3) In the case of a program described in paragraph (1),
nothing in this subsection or subsection (a) shall be
construed to deny any tax credit allowed under such program.
If amounts are required to be withheld from contractors to
pay wages to which workers are entitled, such amounts shall
be treated as expended for construction purposes in
determining whether the requirements of such program are
met.''.

SEC. 324. EMPLOYMENT AND TRAINING ACTIVITIES RELATING TO
CONSTRUCTION OR RECONSTRUCTION OF PUBLIC SCHOOL
FACILITIES.

(a) In General.--Section 134 of the Workforce Investment
Act of 1998 (29 U.S.C. 2864) is amended by adding at the end
the following:
``(f) Local Employment and Training Activities Relating to
Construction or Reconstruction of Public School Facilities.--
``(1) In general.--In order to provide training services
related to construction or reconstruction of public school
facilities receiving funding assistance under an applicable
program, each State shall establish a specialized program of
training meeting the following requirements:
``(A) The specialized program provides training for jobs in
the construction industry.
``(B) The program provides trained workers for projects for
the construction or reconstruction of public school
facilities receiving funding assistance under an applicable
program.
``(C) The program ensures that skilled workers (residing in
the area to be served by the school facilities) will be
available for the construction or reconstruction work.
``(2) Coordination.--The specialized program established
under paragraph (1) shall be integrated with other activities
under this Act, with the activities carried out under the
National Apprenticeship Act of 1937 by the State
Apprenticeship Council or through the Bureau of
Apprenticeship and Training in the Department of Labor, as
appropriate, and with activities carried out under the Carl
D. Perkins Vocational and Technical Education Act of 1998.
Nothing in this subsection shall be construed to require
services duplicative of those referred to in the preceding
sentence.
``(3) Applicable program.--In this subsection, the term
`applicable program' has the meaning given the term in
section 439(b) of the General Education Provisions Act
(relating to labor standards).''.
(b) State Plan.--Section 112(b)(17)(A) of the Workforce
Investment Act of 1998 (29 U.S.C. 2822(b)(17)(A)) is
amended--
(1) in clause (iii), by striking ``and'' at the end;
(2) by redesignating clause (iv) as clause (v); and
(3) by inserting after clause (iii) the following:
``(iv) how the State will establish and carry out a
specialized program of training under section 134(f); and''.

SEC. 325. INDIAN SCHOOL CONSTRUCTION.

(a) Definitions.--In this section:
(1) Bureau.--The term ``Bureau'' means the Bureau of Indian
Affairs of the Department of the Interior.
(2) Indian.--The term ``Indian'' means any individual who
is a member of a tribe.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(4) Tribal school.--The term ``tribal school'' means an
elementary school, secondary school, or dormitory that is
operated by a tribal organization or the Bureau for the
education of Indian children and that receives financial
assistance for its operation under an appropriation for the
Bureau under section 102, 103(a), or 208 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450f,
450h(a), and 458d) or under the Tribally Controlled Schools
Act of 1988 (25 U.S.C. 2501 et seq.) under a contract, a
grant, or an agreement, or for a Bureau-operated school.
(5) Tribe.--The term ``tribe'' has the meaning given the
term ``Indian tribal government'' by section 7701(a)(40) of
the Internal Revenue Code of 1986, including the application
of section 7871(d) of such Code. Such term includes any
consortium of tribes approved by the Secretary.
(b) Issuance of Bonds.--
(1) In general.--The Secretary shall establish a pilot
program under which eligible tribes have the authority to
issue qualified tribal school modernization bonds to provide
funding for the construction, rehabilitation, or repair of
tribal schools, including the advance planning and design
thereof.
(2) Eligibility.--
(A) In general.--To be eligible to issue any qualified
tribal school modernization bond under the program under
paragraph (1), a tribe shall--
(i) prepare and submit to the Secretary a plan of
construction that meets the requirements of subparagraph (B);
(ii) provide for quarterly and final inspection of the
project by the Bureau; and
(iii) pledge that the facilities financed by such bond will
be used primarily for elementary and secondary educational
purposes for not less than the period such bond remains
outstanding.
(B) Plan of construction.--A plan of construction meets the
requirements of this subparagraph if such plan--
(i) contains a description of the construction to be
undertaken with funding provided under a qualified tribal
school modernization bond;
(ii) demonstrates that a comprehensive survey has been
undertaken concerning the construction needs of the tribal
school involved;
(iii) contains assurances that funding under the bond will
be used only for the activities described in the plan;
(iv) contains response to the evaluation criteria contained
in Instructions and Application for Replacement School
Construction, Revision 6, dated February 6, 1999; and
(v) contains any other reasonable and related information
determined appropriate by the Secretary.
(C) Priority.--In determining whether a tribe is eligible
to participate in the program under this subsection, the
Secretary shall give priority to tribes that, as demonstrated
by the relevant plans of construction, will fund projects--
(i) described in the Education Facilities Replacement
Construction Priorities List as of FY 2000 of the Bureau of
Indian Affairs (65 Fed. Reg. 4623-4624);
(ii) described in any subsequent priorities list published
in the Federal Register; or
(iii) which meet the criteria for ranking schools as
described in Instructions and Application for Replacement
School Construction, Revision 6, dated February 6, 1999.
(D) Advance planning and design funding.--A tribe may
propose in its plan of construction to receive advance
planning and design funding from the tribal school
modernization escrow account established under paragraph
(6)(B). Before advance planning and design funds are
allocated from the escrow account, the tribe shall agree to
issue qualified tribal school modernization bonds after the
receipt of such funds and agree as a condition of each bond
issuance that the tribe will deposit into such account or a
fund managed by the trustee as described in paragraph (4)(C)
an amount equal to the amount of such funds received from the
escrow account.
(3) Permissible activities.--In addition to the use of
funds permitted under paragraph (1), a tribe may use amounts
received

[[Page S141]]

through the issuance of a qualified tribal school
modernization bond to--
(A) enter into and make payments under contracts with
licensed and bonded architects, engineers, and construction
firms in order to determine the needs of the tribal school
and for the design and engineering of the school;
(B) enter into and make payments under contracts with
financial advisors, underwriters, attorneys, trustees, and
other professionals who would be able to provide assistance
to the tribe in issuing bonds; and
(C) carry out other activities determined appropriate by
the Secretary.
(4) Bond trustee.--
(A) In general.--Notwithstanding any other provision of
law, any qualified tribal school modernization bond issued by
a tribe under this subsection shall be subject to a trust
agreement between the tribe and a trustee.
(B) Trustee.--Any bank or trust company that meets
requirements established by the Secretary may be designated
as a trustee under subparagraph (A).
(C) Content of trust agreement.--A trust agreement entered
into by a tribe under this paragraph shall specify that the
trustee, with respect to any bond issued under this
subsection shall--
(i) act as a repository for the proceeds of the bond;
(ii) make payments to bondholders;
(iii) receive, as a condition to the issuance of such bond,
a transfer of funds from the tribal school modernization
escrow account established under paragraph (6)(B) or from
other funds furnished by or on behalf of the tribe in an
amount, which together with interest earnings from the
investment of such funds in obligations of or fully
guaranteed by the United States or from other investments
authorized by paragraph (10), will produce moneys sufficient
to timely pay in full the entire principal amount of such
bond on the stated maturity date therefore;
(iv) invest the funds received pursuant to clause (iii) as
provided by such clause; and
(v) hold and invest the funds in a segregated fund or
account under the agreement, which fund or account shall be
applied solely to the payment of the costs of items described
in paragraph (3).
(D) Requirements for making direct payments.--
(i) In general.--Notwithstanding any other provision of
law, the trustee shall make any payment referred to in
subparagraph (C)(v) in accordance with requirements that the
tribe shall prescribe in the trust agreement entered into
under subparagraph (C). Before making a payment to a
contractor under subparagraph (C)(v), the trustee shall
require an inspection of the project by a local financial
institution or an independent inspecting architect or
engineer, to ensure the completion of the project.
(ii) Contracts.--Each contract referred to in paragraph (3)
shall specify, or be renegotiated to specify, that payments
under the contract shall be made in accordance with this
paragraph.
(5) Payments of principal and interest.--
(A) Principal.--No principal payments on any qualified
tribal school modernization bond shall be required until the
final, stated maturity of such bond, which stated maturity
shall be within 15 years from the date of issuance. Upon the
expiration of such period, the entire outstanding principal
under the bond shall become due and payable.
(B) Interest.--In lieu of interest on a qualified tribal
school modernization bond there shall be awarded a tax credit
under section 1400F of the Internal Revenue Code of 1986.
(6) Bond guarantees.--
(A) In general.--Payment of the principal portion of a
qualified tribal school modernization bond issued under this
subsection shall be guaranteed solely by amounts deposited
with each respective bond trustee as described in paragraph
(4)(C)(iii).
(B) Establishment of account.--
(i) In general.--Notwithstanding any other provision of
law, beginning in fiscal year 2002, from amounts made
available for school replacement under the construction
account of the Bureau, the Secretary is authorized to deposit
not more than $30,000,000 each fiscal year into a tribal
school modernization escrow account.
(ii) Payments.--The Secretary shall use any amounts
deposited in the escrow account under clauses (i) and (iii)
to make payments to trustees appointed and acting pursuant to
paragraph (4) or to make payments described in paragraph
(2)(D).
(iii) Transfers of excess proceeds.--Excess proceeds held
under any trust agreement that are not needed for any of the
purposes described in clauses (iii) and (v) of paragraph
(4)(C) shall be transferred, from time to time, by the
trustee for deposit into the tribal school modernization
escrow account.
(7) Limitations.--
(A) Obligation to repay.--Notwithstanding any other
provision of law, the principal amount on any qualified
tribal school modernization bond issued under this subsection
shall be repaid only to the extent of any escrowed funds
furnished under paragraph (4)(C)(iii). No qualified tribal
school modernization bond issued by a tribe shall be an
obligation of, nor shall payment of the principal thereof be
guaranteed by, the United States.
(B) Land and facilities.--Any land or facilities purchased
or improved with amounts derived from qualified tribal school
modernization bonds issued under this subsection shall not be
mortgaged or used as collateral for such bonds.
(8) Sale of bonds.--Qualified tribal school modernization
bonds may be sold at a purchase price equal to, in excess of,
or at a discount from the par amount thereof.
(9) Treatment of trust agreement earnings.--Any amounts
earned through the investment of funds under the control of a
trustee under any trust agreement described in paragraph (4)
shall not be subject to Federal income tax.
(10) Investment of sinking funds.--Any sinking fund
established for the purpose of the payment of principal on a
qualified tribal school modernization bond shall be invested
in obligations issued by or guaranteed by the United States
or in such other assets as the Secretary of the Treasury may
by regulation allow.
(c) Expansion of Incentives for Tribal Schools.--Chapter 1
of the Internal Revenue Code of 1986 (as amended by section
322) is further amended by adding at the end the following
new subchapter:

``Subchapter XI--Tribal School Modernization Provisions

``Sec. 1400J. Credit to holders of qualified tribal school
modernization bonds.

``SEC. 1400J. CREDIT TO HOLDERS OF QUALIFIED TRIBAL SCHOOL
MODERNIZATION BONDS.

``(a) Allowance of Credit.--In the case of a taxpayer who
holds a qualified tribal school modernization bond on a
credit allowance date of such bond which occurs during the
taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for such taxable year an amount
equal to the sum of the credits determined under subsection
(b) with respect to credit allowance dates during such year
on which the taxpayer holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance
date for a qualified tribal school modernization bond is 25
percent of the annual credit determined with respect to such
bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified tribal school modernization bond is
the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(1), the applicable credit rate with respect to an issue is
the rate equal to an average market yield (as of the date of
sale of the issue) on outstanding long-term corporate
obligations (as determined by the Secretary).
``(4) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period
ending on a credit allowance date, the amount of the credit
determined under this subsection with respect to such credit
allowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-month
period during which the bond is outstanding. A similar rule
shall apply when the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under part IV of
subchapter A (other than subpart C thereof, relating to
refundable credits).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such taxable year.
``(d) Qualified Tribal School Modernization Bond; Other
Definitions.--For purposes of this section--
``(1) Qualified tribal school modernization bond.--
``(A) In general.--The term `qualified tribal school
modernization bond' means, subject to subparagraph (B), any
bond issued as part of an issue under section 2(c) of the
Indian School Construction Act, as in effect on the date of
the enactment of this section, if--
``(i) 95 percent or more of the proceeds of such issue are
to be used for the construction, rehabilitation, or repair of
a school facility funded by the Bureau of Indian Affairs of
the Department of the Interior or for the acquisition of land
on which such a facility is to be constructed with part of
the proceeds of such issue,
``(ii) the bond is issued by a tribe,
``(iii) the issuer designates such bond for purposes of
this section, and
``(iv) the term of each bond which is part of such issue
does not exceed 15 years.
``(B) National limitation on amount of bonds designated.--
``(i) National limitation.--There is a national qualified
tribal school modernization bond limitation for each calendar
year. Such limitation is--

``(I) $200,000,000 for 2002,
``(II) $200,000,000 for 2003, and
``(III) zero after 2003.

``(ii) Allocation of limitation.--The national qualified
tribal school modernization

[[Page S142]]

bond limitation shall be allocated to tribes by the Secretary
of the Interior subject to the provisions of section 2 of the
Indian School Construction Act, as in effect on the date of
the enactment of this section.
``(iii) Designation subject to limitation amount.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (d)(1)
with respect to any tribe shall not exceed the limitation
amount allocated to such government under clause (ii) for
such calendar year.
``(iv) Carryover of unused limitation.--If for any calendar
year--

``(I) the limitation amount under this subparagraph,
exceeds
``(II) the amount of qualified tribal school modernization
bonds issued during such year,

the limitation amount under this subparagraph for the
following calendar year shall be increased by the amount of
such excess. The preceding sentence shall not apply if such
following calendar year is after 2010.
``(2) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(3) Bond.--The term `bond' includes any obligation.
``(4) Tribe.--The term ``tribe'' has the meaning given the
term ``Indian tribal government'' by section 7701(a)(40),
including the application of section 7871(d). Such term
includes any consortium of tribes approved by the Secretary
of the Interior.
``(e) Credit Included in Gross Income.--Gross income
includes the amount of the credit allowed to the taxpayer
under this section (determined without regard to subsection
(c)) and the amount so included shall be treated as interest
income.
``(f) Bonds Held by Regulated Investment Companies.--If any
qualified tribal school modernization bond is held by a
regulated investment company, the credit determined under
subsection (a) shall be allowed to shareholders of such
company under procedures prescribed by the Secretary.
``(g) Credits May Be Stripped.--Under regulations
prescribed by the Secretary--
``(1) In general.--There may be a separation (including at
issuance) of the ownership of a qualified tribal school
modernization bond and the entitlement to the credit under
this section with respect to such bond. In case of any such
separation, the credit under this section shall be allowed to
the person who on the credit allowance date holds the
instrument evidencing the entitlement to the credit and not
to the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation
described in paragraph (1), the rules of section 1286 shall
apply to the qualified tribal school modernization bond as if
it were a stripped bond and to the credit under this section
as if it were a stripped coupon.
``(h) Treatment for Estimated Tax Purposes.--Solely for
purposes of sections 6654 and 6655, the credit allowed by
this section to a taxpayer by reason of holding a qualified
tribal school modernization bonds on a credit allowance date
shall be treated as if it were a payment of estimated tax
made by the taxpayer on such date.
``(i) Credit May Be Transferred.--Nothing in any law or
rule of law shall be construed to limit the transferability
of the credit allowed by this section through sale and
repurchase agreements.
``(j) Credit Treated as Allowed Under Part IV of Subchapter
A.--For purposes of subtitle F, the credit allowed by this
section shall be treated as a credit allowable under part IV
of subchapter A of this chapter.
``(k) Reporting.--Issuers of qualified tribal school
modernization bonds shall submit reports similar to the
reports required under section 149(e).''.
(d) Additional Provisions.--
(1) Sovereign immunity.--This section and the amendments
made by this section shall not be construed to impact, limit,
or affect the sovereign immunity of the Federal Government or
any State or tribal government.
(2) Application.--This section and the amendments made by
this section shall take effect on the date of the enactment
of this Act with respect to bonds issued after December 31,
2001, regardless of the status of regulations promulgated
thereunder.

CHAPTER 3--21ST CENTURY COMMUNITY LEARNING CENTERS

SEC. 331. REAUTHORIZATION.

Section 10907 (20 U.S.C. 8247) is amended by striking
``$20,000,000 for fiscal year 1995'' and all that follows
through the period and inserting ``$1,000,000,000 for each of
fiscal years 2002 through 2006, to carry out this part.''.

CHAPTER 4--ENHANCEMENT OF BASIC LEARNING SKILLS

SEC. 341. REDUCING CLASS SIZE.

Title X (20 U.S.C. 8001 et seq.), as amended by section
311, is further amended by adding at the end the following:

``PART M--CLASS SIZE REDUCTION

``SEC. 10998. GRANTS FOR CLASS SIZE REDUCTION.

``(a) In General.--From the amount appropriated for a
fiscal year under subsection (i), the Secretary of
Education--
``(1) shall make available 1 percent of such amount to the
Secretary of the Interior (on behalf of the Bureau of Indian
Affairs) and the outlying areas for activities under this
section; and
``(2) shall allocate the remainder by providing each State
the same percentage of that remainder as it received of the
funds allocated to States under section 307(a)(2) of the
Department of Education Appropriations Act, 1999.
``(b) Allocation of Funds.--
``(1) In general.--Each State that receives funds under
this section shall distribute 100 percent of such funds to
local educational agencies, of which--
``(A) 80 percent of such amount shall be allocated to such
local educational agencies in proportion to the number of
children, aged 5 to 17, who reside in the school district
served by such local educational agency from families with
incomes below the poverty line (as defined by the Office of
Management and Budget and revised annually in accordance with
section 673(2) of the Community Services Block Grant Act (42
U.S.C. 9902(2))) applicable to a family of the size involved
for the most recent fiscal year for which satisfactory data
are available compared to the number of such individuals who
reside in the school districts served by all the local
educational agencies in the State for that fiscal year; and
``(B) 20 percent of such amount shall be allocated to such
local educational agencies in accordance with the relative
enrollments of children, aged 5 to 17, in public and private
nonprofit elementary and secondary schools within the
boundaries of such agencies.
``(2) Exception.--Notwithstanding paragraph (1), if the
award to a local educational agency under this section is
less than the starting salary for a new fully qualified
teacher in that agency, who is certified within the State
(which may include certification through State or local
alternative routes), has a baccalaureate degree, and
demonstrates the general knowledge, teaching skills, and
subject matter knowledge required to teach in his or her
content areas, that agency may use funds under this section
to--
``(A) help pay the salary of a full- or part-time teacher
hired to reduce class size, which may be in combination with
other Federal, State, or local funds; or
``(B) pay for activities described in subsection
(c)(2)(A)(iii) which may be related to teaching in smaller
classes.
``(c) Use of Funds.--
``(1) Purpose, intent, and general use.--The basic purpose
and intent of this section is to reduce class size with fully
qualified teachers. Each local educational agency that
receives funds under this section shall use such funds to
carry out effective approaches to reducing class size with
fully qualified teachers who are certified within the State,
including teachers certified through State or local
alternative routes, and who demonstrate competency in the
areas in which they teach, to improve educational achievement
for both regular and special needs children, with particular
consideration given to reducing class size in the early
elementary grades for which some research has shown class
size reduction is most effective.
``(2) Specific uses.--
``(A) In general.--Each such local educational agency may
use funds under this section for--
``(i) recruiting (including through the use of signing
bonuses, and other financial incentives), hiring, and
training fully qualified regular and special education
teachers (which may include hiring special education teachers
to team-teach with regular teachers in classrooms that
contain both children with disabilities and non-disabled
children) and teachers of special-needs children who are
certified within the State, including teachers certified
through State or local alternative routes, have a
baccalaureate degree and demonstrate the general knowledge,
teaching skills, and subject matter knowledge required to
teach in their content areas;
``(ii) testing new teachers for academic content knowledge
and to meet State certification requirements that are
consistent with title II of the Higher Education Act of 1965;
and
``(iii) providing professional development (which may
include such activities as those described in section 2210,
opportunities for teachers to attend multi-week institutes,
such as those made available during the summer months that
provide intensive professional development in partnership
with local educational agencies and initiatives that promote
retention and mentoring), to teachers, including special
education teachers and teachers of special-needs children, in
order to meet the goal of ensuring that all instructional
staff have the subject matter knowledge, teaching knowledge,
and teaching skills necessary to teach effectively in the
content area or areas in which they provide instruction,
consistent with title II of the Higher Education Act of 1965.
``(B) Limitation.--
``(i) In general.--Except as provided under clause (ii), a
local educational agency may use not more than a total of 25
percent of the award received under this section for
activities described in clauses (ii) and (iii) of
subparagraph (A).
(ii) Exception.--A local educational agency in which 10
percent or more of teachers in elementary schools, as defined
by section 14101(14), have not met applicable State and local
certification requirements (including certification through
State or local alternative routes), or if such requirements
have been waived, may use more than 25 percent of the funds
it receives under this section for

[[Page S143]]

activities described in subparagraph (A)(iii) to help
teachers who are not certified by the State become certified,
including through State or local alternative routes, or to
help teachers affected by class size reduction who lack
sufficient content knowledge to teach effectively in the
areas they teach to obtain that knowledge, if the local
educational agency notifies the State educational agency of
the percentage of the funds that it will use for the purpose
described in this clause.
``(C) Use for further reductions.--A local educational
agency that has already reduced class size in the early
grades to 18 or less children (or has already reduced class
size to a State or local class size reduction goal that was
in effect on the day before the enactment of the Department
of Education Appropriations Act, 2000, if that State or local
educational agency goal is 20 or fewer children) may use
funds received under this section--
``(i) to make further class size reductions in grades
kindergarten through 3;
``(ii) to reduce class size in other grades; or
``(iii) to carry out activities to improve teacher quality
including professional development.
``(D) Professional development.--If a local educational
agency has already reduced class size in the early grades to
18 or fewer children and intends to use funds provided under
this section to carry out professional development
activities, including activities to improve teacher quality,
then the State shall make the award under subsection (b) to
the local educational agency.
``(3) Supplement not supplant.--Each such agency shall use
funds under this section only to supplement, and not to
supplant, State and local funds that, in the absence of such
funds, would otherwise be spent for activities under this
section.
``(4) Limitation.--No funds made available under this
section may be used to increase the salaries or provide
benefits, other than participation in professional
development and enrichment programs, to teachers who are not
hired under this section. Funds under this section may be
used to pay the salary of teachers hired under section 307 of
the Department of Education Appropriations Act, 1999, or
under section 310 of the Department of Education
Appropriations Act, 2000.
``(d) Reporting.--
``(1) In general.--Each State receiving funds under this
section shall report on activities in the State under this
section, consistent with section 6202(a)(2).
``(2) Reporting to parents.--Each State and local
educational agency receiving funds under this section shall
publicly report to parents on its progress in reducing class
size, increasing the percentage of classes in core academic
areas taught by fully qualified teachers who are certified
within the State and demonstrate competency in the content
areas in which they teach, and on the impact that hiring
additional highly qualified teachers and reducing class size,
has had, if any, on increasing student academic achievement.
``(3) Provision of qualification to parents.--Each school
receiving funds under this section shall provide to parents,
upon request, the professional qualifications of their
child's teacher.
``(e) Professional Development.--If a local educational
agency uses funds made available under this section for
professional development activities, the agency shall ensure
for the equitable participation of private nonprofit
elementary and secondary schools in such activities. Section
6402 shall not apply to other activities under this section.
``(f) Limitation on Administrative Costs.--A local
educational agency that receives funds under this section may
use not more than 3 percent of such funds for local
administrative costs.
``(g) Application.--Each local educational agency that
desires to receive funds under this section shall include in
the application required under section 6303 a description of
the agency's program to reduce class size by hiring
additional highly qualified teachers.
``(h) No use of Funds for Payments to Certain Teachers.--No
funds under this section may be used to pay the salary of any
teacher hired with funds under section 307 of the Department
of Education Appropriations Act, 1999, unless, by the start
of the 2001-2002 school year, the teacher is certified within
the State (which may include certification through State or
local alternative routes) and demonstrates competency in the
subject areas in which he or she teaches.
``(i) Notification.--Not later than 30 days after the date
of the enactment of this section, the Secretary shall provide
specific notification to each local educational agency
eligible to receive funds under this part regarding the
flexibility provided under subsection (c)(2)(B)(ii) and the
ability to use such funds to carry out activities described
in subsection (c)(2)(A)(iii).
``(j) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section--
``(1) $2,317,507,723 for fiscal year 2002;
``(2) $3,012,015,447 for fiscal year 2003;
``(3) $3,706,523,170 for fiscal year 2004; and
``(4) $4,401,030,983 for fiscal year 2005.''.

SEC. 342. READING EXCELLENCE.

Part C of title II (20 U.S.C. 6661 et seq.) is amended--
(1) by inserting after the part heading the following:

``SEC. 2250. SHORT TITLE.

``This part may be cited as the `Reading Excellence
Act'.'';
(2) in section 2253(a) (20 U.S.C. 6661b(a)) by adding at
the end the following:
``(3) Amount of Grants.--From the amount appropriated for
each fiscal year under section 2260(a), the Secretary shall
award to each State educational agency a grant under this
part in an amount that is in proportion to the amount the
State received under part A of title I for the previous
fiscal year.'';
(3) in section 2255 (20 U.S.C. 6661d) by adding at the end
the following:
``(f) Other Uses.--With respect to a State educational
agency that has used amounts received under a grant under
section 2253 in a previous fiscal year to sufficiently serve
schools described in subsection (a)(1), such State agency may
use amounts received under such a grant in succeeding fiscal
years to provide subgrants to local educational agencies to
assist other schools that may receive assistance under title
I.''; and
(4) in section 2260(a) (20 U.S.C. 6661i(a)) by adding at
the end the following:
``(3) Other fiscal years.--There are authorized to be
appropriated to carry out this part and section 1202(c)--
``(A) $500,000,000 for fiscal year 2002;
``(B) $600,000,000 for fiscal year 2003;
``(C) $700,000,000 for fiscal year 2004;
``(D) $850,000,000 for fiscal year 2005; and
``(E) $1,000,000,000 for fiscal year 2006.''.

SEC. 343. TUTORIAL ASSISTANCE GRANTS.

(a) In General.--Section 2256 (20 U.S.C. 6661e) is
repealed.
(b) Conforming Amendments.--Part C of title II (20 U.S.C.
6661 et seq.) is amended--
(1) in section 2253 (20 U.S.C. 6661b)--
(A) in subsection (a)(1), by striking ``sections 2254
through 2256'' and inserting ``sections 2254 and 2255''; and
(B) in subsection (b)(2)--
(i) in subparagraph (A)(ii), by striking ``sections 2255
and 2256'' and inserting ``section 2255'';
(ii) in subparagraph (B)--

(I) in clause (ii), by striking ``section 2255 and 2256''
and inserting ``section 2255''; and
(II) in clause (vi), , by striking ``sections 2255 and
2256'' and inserting ``section 2255''; and

(iii) in subparagraph (E)(iii)--

(I) by striking ``sections 2255(a)(1) and 2256(a)(1)'' and
inserting ``section 2255(a)(1)''; and
(II) by striking ``sections 2255 and 2256'' and inserting
``section 2255'';

(2) in section 2254 (20 U.S.C. 6661c)--
(A) in paragraph (1)--
(i) by striking ``(excluding section 2256)''; and
(ii) by striking ``; and'' and inserting a period;
(B) by striking ``2253--'' and all that follows through
``shall use'' in paragraph (1) and inserting ``2253 shall
use''; and
(C) by striking in paragraph (2); and
(3) in section 2258(a) (20 U.S.C. 6661h(a)), by striking
``or 2256''.

CHAPTER 5--INTEGRATION OF TECHNOLOGY INTO THE CLASSROOM

SEC. 351. SHORT TITLE.

This chapter may be cited as the ``Training for Technology
Act of 2001''.

SEC. 352. LOCAL APPLICATIONS FOR SCHOOL TECHNOLOGY RESOURCE
GRANTS.

Section 3135 (20 U.S.C. 6845) is amended--
(1) in the first sentence, by inserting ``(a) In General.--
'' before ``Each local educational agency'';
(2) in subsection (a) (as so redesignated)--
(A) in paragraph (3)(B), by striking ``; and'' and
inserting a semicolon;
(B) in paragraph (4), by striking the period and inserting
``; and''; and
(C) by inserting after paragraph (4) the following:
``(5) demonstrate the manner in which the local educational
agency will utilize at least 30 percent of the amounts
provided to the agency under this subpart in each fiscal year
to provide for in-service teacher training, or that the
agency is using at least 30 percent of its total technology
funding available to the agency from all sources (including
Federal, State, and local sources) to provide in-service
teacher training.'';
(3) by redesignating subsections (d) and (e) as subsections
(b) and (c) respectively; and
(4) in subsection (c) (as so redesignated), by striking
``subsection (e)'' and inserting ``subsection (a)''.

SEC. 353. TEACHER PREPARATION.

Part A of title III (20 U.S.C. 6811 et seq.) is amended by
adding at the end the following:

``Subpart 5--Preparing Tomorrow's Teachers To Use Technology

``SEC. 3161. PURPOSE; PROGRAM AUTHORITY.

``(a) Purpose.--It is the purpose of this subpart to assist
consortia of public and private entities in carrying out
programs that prepare prospective teachers to use advanced
technology to foster learning environments conducive to
preparing all students to achieve to challenging State and
local content and student performance standards.
``(b) Program Authority.--
``(1) In general.--The Secretary is authorized, through the
Office of Educational Technology, to award grants, contracts,
or cooperative agreements on a competitive basis to eligible
applicants in order to assist them in developing or
redesigning teacher preparation programs to enable
prospective teachers to use technology effectively in their
classrooms.
``(2) Period of award.--The Secretary may award grants,
contracts, or cooperative agreements under this subpart for a
period of not more than 5 years.

[[Page S144]]

``SEC. 3162. ELIGIBILITY.

``(a) Eligible Applicants.--In order to receive an award
under this subpart, an applicant shall be a consortium that
includes--
``(1) at least 1 institution of higher education that
offers a baccalaureate degree and prepares teachers for their
initial entry into teaching;
``(2) at least 1 State educational agency or local
educational agency; and
``(3) 1 or more of the following entities:
``(A) an institution of higher education (other than the
institution described in paragraph (1));
``(B) a school or department of education at an institution
of higher education;
``(C) a school or college of arts and sciences at an
institution of higher education;
``(D) a professional association, foundation, museum,
library, for-profit business, public or private nonprofit
organization, community-based organization, or other entity
with the capacity to contribute to the technology-related
reform of teacher preparation programs.
``(b) Application Requirements.--In order to receive an
award under this subpart, an eligible applicant shall submit
an application to the Secretary at such time, and containing
such information, as the Secretary may require. Such
application shall include--
``(1) a description of the proposed project, including how
the project would ensure that individuals participating in
the project would be prepared to use technology to create
learning environments conducive to preparing all students,
including girls and students who have economic and
educational disadvantages, to achieve to challenging State
and local content and student performance standards;
``(2) a demonstration of--
``(A) the commitment, including the financial commitment,
of each of the members of the consortium; and
``(B) the active support of the leadership of each member
of the consortium for the proposed project;
``(3) a description of how each member of the consortium
would be included in project activities;
``(4) a description of how the proposed project would be
continued once the Federal funds awarded under this subpart
end; and
``(5) a plan for the evaluation of the program, which shall
include benchmarks to monitor progress toward specific
project objectives.
``(c) Matching Requirements.--
``(1) In general.--The Federal share of the cost of any
project funded under this subpart shall not exceed 50
percent. Except as provided in paragraph (2), the non-Federal
share of such project may be in cash or in kind, fairly
evaluated, including services.
``(2) Acquisition of equipment.--Not more than 10 percent
of the funds awarded for a project under this subpart may be
used to acquire equipment, networking capabilities, or
infrastructure, and the non-Federal share of the cost of any
such acquisition shall be in cash.

``SEC. 3163. USE OF FUNDS.

``(a) Required Uses.--A recipient shall use funds under
this subpart for--
``(1) creating programs that enable prospective teachers to
use advanced technology to create learning environments
conducive to preparing all students, including girls and
students who have economic and educational disadvantages, to
achieve to challenging State and local content and student
performance standards; and
``(2) evaluating the effectiveness of the project.
``(b) Permissible Uses.--A recipient may use funds under
this subpart for activities, described in its application,
that carry out the purposes of this subpart, such as--
``(1) developing and implementing high-quality teacher
preparation programs that enable educators to--
``(A) learn the full range of resources that can be
accessed through the use of technology;
``(B) integrate a variety of technologies into the
classroom in order to expand students' knowledge;
``(C) evaluate educational technologies and their potential
for use in instruction; and
``(D) help students develop their own technical skills and
digital learning environments;
``(2) developing alternative teacher development paths that
provide elementary schools and secondary schools with well-
prepared, technology-proficient educators;
``(3) developing performance-based standards and aligned
assessments to measure the capacity of prospective teachers
to use technology effectively in their classrooms;
``(4) providing technical assistance to other teacher
preparation programs;
``(5) developing and disseminating resources and
information in order to assist institutions of higher
education to prepare teachers to use technology effectively
in their classrooms; and
``(6) subject to section 3162(c)(2), acquiring equipment,
networking capabilities, and infrastructure to carry out the
project.

``SEC. 3164. AUTHORIZATION OF APPROPRIATIONS.

``For purposes of carrying out this subpart, there is
authorized to be appropriated $150,000,000 for fiscal year
2002, and such sums as may be necessary for each of the 4
succeeding fiscal years.''.

SEC. 354. PROFESSIONAL DEVELOPMENT.

Section 3141(b)(2)(A) (20 U.S.C. 6861(b)(2)(A)) is
amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii)(V), by adding ``and'' after the
semicolon; and
(2) by adding at the end the following:
``(iii) the provision of incentives, including bonus
payments, to recognized educators who achieve the National
Education Technology Standards, or an information technology
certification that is directly related to the curriculum or
content area in which the teacher provides instruction;''.

TITLE IV--INDIVIDUALS WITH DISABILITIES EDUCATION ACT

SEC. 401. FULL FUNDING OF IDEA.

(a) Full Funding.--In additional to any amounts otherwise
appropriated, there are appropriated to carry out part B of
the Individuals with Disabilities Education Act (20 U.S.C.
1411 et seq.), $2,000,000,000 for fiscal year 2002.
(b) Sense of the Senate.--
(1) Findings.--The Senate makes the following findings:
(A) Before the Individuals with Disabilities Education Act
(20 U.S.C. 1400 et seq.) (referred to in this subsection as
``IDEA'') was enacted in 1975, as many as 4,000,000 children
were denied appropriate educational services. Few disabled
preschoolers received services. 1,000,000 children with
disabilities were excluded from public school. Courts ruled
this practice was unconstitutional.
(B) States asked the Federal Government to help them fund
educational services to disabled children. Congress responded
by enacting IDEA to ensure that disabled children received
appropriate services and to provide financial support to the
States for providing these services.
(C) Since the enactment of IDEA, schools have been serving
disabled children, helping them develop their skills and
abilities and go on to lead productive and independent lives.
Today, IDEA serves 5,400,000 children with disabilities from
birth through age 21. Every State offers public education and
early intervention services for children with disabilities.
Fewer than 6,000 disabled children now live in institutional
settings away from their families, compared to 95,000 such
children in 1969. The number of disabled students completing
high school with a diploma or certificate has increased by 10
percent in the last decade. The number of students with
disabilities entering higher education has more than tripled
since the implementation of IDEA.
(D) When IDEA was enacted, the legislation included a goal
to provide 40 percent of the cost of providing services for
these students.
(E) The cost of providing special education has increased
significantly for school districts across the country. The
Federal Government currently provides about 15 percent of the
national average per pupil expenditure for IDEA students.
(F) IDEA will be up for reauthorization for fiscal year
2003.
(2) Sense of the Senate.--It is the sense of the Senate
that--
(A) when Congress reauthorizes the IDEA program, it should
ensure that the Federal Government will reach the goal of
providing 40 percent of the national average per pupil
expenditure under IDEA; and
(B) disabled children will benefit from efforts to help
schools hire and train high quality teachers and principals,
reduce class size, renovate overcrowded and crumbling
buildings, integrate technology into the classroom,
strengthen early literacy programs, and increase the
availability of after-school learning opportunities.

TITLE V--MAKING HIGHER EDUCATION MORE AFFORDABLE

SEC. 501. INCREASE IN MAXIMUM PELL GRANT.

(a) Findings.--Congress makes the following findings:
(1) A college education has become increasingly important,
not just to the individual beneficiary, but to the nation as
a whole. The growth and continued expansion of the nation's
economy is heavily dependent on an educated and highly
skilled workforce.
(2) The opportunity to gain a college education also is
important to the nation as a means to help advance the
American ideals of progress and equality.
(3) The Federal Government plays an invaluable role in
making student financial aid available to ensure that
qualified students are able to attend college, regardless of
their financial means. Since the inception of the Pell Grant
program in 1973, nearly 80,000,000 grants have helped low-
and middle-income students go to college, enrich their lives,
and become productive members of society.
(4) Nationwide, almost 70 percent of high school graduates
continue on to higher education. This degree of college
participation would not exist without the Federal investment
in student aid, especially the Pell Grant program. Nearly 25
percent of low- and middle-income students receive some
amount of Pell Grant funding.
(5) In the next 10 years, the number of undergraduate
students enrolled in the nation's colleges and universities
will increase by 11 percent to more than 11,000,000 students.
Many of these students will be the first in their families to
attend college. One in 5 of these students will be from
families with incomes below the poverty level. The continued
investment in the Pell Grant program is essential if college
is to remain an achievable part of the American dream.

[[Page S145]]

(6) Increasing the maximum Pell Grant to $4,700 would allow
approximately 430,000 additional students to benefit from the
program.
(7) Increasing the maximum Pell Grant to $4,700 would
result in an $800 increase in the average grant award.
(8) Because Pell Grant recipients are more likely to
graduate with student loan debt and to amass more debt than
other student borrowers, increasing the maximum Pell Grant to
$4,700 by fiscal year 2004 will help remedy this disparity.
(b) Sense of the Senate.--It is the sense of the Senate the
maximum Pell Grant should be increased to $4,700.

SEC. 502. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

(a) Deduction Allowed.--Part VII of subchapter B of chapter
1 of the Internal Revenue Code of 1986 (relating to
additional itemized deductions for individuals) is amended by
redesignating section 222 as section 223 and by inserting
after section 221 the following:

``SEC. 222. HIGHER EDUCATION EXPENSES.

``(a) Allowance of Deduction.--
``(1) In general.--In the case of an individual, there
shall be allowed as a deduction an amount equal to the
applicable dollar amount of the qualified higher education
expenses paid by the taxpayer during the taxable year.
``(2) Applicable dollar amount.--The applicable dollar
amount for any taxable year shall be determined as follows:

Applicable
``Taxable year: dollar amount:
2002......................................................$4,000 ....

2003......................................................$8,000 ....

2004 and thereafter......................................$12,000.....

``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount which would (but for this
subsection) be taken into account under subsection (a) shall
be reduced (but not below zero) by the amount determined
under paragraph (2).
``(2) Amount of reduction.--The amount determined under
this paragraph equals the amount which bears the same ratio
to the amount which would be so taken into account as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted gross income for
such taxable year, over
``(ii) $62,450 ($104,050 in the case of a joint return,
$89,150 in the case of a return filed by a head of household,
and $52,025 in the case of a return by a married individual
filing separately), bears to
``(B) $15,000.
``(3) Modified adjusted gross income.--For purposes of this
subsection, the term `modified adjusted gross income' means
the adjusted gross income of the taxpayer for the taxable
year determined--
``(A) without regard to this section and sections 911, 931,
and 933, and
``(B) after the application of sections 86, 135, 219, 220,
and 469.
For purposes of the sections referred to in subparagraph (B),
adjusted gross income shall be determined without regard to
the deduction allowed under this section.
``(c) Qualified Higher Education Expenses.--For purposes of
this section--
``(1) Qualified higher education expenses.--
``(A) In general.--The term `qualified higher education
expenses' means tuition and fees charged by an educational
institution and required for the enrollment or attendance
of--
``(i) the taxpayer,
``(ii) the taxpayer's spouse,
``(iii) any dependent of the taxpayer with respect to whom
the taxpayer is allowed a deduction under section 151, or
``(iv) any grandchild of the taxpayer,
as an eligible student at an institution of higher education.
``(B) Eligible courses.--Amounts paid for qualified higher
education expenses of any individual shall be taken into
account under subsection (a) only to the extent such
expenses--
``(i) are attributable to courses of instruction for which
credit is allowed toward a baccalaureate degree by an
institution of higher education or toward a certificate of
required course work at a vocational school, and
``(ii) are not attributable to any graduate program of such
individual.
``(C) Exception for nonacademic fees.--Such term does not
include any student activity fees, athletic fees, insurance
expenses, or other expenses unrelated to a student's academic
course of instruction.
``(D) Eligible student.--For purposes of subparagraph (A),
the term `eligible student' means a student who--
``(i) meets the requirements of section 484(a)(1) of the
Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in
effect on the date of the enactment of this section, and
``(ii) is carrying at least one-half the normal full-time
work load for the course of study the student is pursuing, as
determined by the institution of higher education.
``(E) Identification requirement.--No deduction shall be
allowed under subsection (a) to a taxpayer with respect to an
eligible student unless the taxpayer includes the name, age,
and taxpayer identification number of such eligible student
on the return of tax for the taxable year.
``(2) Institution of higher education.--The term
`institution of higher education' means an institution
which--
``(A) is described in section 481 of the Higher Education
Act of 1965 (20 U.S.C. 1088), as in effect on the date of the
enactment of this section, and
``(B) is eligible to participate in programs under title IV
of such Act.
``(d) Special Rules.--
``(1) No double benefit.--
``(A) In general.--No deduction shall be allowed under
subsection (a) for any expense for which a deduction is
allowable to the taxpayer under any other provision of this
chapter unless the taxpayer irrevocably waives his right to
the deduction of such expense under such other provision.
``(B) Denial of deduction if credit elected.--No deduction
shall be allowed under subsection (a) for a taxable year with
respect to the qualified higher education expenses of an
individual if the taxpayer elects to have section 25A apply
with respect to such individual for such year.
``(C) Dependents.--No deduction shall be allowed under
subsection (a) to any individual with respect to whom a
deduction under section 151 is allowable to another taxpayer
for a taxable year beginning in the calendar year in which
such individual's taxable year begins.
``(D) Coordination with exclusions.--A deduction shall be
allowed under subsection (a) for qualified higher education
expenses only to the extent the amount of such expenses
exceeds the amount excludable under section 135 or 530(d)(2)
for the taxable year.
``(2) Limitation on taxable year of deduction.--
``(A) In general.--A deduction shall be allowed under
subsection (a) for qualified higher education expenses for
any taxable year only to the extent such expenses are in
connection with enrollment at an institution of higher
education during the taxable year.
``(B) Certain prepayments allowed.--Subparagraph (A) shall
not apply to qualified higher education expenses paid during
a taxable year if such expenses are in connection with an
academic term beginning during such taxable year or during
the first 3 months of the next taxable year.
``(3) Adjustment for certain scholarships and veterans
benefits.--The amount of qualified higher education expenses
otherwise taken into account under subsection (a) with
respect to the education of an individual shall be reduced
(before the application of subsection (b)) by the sum of the
amounts received with respect to such individual for the
taxable year as--
``(A) a qualified scholarship which under section 117 is
not includable in gross income,
``(B) an educational assistance allowance under chapter 30,
31, 32, 34, or 35 of title 38, United States Code, or
``(C) a payment (other than a gift, bequest, devise, or
inheritance within the meaning of section 102(a)) for
educational expenses, or attributable to enrollment at an
eligible educational institution, which is exempt from income
taxation by any law of the United States.
``(4) No deduction for married individuals filing separate
returns.--If the taxpayer is a married individual (within the
meaning of section 7703), this section shall apply only if
the taxpayer and the taxpayer's spouse file a joint return
for the taxable year.
``(5) Nonresident aliens.--If the taxpayer is a nonresident
alien individual for any portion of the taxable year, this
section shall apply only if such individual is treated as a
resident alien of the United States for purposes of this
chapter by reason of an election under subsection (g) or (h)
of section 6013.
``(6) Regulations.--The Secretary may prescribe such
regulations as may be necessary or appropriate to carry out
this section, including regulations requiring recordkeeping
and information reporting.''.
(b) Deduction Allowed in Computing Adjusted Gross Income.--
Section 62(a) of the Internal Revenue Code of 1986 is amended
by inserting after paragraph (17) the following:
``(18) Higher education expenses.--The deduction allowed by
section 222.''.
(c) Conforming Amendment.--The table of sections for part
VII of subchapter B of chapter 1 of the Internal Revenue Code
of 1986 is amended by striking the item relating to section
222 and inserting the following:

``Sec. 222. Higher education expenses.
``Sec. 223. Cross reference.''.
(d) Effective Date.--The amendments made by this section
shall apply to payments made in taxable years beginning after
December 31, 2001.
______

By Mr. DASCHLE (for himself, Mr. Baucus, Mr. Dorgan, Mr. Reid,
Mr. Durbin, Mr. Rockfeller, Mrs. Clinton, Mr. Kerry, Mr.
Schumer, Mr. Dodd, and Mr. Conrad):
S. 9. A bill to amend the Internal Revenue Code of 1986 to provide
tax relief, and for other purposes; to the Committee on Finance.

working family tax relief act of 2001

Mr. DASCHLE. 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:

[[Page S146]]

S. 9

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

SECTION 1. SHORT TITLE; ETC.

(a) Short Title.--This Act may be cited as the ``Working
Family Tax Relief Act of 2001''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; etc.

TITLE I--MARRIAGE PENALTY TAX RELIEF

Sec. 101. Optional separate calculations.

TITLE II--ESTATE TAX RELIEF

Sec. 201. Increase in amount of unified credit against estate and gift
taxes.
Sec. 202. Increase in qualified family-owned business interest
deduction amount.

TITLE III--TAX RELIEF FOR AFFORDABLE HIGHER EDUCATION

Sec. 301. Deduction for higher education expenses.

TITLE IV--TAX RELIEF FOR FAMILY CHOICES IN CHILD CARE

Subtitle A--Dependent Care Tax Credit

Sec. 401. Expanding the dependent care tax credit.
Sec. 402. Minimum credit allowed for stay-at-home parents.
Sec. 403. Credit made refundable.

Subtitle B--Incentives for Employer-Provided Child Care

Sec. 411. Allowance of credit for employer expenses for child care
assistance.

TITLE V--TAX RELIEF FOR LONG-TERM CARE GIVERS

Sec. 501. Long-term care tax credit.

TITLE VI--TAX RELIEF FOR WORKING FAMILIES

Sec. 601. Increased earned income tax credit for 2 or more qualifying
children.
Sec. 602. Simplification of definition of earned income.
Sec. 603. Simplification of definition of child dependent.
Sec. 604. Other modifications to earned income tax credit.

TITLE VII--TAX RELIEF FOR SELF-EMPLOYED INDIVIDUALS

Sec. 701. Deduction for health insurance costs of self-employed
individuals increased.

TITLE VIII--TAX RELIEF FOR EXPANDING PENSION AVAILABILITY

Sec. 801. Nonrefundable credit to certain individuals for elective
deferrals and IRA contributions.
Sec. 802. Credit for qualified pension plan contributions of small
employers.
Sec. 803. Credit for pension plan startup costs of small employers.

TITLE IX--TAX RELIEF FOR ADOPTIVE PARENTS

Sec. 901. Expansion of adoption credit.

TITLE I--MARRIAGE PENALTY TAX RELIEF

SEC. 101. OPTIONAL SEPARATE CALCULATIONS.

(a) In General.--Subpart B of part II of subchapter A of
chapter 61 (relating to income tax returns) is amended by
inserting after section 6013 the following new section:

``SEC. 6013A. COMBINED RETURN WITH SEPARATE RATES.

``(a) General Rule.--A husband and wife may make a combined
return of income taxes under subtitle A under which--
``(1) a separate taxable income is determined for each
spouse by applying the rules provided in this section, and
``(2) the tax imposed by section 1 is the aggregate amount
resulting from applying the separate rates set forth in
section 1(c) to each such taxable income.
``(b) Treatment of Income.--For purposes of this section--
``(1) earned income (within the meaning of section 911(d)),
and any income received as a pension or annuity which arises
from an employer-employee relationship, shall be treated as
the income of the spouse who rendered the services,
``(2) income from property shall be divided between the
spouses in accordance with their respective ownership rights
in such property (equally in the case of property held
jointly by the spouses), and
``(3) any exclusion from income shall be allowable to the
spouse with respect to whom the income would be otherwise
includible.
``(c) Treatment of Deductions.--For purposes of this
section--
``(1) except as otherwise provided in this subsection, the
deductions described in section 62(a) shall be allowed to the
spouse treated as having the income to which such deductions
relate,
``(2) the deductions allowable by section 151(b) (relating
to personal exemptions for taxpayer and spouse) shall be
determined by allocating 1 personal exemption to each spouse,
``(3) section 63 shall be applied as if such spouses were
not married, except that the election whether or not to
itemize deductions shall be made jointly by both spouses and
apply to each, and
``(4) each spouse's share of all other deductions shall be
determined by multiplying the aggregate amount thereof by the
fraction--
``(A) the numerator of which is such spouse's gross income,
and
``(B) the denominator of which is the combined gross
incomes of the 2 spouses.
Any fraction determined under paragraph (4) shall be rounded
to the nearest percentage point.
``(d) Treatment of Credits.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2),
each spouse's share of credits allowed to both spouses shall
be determined by multiplying the aggregate amount of the
credits by the fraction determined under subsection (c)(4).
``(2) Earned income credit.--The earned income credit under
section 32 shall be determined as if each spouse were a
separate taxpayer, except that--
``(A) the earned income and the modified adjusted gross
income of each spouse shall be determined under the rules of
subsections (b), (c), and (e), and
``(B) qualifying children shall be allocated between
spouses proportionate to the earned income of each spouse
(rounded to the nearest whole number).
``(e) Special Rules Regarding Income Limitations.--
``(1) Exclusions and deductions.--For purposes of making a
determination under subsection (b) or (c), any eligibility
limitation with respect to each spouse shall be determined by
taking into account the limitation applicable to a single
individual.
``(2) Credits.--For purposes of making a determination
under subsection (d)(1), in no event shall an eligibility
limitation for any credit allowable to both spouses be less
than twice such limitation applicable to a single individual.
``(f) Special Rules for Alternative Minimum Tax.--If a
husband and wife elect the application of this section--
``(1) the tax imposed by section 55 shall be computed
separately for each spouse, and
``(2) for purposes of applying section 55--
``(A) the rules under this section for allocating items of
income, deduction, and credit shall apply, and
``(B) the exemption amount for each spouse shall be the
amount determined under section 55(d)(1)(B).
``(g) Treatment as Joint Return.--Except as otherwise
provided in this section or in the regulations prescribed
hereunder, for purposes of this title (other than sections 1
and 63(c)) a combined return under this section shall be
treated as a joint return.
``(h) Limitations.--
``(1) Phase-in of benefit.--
``(A) In general.--In the case of any taxable year
beginning before January 1, 2005, the tax imposed by section
1 or 55 shall in no event be less than the sum of--
``(i) the tax determined after the application of this
section, plus
``(ii) the applicable percentage of the excess of--

``(I) the tax determined without the application of this
section, over
``(II) the amount determined under clause (i).

``(B) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage shall be determined in
accordance with the following table:

``For taxable years beginning in: The applicable percentage is:
2003..........................................................50 ....

2004..........................................................10.....

``(2) Limitation of benefit based on combined adjusted
gross income.--With respect to spouses electing the treatment
of this section for any taxable year, the tax under section 1
or 55 shall be increased by an amount which bears the same
ratio to the excess of the tax determined without the
application of this section over the tax determined after the
application of this section as the ratio (but not over 100
percent) of the excess of the combined adjusted gross income
of the spouses over $100,000 bears to $50,000.
``(i) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
this section.''.
(b) Unmarried Rate Made Applicable.--So much of subsection
(c) of section 1 as precedes the table is amended to read as
follows:
``(c) Separate or Unmarried Return Rate.--There is hereby
imposed on the taxable income of every individual (other than
a married individual (as defined in section 7703) filing a
return which is not a combined return under section 6013A, a
surviving spouse as defined in section 2(a), or a head of
household as defined in section 2(b)) a tax determined in
accordance with the following table:''.
(c) Penalty for Substantial Understatement of Income From
Property.--Section 6662 (relating to imposition of accuracy-
related penalty) is amended--
(1) by adding at the end of subsection (b) the following
new paragraph:
``(6) Any substantial understatement of income from
property under section 6013A.'', and
(2) by adding at the end the following new subsection:
``(i) Substantial Understatement of Income From Property
Under Section 6013A.--For purposes of this section, there is

[[Page S147]]

a substantial understatement of income from property under
section 6013A if--
``(1) the spouses electing the treatment of such section
for any taxable year transfer property from 1 spouse to the
other spouse in such year,
``(2) such transfer results in reduced tax liability under
such section, and
``(3) the significant purpose of such transfer is the
avoidance or evasion of Federal income tax.''.
(d) Protection of Social Security and Medicare Trust
Funds.--
(1) In general.--Nothing in this section shall be construed
to alter or amend the Social Security Act (or any regulation
promulgated under that Act).
(2) Transfers.--
(A) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
section has on the income and balances of the trust funds
established under sections 201 and 1817 of the Social
Security Act (42 U.S.C. 401 and 1395i).
(B) Transfer of funds.--If, under subparagraph (A), the
Secretary of the Treasury estimates that the enactment of
this section has a negative impact on the income and balances
of such trust funds, the Secretary shall transfer, not less
frequently than quarterly, from the general revenues of the
Federal Government an amount sufficient so as to ensure that
the income and balances of such trust funds are not reduced
as a result of the enactment of this section.
(e) Clerical Amendment.--The table of sections for subpart
B of part II of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6013 the
following new item:

``Sec. 6013A. Combined return with separate rates.''.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2002.

TITLE II--ESTATE TAX RELIEF

SEC. 201. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE
AND GIFT TAXES.

(a) In General.--The table contained in section 2010(c)
(relating to applicable credit amount) is amended to read as
follows:

``In the case of estates of decedentThe applicable exclusion amount is:
2002, 2003, 2004, 2005, and 2006......................$1,000,000
2007 and 2008.........................................$1,125,000
2009..................................................$1,500,000
2010 or thereafter.................................$2,000,000.''.

(b) Effective Date.--The amendment made by this section
shall apply to the estates of decedents dying, and gifts
made, after December 31, 2001.

SEC. 202. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS
INTEREST DEDUCTION AMOUNT.

(a) In General.--Paragraph (2) of section 2057(a) (relating
to family-owned business interests) is amended to read as
follows:
``(2) Maximum deduction.--
``(A) In general.--The deduction allowed by this section
shall not exceed the sum of--
``(i) the applicable deduction amount, plus
``(ii) in the case of a decedent described in subparagraph
(C), the applicable unused spousal deduction amount.
``(B) Applicable deduction amount.--For purposes of this
subparagraph (A)(i), the applicable deduction amount is
determined in accordance with the following table:

``In the case of estates of decedentThe applicable deduction amount is:
2002, 2003, 2004, 2005, and 2006.......................$1,375,000
2007 and 2008..........................................$1,625,000
2009...................................................$2,375,000
2010 or thereafter....................................$3,375,000.
``(C) Applicable unused spousal deduction amount.--With
respect to a decedent whose immediately predeceased spouse
died after December 31, 2001, and the estate of such
immediately predeceased spouse met the requirements of
subsection (b)(1), the applicable unused spousal deduction
amount for such decedent is equal to the excess of--
``(i) the applicable deduction amount allowable under this
section to the estate of such immediately predeceased spouse,
over
``(ii) the sum of--

``(I) the applicable deduction amount allowed under this
section to the estate of such immediately predeceased spouse,
plus
``(II) the amount of any increase in such estate's unified
credit under paragraph (3)(B) which was allowed to such
estate.''.

(b) Conforming Amendments.--Section 2057(a)(3)(B) is
amended--
(1) by striking ``$675,000'' both places it appears and
inserting ``the applicable deduction amount'', and
(2) by striking ``$675,000'' in the heading and inserting
``applicable deduction amount''.
(c) Effective Date.--The amendment made by this section
shall apply to the estates of decedents dying, and gifts
made, after December 31, 2001.

TITLE III--TAX RELIEF FOR AFFORDABLE HIGHER EDUCATION

SEC. 301. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

(a) Deduction Allowed.--Part VII of subchapter B of chapter
1 (relating to additional itemized deductions for
individuals) is amended by redesignating section 222 as
section 223 and by inserting after section 221 the following
new section:

``SEC. 222. HIGHER EDUCATION EXPENSES.

Applicable
``Taxable year: dollar amount:
2002......................................................$4,000 ....

2003......................................................$8,000 ....

2004 and thereafter......................................$12,000.....

[[Page S148]]

``(D) Coordination with exclusions.--A deduction shall be
allowed under subsection (a) for qualified higher education
expenses only to the extent the amount of such expenses
exceeds the amount excludable under section 135 or 530(d)(2)
for the taxable year.
``(2) Limitation on taxable year of deduction.--
``(A) In general.--A deduction shall be allowed under
subsection (a) for qualified higher education expenses for
any taxable year only to the extent such expenses are in
connection with enrollment at an institution of higher
education during the taxable year.
``(B) Certain prepayments allowed.--Subparagraph (A) shall
not apply to qualified higher education expenses paid during
a taxable year if such expenses are in connection with an
academic term beginning during such taxable year or during
the first 3 months of the next taxable year.
``(3) Adjustment for certain scholarships and veterans
benefits.--The amount of qualified higher education expenses
otherwise taken into account under subsection (a) with
respect to the education of an individual shall be reduced
(before the application of subsection (b)) by the sum of the
amounts received with respect to such individual for the
taxable year as--
``(A) a qualified scholarship which under section 117 is
not includable in gross income,
``(B) an educational assistance allowance under chapter 30,
31, 32, 34, or 35 of title 38, United States Code, or
``(C) a payment (other than a gift, bequest, devise, or
inheritance within the meaning of section 102(a)) for
educational expenses, or attributable to enrollment at an
eligible educational institution, which is exempt from income
taxation by any law of the United States.
``(4) No deduction for married individuals filing separate
returns.--If the taxpayer is a married individual (within the
meaning of section 7703), this section shall apply only if
the taxpayer and the taxpayer's spouse file a joint return
for the taxable year.
``(5) Nonresident aliens.--If the taxpayer is a nonresident
alien individual for any portion of the taxable year, this
section shall apply only if such individual is treated as a
resident alien of the United States for purposes of this
chapter by reason of an election under subsection (g) or (h)
of section 6013.
``(6) Regulations.--The Secretary may prescribe such
regulations as may be necessary or appropriate to carry out
this section, including regulations requiring recordkeeping
and information reporting.''.
(b) Deduction Allowed in Computing Adjusted Gross Income.--
Section 62(a) is amended by inserting after paragraph (17)
the following new paragraph:
``(18) Higher education expenses.--The deduction allowed by
section 222.''.
(c) Conforming Amendment.--The table of sections for part
VII of subchapter B of chapter 1 is amended by striking the
item relating to section 222 and inserting the following new
items:

TITLE IV--TAX RELIEF FOR FAMILY CHOICES IN CHILD CARE

Subtitle A--Dependent Care Tax Credit

SEC. 401. EXPANDING THE DEPENDENT CARE TAX CREDIT.

(a) Percentage of Employment-Related Expenses Determined by
Taxpayer Status.--Section 21(a)(2) (defining applicable
percentage) is amended to read as follows:
``(2) Applicable percentage defined.--For purposes of
paragraph (1), the term `applicable percentage' means--
``(A) except as provided in subparagraph (B), 50 percent
reduced (but not below 20 percent) by 1 percentage point for
each $1,000, or fraction thereof, by which the taxpayers's
adjusted gross income for the taxable year exceeds $30,000,
and
``(B) in the case of employment-related expenses described
in subsection (e)(11), 50 percent reduced (but not below
zero) by 1 percentage point for each $800, or fraction
thereof, by which the taxpayers's adjusted gross income for
the taxable year exceeds $30,000.''.
(b) Inflation Adjustment for Allowable Expenses.--Section
21(c) (relating to dollar limit on amount creditable) is
amended by striking ``The amount determined'' and inserting
``In the case of any taxable year beginning after 2002, each
dollar amount referred to in paragraphs (1) and (2) shall be
increased by an amount equal to such dollar amount multiplied
by the cost-of-living adjustment determined under section
1(f)(3) for the calendar year in which the taxable year
begins, by substituting `calendar year 2001' for `calendar
year 1992' in subparagraph (B) thereof. If any dollar amount
after being increased under the preceding sentence is not a
multiple of $10, such dollar amount shall be rounded to the
nearest multiple of $10. The amount determined''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2001.

SEC. 402. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS.

(a) In General.--Section 21(e) (relating to special rules)
is amended by adding at the end the following new paragraph:
``(11) Minimum credit allowed for stay-at-home parents.--
Notwithstanding subsection (d), in the case of any taxpayer
with one or more qualifying individuals described in
subsection (b)(1)(A) under the age of 1 at any time during
the taxable year, such taxpayer shall be deemed to have
employment-related expenses with respect to such qualifying
individuals in an amount equal to the sum of--
``(A) $90 for each month in such taxable year during which
at least one of such qualifying individuals is under the age
of 1, and
``(B) the amount of employment-related expenses otherwise
incurred for such qualifying individuals for the taxable year
(determined under this section without regard to this
paragraph).''.
(b) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2001.

SEC. 403. CREDIT MADE REFUNDABLE.

(a) In General.--Part IV of subchapter A of chapter 1
(relating to credits against tax) is amended--
(1) by redesignating section 35 as section 36, and
(2) by redesignating section 21 as section 35.
(b) Advance Payment of Credit.--Chapter 25 (relating to
general provisions relating to employment taxes) is amended
by inserting after section 3507 the following new section:

``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

``(a) General Rule.--Except as otherwise provided in this
section, every employer making payment of wages with respect
to whom a dependent care eligibility certificate is in effect
shall, at the time of paying such wages, make an additional
payment equal to such employee's dependent care advance
amount.
``(b) Dependent Care Eligibility Certificate.--For purposes
of this title, a dependent care eligibility certificate is a
statement furnished by an employee to the employer which--
``(1) certifies that the employee will be eligible to
receive the credit provided by section 35 for the taxable
year,
``(2) certifies that the employee reasonably expects to be
an applicable taxpayer for the taxable year,
``(3) certifies that the employee does not have a dependent
care eligibility certificate in effect for the calendar year
with respect to the payment of wages by another employer,
``(4) states whether or not the employee's spouse has a
dependent care eligibility certificate in effect,
``(5) states the number of qualifying individuals in the
household maintained by the employee, and
``(6) estimates the amount of employment-related expenses
for the calendar year.
``(c) Dependent Care Advance Amount.--
``(1) In general.--For purposes of this title, the term
`dependent care advance amount' means, with respect to any
payroll period, the amount determined--
``(A) on the basis of the employee's wages from the
employer for such period,
``(B) on the basis of the employee's estimated employment-
related expenses included in the dependent care eligibility
certificate, and
``(C) in accordance with tables provided by the Secretary.
``(2) Advance amount tables.--The tables referred to in
paragraph (1)(C) shall be similar in form to the tables
prescribed under section 3402 and, to the maximum extent
feasible, shall be coordinated with such tables and the
tables prescribed under section 3507(c).
``(d) Other Rules.--For purposes of this section, rules
similar to the rules of subsections (d) and (e) of section
3507 shall apply.
``(e) Definitions.--For purposes of this section, terms
used in this section which are defined in section 35 shall
have the respective meanings given such terms by section
35.''.
(c) Conforming Amendments.--
(1) Section 35(a)(1), as redesignated by subsection (a)(1),
is amended by striking ``chapter'' and inserting
``subtitle''.
(2) Section 35(e), as so redesignated and amended by
section 402(a), is amended by adding at the end the following
new paragraph:
``(12) Coordination with advance payments and minimum
tax.--Rules similar to the rules of subsections (g) and (h)
of section 32 shall apply for purposes of this section.''.
(3) Sections 23(f)(1) and 129(a)(2)(C) are each amended by
striking ``section 21(e)'' and inserting ``section 35(e)''.
(4) Section 129(b)(2) is amended by striking ``section
21(d)(2)'' and inserting ``section 35(d)(2)''.
(5) Section 129(e)(1) is amended by striking ``section
21(b)(2)'' and inserting ``section 35(b)(2)''.
(6) Section 213(e) is amended by striking ``section 21''
and inserting ``section 35''.
(7) Section 995(f)(2)(C) is amended by striking ``and 34''
and inserting ``34, and 35''.
(8) Section 6211(b)(4)(A) is amended by striking ``and 34''
and inserting ``, 34, and 35''.
(9) Section 6213(g)(2)(H) is amended by striking ``section
21'' and inserting ``section 35''.
(10) Section 6213(g)(2)(L) is amended by striking ``section
21, 24, or 32'' and inserting ``section 24, 32, or 35''.
(11) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by striking the item
relating to section 35 and inserting the following new items:

[[Page S149]]

``Sec. 35. Expenses for household and dependent care services necessary
for gainful employment.
``Sec. 36. Overpayments of tax.''.
(12) The table of sections for subpart A of such part IV is
amended by striking the item relating to section 21.
(13) The table of sections for chapter 25 is amended by
adding after the item relating to section 3507 the following
new item:

``Sec. 3507A. Advance payment of dependent care credit.''.
(14) Section 1324(b)(2) of title 31, United States Code, is
amended by striking ``or'' before ``enacted'' and by
inserting before the period at the end ``, or from section 35
of such Code''.
(d) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2001.

Subtitle B--Incentives for Employer-Provided Child Care

SEC. 411. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD
CARE ASSISTANCE.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits) is amended
by adding at the end the following new section:

``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.

``(a) In General.--For purposes of section 38, the
employer-provided child care credit determined under this
section for the taxable year is an amount equal to the sum
of--
``(1) 25 percent of the qualified child care expenditures,
and
``(2) 10 percent of the qualified child care resource and
referral expenditures,
of the taxpayer for such taxable year.
``(b) Dollar Limitation.--The credit allowable under
subsection (a) for any taxable year shall not exceed
$150,000.
``(c) Definitions.--For purposes of this section--
``(1) Qualified child care expenditure.--
``(A) In general.--The term `qualified child care
expenditure' means any amount paid or incurred--
``(i) to acquire, construct, rehabilitate, or expand
property--

``(I) which is to be used as part of a qualified child care
facility of the taxpayer,
``(II) with respect to which a deduction for depreciation
(or amortization in lieu of depreciation) is allowable, and
``(III) which does not constitute part of the principal
residence (within the meaning of section 121) of the taxpayer
or any employee of the taxpayer,

``(ii) for the operating costs of a qualified child care
facility of the taxpayer, including costs related to the
training of employees, to scholarship programs, and to the
providing of increased compensation to employees with higher
levels of child care training,
``(iii) under a contract with a qualified child care
facility to provide child care services to employees of the
taxpayer, or
``(iv) to reimburse an employee for expenses for child care
which enables the employee to be gainfully employed including
expenses related to--

``(I) day care and before and after school care,
``(II) transportation associated with such care, and
``(III) before and after school and holiday programs
including educational and recreational programs and camp
programs.

``(B) Fair market value.--The term `qualified child care
expenditures' shall not include expenses in excess of the
fair market value of such care.
``(2) Qualified child care facility.--
``(A) In general.--The term `qualified child care facility'
means a facility--
``(i) the principal use of which is to provide child care
assistance, and
``(ii) which meets the requirements of all applicable laws
and regulations of the State or local government in which it
is located, including the licensing of the facility as a
child care facility.
Clause (i) shall not apply to a facility which is the
principal residence (within the meaning of section 121) of
the operator of the facility.
``(B) Special rules with respect to a taxpayer.--A facility
shall not be treated as a qualified child care facility with
respect to a taxpayer unless--
``(i) enrollment in the facility is open to employees of
the taxpayer during the taxable year,
``(ii) if the facility is the principal trade or business
of the taxpayer, at least 30 percent of the enrollees of such
facility are dependents of employees of the taxpayer, and
``(iii) the use of such facility (or the eligibility to use
such facility) does not discriminate in favor of employees of
the taxpayer who are highly compensated employees (within the
meaning of section 414(q)).
``(3) Qualified child care resource and referral
expenditure.--The term `qualified child care resource and
referral expenditure' means any amount paid or incurred under
a contract to provide child care resource and referral
services to an employee of the taxpayer.
``(d) Recapture of Acquisition and Construction Credit.--
``(1) In general.--If, as of the close of any taxable year,
there is a recapture event with respect to any qualified
child care facility of the taxpayer, then the tax of the
taxpayer under this chapter for such taxable year shall be
increased by an amount equal to the product of--
``(A) the applicable recapture percentage, and
``(B) the aggregate decrease in the credits allowed under
section 38 for all prior taxable years which would have
resulted if the qualified child care expenditures of the
taxpayer described in subsection (c)(1)(A) with respect to
such facility had been zero.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection, the
applicable recapture percentage shall be determined from the
following table:

``If the recapture event occurs The applicable recapture percentage is:
Years 1-3....................................................100
Year 4........................................................85
Year 5........................................................70
Year 6........................................................55
Year 7........................................................40
Year 8........................................................25
Years 9 and 10................................................10
Years 11 and thereafter........................................0.
``(B) Years.--For purposes of subparagraph (A), year 1
shall begin on the first day of the taxable year in which the
qualified child care facility is placed in service by the
taxpayer.
``(3) Recapture event defined.--For purposes of this
subsection, the term `recapture event' means--
``(A) Cessation of operation.--The cessation of the
operation of the facility as a qualified child care facility.
``(B) Change in ownership.--
``(i) In general.--Except as provided in clause (ii), the
disposition of a taxpayer's interest in a qualified child
care facility with respect to which the credit described in
subsection (a) was allowable.
``(ii) Agreement to assume recapture liability.--Clause (i)
shall not apply if the person acquiring such interest in the
facility agrees in writing to assume the recapture liability
of the person disposing of such interest in effect
immediately before such disposition. In the event of such an
assumption, the person acquiring the interest in the facility
shall be treated as the taxpayer for purposes of assessing
any recapture liability (computed as if there had been no
change in ownership).
``(4) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable year shall
be increased under paragraph (1) only with respect to credits
allowed by reason of this section which were used to reduce
tax liability. In the case of credits not so used to reduce
tax liability, the carryforwards and carrybacks under section
39 shall be appropriately adjusted.
``(B) No credits against tax.--Any increase in tax under
this subsection shall not be treated as a tax imposed by this
chapter for purposes of determining the amount of any credit
under subpart A, B, or D of this part.
``(C) No recapture by reason of casualty loss.--The
increase in tax under this subsection shall not apply to a
cessation of operation of the facility as a qualified child
care facility by reason of a casualty loss to the extent such
loss is restored by reconstruction or replacement within a
reasonable period established by the Secretary.
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons which are treated as
a single employer under subsections (a) and (b) of section 52
shall be treated as a single taxpayer.
``(2) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(3) Allocation in the case of partnerships.--In the case
of partnerships, the credit shall be allocated among partners
under regulations prescribed by the Secretary.
``(f) No Double Benefit.--
``(1) Reduction in basis.--For purposes of this subtitle--
``(A) In general.--If a credit is determined under this
section with respect to any property by reason of
expenditures described in subsection (c)(1)(A), the basis of
such property shall be reduced by the amount of the credit so
determined.
``(B) Certain dispositions.--If, during any taxable year,
there is a recapture amount determined with respect to any
property the basis of which was reduced under subparagraph
(A), the basis of such property (immediately before the event
resulting in such recapture) shall be increased by an amount
equal to such recapture amount. For purposes of the preceding
sentence, the term `recapture amount' means any increase in
tax (or adjustment in carrybacks or carryovers) determined
under subsection (d).
``(2) Other deductions and credits.--No deduction or credit
shall be allowed under any other provision of this chapter
with respect to the amount of the credit determined under
this section.''.
(b) Conforming Amendments.--
(1) Section 38(b) is amended by striking ``plus'' at the
end of paragraph (12), by striking the period at the end of
paragraph (13) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(14) the employer-provided child care credit determined
under section 45E.''.
(2) Subsection (d) of section 39 is amended by adding at
the end the following new paragraph:
``(10) No carryback of employer-provided child care credit
before january 1, 2002.--No portion of the unused business
credit for any taxable year which is attributable to the
credit under section 45E may be carried back

[[Page S150]]

to a taxable year ending before January 1, 2002.''.
(3) Subsection (c) of section 196 is amended by striking
``and'' at the end of paragraph (8), by striking the period
at the end of paragraph (9) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(10) the employer-provided child care credit determined
under section 45E(a).''.
(4) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:

``Sec. 45E. Employer-provided child care credit.''.
(5) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (26), by striking the period at the end of
paragraph (27) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(28) in the case of a facility with respect to which a
credit was allowed under section 45E, to the extent provided
in section 45E(f)(1).''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

TITLE V--TAX RELIEF FOR LONG-TERM CARE GIVERS

SEC. 501. LONG-TERM CARE TAX CREDIT.

(a) Allowance of Credit.--
(1) In general.--Section 24(a) (relating to allowance of
child tax credit) is amended to read as follows:
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for the
taxable year an amount equal to the sum of--
``(1) $500 multiplied by the number of qualifying children
of the taxpayer, plus
``(2) $3,000 multiplied by the number of applicable
individuals with respect to whom the taxpayer is an eligible
caregiver for the taxable year.''.
(2) Additional credit for taxpayer with 3 or more separate
credit amounts.--So much of section 24(d) as precedes
paragraph (1)(A) thereof is amended to read as follows:
``(d) Additional Credit for Taxpayers With 3 or More
Separate Credit Amounts.--
``(1) In general.--If the sum of the number of qualifying
children of the taxpayer and the number of applicable
individuals with respect to which the taxpayer is an eligible
caregiver is 3 or more for any taxable year, the aggregate
credits allowed under subpart C shall be increased by the
lesser of--''.
(3) Conforming amendments.--
(A) The heading for section 32(n) is amended by striking
``Child'' and inserting ``Family Care''.
(B) The heading for section 24 is amended to read as
follows:

``SEC. 24. FAMILY CARE CREDIT.''.

(C) The table of sections for subpart A of part IV of
subchapter A of chapter 1 is amended by striking the item
relating to section 24 and inserting the following new item:

``Sec. 24. Family care credit.''.

(b) Definitions.--Section 24(c) (defining qualifying child)
is amended to read as follows:
``(c) Definitions.--For purposes of this section--
``(1) Qualifying child.--
``(A) In general.--The term `qualifying child' means any
individual if--
``(i) the taxpayer is allowed a deduction under section 151
with respect to such individual for the taxable year,
``(ii) such individual has not attained the age of 17 as of
the close of the calendar year in which the taxable year of
the taxpayer begins, and
``(iii) such individual bears a relationship to the
taxpayer described in section 32(c)(3)(B).
``(B) Exception for certain noncitizens.--The term
`qualifying child' shall not include any individual who would
not be a dependent if the first sentence of section 152(b)(3)
were applied without regard to all that follows `resident of
the United States'.
``(2) Applicable individual.--
``(A) In general.--The term `applicable individual' means,
with respect to any taxable year, any individual who has been
certified, before the due date for filing the return of tax
for the taxable year (without extensions), by a physician (as
defined in section 1861(r)(1) of the Social Security Act) as
being an individual with long-term care needs described in
subparagraph (B) for a period--
``(i) which is at least 180 consecutive days, and
``(ii) a portion of which occurs within the taxable year.
Such term shall not include any individual otherwise meeting
the requirements of the preceding sentence unless within the
39\1/2\ month period ending on such due date (or such other
period as the Secretary prescribes) a physician (as so
defined) has certified that such individual meets such
requirements.
``(B) Individuals with long-term care needs.--An individual
is described in this subparagraph if the individual meets any
of the following requirements:
``(i) The individual is at least 6 years of age and--

``(I) is unable to perform (without substantial assistance
from another individual) at least 3 activities of daily
living (as defined in section 7702B(c)(2)(B)) due to a loss
of functional capacity, or

``(II) requires substantial supervision to protect such
individual from threats to health and safety due to severe
cognitive impairment and is unable to perform at least 1
activity of daily living (as so defined) or to the extent
provided in regulations prescribed by the Secretary (in
consultation with the Secretary of Health and Human
Services), is unable to engage in age appropriate activities.

``(ii) The individual is at least 2 but not 6 years of age
and is unable due to a loss of functional capacity to perform
(without substantial assistance from another individual) at
least 2 of the following activities: eating, transferring, or
mobility.
``(iii) The individual is under 2 years of age and requires
specific durable medical equipment by reason of a severe
health condition or requires a skilled practitioner trained
to address the individual's condition to be available if the
individual's parents or guardians are absent.
``(3) Eligible caregiver.--
``(A) In general.--A taxpayer shall be treated as an
eligible caregiver for any taxable year with respect to the
following individuals:
``(i) The taxpayer.
``(ii) The taxpayer's spouse.
``(iii) An individual with respect to whom the taxpayer is
allowed a deduction under section 151 for the taxable year.
``(iv) An individual who would be described in clause (iii)
for the taxable year if section 151(c)(1)(A) were applied by
substituting for the exemption amount an amount equal to the
sum of the exemption amount, the standard deduction under
section 63(c)(2)(C), and any additional standard deduction
under section 63(c)(3) which would be applicable to the
individual if clause (iii) applied.
``(v) An individual who would be described in clause (iii)
for the taxable year if--

``(I) the requirements of clause (iv) are met with respect
to the individual, and
``(II) the requirements of subparagraph (B) are met with
respect to the individual in lieu of the support test of
section 152(a).

``(B) Residency test.--The requirements of this
subparagraph are met if an individual has as his principal
place of abode the home of the taxpayer and--
``(i) in the case of an individual who is an ancestor or
descendant of the taxpayer or the taxpayer's spouse, is a
member of the taxpayer's household for over half the taxable
year, or
``(ii) in the case of any other individual, is a member of
the taxpayer's household for the entire taxable year.
``(C) Special rules where more than 1 eligible caregiver.--
``(i) In general.--If more than 1 individual is an eligible
caregiver with respect to the same applicable individual for
taxable years ending with or within the same calendar year, a
taxpayer shall be treated as the eligible caregiver if each
such individual (other than the taxpayer) files a written
declaration (in such form and manner as the Secretary may
prescribe) that such individual will not claim such
applicable individual for the credit under this section.
``(ii) No agreement.--If each individual required under
clause (i) to file a written declaration under clause (i)
does not do so, the individual with the highest modified
adjusted gross income (as defined in section 32(c)(5)) shall
be treated as the eligible caregiver.
``(iii) Married individuals filing separately.--In the case
of married individuals filing separately, the determination
under this subparagraph as to whether the husband or wife is
the eligible caregiver shall be made under the rules of
clause (ii) (whether or not one of them has filed a written
declaration under clause (i)).''.
(c) Identification Requirements.--
(1) In general.--Section 24(e) is amended by adding at the
end the following new sentence: ``No credit shall be allowed
under this section to a taxpayer with respect to any
applicable individual unless the taxpayer includes the name
and taxpayer identification number of such individual, and
the identification number of the physician certifying such
individual, on the return of tax for the taxable year.''.
(2) Assessment.--Section 6213(g)(2)(I) is amended--
(A) by inserting ``or physician identification'' after
``correct TIN'', and
(B) by striking ``child'' and inserting ``family care''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

TITLE VI--TAX RELIEF FOR WORKING FAMILIES

SEC. 601. INCREASED EARNED INCOME TAX CREDIT FOR 2 OR MORE
QUALIFYING CHILDREN.

(a) In General.--The table in section 32(b)(1)(A) (relating
to percentages) is amended--
(1) in the second item--
(A) by striking ``or more'', and
(B) by striking ``21.06'' and inserting ``19.06'', and
(2) by inserting after the second item the following new
item:

``3 or more qualifying children......................... 45 19.06''

(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

[[Page S151]]

SEC. 602. SIMPLIFICATION OF DEFINITION OF EARNED INCOME.

(a) In General.--Section 32(c)(2)(A)(i) (defining earned
income) is amended by inserting ``, but only if such amounts
are includible in gross income for the taxable year'' after
``other employee compensation''.
(b) Conforming Amendment.--Section 32(c)(2)(B) is amended
by striking ``and'' at the end of clause (iv), by striking
the period at the end of clause (v) and inserting ``, and'',
and by adding at the end the following new clause:
``(vi) the requirement under subparagraph (A)(i) that an
amount be includible in gross income shall not apply if such
amount is exempt from tax under section 7873 or is derived
directly from restricted and allotted land under the Act of
February 8, 1887 (commonly known as the Indian General
Allotment Act) (25 U.S.C. 331 et seq.) or from land held
under Acts or treaties containing an exception provision
similar to the Indian General Allotment Act.''.
(c) Effective Date.--The amendment made by this section
shall apply to amounts received in taxable years beginning
after December 31, 2001.

SEC. 603. SIMPLIFICATION OF DEFINITION OF CHILD DEPENDENT.

(a) Removal of Support Test for Certain Individuals.--
Section 152(a) (relating to definition of dependent) is
amended to read as follows:
``(a) General Definition.--For purposes of this subtitle--
``(1) Dependent.--The term `dependent' means--
``(A) any individual described in paragraph (2) over half
of whose support, for the calendar year in which the taxable
year of the taxpayer begins, was received from the taxpayer
(or is treated under subsection (c) as received from the
taxpayer), or
``(B) any individual described in subsection (f).
``(2) Individuals.--An individual is described in this
paragraph if such individual is--
``(A) a brother, sister, stepbrother, or stepsister of the
taxpayer,
``(B) the father or mother of the taxpayer, or an ancestor
of either,
``(C) a stepfather or stepmother of the taxpayer,
``(D) a son or daughter of a brother or sister of the
taxpayer,
``(E) a brother or sister of the father or mother of the
taxpayer,
``(F) a son-in-law, daughter-in-law, father-in-law, mother-
in-law, brother-in-law, or sister-in-law of the taxpayer, or
``(G) an individual (other than an individual who at any
time during the taxable year was the spouse, determined
without regard to section 7703, of the taxpayer) who, for the
taxable year of the taxpayer, has as their principal place of
abode the home of the taxpayer and is a member of the
taxpayer's household.''.
(b) Other Modifications.--Section 152 is amended by adding
at the end the following new subsection:
``(f) Subsection (f) Dependents.--
``(1) In general.--An individual is described in this
subsection for the taxable year if such individual--
``(A) bears a relationship to the taxpayer described in
paragraph (2),
``(B) except in the case of an eligible foster child or as
provided in subsection (e), has the same principal place of
abode as the taxpayer for more than one-half of such taxable
year, and
``(C)(i) has not attained the age of 19 at the close of the
calendar year in which the taxable year begins, or
``(ii) is a student (within the meaning of section
151(c)(4)) who has not attained the age of 24 at the close of
such calendar year.
``(2) Relationship test.--An individual bears a
relationship to the taxpayer described in this paragraph if
such individual is--
``(A) a son or daughter of the taxpayer, or a descendant of
either, or
``(B) a stepson or stepdaughter of the taxpayer.
``(3) Special rules.--
``(A) 2 or more claiming dependent.--Except as provided in
subparagraph (B), if an individual may be claimed as a
dependent by 2 or more taxpayers (but for this subparagraph)
for a taxable year beginning in the same calendar year, only
the taxpayer with the highest adjusted gross income for such
taxable year shall be allowed the deduction with respect to
such individual.
``(B) Release of claim to exemption.--Subparagraph (A)
shall not apply with respect to an individual if--
``(i) the taxpayer with the highest adjusted gross income
under subparagraph (A), for any calendar year signs a written
declaration (in such manner and form as the Secretary may by
regulations prescribe) that such taxpayer will not claim such
individual as a dependent for any taxable year beginning in
such calendar year,
``(ii) the other taxpayer provides over half of such
individual's support for the calendar year in which the
taxable year of such other taxpayer begins, and
``(iii) such other taxpayer attaches such written
declaration to such taxpayer's return for the taxable year
beginning during such calendar year.''.
(c) Rules Relating to Foster Child.--Section 152(b)(2)
(relating to rules relating to general definition) is amended
by striking ``a foster child'' and all that follows through
``individual)'' and inserting ``an eligible foster child (as
defined in section 32(c)(3)(B)(iii)) of an individual''.
(d) Exemption From Gross Income Test.--Section 151(c)(3)
(relating to definition of child) is amended by striking ``or
stepdaughter'' and inserting ``stepdaughter, or a descendant
of such individual''.
(e) Waiver of Deduction for Divorced Parents.--
(1) In general.--So much of section 152(e) as precedes
paragraph (4) (relating to support test in case of child of
divorced parents, etc.) is amended to read as follows:
``(e) Special Rules for Child of Divorced Parents.--
``(1) Release of claim to exemption.--In the case of a
child (as defined in section 151(c)(3)) of parents--
``(A) who are divorced or legally separated under a decree
of divorce or separate maintenance,
``(B) who are separated under a written separation
agreement, or
``(C) who live apart at all times during the last 6 months
of the calendar year,

the custodial parent who is entitled to the deduction under
section 151 for a taxable year with respect to such child may
release such deduction to the noncustodial parent.
``(2) Procedure.--The noncustodial parent may claim a child
described in paragraph (1) as a dependent for the taxable
year if--
``(A) the custodial parent signs a written declaration (in
such manner and form as the Secretary may by regulations
prescribe) that such custodial parent will not claim such
child as a dependent for any taxable year beginning in such
calendar year,
``(B) the custodial parent and the noncustodial parent
provide over half of such child's support for the calendar
year in which the taxable years of such parents begin, and
``(C) the noncustodial parent attaches such written
declaration to such noncustodial parent's return for the
taxable year beginning during such calendar year.
``(3) Definitions.--For purposes of this subsection--
``(A) Custodial parent.--The term `custodial parent' means,
with regard to an individual, a parent who has custody of
such individual for a greater portion of the calendar year
than the noncustodial parent.
``(B) Noncustodial parent.--The term `noncustodial parent'
means the parent who is not the custodial parent.''.
(2) Pre-1985 instruments.--Section 152(e)(4)(A) is amended
by striking ``A child'' and all that follows through
``noncustodial parent'' and inserting ``A noncustodial parent
described in paragraph (1) shall be entitled to the deduction
under section 151 for a taxable year with respect to a child
if''.
(f) Conforming Amendments.--
(1) Section 1(g)(5)(A) is amended by inserting ``as in
effect on the day before the date of the enactment of the
Working Family Tax Relief Act of 2001'' after ``152(e)''.
(2) Section 2(b)(1)(A)(i) is amended by striking
``paragraph (2) or (4) of''.
(3) Section 2(b)(3)(B)(i) is amended by striking
``paragraph (9)'' and inserting ``paragraph (2)(G)''.
(4) Section 21(e)(5)(A) is amended by striking ``paragraph
(2) or (4) of''.
(5) Section 21(e)(5) is amended in the matter following
subclause (B) by inserting ``as in effect on the day before
the date of the enactment of the Working Family Tax Relief
Act of 2001'' after ``152(e)(1)''.
(6) Section 32(c)(1)(G) is amended by striking ``(3)(D).''
and inserting ``(1)(C). An individual whose qualifying child
or qualifying children are not taken into account under
subsection (b) solely by reason of paragraph (3)(D) shall be
treated as an eligible individual if such individual
otherwise meets the requirements of subparagraph (A)(ii).''.
(7) Section 32(c)(3)(B)(ii) is amended by striking
``paragraph (2) or (4) of''.
(8) Section 51(i)(1)(C) is amended by striking
``152(a)(9)'' and inserting ``152(a)(2)(G)''.
(9) Section 152(b) is amended by striking ``specified in
subsection (a)'' and inserting ``specified in subsection
(a)(2) or (f)(2)''.
(10) Section 152(c) is amended by striking ``(a)'' and
inserting ``(a)(1)''.
(11) Section 7703(b)(1) is amended by striking ``paragraph
(2) or (4) of''.
(12) The following provisions of are each amended by
striking ``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (F) of subsection
(a)(2) or subsection (f)(2) of section 152'':
(A) Section 170(g)(3).
(B) Subparagraphs (A) and (B) of section 51(i)(1).
(C) The second sentence of section 213(d)(11).
(D) Section 529(e)(2)(B).
(E) Section 7702B(f)(2)(C)(iii).
(g) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

SEC. 604. OTHER MODIFICATIONS TO EARNED INCOME TAX CREDIT.

(a) Modification of Joint Return Requirement.--Subsection
(d) of section 32 is amended to read as follows:
``(d) Married Individuals.--
``(1) In general.--If the taxpayer is married at the close
of the taxable year, the credit shall be allowed under
subsection (a) only if the taxpayer and his spouse file a
joint return for the taxable year.
``(2) Marital status.--For purposes of paragraph (1), an
individual legally separated from his spouse under a decree
of divorce or of separate maintenance shall not be considered
as married.

[[Page S152]]

``(3) Certain married individuals living apart.--For
purposes of paragraph (1), if--
``(A) an individual --
``(i) is married and files a separate return, and
``(ii) has a qualifying child who is a son, daughter,
stepson, or stepdaughter of such individual, and
``(B) during the last 6 months of such taxable year, such
individual and such individual's spouse do not have the same
principal place of abode,

such individual shall not be considered as married.''.
(b) Modification of Rule Where There Are 2 or More Eligible
Individuals.--Subparagraph (C) of section 32(c)(1) is amended
to read as follows:
``(C) 2 or more eligible individuals.--
``(i) In general.--Except as provided in clause (ii), if 2
or more individuals would (but for this subparagraph and
after application of subparagraph (B)) be treated as eligible
individuals with respect to the same qualifying child for
taxable years beginning in the same calendar year, only the
individual with the highest modified adjusted gross income
for such taxable years shall be treated as an eligible
individual with respect to such qualifying child.
``(ii) Exception for certain parents.--An otherwise
eligible individual who is not treated under clause (i) as
the only eligible individual with respect to any qualifying
child shall be treated as an eligible individual with respect
to such child if--

``(I) such child is the son, daughter, stepson, or
stepdaughter of such individual,
``(II) such child is not taken into account under
subsection (b) by any other individual, and
``(III) the limitation under subsection (a)(2) for the
individual who would (but for this clause) be treated under
clause (i) as the only eligible individual with respect to
such child would be greater than zero (determined as if such
individual had 2 qualifying children).''.

(c) Expansion of Mathematical Error Authority.--Paragraph
(2) of section 6213(g) is amended by striking ``and'' at the
end of subparagraph (K), by striking the period at the end of
subparagraph (L) and inserting ``, and'', and by inserting
after subparagraph (L) the following new subparagraph:
``(M) the entry on the return claiming the credit under
section 32 with respect to a child if, according to the
Federal Case Registry of Child Support Orders established
under section 453(h) of the Social Security Act, the taxpayer
is a noncustodial parent of such child.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

TITLE VII--TAX RELIEF FOR SELF-EMPLOYED INDIVIDUALS

SEC. 701. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
EMPLOYED INDIVIDUALS INCREASED.

(a) In General.--Section 162(l)(1) (relating to special
rules for health insurance costs of self-employed
individuals) is amended to read as follows:
``(1) Allowance of deduction.--In the case of an individual
who is an employee within the meaning of section 401(c)(1),
there shall be allowed as a deduction under this section an
amount equal to the amount paid during the taxable year for
insurance which constitutes medical care for the taxpayer,
the taxpayer's spouse, and dependents.''.
(b) Clarification of Limitations on Other Coverage.--The
first sentence of section 162(l)(2)(B) is amended to read as
follows: ``Paragraph (1) shall not apply to any taxpayer for
any calendar month for which the taxpayer participates in any
subsidized health plan maintained by any employer (other than
an employer described in section 401(c)(4)) of the taxpayer
or the spouse of the taxpayer.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.

TITLE VIII--TAX RELIEF FOR EXPANDING PENSION AVAILABILITY

SEC. 801. NONREFUNDABLE CREDIT TO CERTAIN INDIVIDUALS FOR
ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS.

(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 (relating to nonrefundable personal credits), as
amended by section 302(a), is amended by inserting after
section 25B the following new section:

``SEC. 25C. ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS BY
CERTAIN INDIVIDUALS.

``(a) Allowance of Credit.--In the case of an eligible
individual, there shall be allowed as a credit against the
tax imposed by this subtitle for the taxable year an amount
equal to the applicable percentage of so much of the
qualified retirement savings contributions of the eligible
individual for the taxable year as do not exceed $2,000.
``(b) Applicable Percentage.--For purposes of this section,
the applicable percentage is the percentage determined in
accordance with the following table:

----------------------------------------------------------------------------------------------------------------
Adjusted Gross Income
-------------------------------------------------------------------------------------------------
Joint return Head of a household All other cases Applicable
------------------------------------------------------------------------------------------------- percentage
Over Not over Over Not over Over Not over
----------------------------------------------------------------------------------------------------------------
$0 $35,000 $0 $26,250 $0 $17,500 50
35,000 40,000 26,250 30,000 17,500 20,000 40
40,000 45,000 30,000 33,750 20,000 22,500 30
45,000 50,000 33,750 37,500 22,500 25,000 15
----------------------------------------------------------------------------------------------------------------

``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual' means any
individual if such individual has attained the age of 18 as
of the close of the taxable year.
``(2) Dependents and full-time students not eligible.--The
term `eligible individual' shall not include--
``(A) any individual with respect to whom a deduction under
section 151 is allowed to another taxpayer for a taxable year
beginning in the calendar year in which such individual's
taxable year begins, and
``(B) any individual who is a student (as defined in
section 151(c)(4)).
``(d) Qualified Retirement Savings Contributions.--For
purposes of this section--
``(1) In general.--The term `qualified retirement savings
contributions' means, with respect to any taxable year, the
sum of--
``(A) the amount of the qualified retirement contributions
(as defined in section 219(e)) made by the eligible
individual,
``(B) the amount of--
``(i) any elective deferrals (as defined in section
402(g)(3)) of such individual, and
``(ii) any elective deferral of compensation by such
individual under an eligible deferred compensation plan (as
defined in section 457(b)) of an eligible employer described
in section 457(e)(1)(A), and
``(C) the amount of voluntary employee contributions by
such individual to any qualified retirement plan (as defined
in section 4974(c)).
``(2) Reduction for certain distributions.--
``(A) In general.--The qualified retirement savings
contributions determined under paragraph (1) shall be reduced
(but not below zero) by the sum of--
``(i) any distribution from a qualified retirement plan (as
defined in section 4974(c)), or from an eligible deferred
compensation plan (as defined in section 457(b)), received by
the individual during the testing period which is includible
in gross income, and
``(ii) any distribution from a Roth IRA received by the
individual during the testing period which is not a qualified
rollover contribution (as defined in section 408A(e)) to a
Roth IRA.
``(B) Testing period.--For purposes of subparagraph (A),
the testing period, with respect to a taxable year, is the
period which includes--
``(i) such taxable year,
``(ii) the 2 preceding taxable years, and
``(iii) the period after such taxable year and before the
due date (including extensions) for filing the return of tax
for such taxable year.
``(C) Excepted distributions.--There shall not be taken
into account under subparagraph (A)--
``(i) any distribution referred to in section 72(p),
401(k)(8), 401(m)(6), 402(g)(2), 404(k), or 408(d)(4), and
``(ii) any distribution to which section 408A(d)(3)
applies.
``(D) Treatment of distributions received by spouse of
individual.--For purposes of determining distributions
received by an individual under subparagraph (A) for any
taxable year, any distribution received by the spouse of such
individual shall be treated as received by such individual if
such individual and spouse file a joint return for such
taxable year and for the taxable year during which the spouse
receives the distribution.
``(e) Adjusted Gross Income.--For purposes of this section,
adjusted gross income shall be determined without regard to
sections 911, 931, and 933.
``(f) Investment in the Contract.--Notwithstanding any
other provision of law, a qualified retirement savings
contribution shall not fail to be included in determining the
investment in the contract for purposes of section 72 by
reason of the credit under this section.''.
(b) Credit Allowed Against Regular Tax and Alternative
Minimum Tax.--

[[Page S153]]

(1) In general.--Subsection (a) of section 26 is amended by
inserting ``(other than the credit allowed by section 25C)''
after ``credits allowed by this subpart''.
(2) Conforming amendment.--Section 25C, as added by
subsection (a), is amended by inserting after subsection (f)
the following new subsection:
``(g) Limitation Based on Amount of Tax.--The aggregate
credit allowed by this section for the taxable year shall not
exceed the sum of--
``(1) the taxpayer's regular tax liability for the taxable
year reduced by the sum of the credits allowed by sections
21, 22, 23, 24, 25, 25A, and 25B, plus
``(2) the tax imposed by section 55 for such taxable
year.''.
(c) Annual Report.--The Comptroller General of the United
States shall submit a report annually to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate regarding the number of
taxpayers receiving the credit allowed under section 25C of
the Internal Revenue Code of 1986, as added by subsection
(a).
(d) Conforming Amendment.--The table of sections for
subpart A of part IV of subchapter A of chapter 1, as amended
by section 302(b), is amended by inserting after the item
relating to section 25B the following new item:

``Sec. 25C. Elective deferrals and IRA contributions by certain
individuals.''.

(e) Effective Dates.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

SEC. 802. CREDIT FOR QUALIFIED PENSION PLAN CONTRIBUTIONS OF
SMALL EMPLOYERS.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits), as amended
by section 411(a), is amended by adding at the end the
following new section:

``SEC. 45F. SMALL EMPLOYER PENSION PLAN CONTRIBUTIONS.

``(a) General Rule.--For purposes of section 38, in the
case of an eligible employer, the small employer pension plan
contribution credit determined under this section for any
taxable year is an amount equal to 50 percent of the amount
which would (but for subsection (f)(1)) be allowed as a
deduction under section 404 for such taxable year for
qualified employer contributions made to any qualified
retirement plan on behalf of any employee who is not a highly
compensated employee.
``(b) Credit Limited to 3 Years.--The credit allowable by
this section shall be allowed only with respect to the period
of 3 taxable years beginning with the first taxable year for
which a credit is allowable with respect to a plan under this
section.
``(c) Qualified Employer Contribution.--For purposes of
this section--
``(1) Defined contribution plans.--In the case of a defined
contribution plan, the term `qualified employer contribution'
means the amount of nonelective and matching contributions to
the plan made by the employer on behalf of any employee who
is not a highly compensated employee to the extent such
amount does not exceed 3 percent of such employee's
compensation from the employer for the year.
``(2) Defined benefit plans.--In the case of a defined
benefit plan, the term `qualified employer contribution'
means the amount of employer contributions to the plan made
on behalf of any employee who is not a highly compensated
employee to the extent that the accrued benefit of such
employee derived from employer contributions for the year
does not exceed the equivalent (as determined under
regulations prescribed by the Secretary and without regard to
contributions and benefits under the Social Security Act) of
3 percent of such employee's compensation from the employer
for the year.
``(d) Qualified Retirement Plan.--
``(1) In general.--The term `qualified retirement plan'
means any plan described in section 401(a) which includes a
trust exempt from tax under section 501(a) if the plan
meets--
``(A) the contribution requirements of paragraph (2),
``(B) the vesting requirements of paragraph (3), and
``(C) the distributions requirements of paragraph (4).
``(2) Contribution requirements.--
``(A) In general.--The requirements of this paragraph are
met if, under the plan--
``(i) the employer is required to make nonelective
contributions of at least 1 percent of compensation (or the
equivalent thereof in the case of a defined benefit plan) for
each employee who is not a highly compensated employee who is
eligible to participate in the plan, and
``(ii) allocations of nonelective employer contributions
are either in equal dollar amounts for all employees covered
by the plan or bear a uniform relationship to the total
compensation, or the basic or regular rate of compensation,
of the employees covered by the plan.
``(B) Compensation limitation.--The compensation taken into
account under subparagraph (A) for any year shall not exceed
the limitation in effect for such year under section
401(a)(17).
``(3) Vesting requirements.--The requirements of this
paragraph are met if the plan satisfies the requirements of
subparagraph (A) or (B).
``(A) 3-year vesting.--A plan satisfies the requirements of
this subparagraph if an employee who has completed at least 3
years of service has a nonforfeitable right to 100 percent of
the employee's accrued benefit derived from employer
contributions.
``(B) 5-year graded vesting.--A plan satisfies the
requirements of this subparagraph if an employee has a
nonforfeitable right to a percentage of the employee's
accrued benefit derived from employer contributions
determined under the following table:

The nonforfeitable
``Years of service: percentage is:
1.............................................................20 ....

2.............................................................40 ....

3.............................................................60 ....

4.............................................................80 ....

5............................................................100.....

``(4) Distribution requirements.--In the case of a profit-
sharing or stock bonus plan, the requirements of this
paragraph are met if, under the plan, qualified employer
contributions are distributable only as provided in section
401(k)(2)(B).
``(e) Other Definitions.--For purposes of this section--
``(1) Eligible employer.--
``(A) In general.--The term `eligible employer' means, with
respect to any year, an employer which has no more than 50
employees who received at least $5,000 of compensation from
the employer for the preceding year.
``(B) Requirement for new qualified employer plans.--Such
term shall not include an employer if, during the 3-taxable
year period immediately preceding the 1st taxable year for
which the credit under this section is otherwise allowable
for a qualified employer plan of the employer, the employer
or any member of any controlled group including the employer
(or any predecessor of either) established or maintained a
qualified employer plan with respect to which contributions
were made, or benefits were accrued, for substantially the
same employees as are in the qualified employer plan.
``(2) Highly compensated employee.--The term `highly
compensated employee' has the meaning given such term by
section 414(q) (determined without regard to section
414(q)(1)(B)(ii)).
``(f) Special Rules.--
``(1) Disallowance of deduction.--No deduction shall be
allowed for that portion of the qualified employer
contributions paid or incurred for the taxable year which is
equal to the credit determined under subsection (a).
``(2) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable year.
``(3) Aggregation rules.--All persons treated as a single
employer under subsection (a) or (b) of section 52, or
subsection (n) or (o) of section 414, shall be treated as one
person. All eligible employer plans shall be treated as 1
eligible employer plan.
``(g) Recapture of Credit on Forfeited Contributions.--
``(1) In general.--Except as provided in paragraph (2), if
any accrued benefit which is forfeitable by reason of
subsection (d)(3) is forfeited, the employer's tax imposed by
this chapter for the taxable year in which the forfeiture
occurs shall be increased by 35 percent of the employer
contributions from which such benefit is derived to the
extent such contributions were taken into account in
determining the credit under this section.
``(2) Reallocated contributions.--Paragraph (1) shall not
apply to any contribution which is reallocated by the
employer under the plan to employees who are not highly
compensated employees.''.
(b) Credit Allowed as Part of General Business Credit.--
Section 38(b) (defining current year business credit), as
amended by section 411(b)(1), is amended by striking ``plus''
at the end of paragraph (13), by striking the period at the
end of paragraph (14) and inserting ``, plus'', and by adding
at the end the following new paragraph:
``(15) in the case of an eligible employer (as defined in
section 45F(e)), the small employer pension plan contribution
credit determined under section 45F(a).''.
(c) Conforming Amendments.--
(1) Section 39(d), as amended by section 411(b)(2), is
amended by adding at the end the following new paragraph:
``(11) No carryback of small employer pension plan
contribution credit before january 1, 2002.--No portion of
the unused business credit for any taxable year which is
attributable to the small employer pension plan contribution
credit determined under section 45F may be carried back to a
taxable year beginning before January 1, 2002.''.
(2) Subsection (c) of section 196, as amended by section
411(b)(3), is amended by striking ``and'' at the end of
paragraph (9), by striking the period at the end of paragraph
(10) and inserting ``, and'', and by adding at the end the
following new paragraph:
``(11) the small employer pension plan contribution credit
determined under section 45F(a).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by section 411(b)(4),
is amended by adding at the end the following new item:

``Sec. 45F. Small employer pension plan contributions.''.

(d) Effective Date.--The amendments made by this section
shall apply to contributions paid or incurred in taxable
years beginning after December 31, 2001.

[[Page S154]]

SEC. 803. CREDIT FOR PENSION PLAN STARTUP COSTS OF SMALL
EMPLOYERS.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits), as amended
by section 802(a), is amended by adding at the end the
following new section:

``SEC. 45G. SMALL EMPLOYER PENSION PLAN STARTUP COSTS.

``(a) General Rule.--For purposes of section 38, in the
case of an eligible employer, the small employer pension plan
startup cost credit determined under this section for any
taxable year is an amount equal to 50 percent of the
qualified startup costs paid or incurred by the taxpayer
during the taxable year.
``(b) Dollar Limitation.--The amount of the credit
determined under this section for any taxable year shall not
exceed--
``(1) $500 for the first credit year and each of the 2
taxable years immediately following the first credit year,
and
``(2) zero for any other taxable year.
``(c) Eligible Employer.--For purposes of this section--
``(1) In general.--The term `eligible employer' has the
meaning given such term by section 408(p)(2)(C)(i).
``(2) Requirement for new qualified employer plans.--Such
term shall not include an employer if, during the 3-taxable
year period immediately preceding the 1st taxable year for
which the credit under this section is otherwise allowable
for a qualified employer plan of the employer, the employer
or any member of any controlled group including the employer
(or any predecessor of either) established or maintained a
qualified employer plan with respect to which contributions
were made, or benefits were accrued, for substantially the
same employees as are in the qualified employer plan.
``(d) Other Definitions.--For purposes of this section--
``(1) Qualified startup costs.--
``(A) In general.--The term `qualified startup costs' means
any ordinary and necessary expenses of an eligible employer
which are paid or incurred in connection with--
``(i) the establishment or administration of an eligible
employer plan, or
``(ii) the retirement-related education of employees with
respect to such plan.
``(B) Plan must have at least 1 participant.--Such term
shall not include any expense in connection with a plan that
does not have at least 1 employee eligible to participate who
is not a highly compensated employee.
``(2) Eligible employer plan.--The term `eligible employer
plan' means a qualified employer plan within the meaning of
section 4972(d).
``(3) First credit year.--The term `first credit year'
means--
``(A) the taxable year which includes the date that the
eligible employer plan to which such costs relate becomes
effective, or
``(B) at the election of the eligible employer, the taxable
year preceding the taxable year referred to in subparagraph
(A).
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons treated as a single
employer under subsection (a) or (b) of section 52, or
subsection (n) or (o) of section 414, shall be treated as one
person. All eligible employer plans shall be treated as 1
eligible employer plan.
``(2) Disallowance of deduction.--No deduction shall be
allowed for that portion of the qualified startup costs paid
or incurred for the taxable year which is equal to the credit
determined under subsection (a).
``(3) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable
year.''.
(b) Credit Allowed as Part of General Business Credit.--
Section 38(b) (defining current year business credit), as
amended by section 802(b), is amended by striking ``plus'' at
the end of paragraph (14), by striking the period at the end
of paragraph (15) and inserting ``, plus'', and by adding at
the end the following new paragraph:
``(16) in the case of an eligible employer (as defined in
section 45G(c)), the small employer pension plan startup cost
credit determined under section 45G(a).''.
(c) Conforming Amendments.--
(1) Section 39(d), as amended by section 802(c)(1), is
amended by adding at the end the following new paragraph:
``(12) No carryback of small employer pension plan startup
cost credit before january 1, 2002.--No portion of the unused
business credit for any taxable year which is attributable to
the small employer pension plan startup cost credit
determined under section 45G may be carried back to a taxable
year beginning before January 1, 2002.''.
(2) Subsection (c) of section 196, as amended by section
802(c)(2), is amended by striking ``and'' at the end of
paragraph (10), by striking the period at the end of
paragraph (11) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(12) the small employer pension plan startup cost credit
determined under section 45G(a).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by section 802(c)(3),
is amended by adding at the end the following new item:

``Sec. 45G. Small employer pension plan startup costs.''.

(d) Effective Date.--The amendments made by this section
shall apply to costs paid or incurred in taxable years
beginning after December 31, 2001, with respect to qualified
employer plans established after such date.

TITLE IX--TAX RELIEF FOR ADOPTIVE PARENTS

SEC. 901. EXPANSION OF ADOPTION CREDIT.

(a) In General.--
(1) Adoption credit.--Section 23(a)(1) (relating to
allowance of credit) is amended to read as follows:
``(1) In general.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter--
``(A) in the case of an adoption of a child other than a
child with special needs, the amount of the qualified
adoption expenses paid or incurred by the taxpayer, and
``(B) in the case of an adoption of a child with special
needs, $10,000.''.
(2) Adoption assistance programs.--Section 137(a) (relating
to adoption assistance programs) is amended to read as
follows:
``(a) In General.--Gross income of an employee does not
include amounts paid or expenses incurred by the employer for
adoption expenses in connection with the adoption of a child
by an employee if such amounts are furnished purusant to an
adoption assistance program. The amount of the exclusion
shall be--
``(1) in the case of an adoption of a child other than a
child with special needs, the amount of the qualified
adoption expenses paid or incurred by the taxpayer, and
``(2) in the case of an adoption of a child with special
needs, $10,000.''.
(b) Dollar Limitations.--
(1) Dollar amount of allowed expenses.--
(A) Adoption expenses.--Section 23(b)(1) (relating to
allowance of credit) is amended--
(i) by striking ``$5,000'' and inserting ``$10,000'',
(ii) by striking ``($6,000, in the case of a child with
special needs)'', and
(iii) by striking ``subsection (a)'' and inserting
``subsection (a)(1)(A)''.
(B) Adoption assistance programs.--Section 137(b)(1)
(relating to dollar limitations for adoption assistance
programs) is amended--
(i) by striking ``$5,000'' and inserting ``$10,000'', and
(ii) by striking ``($6,000, in the case of a child with
special needs)'', and
(iii) by striking ``subsection (a)'' and inserting
``subsection (a)(1)''.
(2) Phase-out limitation.--
(A) Adoption expenses.--Clause (i) of section 23(b)(2)(A)
(relating to income limitation) is amended by striking
``$75,000'' and inserting ``$150,000''.
(B) Adoption assistance programs.--Section 137(b)(2)(A)
(relating to income limitation) is amended by striking
``$75,000'' and inserting ``$150,000''.
(c) Year Credit Allowed.--Section 23(a)(2) is amended by
adding at the end the following new flush sentence:
``In the case of the adoption of a child with special needs,
the credit allowed under paragraph (1) shall be allowed for
the taxable year in which the adoption becomes final.''.
(d) Repeal of Sunset Provisions.--
(1) Children Without Special Needs.--Paragraph (2) of
section 23(d) (relating to definition of eligible child) is
amended to read as follows:
``(2) Eligible child.--The term `eligible child' means any
individual who--
``(A) has not attained age 18, or
``(B) is physically or mentally incapable of caring for
himself.''.
(2) Adoption Assistance Programs.--Section 137 (relating to
adoption assistance programs) is amended by striking
subsection (f).
(e) Adjustment of Dollar and Income Limitations for
Inflation.--
(1) Adoption credit.--Section 23 is amended by
redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) Adjustments for Inflation.--In the case of a taxable
year beginning after December 31, 2002, each of the dollar
amounts in subsection (a)(1)(B) and paragraphs (1) and
(2)(A)(i) of subsection (b) shall be increased by an amount
equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2001'
for `calendar year 1992' in subparagraph (B) thereof.''.
(2) Adoption assistance programs.--Section 137, as amended
by subsection (d), is amended by adding at the end the
following new subsection:
``(f) Adjustments for Inflation.--In the case of a taxable
year beginning after December 31, 2002, each of the dollar
amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of
subsection (b) shall be increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2001'
for `calendar year 1992' in subparagraph (B) thereof.''.
(f) Limitation Based on Amount of Tax.--
(1) In general.--Subsection (c) of section 23 is amended by
striking ``the limitation imposed'' and all that follows
through ``1400C)'' and inserting ``the applicable tax
limitation''.

[[Page S155]]

(2) Applicable tax limitation.--Subsection (d) of section
23 is amended by adding at the end the following new
paragraph:
``(4) Applicable tax limitation.--The term `applicable tax
limitation' means the sum of--
``(A) the taxpayer's regular tax liability for the taxable
year, reduced (but not below zero) by the sum of the credits
allowed by sections 21, 22, 24 (other than the amount of the
increase under subsection (d) thereof), 25, and 25A, and
``(B) the tax imposed by section 55 for such taxable
year.''.
(3) Conforming amendments.--
(A) Subsection (a) of section 26 (relating to limitation
based on amount of tax) is amended by inserting ``(other than
section 23)'' after ``allowed by this subpart''.
(B) Paragraph (1) of section 53(b) (relating to minimum tax
credit) is amended by inserting ``reduced by the aggregate
amount taken into account under section 23(d)(3)(B) for all
such prior taxable years,'' after ``1986,''.
(g) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.
______

By Mr. DASCHLE (for himself, Mr. Baucus, Mr. Graham, Mr. Kennedy,
Mr. Akaka, Mr. Biden, Mr. Bingaman, Mrs. Boxer, Mr. Byrd, Mrs.
Carnahan, Mr. Cleland, Mrs. Clinton, Mr. Corzine, Mr. Dayton,
Mr. Dodd, Mr. Dorgan, Mr. Durbin, Mr. Hollings, Mr. Inouye, Mr.
Johnson, Mr. Kerry, Mr. Leahy, Mr. Levin, Mrs. Lincoln, Ms.
Mikulski, Mrs. Murray, Mr. Nelson of Florida, Mr. Reed, Mr.
Reid, Mr. Rockefeller, Mr. Sarbanes and, Mr. Schumer):
S. 10. A bill to amend title XVIII of the Social Security Act to
provide coverage of outpatient prescription drugs under the Medicare
Program; to the Committee on Finance.

medicare prescription drug coverage act of 2001

Mr. BAUCUS. Mr. President, today I introduce legislation, along with
Senator Daschle and our colleagues, to establish a universal
prescription drug benefit program in Medicare. I am pleased to be part
of this effort, because I believe Congress should enact a drug benefit
this year. The lack of coverage for outpatient prescription drugs in
Medicare has become a glaring gap in the program.
The practice of medicine has changed dramatically since Medicare was
created in 1965. Today, more often than not, a trip to the doctor
results in a trip to the pharmacy, to fill a prescription as part of
the therapy. In many cases, prescription drugs allow patients to avoid
more expensive and invasive therapies such as hospitalization and
surgery.
Our increasing reliance on pharmaceutical products has also fueled
drug spending. Pharmaceuticals are the fastest growing segment of
national health expenditures. In 2000, national drug spending increased
by an estimated 11 percent, compared with 7 percent for physician
services and 6 percent for hospital care. Since 1990, national spending
for prescription drugs has tripled.
And as the role and expense of prescription drugs have grown, their
absence from Medicare's outpatient benefit package has become
increasingly problematic for beneficiaries. An estimated 35 percent of
Medicare beneficiaries currently lack coverage for outpatient
prescription drugs. But that figure may understate the problem. One
study has shown that only about 50 percent of seniors have drug
coverage throughout the year, and for many who do have coverage, it is
often limited or inadequate.
In my home state of Montana, Medicare beneficiaries are even less
likely to have coverage for prescription drugs than those living in
other parts of the country. A National Economic Council study that I
requested last year showed that rural Medicare beneficiaries are 50
percent less likely than their urban counterparts to have prescription
drug coverage. And although rural Medicare beneficiaries use 10 percent
more prescriptions than urban folks, they pay 25 percent more out-of-
pocket for their drugs.
These factors underscore the importance of this issue to folks back
home. I intend to work hard this year to pass a Medicare drug bill for
them and for the millions of other Medicare beneficiaries who lack
coverage or are at risk of losing the coverage they currently have. It
is time for Congress to act on this issue and pass legislation to
provide prescription drugs for America's seniors.
The Medicare Prescription Drug Coverage Act of 2001 is a good place
to start. This legislation builds on the excellent work of Senator
Graham and other members of the Finance Committee, including Senators
Conrad, Jeffords, and Rockefeller. The benefit is universal, it is part
of the Medicare program, it includes a deductible, and patient
coinsurance decreases as drug expenditures increase. The proposal
provides subsidies for low-income seniors to help them with their
premiums and cost sharing. And the proposal relies on private sector
entities to administer the benefit.
Let me add--by no means does this legislation represent the end of
the debate. Rather, it represents a beginning, a starting point. For
example, the bill does not address many of the elements of Medicare
reform that are currently on the table and, quite frankly, should be
included. President Bush and others have emphasized that a new drug
benefit must be added in the context of overall Medicare reform. As
Senator Breaux is fond of saying, a prescription drug benefit is the
dessert that we get when we take the medicine of reform.
I expect that any prescription drug legislation we pass, and the
President signs, will include provisions addressing solvency,
competition, HCFA reform, and fee-for-service modernizations. These are
areas, in addition to adding a drug benefit, where Medicare could also
be updated and improved, and the bipartisan Medicare Commission has
gone a long way toward putting these issues on the national agenda.
I am encouraged that the new administration also recognizes that
prescription drugs is an important issue. President Bush campaigned on
a promise to address this issue early on, and I sincerely appreciate
that it is one of the top priorities of the new administration.
Likewise, I know that Senator Grassley also cares deeply about this
issue.
In closing, I want to reiterate that I am committed to working with
Senator Grassley, with the other members of the Finance Committee, and
with the new Administration to come up with a compromise solution. It
is truly my hope that we can work together, build consensus, and forge
compromise solutions on this issue. If we're creative, and if we listen
to each other, I am confident that we can find balanced and bipartisan
solution.

S. 10

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 ``Medicare
Prescription Drug Coverage Act of 2001''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Medicare outpatient prescription drug benefit program.

``Part D--Outpatient Prescription Drug Benefit Program

``Sec. 1860. Definitions.

``Subpart 1--Establishment of Outpatient Prescription Drug Benefit
Program

``Sec. 1860A. Establishment of outpatient prescription drug benefit
program.
``Sec. 1860B. Enrollment.
``Sec. 1860C. Providing information to beneficiaries.
``Sec. 1860D. Premiums.
``Sec. 1860E. Cost-sharing.
``Sec. 1860F. Selection of entities to provide outpatient drug benefit.
``Sec. 1860G. Conditions for awarding contract.
``Sec. 1860H. Payments.
``Sec. 1860I. Employer incentive program for employment-based retiree
drug coverage.
``Sec. 1860J. Procedures for partial year implementation.
``Sec. 1860K. Appropriations.

``Subpart 2--Medicare Pharmacy and Therapeutics (P&T) Advisory
Committee

``Sec. 1860M. Medicare Pharmacy and Therapeutics (P&T) Advisory
Committee.''.
Sec. 4. Part D benefits under Medicare+Choice plans.
Sec. 5. Exclusion of part D costs from determination of part B monthly
premium.
Sec. 6. Additional assistance for low-income beneficiaries.
Sec. 7. Medigap revisions.
Sec. 8. Comprehensive immunosuppressive drug coverage for transplant
patients.

[[Page S156]]

Sec. 9. HHS studies and report to Congress regarding outpatient
prescription drug benefit program.
Sec. 10. GAO study and biennial reports on competition and savings.
Sec. 11. MedPAC study and annual reports on the pharmaceutical market,
pharmacies, and beneficiary access.
Sec. 12. Appropriations.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Prescription drug coverage was not a standard part of
health insurance when the medicare program under title XVIII
of the Social Security Act was enacted in 1965. Since 1965,
however, drug coverage has become a key component of most
private and public health insurance coverage, except for the
medicare program.
(2) At least \2/3\ of medicare beneficiaries have
unreliable, inadequate, or no drug coverage at all.
(3) Seniors who do not have drug coverage typically pay 15
percent more for prescription drugs than individuals that
have such coverage pay for such drugs, and often pay 2 times
the best available price for such drugs.
(4) Although many medicare beneficiaries who lack
prescription drug coverage have low incomes, more than \1/2\
of such beneficiaries have incomes greater than 150 percent
of the poverty line.
(5) The number of private firms offering retiree health
coverage is declining.
(6) The premiums for medicare supplemental policies
(medigap policies) that provide prescription drug coverage
are too expensive for most medicare beneficiaries and are
highest for older senior citizens who need prescription drug
coverage the most and typically have the lowest incomes.
(7) The management of a medicare prescription drug benefit
should mirror the practices employed by private entities in
delivering prescription drugs. Discounts should be achieved
through competition.
(8) All medicare beneficiaries should have access to a
voluntary, reliable, affordable outpatient drug benefit as
part of the medicare program that assists with the high cost
of prescription drugs and protects them against excessive
out-of-pocket costs.
(9) The addition of a medicare drug benefit should be
consistent with an overall plan to strengthen and modernize
the medicare program.

SEC. 3. MEDICARE OUTPATIENT PRESCRIPTION DRUG BENEFIT
PROGRAM.

(a) Establishment.--Title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) is amended by redesignating part D
as part E and by inserting after part C the following new
part:

``Part D--Outpatient Prescription Drug Benefit Program

``definitions

``Sec. 1860. In this part:
``(1) Covered outpatient drug.--
``(A) In general.--Except as provided in subparagraph (B),
the term `covered outpatient drug' means any of the following
products:
``(i) A drug which may be dispensed only upon prescription,
and--

``(I) which is approved for safety and effectiveness as a
prescription drug under section 505 of the Federal Food,
Drug, and Cosmetic Act;
``(II)(aa) which was commercially used or sold in the
United States before the date of enactment of the Drug
Amendments of 1962 or which is identical, similar, or related
(within the meaning of section 310.6(b)(1) of title 21 of the
Code of Federal Regulations) to such a drug, and (bb) which
has not been the subject of a final determination by the
Secretary that it is a `new drug' (within the meaning of
section 201(p) of the Federal Food, Drug, and Cosmetic Act)
or an action brought by the Secretary under section 301,
302(a), or 304(a) of such Act to enforce section 502(f) or
505(a) of such Act; or
``(III)(aa) which is described in section 107(c)(3) of the
Drug Amendments of 1962 and for which the Secretary has
determined there is a compelling justification for its
medical need, or is identical, similar, or related (within
the meaning of section 310.6(b)(1) of title 21 of the Code of
Federal Regulations) to such a drug, and (bb) for which the
Secretary has not issued a notice of an opportunity for a
hearing under section 505(e) of the Federal Food, Drug, and
Cosmetic Act on a proposed order of the Secretary to withdraw
approval of an application for such drug under such section
because the Secretary has determined that the drug is less
than effective for all conditions of use prescribed,
recommended, or suggested in its labeling.

``(ii) A biological product which--

``(I) may only be dispensed upon prescription;
``(II) is licensed under section 351 of the Public Health
Service Act; and
``(III) is produced at an establishment licensed under such
section to produce such product.

``(iii) Insulin approved under appropriate Federal law,
including needles, syringes, and disposable pumps for the
administration of such insulin.
``(iv) A prescribed drug or biological product that would
meet the requirements of clause (i) or (ii) but that it is
available over-the-counter in addition to being available
upon prescription.
``(B) Exclusion.--The term `covered outpatient drug' does
not include any product--
``(i) except as provided in subparagraph (A)(iv), which may
be distributed to individuals without a prescription;
``(ii) that is covered under part A or B (unless coverage
of such product is not available because benefits under part
A or B have been exhausted); or
``(iii) except for agents used to promote smoking
cessation, for which coverage may be excluded or restricted
under section 1927(d)(2).
``(2) Eligible beneficiary.--The term `eligible
beneficiary' means an individual that is entitled to benefits
under part A or enrolled under part B.
``(3) Eligible entity.--The term `eligible entity' means
any entity that the Secretary determines to be appropriate to
provide eligible beneficiaries with covered outpatient drugs
under a contract entered into under this part, including--
``(A) a pharmacy benefit management company;
``(B) a retail pharmacy delivery system;
``(C) a health plan or insurer;
``(D) a State (through mechanisms established under a State
plan under title XIX);
``(E) any other entity approved by the Secretary; or
``(F) any combination of the entities described in
subparagraphs (A) through (E) if the Secretary determines
that such combination--
``(i) increases the scope or efficiency of the provision of
benefits under this part; and
``(ii) is not anticompetitive.

``Subpart 1--Establishment of Outpatient Prescription Drug Benefit
Program

``establishment of outpatient prescription drug benefit program

``Sec. 1860A. (a) Provision of Benefit.--Beginning on the
date that is 1 year after the date of enactment of this Act,
the Secretary shall provide for an outpatient prescription
drug benefit program under which an eligible beneficiary
shall be provided covered outpatient drugs.
``(b) Voluntary Nature of Program.--Nothing in this part
shall be construed as requiring an eligible beneficiary to
enroll in the program established under this part.
``(c) Scope of Benefits.--The program established under
this part shall provide for coverage of all therapeutic
classes of covered outpatient drugs.
``(d) Financing.--The costs of providing benefits under
this part shall be payable from the Federal Supplementary
Medical Insurance Trust Fund established under section 1841.

``enrollment

``Sec. 1860B. (a) Enrollment Under Part D.--
``(1) Establishment of process.--
``(A) In general.--The Secretary shall establish a process
through which an eligible beneficiary (including an eligible
beneficiary enrolled in a Medicare+Choice plan offered by a
Medicare+Choice organization) may make an election to enroll
under this part. Such process shall be similar to the process
for enrollment in part B under section 1837.
``(B) Requirement of enrollment.--An eligible beneficiary
must enroll under this part in order to be eligible to
receive covered outpatient drugs under this title.
``(2) Enrollment procedures.--
``(A) Late enrollment penalty.--
``(i) In general.--Subject to the succeeding provisions of
this subparagraph, in the case of an eligible beneficiary
whose coverage period under this part began pursuant to an
enrollment after the beneficiary's initial enrollment period
under part B (determined pursuant to section 1837(d)) and not
pursuant to the open enrollment period described in
subparagraph (B), the Secretary shall establish procedures
for increasing the amount of the monthly premium under
section 1860D applicable to such beneficiary--

``(I) by an amount that is equal to 10 percent of such
premium for each full 12-month period (in the same continuous
period of eligibility) in which the eligible beneficiary
could have been enrolled under this part but was not so
enrolled; or
``(II) if determined appropriate by the Secretary, by an
amount that the Secretary determines is actuarily sound for
each such period.

``(ii) Periods taken into account.--For purposes of
calculating any 12-month period under clause (i), there shall
be taken into account--

``(I) the months which elapsed between the close of the
eligible beneficiary's initial enrollment period and the
close of the enrollment period in which the beneficiary
enrolled; and
``(II) in the case of an eligible beneficiary who reenrolls
under this part, the months which elapsed between the date of
termination of a previous coverage period and the close of
the enrollment period in which the beneficiary reenrolled.

``(iii) Periods not taken into account.--

``(I) In general.--For purposes of calculating any 12-month
period under clause (i), subject to subclause (II), there
shall not be taken into account months for which the eligible
beneficiary can demonstrate that the beneficiary was covered
under a group health plan, including a qualified retiree
prescription drug plan (as defined in section 1860I(e)(3))
for which an incentive payment was paid under section 1860I,
that provides coverage of the cost of prescription drugs
whose actuarial value (as defined by the Secretary) to the
beneficiary equals or exceeds the actuarial value of the
benefits provided to an individual enrolled in the outpatient

[[Page S157]]

prescription drug benefit program under this part.
``(II) Application.--This clause shall only apply with
respect to a coverage period the enrollment for which occurs
before the end of the 60-day period that begins on the first
day of the month which includes the date on which the plan
terminates, ceases to provide, or reduces the value of the
prescription drug coverage under such plan to below the value
of the coverage provided under the program under this part.

``(iv) Periods treated separately.--Any increase in an
eligible beneficiary's monthly premium under clause (i) with
respect to a particular continuous period of eligibility
shall not be applicable with respect to any other continuous
period of eligibility which the beneficiary may have.
``(v) Continuous period of eligibility.--

``(I) In general.--Subject to subclause (II), for purposes
of this subparagraph, an eligible beneficiary's `continuous
period of eligibility' is the period that begins with the
first day on which the beneficiary is eligible to enroll
under section 1836 and ends with the beneficiary's death.
``(II) Separate period.--Any period during all of which an
eligible beneficiary satisfied paragraph (1) of section 1836
and which terminated in or before the month preceding the
month in which the beneficiary attained age 65 shall be a
separate `continuous period of eligibility' with respect to
the beneficiary (and each such period which terminates shall
be deemed not to have existed for purposes of subsequently
applying this subparagraph).

``(B) Open enrollment period for current beneficiaries in
which late enrollment procedures do not apply.--The Secretary
shall establish an applicable period, which shall begin on
the date on which the Secretary first begins to accept
elections for enrollment under this part, during which any
eligible beneficiary may enroll under this part without the
application of the late enrollment procedures established
under subparagraph (A)(i).
``(3) Period of coverage.--
``(A) In general.--Except as provided in subparagraph (B),
an eligible beneficiary's coverage under the program under
this part shall be effective for the period provided in
section 1838, as if that section applied to the program under
this part.
``(B) Open enrollment.--An eligible beneficiary who enrolls
under the program under this part pursuant to paragraph
(2)(B) shall be entitled to the benefits under this part
beginning on the first day of the month following the month
in which such enrollment occurs.
``(C) Limitation.--Coverage under this part shall not begin
prior to the date that is 1 year after the date of enactment
of this Act.
``(4) Part d coverage terminated by termination of coverage
under parts a and b.--
``(A) In general.--In addition to the causes of termination
specified in section 1838, the Secretary shall terminate an
individual's coverage under this part if the individual is no
longer enrolled in either part A or part B.
``(B) Effective date.--The termination described in
subparagraph (A) shall be effective on the effective date of
termination of coverage under part A or (if later) under part
B.
``(b) Enrollment With Eligible Entity.--
``(1) Process.--
``(A) In general.--The Secretary shall establish a process
through which an eligible beneficiary who is enrolled under
this part but not enrolled in a Medicare+Choice plan offered
by a Medicare+Choice organization shall make an annual
election to enroll with any eligible entity that has been
awarded a contract under this part and serves the geographic
area in which the beneficiary resides.
``(B) Rules.--In establishing the process under
subparagraph (A), the Secretary shall use rules similar to
the rules for enrollment and disenrollment with a
Medicare+Choice plan under section 1851 (including special
election periods under subsection (e)(4) of such section).
``(2) Medicare+choice enrollees.--An eligible beneficiary
who is enrolled under this part and enrolled in a
Medicare+Choice plan offered by a Medicare+Choice
organization shall receive coverage of covered outpatient
drugs under this part through such plan.
``(c) First Enrollment Period.--The processes developed
under subsections (a) and (b) shall ensure that eligible
beneficiaries are permitted to enroll under this part and
with an eligible entity prior to the date that is 1 year
after the date of enactment of this Act, in order to ensure
that coverage under this part is effective as of such date.

``providing information to beneficiaries

``Sec. 1860C. (a) Activities.--
``(1) In general.--The Secretary shall conduct activities
that are designed to broadly disseminate information to
eligible beneficiaries (and prospective eligible
beneficiaries) regarding the coverage provided under this
part.
``(2) Special rule for first enrollment under the
program.--To the extent practicable, the activities described
in paragraph (1) shall ensure that eligible beneficiaries are
provided with such information at least 30 days prior to the
first enrollment period described in section 1860B(c).
``(b) Requirements.--
``(1) In general.--The activities described in subsection
(a) shall--
``(A) be similar to the activities performed by the
Secretary under section 1851(d);
``(B) be coordinated with the activities performed by the
Secretary under such section and under section 1804; and
``(C) provide for the dissemination of information
comparing the eligible entities that are available to
eligible beneficiaries residing in an area under this part.
``(2) Comparative information.--The comparative information
described in paragraph (1)(B) shall include the following:
``(A) Benefits.--A comparison of the benefits provided by
each eligible entity, including a comparison of the pharmacy
networks used by each eligible entity and the formularies and
appeals processes implemented by each entity.
``(B) Quality and performance.--To the extent available,
the quality and performance of each eligible entity.
``(C) Beneficiary costs.--The cost-sharing required of
eligible beneficiaries enrolled in each eligible entity.
``(D) Consumer satisfaction surveys.--To the extent
available, the results of consumer satisfaction surveys
regarding each eligible entity.
``(E) Additional information.--Such additional information
as the Secretary may prescribe.
``(3) Information standards.--The Secretary shall develop
standards to ensure that the information provided to eligible
beneficiaries under this part is complete, accurate, and
uniform.
``(c) Use of Medicare Consumer Coalitions To Provide
Information.--
``(1) In general.--The Secretary may contract with Medicare
Consumer Coalitions to conduct the informational activities--
``(A) under this section;
``(B) under section 1851(d); and
``(C) under section 1804.
``(2) Selection of coalitions.--If the Secretary determines
the use of Medicare Consumer Coalitions to be appropriate,
the Secretary shall--
``(A) develop and disseminate, in such areas as the
Secretary determines appropriate, a request for proposals for
Medicare Consumer Coalitions to contract with the Secretary
in order to conduct any of the informational activities
described in paragraph (1); and
``(B) select a proposal of a Medicare Consumer Coalition to
conduct the informational activities in each such area, with
a preference for broad participation by organizations with
experience in providing information to beneficiaries under
this title.
``(3) Payment to medicare consumer coalitions.--The
Secretary shall make payments to Medicare Consumer Coalitions
contracting under this subsection in such amounts and in such
manner as the Secretary determines appropriate.
``(4) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary such sums as
may be necessary to contract with Medicare Consumer
Coalitions under this section.
``(5) Medicare consumer coalition defined.--In this
subsection, the term `Medicare Consumer Coalition' means an
entity that is a nonprofit organization operated under the
direction of a board of directors that is primarily composed
of beneficiaries under this title.

``premiums

``Sec. 1860D. (a) Annual Establishment of Monthly Premium
Rates.--
``(1) Premium.--The Secretary shall, during September of
each year (beginning with the first September after the day
that is 1 year after the date of enactment of the Medicare
Prescription Drug Coverage Act of 2001), determine and
promulgate a monthly premium rate for the succeeding year in
accordance with the provisions of this subsection.
``(2) Actuarial determinations.--
``(A) Determination of annual benefit and administrative
costs.--The Secretary shall estimate annually for the
succeeding year the amount equal to the total of the benefits
and administrative costs that will be payable from the
Federal Supplementary Medical Insurance Trust Fund for
providing covered outpatient drugs in such calendar year with
respect to enrollees in the program under this part.
``(B) Determination of monthly premium rates.--
``(i) In general.--The Secretary shall determine the
monthly premium rate with respect to such enrollees for such
succeeding year, which shall be \1/12\ of the applicable
percent of the amount determined under subparagraph (A),
divided by the total number of such enrollees, and rounded
(if such rate is not a multiple of 10 cents) to the nearest
multiple of 10 cents.
``(ii) Definition of applicable percent.--For purposes of
clause (i), the term `applicable percent' means--

``(I) 45 percent, in the case of premiums paid by an
eligible beneficiary enrolled in the program under this part;
and
``(II) 66.66 percent, in the case of premiums paid for such
a beneficiary by an employer (as defined in section
1860I(e)(2)) that the beneficiary formerly worked for.

``(3) Publication of assumptions.--The Secretary shall
publish, together with the promulgation of the monthly
premium rates for the succeeding year, a statement setting
forth the actuarial assumptions and bases employed in
arriving at the amounts and rates determined under paragraphs
(1) and (2).
``(b) Collection of Premium.--The monthly premium
applicable to an eligible beneficiary under this part shall
be collected and

[[Page S158]]

credited to the Federal Supplementary Medical Insurance Trust
Fund in the same manner as the monthly premium determined
under section 1839 is collected and credited to such Trust
Fund under section 1840.

``cost-sharing

``Sec. 1860E. (a) Deductible.--
``(1) In general.--Subject to paragraph (2), no payments
shall be made under this part on behalf of an eligible
beneficiary until the beneficiary has met a $250 deductible.
``(2) Waiver of deductible for generic drugs.--
``(A) In general.--An eligible entity may provide that
generic drugs are not subject to the deductible described in
paragraph (1) if the Secretary determines that the waiver of
the deductible--
``(i) is tied to the performance measures and other
incentives applicable to the entity pursuant to section
1860H(a); and
``(ii) will not result in an increase in the expenditures
made from the Federal Supplementary Medical Insurance Trust
Fund.
``(B) Credit for amounts paid.--If the deductible is waived
pursuant to subparagraph (A), any coinsurance paid by an
eligible beneficiary for the generic drug shall be credited
toward the annual deductible.
``(b) Coinsurance.--
``(1) Establishment.--
``(A) In general.--Subject to paragraph (2), if any covered
outpatient drug is provided to an eligible beneficiary in a
year after the beneficiary has met any deductible requirement
under subsection (a) for the year, the beneficiary shall be
responsible for making payments for the drug in an amount
equal to the applicable percentage of the cost of the drug.
``(B) Applicable percentage defined.--For purposes of
subparagraph (A), the `applicable percentage' means, with
respect to any covered outpatient drug provided to an
eligible beneficiary in a year--
``(i) 50 percent to the extent the out-of-pocket expenses
of the beneficiary for such drug, when added to the out-of-
pocket expenses of the beneficiary for covered outpatient
drugs previously provided in the year, do not exceed $3,500;
``(ii) 25 percent to the extent such expenses, when so
added, exceed $3,500 but do not exceed $4,000; and
``(iii) 0 percent to the extent such expenses, when so
added, would exceed $4,000.
``(C) Out-of-pocket expenses defined.--For purposes of
subparagraph (B), the term `out-of-pocket expenses' means
expenses incurred as a result of the application of the
deductible under subsection (a) and the coinsurance required
under this subsection.
``(2) Reduction by eligible entity.--An eligible entity may
reduce the applicable percentage that an eligible beneficiary
is subject to under paragraph (1) if the Secretary determines
that such reduction--
``(A) is tied to the performance measures and other
incentives applicable to the entity pursuant to section
1860H(a); and
``(B) will not result in an increase in the expenditures
made from the Federal Supplementary Medical Insurance Trust
Fund.
``(c) Inflation Adjustment.--
``(1) In general.--In the case of any calendar year
beginning after 2004, each of the dollar amounts in
subsections (a)(1) and (b)(1)(B) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the percentage (if any) by which the amount of
average per capita expenditures under this part in the
preceding calendar year exceeds the amount of such
expenditures in 2003.
``(2) Rounding.--If any dollar amount after being increased
under paragraph (1) is not a multiple of $5, such dollar
amount shall be rounded to the nearest multiple of $5.

``selection of entities to provide outpatient drug benefit

``Sec. 1860F. (a) Establishment of Bidding Process.--
``(1) In general.--The Secretary shall establish procedures
under which the Secretary accepts bids submitted by eligible
entities and awards contracts to such entities in order to
administer and deliver the benefits provided under this part
to eligible beneficiaries in an area.
``(2) Competitive procedures.--Competitive procedures (as
defined in section 4(5) of the Office of Federal Procurement
Policy Act (41 U.S.C. 403(5))) shall be used to enter into
contracts under this part.
``(b) Area for Contracts.--
``(1) Regional basis.--
``(A) In general.--Except as provided in subparagraph (B)
and subject to paragraph (2), the contract entered into
between the Secretary and an eligible entity shall require
the eligible entity to provide covered outpatient drugs on a
regional basis.
``(B) Partial regional basis.--
``(i) In general.--If determined appropriate by the
Secretary, the Secretary may permit the coverage described in
subparagraph (A) to be provided on a partial regional basis.
``(ii) Requirements.--If the Secretary permits coverage
pursuant to clause (i), the Secretary shall ensure that the
partial region in which coverage is provided is--

``(I) at least the size of the commercial service area of
the eligible entity for that area; and
``(II) not smaller than a State.

``(2) Determination.--
``(A) In general.--In determining coverage areas under this
part, the Secretary shall--
``(i) take into account the number of eligible
beneficiaries in an area in order to encourage participation
by eligible entities; and
``(ii) ensure that there are at least 10 different coverage
areas in the United States.
``(B) No administrative or judicial review.--The
determination of coverage areas under this part shall not be
subject to administrative or judicial review.
``(c) Submission of Bids.--
``(1) In general.--Each eligible entity desiring to provide
covered outpatient drugs under this part shall submit a bid
to the Secretary at such time, in such manner, and
accompanied by such information as the Secretary may
reasonably require.
``(2) Required information.--The bids described in
paragraph (1) shall include--
``(A) a proposal for the estimated prices of covered
outpatient drugs and the projected annual increases in such
prices, including differentials between formulary and
nonformulary prices, if applicable;
``(B) the amount that the entity will charge the Secretary
for administering and delivering the benefits under such
contract;
``(C) a statement regarding whether the entity will waive
the deductible for generic drugs pursuant to section
1860E(a)(2);
``(D) a statement regarding whether the entity will reduce
the applicable coinsurance percentage pursuant to section
1860E(b)(2) and if so, the amount of such reduction;
``(E) a detailed description of--
``(i) the risk corridors tied to performance measures and
other incentives that the entity will accept under the
contract; and
``(ii) how the entity will meet such measures and
incentives;
``(F) a detailed description of proposed contracts with
local pharmacy providers designed to ensure access, including
compensation for local pharmacists' services;
``(G) a detailed description of any ownership or shared
financial interests with other entities involved in the
delivery of the benefit as proposed;
``(H) a detailed description of the entity's estimated
marketing and advertising expenditures related to enrolling
and retaining eligible beneficiaries; and
``(I) such other information that the Secretary determines
is necessary in order to carry out this part, including
information relating to the bidding process under this part.
``(d) Access.--
``(1) In general.--The Secretary shall ensure that an
eligible entity--
``(A) complies with the access requirements described in
section 1860G(a)(4)(A); and
``(B) makes available to each beneficiary covered under the
contract the full scope of the benefits required under this
part.
``(2) Areas not covered by contracts.--The Secretary shall
develop procedures for the provision of covered outpatient
drugs under this part to each eligible beneficiary that
resides in an area that is not covered by any contract under
this part.
``(3) Beneficiaries residing in different locations.--The
Secretary shall develop procedures to ensure that each
eligible beneficiary that resides in different areas in a
year is provided the benefits under this part throughout the
entire year.
``(4) Special attention to rural and hard-to-serve areas.--
``(A) In general.--The Secretary shall ensure that all
eligible beneficiaries have access to the full range of
benefits under this part, and shall give special attention to
access, pharmacist counseling, and delivery in rural and
hard-to-serve areas (as the Secretary may define by
regulation).
``(B) Special attention defined.--For purposes of
subparagraph (A), the term `special attention' may include
bonus payments to retail pharmacists in rural areas, extra
payments to eligible entities for the cost of rapid delivery
of pharmaceuticals, and any other actions the Secretary
determines are necessary to ensure full access to benefits
under this part by eligible beneficiaries residing in rural
and hard-to-serve areas.
``(C) GAO report.--Not later than 2 years after the date of
enactment of the Medicare Prescription Drug Coverage Act of
2001, the Comptroller General of the United States shall
submit to Congress a report on the access to benefits under
this part by eligible beneficiaries residing in rural and
hard-to-serve areas, together with any recommendations of the
Comptroller General regarding any additional steps the
Secretary may need to take to ensure the access of medicare
beneficiaries to such benefits.
``(e) Awarding of Contracts.--
``(1) Number of contracts.--The Secretary shall, consistent
with the requirements of this part and the goal of containing
costs under this title, award in a competitive manner at
least 2 contracts in an area, unless only 1 bidding entity
meets the minimum standards specified under this part and by
the Secretary.
``(2) Determination.--In determining which of the eligible
entities that submitted bids that meet the minimum standards
specified under this part and by the Secretary (including the
terms and conditions described in section 1860G) to award a
contract, the Secretary shall consider the comparative merits
of each bid, as determined on the basis of the past
performance of the entity and other relevant factors, with
respect to--
``(A) how well the entity meets such minimum standards;

[[Page S159]]

``(B) the amount that the entity will charge the Secretary
for administering and delivering the benefits under the
contract;
``(C) the proposed prices of covered outpatient drugs and
annual increases in such prices;
``(D) the proposed risk corridors tied to performance
measures and other incentives that the entity will be subject
to under the contract;
``(E) the factors described in section 1860C(b)(2);
``(F) prior experience in administering a prescription drug
benefit program;
``(G) effectiveness in containing costs through pricing
incentives and utilization management; and
``(H) such other factors as the Secretary deems necessary
to evaluate the merits of each bid.
``(3) Exception to conflict of interest rules.--In awarding
contracts under this part, the Secretary may waive conflict
of interest laws generally applicable to Federal acquisitions
(subject to such safeguards as the Secretary may find
necessary to impose) in circumstances where the Secretary
finds that such waiver--
``(A) is not inconsistent with the--
``(i) purposes of the programs under this title; or
``(ii) best interests of enrolled individuals; and
``(B) permits a sufficient level of competition for such
contracts, promotes efficiency of benefits administration, or
otherwise serves the objectives of the program under this
part.
``(4) No administrative or judicial review.--The
determination of the Secretary to award or not award a
contract to an eligible entity under this part shall not be
subject to administrative or judicial review.
``(f) Approval of Marketing Material and Application
Forms.--The provisions of section 1851(h) shall apply to
marketing material and application forms under this part in
the same manner as such provisions apply to marketing
material and application forms under part C.
``(g) Duration of Contracts.--Each contract under this part
shall be for a term of at least 2 years but not more than 5
years, as determined by the Secretary.

``conditions for awarding contract

``Sec. 1860G. (a) In General.--The Secretary shall not
award a contract to an eligible entity under this part unless
the Secretary finds that the eligible entity agrees to comply
with such terms and conditions as the Secretary shall
specify, including the following:
``(1) Quality and financial standards.--The eligible entity
meets the quality and financial standards specified by the
Secretary.
``(2) Procedures to ensure proper utilization, compliance,
and avoidance of adverse drug reactions.--The eligible entity
has in place drug utilization review procedures to ensure--
``(A) the appropriate utilization by eligible beneficiaries
of the benefits to be provided under the contract; and
``(B) the avoidance of adverse drug reactions among
eligible beneficiaries enrolled with the entity, including
problems due to therapeutic duplication, drug-disease
contraindications, drug-drug interactions (including serious
interactions with nonprescription or over-the-counter drugs),
incorrect drug dosage or duration of drug treatment, drug-
allergy interactions, and clinical abuse and misuse.
``(3) Cost-effective provision of benefits.--
``(A) In general.--In providing the benefits under a
contract under this part, an eligible entity may--
``(i) employ mechanisms to provide the benefits
economically, including the use of--

``(I) formularies (pursuant to subparagraph (B));
``(II) alternative methods of distribution; and
``(III) generic drug substitution;

``(ii) use mechanisms to encourage eligible beneficiaries
to select cost-effective drugs or less costly means of
receiving drugs, including the use of pharmacy incentive
programs, therapeutic interchange programs, and disease
management programs; and
``(iii) encourage pharmacy providers to--

``(I) inform beneficiaries of the differentials in price
between generic and nongeneric drug equivalents; and
``(II) provide medication therapy management programs in
order to enhance beneficiaries' understanding of the
appropriate use of medications and to reduce the risk of
potential adverse events associated with medications.

``(B) Formularies.--If an eligible entity uses a formulary
under this part, such formulary shall comply with standards
established by the Secretary in consultation with the
Medicare Pharmacy and Therapeutics Advisory Committee
established under section 1860M. Such standards shall require
that the eligible entity--
``(i) use a pharmacy and therapeutic committee (that meets
the standards for a pharmacy and therapeutic committee
established by the Secretary in consultation with the
Medicare Pharmacy and Therapeutics Advisory Committee
established under section 1860M) to develop and implement the
formulary;
``(ii) include in the formulary--

``(I) at least 1 drug from each therapeutic class (as
defined by the entity's pharmacy and therapeutic committee in
accordance with standards established by the Secretary in
consultation with the Medicare Pharmacy and Therapeutics
Advisory Committee established under section 1860M);

``(II) if there is more than 1 drug available in a
therapeutic class, at least 2 drugs from such class; and
``(III) if there are more than 2 drugs available in a
therapeutic class, at least 2 drugs from such class and a
generic drug substitute if available;

``(iii) develop procedures for the--

``(I) addition of new therapeutic classes to the formulary;
``(II) addition of new drugs to an existing therapeutic
class; and
``(III) modification of the formulary;

``(iv) provide for coverage of otherwise covered non-
formulary drugs when recommended by a prescribing provider;
and
``(v) disclose to current and prospective beneficiaries and
to providers in the service area the nature of the formulary
restrictions, including information regarding the drugs
included in the formulary, coinsurance, and any difference in
the cost-sharing for different types of drugs.
``(C) Construction.--Nothing in this paragraph shall be
construed as precluding an eligible entity from--
``(i) requiring cost-sharing for nonformulary drugs that is
higher than the cost-sharing established in section 1860E(b),
except that such entity shall provide for coverage of a
nonformulary drug at the same cost-sharing level as a drug
within the formulary if such nonformulary drug is recommended
by a prescribing provider;
``(ii) educating prescribing providers, pharmacists, and
beneficiaries about the medical and cost benefits of
formulary drugs (including generic drugs); or
``(iii) requiring prescribing providers to consider a
formulary drug prior to dispensing of a nonformulary drug, as
long as such requirement does not unduly delay the provision
of the drug.
``(4) Patient protections.--
``(A) Access.--The eligible entity ensures that the covered
outpatient drugs are accessible and convenient to eligible
beneficiaries covered under the contract, including by doing
the following:
``(i) Services during emergencies.--Offering services 24
hours a day and 7 days a week for emergencies.
``(ii) Agreements with pharmacies.--Entering into
participation agreements under subsection (b) with
pharmacies, that include terms that--

``(I) secure the participation of sufficient numbers of
pharmacies to ensure convenient access (including adequate
emergency access); and
``(II) permit the participation of any pharmacy in the
service area that meets the participation requirements
described in subsection (b).

``(B) Continuity of care.--
``(i) In general.--The eligible entity ensures that, in the
case of an eligible beneficiary who loses coverage under this
part with such entity under circumstances that would permit a
special election period (as established by the Secretary
under section 1860B(b)), the entity will continue to provide
coverage under this part to such beneficiary until the
beneficiary enrolls and receives such coverage with another
eligible entity under this part.
``(ii) Limited period.--In no event shall an eligible
entity be required to provide the extended coverage required
under clause (i) beyond the date which is 30 days after the
coverage with such entity would have terminated but for this
subparagraph.
``(C) Procedures regarding denials of care.--The eligible
entity has in place procedures to ensure--
``(i) a timely internal and external review and resolution
of denials of coverage (in whole or in part) and complaints
(including those regarding the use of formularies under
paragraph (3)) by eligible beneficiaries, or by providers,
pharmacists, and other individuals acting on behalf of each
such beneficiary (with the beneficiary's consent) in
accordance with requirements (as established by the
Secretary) that are comparable to such requirements for
Medicare+Choice organizations under part C; and
``(ii) that beneficiaries are provided with information
regarding the appeals procedures under this part at the time
of enrollment.
``(D) Procedures regarding patient confidentiality.--
Insofar as an eligible entity maintains individually
identifiable medical records or other health information
regarding eligible beneficiaries under a contract entered
into under this part, the entity has in place procedures to--
``(i) safeguard the privacy of any individually
identifiable beneficiary information;
``(ii) maintain such records and information in a manner
that is accurate and timely;
``(iii) ensure timely access by such beneficiaries to such
records and information; and
``(iv) otherwise comply with applicable laws relating to
patient confidentiality.
``(E) Procedures regarding transfer of medical records.--
``(i) In general.--The eligible entity has in place
procedures for the timely transfer of records and information
described in subparagraph (D) (with respect to a beneficiary
who loses coverage under this part with the entity and
enrolls with another entity under this part) to such other
entity.
``(ii) Patient confidentiality.--The procedures described
in clause (i) shall comply

[[Page S160]]

with the patient confidentiality procedures described in
subparagraph (D).
``(F) Procedures regarding medical errors.--The eligible
entity has in place procedures for working with the Secretary
to deter medical errors related to the provision of covered
outpatient drugs.
``(5) Procedures to control fraud, abuse, and waste.--The
eligible entity has in place procedures to control fraud,
abuse, and waste.
``(6) Reporting requirements.--
``(A) In general.--The eligible entity provides the
Secretary with reports containing information regarding the
following:
``(i) The prices that the eligible entity is paying for
covered outpatient drugs.
``(ii) The prices that eligible beneficiaries enrolled with
the entity will be charged for covered outpatient drugs.
``(iii) The administrative costs of providing such
benefits.
``(iv) Utilization of such benefits.
``(v) Marketing and advertising expenditures related to
enrolling and retaining eligible beneficiaries.
``(B) Timeframe for submitting reports.--
``(i) In general.--The eligible entity shall submit a
report described in subparagraph (A) to the Secretary within
3 months after the end of each 12-month period in which the
eligible entity has a contract under this part. Such report
shall contain information concerning the benefits provided
during such 12-month period.
``(ii) Last year of contract.--In the case of the last year
of a contract under this section, the Secretary may require
that a report described in subparagraph (A) be submitted 3
months prior to the end of the contract. Such report shall
contain information concerning the benefits provided between
the period covered by the most recent report under this
subparagraph and the date that a report is submitted under
this clause.
``(C) Confidentiality of information.--
``(i) In general.--Notwithstanding any other provision of
law and subject to clause (ii), information disclosed by an
eligible entity pursuant to subparagraph (A) is confidential
and shall only be used by the Secretary for the purposes of,
and to the extent necessary, to carry out this part.
``(ii) Utilization data.--Subject to patient
confidentiality laws, the Secretary shall make information
disclosed by an eligible entity pursuant to subparagraph
(A)(iv) (regarding utilization data) available for research
purposes. The Secretary may charge a reasonable fee for
making such information available.
``(7) Approval of marketing material and application
forms.--The eligible entity will comply with the requirements
described in section 1860F(f).
``(8) Records and audits.--The eligible entity maintains
adequate records related to the administration of the benefit
under this part and affords the Secretary access to such
records for auditing purposes.
``(b) Pharmacy Participation Agreements.--
``(1) In general.--A pharmacy that meets the requirements
of this subsection shall be eligible to enter an agreement
with an eligible entity to furnish covered outpatient drugs
and pharmacists' services to eligible beneficiaries enrolled
with such entity and residing in the service area.
``(2) Terms of agreement.--An agreement under this
subsection shall include the following terms and
requirements:
``(A) Licensing.--The pharmacy and pharmacists shall meet
(and throughout the contract period will continue to meet)
all applicable State and local licensing requirements.
``(B) Limitation on charges.--Pharmacies participating
under this part shall not charge an eligible beneficiary
enrolled with the eligible entity more than--
``(i) the negotiated price for an individual drug (as
reported to the Secretary pursuant to subsection (a)(6)(A));
or
``(ii) the amount of the beneficiary's obligation (as
determined in accordance with the provisions of this part) of
the negotiated price of such drug.
``(C) Performance standards.--The pharmacy shall comply
with performance standards relating to--
``(i) measures for quality assurance, reduction of medical
errors, and compliance with the drug utilization review
procedures described in subsection (a)(2);
``(ii) systems to ensure compliance with the patient
confidentiality standards applicable under subsection
(a)(4)(D); and
``(iii) other requirements as the Secretary may impose to
ensure integrity, efficiency, and the quality of the program
under this part.

``payments

``Sec. 1860H. (a) Payments to Eligible Entities.--
``(1) Procedures.--
``(A) In general.--The Secretary shall establish procedures
for making payments to an eligible entity under a contract
entered into under this part for the administration and
delivery of the benefits under this part.
``(B) Entities only subject to limited risk.--Under the
procedures established under subparagraph (A), an eligible
entity shall only be at risk to the extent that the entity is
at risk under paragraph (2).
``(2) Risk corridors tied to performance measures and other
incentives.--
``(A) In general.--The procedures established under
paragraph (1) may include the use of--
``(i) risk corridors tied to performance measures that have
been agreed to between the eligible entity and the Secretary
under the contract; and
``(ii) any other incentives that the Secretary determines
appropriate.
``(B) Phase-in of risk corridors tied to performance
measures.--The Secretary may phase-in the use of risk
corridors tied to performance measures if the Secretary
determines such phase-in to be appropriate.
``(C) Payments subject to incentives.--If a contract under
this part includes the use of risk corridors tied to
performance measures or other incentives pursuant to
subparagraph (A), payments to eligible entities under such
contract shall be subject to such risk corridors tied to
performance measures and other incentives.
``(3) Risk adjustment.--To the extent that eligible
entities are at risk because of the risk corridors or other
incentives described in paragraph (2)(A), the procedures
established under paragraph (1) may include a methodology for
adjusting the payments made to such entities based on the
differences in actuarial risk of different enrollees being
served if the Secretary determines such adjustments to be
necessary and appropriate.
``(b) Secondary Payer Provisions.--The provisions of
section 1862(b) shall apply to the benefits provided under
this part.

``employer incentive program for employment-based retiree drug coverage

``Sec. 1860I. (a) Program Authority.--The Secretary is
authorized to develop and implement a program under this
section called the `Employer Incentive Program' that
encourages employers and other sponsors of employment-based
health care coverage to provide adequate prescription drug
benefits to retired individuals by subsidizing, in part, the
sponsor's cost of providing coverage under qualifying plans.
``(b) Sponsor Requirements.--In order to be eligible to
receive an incentive payment under this section with respect
to coverage of an individual under a qualified retiree
prescription drug plan (as defined in subsection (f)(3)), a
sponsor shall meet the following requirements:
``(1) Assurances.--The sponsor shall--
``(A) annually attest, and provide such assurances as the
Secretary may require, that the coverage offered by the
sponsor is a qualified retiree prescription drug plan, and
will remain such a plan for the duration of the sponsor's
participation in the program under this section; and
``(B) guarantee that it will give notice to the Secretary
and covered retirees--
``(i) at least 120 days before terminating its plan; and
``(ii) immediately upon determining that the actuarial
value of the prescription drug benefit under the plan falls
below the actuarial value of the outpatient prescription drug
benefit under this part.
``(2) Beneficiary information.--The sponsor shall report to
the Secretary, for each calendar quarter for which it seeks
an incentive payment under this section, the names and social
security numbers of all retirees (and their spouses and
dependents) covered under such plan during such quarter and
the dates (if less than the full quarter) during which each
such individual was covered.
``(3) Audits.--The sponsor and the employment-based retiree
health coverage plan seeking incentive payments under this
section shall agree to maintain, and to afford the Secretary
access to, such records as the Secretary may require for
purposes of audits and other oversight activities necessary
to ensure the adequacy of prescription drug coverage, the
accuracy of incentive payments made, and such other matters
as may be appropriate.
``(4) Other requirements.--The sponsor shall provide such
other information, and comply with such other requirements,
as the Secretary may find necessary to administer the program
under this section.
``(c) Incentive Payments.--
``(1) In general.--A sponsor that meets the requirements of
subsection (b) with respect to a quarter in a calendar year
shall be entitled to have payment made by the Secretary on a
quarterly basis (to the sponsor or, at the sponsor's
direction, to the appropriate employment-based health plan)
of an incentive payment, in the amount determined in
paragraph (2), for each retired individual (or spouse) who--
``(A) was covered under the sponsor's qualified retiree
prescription drug plan during such quarter; and
``(B) was eligible for, but was not enrolled in, the
outpatient prescription drug benefit program under this part.
``(2) Amount of incentive.--The payment under this section
with respect to each individual described in paragraph (1)
for a month shall be equal to \2/3\ of the monthly premium
amount payable by an eligible beneficiary enrolled under this
part, as set for the calendar year pursuant to section
1860D(a)(2).
``(3) Payment date.--The incentive under this section with
respect to a calendar quarter shall be payable as of the end
of the next succeeding calendar quarter.
``(d) Civil Money Penalties.--A sponsor, health plan, or
other entity that the Secretary determines has, directly or
through its agent, provided information in connection with a
request for an incentive payment under this section that the
entity knew or should have known to be false shall be subject
to a civil monetary penalty in an amount up to 3 times the
total incentive

[[Page S161]]

amounts under subsection (c) that were paid (or would have
been payable) on the basis of such information.
``(e) Definitions.--In this section:
``(1) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health
insurance or other coverage of health care costs for retired
individuals (or for such individuals and their spouses and
dependents) based on their status as former employees or
labor union members.
``(2) Employer.--The term `employer' has the meaning given
the term in section 3(5) of the Employee Retirement Income
Security Act of 1974 (except that such term shall include
only employers of 2 or more employees).
``(3) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' means health
insurance coverage included in employment-based retiree
health coverage that--
``(A) provides coverage of the cost of prescription drugs
whose actuarial value (as defined by the Secretary) to each
retired beneficiary equals or exceeds the actuarial value of
the benefits provided to an individual enrolled in the
outpatient prescription drug benefit program under this part;
and
``(B) does not deny, limit, or condition the coverage or
provision of prescription drug benefits for retired
individuals based on age or any health status-related factor
described in section 2702(a)(1) of the Public Health Service
Act.
``(4) Sponsor.--The term `sponsor' has the meaning given
the term `plan sponsor' in section 3(16)(B) of the Employer
Retirement Income Security Act of 1974.
``(f) Authorization of Appropriations.--There are
authorized to be appropriated from time to time, out of any
moneys in the Treasury not otherwise appropriated, such sums
as may be necessary to carry out the program under this
section.

``procedures for partial year implementation

``Sec. 1860J. If the Secretary first implements the program
under this part on a day other that January 1 of a year, the
Secretary shall establish procedures for implementing the
program during the period between the date of implementation
and December 31 of such year, including procedures--
``(1) for prorating premiums, deductibles, and coinsurance
under the program during such period; and
``(2) relating to requirements and payments under the
Medicare+Choice program during such period.

``appropriations

``Sec. 1860K. There are authorized to be appropriated from
time to time, out of any moneys in the Treasury not otherwise
appropriated, to the Federal Supplementary Medical Insurance
Trust Fund established under section 1841, an amount equal to
the amount by which the benefits and administrative costs of
providing the benefits under this part exceed the premiums
collected under section 1860D.

``Subpart 2--Medicare Pharmacy and Therapeutics (P&T) Advisory
Committee

``medicare pharmacy and therapeutics (p&t) advisory committee

``Sec. 1860M. (a) Establishment of Committee.--There is
established a Medicare Pharmacy and Therapeutics Advisory
Committee (in this section referred to as the `Committee').
``(b) Functions of Committee.--On and after January 1,
2002, the Committee shall advise the Secretary on policies
related to--
``(1) the development of guidelines for the implementation
and administration of the outpatient prescription drug
benefit program under this part; and
``(2) the development of--
``(A) standards for a pharmacy and therapeutics committee
required of eligible entities under section
1860G(a)(3)(B)(i);
``(B) standards for--
``(i) defining therapeutic classes;
``(ii) adding new therapeutic classes to a formulary;
``(iii) adding new drugs to a therapeutic class within a
formulary; and
``(iv) when and how often a formulary should be modified;
``(C) procedures to evaluate the bids submitted by eligible
entities under this part; and
``(D) procedures to ensure that eligible entities with a
contract under this part are in compliance with the
requirements under this part.
``(c) Structure and Membership of the Committee.--
``(1) Structure.--The Committee shall be composed of 19
members who shall be appointed by the Secretary.
``(2) Membership.--
``(A) In general.--The members of the Committee shall be
chosen on the basis of their integrity, impartiality, and
good judgment, and shall be individuals who are, by reason of
their education, experience, and attainments, exceptionally
qualified to perform the duties of members of the Committee.
``(B) Specific members.--Of the members appointed under
paragraph (1)--
``(i) eleven shall be chosen to represent physicians;
``(ii) four shall be chosen to represent pharmacists;
``(iii) one shall be chosen to represent the Health Care
Financing Administration;
``(iv) two shall be chosen to represent actuaries and
pharmacoeconomists; and
``(v) one shall be chosen to represent emerging drug
technologies.
``(d) Terms of Appointment.--Each member of the Committee
shall serve for a term determined appropriate by the
Secretary. The terms of service of the members initially
appointed shall begin on January 1, 2002.
``(e) Chairman.--The Secretary shall designate a member of
the Committee as Chairman. The term as Chairman shall be for
a 1-year period.
``(f) Compensation and Travel Expenses.--
``(1) Compensation of members.--Each member of the
Committee who is not an officer or employee of the Federal
Government shall be compensated at a rate equal to the daily
equivalent of the annual rate of basic pay prescribed for
level IV of the Executive Schedule under section 5315 of
title 5, United States Code, for each day (including travel
time) during which such member is engaged in the performance
of the duties of the Committee. All members of the Committee
who are officers or employees of the United States shall
serve without compensation in addition to that received for
their services as officers or employees of the United States.
``(2) Travel expenses.--The members of the Committee shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Committee.
``(g) Operation of the Committee.--
``(1) Meetings.--The Committee shall meet at the call of
the Chairman (after consultation with the other members of
the Committee) not less often than quarterly to consider a
specific agenda of issues, as determined by the Chairman
after such consultation.
``(2) Quorum.--Ten members of the Committee shall
constitute a quorum for purposes of conducting business.
``(h) Federal Advisory Committee Act.--Section 14 of the
Federal Advisory Committee Act (5 U.S.C. App.) shall not
apply to the Committee.
``(i) Transfer of Personnel, Resources, and Assets.--For
purposes of carrying out its duties, the Secretary and the
Committee may provide for the transfer to the Committee of
such civil service personnel in the employ of the Department
of Health and Human Services, and such resources and assets
of the Department used in carrying out this title, as the
Committee requires.
``(j) Authorization of Appropriations.--There are
authorized to be appropriated such sums as may be necessary
to carry out the purposes of this section.''.
(b) Exclusions From Coverage.--
(1) Application to part d.--Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)) is amended in the matter
preceding paragraph (1) by striking ``part A or part B'' and
inserting ``part A, B, or D''.
(2) Prescription drugs not excluded from coverage if
appropriately prescribed.--Section 1862(a)(1) of the Social
Security Act (42 U.S.C. 1395y(a)(1)) is amended--
(A) in subparagraph (H), by striking ``and'' at the end;
(B) in subparagraph (I), by striking the semicolon at the
end and inserting ``, and''; and
(C) by adding at the end the following new subparagraph:
``(J) in the case of prescription drugs covered under part
D, which are not prescribed in accordance with such part;''.
(c) Conforming References to Previous Part D.--
(1) In general.--Any reference in law (in effect before the
date of enactment of this Act) to part D of title XVIII of
the Social Security Act is deemed a reference to part E of
such title (as in effect after such date).
(2) Secretarial submission of legislative proposal.--Not
later than 6 months after the date of enactment of this Act,
the Secretary of Health and Human Services shall submit to
the appropriate committees of Congress a legislative proposal
providing for such technical and conforming amendments in the
law as are required by the provisions of this Act.

SEC. 4. PART D BENEFITS UNDER MEDICARE+CHOICE PLANS.

(a) Eligibility, Election, and Enrollment.--Section 1851 of
the Social Security Act (42 U.S.C. 1395w-21) is amended--
(1) in subsection (a)(1)(A), by striking ``parts A and B''
and inserting ``parts A, B, and D''; and
(2) in subsection (i)(1), by striking ``parts A and B'' and
inserting ``parts A, B, and D''.
(b) Voluntary Beneficiary Enrollment for Drug Coverage.--
Section 1852(a)(1)(A) of such Act (42 U.S.C. 1395w-
22(a)(1)(A)) is amended by inserting ``(and under part D to
individuals also enrolled under that part)'' after ``parts A
and B''.
(c) Access to Services.--Section 1852(d)(1) of such Act (42
U.S.C. 1395w-22(d)(1)) is amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) in subparagraph (E), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(F) in the case of covered outpatient drugs provided to
individuals enrolled under

[[Page S162]]

part D (as defined in section 1860(1)), the organization
complies with the access requirements applicable under part
D.''.
(d) Payments to Organizations.--Section 1853(a)(1)(A) of
such Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended--
(1) by inserting ``determined separately for the benefits
under parts A and B and under part D (for individuals
enrolled under that part)'' after ``as calculated under
subsection (c)'';
(2) by striking ``that area, adjusted for such risk
factors'' and inserting ``that area. In the case of payment
for the benefits under parts A and B, such payment shall be
adjusted for such risk factors as''; and
(3) by inserting before the last sentence the following:
``In the case of the payments for the benefits under part D,
such payment shall initially be adjusted for the risk factors
of each enrollee as the Secretary determines to be feasible
and appropriate to ensure actuarial equivalence. By 2006, the
adjustments to payments for benefits under part D shall be
for the same risk factors used to adjust payments for the
benefits under parts A and B.''.
(e) Calculation of Annual Medicare+Choice Capitation
Rates.--Section 1853(c) of such Act (42 U.S.C. 1395w-23(c))
is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by inserting ``for benefits under parts A and B'' after
``capitation rate''; and
(2) by adding at the end the following new paragraph:
``(8) Payment for part d benefits.--The Secretary shall
determine a capitation rate for part D benefits (for
individuals enrolled under such part) as follows:
``(A) Drugs dispensed before 2004.--In the case of
prescription drugs dispensed on or after the date that is 1
year after the date of enactment of the Medicare Prescription
Drug Coverage Act of 2001 and before January 1, 2004, the
capitation rate shall be based on the projected national per
capita costs for prescription drug benefits under part D and
associated claims processing costs for beneficiaries enrolled
under part D and not enrolled with a Medicare+Choice
organization under this part.
``(B) Drugs dispensed in subsequent years.--In the case of
prescription drugs dispensed in 2004 or a subsequent year,
the capitation rate shall be equal to the capitation rate for
the preceding year increased by the Secretary's estimate of
the projected per capita rate of growth in expenditures under
this title for an individual enrolled under part D for such
subsequent year.''.
(f) Limitation on Enrollee Liability.--Section 1854(e) of
such Act (42 U.S.C. 1395w-24(e)) is amended by adding at the
end the following new paragraph:
``(5) Special rule for part d benefits.--With respect to
outpatient prescription drug benefits under part D, a
Medicare+Choice organization may not require that an enrollee
pay a deductible or a coinsurance percentage that exceeds the
deductible or coinsurance percentage applicable for such
benefits for an eligible beneficiary under part D.''.
(g) Requirement for Additional Benefits.--Section
1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is amended
by adding at the end the following new sentence: ``Such
determination shall be made separately for the benefits under
parts A and B and for prescription drug benefits under part
D.''.
(h) Effective Date.--The amendments made by this section
shall apply to items and services provided under a
Medicare+Choice plan on or after the date that is 1 year
after the date of enactment of this Act.

SEC. 5. EXCLUSION OF PART D COSTS FROM DETERMINATION OF PART
B MONTHLY PREMIUM.

Section 1839(g) of the Social Security Act (42 U.S.C.
1395r(g)) is amended--
(1) by striking ``attributable to the application of
section'' and inserting ``attributable to--
``(1) the application of section'';
(2) by striking the period and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(2) the program under part D providing payment for
covered outpatient drugs (including costs associated with
making payments to employers and other sponsors of
employment-based health care coverage under the Employer
Incentive Program under section 1860I).''.

SEC. 6. ADDITIONAL ASSISTANCE FOR LOW-INCOME BENEFICIARIES.

(a) Inclusion in Medicare Cost-Sharing.--Section 1905(p)(3)
of the Social Security Act (42 U.S.C. 1396d(p)(3)) is
amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and'' at the end; and
(C) by adding at the end the following new clause:
``(iii) premiums under section 1860D.'';
(2) in subparagraph (B), by striking ``section 1813'' and
inserting ``sections 1813 and 1860E(b)''; and
(3) in subparagraph (C), by striking ``section 1813 and
section 1833(b)'' and inserting ``sections 1813, 1833(b), and
1860E(a)''.
(b) Expansion of Medical Assistance.--Section
1902(a)(10)(E) of the Social Security Act (42 U.S.C.
1396a(a)(10)(E)) is amended--
(1) in clause (iii)--
(A) by striking ``section 1905(p)(3)(A)(ii)'' and inserting
``clauses (ii) and (iii) of section 1905(p)(3)(A), for the
coinsurance described in section 1860E(b), and for the
deductible described in section 1860E(a)''; and
(B) by striking ``and'' at the end;
(2) by redesignating clause (iv) as clause (vi); and
(3) by inserting after clause (iii) the following new
clauses:
``(iv) for making medical assistance available for Medicare
cost-sharing described in section 1905(p)(3)(A)(iii), for the
coinsurance described in section 1860E(b), and for the
deductible described in section 1860E(a) for individuals who
would be qualified Medicare beneficiaries described in
section 1905(p)(1) but for the fact that their income exceeds
120 percent but does not exceed 135 percent of such official
poverty line for a family of the size involved;
``(v) for making medical assistance available for Medicare
cost-sharing described in section 1905(p)(3)(A)(iii) on a
linear sliding scale based on the income of such individuals
for individuals who would be qualified Medicare beneficiaries
described in section 1905(p)(1) but for the fact that their
income exceeds 135 percent but does not exceed 175 percent of
such official poverty line for a family of the size involved;
and''.
(c) Nonapplicability of Resource Requirements to Medicare
Part D Cost-Sharing.--Section 1905(p)(1) of the Social
Security Act (42 U.S.C. 1396d(p)(1)) is amended by adding at
the end the following flush sentence:
``In determining if an individual is a qualified medicare
beneficiary under this paragraph, subparagraph (C) shall not
be applied for purposes of providing the individual with
medicare cost-sharing that consists of premiums under section
1860D, coinsurance described in section 1860E(b), or
deductibles described in section 1860E(a).''.
(d) Nonapplicability of Payment Differential Requirements
to Medicare Part D Cost-Sharing.--Section 1902(n)(2) of the
Social Security Act (42 U.S.C. 1396a(n)(2)) is amended by
adding at the end the following new sentence: ``The preceding
sentence shall not apply to coinsurance described in section
1860E(b) or deductibles described in section 1860E(a).''.
(e) 100 Percent Federal Medical Assistance Percentage.--The
first sentence of section 1905(b) of the Social Security Act
(42 U.S.C. 1396d(b)) is amended--
(1) by striking ``and'' before ``(3)''; and
(2) by inserting before the period at the end the
following: ``, and (4) the Federal medical assistance
percentage shall be 100 percent with respect to medical
assistance provided under clauses (iv) and (v) of section
1902(a)(10)(E)''.
(f) Treatment of Territories.--Section 1108(g) of such Act
(42 U.S.C. 1308(g)) is amended by adding at the end the
following new paragraph:
``(3) Notwithstanding the preceding provisions of this
subsection, with respect to the first fiscal quarter that
begins on or after the date that is 1 year after the date of
enactment of the Medicare Prescription Drug Coverage Act of
2001 and any fiscal year thereafter, the amount otherwise
determined under this subsection (and subsection (f)) for the
fiscal year for a Commonwealth or territory shall be
increased by the ratio (as estimated by the Secretary) of--
``(A) the aggregate amount of payments made to the 50
States and the District of Columbia for the fiscal year under
title XIX that are attributable to making medical assistance
available for individuals described in clauses (i), (iii),
(iv), and (v) of section 1902(a)(10)(E) for payment of
Medicare cost-sharing that consists of premiums under section
1860D, coinsurance described in section 1860E(b), or
deductibles described in section 1860E(a); to
``(B) the aggregate amount of total payments made to such
States and District for the fiscal year under such title.''.
(g) Conforming Amendments.--Section 1933 of the Social
Security Act (42 U.S.C. 1396u-3) is amended--
(1) in subsection (a), by striking ``section
1902(a)(10)(E)(iv)'' and inserting ``section
1902(a)(10)(E)(vi)'';
(2) in subsection (c)(2)(A)--
(A) in clause (i), by striking ``section
1902(a)(10)(E)(iv)(I)'' and inserting ``section
1902(a)(10)(E)(vi)(I)''; and
(B) in clause (ii), by striking ``section
1902(a)(10)(E)(iv)(II)'' and inserting ``section
1902(a)(10)(E)(vi)(II)'';
(3) in subsection (d), by striking ``section
1902(a)(10)(E)(iv)'' and inserting ``section
1902(a)(10)(E)(vi)''; and
(4) in subsection (e), by striking ``section
1902(a)(10)(E)(iv)'' and inserting ``section
1902(a)(10)(E)(vi)''.
(h) Effective Date.--The amendments made by this section
shall apply for medical assistance provided under section
1902(a)(10)(E) of the Social Security Act (42 U.S.C.
1396a(a)(10)(E)) on and after the date that is 1 year after
the date of enactment of this Act.

SEC. 7. MEDIGAP REVISIONS.

Section 1882 of the Social Security Act (42 U.S.C. 1395ss)
is amended by adding at the end the following new subsection:
``(v) Modernized Benefit Packages for Medicare Supplemental
Policies.--
``(1) Promulgation of model regulation.--
``(A) NAIC model regulation.--If, within 6 months after the
date of enactment of the Medicare Prescription Drug Coverage
Act of 2001, the National Association of Insurance

[[Page S163]]

Commissioners (in this subsection referred to as the `NAIC')
changes the 1991 NAIC Model Regulation (described in
subsection (p)) to revise the benefit packages classified as
`H', `I', and `J' under the standards established by
subsection (p)(2) (including the benefit package classified
as `J' with a high deductible feature, as described in
subsection (p)(11)) so that--
``(i) the coverage for outpatient prescription drugs
available under such benefit packages is replaced with
coverage for outpatient prescription drugs that compliments
but does not duplicate the benefits for outpatient
prescription drugs that beneficiaries are otherwise entitled
to under this title;
``(ii) the revised benefit packages provide a range of
coverage options for outpatient prescription drugs for
beneficiaries, but do not provide coverage for--

``(I) the deductible under section 1860E(a); or
``(II) more than 90 percent of the coinsurance applicable
to an individual under section 1860E(b);

``(iii) uniform language and definitions are used with
respect to such revised benefits;
``(iv) uniform format is used in the policy with respect to
such revised benefits; and
``(v) such revised standards meet any additional
requirements imposed by the Medicare Prescription Drug
Coverage Act of 2001;
subsection (g)(2)(A) shall be applied in each State,
effective for policies issued to policy holders on and after
the date that is 1 year after the date of enactment of the
Medicare Prescription Drug Coverage Act of 2001, as if the
reference to the Model Regulation adopted on June 6, 1979,
were a reference to the 1991 NAIC Model Regulation as changed
under this subparagraph (such changed regulation referred to
in this section as the `2002 NAIC Model Regulation').
``(B) Regulation by the secretary.--If the NAIC does not
make the changes in the 1991 NAIC Model Regulation within the
6-month period specified in subparagraph (A), the Secretary
shall promulgate, not later than 6 months after the end of
such period, a regulation and subsection (g)(2)(A) shall be
applied in each State, effective for policies issued to
policy holders on and after the date that is 1 year after the
date of enactment of the Medicare Prescription Drug Coverage
Act of 2001, as if the reference to the Model Regulation
adopted on June 6, 1979, were a reference to the 1991 NAIC
Model Regulation as changed by the Secretary under this
subparagraph (such changed regulation referred to in this
section as the `2002 Federal Regulation').
``(C) Consultation with working group.--In promulgating
standards under this paragraph, the NAIC or Secretary shall
consult with a working group similar to the working group
described in subsection (p)(1)(D).
``(D) Modification of standards if medicare benefits
change.--If benefits (including deductibles and coinsurance)
under part D of this title are changed and the Secretary
determines, in consultation with the NAIC, that changes in
the 2002 NAIC Model Regulation or 2002 Federal Regulation are
needed to reflect such changes, the preceding provisions of
this paragraph shall apply to the modification of standards
previously established in the same manner as they applied to
the original establishment of such standards.
``(2) Construction of benefits in other medicare
supplemental policies.--Nothing in the benefit packages
classified as `A' through `G' under the standards established
by subsection (p)(2) (including the benefit package
classified as `F' with a high deductible feature, as
described in subsection (p)(11)) shall be construed as
providing coverage for benefits for which payment may be made
under part D.
``(3) Application of provisions and conforming
references.--
``(A) Application of provisions.--The provisions of
paragraphs (4) through (10) of subsection (p) shall apply
under this section, except that--
``(i) any reference to the model regulation applicable
under that subsection shall be deemed to be a reference to
the applicable 2002 NAIC Model Regulation or 2002 Federal
Regulation; and
``(ii) any reference to a date under such paragraphs of
subsection (p) shall be deemed to be a reference to the
appropriate date under this subsection.
``(B) Other references.--Any reference to a provision of
subsection (p) or a date applicable under such subsection
shall also be considered to be a reference to the appropriate
provision or date under this subsection.''.

SEC. 8. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE FOR
TRANSPLANT PATIENTS.

(a) In General.--Section 1861(s)(2)(J) of the Social
Security Act (42 U.S.C. 1395x(s)(2)(J)), as amended by
section 113(a) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law
by section 1(a)(6) of Public Law 106-554), is amended by
striking ``, to an individual who receives'' and all that
follows before the semicolon at the end and inserting ``to an
individual who has received an organ transplant''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to drugs furnished on or after the date of
enactment of this Act.

SEC. 9. HHS STUDIES AND REPORT TO CONGRESS REGARDING
OUTPATIENT PRESCRIPTION DRUG BENEFIT PROGRAM.

(a) Studies.--The Secretary of Health and Human Services
shall conduct a study on the following:
(1) Waiver or reduction of late enrollment penalty.--The
feasibility and advisability of establishing an annual open
enrollment period under the outpatient prescription drug
benefit program under part D of title XVIII of the Social
Security Act (as added by section 3) in which the late
enrollment penalty under section 1860B(a)(2)(A) of the Social
Security Act (as so added) would be reduced or would not be
applied. Such study shall include a projection of the costs
if open enrollment was allowed with a reduced penalty or
without a penalty.
(2) Uniform format for pharmacy benefit cards.--The
feasibility and advisability of establishing a uniform format
for pharmacy benefit cards provided to beneficiaries by
eligible entities under such outpatient prescription drug
benefit program.
(3) Development of systems to electronically transfer
prescriptions.--The feasibility and advisability of
developing systems to electronically transfer prescriptions
under such outpatient prescription drug benefit program from
the prescriber to the pharmacist.
(b) Report.--Not later than 9 months after the date of
enactment of this Act, the Secretary of Health and Human
Services shall submit to Congress a report on the results of
the studies conducted under subsection (a), together with any
recommendations for legislation that the Secretary determines
to be appropriate as a result of such studies.

SEC. 10. GAO STUDY AND BIENNIAL REPORTS ON COMPETITION AND
SAVINGS.

(a) Ongoing Study.--The Comptroller General of the United
States shall conduct an ongoing study and analysis of the
outpatient prescription drug benefit program under part D of
title XVIII of the Social Security Act (as added by section
3), including an analysis of--
(1) the extent to which the competitive bidding process
under such program fosters maximum competition and
efficiency; and
(2) the savings to the medicare program resulting from such
outpatient prescription drug benefit program, including the
reduction in the number or length of hospital visits.
(b) Initial Report on Competitive Bidding Process.--Not
later than 9 months after the date of enactment of this Act,
the Comptroller General shall submit to Congress a report on
the extent to which the competitive bidding process under the
outpatient prescription drug benefit program under part D of
title XVIII of the Social Security Act (as added by section
3) is expected to foster maximum competition and efficiency.
(c) Biennial Reports.--Not later than January 1, 2004, and
biennially thereafter, the Comptroller General of the United
States shall submit to Congress a report on the results of
the study conducted under subsection (a), together with any
recommendations for legislation that the Comptroller General
determines to be appropriate as a result of such study.

SEC. 11. MEDPAC STUDY AND ANNUAL REPORTS ON THE
PHARMACEUTICAL MARKET, PHARMACIES, AND
BENEFICIARY ACCESS.

(a) Ongoing Study.--The Medicare Payment Advisory
Commission shall conduct an ongoing study and analysis of the
outpatient prescription drug benefit program under part D of
title XVIII of the Social Security Act (as added by section
3), including an analysis of the impact of such program on--
(1) the pharmaceutical market, including costs and pricing
of pharmaceuticals, beneficiary access to such
pharmaceuticals, and trends in research and development;
(2) franchise, independent, and rural pharmacies; and
(3) beneficiary access to outpatient prescription drugs,
including an assessment of--
(A) out-of-pocket spending;
(B) generic and brand-name utilization; and
(C) pharmacists' services.
(b) Report.--Not later than January 1, 2004, and annually
thereafter, the Medicare Payment Advisory Commission shall
submit to Congress a report on the results of the study
conducted under subsection (a), together with any
recommendations for legislation that such Commission
determines to be appropriate as a result of such study.

SEC. 12. APPROPRIATIONS.

In addition to amounts otherwise appropriated to the
Secretary of Health and Human Services, there are authorized
to be appropriated to the Secretary for fiscal year 2002 and
each subsequent fiscal year such sums as may be necessary to
administer the outpatient prescription drug benefit program
under part D of title XVIII of the Social Security Act (as
added by section 3).
______

By Mrs. HUTCHISON (for herself, Mr. Lott, Mr. Brownback, Mr.
Nickles, Mr. Kyl, Mr. Murkowski, Mr. Allen, Mr. Gramm, Mr.
Crapo, Mr. Warner, Mr. Hagel, Mr. Bunning, Mr. Frist, Mr.
McConnell, Mr. Burns, Mr. Ensign, Mr. Helms, and Mr. Craig):
S. 11. A bill to amend the Internal Revenue Code of 1986 to eliminate
the marriage penalty by providing that the income tax rate bracket
amounts, and the amount of the standard deduction, for joint returns
shall be twice the amounts applicable to unmarried individuals, and for
other purposes; to the Committee on Finance.

[[Page S164]]

marriage penalty legislation

Mrs. HUTCHISON. Mr. President, for 4 years now, I have introduced a
bill to eliminate the marriage penalty tax. I have said all of these
years that I do not think Americans should have to choose between love
and money. They should be able to get married and not be penalized
because they do. But in fact 25 million married couples in America
today do pay a penalty just because they got married. The sad thing is,
the average penalty they pay is about $1,400. That is $1,400 that a
young couple would like to have as they are starting their lives
together, for the things they want: Like the down payment on the new
house or the new car or the expenses associated with having children.
We want them to be able to have the money they earn to make their
choices rather than having Uncle Sam take $1,400 more just because of
what amounts to a glitch in the Tax Code that requires these married
couples to pay this penalty.
The bill I have just introduced today, S. 11, is cosponsored by
Senators Brownback, Lott, Nickles, Allen, Bunning, Burns, Crapo, Frist,
Gramm, Hagel, Kyl, Ensign, McConnell, Murkowski and Warner.
This is a bill that I hope will have broad bipartisan support
because, in fact, we have passed it twice and sent it to the President
with bipartisan majorities in the past. The President has chose to veto
the bills before, but today we have a new President who I believe will
sign marriage penalty relief. It was part of President Bush's campaign.
When we send him Marriage penalty relief for the third time in a
bipartisan way in Congress, I believe President Bush will sign it.
I am very pleased this bill will double the standard deduction for
married couples. Today, if you get married the standard deduction that
two single people would have is not double. We want to double the
standard deduction. Two people getting married who have two incomes but
do not itemize would receive a increase of $1,500 in their standard
deduction. That is what we want to do.
Secondly, we will double each tax bracket for married couples filing
a joint return. For example, if a couple is in the 15-percent income
tax bracket but they get married and are thrown into the 30-percent
bracket, we want to provide them relief such that they will effectively
remain in the 15 percent bracket. This bill would widen the 15-percent
bracket by $9,000 for married couples.
Congress passed this legislation, and it was vetoed. Today, I am
introducing this bill. I know we are going to pass it in this Congress,
and I know it will be signed. This is the beginning of a new day in our
United States of America, and we are going to eliminate the marriage
penalty this year. I will count on it.
Mr. BURNS. Mr. President, I rise in support of legislation my
colleague from Texas introduced today that will put an end to the
``marriage penalty'' tax. Mr. President, we've been fighting this tax
inequity for several years now. The people of Montana have spoken to me
either through letters or conversation--they think this tax is unfair.
When we first started working to resolve this issue, I was contacted
by Joshua and Jody Hayes of Billings, Montana. The Hayes paid $971 more
in taxes because they were married than they would have paid if they
remained single.
In Montana, it is estimated that nearly 90,000 couples are penalized
by this tax to the tune of $51.5 million--solely for being married.
Making a living--supporting a family--is a difficult task in today's
fast paced economy. A young couple married today is immediately subject
to an additional financial burden because they want to share their
lives together. The federal tax system penalizes these young couples.
These are not wealthy people--this effort to provide tax relief does
not discriminate--this effort does not single out a specific income
group. It is a tax on families.
I, along with my Republican colleagues, have made it clear that
continued tax reform and tax relief is necessary, but I can think of no
other tax that has such a dramatic impact on so many people.
If ever there was a disincentive to be married, this penalty would be
it. I believe this, along with the estate tax, is one of the most
unfair taxes on Americans. It is not right for people to be penalized
with higher taxes simply because they choose to get married.
According to the Congressional Budget Office (CBO), almost half of
all married couples pay higher taxes due to their marital status.
Cumulatively, the marriage penalty increases taxes on affected couples
by $29 billion per year. Currently, this tax penalty imposes an average
additional tax of $1400 on 21 million married couples nationwide.
Mr. President, the marriage penalty can have significantly negative
economic implications for the country as a whole as well. Not only does
this penalty within the tax system stand as a likely obstacle to
marriage, it can actually discourage a spouse from entering the
workforce.
By adding together husband and wife under the rate schedule, tax laws
both encourage families to identify a primary and secondary worker and
then place an extra burden on the secondary worker because his or her
wages come on top of the primary earner's wages.
As the American family realizes lower income levels, the nation
realizes lower economic output. From a strictly economic perspective,
the fact that potential workers would avoid the labor force as a result
of a tax penalty is a clear sign of a failure to maximize true economic
output. As a result, the nation as a whole fails to reach its economic
potential, which is demonstrated by decreased earnings and
international competitiveness.
Whereas I am very disappointed President Clinton has vetoed this
initiative in the past, I am confident our new President will support
America's families.
Congress has momentum considering this body has already passed this
legislation to correct this inequity. I encourage my colleagues to
support this legislation to repeal the marriage penalty.
______

By Mr. DASCHLE (for himself, Mr. Leahy, Mr. Schumer, Mr. Durbin,
Mrs. Boxer, Mr. Breaux, Mrs. Clinton, Mr. Corzine, Mr.
Rockefeller, Mr. Levin, and Mr. Johnson):
S. 16. A bill to improve law enforcement, crime prevention, and
victim assistance in the 21st century; to the Committee on the
Judiciary.

21st Century Law Enforcement, Crime Prevention, and Victims Assistance
Act

Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of
the bill and an analysis of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 16

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``21st
Century Law Enforcement, Crime Prevention, and Victims
Assistance Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title and table of contents.

TITLE I--SUPPORTING LAW ENFORCEMENT AND THE EFFECTIVE ADMINISTRATION OF
JUSTICE

Subtitle A--Support for Community Personnel

Sec. 1101. 21st Century Community Policing Initiative.

Subtitle B--Protecting Federal, State, and Local Law Enforcement
Officers and the Judiciary

Sec. 1201. Expansion of protection of Federal officers and employees
from murder due to their status.
Sec. 1202. Assaulting, resisting, or impeding certain officers or
employees.
Sec. 1203. Influencing, impeding, or retaliating against a Federal
official by threatening a family member.
Sec. 1204. Mailing threatening communications.
Sec. 1205. Amendment of the sentencing guidelines for assaults and
threats against Federal judges and certain other Federal
officials and employees.
Sec. 1206. Killing persons aiding Federal investigations or State
correctional officers.
Sec. 1207. Killing State correctional officers.
Sec. 1208. Establishment of protective function privilege.

Subtitle C--Disarming Felons and Protecting Children From Violence

Part 1--Extension of Project Exile

Sec. 1311. Authorization of funding for additional State and local gun
prosecutors.

[[Page S165]]

Sec. 1312. Authorization of funding for additional Federal firearms
prosecutors and gun enforcement teams.

Part 2--Expansion of the Youth Crime Gun Interdiction Initiative

Sec. 1321. Youth Crime Gun Interdiction Initiative.

Part 3--Gun Offenses

Sec. 1331. Gun ban for dangerous juvenile offenders.
Sec. 1332. Improving firearms safety.
Sec. 1333. Juvenile handgun safety.
Sec. 1334. Serious juvenile drug offenses as armed career criminal
predicates.
Sec. 1335. Increased penalty for transferring a firearm to a minor for
use in crime of violence or drug trafficking crime.
Sec. 1336. Increased penalty for firearms conspiracy.

Part 4--Closing the Gun Show Loophole

Sec. 1341. Extension of Brady background checks to gun shows.

Subtitle D--Assistance to States for Prosecuting and Punishing Juvenile
Offenders, and Reducing Juvenile Crime

Sec. 1401. Juvenile and violent offender incarceration grants.
Sec. 1402. Certain punishment and graduated sanctions for youth
offenders.
Sec. 1403. Pilot program to promote replication of recent successful
juvenile crime reduction strategies.
Sec. 1404. Reimbursement of States for costs of incarcerating juvenile
alien offenders.

Subtitle E--Ballistics, Law Assistance, and Safety Technology

Sec. 1501. Short title.
Sec. 1502. Purposes.
Sec. 1503. Definition of ballistics.
Sec. 1504. Test firing and automated storage of ballistics records.
Sec. 1505. Privacy rights of law abiding citizens.
Sec. 1506. Demonstration firearm crime reduction strategy.

Subtitle F--Offender Reentry and Community Safety

Sec. 1601. Short title.
Sec. 1602. Findings.
Sec. 1603. Purposes.

Part 1--Federal Reentry Demonstration Projects

Sec. 1611. Federal reentry center demonstration.
Sec. 1612. Federal high-risk offender reentry demonstration.
Sec. 1613. District of Columbia Intensive Supervision, Tracking, and
Reentry Training (DC iSTART) Demonstration.
Sec. 1614. Federal Intensive Supervision, Tracking, and Reentry
Training (FED iSTART) Demonstration.
Sec. 1615. Federal enhanced in-prison vocational assessment and
training and demonstration.
Sec. 1616. Research and reports to Congress.
Sec. 1617. Definitions.
Sec. 1618. Authorization of appropriations.

Part 2--State Reentry Grant Programs

Sec. 1621. Amendments to the Omnibus Crime Control and Safe Streets Act
of 1968.

TITLE II--STRENGTHENING THE FEDERAL CRIMINAL LAWS

Subtitle A--Combating Gang Violence

Part 1--Enhanced Penalties for Gang-related Activities

Sec. 2101. Gang franchising.
Sec. 2102. Enhanced penalty for use or recruitment of minors in gangs.
Sec. 2103. Gang franchising as a RICO predicate.
Sec. 2104. Increase in offense level for participation in crime as gang
member.
Sec. 2105. Enhanced penalty for discharge of firearms in relation to
counts of violence or drug trafficking crimes.
Sec. 2106. Punishment of arson or bombing at facilities receiving
Federal financial assistance.
Sec. 2107. Elimination of statute of limitations for murder.
Sec. 2108. Extension of statute of limitations for violent and drug
trafficking crimes.
Sec. 2109. Increased penalties under the RICO law for gang and violent
crimes.
Sec. 2110. Increased penalty and broadened scope of statute against
violent crimes in aid of racketeering.
Sec. 2111. Facilitating the prosecution of carjacking offenses.
Sec. 2112. Facilitation of RICO prosecutions.
Sec. 2113. Assault as a RICO predicate.
Sec. 2114. Expansion of definition of ``racketeering activity'' to
affect gangs in Indian country.
Sec. 2115. Increased penalties for violence in the course of riot
offenses.
Sec. 2116. Expansion of Federal jurisdiction over crimes occurring in
private penal facilities housing Federal prisoners or
prisoners from other States.

Part 2--Targeting Gang-related Gun Offenses

Sec. 2121. Transfer of firearm to commit a crime of violence.
Sec. 2122. Increased penalty for knowingly receiving firearm with
obliterated serial number.
Sec. 2123. Amendment of the sentencing guidelines for transfers of
firearms to prohibited persons.

Part 3--Using and Protecting Witnesses to Help Prosecute Gangs and
Other Violent Criminals

Sec. 2131. Interstate travel to engage in witness intimidation or
obstruction of justice.
Sec. 2132. Expanding pretrial detention eligibility for serious gang
and other violent criminals.
Sec. 2133. Conspiracy penalty for obstruction of justice offenses
involving victims, witnesses, and informants.
Sec. 2134. Allowing a reduction of sentence for providing useful
investigative information although not regarding a
particular individual.
Sec. 2135. Increasing the penalty for using physical force to tamper
with witnesses, victims, or informants.
Sec. 2136. Expansion of Federal kidnapping offense to cover when death
of victim occurs before crossing State line and when
facility in interstate commerce or the mails are used.
Sec. 2137. Assaults or other crimes of violence for hire.
Sec. 2138. Clarification of interstate threat statute to cover threats
to kill.
Sec. 2139. Conforming amendment to law punishing obstruction of justice
by notification of existence of a subpoena for records in
certain types of investigations.

Part 4--Gang Paraphernalia

Sec. 2141. Streamlining procedures for law enforcement access to clone
numeric pagers.
Sec. 2142. Sentencing enhancement for using body armor in commission of
a felony.
Sec. 2143. Sentencing enhancement for using laser sighting devices in
commission of a felony.
Sec. 2144. Government access to location information.
Sec. 2145. Limitation on obtaining transactional information from pen
registers or trap and trace devices.

Subtitle B--Combating Money Laundering

Sec. 2201. Short title.
Sec. 2202. Illegal money transmitting businesses.
Sec. 2203. Restraint of assets of persons arrested abroad.
Sec. 2204. Civil money laundering jurisdiction over foreign persons.
Sec. 2205. Punishment of laundering money through foreign banks.
Sec. 2206. Addition of serious foreign crimes to list of money
laundering predicates.
Sec. 2207. Criminal forfeiture for money laundering conspiracies.
Sec. 2208. Fungible property in foreign bank accounts.
Sec. 2209. Admissibility of foreign business records.
Sec. 2210. Charging money laundering as a course of conduct.
Sec. 2211. Venue in money laundering cases.
Sec. 2212. Technical amendment to restore wiretap authority for certain
money laundering offenses.
Sec. 2213. Criminal penalties for violations of anti-money laundering
orders.
Sec. 2214. Encouraging financial institutions to notify law enforcement
authorities of suspicious financial transactions.
Sec. 2215. Coverage of foreign bank branches in the territories.
Sec. 2216. Conforming statute of limitations amendment for certain bank
fraud offenses.
Sec. 2217. Jurisdiction over certain financial crimes committed abroad.
Sec. 2218. Knowledge that the property is the proceeds of a felony.
Sec. 2219. Money laundering transactions; commingled accounts.
Sec. 2220. Laundering the proceeds of terrorism.
Sec. 2221. Violations of section 6050i.
Sec. 2222. Including agencies of tribal governments in the definition
of a financial institution.
Sec. 2223. Penalties for violations of geographic targeting orders and
certain recordkeeping requirements.

Subtitle C--Antidrug Provisions

Sec. 2301. Amendments concerning temporary emergency scheduling.
Sec. 2302. Amendment to reporting requirement for transactions
involving certain listed chemicals.
Sec. 2303. Drug paraphernalia.
Sec. 2304. Counterfeit substances/imitation controlled substances.
Sec. 2305. Conforming amendment concerning marijuana plants.
Sec. 2306. Serious juvenile drug trafficking offenses as armed career
criminal act predicates.
Sec. 2307. Increased penalties for using Federal property to grow or
manufacture controlled substances.

[[Page S166]]

Sec. 2308. Clarification of length of supervised release terms in
controlled substance cases.
Sec. 2309. Supervised release period after conviction for continuing
criminal enterprise.
Sec. 2310. Technical correction to ensure compliance of sentencing
guidelines with provisions of all Federal statutes.
Sec. 2311. Import and export of chemicals used to produce illicit
drugs.

Subtitle D--Deterring Cargo Theft

Sec. 2351. Punishment of cargo theft.
Sec. 2352. Reports to Congress on cargo theft.
Sec. 2353. Establishment of Advisory Committee on Cargo Theft.
Sec. 2354. Addition of attempted theft and counterfeiting offenses to
eliminate gaps and inconsistencies in coverage.
Sec. 2355. Clarification of scienter requirement for receiving property
stolen from an Indian tribal organization.
Sec. 2356. Larceny involving post office boxes and postal stamp vending
machines.
Sec. 2357. Expansion of Federal theft offenses to cover theft of
vessels.

Subtitle E--Improvements to Federal Criminal Law

Part 1--Sentencing Improvements

Sec. 2411. Application of sentencing guidelines to all pertinent
statutes.
Sec. 2412. Doubling maximum penalty for voluntary manslaughter.
Sec. 2413. Authorization of imposition of both a fine and imprisonment
rather than only either penalty in certain offenses.
Sec. 2414. Addition of supervised release violation as predicates for
certain offenses.
Sec. 2415. Authority of court to impose a sentence of probation or
supervised release when reducing a sentence of
imprisonment in certain cases.
Sec. 2416. Elimination of proof of value requirement for felony theft
or conversion of grand jury material.
Sec. 2417. Increased maximum corporate penalty for antitrust
violations.
Sec. 2418. Amendment of Federal sentencing guidelines for counterfeit
bearer obligations of the United States.

Part 2--Additional Improvements to Federal Criminal Law

Sec. 2421. Violence directed at dwellings in Indian country.
Sec. 2422. Corrections to Amber Hagerman Child Protection Act.
Sec. 2423. Elimination of ``bodily harm'' element in assault with a
dangerous weapon offense.
Sec. 2424. Appeals from certain dismissals.
Sec. 2425. Authority for injunction against disposal of ill-gotten
gains from violations of fraud statutes.
Sec. 2426. Expansion of interstate travel fraud statute to cover
interstate travel by perpetrator.
Sec. 2427. Clarification of scope of unauthorized selling of military
medals or decorations.
Sec. 2428. Amendment to section 669 to conform to Public Law 104-294.
Sec. 2429. Expansion of jurisdiction over child buying and selling
offenses.
Sec. 2430. Limits on disclosure of wiretap orders.
Sec. 2431. Prison credit and aging prisoner reform.
Sec. 2432. Miranda reaffirmation.

TITLE III--PROTECTING AMERICANS AND SUPPORTING VICTIMS OF CRIME

Subtitle A--Crime Victims Assistance

Sec. 3101. Short title.

Part 1--Victim Rights

Sec. 3111. Right to notice and to be heard concerning detention.
Sec. 3112. Right to a speedy trial.
Sec. 3113. Right to notice and to be heard concerning plea.
Sec. 3114. Enhanced participatory rights at trial.
Sec. 3115. Right to notice and to be heard concerning sentence.
Sec. 3116. Right to notice and to be heard concerning sentence
adjustment.
Sec. 3117. Right to notice of release or escape.
Sec. 3118. Right to notice and to be heard concerning executive
clemency.
Sec. 3119. Remedies for noncompliance.

Part 2--Victim Assistance Initiatives

Sec. 3121. Pilot programs to establish ombudsman programs for crime
victims.
Sec. 3122. Amendments to Victims of Crime Act of 1984.
Sec. 3123. Increased training for law enforcement officers and court
personnel to respond to the needs of crime victims.
Sec. 3124. Increased resources to develop State-of-the-art systems for
notifying crime victims of important dates and
developments.

Part 3--Victim-offender Programs: ``Restorative Justice''

Sec. 3131. Pilot program and study on effectiveness of restorative
justice approach on behalf of victims of crime.

Subtitle B--Violence Against Women Act Enhancements

Sec. 3201. Shelter services for battered women and children.
Sec. 3202. Transitional housing assistance for victims of domestic
violence.
Sec. 3203. Family unity demonstration project.

Subtitle C--Senior Safety

Sec. 3301. Short title.
Sec. 3302. Findings and purposes.
Sec. 3303. Definitions.

Part 1--Combating Crimes Against Seniors

Sec. 3311. Enhanced sentencing penalties based on age of victim.
Sec. 3312. Study and report on health care fraud sentences.
Sec. 3313. Increased penalties for fraud resulting in serious injury or
death.
Sec. 3314. Safeguarding pension plans from fraud and theft.
Sec. 3315. Additional civil penalties for defrauding pension plans.
Sec. 3316. Punishing bribery and graft in connection with employee
benefit plans.

Part 2--Preventing Telemarketing Fraud

Sec. 3321. Centralized complaint and consumer education service for
victims of telemarketing fraud.
Sec. 3322. Blocking of telemarketing scams.

Part 3--Preventing Health Care Fraud

Sec. 3331. Injunctive authority relating to false claims and illegal
kickback schemes involving Federal health care programs.
Sec. 3332. Authorized investigative demand procedures.
Sec. 3333. Extending antifraud safeguards to the Federal employee
health benefits program.
Sec. 3334. Grand jury disclosure.
Sec. 3335. Increasing the effectiveness of civil investigative demands
in false claims investigations.

Part 4--Protecting the Rights of Elderly Crime Victims

Sec. 3341. Use of forfeited funds to pay restitution to crime victims
and regulatory agencies.
Sec. 3342. Victim restitution.
Sec. 3343. Bankruptcy proceedings not used to shield illegal gains from
false claims.
Sec. 3344. Forfeiture for retirement offenses.

Subtitle D--Violent Crime Reduction Trust Fund

Sec. 3401. Extension of violent crime reduction trust fund.

TITLE IV--BREAKING THE CYCLE OF DRUGS AND VIOLENCE

Subtitle A--Drug Courts, Drug Treatment, and Alternative Sentencing

Part 1--Expansion of Drug Courts

Sec. 4111. Reauthorization of drug courts program.
Sec. 4112. Juvenile drug courts.

Part 2--Zero Tolerance Drug Testing

Sec. 4121. Grant authority.
Sec. 4122. Administration.
Sec. 4123. Applications.
Sec. 4124. Federal share.
Sec. 4125. Geographic distribution.
Sec. 4126. Technical assistance, training, and evaluation.
Sec. 4127. Authorization of appropriations.
Sec. 4128. Permanent set-aside for research and evaluation.
Sec. 4129. Additional requirements for the use of funds under the
violent offender incarceration and truth-in-sentencing
grant programs.

Part 3--Drug Treatment

Sec. 4131. Drug treatment alternative to prison programs administered
by State or local prosecutors.
Sec. 4132. Substance abuse treatment in Federal prisons
reauthorization.
Sec. 4133. Residential substance abuse treatment for State prisoners
reauthorization
Sec. 4134. Drug treatment for juveniles.

Part 4--Funding for Drug Free Community Programs

Sec. 4141. Extension of safe and drug-free schools and communities
program.
Sec. 4142. Say No to Drugs community centers.
Sec. 4143. Drug education and prevention relating to youth gangs.
Sec. 4144. Drug education and prevention program for runaway and
homeless youth.

Subtitle B--Youth Crime Prevention and Juvenile Courts

Part 1--Grants to Youth Organizations

Sec. 4211. Grant program.
Sec. 4212. Grants to national organizations.
Sec. 4213. Grants to States.
Sec. 4214. Allocation; grant limitation.
Sec. 4215. Report and evaluation.
Sec. 4216. Authorization of appropriations.
Sec. 4217. Grants to public and private agencies.

Part 2--Reauthorization of Incentive Grants for Local Delinquency
Prevention Programs

Sec. 4221. Incentive grants for local delinquency prevention programs.

[[Page S167]]

Sec. 4222. Research, evaluation, and training.

Part 3--Jump Ahead

Sec. 4231. Short title.
Sec. 4232. Findings.
Sec. 4233. Juvenile mentoring grants.
Sec. 4234. Implementation and evaluation grants.
Sec. 4235. Evaluations; reports.

Part 4--Truancy Prevention

Sec. 4241. Short title.
Sec. 4242. Findings.
Sec. 4243. Grants.

Part 5--Juvenile Crime Control and Delinquency Prevention Act

Sec. 4251. Short title.
Sec. 4252. Findings.
Sec. 4253. Purpose.
Sec. 4254. Definitions.
Sec. 4255. Name of office.
Sec. 4256. Concentration of Federal effort.
Sec. 4257. Allocation.
Sec. 4258. State plans.
Sec. 4259. Juvenile delinquency prevention block grant program.
Sec. 4260. Research; evaluation; technical assistance; training.
Sec. 4261. Demonstration projects.
Sec. 4262. Authorization of appropriations.
Sec. 4263. Administrative authority.
Sec. 4264. Use of funds.
Sec. 4265. Limitation on use of funds.
Sec. 4266. Rules of construction.
Sec. 4267. Leasing surplus Federal property.
Sec. 4268. Issuance of rules.
Sec. 4269. Technical and conforming amendments.
Sec. 4270. References.

Part 6--Local Gun Violence Prevention Programs

Sec. 4271. Competitive grants for children's firearm safety education.
Sec. 4272. Dissemination of best practices via the Internet.
Sec. 4273. Grant priority for tracing of guns used in crimes by
juveniles.

TITLE I--SUPPORTING LAW ENFORCEMENT AND THE EFFECTIVE ADMINISTRATION OF
JUSTICE

Subtitle A--Support for Community Personnel

SEC. 1101. 21ST CENTURY COMMUNITY POLICING INITIATIVE.

(a) COPS Program.--Section 1701(a) of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3796dd(a)) is amended by--
(1) inserting ``and prosecutor'' after ``increase police'';
and
(2) inserting ``to enhance law enforcement access to new
technologies, and'' after ``presence,''.
(b) Hiring and Redeployment Grant Projects.--Section
1701(b) of title I of the Omnibus Crime Control and Safe
Streets Act of 1968 (42 U.S.C. 3796dd(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``and'' at the end of subparagraph (B) and
inserting after ``Nation,'' ``or pay overtime to existing
career law enforcement officers;'';
(B) by striking the period at the end of subparagraph (C)
and inserting ``; and''; and
(C) by adding at the end the following:
``(D) promote higher education among inservice State and
local law enforcement officers by reimbursing them for the
costs associated with seeking a college or graduate school
education.''; and
(2) in paragraph (2), by striking all that follows
``Support systems.--'' and inserting ``Grants pursuant to
paragraph (1)(A) for overtime may not exceed 25 percent of
the funds available for grants pursuant to this subsection
for any fiscal year; grants pursuant to paragraph (1)(C) may
not exceed 20 percent of the funds available for grants
pursuant to this subsection in any fiscal year, and grants
pursuant to paragraph (1)(D) may not exceed 5 percent of the
funds available for grants pursuant to this subsection for
any fiscal year.''.
(c) Additional Grant Projects.--Section 1701(d) of title I
of the Omnibus Crime Control and Safe Streets Act of 1968 (42
U.S.C. 3796dd(d)) is amended--
(1) in paragraph (2)--
(A) by inserting ``integrity and ethics'' after
``specialized''; and
(B) by inserting ``and'' after ``enforcement officers'';
(2) in paragraph (7), by inserting ``school officials,
religiously affiliated organizations,'' after ``enforcement
officers'';
(3) by striking paragraph (8) and inserting the following:
``(8) establish school-based partnerships between local law
enforcement agencies and local school systems, by using
school resource officers who operate in and around elementary
and secondary schools to serve as a law enforcement liaison
with other Federal, State, and local law enforcement and
regulatory agencies, combat school-related crime and disorder
problems, gang membership and criminal activity, firearms and
explosives-related incidents, illegal use and possession of
alcohol and illegal possession, use, and distribution of
drugs;'';
(4) in paragraph (10), by striking ``and'' at the end;
(5) in paragraph (11), by striking the period that appears
at the end and inserting a semicolon; and
(6) by adding at the end the following:
``(12) develop and implement innovative programs (such as
the TRIAD program) that bring together a community's sheriff,
chief of police, and elderly residents to address the public
safety concerns of older citizens; and
``(13) assist State, local, or tribal prosecutors' offices
in the implementation of community-based programs that build
on local community efforts through the--
``(A) hiring of additional indigent defense attorneys to be
assigned to community programs; and
``(B) establishment of programs to assist local indigent
defense offices in the implementation of programs that help
them identify and respond to priority needs of a community
with specifically tailored solutions.''.

(d) Technical Assistance.--Section 1701(f) of title I of
the Omnibus Crime Control and Safe Streets Act of 1968 (42
U.S.C. 3796dd(f)) is amended--
(1) in paragraph (1)--
(A) by inserting ``use up to 5 percent of the funds
appropriated under subsection (a) to'' after ``The Attorney
General may'';
(B) by inserting at the end the following: ``In addition,
the Attorney General may use up to 5 percent of the funds
appropriated under subsections (d), (e), and (f) for
technical assistance and training to States, units of local
government, Indian tribal governments, and to other public
and private entities for those respective purposes,'';
(2) in paragraph (2), by inserting ``under subsection (a)''
after ``the Attorney General''; and
(3) in paragraph (3)--
(A) by striking ``the Attorney General may'' and inserting
``the Attorney General shall'';
(B) by inserting ``regional community policing institutes''
after ``operation of''; and
(C) by inserting ``representatives of police labor and
management organizations, community residents,'' after
``supervisors,''.
(e) Technology and Prosecution Programs.--Section 1701 of
title I of the Omnibus Crime Control and Safe Streets Act of
1968 (42 U.S.C. 3796dd) is amended by--
(1) striking subsection (k);
(2) redesignating subsections (f) through (j) as
subsections (g) through (k), respectively; and
(3) striking subsection (e) and inserting the following:
``(e) Law Enforcement Technology Program.--Grants made
under subsection (a) may be used to assist police
departments, in employing professional, scientific, and
technological advancements that will help them--
``(1) improve police communications through the use of
wireless communications, computers, software, videocams,
databases, and other hardware and software that allow law
enforcement agencies to communicate more effectively across
jurisdictional boundaries and effectuate interoperability;
``(2) develop and improve access to crime-solving
technologies, including DNA analysis, photo enhancement,
voice recognition, and other forensic capabilities; and
``(3) promote comprehensive crime analysis by utilizing new
techniques and technologies, such as crime mapping, that
allow law enforcement agencies to use real-time crime and
arrest data and other related information, including non-
criminal justice data, to improve their ability to analyze,
predict, and respond proactively to local crime and disorder
problems, as well as to engage in regional crime analysis.
``(f) Community-Based Prosecution Program.--Grants made
under subsection (a) may be used to assist State, local, or
tribal prosecutors' offices in the implementation of
community-based prosecution programs that build on local
community policing efforts. Funds made available under this
subsection may be used to--
``(1) hire additional prosecutors who will be assigned to
community prosecution programs, including (but not limited
to) programs that assign prosecutors to handle cases from
specific geographic areas, to address specific violent crime
and other local crime problems (including intensive illegal
gang, gun, and drug enforcement projects and quality of life
initiatives), and to address localized violent and other
crime problems based on needs identified by local law
enforcement agencies, community organizations, and others;
``(2) redeploy existing prosecutors to community
prosecution programs as described in paragraph (1) of this
section by hiring victim and witness coordinators,
paralegals, community outreach, and other such personnel; and
``(3) establish programs to assist local prosecutors'
offices in the implementation of programs that help them
identify and respond to priority crime problems in a
community with specifically tailored solutions.
At least 75 percent of the funds made available under this
subsection shall be reserved for grants under paragraphs (1)
and (2) and of those amounts no more than 10 percent may be
used for grants under paragraph (2) and at least 25 percent
of the funds shall be reserved for grants under paragraphs
(1) and (2) to units of local government with a population of
less than 50,000.''.
(f) Retention Grants.--Section 1703 of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3796dd-2) is amended by inserting at the end the following:
``(d) Retention Grants.--The Attorney General may use no
more than 50 percent of the funds under subsection (a) to
award grants targeted specifically for retention of police
officers to grantees in good standing, with preference to
those that demonstrate financial hardship or severe budget
constraint

[[Page S168]]

that impacts the entire local budget and may result in the
termination of employment for police officers funded under
subsection (b)(1).''.
(g) Hiring Costs.--Section 1704(c) of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3796dd-3(c)) is amended by striking ``$75,000'' and inserting
``$125,000''.
(h) Definitions.--
(1) Career law enforcement officer.--Section 1709(1) of
title I of the Omnibus Crime Control and Safe Streets Act of
1968 (42 U.S.C. 3796dd-8) is amended by inserting after
``criminal laws'' the following: ``including sheriffs'
deputies charged with supervising offenders who are released
into the community but also engaged in local community
policing efforts.''.
(2) School resource officer.--Section 1709(4) of title I of
the Omnibus Crime Control and Safe Streets Act of 1968 (42
U.S.C. 3796dd-8) is amended--
(A) by striking subparagraph (A) and inserting the
following:
``(A) to serve as a law enforcement liaison with other
Federal, State, and local law enforcement and regulatory
agencies, to address and document crime and disorder problems
including gangs and drug activities, firearms and explosives-
related incidents, and illegal use and possession of alcohol
affecting or occurring in or around an elementary or
secondary school;'';
(B) by striking subparagraph (E) and inserting the
following:
``(E) to train students in conflict resolution, restorative
justice, and crime awareness, and to provide assistance to
and coordinate with other officers, mental health
professionals, and youth counselors who are responsible for
the implementation of prevention/intervention programs within
the schools;''; and
(C) by adding at the end the following:
``(H) to work with school administrators, members of the
local parent teacher associations, community organizers, law
enforcement, fire departments, and emergency medical
personnel in the creation, review, and implementation of a
school violence prevention plan;
``(I) to assist in documenting the full description of all
firearms found or taken into custody on school property and
to initiate a firearms trace and ballistics examination for
each firearm with the local office of the Bureau of Alcohol,
Tobacco, and Firearms;
``(J) to document the full description of all explosives or
explosive devices found or taken into custody on school
property and report to the local office of the Bureau of
Alcohol, Tobacco, and Firearms; and
``(K) to assist school administrators with the preparation
of the Department of Education, Annual Report on State
Implementation of the Gun-Free Schools Act which tracks the
number of students expelled per year for bringing a weapon,
firearm, or explosive to school.''.
(i) Authorization of Appropriations.--Section 1001(a)(11)
of title I of the Omnibus Crime Control and Safe Streets Act
of 1968 (42 U.S.C. 3793(a)(11)) is amended--
(1) by amending subparagraph (A) to read as follows:
``(A) There are authorized to be appropriated to carry out
part Q, to remain available until expended--
``(i) $1,150,000,000 for fiscal year 2002;
``(ii) $1,150,000,000 for fiscal year 2003;
``(iii) $1,150,000,000 for fiscal year 2004;
``(iv) $1,150,000,000 for fiscal year 2005;
``(v) $1,150,000,000 for fiscal year 2006; and
``(vi) $1,150,000,000 for fiscal year 2007.''; and
(2) in subparagraph (B)--
(A) by striking ``3 percent'' and inserting ``5 percent'';
(B) by striking ``85 percent'' and inserting
``$600,000,000''; and
(C) by striking ``1701(b),'' and all that follows through
``of part Q'' and inserting the following: ``1701 (b) and
(c), $350,000,000 to grants for the purposes specified in
section 1701(f), and $200,000,000 to grants for the purposes
specified in section 1701(g).''.

Subtitle B--Protecting Federal, State, and Local Law Enforcement
Officers and the Judiciary

SEC. 1201. EXPANSION OF PROTECTION OF FEDERAL OFFICERS AND
EMPLOYEES FROM MURDER DUE TO THEIR STATUS.

Section 1114 of title 18, United States Code, is amended--
(1) by inserting ``or because of the status of the victim
as such an officer or employee,'' after ``on account of the
performance of official duties,''; and
(2) by inserting ``or, if the person assisting is an
officer or employee of a State or local government, because
of the status of the victim as such an officer or employee,''
after ``on account of that assistance,''.

SEC. 1202. ASSAULTING, RESISTING, OR IMPEDING CERTAIN
OFFICERS OR EMPLOYEES.

Section 111 of title 18, United States Code, is amended--
(1) in subsection (a), by striking ``three'' and inserting
``12''; and
(2) in subsection (b), by striking ``ten'' and inserting
``20''.

SEC. 1203. INFLUENCING, IMPEDING, OR RETALIATING AGAINST A
FEDERAL OFFICIAL BY THREATENING A FAMILY
MEMBER.

Section 115(b)(4) of title 18, United States Code, is
amended--
(1) by striking ``five'' and inserting ``10''; and
(2) by striking ``three'' and inserting ``6''.

SEC. 1204. MAILING THREATENING COMMUNICATIONS.

Section 876 of title 18, United States Code, is amended--
(1) by designating the first 4 undesignated paragraphs as
subsections (a) through (d), respectively;
(2) in subsection (c), as so designated, by adding at the
end the following: ``If such a communication is addressed to
a United States judge, a Federal law enforcement officer, or
an official who is covered by section 1114, the individual
shall be fined under this title, imprisoned not more than 10
years, or both.''; and
(3) in subsection (d), as so designated, by adding at the
end the following: ``If such a communication is addressed to
a United States judge, a Federal law enforcement officer, or
an official who is covered by section 1114, the individual
shall be fined under this title, imprisoned not more than 10
years, or both.''.

SEC. 1205. AMENDMENT OF THE SENTENCING GUIDELINES FOR
ASSAULTS AND THREATS AGAINST FEDERAL JUDGES AND
CERTAIN OTHER FEDERAL OFFICIALS AND EMPLOYEES.

(a) In General.--Pursuant to its authority under section
994 of title 28, United States Code, the United States
Sentencing Commission shall review and amend the Federal
sentencing guidelines and the policy statements of the
Commission, if appropriate, to provide an appropriate
sentencing enhancement for offenses involving influencing,
assaulting, resisting, impeding, retaliating against, or
threatening a Federal judge, magistrate judge, or any other
official described in section 111 or 115 of title 18, United
States Code.
(b) Factors for Consideration.--In carrying out this
section, the United States Sentencing Commission shall
consider, with respect to each offense described in
subsection (a)--
(1) any expression of congressional intent regarding the
appropriate penalties for the offense;
(2) the range of conduct covered by the offense;
(3) the existing sentences for the offense;
(4) the extent to which sentencing enhancements within the
Federal sentencing guidelines and the court's authority to
impose a sentence in excess of the applicable guideline range
are adequate to ensure punishment at or near the maximum
penalty for the most egregious conduct covered by the
offense;
(5) the extent to which Federal sentencing guideline
sentences for the offense have been constrained by statutory
maximum penalties;
(6) the extent to which Federal sentencing guidelines for
the offense adequately achieve the purposes of sentencing as
set forth in section 3553(a)(2) of title 18, United States
Code;
(7) the relationship of Federal sentencing guidelines for
the offense to the Federal sentencing guidelines for other
offenses of comparable seriousness; and
(8) any other factors that the Commission considers to be
appropriate.

SEC. 1206. KILLING PERSONS AIDING FEDERAL INVESTIGATIONS OR
STATE CORRECTIONAL OFFICERS.

Section 1121(a)(1) of title 18, United States Code, is
amended in the matter preceding subparagraph (A), by
inserting ``, State, or joint Federal-State'' after ``a
Federal''.

SEC. 1207. KILLING STATE CORRECTIONAL OFFICERS.

Section 1121(b)(3) of title 18, United States Code, is
amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(C) the incarcerated person is incarcerated pending an
initial appearance, arraignment, trial, or appeal for an
offense against the United States.''.

SEC. 1208. ESTABLISHMENT OF PROTECTIVE FUNCTION PRIVILEGE.

(a) Findings.--Congress makes the following findings:
(1) The physical safety of the Nation's top elected
officials is a public good of transcendent importance.
(2) By virtue of the critical importance of the Office of
the President, the President and those in direct line of the
Presidency are subject to unique and mortal jeopardy--
jeopardy that in turn threatens profound disruption to our
system of representative government and to the security and
future of the Nation.
(3) The physical safety of visiting heads of foreign states
and foreign governments is also a matter of paramount
importance. The assassination of such a person while on
American soil could have calamitous consequences for our
foreign relations and national security.
(4) Given these grave concerns, Congress has provided for
the Secret Service to protect the President and those in
direct line of the Presidency, and has directed that these
officials may not waive such protection. Congress has also
provided for the Secret Service to protect visiting heads of
foreign states and foreign governments.
(5) The protective strategy of the Secret Service depends
critically on the ability of its personnel to maintain close
and unremitting physical proximity to the protectee.
(6) Secret Service personnel must remain at the side of the
protectee on occasions of confidential conversations and, as
a result,

[[Page S169]]

may overhear top secret discussions, diplomatic exchanges,
sensitive conversations, and matters of personal privacy.
(7) The necessary level of proximity can be maintained only
in an atmosphere of complete trust and confidence between the
protectee and his or her protectors.
(8) If a protectee has reason to doubt the confidentiality
of actions or conversations taken in sight or hearing of
Secret Service personnel, the protectee may seek to push the
protective envelope away or undermine it to the point at
which it could no longer be fully effective.
(9) The possibility that Secret Service personnel might be
compelled to testify against their protectees could induce
foreign nations to refuse Secret Service protection in future
state visits, making it impossible for the Secret Service to
fulfill its important statutory mission of protecting the
life and safety of foreign dignitaries.
(10) A privilege protecting information acquired by Secret
Service personnel while performing their protective function
in physical proximity to a protectee will preserve the
security of the protectee by lessening the incentive of the
protectee to distance Secret Service personnel in situations
in which there is some risk to the safety of the protectee.
(11) Recognition of a protective function privilege for the
President and those in direct line of the Presidency, and for
visiting heads of foreign states and foreign governments,
will promote sufficiently important interests to outweigh the
need for probative evidence.
(12) Because Secret Service personnel retain law
enforcement responsibility even while engaged in their
protective function, the privilege must be subject to a
crime/treason exception.
(b) Purposes.--The purposes of this Act are--
(1) to facilitate the relationship of trust and confidence
between Secret Service personnel and certain protected
officials that is essential to the ability of the Secret
Service to protect these officials, and the Nation, from the
risk of assassination; and
(2) to ensure that Secret Service personnel are not
precluded from testifying in a criminal investigation or
prosecution about unlawful activity committed within their
view or hearing.
(c) Admissibility of Information Acquired by Secret Service
Personnel While Performing Their Protective Function.--
(1) Protective function privilege.--Chapter 203 of title
18, United States Code, is amended by inserting after section
3056 the following:

``Sec. 3056A. Testimony by Secret Service personnel;
protective function privilege

``(a) Definitions.--In this section:
``(1) Protectee.--The term `protectee' means--
``(A) the President;
``(B) the Vice President (or other officer next in the
order of succession to the Office of President);
``(C) the President-elect;
``(D) the Vice President-elect; and
``(E) visiting heads of foreign states or foreign
governments who, at the time and place concerned, are being
provided protection by the United States Secret Service.
``(2) Secret service personnel.--The term `Secret Service
personnel' means any officer or agent of the United States
Secret Service.
``(b) General Rule of Privilege.--Subject to subsection
(c), testimony by Secret Service personnel or former Secret
Service personnel regarding information affecting a protectee
that was acquired during the performance of a protective
function in physical proximity to the protectee shall not be
received in evidence or otherwise disclosed in any trial,
hearing, or other proceeding in or before any court, grand
jury, department, officer, agency, regulatory body, or other
authority of the United States, a State, or a political
subdivision thereof.
``(c) Exceptions.--There is no privilege under this
section--
``(1) with respect to information that, at the time the
information was acquired by Secret Service personnel, was
sufficient to provide reasonable grounds to believe that a
crime had been, was being, or would be committed; or
``(2) if the privilege is waived by the protectee or the
legal representative of a protectee or deceased protectee.''.
(2) Technical and conforming amendment.--The analysis for
chapter 203 of title 18, United States Code, is amended by
inserting after the item relating to section 3056 the
following:

``3056A. Testimony by Secret Service personnel; protective function
privilege.''.

(3) Application.--This section and the amendments made by
this section shall apply to any proceeding commenced on or
after the date of enactment of this section.

Subtitle C--Disarming Felons and Protecting Children From Violence

PART 1--EXTENSION OF PROJECT EXILE

SEC. 1311. AUTHORIZATION OF FUNDING FOR ADDITIONAL STATE AND
LOCAL GUN PROSECUTORS.

(a) Grants for State and Local Gun Prosecutors.--Title III
of the Violent Crime Control and Law Enforcement Act of 1994
is amended by adding at the end the following:

``Subtitle Y--Grants for State and Local Gun Prosecutors

``SEC. 32501. GRANT AUTHORIZATION.

``The Attorney General may award grants to State, Indian
tribal, or local prosecutors for the purpose of supporting
the creation or expansion of community-based justice programs
for the prosecution of firearm-related crimes.

``SEC. 32502. USE OF FUNDS.

``Grants awarded by the Attorney General under this
subtitle shall be used to fund programs for the hiring of
prosecutors and related personnel under which those
prosecutors and personnel shall utilize an interdisciplinary
team approach to prevent, reduce, and respond to firearm-
related crimes in partnership with communities.

``SEC. 32503. APPLICATIONS.

``(a) Eligibility.--To be eligible to receive a grant award
under this subtitle for a fiscal year, a State, Indian
tribal, or local prosecutor, in conjunction with the chief
executive officer of the jurisdiction in which the program
will be placed, shall submit to the Attorney General an
application, in such form and containing such information as
the Attorney General may reasonably require.
``(b) Requirements.--Each application submitted under this
section shall include--
``(1) a request for funds for the purposes described in
section 32502;
``(2) a description of the communities to be served by the
grant, including the nature of the firearm-related crime in
such communities; and
``(3) assurances that Federal funds received under this
subtitle shall be used to supplement, not supplant, non-
Federal funds that would otherwise be available for
activities funded under this section.

``SEC. 32504. MATCHING REQUIREMENT.

``The Federal share of a grant awarded under this subtitle
may not exceed 50 percent of the total cost of the program
described in the application submitted under section 32503
for the fiscal year for which the program receives assistance
under this subtitle.

``SEC. 32505. AWARD OF GRANTS.

``(a) In General.--Except as provided in subsection (b), in
awarding grants under this subtitle, the Attorney General
shall consider--
``(1) the demonstrated need for, and the evidence of the
ability of the applicant to provide, the services described
in section 32503(b)(2), as described in the application
submitted under section 32503;
``(2) the extent to which, as reflected in the 1998 Uniform
Crime Report of the Federal Bureau of Investigation, there is
a high rate of firearm-related crime in the jurisdiction of
the applicant, measured either in total or per capita;
``(3) the extent to which the jurisdiction of the applicant
has experienced an increase in the total or per capita rate
of firearm-related crime, as reported in the 3 most recent
annual Uniform Crime Reports of the Federal Bureau of
Investigation;
``(4) the extent to which State and local law enforcement
agencies in the jurisdiction of the applicant have pledged to
cooperate with Federal officials in responding to the illegal
acquisition, distribution, possession, and use of firearms
within the jurisdiction; and
``(5) The extent to which the jurisdiction of the applicant
participates in comprehensive firearm law enforcement
strategies, including programs such as the Youth Crime Gun
Interdiction Initiative, Project Achilles, Project Disarm,
Project Triggerlock, Project Exile, Project Surefire, and
Operation Ceasefire.
``(b) Indian Tribes.--
``(1) Federal grants.--Not less than 5 percent of the
amount made available for grants under this subtitle for each
fiscal year shall be awarded as grants to Indian tribes.
``(2) Grant criteria.--In awarding grants to Indian tribes
in accordance with this subsection, the Attorney General
shall consider, to the extent practicable, the factors for
consideration set forth in subsection (a).
``(c) Research and Evaluation.--Of the amount made
available for grants under this subtitle for each fiscal
year, the Attorney General shall use not less than 1 percent
and not more than 3 percent for research and evaluation of
the activities carried out with grants awarded under this
subtitle.

``SEC. 32506. REPORTS.

``(a) Report to Attorney General.--Not later than March 1
of each fiscal year, each law enforcement agency that
receives funds from a grant awarded under this subtitle for
that fiscal year shall submit to the Attorney General a
report describing the progress achieved in carrying out the
grant program for which those funds were received.
``(b) Report to Congress.--Beginning not later than October
1 of the first fiscal year following the initial fiscal year
during which grants are awarded under this subtitle, and not
later than October 1 of each fiscal year thereafter, the
Attorney General shall submit to Congress a report, which
shall contain a detailed statement regarding grant awards,
activities of grant recipients, a compilation of statistical
information submitted by applicants, and an evaluation of
programs established with amounts from grants awarded under
this subtitle during the preceding fiscal year.

``SEC. 32507. DEFINITIONS.

``In this subtitle--
``(1) the term `firearm' has the meaning given the term in
section 921(a) of title 18, United States Code;
``(2) the term `Indian tribe' means a tribe, band, pueblo,
nation, or other organized

[[Page S170]]

group or community of Indians, including an Alaska Native
village (as defined in or established under the Alaska Native
Claims Settlement Act (43 U.S.C. 1601 et seq.)), that is
recognized as eligible for the special programs and services
provided by the United States to Indians because of their
status as Indians; and
``(3) the term `State' means a State, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth
of the Northern Mariana Islands, American Samoa, Guam, and
the United States Virgin Islands.

``SEC. 32508. AUTHORIZATION OF APPROPRIATIONS.

``There is authorized to be appropriated to carry out this
subtitle $150,000,000 for fiscal year 2002.''.
(b) Technical and Conforming Amendment.--The table of
contents in section 2 of the Violent Crime Control and Law
Enforcement Act of 1994 is amended by inserting after the
item relating to subtitle X the following:

``Subtitle Y--Grants for State and Local Gun Prosecutors

``Sec. 32501. Grant authorization.
``Sec. 32502. Use of funds.
``Sec. 32503. Applications.
``Sec. 32504. Matching requirement.
``Sec. 32505. Award of grants.
``Sec. 32506. Reports.
``Sec. 32507. Definitions.
``Sec. 32508. Authorization of appropriations.''.

SEC. 1312. AUTHORIZATION OF FUNDING FOR ADDITIONAL FEDERAL
FIREARMS PROSECUTORS AND GUN ENFORCEMENT TEAMS.

(a) Additional Federal Firearms Prosecutors.--The Attorney
General shall hire 114 additional Federal prosecutors to
prosecute violations of Federal firearms laws.
(b) Gun Enforcement Teams.--
(1) Establishment.--The Attorney General shall establish in
each of the jurisdictions specified in paragraph (3) a gun
enforcement team.
(2) Gun enforcement team requirements.--Each gun
enforcement team established under this subsection shall be
composed of--
(A) 1 coordinator, who shall be responsible, with respect
to the jurisdiction concerned, for coordinating among
Federal, State, and local law enforcement--
(i) the appropriate forum for the prosecution of crimes
relating to firearms; and
(ii) efforts for the prevention of such crimes; and
(B) 1 analyst, who shall be responsible, with respect to
the jurisdiction concerned, for analyzing data relating to
such crimes and recommending law enforcement strategies to
reduce such crimes.
(3) Covered jurisdictions.--The jurisdictions specified in
this subsection are not more than 20 jurisdictions designated
by the Attorney General for purposes of this subsection as
areas having high rates of crimes relating to firearms.
(c) Authorization of Appropriations.--In addition to any
other amounts authorized to be appropriated that may be used
for such purpose, there is authorized to be appropriated to
carry out this section $15,000,000 for fiscal year 2002.

PART 2--EXPANSION OF THE YOUTH CRIME GUN INTERDICTION INITIATIVE

SEC. 1321. YOUTH CRIME GUN INTERDICTION INITIATIVE.

(a) In General.--
(1) Expansion of number of cities.--The Secretary of the
Treasury shall endeavor to expand the number of cities and
counties directly participating in the Youth Crime Gun
Interdiction Initiative (in this section referred to as the
``YCGII'') to 75 cities or counties by October 1, 2002, to
150 cities or counties by October 1, 2004, and to 250 cities
or counties by October 1, 2005.
(2) Selection.--Cities and counties selected for
participation in the YCGII shall be selected by the Secretary
of the Treasury and in consultation with Federal, State and
local law enforcement officials.
(b) Identification of Individuals.--
(1) In general.--The Secretary of the Treasury shall,
utilizing the information provided by the YCGII, facilitate
the identification and prosecution of individuals illegally
trafficking firearms to prohibited individuals.
(2) Sharing of information.--The Secretary of the Treasury
shall share information derived from the YCGII with State and
local law enforcement agencies through on-line computer
access, as soon as such capability is available.
(c) Grant Awards.--
(1) In general.--The Secretary of the Treasury shall award
grants (in the form of funds or equipment) to States, cities,
and counties for purposes of assisting such entities in the
tracing of firearms and participation in the YCGII.
(2) Use of grant funds.--Grants made under this part shall
be used to--
(A) hire or assign additional personnel for the gathering,
submission and analysis of tracing data submitted to the
Bureau of Alcohol, Tobacco and Firearms under the YCGII;
(B) hire additional law enforcement personnel for the
purpose of identifying and arresting individuals illegally
trafficking firearms; and
(C) purchase additional equipment, including automatic data
processing equipment and computer software and hardware, for
the timely submission and analysis of tracing data.

PART 3--GUN OFFENSES

SEC. 1331. GUN BAN FOR DANGEROUS JUVENILE OFFENDERS.

(a) Definition.--Section 921(a)(20) of title 18, United
States Code, is amended--
(1) by inserting ``(A)'' after ``(20)'';
(2) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(3) by inserting after subparagraph (A) the following:
``(B) For purposes of subsections (d), (g), and (s) of
section 922, the term `act of juvenile delinquency' means an
adjudication of delinquency based on a finding of the
commission of an act by a person prior to his or her
eighteenth birthday that, if committed by an adult, would be
a serious drug offense or violent felony (as defined in
section 3559(c)(2) of this title), on or after the date of
enactment of this paragraph.''; and
(4) by striking ``What constitutes'' through the end and
inserting the following: ``What constitutes a conviction of
such a crime or an adjudication of juvenile delinquency shall
be determined in accordance with the law of the jurisdiction
in which the proceedings were held. Any State conviction or
adjudication of delinquency which has been expunged or set
aside or for which a person has been pardoned or has had
civil rights restored by the jurisdiction in which the
conviction or adjudication of delinquency occurred shall not
be considered a conviction or adjudication of delinquency.
(b) Prohibition.--Section 922 of title 18, United States
Code is amended--
(1) in subsection (d)--
(A) by striking ``or'' at the end of paragraph (8);
(B) by striking the period at the end of paragraph (9) and
inserting ``; or''; and
(C) by inserting after paragraph (9) the following:
``(10) who has committed an act of juvenile delinquency.'';
(2) in subsection (g)--
(A) by striking ``or'' at the end of paragraph (8);
(B) by striking the period at the end of paragraph (9) and
inserting ``; or''; and
(C) by inserting after paragraph (9) the following:
``(10) who has committed an act of juvenile delinquency.'';
and
(3) in subsection (s)(3)(B)--
(A) by striking ``and'' at the end of clause (vi);
(B) by inserting ``and'' after the semicolon at the end of
clause (vii); and
(C) by inserting after clause (vii) the following:
``(viii) has not committed an act of juvenile
delinquency.''.

SEC. 1332. IMPROVING FIREARMS SAFETY.

(a) Secure Gun Storage Device.--Section 921(a) of title 18,
United States Code, is amended by adding at the end the
following:
``(35) Secure gun storage or safety device.--The term
`secure gun storage or safety device' means--
``(A) a device that, when installed on a firearm, is
designed to prevent the firearm from being operated without
first deactivating the device;
``(B) a device incorporated into the design of the firearm
that is designed to prevent the operation of the firearm by
anyone not having access to the device; or
``(C) a safe, gun safe, gun case, lock box, or other device
that is designed to be or can be used to store a firearm and
that is designed to be unlocked only by means of a key, a
combination, or other similar means.''.
(b) Certification Required in Application for Dealer's
License.--Section 923(d)(1) of title 18, United States Code,
is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(G) in the case of an application to be licensed as a
dealer, the applicant certifies that secure gun storage or
safety devices will be available at any place in which
firearms are sold under the license to persons who are not
licensees (subject to the exception that in any case in which
a secure gun storage or safety device is temporarily
unavailable because of theft, casualty loss, consumer sales,
backorders from a manufacturer, or any other similar reason
beyond the control of the licensee, the dealer shall not be
considered to be in violation of the requirement under this
subparagraph to make available such a device).''.
(c) Revocation of Dealer's License for Failure To Have
Secure Gun Storage or Safety Devices Available.--The first
sentence of section 923(e) of title 18, United States Code,
is amended by inserting before the period at the end the
following: ``or fails to have secure gun storage or safety
devices available at any place in which firearms are sold
under the license to persons who are not licensees (except
that in any case in which a secure gun storage or safety
device is temporarily unavailable because of theft, casualty
loss, consumer sales, backorders from a manufacturer, or any
other similar reason beyond the control of the licensee, the
dealer shall not be considered to be in violation of the
requirement to make available such a device)''.
(d) Statutory Construction.--Nothing in the amendments made
by this section shall be construed--
(1) as creating a cause of action against any firearms
dealer or any other person for any civil liability; or

[[Page S171]]

(2) as establishing any standard of care.

SEC. 1333. JUVENILE HANDGUN SAFETY.

(a) Juvenile Handgun Safety.--Section 924(a)(6) of title
18, United States Code, is amended--
(1) by striking subparagraph (A);
(2) by redesignating subparagraph (B) as subparagraph (A);
and
(3) in subparagraph (A), as redesignated--
(A) by striking ``A person other than a juvenile who
knowingly'' and inserting ``A person who knowingly''; and
(B) in clause (i), by striking ``not more than 1 year'' and
inserting ``not more than 5 years''.

SEC. 1334. SERIOUS JUVENILE DRUG OFFENSES AS ARMED CAREER
CRIMINAL PREDICATES.

Section 924(e)(2)(A) of title 18, United States Code, is
amended--
(1) in clause (i), by striking ``or'' at the end;
(2) in clause (ii), by adding ``or'' at the end; and
(3) by adding at the end the following:
``(iii) any act of juvenile delinquency that, if committed
by an adult, would be an offense described in this
paragraph;''.

SEC. 1335. INCREASED PENALTY FOR TRANSFERRING A FIREARM TO A
MINOR FOR USE IN CRIME OF VIOLENCE OR DRUG
TRAFFICKING CRIME.

Section 924(h) of title 18, United States Code, is amended
by striking ``10 years, fined in accordance with this title,
or both'' and inserting ``10 years, and if the transferee is
a person who is under 18 years of age, imprisoned for a term
of not more than 15 years, fined in accordance with this
title, or both''.

SEC. 1336. INCREASED PENALTY FOR FIREARMS CONSPIRACY.

Section 924 of title 18, United States Code, is amended by
adding at the end the following:
``(p) Except as otherwise provided in this section, a
person who conspires to commit an offense defined in this
chapter shall be subject to the same penalties (other than
the penalty of death) as those prescribed for the offense the
commission of which is the object of the conspiracy.''.

Part 4--CLOSING THE GUN SHOW LOOPHOLE

SEC. 1341. EXTENSION OF BRADY BACKGROUND CHECKS TO GUN SHOWS.

(a) Findings.--Congress finds that--
(1) more than 4,400 traditional gun shows are held annually
across the United States, attracting thousands of attendees
per show and hundreds of Federal firearms licensees and
nonlicensed firearms sellers;
(2) traditional gun shows, as well as flea markets and
other organized events, at which a large number of firearms
are offered for sale by Federal firearms licensees and
nonlicensed firearms sellers, form a significant part of the
national firearms market;
(3) firearms and ammunition that are exhibited or offered
for sale or exchange at gun shows, flea markets, and other
organized events move easily in and substantially affect
interstate commerce;
(4) in fact, even before a firearm is exhibited or offered
for sale or exchange at a gun show, flea market, or other
organized event, the gun, its component parts, ammunition,
and the raw materials from which it is manufactured have
moved in interstate commerce;
(5) gun shows, flea markets, and other organized events at
which firearms are exhibited or offered for sale or exchange,
provide a convenient and centralized commercial location at
which firearms may be bought and sold anonymously, often
without background checks and without records that enable gun
tracing;
(6) at gun shows, flea markets, and other organized events
at which guns are exhibited or offered for sale or exchange,
criminals and other prohibited persons obtain guns without
background checks and frequently use guns that cannot be
traced to later commit crimes;
(7) many persons who buy and sell firearms at gun shows,
flea markets, and other organized events cross State lines to
attend these events and engage in the interstate
transportation of firearms obtained at these events;
(8) gun violence is a pervasive, national problem that is
exacerbated by the availability of guns at gun shows, flea
markets, and other organized events;
(9) firearms associated with gun shows have been
transferred illegally to residents of another State by
Federal firearms licensees and nonlicensed firearms sellers,
and have been involved in subsequent crimes including drug
offenses, crimes of violence, property crimes, and illegal
possession of firearms by felons and other prohibited
persons; and
(10) Congress has the power, under the interstate commerce
clause and other provisions of the Constitution of the United
States, to ensure that criminals and other prohibited persons
do not obtain firearms at gun shows, flea markets, and other
organized events.
(b) Definitions.--Section 921(a) of title 18, United States
Code, is amended by adding at the end the following:
``(35) Gun show.--The term `gun show' means any event--
``(A) at which 50 or more firearms are offered or exhibited
for sale, transfer, or exchange, if 1 or more of the firearms
has been shipped or transported in, or otherwise affects,
interstate or foreign commerce; and
``(B) at which--
``(i) not less than 20 percent of the exhibitors are
firearm exhibitors;
``(ii) there are not less than 10 firearm exhibitors; or
``(iii) 50 or more firearms are offered for sale, transfer,
or exchange.
``(36) Gun show promoter.--The term `gun show promoter'
means any person who organizes, plans, promotes, or operates
a gun show.
``(37) Gun show vendor.--The term `gun show vendor' means
any person who exhibits, sells, offers for sale, transfers,
or exchanges 1 or more firearms at a gun show, regardless of
whether or not the person arranges with the gun show promoter
for a fixed location from which to exhibit, sell, offer for
sale, transfer, or exchange 1 or more firearms.''
(c) Regulation of Firearms Transfers at Gun Shows.--
(1) In general.--Chapter 44 of title 18, United States
Code, is amended by adding at the end the following:

``Sec. 931. Regulation of firearms transfers at gun shows

``(a) Registration of Gun Show Promoters.--It shall be
unlawful for any person to organize, plan, promote, or
operate a gun show unless that person--
``(1) registers with the Secretary in accordance with
regulations promulgated by the Secretary; and
``(2) pays a registration fee, in an amount determined by
the Secretary.
``(b) Responsibilities of Gun Show Promoters.--It shall be
unlawful for any person to organize, plan, promote, or
operate a gun show unless that person--
``(1) before commencement of the gun show, verifies the
identity of each gun show vendor participating in the gun
show by examining a valid identification document (as defined
in section 1028(d)(1)) of the vendor containing a photograph
of the vendor;
``(2) before commencement of the gun show, requires each
gun show vendor to sign--
``(A) a ledger with identifying information concerning the
vendor; and
``(B) a notice advising the vendor of the obligations of
the vendor under this chapter; and
``(3) notifies each person who attends the gun show of the
requirements of this chapter, in accordance with such
regulations as the Secretary shall prescribe; and
``(4) maintains a copy of the records described in
paragraphs (1) and (2) at the permanent place of business of
the gun show promoter for such period of time and in such
form as the Secretary shall require by regulation.
``(c) Responsibilities of Transferors Other Than
Licensees.--
``(1) In general.--If any part of a firearm transaction
takes place at a gun show, it shall be unlawful for any
person who is not licensed under this chapter to transfer a
firearm to another person who is not licensed under this
chapter, unless the firearm is transferred through a licensed
importer, licensed manufacturer, or licensed dealer in
accordance with subsection (e).
``(2) Criminal background checks.--A person who is subject
to the requirement of paragraph (1)--
``(A) shall not transfer the firearm to the transferee
until the licensed importer, licensed manufacturer, or
licensed dealer through which the transfer is made under
subsection (e) makes the notification described in subsection
(e)(3)(A); and
``(B) notwithstanding subparagraph (A), shall not transfer
the firearm to the transferee if the licensed importer,
licensed manufacturer, or licensed dealer through which the
transfer is made under subsection (e) makes the notification
described in subsection (e)(3)(B).
``(3) Absence of recordkeeping requirements.--Nothing in
this section shall permit or authorize the Secretary to
impose recordkeeping requirements on any nonlicensed vendor.
``(d) Responsibilities of Transferees Other Than
Licensees.--
``(1) In general.--If any part of a firearm transaction
takes place at a gun show, it shall be unlawful for any
person who is not licensed under this chapter to receive a
firearm from another person who is not licensed under this
chapter, unless the firearm is transferred through a licensed
importer, licensed manufacturer, or licensed dealer in
accordance with subsection (e).
``(2) Criminal background checks.--A person who is subject
to the requirement of paragraph (1)--
``(A) shall not receive the firearm from the transferor
until the licensed importer, licensed manufacturer, or
licensed dealer through which the transfer is made under
subsection (e) makes the notification described in subsection
(e)(3)(A); and
``(B) notwithstanding subparagraph (A), shall not receive
the firearm from the transferor if the licensed importer,
licensed manufacturer, or licensed dealer through which the
transfer is made under subsection (e) makes the notification
described in subsection (e)(3)(B).
``(e) Responsibilities of Licensees.--A licensed importer,
licensed manufacturer, or licensed dealer who agrees to
assist a person who is not licensed under this chapter in
carrying out the responsibilities of that person under
subsection (c) or (d) with respect to the transfer of a
firearm shall--
``(1) enter such information about the firearm as the
Secretary may require by regulation into a separate bound
record;

[[Page S172]]

``(2) record the transfer on a form specified by the
Secretary;
``(3) comply with section 922(t) as if transferring the
firearm from the inventory of the licensed importer, licensed
manufacturer, or licensed dealer to the designated transferee
(although a licensed importer, licensed manufacturer, or
licensed dealer complying with this subsection shall not be
required to comply again with the requirements of section
922(t) in delivering the firearm to the nonlicensed
transferor), and notify the nonlicensed transferor and the
nonlicensed transferee--
``(A) of such compliance; and
``(B) if the transfer is subject to the requirements of
section 922(t)(1), of any receipt by the licensed importer,
licensed manufacturer, or licensed dealer of a notification
from the national instant criminal background check system
that the transfer would violate section 922 or would violate
State law;
``(4) not later than 10 days after the date on which the
transfer occurs, submit to the Secretary a report of the
transfer, which report--
``(A) shall be on a form specified by the Secretary by
regulation; and
``(B) shall not include the name of or other identifying
information relating to any person involved in the transfer
who is not licensed under this chapter;
``(5) if the licensed importer, licensed manufacturer, or
licensed dealer assists a person other than a licensee in
transferring, at 1 time or during any 5 consecutive business
days, 2 or more pistols or revolvers, or any combination of
pistols and revolvers totaling 2 or more, to the same
nonlicensed person, in addition to the reports required under
paragraph (4), prepare a report of the multiple transfers,
which report shall be--
``(A) prepared on a form specified by the Secretary; and
``(B) not later than the close of business on the date on
which the transfer occurs, forwarded to--
``(i) the office specified on the form described in
subparagraph (A); and
``(ii) the appropriate State law enforcement agency of the
jurisdiction in which the transfer occurs; and
``(6) retain a record of the transfer as part of the
permanent business records of the licensed importer, licensed
manufacturer, or licensed dealer.
``(f) Records of Licensee Transfers.--If any part of a
firearm transaction takes place at a gun show, each licensed
importer, licensed manufacturer, and licensed dealer who
transfers 1 or more firearms to a person who is not licensed
under this chapter shall, not later than 10 days after the
date on which the transfer occurs, submit to the Secretary a
report of the transfer, which report--
``(1) shall be in a form specified by the Secretary by
regulation;
``(2) shall not include the name of or other identifying
information relating to the transferee; and
``(3) shall not duplicate information provided in any
report required under subsection (e)(4).
``(g) Firearm Transaction Defined.--In this section, the
term `firearm transaction'--
``(1) includes the offer for sale, sale, transfer, or
exchange of a firearm; and
``(2) does not include the mere exhibition of a firearm.''.
(2) Penalties.--Section 924(a) of title 18, United States
Code, is amended by adding at the end the following:
``(7)(A) Whoever knowingly violates section 931(a) shall be
fined under this title, imprisoned not more than 5 years, or
both.
``(B) Whoever knowingly violates subsection (b) or (c) of
section 931, shall be--
``(i) fined under this title, imprisoned not more than 2
years, or both; and
``(ii) in the case of a second or subsequent conviction,
such person shall be fined under this title, imprisoned not
more than 5 years, or both.
``(C) Whoever willfully violates section 931(d), shall be--
``(i) fined under this title, imprisoned not more than 2
years, or both; and
``(ii) in the case of a second or subsequent conviction,
such person shall be fined under this title, imprisoned not
more than 5 years, or both.
``(D) Whoever knowingly violates subsection (e) or (f) of
section 931 shall be fined under this title, imprisoned not
more than 5 years, or both.
``(E) In addition to any other penalties imposed under this
paragraph, the Secretary may, with respect to any person who
knowingly violates any provision of section 931--
``(i) if the person is registered pursuant to section
931(a), after notice and opportunity for a hearing, suspend
for not more than 6 months or revoke the registration of that
person under section 931(a); and
``(ii) impose a civil fine in an amount equal to not more
than $10,000.''.
(2) Technical and conforming amendments.--Chapter 44 of
title 18, United States Code, is amended--
(A) in the chapter analysis, by adding at the end the
following:

``931. Regulation of firearms transfers at gun shows.'';

and
(B) in the first sentence of section 923(j), by striking
``a gun show or event'' and inserting ``an event''; and
(d) Inspection Authority.--Section 923(g)(1) is amended by
adding at the end the following:
``(E) Notwithstanding subparagraph (B), the Secretary may
enter during business hours the place of business of any gun
show promoter and any place where a gun show is held for the
purposes of examining the records required by sections 923
and 931 and the inventory of licensees conducting business at
the gun show. Such entry and examination shall be conducted
for the purposes of determining compliance with this chapter
by gun show promoters and licensees conducting business at
the gun show and shall not require a showing of reasonable
cause or a warrant.''.
(e) Increased Penalties for Serious Recordkeeping
Violations by Licensees.--Section 924(a)(3) of title 18,
United States Code, is amended to read as follows:
``(3)(A) Except as provided in subparagraph (B), any
licensed dealer, licensed importer, licensed manufacturer, or
licensed collector who knowingly makes any false statement or
representation with respect to the information required by
this chapter to be kept in the records of a person licensed
under this chapter, or violates section 922(m) shall be fined
under this title, imprisoned not more than 1 year, or both.
``(B) If the violation described in subparagraph (A) is in
relation to an offense--
``(i) under paragraph (1) or (3) of section 922(b), such
person shall be fined under this title, imprisoned not more
than 5 years, or both; or
``(ii) under subsection (a)(6) or (d) of section 922, such
person shall be fined under this title, imprisoned not more
than 10 years, or both.''.
(f) Increased Penalties for Violations of Criminal
Background Check Requirements.--
(1) Penalties.--Section 924 of title 18, United States
Code, is amended--
(A) in paragraph (5), by striking ``subsection (s) or (t)
of section 922'' and inserting ``section 922(s)''; and
(B) by adding at the end the following:
``(8) Whoever knowingly violates section 922(t) shall be
fined under this title, imprisoned not more than 5 years, or
both.''.
(2) Elimination of certain elements of offense.--Section
922(t)(5) of title 18, United States Code, is amended by
striking ``and, at the time'' and all that follows through
``State law''.
(g) Gun Owner Privacy and Prevention of Fraud and Abuse of
System Information.--Section 922(t)(2)(C) of title 18, United
States Code, is amended by inserting before the period at the
end the following: ``, as soon as possible, consistent with
the responsibility of the Attorney General under section
103(h) of the Brady Handgun Violence Prevention Act to ensure
the privacy and security of the system and to prevent system
fraud and abuse, but in no event later than 90 days after the
date on which the licensee first contacts the system with
respect to the transfer''.
(h) Effective Date.--This section and the amendments made
by this section shall take effect 180 days after the date of
enactment of this Act.

Subtitle D--Assistance to States for Prosecuting and Punishing Juvenile
Offenders, and Reducing Juvenile Crime

SEC. 1401. JUVENILE AND VIOLENT OFFENDER INCARCERATION
GRANTS.

(a) Grants for Violent and Chronic Juvenile Facilities.--
(1) Definitions.--In this subsection:
(A) Co-located facility.--The term ``co-located facility''
means the location of adult and juvenile facilities on the
same property in a manner consistent with regulations issued
by the Attorney General to ensure that adults and juveniles
are substantially segregated.
(B) Substantially segregated.--The term ``substantially
segregated'' means--
(i) complete sight and sound separation in residential
confinement;
(ii) use of shared direct care and management staff,
properly trained and certified by the State to interact with
juvenile offenders, if the staff does not interact with adult
and juvenile offenders during the same shift; and
(iii) incidental contact during transportation to court
proceedings and other activities in accordance with
regulations issued by the Attorney General to ensure
reasonable efforts are made to segregate adults and
juveniles.
(C) Violent juvenile offender.--The term ``violent juvenile
offender'' means a person under the age of majority pursuant
to State law who has been adjudicated delinquent or convicted
in adult court of a violent felony as defined in section
924(e)(2)(B) of title 18, United States Code.
(D) Qualifying state.--The term ``qualifying State'' means
a State that has submitted, or a State in which an eligible
unit of local government has submitted, a grant application
that meets the requirements of paragraphs (3) and (5).
(2) Authority.--
(A) In general.--The Attorney General may make grants in
accordance with this subsection to States, units of local
government, or any combination thereof, to assist them in
planning, establishing, and operating secure facilities,
staff-secure facilities, detention centers, and other
correctional programs for violent juvenile offenders.
(B) Use of amounts.--Grants under this subsection may be
used--
(i) for co-located facilities for adult prisoners and
violent juvenile offenders; and

[[Page S173]]

(ii) only for the construction or operation of facilities
in which violent juvenile offenders are substantially
segregated from nonviolent juvenile offenders.
(3) Applications.--
(A) In general.--The chief executive officer of a State or
unit of local government that seeks to receive a grant under
this subsection shall submit to the Attorney General an
application, in such form and in such manner as the Attorney
General may prescribe.
(B) Contents.--Each application submitted under
subparagraph (A) shall provide written assurances that each
facility or program funded with a grant under this
subsection--
(i) will provide appropriate educational and vocational
training, appropriate mental health services, a program of
substance abuse testing, and substance abuse treatment for
appropriate juvenile offenders; and
(ii) will afford juvenile offenders intensive post-release
supervision and services.
(4) Minimum amount.--
(A) In general.--Except as provided in subparagraph (B),
each qualifying State, together with units of local
government within the State, shall be allocated for each
fiscal year not less than 1.0 percent of the total amount
made available in each fiscal year for grants under this
subsection.
(B) Exception.--The United States Virgin Islands, American
Samoa, Guam, and the Northern Mariana Islands shall each be
allocated 0.2 percent of the total amount made available in
each fiscal year for grants under this subsection.
(5) Performance evaluation.--
(A) Evaluation components.--
(i) In general.--Each facility or program funded under this
subsection shall contain an evaluation component developed
pursuant to guidelines established by the Attorney
General.
(ii) Outcome measures.--The evaluations required by this
subsection shall include outcome measures that can be used to
determine the effectiveness of the funded programs, including
the effectiveness of such programs in comparison with other
correctional programs or dispositions in reducing the
incidence of recidivism, and other outcome measures.
(B) Periodic review and reports.--
(i) Review.--The Attorney General shall review the
performance of each grant recipient under this subsection.
(ii) Reports.--The Attorney General may require a grant
recipient to submit to the Office of Justice Programs,
Corrections Programs Office the results of the evaluations
required under subparagraph (A) and such other data and
information as are reasonably necessary to carry out the
responsibilities of the Attorney General under this
subsection.
(6) Technical assistance and training.--The Attorney
General shall provide technical assistance and training to
grant recipients under this subsection to achieve the
purposes of this subsection.
(b) Juvenile Facilities on Tribal Lands.--
(1) Reservation of funds.--Of amounts made available to
carry out this section under section 20108(a)(2)(A) of the
Violent Crime Control and Law Enforcement Act of 1994 (42
U.S.C. 13708(a)(2)(A)), the Attorney General shall reserve,
to carry out this subsection, 0.75 percent for each of fiscal
years 2002 through 2005.
(2) Grants to indian tribes.--Of amounts reserved under
paragraph (1), the Attorney General may make grants to Indian
tribes or to regional groups of Indian tribes for the purpose
of constructing secure facilities, staff-secure facilities,
detention centers, and other correctional programs for
incarceration of juvenile offenders subject to tribal
jurisdiction.
(3) Applications.--To be eligible to receive a grant under
this section, an Indian tribe shall submit to the Attorney
General an application in such form and containing such
information as the Attorney General may by regulation
require.
(4) Regional groups.--Individual Indian tribes from a
geographic region may apply for grants under paragraph (2)
jointly for the purpose of building regional facilities.
(c) Report on Accountability and Performance Measures in
Juvenile Corrections Programs.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Attorney General shall, after
consultation with the National Institute of Justice and other
appropriate governmental and nongovernmental organizations,
submit to Congress a report regarding the possible use of
performance-based criteria in evaluating and improving the
effectiveness of juvenile corrections facilities and
programs.
(2) Contents.--The report required under this subsection
shall include an analysis of--
(A) the range of performance-based measures that might be
utilized as evaluation criteria, including measures of
recidivism among juveniles who have been incarcerated in
facilities or have participated in correctional programs;
(B) the feasibility of linking Federal juvenile corrections
funding to the satisfaction of performance-based criteria by
grantees (including the use of a Federal matching mechanism
under which the share of Federal funding would vary in
relation to the performance of a program or facility);
(C) whether, and to what extent, the data necessary for the
Attorney General to utilize performance-based criteria in the
Attorney General's administration of juvenile corrections
programs are collected and reported nationally; and
(D) the estimated cost and feasibility of establishing
minimal, uniform data collection and reporting standards
nationwide that would allow for the use of performance-based
criteria in evaluating juvenile corrections programs and
facilities and administering Federal juvenile corrections
funds.

SEC. 1402. CERTAIN PUNISHMENT AND GRADUATED SANCTIONS FOR
YOUTH OFFENDERS.

(a) Findings and Purposes.--
(1) Findings.--Congress finds that--
(A) youth violence constitutes a growing threat to the
national welfare requiring immediate and comprehensive action
by the Federal Government to reduce and prevent youth
violence;
(B) the behavior of youth who become violent offenders
often follows a progression, beginning with aggressive
behavior in school, truancy, and vandalism, leading to
property crimes and then serious violent offenses;
(C) the juvenile justice systems in most States are ill-
equipped to provide meaningful sanctions to minor, nonviolent
offenders because most of their resources are dedicated to
dealing with more serious offenders;
(D) in most States, some youth commit multiple, nonviolent
offenses without facing any significant criminal sanction;
(E) the failure to provide meaningful criminal sanctions
for first time, nonviolent offenders sends the false message
to youth that they can engage in antisocial behavior without
suffering any negative consequences and that society is
unwilling or unable to restrain that behavior;
(F) studies demonstrate that interventions during the early
stages of a criminal career can halt the progression to more
serious, violent behavior; and
(G) juvenile courts need access to a range of sentencing
options so that at least some level of sanction is imposed on
all youth offenders, including status offenders, and the
severity of the sanctions increase along with the seriousness
of the offense.
(2) Purposes.--The purposes of this section are to
provide--
(A) assistance to State and local juvenile courts to expand
the range of sentencing options for first time, nonviolent
offenders; and
(B) a selection of graduated sanctions for more serious
offenses.
(b) Definitions.--In this section:
(1) First time offender.--The term ``first time offender''
means a juvenile against whom formal charges have not
previously been filed in any Federal or State judicial
proceeding.
(2) Nonviolent offender.--The term ``nonviolent offender''
means a juvenile who is charged with an offense that does not
involve the use of force against the person of another.
(3) Status offender.--The term ``status offender'' means a
juvenile who is charged with an offense that would not be
criminal if committed by an adult (other than an offense that
constitutes a violation of a valid court order or a violation
of section 922(x) of title 18, United States Code (or similar
State law)).
(c) Grant Authorization.--The Attorney General may make
grants in accordance with this section to States, State
courts, local courts, units of local government, and Indian
tribes, for the purposes of--
(1) providing juvenile courts with a range of sentencing
options such that first time juvenile offenders, including
status offenders such as truants, vandals, and juveniles in
violation of State or local curfew laws, face at least some
level of punishment as a result of their initial contact with
the juvenile justice system; and
(2) increasing the sentencing options available to juvenile
court judges so that juvenile offenders receive increasingly
severe sanctions--
(A) as the seriousness of their unlawful conduct increases;
and
(B) for each additional offense.
(d) Applications.--
(1) Eligibility.--In order to be eligible to receive a
grant under this section, the chief executive of a State,
unit of local government, or Indian tribe, or the chief judge
of a local court, shall submit an application to the Attorney
General in such form and containing such information as the
Attorney General may reasonably require.
(2) Requirements.--Each application submitted in accordance
with paragraph (1) shall include--
(A) a request for a grant to be used for the purposes
described in this section;
(B) a description of the communities to be served by the
grant, including the extent of youth crime and violence in
those communities;
(C) written assurances that Federal funds received under
this subtitle will be used to supplement, not supplant, non-
Federal funds that would otherwise be available for
activities funded under this subsection;
(D) a comprehensive plan described in paragraph (3) (in
this section referred to as the ``comprehensive plan''); and
(E) any additional information in such form and containing
such information as the Attorney General may reasonably
require.
(3) Implementation plan.--For purposes of paragraph (2), a
comprehensive plan shall include--
(A) an action plan outlining the manner in which the
applicant will achieve the purposes described in subsection
(c)(1);

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(B) a description of any resources available in the
jurisdiction of the applicant to implement the action plan
described in subparagraph (A);
(C) an estimate of the costs of full implementation of the
plan; and
(D) a plan for evaluating the impact of the grant on the
jurisdiction's juvenile justice system.
(e) Grant Awards.--
(1) Considerations.--In awarding grants under this section,
the Attorney General shall consider--
(A) the ability of the applicant to provide the stated
services;
(B) the level of youth crime, violence, and drug use in the
community; and
(C) to the extent practicable, achievement of an equitable
geographic distribution of the grant awards.
(2) Allocations.--
(A) In general.--The Attorney General shall allot not less
than 0.75 percent of the total amount made available to carry
out this section in each fiscal year to applicants in each
State from which applicants have applied for grants under
this section.
(B) Indian tribes.--The Attorney General shall allocate not
less than 0.75 percent of the total amount made available to
carry out this section in each fiscal year to Indian tribes.
(f) Use of Grant Amounts.--
(1) In general.--Each grant made under this section shall
be used to establish programs that--
(A) expand the number of judges, prosecutors, and public
defenders for the purpose of imposing sanctions on first time
juvenile offenders and status offenders and for establishing
restorative justice boards involving members of the
community;
(B) provide expanded sentencing options, such as
restitution, community service, drug testing and treatment,
mandatory job training, curfews, house arrest, mandatory work
projects, and boot camps, for status offenders and nonviolent
offenders;
(C) increase staffing for probation officers to supervise
status offenders and nonviolent offenders to ensure that
sanctions are enforced;
(D) provide aftercare and supervision for status and
nonviolent offenders, such as drug education and drug
treatment, vocational training, job placement, and family
counseling;
(E) encourage private sector employees to provide training
and work opportunities for status offenders and nonviolent
offenders; and
(F) provide services and interventions for status and
nonviolent offenders designed, in tandem with criminal
sanctions, to reduce the likelihood of further criminal
behavior.
(2) Prohibition on use of amounts.--
(A) Definitions.--In this paragraph:
(i) Alien.--The term ``alien'' has the same meaning as in
section 101(a) of the Immigration and Nationality Act (8
U.S.C. 1101(a)).
(ii) Secure detention facility; secure correctional
facility.--The terms ``secure detention facility'' and
``secure correctional facility'' have the same meanings as in
section 103 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5603).
(B) Prohibition.--No amounts made available under this
subtitle may be used for any program that permits the
placement of status offenders, alien juveniles in custody, or
nonoffender juveniles (such as dependent, abused, or
neglected children) in secure detention facilities or secure
correctional facilities.
(g) Grant Limitations.--Not more than 3 percent of the
amounts made available to the Attorney General or a grant
recipient under this section may be used for administrative
purposes.
(h) Federal Share.--
(1) In general.--Subject to paragraphs (2) and (3), the
Federal share of a grant made under this section may not
exceed 90 percent of the total estimated costs of the program
described in the comprehensive plan submitted under
subsection (d)(3) for the fiscal year for which the program
receives assistance under this section.
(2) Waiver.--The Attorney General may waive, in whole or in
part, the requirements of paragraph (1).
(3) In-kind contributions.--For purposes of paragraph (1),
in-kind contributions may constitute any portion of the non-
Federal share of a grant under this section.
(i) Report and Evaluation.--
(1) Report to the attorney general.--Not later than October
1, 2002, and October 1 of each year thereafter, each grant
recipient under this section shall submit to the Attorney
General a report that describes, for the year to which the
report relates, any progress achieved in carrying out the
comprehensive plan of the grant recipient.
(2) Evaluation and report to congress.--Not later than
March 1, 2003, and March 1 of each year thereafter, the
Attorney General shall submit to Congress an evaluation and
report that contains a detailed statement regarding grant
awards, activities of grant recipients, a compilation of
statistical information submitted by grant recipients under
this section, and an evaluation of programs established by
grant recipients under this section.
(3) Criteria.--In assessing the effectiveness of the
programs established and operated by grant recipients
pursuant to this section, the Attorney General shall
consider--
(A) a comparison between the number of first time offenders
who received a sanction for criminal behavior in the
jurisdiction of the grant recipient before and after
initiation of the program;
(B) changes in the recidivism rate for first time offenders
in the jurisdiction of the grant recipient;
(C) a comparison of the recidivism rates and the
seriousness of future offenses of first time offenders in the
jurisdiction of the grant recipient that receive a sanction
and those who do not;
(D) changes in truancy rates of the public schools in the
jurisdiction of the grant recipient; and
(E) changes in the arrest rates for vandalism and other
property crimes in the jurisdiction of the grant recipient.
(4) Documents and information.--Each grant recipient under
this section shall provide the Attorney General with all
documents and information that the Attorney General
determines to be necessary to conduct an evaluation of the
effectiveness of programs funded under this section.
(j) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section from the Violent
Crime Reduction Trust Fund--
(1) such sums as may be necessary for each of fiscal years
2002 and 2003; and
(2) $175,000,000 for each of fiscal years 2004 and 2005.

SEC. 1403. PILOT PROGRAM TO PROMOTE REPLICATION OF RECENT
SUCCESSFUL JUVENILE CRIME REDUCTION STRATEGIES.

(a) Pilot Program To Promote Replication of Recent
Successful Juvenile Crime Reduction Strategies.--
(1) Establishment.--The Attorney General (or a designee of
the Attorney General), in conjunction with the Secretary of
the Treasury (or the designee of the Secretary), shall
establish a pilot program (in this section referred to as the
``program'') to encourage and support communities that adopt
a comprehensive approach to suppressing and preventing
violent juvenile crime patterned after successful State
juvenile crime reduction strategies.
(2) Program.--In carrying out the program, the Attorney
General shall--
(A) make and track grants to grant recipients (in this
section referred to as ``coalitions'');
(B) in conjunction with the Secretary of the Treasury,
provide for technical assistance and training, data
collection, and dissemination of relevant information; and
(C) provide for the general administration of the program.
(3) Administration.--Not later than 30 days after the date
of enactment of this Act, the Attorney General shall appoint
an Administrator (in this section referred to as the
``Administrator'') to carry out the program.
(4) Program authorization.--To be eligible to receive an
initial grant or a renewal grant under this section, a
coalition shall meet each of the following criteria:
(A) Composition.--The coalition shall consist of 1 or more
representatives of--
(i) the local police department or sheriff's department;
(ii) the local prosecutors' office;
(iii) the United States Attorney's office;
(iv) the Federal Bureau of Investigation;
(v) the Bureau of Alcohol, Tobacco and Firearms;
(vi) State or local probation officers;
(vii) religious affiliated or fraternal organizations
involved in crime prevention;
(viii) schools;
(ix) parents or local grass roots organizations such as
neighborhood watch groups; and
(x) social service agencies involved in crime prevention.
(B) Other participants.--If possible, in addition to the
representatives from the categories listed in subparagraph
(A), the coalition shall include--
(i) representatives from the business community; and
(ii) researchers who have studied criminal justice and can
offer technical or other assistance.
(C) Coordinated strategy.--A coalition shall submit to the
Attorney General, or the Attorney General's designee, a
comprehensive plan for reducing violent juvenile crime. To be
eligible for consideration, a plan shall--
(i) ensure close collaboration among all members of the
coalition in suppressing and preventing juvenile crime;
(ii) place heavy emphasis on coordinated enforcement
initiatives, such as Federal and State programs that
coordinate local police departments, prosecutors, and local
community leaders to focus on the suppression of violent
juvenile crime involving gangs;
(iii) ensure that there is close collaboration between
police and probation officers in the supervision of juvenile
offenders, such as initiatives that coordinate the efforts of
parents, school officials, and police and probation officers
to patrol the streets and make home visits to ensure that
offenders comply with the terms of their probation;
(iv) ensure that a program is in place to trace all
firearms seized from crime scenes or offenders in an effort
to identify illegal gun traffickers; and
(v) ensure that effective crime prevention programs are in
place, such as programs that provide after-school safe havens
and other opportunities for at-risk youth to escape or avoid
gang or other criminal activity, and to reduce recidivism.
(D) Accountability.--A coalition shall--

[[Page S175]]

(i) establish a system to measure and report outcomes
consistent with common indicators and evaluation protocols
established by the Administrator and which receives the
approval of the Administrator; and
(ii) devise a detailed model for measuring and evaluating
the success of the plan of the coalition in reducing violent
juvenile crime, and provide assurances that the plan will be
evaluated on a regular basis to assess progress in reducing
violent juvenile crime.
(5) Grant amounts.--
(A) In general.--The Administrator may grant to an eligible
coalition under this paragraph, an amount not to exceed the
amount of non-Federal funds raised by the coalition,
including in-kind contributions, for that fiscal year.
(B) Nonsupplanting requirement.--A coalition seeking funds
shall provide reasonable assurances that funds made available
under this program to States or units of local government
shall be so used as to supplement and increase (but not
supplant) the level of the State, local, and other non-
Federal funds that would in the absence of such Federal funds
be made available for programs described in this section, and
shall in no event replace such State, local, or other non-
Federal funds.
(C) Suspension of grants.--If a coalition fails to continue
to meet the criteria set forth in this section, the
Administrator may suspend the grant, after providing written
notice to the grant recipient and an opportunity to appeal.
(D) Renewal grants.--Subject to subparagraph (E), the
Administrator may award a renewal grant to a grant recipient
under this subparagraph for each fiscal year following the
fiscal year for which an initial grant is awarded, in an
amount not to exceed the amount of non-Federal funds raised
by the coalition, including in-kind contributions, for that
fiscal year, during the 4-year period following the period of
the initial grant.
(E) Limitation.--The amount of a grant award under this
section may not exceed $300,000 for a fiscal year.
(6) Permitted use of funds.--A coalition receiving funds
under this section may expend such Federal funds on any use
or program that is contained in the plan submitted to the
Administrator.
(7) Congressional consultation.--Two years after the date
of implementation of the program established in this section,
the General Accounting Office shall submit a report to
Congress reviewing the effectiveness of the program in
suppressing and reducing violent juvenile crime in the
participating communities. The report shall contain an
analysis of each community participating in the program,
along with information regarding the plan undertaken in the
community, and the effectiveness of the plan in reducing
violent juvenile crime. The report shall contain
recommendations regarding the efficacy of continuing the
program.
(b) Information Collection and Dissemination With Respect
to Coalitions.--
(1) Coalition information.--For the purpose of audit and
examination, the Administrator--
(A) shall have access to any books, documents, papers, and
records that are pertinent to any grant or grant renewal
request under this section; and
(B) may periodically request information from a coalition
to ensure that the coalition meets the applicable criteria.
(2) Reporting.--The Administrator shall, to the maximum
extent practicable and in a manner consistent with applicable
law, minimize reporting requirements by a coalition and
expedite any application for a renewal grant made under this
section.
(c) Authorization of Appropriations.--There are authorized
to be appropriated from the Violent Crime Reduction Trust
Fund to carry out this section, $3,000,000 in each of fiscal
years 2002, 2003, and 2004.

SEC. 1404. REIMBURSEMENT OF STATES FOR COSTS OF INCARCERATING
JUVENILE ALIEN OFFENDERS.

(a) In General.--Section 501 of the Immigration Reform and
Control Act of 1986 (8 U.S.C. 1365) is amended--
(1) in subsection (a), by inserting ``or illegal juvenile
alien who has been adjudicated delinquent and committed to a
juvenile correctional facility by such State or locality''
before the period;
(2) in subsection (b), by inserting ``(including any
juvenile alien who has been adjudicated delinquent and has
been committed to a correctional facility)'' before ``who is
in the United States unlawfully''; and
(3) by adding at the end the following:
``(f) Juvenile Alien Defined.--In this section, the term
`juvenile alien' means an alien (as that term is defined in
section 101(a)(3) of the Immigration and Nationality Act (8
U.S.C. 1103)) who has been adjudicated delinquent and
committed to a correctional facility by a State or locality
as a juvenile offender.''.

Subtitle E--Ballistics, Law Assistance, and Safety Technology

SEC. 1501. SHORT TITLE.

This subtitle may be cited as the ``Ballistics, Law
Assistance, and Safety Technology Act'' (``BLAST'').

SEC. 1502. PURPOSES.

The purposes of this subtitle are--
(1) to increase public safety by assisting law enforcement
in solving more gun-related crimes and offering prosecutors
evidence to link felons to gun crimes through ballistics
technology;
(2) to provide for ballistics testing of all new firearms
for sale to assist in the identification of firearms used in
crimes;
(3) to require ballistics testing of all firearms in
custody of Federal agencies to assist in the identification
of firearms used in crimes; and
(4) to add ballistics testing to existing firearms
enforcement programs.

SEC. 1503. DEFINITION OF BALLISTICS.

Section 921(a) of title 18, United States Code, is amended
by adding at the end the following:
``(35) Ballistics.--The term `ballistics' means a
comparative analysis of fired bullets and cartridge casings
to identify the firearm from which bullets were discharged,
through identification of the unique characteristics that
each firearm imprints on bullets and cartridge casings.''.

SEC. 1504. TEST FIRING AND AUTOMATED STORAGE OF BALLISTICS
RECORDS.

(a) Amendment.--Section 923 of title 18, United States
Code, is amended by adding at the end the following:
``(m)(1) In addition to the other licensing requirements
under this section, a licensed manufacturer or licensed
importer shall--
``(A) test fire firearms manufactured or imported by such
licensees as specified by the Secretary by regulation;
``(B) prepare ballistics images of the fired bullet and
cartridge casings from the test fire;
``(C) make the records available to the Secretary for entry
in a computerized database; and
``(D) store the fired bullet and cartridge casings in such
a manner and for such a period as specified by the Secretary
by regulation.
``(2) Nothing in this subsection creates a cause of action
against any Federal firearms licensee or any other person for
any civil liability except for imposition of a civil penalty
under this section.
``(3)(A) The Attorney General and the Secretary shall
assist firearm manufacturers and importers in complying with
paragraph (1) through--
``(i) the acquisition, disposition, and upgrades of
ballistics equipment and bullet recovery equipment to be
placed at or near the sites of licensed manufacturers and
importers;
``(ii) the hiring or designation of personnel necessary to
develop and maintain a database of ballistics images of fired
bullets and cartridge casings, research and evaluation;
``(iii) providing education about the role of ballistics as
part of a comprehensive firearm crime reduction strategy;
``(iv) providing for the coordination among Federal, State,
and local law enforcement and regulatory agencies and the
firearm industry to curb firearm-related crime and illegal
firearm trafficking; and
``(v) any other steps necessary to make ballistics testing
effective.
``(B) The Attorney General and the Secretary shall--
``(i) establish a computer system through which State and
local law enforcement agencies can promptly access ballistics
records stored under this subsection, as soon as such a
capability is available; and
``(ii) encourage training for all ballistics examiners.
``(4) Not later than 1 year after the date of enactment of
this subsection and annually thereafter, the Attorney General
and the Secretary shall submit to the Committee on the
Judiciary of the Senate and the Committee on the Judiciary of
the House of Representatives a report regarding the impact of
this section, including--
``(A) the number of Federal and State criminal
investigations, arrests, indictments, and prosecutions of all
cases in which access to ballistics records provided under
this section served as a valuable investigative tool;
``(B) the extent to which ballistics records are accessible
across jurisdictions; and
``(C) a statistical evaluation of the test programs
conducted pursuant to section 1506 of the Ballistics, Law
Assistance, and State Technology Act.
``(5) There is authorized to be appropriated to the
Department of Justice and the Department of the Treasury for
each of fiscal years 2002 through 2005, $20,000,000 to carry
out this subsection, including--
``(A) installation of ballistics equipment and bullet
recovery equipment;
``(B) establishment of sites for ballistics testing;
``(C) salaries and expenses of necessary personnel; and
``(D) research and evaluation.
``(6) The Secretary and the Attorney General shall conduct
mandatory ballistics testing of all firearms obtained or in
the possession of their respective agencies.''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by subsection (a) take effect on the date on
which the Attorney General and the Secretary of the Treasury,
in consultation with the Board of the National Integrated
Ballistics Information Network, certify that the ballistics
systems used by the Department of Justice and the Department
of the Treasury are sufficiently interoperable to make
mandatory ballistics testing of new firearms possible.
(2) Effective on date of enactment.--Section 923(m)(6) of
title 18, United States Code, as added by subsection (a),
shall take effect on the date of enactment of this Act.

[[Page S176]]

SEC. 1505. PRIVACY RIGHTS OF LAW ABIDING CITIZENS.

Ballistics information of individual guns in any form or
database established by this Act may not be used for--
(1) prosecutorial purposes unless law enforcement officials
have a reasonable belief that a crime has been committed and
that ballistics information would assist in the investigation
of that crime; or
(2) the creation of a national firearms registry of gun
owners.

SEC. 1506. DEMONSTRATION FIREARM CRIME REDUCTION STRATEGY.

(a) In General.--Not later than 60 days after the date of
enactment of this Act, the Secretary of the Treasury and the
Attorney General shall establish in the jurisdictions
selected under subsection (c), a comprehensive firearm crime
reduction strategy that meets the requirements of subsection
(b).
(b) Program Elements.--Each program established under
subsection (a) shall, for the jurisdiction concerned--
(1) provide for ballistics testing, in accordance with
criteria set forth by the National Integrated Ballistics
Information Network, of all firearms recovered during
criminal investigations, in order to--
(A) identify the types and origins of the firearms;
(B) identify suspects; and
(C) link multiple crimes involving the same firearm;
(2) require that all identifying information relating to
firearms recovered during criminal investigations be promptly
submitted to the Secretary of the Treasury, in order to
identify the types and origins of the firearms and to
identify illegal firearms traffickers;
(3) provide for coordination among Federal, State, and
local law enforcement officials, firearm examiners,
technicians, laboratory personnel, investigators, and
prosecutors in the tracing and ballistics testing of firearms
and the investigation and prosecution of firearms-related
crimes including illegal firearms trafficking; and
(4) require analysis of firearm tracing and ballistics data
in order to establish trends in firearm-related crime and
firearm trafficking.
(c) Participating Jurisdictions.--
(1) In general.--The Secretary of the Treasury and the
Attorney General shall select not fewer than 10 jurisdictions
for participation in the program under this section.
(2) Considerations.--In selecting jurisdictions under this
subsection, the Secretary of the Treasury and the Attorney
General shall give priority to jurisdictions that--
(A) participate in comprehensive firearm law enforcement
strategies, including programs such as the Youth Crime Gun
Interdiction Initiative, Project Achilles, Project Disarm,
Project Triggerlock, Project Exile, Project Surefire, and
Operation Ceasefire;
(B) draft a plan to share ballistics records with nearby
jurisdictions that require ballistics testing of firearms
recovered during criminal investigations; and
(C) pledge to match Federal funds for the expansion of
ballistics testing on a one-on-one basis.
(d) Authorization of Appropriations.--There is authorized
to be appropriated for each of fiscal years 2002 through
2005, $20,000,000 to carry out this section, including--
(1) installation of ballistics equipment; and
(2) salaries and expenses for personnel (including
personnel from the Department of Justice and the Bureau of
Alcohol, Tobacco, and Firearms).

Subtitle F--Offender Reentry and Community Safety

SEC. 1601. SHORT TITLE.

This subtitle may be cited as the ``Offender Reentry and
Community Safety Act of 2001''.

SEC. 1602. FINDINGS.

Congress finds the following:
(1) There are now nearly 1,900,000 individuals in our
country's prisons and jails, including over 140,000
individuals under the jurisdiction of the Federal Bureau of
Prisons.
(2) Enforcement of offender violations of conditions of
releases has sharply increased the number of offenders who
return to prison--while revocations comprised 17 percent of
State prison admissions in 1980, they rose to 36 percent in
1998.
(3) Although prisoners generally are serving longer
sentences than they did a decade ago, most eventually reenter
communities; for example, in 1999, approximately 538,000
State prisoners and over 50,000 Federal prisoners, a record
number, were returned to American communities. Approximately
100,000 State offenders who returned to communities received
no supervision whatsoever.
(4) Historically, two-thirds of returning State prisoners
have been rearrested for new crimes within three years, so
these individuals pose a significant public safety risk and a
continuing financial burden to society.
(5) A key element to effective post-incarceration
supervision is an immediate, predetermined, and appropriate
response to violations of the conditions of supervision.
(6) An estimated 187,000 State and Federal prison inmates
have been diagnosed with mental health problems; about 70
percent of State prisoners and 57 percent of Federal
prisoners have a history of drug use or abuse; and nearly 75
percent of released offenders with heroin or cocaine problems
return to using drugs within three months if untreated;
however, few States link prison mental health treatment
programs with those in the return community.
(7) Between 1987 and 1997, the volume of juvenile
adjudicated cases resulting in court-ordered residential
placements rose 56 percent. In 1997 alone, there were a total
of 163,200 juvenile court-ordered residential placements. The
steady increase of youth exiting residential placement has
strained the juvenile justice aftercare system, however,
without adequate supervision and services, youth are likely
to relapse, recidivate, and return to confinement at the
public's expense.
(8) Emerging technologies and multidisciplinary community-
based strategies present new opportunities to alleviate the
public safety risk posed by released prisoners while helping
offenders to reenter their communities successfully.

SEC. 1603. PURPOSES.

The purposes of this subtitle are to--
(1) establish demonstration projects in several Federal
judicial districts, the District of Columbia, and in the
Federal Bureau of Prisons, using new strategies and emerging
technologies that alleviate the public safety risk posed by
released prisoners by promoting their successful
reintegration into the community;
(2) establish court-based programs to monitor the return of
offenders into communities, using court sanctions to promote
positive behavior;
(3) establish offender reentry demonstration projects in
the states using government and community partnerships to
coordinate cost efficient strategies that ensure public
safety and enhance the successful reentry into communities of
offenders who have completed their prison sentences;
(4) establish intensive aftercare demonstration projects
that address public safety and ensure the special reentry
needs of juvenile offenders by coordinating the resources of
juvenile correctional agencies, juvenile courts, juvenile
parole agencies, law enforcement agencies, social service
providers, and local Workforce Investment Boards; and
(5) rigorously evaluate these reentry programs to determine
their effectiveness in reducing recidivism and promoting
successful offender reintegration.

PART 1--FEDERAL REENTRY DEMONSTRATION PROJECTS

SEC. 1611. FEDERAL REENTRY CENTER DEMONSTRATION.

(a) Authority and Establishment of Demonstration Project.--
From funds made available to carry out this section, the
Attorney General, in consultation with the Director of the
Administrative Office of the United States Courts, shall
establish the Federal Reentry Center Demonstration project.
The project shall involve appropriate prisoners from the
Federal prison population and shall utilize community
corrections facilities, home confinement, and a coordinated
response by Federal agencies to assist participating
prisoners, under close monitoring and more seamless
supervision, in preparing for and adjusting to reentry into
the community.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) a Reentry Review Team for each prisoner, consisting of
representatives from the Bureau of Prisons, the United States
Probation System, and the relevant community corrections
facility, who shall initially meet with the prisoner to
develop a reentry plan tailored to the needs of the prisoner
and incorporating victim impact information, and will
thereafter meet regularly to monitor the prisoner's
progress toward reentry and coordinate access to
appropriate reentry measures and resources;
(2) regular drug testing, as appropriate;
(3) a system of graduated levels of supervision within the
community corrections facility to promote community safety,
provide incentives for prisoners to complete the reentry
plan, including victim restitution, and provide a reasonable
method for imposing immediate sanctions for a prisoner's
minor or technical violation of the conditions of
participation in the project;
(4) substance abuse treatment and aftercare, mental and
medical health treatment and aftercare, vocational and
educational training, life skills instruction, conflict
resolution skills training, batterer intervention programs,
assistance obtaining suitable affordable housing, and other
programming to promote effective reintegration into the
community as needed;
(5) to the extent practicable, the recruitment and
utilization of local citizen volunteers, including volunteers
from the faith-based and business communities, to serve as
advisers and mentors to prisoners being released into the
community;
(6) a description of the methodology and outcome measures
that will be used to evaluate the program; and
(7) notification to victims on the status and nature of
offenders' reentry plan.
(c) Probation Officers.--From funds made available to carry
out this section, the Director of the Administrative Office
of the United States Courts shall assign one or more
probation officers from each participating judicial district
to the Reentry Demonstration project. Such officers shall be
assigned to and stationed at the community corrections
facility and shall serve on the Reentry Review Teams.
(d) Project Duration.--The Reentry Center Demonstration
project shall begin not

[[Page S177]]

later than 6 months following the availability of funds to
carry out this section, and shall last 3 years. The Attorney
General may extend the project for a period of up to 6 months
to enable participant prisoners to complete their involvement
in the project.
(e) Selection of Districts.--The Attorney General, in
consultation with the Judicial Conference of the United
States, shall select an appropriate number of Federal
judicial districts in which to carry out the Reentry Center
Demonstration project.
(f) Coordination of Projects.--The Attorney General, may,
if appropriate, include in the Reentry Center Demonstration
project offenders who participated in the Enhanced In-Prison
Vocational Assessment and Training Demonstration project
established by section 1615 of this Act.

SEC. 1612. FEDERAL HIGH-RISK OFFENDER REENTRY DEMONSTRATION.

(a) Authority and Establishment of Demonstration Project.--
From funds made available to carry out this section, the
Director of the Administrative Office of the United States
Courts, in consultation with the Attorney General, shall
establish the Federal High-Risk Offender Reentry
Demonstration project. The project shall involve Federal
offenders under supervised release who have previously
violated the terms of their release following a term of
imprisonment and shall utilize, as appropriate and indicated,
community corrections facilities, home confinement,
appropriate monitoring technologies, and treatment and
programming to promote more effective reentry into the
community.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) participation by Federal prisoners who have previously
violated the terms of their release following a term of
imprisonment;
(2) use of community corrections facilities and home
confinement that, together with the technology referenced in
paragraph (5), will be part of a system of graduated levels
of supervision;
(3) substance abuse treatment and aftercare, mental and
medical health treatment and aftercare, vocational and
educational training, life skills instruction, conflict
resolution skills training, batterer intervention programs,
and other programming to promote effective reintegration into
the community as appropriate;
(4) involvement of a victim advocate and the family of the
prisoner, if it is safe for the victim(s), especially in
domestic violence cases, to be involved;
(5) the use of monitoring technologies, as appropriate and
indicated, to monitor and supervise participating offenders
in the community;
(6) a description of the methodology and outcome measures
that will be used to evaluate the program; and
(7) notification to victims on the status and nature of a
prisoner's reentry plan.
(c) Mandatory Condition of Supervised Release.--In each of
the judicial districts in which the demonstration project is
in effect, appropriate offenders who are found to have
violated a previously imposed term of supervised release and
who will be subject to some additional term of supervised
release, shall be designated to participate in the
demonstration project. With respect to these offenders, the
court shall impose additional mandatory conditions of
supervised release that each offender shall, as directed by
the probation officer, reside at a community corrections
facility or participate in a program of home confinement, or
both, and submit to appropriate monitoring, and otherwise
participate in the project.
(d) Project Duration.--The Federal High-Risk Offender
Reentry Demonstration shall begin not later than six months
following the availability of funds to carry out this
section, and shall last 3 years. The Director of the
Administrative Office of the United States Courts may extend
the project for a period of up to six months to enable
participating prisoners to complete their involvement in the
project.
(e) Selection of Districts.--The Judicial Conference of the
United States, in consultation with the Attorney General,
shall select an appropriate number of Federal judicial
districts in which to carry out the Federal High-Risk
Offender Reentry Demonstration project.

SEC. 1613. DISTRICT OF COLUMBIA INTENSIVE SUPERVISION,
TRACKING, AND REENTRY TRAINING (DC ISTART)
DEMONSTRATION.

(a) Authority and Establishment of Demonstration Project.--
From funds made available to carry out this section, the
Trustee of the Court Services and Offender Supervision Agency
of the District of Columbia, as authorized by the National
Capital Revitalization and Self Government Improvement Act of
1997 (Public Law 105-33; 111 Stat. 712) shall establish the
District of Columbia Intensive Supervision, Tracking and
Reentry Training Demonstration (DC iSTART) project. The
project shall involve high risk District of Columbia parolees
who would otherwise be released into the community without a
period of confinement in a community corrections facility and
shall utilize intensive supervision, monitoring, and
programming to promote such parolees' successful reentry into
the community.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) participation by appropriate high risk parolees;
(2) use of community corrections facilities and home
confinement;
(3) a Reentry Review Team that includes a victim witness
professional for each parolee which shall meet with the
parolee--by video conference or other means as appropriate--
before the parolee's release from the custody of the Federal
Bureau of Prisons to develop a reentry plan that incorporates
victim impact information and is tailored to the needs of the
parolee and which will thereafter meet regularly to monitor
the parolee's progress toward reentry and coordinate access
to appropriate reentry measures and resources;
(4) regular drug testing, as appropriate;
(5) a system of graduated levels of supervision within the
community corrections facility to promote community safety,
encourage victim restitution, provide incentives for
prisoners to complete the reentry plan, and provide a
reasonable method for immediately sanctioning a prisoner's
minor or technical violation of the conditions of
participation in the project;
(6) substance abuse treatment and aftercare, mental and
medical health treatment and aftercare, vocational and
educational training, life skills instruction, conflict
resolution skills training, batterer intervention programs,
assistance obtaining suitable affordable housing, and other
programming to promote effective reintegration into the
community as needed and indicated;
(7) the use of monitoring technologies, as appropriate;
(8) to the extent practicable, the recruitment and
utilization of local citizen volunteers, including volunteers
from the faith-based communities, to serve as advisers and
mentors to prisoners being released into the community; and
(9) notification to victims on the status and nature of a
prisoner's reentry plan.
(c) Mandatory Condition of Parole.--For those offenders
eligible to participate in the demonstration project, the
United States Parole Commission shall impose additional
mandatory conditions of parole such that the offender when on
parole shall, as directed by the community supervision
officer, reside at a community corrections facility or
participate in a program of home confinement, or both, submit
to electronic and other remote monitoring, and otherwise
participate in the project.
(d) Program Duration.--The District of Columbia Intensive
Supervision, Tracking and Reentry Training Demonstration
shall begin not later than 6 months following the
availability of funds to carry out this section, and shall
last 3 years. The Trustee of the Court Services and Offender
Supervision Agency of the District of Columbia may extend the
project for a period of up to 6 months to enable
participating prisoners to complete their involvement in the
project.

SEC. 1614. FEDERAL INTENSIVE SUPERVISION, TRACKING, AND
REENTRY TRAINING (FED ISTART) DEMONSTRATION.

(a) Authority and Establishment of Demonstration Project.--
From funds made available to carry out this section, the
Director of the Administrative Office of the United States
Courts shall establish the Federal Intensive Supervision,
Tracking and Reentry Training Demonstration (FED iSTART)
project. The project shall involve appropriate high risk
Federal offenders who are being released into the community
without a period of confinement in a community corrections
facility.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) participation by appropriate high risk Federal
offenders;
(2) significantly smaller caseloads for probation officers
participating in the demonstration project;
(3) substance abuse treatment and aftercare, mental and
medical health treatment and aftercare, vocational and
educational training, life skills instruction, conflict
resolution skills training, batterer intervention programs,
assistance obtaining suitable affordable housing, and other
programming to promote effective reintegration into the
community as needed; and
(4) notification to victims on the status and nature of a
prisoner's reentry plan.
(c) Program Duration.--The Federal Intensive Supervision,
Tracking and Reentry Training Demonstration shall begin not
later than 6 months following the availability of funds to
carry out this section, and shall last 3 years. The Director
of the Administrative Office of the United States Courts may
extend the project for a period of up to six months to enable
participating prisoners to complete their involvement in the
project.
(d) Selection of Districts.--The Judicial Conference of the
United States, in consultation with the Attorney General,
shall select an appropriate number of Federal judicial
districts in which to carry out the Federal Intensive
Supervision, Tracking and Reentry Training Demonstration
project.

SEC. 1615. FEDERAL ENHANCED IN-PRISON VOCATIONAL ASSESSMENT
AND TRAINING DEMONSTRATION.

(a) Authority and Establishment of Demonstration Project.--
From funds made available to carry out this section, the
Attorney General shall establish the Federal Enhanced In-
Prison Vocational Assessment and Training Demonstration
project in selected institutions. The project shall provide
in-prison assessments of prisoners' vocational needs and
aptitudes, enhanced work skills development, enhanced release
readiness programming, and other components as appropriate to
prepare Federal prisoners for release and reentry into the
community.
(b) Program Duration.--The Enhanced In-Prison Vocational
Assessment and Training

[[Page S178]]

Demonstration shall begin not later than six months following
the availability of funds to carry out this section, and
shall last 3 years. The Attorney General may extend the
project for a period of up to 6 months to enable
participating prisoners to complete their involvement in the
project.

SEC. 1616. RESEARCH AND REPORTS TO CONGRESS.

(a) Attorney General.--Not later than 2 years after the
enactment of this Act, the Attorney General shall report to
Congress on the progress of the demonstration projects
authorized by sections 1611 and 1615. Not later than 1 year
after the end of the demonstration projects authorized by
sections 1611 and 1615, the Director of the Federal Bureau of
Prisons shall report to Congress on the effectiveness of the
reentry projects authorized by sections 1611 and 1615 on
post-release outcomes and recidivism. The report shall
address post-release outcomes and recidivism for a period of
3 years following release from custody. The reports submitted
pursuant to this section shall be submitted to the Committees
on the Judiciary in the House of Representatives and the
Senate.
(b) Administrative Office of the United States Courts.--Not
later than 2 years after the enactment of this Act, Director
of the Administrative Office of the United States Courts
shall report to Congress on the progress of the demonstration
projects authorized by sections 1612 and 1614. Not later than
180 days after the end of the demonstration projects
authorized by sections 1612 and 1614, the Director of the
Administrative Office of the United States Courts shall
report to Congress on the effectiveness of the reentry
projects authorized by sections 1612 and 1614 on post-release
outcomes and recidivism. The report should address post-
release outcomes and recidivism for a period of 3 years
following release from custody. The reports submitted
pursuant to this section shall be submitted to the Committees
on the Judiciary in the House of Representatives and the
Senate.
(c) DC ISTART.--Not later than 2 years after the enactment
of this Act, the Executive Director of the corporation or
institute authorized by section 11281(2) of the National
Capital Revitalization and Self-Government Improvement Act of
1997 (Pub. Law 105-33; 111 Stat. 712) shall report to
Congress on the progress of the demonstration project
authorized by section 1613 of this Act. Not later than 1 year
after the end of the demonstration project authorized by
section 1613, the Executive Director of the corporation or
institute authorized by section 11281(2) of the National
Capital Revitalization and Self-Government Improvement Act of
1997 (Pub. Law 105-33; 111 Stat. 712) shall report to
Congress on the effectiveness of the reentry project
authorized by section 1613 of this Act on post-release
outcomes and recidivism. The report shall address post-
release outcomes and recidivism for a period of three years
following release from custody. The reports submitted
pursuant to this section shall be submitted to the Committees
on the Judiciary in the House of Representatives and the
Senate. In the event that the corporation or institute
authorized by section 11281(2) of the National Capital
Revitalization and Self-Government Improvement Act of 1997
(Pub. Law 105-33; 111 Stat. 712) is not in operation 1 year
after the enactment of this Act, the Director of the National
Institute of Justice shall prepare and submit the reports
required by this section and may do so from funds made
available to the Court Services and Offender Supervision
Agency of the District of Columbia, as authorized by the
National Capital Revitalization and Self-Government
Improvement Act of 1997 (Pub. Law 105-33; 111 Stat. 712).

SEC. 1617. DEFINITIONS.

In this part--
(1) the term ``appropriate prisoner'' means a person who is
considered by prison authorities--
(A) to pose a medium to high risk of committing a criminal
act upon reentering the community, and
(B) to lack the skills and family support network that
facilitate successful reintegration into the community; and
(2) the term ``appropriate high risk parolees'' means
parolees considered by prison authorities--
(A) to pose a medium to high risk of committing a criminal
act upon reentering the community; and
(B) to lack the skills and family support network that
facilitate successful reintegration into the community.

SEC. 1618. AUTHORIZATION OF APPROPRIATIONS.

To carry out this part, there are authorized to be
appropriated, to remain available until expended, the
following amounts:
(1) To the Federal Bureau of Prisons--
(A) $1,375,000 for fiscal year 2002;
(B) $1,110,000 for fiscal year 2003;
(C) $1,130,000 for fiscal year 2004;
(D) $1,155,000 for fiscal year 2005; and
(E) $1,230,000 for fiscal year 2006.
(2) To the Federal Judiciary--
(A) $3,380,000 for fiscal year 2002;
(B) $3,540,000 for fiscal year 2003;
(C) $3,720,000 for fiscal year 2004;
(D) $3,910,000 for fiscal year 2005; and
(E) $4,100,000 for fiscal year 2006.
(3) To the Court Services and Offender Supervision Agency
of the District of Columbia, as authorized by the National
Capital Revitalization and Self-Government Improvement Act of
1997 (Pub. Law 105-33; 111 Stat. 712)--
(A) $4,860,000 for fiscal year 2002;
(B) $4,510,000 for fiscal year 2003;
(C) $4,620,000 for fiscal year 2004;
(D) $4,740,000 for fiscal year 2005; and
(E) $4,860,000 for fiscal year 2006.

PART 2--STATE REENTRY GRANT PROGRAMS

SEC. 1621. AMENDMENTS TO THE OMNIBUS CRIME CONTROL AND SAFE
STREETS ACT OF 1968.

(a) In General.--Title I of the Omnibus Crime Control and
Safe Streets Act of 1968 (42 U.S.C. 3711 et seq.) as amended,
is amended by inserting after part CC the following new part:
``PART DD--OFFENDER REENTRY AND COMMUNITY SAFETY

``SEC. 2951. ADULT OFFENDER STATE AND LOCAL REENTRY
PARTNERSHIPS.

``(a) Grant Authorization.--The Attorney General shall make
grants of up to $1,000,000 to States, Territories, and Indian
tribes, in partnership with units of local government and
nonprofit organizations, for the purpose of establishing
adult offender reentry demonstration projects. Funds may be
expended by the projects for the following purposes:
``(1) oversight/monitoring of released offenders;
``(2) providing returning offenders with drug and alcohol
testing and treatment and mental health assessment and
services;
``(3) convening community impact panels, victim impact
panels or victim impact educational classes;
``(4) providing and coordinating the delivery of other
community services to offenders such as housing assistance,
education, employment training, conflict resolution skills
training, batterer intervention programs, and other social
services as appropriate; and
``(5) establishing and implementing graduated sanctions and
incentives.
``(b) Submission of Application.--In addition to any other
requirements that may be specified by the Attorney General,
an application for a grant under this subpart shall--
``(1) describe a long-term strategy and detailed
implementation plan, including how the jurisdiction plans to
pay for the program after the Federal funding ends;
``(2) identify the governmental and community agencies that
will be coordinated by this project;
``(3) certify that there has been appropriate consultation
with all affected agencies and there will be appropriate
coordination with all affected agencies in the implementation
of the program, including existing community corrections and
parole; and
``(4) describe the methodology and outcome measures that
will be used in evaluating the program.
``(c) Applicants.--The applicants as designated under
subsection (a)--
``(1) shall prepare the application as required under
subsection (b); and
``(2) shall administer grant funds in accordance with the
guidelines, regulations, and procedures promulgated by the
Attorney General, as necessary to carry out the purposes of
this part.
``(d) Matching Funds.--The Federal share of a grant
received under this title may not exceed 25 percent of the
costs of the project funded under this title unless the
Attorney General waives, wholly or in part, the requirements
of this section.
``(e) Reports.--Each entity that receives a grant under
this part shall submit to the Attorney General, for each year
in which funds from a grant received under this part is
expended, a report at such time and in such manner as the
Attorney General may reasonably require that contains:
``(1) a summary of the activities carried out under the
grant and an assessment of whether such activities are
meeting the needs identified in the application funded under
this part; and
``(2) such other information as the Attorney General may
require.
``(f) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this section $40,000,000 in fiscal years 2002
and 2003; and such sums as may be necessary for each of the
fiscal years 2004, 2005, and 2006.
``(2) Limitations.--Of the amount made available to carry
out this section in any fiscal year--
``(A) not more than 2 percent or less than 1 percent may be
used by the Attorney General for salaries and administrative
expenses; and
``(B) not more than 3 percent or less than 2 percent may be
used for technical assistance and training.

``SEC. 2952. STATE AND LOCAL REENTRY COURTS.

``(a) Grant Authorization.--The Attorney General shall make
grants of up to $500,000 to State and local courts or state
agencies, municipalities, public agencies, nonprofit
organizations, and tribes that have agreements with courts to
take the lead in establishing a reentry court. Funds may be
expended by the projects for the following purposes:
``(1) monitoring offenders returning to the community;
``(2) providing returning offenders with drug and alcohol
testing and treatment and mental and medical health
assessment and services;
``(3) convening community impact panels, victim impact
panels, or victim impact educational classes;
``(4) providing and coordinating the delivery of other
community services to offenders, such as housing assistance,
education, employment training, conflict resolution skills
training, batterer intervention programs, and other social
services as appropriate; and

[[Page S179]]

``(5) establishing and implementing graduated sanctions and
incentives.
``(b) Submission of Application.--In addition to any other
requirements that may be specified by the Attorney General,
an application for a grant under this subpart shall--
``(1) describe a long-term strategy and detailed
implementation plan, including how the jurisdiction plans to
pay for the program after the Federal funding ends;
``(2) identify the governmental and community agencies that
will be coordinated by this project;
``(3) certify that there has been appropriate consultation
with all affected agencies, including existing community
corrections and parole, and there will be appropriate
coordination with all affected agencies in the implementation
of the program;
``(4) describe the methodology and outcome measures that
will be used in evaluation of the program.
``(c) Applicants.--The applicants as designated under
subsection (a)--
``(1) shall prepare the application as required under
subsection (b); and
``(2) shall administer grant funds in accordance with the
guidelines, regulations, and procedures promulgated by the
Attorney General, as necessary to carry out the purposes of
this part.
``(d) Matching Funds.--The Federal share of a grant
received under this title may not exceed 25 percent of the
costs of the project funded under this title unless the
Attorney General waives, wholly or in part, the requirements
of this section.
``(e) Reports.--Each entity that receives a grant under
this part shall submit to the Attorney General, for each year
in which funds from a grant received under this part is
expended, a report at such time and in such manner as the
Attorney General may reasonably require that contains:
``(1) a summary of the activities carried out under the
grant and an assessment of whether such activities are
meeting the needs identified in the application funded under
this part; and
``(2) such other information as the Attorney General may
require.
``(f) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this section $10,000,000 in fiscal years 2002
and 2003, and such sums as may be necessary for each of the
fiscal years 2004, 2005, and 2006.
``(2) Limitations.--Of the amount made available to carry
out this section in any fiscal year--
``(A) not more than 2 percent or less than 1 percent may be
used by the Attorney General for salaries and administrative
expenses; and
``(B) not more than 3 percent or less than 2 percent may be
used for technical assistance and training.

``SEC. 2953. JUVENILE OFFENDER STATE AND LOCAL REENTRY
PROGRAMS.

``(a) Grant Authorization.--The Attorney General shall make
grants of up to $250,000 to States, in partnership with local
units of governments or nonprofit organizations, for the
purpose of establishing juvenile offender reentry programs.
Funds may be expended by the projects for--
``(1) providing returning juvenile offenders with drug and
alcohol testing and treatment and mental and medical health
assessment and services;
``(2) convening victim impact panels, restorative justice
panels, or victim impact educational classes for juvenile
offenders;
``(3) oversight/monitoring of released juvenile offenders;
and
``(4) providing for the planning of reentry services when
the youth is initially incarcerated and coordinating the
delivery of community-based services, such as education,
conflict resolution skills training, batterer intervention
programs, employment training and placement, efforts to
identify suitable living arrangements, family involvement and
support, and other services.
``(b) Submission of Application.--In addition to any other
requirements that may be specified by the Attorney General,
an application for a grant under this subpart shall--
``(1) describe a long-term strategy and detailed
implementation plan, including how the jurisdiction plans to
pay for the program after the Federal funding ends;
``(2) identify the governmental and community agencies that
will be coordinated by this project;
``(3) certify that there has been appropriate consultation
with all affected agencies and there will be appropriate
coordination with all affected agencies, including existing
community corrections and parole, in the implementation of
the program;
``(4) describe the methodology and outcome measures that
will be used in evaluating the program.
``(c) Applicants.--The applicants as designated under
subsection (a)--
``(1) shall prepare the application as required under
subsection (b); and
``(2) shall administer grant funds in accordance with the
guidelines, regulations, and procedures promulgated by the
Attorney General, as necessary to carry out the purposes of
this part.
``(d) Matching Funds.--The Federal share of a grant
received under this title may not exceed 25 percent of the
costs of the project funded under this title unless the
Attorney General waives, wholly or in part, the requirements
of this section.
``(e) Reports.--Each entity that receives a grant under
this part shall submit to the Attorney General, for each year
in which funds from a grant received under this part is
expended, a report at such time and in such manner as the
Attorney General may reasonably require that contains:
``(1) a summary of the activities carried out under the
grant and an assessment of whether such activities are
meeting the needs identified in the application funded under
this part; and
``(2) such other information as the Attorney General may
require.
``(f) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this section $5,000,000 in fiscal years 2002 and
2003, and such sums as are necessary for each of the fiscal
years 2004, 2005, and 2006.
``(2) Limitations.--Of the amount made available to carry
out this section in any fiscal year--
``(A) not more than 2 percent or less than 1 percent may be
used by the Attorney General for salaries and administrative
expenses; and
``(B) not more than 3 percent or less than 2 percent may be
used for technical assistance and training.

``SEC. 2954. STATE REENTRY PROGRAM RESEARCH, DEVELOPMENT, AND
EVALUATION.

``(a) Grant Authorization.--The Attorney General shall make
grants to conduct research on a range of issues pertinent to
reentry programs, the development and testing of new reentry
components and approaches, selected evaluation of projects
authorized in the preceding sections, and dissemination of
information to the field.
``(b) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$5,000,000 in fiscal years 2002 and 2003, and such sums as
are necessary to carry out this section in fiscal years 2004,
2005, and 2006.''.
(b) Technical Amendment.--The table of contents of title I
of the Omnibus Crime Control and Safe Street Act of 1968 (42
U.S.C. 3711 et seq.), as amended, is amended by inserting
after the matter relating to part CC the following:

``Part DD--Offender Reentry and Community Safety Act

``Sec. 2951. Adult Offender State and Local Reentry Partnerships.
``Sec. 2952. State and Local Reentry Courts.
``Sec. 2953. Juvenile Offender State and Local Reentry Programs.
``Sec. 2954. State Reentry Program Research and Evaluation.''.

TITLE II--STRENGTHENING THE FEDERAL CRIMINAL LAWS

Subtitle A--Combating Gang Violence

PART 1--ENHANCED PENALTIES FOR GANG-RELATED ACTIVITIES

SEC. 2101. GANG FRANCHISING.

Chapter 26 of title 18, United States Code, is amended by
adding at the end the following:

``SEC. 522. INTERSTATE FRANCHISING OF CRIMINAL STREET GANGS.

``(a) Prohibited Act.--Whoever travels in interstate or
foreign commerce, or causes another to do so, to recruit,
solicit, induce, command, or cause to create, or attempt to
create a franchise of a criminal street gang shall be
punished in accordance with subsection (c).
``(b) Definitions.--In this section:
``(1) Criminal street gang.--The term `criminal street
gang' has the meaning given that term in section 521.
``(2) Franchise.--The term `franchise' means an organized
group of individuals related by name, moniker, or other
identifier, that engages in coordinated violent crime or drug
trafficking activities in interstate or foreign commerce with
a criminal street gang in another State.
``(c) Penalties.--A person who violates subsection (a)
shall be imprisoned for not more than 10 years, fined under
this title, or both.''.

SEC. 2102. ENHANCED PENALTY FOR USE OR RECRUITMENT OF MINORS
IN GANGS.

(a) In General.--Chapter 26 of title 18, United States
Code, as amended by section 2101 of this title, is amended by
adding at the end the following:

``Sec. 523. Sentencing enhancement for use or recruitment of
minors

``Pursuant to its authority under section 994(p) of title
28, the United States Sentencing Commission shall amend the
Federal sentencing guidelines to provide an appropriate
enhancement for the use of minors in a criminal street gang
and the recruitment of minors in furtherance of the creation
of a criminal street gang franchise.''.
(b) Conforming Amendment.--The chapter analysis for chapter
26 of title 18, United States Code, is amended by adding at
the end the following:

``522. Interstate franchising of criminal street gangs.
``523. Sentencing enhancement for use or recruitment of minors.''.

SEC. 2103. GANG FRANCHISING AS A RICO PREDICATE.

Section 1961(1) of title 18, United States Code, is
amended--
(1) by striking ``or'' before ``(F)''; and

[[Page S180]]

(2) by inserting ``, or (G) an offense under section 522 of
this title'' before the semicolon at the end.

SEC. 2104. INCREASE IN OFFENSE LEVEL FOR PARTICIPATION IN
CRIME AS GANG MEMBER.

(a) Definition of Criminal Street Gang.--In this section,
the term ``criminal street gang'' has the same meaning as in
section 521(a) of title 18, United States Code.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate enhancement
with respect to any offense committed in connection with, or
in furtherance of, the activities of a criminal street gang
if the defendant is a member of the criminal street gang at
the time of the offense.
(c) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.

SEC. 2105. ENHANCED PENALTY FOR DISCHARGE OF FIREARMS IN
RELATION TO COUNTS OF VIOLENCE OR DRUG
TRAFFICKING CRIMES.

(a) Definitions.--In this section, the terms ``crime of
violence'' and ``drug trafficking crime'' have the same
meanings as in section 924(c) of title 18, United States
Code.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate sentence
enhancement with respect to any defendant who discharges a
firearm during or in relation to any crime of violence or any
drug trafficking crime.
(c) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.

SEC. 2106. PUNISHMENT OF ARSON OR BOMBING AT FACILITIES
RECEIVING FEDERAL FINANCIAL ASSISTANCE.

Section 844(f)(1) of title 18, United States Code, is
amended by inserting ``or any institution or organization
receiving Federal financial assistance'' after ``or agency
thereof,''.

SEC. 2107. ELIMINATION OF STATUTE OF LIMITATIONS FOR MURDER.

(a) In General.--Section 3281 of title 18, United States
Code, is amended to read as follows:

``Sec. 3281. Capital offenses and Class A felonies involving
murder

``An indictment for any offense punishable by death or an
indictment or information for a Class A felony involving
murder (as defined in section 1111 or as defined under
applicable State law in the case of an offense under section
1963(a) involving racketeering activity described in section
1961(1)) may be found at any time without limitation.''.
(b) Applicability.--The amendment made by subsection (a)
applies to any offense for which the applicable statute of
limitations had not run as of the date of enactment of this
Act.

SEC. 2108. EXTENSION OF STATUTE OF LIMITATIONS FOR VIOLENT
AND DRUG TRAFFICKING CRIMES.

(a) In General.--Chapter 213 of title 18, United States
Code, is amended by adding at the end the following:

``Sec. 3296. Class A violent and drug trafficking offenses

``Except as provided in section 3281, no person shall be
prosecuted, tried, or punished for a Class A felony that is a
crime of violence or a drug trafficking crime (as that term
is defined in section 924(c)) unless the indictment is
returned or the information is filed within 10 years after
the commission of the offense.''.
(b) Applicability.--The amendment made by subsection (a)
applies to any offense for which the applicable statute of
limitations had not run as of the date of enactment of this
Act.
(c) Conforming Amendments.--The chapter analysis for
chapter 213 of title 18, United States Code, is amended--
(1) in the item relating to section 3281, by inserting
``and Class A felonies involving murder'' before the period;
and
(2) by adding at the end the following:

``3296. Class A violent and drug trafficking offenses.''.

SEC. 2109. INCREASED PENALTIES UNDER THE RICO LAW FOR GANG
AND VIOLENT CRIMES.

Section 1963(a) of title 18, United States Code, is amended
by striking ``or imprisoned not more than 20 years (or for
life if the violation is based on a racketeering activity for
which the maximum penalty includes life imprisonment), or
both,'' and inserting ``or imprisoned not more than the
greater of 20 years or the statutory maximum term of
imprisonment (other than the penalty of death) applicable to
a racketeering activity on which the violation is based, or
both,''.

SEC. 2110. INCREASED PENALTY AND BROADENED SCOPE OF STATUTE
AGAINST VIOLENT CRIMES IN AID OF RACKETEERING.

Section 1959(a) of title 18, United States Code, is
amended--
(1) by inserting ``or commits any other crime of violence''
before ``or threatens to commit a crime of violence'';
(2) in paragraph (4), by inserting ``committing any other
crime of violence or for'' before ``threatening to commit a
crime of violence'', and by striking ``five'' and inserting
``ten'';
(3) in paragraph (5), by striking ``for not more than ten
years'' and inserting ``for any term of years or for life'';
(4) in paragraph (6), by--
(A) striking ``or'' before ``assault resulting in serious
bodily injury'';
(B) inserting ``or any other crime of violence'' after
``assault resulting in serious bodily injury''; and
(C) striking ``three'' and inserting ``10''; and
(5) by inserting ``(as defined in section 1365 of this
title)'' after ``serious bodily injury'' the first place that
term appears.

SEC. 2111. FACILITATING THE PROSECUTION OF CARJACKING
OFFENSES.

Section 2119 of title 18, United States Code, is amended by
striking ``, with the intent to cause death or serious bodily
harm''.

SEC. 2112. FACILITATION OF RICO PROSECUTIONS.

Section 1962(d) of title 18, United States Code, is amended
by adding at the end the following: ``For purposes of this
subsection, it is not necessary to establish that the
defendant personally committed an act of racketeering
activity.''.

SEC. 2113. ASSAULT AS A RICO PREDICATE.

Section 1961(1)(A) of title 18, United States Code, is
amended by adding after ``extortion,'' ``assault''.

SEC. 2114. EXPANSION OF DEFINITION OF ``RACKETEERING
ACTIVITY'' TO AFFECT GANGS IN INDIAN COUNTRY.

Section 1961(1)(A) of title 18, United States Code, is
amended by inserting ``or, with respect to an act or threat
occurring solely in Indian country, as defined in section
1151 of this title, Federal'' after ``chargeable under
State''.

SEC. 2115. INCREASED PENALTIES FOR VIOLENCE IN THE COURSE OF
RIOT OFFENSES.

Section 2101(a) of title 18, United States Code, is amended
by striking ``paragraph--'' and all that follows through the
end of the subsection and inserting ``shall be fined under
this title--
``(i) if death results from such act, be imprisoned for any
term of years or for life, or both;
``(ii) if serious bodily injury (as defined in section 1365
of this title) results from such act, be imprisoned for not
more than 20 years, or both; or
``(iii) in any other case, be imprisoned for not more than
5 years, or both''.

SEC. 2116. EXPANSION OF FEDERAL JURISDICTION OVER CRIMES
OCCURRING IN PRIVATE PENAL FACILITIES HOUSING
FEDERAL PRISONERS OR PRISONERS FROM OTHER
STATES.

Section 1791(d)(4) of title 18, United States Code, is
amended by inserting before the period at the end the
following: ``, including privately owned facilities housing
Federal prisoners or prisoners who are serving a term
of imprisonment under a commitment order from a State
other than the State in which the penal facility is
located''.

PART 2--TARGETING GANG-RELATED GUN OFFENSES

SEC. 2121. TRANSFER OF FIREARM TO COMMIT A CRIME OF VIOLENCE.

Section 924(h) of title 18, United States Code, is amended
by inserting ``or having reasonable cause to believe'' after
``knowing''.

SEC. 2122. INCREASED PENALTY FOR KNOWINGLY RECEIVING FIREARM
WITH OBLITERATED SERIAL NUMBER.

Section 924(a) of title 18, United States Code, is
amended--
(1) in paragraph (1)(B), by striking ``(k),''; and
(2) in paragraph (2), by inserting ``(k),'' after ``(j),''.

SEC. 2123. AMENDMENT OF THE SENTENCING GUIDELINES FOR
TRANSFERS OF FIREARMS TO PROHIBITED PERSONS.

Pursuant to its authority under section 994(p) of title 28,
United States Code, the United States Sentencing Commission
shall amend the Federal sentencing guidelines to increase the
base offense level for offenses subject to section 2K2.1 of
those guidelines (Unlawful Receipt, Possession, or Firearms
or Ammunitions) to assume that a person who transferred a
firearm or ammunition and who knew or had reasonable cause to
believe that the transferee was a prohibited person is
subject to the same base offense level as the transferee. The
amended guidelines shall not require the same offense level
for the transferor and transferee to the extent that the
transferee's base offense level is subject to an additional
increase on the basis of a past criminal conviction of either
a crime of violence or a controlled substance offense.

PART 3--USING AND PROTECTING WITNESSES TO HELP PROSECUTE GANGS AND
OTHER VIOLENT CRIMINALS

SEC. 2131. INTERSTATE TRAVEL TO ENGAGE IN WITNESS
INTIMIDATION OR OBSTRUCTION OF JUSTICE.

Section 1952 of title 18, United States Code, is amended--
(1) by redesignating subsections (b) and (c) as (c) and
(d), respectively; and
(2) by inserting after subsection (a) the following:

[[Page S181]]

``(b) Whoever travels in interstate or foreign commerce
with intent by bribery, force, intimidation, or threat,
directed against any person, to delay or influence the
testimony of or prevent from testifying a witness in a State
criminal proceeding or by any such means to cause any person
to destroy, alter, or conceal a record, document, or other
object, with intent to impair the object's integrity or
availability for use in such a proceeding, and thereafter
engages or endeavors to engage in such conduct, shall--
``(1) be fined under this title or imprisoned not more than
10 years, or both;
``(2) if serious bodily injury (as defined in section 1365)
results, be so fined or imprisoned for not more than 20
years, or both; and
``(3) if death results, be so fined and imprisoned for any
term of years or for life, or both, and may be sentenced to
death.''.

SEC. 2132. EXPANDING PRETRIAL DETENTION ELIGIBILITY FOR
SERIOUS GANG AND OTHER VIOLENT CRIMINALS.

(a) In General.--Section 3142(f)(1) of title 18, United
States Code, is amended by adding at the end the following:

``For purposes of subparagraph (D), the term `convicted'
includes a finding, under Federal or State law, that a person
has committed an act of juvenile delinquency;''.
(b) Offenses.--Section 3156(a)(4) of title 18, United
States Code, is amended--
(1) by striking ``or'' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C)
and inserting ``; or''; and
(3) by adding at the end the following:

``(D) an offense that is a violation of section 842(i)(1)
or 922(g)(1) of this title (relating to possession of
explosives or firearms by convicted felons).''.
(c) Factors.--Section 3142(g)(3)(B) of title 18, United
States Code, is amended--
(1) by striking ``the person was on probation'' and
inserting ``the person was--
``(i) on probation'';
(2) by striking ``local law; and'' and inserting ``local
law; or''; and
(3) by adding at the end the following:
``(ii) was a member of or participated in a criminal street
gang or racketeering enterprise; and''.

SEC. 2133. CONSPIRACY PENALTY FOR OBSTRUCTION OF JUSTICE
OFFENSES INVOLVING VICTIMS, WITNESSES, AND
INFORMANTS.

Section 1512 of title 18, United States Code, is amended by
adding at the end the following:
``(j) Whoever conspires to commit any offense defined in
this section or section 1513 of this title shall be subject
to the same penalties as those prescribed for the offense the
commission of which was the object of the conspiracy.''.

SEC. 2134. ALLOWING A REDUCTION OF SENTENCE FOR PROVIDING
USEFUL INVESTIGATIVE INFORMATION ALTHOUGH NOT
REGARDING A PARTICULAR INDIVIDUAL.

(a) Title 18.--Section 3553(e) of title 18, United States
Code, is amended by striking ``substantial assistance in the
investigation or prosecution of another person who has
committed an offense'' and inserting ``substantial assistance
in an investigation of any offense or the prosecution of
another person who has committed an offense''.
(b) Title 28.--Section 994(n) of title 28, United States
Code, is amended by striking ``substantial assistance in the
investigation or prosecution of another person who has
committed an offense'' and inserting ``substantial assistance
in an investigation of any offense or the prosecution of
another person who has committed an offense''.
(c) Federal Rules of Criminal Procedure.--Rule 35(b) of the
Federal Rules of Criminal Procedure is amended by striking
``substantial assistance in the investigation or prosecution
of another person who has committed an offense'' and
inserting ``substantial assistance in an investigation of any
offense or the prosecution of another person who has
committed an offense''.

SEC. 2135. INCREASING THE PENALTY FOR USING PHYSICAL FORCE TO
TAMPER WITH WITNESSES, VICTIMS, OR INFORMANTS.

Section 1512 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``as provided in
paragraph (2)'' and inserting ``as provided in paragraph
(3)'';
(B) by redesignating paragraph (2) as paragraph (3);
(C) by inserting after paragraph (1) the following:
``(2) Whoever uses physical force or the threat of physical
force, or attempts to do so, with intent to--
``(A) influence, delay, or prevent the testimony of any
person in an official proceeding;
``(B) cause or induce any person to--
``(i) withhold testimony, or withhold a record, document,
or other object, from an official proceeding;
``(ii) alter, destroy, mutilate, or conceal an object with
intent to impair the object's integrity or availability for
use in an official proceeding;
``(iii) evade legal process summoning that person to appear
as a witness, or to produce a record, document, or other
object, in an official proceeding; and
``(iv) be absent from an official proceeding to which such
person has been summoned by legal process; or
``(C) hinder, delay, or prevent the communication to a law
enforcement officer or judge of the United States of
information relating to the commission or possible commission
of a Federal offense or a violation of conditions of
probation, parole, or release pending judicial proceedings;

shall be punished as provided in paragraph (3).''; and
(D) by striking paragraph (3)(B), as redesignated, and
inserting the following:
``(B) an attempt to murder, the use of physical force, the
threat of physical force, or an attempt to do so,
imprisonment for not more than 20 years.''; and
(2) in subsection (b), by striking ``or physical force''.

SEC. 2136. EXPANSION OF FEDERAL KIDNAPPING OFFENSE TO COVER
WHEN DEATH OF VICTIM OCCURS BEFORE CROSSING
STATE LINE AND WHEN FACILITY IN INTERSTATE
COMMERCE OR THE MAILS ARE USED.

Section 1201(a) of title 18, United States Code, is
amended--
(1) by inserting before the semicolon at the end of
paragraph (1) the following: ``, without regard to whether
such person was alive when transported across a State
boundary if the person was alive when the transportation
began'';
(2) by striking ``or'' at the end of paragraph (4); and
(3) by inserting after paragraph (5) the following:
``(6) an individual travels in interstate or foreign
commerce in furtherance of the offense; or
``(7) the mail or a facility in interstate or foreign
commerce is used in furtherance of the offense;''.

SEC. 2137. ASSAULTS OR OTHER CRIMES OF VIOLENCE FOR HIRE.

Section 1958(a) of title 18, United States Code, is amended
by inserting ``or other felony crime of violence against the
person'' after ``murder''.

SEC. 2138. CLARIFICATION OF INTERSTATE THREAT STATUTE TO
COVER THREATS TO KILL.

Subsections (b) and (c) of section 875 of title 18, United
States Code, and the second and third undesignated paragraphs
of sections 876 and 877 of title 18, United States Code, are
each amended by striking ``any threat to injure'' and
inserting ``any threat to kill or injure''.

SEC. 2139. CONFORMING AMENDMENT TO LAW PUNISHING OBSTRUCTION
OF JUSTICE BY NOTIFICATION OF EXISTENCE OF A
SUBPOENA FOR RECORDS IN CERTAIN TYPES OF
INVESTIGATIONS.

Section 1510(b)(3)(B) of title 18, United States Code, is
amended--
(1) in clause (i), by striking ``or'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(iii) the Controlled Substances Act (21 U.S.C. 801 et
seq.), the Controlled Substances Import and Export Act (21
U.S.C. 951 et seq.), or section 6050I of the Internal Revenue
Code of 1986; and
``(iv) section 286, 287, 669, 1001, 1027, 1035, 1341, 1343,
1347, 1518, or 1954 relating to a Federal health care
offense.''.

PART 4--GANG PARAPHERNALIA

SEC. 2141. STREAMLINING PROCEDURES FOR LAW ENFORCEMENT ACCESS
TO CLONE NUMERIC PAGERS.

(a) Amendment to Chapter 206.--Chapter 206 of title 18,
United States Code, is amended--
(1) in the chapter heading, by striking ``AND TRAP AND
TRACE DEVICES'' and inserting: ``TRAP AND TRACE DEVICES, AND
CLONE NUMERIC PAGERS'';
(2) in section 3121--
(A) in the section heading, by striking ``and trap and
trace device'' and inserting ``, trap and trace device, and
clone pager'';
(B) in subsection (a)--
(i) by striking ``or a trap and trace device'' each place
that term appears and inserting ``, a trap and trace device,
or a clone pager'';
(ii) after ``3123'' by inserting ``or section 3129''; and
(C) in subsections (b) and (c), by striking ``or trap and
trace device'' each place that term appears and inserting ``,
a trap and trade device or a cone pager'';
(3) in section 3124--
(A) in the section heading, by striking ``or a trap and
trace device'' and inserting ``, a trap and trace device, or
a clone pager'';
(B) by redesignating subsections (c) through (f) as
subsections (d) through (g), respectively; and
(C) by inserting after subsection (b) the following:
``(c) Clone Pager.--Upon the request of an attorney for the
Government or an officer of a law enforcement agency
authorized to use a clone pager under this chapter, a
provider of a paging service or electronic communication
service shall furnish such investigative or law enforcement
officer, all information, facilities, and technical
assistance necessary to accomplish the use of the clone pager
unobtrusively and with a minimum of interference with the
services that the person so ordered by the court provides to
the subscriber, if such assistance is directed by a court
order as provided in section 3129(b)(2) of this chapter.'';
(4) in section 3125--
(A) in the section heading, by striking ``and trap and
trace device'' and inserting ``, trap and trace device, and
clone pager'';
(B) in subsection (a)--
(i) by striking ``or trap and trace device'' each place
that term appears and inserting ``, a trap and trace device,
or a clone pager''; and

[[Page S182]]

(ii) by striking ``an order approving the installation or
use is issued in accordance with section 3123 of this title''
and inserting ``an application is made for an order approving
the installation or use in accordance with section 3123 or
section 3128 of this title''; and
(C) in subsection (b), by adding at the end the following:
``In the event such application for the use of a clone pager
is denied, or in any other case where the use of the clone
pager is terminated without an order having been issued, an
inventory shall be served as provided for in section
3129(e).'';
(5) in section 3126--
(A) in the section heading, by striking ``and trap and
trace devices'' and inserting ``, trap and trace devices, and
clone pagers''; and
(B) by striking ``pen register orders and orders for trap
and trace devices'' and inserting ``orders for pen registers,
trap and trace devices, and clone pagers''; and
(6) in section 3127--
(A) in paragraph (2), by striking ``pen register or a trap
and trace device'' and inserting ``pen register, a trap and
trace device, or a clone pager'';
(B) by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively; and
(C) by inserting after paragraph (4) the following:
``(5) the term `clone pager' means a numeric display device
that receives transmissions intended for another numeric
display paging device.''.
(b) Applications for Orders.--Chapter 206 of title 18,
United States Code, is amended by adding at the end the
following:

``Sec. 3128. Application for an order for use of a clone
pager

``(a) Application.--(1) An attorney for the Government may
apply to a court of competent jurisdiction for an order or an
extension of an order under section 3129 of this title
authorizing the use of a clone pager.
``(2) A State investigative or law enforcement officer may,
if authorized by State law, apply to a court of competent
jurisdiction of such State for an order or an extension of an
order under section 3129 of this title authorizing the use of
a clone pager.
``(b) Contents of Application.--An application under
subsection (a) of this section shall include--
``(1) the identify of the attorney for the Government or
the State law enforcement or investigative officer making the
application and the identify of the law enforcement agency
conducting the investigation;
``(2) the identify, if known, of the person using the
numeric display paging device to be cloned;
``(3) a description of the numeric display paging device to
be cloned;
``(4) the identify, if known, of the person who is the
subject of the criminal investigation; and
``(5) an affidavit, sworn to before the court of competent
jurisdiction, establishing probable cause for belief that
information relevant to an ongoing criminal investigation
being conducted by that agency will be obtained through use
of the clone pager.

``Sec. 3129. Issuance of an order for use of a clone pager

``(a) In General.--Upon an application made under section
3128 of this title, the court shall enter an ex parte order
authorizing the use of a clone pager within the jurisdiction
of the court if the court finds that the application has
established probable cause to believe that information
relevant to an ongoing criminal investigation being conducted
by that agency will be obtained through use of the clone
pager.
``(b) Contents of an Order.--An order issued under this
section--
``(1) shall specify--
``(A) the identity, if known, of each individual using the
numeric display paging device to be cloned;
``(B) the numeric display paging device to be cloned;
``(C) the identity, if known, of the person who is the
subject of the criminal investigation; and
``(D) the offense to which the information likely to be
obtained by the clone pager relates; and
``(2) shall direct, upon the request of the applicant, the
furnishing of information, facilities, and technical
assistance necessary to use the clone pager under section
3124 of this title.
``(c) Time Period and Extensions.--(1) An order issued
under this section shall authorize the use of a clone pager
for a period not to exceed 30 days.
``(2) Extensions of an order referred to in paragraph (1)
may be granted, but only upon an application for an order
under section 3128 of this title and upon the judicial
finding required by subsection (a). The period of extension
shall be for a period not to exceed 30 days.
``(3) Within a reasonable time after the termination of the
period of a clone pager order or any extensions thereof, the
applicant shall report to the issuing judge the number of
numeric pager messages acquired through the use of the clone
pager during such period.
``(d) Nondisclosure of Existence of Clone Pager.--An order
authorizing the use of a clone pager shall direct that--
``(1) the order be sealed until otherwise ordered by the
court; and
``(2) the person who has been ordered by the court to
provide assistance to the applicant not disclose the
existence of the clone pager or the existence of the
investigation to the listed subscriber, or to any other
person, until otherwise ordered by the court.
``(e) Notification.--Within a reasonable time but not later
than 90 days after the termination of the period of a clone
pager order or any extensions thereof, the issuing judge
shall cause to be served, on each individual using the
numeric display paging device which was cloned, an inventory
including notice of--
``(1) the fact of the entry of the order or the
application;
``(2) the date of the entry and the period of clone pager
use authorized, or the denial of the application; and
``(3) whether or not information was obtained through the
use of the clone pager.

Upon an ex parte showing of good cause, a court of competent
jurisdiction may in its discretion postpone the serving of
the notice required by this section.''.
(c) Conforming Amendment.--The analysis for chapter 206 of
title 18, United States Code, is amended--
(1) by striking the item relating to section 3121 and
inserting the following:

``3121. General prohibition on pen register, trap and trace device, and
clone pager use; exception.'';

(2) by striking the item relating to section 3124 and
inserting the following:

``3124. Assistance in installation and use of a pen register, a trap
and trace device, or clone pager.'';

(3) by striking the item relating to section 3125 and
inserting the following:

``3125. Emergency pen register, trap and trace device, and clone pager
installation and use.'';

(4) by striking the item relating to section 3126 and
inserting the following:

``3126. Reports concerning pen registers, trap and trace devices, and
clone pagers.'';

and
(5) by adding at the end the following:

``3128. Application for an order for use of a clone pager.
``3129. Issuance of an order for use of a clone pager.''.

(d) Conforming Amendments.--
(1) Section 2511(2)(h) of title 18, United States Code, is
amended by striking clause (i) and inserting the following:
``(i) to use a pen register, a trap and trace device, or a
clone pager (as those terms are defined for the purposes of
chapter 206 (relating to pen registers, trap and trace
devices, and clone pagers) of this title); or''.
(2) Section 2510(12) of title 18, United States Code, is
amended--
(A) in subparagraph (C), by striking ``or'' at the end;
(B) by inserting ``or'' after subparagraph (D); and
(C) by adding at the end the following:
``(E) any transmission made through a clone pager (as
defined in section 3127(5) of this title).''.
(3) Section 705(a) of the Communications Act of 1934 (47
U.S.C. 605(a)) is amended by striking ``chapter 119'' and
inserting ``chapters 119 and 206''.

SEC. 2142. SENTENCING ENHANCEMENT FOR USING BODY ARMOR IN
COMMISSION OF A FELONY.

(a) Definitions.--In this section:
(1) Body armor.--The term ``body armor'' means any product
sold or offered for sale as personal protective body covering
intended to protect against gunfire, regardless of whether
the product is to be worn alone or is sold as a complement to
another product or garment; and
(2) Law enforcement officer.--The term ``law enforcement
officer'' means any officer, agent, or employee of the United
States, a State, or a political subdivision of a State,
authorized by law or by a government agency to engage in or
supervise the prevention, detection, investigation, or
prosecution of any violation of criminal law.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate sentencing
enhancement for any offense in which the defendant used body
armor.
(c) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.
(d) Applicability.--No Federal sentencing guideline
amendment made under this section shall apply if the Federal
crime in which the body armor is used constitutes a violation
of, attempted violation of, or conspiracy to violate the
civil rights of a person by a law enforcement officer acting
under color of the authority of such law enforcement officer.

SEC. 2143. SENTENCING ENHANCEMENT FOR USING LASER SIGHTING
DEVICES IN COMMISSION OF A FELONY.

(a) Definitions.--In this section--
(1) the term ``firearm'' has the same meaning as in section
921 of title 18, United States Code; and
(2) the term ``laser-sighting device'' includes any device
designed to be attached to a firearm that uses technology,
such as laser sighting, red-dot-sighting, night sighting,

[[Page S183]]

telescopic sighting, or other similarly effective technology,
in order to enhance target acquisition.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate sentencing
enhancement for any serious violent felony or serious drug
offense, as defined in section 3559 of title 18, United
States Code, in which the defendant--
(1) possessed a firearm equipped with a laser-sighting
device; or
(2) possessed a firearm and the defendant possessed a
laser-sighting device (capable of being readily attached to
the firearm).
(c) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.

SEC. 2144. GOVERNMENT ACCESS TO LOCATION INFORMATION.

(a) Court Order Required.--Section 2703 of title 18, United
States Code, is amended by adding at the end the following:
``(g) Requirements for Disclosure of Location
Information.--A provider of mobile electronic communication
service shall provide to a governmental entity information
generated by and disclosing, on a real time basis, the
physical location of a subscriber's equipment only if the
governmental entity obtains a court order issued upon a
finding that there is probable cause to believe that an
individual using or possessing the subscriber equipment is
committing, has committed, or is about to commit a felony
offense.''.
(b) Conforming Amendment.--Section 2703(c)(1)(B) of title
18, United States Code, is amended by inserting ``or wireless
location information covered by subsection (g) of this
section'' after ``(b) of this section''.

SEC. 2145. LIMITATION ON OBTAINING TRANSACTIONAL INFORMATION
FROM PEN REGISTERS OR TRAP AND TRACE DEVICES.

Subsection 3123(a) of title 18, United States Code, is
amended to read as follows:
``(a) In General.--Upon an application made under section
3122, the court may enter an ex parte order--
``(1) authorizing the installation and use of a pen
register or a trap and trace device within the jurisdiction
of the court if the court finds, based on the certification
by the attorney for the Government or the State law
enforcement or investigative officer, that the information
likely to be obtained by such installation and use is
relevant to an ongoing criminal investigation; and
``(2) directing that the use of the pen register or trap
and trace device be conducted in such a way as to minimize
the recording or decoding of any electronic or other impulses
that are not related to the dialing and signaling information
utilized in call processing.''.

Subtitle B--Combating Money Laundering

SEC. 2201. SHORT TITLE.

This subtitle may be cited as the ``Money Laundering
Enforcement Act of 2001''.

SEC. 2202. ILLEGAL MONEY TRANSMITTING BUSINESSES.

(a) Civil Forfeiture for Money Transmitting Violation.--
Section 981(a)(1)(A) of title 18, United States Code, is
amended by striking ``or 1957'' and inserting ``, 1957, or
1960''.
(b) Scienter Requirement for Section 1960 Violation.--
Section 1960 of title 18, United States Code, is amended by
adding at the end the following:
``(c) Scienter Requirement.--For the purposes of proving a
violation of this section involving an illegal money
transmitting business--
``(1) it shall be sufficient for the Government to prove
that the defendant knew that the money transmitting business
lacked a license required by State law; and
``(2) it shall not be necessary to show that the defendant
knew that the operation of such a business without the
required license was an offense punishable as a felony or
misdemeanor under State law.''.

SEC. 2203. RESTRAINT OF ASSETS OF PERSONS ARRESTED ABROAD.

Section 981(b) of title 18, United States Code, is amended
by adding at the end the following:
``(3) Restraint of Assets.--
``(A) In general.--If any person is arrested or charged in
a foreign country in connection with an offense that would
give rise to the forfeiture of property in the United States
under this section or under the Controlled Substances Act (21
U.S.C. 801 et seq.), the Attorney General may apply to any
Federal judge or magistrate judge in the district in which
the property is located for an ex parte order restraining the
property subject to forfeiture for not more than 30 days,
except that the time may be extended for good cause shown at
a hearing conducted in the manner provided in Rule 43(e) of
the Federal Rules of Civil Procedure.
``(B) Application.--An application for a restraining order
under subparagraph (A) shall--
``(i) set forth the nature and circumstances of the foreign
charges and the basis for belief that the person arrested or
charged has property in the United States that would be
subject to forfeiture; and
``(ii) contain a statement that the restraining order is
needed to preserve the availability of property for such time
as is necessary to receive evidence from the foreign country
or elsewhere in support of probable cause for the seizure of
the property under this subsection.''.

SEC. 2204. CIVIL MONEY LAUNDERING JURISDICTION OVER FOREIGN
PERSONS.

Section 1956(b) of title 18, United States Code, is
amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and indenting each
subparagraph appropriately;
(2) by striking ``(b) Whoever'' and inserting the
following:
``(b) Civil Penalties.--
``(1) In general.--Whoever''; and
(3) by adding at the end the following:
``(2) Jurisdiction.--For purposes of adjudicating an action
filed or enforcing a penalty ordered under this section, the
district courts of the United States shall have jurisdiction
over any foreign person, including any financial institution
authorized under the laws of a foreign country, that commits
an offense under subsection (a) involving a financial
transaction that occurs in whole or in part in the United
States, if service of process upon such foreign person is
made in accordance with the Federal Rules of Civil Procedure
or the laws of the foreign country in which the foreign
person is found.
``(3) Satisfaction of judgment.--In any action described in
paragraph (2), the court may issue a pretrial restraining
order or take any other action necessary to ensure that any
bank account or other property held by the defendant in the
United States is available to satisfy a judgment under this
section.''.

SEC. 2205. PUNISHMENT OF LAUNDERING MONEY THROUGH FOREIGN
BANKS.

Section 1956(c)(6) of title 18, United States Code, is
amended to read as follows:
``(6) the term `financial institution' includes--
``(A) any financial institution described in section
5312(a)(2) of title 31, or the regulations promulgated
thereunder; and
``(B) any foreign bank, as defined in section 1(b)(7) of
the International Banking Act of 1978 (12 U.S.C. 3101(7));''.

SEC. 2206. ADDITION OF SERIOUS FOREIGN CRIMES TO LIST OF
MONEY LAUNDERING PREDICATES.

(a) In General.--Section 1956(c)(7) of title 18, United
States Code, is amended--
(1) in subparagraph (B)--
(A) by striking clause (ii) and inserting the following:
``(ii) any act or acts constituting a crime of violence;'';
and
(B) by adding at the end the following:
``(iv) fraud, or any scheme to defraud, committed against a
foreign government or foreign governmental entity;
``(v) bribery of a public official, or the
misappropriation, theft, or embezzlement of public funds by
or for the benefit of a public official;
``(vi) smuggling or export control violations involving
munitions listed in the United States Munitions List or
technologies with military applications as defined in the
Commerce Control List of the Export Administration
Regulations; or
``(vii) an offense with respect to which the United States
would be obligated by a multilateral treaty either to
extradite the alleged offender or to submit the case for
prosecution, if the offender were found within the territory
of the United States;'';
(2) in subparagraph (D)--
(A) by inserting ``section 541 (relating to goods falsely
classified),'' before ``section 542'';
(B) by inserting ``section 922(l) (relating to the unlawful
importation of firearms), section 924(m) (relating to
firearms trafficking),'' before ``section 956'';
(C) by inserting ``section 1030 (relating to computer fraud
and abuse),'' before ``1032''; and
(D) by inserting ``any felony violation of the Foreign
Agents Registration Act of 1938 (22 U.S.C. 611 et seq.),''
before ``or any felony violation of the Foreign Corrupt
Practices Act''; and
(3) in subparagraph (E), by inserting ``the Clean Air Act
(42 U.S.C. 6901 et seq.),'' after ``the Safe Drinking Water
Act (42 U.S.C. 300f et seq.),''.

SEC. 2207. CRIMINAL FORFEITURE FOR MONEY LAUNDERING
CONSPIRACIES.

Section 982(a)(1) of title 18, United States Code, is
amended by inserting ``or a conspiracy to commit any such
offense,'' after ``of this title,''.

SEC. 2208. FUNGIBLE PROPERTY IN FOREIGN BANK ACCOUNTS.

Section 984(d) of title 18, United States Code, is amended
by adding at the end the following:
``(3) In this subsection, the term `financial institution'
includes a foreign bank, as defined in section 1(b)(7) of the
International Banking Act of 1978 (12 U.S.C. 3101(7)).''.

SEC. 2209. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS.

(a) In General.--Chapter 163 of title 28, United States
Code, is amended by adding at the end the following:

``Sec. 2467. Foreign records

``(a) Definitions.--In this section--
``(1) the term `business' includes business, institution,
association, profession, occupation, and calling of every
kind whether or not conducted for profit;
``(2) the term `foreign certification' means a written
declaration made and signed in a foreign country by the
custodian of a record

[[Page S184]]

of regularly conducted activity or another qualified person,
that if falsely made, would subject the maker to criminal
penalty under the law of that country;
``(3) the term `foreign record of regularly conducted
activity' means a memorandum, report, record, or data
compilation, in any form, of acts, events, conditions,
opinions, or diagnoses, maintained in a foreign country; and
``(4) the term `official request' means a letter rogatory,
a request under an agreement, treaty or convention, or any
other request for information or evidence made by a court of
the United States or an authority of the United States having
law enforcement responsibility, to a court or other authority
of a foreign country.
``(b) Admissibility.--In a civil proceeding in a court of
the United States, including a civil forfeiture proceeding
and a proceeding in the United States Claims Court and the
United States Tax Court, unless the source of information or
the method or circumstances of preparation indicate lack of
trustworthiness, a foreign record of regularly conducted
activity (or a duplicate of such record), obtained pursuant
to an official request, shall not be excluded as evidence by
the hearsay rule if a foreign certification, also obtained
pursuant to the same official request or subsequent official
request that adequately identifies such foreign record,
attests that--
``(1) the foreign record was made, at or near the time of
the occurrence of the matters set forth, by (or from
information transmitted by) a person with knowledge of those
matters;
``(2) the foreign record was kept in the course of a
regularly conducted business activity;
``(3) the business activity made such a record as a regular
practice; and
``(4) if the foreign record is not the original, the record
is a duplicate of the original.
``(c) Foreign Certification.--A foreign certification under
this section shall authenticate a record or duplicate
described in subsection (b).
``(d) Notice.--
``(1) In general.--As soon as practicable after a
responsive pleading has been filed, a party intending to
offer in evidence under this section a foreign record of
regularly conducted activity shall provide written notice of
that intention to each other party.
``(2) Opposition.--A motion opposing admission in evidence
of a record under paragraph (1) shall be made by the opposing
party and determined by the court before trial. Failure by a
party to file such motion before trial shall constitute a
waiver of objection to such record, except that the court for
cause shown may grant relief from the waiver.''.
(b) Conforming Amendment.--The analysis for chapter 163 of
title 28, United States Code, is amended by adding at the end
the following:

``2467. Foreign records.''.

SEC. 2210. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.

Section 1956(h) of title 18, United States Code, is
amended--
(1) by striking ``(h) Any person'' and inserting the
following:
``(h) Conspiracy; Multiple Violations.--
``(1) Conspiracy.--Any person''; and
(2) by adding at the end the following:
``(2) Multiple violations.--Any person who commits multiple
violations of this section or section 1957 that are part of
the same scheme or continuing course of conduct may be
charged, at the election of the Government, in a single count
in an indictment or information.''.

SEC. 2211. VENUE IN MONEY LAUNDERING CASES.

Section 1956 of title 18, United States Code, is amended by
adding at the end the following:
``(i) Venue.--
``(1) In general.--Except as provided in paragraph (2), a
prosecution for an offense under this section or section 1957
may be brought in any district in which the financial or
monetary transaction is conducted, or in which a prosecution
for the underlying specified unlawful activity could be
brought, if the defendant participates in the transfer of the
proceeds of the specified unlawful activity from that
district to the district where the financial or monetary
transaction is conducted.
``(2) Exception.--A prosecution for an attempt or
conspiracy offense under this section or section 1957 may be
brought in the district in which venue would lie for the
completed offense under paragraph (1), or in any other
district in which an act in furtherance of the attempt or
conspiracy took place.''.

SEC. 2212. TECHNICAL AMENDMENT TO RESTORE WIRETAP AUTHORITY
FOR CERTAIN MONEY LAUNDERING OFFENSES.

Section 2516(1)(g) of title 18, United States Code, is
amended by striking ``of title 31, United States Code
(dealing with the reporting of currency transactions)'' and
inserting ``or 5324 of title 31 (dealing with the reporting
and illegal structuring of currency transactions)''.

SEC. 2213. CRIMINAL PENALTIES FOR VIOLATIONS OF ANTI-MONEY
LAUNDERING ORDERS.

(a) Reporting Violations.--Section 5324(a) of title 31,
United States Code, is amended--
(1) in the matter preceding paragraph (1), by inserting ``,
or the reporting requirements imposed by an order issued
pursuant to section 5326'' after ``any such section''; and
(2) in each of paragraphs (1) and (2), by inserting ``, or
a report required under any order issued pursuant to section
5326'' before the semicolon.
(b) Penalties.--Sections 5321(a)(1), 5322(a), and 5322(b)
of title 31, United States Code, are each amended by
inserting ``or order issued'' after ``or a regulation
prescribed'' each place that term appears.

SEC. 2214. ENCOURAGING FINANCIAL INSTITUTIONS TO NOTIFY LAW
ENFORCEMENT AUTHORITIES OF SUSPICIOUS FINANCIAL
TRANSACTIONS.

(a) In General.--Section 2702(b)(6) of title 18, United
States Code, is amended--
(1) by inserting ``or supervisory agency'' after ``a law
enforcement agency'';
(2) in subparagraph (A), by striking ``; and'' and
inserting ``and appear to pertain to the commission of the
crime; or''; and
(3) in subparagraph (B), by striking ``appear to pertain to
the commission of the crime.'' and inserting ``appear to
reveal a suspicious transaction relevant to a possible
violation of law or regulation.''
(b) Definitions.--Section 2711 of title 18, United States
Code, is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(3) the terms `suspicious transaction' and `relevant to a
possible violation of the law or regulation' shall be
interpreted in the same manner as those terms have been
interpreted for purposes of section 5318(g) of title 31; and
``(4) the term `supervisory agency' has the meaning given
the term in section 1101(7) of the Right to Financial Privacy
Act of 1978.''.

SEC. 2215. COVERAGE OF FOREIGN BANK BRANCHES IN THE
TERRITORIES.

Section 20(9) of title 18, United States Code, is amended
by inserting before the period the following: ``, except that
for purposes of this section the definition of the term
`State' in such Act shall be deemed to include a
commonwealth, territory, or possession of the United
States''.

SEC. 2216. CONFORMING STATUTE OF LIMITATIONS AMENDMENT FOR
CERTAIN BANK FRAUD OFFENSES.

Section 3293 of title 18, United States Code, is amended--
(1) by inserting ``225,'' after ``215,''; and
(2) by inserting ``1032,'' before ``1033''.

SEC. 2217. JURISDICTION OVER CERTAIN FINANCIAL CRIMES
COMMITTED ABROAD.

Section 1029 of title 18, United States Code, is amended by
adding at the end the following:
``(h) Jurisdiction Over Certain Financial Crimes Committed
Abroad.--Any person who, outside the jurisdiction of the
United States, engages in any act that, if committed within
the jurisdiction of the United States, would constitute an
offense under subsection (a) or (b), shall be subject to the
same penalties as if that offense had been committed in the
United States, if the act--
``(1) involves an access device issued, owned, managed, or
controlled by a financial institution, account issuer, credit
card system member, or other entity within the jurisdiction
of the United States; and
``(2) causes, or if completed would have caused, a transfer
of funds from or a loss to an entity listed in paragraph
(1).''.

SEC. 2218. KNOWLEDGE THAT THE PROPERTY IS THE PROCEEDS OF A
FELONY.

Section 1956(c)(1) of title 18, United States Code, is
amended by inserting ``, and regardless of whether or not the
person knew that the activity constituted a felony'' before
the semicolon at the end.

SEC. 2219. MONEY LAUNDERING TRANSACTIONS; COMMINGLED
ACCOUNTS.

(a) Section 1956.--Section 1956 of title 18, United States
Code, is amended by adding at the end the following:
``(i) A transaction, transportation, transmission, or
transfer of funds shall be considered for the purposes of
this section to be one involving the proceeds of specified
unlawful activity, or property represented to be the proceeds
of specified unlawful activity, if the transaction,
transportation, transmission, or transfer involves--
``(1) funds directly traceable to the specified unlawful
activity, or represented to be directly traceable to the
specified unlawful activity;
``(2) a bank account in which the proceeds of specified
unlawful activity, or property represented to be the proceeds
of specified unlawful activity, have been commingled with
other funds; or
``(3) 2 or more bank accounts, where the proceeds of
specified unlawful activity, or property represented to be
the proceeds of specified unlawful activity, are deposited
into 1 bank account and there is a contemporaneous, related
withdrawal from, or debit to, another bank account controlled
by the same person, or by a person acting in concert with
that person.''.
(b) Section 1957.--Section 1957(f) of title 18, United
States Code, is amended by inserting after paragraph (3) the
following:
``(4) the term `monetary transaction in criminally derived
property that is of a value greater than $10,000' includes--
``(A) a monetary transaction involving the transfer,
withdrawal, encumbrance or other disposition of more than
$10,000 from a bank account in which more than $10,000 in
proceeds of specified unlawful activity have been commingled
with other funds;
``(B) a series of monetary transactions in amounts under
$10,000 that exceed $10,000 in the aggregate and that are
closely related to

[[Page S185]]

each other in terms of time, the identity of the parties
involved, the nature of the transactions and the manner in
which they are conducted; and
``(C) any financial transaction described in section
1956(i)(3) that involves more than $10,000 in proceeds of
specified unlawful activity.''.
(c) Technical Amendment.--Section 1956(c)(7)(F) of title
18, United States Code, is amended by inserting ``, as
defined in section 24'' before the period.

SEC. 2220. LAUNDERING THE PROCEEDS OF TERRORISM.

Section 1956(c)(7)(D) of title 18, United States Code, is
amended by inserting ``or 2339B'' after ``2339A''.

SEC. 2221. VIOLATIONS OF SECTION 6050I.

Sections 981(a)(1)(A) and 982(a)(1) of title 18, United
States Code, are amended by inserting ``, or of section 6050I
of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 6050I)''
after ``of title 31''.

SEC. 2222. INCLUDING AGENCIES OF TRIBAL GOVERNMENTS IN THE
DEFINITION OF A FINANCIAL INSTITUTION.

Section 5312(a)(2)(W) of title 31, United States Code, is
amended by striking ``State or local'' and inserting ``State,
local or tribal''.

SEC. 2223. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING
ORDERS AND CERTAIN RECORDKEEPING REQUIREMENTS.

(a) Civil Penalty for Violation of Targeting Order.--
Section 5321(a)(1) of title 31, United States Code, is
amended--
(1) by inserting ``or order issued'' after ``subchapter or
a regulation prescribed''; and
(2) by inserting A, or willfully violating a regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508,'' after ``section
5314 and 5315)''.
(b) Criminal Penalties for Violation of Targeting Order.--
Section 5322 of title 31, United States Code, is amended--
(1) in subsection (a)--
(A) by inserting ``or order issued'' after ``willfully
violating this subchapter or a regulation prescribed''; and
(B) by inserting ``or willfully violating a regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508,'' after ``under
section 5315 or 5324),'';
(2) in subsection (b)--
(A) by inserting ``or order issued'' after ``willfully
violating this subchapter or a regulation prescribed''; and
(B) by inserting ``willfully violating a regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508,'' after ``under
section 5315 or 5324),'';
(c) Structuring Transactions To Evade Targeting Order or
Certain Recordkeeping Requirements.--Section 5324 of title
31, United States Code, is amended--
(1) in the title by inserting ``or recordkeeping'' after
``reporting''.
(2) in subsection (a)--
(A) by inserting a comma after ``shall'';
(B) by striking ``section--'' and inserting ``section, the
reporting or recordkeeping requirements imposed by any order
issued under section 5326, or the recordkeeping requirements
imposed by any regulation prescribed under section 21 of the
Federal Deposit Insurance Act or section 123 of Public Law
91-508--'';
(C) in paragraphs (1) and (2), by inserting ``, to file a
report or maintain a record required by any order issued
under section 5326, or to maintain a record required pursuant
to any regulation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law 91-508''
after ``regulation prescribed under any such section'' each
place that term appears.

Subtitle C--Antidrug Provisions

SEC. 2301. AMENDMENTS CONCERNING TEMPORARY EMERGENCY
SCHEDULING.

Section 201(h) of the Controlled Substances Act (21 U.S.C.
811(h)) is amended to read as follows:
``(h) Temporary Scheduling To Avoid Imminent Hazards to
Public Safety.--
``(1) In general.--If the Attorney General finds that the
control of a 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) of this section relating to the Secretary
of Health and Human Services, and without regard to the
findings required under section 202(b) (21 U.S.C. 812(b)),
temporarily schedule such substance in accordance with this
subsection if no approval is in effect for the substance
under section 505(i) of the Federal Food, Drug, and Cosmetic
Act (hereafter in this subsection referred to as the FDC Act)
(21 U.S.C. 355(i)).
``(A) If the substance is not contained in a drug for which
an investigational new drug exemption is in effect under
section 505(i) of the FDC Act, the temporary scheduling order
shall place such substance in schedule I.
``(B) If the substance is contained in a drug for which an
investigational new drug exemption is in effect under section
505(i) of the FDC Act, the temporary scheduling order shall
place such substance in schedule II, subject to the
conditions set forth in paragraph (6) of this subsection.
``(C) A temporary scheduling order, or order renewing such
order, may not take effect before the expiration of thirty
days from--
``(i) the date of the publication by the Attorney General
of a notice in the Federal Register of the intention to issue
such order and the grounds upon which such order is to be
issued; and
``(ii) the date the Attorney General has transmitted the
notice required by paragraph (4).
``(2) Duration of temporary scheduling; renewal of
orders.--
``(A) A temporary scheduling order issued under
subparagraph (1)(A) of this subsection shall expire at the
end of one year from the effective date of the order, except
that the Attorney General may, during the pendency of
proceedings under subsection (a)(1) of this section with
respect to the substance, extend the temporary scheduling
order for up to six months.
``(B) A temporary scheduling order issued under
subparagraph (1)(B) of this subsection shall expire at the
end of 18 months from the effective date of the order, except
that, if the Attorney General determines that continuation of
the temporary scheduling order is necessary to avoid an
imminent hazard to the public safety, the Attorney General
may issue a renewal order, 30 days prior to expiration of
the temporary scheduling order, extending the original
order for an additional 18 months, provided the following
conditions are met--
``(i) an exemption with respect to such substance remains
in effect under section 505(i) of the FDC Act; and--
``(ii) the holder of such exemption is actively pursuing
the clinical investigation of the substance.

The Secretary shall certify to the Attorney General whether
or not each of conditions (i) and (ii) continue to be met no
later than 90 days prior to the date on which the temporary
scheduling order is scheduled to a expire. As long as both
conditions continue to be met, the Attorney General may,
every 18 months, continue to issue orders renewing the
temporary scheduling of a particular substance. If either of
the foregoing conditions are no longer met for a particular
substance, the temporary scheduling of that substance may not
be renewed and shall expire 12 months after the date on which
such condition fails to be met, except that the Attorney
General may, during the pendency of proceedings under
subsection (a)(l) of this section with respect to the
substance, extend the temporary scheduling for an additional
six months.
``(3) Factors determinative of temporary scheduling.--When
issuing an order under paragraph (1), the Attorney General
shall be required to consider, with respect to the finding of
an imminent hazard to the public safety, only those factors
set forth in paragraphs (4), (5), and (6) of subsection (c)
of this section, including actual abuse, diversion from
legitimate channels, and clandestine importation,
manufacture, or distribution.
``(4) Consultation with the secretary of health and human
services.--The Attorney General shall transmit notice of an
order proposed to be issued under paragraph (1) to the
Secretary of Health and Human Services. In issuing an order
under paragraph (1), the Attorney General shall take into
consideration any comments submitted by the Secretary in
response to a notice transmitted pursuant to this paragraph.
``(5) Effect of permanent scheduling proceedings.--An order
issued under paragraph (1) with respect to a substance shall
be vacated upon the conclusion of a subsequent rule making
proceeding initiated under subsection (a) of this section
with respect to such substance.
``(6) Special rules applicable to temporarily scheduled
investigational drugs.--
(A) In the case of a substance that is temporarily
scheduled under subparagraph (l)(B) of this subsection that
was controlled under this subchapter prior to its temporary
scheduling, any person who manufactures, distributes,
dispenses, possesses, or uses such substance within the scope
of the exemption under section 505(i) of the FDC Act shall be
subject to the same requirements of this subchapter that were
in effect prior to the temporary scheduling.
``(B) In the case of a substance that is temporarily
scheduled under subparagraph (l)(B) of this subsection that
was not controlled under this subchapter prior to its
temporary scheduling, any person who manufactures,
distributes, dispenses, possesses, or uses such substance
within the scope of the exemption under section 505(i) of the
FDC Act shall not be required to comply with the requirements
of part C of this subchapter, except as provided in this
paragraph--
``(i) Such person shall be subject to sections 302, 303,
and 304 (21 U.S.C. 822, 823, and 824), relating to
registration.
``(ii) Compliance with applicable record keeping and
reporting requirements of the FDC Act, as determined by the
Secretary, shall constitute compliance with section 307 (21
U.S.C. 827). A violation of such requirements shall
constitute a violation of section 307 and shall subject a
violator to applicable penalties under Part D of this
subchapter, in addition to any other penalties provided by
law. Records or documents required to be kept for such
purposes under the FDC Act shall be deemed records or
documents required under this subchapter, and places where
such records or documents are kept or required to be kept
shall be deemed controlled premises for purposes of
administrative inspections and warrants under section 510 (21
U.S.C. 880).

[[Page S186]]

``(iii) A registrant handling an investigational drug that
has been temporarily scheduled under this section shall be
subject to the requirements established under section 307(f),
relating to procedures necessary to insure the security and
accountability of controlled substances used in research and
to prevent theft or diversion of the drug into illegal
channels of distribution.
``(C) Each person that is a sponsor of an investigation of
a new drug for which a research exemption is in effect under
section 505(i) of the FDC Act with respect to such substance
shall be required to certify to the Secretary of Health and
Human Services, by one month after the effective date of the
temporary scheduling order with respect to the substance, and
by the end of each succeeding six month period, that such
person is able to account for the location and use of all
quantities of such substance that are or have been
manufactured, distributed, dispensed, possessed, or used
under such exemption on or before the date of such
certification.
``(D) In the case of a substance that is temporarily
scheduled under subparagraph (1)(B) of this subsection, the
disclosure of the existence of an exemption under section
505(i) of the FDC Act with respect to such substance shall
not be considered to be disclosure prohibited by section
301(j) of the FDC Act or section 1905 of title 18 of the
United States Code.
``(E) The manufacture, possession, distribution, or use of
such substance within the scope of such exception shall not
be subject to any requirements or penalty under State or
local law more stringent than the provisions of this chapter
or other applicable Federal law.
``(7) Judicial review.--An order issued under paragraph (1)
is not subject to judicial review, except that a renewal
order issued under subparagraph (2)(B) of this subsection is
subject to judicial review in accordance with section 507 (21
U.S.C. 877).''.

SEC. 2302. AMENDMENT TO REPORTING REQUIREMENT FOR
TRANSACTIONS INVOLVING CERTAIN LISTED
CHEMICALS.

Section 310(b)(3) of the Controlled Substances Act (21
U.S.C. 830(b)(3)) is amended by--
(1) redesignating subparagraphs (A) and (B) as
subparagraphs (B) and (C);
(2) inserting a new subparagraph (A) as follows:
``(A) As used in this section, the term `drug product'
means a pharmaceutical substance in dosage form that has been
approved under the Food, Drug and Cosmetic Act for
distribution in the United States.'';
(3) in the redesignated (B) by inserting ``or who engages
in an export transaction'' after ``nonregulated person''; and
(4) adding at the end the following--
``(D) Except as provided in subparagraph (E), the following
distributions to a nonregulated person and the following
export transactions shall not be subject to the reporting
requirement established in subparagraph (B):
``(i) distributions of sample packages of drug products
when such packages contain not more than 2 solid dosage units
or the equivalent of 2 dosage units in liquid form, not to
exceed 10 milliliters of liquid per package, and not more
than one package is distributed to an individual or
residential address in any 30-day time period;
``(ii) distributions of drug products by retail
distributors to the extent that such distributions are
consistent with the activities authorized for a
retail distributor as set out in section 102(46) of this
title;
``(iii) distributions of drug products to a resident of a
Long Term Care Facility (as that term is defined in the
regulations of the Attorney General) or distributions of drug
products to a Long Term Care Facility for dispensing to or
for use by a resident of that facility;
``(iv) distributions of drug products pursuant to a valid
prescription (as used in this section, the term `valid
prescription' is one which is issued for a legitimate medical
purpose by individual practitioner licensed by law to
administer and prescribe such drugs and acting in the usual
course of his/her professional practice);
``(v) exports which have been reported to the Attorney
General pursuant to section 1004 or 1018 of title III or
which are subject to a waiver granted under section
1018(e)(2) of title III; and
``(vi) any quantity, method or type of distribution or any
quantity, method or type of distribution of a specific listed
chemical (including specific formulations or drug products)
or of a group of listed chemicals (including specific
formulations or drug products) which the Attorney General has
excluded by regulation from this reporting requirement on the
basis that such reporting is not necessary to the enforcement
of this title or title III.
``(E) The Attorney General may revoke any or all of the
exemptions listed in (C) for an individual regulated person
if he finds that drug products distributed by that person are
being used in violation of this title or title III. The
regulated person shall be notified of this revocation, which
will be effective upon receipt by the regulated person of
such notice, as provided in section 1018(c)(1) of title III
and has the right to an expedited hearing as provided in
section 1018(c)(2) of title III.''.

SEC. 2303. DRUG PARAPHERNALIA.

(a) In General.--Section 422(d) of the Controlled
Substances Act (21 U.S.C. 863(d)) is amended by inserting
``packaging,'' after ``concealing,''.
(b) Determination of Drug Paraphernalia.--Section 422(e)(4)
of the Controlled Substances Act (21 U.S.C. 863(e)(4)) is
amended by adding the following after ``sale'': ``including,
but not limited to, whether the item displays any name brand,
insignia or other indicator which is associated with illegal
drugs or which is used to advertise or identify an illegal
drug''.
(c) Clerical Amendments.--(1) Section 511(a)(10) of the
Controlled Substances Act (21 U.S.C. 881(a)(10)) is amended
by striking all after ``as defined in'' and inserting
``section 422 of this title.''.
(2) Section 422 of the Controlled Substances Act (21 U.S.C.
881(a)(10)) is amended--
(A) by deleting subsection (c); and
(B) by redesignating subsections (d), (e), and (f) as
subsections (c), (d), and (e), respectively.

SEC. 2304. COUNTERFEIT SUBSTANCES/IMITATION CONTROLLED
SUBSTANCES.

(a) Section 102(7) of the Controlled Substances Act (21
U.S.C. 802(7)) is amended by--
(1) inserting ``(A)'' after ``(7)'';
(2) designating the text after ``a controlled substance''
as clause (i);
(3) inserting ``characteristic,'' after ``number,'';
(4) striking the period at the end and inserting a
semicolon; and
(5) adding at the end the following:
``(ii) which falsely purports or is represented to be a
different controlled substance; or
``(iii) which is manufactured or designed in such a manner,
or is distributed, dispensed, or otherwise transferred under
such circumstances, such that a reasonable person would
believe that the substance is a different controlled
substance.
``(B) The term `imitation controlled substance' means a
substance, which is not a controlled substance, that is
represented (expressly or by implication) to be a controlled
substance.
``(C) The term `imitation controlled substance' does not
include a placebo which is directly applied to the body of a
research subject or a patient or which is delivered to a
research subject or a person for his own use, by, or pursuant
to the order of, a practitioner for a lawful purpose.''.
(b) Section 102(8) of the Controlled Substances Act (21
U.S.C. 802(8)) is amended by inserting ``, an imitation
controlled substance,'' after ``controlled substance''.
(c) Section 102(11) of the Controlled Substances Act (21
U.S.C. 802(11)) is amended by--
(1) inserting ``to deliver an imitation controlled
substance or'' after ``controlled substance or'' in the first
sentence; and
(2) inserting ``, an imitation controlled substance,''
after ``controlled substance'' in the second sentence.
(d) Section 102(44) of the Controlled Substances Act (21
U.S.C. 802(44)) is amended by--
(1) striking ``or'' after ``marihuana,''; and
(2) inserting ``, anabolic agents, or listed chemicals, or
an offense that is punishable by imprisonment for more than
one year under any provision of this title or title III''
after ``stimulant substances''.
(e) Section 401(a) of the Controlled Substances Act (21
U.S.C. 841(a)) is amended by--
(1) striking ``or'' at the end of paragraph (1);
(2) striking ``create'' in paragraph (2) and inserting
``manufacture'';
(3) inserting ``manufacture,'' after ``intent to'' in
paragraph (2);
(4) striking the period at the end of paragraph (2) and
inserting ``; or'' ; and
(5) adding at the end the following paragraph:
``(3) to manufacture, distribute, or dispense, or possess
with intent to manufacture, distribute or dispense, an
imitation controlled substance.''.
(f) Section 401(b) of the Controlled Substances Act (21
U.S.C. 841(b) is amended by redesignating paragraphs (4)
through (7) as paragraphs (6) through (9) and inserting after
paragraph (3) the following:
``(4)(A) In the case of a counterfeit substance, such
person shall be sentenced in accordance with this section
based on the controlled substance which the counterfeit
substance is represented to be or based on the controlled
substance which is actually contained in the counterfeit
substance, whichever provides the greater sentence.
``(B) Paragraph (5)(B) of this subsection may be applied to
make a determination that a controlled substance is a
counterfeit substance.
``(5)(A) In the case of an imitation controlled substance,
such person shall be sentenced to a term of imprisonment or a
fine, or both, which does not exceed one-half of the maximum
term of imprisonment and fine which would apply under this
section to the controlled substance which the imitation
controlled substance is represented to be. The minimum period
of supervised release for such person shall be one-half of
that which would apply under this section to the controlled
substance which the imitation controlled substance is
represented to be.
``(B) In the case of a violation of this title or title III
involving an imitation controlled substance, the following
provisions shall apply:

[[Page S187]]

``(i) The trier of fact may consider the following factors
in addition to any other factor that may be relevant for
purposes of determining whether a substance was an imitation
controlled substance. The presence of any two of the
following factors shall be prima facie evidence that the
substance was an imitation controlled substance; however, the
presence of two factors is not required for a determination
that a substance is an imitation controlled substance:
``(I) The person in control of the substance expressly or
impliedly represents that the substance is a controlled
substance or has the effect of a controlled substance;
``(II) The person in control of the substance expressly or
impliedly represents that the substance because of its nature
or appearance can be sold, delivered or used as a controlled
substance or as a substitute for a controlled substance;
``(III) The person in control of the substance utilizes
evasive tactics or actions to avoid detection by law
enforcement authorities or other authorities such as school
authorities;
``(IV) The physical appearance of the substance is, or is
designed to be, substantially identical to a specific
controlled substance. This may be determined by such factors
as color, shape, size, markings, taste, odor, consistency,
packaging, labeling, or other identifying characteristics;
``(V) The substance is packaged or distributed in a manner
normally used for the illegal distribution of controlled
substances; or
``(VI) The distribution or attempted distribution includes
an exchange or demand for money or other property as
consideration, and the amount of the consideration is
substantially greater than the reasonable retail market value
of the substance.
``(ii) It shall not constitute a defense that the accused
believed the imitation controlled substance to actually be a
controlled substance.''.
(g) Section 403 of the Controlled Substances Act (21 U.S.C.
843) is amended--
(1) in paragraph (a)(2), by inserting ``or list I
chemical'' after ``controlled substance'' each place it
appears;
(2) in paragraph (a)(3), by inserting ``or a laboratory
supply (as defined in section 402(a) of this title)'' after
``controlled substance''; and
(3) in paragraph (a)(5) by--
(A) inserting ``or substance'' after ``drug'' both places
it appears; and
(B) inserting ``or an imitation controlled substance''
after ``counterfeit substance''.
(h) Section 506(a) of the Controlled Substances Act (21
U.S.C. 876(a)) is amended by inserting ``, imitation
controlled substances,'' after ``controlled substances''.
(i) Section 509 of the Controlled Substances Act (21 U.S.C.
879) is amended by inserting ``imitation controlled
substances, or listed chemicals'' after ``controlled
substances''.
(j)(1) Section 511(a) of the Controlled Substances Act (21
U.S.C. 881(a)) is amended--
(A) in paragraph (1), by inserting ``and imitation
controlled substances'' after ``controlled substances'';
(B) in paragraph (2), by inserting ``, imitation controlled
substance,'' after ``controlled substance'';
(C) in paragraph (6), by inserting ``, imitation controlled
substance,'' after ``controlled substance''; and
(D) in paragraph (8), by inserting ``and imitation
controlled substances'' after ``controlled substances''.
(2) Section 607(a)(3) of the Tariff Act of 1930 (19 U.S.C.
1607(a)(3)) is amended by inserting ``, imitation controlled
substance,'' after ``controlled substance''.
(3) Section 607(b) of the Tariff Act of 1930 (19 U.S.C.
1607(b)) is amended by inserting ``, `imitation controlled
substance','' after `` `controlled substance' ''.
(k) Section 1010(a) of the Controlled Substances Act (21
U.S.C. 960(a)) is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by inserting ``or'' after
``substance,''; and
(3) by inserting after paragraph (3) the following:
``(4) knowingly or intentionally imports or exports a
counterfeit substance or an imitation controlled
substance,''.
(l) Section 2516(1)(e) of title 18, United States Code, is
amended by inserting ``or a violation of the Controlled
Substances Act (21 U.S.C. 801 et seq.) or the Controlled
Substances Import and Export Act (21 U.S.C. 851, et seq.)''
after ``United States''.

SEC. 2305. CONFORMING AMENDMENT CONCERNING MARIJUANA PLANTS.

Section 1010(b)(4) of the Controlled Substances Import and
Export Act (21 U.S.C. 960(b)(4)) is amended by striking
``except in the case of 100 or more marijuana plants'' and
inserting ``except in the case of 50 or more marijuana
plants''.

SEC. 2306. SERIOUS JUVENILE DRUG TRAFFICKING OFFENSES AS
ARMED CAREER CRIMINAL ACT PREDICATES.

Section 924(e)(2)(C) of title 18, United States Code, is
amended by inserting ``or serious drug offense'' after
``violent felony''.

SEC. 2307. INCREASED PENALTIES FOR USING FEDERAL PROPERTY TO
GROW OR MANUFACTURE CONTROLLED SUBSTANCES.

(a) In General.--Section 401(b)(5) of the Controlled
Substances Act (21 U.S.C. 841(b)(5)) is amended to read as
follows:
``(5) Any person who violates subsection (a) of this
section by cultivating or manufacturing a controlled
substance on any property in whole or in part owned by or
leased to the United States or any department or agency
thereof shall be subject to twice the maximum punishment
otherwise authorized for the offense.''.
(b) Sentencing Enhancement.--
(1) In general.--Pursuant to its authority under section
994(p) of title 28, United States Code, the United States
Sentencing Commission shall amend the Federal sentencing
guidelines to provide an appropriate sentencing enhancement
for any offense under section 401(b)(5) of the Controlled
Substances Act (21 U.S.C. 841(b)(5)) that occurs on Federal
property.
(2) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(A) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(B) avoid duplicative punishment for substantially the same
offense.

SEC. 2308. CLARIFICATION OF LENGTH OF SUPERVISED RELEASE
TERMS IN CONTROLLED SUBSTANCE CASES.

Subparagraphs (A) through (D) of section 401(b)(1) of the
Controlled Substances Act (21 U.S.C. 841(b)(1)) are each
amended by striking ``Any sentence'' and inserting
``Notwithstanding section 3583 of title 18, any sentence''.

SEC. 2309. SUPERVISED RELEASE PERIOD AFTER CONVICTION FOR
CONTINUING CRIMINAL ENTERPRISE.

Section 848(a) of title 21, United States Code, is amended
by adding to the end of the following: ``Any sentence under
this paragraph shall, in the absence of such a prior
conviction, impose a term of supervised release of not less
than 10 years in addition to such term of imprisonment and
shall, if there was such a prior conviction, impose a term of
supervised release of not less than 15 years in addition to
such term of imprisonment.''.

SEC. 2310. TECHNICAL CORRECTION TO ENSURE COMPLIANCE OF
SENTENCING GUIDELINES WITH PROVISIONS OF ALL
FEDERAL STATUTES.

Section 994(a) of title 28, United States Code, is amended
by striking ``consistent with all pertinent provisions of
this title and title 18, United States Code,'' and inserting
``consistent with all pertinent provisions of any Federal
statute''.

SEC. 2311. IMPORT AND EXPORT OF CHEMICALS USED TO PRODUCE
ILLICIT DRUGS.

(a) Notification Requirements.--Section 1018 of the
Controlled Substances Import and Export Act (21 U.S.C. 971)
is amended--
(1) by amending subsection (a) to read as follows:
``(a) Each person who proposes to engage in a transaction
involving the importation or exportation of a listed chemical
which requires advance notification pursuant to the
regulations of the Attorney General or the importation or
exportation of a tableting machine or an encapsulating
machine shall notify the Attorney General of the importation
or exportation not later than 15 days before the transaction
is to take place in such form and supplying such information
as the Attorney General shall require by regulation; in the
case of an importation for transfer or transshipment pursuant
to section 1004 of this title, such notice will be made as
provided in that section.'';
(2) in subsection (c)(1)--
(A) by striking the phrase ``(other than a regulated
transaction to which the requirement of subsection (a) of
this section does not apply by reason of subsection (b) of
this section)'';
(B) by inserting ``, a tableting machine or an
encapsulating machine'' after ``a listed chemical''; and
(C) by inserting ``, tableting machine, or encapsulating
machine'' after ``the chemical''; and
(3) in subsection (e)--
(A) by redesignating paragraphs (2) and (3) as paragraphs
(4) and (5);
(B) by inserting after paragraph (1) new paragraphs (2) and
(3) as follows:
``(2) The Attorney General may by regulation require that
the 15-day notification requirement of subsection (a) apply
to all imports of a listed chemical, regardless of the status
of certain importers of that listed chemical as regular
importers, if the Attorney General finds that such
notification is necessary to support effective chemical
diversion control programs or is required by treaty or
other international agreement to which the United States
is a party.
``(3) The Attorney General may require that the
notification requirement of subsection (a) for certain
importations or exportations, including those subject to
section 1004 of this title, include additional information to
enable a determination to be made that the listed chemical
being imported or exported will be used for a legitimate
purpose or when such information is needed to satisfy
requirements of the importing or exporting country. The
Attorney General will provide notice of these additional
requirements specifically identifying the listed chemicals
and countries involved.''.
(b) Transshipment.--Section 1004 of the Controlled
Substances Import and Export Act (21 U.S.C. 954) is amended
to read as follows:

``Sec. 954. Transshipment and in-transit shipment of
controlled substances

``(a) Notwithstanding sections 952, 953, 957 and 971 of
this title, except as provided below--
``(1) A controlled substance in schedule I may be imported
into the United States--
``(A) for transshipment to another country, or

[[Page S188]]

``(B) for transference or transshipment from one vessel,
vehicle, or aircraft to another vessel, vehicle, or aircraft
within the United States for immediate exportation, if and
only if (i) evidence is furnished which enables the Attorney
General to determine that the substance being so imported,
transferred, or transshipped will be used for scientific,
medical, or other legitimate purposes in the country of
destination, and (ii) it is so imported, transferred, or
transshipped with the prior written approval of the Attorney
General (which shall be granted or denied within 21 days of
the request) based on a determination that the requirements
of this section and the applicable subsections of sections
952 and 953 have been satisfied.
``(2) A controlled substance in schedule II, III, or IV or
a listed chemical may be so imported, transferred, or
transshipped if and only evidence is furnished which enables
the Attorney General to determine that the substance or
chemical being so imported, transferred, or transshipped will
be used for scientific, medical, or other legitimate purposes
in the country of destination and (ii) advance notification
is given to the Attorney General not later than 15 days prior
to the exportation of the substance or chemical from the
foreign port of embarkation (the notification period for
imports other than for transfer or transshipment pursuant to
section 1002 or 1018 of this title is not affected by this
subsection). Such notification shall be in such form and
contain such information as the Attorney General may require
by regulation.
``(b)(1) Any such importation, transfer or transshipment of
a controlled substance shall be subject to the applicable
subsections of sections 1002 and 1003 of this title. The
importation, transfer, transshipment or exportation of any
controlled substance may be suspended on the ground that the
controlled substance may be diverted to other than
scientific, medical or other legitimate purposes.
``(2) Any such importation, transfer or transshipment of a
listed chemical shall be subject to all the requirements of
section 1018 of this title, except that in no case shall the
15-day advance notification requirement be waived. The
importation, transfer, transshipment or exportation of a
listed chemical may be suspended on the ground that the
chemical may be diverted to the clandestine manufacture of a
controlled substance.
``(3) Any such importation, transfer or transshipment of a
controlled substance or listed chemical may be suspended if
any requirement of subsection (a) is not satisfied. The
Attorney General may withdraw a suspension order issued under
this paragraph if (A) the requirements of subsection (a) are
ultimately satisfied and (B) no grounds exist under
paragraphs (1) or (2) of this subsection to suspend the
shipment.
``(c) The suspension of any exportation of a controlled
substance or listed chemical will be subject to the
procedures and requirements established in section 1018(c) of
this title.
``(d) Any shipment of a controlled substance or listed
chemical which has been imported or is subject to the
jurisdiction of the United States whose importation,
transfer, transshipment or exportation has been suspended
may, in the discretion of the Attorney General, be placed
under seal. No disposition may be made of any such controlled
substance or listed chemical until the suspension order
becomes final. However, a court, upon application therefor,
may at any time order the sale of a perishable controlled
substance or listed chemical. Any such order shall require
the deposit of the proceeds of the sale with the court. Upon
a suspension order becoming final, the shipment may be
disposed of as follows, at the discretion of the Attorney
General and subject to such conditions as the Attorney
General may impose:
``(1) The title holder may be allowed to return the
shipment to any of the original exporter's facilities in the
country of exportation;
``(2) The shipment may be exported, subject to the
requirements of section 1003 or 1018 of this title, as
appropriate, to a new consignee;
``(3) The shipment may be surrendered to the Attorney
General for appropriate disposition; all costs associated
with this disposition will be the responsibility of the title
holder, however if there are any proceeds from the
disposition, these will be applied to the repayment of the
costs and any excess proceeds will be returned to the
titleholder;
``(4) If sufficient cause exists, the shipment of
controlled substances or listed chemicals (or proceeds of
sale deposited in court) may be forfeited to the United
States pursuant to section 511 of title II and may be
disposed of in accordance with that section.
``(e) Nothing in this section may be used by any party to
defend against a forfeiture action against a shipment of
controlled substances or listed chemicals initiated by the
United States or by any state. This section does not affect
the liability of any party for storage and transportation
costs incurred by the Government as a result of the
suspension of a shipment.''.
(c) Penalties.--Section 1010(d) of the Controlled
Substances Import and Export Act (21 U.S.C. 960(d)) is
amended--
(1) by redesignating paragraphs (5), (6) and (7) as
paragraphs (6), (7) and (8);
(2) in the redesignated paragraph (6), by striking
``1018(e)(2) or (3)'' and inserting ``1018(e)(4) or (5)'';
(3) in the redesignated paragraph (7), by inserting ``or
violates section 1004 of this title,'' after ``1007 or 1018
of this title''; and
(4) by inserting after paragraph (4) a new paragraph (5) as
follows:
``(5) imports or exports a listed chemical, with the intent
to evade the reporting or recordkeeping requirements of
section 1018 applicable to such importation or exportation by
falsely representing to the Attorney General that the
importation or exportation is not subject to the 15-day
advance notification required by section 1018(a) or to any
reporting requirements established by the Attorney General
pursuant to section 1018(e) (1), (2) or (3) by
misrepresenting the actual country of final destination of
the listed chemical, or the actual listed chemical being
imported or exported; or''.
(d) Section 1011 of the Controlled Substances Import and
Export Act (21 U.S.C. 961) is amended to read as follows:

``Sec. 1011. Injunctions

``In addition to any other applicable penalty, any person
convicted of a felony violation of this title or title II
relating to the receipt, distribution, manufacture,
importation or exportation of a listed chemical may be
enjoined from engaging in any transaction involving a listed
chemical for not more than ten years.''.

Subtitle D--Deterring Cargo Theft

SEC. 2351. PUNISHMENT OF CARGO THEFT.

(a) In General.--Section 659 of title 18, United States
Code, is amended--
(1) by striking ``with intent to convert to his own use''
each place that term appears;
(2) in the first undesignated paragraph--
(A) by inserting ``trailer,'' after ``motortruck,'';
(B) by inserting ``air cargo container,'' after
``aircraft,''; and
(C) by inserting ``, or from any intermodal container,
trailer, container freight station, warehouse, or freight
consolidation facility,'' after ``air navigation facility'';
(3) in the fifth undesignated paragraph, by striking ``one
year'' and inserting ``3 years'';
(4) in the penultimate undesignated paragraph, by inserting
after the first sentence the following: ``For purposes of
this section, goods and chattel shall be construed to be
moving as an interstate or foreign shipment at all points
between the point of origin and the final destination (as
evidenced by the waybill or other shipping document of the
shipment), regardless of any temporary stop while awaiting
transshipment or otherwise.''; and
(5) by adding at the end the following:
``It shall be an affirmative defense (on which the
defendant bears the burden of persuasion by a preponderance
of the evidence) to an offense under this section that the
defendant bought, received, or possessed the goods, chattels,
money, or baggage at issue with the sole intent to report the
matter to an appropriate law enforcement officer or to the
owner of the goods, chattels, money, or baggage.''.
(b) Federal Sentencing Guidelines.--Pursuant to section 994
of title 28, United States Code, the United States Sentencing
Commission shall review the Federal sentencing guidelines
under section 659 of title 18, United States Code, as amended
by this section and, upon completion of the review,
promulgate amendments to the Federal Sentencing Guidelines to
provide appropriate enhancement of the applicable guidelines.

SEC. 2352. REPORTS TO CONGRESS ON CARGO THEFT.

The Attorney General shall annually submit to Congress a
report, which shall include an evaluation of law enforcement
activities relating to the investigation and prosecution of
offenses under section 659 of title 18, United States Code,
as amended by this subtitle.

SEC. 2353. ESTABLISHMENT OF ADVISORY COMMITTEE ON CARGO
THEFT.

(a) Establishment.--
(1) In general.--There is established a Committee to be
known as the Advisory Committee on Cargo Theft (in this
section referred to as the ``Committee'').
(2) Membership.--
(A) Composition.--The Committee shall be composed of 6
members, who shall be appointed by the President, of whom--
(i) 1 shall be an officer or employee of the Department of
Justice;
(ii) 1 shall be an officer or employee of the Department of
Transportation;
(iii) 1 shall be an officer or employee of the Department
of the Treasury; and
(iv) 3 shall be individuals from the private sector who are
experts in cargo security.
(B) Date.--The appointments of the initial members of the
Committee shall be made not later than 30 days after the date
of enactment of this Act.
(3) Period of appointment; vacancies.--Each member of the
Committee shall be appointed for the life of the Committee.
Any vacancy in the Committee shall not affect its powers, but
shall be filled in the same manner as the original
appointment.
(4) Initial meeting.--Not later than 15 days after the date
on which all initial members of the Committee have been
appointed, the Committee shall hold its first meeting.
(5) Meetings.--The Committee shall meet, not less
frequently than quarterly, at the call of the Chairperson.
(6) Quorum.--A majority of the members of the Committee
shall constitute a quorum, but a lesser number of members may
hold hearings.
(7) Chairperson.--The President shall select 1 member of
the Committee to serve as the Chairperson of the Committee.

[[Page S189]]

(b) Duties.--
(1) Study.--The Committee shall conduct a thorough study
of, and develop recommendations with respect to, all matters
relating to--
(A) the establishment of a national computer database for
the collection and dissemination of information relating to
violations of section 659 of title 18, United States Code (as
added by section 3801(a) of this title); and
(B) the establishment of an office within the Federal
Government to promote cargo security and to increase
coordination between the Federal Government and the private
sector with respect to cargo security.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Committee shall submit to the
President and to Congress a report, which shall contain a
detailed statement of results of the study and the
recommendations of the Committee under paragraph (1).
(c) Powers.--
(1) Hearings.--The Committee may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Committee considers advisable to
carry out the purposes of this section.
(2) Information from federal agencies.--The Committee may
secure directly from any Federal department or agency such
information as the Committee considers necessary to carry out
the provisions of this section. Upon request of the
Chairperson of the Committee, the head of such department or
agency shall furnish such information to the Committee.
(3) Postal services.--The Committee may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
(4) Gifts.--The Committee may accept, use, and dispose of
gifts or donations of services or property.
(d) Personnel Matters.--
(1) Compensation of members.--
(A) Non-federal members.--Each member of the Committee who
is not an officer or employee of the Federal Government shall
be compensated at a rate equal to the daily equivalent of the
annual rate of basic pay prescribed for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during
which such member is engaged in the performance of the duties
of the Committee.
(B) Federal members.--Each member of the Committee who is
an officer or employee of the United States shall serve
without compensation in addition to that received for
their service as an officer or employee of the United
States.
(2) Travel expenses.--The members of the Committee shall be
allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Committee.
(3) Staff.--
(A) In general.--The Chairperson of the Committee may,
without regard to the civil service laws and regulations,
appoint and terminate an executive director and such other
additional personnel as may be necessary to enable the
Committee to perform its duties. The employment of an
executive director shall be subject to confirmation by the
Committee.
(B) Compensation.--The Chairperson of the Committee may fix
the compensation of the executive director and other
personnel without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of title 5, United States Code,
relating to classification of positions and General Schedule
pay rates, except that the rate of pay for the executive
director and other personnel may not exceed the rate payable
for level V of the Executive Schedule under section 5316 of
such title.
(4) Detail of government employees.--Any Federal Government
employee may be detailed to the Committee without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege.
(5) Procurement of temporary and intermittent services.--
The Chairperson of the Committee may procure temporary and
intermittent services under section 3109(b) of title 5,
United States Code, at rates for individuals which do not
exceed the daily equivalent of the annual rate of basic pay
prescribed for level V of the Executive Schedule under
section 5316 of such title.
(e) Termination.--The Committee shall terminate 90 days
after the date on which the Committee submits the report
under subsection (b)(2).
(f) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated
such sums as may be necessary to the Committee to carry out
the purposes of this section.
(2) Availability.--Any sums appropriated under the
authorization contained in this section shall remain
available, without fiscal year limitation, until expended.

SEC. 2354. ADDITION OF ATTEMPTED THEFT AND COUNTERFEITING
OFFENSES TO ELIMINATE GAPS AND INCONSISTENCIES
IN COVERAGE.

(a) In General.--
(1) Embezzlement against estate.--Section 153(a) of title
18, United States Code, is amended by inserting ``, or
attempts so to appropriate, embezzle, spend, or transfer,''
before ``any property''.
(2) Public money.--Section 641 of title 18, United States
Code, is amended by striking ``or'' at the end of the first
paragraph and by inserting after such paragraph the
following:

``Whoever attempts to commit an offense described in the
preceding paragraph; or''.
(3) Theft by bank examiner.--Section 655 of title 18,
United States Code, is amended by inserting ``or attempts to
steal or so take,'' after ``unlawfully takes,''.
(4) Theft, embezzlement, or misapplication by bank officer
or employee.--Sections 656 and 657 of title 18, United States
Code, are each amended--
(A) by inserting ``, or attempts to embezzle, abstract,
purloin, or willfully misapply,'' after ``willfully
misapplies''; and
(B) by inserting ``or attempted to be embezzled,
abstracted, purloined, or misapplied'' after ``misapplied''.
(5) Property mortgaged or pledged to farm credit
agencies.--Section 658 of title 18, United States Code, is
amended by inserting ``or attempts so to remove, dispose of,
or convert,'' before ``any property''.
(6) Interstate or foreign shipments.--Section 659 of title
18, United States Code, is amended--
(A) in the first and third paragraphs, by inserting ``or
attempts to embezzle, steal, or so take or carry away,''
after ``carries away,''; and
(B) in the fourth paragraph by inserting ``or attempts to
embezzle, steal, or so take,'' before ``from any railroad
car''.
(7) Within special maritime and territorial jurisdiction.--
Section 661 of title 18, United States Code, is amended--
(A) by inserting ``or attempts so to take and carry away,''
before ``any personal property''; and
(B) by inserting ``or attempted to be taken'' after
``taken'' each place it appears.
(8) Theft or embezzlement from employee benefit plans.--
Section 664 of title 18, United States Code, is amended by
inserting ``or attempts to embezzle, steal, or so abstract or
convert,'' before ``any of the moneys''.
(9) Theft or embezzlement from employment and training
funds.--Section 665(a) of title 18, United States Code, is
amended--
(A) by inserting ``, or attempts to embezzle, so misapply,
steal, or obtain by fraud,'' before ``any of the moneys'';
and
(B) by inserting ``or attempted to be embezzled,
misapplied, stolen, or obtained by fraud'' after ``obtained
by fraud''.
(10) Theft or bribery concerning programs receiving federal
funds.--Section 666(a)(1)(A) of title 18, United States Code,
is amended by inserting ``or attempts to embezzle, steal,
obtain by fraud, or so convert or misapply,'' before
``property''.
(11) False pretenses on high seas.--Section 1025 of title
18, United States Code, is amended--
(A) by inserting ``or attempts to obtain'' after
``obtains''; and
(B) by inserting ``or attempted to be obtained'' after
``obtained''.
(12) Embezzlement and theft from indian tribal
organizations.--Section 1163 of title 18, United States Code,
is amended by inserting ``attempts so to embezzle, steal,
convert, or misapply,'' after ``willfully misapplies,''.
(13) Theft from group establishments on indian lands.--
Section 1167 (a) and (b) of title 18, United States Code, are
each amended by inserting ``or attempts so to abstract,
purloin, misapply, or take and carry away,'' before ``any
money''.
(14) Theft by officers and employees of gaming
establishments on indian lands.--Section 1168 (a) and (b) of
title 18, United States Code, are each amended by inserting
``or attempts so to embezzle, abstract, purloin, misapply, or
take and carry away,'' before ``any moneys,''.
(15) Theft of property used by the postal service.--Section
1707 of title 18, United States Code, is amended by inserting
``, or attempts to steal, purloin, or embezzle,'' before
``any property'' and by inserting ``or attempts to
appropriate'' after ``appropriates''.
(16) Theft in receipt of stolen mail matter.--Section 1708
of title 18, United States Code, is amended in the second
paragraph by inserting ``or attempts to steal, take, or
abstract,'' after ``abstracts,'' and by inserting ``, or
attempts so to obtain,'' after ``obtains''.
(17) Theft of mail matter by officer or employee.--Section
1709 of title 18, United States Code, is amended--
(A) by inserting ``or attempts to embezzle'' after
``embezzles''; and
(B) by inserting ``, or attempts to steal, abstract, or
remove,'' after ``removes''.
(18) Misappropriation of postal funds.--Section 1711 of
title 18, United States Code, is amended by inserting ``or
attempts to loan, use, pledge, hypothecate, or convert to his
own use,'' after ``use''.
(19) Bank robbery and incidental crimes.--Section 2113(b)
of title 18, United States Code, is amended by inserting ``or
attempts so to take and carry away,'' before ``any property''
each place it appears.
(b) Securities Crimes.--
(1) Possession of tools.--Section 477 of title 18, United
States Code, is amended by inserting ``, or attempts so to
sell, give, or deliver,'' before ``any such imprint''.
(2) Uttering counterfeit foreign obligations or
securities.--Section 479 of title 18, United States Code, is
amended by inserting ``or attempts to utter or pass,'' after
``passes,''.
(3) Minor coins.--Section 490 of title 18, United States
Code, is amended by inserting

[[Page S190]]

``attempts to pass, utter, or sell,'' before ``or
possesses''.
(4) Securities of states and private entities.--Section
513(a) of title 18, United States Code, is amended by
inserting ``or attempts to utter,'' after ``utters''.

SEC. 2355. CLARIFICATION OF SCIENTER REQUIREMENT FOR
RECEIVING PROPERTY STOLEN FROM AN INDIAN TRIBAL
ORGANIZATION.

Section 1163 of title 18, United States Code, is amended in
the second paragraph by striking ``so''.

SEC. 2356. LARCENY INVOLVING POST OFFICE BOXES AND POSTAL
STAMP VENDING MACHINES.

Section 2115 of title 18, United States Code, is amended--
(1) by striking ``or'' before ``any building'';
(2) by inserting ``or any post office box or postal stamp
vending machine for the sale of stamps owned by the Postal
Service,'' after ``used in whole or in part as a post
office,''; and
(3) by inserting ``or in such box or machine,'' after ``so
used''.

SEC. 2357. EXPANSION OF FEDERAL THEFT OFFENSES TO COVER THEFT
OF VESSELS.

(a) Vessel Defined.--Section 2311 of title 18, United
States Code, is amended by adding at the end the following:
`` `Vessel' means any watercraft or other contrivance used
or designed for transportation or navigation on, under, or
immediately above, water.''.
(b) Transportation of Stolen Vehicles; Sale or Receipt of
Stolen Vehicles.--Sections 2312 and 2313 of title 18, United
States Code, are each amended by striking ``motor vehicle or
aircraft'' and inserting ``motor vehicle, vessel, or
aircraft''.

Subtitle E--Improvements to Federal Criminal Law

PART 1--SENTENCING IMPROVEMENTS

SEC. 2411. APPLICATION OF SENTENCING GUIDELINES TO ALL
PERTINENT STATUTES.

SEC. 2412. DOUBLING MAXIMUM PENALTY FOR VOLUNTARY
MANSLAUGHTER.

Section 1112(b) of title 18, United States Code, is amended
by striking ``ten years'' and inserting ``20 years''.

SEC. 2413. AUTHORIZATION OF IMPOSITION OF BOTH A FINE AND
IMPRISONMENT RATHER THAN ONLY EITHER PENALTY IN
CERTAIN OFFENSES.

(a) Power of Court.--Section 401 of title 18, United States
Code, is amended by inserting ``or both,'' after ``fine or
imprisonment,''.
(b) Destruction of Letter Boxes or Mail.--Section 1705 of
title 18, United States Code, is amended by inserting ``, or
both'' after ``years''.
(c) Other Sections.--Sections 1916, 2234, and 2235 of title
18, United States Code, are each amended by inserting ``, or
both'' after ``year''.

SEC. 2414. ADDITION OF SUPERVISED RELEASE VIOLATION AS
PREDICATES FOR CERTAIN OFFENSES.

(a) In General.--Sections 1512(a)(1)(C), 1512(b)(3),
1512(c)(2), 1513(a)(1)(B), and 1513(b)(2) are each amended by
striking ``violation of conditions of probation, parole or
release pending judicial proceedings'' and inserting
``violation of conditions of probation, supervised release,
parole, or release pending judicial proceedings''.
(b) Release or Detention of Defendant Pending Trial.--
Section 3142 of title 18, United States Code, is amended--
(1) in subsection (d)(1)(A)(iii), by inserting ``,
supervised release,'' after ``probation''; and
(2) in subsection (g)(3)(B), by inserting ``or supervised
release'' after ``probation''.

SEC. 2415. AUTHORITY OF COURT TO IMPOSE A SENTENCE OF
PROBATION OR SUPERVISED RELEASE WHEN REDUCING A
SENTENCE OF IMPRISONMENT IN CERTAIN CASES.

Section 3582(c)(1)(A) of title 18, United States Code, is
amended by inserting ``(and may impose a sentence of
probation or supervised release with or without conditions)''
after ``may reduce the term of imprisonment''.

SEC. 2416. ELIMINATION OF PROOF OF VALUE REQUIREMENT FOR
FELONY THEFT OR CONVERSION OF GRAND JURY
MATERIAL.

Section 641 of title 18, United States Code, is amended by
striking ``but if the value of such property does not exceed
the sum of $1,000, he'' and inserting ``but if the value of
such property, other than property constituting `matters
occurring before the grand jury' within the meaning of Rule
6(e) of the Federal Rules of Criminal Procedure, does not
exceed the sum of $1,000,''.

SEC. 2417. INCREASED MAXIMUM CORPORATE PENALTY FOR ANTITRUST
VIOLATIONS.

(a) Restraint of Trade Among the States.--Section 1 of the
Sherman Act (15 U.S.C. 1) is amended by striking
``$10,000,000'' and inserting ``$100,000,000''.
(b) Monopolizing Trade.--Section 2 of the Sherman Act (15
U.S.C. 2) is amended by striking ``$10,000,000'' and
inserting ``$100,000,000''.
(c) Other Restraints.--Section 3 of the Sherman Act (15
U.S.C. 3) is amended by striking ``$10,000,000'' and
inserting ``$100,000,000''.

SEC. 2418. AMENDMENT OF FEDERAL SENTENCING GUIDELINES FOR
COUNTERFEIT BEARER OBLIGATIONS OF THE UNITED
STATES.

(a) In General.--Pursuant to its authority under section
994(p) of title 28, United States Code, the United States
Sentencing Commission shall review and if appropriate, amend
the Federal sentencing guidelines generally to enhance the
penalty for offenses involving counterfeit bearer obligation
of the United States.
(b) Factors for Consideration.--In carrying out this
section, the Commission shall consider, with respect to the
offenses described in subsection (a)--
(1) whether the base offense level in the current
guidelines is adequate to address the serious nature of these
offenses and the public interest in protecting the integrity
of United States currency, especially in light of recent
technological advancements in counterfeiting methods that
decrease the cost and increase the availability of such
counterfeiting methods to criminals;
(2) whether the current specific offense characteristic
applicable to manufacturing counterfeit obligations fails to
take into account the range of offenses in this category; and
(3) any other factor that the Commission considers to be
appropriate.
(c) Emergency Authority to Sentencing Commission.--The
Commission shall promulgate the guidelines or amendments
provided for under this section as soon as is practicable in
accordance with the procedure set forth in section 21(a) of
the Sentencing Act of 1987, as though the authority under
that Act had not expired.

PART 2--ADDITIONAL IMPROVEMENTS TO FEDERAL CRIMINAL LAW

SEC. 2421. VIOLENCE DIRECTED AT DWELLINGS IN INDIAN COUNTRY.

Section 1153(a) of title 18, United States Code, is amended
by inserting ``or 1363'' after ``section 661''.

SEC. 2422. CORRECTIONS TO AMBER HAGERMAN CHILD PROTECTION
ACT.

(a) Aggravated Sexual Abuse.--Section 2241(c) of title 18,
United States Code, is amended by striking ``younger than
that person'' and inserting ``younger than the person so
engaging''.
(b) Sexual Abuse of a Minor or Ward.--Section 2243(a) of
title 18, United States Code, is amended--
(1) by striking ``Whoever'' and inserting ``Except as
provided in section 2241(c) of this title, whoever''; and
(2) by striking ``crosses a State line with intent to
engage in a sexual act with a person who has not attained the
age of 12 years, or''.
(c) Definitions.--Section 2246 of title 18, United States
Code, is amended--
(1) in paragraph (4), by striking the period and inserting
a semicolon;
(2) in paragraph (5), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(6) the term `State' means a State of the United States,
the District of Columbia, and any commonwealth, possession,
or territory of the United States.''.

SEC. 2423. ELIMINATION OF ``BODILY HARM'' ELEMENT IN ASSAULT
WITH A DANGEROUS WEAPON OFFENSE.

Section 113(a)(3) of title 18, United States Code, is
amended by striking ``with intent to do bodily harm, and''.

SEC. 2424. APPEALS FROM CERTAIN DISMISSALS.

Section 3731 of title 18, United States Code, is amended by
inserting ``or any part thereof'' after ``as to any one or
more counts''.

SEC. 2425. AUTHORITY FOR INJUNCTION AGAINST DISPOSAL OF ILL-
GOTTEN GAINS FROM VIOLATIONS OF FRAUD STATUTES.

Section 1345(a)(2) of title 18, United States Code, is
amended by inserting ``violation of this chapter or section
287, 371 (insofar as such violation involves a conspiracy to
defraud the United States or any agency thereof), or 1001 of
this title or of a'' after ``as a result of a''.

SEC. 2426. EXPANSION OF INTERSTATE TRAVEL FRAUD STATUTE TO
COVER INTERSTATE TRAVEL BY PERPETRATOR.

Section 2314 of title 18, United States Code, is amended in
the second undesignated paragraph--
(1) by inserting ``travels in,'' before ``transports or
causes to be transported, or induce any person or persons to
travel in''; and
(2) by inserting a comma after ``transports''.

SEC. 2427. CLARIFICATION OF SCOPE OF UNAUTHORIZED SELLING OF
MILITARY MEDALS OR DECORATIONS.

Section 704(b)(2) of title 18, United States Code, is
amended by striking ``with respect to a Congressional Medal
of Honor''.

SEC. 2428. AMENDMENT TO SECTION 669 TO CONFORM TO PUBLIC LAW
104-294.

Section 669 of title 18, United States Code, is amended by
striking ``$100'' and inserting ``$1,000''.

SEC. 2429. EXPANSION OF JURISDICTION OVER CHILD BUYING AND
SELLING OFFENSES.

Section 2251A(c)(3) of title 18, United States Code, is
amended by striking ``in any territory or possession of the
United States'' and inserting ``in the special maritime and
territorial jurisdiction of the United States or in any
commonwealth, territory, or possession of the United
States''.

[[Page S191]]

SEC. 2430. LIMITS ON DISCLOSURE OF WIRETAP ORDERS.

Section 2518(9) of title 18, United States Code, is amended
by inserting ``aggrieved'' before the word ``party'' wherever
it appears.

SEC. 2431. PRISON CREDIT AND AGING PRISONER REFORM.

(a) Prison Credits in General.--Section 3585(b) of title
18, United States Code, is amended to read as follows:
``(b) Credit for Prior Custody.--A defendant shall be given
credit toward the service of a term of imprisonment for any
time spent in official detention prior to the date the
sentence commences only if that official detention is as a
result of the offense for which the sentence was imposed and
has not been--
``(1) credited toward another sentence; or
``(2) applied in any manner to an undischarged concurrent
term of imprisonment.''.
(b) Good Time Credits for Foreign Prisoners Transferred to
the United States.--Section 4105(c) of title 18, United
States Code, is amended--
(1) in paragraph (1), by inserting ``by the Bureau of
Prisons and deducted from the sentence imposed by the foreign
court'' after ``These credits shall be combined'';
(2) by redesignating paragraphs (3) and (4) as paragraphs
(5) and (6), respectively; and
(3) by inserting after paragraph (2) the following:
``(3) If the term of imprisonment under section
4106A(b)(1)(A) is less than or equal to the total sentence
imposed and certified by the foreign authorities on the basis
of considerations other than the limitation arising under
section 4106A(b)(1)(C), the Bureau of Prisons shall calculate
credits for satisfactory behavior at the rate provided in
section 3624(b) and computed on the basis of the term of
imprisonment under section 4106A(b)(1)(A). If the credits
calculated under this paragraph produce a release date that
is earlier than the release date otherwise determined under
this section, the release date calculated under this
paragraph shall apply to the transferred offender.
``(4) Upon release from imprisonment, the offender shall
commence service of any period of supervised release
established pursuant to section 4106A(b)(1)(A), and the
balance of the foreign sentence remaining at the time of
release from prison shall not be reduced by credits for
satisfactory behavior, or labor, or any other credit that has
been applied to establish the offender's release date.''.
(c) Conforming Amendment.--Section 4106A(b)(1)(A) of title
18, United States Code, is amended by striking ``release
date'' and inserting ``term of imprisonment''.
(d) Expansion of Provision Allowing for Release of
Nondangerous Offenders Who Have Served at Least 30 Years in
Prison and Are at Least 70 Years Old.--Section 3582(c)(1)(A)
of title 18, United States Code, is amended--
(1) by inserting ``(and may impose a sentence of probation
or supervised release with or without conditions)'' after
``may reduce the term of imprisonment'';
(2) in subparagraph (ii), by inserting ``(other than an
offense or offenses under chapter 109A of this title)'' after
``the offense or offenses''; and
(3) in subparagraph (ii), by striking ``, pursuant to a
sentence imposed under section 3559(c),''.

SEC. 2432. MIRANDA REAFFIRMATION.

Section 3501 of title 18, United States Code, is amended--
(1) by striking subsections (a) and (b); and
(2) by redesignating subsections (c), (d), and (e) as
subsections (a), (b), and (c), respectively.

TITLE III--PROTECTING AMERICANS AND SUPPORTING VICTIMS OF CRIME

Subtitle A--Crime Victims Assistance

SEC. 3101. SHORT TITLE.

This subtitle may be cited as the ``Crime Victims
Assistance Act of 2001''.

PART 1--VICTIM RIGHTS

SEC. 3111. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
DETENTION.

(a) In General.--Section 3142 of title 18, United States
Code, is amended--
(1) in subsection (g)--
(A) in paragraph (3), by striking ``and'' at the end;
(B) by redesignating paragraph (4) as paragraph (5); and
(C) by inserting after paragraph (3) the following:
``(4) the views of the victim; and''; and
(2) by adding at the end the following:
``(k) Notice and Right To Be Heard.--
``(1) In general.--Subject to paragraph (2), with respect
to each hearing under subsection (f)--
``(A) before the hearing, the Government shall make
reasonable efforts to notify the victim of--
``(i) the date and time of the hearing; and
``(ii) the right of the victim to be heard on the issue of
detention; and
``(B) at the hearing, the court shall inquire of the
Government whether the victim wishes to be heard on the issue
of detention and, if so, shall afford the victim such an
opportunity.
``(2) Exceptions.--The requirements of paragraph (1) shall
not apply to any case in which the Government or the court
reasonably believes--
``(A) available evidence raises a significant expectation
of physical violence or other retaliation by the victim
against the defendant; or
``(B) identification of the defendant by the victim is a
fact in dispute, and no means of verification has been
attempted.''.
(b) Victim Defined.--Section 3156(a) of title 18, United
States Code, is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(6) the term `victim'--
``(A) means an individual harmed as a result of a
commission of an offense involving death or bodily injury to
any person, a threat of death or bodily injury to any person,
a sexual assault, or an attempted sexual assault; and
``(B) includes--
``(i) in the case of a victim who is less than 18 years of
age or incompetent, the parent or legal guardian of the
victim;
``(ii) in the case of a victim who is deceased or
incapacitated, 1 or more family members designated by the
court; and
``(iii) any other person appointed by the court to
represent the victim.''.

SEC. 3112. RIGHT TO A SPEEDY TRIAL.

Section 3161(h)(8)(B) of title 18, United States Code, is
amended by adding at the end the following:
``(v) The interests of the victim (or the family of a
victim who is deceased or incapacitated) in the prompt and
appropriate disposition of the case, free from unreasonable
delay.''.

SEC. 3113. RIGHT TO NOTICE AND TO BE HEARD CONCERNING PLEA.

(a) In General.--Rule 11 of the Federal Rules of Criminal
Procedure is amended--
(1) by redesignating subdivision (h) as subdivision (i);
and
(2) by inserting after subdivision (g) the following:
``(h) Rights of Victims.--
``(1) Victim defined.--In this subdivision, the term
`victim' means an individual harmed as a result of a
commission of an offense involving death or bodily injury to
any person, a threat of death or bodily injury to any person,
a sexual assault, or an attempted sexual assault, and also
includes--
``(A) in the case of a victim who is less than 18 years of
age or incompetent, the parent or legal guardian of the
victim;
``(B) in the case of a victim who is deceased or
incapacitated, 1 or more family members designated by the
court; and
``(C) any other person appointed by the court to represent
the victim.
``(2) Notice.--The Government, before a proceeding at which
a plea of guilty or nolo contendere is entered, shall make
reasonable efforts to notify the victim of--
``(A) the date and time of the proceeding;
``(B) the elements of the proposed plea or plea agreement;
``(C) the right of the victim to attend the proceeding; and
``(D) the right of the victim to address the court
personally, through counsel, or in writing on the issue of
the proposed plea or plea agreement.
``(3) Opportunity to be heard.--The court, before accepting
a plea of guilty or nolo contendere, shall afford the victim
an opportunity to be heard, personally, through counsel, or
in writing, on the proposed plea or plea agreement.
``(4) Exceptions.--Notwithstanding any other provision of
this subdivision--
``(A) in any case in which a victim is a defendant in the
same or a related case, or in which the Government certifies
to the court under seal that affording such victim any right
provided under this rule will jeopardize an ongoing
investigation, the victim shall not have such right;
``(B) a victim who, at the time of a proceeding at which a
plea of guilty or nolo contendere is entered, is incarcerated
in any Federal, State, or local correctional or detention
facility, shall not have the right to appear in person, but,
subject to subparagraph (A), shall be afforded a reasonable
opportunity to present views or participate by alternate
means; and
``(C) in any case involving more than 15 victims, the
court, after consultation with the Government and the
victims, may appoint a number of victims to represent the
interests of the victims, except that all victims shall
retain the right to submit a written statement under
paragraph (2).''.
(b) Effective Date.--
(1) In general.--The amendments made by subsection (a)
shall become effective as provided in paragraph (3).
(2) Action by judicial conference.--
(A) Recommendations.--Not later than 180 days after the
date of enactment of this Act, the Judicial Conference of the
United States shall submit to Congress a report containing
recommendations for amending the Federal Rules of Criminal
Procedure to provide enhanced opportunities for victims to be
heard on the issue of whether or not the court should accept
a plea of guilty or nolo contendere.
(B) Inapplicability of other law.--Chapter 131 of title 28,
United States Code, does not apply to any recommendation made
by the Judicial Conference of the United States under this
paragraph.
(3) Congressional action.--Except as otherwise provided by
law, if the Judicial Conference of the United States--
(A) submits a report in accordance with paragraph (2)
containing recommendations described in that paragraph, and
those recommendations are the same as the amendments made by
subsection (a), then the

[[Page S192]]

amendments made by subsection (a) shall become effective 30
days after the date on which the recommendations are
submitted to Congress under paragraph (2);
(B) submits a report in accordance with paragraph (2)
containing recommendations described in that paragraph, and
those recommendations are different in any respect from the
amendments made by subsection (a), the recommendations made
pursuant to paragraph (2) shall become effective 180 days
after the date on which the recommendations are submitted to
Congress under paragraph (2), unless an Act of Congress is
passed overturning the recommendations; and
(C) fails to comply with paragraph (2), the amendments made
by subsection (a) shall become effective 360 days after the
date of enactment of this Act.
(4) Application.--Any amendment made pursuant to this
section (including any amendment made pursuant to the
recommendations of the Judicial Conference of the United
States under paragraph (2)) shall apply in any proceeding
commenced on or after the effective date of the amendment.

SEC. 3114. ENHANCED PARTICIPATORY RIGHTS AT TRIAL.

(a) Amendment to Victim Rights Clarification Act.--Section
3510 of title 18, United States Code, is amended by adding at
the end the following:
``(d) Application to Televised Proceedings.--This section
applies to any victim viewing proceedings pursuant to section
235 of the Antiterrorism and Effective Death Penalty Act of
1996 (42 U.S.C. 10608), or any rule issued thereunder.''.
(b) Amendment to Victims' Rights and Restitution Act of
1990.--Section 502(b) of the Victims' Rights and Restitution
Act of 1990 (42 U.S.C. 10606(b)) is amended--
(1) by striking paragraph (4) and inserting the following:
``(4) The right to be present at all public court
proceedings related to the offense, unless the court
determines that testimony by the victim at trial would be
materially affected if the victim heard the testimony of
other witnesses.''; and
(2) in paragraph (5), by striking ``attorney'' and
inserting ``the attorney''.

SEC. 3115. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
SENTENCE.

(a) Enhanced Notice and Consideration of Victims' Views.--
(1) Imposition of sentence.--Section 3553(a) of title 18,
United States Code, is amended--
(A) in paragraph (6), by striking ``and'' at the end;
(B) by redesignating paragraph (7) as paragraph (8); and
(C) by inserting after paragraph (6) the following:
``(7) the views of any victims of the offense, if such
views are presented to the court; and''.
(2) Issuance and enforcement of order of restitution.--
Section 3664(d)(2)(A) of title 18, United States Code is
amended--
(A) by redesignating clauses (v) and (vi) as clauses (vii)
and (viii) respectively; and
(B) by inserting after clause (iv) the following:
``(v) the opportunity of the victim to attend the
sentencing hearing;
``(vi) the opportunity of the victim, personally or through
counsel, to make a statement or present any information to
the court in relation to the sentence;''.
(b) Enhanced Participatory Rights.--Rule 32 of the Federal
Rules of Criminal Procedure is amended--
(1) in subdivision (b)--
(A) by redesignating paragraphs (4), (5), and (6) as
paragraphs (5), (6), and (7), respectively;
(B) by inserting after paragraph (3) the following:
``(4) Notice to victim.--The probation officer must, before
submitting the presentence report, provide notice to the
victim as provided by section 3664(d)(2)(A) of title 18,
United States Code.''; and
(C) in paragraph (5), as redesignated--
(i) by redesignating subparagraphs (E) through (H) as
subparagraphs (F) through (I), respectively; and
(ii) by inserting after subparagraph (D) the following:
``(E) any victim impact statement submitted by a victim to
the probation officer;'';
(2) in subdivision (c)(3), by striking subparagraph (E) and
inserting the following:
``(E) afford the victim, personally or through counsel, an
opportunity to make a statement or present any information in
relation to the sentence, including information concerning
the extent and scope of the victim's injury or loss, and the
impact of the offense on the victim or the family of the
victim, except that the court may reasonably limit the number
of victims permitted to address the court if the number is so
large that affording each victim such right would result in
cumulative victim impact information or would unreasonably
prolong the sentencing process.''; and
(3) in subdivision (f)(1)--
(A) by striking ``the right of allocution under subdivision
(c)(3)(E)'' and inserting ``the notice and participatory
rights under subdivisions (b)(4) and (c)(3)(E)''; and
(B) by striking ``if such person or persons are present at
the sentencing hearing, regardless of whether the victim is
present;''.
(c) Effective Date.--
(1) In general.--The amendments made by subsection (b)
shall become effective as provided in paragraph (3).
(2) Action by judicial conference.--
(A) Recommendations.--Not later than 180 days after the
date of enactment of this Act, the Judicial Conference of the
United States shall submit to Congress a report containing
recommendations for amending the Federal Rules of Criminal
Procedure to provide enhanced opportunities for victims to
participate during the presentencing and sentencing phase of
the criminal process.
(B) Inapplicability of other law.--Chapter 131 of title 28,
United States Code, does not apply to any recommendation made
by the Judicial Conference of the United States under this
paragraph.
(3) Congressional action.--Except as otherwise provided by
law, if the Judicial Conference of the United States--
(A) submits a report in accordance with paragraph (2)
containing recommendations described in that paragraph, and
those recommendations are the same as the amendments made by
subsection (b), then the amendments made by subsection (b)
shall become effective 30 days after the date on which the
recommendations are submitted to Congress under paragraph
(2);
(B) submits a report in accordance with paragraph (2)
containing recommendations described in that paragraph, and
those recommendations are different in any respect from the
amendments made by subsection (b), the recommendations made
pursuant to paragraph (2) shall become effective 180 days
after the date on which the recommendations are submitted to
Congress under paragraph (2), unless an Act of Congress is
passed overturning the recommendations; and
(C) fails to comply with paragraph (2), the amendments made
by subsection (b) shall become effective 360 days after the
date of enactment of this Act.
(4) Application.--Any amendment made pursuant to this
section (including any amendment made pursuant to the
recommendations of the Judicial Conference of the United
States under paragraph (2)) shall apply in any proceeding
commenced on or after the effective date of the amendment.

SEC. 3116. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
SENTENCE ADJUSTMENT.

(a) In General.--Rule 32.1(a) of the Federal Rules of
Criminal Procedure is amended by adding at the end the
following:
``(3) Notice to victim.--At any hearing pursuant to
paragraph (2) involving 1 or more persons who have been
convicted of an offense involving death or bodily injury to
any person, a threat of death or bodily injury to any person,
a sexual assault, or an attempted sexual assault, the
Government shall make reasonable efforts to notify the victim
of the offense (and the victim of any new charges giving rise
to the hearing), of--
``(A) the date and time of the hearing; and
``(B) the right of the victim to attend the hearing and to
address the court regarding whether the terms or conditions
of probation or supervised release should be modified.''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
become effective as provided in paragraph (3).
(2) Action by judicial conference.--
(A) Recommendations.--Not later than 180 days after the
date of enactment of this Act, the Judicial Conference of the
United States shall submit to Congress a report containing
recommendations for amending the Federal Rules of Criminal
Procedure to ensure that reasonable efforts are made to
notify victims of violent offenses of any revocation hearing
held pursuant to Rule 32.1(a)(2), and to afford such victims
an opportunity to participate.
(B) Inapplicability of other law.--Chapter 131 of title 28,
United States Code, does not apply to any recommendation made
by the Judicial Conference of the United States under this
paragraph.
(3) Congressional action.--Except as otherwise provided by
law, if the Judicial Conference of the United States--
(A) submits a report in accordance with paragraph (2)
containing recommendations described in that paragraph, and
those recommendations are the same as the amendment made by
subsection (a), then the amendment made by subsection (a)
shall become effective 30 days after the date on which the
recommendations are submitted to Congress under paragraph
(2);
(B) submits a report in accordance with paragraph (2)
containing recommendations described in that paragraph, and
those recommendations are different in any respect from the
amendment made by subsection (a), the recommendations made
pursuant to paragraph (2) shall become effective 180 days
after the date on which the recommendations are submitted to
Congress under paragraph (2), unless an Act of Congress is
passed overturning the recommendations; and
(C) fails to comply with paragraph (2), the amendment made
by subsection (a) shall become effective 360 days after the
date of enactment of this Act.
(4) Application.--Any amendment made pursuant to this
section (including any amendment made pursuant to the
recommendations of the Judicial Conference of the United
States under paragraph (2)) shall apply in any proceeding
commenced on or after the effective date of the amendment.

SEC. 3117. RIGHT TO NOTICE OF RELEASE OR ESCAPE.

(a) In General.--Subchapter C of chapter 229 of title 18,
United States Code, is amended by adding at the end the
following:

[[Page S193]]

``Sec. 3627. Notice to victims of release or escape of
defendants

``(a) In General.--The Bureau of Prisons shall ensure that
reasonable notice is provided to each victim of an offense
for which a person is in custody pursuant to this
subchapter--
``(1) not less than 30 days before the release of such
person under section 3624, assignment of such person to pre-
release custody under section 3624(c), or transfer of such
person under section 3623;
``(2) not less than 10 days before the temporary release of
such person under section 3622;
``(3) not later than 12 hours after discovery that such
person has escaped;
``(4) not later than 12 hours after the return to custody
of such person after an escape; and
``(5) at such other times as may be reasonable before any
other form of release of such person as may occur.
``(b) Applicability.--This section applies to any escape,
work release, furlough, or any other form of release from a
psychiatric institution or other facility that provides
mental or other health services to persons in the custody of
the Bureau of Prisons.
``(c) Victim Contact Information.--It shall be the
responsibility of a victim to notify the Bureau of Prisons,
by means of a form to be provided by the Attorney General, of
any change in the mailing address of the victim, or other
means of contacting the victim, while the defendant is in the
custody of the Bureau of Prisons. The Bureau of Prisons shall
ensure the confidentiality of any information relating to a
victim.''.
(b) Technical and Conforming Amendment.--The analysis for
subchapter C of chapter 229 of title 18, United States Code,
is amended by adding at the end the following:

``3627. Notice to victims of release or escape of defendants.''.

SEC. 3118. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
EXECUTIVE CLEMENCY.

(a) Notification.--Subchapter C of chapter 229 of title 18,
United States Code, is amended by adding after section 3627,
as added by section 3117, the following:

``Sec. 3628. Notice to victims concerning grant of executive
clemency

``(a) Definitions.--In this section--
``(1) the term `executive clemency'--
``(A) means any exercise by the President of the power to
grant reprieves and pardons under clause 1 of section 2 of
article II of the Constitution of the United States; and
``(B) includes any pardon, reprieve, commutation of
sentence, or remission of fine; and
``(2) the term `victim' has the same meaning given that
term in section 503(e) of the Victims' Rights and Restitution
Act of 1990 (42 U.S.C. 10607(e)).
``(b) Notice of Grant of Executive Clemency.--
``(1) If a petition for executive clemency is granted, the
Attorney General shall make reasonable efforts to notify any
victim of any offense that is the subject of the grant of
executive clemency that such grant has been made as soon as
practicable after that grant is made.
``(2) If a grant of executive clemency will result in the
release of any person from custody, notice under paragraph
(1) shall be prior to that release from custody, if
practicable.''.
(b) Technical and Conforming Amendment.--The analysis for
subchapter C of chapter 229 of title 18, United States Code,
is amended by adding at the end the following:

``3628. Notice to victims concerning grant of executive clemency.''.
(c) Reporting Requirements.--The Attorney General shall
submit biannually to the Committees on the Judiciary of the
House of Representatives and the Senate a report on executive
clemency matters or cases delegated for review or
investigation to the Attorney General by the President,
including for each year--
(1) the number of petitions so delegated;
(2) the number of reports submitted to the President;
(3) the number of petitions for executive clemency granted
and the number denied;
(4) the name of each person whose petition for executive
clemency was granted or denied and the offenses of conviction
of that person for which executive clemency was granted or
denied; and
(5) with respect to any person granted executive clemency,
the date that any victim of an offense that was the subject
of that grant of executive clemency was notified, pursuant to
Department of Justice regulations, of a petition for
executive clemency, and whether such victim submitted a
statement concerning the petition.
(d) Sense of Congress Concerning the Right of Victims To
Notice and To Be Heard Concerning Executive Clemency.--It is
the sense of Congress that--
(1) victims of a crime should be notified about any
petition for executive clemency filed by the perpetrators of
that crime and provided an opportunity to submit a statement
concerning the petition to the President; and
(2) the Attorney General should promulgate regulations or
internal guidelines to ensure that such notification and
opportunity to submit a statement are provided.

SEC. 3119. REMEDIES FOR NONCOMPLIANCE.

(a) General Limitation.--Any failure to comply with any
amendment made by this part shall not give rise to a claim
for damages, or any other action against the United States,
or any employee of the United States, any court official or
officer of the court, or an entity contracting with the
United States, or any action seeking a rehearing or other
reconsideration of action taken in connection with a
defendant.
(b) Regulations To Ensure Compliance.--
(1) In general.--Notwithstanding subsection (a), not later
than 1 year after the date of enactment of this Act, the
Attorney General of the United States and the Chairman of the
United States Parole Commission shall promulgate regulations
to implement and enforce the amendments made by this title.
(2) Contents.--The regulations promulgated under paragraph
(1) shall--
(A) contain disciplinary sanctions, including suspension or
termination from employment, for employees of the Department
of Justice (including employees of the United States Parole
Commission) who willfully or repeatedly violate the
amendments made by this title, or willfully or repeatedly
refuse or fail to comply with provisions of Federal law
pertaining to the treatment of victims of crime;
(B) include an administrative procedure through which
parties can file formal complaints with the Department of
Justice alleging violations of the amendments made by this
title;
(C) provide that a complainant is prohibited from
recovering monetary damages against the United States, or any
employee of the United States, either in his official or
personal capacity; and
(D) provide that the Attorney General, or the designee of
the Attorney General, shall be the final arbiter of the
complaint, and there shall be no judicial review of the final
decision of the Attorney General by a complainant.

PART 2--VICTIM ASSISTANCE INITIATIVES

SEC. 3121. PILOT PROGRAMS TO ESTABLISH OMBUDSMAN PROGRAMS
FOR CRIME VICTIMS.

(a) Definitions.--In this section:
(1) Director.--The term ``Director'' means the Director of
the Office of Victims of Crime.
(2) Office.--The term ``Office'' means the Office for
Victims of Crime.
(3) Qualified private entity.--The term ``qualified private
entity'' means a private entity that meets such requirements
as the Attorney General, acting through the Director, may
establish.
(4) Qualified unit of state or local government.--The term
``local government'' means a unit of a State or local
government, including a State court, that meets such
requirements as the Attorney General, acting through the
Director, may establish.
(5) Voice centers.--The term ``VOICE Centers'' means the
Victim Ombudsman Information Centers established under the
program under subsection (b).
(b) Pilot Programs.--
(1) In general.--Not later than 12 months after the date of
enactment of this Act, the Attorney General, acting through
the Director, shall establish and carry out a program to
provide for pilot programs to establish and operate Victim
Ombudsman Information Centers in each of the following
States:
(A) Iowa.
(B) Massachusetts.
(C) Maryland.
(D) Vermont.
(E) Virginia.
(F) Washington.
(G) Wisconsin.
(2) Agreements.--
(A) In general.--The Attorney General, acting through the
Director, shall enter into an agreement with a qualified
private entity or unit of State or local government to
conduct a pilot program referred to in paragraph (1). Under
the agreement, the Attorney General, acting through the
Director, shall provide for a grant to assist the qualified
private entity or unit of State or local government in
carrying out the pilot program.
(B) Contents of agreement.--The agreement referred to in
subparagraph (A) shall specify that--
(i) the VOICE Center shall be established in accordance
with this section; and
(ii) except with respect to meeting applicable requirements
of this section concerning carrying out the duties of a VOICE
Center under this section (including the applicable reporting
duties under subsection (c) and the terms of the agreement)
each VOICE Center shall operate independently of the Office.
(C) No authority over daily operations.--The Office shall
have no supervisory or decisionmaking authority over the day-
to-day operations of a VOICE Center.
(c) Objectives.--
(1) Mission.--The mission of each VOICE Center established
under a pilot program under this section shall be to assist a
victim of a Federal or State crime to ensure that the
victim--
(A) is fully apprised of the rights of that victim under
applicable Federal or State law; and
(B) is provided the opportunity to participate in the
criminal justice process to the fullest extent of the law.
(2) Duties.--The duties of a VOICE Center shall include--
(A) providing information to victims of Federal or State
crime regarding the right of those victims to participate in
the criminal justice process (including information
concerning any right that exists under applicable Federal or
State law);

[[Page S194]]

(B) identifying and responding to situations in which the
rights of victims of crime under applicable Federal or State
law may have been violated;
(C) attempting to facilitate compliance with Federal or
State law referred to in subparagraph (B);
(D) educating police, prosecutors, Federal and State
judges, officers of the court, and employees of jails and
prisons concerning the rights of victims under applicable
Federal or State law; and
(E) taking measures that are necessary to ensure that
victims of crime are treated with fairness, dignity, and
compassion throughout the criminal justice process.
(d) Oversight.--
(1) Technical assistance.--The Office may provide technical
assistance to each VOICE Center.
(2) Annual report.--Each qualified private entity or
qualified unit of State or local government that carries out
a pilot program to establish and operate a VOICE Center under
this section shall prepare and submit to the Director, not
later than 1 year after the VOICE Center is established, and
annually thereafter, a report that--
(A) describes in detail the activities of the VOICE Center
during the preceding year; and
(B) outlines a strategic plan for the year following the
year covered under subparagraph (A).
(e) Review of Program Effectiveness.--
(1) GAO study.--Not later than 2 years after the date on
which each VOICE Center established under a pilot program
under this section is fully operational, the Comptroller
General of the United States shall conduct a review of each
pilot program carried out under this section to determine the
effectiveness of the VOICE Center that is the subject of the
pilot program in carrying out the mission and duties
described in subsection (c).
(2) Other studies.--Not later than 2 years after the date
on which each VOICE Center established under a pilot program
under this section is fully operational, the Attorney
General, acting through the Director, shall enter into an
agreement with 1 or more private entities that meet such
requirements that the Attorney General, acting through the
Director, may establish, to study the effectiveness of each
VOICE Center established by a pilot program under this
section in carrying out the mission and duties described in
subsection (c).
(f) Termination Date.--
(1) In general.--Except as provided in paragraph (2), a
pilot program established under this section shall terminate
on the date that is 4 years after the date of enactment of
this Act.
(2) Renewal.--If the Attorney General determines that any
of the pilot programs established under this section should
be renewed for an additional period, the Attorney General may
renew that pilot program for a period not to exceed 2 years.
(g) Funding.--Notwithstanding any other provision of law,
an aggregate amount not to exceed $5,000,000 of the amounts
collected pursuant to sections 3729 through 3731 of title 31,
United States Code (commonly known as the ``False Claims
Act''), may be used by the Director to make grants under
subsection (b).

SEC. 3122. AMENDMENTS TO VICTIMS OF CRIME ACT OF 1984.

(a) Crime Victims Fund.--Section 1402 of the Victims of
Crime Act of 1984 (42 U.S.C. 10601) is amended--
(1) in subsection (b)--
(A) in paragraph (3), by striking ``and'' at the end;
(B) in paragraph (4), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(5) any gifts, bequests, or donations from private
entities or individuals.''; and
(2) in subsection (d)--
(A) in paragraph (4)--
(i) in subparagraph (A), by striking ``48.5'' and inserting
``47.5'';
(ii) in subparagraph (B), by striking ``48.5'' and
inserting ``47.5''; and
(iii) in subparagraph (C), by striking ``3'' and inserting
``5''; and
(B) in paragraph (5), by adding at the end the following:
``(C) Any State that receives supplemental funding to
respond to incidents or terrorism or mass violence under this
section shall be required to return to the Crime Victims Fund
for deposit in the reserve fund, amounts subrogated to the
State as a result of third-party payments to victims.''.
(b) Crime Victim Compensation.--Section 1403 of the Victims
of Crime Act of 1984 (42 U.S.C. 10602) is amended--
(1) in subsection (a)--
(A) in each of paragraphs (1) and (2), by striking ``40''
and inserting ``60''; and
(B) in paragraph (3)--
(i) by striking ``5'' and inserting ``10''; and
(ii) by inserting ``and evaluation'' after
``administration''; and
(2) in subsection (b)--
(A) in paragraph (7), by inserting ``because the identity
of the offender was not determined beyond a reasonable doubt
in a criminal trial, because criminal charges were not
brought against the offender, or'' after ``deny compensation
to any victim'';
(B) by redesignating paragraphs (8) and (9) as paragraphs
(9) and (10), respectively; and
(C) by inserting after paragraph (7) the following:
``(8) such program does not discriminate against victims
because they oppose the death penalty or disagree with the
way the State is prosecuting the criminal case.''.
(c) Crime Victim Assistance.--Section 1404 of the Victims
of Crime Act of 1984 (42 U.S.C. 10603) is amended--
(1) in subsection (b)(3), by striking ``5'' and inserting
``10'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by inserting ``or enter into cooperative agreements''
after ``make grants'';
(ii) by striking subparagraph (A) and inserting the
following:
``(A) for demonstration projects, evaluation, training, and
technical assistance services to eligible organizations;'';
(iii) in subparagraph (B), by striking the period at the
end and inserting ``; and''; and
(iv) by adding at the end the following:
``(C) training and technical assistance that address the
significance of and effective delivery strategies for
providing long-term psychological care.''; and
(B) in paragraph (3)--
(i) in subparagraph (C), by striking ``and'' at the end;
(ii) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(E) use funds made available to the Director under this
subsection--
``(i) for fellowships and clinical internships; and
``(ii) to carry out programs of training and special
workshops for the presentation and dissemination of
information resulting from demonstrations, surveys, and
special projects.''; and
(3) in subsection (d)--
(A) by striking paragraph (1) and inserting the following:
``(1) the term `State' includes--
``(A) the District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands, and any other
territory or possession of the United States; and
``(B) for purposes of a subgrant under subsection (a)(1) or
a grant or cooperative agreement under subsection (c)(1), the
United States Virgin Islands and any agency of the Government
of the District of Columbia or the Federal Government
performing law enforcement functions in and on behalf of the
District of Columbia.'';
(B) in paragraph (2)--
(i) in subparagraph (C), by striking ``and'' at the end;
and
(ii) by adding at the end the following:
``(E) public awareness and education and crime prevention
activities that promote, and are conducted in conjunction
with, the provision of victim assistance; and
``(F) for purposes of an award under subsection (c)(1)(A),
preparation, publication, and distribution of informational
materials and resources for victims of crime and crime
victims organizations.'';
(C) by striking paragraph (4) and inserting the following:
``(4) the term `crisis intervention services' means
counseling and emotional support including mental health
counseling, provided as a result of crisis situations for
individuals, couples, or family members following and related
to the occurrence of crime;'';
(D) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(E) by adding at the end the following:
``(6) for purposes of an award under subsection (c)(1), the
term `eligible organization' includes any--
``(A) national or State organization with a commitment to
developing, implementing, evaluating, or enforcing victims'
rights and the delivery of services;
``(B) State agency or unit of local government;
``(C) State court;
``(D) tribal organization;
``(E) organization--
``(i) described in section 501(c) of the Internal Revenue
Code of 1986; and
``(ii) exempt from taxation under section 501(a) of such
Code; or
``(F) other entity that the Director determines to be
appropriate.''.

SEC. 3123. INCREASED TRAINING FOR LAW ENFORCEMENT OFFICERS
AND COURT PERSONNEL TO RESPOND TO THE NEEDS OF
CRIME VICTIMS.

Notwithstanding any other provision of law, amounts
collected pursuant to sections 3729 through 3731 of title 31,
United States Code (commonly known as the ``False Claims
Act'') may be used by the Office for Victims of Crime to make
grants to States, State courts, units of local government,
and qualified private entities, to provide training and
information to prosecutors, judges, law enforcement officers,
probation officers, and other officers and employees of
Federal and State courts to assist them in responding
effectively to the needs of victims of crime.

SEC. 3124. INCREASED RESOURCES TO DEVELOP STATE-OF-THE-ART
SYSTEMS FOR NOTIFYING CRIME VICTIMS OF
IMPORTANT DATES AND DEVELOPMENTS.

(a) In General.--Subtitle A of title XXIII of the Violent
Crime Control and Law Enforcement Act of 1994 (Public Law
103-322; 108 Stat. 2077) is amended by adding at the end the
following:

``SEC. 230103. STATE-OF-THE-ART SYSTEMS FOR NOTIFYING VICTIMS
OF IMPORTANT DATES AND DEVELOPMENTS.

``(a) Authorization of Appropriations.--There are
authorized to be appropriated to the Office for Victims of
Crime of the Department of Justice such sums as may be
necessary for grants to Federal, State, and local
prosecutors' offices and law enforcement agencies, Federal
and State courts,

[[Page S195]]

county jails, Federal and State correctional institutions,
and qualified private entities, to develop and implement
state-of-the-art systems for notifying victims of crime of
important dates and developments relating to the criminal
proceedings at issue.
``(b) False Claims Act.--Notwithstanding any other
provision of law, amounts collected pursuant to sections 3729
through 3731 of title 31, United States Code (commonly known
as the `False Claims Act'), may be used for grants under this
section.''.
(b) Violent Crime Reduction Trust Fund.--Section 310004(d)
of the Violent Crime Control and Law Enforcement Act of 1994
(42 U.S.C. 14214(d)) is amended--
(1) in the first paragraph designated as paragraph (15)
(relating to the definition of the term ``Federal law
enforcement program''), by striking ``and'' at the end;
(2) in the first paragraph designated as paragraph (16)
(relating to the definition of the term ``Federal law
enforcement program''), by striking the period at the end and
inserting ``; and''; and
(3) by inserting after the first paragraph designated as
paragraph (16) (relating to the definition of the term
``Federal law enforcement program'') the following:
``(17) section 230103.''.

PART 3--VICTIM-OFFENDER PROGRAMS: ``RESTORATIVE JUSTICE''

SEC. 3131. PILOT PROGRAM AND STUDY ON EFFECTIVENESS OF
RESTORATIVE JUSTICE APPROACH ON BEHALF OF
VICTIMS OF CRIME.

(a) In General.--Notwithstanding any other provision of
law, amounts collected pursuant to sections 3729 through 3731
of title 31, United States Code (commonly known as the
``False Claims Act'') and amounts available in the Crime
Victims Fund (42 U.S.C. 10601 et seq.), may be used by the
Office of Justice Programs of the Department of Justice to
make grants to States, State courts, units of local
government, tribal governments, and qualified private
entities for the establishment of pilot programs that
implement balanced and restorative justice models in juvenile
court settings.
(b) Study.--The Office of Justice Programs of the
Department of Justice shall conduct a study and report to
Congress not later than 2 years after the date of enactment
of this Act on the effectiveness of restorative justice
models utilized as a part of grants made pursuant to this
section.
(c) Criteria.--The study shall--
(1) evaluate the success of models already implemented in
the States;
(2) examine such factors as community restoration, victim
restoration, offender accountability, offender training, and
treatment; and
(3) contain recommendations of best practices.
(d) Voluntary Programs.--Any program funded under this
section shall be fully voluntary by both the victim and the
offender, once the prosecuting agency has determined that the
case is appropriate.
(e) Definition of Balanced and Restorative Justice Model.--
In this section, the term ``balanced and restorative justice
model'' means programs served by the criminal justice system
that utilize alternatives to incarceration where the purposes
are to--
(1) protect the community served by the system and
agencies;
(2) ensure accountability of the offender and the system;
(3) obligate the offender to pay restitution to the victim
and/or the community; and
(4) equip juvenile offenders with the skills needed to live
responsibly and productively.
(f) Authorization.--There are authorized to be appropriated
such sums as are necessary to carry out this section.

Subtitle B--Violence Against Women Act Enhancements

SEC. 3201. SHELTER SERVICES FOR BATTERED WOMEN AND CHILDREN.

(a) State Shelter Grants.--Section 303(a)(2)(C) of the
Family Violence Prevention and Services Act (42 U.S.C.
10402(a)(2)(C)) is amended by striking ``populations
underserved because of ethnic, racial, cultural, language
diversity or geographic isolation'' and inserting
``populations underserved because of race, ethnicity, age,
disability, religion, alienage status, geographic location
(including rural isolation), or language barriers, and any
other populations determined by the Secretary to be
underserved''.
(b) Secretarial Responsibilities.--Section 305(a) of the
Family Violence Prevention and Services Act (42 U.S.C.
10404(a)) is amended--
(1) by striking ``an employee'' and inserting ``1 or more
employees'';
(2) by striking ``of this title.'' and inserting ``of this
title, including carrying out evaluation and monitoring under
this title.''; and
(3) by striking ``The individual'' and inserting ``Any
individual''.
(c) Resource Centers.--Section 308 of the Family Violence
Prevention and Services Act (42 U.S.C. 10407) is amended--
(1) in subsection (a)(2), by inserting ``on providing
information, training, and technical assistance'' after
``focusing''; and
(2) in subsection (c), by adding at the end the following:
``(8) Providing technical assistance and training to local
entities carrying out domestic violence programs that provide
shelter, related assistance, or transitional housing
assistance.
``(9) Improving access to services, information, and
training, concerning family violence, within Indian tribes
and Indian tribal agencies.
``(10) Providing technical assistance and training to
appropriate entities to improve access to services,
information, and training concerning family violence
occurring in underserved populations.''.
(d) Conforming Amendment.--Section 309(6) of the Family
Violence Prevention and Services Act (42 U.S.C. 10408(6)) is
amended by striking ``the Virgin Islands, the Northern
Mariana Islands, and the Trust Territory of the Pacific
Islands'' and inserting ``the United States Virgin Islands,
the Commonwealth of the Northern Mariana Islands, and the
combined Freely Associated States''.
(e) Reauthorization.--Section 310 of the Family Violence
Prevention and Services Act (42 U.S.C. 10409) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) In General.--
``(1) Authorization of appropriations.--There are
authorized to be appropriated to carry out this title
$175,000,000 for each of fiscal years 2002 through 2005.
``(2) Source of funds.--Amounts made available under
paragraph (1) may be appropriated from the Violent Crime
Reduction Trust Fund established under section 310001 of the
Violent Crime Control and Law Enforcement Act of 1994 (42
U.S.C. 14211).'';
(2) in subsection (b), by striking ``under subsection
303(a)'' and inserting ``under section 303(a)'';
(3) in subsection (c), by inserting ``not more than the
lesser of $7,500,000 or'' before ``5''; and
(4) by adding at the end the following:
``(f) Evaluation, Monitoring, and Administration.--Of the
amounts appropriated under subsection (a) for each fiscal
year, not more than 1 percent shall be used by the Secretary
for evaluation, monitoring, and administrative costs under
this title.''.
(f) State Domestic Violence Coalition Grant Activities.--
Section 311 of the Family Violence Prevention and Services
Act (42 U.S.C. 10410) is amended--
(1) in subsection (a)(4), by striking ``underserved racial,
ethnic or language-minority populations'' and inserting
``underserved populations described in section
303(a)(2)(C)''; and
(2) in subsection (c), by striking ``the U.S. Virgin
Islands, the Northern Mariana Islands, and the Trust
Territory of the Pacific Islands'' and inserting ``the United
States Virgin Islands, the Commonwealth of the Northern
Mariana Islands, and the Freely Associated States''.

SEC. 3202. TRANSITIONAL HOUSING ASSISTANCE FOR VICTIMS OF
DOMESTIC VIOLENCE.

Title III of the Family Violence Prevention and Services
Act (42 U.S.C. 10401 et seq.) is amended by adding at the end
the following new section:

``SEC. 319. TRANSITIONAL HOUSING ASSISTANCE.

``(a) In General.--The Secretary shall award grants under
this section to carry out programs to provide assistance to
individuals, and their dependents--
``(1) who are homeless or in need of transitional housing
or other housing assistance, as a result of fleeing a
situation of domestic violence; and
``(2) for whom emergency shelter services are unavailable
or insufficient.
``(b) Assistance Described.--Assistance provided under this
section may include--
``(1) short-term housing assistance, including rental or
utilities payments assistance and assistance with related
expenses, such as payment of security deposits and other
costs incidental to relocation to transitional housing, in
cases in which assistance described in this paragraph is
necessary to prevent homelessness because an individual or
dependent is fleeing a situation of domestic violence; and
``(2) short-term support services, including payment of
expenses and costs associated with transportation and job
training referrals, child care, counseling, transitional
housing identification and placement, and related services.
``(c) Term of Assistance.--An individual or dependent
assisted under this section may not receive assistance under
this section for a total of more than 12 months.
``(d) Reports.--
``(1) Report to secretary.--
``(A) In general.--An entity that receives a grant under
this section shall annually prepare and submit to the
Secretary a report describing the number of individuals and
dependents assisted, and the types of housing assistance and
support services provided, under this section.
``(B) Contents.--Each report shall include information on--
``(i) the purpose and amount of housing assistance provided
to each individual or dependent assisted under this section;
``(ii) the number of months each individual or dependent
received the assistance;
``(iii) the number of individuals and dependents who were
eligible to receive the assistance, and to whom the entity
could not provide the assistance solely due to a lack of
available housing; and
``(iv) the type of support services provided to each
individual or dependent assisted under this section.
``(2) Report to congress.--The Secretary shall annually
prepare and submit to the Committee on the Judiciary of the
House of Representatives and the Committee on the Judiciary
of the Senate a report that contains a compilation of the
information contained in reports submitted under paragraph
(1).

[[Page S196]]

``(e) Authorization of Appropriations.--There are
authorized to be appropriated from the Violent Crime
Reduction Trust Fund established under section 310001 of the
Violent Crime Control and Law Enforcement Act of 1994 (42
U.S.C. 14211) to carry out this section--
``(1) $25,000,000 for each of fiscal years 2002 through
2003; and
``(2) $30,000,000 for each of fiscal years 2004 and
2005.''.

SEC. 3203. FAMILY UNITY DEMONSTRATION PROJECT.

Section 31904(a) of the Family Unity Demonstration Project
Act (42 U.S.C. 13883(a)) is amended--
(1) by striking ``1997'' and inserting ``2002'';
(2) by striking ``1998'' and inserting ``2003'';
(3) by striking ``1999'' and inserting ``2004''; and
(4) by striking ``2000'' and inserting ``2005''.

Subtitle C--Senior Safety

SEC. 3301. SHORT TITLE.

This subtitle may be cited as the ``Seniors Safety Act of
2001''.

SEC. 3302. FINDINGS AND PURPOSES.

(a) Findings.--Congress makes the following findings:
(1) The number of older Americans is growing both
numerically and proportionally in the United States. Since
1990, the population of seniors has increased by almost
5,000,000, and is now 20.2 percent of the United States
population.
(2) In 1997, 7 percent of victims of serious violent crime
were age 50 or older.
(3) In 1997, 17.7 percent of murder victims were age 55 or
older.
(4) According to the National Crime Victimization Survey,
persons aged 50 and older experienced approximately 673,460
incidents of violent crime, including rape and sexual
assaults, robberies and general assaults, during 1997.
(5) Older victims of violent crime are almost twice as
likely as younger victims to be raped, robbed, or assaulted
at or in their own homes.
(6) Approximately half of Americans who are 50 years old or
older feel afraid to walk alone at night in their own
neighborhoods.
(7) Seniors over the age of 50 reportedly account for 37
percent of the estimated $40,000,000,000 in losses each year
due to telemarketing fraud.
(8) In 1998, Congress enacted legislation to provide for
increased penalties for telemarketing fraud that targets
seniors.
(9) There has not been a comprehensive study of crimes
committed against seniors since 1994.
(10) It has been estimated that approximately 43 percent of
those turning 65 can expect to spend some time in a long-term
care facility, and approximately 20 percent can expect to
spend 5 years or longer in a such a facility.
(11) In 1997, approximately $82,800,000,000 was spent on
nursing home care in the United States and over half of this
amount was spent by the medicaid and medicare programs.
(12) Losses to fraud and abuse in health care reportedly
cost the United States an estimated $100,000,000,000 in 1996.
(13) The Inspector General for the Department of Health and
Human Services has estimated that about $12,600,000,000 in
improper medicare benefit payments, due to inadvertent
mistake, fraud and abuse, were made during fiscal year 1998.
(14) Incidents of health care fraud and abuse remain high
despite awareness of the problem.
(b) Purposes.--The purposes of this subtitle are to--
(1) combat nursing home fraud and abuse;
(2) enhance safeguards for pension plans and health care
programs;
(3) develop strategies for preventing and punishing crimes
that target or otherwise disproportionately affect seniors by
collecting appropriate data to measure the extent of crimes
committed against seniors and determine the extent of
domestic and elder abuse of seniors; and
(4) prevent and deter criminal activity, such as
telemarketing fraud, that results in economic and physical
harm against seniors and ensure appropriate restitution.

SEC. 3303. DEFINITIONS.

In this subtitle--
(1) the term ``crime'' means any criminal offense under
Federal or State law;
(2) the term ``nursing home'' means any institution or
residential care facility defined as such for licensing
purposes under State law, or if State law does not employ the
term nursing home, the equivalent term or terms as determined
by the Secretary of Health and Human Services, pursuant to
section 1908(e) of the Social Security Act (42 U.S.C.
1396g(e)); and
(3) the term ``senior'' means an individual who is more
than 55 years of age.

PART 1--COMBATING CRIMES AGAINST SENIORS

SEC. 3311. ENHANCED SENTENCING PENALTIES BASED ON AGE OF
VICTIM.

(a) Directive to the United States Sentencing Commission.--
Pursuant to its authority under section 994(p) of title 28,
United States Code, and in accordance with this section, the
United States Sentencing Commission shall review and, if
appropriate, amend section 3A1.1(a) of the Federal sentencing
guidelines to include the age of a crime victim as 1 of the
criteria for determining whether the application of a
sentencing enhancement is appropriate.
(b) Requirements.--In carrying out this section, the
Commission shall--
(1) ensure that the Federal sentencing guidelines and the
policy statements of the Commission reflect the serious
economic and physical harms associated with criminal activity
targeted at seniors due to their particular vulnerability;
(2) consider providing increased penalties for persons
convicted of offenses in which the victim was a senior in
appropriate circumstances;
(3) consult with individuals or groups representing
seniors, law enforcement agencies, victims organizations, and
the Federal judiciary, as part of the review described in
subsection (a);
(4) ensure reasonable consistency with other Federal
sentencing guidelines and directives;
(5) account for any aggravating or mitigating circumstances
that may justify exceptions, including circumstances for
which the Federal sentencing guidelines provide sentencing
enhancements;
(6) make any necessary conforming changes to the Federal
sentencing guidelines; and
(7) ensure that the Federal sentencing guidelines
adequately meet the purposes of sentencing set forth in
section 3553(a)(2) of title 18, United States Code.
(c) Report.--Not later than December 31, 2002, the
Commission shall submit to Congress a report on issues
relating to the age of crime victims, which shall include--
(1) an explanation of any changes to sentencing policy made
by the Commission under this section; and
(2) any recommendations of the Commission for retention or
modification of penalty levels, including statutory penalty
levels, for offenses involving seniors.

SEC. 3312. STUDY AND REPORT ON HEALTH CARE FRAUD SENTENCES.

(a) Directive to the United States Sentencing Commission.--
Pursuant to its authority under section 994(p) of title 28,
United States Code, and in accordance with this section, the
United States Sentencing Commission shall review and, if
appropriate, amend the Federal sentencing guidelines and the
policy statements of the Commission with respect to persons
convicted of offenses involving fraud in connection with a
health care benefit program (as defined in section 24(b) of
title 18, United States Code).
(b) Requirements.--In carrying out this section, the
Commission shall--
(1) ensure that the Federal sentencing guidelines and the
policy statements of the Commission reflect the serious harms
associated with health care fraud and the need for aggressive
and appropriate law enforcement action to prevent such fraud;
(2) consider providing increased penalties for persons
convicted of health care fraud in appropriate circumstances;
(3) consult with individuals or groups representing victims
of health care fraud, law enforcement agencies, the health
care industry, and the Federal judiciary as part of the
review described in subsection (a);
(4) ensure reasonable consistency with other Federal
sentencing guidelines and directives;
(5) account for any aggravating or mitigating circumstances
that might justify exceptions, including circumstances for
which the Federal sentencing guidelines provide sentencing
enhancements;
(6) make any necessary conforming changes to the Federal
sentencing guidelines; and
(7) ensure that the Federal sentencing guidelines
adequately meet the purposes of sentencing as set forth in
section 3553(a)(2) of title 18, United States Code.
(c) Report.--Not later than December 31, 2002, the
Commission shall submit to Congress a report on issues
relating to offenses described in subsection (a), which shall
include--
(1) an explanation of any changes to sentencing policy made
by the Commission under this section; and
(2) any recommendations of the Commission for retention or
modification of penalty levels, including statutory penalty
levels, for those offenses.

SEC. 3313. INCREASED PENALTIES FOR FRAUD RESULTING IN SERIOUS
INJURY OR DEATH.

Sections 1341 and 1343 of title 18, United States Code, are
each amended by inserting before the last sentence the
following: ``If the violation results in serious bodily
injury (as defined in section 1365 of this title), such
person shall be fined under this title, imprisoned not more
than 20 years, or both, and if the violation results in
death, such person shall be fined under this title,
imprisoned for any term of years or life, or both.''.

SEC. 3314. SAFEGUARDING PENSION PLANS FROM FRAUD AND THEFT.

(a) In General.--Chapter 63 of title 18, United States
Code, is amended by adding at the end the following:

``Sec. 1348. Fraud in relation to retirement arrangements

``(a) Retirement Arrangement Defined.--In this section--
``(1) In general.--The term `retirement arrangement'
means--
``(A) any employee pension benefit plan subject to any
provision of title I of the Employee Retirement Income
Security Act of 1974;
``(B) any qualified retirement plan within the meaning of
section 4974(c) of the Internal Revenue Code of 1986;

[[Page S197]]

``(C) any medical savings account described in section 220
of the Internal Revenue Code of 1986; or
``(D) fund established within the Thrift Savings Fund by
the Federal Retirement Thrift Investment Board pursuant to
subchapter III of chapter 84 of title 5.
``(2) Exception for governmental plan.--Such term does not
include any governmental plan (as defined in section 3(32) of
title I of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(32))), except as provided in paragraph
(1)(D).
``(3) Certain arrangements included.--Such term shall
include any arrangement that has been represented to be an
arrangement described in any subparagraph of paragraph (1)
(whether or not so described).
``(b) Prohibition and Penalties.--Whoever executes, or
attempts to execute, a scheme or artifice--
``(1) to defraud any retirement arrangement or other person
in connection with the establishment or maintenance of a
retirement arrangement; or
``(2) to obtain, by means of false or fraudulent pretenses,
representations, or promises, any of the money or property
owned by, or under the custody or control of, any retirement
arrangement or other person in connection with the
establishment or maintenance of a retirement arrangement;
shall be fined under this title, imprisoned not more than 10
years, or both.
``(c) Enforcement.--
``(1) In general.--Subject to paragraph (2), the Attorney
General may investigate any violation of and otherwise
enforce this section.
``(2) Effect on other authority.--Nothing in this
subsection may be construed to preclude the Secretary of
Labor or the head of any other appropriate Federal agency
from investigating a violation of this section in relation to
a retirement arrangement subject to title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1001 et
seq.) or any other provision of Federal law.''.
(b) Technical Amendment.--Section 24(a)(1) of title 18,
United States Code, is amended by inserting ``1348,'' after
``1347,''.
(c) Conforming Amendment.--The analysis for chapter 63 of
title 18, United States Code, is amended by adding at the end
the following:

``1348. Fraud in relation to retirement arrangements.''.

SEC. 3315. ADDITIONAL CIVIL PENALTIES FOR DEFRAUDING PENSION
PLANS.

(a) In General.--
(1) Action by attorney general.--Except as provided in
subsection (b)--
(A) the Attorney General may bring a civil action in the
appropriate district court of the United States against any
person who engages in conduct constituting an offense under
section 1348 of title 18, United States Code, or conspiracy
to violate such section 1348; and
(B) upon proof of such conduct by a preponderance of the
evidence, such person shall be subject to a civil penalty in
an amount equal to the greatest of--
(i) the amount of pecuniary gain to that person;
(ii) the amount of pecuniary loss sustained by the victim;
or
(iii) not more than--

(I) $50,000 for each such violation in the case of an
individual; or
(II) $100,000 for each violation in the case of a person
other than an individual.

(2) No effect on other remedies.--The imposition of a civil
penalty under this subsection does not preclude any other
statutory, common law, or administrative remedy available by
law to the United States or any other person.
(b) Exception.--No civil penalty may be imposed pursuant to
subsection (a) with respect to conduct involving a retirement
arrangement that--
(1) is an employee pension benefit plan subject to title I
of Employee Retirement Income Security Act of 1974; and
(2) for which the civil penalties may be imposed under
section 502 of Employee Retirement Income Security Act of
1974 (29 U.S.C. 1132).
(c) Determination of Penalty Amount.--In determining the
amount of the penalty under subsection (a), the district
court may consider the effect of the penalty on the violator
or other person's ability to--
(1) restore all losses to the victims; or
(2) provide other relief ordered in another civil or
criminal prosecution related to such conduct, including any
penalty or tax imposed on the violator or other person
pursuant to the Internal Revenue Code of 1986.''.

SEC. 3316. PUNISHING BRIBERY AND GRAFT IN CONNECTION WITH
EMPLOYEE BENEFIT PLANS.

Section 1954 of title 18, United State Code, is amended to
read as follows:

``Sec. 1954. Bribery and graft in connection with employee
benefit plans

``(a) Definitions.--In this section--
``(1) the term `employee benefit plan' means any employee
welfare benefit plan or employee pension benefit plan subject
to any provision of title I of the Employee Retirement Income
Security Act of 1974;
``(2) the terms `employee organization', `administrator',
and `employee benefit plan sponsor' mean any employee
organization, administrator, or plan sponsor, as defined in
title I of the Employment Retirement Income Security Act of
1974; and
``(3) the term `applicable person' means a person who is--
``(A) an administrator, officer, trustee, custodian,
counsel, agent, or employee of any employee benefit plan;
``(B) an officer, counsel, agent, or employee of an
employer or an employer any of whose employees are covered by
such plan;
``(C) an officer, counsel, agent, or employee of an
employee organization any of whose members are covered by
such plan;
``(D) a person who, or an officer, counsel, agent, or
employee of an organization that, provides benefit plan
services to such plan; or
``(E) a person with actual or apparent influence or
decisionmaking authority in regard to such plan.
``(b) Bribery and Graft.--Whoever--
``(1) being an applicable person, receives or agrees to
receive or solicits, any fee, kickback, commission, gift,
loan, money, or thing of value, personally or for any other
person, because of or with the intent to be corruptly
influenced with respect to any action, decision, or duty of
that applicable person relating to any question or matter
concerning an employee benefit plan;
``(2) directly or indirectly, gives or offers, or promises
to give or offer, any fee, kickback, commission, gift, loan,
money, or thing of value, to any applicable person, because
of or with the intent to be corruptly influenced with respect
to any action, decision, or duty of that applicable person
relating to any question or matter concerning an employee
benefit plan; or
``(3) attempts to give, accept, or receive any thing of
value with the intent to be corruptly influenced in violation
of this subsection;
shall be fined under this title, imprisoned not more than 5
years, or both.
``(c) Exceptions.--Nothing in this section may be construed
to apply to any--
``(1) payment to or acceptance by any person of bona fide
salary, compensation, or other payments made for goods or
facilities actually furnished or for services actually
performed in the regular course of his duties as an
applicable person; or
``(2) payment to or acceptance in good faith by any
employee benefit plan sponsor, or person acting on the
sponsor's behalf, of any thing of value relating to the
sponsor's decision or action to establish, terminate, or
modify the governing instruments of an employee benefit plan
in a manner that does not violate title I of the Employee
Retirement Income Security Act of 1974, or any regulation or
order promulgated thereunder, or any other provision of law
governing the plan.''.

PART 2--PREVENTING TELEMARKETING FRAUD

SEC. 3321. CENTRALIZED COMPLAINT AND CONSUMER EDUCATION
SERVICE FOR VICTIMS OF TELEMARKETING FRAUD.

(a) Centralized Service.--
(1) Requirement.--The Federal Trade Commission shall, after
consultation with the Attorney General, establish procedures
to--
(A) log and acknowledge the receipt of complaints by
individuals who certify that they have a reasonable belief
that they have been the victim of fraud in connection with
the conduct of telemarketing (as that term is defined in
section 2325 of title 18, United States Code, as amended by
section 3322(a) of this Act);
(B) provide to individuals described in subparagraph (A),
and to any other persons, information on telemarketing fraud,
including--
(i) general information on telemarketing fraud, including
descriptions of the most common telemarketing fraud schemes;
(ii) information on means of referring complaints on
telemarketing fraud to appropriate law enforcement agencies,
including the Director of the Federal Bureau of
Investigation, the attorneys general of the States, and the
national toll-free telephone number on telemarketing fraud
established by the Attorney General; and
(iii) information, if available, on the number of
complaints of telemarketing fraud against particular
companies and any record of convictions for telemarketing
fraud by particular companies for which a specific request
has been made; and
(C) refer complaints described in subparagraph (A) to
appropriate entities, including State consumer protection
agencies or entities and appropriate law enforcement
agencies, for potential law enforcement action.
(2) Central location.--The service under the procedures
under paragraph (1) shall be provided at and through a single
site selected by the Commission for that purpose.
(3) Commencement.--The Commission shall commence carrying
out the service not later than 1 year after the date of
enactment of this Act.
(b) Creation of Fraud Conviction Database.--
(1) Requirement.--The Attorney General shall establish and
maintain a computer database containing information on the
corporations and companies convicted of offenses for
telemarketing fraud under Federal and State law. The database
shall include a description of the type and method of the
fraud scheme for which each corporation or company covered by
the database was convicted.
(2) Use of database.--The Attorney General shall make
information in the database available to the Federal Trade
Commission for purposes of providing information as part of
the service under subsection (a).
(c) Authorization of Appropriations.--There is authorized
to be appropriated such

[[Page S198]]

sums as may be necessary to carry out this section.

SEC. 3322. BLOCKING OF TELEMARKETING SCAMS.

(a) Expansion of Scope of Telemarketing Fraud Subject to
Enhanced Criminal Penalties.--Section 2325(1) of title 18,
United States Code, is amended by striking ``telephone
calls'' and inserting ``wire communications utilizing a
telephone service''.
(b) Blocking or Termination of Telephone Service Associated
With Telemarketing Fraud.--
(1) In general.--Chapter 113A of title 18, United States
Code, is amended by adding at the end the following:

``Sec. 2328. Blocking or termination of telephone service

``(a) In General.--If a common carrier subject to the
jurisdiction of the Federal Communications Commission is
notified in writing by the Attorney General, acting within
the Attorney General's jurisdiction, that any wire
communications facility furnished by such common carrier is
being used or will be used by a subscriber for the purpose of
transmitting or receiving a wire communication in interstate
or foreign commerce for the purpose of executing any scheme
or artifice to defraud, or for obtaining money or property by
means of false or fraudulent pretenses, representations, or
promises, in connection with the conduct of telemarketing,
the common carrier shall discontinue or refuse the leasing,
furnishing, or maintaining of the facility to or for the
subscriber after reasonable notice to the subscriber.
``(b) Prohibition on Damages.--No damages, penalty, or
forfeiture, whether civil or criminal, shall be found or
imposed against any common carrier for any act done by the
common carrier in compliance with a notice received from the
Attorney General under this section.
``(c) Relief.--
``(1) In general.--Nothing in this section may be construed
to prejudice the right of any person affected thereby to
secure an appropriate determination, as otherwise provided by
law, in a Federal court, that--
``(A) the leasing, furnishing, or maintaining of a facility
should not be discontinued or refused under this section; or
``(B) the leasing, furnishing, or maintaining of a facility
that has been so discontinued or refused should be restored.
``(2) Supporting information.--In any action brought under
this subsection, the court may direct that the Attorney
General present evidence in support of the notice made under
subsection (a) to which such action relates.
``(d) Definitions.--In this section:
``(1) Reasonable notice to the subscriber.--
``(A) In general.--The term `reasonable notice to the
subscriber', in the case of a subscriber of a common carrier,
means any information necessary to provide notice to the
subscriber that--
``(i) the wire communications facilities furnished by the
common carrier may not be used for the purpose of
transmitting, receiving, forwarding, or delivering a wire
communication in interstate or foreign commerce for the
purpose of executing any scheme or artifice to defraud in
connection with the conduct of telemarketing; and
``(ii) such use constitutes sufficient grounds for the
immediate discontinuance or refusal of the leasing,
furnishing, or maintaining of the facilities to or for the
subscriber.
``(B) Included matter.--The term includes any tariff filed
by the common carrier with the Federal Communications
Commission that contains the information specified in
subparagraph (A).
``(2) Wire communication.--The term `wire communication'
has the meaning given that term in section 2510(1) of this
title.
``(3) Wire communications facility.--The term `wire
communications facility' means any facility (including
instrumentalities, personnel, and services) used by a common
carrier for purposes of the transmission, receipt,
forwarding, or delivery of wire communications.''.
(2) Conforming amendment.--The analysis for that chapter is
amended by adding at the end the following:

``2328. Blocking or termination of telephone service.''.

PART 3--PREVENTING HEALTH CARE FRAUD

SEC. 3331. INJUNCTIVE AUTHORITY RELATING TO FALSE CLAIMS AND
ILLEGAL KICKBACK SCHEMES INVOLVING FEDERAL
HEALTH CARE PROGRAMS.

(a) In General.--Section 1345(a) of title 18, United States
Code, is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``, or'' and inserting
a semicolon;
(B) in subparagraph (C), by striking the period at the end
and inserting ``; or''; and
(C) by inserting after subparagraph (C) the following:
``(D) committing or about to commit an offense under
section 1128B of the Social Security Act (42 U.S.C. 1320a-
7b);''; and
(2) in paragraph (2), by inserting ``a violation of
paragraph (1)(D) or'' before ``a banking''.
(b) Civil Actions.--
(1) In general.--Section 1128B of the Social Security Act
(42 U.S.C. 1320a-7b) is amended by adding at the end the
following:
``(g) Civil Actions.--
``(1) In general.--The Attorney General may bring an action
in the appropriate district court of the United States to
impose upon any person who carries out any activity in
violation of this section with respect to a Federal health
care program a civil penalty of not more than $50,000 for
each such violation, or damages of 3 times the total
remuneration offered, paid, solicited, or received, whichever
is greater.
``(2) Existence of violation.--A violation exists under
paragraph (1) if 1 or more purposes of the remuneration is
unlawful, and the damages shall be the full amount of such
remuneration.
``(3) Procedures.--An action under paragraph (1) shall be
governed by--
``(A) the procedures with regard to subpoenas, statutes of
limitations, standards of proof, and collateral estoppel set
forth in section 3731 of title 31, United States Code; and
``(B) the Federal Rules of Civil Procedure.
``(4) No effect on other remedies.--Nothing in this section
may be construed to affect the availability of any other
criminal or civil remedy.
``(h) Injunctive Relief.--The Attorney General may commence
a civil action in an appropriate district court of the United
States to enjoin a violation of this section, as provided in
section 1345 of title 18, United States Code.''.
(2) Conforming amendment.--The heading of section 1128B of
the Social Security Act (42 U.S.C. 1320a-7b) is amended by
inserting ``AND CIVIL'' after ``CRIMINAL''.

SEC. 3332. AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES.

Section 3486 of title 18, United States Code, is amended--
(1) in subsection (a), by inserting ``, or any allegation
of fraud or false claims (whether criminal or civil) in
connection with a Federal health care program (as defined in
section 1128B(f) of the Social Security Act (42 U.S.C. 1320a-
7b(f))),'' after ``Federal health care offense,''; and
(2) by adding at the end the following:
``(f) Privacy Protection.--
``(1) In general.--Except as provided in paragraph (2), any
record (including any book, paper, document, electronic
medium, or other object or tangible thing) produced pursuant
to a subpoena issued under this section that contains
personally identifiable health information may not be
disclosed to any person, except pursuant to a court order
under subsection (e)(1).
``(2) Exceptions.--A record described in paragraph (1) may
be disclosed--
``(A) to an attorney for the government for use in the
performance of the official duty of the attorney (including
presentation to a Federal grand jury);
``(B) to such government personnel (including personnel of
a State or subdivision of a State) as are determined to be
necessary by an attorney for the government to assist an
attorney for the government in the performance of the
official duty of that attorney to enforce Federal criminal
law;
``(C) as directed by a court preliminarily to or in
connection with a judicial proceeding; and
``(D) as permitted by a court--
``(i) at the request of a defendant in an administrative,
civil, or criminal action brought by the United States, upon
a showing that grounds may exist for a motion to exclude
evidence obtained under this section; or
``(E) at the request of an attorney for the government,
upon a showing that such matters may disclose a violation of
State criminal law, to an appropriate official of a State or
subdivision of a State for the purpose of enforcing such law.
``(3) Manner of court ordered disclosures.--If a court
orders the disclosure of any record described in paragraph
(1), the disclosure shall be made in such manner, at such
time, and under such conditions as the court may direct and
shall be undertaken in a manner that preserves the
confidentiality and privacy of individuals who are the
subject of the record, unless disclosure is required by the
nature of the proceedings, in which event the attorney for
the government shall request that the presiding judicial or
administrative officer enter an order limiting the disclosure
of the record to the maximum extent practicable, including
redacting the personally identifiable health information from
publicly disclosed or filed pleadings or records.
``(4) Destruction of records.--Any record described in
paragraph (1), and all copies of that record, in whatever
form (including electronic) shall be destroyed not later than
90 days after the date on which the record is produced,
unless otherwise ordered by a court of competent
jurisdiction, upon a showing of good cause.
``(5) Effect of violation.--Any person who knowingly fails
to comply with this subsection may be punished as in contempt
of court.
``(g) Personally Identifiable Health Information Defined.--
In this section, the term `personally identifiable health
information' means any information, including genetic
information, demographic information, and tissue samples
collected from an individual, whether oral or recorded in any
form or medium, that--
``(1) relates to the past, present, or future physical or
mental health or condition of an individual, the provision of
health care to an individual, or the past, present, or future
payment for the provision of health care to an individual;
and
``(2) either--
``(A) identifies an individual; or

[[Page S199]]

``(B) with respect to which there is a reasonable basis to
believe that the information can be used to identify an
individual.''.

SEC. 3333. EXTENDING ANTIFRAUD SAFEGUARDS TO THE FEDERAL
EMPLOYEE HEALTH BENEFITS PROGRAM.

Section 1128B(f)(1) of the Social Security Act (42 U.S.C.
1320a-7b(f)(1)) is amended by striking ``(other than the
health insurance program under chapter 89 of title 5, United
States Code)''.

SEC. 3334. GRAND JURY DISCLOSURE.

Section 3322 of title 18, United States Code, is amended--
(1) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Grand Jury Disclosure.--Subject to section 3486(f),
upon ex parte motion of an attorney for the government
showing that such disclosure would be of assistance to
enforce any provision of Federal law, a court may direct the
disclosure of any matter occurring before a grand jury during
an investigation of a Federal health care offense (as defined
in section 24(a) of this title) to an attorney for the
government to use in any investigation or civil proceeding
relating to fraud or false claims in connection with a
Federal health care program (as defined in section 1128B(f)
of the Social Security Act (42 U.S.C. 1320a-7b(f))).''.

SEC. 3335. INCREASING THE EFFECTIVENESS OF CIVIL
INVESTIGATIVE DEMANDS IN FALSE CLAIMS
INVESTIGATIONS.

Section 3733 of title 31, United States Code, is amended--
(1) in subsection (a)(1), in the second sentence, by
inserting ``, except to the Deputy Attorney General or to an
Assistant Attorney General'' before the period at the end;
and
(2) in subsection (i)(2)(C), by adding at the end the
following: ``Disclosure of information to a person who brings
a civil action under section 3730, or such person's counsel,
shall be allowed only upon application to a United States
district court showing that such disclosure would assist the
Department of Justice in carrying out its statutory
responsibilities.''.

PART 4--PROTECTING THE RIGHTS OF ELDERLY CRIME VICTIMS

SEC. 3341. USE OF FORFEITED FUNDS TO PAY RESTITUTION TO CRIME
VICTIMS AND REGULATORY AGENCIES.

Section 981(e) of title 18, United States Code, is
amended--
(1) in each of paragraphs (3), (4), and (5), by striking
``in the case of property referred to in subsection
(a)(1)(C)'' and inserting ``in the case of property forfeited
in connection with an offense resulting in a pecuniary loss
to a financial institution or regulatory agency'';
(2) by striking paragraph (6) and inserting the following:
``(6) as restoration to any victim of the offense giving
rise to the forfeiture, including, in the case of a money
laundering offense, any offense constituting the underlying
specified unlawful activity; or''; and
(3) in paragraph (7), by striking ``in the case of property
referred to in subsection (a)(1)(D)'' and inserting ``in the
case of property forfeited in connection with an offense
relating to the sale of assets acquired or held by any
Federal financial institution or regulatory agency, or person
appointed by such agency, as receiver, conservator, or
liquidating agent for an financial institution''.

SEC. 3342. VICTIM RESTITUTION.

Section 413 of the Controlled Substances Act (21 U.S.C.
853) is amended by adding at the end the following:
``(r) Victim Restitution.--
``(1) Satisfaction of order of restitution.--
``(A) In general.--Except as provided in subparagraph (B),
a defendant may not use property subject to forfeiture under
this section to satisfy an order of restitution.
``(B) Exception.--If there are 1 or more identifiable
victims entitled to restitution from a defendant, and the
defendant has no assets other than the property subject to
forfeiture with which to pay restitution to the victim or
victims, the attorney for the Government may move to dismiss
a forfeiture allegation against the defendant before entry of
a judgment of forfeiture in order to allow the property to be
used by the defendant to pay restitution in whatever manner
the court determines to be appropriate if the court grants
the motion. In granting a motion under this subparagraph, the
court shall include a provision ensuring that costs
associated with the identification, seizure, management, and
disposition of the property are recovered by the United
States.
``(2) Restoration of forfeited property.--
``(A) In general.--If an order of forfeiture is entered
pursuant to this section and the defendant has no assets
other than the forfeited property to pay restitution to 1 or
more identifiable victims who are entitled to restitution,
the Government shall restore the forfeited property to the
victims pursuant to subsection (i)(1) once the ancillary
proceeding under subsection (n) has been completed and the
costs of the forfeiture action have been deducted.
``(B) Distribution of property.--On motion of the attorney
for the Government, the court may enter any order necessary
to facilitate the distribution of any property restored under
this paragraph.
``(3) Victim defined.--In this subsection, the term
`victim'--
``(A) means a person other than a person with a legal
right, title, or interest in the forfeited property
sufficient to satisfy the standing requirements of subsection
(n)(2) who may be entitled to restitution from the forfeited
funds pursuant to section 9.8 of part 9 of title 28, Code of
Federal Regulations (or any successor to that regulation);
and
``(B) includes any person who is the victim of the offense
giving rise to the forfeiture, or of any offense that was
part of the same scheme, conspiracy, or pattern of criminal
activity, including, in the case of a money laundering
offense, any offense constituting the underlying specified
unlawful activity.''.

SEC. 3343. BANKRUPTCY PROCEEDINGS NOT USED TO SHIELD ILLEGAL
GAINS FROM FALSE CLAIMS.

(a) Certain Actions Not Stayed by Bankruptcy Proceedings.--
(1) In general.--Notwithstanding any other provision of
law, the commencement or continuation of an action under
section 3729 of title 31, United States Code, does not
operate as a stay under section 105(a) or 362(a)(1) of title
11, United States Code.
(2) Conforming amendment.--Section 362(b) of title 11,
United States Code, is amended--
(A) in paragraph (17), by striking ``or'' at the end;
(B) in paragraph (18), by striking the period at the end
and inserting ``; or''; and
(C) by adding at the end the following:
``(19) the commencement or continuation of an action under
section 3729 of title 31.''.
(b) Certain Debts Not Dischargeable in Bankruptcy.--Section
523 of title 11, United States Code, is amended by adding at
the end the following:
``(f) A discharge under section 727, 1141, 1228(a),
1228(b), or 1328(b) does not discharge a debtor from a debt
owed for violating section 3729 of title 31.''.
(c) Repayment of Certain Debts Considered Final.--
(1) In general.--Chapter 1 of title 11, United States Code,
is amended by adding at the end the following:

``Sec. 111. False claims

``No transfer on account of a debt owed to the United
States for violating 3729 of title 31, or under a compromise
order or other agreement resolving such a debt may be avoided
under section 544, 545, 547, 548, 549, 553(b), or 742(a).''.
(2) Conforming amendment.--The analysis for chapter 1 of
title 11, United States Code, is amended by adding at the end
the following:

``111. False claims.''.

SEC. 3344. FORFEITURE FOR RETIREMENT OFFENSES.

(a) Criminal Forfeiture.--Section 982(a) of title 18,
United States Code, is amended by adding at the end the
following:
``(9) Criminal Forfeiture.--
``(A) In general.--The court, in imposing sentence on a
person convicted of a retirement offense, shall order the
person to forfeit property, real or personal, that
constitutes or that is derived, directly or indirectly, from
proceeds traceable to the commission of the offense.
``(B) Retirement offense defined.--In this paragraph, the
term `retirement offense' means a violation of any of the
following provisions of law, if the violation, conspiracy, or
solicitation relates to a retirement arrangement (as defined
in section 1348 of title 18, United States Code):
``(i) Section 664, 1001, 1027, 1341, 1343, 1348, 1951,
1952, or 1954 of title 18, United States Code.
``(ii) Sections 411, 501, or 511 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1111, 1131, 1141).''.
(b) Civil Forfeiture.--Section 981(a)(1) of title 18,
United States Code, is amended by adding at the end the
following:
``(G) Any property, real or personal, that constitutes or
is derived, directly or indirectly, from proceeds traceable
to the commission of a violation of, a criminal conspiracy to
violated or solicitation to commit a crime of violence
involving a retirement offense (as defined in section
982(a)(9)(B)).''.

Subtitle D--Violent Crime Reduction Trust Fund

SEC. 3401. EXTENSION OF VIOLENT CRIME REDUCTION TRUST FUND.

(a) In General.--Section 310001(b) of the Violent Crime
Control and Law Enforcement Act of 1994 (42 U.S.C. 14211) is
amended by striking paragraphs (1) through (5) and inserting
the following:
``(1) for fiscal year 2002, $6,169,000,000;
``(2) for fiscal year 2003, $6,316,000,000;
``(3) for fiscal year 2004, $6,458,000,000; and
``(4) for fiscal year 2005, $6,616,000,000.''.
(b) Discretionary Limits.--Title XXXI of the Violent Crime
Control and Law Enforcement Act of 1994 (42 U.S.C. 14211 et
seq.) is amended by inserting after section 310001 the
following:

``SEC. 310002. DISCRETIONARY LIMITS.

``For the purposes of allocations made for the
discretionary category under section 302(a) of the
Congressional Budget Act of 1974 (2 U.S.C. 633(a)), the term
`discretionary spending limit' means--
``(1) with respect to fiscal year 2002--
``(A) for the discretionary category, amounts of budget
authority and outlays necessary to adjust the discretionary
spending limits to reflect the changes in subparagraph (B) as
determined by the Chairman of the Committee on the Budget of
the House of Representatives and the Chairman of the
Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category,
$6,169,000,000 in new budget authority and $6,020,000,000 in
outlays;

[[Page S200]]

``(2) with respect to fiscal year 2003--
``(A) for the discretionary category, amounts of budget
authority and outlays necessary to adjust the discretionary
spending limits to reflect the changes in subparagraph (B) as
determined by the Chairman of the Committee on the Budget of
the House of Representatives and the Chairman of the
Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category,
$6,316,000,000 in new budget authority and $6,161,000,000 in
outlays;
``(3) with respect to fiscal year 2004--
``(A) for the discretionary category, amounts of budget
authority and outlays necessary to adjust the discretionary
spending limits to reflect the changes in subparagraph (B) as
determined by the Chairman of the Committee on the Budget of
the House of Representatives and the Chairman of the
Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category,
$6,459,000,000 in new budget authority and $6,303,000,000 in
outlays; and
``(4) with respect to fiscal year 2005--
``(A) for the discretionary category, amounts of budget
authority and outlays necessary to adjust the discretionary
spending limits to reflect the changes in subparagraph (B) as
determined by the Chairman of the Committee on the Budget of
the House of Representatives and the Chairman of the
Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category, $6,616,000
in new budget authority and $6,452,000,000 in outlays;
as adjusted in accordance with section 251(b) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
901(b)) and section 314 of the Congressional Budget Act of
1974.''.

TITLE IV--BREAKING THE CYCLE OF DRUGS AND VIOLENCE

Subtitle A--Drug Courts, Drug Treatment, and Alternative Sentencing

PART 1--EXPANSION OF DRUG COURTS

SEC. 4111. REAUTHORIZATION OF DRUG COURTS PROGRAM.

(a) Repeal.--Section 114(b)(1)(A) of title I of Public Law
104-134 is repealed.
(b) Reauthorization.--Section 1001(a)(20) of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3793(a)(20)) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(G) $400,000,000 for fiscal year 2002; and
``(H) $400,000,000 for fiscal year 2003.''.

SEC. 4112. JUVENILE DRUG COURTS.

Title I of the Omnibus Crime Control and Safe Streets Act
of 1968 (42 U.S.C. 3711 et seq.) is amended by inserting
after part BB the following:

``PART Z--JUVENILE DRUG COURTS

``SEC. 2976. GRANT AUTHORITY.

``(a) Appropriate Drug Court Programs.--The Attorney
General may make grants to States, State courts, local
courts, units of local government, and Indian tribes to
establish programs that--
``(1) involve continuous early judicial supervision over
juvenile offenders, other than violent juvenile offenders
with substance abuse, or substance abuse-related problems;
and
``(2) integrate administration of other sanctions and
services, including--
``(A) mandatory periodic testing for the use of controlled
substances or other addictive substances during any period of
supervised release or probation for each participant;
``(B) substance abuse treatment for each participant;
``(C) diversion, probation, or other supervised release
involving the possibility of prosecution, confinement, or
incarceration based on noncompliance with program
requirements or failure to show satisfactory progress;
``(D) programmatic, offender management, and aftercare
services such as relapse prevention, health care, education,
vocational training, job placement, housing placement, and
child care or other family support service for each
participant who requires such services;
``(E) payment by the offender of treatment costs, to the
extent practicable, such as costs for urinalysis or
counseling; or
``(F) payment by the offender of restitution, to the extent
practicable, to either a victim of the offense at issue or to
a restitution or similar victim support fund.
``(b) Continued Availability of Grant Funds.--Amounts made
available under this part shall remain available until
expended.

``SEC. 2977. PROHIBITION OF PARTICIPATION BY VIOLENT
OFFENDERS.

``The Attorney General shall issue regulations and
guidelines to ensure that the programs authorized in this
part do not permit participation by violent offenders.

``SEC. 2978. DEFINITION.

``In this part, the term `violent offender' means an
individual charged with an offense during the course of
which--
``(1) the individual carried, possessed, or used a firearm
or dangerous weapon;
``(2) the death of or serious bodily injury of another
person occurred as a direct result of the commission of such
offense; or
``(3) the individual used force against the person of
another.

``SEC. 2979. ADMINISTRATION.

``(a) Regulatory Authority.--The Attorney General shall
issue any regulations and guidelines necessary to carry out
this part.
``(b) Applications.--In addition to any other requirements
that may be specified by the Attorney General, an application
for a grant under this part shall--
``(1) include a long term strategy and detailed
implementation plan;
``(2) explain the inability of the applicant to fund the
program adequately without Federal assistance;
``(3) certify that the Federal support provided will be
used to supplement, and not supplant, State, tribal, or local
sources of funding that would otherwise be available;
``(4) identify related governmental or community
initiatives that complement or will be coordinated with the
proposal;
``(5) certify that there has been appropriate consultation
with all affected agencies and that there will be appropriate
coordination with all affected agencies in the implementation
of the program;
``(6) certify that participating offenders will be
supervised by one or more designated judges with
responsibility for the drug court program;
``(7) specify plans for obtaining necessary support and
continuing the proposed program following the conclusion of
Federal support; and
``(8) describe the methodology that will be used in
evaluating the program.

``SEC. 2980. APPLICATIONS.

``To request funds under this part, the chief executive or
the chief justice of a State, or the chief executive or chief
judge of a unit of local government or Indian tribe shall
submit an application to the Attorney General in such form
and containing such information as the Attorney General may
reasonably require.

``SEC. 2981. FEDERAL SHARE.

``(a) In General.--The Federal share of a grant made under
this part may not exceed 75 percent of the total costs of the
program described in the application submitted under section
2605 for the fiscal year for which the program receives
assistance under this part.
``(b) Waiver.--The Attorney General may waive, in whole or
in part, the requirement of a matching contribution under
subsection (a).
``(c) In-Kind Contributions.--In-kind contributions may
constitute a portion of the non-Federal share of a grant
under this part.

``SEC. 2982. DISTRIBUTION OF FUNDS.

``(a) Geographical Distribution.--The Attorney General
shall ensure that, to the extent practicable, an equitable
geographic distribution of grant awards is made.
``(b) Indian Tribes.--The Attorney General shall allocate
0.75 percent of amounts made available under this subtitle
for grants to Indian tribes.

``SEC. 2983. REPORT.

``A State, Indian tribe, or unit of local government that
receives funds under this part during a fiscal year shall
submit to the Attorney General, in March of the year
following receipt of a grant under this part, a report
regarding the effectiveness of programs established pursuant
to this part.

``SEC. 2984. TECHNICAL ASSISTANCE, TRAINING, AND EVALUATION.

``(a) Technical Assistance and Training.--The Attorney
General may provide technical assistance and training in
furtherance of the purposes of this part.
``(b) Evaluations.--In addition to any evaluation
requirements that may be prescribed for grantees, the
Attorney General may carry out or make arrangements for
evaluations of programs that receive support under this part.
``(c) Administration.--The technical assistance, training,
and evaluations authorized by this section may be carried out
directly by the Attorney General, in collaboration with the
Secretary of Health and Human Services, or through grants,
contracts, or other cooperative arrangements with other
entities.

``SEC. 2985. UNAWARDED FUNDS.

``The Attorney General may reallocate any grant funds that
are not awarded for juvenile drug courts under this part for
use for other juvenile delinquency and crime prevention
initiatives.

``SEC. 2986. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this
part from the Violent Crime Reduction Trust Fund--
``(1) such sums as may be necessary for each of fiscal
years 2002 and 2003;
``(2) $50,000,000 for fiscal year 2004; and
``(3) $50,000,000 for fiscal year 2005.''.

PART 2--ZERO TOLERANCE DRUG TESTING

SEC. 4121. GRANT AUTHORITY.

The Attorney General may make grants to States and units of
local government, State courts, local courts, and Indian
tribal governments, acting directly or through agreements
with other public or private entities, for programs that
support--
(1) developing and/or implementing comprehensive drug
testing policies and practices with regard to criminal
justice populations; and
(2) establishing appropriate interventions to illegal drug
use for offender populations. Applicants may choose to submit
joint proposals with other eligible criminal justice/court
agencies for systemic drug testing and intervention programs;
in this case, one organization must be designated as the
primary applicant.

[[Page S201]]

SEC. 4122. ADMINISTRATION.

(a) Consultation/Coordination.--In carrying out section
4121, the Attorney General shall coordinate with the other
Justice Department initiatives that address drug testing and
interventions in the criminal justice system.
(b) Guidelines.--The Attorney General may issue guidelines
necessary to carry out section 4121.
(c) Applications.--In addition to any other requirements
that may be specified by the Attorney General, an application
for a grant under section 4121 shall--
(1) reflect a comprehensive approach that recognizes the
importance of collaboration and a continuum of testing,
treatment, and other interventions;
(2) include a long-term strategy and detailed
implementation plan;
(3) address the applicant's capability to continue the
proposed program following the conclusion of Federal support;
(4) identify related governmental or community initiatives
which complement or will be coordinated with the proposal;
(5) certify that there has been appropriate consultation
with affected agencies and key stakeholders throughout the
criminal justice system and that there will be continued
coordination throughout the implementation of the program;
and
(6) describe the methodology that will be used in
evaluating the program.

SEC. 4123. APPLICATIONS.

To request funds under section 4121, interested applicants
shall submit an application to the Attorney General in such
form and containing such information as the Attorney General
may reasonably require. Federal funding shall be awarded on a
competitive basis based on criteria established by the
Attorney General and specified in program guidelines.

SEC. 4124. FEDERAL SHARE.

The Federal share of a grant made under section 4121 may
not exceed 75 percent of the total cost of the program
described in the application submitted for the fiscal year
for which the program receives assistance under section 4121,
unless the Attorney General waives, wholly or in part, the
requirement of a matching contribution under this section.
In-kind contributions may constitute a portion of the non-
federal share of a grant.

SEC. 4125. GEOGRAPHIC DISTRIBUTION.

The Attorney General shall ensure that, to the extent
practicable, an equitable geographic distribution of grant
awards under section 4121 is made, with rural and tribal
jurisdiction representation.

SEC. 4126. TECHNICAL ASSISTANCE, TRAINING, AND EVALUATION.

(a) Technical Assistance and Training.--The Attorney
General shall provide technical assistance and training in
furtherance of the purposes of section 4121.
(b) Evaluation.--In addition to any evaluation requirements
that may be prescribed for grantees, the Attorney General may
carry out or make arrangements for a rigorous evaluation of
the programs that receive support under section 4121.
(c) Administration.--The technical assistance, training,
and evaluations authorized by this section may be carried out
directly by the Attorney General or through grants,
contracts, or cooperative agreements with other entities.

SEC. 4127. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out
sections 4122 through 4126 $75,000,000 for fiscal year 2002
and such sums as may be necessary for fiscal years 2003
through 2006.

SEC. 4128. PERMANENT SET-ASIDE FOR RESEARCH AND EVALUATION.

The Attorney General shall reserve not less than 1 percent
and no more than 3 percent of the sums appropriated under
section 4127 in each fiscal year for research and evaluation
of this program.

SEC. 4129. ADDITIONAL REQUIREMENTS FOR THE USE OF FUNDS UNDER
THE VIOLENT OFFENDER INCARCERATION AND TRUTH-
IN-SENTENCING GRANT PROGRAMS.

Section 20105(b) of the Violent Crime Control and Law
Enforcement Act of 1994 (42 U.S.C. 13705(b)) is amended to
read as follows:
``(b) Additional Requirements.--
``(1) Eligibility for grant.--To be eligible to receive a
grant under section 20103 or section 20104, a State shall--
``(A) provide assurances to the Attorney General that the
State has implemented or will implement not later than 18
months after the date of the enactment of this subtitle,
policies that provide for the recognition of the rights of
crime victims; and
``(B) no later than September 1, 2002, have a program of
drug testing and intervention for appropriate categories of
convicted offenders during periods of incarceration and
criminal justice supervision, with sanctions including denial
or revocation of release for positive drug tests, consistent
with guidelines issued by the Attorney General.
``(2) Use of funds.--Funds provided under section 20103 or
section 20104 of this subtitle may be applied to the cost of
offender drug testing and appropriate intervention programs
during periods of incarceration and criminal justice
supervision, consistent with guidelines issued by the
Attorney General. Further, such funds may be used by the
States to pay the costs of providing to the Attorney
General a baseline study on their prison drug abuse
problem. Such studies shall be consistent with guidelines
issued by the Attorney General.
``(3) System of sanctions and penalties.--Beginning in
fiscal year 2002, and thereafter, States receiving funds
pursuant to section 20103 or section 20104 of this subtitle
shall have a system of sanctions and penalties that address
drug trafficking within and into correctional facilities
under their jurisdiction. Such systems shall be in accordance
with guidelines issued by the Attorney General. Beginning in
fiscal year 2002, and each year thereafter, any State that
the Attorney General determines not to be in compliance with
the provisions of this paragraph shall have the funds it
would have otherwise been eligible to receive under section
20103 or section 20104 reduced by 10 percent for each fiscal
year for which the Attorney General determines it does not
comply. Any funds that are not allocated for failure to
comply with this section shall be reallocated to States that
comply with this section.''.

PART 3--DRUG TREATMENT

SEC. 4131. DRUG TREATMENT ALTERNATIVE TO PRISON PROGRAMS
ADMINISTERED BY STATE OR LOCAL PROSECUTORS.

(a) Prosecution Drug Treatment Alternative to Prison
Programs.--Title I of the Omnibus Crime Control and Safe
Streets Act of 1968 (42 U.S.C. 3711 et seq.) is amended by
adding at the end the following new part:

``PART CC--PROSECUTION DRUG TREATMENT ALTERNATIVE TO PRISON PROGRAMS

``SEC. 2901. PROGRAM AUTHORIZED.

``(a) In General.--The Attorney General may make grants to
State or local prosecutors for the purpose of developing,
implementing, or expanding drug treatment alternative to
prison programs that comply with the requirements of this
part.
``(b) Use of Funds.--A State or local prosecutor who
receives a grant under this part shall use amounts provided
under the grant to develop, implement, or expand the drug
treatment alternative to prison program for which the grant
was made, which may include payment of the following
expenses:
``(1) Salaries, personnel costs, equipment costs, and other
costs directly related to the operation of the program,
including the enforcement unit.
``(2) Payments to licensed substance abuse treatment
providers for providing treatment to offenders participating
in the program for which the grant was made, including
aftercare supervision, vocational training, education, and
job placement.
``(3) Payments to public and nonprofit private entities for
providing treatment to offenders participating in the program
for which the grant was made.
``(c) Federal Share.--The Federal share of a grant under
this part shall not exceed 75 percent of the cost of the
program.
``(d) Supplement and Not Supplant.--Grant amounts received
under this part shall be used to supplement, and not
supplant, non-Federal funds that would otherwise be available
for activities funded under this part.

``SEC. 2902. PROGRAM REQUIREMENTS.

``A drug treatment alternative to prison program with
respect to which a grant is made under this part shall comply
with the following requirements:
``(1) A State or local prosecutor shall administer the
program.
``(2) An eligible offender may participate in the program
only with the consent of the State or local prosecutor.
``(3) Each eligible offender who participates in the
program shall, as an alternative to incarceration, be
sentenced to or placed with a long term, drug free
residential substance abuse treatment provider that is
licensed under State or local law.
``(4) Each eligible offender who participates in the
program shall serve a sentence of imprisonment with respect
to the underlying crime if that offender does not
successfully complete treatment with the residential
substance abuse provider.
``(5) Each residential substance abuse provider treating an
offender under the program shall--
``(A) make periodic reports of the progress of treatment of
that offender to the State or local prosecutor carrying out
the program and to the appropriate court in which the
defendant was convicted; and
``(B) notify that prosecutor and that court if that
offender absconds from the facility of the treatment provider
or otherwise violates the terms and conditions of the
program.
``(6) The program shall have an enforcement unit comprised
of law enforcement officers under the supervision of the
State or local prosecutor carrying out the program, the
duties of which shall include verifying an offender's
addresses and other contacts, and, if necessary, locating,
apprehending, and arresting an offender who has absconded
from the facility of a residential substance abuse treatment
provider or otherwise violated the terms and conditions of
the program, and returning such offender to court for
sentence on the underlying crime.

``SEC. 2903. APPLICATIONS.

``(a) In General.--To request a grant under this part, a
State or local prosecutor shall submit an application to the
Attorney General in such form and containing such information
as the Attorney General may reasonably require.
``(b) Certifications.--Each such application shall contain
the certification of the State or local prosecutor that the
program for which the grant is requested shall meet each of
the requirements of this part.

``SEC. 2904. GEOGRAPHIC DISTRIBUTION.

``The Attorney General shall ensure that, to the extent
practicable, the distribution of

[[Page S202]]

grant awards is equitable and includes State or local
prosecutors--
``(1) in each State; and
``(2) in rural, suburban, and urban jurisdictions.

``SEC. 2905. REPORTS AND EVALUATIONS.

``For each fiscal year, each recipient of a grant under
this part during that fiscal year shall submit to the
Attorney General a report regarding the effectiveness of
activities carried out using that grant. Each report shall
include an evaluation in such form and containing such
information as the Attorney General may reasonably require.
The Attorney General shall specify the dates on which such
reports shall be submitted.

``SEC. 2906. DEFINITIONS.

``In this part:
``(1) Eligible offender.--The term `eligible offender'
means an individual who--
``(A) has been convicted of, or pled guilty to, or admitted
guilt with respect to a crime for which a sentence of
imprisonment is required and has not completed such sentence;
``(B) has never been convicted of, or pled guilty to, or
admitted guilt with respect to, and is not presently charged
with, a felony crime of violence or a major drug offense or a
crime that is considered a violent felony under State or
local law; and
``(C) has been found by a professional substance abuse
screener to be in need of substance abuse treatment because
that offender has a history of substance abuse that is a
significant contributing factor to that offender's criminal
conduct.
``(2) Felony crime of violence.--The term `felony crime of
violence' has the meaning given such term in section
924(c)(3) of title 18, United States Code.
``(3) Major drug offense.--The term `major drug offense'
has the meaning given such term in section 36(a) of title 18,
United States Code.
``(4) State or local prosecutor.--The term `State or local
prosecutor' means any district attorney, State attorney
general, county attorney, or corporation counsel who has
authority to prosecute criminal offenses under State or local
law.''.
(b) Authorization of Appropriations.--Section 1001(a) of
title I of the Omnibus Crime Control and Safe Street Act of
1968 (42 U.S.C. 3793(a)) is amended by adding at the end the
following new paragraph:
``(24) There are authorized to be appropriated to carry out
part CC--
``(A) $75,000,000 for fiscal year 2002;
``(B) $85,000,000 for fiscal year 2003;
``(C) $95,000,000 for fiscal year 2004;
``(D) $105,000,000 for fiscal year 2005; and
``(E) $125,000,000 for fiscal year 2006.''.

SEC. 4132. SUBSTANCE ABUSE TREATMENT IN FEDERAL PRISONS
REAUTHORIZATION.

Section 3621(e)(4) of title 18, United States Code, is
amended by striking subparagraph (E) and inserting the
following:
``(E) $31,000,000 for fiscal year 2002; and
``(F) $38,000,000 for fiscal year 2003.''.

SEC. 4133. RESIDENTIAL SUBSTANCE ABUSE TREATMENT FOR STATE
PRISONERS REAUTHORIZATION

(a) Reauthorization.--Paragraph (17) of section 1001(a) of
title I of the Omnibus Crime Control and Safe Streets Act of
1968 (42 U.S.C. 3793(a)(17)) is amended to read as follows:
``(17) There are authorized to be appropriated to carry out
part S $100,000,000 for fiscal year 2002 and such sums as may
be necessary for fiscal years 2003 through 2007.''.
(b) Use of Residential Substance Abuse Treatment Grants to
Provide For Services During and After Incarceration.--Section
1901 of title I of the Omnibus Crime Control and Safe Streets
Act of 1968 (42 U.S.C. 3796ff) is amended by adding at the
end the following:
``(c) Additional Use of Funds.--States that demonstrate
that they have existing in-prison drug treatment programs
that are in compliance with Federal requirements may use
funds awarded under this part for treatment and sanctions
both during incarceration and after release.''.

SEC. 4134. DRUG TREATMENT FOR JUVENILES.

Title V of the Public Health Service Act (42 U.S.C. 290aa
et seq.) is amended by adding at the end the following:

``PART G--RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES

``SEC. 575. RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES.

``(a) In General.--The Director of the Center for Substance
Abuse Treatment shall award grants to, or enter into
cooperative agreements or contracts, with public and
nonprofit private entities for the purpose of providing
treatment to juveniles for substance abuse through programs
in which, during the course of receiving such treatment the
juveniles reside in facilities made available by the
programs.
``(b) Availability of Services for Each Participant.--A
funding agreement for an award under subsection (a) for an
applicant is that, in the program operated pursuant to such
subsection--
``(1) treatment services will be available through the
applicant, either directly or through agreements with other
public or nonprofit private entities; and
``(2) the services will be made available to each person
admitted to the program.
``(c) Individualized Plan of Services.--A funding agreement
for an award under subsection (a) for an applicant is that--
``(1) in providing authorized services for an eligible
person pursuant to such subsection, the applicant will, in
consultation with the juvenile and, if appropriate the parent
or guardian of the juvenile, prepare an individualized plan
for the provision to the juvenile or young adult of the
services; and
``(2) treatment services under the plan will include--
``(A) individual, group, and family counseling, as
appropriate, regarding substance abuse; and
``(B) followup services to assist the juvenile or young
adult in preventing a relapse into such abuse.
``(d) Eligible Supplemental Services.--Grants under
subsection (a) may be used to provide an eligible juvenile,
the following services:
``(1) Hospital referrals.--Referrals for necessary hospital
services.
``(2) HIV and aids counseling.--Counseling on the human
immunodeficiency virus and on acquired immune deficiency
syndrome.
``(3) Domestic violence and sexual abuse counseling.--
Counseling on domestic violence and sexual abuse.
``(4) Preparation for reentry into society.--Planning for
and counseling to assist reentry into society, both before
and after discharge, including referrals to any public or
nonprofit private entities in the community involved that
provide services appropriate for the juvenile.
``(e) Minimum Qualifications for Receipt of Award.--
``(1) Certification by relevant state agency.--With respect
to the principal agency of a State or Indian tribe that
administers programs relating to substance abuse, the
Director may award a grant to, or enter into a cooperative
agreement or contract with, an applicant only if the agency
or Indian tribe has certified to the Director that--
``(A) the applicant has the capacity to carry out a program
described in subsection (a);
``(B) the plans of the applicant for such a program are
consistent with the policies of such agency regarding the
treatment of substance abuse; and
``(C) the applicant, or any entity through which the
applicant will provide authorized services, meets all
applicable State licensure or certification requirements
regarding the provision of the services involved.
``(2) Status as medicaid provider.--
``(A) In general.--Subject to subparagraphs (B) and (C),
the Director may make a grant, or enter into a cooperative
agreement or contract, under subsection (a) only if, in the
case of any authorized service that is available pursuant to
the State plan approved under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) for the State
involved--
``(i) the applicant for the grant, cooperative agreement,
or contract will provide the service directly, and the
applicant has entered into a participation agreement under
the State plan and is qualified to receive payments under
such plan; or
``(ii) the applicant will enter into an agreement with a
public or nonprofit private entity under which the entity
will provide the service, and the entity has entered into
such a participation agreement plan and is qualified to
receive such payments.
``(B) Services.--
``(i) In general.--In the case of an entity making an
agreement pursuant to subparagraph (A)(ii) regarding the
provision of services, the requirement established in such
subparagraph regarding a participation agreement shall be
waived by the Director if the entity does not, in providing
health care services, impose a charge or accept reimbursement
available from any third party payor, including reimbursement
under any insurance policy or under any Federal or State
health benefits plan.
``(ii) Voluntary donations.--A determination by the
Director of whether an entity referred to in clause (i) meets
the criteria for a waiver under such clause shall be made
without regard to whether the entity accepts voluntary
donations regarding the provision of services to the public.
``(C) Mental diseases.--
``(i) In general.--With respect to any authorized service
that is available pursuant to the State plan described in
subparagraph (A), the requirements established in such
subparagraph shall not apply to the provision of any such
service by an institution for mental diseases to an
individual who has attained 21 years of age and who has not
attained 65 years of age.
``(ii) Definition of institution for mental diseases.--In
this subparagraph, the term `institution for mental diseases'
has the same meaning as in section 1905(i) of the Social
Security Act (42 U.S.C. 1396d(i)).
``(f) Requirements for Matching Funds.--
``(1) In general.--With respect to the costs of the program
to be carried out by an applicant pursuant to subsection (a),
a funding agreement for an award under such subsection is
that the applicant will make available (directly or through
donations from public or private entities) non-Federal
contributions toward such costs in an amount that--
``(A) for the first fiscal year for which the applicant
receives payments under an award under such subsection, is
not less than $1 for each $9 of Federal funds provided in the
award;
``(B) for any second such fiscal year, is not less than $1
for each $9 of Federal funds provided in the award; and

[[Page S203]]

``(C) for any subsequent such fiscal year, is not less than
$1 for each $3 of Federal funds provided in the award.
``(2) Determination of amount contributed.--Non-Federal
contributions required in paragraph (1) may be in cash or in
kind, fairly evaluated, including plant, equipment, or
services. Amounts provided by the Federal Government, or
services assisted or subsidized to any significant extent by
the Federal Government, may not be included in determining
the amount of such non-Federal contributions.
``(g) Outreach.--A funding agreement for an award under
subsection (a) for an applicant is that the applicant will
provide outreach services in the community involved to
identify juveniles who are engaging in substance abuse and to
encourage the juveniles to undergo treatment for such abuse.
``(h) Accessibility of Program.--A funding agreement for an
award under subsection (a) for an applicant is that the
program operated pursuant to such subsection will be operated
at a location that is accessible to low income juveniles.
``(i) Continuing Education.--A funding agreement for an
award under subsection (a) is that the applicant involved
will provide for continuing education in treatment services
for the individuals who will provide treatment in the program
to be operated by the applicant pursuant to such subsection.
``(j) Imposition of Charges.--A funding agreement for an
award under subsection (a) for an applicant is that, if a
charge is imposed for the provision of authorized services to
or on behalf of an eligible juvenile, such charge--
``(1) will be made according to a schedule of charges that
is made available to the public;
``(2) will be adjusted to reflect the economic condition of
the juvenile involved; and
``(3) will not be imposed on any such juvenile whose family
has an income of less than 185 percent of the official
poverty line, as established by the Director of the Office
for Management and Budget and revised by the Secretary in
accordance with section 673(2) of the Omnibus Budget
Reconciliation Act of 1981 (42 U.S.C. 9902(2)).
``(k) Reports to Director.--A funding agreement for an
award under subsection (a) is that the applicant involved
will submit to the Director a report--
``(1) describing the utilization and costs of services
provided under the award;
``(2) specifying the number of juveniles served, and the
type and costs of services provided; and
``(3) providing such other information as the Director
determines to be appropriate.
``(l) Requirement of Application.--The Director may make an
award under subsection (a) only if an application for the
award is submitted to the Director containing such
agreements, and the application is in such form, is made in
such manner, and contains such other agreements and such
assurances and information as the Director determines to be
necessary to carry out this section.
``(m) Equitable Allocation of Awards.--In making awards
under subsection (a), the Director shall ensure that the
awards are equitably allocated among the principal geographic
regions of the United States, as well as among Indian tribes,
subject to the availability of qualified applicants for the
awards.
``(n) Duration of Award.--
``(1) In general.--The period during which payments are
made to an entity from an award under this section may not
exceed 5 years.
``(2) Approval of director.--The provision of payments
described in paragraph (1) shall be subject to--
``(A) annual approval by the Director of the payments; and
``(B) the availability of appropriations for the fiscal
year at issue to make the payments.
``(3) No limitation.--This subsection may not be construed
to establish a limitation on the number of awards that may be
made to an entity under this section.
``(o) Evaluations; Dissemination of Findings.--The Director
shall, directly or through contract, provide for the conduct
of evaluations of programs carried out pursuant to subsection
(a). The Director shall disseminate to the States the
findings made as a result of the evaluations.
``(p) Reports to Congress.--
``(1) Initial report.--Not later than October 1, 2002, the
Director shall submit to the Committee on the Judiciary of
the House of Representatives, and to the Committee on the
Judiciary of the Senate, a report describing programs carried
out pursuant to this section.
``(2) Periodic reports.--
``(A) In general.--Not less than biennially after the date
described in paragraph (1), the Director shall prepare a
report describing programs carried out pursuant to this
section during the preceding 2-year period, and shall submit
the report to the Administrator for inclusion in the biennial
report under section 501(k).
``(B) Summary.--Each report under this subsection shall
include a summary of any evaluations conducted under
subsection (m) during the period with respect to which the
report is prepared.
``(q) Definitions.--In this section:
``(1) Authorized services.--The term `authorized services'
means treatment services and supplemental services.
``(2) Juvenile.--The term `juvenile' means anyone 18 years
of age or younger at the time that of admission to a program
operated pursuant to subsection (a).
``(3) Eligible juvenile.--The term `eligible juvenile'
means a juvenile who has been admitted to a program operated
pursuant to subsection (a).
``(4) Funding agreement under subsection (a).--The term
`funding agreement under subsection (a)', with respect to an
award under subsection (a), means that the Director may make
the award only if the applicant makes the agreement involved.
``(5) Treatment services.--The term `treatment services'
means treatment for substance abuse, including the counseling
and services described in subsection (c)(2).
``(6) Supplemental services.--The term `supplemental
services' means the services described in subsection (d).
``(r) Authorization of Appropriations.--
``(1) In general.--For the purpose of carrying out this
section and section 576 there is authorized to be
appropriated such sums as may be necessary for fiscal years
2002 and 2003. There is authorized to be appropriated from
the Violent Crime Reduction Trust Fund $300,000,000 in each
of fiscal years 2004 and 2005.
``(2) Transfer.--For the purpose described in paragraph
(1), in addition to the amounts authorized in such paragraph
to be appropriated for a fiscal year, there is authorized to
be appropriated for the fiscal year from the special
forfeiture fund of the Director of the Office of National
Drug Control Policy such sums as may be necessary.
``(3) Rule of construction.--The amounts authorized in this
subsection to be appropriated are in addition to any other
amounts that are authorized to be appropriated and are
available for the purpose described in paragraph (1).

``SEC. 576. OUTPATIENT TREATMENT PROGRAMS FOR JUVENILES.

``(a) Grants.--The Secretary of Health and Human Services,
acting through the Director of the Center for Substance Abuse
Treatment, shall make grants to establish projects for the
outpatient treatment of substance abuse among juveniles.
``(b) Prevention.--Entities receiving grants under this
section shall engage in activities to prevent substance abuse
among juveniles.
``(c) Evaluation.--The Secretary of Health and Human
Services shall evaluate projects carried out under subsection
(a) and shall disseminate to appropriate public and private
entities information on effective projects.''.

PART 4--FUNDING FOR DRUG-FREE COMMUNITY PROGRAMS

SEC. 4141. EXTENSION OF SAFE AND DRUG-FREE SCHOOLS AND
COMMUNITIES PROGRAM.

Title IV of the Elementary and Secondary Education Act (20
U.S.C. 7104) is amended to read as follows:

``TITLE IV--AUTHORIZATIONS

``SEC. 4001. AUTHORIZATION OF APPROPRIATIONS.

``There is authorized to be appropriated for State grants
under subpart 1 and national programs under subpart 2,
$655,000,000 for fiscal years 2002 and 2003, and $955,000,000
for fiscal years 2004 through 2005, of which the following
amounts may be appropriated from the Violent Crime Reduction
Trust Fund:
``(1) $300,000,000 for fiscal year 2004; and
``(2) $300,000,000 for fiscal year 2005.''.

SEC. 4142. SAY NO TO DRUGS COMMUNITY CENTERS.

(a) Short Title.--This section may be cited as the ``Say No
to Drugs Community Centers Act of 2001''.
(b) Definitions.--In this section--
(1) Community-based organization.--The term ``community-
based organization'' means a private, locally initiated
organization that--
(A) is a nonprofit organization, as that term is defined in
section 103(23) of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5603(23)); and
(B) involves the participation, as appropriate, of members
of the community and community institutions, including--
(i) business and civic leaders actively involved in
providing employment and business development opportunities
in the community;
(ii) educators;
(iii) religious organizations (which shall not provide any
sectarian instruction or sectarian worship in connection with
program activities funded under this subtitle);
(iv) law enforcement agencies; and
(v) other interested parties.
(2) Eligible community.--The term ``eligible community''
means a community--
(A) identified by an eligible recipient for assistance
under this subtitle; and
(B) an area that meets such criteria as the Attorney
General may, by regulation, establish, including criteria
relating to poverty, juvenile delinquency, and crime.
(3) Eligible recipient.--The term ``eligible recipient''
means a community-based organization or public school that
has--
(A) been approved for eligibility by the Attorney General,
upon application submitted to the Attorney General in
accordance with subsection (e); and
(B) demonstrated that the projects and activities it seeks
to support in an eligible community involve the
participation, when feasible and appropriate, of--
(i) parents, family members, and other members of the
eligible community;

[[Page S204]]

(ii) civic and religious organizations serving the eligible
community;
(iii) school officials and teachers employed at schools
located in the eligible community;
(iv) public housing resident organizations in the eligible
community; and
(v) public and private nonprofit organizations and
organizations serving youth that provide education, child
protective services, or other human services to low income,
at-risk youth and their families.
(4) Poverty line.--The term ``poverty line'' means the
income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance
with section 673(2) of the Community Services Block Grant Act
(42 U.S.C. 9902(2)) applicable to a family of the size
involved.
(5) Public school.--The term ``public school'' means a
public elementary school, as defined in section 1201(i) of
the Higher Education Act of 1965 (20 U.S.C. 1141(i)), and a
public secondary school, as defined in section 1201(d) of
that Act (42 U.S.C. 1141(d)).
(c) Grant Requirements.--The Attorney General may make
grants to eligible recipients, which grants may be used to
provide to youth living in eligible communities during after
school hours or summer vacations, the following services:
(1) Rigorous drug prevention education.
(2) Drug counseling and treatment.
(3) Academic tutoring and mentoring.
(4) Activities promoting interaction between youth and law
enforcement officials.
(5) Vaccinations and other basic preventive health care.
(6) Sexual abstinence education.
(7) Other activities and instruction to reduce youth
violence and substance abuse.
(d) Location and Use of Amounts.--An eligible recipient
that receives a grant under this section--
(1) shall ensure that the stated program is carried out--
(A) when appropriate, in the facilities of a public school
during nonschool hours; or
(B) in another appropriate local facility that is--
(i) in a location easily accessible to youth in the
community; and
(ii) in compliance with all applicable State and local
ordinances;
(2) shall use the grant amounts to provide to youth in the
eligible community services and activities that include
extracurricular and academic programs that are offered--
(A) after school and on weekends and holidays, during the
school year; and
(B) as daily full day programs (to the extent available
resources permit) or as part day programs, during the summer
months;
(3) shall use not more than 5 percent of the amounts to pay
for the administrative costs of the program;
(4) shall not use such amounts to provide sectarian worship
or sectarian instruction; and
(5) may not use the amounts for the general operating costs
of public schools.
(e) Applications.--
(1) In general.--Each application to become an eligible
recipient shall be submitted to the Attorney General at such
time, in such manner, and accompanied by such information, as
the Attorney General may reasonably require.
(2) Contents of application.--Each application submitted
pursuant to paragraph (1) shall--
(A) describe the activities and services to be provided
through the program for which the grant is sought;
(B) contain a comprehensive plan for the program that is
designed to achieve identifiable goals for youth in the
eligible community;
(C) describe in detail the drug education and drug
prevention programs that will be implemented;
(D) specify measurable goals and outcomes for the program
that will include--
(i) reducing the percentage of youth in the eligible
community that enter the juvenile justice system or become
addicted to drugs;
(ii) increasing the graduation rates, school attendance,
and academic success of youth in the eligible community; and
(iii) improving the skills of program participants;
(E) contain an assurance that the applicant will use grant
amounts received under this subtitle to provide youth in the
eligible community with activities and services consistent
with subsection (c);
(F) demonstrate the manner in which the applicant will make
use of the resources, expertise, and commitment of private
entities in carrying out the program for which the grant is
sought;
(G) include an estimate of the number of youth in the
eligible community expected to be served under the program;
(H) include a description of charitable private resources,
and all other resources, that will be made available to
achieve the goals of the program;
(I) contain an assurance that the applicant will comply
with any research effort authorized under Federal law, and
any investigation by the Attorney General;
(J) contain an assurance that the applicant will prepare
and submit to the Attorney General an annual report regarding
any program conducted under this subtitle;
(K) contain an assurance that the program for which the
grant is sought will, to the maximum extent practicable,
incorporate services that are provided solely through non-
Federal private or nonprofit sources; and
(L) contain an assurance that the applicant will maintain
separate accounting records for the program for which the
grant is sought.
(3) Priority.--In determining eligibility under this
section, the Attorney General shall give priority to
applicants that submit applications that demonstrate the
greatest local support for the programs they seek to support.
(f) Payments; Federal Share; Non-Federal Share.--
(1) Payments.--The Attorney General shall, subject to the
availability of appropriations, provide to each eligible
recipient the Federal share of the costs of developing and
carrying out programs described in this section.
(2) Federal share.--The Federal share of the cost of a
program under this subtitle shall be not more than--
(A) 75 percent of the total cost of the program for each of
the first 2 years of the duration of a grant;
(B) 70 percent of the total cost of the program for the
third year of the duration of a grant; and
(C) 60 percent of the total cost of the program for each
year thereafter.
(3) Non-federal share.--
(A) In general.--The non-Federal share of the cost of a
program under this subtitle may be in cash or in kind, fairly
evaluated, including plant, equipment, and services. Federal
funds made available for the activity of any agency of an
Indian tribal government or the Bureau of Indian Affairs on
any Indian lands may be used to provide the non-Federal share
of the costs of programs or projects funded under this
subtitle.
(B) Special rule.--Not less than 15 percent of the non-
Federal share of the costs of a program under this subtitle
shall be provided from private or nonprofit sources.
(g) Program Authority.--
(1) In general.--
(A) Allocations for states and indian tribes.--
(i) In general.--In any fiscal year in which the total
amount made available to carry out this subtitle is equal to
or greater than $20,000,000, from the amount made available
to carry out this subtitle, the Attorney General shall
allocate not less than 0.75 percent for grants under
subparagraph (B) to eligible recipients in each State.
(ii) Indian tribes.--The Attorney General shall allocate
0.75 percent of amounts made available under this subtitle
for grants to Indian tribes.
(B) Grants to community-based organizations and public
schools from allocations.--For each fiscal year described in
subparagraph (A), the Attorney General may award grants from
the appropriate State or Indian tribe allocation determined
under subparagraph (A) on a competitive basis to eligible
recipients to pay for the Federal share of assisting eligible
communities to develop and carry out programs in accordance
with this subtitle.
(C) Reallocation.--If, at the end of a fiscal year
described in subparagraph (A), the Attorney General
determines that amounts allocated for a particular State or
Indian tribe under subparagraph (B) remain unobligated, the
Attorney General shall use such amounts to award grants to
eligible recipients in another State or Indian tribe to pay
for the Federal share of assisting eligible communities to
develop and carry out programs in accordance with this
subtitle. In awarding such grants, the Attorney General shall
consider the need to maintain geographic diversity among
eligible recipients.
(D) Availability of amounts.--Amounts made available under
this paragraph shall remain available until expended.
(2) Other fiscal years.--In any fiscal year in which the
amount made available to carry out this subtitle is equal to
or less than $20,000,000, the Attorney General may award
grants on a competitive basis to eligible recipients to pay
for the Federal share of assisting eligible communities to
develop and carry out programs in accordance with this
subtitle.
(3) Administrative costs.--The Attorney General may use not
more than 3 percent of the amounts made available to carry
out this subtitle in any fiscal year for administrative
costs, including training and technical assistance.
(h) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section from the Violent
Crime Reduction Trust Fund--
(1) for fiscal year 2002, $125,000,000; and
(2) for fiscal year 2003, $125,000,000.

SEC. 4143. DRUG EDUCATION AND PREVENTION RELATING TO YOUTH
GANGS.

Section 3505 of the Anti-Drug Abuse Act of 1988 (42 U.S.C.
11805) is amended to read as follows:

``SEC. 3505. AUTHORIZATION OF APPROPRIATIONS.

``There is authorized to be appropriated to carry out this
chapter such sums as may be necessary for each of fiscal
years 2002, 2003, 2004, 2005, and 2006.''.

SEC. 4144. DRUG EDUCATION AND PREVENTION PROGRAM FOR RUNAWAY
AND HOMELESS YOUTH.

Section 3513 of the Anti-Drug Abuse Act of 1988 (42 U.S.C.
11823) is amended to read as follows:

``SEC. 3513. AUTHORIZATION OF APPROPRIATIONS.

``There is authorized to be appropriated to carry out this
chapter such sums as may be necessary for each of fiscal
years 2002, 2003, 2004, 2005, and 2006.''.

[[Page S205]]

Subtitle B--Youth Crime Prevention and Juvenile Courts

PART 1--GRANTS TO YOUTH ORGANIZATIONS

SEC. 4211. GRANT PROGRAM.

The Attorney General may make grants to States, Indian
tribes, and national or statewide nonprofit organizations in
crime prone areas, such as Boys and Girls Clubs, Police
Athletic Leagues, 4-H Clubs, YMCA Big Brothers and Big
Sisters, and Kids 'N Kops programs, for the purpose of--
(1) providing constructive activities to youth during after
school hours, weekends, and school vacations;
(2) providing supervised activities in safe environments to
youth in crime prone areas;
(3) providing antidrug education to prevent drug abuse
among youth;
(4) supporting police officer training and salaries and
educational materials to expand D.A.R.E. America's middle
school campaign; or
(5) providing constructive activities to youth in a safe
environment through parks and other public recreation areas.

SEC. 4212. GRANTS TO NATIONAL ORGANIZATIONS.

(a) Applications.--
(1) Eligibility.--In order to be eligible to receive a
grant under this section, the chief operating officer of a
national or statewide community-based organization shall
submit an application to the Attorney General in such form
and containing such information as the Attorney General may
reasonably require.
(2) Application requirements.--Each application submitted
in accordance with paragraph (1) shall include--
(A) a request for a grant to be used for the purposes
described in this subtitle;
(B) a description of the communities to be served by the
grant, including the nature of juvenile crime, violence, and
drug use in the communities;
(C) written assurances that Federal funds received under
this subtitle will be used to supplement and not supplant,
non-Federal funds that would otherwise be available for
activities funded under this subtitle;
(D) written assurances that all activities will be
supervised by an appropriate number of responsible adults;
(E) a plan for assuring that program activities will take
place in a secure environment that is free of crime and
drugs; and
(F) any additional statistical or financial information
that the Attorney General may reasonably require.
(b) Grant Awards.--In awarding grants under this section,
the Attorney General shall consider--
(1) the ability of the applicant to provide the stated
services;
(2) the history and establishment of the applicant in
providing youth activities on a national or statewide basis;
and
(3) the extent to which the organizations shall achieve an
equitable geographic distribution of the grant awards.

SEC. 4213. GRANTS TO STATES.

(a) Applications.--
(1) In general.--The Attorney General may make grants under
this section to States for distribution to units of local
government and community-based organizations for the purposes
set forth in section 4211.
(2) Grants.--To request a grant under this section, the
chief executive of a State shall submit an application to the
Attorney General in such form and containing such information
as the Attorney General may reasonably require.
(3) Application requirements.--Each application submitted
in accordance with paragraph (2) shall include--
(A) a request for a grant to be used for the purposes
described in this subtitle;
(B) a description of the communities to be served by the
grant, including the nature of juvenile crime, violence, and
drug use in the community;
(C) written assurances that Federal funds received under
this subtitle will be used to supplement and not supplant,
non-Federal funds that would otherwise be available for
activities funded under this subtitle;
(D) written assurances that all activities will be
supervised by an appropriate number of responsible adults;
and
(E) a plan for assuring that program activities will take
place in a secure environment that is free of crime and
drugs.
(b) Grant Awards.--In awarding grants under this section,
the State shall consider--
(1) the ability of the applicant to provide the stated
services;
(2) the history and establishment of the applicant in the
community to be served;
(3) the level of juvenile crime, violence, and drug use in
the community;
(4) the extent to which structured extracurricular
activities for youth are otherwise unavailable in the
community;
(5) the need in the community for secure environments for
youth to avoid criminal victimization and exposure to crime
and illegal drugs;
(6) to the extent practicable, achievement of an equitable
geographic distribution of the grant awards; and
(7) whether the applicant has an established record of
providing extracurricular activities that are generally not
otherwise available to youth in the community.
(c) Allocation.--
(1) State allocations.--The Attorney General shall allot
not less than 0.75 percent of the total amount made available
each fiscal year to carry out this section to each State that
has applied for a grant under this section.
(2) Indian tribes.--The Attorney General shall allot not
less than 0.75 percent of the total amount made available
each fiscal year to carry out this section to Indian tribes,
in accordance with the criteria set forth in subsections (a)
and (b).
(3) Remaining amounts.--Of the amount remaining after the
allocations under paragraphs (1) and (2), the Attorney
General shall allocate to each State an amount that bears the
same ratio to the total amount of remaining funds as the
population of the State bears to the total population of all
States.

SEC. 4214. ALLOCATION; GRANT LIMITATION.

(a) Allocation.--Of amounts made available to carry out
this part--
(1) 20 percent shall be for grants to national or statewide
organizations under section 4212; and
(2) 80 percent shall be for grants to States under section
4213.
(b) Grant Limitation.--Not more than 3 percent of the funds
made available to the Attorney General or a grant recipient
under this subtitle may be used for administrative purposes.

SEC. 4215. REPORT AND EVALUATION.

(a) Report to the Attorney General.--Not later than October
1, 2002 and October 1 of each year thereafter, each grant
recipient under this subtitle shall submit to the Attorney
General a report that describes, for the year to which the
report relates--
(1) the activities provided;
(2) the number of youth participating;
(3) the extent to which the grant enabled the provision of
activities to youth that would not otherwise be available;
and
(4) any other information that the Attorney General
requires for evaluating the effectiveness of the program.
(b) Evaluation and Report to Congress.--Not later than
March 1, 2003, and March 1 of each year thereafter, the
Attorney General shall submit to Congress an evaluation and
report that contains a detailed statement regarding grant
awards, activities of grant recipients, a compilation of
statistical information submitted by grant recipients
under this part, and an evaluation of programs established
by grant recipients under this part.
(c) Criteria.--In assessing the effectiveness of the
programs established and operated by grant recipients
pursuant to this part, the Attorney General shall consider--
(1) the number of youth served by the grant recipient;
(2) the percentage of youth participating in the program
charged with acts of delinquency or crime compared to youth
in the community at large;
(3) the percentage of youth participating in the program
that uses drugs compared to youth in the community at large;
(4) the percentage of youth participating in the program
that are victimized by acts of crime or delinquency compared
to youth in the community at large; and
(5) the truancy rates of youth participating in the program
compared to youth in the community at large.
(d) Documents and Information.--Each grant recipient under
this part shall provide the Attorney General with all
documents and information that the Attorney General
determines to be necessary to conduct an evaluation of the
effectiveness of programs funded under this part.

SEC. 4216. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated to
carry out this part from the Violent Crime Reduction Trust
Fund--
(1) such sums as may be necessary for each of fiscal years
2002 and 2003; and
(2) $125,000,000 for each of fiscal years 2004 and 2005.
(b) Continued Availability.--Amounts made available under
this part shall remain available until expended.

SEC. 4217. GRANTS TO PUBLIC AND PRIVATE AGENCIES.

Title II of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5611 et seq.) is amended--
(1) by striking the first part designated as part I;
(2) by redesignating the second part designated as part I
as part M; and
(3) by inserting after part H the following:

``PART I--AFTER SCHOOL CRIME PREVENTION

``SEC. 291. GRANTS TO PUBLIC AND PRIVATE AGENCIES FOR
EFFECTIVE AFTER SCHOOL CRIME PREVENTION
PROGRAMS.

``(a) In General.--Subject to the availability of
appropriations, the Administrator shall make grants in
accordance with this section to public and private agencies
to fund effective after school juvenile crime prevention
programs.
``(b) Matching Requirement.--The Administrator may not make
a grant to a public or private agency under this section
unless that agency agrees that, with respect to the costs to
be incurred by the agency in carrying out the program for
which the grant is to be awarded, the agency will make
available non-Federal contributions in an amount that is not
less than a specific percentage of Federal funds provided
under the grant, as determined by the Administrator.
``(c) Priority.--In making grants under this section, the
Administrator shall give priority to funding programs that--
``(1) are targeted to high crime neighborhoods or at-risk
juveniles;

[[Page S206]]

``(2) operate during the period immediately following
normal school hours;
``(3) provide educational or recreational activities
designed to encourage law-abiding conduct, reduce the
incidence of criminal activity, and teach juveniles
alternatives to crime; and
``(4) coordinate with State or local juvenile crime control
and juvenile offender accountability programs.
``(d) Funding.--There are authorized to be appropriated for
grants under this section $250,000,000 for each of fiscal
years 2002, 2003, 2004, 2005, and 2006.''.

PART 2--REAUTHORIZATION OF INCENTIVE GRANTS FOR LOCAL DELINQUENCY
PREVENTION PROGRAMS

SEC. 4221. INCENTIVE GRANTS FOR LOCAL DELINQUENCY PREVENTION
PROGRAMS.

Section 506 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5785) is amended to read as
follows:

``SEC. 506. AUTHORIZATION OF APPROPRIATIONS.

``There is authorized to be appropriated to carry out this
title such sums as may be necessary for each of fiscal years
2002, 2003, 2004, 2005, and 2006.''.

SEC. 4222. RESEARCH, EVALUATION, AND TRAINING.

Title V of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5781 et seq.) is amended by adding at
the end the following:

``SEC. 507. RESEARCH, EVALUATION, AND TRAINING.

``Of the amounts made available by appropriations pursuant
to section 506--
``(1) 2 percent shall be used by the Administrator for
providing training and technical assistance under this title;
and
``(2) 10 percent shall be used by the Administrator for
research, statistics, and evaluation activities carried out
in conjunction with the grant programs under this title.''.

PART 3--JUMP AHEAD

SEC. 4231. SHORT TITLE.

This part may be cited as the ``JUMP Ahead Act of 2001''.

SEC. 4232. FINDINGS.

Congress finds that--
(1) millions of young people in America live in areas in
which drug use and violent and property crimes are pervasive;
(2) unfortunately, many of these same young people come
from single parent homes, or from environments in which there
is no responsible, caring adult supervision;
(3) all children and adolescents need caring adults in
their lives, and mentoring is an effective way to fill this
special need for at-risk children;
(4) the special bond of commitment fostered by the mutual
respect inherent in effective mentoring can be the tie that
binds a young person to a better future;
(5) through a mentoring relationship, adult volunteers and
participating youth make a significant commitment of time and
energy to develop relationships devoted to personal,
academic, or career development and social, artistic, or
athletic growth;
(6) rigorous independent studies have confirmed that
effective mentoring programs can significantly reduce and
prevent the use of alcohol and drugs by young people, improve
school attendance and performance, improve peer and family
and peer relationships, and reduce violent behavior;
(7) since the inception of the Federal JUMP program, dozens
of innovative, effective mentoring programs have received
funding grants;
(8) unfortunately, despite the recent growth in public and
private mentoring initiatives, it is reported that between
5,000,000 and 15,000,000 additional children in the United
States could benefit from being matched with a mentor; and
(9) although great strides have been made in reaching at-
risk youth since the inception of the JUMP program, millions
of vulnerable American children are not being reached, and
without an increased commitment to connect these young people
to responsible adult role models, our country risks losing an
entire generation to drugs, crime, and unproductive lives.

SEC. 4233. JUVENILE MENTORING GRANTS.

(a) In General.--Section 288B of the Juvenile Justice and
Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) is
amended--
(1) by inserting ``(a) In General.--'' before ``The
Administrator shall'';
(2) by striking paragraph (2) and inserting the following:
``(2) are intended to achieve 1 or more of the following
goals:
``(A) Discourage at-risk youth from--
``(i) using illegal drugs and alcohol;
``(ii) engaging in violence;
``(iii) using guns and other dangerous weapons;
``(iv) engaging in other criminal and antisocial behavior;
and
``(v) becoming involved in gangs.
``(B) Promote personal and social responsibility among at-
risk youth.
``(C) Increase at-risk youth's participation in, and
enhance the ability of those youth to benefit from,
elementary and secondary education.
``(D) Encourage at-risk youth participation in community
service and community activities.
``(E) Provide general guidance to at-risk youth.''; and
(3) by adding at the end the following:
``(b) Amount and Duration.--Each grant under this part
shall be awarded in an amount not to exceed a total of
$200,000 over a period of not more than 3 years.
``(c) Authorization of Appropriations.--There is authorized
to be appropriated $50,000,000 for each of fiscal years 2002,
2003, 2004, and 2005 to carry out this part.''.

SEC. 4234. IMPLEMENTATION AND EVALUATION GRANTS.

(a) In General.--The Administrator of the Office of
Juvenile Justice and Delinquency Prevention of the Department
of Justice may make grants to national organizations or
agencies serving youth, in order to enable those
organizations or agencies--
(1) to conduct a multisite demonstration project, involving
between 5 and 10 project sites, that--
(A) provides an opportunity to compare various mentoring
models for the purpose of evaluating the effectiveness and
efficiency of those models;
(B) allows for innovative programs designed under the
oversight of a national organization or agency serving youth,
which programs may include--
(i) technical assistance;
(ii) training; and
(iii) research and evaluation; and
(C) disseminates the results of such demonstration project
to allow for the determination of the best practices for
various mentoring programs;
(2) to develop and evaluate screening standards for
mentoring programs; and
(3) to develop and evaluate volunteer recruitment
techniques and activities for mentoring programs.
(b) Authorization of Appropriations.--There is authorized
to be appropriated $5,000,000 for each of fiscal years 2002,
2003, 2004, and 2005 to carry out this section.

SEC. 4235. EVALUATIONS; REPORTS.

(a) Evaluations.--
(1) In general.--The Attorney General shall enter into a
contract with an evaluating organization that has
demonstrated experience in conducting evaluations, for the
conduct of an ongoing rigorous evaluation of the programs and
activities assisted under this Act or under section 228B of
the Juvenile Justice and Delinquency Prevention Act of
1974 (42 U.S.C. 5667e-2) (as amended by this title).
(2) Criteria.--The Attorney General shall establish a
minimum criteria for evaluating the programs and activities
assisted under this Act or under section 228B of the Juvenile
Justice and Delinquency Prevention Act of 1974 (42 U.S.C.
5667e-2) (as amended by this title), which shall provide for
a description of the implementation of the program or
activity, and the effect of the program or activity on
participants, schools, communities, and youth served by the
program or activity.
(3) Mentoring program of the year.--The Attorney General
shall, on an annual basis, based on the most recent
evaluation under this subsection and such other criteria as
the Attorney General shall establish by regulation--
(A) designate 1 program or activity assisted under this Act
as the ``Juvenile Mentoring Program of the Year''; and
(B) publish notice of such designation in the Federal
Register.
(b) Reports.--
(1) Grant recipients.--Each entity receiving a grant under
this Act or under section 228B of the Juvenile Justice and
Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) (as
amended by this title) shall submit to the evaluating
organization entering into the contract under subsection
(a)(1), an annual report regarding any program or activity
assisted under this Act or under section 228B of the Juvenile
Justice and Delinquency Prevention Act of 1974 (42 U.S.C.
5667e-2) (as amended by this title). Each report under this
paragraph shall be submitted at such time, in such a manner,
and shall be accompanied by such information, as the
evaluating organization may reasonably require.
(2) Comptroller general.--Not later than 4 years after the
date of enactment of this Act, the Attorney General shall
submit to Congress a report evaluating the effectiveness of
grants awarded under this Act and under section 228B of the
Juvenile Justice and Delinquency Prevention Act of 1974 (42
U.S.C. 5667e-2) (as amended by this title), in--
(A) reducing juvenile delinquency and gang participation;
(B) reducing the school dropout rate; and
(C) improving academic performance of juveniles.

PART 4--TRUANCY PREVENTION

SEC. 4241. SHORT TITLE.

This part may be cited as the ``Truancy Prevention and
Juvenile Crime Reduction Act of 2001''.

SEC. 4242. FINDINGS.

Congress makes the following findings:
(1) Truancy is often the first sign of trouble--the first
indicator that a young person is giving up and losing his or
her way.
(2) Many students who become truant eventually drop out of
school, and high school drop outs are two and a half times
more likely to be on welfare than high school graduates,
twice as likely to be unemployed, or if employed, earn lower
salaries.
(3) Truancy is the top-ranking characteristic of
criminals--more common than such factors as coming from
single-parent families and being abused as children.
(4) High rates of truancy are linked to high daytime
burglary rates and high vandalism.
(5) As much as 44 percent of violent juvenile crime takes
place during school hours.

[[Page S207]]

(6) As many as 75 percent of children ages 13 to 16 who are
arrested and prosecuted for crimes are truants.
(7) Some cities report as many as 70 percent of daily
student absences are unexcused, and the total number of
absences in a single city can reach 4,000 per day.
(8) Society pays a significant social and economic cost due
to truancy: only 34 percent of inmates have completed high
school education; 17 percent of youth under age 18 entering
adult prisons have not completed grade school (8th grade or
less), 25 percent completed 10th grade, and 2 percent
completed high school.
(9) Truants and later high school drop outs cost the Nation
$240,000,000,000 in lost earnings and foregone taxes over
their lifetimes, and the cost of crime control is staggering.
(10) In many instances, parents are unaware a child is
truant.
(11) Effective truancy prevention, early intervention, and
accountability programs can improve school attendance and
reduce daytime crime rates.
(12) There is a lack of targeted funding for effective
truancy prevention programs in current law.

SEC. 4243. GRANTS.

(a) Definitions.--In this section:
(1) Eligible partnership.--The term ``eligible
partnership'' means a partnership between 1 or more qualified
units of local government and 1 or more local educational
agencies.
(2) Local educational agency.--The term ``local educational
agency'' has the meaning given the term in section 14101 of
the Elementary and Secondary Education Act of 1965 (20 U.S.C.
8801).
(3) Qualified unit of local government.--The term
``qualified unit of local government'' means a unit of local
government that has in effect, as of the date on which the
eligible partnership submits an application for a grant under
this section, a statute or regulation that meets the
requirements of section 223(a)(14) of the Juvenile Justice
and Delinquency and Prevention Act of 1974 (42 U.S.C.
5633(a)(14)).
(4) Unit of local government.--The term ``unit of local
government'' means any city, county, township, town, borough,
parish, village, or other general purpose political
subdivision of a State, or any Indian tribe.
(b) Grant Authority.--The Attorney General, in consultation
with the Secretary of Education, shall make grants in
accordance with this section on a competitive basis to
eligible partnerships to reduce truancy and the incidence of
daytime juvenile crime.
(c) Maximum Amount; Allocation; Renewal.--
(1) Maximum amount.--The total amount awarded to an
eligible partnership under this section in any fiscal year
shall not exceed $100,000.
(2) Allocation.--Not less than 25 percent of each grant
awarded to an eligible partnership under this section shall
be allocated for use by the local educational agency or
agencies participating in the partnership.
(3) Renewal.--A grant awarded under this section for a
fiscal year may be renewed for an additional period of not
more than 2 fiscal years.
(d) Use of Funds.--
(1) In general.--Grant amounts made available under this
section may be used by an eligible partnership to
comprehensively address truancy through the use of--
(A) parental involvement in prevention activities,
including meaningful incentives for parental responsibility;
(B) sanctions, including community service, or drivers'
license suspension for students who are habitually truant;
(C) parental accountability, including fines, teacher-aid
duty, or community service;
(D) in-school truancy prevention programs, including
alternative education and in-school suspension;
(E) involvement of the local law enforcement, social
services, judicial, business, and religious communities, and
nonprofit organizations;
(F) technology, including automated telephone notice to
parents and computerized attendance system; or
(G) elimination of 40-day count and other unintended
incentives to allow students to be truant after a certain
time of school year.
(2) Model programs.--In carrying out this section, the
Attorney General may give priority to funding the following
programs and programs that attempt to replicate one or more
of the following model programs:
(A) The Truancy Intervention Project of the Fulton County,
Georgia, Juvenile Court.
(B) The TABS (Truancy Abatement and Burglary Suppression)
program of Milwaukee, Wisconsin.
(C) The Roswell Daytime Curfew Program of Roswell, New
Mexico.
(D) The Stop, Cite and Return Program of Rohnert Park,
California.
(E) The Stay in School Program of New Haven, Connecticut.
(F) The Atlantic County Project Helping Hand of Atlantic
County, New Jersey.
(G) The THRIVE (Truancy Habits Reduced Increasing Valuable
Education) initiative of Oklahoma City, Oklahoma.
(H) The Norfolk, Virginia project using computer software
and data collection.
(I) The Community Service Early Intervention Program of
Marion, Ohio.
(J) The Truancy Reduction Program of Bakersfield,
California.
(K) The Grade Court program of Farmington, New Mexico.
(L) Any other model program that the Attorney General
determines to be appropriate.
(e) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section, $25,000,000 for
each of fiscal years 2002, 2003, and 2004.

PART 5--JUVENILE CRIME CONTROL AND DELINQUENCY PREVENTION ACT

SEC. 4251. SHORT TITLE.

This part may be cited as the ``Juvenile Crime Control and
Delinquency Prevention Act of 2001''.

SEC. 4252. FINDINGS.

Section 101 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5601) is amended to read as
follows:

``SEC. 101. FINDINGS.

``(a) Congress finds that the juvenile crime problem should
be addressed through a 2-track common sense approach that
addresses the needs of individual juveniles and society at
large by promoting--
``(1) quality prevention programs that--
``(A) work with juveniles, their families, local public
agencies, and community-based organizations, and take into
consideration such factors as whether juveniles have ever
been the victims of family violence (including child abuse
and neglect); and
``(B) are designed to reduce risks and develop competencies
in at-risk juveniles that will prevent, and reduce the rate
of, violent delinquent behavior; and
``(2) programs that assist in holding juveniles accountable
for their actions, including a system of graduated sanctions
to respond to each delinquent act, requiring juveniles to
make restitution, or perform community service, for the
damage caused by their delinquent acts, and methods for
increasing victim satisfaction with respect to the penalties
imposed on juveniles for their acts.
``(b) Congress must act now to reform this program by
focusing on juvenile delinquency prevention programs, as well
as programs that hold juveniles accountable for their
acts.''.

SEC. 4253. PURPOSE.

Section 102 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5602) is amended to read as
follows:

``SEC. 102. PURPOSES.

``The purposes of this title are--
``(1) to support State and local programs that prevent
juvenile involvement in delinquent behavior;
``(2) to assist State and local governments in promoting
public safety by encouraging accountability for acts of
juvenile delinquency; and
``(3) to assist State and local governments in addressing
juvenile crime through the provision of technical assistance,
research, training, evaluation, and the dissemination of
information on effective programs for combating juvenile
delinquency.''.

SEC. 4254. DEFINITIONS.

Section 103 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5603) is amended--
(1) in paragraph (3), by striking ``to help prevent
juvenile delinquency'' and inserting ``designed to reduce
known risk factors for juvenile delinquent behavior, provide
activities that build on protective factors for, and develop
competencies in, juveniles to prevent, and reduce the rate
of, delinquent juvenile behavior'',
(2) in paragraph (4), by inserting ``title I of'' before
``the Omnibus'' each place it appears,
(3) in paragraph (7), by striking ``the Trust Territory of
the Pacific Islands,'',
(4) in paragraph (9), by striking ``justice'' and inserting
``crime control'',
(5) in paragraph (12)(B), by striking ``, of any
nonoffender,'',
(6) in paragraph (13)(B), by striking ``, any
nonoffender,'',
(7) in paragraph (14), by inserting ``drug trafficking,''
after ``assault,'',
(8) in paragraph (16)--
(A) in subparagraph (A), by adding ``and'' at the end, and
(B) by striking subparagraph (C),
(9) by striking paragraph (17),
(10) in paragraph (22)--
(A) by redesignating subparagraphs (i), (ii), and (iii) as
subparagraphs (A), (B), and (C), respectively, and
(B) by striking ``and'' at the end,
(11) in paragraph (23), by striking the period at the end
and inserting a semicolon,
(12) by redesignating paragraphs (18), (19), (20), (21),
(22), and (23) as paragraphs (17) through (22), respectively,
and
(13) by adding at the end the following:
``(23) the term `boot camp' means a residential facility
(excluding a private residence) at which there are provided--
``(A) a highly regimented schedule of discipline, physical
training, work, drill, and ceremony characteristic of
military basic training.
``(B) regular, remedial, special, and vocational education;
and
``(C) counseling and treatment for substance abuse and
other health and mental health problems;
``(24) the term `graduated sanctions' means an
accountability-based, graduated series of sanctions
(including incentives and services) applicable to juveniles
within the juvenile justice system to hold such juveniles
accountable for their actions and to protect communities from
the effects of juvenile delinquency by providing appropriate
sanctions for every act for which a juvenile is adjudicated
delinquent, by inducing their law-

[[Page S208]]

abiding behavior, and by preventing their subsequent
involvement with the juvenile justice system;
``(25) the term `violent crime' means--
``(A) murder or nonnegligent manslaughter, forcible rape,
or robbery, or
``(B) aggravated assault committed with the use of a
firearm;
``(26) the term `co-located facilities' means facilities
that are located in the same building, or are part of a
related complex of buildings located on the same grounds; and
``(27) the term `related complex of buildings' means 2 or
more buildings that share--
``(A) physical features, such as walls and fences, or
services beyond mechanical services (heating, air
conditioning, water and sewer); or
``(B) the specialized services that are allowable under
section 31.303(e)(3)(i)(C)(3) of title 28 of the Code of
Federal Regulations, as in effect on December 10, 1996.''.

SEC. 4255. NAME OF OFFICE.

Title II of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5611 et seq.) is amended--
(1) in part A, by striking the part heading and inserting
the following:

``Part A--Office of Juvenile Crime Control and Delinquency
Prevention'';

(2) in section 201(a), by striking ``Justice and
Delinquency Prevention'' and inserting ``Crime Control and
Delinquency Prevention''; and
(3) in section 299A(c)(2) by striking ``Justice and
Delinquency Prevention'' and inserting ``Crime Control and
Delinquency Prevention''.

SEC. 4256. CONCENTRATION OF FEDERAL EFFORT.

Section 204 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5614) is amended--
(1) in subsection (a)(1), by striking the last sentence;
(2) in subsection (b)--
(A) in paragraph (3), by striking ``and of the
prospective'' and all that follows through ``administered'';
(B) by striking paragraph (5); and
(C) by redesignating paragraphs (6) and (7) as paragraphs
(5) and (6), respectively;
(3) in subsection (c), by striking ``and reports'' and all
that follows through ``this part'', and inserting ``as may be
appropriate to prevent the duplication of efforts, and to
coordinate activities, related to the prevention of juvenile
delinquency'';
(4) by striking subsection (i); and
(5) by redesignating subsection (h) as subsection (f).

SEC. 4257. ALLOCATION.

Section 222 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5632) is amended--
(1) in subsection (a)--
(A) in paragraph (2)--
(i) in subparagraph (A)--

(I) by striking ``amount, up to $400,000,'' and inserting
``amount up to $400,000'';
(II) by inserting a comma after ``1992'' the first place it
appears;
(III) by striking ``the Trust Territory of the Pacific
Islands,''; and
(IV) by striking ``amount, up to $100,000,'' and inserting
``amount up to $100,000'';

(ii) in subparagraph (B)--

(I) by striking ``(other than part D)'';
(II) by striking ``or such greater amount, up to $600,000''
and all that follows through ``section 299(a) (1) and (3)'';
(III) by striking ``the Trust Territory of the Pacific
Islands,'';

(IV) by striking ``amount, up to $100,000,'' and inserting
``amount up to $100,000''; and
(V) by inserting a comma after ``1992'';

(B) in paragraph (3) by striking ``allot'' and inserting
``allocate''; and
(2) in subsection (b) by striking ``the Trust Territory of
the Pacific Islands,''.

SEC. 4258. STATE PLANS.

Section 223 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5633) is amended--
(1) in subsection (a)--
(A) in the second sentence, by striking ``challenge'' and
all that follows through ``part E'', and inserting ``,
projects, and activities'';
(B) in paragraph (3)--
(i) by striking ``, which--'' and inserting ``that--'';
(ii) in subparagraph (A)--

(I) by striking ``not less'' and all that follows through
``33'', and inserting ``the attorney general of the State or
such other State official who has primary responsibility for
overseeing the enforcement of State criminal laws, and'';
(II) by inserting ``, in consultation with the attorney
general of the State or such other State official who has
primary responsibility for overseeing the enforcement of
State criminal laws'' after ``State'';
(III) in clause (i), by striking ``or the administration of
juvenile justice'' and inserting ``, the administration of
juvenile justice, or the reduction of juvenile delinquency'';
(IV) in clause (ii), by striking ``include--'' and all that
follows through the semicolon at the end of subclause (VIII),
and inserting the following:

``represent a multidisciplinary approach to addressing
juvenile delinquency and may include--

``(I) individuals who represent units of general local
government, law enforcement and juvenile justice agencies,
public agencies concerned with the prevention and treatment
of juvenile delinquency and with the adjudication of
juveniles, representatives of juveniles, or nonprofit private
organizations, particularly such organizations that serve
juveniles; and
``(II) such other individuals as the chief executive
officer considers to be appropriate; and''; and
(V) by striking clauses (iv) and (v);

(iii) in subparagraph (C), by striking ``justice'' and
inserting ``crime control'';
(iv) in subparagraph (D)--

(I) in clause (i), by inserting ``and'' at the end; and
(II) in clause (ii), by striking ``paragraphs'' and all
that follows through ``part E'', and inserting ``paragraphs
(11), (12), and (13)''; and

(v) in subparagraph (E), by striking ``title--'' and all
that follows through ``(ii)'' and inserting ``title,'';
(C) in paragraph (5)--
(i) in the matter preceding subparagraph (A), by striking
``, other than'' and inserting ``reduced by the percentage
(if any) specified by the State under the authority of
paragraph (25) and excluding'' after ``section 222''; and
(ii) in subparagraph (C), by striking ``paragraphs (12)(A),
(13), and (14)'' and inserting ``paragraphs (11), (12), and
(13)'';
(D) by striking paragraph (6);
(E) in paragraph (7), by inserting ``, including in rural
areas'' before the semicolon at the end;
(F) in paragraph (8)--
(i) in subparagraph (A)--

(I) by striking ``for (i)'' and all that follows through
``relevant jurisdiction'', and inserting ``for an analysis of
juvenile delinquency problems in, and the juvenile
delinquency control and delinquency prevention needs
(including educational needs) of, the State'';

(II) by striking ``justice'' the second place it appears
and inserting ``crime control''; and
(III) by striking ``of the jurisdiction; (ii)'' and all
that follows through the semicolon at the end, and inserting
``of the State; and'';

(ii) by striking subparagraph (B) and inserting the
following:
``(B) contain--
``(i) a plan for providing needed gender-specific services
for the prevention and treatment of juvenile delinquency;
``(ii) a plan for providing needed services for the
prevention and treatment of juvenile delinquency in rural
areas; and
``(iii) a plan for providing needed mental health services
to juveniles in the juvenile justice system;''; and
(iii) by striking subparagraphs (C) and (D);
(G) by striking paragraph (9) and inserting the following:
``(9) provide for the coordination and maximum utilization
of existing juvenile delinquency programs, programs operated
by public and private agencies and organizations, and other
related programs (such as education, special education,
recreation, health, and welfare programs) in the State;'';
(H) in paragraph (10)--
(i) in subparagraph (A), by striking ``, specifically'' and
inserting ``including''; and
(ii) by striking subparagraph (B) and inserting the
following:
``(B) programs that assist in holding juveniles accountable
for their actions, including the use of graduated sanctions
and of neighborhood courts or panels that increase victim
satisfaction and require juveniles to make restitution for
the damage caused by their delinquent behavior;'';
(iii) in subparagraph (C), by striking ``juvenile justice''
and inserting ``juvenile crime control'';
(iv) by striking subparagraph (D) and inserting the
following:
``(D) programs that provide treatment to juvenile offenders
who are victims of child abuse or neglect, and to their
families, in order to reduce the likelihood that such
juvenile offenders will commit subsequent violations of
law;'';
(v) in subparagraph (E)--

(I) by redesignating clause (ii) as clause (iii); and
(II) by striking ``juveniles, provided'' and all that
follows through ``provides; and'', and inserting the
following:

``juveniles--
``(i) to encourage juveniles to remain in elementary and
secondary schools or in alternative learning situations;
``(ii) to provide services to assist juveniles in making
the transition to the world of work and self-sufficiency;
and'';
(vi) by striking subparagraph (F) and inserting the
following:
``(F) expanding the use of probation officers--
``(i) particularly for the purpose of permitting nonviolent
juvenile offenders (including status offenders) to remain at
home with their families as an alternative to incarceration
or institutionalization; and
``(ii) to ensure that juveniles follow the terms of their
probation;'';
(vii) by striking subparagraph (G) and inserting the
following:
``(G) one-on-one mentoring programs that are designed to
link at-risk juveniles and juvenile offenders, particularly
juveniles residing in high-crime areas and juveniles
experiencing educational failure, with responsible adults
(such as law enforcement officers, adults working with local
businesses, and adults working with community-based
organizations and agencies) who are properly screened and
trained;'';

[[Page S209]]

(viii) in subparagraph (H) by striking ``handicapped
youth'' and inserting ``juveniles with disabilities'';
(ix) by striking subparagraph (K) and inserting the
following:
``(K) boot camps for juvenile offenders;'';
(x) by striking subparagraph (L) and inserting the
following:
``(L) community-based programs and services to work with
juveniles, their parents, and other family members during and
after incarceration in order to strengthen families so that
such juveniles may be retained in their homes;'';
(xi) by striking subparagraph (M) and inserting the
following:
``(M) other activities (such as court-appointed advocates)
that the State determines will hold juveniles accountable for
their acts and decrease juvenile involvement in delinquent
activities;'';
(xii) in subparagraph (O)--

(I) in striking ``cultural'' and inserting ``other''; and
(II) by striking the period at the end and inserting a
semicolon; and

(xiii) by adding at the end the following:
``(P) programs that utilize multidisciplinary interagency
case management and information sharing, that enable the
juvenile justice and law enforcement agencies, schools, and
social service agencies to make more informed decisions
regarding early identification, control, supervision, and
treatment of juveniles who repeatedly commit violent or
serious delinquent acts; and
``(Q) programs designed to prevent and reduce hate crimes
committed by juveniles.'';
(I) by striking paragraph (12) and inserting the following:
``(12) shall, in accordance with rules issued by the
Administrator, provide that--
``(A) juveniles who are charged with or who have committed
an offense that would not be criminal if committed by an
adult, excluding--
``(i) juveniles who are charged with or who have committed
a violation of section 922(x)(2) of title 18, United States
Code, or of a similar State law;
``(ii) juveniles who are charged with or who have committed
a violation of a valid court order; and
``(iii) juveniles who are held in accordance with the
Interstate Compact on Juveniles, as enacted by the State;

shall not be placed in secure detention facilities or secure
correctional facilities; and
``(B) juveniles--
``(i) who are not charged with any offense; and
``(ii) who are--

``(I) aliens; or
``(II) alleged to be dependent, neglected, or abused;

shall not be placed in secure detention facilities or secure
correctional facilities;'';
(J) by striking paragraph (13) and inserting the following:
``(13) provide that--
``(A) juveniles alleged to be or found to be delinquent,
and juveniles within the purview of paragraph (11), will not
be detained or confined in any institution in which they have
prohibited physical contact or sustained oral communication
(as defined in subparagraphs (D) and (E)) with adults
incarcerated because such adults have been convicted of a
crime or are awaiting trial on criminal charges;
``(B) to the extent practicable, violent juveniles shall be
kept separate from nonviolent juveniles;
``(C) there is in effect in the State a policy that
requires individuals who work with both such juveniles and
such adults in colocated facilities have been trained and
certified to work with juveniles;
``(D) the term `prohibited physical contact'--
``(i) means--

``(I) any physical contact between a juvenile and an adult
inmate; and
``(II) proximity that provides an opportunity for physical
contact between a juvenile and an adult inmate; and

``(ii) does not include--

``(I) communication that is accidental or incidental;
``(II) sounds or noises that cannot reasonably be
considered to be speech; or

``(III) does not include supervised proximity between a
juvenile and an adult inmate that is brief and incidental or
accidental; and
``(E) the term `sustained oral communication' means the
imparting or interchange of speech by or between an adult
inmate and a juvenile;''.
(K) by striking paragraph (14) and inserting the following:
``(14) provide that no juvenile will be detained or
confined in any jail or lockup for adults except--
``(A) juveniles who are accused of nonstatus offenses and
who are detained in such jail or lockup for a period not to
exceed 6 hours--
``(i) for processing or release;
``(ii) while awaiting transfer to a juvenile facility; or
``(iii) in which period such juveniles make a court
appearance;
``(B) juveniles who are accused of nonstatus offenses, who
are awaiting an initial court appearance that will occur
within 48 hours after being taken into custody (excluding
Saturdays, Sundays, and legal holidays), and who are detained
or confined in a jail or lockup--
``(i) in which--

``(I) such juveniles do not have prohibited physical
contact or sustained oral communication (as defined in
subparagraphs (D) and (E) of paragraph (13)) with adults
incarcerated because such adults have been convicted of a
crime or are awaiting trial on criminal charges;

``(II) to the extent practicable, violent juveniles shall
be kept separate from nonviolent juveniles; and
``(III) there is in effect in the State a policy that
requires individuals who work with both such juveniles and
such adults in co-located facilities have been trained and
certified to work with juveniles; and

``(ii) that--

``(I) is located outside a metropolitan statistical area
(as defined by the Director of the Office of Management and
Budget) and has no existing acceptable alternative placement
available; or
``(II) is located where conditions of distance to be
traveled or the lack of highway, road, or transportation do
not allow for court appearances within 48 hours after being
taken into custody (excluding Saturdays, Sundays, and legal
holidays) so that a brief (not to exceed an additional 48
hours) delay is excusable; or
``(III) is located where conditions of safety exist (such
as severe adverse, life-threatening weather conditions that
do not allow for reasonably safe travel), in which case the
time for an appearance may be delayed until 24 hours after
the time that such conditions allow for reasonable safe
travel;'';

(L) in paragraph (15)--
(i) by striking ``paragraph (12)(A), paragraph (13), and
paragraph (14)'' and inserting ``paragraphs (11), (12), and
(13)''; and
(ii) by striking ``paragraph (12)(A) and paragraph (13)''
and inserting ``paragraphs (11) and (12)'';
(M) in paragraph (16) by striking ``mentally, emotionally,
or physically handicapping conditions'' and inserting
``disability'';
(N) by striking paragraph (19) and inserting the following:
``(19) provide assurances that--
``(A) any assistance provided under this Act will not cause
the displacement (including a partial displacement, such as a
reduction in the hours of nonovertime work, wages, or
employment benefits) of any currently employed employee;
``(B) activities assisted under this Act will not impair an
existing collective bargaining relationship, contract for
services, or collective bargaining agreement; and
``(C) no such activity that would be inconsistent with the
terms of a collective bargaining agreement shall be
undertaken without the written concurrence of the labor
organization involved;'';
(O) by striking paragraph (23) and inserting the following:
``(23) address juvenile delinquency prevention efforts and
system improvement efforts designed to reduce, without
establishing or requiring numerical standards or quotas, the
disproportionate number of juvenile members of minority
groups, who come into contact with the juvenile justice
system;'';
(P) by striking paragraph (24) and inserting the following:
``(24) provide that if a juvenile is taken into custody for
violating a valid court order issued for committing a status
offense--
``(A) an appropriate public agency shall be promptly
notified that such juvenile is held in custody for violating
such order;
``(B) not later than 24 hours after the juvenile is taken
into custody and during which the juvenile is so held, an
authorized representative of such agency shall interview, in
person, such juvenile; and
``(C) not later than 48 hours after the juvenile is taken
into custody and during which the juvenile is so held--
``(i) such representative shall submit an assessment to the
court that issued such order, regarding the immediate needs
of such juvenile; and
``(ii) such court shall conduct a hearing to determine--

``(I) whether there is reasonable cause to believe that
such juvenile violated such order; and

``(II) the appropriate placement of such juvenile pending
disposition of the violation alleged;'';

(Q) in paragraph (25) by striking the period at the end and
inserting a semicolon;
(R) by redesignating paragraphs (7) through (25) as
paragraphs (6) through (24), respectively; and
(S) by adding at the end the following:
``(25) specify a percentage (if any), not to exceed 5
percent, of funds received by the State under section 222
(other than funds made available to the state advisory group
under section 222(d)) that the State will reserve for
expenditure by the State to provide incentive grants to units
of general local government that reduce the caseload of
probation officers within such units.''; and
(2) by striking subsection (c) and inserting the following:
``(c) If a State fails to comply with any applicable
requirement of paragraph (11), (12), (13), or (22) of
subsection (a) in any fiscal year beginning after September
30, 1999, then the amount allocated to such State for the
subsequent fiscal year shall be reduced by not to exceed 12.5
percent for each such paragraph with respect to which the
failure occurs, unless the Administrator determines that the
State--
``(1) has achieved substantial compliance with such
applicable requirements with respect to which the State was
not in compliance; and

[[Page S210]]

``(2) has made, through appropriate executive or
legislative action, an unequivocal commitment to achieving
full compliance with such applicable requirements within a
reasonable time.''; and
(3) in subsection (d)--
(A) by striking ``allotment'' and inserting ``allocation'';
and
(B) by striking ``subsection (a) (12)(A), (13), (14) and
(23)'' each place it appears and inserting ``paragraphs (11),
(12), (13), and (22) of subsection (a)''.

SEC. 4259. JUVENILE DELINQUENCY PREVENTION BLOCK GRANT
PROGRAM.

Title II of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting
after part I, as added by section 4217 of this title, the
following:

``PART J--JUVENILE DELINQUENCY PREVENTION BLOCK GRANT PROGRAM

``SEC. 292. AUTHORITY TO MAKE GRANTS.

``The Administrator may make grants to eligible States,
from funds allocated under section 292A, for the purpose of
providing financial assistance to eligible entities to carry
out projects designed to prevent juvenile delinquency,
including--
``(1) projects that assist in holding juveniles accountable
for their actions, including the use of neighborhood courts
or panels that increase victim satisfaction and require
juveniles to make restitution, or perform community service,
for the damage caused by their delinquent acts;
``(2) projects that provide treatment to juvenile offenders
who are victims of child abuse or neglect, and to their
families, in order to reduce the likelihood that such
juvenile offenders will commit subsequent violations of law;
``(3) educational projects or supportive services for
delinquent or other juveniles--
``(A) to encourage juveniles to remain in elementary and
secondary schools or in alternative learning situations in
educational settings;
``(B) to provide services to assist juveniles in making the
transition to the world of work and self-sufficiency;
``(C) to assist in identifying learning difficulties
(including learning disabilities);
``(D) to prevent unwarranted and arbitrary suspensions and
expulsions;
``(E) to encourage new approaches and techniques with
respect to the prevention of school violence and vandalism;
``(F) which assist law enforcement personnel and juvenile
justice personnel to more effectively recognize and provide
for learning-disabled and other disabled juveniles; or
``(G) which develop locally coordinated policies and
programs among education, juvenile justice, and social
service agencies;
``(4) projects which expand the use of probation officers--
``(A) particularly for the purpose of permitting nonviolent
juvenile offenders (including status offenders) to remain at
home with their families as an alternative to incarceration
or institutionalization; and
``(B) to ensure that juveniles follow the terms of their
probation;
``(5) one-on-one mentoring projects that are designed to
link at-risk juveniles and juvenile offenders who did not
commit serious crime, particularly juveniles residing in
high-crime areas and juveniles experiencing educational
failure, with responsible adults (such as law enforcement
officers, adults working with local businesses, and adults
working for community-based organizations and agencies) who
are properly screened and trained;
``(6) community-based projects and services (including
literacy and social service programs) which work with
juvenile offenders, including those from families with
limited English-speaking proficiency, their parents, their
siblings, and other family members during and after
incarceration of the juvenile offenders, in order to
strengthen families, to allow juvenile offenders to be
retained in their homes, and to prevent the involvement of
other juvenile family members in delinquent activities;
``(7) projects designed to provide for the treatment of
juveniles for dependence on or abuse of alcohol, drugs, or
other harmful substances;
``(8) projects which leverage funds to provide scholarships
for postsecondary education and training for low-income
juveniles who reside in neighborhoods with high rates of
poverty, violence, and drug-related crimes;
``(9) projects which provide for an initial intake
screening of each juvenile taken into custody--
``(A) to determine the likelihood that such juvenile will
commit a subsequent offense; and
``(B) to provide appropriate interventions, including
mental health services and substance abuse treatment, to
prevent such juvenile from committing subsequent offenses;
``(10) projects (including school- or community-based
projects) that are designed to prevent, and reduce the rate
of, the participation of juveniles in gangs that commit
crimes (particularly violent crimes), that unlawfully use
firearms and other weapons, or that unlawfully traffic in
drugs and that involve, to the extent practicable, families
and other community members (including law enforcement
personnel and members of the business community) in the
activities conducted under such projects;
``(11) comprehensive juvenile justice and delinquency
prevention projects that meet the needs of juveniles through
the collaboration of the many local service systems juveniles
encounter, including schools, courts, law enforcement
agencies, child protection agencies, mental health agencies,
welfare services, health care agencies, and private nonprofit
agencies offering services to juveniles;
``(12) to develop, implement, and support, in conjunction
with public and private agencies, organizations, and
businesses, projects for the employment of juveniles and
referral to job training programs (including referral to
Federal job training programs);
``(13) delinquency prevention activities which involve
youth clubs, sports, recreation and parks, peer counseling
and teaching, the arts, leadership development, community
service, volunteer service, before- and after-school
programs, violence prevention activities, mediation skills
training, camping, environmental education, ethnic or
cultural enrichment, tutoring, and academic enrichment;
``(14) family strengthening activities, such as mutual
support groups for parents and their children;
``(15) programs that encourage social competencies,
problem-solving skills, and communication skills, youth
leadership, and civic involvement;
``(16) programs that focus on the needs of young girls at-
risk of delinquency or status offenses; and
``(17) other activities that are likely to prevent juvenile
delinquency.

``SEC. 292A. ALLOCATION.

``Funds appropriated to carry out this part shall be
allocated among eligible States as follows:
``(1) 0.75 percent shall be allocated to each State.
``(2) Of the total amount remaining after the allocation
under paragraph (1), there shall be allocated to each State
as follows:
``(A) 50 percent of such amount shall be allocated
proportionately based on the population that is less than 18
years of age in the eligible States.
``(B) 50 percent of such amount shall be allocated
proportionately based on the annual average number of arrests
for serious crimes committed in the eligible States by
juveniles during the then most recently completed period of 3
consecutive calendar years for which sufficient
information is available to the Administrator.

``SEC. 292B. ELIGIBILITY OF STATES.

``(a) Application.--To be eligible to receive a grant under
section 292, a State shall submit to the Administrator an
application that contains the following:
``(1) An assurance that the State will use--
``(A) not more than 5 percent of such grant, in the
aggregate, for--
``(i) the costs incurred by the State to carry out this
part; and
``(ii) to evaluate, and provide technical assistance
relating to, projects and activities carried out with funds
provided under this part; and
``(B) the remainder of such grant to make grants under
section 292C.
``(2) An assurance that, and a detailed description of how,
such grant will support, and not supplant State and local
efforts to prevent juvenile delinquency.
``(3) An assurance that such application was prepared after
consultation with and participation by community-based
organizations, and organizations in the local juvenile
justice system, that carry out programs, projects, or
activities to prevent juvenile delinquency.
``(4) An assurance that each eligible entity described in
section 292C(a) that receives an initial grant under section
292 to carry out a project or activity shall also receive an
assurance from the State that such entity will receive from
the State, for the subsequent fiscal year to carry out such
project or activity, a grant under such section in an amount
that is proportional, based on such initial grant and on the
amount of the grant received under section 292 by the State
for such subsequent fiscal year, but that does not exceed the
amount specified for such subsequent fiscal year in such
application as approved by the State.
``(5) Such other information and assurances as the
Administrator may reasonably require by rule.
``(b) Approval of Applications.--
``(1) Approval required.--Subject to paragraph (2), the
Administrator shall approve an application, and amendments to
such application submitted in subsequent fiscal years, that
satisfy the requirements of subsection (a).
``(2) Limitation.--The Administrator may not approve such
application (including amendments to such application) for a
fiscal year unless--
``(A)(i) the State submitted a plan under section 223 for
such fiscal year; and
``(ii) such plan is approved by the Administrator for such
fiscal year; or
``(B) the Administrator waives the application of
subparagraph (A) to such State for such fiscal year, after
finding good cause for such a waiver.

``SEC. 292C. GRANTS FOR LOCAL PROJECTS.

``(a) Selection From Among Applications.--
``(1) In general.--Using a grant received under section
292, a State may make grants to eligible entities whose
applications are received by the State in accordance with
subsection (b) to carry out projects and activities described
in section 292.

[[Page S211]]

``(2) For purposes of making grants under this section, the
State shall give special consideration to eligible entities
that--
``(A) propose to carry out such projects in geographical
areas in which there is--
``(i) a disproportionately high level of serious crime
committed by juveniles; or
``(ii) a recent rapid increase in the number of nonstatus
offenses committed by juveniles;
``(B)(i) agreed to carry out such projects or activities
that are multidisciplinary and involve 2 or more eligible
entities; or
``(ii) represent communities that have a comprehensive plan
designed to identify at-risk juveniles and to prevent or
reduce the rate of juvenile delinquency, and that involve
other entities operated by individuals who have a
demonstrated history of involvement in activities designed to
prevent juvenile delinquency; and
``(C) the amount of resources (in cash or in kind) such
entities will provide to carry out such projects and
activities.
``(b) Receipt of Applications.--
``(1) In general.--Subject to paragraph (2), a unit of
general local government shall submit to the State
simultaneously all applications that are--
``(A) timely received by such unit from eligible entities;
and
``(B) determined by such unit to be consistent with a
current plan formulated by such unit for the purpose of
preventing, and reducing the rate of, juvenile delinquency in
the geographical area under the jurisdiction of such unit.
``(2) Direct submission to state.--If an application
submitted to such unit by an eligible entity satisfies the
requirements specified in subparagraphs (A) and (B) of
paragraph (1), such entity may submit such application
directly to the State.

``SEC. 292D. ELIGIBILITY OF ENTITIES.

``(a) Eligibility.--Subject to subsections (b) and except
as provided in subsection (c), to be eligible to receive a
grant under section 292C, a community-based organization,
local juvenile justice system officials (including
prosecutors, police officers, judges, probation officers,
parole officers, and public defenders), local education
authority (as defined in section 14101 of the Elementary and
Secondary Education Act of 1965 and including a school within
such authority), nonprofit private organization, unit of
general local government, or social service provider, and or
other entity with a demonstrated history of involvement in
the prevention of juvenile delinquency, shall submit to a
unit of general local government an application that contains
the following:
``(1) An assurance that such applicant will use such grant,
and each such grant received for the subsequent fiscal year,
to carry out throughout a 2-year period a project or
activity described in reasonable detail, and of a kind
described in 1 or more of paragraphs (1) through (14) of
section 292 as specified in, such application.
``(2) A statement of the particular goals such project or
activity is designed to achieve, and the methods such entity
will use to achieve, and assess the achievement of, each of
such goals.
``(3) A statement identifying the research (if any) such
entity relied on in preparing such application.
``(b) Review and Submission of Applications.--Except as
provided in subsection (c), an entity shall not be eligible
to receive a grant under section 292C unless--
``(1) such entity submits to a unit of general local
government an application that--
``(A) satisfies the requirements specified in subsection
(a); and
``(B) describes a project or activity to be carried out in
the geographical area under the jurisdiction of such unit;
and
``(2) such unit determines that such project or activity is
consistent with a current plan formulated by such unit for
the purpose of preventing, and reducing the rate of, juvenile
delinquency in the geographical area under the jurisdiction
of such unit.
``(c) Limitation.--If an entity that receives a grant under
section 292C to carry out a project or activity for a 2-year
period, and receives technical assistance from the State or
the Administrator after requesting such technical assistance
(if any), fails to demonstrate, before the expiration of such
2-year period, that such project or such activity has
achieved substantial success in achieving the goals specified
in the application submitted by such entity to receive such
grants, then such entity shall not be eligible to receive any
subsequent grant under such section to continue to carry out
such project or activity.''.

SEC. 4260. RESEARCH; EVALUATION; TECHNICAL ASSISTANCE;
TRAINING.

Title II of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting
after part J, as added by section 4259 of this title, the
following:

``PART K--RESEARCH; EVALUATION; TECHNICAL ASSISTANCE; TRAINING

``SEC. 293. RESEARCH AND EVALUATION; STATISTICAL ANALYSES;
INFORMATION DISSEMINATION.

``(a) Research and Evaluation.--(1) The Administrator may--
``(A) plan and identify, after consultation with the
Director of the National Institute of Justice, the purposes
and goals of all agreements carried out with funds provided
under this subsection; and
``(B) make agreements with the National Institute of
Justice or, subject to the approval of the Assistant Attorney
General for the Office of Justice Programs, with another
Federal agency authorized by law to conduct research or
evaluation in juvenile justice matters, for the purpose of
providing research and evaluation relating to--
``(i) the prevention, reduction, and control of juvenile
delinquency and serious crime committed by juveniles;
``(ii) the link between juvenile delinquency and the
incarceration of members of the families of juveniles;
``(iii) successful efforts to prevent first-time minor
offenders from committing subsequent involvement in serious
crime;
``(iv) successful efforts to prevent recidivism;
``(v) the juvenile justice system;
``(vi) juvenile violence; and
``(vii) other purposes consistent with the purposes of this
title and title I.
``(2) The Administrator shall ensure that an equitable
amount of funds available to carry out paragraph (1)(B) is
used for research and evaluation relating to the prevention
of juvenile delinquency.
``(b) Statistical Analyses.--The Administrator may--
``(1) plan and identify, after consultation with the
Director of the Bureau of Justice Statistics, the purposes
and goals of all agreements carried out with funds provided
under this subsection; and
``(2) make agreements with the Bureau of Justice
Statistics, or subject to the approval of the Assistant
Attorney General for the Office of Justice Programs, with
another Federal agency authorized by law to undertake
statistical work in juvenile justice matters, for the purpose
of providing for the collection, analysis, and dissemination
of statistical data and information relating to juvenile
delinquency and serious crimes committed by juveniles, to the
juvenile justice system, to juvenile violence, and to other
purposes consistent with the purposes of this title and title
I.
``(c) Competitive Selection Process.--The Administrator
shall use a competitive process, established by rule by the
Administrator, to carry out subsections (a) and (b).
``(d) Implementation of Agreements.--A Federal agency that
makes an agreement under subsections (a)(1)(B) and (b)(2)
with the Administrator may carry out such agreement directly
or by making grants to or contracts with public and private
agencies, institutions, and organizations.
``(e) Information Dissemination.--The Administrator may--
``(1) review reports and data relating to the juvenile
justice system in the United States and in foreign nations
(as appropriate), collect data and information from studies
and research into all aspects of juvenile delinquency
(including the causes, prevention, and treatment of juvenile
delinquency) and serious crimes committed by juveniles;
``(2) establish and operate, directly or by contract, a
clearinghouse and information center for the preparation,
publication, and dissemination of information relating to
juvenile delinquency, including State and local prevention
and treatment programs, plans, resources, and training and
technical assistance programs; and
``(3) make grants and contracts with public and private
agencies, institutions, and organizations, for the purpose of
disseminating information to representatives and personnel of
public and private agencies, including practitioners in
juvenile justice, law enforcement, the courts, corrections,
schools, and related services, in the establishment,
implementation, and operation of projects and activities for
which financial assistance is provided under this title.

``SEC. 293A. TRAINING AND TECHNICAL ASSISTANCE.

``(a) Training.--The Administrator may--
``(1) develop and carry out projects for the purpose of
training representatives and personnel of public and private
agencies, including practitioners in juvenile justice, law
enforcement, courts, corrections, schools, and related
services, to carry out the purposes specified in section 102;
and
``(2) make grants to and contracts with public and private
agencies, institutions, and organizations for the purpose of
training representatives and personnel of public and private
agencies, including practitioners in juvenile justice, law
enforcement, courts, corrections, schools, and related
services, to carry out the purposes specified in section 102.
``(b) Technical Assistance.--The Administrator may--
``(1) develop and implement projects for the purpose of
providing technical assistance to representatives and
personnel of public and private agencies and organizations,
including practitioners in juvenile justice, law enforcement,
courts, corrections, schools, and related services, in the
establishment, implementation, and operation of programs,
projects, and activities for which financial assistance is
provided under this title; and
``(2) make grants to and contracts with public and private
agencies, institutions, and organizations, for the purpose of
providing technical assistance to representatives and
personnel of public and private agencies, including
practitioners in juvenile justice, law enforcement, courts,
corrections, schools, and related services, in the
establishment, implementation, and operation of programs,
projects, and activities for which financial assistance is
provided under this title.''.

[[Page S212]]

SEC. 4261. DEMONSTRATION PROJECTS.

Title II of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting
after part K, as added by section 4260 of this title, the
following:

``PART L--DEVELOPING, TESTING, AND DEMONSTRATING PROMISING NEW
INITIATIVES AND PROGRAMS

``SEC. 294. GRANTS AND PROJECTS.

``(a) Authority To Make Grants.--The Administrator may make
grants to and contracts with States, units of general local
government, Indian tribal governments, public and private
agencies, organizations, and individuals, or combinations
thereof, to carry out projects for the development, testing,
and demonstration of promising initiatives and programs for
the prevention, control, or reduction of juvenile
delinquency. The Administrator shall ensure that, to the
extent reasonable and practicable, such grants are made to
achieve an equitable geographical distribution of such
projects throughout the United States.
``(b) Use of Grants.--A grant made under subsection (a) may
be used to pay all or part of the cost of the project for
which such grant is made.

``SEC. 294A. GRANTS FOR TECHNICAL ASSISTANCE.

``The Administrator may make grants to and contracts with
public and private agencies, organizations, and individuals
to provide technical assistance to States, units of general
local government, Indian tribal governments, local private
entities or agencies, or any combination thereof, to carry
out the projects for which grants are made under section 261.

``SEC. 294B. ELIGIBILITY.

``To be eligible to receive a grant made under this part, a
public or private agency, Indian tribal government,
organization, institution, individual, or combination thereof
shall submit an application to the Administrator at such
time, in such form, and containing such information as the
Administrator may reasonable require by rule.

``SEC. 294C. REPORTS.

``Recipients of grants made under this part shall submit to
the Administrator such reports as may be reasonably requested
by the Administrator to describe progress achieved in
carrying the projects for which such grants are made.''.

SEC. 4262. AUTHORIZATION OF APPROPRIATIONS.

Section 299 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5671) is amended--
(1) by striking subsection (e); and
(2) by striking subsections (a) and (b), and inserting the
following:
``(a) Authorization of Appropriations for Title II.--
``(1) In general.--There are authorized to be appropriated
to carry out this title such sums as may be appropriate for
fiscal years 2002, 2003, and 2004.
``(2) Allocation.--Of the amount made available for each
fiscal year to carry out this title not more than 5 percent
shall be available to carry out part A.

SEC. 4263. ADMINISTRATIVE AUTHORITY.

Section 299A(d) of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5672) is amended by
striking ``as are consistent with the purpose of this Act''
and inserting ``only to the extent necessary to ensure that
there is compliance with the specific requirements of this
title or to respond to requests for clarification and
guidance relating to such compliance''.

SEC. 4264. USE OF FUNDS.

Section 299C of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5674) is amended--
(1) in subsection (a)--
(A) by striking ``may be used for'';
(B) in paragraph (1), by inserting ``may be used for''
after ``(1)''; and
(C) by striking paragraph (2) and inserting the following:
``(2) may not be used for the cost of construction of any
short- or long-term facilities for adult or juvenile
offenders, except not more than 15 percent of the funds
received under this title by a State for a fiscal year may be
used for the purpose of renovating or replacing juvenile
facilities.'';
(2) by striking subsection (b); and
(3) by redesignating subsection (c) as subsection (b).

SEC. 4265. LIMITATION ON USE OF FUNDS.

Part M of title II of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as
redesignated by section 4217 of this title, is amended by
adding at the end the following:

``SEC. 299F. LIMITATION ON USE OF FUNDS.

``None of the funds made available to carry out this title
may be used to advocate for, or support, the unsecured
release of juveniles who are charged with a violent crime.''.

SEC. 4266. RULES OF CONSTRUCTION.

Part M of title II of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended
by section 4265 of this title, is amended by adding at the
end the following:

``SEC. 299G. RULES OF CONSTRUCTION.

``Nothing in this title or title I may be construed--
``(1) to prevent financial assistance from being awarded
through grants under this title to any otherwise eligible
organization; or
``(2) to modify or affect any Federal or State law relating
to collective bargaining rights of employees.''.

SEC. 4267. LEASING SURPLUS FEDERAL PROPERTY.

Part M of title II of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended
by section 4266 of this title, is amended by adding at the
end the following:

``SEC. 299H. LEASING SURPLUS FEDERAL PROPERTY.

``The Administrator may receive surplus Federal property
(including facilities) and may lease such property to States
and units of general local government for use in or as
facilities for juvenile offenders, or for use in or as
facilities for delinquency prevention and treatment
activities.''.

SEC. 4268. ISSUANCE OF RULES.

Part M of title II or the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended
by section 4267 of this title, is amended by adding at the
end the following:

``SEC. 299I. ISSUANCE OF RULES.

``The Administrator shall issue rules to carry out this
title, including rules that establish procedures and methods
for making grants and contracts, and distributing funds
available, to carry out this title.''.

SEC. 4269. TECHNICAL AND CONFORMING AMENDMENTS.

(a) Technical Amendments.--The Juvenile Justice and
Delinquency Prevention Act of 1974 (42 U.S.C. 5601 et seq.)
is amended--
(1) in section 202(b), by striking ``prescribed for GS-18
of the General Schedule by section 5332'' and inserting
``payable under section 5376'';
(2) in section 221(b)(2), by striking the last sentence;
and
(3) in section 299D, by striking subsection (d).
(b) Conforming Amendments.--
(1) Title 5.--Section 5315 of title 5, United States Code,
is amended by striking ``Office of Juvenile Justice and
Delinquency Prevention'' and inserting ``Office of Juvenile
Crime Control and Delinquency Prevention''.
(2) Title 18.--Section 4351(b) of title 18, United States
Code, is amended by striking ``Office of Juvenile Justice and
Delinquency Prevention'' and inserting ``Office of Juvenile
Crime Control and Delinquency Prevention''.
(3) Title 39.--Subsections (a)(1) and (c) of section 3220
of title 39, United States Code, is amended by striking
``Office of Juvenile Justice and Delinquency Prevention''
each place it appears and inserting ``Office of Juvenile
Crime Control and Delinquency Prevention''.
(4) Social security act.--Section 463(f) of the Social
Security Act (42 U.S.C. 663(f)) is amended by striking
``Office of Juvenile Justice and Delinquency Prevention'' and
inserting ``Office of Juvenile Crime Control and Delinquency
Prevention''.
(5) Omnibus crime control and safe streets act of 1968.--
Sections 801(a), 804, 805, and 813 of title I of the Omnibus
Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3712(a), 3782, 3785, 3786, 3789i) are each amended by
striking ``Office of Juvenile Justice and Delinquency
Prevention'' each place it appears and inserting ``Office of
Juvenile Crime Control and Delinquency Prevention''.
(6) Victims of child abuse act of 1990.--The Victims of
Child Abuse Act of 1990 (42 U.S.C. 13001 et seq.) is
amended--
(A) in section 214(b)(1), by striking ``262, 293, and 296
of subpart II of title II'' and inserting ``299B and 299E'';
(B) in section 214A(c)(1), by striking ``262, 293, and 296
of subpart II of title II'' and inserting ``299B and 299E'';
(C) in sections 217 and 222, by striking ``Office of
Juvenile Justice and Delinquency Prevention'' each place it
appears and inserting ``Office of Juvenile Crime Control and
Delinquency Prevention''; and
(D) in section 223(c), by striking ``section 262, 293, and
296'' and inserting ``sections 262, 299B, and 299E''.
(7) Missing children's assistance.--The Missing Children's
Assistance Act (42 U.S.C. 5771 et seq.) is amended--
(A) in section 403(2), by striking ``Justice and
Delinquency Prevention'' and inserting ``Crime Control and
Delinquency Prevention''; and
(B) in subsections (a)(5)(E) and (b)(1)(B) of section 404,
by striking ``section 313'' and inserting ``section 331''.
(8) Crime control act of 1990.--The Crime Control Act of
1990 (42 U.S.C. 13001 et seq.) is amended--
(A) in section 217(c)(1), by striking ``sections 262, 293,
and 296 of subpart II of title II'' and inserting ``sections
299B and 299E''; and
(B) in section 223(c), by striking ``section 262, 293, and
296 of title II'' and inserting ``sections 299B and 299E''.

SEC. 4270. REFERENCES.

In any Federal law (excluding this Act and the Acts amended
by this Act), Executive order, rule, regulation, order,
delegation of authority, grant, contract, suit, or document--
(1) a reference to the Office of Juvenile Justice and
Delinquency Prevention shall be deemed to include a reference
to the Office of Juvenile Crime Control and Delinquency
Prevention, and
(2) a reference to the National Institute for Juvenile
Justice and Delinquency Prevention shall be deemed to include
a reference to Office of Juvenile Crime Control and
Delinquency Prevention.

[[Page S213]]

PART 6--LOCAL GUN VIOLENCE PREVENTION PROGRAMS

SEC. 4271. COMPETITIVE GRANTS FOR CHILDREN'S FIREARM SAFETY
EDUCATION.

(a) Purposes.--The purposes of this section are--
(1) to award grants to assist local educational agencies,
in consultation with community groups and law enforcement
agencies, to educate children about preventing gun violence;
and
(2) to assist communities in developing partnerships
between public schools, community organizations, law
enforcement, and parents in educating children about
preventing gun violence.
(b) Definitions.--In this section:
(1) Local educational agency.--The term ``local educational
agency'' has the same meaning given such term in section
14101 of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 8801).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Education.
(3) State.--The term ``State'' means each of the 50 States,
the District of Columbia, the Commonwealth of Puerto Rico,
Guam, American Samoa, the Commonwealth of the Northern
Mariana Islands, and the United States Virgin Islands.
(c) Allocation of Competitive Grants.--
(1) Grants by the secretary.--For any fiscal year in which
the amount appropriated to carry out this section does not
equal or exceed $50,000,000, the Secretary of Education may
award competitive grants described under subsection (d).
(2) Grants by the states.--For any fiscal year in which the
amount appropriated to carry out this section exceeds
$50,000,000, the Secretary shall make allotments to State
educational agencies pursuant to paragraph (3) to award
competitive grants described in subsection (d).
(3) Formula.--Except as provided in paragraph (4), funds
appropriated to carry out this section shall be allocated
among the States as follows:
(A) Minors.--75 percent of such amount shall be allocated
proportionately based upon the population that is less than
18 years of age in the State.
(B) Incarcerated minors.--25 percent of such amount shall
be allocated proportionately based upon the population that
is less than 18 years of age in the State that is
incarcerated.
(4) Minimum allotment.--Of the amounts appropriated to
carry out this section, 0.50 percent shall be allocated to
each State.
(d) Authorization of Competitive Grants.--The Secretary or
the State educational agency, as the case may be, may award
grants to eligible local educational agencies for the
purposes of educating children about preventing gun violence,
in accordance with the following:
(1) Assurances.--
(A) Amount of funds distributed.--The Secretary or the
State educational agency, as the case may be, shall ensure
that not less than 90 percent of the funds allotted under
this section are distributed to local educational agencies.
(B) Distribution.--In awarding the grants, the Secretary or
the State educational agency, as the case may be, shall
ensure, to the maximum extent practicable--
(i) an equitable geographic distribution of grant awards;
(ii) an equitable distribution of grant awards among
programs that serve public elementary school students, public
secondary school students, and a combination of both; and
(iii) that urban, rural and suburban areas are represented
within the grants that are awarded.
(2) Priority.--In awarding grants under this section, the
Secretary or the State educational agency, as the case may
be, shall give priority to a local educational agency that--
(A) coordinates with other Federal, State, and local
programs that educate children about personal health, safety,
and responsibility, including programs carried out under the
Safe and Drug-Free Schools and Communities Act of 1994 (20
U.S.C. 7101 et seq.);
(B) serves a population with a high incidence of students
found in possession of a weapon on school property or
students suspended or expelled for bringing a weapon onto
school grounds or engaging in violent behavior on school
grounds; and
(C) forms a partnership that includes not less than 1 local
educational agency working in consultation with not less than
1 public or private nonprofit agency or organization with
experience in violence prevention or 1 local law enforcement
agency.
(3) Peer review; consultation.--
(A) In general.--
(i) Peer review by panel.--Before grants are awarded, the
Secretary shall submit grant applications to a peer review
panel for evaluation.
(ii) Composition of panel.--The panel shall be composed of
not less than 1 representative from a local educational
agency, State educational agency, a local law enforcement
agency, and a public or private nonprofit organization with
experience in violence prevention.
(B) Consultation.--The Secretary shall submit grant
applications to the Attorney General for consultation.
(e) Eligible Grant Recipients.--
(1) In general.--Except as provided in paragraph (2), an
eligible grant recipient is a local educational agency that
may work in partnership with 1 or more of the following:
(A) A public or private nonprofit agency or organization
with experience in violence prevention.
(B) A local law enforcement agency.
(C) An institution of higher education.
(2) Exception.--A State educational agency may, with the
approval of a local educational agency, submit an application
on behalf of such local educational agency or a consortium of
such agencies.
(f) Local Applications; Reports.--
(1) Applications.--Each local educational agency that
wishes to receive a grant under this section shall submit an
application to the Secretary and the State educational agency
that includes--
(A) a description of the proposed activities to be funded
by the grant and how each activity will further the goal of
educating children about preventing gun violence;
(B) how the program will be coordinated with other programs
that educate children about personal health, safety, and
responsibility, including programs carried out under the Safe
and Drug-Free Schools and Communities Act of 1994 (20
U.S.C. 7101 et seq.); and
(C) the age and number of children that the programs will
serve.
(2) Reports.--Each local educational agency that receives a
grant under this section shall submit a report to the
Secretary and to the State educational agency not later than
18 months after the grant is awarded and submit an additional
report to the Secretary and to the State not later than 36
months after the grant is awarded. Each report shall include
information regarding--
(A) the activities conducted to educate children about gun
violence;
(B) how the program will continue to educate children about
gun violence in the future; and
(C) how the grant is being coordinated with other Federal,
State, and local programs that educate children about
personal health, safety, and responsibility, including
programs carried out under the Safe and Drug-Free Schools and
Communities Act of 1994 (20 U.S.C. 7101 et seq.).
(g) Authorized Activities.--
(1) Required activities.--Grants authorized under
subsection (d) shall be used for the following activities:
(A) Supporting existing programs that educate children
about personal health, safety, and responsibility, including
programs carried out under the Safe and Drug-Free Schools and
Communities Act of 1994 (20 U.S.C. 7101 et seq.).
(B) Educating children about the effects of gun violence.
(C) Educating children to identify dangerous situations in
which guns are involved and how to avoid and prevent such
situations.
(D) Educating children how to identify threats and other
indications that their peers are in possession of a gun and
may use a gun, and what steps they can take in such
situations.
(E) Developing programs to give children access to adults
to whom they can report, in a confidential manner, any
problems relating to guns.
(2) Permissible activities.--Grants authorized under
subsection (d) may be used for the following:
(A) Encouraging schoolwide programs and partnerships that
involve teachers, students, parents, administrators, other
staff, and members of the community in reducing gun incidents
in public elementary and secondary schools.
(B) Establishing programs that assist parents in helping
educate their children about firearm safety and the
prevention of gun violence.
(C) Providing ongoing professional development for public
school staff and administrators to identify the causes and
effects of gun violence and risk factors and student behavior
that may result in gun violence, including training sessions
to review and update school crisis response plans and school
policies for preventing the presence of guns on school
grounds and facilities.
(D) Providing technical assistance for school psychologists
and counselors to provide timely counseling and evaluations,
in accordance with State and local laws, of students who
possess a weapon on school grounds.
(E) Improving security on public elementary and secondary
school campuses to prevent outside persons from entering
school grounds with firearms.
(F) Assisting public schools and communities in developing
crisis response plans when firearms are found on school
campuses and when gun-related incidents occur.
(h) State Applications; Activities and Reports.--
(1) State applications.--
(A) Contents.--Each State desiring to receive funds under
this section shall, through its State educational agency,
submit an application to the Secretary of Education at such
time and in such manner as the Secretary shall require. Such
application shall describe--
(i) the manner in which funds under this section for State
activities and competitive grants will be used to fulfill the
purposes of this section;

[[Page S214]]

(ii) the manner in which the activities and projects
supported by this section will be coordinated with other
State and Federal education, law enforcement, and juvenile
justice programs, including the Safe and Drug-Free Schools
and Communities Act of 1994 (20 U.S.C. 7101 et seq.);
(iii) the manner in which States will ensure an equitable
geographic distribution of grant awards; and
(iv) the criteria which will be used to determine the
impact and effectiveness of the funds used pursuant to this
section.
(B) Form.--A State educational agency may submit an
application to receive a grant under this section under
paragraph (1) or as an amendment to the application the State
educational agency submits under the Safe and Drug-Free
Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.).
(2) State activities.--Of appropriated amounts allocated to
the States under subsection (c)(2), the State educational
agency may reserve not more than 10 percent for activities to
further the goals of this section, including--
(A) providing technical assistance to eligible grant
recipients in the State;
(B) performing ongoing research into the causes of gun
violence among children and methods to prevent gun violence
among children; and
(C) providing ongoing professional development for public
school staff and administrators to identify the causes and
indications of gun violence.
(3) State reports.--Each State receiving an allotment under
this section shall submit a report to the Secretary and to
the Committees on Health, Education, Labor, and Pensions and
the Judiciary of the Senate and the Committees on Education
and the Workforce and the Judiciary of the House of
Representatives, not later than 12 months after receipt of
the grant award and shall submit an additional report to
those committees not later than 36 months after receipt of
the grant award. Each report shall include information
regarding--
(A) the progress of local educational agencies that
received a grant award under this section in the State in
educating children about firearms;
(B) the progress of State activities under paragraph (1) to
advance the goals of this section; and
(C) how the State is coordinating funds allocated under
this section with other State and Federal education, law
enforcement, and juvenile justice programs, including the
Safe and Drug-Free Schools and Communities Act of 1994 (20
U.S.C. 7101 et seq.).
(i) Supplement Not Supplant.--A State or local educational
agency shall use funds received under this section only to
supplement the amount of funds that would, in the absence of
such Federal funds, be made available from non-Federal
sources for reducing gun violence among children and
educating children about firearms, and not to supplant such
funds.
(j) Displacement.--A local educational agency that receives
a grant award under this section shall ensure that persons
hired to carry out the activities under this section do not
displace persons already employed.
(k) Home Schools.--Nothing in this section shall be
construed to affect home schools.
(l) Authorization of Appropriations.--There are authorized
to be appropriated for this section $60,000,000 for each of
fiscal years 2002, 2003, and 2004.

SEC. 4272. DISSEMINATION OF BEST PRACTICES VIA THE INTERNET.

(a) Model Dissemination.--The Secretary of Education shall
include on the Internet site of the Department of Education a
description of programs that receive grants under section
4271.
(b) Grant Program Notification.--The Secretary shall
publicize the competitive grant program through its Internet
site, publications, and public service announcements.

SEC. 4273. GRANT PRIORITY FOR TRACING OF GUNS USED IN CRIMES
BY JUVENILES.

Section 517 of the Omnibus Crime Control and Safe Streets
Act of 1968 (42 U.S.C. 3763) is amended by adding at the end
the following:
``(c) Priority.--In awarding discretionary grants under
section 511 to public agencies to undertake law enforcement
initiatives relating to gangs, or relating to juveniles who
are involved or at risk of involvement in gangs, the Director
shall give priority to a public agency that includes in its
application a description of strategies or programs of that
public agency (either in effect or proposed) that provide
cooperation between Federal, State, and local law enforcement
authorities, through the use of firearms and ballistics
identification systems, to disrupt illegal sale or transfer
of firearms to or between juveniles through tracing the
sources of guns used in crime that were provided to
juveniles.''.
____

21st Century Law Enforcement, Crime Prevention, and Victim Assistance
Act--Section-by-Section Analysis

Title I: supporting Law Enforcement and the Effective Administration of
Justice

Subtitle A. Support for Community Personnel

Sec. 1101. 21st century community policing initiative.
Extends COPS program through FY2007. Authorizes funds for up
to 50,000 police officers, 10,000 additional prosecutors, and
10,000 indigent defense attorneys. Authorizes $350 million
annually for new law enforcement technology designed to
improve police communications and promote comprehensive crime
analysis.

Subtitle B. Protecting Federal, State, and Local Law Enforcement
Officers and the Judiciary

Sec. 1201. Expansion of protection of Federal officers and
employees from murder due to their status. Clarifies that it
is a crime to murder a Federal employee because of his or her
status, as well as because of his or her performance of
official duties, and that the same protection applies to a
State or local government employee who is assisting a Federal
official.
Sec. 1202. Assaulting, resisting, or impeding certain
officers or employees. Increases the maximum penalties for
simple assault (from 1 to 3 years) and other assaults (from
10 to 20 years) on Federal officials acting in performance of
their official duties, or persons acting in concert with a
Federal employee.
Sec. 1203. Influencing, impeding, or retaliating against a
Federal official by threatening or injuring a family member.
Increases the maximum penalties for actual or attempted
influencing, impeding, or retaliating against a Federal
official by threatening a family member of the employee, from
5 to 10 years, and from 3 to 6 years if the threat is to
commit an assault.
Sec. 1204. Mailing threatening communications. Increases
the maximum penalties from 5 to 10 years for threats of
injury or kidnaping of any person mailed to a Federal judge,
and from 3 to 6 years for extortionate threats to Federal
judges.
Sec. 1205. Amendment of the sentencing guidelines for
assaults and threats against Federal judges and certain other
Federal officials and employees. Directs the United States
Sentencing Commission to amend the Sentencing Guidelines to
enhance penalties for assaults and threats against Federal
judges and other Federal officials and employees engaged in
their official duties.
Sec. 1206. Killing persons aiding Federal investigations or
State correctional officers. Provides that the killing of a
person working with Federal officials in a State or joint
Federal-State investigation shall be a crime, just as is a
killing in conjunction with a Federal investigation.
Sec. 1207. Killing State correctional officers. Clarifies
that Federal criminal penalties regarding assaults by
prisoners apply where the person committing the offense was
incarcerated prior to a finding of guilt, including pending
an initial appearance, arraignment, trial, or appeal.
Sec. 1208. Establishment of protective function privilege.
Establishes a privilege against testimony by Secret Service
officers charged with protecting the President, those in
direct line for the Presidency, and visiting foreign heads of
state.

Part 1. Extension of Project Exile

Sec. 1311. Authorization of funding for additional State
and local gun prosecutors. Authorizes $150,000,000 in FY2002
to hire additional local and State prosecutors to expand the
Project Exile program in high gun-crime areas. Requires
interdisciplinary team approach to prevent, reduce, and
respond to firearm related crimes in partnership with
communities.
Sec. 1312. Authorization of funding for additional Federal
firearms prosecutors and gun enforcement teams. Authorizes
the Attorney General to hire 114 additional Federal
prosecutors to prosecute violations of Federal firearms in up
to 20 jurisdictions designated as high crime areas.
Authorizes $15,000,000 for FY2002.

Part 2. Expansion of the Youth Crime Gun Interdiction Initiative

Sec. 1321. Youth Crime Gun Interdiction Initiative. Directs
the Secretary of the Treasury to expand participation in the
Youth Crime Gun Interdiction Initiative (``YCGII'').
Authorizes grants to States and localities for purposes of
assisting them in the tracing of firearms and participation
in the YCGII.

Part 3. Gun Offenses

Sec. 1331. Gun ban for dangerous juvenile offenders.
Prohibits juveniles adjudged delinquent for serious drug
offenses or violent felonies from receiving or possessing a
firearm, and makes it a crime for any person to sell or
provide a firearm to someone they have reason to believe has
been adjudged delinquent. This section applies only
prospectively, and access to firearms may be restored under
State restoration of rights provisions, but only if such
restoration is on a case-by-case, rather than automatic
basis.
Sec. 1332. Improving firearms safety. Requires gun dealers
to have secure gun storage devices available for sale,
including any device or attachment to prevent a gun's use by
one not having regular access to the firearm, or a lockable
safe or storage box.
Sec. 1333. Juvenile handgun safety. Increases the maximum
penalty for transferring a handgun to a juvenile or for a
juvenile to unlawfully possess a handgun from 1 to 5 years.
Sec. 1334. Serious juvenile drug offenses as armed career
criminal predicates. Permits the use of an adjudication of
juvenile delinquency for a serious drug trafficking offense
as a predicate offense for determining whether a defendant
falls within the Armed Career Criminal Act. That act provides
additional penalties for armed criminals with a proven record
of serious crimes involving drugs and violence.

[[Page S215]]

Sec. 1335. Increased penalty for transferring a firearm to
a minor for use in crime of violence or drug trafficking
crime. Increases the maximum penalty for providing a firearm
to a juvenile that one knows will be used in a serious crime
from 10 to 15 years.
Sec. 1336. Increased penalty for firearms conspiracy.
Subjects conspirators to the same penalties as are provided
for the underlying firearm offenses in 18 U.S.C. Sec. 924.

Part 4. Closing the Gun Show Loophole

Sec. 1341. Extension of Brady background checks to gun
shows. Eliminates the gun show loopholes by requiring
criminal background checks on all gun sales at gun shows;
clarifies that gun sellers and buyers are not subject to
penalties unless they knowingly attempt to circumvent the
background checks; and amends the Brady law to prevent the
Federal government from keeping records on qualified
purchasers for more than 90 days.

Subtitle D. Assistance to States for Prosecuting and Punishing Juvenile
Offenders, and Reducing Juvenile Crime

Sec. 1401. Juvenile and violent offender incarceration
grants. Authorizes the Attorney General to make grants to
States, local governments, or any combination thereof, to
assist them in planning, establishing, and operating secure
facilities, staff-secure facilities, detention centers, and
other correctional programs for violent juvenile offenders.
Sec. 1402. Certain punishment and graduated sanctions for
youth offenders. Authorizes the Attorney General to make
grants for the purposes of: (1) providing juvenile courts
with a range of sentencing options such that first time
juvenile offenders face some level of punishment as a result
of their initial contact with the juvenile justice system;
and (2) increasing the sentencing options available to
juvenile court judges. Authorizes appropriations through
FY2005.
Sec. 1403. Pilot program to promote replication of recent
successful juvenile crime reduction strategies. Directs the
Attorney General to establish a pilot program to encourage
and support communities that adopt a comprehensive approach
to suppressing and preventing violent juvenile crime
patterned after successful State juvenile crime reduction
strategies. Authorities appropriations through FY2004.
Sec. 1404. Reimbursement of States for costs of
incarcerating juvenile alien offenders. Amends: (1) the
Immigration Reform and Control Act of 1986 to provide for the
reimbursement of States for the costs of incarcerating
juvenile alien offenders; and (2) the Illegal Immigration
Reform and Immigrant Reform and Immigrant Responsibility Act
of 1996 to require that the annual report on criminal aliens
include additional details on illegal juvenile aliens.

Subtitle E. Ballistics, Law Assistance, and Safety Technology

Sec. 1501. Short title. This subtitle may be cited as the
``Ballistics, Law Assistance, and Safety Technology Act''
(``BLAST'').
Sec. 1502. Purposes. Statement of legislative purposes.
Sec. 1511. Definition of ballistics. Defines terms used in
this subtitle.
Sec. 1512. Test firing and automated storage of ballistics
records. Requires a licensed manufacturer or importer to test
fire firearms, prepare ballistics images, make records
available to the Secretary of the Treasury for entry in a
computerized database, and store the fired bullet and
cartridge casings. Directs the Attorney General and the
Secretary to assist firearm manufacturers and importers in
complying. Specifies that nothing herein creates a cause of
action against any Federal firearms licensee or any other
person for any civil liability except for imposition of a
civil penalty under this section.
Sec. 1513. Privacy rights of law abiding citizens.
Prohibits the use of ballistics information of individual
guns for (1) prosecutorial purposes, unless law enforcement
officials have a reasonable belief that crime has been
committed and that ballistics information would assist in the
investigation of that crime, or (2) the creation of a
national firearms registry of gun owners.
Sec. 1514. Demonstration firearm crime reduction strategy.
Directs the Secretary and the Attorney General to establish
in the jurisdiction selected a comprehensive firearm crime
reduction strategy. Requires the Secretary and the Attorney
General to select not fewer than ten jurisdictions for
participation in the program. Sets forth provisions regarding
selection criteria.

Subtitle F. Offender Reentry and Community Safety

Section 1601. Short title. This subtitle may be cited as
the ``Offender Reentry and Community Safety Act of 2001.''
Section 1602. Findings. Legislative findings in support of
this subtitle.
Section 1603. Purposes. Statement of legislative purposes.

Part 1. Federal Reentry Demonstration Projects

Section 1611. Federal Reentry Center Demonstration.
Establishes the Federal Reentry Center Demonstration project
to assist participating prisoners, under close monitoring, in
preparing for and adjusting to reentry into the community;
details project duration and selection of districts in which
to carry out programs.
Section 1612. Federal High-Risk Offender Reentry
Demonstration. Establishes the Federal High-Risk Offender
Reentry Demonstration project. Uses community corrections
facilities and appropriate monitoring technologies to promote
effective reentry into the community; notifies victims of
prisoner reentry; details project duration and selection of
districts in which to carry out programs.
Section 1613. District of Columbia Intensive Supervision,
Tracking, and Reentry Training (DC iSTART) Demonstration.
Establishes the District of Columbia Intensive Supervision,
Tracking and Reentry Training Demonstration (DC iSTART)
project. Uses intensive supervision to promote high risk
parolees' successful reentry into the community.
Section 1614. Federal Intensive Supervision, Tracking, and
Reentry Training (FED iSTART) Demonstration. Establishes the
Federal Intensive Supervision, Tracking and Reentry Training
Demonstration (FED iSTART) project. Uses intensive
supervision to promote high risk parolees' successful reentry
into the community.
Section 1615. Federal Enhanced In-Prison Vocational
Assessment and Training Demonstration. Establishes Federal
Enhanced In-Prison Vocational Assessment and Training
Demonstration project to provide in-prison assessment of
prisoners' vocational needs, development, and release
readiness, and other programs to prepare Federal prisoners
for reentry into the community.
Section 1616. Research and reports to Congress. Defines
requirements for reporting on the effectiveness of the
programs established in this subtitle.
Section 1617., Definitions. Defines terms used in this
subtitle.
Section 1618. Authorization of appropriations. Authorizes
appropriations through FY2006.

Part 2. State Reentry Grant Programs

Section 1621. Amendments to the Omnibus Crime Control and
Safe Streets Act of 1968. Establishes adult offender reentry
demonstration projects; State and local reentry courts;
juvenile offender State and local reentry programs; and State
reentry program research, development, and evaluation.

Title II: Strengthening the Federal Criminal Laws

Subtitle A. Combating Gang Violence

Part 1. Enhanced Penalties for Gang Related Activities

Sec. 2101. Gang franchising. Prohibits travel in interstate
commerce to create or promote a franchise of a criminal
street gang, with penalty of up to 10 years in prison for a
violation.
Sec. 2102. Enhanced penalties for use or recruitment of
minors in gangs. Requires the United States Sentencing
Commission to provide for enhanced penalties for those who
use or recruit minors in a criminal street gang franchise.
Sec. 2103. Gang franchising as a RICO predicate. Makes gang
franchising a predicate crime for a RICO prosecution.
Sec. 2104. Increase in offense level for participating in
crime as a gang member. Requires the United States Sentencing
Commission to provide an enhanced penalty for street gang
members who commit crimes as a member of the gang.
Sec. 2105. Enhanced penalty for discharge of a firearm in
relation to counts of violence or drug trafficking crimes.
Requires the United States Sentencing Commission to provide
for an enhanced penalty for any defendant who discharges a
firearm during the course of a crime of violence or a drug
offense.
Sec. 2106. Punishment of arson or bombings at facilities
receiving Federal financial assistance. Sets penalties for
arson or bombings a facilities of any institution or
organization receiving Federal financial assistance.
Sec. 2107. Elimination of statute of limitations for
murder. Eliminates the Federal statute of limitations for
Federal crimes involving murder regardless of whether the
crime carries the death penalty. Lifts the statute of
limitation, for example, on RICO offenses involving murder.
Sec. 2108. Extension of statute of limitations for violent
and drug trafficking crimes. Extends to 10 years the statute
of limitations for Class A felonies involving drug
trafficking and crimes of violence.
Sec. 2109. Increased penalties under the RICO law for gang
and violent crimes. Raises the maximum term of imprisonment
for a violation of RICO to 20 years or life imprisonment.
Sec. 2110. Increased penalty and broadened scope of statute
against violent crimes in aid of racketeering. Expands the
scope of anti-racketeering laws by including as violations
not only threats of violence in aid of racketeering, but also
actual acts of violence. Increases maximum penalty for
conspiracy to kidnap or murder in aid of racketeering from 10
years to life imprisonment; raises maximum penalty for other
actual or attempted crimes of violence in aid of racketeering
from 5 to 10 years.
Sec. 2111. Facilitating the prosecution of carjacking
offenses. Eliminates requirement that prosecutors prove that
a defendant actually intended to cause death or serious
bodily injury, as opposed, for example, to using a firearm
``merely'' to threaten the car owner.
Sec. 2112. Facilitation of RICO prosecutions. Eliminates
requirement that prosecutors prove that each defendant
committed two specific acts of racketeering activity. Brings
RICO conspiracy law into line with general conspiracy law.
Sec. 2113. Assault as a RICO predicate. Makes an assault a
predicate offense for purposes of the RICO statute

[[Page S216]]

Sec. 2114. Expansion of definition of ``racketeering
activity'' to affect gangs in Indian country. Expands the
definition of racketeering activity to include acts or
threats committed solely in Indian Country.
Sec. 2115. Increased penalties for violence in the course
of riot offenses. Changes the current 5 year maximum penalty
for violence in the course of a riot to a maximum of life
imprisonment where death results, or 20 years where serious
bodily injury results.
Sec. 2116. Expansion of Federal jurisdiction over crimes
occurring in private penal facilities housing Federal
prisoners or prisoners from other States. Expands the
definition of prisons under chapter 87 of Title 18 to
include, in addition to Federal prisons, private facilities
used to house Federal prisoners or for interstate housing of
prisoners.

Part 2. Targeting Gang-Related Gun Offenses

Sec. 2121. Transfer of firearm to commit a crime of
violence. Increases the ability of prosecutors to punish
those who facilitate crimes of violence by providing firearms
to criminals. Specifies that it is a crime for a person to
transfer a weapon to another when the person has ``reason to
know'', or actual knowledge, that the recipient of the weapon
will use it to commit a crime of violence.
Sec. 2122. Increased penalty for knowingly receiving
firearm with obliterated serial number. Increases from 5 to
10 years the maximum penalty for receiving a firearm with an
obliterated serial number, makes the maximum penalty the same
as for receiving a firearm known to be stolen.
Sec. 2123. Amendment of sentencing guidelines for transfers
of firearms to prohibited persons. Directs the United States
Sentencing commission to enhance penalties for the transfer
of a firearm to a person whom the defendant has reasonable
cause to believe is prohibited from possessing the firearm.

Part 3. Using and Protecting Witnesses to Help Prosecute Gangs and
Other Violent Criminals

Sec. 2131. Interstate travel to engage in witness
intimidation or obstruction of justice. Adds witness bribery,
witness intimidation, obstruction of justice, and related
conduct in State criminal proceedings to the list of
predicates under the Travel Act.
Sec. 2132. Expanding pretrial detention eligibility for
serious gang and other violent criminals. Protects witnesses
by expanding eligibility for pretrial detention of gang
members likely to harm or intimidate a witness. Allows a
court to (1) consider any adjudication of juvenile
delinquency in determining the number of prior convictions of
a defendant; (2) treat prior convictions for crimes of
possession of explosives or firearms as ``crimes of
violence''; and (3) consider membership in a criminal street
gang as a factor.
Sec. 2133. Conspiracy penalty for obstruction of justice
offenses involving victims, witnesses, and informants. Makes
a conspiracy to intimidate a witness or to obstruct justice a
separate crime punishable by up to the amount of the
contemplated crime, as opposed to the five year maximum under
the existing general conspiracy statute.
Sec. 2134. Allowing a reduction in sentence for providing
useful investigative information although not regarding a
particular individual. Clarifies the criminal code and the
Federal Rules of Criminal Procedure provisions dealing with
reduced sentences in return for cooperation investigation, as
opposed to an investigation focused on a particular person.
Sec. 2135. Increasing the penalty for using physical force
to tamper with witnesses, victims or informants. Amends the
witness tampering statute to include not only killing or
attempting to kill a witness, but also any use or attempted
use of physical force to deter a witness, and efforts to
delay testimony by witnesses or to alter or destroy
documents.
Sec. 2136. Expansion of Federal kidnaping offense to cover
when death of victim occurs before crossing State line and
when facility in interstate commerce or the mails are used.
Expands the Federal kidnaping offense to cover situations
where the death of the victim occurs before the crossing of
any State line, and situations where a facility in interstate
commerce or the mails is used, to make clear that the Federal
courts have jurisdiction over such cases.
Sec. 2137. Assaults or other crimes of violence for hire.
Includes, in addition to murder for hire connected to
interstate commerce, all felony crimes of violence against
persons under such circumstances as Federal crimes.
Sec. 2138. Clarification of interstate threats statute to
cover threats to kill. Clarifies the interstate threats
statute covers threats to kill as well as threats merely to
injure.
Sec. 2139. Conforming amendment to law punishing
obstruction of justice by notification of existence of
subpoena for records in certain types of investigations.
Expands the list of predicate crimes under the Federal
obstruction of justice statute to include the Controlled
Substances Act, the Controlled Substances Import and Export
Act, and the Internal Revenue Code.

Part 4. Gang Paraphernalia

Sec. 2141. Streamlining procedures for law enforcement
access to clone numeric pagers. Allows the use of clone
pagers (devices used to capture numbers sent to another
pager) with consent or on application to a court.
Sec. 2142. Sentencing enhancement for using body armor in
commission of a felony. Requires the Sentencing Commission to
adopt an appropriate sentencing enhancement for crimes
committed by persons wearing body armor, and provides an
exception where the crime is committed by a police officer,
who often wears such armor in the course of official duties.
Sec. 2143. Sentencing enhancement for using laser sighting
devices in commission of a felony. Requires the Sentencing
Commission to adopt an appropriate sentencing enhancement for
the use or possession of a laser sighting device in the
commission of a felony.
Sec. 2144. Government access to location information.
Provides that a mobile electronic communications service is
to provide the real-time physical location of a customer's
cell phone only upon a court order finding probable cause
connecting the subscriber to a felony.
Sec. 2145. Limitation on obtaining transactional
information from pen registers or trap and trace devices.
Provides that ex parte orders for the use of pen registers or
trap and trace devices are to direct that the devices be used
so as to minimize the interception of information other than
that involved in processing the call (i.e. telephone
numbers).

Subtitle B. Combating Money Laundering

Sec. 2201. Short title. This subtitle may be cited as the
``Money Laundering Enforcement Act of 2001''.
Sec. 2202. Illegal money transmitting businesses. Provides
that a defendant need only know that a money transmitting
business lacked a license required by the State law, not that
the operation of the business without the license was a
criminal violation of State law. Therefore, a prosecutor does
not have to provide actual knowledge of State law.
Sec. 2203. Restraint of assets of persons arrested a
abroad. Responds to the ease with which money can be
transferred from country to country by electronic means, and
provides for temporary seizure of property held within the
Unites States when a person has been arrested or charged in a
foreign country.
Sec. 2204. Civil money laundering jurisdiction over foreign
persons.. Provides ``long arm'' jurisdiction over foreign
banks engaged in money laundering that have accounts in the
United States, so that the foreign bank cannot claim that it
lacks the minimum contacts with the United States for in
personam jurisdiction.
Sec. 2205. Punishment of laundering money through foreign
banks. Amends civil money laundering provisions to include
foreign as well as domestic banks in the definition of
``financial institutions''.
Sec. 2206. Addition of serious foreign crimes to list of
money laundering predicates. Expands the list of money
laundering ``specified unlawful activity,'' or crimes for
which money laundering prosecutions can be brought. Includes
the following foreign crimes as predictes for a money
laundering prosecution: (1) all crimes of violence not
currently covered; (2) fraud against a foreign government;
(3) bribery of or theft by a foreign official; (4) smuggling
weapons; and (5) any other offense for which the United
States would extradite the defendant.
Sec. 2207. Criminal forfeiture for money laundering
conspiracies.. Makes a conspiracy to commit an existing
forfeiture crime a separate criminal violation.
Sec. 2208. Fungible property in foreign bank accounts.
Amends fungible property provisions to make them applicable
to all forfeitures (e.g., drug violations as well as money
laundering violations) and to foreign and domestic banks.
Extends the term for bringing fungible property actions from
one year to two years. Makes clear that the time runs from
the arrest or seizure.
Sec. 2209. Admissibility of foreign business records.
Provides that foreign records are admissible in civil
proceedings in the same way that they currently are
admissible in criminal proceedings.
Sec. 2210. Charging money laundering as a course of
conduct. Allows prosecutors to charge a continuing scheme to
violate the money laundering statutes as a single count in an
indictment, as an alternative to the present requirement that
prosecutors charge each transaction as a separate count.
Sec. 2211. Venue in money laundering cases. Establishes
that a money laundering prosecution can be brought in any
district in which the transaction is conducted, where a
prosecution for the underlying specified unlawful activity
could be brought, or where an act in any conspiracy took
place.
Sec. 2212. Technical amendment to restore wiretap authority
for certain money laundering offenses. Restores Federal
authority to obtain wiretaps in cases involving illegal
structuring of currency transactions.
Sec. 2213. Criminal penalties for violations of anti-money
laundering orders. Clarifies that criminal penalties apply to
violations of Department of Treasury ``geographic targeting
orders'' (temporary orders in enforcement of the Bank Secrecy
Act). Violations occur where there are false reports or
failures to make required reports.
Sec. 2214. Encouraging financial institution to notify law
enforcement of suspicious financial transactions. Expands the
definition of financial institutions which may, without civil
liability, report suspicious financial transactions to law
enforcement officials. Expanded definition includes
electronics communications services that facilitate
international transfer.

[[Page S217]]

Sec. 2215. Coverage of foreign bank branches in the
territories. Expands the definition of ``State'' to include
commonwealths, territories, and possessions of the United
States for purposes of the International Banking Act of 1978.
Sec. 2216. Conforming statute of limitations amendment for
certain bank fraud offenses. Technical amendment to conform
section number references.
Sec. 2217. Jurisdiction over certain financial crimes
committee abroad. Clarifies United States' jurisdiction over
access device fraud (credit card, debit card and
telecommunications fraud) where the fraud has an effect on an
entity within the United States.
Sec. 2218. Knowledge that property is the process of a
felony. Clarifies the law regarding a defendant's knowledge
of the source of money in a money laundering transactions.
Although the offense must in fact be a felony, it is not
necessary that the defendant be aware that the legislature
has so classified the offense.
Sec. 2219. Money laundering transactions; commingled
accounts. Clarifies the requirement in 18 U.S.A. Sec. 1957
that the monetary transaction involve more than $10,000 in
criminally derived property. Discusses the impact on money
laundering cases of commingled accounts which contain clean
money and money in criminally derived property.
Sec. 2220. Laundering the process of terrorism. Corrects an
omission in the Antiterrorism and Effective Death Penalty Act
of 1996 by making it an offense to launder money which was
raised for the material support of a foreign terrorist
organization. Current law makes it an offense to raise such
funds but not to launder the same.
Sec. 2221. Violations of sections 6050I. Requires any trade
or business receiving more than $10,000 in cash to report the
transaction to the IRS on Form 8300. Violations of the Form
8300 requirement will be treated the same as CTR and CMIR
violations for forfeiture purposes.
Sec. 2222. Including agencies of tribal governments in the
definition of a financial institution. Prevent tribes from
offering ``off-shore banking'' on Indian reservations by
forming tribal banks that may conceal deposit records from
the Federal Government. Clarifies present law to state that
the BSA and money laundering statues apply to banks owned or
operated by Indian tribes.
Sec. 2223. Penalties for violations of geographic targeting
orders and certain record keeping requirements. Correct
ambiguity regarding reporting under the Bank Secrecy Act
(BSA). Eliminates doubt concerning the applicability of
reporting provisions in reports required by GTOs issued under
31 U.S.C. Sec. 5326.

Subtitle C. Antidrug Provisions

Sec. 2301. Amendments concerning temporary emergency
scheduling. Authorizes the Attorney General to schedule
controlled substances on an emergency basis when that
substance proses an immediate threat to health and/or public
safety. Provides protections for legitimate researchers.
Sec. 2302. Amendment to reporting requirement for
transactions involving certain listed chemicals. Allows
reporting of certain transactions involving ephedrine,
pseudoephedrine and phenylpropanolamine to be exempted from
reporting requirements with no negative impact on law
enforcement goals.
Sec. 2303. Drug paraphernalia. Adds ``packaging'' to the
list of uses included in the definition of ``drug
paraphernalia'' in the Controlled Substances Act (21 U.S.C.
Sec. 863(d)). Facilitates prosecution of those who
manufacture packaging materials, sell them, and possess them.
Sec. 2304. Counterfeit substances/imitation controlled
substances. Expands the definition of counterfeit substance.
``Counterfeit substance'' applies to any controlled substance
which is represented to be or which imitates another
controlled substance regardless of whether that controlled
substance is of licit or illicit origin. Adds a new
definition for imitation controlled substances.
Sec. 2305. Conforming amendment concerning marijuana
plants. Corrects an inconsistency in the penalties relating
to marijuana plants that exists between 21 U.S.C. Sec. 841(b)
and 21 U.S.C. Sec. 960(b). The former statute applies to
domestic controlled substance trafficking violations and the
latter to controlled substance importation offenses. The
correction would make identical the number of marijuana
plants cited in the provisions.
Sec. 2306. Serious juvenile drug trafficking offenses as
armed career criminal act predicates. Permits the use of an
adjudication of juvenile delinquency based on a serious drug
trafficking offense as a predicate offense under the Armed
Career Criminal Act (ACCA), 18 U.S.C. Sec. 924(c)(2)(A). The
ACCA targets for a lengthy period of at least 15 years'
imprisonment those felons found in unlawful possession of a
firearm who have proven records of involvement in serious
acts of misconduct involving drugs or violence.
Sec. 2307. Increased penalties for using Federal property
to grow or manufacture controlled substances. Increases the
penalty for cultivating or manufacturing a controlled
substance on Federally owned or leased land. Federal law
enforcement agencies believe that the use of Federal lands
for cultivating and manufacturing controlled substances has
increased because there is no possibility that the land will
be forfeited as is the case if the cultivation or manufacture
took place on private property.
Sec. 2308. Clarification of length of supervised release
terms in controlled substance cases. Resolves a conflict in
the circuits as to the permissible length of supervised
release terms in controlled substance cases.
Sec. 2309. Supervised release period after conviction for
continuing criminal enterprise. Provides a mandatory minimum
period of 10 years of supervised release after a conviction
for participation in a continuing criminal enterprise where
there is no prior conviction, and a minimum of 15 years where
there has been a prior conviction.
Sec. 2310. Technical correction to ensure compliance of
sentencing guidelines with provisions of all Federal
statutes. Ensures that sentencing guidelines promulgated by
the United States Sentencing Commission are consistent with
the provisions of all Federal statutes.
Sec. 2311. Import and export of chemicals used to produce
illicit drugs. Authorizes the Drug Enforcement Administration
to require that exporters of certain listed chemicals to drug
producing areas of the world document to DEA the ultimate
consignee and use of the listed chemical Clarifies DEA's
authority to require advance notification of imports and
exports including identifying the importer in the country of
destination.

Subtitle D. Deterring Cargo Theft

Sec. 2351. Punishment of cargo theft. Clarifies Federal
statute governing thefts of vehicles normally used in
interstate commerce to include trailers, motortrucks, and air
cargo containers; and freight warehouses and transfer
stations. Makes such a theft a felony punishable by three
(not one) years in prison. Provides for appropriate
amendments to the Sentencing Guidelines.
Sec. 2352. Reports to Congress on cargo theft. Mandates
annual reports by the Attorney General to evaluate and
identify further means of combating cargo theft.
Sec. 2353. Establishment of Advisory Committee on cargo
theft. Establishes a six-member Advisory Committee on Cargo
Theft with representatives of the Departments of Justice,
Treasury and Transportation, and three experts from the
private sector. Committee will hold hearing and submit a
report within one year with detailed recommendations on cargo
security.
Sec. 2354. Addition of attempted theft and counterfeiting
offenses to eliminate gaps and inconsistencies in coverage.
Amends 22 statutes to clarify that attempt to embezzle funds
or counterfeit is a crime, just as is actual embezzlement or
counterfeiting.
Sec. 2355. Clarification of scienter requirement for
receiving property stolen from an Indian tribal organization.
Provides that it is a crime to receive, conceal or retain
property stolen from a tribal organization if one knows that
the property has been stolen, even if one did not know that
it had been stolen from a tribal organization.
Sec. 2356. Larceny involving post office boxes and postal
stamp vending machines. Clarifies that it is a crime to steal
from a post office box or stamp vending machine irrespective
of whether it is in a building used by the Postal Service.
Sec. 2357. Expansion of Federal theft offenses to cover
theft of vessels. Expands Federal law covering the
transportation of stolen vehicles to include watercraft.

Subtitle E. Improvements to Federal Criminal Law

Part 1. Sentencing Improvements

Sec. 2411. Application of sentencing guidelines to all
pertinent statutes. Clarifies that the rules and regulations
promulgated by the United States Sentencing Commission are
required to be consistent with all pertinent Federal
statutes, not just the Federal criminal statues within titles
18 and 28 of the United States Code.
Sec. 2412. Doubling maximum penalty for voluntary
manslaughter. Increases the maximum penalty for voluntary
manslaughter within the special maritime and territorial
jurisdiction of the United States from 10 to 20 years. Brings
it in line with related Federal penalties and the higher
penalty for voluntary manslaughter in many States.
Sec. 2413. Authorization of imposition of both a fine and
imprisonment rather than only either penalty in certain
offenses. Provides a uniform rule allowing both fine and
imprisonment in all criminal statutes. Addresses drafting
errors that have resulted in five Federal criminal statues,
18 U.S.C. Sec. 401 (criminal contempt), 18 U.S.C. Sec. 1705
(destruction of letter boxes), 18 U.S.C. Sec. 1916
(unauthorized employment or disposition of lapsed
appropriations), 18 U.S.C. Sec. 2234 (willfully exceeding
search warrant) and 18 U.S.C. Sec. 2235 (maliciously
procuring search warrant), where the court can impose either
a fine or imprisonment, but not both.
Sec. 2414. Addition of supervised release violation as
predicate for certain offenses. Adds supervised release to
various statutes which now relate only to probation or
parole. Violation of supervised release could serve as a
predicate offense in the same ways a violation of probation
or parole currently does.
Sec. 2415. Authority of court to impose a sentence of
probation or supervised release when reducing a sentence of
imprisonment in certain cases. Allows a court to impose
conditions of parole or supervised release (such as home
confinement) where a prisoner has a terminal illness that is
contagious.
Sec. 2416. Elimination of proof of value requirement for
felony theft or conversion of grand jury material. Eliminates
the $1,000

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felony threshold for thefts of government property under 18
U.S.C. Sec. 641 where the material stolen is grand jury
material.
Sec. 2417. Increased maximum corporate penalty for
antitrust violations. Increases the maximum statutory fine
for corporations convicted of criminal antitrust violations
from the current Sherman Act maximum of $10,000,000 to a new
maximum of $100,000,000.
Sec. 2418. Amendment of Federal sentencing guidelines for
counterfeit bearer obligations of the United States. Directs
the United States Sentencing Commission to amend the
Sentencing Guidelines to enhance penalties for counterfeiting
offenses, to address the recent increase of computer-
generated counterfeit U.S. currency produced by inkjet
printers and color copiers.

Part 2--Additional Improvements to Federal Criminal Law

Sec. 2421. Violence directed at dwellings in Indian
country. Allows the prosecution of Indians as well as non-
Indians who commit acts of violence directed against
dwellings on Indian reservations. Such crimes currently are
not among those specifically listed as prosecutable in the
Major Crimes Act.
Sec. 2422. Correction to Amber Hagerman Child Protection
Act. Corrects drafting errors in the Amber Hagerman Child
Protection Act (a bill regarding the crossing of State lines
to engage in sex with a child under 12). Expands penalties
for engaging in forcible sex with children ages 12 to 16.
Sec. 2423. Elimination of ``bodily harm'' element in
assault with a dangerous weapon offense. Eliminates voluntary
intoxication as a defense in the case of a person accused of
committing assault with a deadly weapon in the special
maritime and territorial jurisdiction of the United States.
Sec. 2424. Appeals from certain dismissals. Clarifies that
the government appeal statute authorizes appeal by the United
States whenever a court dismisses any part of an indictment
or information, so long as the appeal is consistent with the
Double Jeopardy Clause. The decision to appeal is to be made
by the Solicitor General.
Sec. 2425. Authority for injunction against disposal of
ill-gotten gains from violations of fraud statutes. Allows
injunctions for fraud when a person is disposing of or about
to dispose of property obtained not only as a result of bank
fraud, but also as a result of violations of general anti-
fraud statutes: a false statement under 18 U.S.C. Sec. 1001,
a false claim under 18 U.S.C. Sec. 287, or a conspiracy to
defraud the United States or violate the law under 18 U.S.C.
Sec. 371.
Sec. 2426. Expansion of interstate travel fraud statute to
cover interstate travel by perpetrator. Closes a gap in the
interstate travel fraud statute to cover situations where the
perpetrator travels in interstate commerce, in addition to
situations where the perpetrator transports or causes others
to travel in interstate commerce.
Sec. 2427. Clarification scope of unauthorized selling of
military medals or decorations. Clarifies that the
prohibition against the unauthorized selling of military
decorations also covers a person who ``trades, barters or
exchanges for . . . value.''
Sec. 2428. Amendment to section 669 to conform to Public
Law 104-294. Changes the threshold amount for a felony
involving health care fraud from $100 to $1,000.
Sec. 2429. Expansion of jurisdiction over child buying and
selling offenses. Expands Federal jurisdiction over child
buying and selling statutes to cover, in addition to any
territory or possession of the United States, the special
maritime and territorial jurisdiction of the United States,
and commonwealths and possessions of the United States.
Sec. 2430. Limits on disclosure of wiretap orders. Provides
that only an ``aggrieved party'' may have access to Title III
applications and orders for wiretaps. Only such aggrieved
persons have standing to seek suppression of the resulting
intercepted communications.
Sec. 2431. Prison credit and aging prisoner reform.
Eliminates inappropriate accrual of custody credit and avoids
the resulting unwarranted disparities in time served by
Federal offenders. Eliminates disparities in the treatment of
foreign and domestic prisoners with respect to ``good time
credits''. Permits certain non-dangerous Federal prisoners
over the age of 70 to be released after they have served at
least 30 years in custody, upon approval of the Bureau of
Prisons and a Federal court.
Sec. 2432. Miranda reaffirmation. Repeals 18 U.S.C.
Sec. 3501, which purported to overturn the Supreme Court's
Miranda decision; the Court has held Sec. 3501 to be
unconstitutional.

Title III: Protecting Americans and Supporting Victims of Crime

Subtitle A. Crime Victims Assistance

Sec. 3101. Short title. This subtitle may be cited as the
``Crime Victims Assistance Act of 2001''.

Part 1. Victim Rights

Sec. 3111. Right to notice and to be heard concerning
detention. Require the government to make reasonable efforts
to notify victims of upcoming detention hearings and of their
right to attend and address the court. Where identification
of the defendant remains at issue, provides flexibility to
the presiding judge to protect the integrity of the
identification.
Sec. 3112. Right to a speedy trial. Require courts to take
into account the interests of the victim in the prompt and
appropriate disposition of the case.
Sec. 3113. Right to notice and to be heard concerning plea.
Require the government to make reasonable efforts to notify
victims of upcoming plea hearings and of their right to
attend and address the court.
Sec. 3114. Enhanced participatory rights at trial. Extends
the Victim Rights Clarification Act to apply to televised
proceedings. Amends the Victims' Rights and Restitution Act
of 1990 to strengthen the right of crime victims to be
present at court proceedings, including trials.
Sec. 3115. Right to notice and to be heard concerning
sentence. Directs courts to consider the views of victims in
imposing sentence, and requires probation officers to notify
victims of their right to attend sentencing proceedings and
address the court.
Sec. 3116. Right to notice and to be heard concerning
sentence adjustment. Directs the government to make
reasonable efforts to notify victims of upcoming hearings
concerning revocation or modification of probation or
supervised release and of their right to attend and address
the court.
Sec. 3117. Right to notice of release or escape. Requires
the Bureau of Prisons to ensure victims reasonable notice of
an offender's release or escape from custody. Specifically
clarifies victim's rights to notification of an offender's
release or escape from a psychiatric institution.
Sec. 3118. Right to notice and to be heard concerning
executive clemency. Requires the Attorney General to make
reasonable efforts to notify victims of the grant of
executive clemency, and to report to Congress concerning
executive clemency matters delegated for review or
investigation to the Attorney General.
Sec. 3119. Remedies for noncompliance. Establishes a
mechanism for addressing violations of the newly created
statutory rights of crime victims.

Part 2. Victim Assistance Initiatives

Sec. 3121. Pilot programs to establish ombudsman programs
for crime victims. Authorizes the establishment of pilot
programs to operate Victim Ombudsman Information Centers in
seven States, which would provide information to victims
concerning their right to participate in the criminal justice
process, identify and respond to violations of victims'
rights, and educate public officials concerning the rights of
victims. Authorizes the use of up to $5 million of False
Claims Act funds to make grants for these pilot programs.
Sec. 3122. Amendments to Victims of Crime Act of 1984.
Provides for improvements in Federal support for victim
assistance and compensation under the Victims of Crime Act.
Includes changes in the sources of funding to the Crime
Victims Fund and increases the minimum threshold for the
annual grant to victim compensation programs.
Sec. 3123. Increased training for law enforcement and court
personnel to respond to the needs of crime victims.
Authorizes the use of False Claims Act funds to make grants
to provide victim-related training.
Sec. 3124. Increased resources to develop state-of-the-art
systems for notifying crime victims of important dates and
developments. Authorizes grants for the development of crime
victim notification systems, using False Claims Act funds and
amounts available in the Violent Crime Reduction Trust Fund.

Part 3. Victim-Offender Programs: ``Restorative Justice''

Sec. 3131. Pilot program and study of restorative justice
approach on behalf of victims of crime. Authorizes grants for
pilot programs in restorative justice in juvenile court
settings. Includes a study of existing programs. Requires
that participation in pilot programs be voluntary.

Subtitle B. Violence Against Women Act Enhancements

Sec. 3201. Shelter services for battered women and
children. Provides assistance to local entities that provide
shelter or transitional housing assistance to victims of
domestic violence. Provides means to improve access to
information on family violence within underserved
populations. Reauthorizes funding for the Family Violence
Prevention and Services Act at a level of $175,000,000
through FY 2005.
Sec. 3202. Transitional housing assistance for victims of
domestic violence. Provides grants to those in need of
housing assistance as a result of fleeing a family violence
situation. Funding includes assistance with rent, utilities,
transportation, and child care.
Sec. 3203. Family unity demonstration project. Extends the
Family Unity Demonstration Project through FY 2005.

Subtitle C. Senior Safety

Sec. 3301. Short title. This subtitle may be cited as the
``Seniors Safety Act of 2001''.
Sec. 3302. Finding and purposes. Legislative findings in
support of this subtitle, and statement of legislative
purposes.
Sec. 3303. Definitions. Defines terms used in this
subtitle.

Part 1. Combating Crimes Against Seniors

Sec. 3311. Enhanced sentencing penalties based on age of
victim. Directs the U.S. Sentencing Commission to review and,
if appropriate, amend the sentencing guidelines to include
age as one of the criteria for determining whether a
sentencing enhancement is appropriate. Encourages such review
to reflect the economic and physical harms associated with
criminal activity targeted at seniors and consider providing
increased penalties for offenses where the victim was a
senior.
Sec. 3312. Study and report on health care fraud sentences.
Directs the U.S. Sentencing Commission to review and, if
appropriate,

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amend the sentencing guidelines applicable to health care
fraud offenses. Encourages such review to reflect the serious
harms associated with health care fraud and the need for law
enforcement to prevent such fraud, and to consider enhanced
penalties for persons convicted of health care fraud.
Sec. 3313. Increased penalties for fraud resulting in
serious injury or death. Increases the penalties under the
mail fraud statute and the wire fraud statute for fraudulent
schemes that result in serious injury or death. The maximum
penalty if serious bodily harm occurred would be up to twenty
years; if a death occurred, the maximum penalty would be a
life sentence.
Sec. 3314. Safeguarding pension plans from fraud and theft.
Punishes, with up to 10 years' imprisonment, the act of
defrauding retirement arrangements, or obtaining by means of
false or fraudulent pretenses money or property of any
retirement arrangement.
Sec. 3315. Additional civil penalties for defrauding
pension plans. Authorizes the Attorney General to bring a
civil action for retirement fraud, with penalties up to
$50,000 for an individual or $100,000 for an organization, or
the amount of the gain to the offender or loss to the victim,
whichever is greatest.
Sec. 3316. Punishing bribery and graft in connection with
employee benefit plans. Increases the maximum penalty for
bribery and graft in connection with the operation of an
employee benefit plan from 3 to 5 years' imprisonment.
Broadens existing law to cover corrupt attempts to give or
accept bribery or graft payments, and to proscribe bribery or
graft payments to persons exercising de facto influence or
control over employee benefit plans.

Part 2. Preventing Telemarketing Crime

Sec. 3321. Centralized complaint and consumer education
service for victims of telemarketing fraud. Directs the
Federal Trade Commission (FTC) to establish a central
information clearinghouse for victims of telemarketing fraud
and procedures for logging in complaints of telemarketing
fraud victims, providing information on telemarketing fraud
schemes, referring complaints to appropriate law enforcement
officials, and providing complaint or prior conviction
information. Directs the Attorney General to establish a
database of telemarketing fraud convictions secured against
corporations or companies, for uses described above.
Sec. 3322. Blocking of telemarketing scams. Clarifies that
telemarketing fraud schemes executed using cellular telephone
services are subject to the enhanced penalties for such fraud
under 18 U.S.C. Sec. 2326. Authorizes termination of
telephone service used to carry on telemarketing fraud.
Requires telephone companies, upon notification in writing
from the Department of Justice that a particular phone number
is being used to engage in fraudulent telemarketing or other
fraudulent conduct, and after notice to the customer, to
terminate the subscriber's telephone service.

Part 3. Preventing Health Care Fraud

Sec. 3331. Injunctive authority relating to false claims
and illegal kickback schemes involving Federal health care
programs. Authorizes the Attorney General to take immediate
action to halt illegal health care fraud kickback schemes
under the Social Security Act. Attorney General may seek a
civil penalty of up to $50,000 per violation, or three times
the remuneration, whichever is greater, for each offense
under this section with respect to a Federal health care
program.
Sec. 3332. Authorized investigative demand procedures.
Authorizes the Attorney General to issue administrative
subpoenas to investigate civil health care fraud cases.
Provides privacy safeguards for personally identifiable
health information that may be obtained in response to an
administrative subpoena and divulged in the course of a
Federal investigation.
Sec. 3333. Extending antifraud safeguards to the Federal
employees health benefits program. Removes the anti-fraud
exemption for the Federal Employee Health Benefits Act
(FEHB), thereby extending anti-fraud and anti-kickback
safeguards applicable to the Medicare and Medicaid program to
the FEHB. Allows the Attorney General to use the same civil
enforcement tools to fight fraud perpetrated against the FEHB
program as are available to other Federal health care
programs, and to recover civil penalties against persons or
entities engaged in illegal kickback schemes.
Sec. 3334. Grand jury disclosure. Authorizes Federal
prosecutors to seek a court order to share grand jury
information regarding health care offenses with other Federal
prosecutors for use in civil proceedings or investigations
relating to fraud or false claims in connection with any
Federal health care program. Permits grand jury information
regarding health care offenses to be shared with Federal
civil prosecutors, only after ex parte court review and a
finding that the information would assist in enforcement of
Federal laws or regulations.
Sec. 3335. Increasing the effectiveness of civil
investigative demands in false claims investigations.
Authorizes the Attorney General to delegate authority to
issue civil investigative demands to the Deputy Attorney
General or an Assistant Attorney General. Authorizes whistle-
blowers who have brought qui tam actions under the False
Claims Act to seek permission from a district court to obtain
information disclosed to the Justice Department in response
to civil investigative demands.

Part 4. Protecting the Rights of Elderly Crime Victims

Sec. 3341. Use of forfeited funds to pay restitution to
crime victims and regulatory agencies. Authorizes the use of
forfeited funds to pay restitution to crime victims and
regulatory agencies.
Sec. 3342. Victim restitution. Allows the government to
move to dismiss forfeiture proceedings to allow the defendant
to use the property subject to forfeiture for the payment of
restitution to victims. If forfeiture proceedings are
complete, Government may return the forfeited property so it
may be used for restitution.
Sec. 3343. Bankruptcy proceedings not used to shield
illegal gains from false claims. Allows an action under the
False Claims Act despite concurrent bankruptcy proceedings.
Prohibits discharge of debts resulting from judgments or
settlements in Medicare and Medicaid fraud cases. Provides
that no debt owed for a violation of the False Claims Act or
other agreement may be avoided under bankruptcy provisions.
Sec. 3344. Forfeiture for retirement offenses. Requires the
forfeiture of proceeds of a criminal retirement offense.
Permits the civil forfeiture of proceeds from a criminal
retirement offense.

Subtitle D. Violent Crime Reduction Trust Fund

Sec. 3401. Extension of Violent Crime Reduction Trust Fund.
Extends funding for the Violent Crime Control and Law
Enforcement Act of 1994 through FY2005.

Title IV: Breaking the Cycle of Drugs and Violence

Subtitle A. Drug Courts, Drug Treatment, and Alternative sentencing

Part 1. Expansion of Drug Courts

Sec. 4111. Reauthorization of drug courts program.
Authorizes appropriations for the Drug Courts Program for
FY2002 and FY2003 at $400,000,000 each year.
Sec. 4112. Juvenile drug courts. Authorizes grants to
States, State and local courts, and Indian tribes, to
establish programs for juveniles adjudicated delinquent for
non-violent crimes who have substance abuse problems.
Programs must include drug testing, drug treatment, and
aftercare services such as relapse prevention and vocational
training. Authorizes appropriations through FY2005 from the
Violent Crime Reduction Trust Fund.

Part 2. Zero Tolerance Drug Testing

Sec. 4121. Grant authority. Authorizes grants to States and
localities for programs supporting comprehensive drug testing
of criminal justice populations, and to establish appropriate
interventions to illegal drug use for offender populations.
Sec. 4122. Administration. Instructs Attorney General to
coordinate with the other Justice Department initiatives that
address drug testing and interventions in the criminal
justice system.
Sec. 4123. Applications. Instructs potential applicants on
the process of requesting such grants, which are to be
awarded on a competitive basis.
Sec. 4124. Federal share. The Federal share of a grant made
under this part may not exceed 75 percent of the total cost
of the program.
Sec. 4125. Geographic distribution. The Attorney General
shall ensure that, to the extent practicable, an equitable
geographic distribution of grant awards is made, with rural
and tribal jurisdiction representation.
Sec. 4126. Technical assistance, training, and evaluation.
The Attorney General shall provide technical assistance and
training in furtherance of the purposes of this part.
Sec. 4127. Authorization of appropriations. Authorizes
$75,000,000 for FY2002 and such sums as are necessary for
FY2003 through FY2006.
Sec. 4128. Permanent set-aside for research and evaluation.
The Attorney General shall set aside between 1 and 3 percent
of the sums appropriated under section 4127 for research and
evaluation of this program.
Sec. 4129. Additional requirements for the use of funds
under the violent offender incarceration and truth-in-
sentencing grant programs. Requires that States receiving
grants under the Violent Offender Incarceration and Truth-In-
Sentencing grant programs (VOI/TIS) adopt a system of
controlled substance testing and interventions. Permits use
of VOI/TIS funds for such testing. Adds other conditions for
receipt of funding under the VOI/TIS program.

Part 3. Drug Treatment

Sec. 4131. Drug treatment alternative to prison programs
administered by State or local prosecutors. Authorizes the
Attorney General to make grants to State or local prosecutors
to implement or expand drug treatment alternative to prison
programs. Authorizes appropriations through FY2006.
Sec. 4132. Substance abuse treatment in Federal prisons
reauthorization. Authorizes funding for substance abuse
treatment in Federal prisons for FY2002 and FY2003.
Sec. 4133. Residential substance abuse treatment for State
prisoners reauthorization. Authorizes appropriations for
residential substance abuse treatment for State prisoners
through FY2007. Allows States to offer treatment during
incarceration and after release.
Sec. 4134. Drug treatment for juveniles. Allows the
Director of the Center for Substance Abuse to make grants to
public and private nonprofit entities to provide residential
drug treatment programs for juveniles. Authorizes
appropriations through FY2005.

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Part 4. Funding for Drug Free Community Programs

Sec. 4141. Extension of safe and drug-free schools and
community programs. Extends funding for the Safe and Drug-
Free Schools and Communities Program through FY2005, at
$655,000,000 for FY2002 and FY2003, and $955,000,000 for
FY2004 and FY2005.
Sec. 4142. Say No to Drugs community centers. Authorizes
grants for the provision of drug prevention services to youth
living in eligible communities during after-school hours or
summer vacations. Authorizes $125,000,000 for each of FY2002
and FY2003 from the Violent Crime Reduction Trust Fund.
Sec. 4143. Drug education and prevention relating to youth
gangs. Extends funding under the Anti-Drug Abuse Act of 1988
through FY2006.
Sec. 4144. Drug education and prevention program for
runaway and homeless youth. Extends funding under the Anti-
Drug Abuse Act of 1988 through FY2006.

Subtitle B--Youth Crime Prevention and Juvenile Courts

Part 1--Grants to Youth Organizations

Sec. 4211. Grant program. Establishes a grant program for
provision of (1) constructive activities for youth during
critical time periods; (2) supervised activities in a safe
environment; (3) anti-drug education; (4) anti-drug police
efforts; or (5) a safe environment for activities in parks
and other public recreation areas.
Sec. 4212. Grants to national organizations. Establishes
application requirements and evaluation criteria for awarding
grants to national and statewide organizations.
Sec. 4213. Grants to States. Establishes application
requirements and evaluation criteria for awarding grants to
States.
Sec. 4214. Allocation; grant limitation. Allocates funds
under this subtitle: 20 percent shall go to national and
statewide organizations; 80 percent shall go to States.
Sec. 4215. Report and evaluation. Defines reporting
requirements and establishes criteria by which the Attorney
General shall evaluate the funded programs.
Sec. 4216. Authorization of appropriations. Authorizes
appropriation of such sums as may be necessary for FY2002 and
FY2003, and $125,000,000 for each of FY2004 and FY2005.
Sec. 4217. Grants to public and private agencies.
Authorizes grants to public and private agencies to fund
effective after school juvenile crime prevention programs.

Part 2. Reauthorization of Incentive Grants for Local Delinquency
Prevention Programs

Sec. 4221. Incentive grants for local delinquency
prevention programs. Reauthorizes incentive grants for local
delinquency prevention programs through FY2006.
Sec. 4222. Research, evaluation, and training. Allocates a
portion of the amounts appropriated for incentive grants for
local delinquency programs to research, evaluation and
training.

Part 3. JUMP Ahead

Sec. 4231. Short title. This part may be cited as the
``JUMP Ahead Act of 2001''.
Sec. 4232. Findings. Legislative findings in support of
this part.
Sec. 4233. Juvenile mentoring grants. Amends the Juvenile
Justice and Delinquency Prevention Act of 1973 (JJDPA) to
include a list of the intended goals of mentoring grants.
Each grant is limited to a total of $200,000 over a period
not more than three years. Authorizes $50,000,000 for each of
FY2002 through FY2005.
Sec. 4234. Implementation and evaluation grants. Authorizes
grants to national organizations or agencies to improve youth
mentoring programs. Authorizes $5,000,000 for each of FY2002
through FY2005.
Sec. 4235. Evaluations; reports. Directs the Attorney
General to evaluate the programs and activities assisted
under this part or under the JJDPA. Requires each grant
recipient to report annually to the evaluating organization
on any program or activity so assisted.

Part 4. Truancy Prevention

Sec. 4241. Short title. This part may be cited as the
``Truancy Prevention and Juvenile Crime Reduction Act of
2001''.
Sec. 4242. Findings. Legislative findings in support of
this part.
Sec. 4243. Grants. Authorizes grants to eligible
partnerships to reduce truancy and daytime juvenile crime.
Authorizes $25,000,000 for each of FY2002 through FY2004.

Part 5. Juvenile Crime Control and Delinquency Prevention Act

Sec. 4251. Short title. This part may be cited as the
``Juvenile Crime Control and Delinquency Prevention Act of
2001''.
Sec. 4252. Findings. Legislative findings in support of
this part.
Sec. 4253. Purpose. Statement of legislative purpose.
Sec. 4254. Definitions. Defines terms used in this part.
Sec. 4255. Name of office. Redesignated the Office of
Juvenile and Delinquency Prevention as the Office of Juvenile
Crime Control and Delinquency Prevention.
Sec. 4256. Concentration of Federal effort. Modifies
provisions of the JJDPA regarding annual submission of
juvenile delinquency development statements and the contents
of such reports.
Sec. 4257. Allocation. Makes certain technical amendments
to the allocation formulas.
Sec. 4258. State plans. Modifies JJDPA requirements
regarding State plans. Defines who shall serve on State
advisory groups. Requires State plans to provide services in
rural areas, offer mental health services, and address
gender-specific needs. Defines projects to which funds may be
applied. Revises State plan requirements regarding limits on
the placement of juveniles in secure detention or
correctional facilities.
Sec. 4259. Juvenile delinquency prevention block grant
program. Authorizes grants to eligible States to carry out
projects designed to prevent juvenile delinquency. Delineates
the manner in which funding shall be allocated between
States. Defines requirements under which States must consider
applications.
Sec. 4260. Research; evaluation; technical assistance;
training. Authorizes the Administrator to undertake specified
activities regarding research, evaluation, technical
assistance, and training. Permits Federal agencies to carry
out projects directly or by making grants to or contracts
with public and private agencies, institutions, and
organizations.
Sec. 4261. Demonstration projects. Authorizes the
Administrator to fund initiatives for the prevention,
control, or reduction of juvenile delinquency.
Sec. 4262. Authorization of appropriations. Authorizes
appropriations for specified programs under the JJDPA for
FY2002 through FY2004.
Sec. 4263. Administrative authority. Limits the
Administrator's authority to establish rules, regulations and
procedures to those necessary for the exercise of the
function of the office and to ensure compliance with the
requirements of the title.
Sec. 4264. Use of funds. Prohibits the use of funds for the
construction of short or long-term juvenile or adult offender
facilities; allows up to 15 percent of funds from a State's
allocation for replacement or renovation of juvenile
facilities.
Sec. 4265. Limitation on use of funds. Prohibits the use of
funds under this part for advocacy or support for the
unsecured release of juvenile charged with violent crimes.
Sec. 4266. Rules of construction. The JJDPA shall not be
construed (1) to prevent financial assistance from being
awarded through grants under the JJDPA to any otherwise
eligible organization, or (2) to modify or affect any Federal
or State law relating to collective bargaining rights.
Sec. 4267. Leasing surplus Federal property. Authorizes the
Administrator to lease surplus Federal property to States and
localities for use as facilities for juveniles offenders;
issues rules for making grants and contracts, and
distributing funds available, to carry out the JJDPA.
Sec. 4268. Issuance of rules. Authorizes the Administrator
to issue such rules as are necessary to carry out this part.
Sec. 4269. Technical and conforming amendments. Makes
technical and conforming amendments to the JJDPA and other
laws.
Sec. 4270. References. Any reference to the Office of
Juvenile Justice and Delinquency Prevention shall be deemed
to include a reference to the Office of Juvenile Crime
Control and Delinquency Prevention.

Part 6. Local Gun Violence Prevention Program

Sec. 4271. Competitive grants for children's firearm safety
education. Authorizes competitive grants to eligible local
educational agencies to educate children about prevention
violence. Authorizes $60,000,000 for each of FY2002 and
FY2004.
Sec. 4272. Dissemination of best practices via the
Internet. Requires the Secretary of Education to post details
of programs that receive grants on the Department's Internet
site, and to publicize the program on its Internet site and
in its publications.
Sec. 4273. Grant priority for tracing guns used in crimes
by juveniles. Requires the Bureau of Justice Assistance to
give priority to grant applications that include coordinated
enforcement strategies to trace firearms and disrupt illegal
firearms sales to or among juveniles.

Mr. LEAHY. I am pleased today to join Senator Daschle and other
Democratic Senators in introducing the 21st Century Law Enforcement,
Crime Prevention, and Victims Assistance Act. This comprehensive crime
bill builds on prior Democratic crime initiatives, including the
landmark Violent Crime Control and Law Enforcement Act of 1994, that
have substantially reduced the Nations' serious crime rates.
Our current Attorney General, Janet Reno, has helped us all make
unprecedented strides in combating violent crime, protecting women's
rights, protecting crime victims rights and reducing violence against
women. The Nation's serious crime rates have declined for an
unprecedented eight straight years. Murder rates have fallen to their
lowest levels in three decades, and since 1994, violent crimes by
juveniles and the juvenile arrest rates for serious crimes have also
declined. Our outgoing Attorney General must be commended for greatly
improving the effectiveness of our law enforcement coordination
efforts, federal law enforcement assistance efforts and for extending
the reach of those efforts into rural areas.

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The 21st Century Law Enforcement, Crime Prevention, and Victims
Assistance Act is designed to keep our Nation's crime rates moving in
the right direction--downward. The Nation's serious crime rates are now
at their lowest level since 1973, the first year the national crime
victimization survey was conducted. We are proud of the significant
reduction in crime rates, but we must not become complacent. Too many
Americans still encounter violence in their neighborhoods, workplaces,
and unfortunately, even in their homes. This bill would ensure that the
crime rates continue their downward trend next year, the year after,
and beyond.
We should be able to enact this bill, without partisan or ideological
controversy. We have tried to avoid the easy rhetoric about crime that
some have to offer in this crucial area of public policy. Instead, we
have crafted a bill that could actually make a difference.
The 21st Century Law Enforcement, Crime Prevention, and Victims
Assistance Act targets violent crime in our schools, combats gang
violence, cracks down on the sale and use of illegal drugs, enhances
the rights of crime victims, fights crime against America's senior
citizens, and provides meaningful assistance to law enforcement
officers in the battle against street crime. The bill represents an
important next step in the continuing effort by Senate Democrats to
enact tough yet balanced reforms to our criminal justice system.
I should note that the bill contains no new death penalties and no
new or increased mandatory minimum sentences. We can be tough without
imposing the death penalty, and we can ensure swift and certain
punishment without removing all discretion from the judge at
sentencing.
Title I of the bill deals with proposals for supporting Federal,
State and local law enforcement and promoting the effective
administration of justice. this title extends the COPS program through
fiscal year 2007, authorizing funding to deploy up to 50,000 additional
police officers, 10,000 additional prosecutors, and 10,000 indigent
defense attorneys in the coming years. The bill also extends Project
Exile, the Department of Justice's gun violence reduction initiative
designed to prosecute felons who unlawfully possess firearms, and the
Youth Crime Gun Interdiction Initiative, the national program to
disrupt the illegal supply of firearms to juveniles by tracing the guns
that are used in crimes, and it includes a provision sponsored by
Senator Biden to authorize grants to alleviate the public safety risk
posed by released prisoners by promoting their successful reintegration
into society.
Other important initiatives are included to protect children from
violence, including violence resulting from the misuse of guns.
Americans want concrete proposals to reduce the risk of such incidents
recurring. At the same time, we must preserve adults' rights to use
guns for legitimate purposes, such as home protection, hunting and for
sport. Title I of the bill imposes a prospective gun ban for juveniles
convicted or adjudicated delinquent for violent crimes. It also
requires revocation of a firearms dealer's license for failing to have
secure gun storage or safety devices available for sale with firearms.
The bill enhances the penalties for certain firearm laws involving
juveniles. In addition, the bill would close the gun show loophole by
requiring criminal background checks on all gun sales at gun shows.
This title of the bill also recognizes that law enforcement officers
put their lives on the line every day. According to the FBI, over 1,000
officers have been killed in the line of duty since 1980. The 21st
Century Law Enforcement, Crime Prevention, and Victims Assistance Act
establishes new crimes and increases penalties for killing Federal
officers and persons working with Federal officers, including in their
work with Federal prisoners, and for retaliation against Federal
officials by threatening or injuring their family members. The bill
enhances the penalty for assaults and threats against Federal judges
and other federal officials engaged in their official duties.
A significant problem that arose during Special Prosecutor Kenneth
Starr's investigation of president Clinton was the loss of
confidentiality that had previously attached to the important work of
the U.S. Secret Service. The Departments of Justice and Treasury and
even a former Republican President advise that the safety of future
Presidents may be jeopardized by forcing U.S. Secret Service agents to
breach the confidentiality they need to do their job by testifying
before a grant jury. I trust the Secret Service on this issue; they are
the experts with the mission of protecting the lives of the President
and other high-level official and visiting dignitaries. I also have
confidence in the judgment of former President Bush, who has written,
``I feel very strongly that [Secret Service] agents should not be made
to appear in court to discuss that which they might or might not have
seen or heard.''
Title I of the 21st Century Law Enforcement, Crime Prevention, and
Victims Assistance Act provides a reasonable and limited protective
function privilege so future Secret Service agents are able to maintain
the confidentiality they say they need to protect the lives of the
President, Vice President and visiting heads of state.
Title II of the bill is aimed at strengthening the Federal criminal
laws. This part of the bill cracks down on gangs by making the
interstate ``franchising'' of street gangs a crime. It would also
increase penalties for crimes during which the convicted felon wears
protective body armor or uses ``laser-sighting'' devices to commit the
crime, and doubles the maximum criminal penalties for using or
threatening physical violence against witnesses and contains other
provisions designed to facilitate the use and protection of witnesses
to help prosecute gangs and other violent criminals.

Title II of the bill also details provisions for combating money
laundering. Crime increasingly has an international face, from drug
kingpins to millionaire terrorists, like Osama bin Laden. The money
laundering provisions of this bill hit these international criminals
where it hurts most--in the pocketbook.
These provisions would provide important tools not just to combat
international terrorism but drug trafficking as well. We must have
interdiction, we must have treatment programs; we must tell kids to say
``No'' to drugs. But we have to do more, and taking the profit away
from international drug lords is an effective weapon. This Democratic
crime bill would strengthen these laws.
Title II also contains important initiatives to deter cargo thefts,
enhance the maximum penalties for voluntary manslaughter, felony theft
or conversion of grand jury material, counterfeiting, and certain
antitrust violations committed by corporations.
Title III of the bill is intended to increase the rights of victims
within the criminal justice system. The criminal is only half of the
equation. This bill guarantees the rights of crime victims. All States
recognize victims' rights in some form, but they often lack the
training and resources to make those rights a reality. This title
provides a model Bill of Rights for crime victims in the Federal
system, and makes available to the States grants for victim-related
training and state-of-the art notification systems. In addition, this
title would authorize grants for pilot programs to operate Victim
Ombudsman Information Centers in seven States, and to study the
effectiveness of the restorative justice approach for victims. It would
also provide assistance for shelters and transitional housing for
victims of domestic violence. In short, this title would help make
victims' rights a reality.
This title of the bill also includes a number of provisions to
improve the safety and security of older Americans. During the 1990s,
while overall crime rates dropped throughout the nation, the rate of
crime against seniors remained constant. In addition to the increased
vulnerability of some seniors to violent crime, older Americans are
increasingly targeted by swindlers looking to take advantage of them
through telemarketing schemes, pension fraud, and health care fraud. We
must strengthen the hand of law enforcement to combat those criminals
who plunder the savings that older Americans have worked their
lifetimes to earn. The 21st Century Law Enforcement, Crime Prevention,
and Victims Assistance Act tries to do exactly that,

[[Page S222]]

through a comprehensive package of proposals to establish new
protections and increase penalties for a wide variety of crimes against
seniors.
Title IV of the bill outlines a number of prevention and alternative
sentencing programs that are critical to further reducing juvenile
crime. These programs include grants to youth organizations and ``Say
No to Drugs'' Community Centers, and grants to promote drug testing and
drug treatment, as well as reauthorization of the Safe and Drug-Free
Schools and Communities Program, the Anti-Drug Abuse Programs, and the
Local Deliquency Prevention Programs. Additional sections include a
program suggested by Senator Bingaman to establish a competitive grant
program to reduce truancy, with priority given to efforts to replicate
successful programs.
The bill would also reauthorize the Juvenile Justice and Deliquency
Prevention Act and create a new juvenile justice block grant program,
retaining the four core protections for youth in the juvenile justice
system while adopting greater flexibility for rural areas.
In recent years, the Senate Republicans have tried to gut these core
protections in their juvenile crime bills. This Democratic crime bill
puts ideology aside, and follows the advice of numerous child advocacy
experts--including the Children's Defense Fund, National Collaboration
for Youth, Youth Law Center and National Network for Youth--who believe
these key protections must be preserved in order to protect juveniles
who have been arrested or detained. These core protections ensure that
juveniles are not housed with adults, do not have verbal or physical
contact with adult inmates, and any disproportionate confinement of
minority youth is addressed by the States. If these protections are
abolished, many more youth may end up committing suicide or being
released with serious physical or emotional scars.
The 21st Century Law Enforcement, Crime Prevention, and Victims
Assistance Act is a comprehensive and realistic set of proposals for
assisting local enforcement, preventing crime, protecting our children
and senior citizens, and assisting the victims of crime. I look forward
to working on a bipartisan basis for passage of as much of this bill as
possible during the 107th Congress.
______

By Mr. DASCHLE (for himself, Mr. Dodd, Mr. Lieberman, Mr. Dorgan,
Mr. Durbin, Mr. Biden, Mrs. Boxer, Mrs. Clinton, Mr. Corzine,
Mr. Harkin, Mr. Johnson, Mr. Kennedy, Mr. Leahy, Ms. Mikulski,
Mr. Rockefeller, Mr. Sarbanes, and Mr. Schumer):
S. 17. A bill to amend the Federal Election Campaign Act of 1971 to
provide bipartisan campaign reform; to the Committee on Rules and
Administration.

federal elections reform act of 2001

Mr. DASCHLE. 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. 17

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 ``Federal
Elections Reform Act of 2001''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE

Sec. 101. Soft money of political parties.
Sec. 102. Increased contribution limits for State committees of
political parties and aggregate contribution limit for
individuals.
Sec. 103. Reporting requirements.

TITLE II--INDEPENDENT AND COORDINATED EXPENDITURES

Sec. 201. Definitions.
Sec. 202. Express advocacy determined without regard to background
music.
Sec. 203. Civil penalty.
Sec. 204. Reporting requirements for certain independent expenditures.
Sec. 205. Independent versus coordinated expenditures by party.
Sec. 206. Coordination with candidates.

TITLE III--DISCLOSURE

Sec. 301. Audits.
Sec. 302. Reporting requirements for contributions of $50 or more.
Sec. 303. Use of candidates' names.
Sec. 304. Prohibition of false representation to solicit contributions.
Sec. 305. Campaign advertising.

TITLE IV--MISCELLANEOUS

Sec. 401. Codification of Beck decision.
Sec. 402. Use of contributed amounts for certain purposes.
Sec. 403. Limit on congressional use of the franking privilege.
Sec. 404. Prohibition of fundraising on Federal property.
Sec. 405. Penalties for violations.
Sec. 406. Strengthening foreign money ban.
Sec. 407. Prohibition of contributions by minors.
Sec. 408. Expedited procedures.
Sec. 409. Initiation of enforcement proceeding.
Sec. 410. Protecting equal participation of eligible voters in
campaigns and elections.
Sec. 411. Penalty for violation of prohibition against foreign
contributions.
Sec. 412. Expedited court review of certain alleged violations of
Federal Election Campaign Act of 1971.
Sec. 413. Conspiracy to violate presidential campaign spending limits.
Sec. 414. Deposit of certain contributions and donations in Treasury
account.
Sec. 415. Establishment of a clearinghouse of information on political
activities within the Federal Election Commission.
Sec. 416. Enforcement of spending limit on presidential and vice
presidential candidates who receive public financing.
Sec. 417. Clarification of right of nationals of the United States to
make political contributions.
Sec. 418. Prohibiting use of White House meals and accommodations for
political fundraising.
Sec. 419. Prohibition against acceptance or solicitation to obtain
access to certain Federal government property.
Sec. 420. Requiring national parties to reimburse at cost for use of
Air Force One for political fundraising.
Sec. 421. Enhancing enforcement of campaign finance law.
Sec. 422. Ban on coordination of soft money for issue advocacy by
presidential candidates receiving public financing.
Sec. 423. Requirement that names of passengers on Air Force One and Air
Force Two be made available through the Internet.

TITLE V--ELECTION ADMINISTRATION AND TECHNOLOGY

Sec. 501. Findings.

Subtitle A--Establishment of Commission on Voting Rights and Procedures

Sec. 511. Establishment.
Sec. 512. Membership of the Commission.
Sec. 513. Duties of the Commission.
Sec. 514. Powers of the Commission.
Sec. 515. Personnel matters.
Sec. 516. Termination of the Commission.
Sec. 517. Authorization of appropriations for the Commission.

Subtitle B--Grant Program

Sec. 521. Establishment of grant program.
Sec. 522. Authorized activities.
Sec. 523. General policies and criteria.
Sec. 524. Submission of State plans.
Sec. 525. Approval of State plans.
Sec. 526. Federal matching funds.
Sec. 527. Audits and examinations.
Sec. 528. Reports.
Sec. 529. State defined.
Sec. 530. Authorization of appropriations.

Subtitle C--Miscellaneous

Sec. 541. Relationship to other laws.

TITLE VI--MILITARY VOTING

Sec. 601. Short title.
Sec. 602. Guarantee of residency.
Sec. 603. State responsibility to guarantee military voting rights.

TITLE VII--SEVERABILITY; CONSTITUTIONALITY; EFFECTIVE DATE; REGULATIONS

Sec. 701. Severability.
Sec. 702. Review of constitutional issues.
Sec. 703. Effective date.
Sec. 704. Regulations.

TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE

SEC. 101. SOFT MONEY OF POLITICAL PARTIES.

(a) In General.--Title III of the Federal Election Campaign
Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at
the end the following:

``SEC. 323. SOFT MONEY OF POLITICAL PARTIES.

``(a) National Committees.--
``(1) In general.--A national committee of a political
party (including a national congressional campaign committee
of a political party) and any officers or agents of such
party committees, shall not solicit, receive, or direct to
another person a contribution, donation, or transfer of
funds, or spend any funds, that are not subject to the
limitations, prohibitions, and reporting requirements of this
Act.
``(2) Applicability.--This subsection shall apply to an
entity that is directly or indirectly established, financed,
maintained, or controlled by a national committee of a
political party (including a national congressional campaign
committee of a political

[[Page S223]]

party), or an entity acting on behalf of a national
committee, and an officer or agent acting on behalf of any
such committee or entity.
``(b) State, District, and Local Committees.--
``(1) In general.--An amount that is expended or disbursed
by a State, district, or local committee of a political party
(including an entity that is directly or indirectly
established, financed, maintained, or controlled by a State,
district, or local committee of a political party and an
officer or agent acting on behalf of such committee or
entity) for Federal election activity shall be made from
funds subject to the limitations, prohibitions, and reporting
requirements of this Act.
``(2) Federal election activity.--
``(A) In general.--The term `Federal election activity'
means--
``(i) voter registration activity during the period that
begins on the date that is 120 days before the date a
regularly scheduled Federal election is held and ends on the
date of the election;
``(ii) voter identification, get-out-the-vote activity, or
generic campaign activity conducted in connection with an
election in which a candidate for Federal office appears on
the ballot (regardless of whether a candidate for State or
local office also appears on the ballot); and
``(iii) a communication that refers to a clearly identified
candidate for Federal office (regardless of whether a
candidate for State or local office is also mentioned or
identified) and is made for the purpose of influencing a
Federal election (regardless of whether the communication is
express advocacy).
``(B) Excluded activity.--The term `Federal election
activity' does not include an amount expended or disbursed by
a State, district, or local committee of a political party
for--
``(i) campaign activity conducted solely on behalf of a
clearly identified candidate for State or local office,
provided the campaign activity is not a Federal election
activity described in subparagraph (A);
``(ii) a contribution to a candidate for State or local
office, provided the contribution is not designated or used
to pay for a Federal election activity described in
subparagraph (A);
``(iii) the costs of a State, district, or local political
convention;
``(iv) the costs of grassroots campaign materials,
including buttons, bumper stickers, and yard signs, that name
or depict only a candidate for State or local office;
``(v) the non-Federal share of a State, district, or local
party committee's administrative and overhead expenses (but
not including the compensation in any month of an individual
who spends more than 20 percent of the individual's time on
Federal election activity) as determined by a regulation
promulgated by the Commission to determine the non-Federal
share of a State, district, or local party committee's
administrative and overhead expenses; and
``(vi) the cost of constructing or purchasing an office
facility or equipment for a State, district or local
committee.
``(c) Fundraising Costs.--An amount spent by a national,
State, district, or local committee of a political party, by
an entity that is established, financed, maintained, or
controlled by a national, State, district, or local committee
of a political party, or by an agent or officer of any such
committee or entity, to raise funds that are used, in whole
or in part, to pay the costs of a Federal election activity
shall be made from funds subject to the limitations,
prohibitions, and reporting requirements of this Act.
``(d) Tax-Exempt Organizations.--A national, State,
district, or local committee of a political party (including
a national congressional campaign committee of a political
party), an entity that is directly or indirectly established,
financed, maintained, or controlled by any such national,
State, district, or local committee or its agent, and an
officer or agent acting on behalf of any such party committee
or entity, shall not solicit any funds for, or make or direct
any donations to, an organization that is described in
section 501(c) of the Internal Revenue Code of 1986 and
exempt from taxation under section 501(a) of such Code (or
has submitted an application to the Commissioner of the
Internal Revenue Service for determination of tax-exemption
under such section).
``(e) Candidates.--
``(1) In general.--A candidate, individual holding Federal
office, agent of a candidate or individual holding Federal
office, or an entity directly or indirectly established,
financed, maintained or controlled by or acting on behalf of
one or more candidates or individuals holding Federal office,
shall not--
``(A) solicit, receive, direct, transfer, or spend funds in
connection with an election for Federal office, including
funds for any Federal election activity, unless the funds are
subject to the limitations, prohibitions, and reporting
requirements of this Act; or
``(B) solicit, receive, direct, transfer, or spend funds in
connection with any election other than an election for
Federal office or disburse funds in connection with such an
election unless the funds--
``(i) are not in excess of the amounts permitted with
respect to contributions to candidates and political
committees under paragraphs (1) and (2) of section 315(a);
and
``(ii) are not from sources prohibited by this Act from
making contributions with respect to an election for Federal
office.
``(2) State law.--Paragraph (1) does not apply to the
solicitation, receipt, or spending of funds by an individual
who is a candidate for a State or local office in connection
with such election for State or local office if the
solicitation, receipt, or spending of funds is permitted
under State law for any activity other than a Federal
election activity.
``(3) Fundraising events.--Notwithstanding paragraph (1), a
candidate may attend, speak, or be a featured guest at a
fundraising event for a State, district, or local committee
of a political party.''.
(b) Definition of Generic Campaign Activity.--Section 301
of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et
seq.) (as amended by section 201(b)) is further amended by
adding at the end the following:
``(21) Generic campaign activity.--The term `generic
campaign activity' means an activity that promotes a
political party and does not promote a candidate or non-
Federal candidate.''.

SEC. 102. INCREASED CONTRIBUTION LIMITS FOR STATE COMMITTEES
OF POLITICAL PARTIES AND AGGREGATE CONTRIBUTION
LIMIT FOR INDIVIDUALS.

(a) Contribution Limit for State Committees of Political
Parties.--Section 315(a)(1) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 441a(a)(1)) is amended--
(1) in subparagraph (B), by striking ``or'' at the end;
(2) in subparagraph (C)--
(A) by inserting ``(other than a committee described in
subparagraph (D))'' after ``committee''; and
(B) by striking the period at the end and inserting ``;
or''; and
(3) by adding at the end the following:
``(D) to a political committee established and maintained
by a State committee of a political party in any calendar
year that, in the aggregate, exceed $10,000.''.
(b) Aggregate Contribution Limit for Individual.--Section
315(a)(3) of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a(a)(3)) is amended by striking ``$25,000'' and
inserting ``$30,000''.

SEC. 103. REPORTING REQUIREMENTS.

(a) Reporting Requirements.--Section 304 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 434), as amended by
section 204, is amended by inserting after subsection (f) the
following:
``(g) Political Committees.--
``(1) National and congressional political committees.--The
national committee of a political party, any national
congressional campaign committee of a political party, and
any subordinate committee of either, shall report all
receipts and disbursements during the reporting period.
``(2) Other political committees to which section 323
applies.--In addition to any other reporting requirements
applicable under this Act, a political committee (not
described in paragraph (1)) to which section 323(b)(1)
applies shall report all receipts and disbursements made for
activities described in paragraphs (2)(A) and (2)(B)(v) of
section 323(b).
``(3) Itemization.--If a political committee has receipts
or disbursements to which this subsection applies from any
person aggregating in excess of $200 for any calendar year,
the political committee shall separately itemize its
reporting for such person in the same manner as required in
paragraphs (3)(A), (5), and (6) of subsection (b).
``(4) Reporting periods.--Reports required to be filed
under this subsection shall be filed for the same time
periods required for political committees under subsection
(a).''.
(b) Building Fund Exception to the Definition of
Contribution.--Section 301(8)(B) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431(8)(B)) is amended--
(1) by striking clause (viii); and
(2) by redesignating clauses (ix) through (xv) as clauses
(viii) through (xiv), respectively.

TITLE II--INDEPENDENT AND COORDINATED EXPENDITURES

SEC. 201. DEFINITIONS.

(a) Definition of Independent Expenditure.--Section 301 of
the Federal Election Campaign Act (2 U.S.C. 431) is amended
by striking paragraph (17) and inserting the following:
``(17) Independent expenditure.--
``(A) In general.--The term `independent expenditure' means
an expenditure by a person--
``(i) for a communication that is express advocacy; and
``(ii) that is not coordinated activity or is not provided
in coordination with a candidate or a candidate's agent or a
person who is coordinating with a candidate or a candidate's
agent.''.
(b) Definition of Express Advocacy.--Section 301 of the
Federal Election Campaign Act of 1971 (2 U.S.C. 431) is
amended by adding at the end the following:
``(20) Express advocacy.--
``(A) In general.--The term `express advocacy' means a
communication that advocates the election or defeat of a
candidate by--
``(i) containing a phrase such as `vote for', `re-elect',
`support', `cast your ballot for', `(name of candidate) for
Congress', `(name of candidate) in 1997', `vote against',
`defeat', `reject', or a campaign slogan or words that in
context can have no reasonable meaning other than to advocate
the election or defeat of one or more clearly identified
candidates;
``(ii) referring to one or more clearly identified
candidates in a paid advertisement that is transmitted
through radio or television within 60 calendar days preceding
the

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date of an election of the candidate and that appears in the
State in which the election is occurring, except that with
respect to a candidate for the office of Vice President or
President, the time period is within 60 calendar days
preceding the date of a general election; or
``(iii) expressing unmistakable and unambiguous support for
or opposition to one or more clearly identified candidates
when taken as a whole and with limited reference to external
events, such as proximity to an election.
``(B) Voting record and voting guide exception.--The term
`express advocacy' does not include a communication which is
in printed form or posted on the Internet that--
``(i) presents information solely about the voting record
or position on a campaign issue of one or more candidates
(including any statement by the sponsor of the voting record
or voting guide of its agreement or disagreement with the
record or position of a candidate), so long as the voting
record or voting guide when taken as a whole does not express
unmistakable and unambiguous support for or opposition to one
or more clearly identified candidates;
``(ii) is not coordinated activity or is not made in
coordination with a candidate, political party, or agent of
the candidate or party, or a candidate's agent or a person
who is coordinating with a candidate or a candidate's agent,
except that nothing in this clause may be construed to
prevent the sponsor of the voting guide from directing
questions in writing to a candidate about the candidate's
position on issues for purposes of preparing a voter guide or
to prevent the candidate from responding in writing to such
questions; and
``(iii) does not contain a phrase such as `vote for', `re-
elect', `support', `cast your ballot for', `(name of
candidate) for Congress', `(name of candidate) in (year)',
`vote against', `defeat', or `reject', or a campaign slogan
or words that in context can have no reasonable meaning other
than to urge the election or defeat of one or more clearly
identified candidates.''.
(c) Definition of Expenditure.--Section 301(9)(A) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 431(9)(A)) is
amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(iii) a payment made by a political committee for a
communication that--
``(I) refers to a clearly identified candidate; and
``(II) is for the purpose of influencing a Federal election
(regardless of whether the communication is express
advocacy).''.

SEC. 202. EXPRESS ADVOCACY DETERMINED WITHOUT REGARD TO
BACKGROUND MUSIC.

Section 301(20) of the Federal Election Campaign Act of
1971 (2 U.S.C. 431(20)), as added by section 201(b), is
amended by adding at the end the following new subparagraph:
``(C) Background music.--In determining whether any
communication by television or radio broadcast constitutes
express advocacy for purposes of this Act, there shall not be
taken into account any background music not including lyrics
used in such broadcast.''.

SEC. 203. CIVIL PENALTY.

Section 309 of the Federal Election Campaign Act of 1971 (2
U.S.C. 437g) is amended--
(1) in subsection (a)--
(A) in paragraph (4)(A)--
(i) in clause (i), by striking ``clause (ii)'' and
inserting ``clauses (ii) and (iii)''; and
(ii) by adding at the end the following:
``(iii) If the Commission determines by an affirmative vote
of 4 of its members that there is probable cause to believe
that a person has made a knowing and willful violation of
section 304(c), the Commission shall not enter into a
conciliation agreement under this paragraph and may institute
a civil action for relief under paragraph (6)(A).''; and
(B) in paragraph (6)(B), by inserting ``(except an action
instituted in connection with a knowing and willful violation
of section 304(c))'' after ``subparagraph (A)''; and
(2) in subsection (d)(1)--
(A) in subparagraph (A), by striking ``Any person'' and
inserting ``Except as provided in subparagraph (D), any
person''; and
(B) by adding at the end the following:
``(D) In the case of a knowing and willful violation of
section 304(c) that involves the reporting of an independent
expenditure, the violation shall not be subject to this
subsection.''.

SEC. 204. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT
EXPENDITURES.

Section 304 of the Federal Election Campaign Act of 1971 (2
U.S.C. 434) is amended--
(1) in subsection (c)(2), by striking the undesignated
matter after subparagraph (C);
(2) by redesignating paragraph (3) of subsection (c) as
subsection (e); and
(3) by inserting after subsection (e), as redesignated by
paragraph (2), the following:
``(f) Time for Reporting Certain Expenditures.--
``(1) Expenditures aggregating $1,000.--
``(A) Initial report.--A person (including a political
committee) that makes or contracts to make independent
expenditures aggregating $1,000 or more after the 20th day,
but more than 24 hours, before the date of an election shall
file a report describing the expenditures within 24 hours
after that amount of independent expenditures has been made.
``(B) Additional reports.--After a person files a report
under subparagraph (A), the person shall file an additional
report within 24 hours after each time the person makes or
contracts to make independent expenditures aggregating an
additional $1,000 with respect to the same election as that
to which the initial report relates.
``(2) Expenditures aggregating $10,000.--
``(A) Initial report.--A person (including a political
committee) that makes or contracts to make independent
expenditures aggregating $10,000 or more at any time up to
and including the 20th day before the date of an election
shall file a report describing the expenditures within 48
hours after that amount of independent expenditures has been
made.
``(B) Additional reports.--After a person files a report
under subparagraph (A), the person shall file an additional
report within 48 hours after each time the person makes or
contracts to make independent expenditures aggregating an
additional $10,000 with respect to the same election as that
to which the initial report relates.
``(3) Place of filing; contents.--A report under this
subsection--
``(A) shall be filed with the Commission; and
``(B) shall contain the information required by subsection
(b)(6)(B)(iii), including the name of each candidate whom an
expenditure is intended to support or oppose.''.

SEC. 205. INDEPENDENT VERSUS COORDINATED EXPENDITURES BY
PARTY.

Section 315(d) of the Federal Election Campaign Act (2
U.S.C. 441a(d)) is amended--
(1) in paragraph (1), by striking ``and (3)'' and inserting
``, (3), and (4)''; and
(2) by adding at the end the following:
``(4) Independent Versus Coordinated Expenditures by
Party.--
``(A) In general.--On or after the date on which a
political party nominates a candidate, a committee of the
political party shall not make both expenditures under this
subsection and independent expenditures (as defined in
section 301(17)) with respect to the candidate during the
election cycle.
``(B) Certification.--Before making a coordinated
expenditure under this subsection with respect to a
candidate, a committee of a political party shall file with
the Commission a certification, signed by the treasurer of
the committee, that the committee has not and shall not make
any independent expenditure with respect to the candidate
during the same election cycle.
``(C) Application.--For the purposes of this paragraph, all
political committees established and maintained by a national
political party (including all congressional campaign
committees) and all political committees established and
maintained by a State political party (including any
subordinate committee of a State committee) shall be
considered to be a single political committee.
``(D) Transfers.--A committee of a political party that
submits a certification under subparagraph (B) with respect
to a candidate shall not, during an election cycle, transfer
any funds to, assign authority to make coordinated
expenditures under this subsection to, or receive a transfer
of funds from, a committee of the political party that has
made or intends to make an independent expenditure with
respect to the candidate.''.

SEC. 206. COORDINATION WITH CANDIDATES.

(a) Definition of Coordination With Candidates.--
(1) Section 301(8).--Section 301(8) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431(8)) is amended--
(A) in subparagraph (A)--
(i) by striking ``or'' at the end of clause (i);
(ii) by striking the period at the end of clause (ii) and
inserting ``; or''; and
(iii) by adding at the end the following:
``(iii) coordinated activity (as defined in subparagraph
(C)).''; and
(B) by adding at the end the following:
``(C) Coordinated activity.--The term `coordinated
activity' means anything of value provided by a person in
coordination with a candidate, an agent of the candidate, or
the political party of the candidate or its agent for the
purpose of influencing a Federal election (regardless of
whether the value being provided is a communication that is
express advocacy) in which such candidate seeks nomination or
election to Federal office, and includes any of the
following:
``(i) A payment made by a person in cooperation,
consultation, or concert with, at the request or suggestion
of, or pursuant to any general or particular understanding
with a candidate, the candidate's authorized committee, the
political party of the candidate, or an agent acting on
behalf of a candidate, authorized committee, or the political
party of the candidate.
``(ii) A payment made by a person for the production,
dissemination, distribution, or republication, in whole or in
part, of any broadcast or any written, graphic, or other form
of campaign material prepared by a candidate, a candidate's
authorized committee, or an agent of a candidate or
authorized committee (not including a communication described
in paragraph (9)(B)(i) or a communication that expressly
advocates the candidate's defeat).
``(iii) A payment made by a person based on information
about a candidate's plans, projects, or needs provided to the
person making the payment by the candidate or the candidate's
agent who provides the information with the intent that the
payment be made.
``(iv) A payment made by a person if, in the same election
cycle in which the payment is

[[Page S225]]

made, the person making the payment is serving or has served
as a member, employee, fundraiser, or agent of the
candidate's authorized committee in an executive or
policymaking position.
``(v) A payment made by a person if the person making the
payment has served in any formal policy making or advisory
position with the candidate's campaign or has participated in
formal strategic or formal policymaking discussions (other
than any discussion treated as a lobbying contact under the
Lobbying Disclosure Act of 1995 in the case of a candidate
holding Federal office or as a similar lobbying activity in
the case of a candidate holding State or other elective
office) with the candidate's campaign relating to the
candidate's pursuit of nomination for election, or election,
to Federal office, in the same election cycle as the election
cycle in which the payment is made.
``(vi) A payment made by a person if, in the same election
cycle, the person making the payment retains the professional
services of any person that has provided or is providing
campaign-related services in the same election cycle to a
candidate (including services provided through a political
committee of the candidate's political party) in connection
with the candidate's pursuit of nomination for election, or
election, to Federal office, including services relating to
the candidate's decision to seek Federal office, and the
person retained is retained to work on activities relating to
that candidate's campaign.
``(vii) A payment made by a person who has directly
participated in fundraising activities with the candidate or
in the solicitation or receipt of contributions on behalf of
the candidate.
``(viii) A payment made by a person who has communicated
with the candidate or an agent of the candidate (including a
communication through a political committee of the
candidate's political party) after the declaration of
candidacy (including a pollster, media consultant, vendor,
advisor, or staff member acting on behalf of the candidate),
about advertising message, allocation of resources,
fundraising, or other campaign matters related to the
candidate's campaign, including campaign operations,
staffing, tactics, or strategy.
``(ix) The provision of in-kind professional services or
polling data (including services or data provided through a
political committee of the candidate's political party) to
the candidate or candidate's agent.
``(x) A payment made by a person who has engaged in a
coordinated activity with a candidate described in clauses
(i) through (ix) for a communication that clearly refers to
the candidate or the candidate's opponent and is for the
purpose of influencing that candidates's election (regardless
of whether the communication is express advocacy).
``(D) Professional services.--For purposes of subparagraph
(C), the term `professional services' means polling, media
advice, fundraising, campaign research or direct mail (except
for mailhouse services solely for the distribution of voter
guides as defined in section 301(20)(B)) services in support
of a candidate's pursuit of nomination for election, or
election, to Federal office.
``(E) Aggregation.--For purposes of subparagraph (C), all
political committees established and maintained by a national
political party (including all congressional campaign
committees) and all political committees established and
maintained by a State political party (including any
subordinate committee of a State committee) shall be
considered to be a single political committee.''.
(2) Section 315(a)(7).--Section 315(a)(7) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441a(a)(7)) is
amended by striking subparagraph (B) and inserting the
following:
``(B) a coordinated activity, as described in section
301(8)(C), shall be considered to be a contribution to the
candidate, and in the case of a limitation on expenditures,
shall be treated as an expenditure by the candidate; and''.
(b) Meaning of Contribution or Expenditure for the Purposes
of Section 316.--Section 316(b)(2) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441b(b)) is amended by
striking ``shall include'' and inserting ``includes a
contribution or expenditure, as those terms are defined in
section 301, and also includes''.

TITLE III--DISCLOSURE

SEC. 301. AUDITS.

(a) Random Audits.--Section 311(b) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 438(b)) is amended--
(1) by striking ``(b) The Commission'' and inserting the
following:
``(b) Audits.--
``(1) In general.--The Commission''; and
(2) by adding at the end the following:
``(2) Random audits.--
``(A) In general.--Notwithstanding paragraph (1), the
Commission may conduct random audits and investigations to
ensure voluntary compliance with this Act. The selection of
any candidate for a random audit or investigation shall be
based on criteria adopted by a vote of at least four members
of the Commission.
``(B) Limitation.--The Commission shall not conduct an
audit or investigation of a candidate's authorized committee
under subparagraph (A) until the candidate is no longer a
candidate for the office sought by the candidate in an
election cycle.
``(C) Applicability.--This paragraph does not apply to an
authorized committee of a candidate for President or Vice
President subject to audit under section 9007 or 9038 of the
Internal Revenue Code of 1986.''.
(b) Extension of Period During Which Campaign Audits May Be
Begun.--Section 311(b) of the Federal Election Campaign Act
of 1971 (2 U.S.C. 438(b)) is amended by striking ``6 months''
and inserting ``12 months''.

SEC. 302. REPORTING REQUIREMENTS FOR CONTRIBUTIONS OF $50 OR
MORE.

Section 304(b)(3)(A) of the Federal Election Campaign Act
at 1971 (2 U.S.C. 434(b)(3)(A) is amended--
(1) by striking ``$200'' and inserting ``$50''; and
(2) by striking the semicolon and inserting ``, except that
in the case of a person who makes contributions aggregating
at least $50 but not more than $200 during the calendar year,
the identification need include only the name and address of
the person;''.

SEC. 303. USE OF CANDIDATES' NAMES.

Section 302(e) of the Federal Election Campaign Act of 1971
(2 U.S.C. 432(e)) is amended by striking paragraph (4) and
inserting the following:
``(4) Name of committee.--
``(A) Authorized committee.--The name of each authorized
committee shall include the name of the candidate who
authorized the committee under paragraph (1).
``(B) Other political committees.--A political committee
that is not an authorized committee shall not--
``(i) include the name of any candidate in its name; or
``(ii) except in the case of a national, State, or local
party committee, use the name of any candidate in any
activity on behalf of the committee in such a context as to
suggest that the committee is an authorized committee of the
candidate or that the use of the candidate's name has been
authorized by the candidate.''.

SEC. 304. PROHIBITION OF FALSE REPRESENTATION TO SOLICIT
CONTRIBUTIONS.

Section 322 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441h) is amended--
(1) by inserting after ``Sec. 322.'' the following: ``(a)
In General.--''; and
(2) by adding at the end the following:
``(b) Solicitation of Contributions.--No person shall
solicit contributions by falsely representing himself or
herself as a candidate or as a representative of a candidate,
a political committee, or a political party.''.

SEC. 305. CAMPAIGN ADVERTISING.

Section 318 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441d) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``Whenever'' and inserting ``Whenever a
political committee makes a disbursement for the purpose of
financing any communication through any broadcasting station,
newspaper, magazine, outdoor advertising facility, mailing,
or any other type of general public political advertising, or
whenever'';
(ii) by striking ``an expenditure'' and inserting ``a
disbursement''; and
(iii) by striking ``direct''; and
(B) in paragraph (3), by inserting ``and permanent street
address'' after ``name''; and
(2) by adding at the end the following:
``(c) Specification.-- Any printed communication described
in subsection (a) shall--
``(1) be of sufficient type size to be clearly readable by
the recipient of the communication;
``(2) be contained in a printed box set apart from the
other contents of the communication; and
``(3) be printed with a reasonable degree of color contrast
between the background and the printed statement.
``(d) Additional Requirements.--
``(1) Audio statement.--
``(A) Candidate.--Any communication described in paragraphs
(1) or (2) of subsection (a) which is transmitted through
radio or television shall include, in addition to the
requirements of that paragraph, an audio statement by the
candidate that identifies the candidate and states that the
candidate has approved the communication.
``(B) Other persons.--Any communication described in
paragraph (3) of subsection (a) which is transmitted through
radio or television shall include, in addition to the
requirements of that paragraph, in a clearly spoken manner,
the following statement: `________________ is responsible for
the content of this advertisement.' (with the blank to be
filled in with the name of the political committee or other
person paying for the communication and the name of any
connected organization of the payor). If transmitted through
television, the statement shall also appear in a clearly
readable manner with a reasonable degree of color contrast
between the background and the printed statement, for a
period of at least 4 seconds.''.
``(2) Television.--If a communication described in
paragraph (1)(A) is transmitted through television, the
communication shall include, in addition to the audio
statement under paragraph (1), a written statement that--
``(A) appears at the end of the communication in a clearly
readable manner with a reasonable degree of color contrast
between the background and the printed statement, for a
period of at least 4 seconds; and
``(B) is accompanied by a clearly identifiable photographic
or similar image of the candidate.''.

[[Page S226]]

TITLE IV--MISCELLANEOUS

SEC. 401. CODIFICATION OF BECK DECISION.

Section 8 of the National Labor Relations Act (29 U.S.C.
158) is amended by adding at the end the following:
``(h) Nonunion Member Payments to Labor Organization.--
``(1) In general.--It shall be an unfair labor practice for
any labor organization which receives a payment from an
employee pursuant to an agreement that requires employees who
are not members of the organization to make payments to such
organization in lieu of organization dues or fees not to
establish and implement the objection procedure described in
paragraph (2).
``(2) Objection procedure.--The objection procedure
required under paragraph (1) shall meet the following
requirements:
``(A) The labor organization shall annually provide to
employees who are covered by such agreement but are not
members of the organization--
``(i) reasonable personal notice of the objection
procedure, a list of the employees eligible to invoke the
procedure, and the time, place, and manner for filing an
objection; and
``(ii) reasonable opportunity to file an objection to
paying for organization expenditures supporting political
activities unrelated to collective bargaining, including but
not limited to the opportunity to file such objection by
mail.
``(B) If an employee who is not a member of the labor
organization files an objection under the procedure in
subparagraph (A), such organization shall--
``(i) reduce the payments in lieu of organization dues or
fees by such employee by an amount which reasonably reflects
the ratio that the organization's expenditures supporting
political activities unrelated to collective bargaining bears
to such organization's total expenditures; and
``(ii) provide such employee with a reasonable explanation
of the organization's calculation of such reduction,
including calculating the amount of organization expenditures
supporting political activities unrelated to collective
bargaining.
``(3) Definition.--In this subsection, the term
`expenditures supporting political activities unrelated to
collective bargaining' means expenditures in connection with
a Federal, State, or local election or in connection with
efforts to influence legislation unrelated to collective
bargaining.''.

SEC. 402. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES.

Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.) is amended by striking section 313 and
inserting the following:

``SEC. 313. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES.

``(a) Permitted Uses.--A contribution accepted by a
candidate, and any other amount received by an individual as
support for activities of the individual as a holder of
Federal office, may be used by the candidate or individual--
``(1) for expenditures in connection with the campaign for
Federal office of the candidate or individual;
``(2) for ordinary and necessary expenses incurred in
connection with duties of the individual as a holder of
Federal office;
``(3) for contributions to an organization described in
section 170(c) of the Internal Revenue Code of 1986; or
``(4) for transfers to a national, State, or local
committee of a political party.
``(b) Prohibited Use.--
``(1) In general.--A contribution or amount described in
subsection (a) shall not be converted by any person to
personal use.
``(2) Conversion.--For the purposes of paragraph (1), a
contribution or amount shall be considered to be converted to
personal use if the contribution or amount is used to fulfill
any commitment, obligation, or expense of a person that would
exist irrespective of the candidate's election campaign or
individual's duties as a holder of Federal officeholder,
including--
``(A) a home mortgage, rent, or utility payment;
``(B) a clothing purchase;
``(C) a noncampaign-related automobile expense;
``(D) a country club membership;
``(E) a vacation or other noncampaign-related trip;
``(F) a household food item;
``(G) a tuition payment;
``(H) admission to a sporting event, concert, theater, or
other form of entertainment not associated with an election
campaign; and
``(I) dues, fees, and other payments to a health club or
recreational facility.''.

SEC. 403. LIMIT ON CONGRESSIONAL USE OF THE FRANKING
PRIVILEGE.

Section 3210(a)(6) of title 39, United States Code, is
amended by striking subparagraph (A) and inserting the
following:
``(A) A Member of Congress shall not mail any mass mailing
as franked mail during the 180-day period which ends on the
date of the general election for the office held by the
Member or during the 90-day period which ends on the date of
any primary election for that office, unless the Member has
made a public announcement that the Member will not be a
candidate for reelection during that year or for election to
any other Federal office.''.

SEC. 404. PROHIBITION OF FUNDRAISING ON FEDERAL PROPERTY.

Section 607 of title 18, United States Code, is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Prohibition.--
``(1) In general.--It shall be unlawful for any person to
solicit or receive a donation of money or other thing of
value in connection with a Federal, State, or local election
from a person who is located in a room or building occupied
in the discharge of official duties by an officer or employee
of the United States. An individual who is an officer or
employee of the Federal Government, including the President,
Vice President, and Members of Congress, shall not solicit a
donation of money or other thing of value in connection with
a Federal, State, or local election while in any room or
building occupied in the discharge of official duties by an
officer or employee of the United States, from any person.
``(2) Penalty.--A person who violates this section shall be
fined not more than $5,000, imprisoned more than 3 years, or
both.''; and
(2) in subsection (b), by inserting ``or Executive Office
of the President'' after ``Congress''.

SEC. 405. PENALTIES FOR VIOLATIONS.

(a) Increased Penalties.--Section 309(a) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended--
(1) in paragraphs (5)(A), (6)(A), and (6)(B), by striking
``$5,000'' and inserting ``$10,000''; and
(2) in paragraphs (5)(B) and (6)(C), by striking ``$10,000
or an amount equal to 200 percent'' and inserting ``$20,000
or an amount equal to 300 percent''.
(b) Equitable Remedies.--Section 309(a)(5)(A) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(5))
is amended by striking the period at the end and inserting
``, and may include equitable remedies or penalties,
including disgorgement of funds to the Treasury or community
service requirements (including requirements to participate
in public education programs).''.

SEC. 406. STRENGTHENING FOREIGN MONEY BAN.

(a) In General.--Section 319 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441e) is amended--
(1) by striking the heading and inserting the following:
``contributions and donations by foreign nationals''; and
(2) by striking subsection (a) and inserting the following:
``(a) Prohibition.--It shall be unlawful for--
``(1) a foreign national, directly or indirectly, to make--
``(A) a donation of money or other thing of value, or to
promise expressly or impliedly to make a donation, in
connection with a Federal, State, or local election; or
``(B) a contribution or donation to a committee of a
political party; or
``(2) a person to solicit, accept, or receive such a
contribution or donation from a foreign national.''.
(b) Prohibiting Use of Willful Blindness as Defense Against
Charge of Violating Foreign Contribution Ban.--
(1) In general.--Section 319 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441e) is amended--
(A) by redesignating subsection (b) as subsection (c); and
(B) by inserting after subsection (a) the following new
subsection:
``(b) Prohibiting Use of Willful Blindness Defense.--It
shall not be a defense to a violation of subsection (a) that
the defendant did not know that the contribution originated
from a foreign national if the defendant should have known
that the contribution originated from a foreign national,
except that the trier of fact may not find that the defendant
should have known that the contribution originated from a
foreign national solely because of the name of the
contributor.''.
(2) Effective date.--The amendments made by this subsection
shall apply with respect to violations occurring on or after
the date of enactment of this Act.

SEC. 407. PROHIBITION OF CONTRIBUTIONS BY MINORS.

Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.), as amended by section 101, is amended by
adding at the end the following:

``SEC. 324. PROHIBITION OF CONTRIBUTIONS BY MINORS.

``An individual who is 17 years old or younger shall not
make a contribution to a candidate or a contribution or
donation to a committee of a political party.''.

SEC. 408. EXPEDITED PROCEDURES.

(a) In General.--Section 309(a) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended by adding
at the end the following:
``(13) Expedited procedure.--
``(A) In general.--If the complaint in a proceeding was
filed within 60 days preceding the date of a general
election, the Commission may take action described in this
subparagraph.
``(B) Clear and convincing evidence exists.--If the
Commission determines, on the basis of facts alleged in the
complaint and other facts available to the Commission, that
there is clear and convincing evidence that a violation of
this Act has occurred, is occurring, or is about to occur,
the Commission may order expedited proceedings, shortening
the time periods for proceedings under paragraphs (1), (2),
(3), and (4) as necessary to allow the matter to be resolved
in sufficient

[[Page S227]]

time before the election to avoid harm or prejudice to the
interests of the parties.
``(C) Complaint without merit.--If the Commission
determines, on the basis of facts alleged in the complaint
and other facts available to the Commission, that the
complaint is clearly without merit, the Commission may--
``(i) order expedited proceedings, shortening the time
periods for proceedings under paragraphs (1), (2), (3), and
(4) as necessary to allow the matter to be resolved in
sufficient time before the election to avoid harm or
prejudice to the interests of the parties; or
``(ii) if the Commission determines that there is
insufficient time to conduct proceedings before the election,
summarily dismiss the complaint.''.
(b) Referral to Attorney General.--Section 309(a)(5) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(5))
is amended by striking subparagraph (C) and inserting the
following:
``(C) Referral to attorney general.--The Commission may at
any time, by an affirmative vote of at least 4 of its
members, refer a possible violation of this Act or chapter 95
or 96 of the Internal Revenue Code of 1986, to the Attorney
General of the United States, without regard to any
limitation set forth in this section.''.

SEC. 409. INITIATION OF ENFORCEMENT PROCEEDING.

Section 309(a)(2) of the Federal Election Campaign Act of
1971 (2 U.S.C. 437g(a)(2)) is amended by striking ``reason to
believe that'' and inserting ``reason to investigate
whether''.

SEC. 410. PROTECTING EQUAL PARTICIPATION OF ELIGIBLE VOTERS
IN CAMPAIGNS AND ELECTIONS.

Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.), as amended by sections 101 and 407, is
amended by adding at the end the following:

``SEC. 325. PROTECTING EQUAL PARTICIPATION OF ELIGIBLE VOTERS
IN CAMPAIGNS AND ELECTIONS.

``(a) In General.--Nothing in this Act may be construed to
prohibit any individual eligible to vote in an election for
Federal office from making contributions or expenditures in
support of a candidate for such an election (including
voluntary contributions or expenditures made through a
separate segregated fund established by the individual's
employer or labor organization) or otherwise participating in
any campaign for such an election in the same manner and to
the same extent as any other individual eligible to vote in
an election for such office.
``(b) No Effect on Geographic Restrictions on
Contributions.--Subsection (a) may not be construed to affect
any restriction under this title regarding the portion of
contributions accepted by a candidate from persons residing
in a particular geographic area.''.

SEC. 411. PENALTY FOR VIOLATION OF PROHIBITION AGAINST
FOREIGN CONTRIBUTIONS.

(a) In General.--Section 319 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441e), as amended by section
406(b), is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
``(c) Penalty.--
``(1) In general.--Except as provided in paragraph (2),
notwithstanding any other provision of this title, any person
who violates subsection (a) shall be sentenced to a term of
imprisonment which may not be more than 10 years, fined in an
amount not to exceed $1,000,000, or both.
``(2) Exception.--Paragraph (1) shall not apply with
respect to any violation of subsection (a) arising from a
contribution or donation made by an individual who is
lawfully admitted for permanent residence (as defined in
section 101(a)(22) of the Immigration and Nationality
Act).''.
(b) Effective Date.--The amendments made by this section
shall apply with respect to violations occurring on or after
the date of enactment of this Act.

SEC. 412. EXPEDITED COURT REVIEW OF CERTAIN ALLEGED
VIOLATIONS OF FEDERAL ELECTION CAMPAIGN ACT OF
1971.

(a) In General.--Section 309 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 437g) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following new
subsection:
``(d) Private Action.--
``(1) In general.--Notwithstanding any other provision of
this section, if a candidate (or the candidate's authorized
committee) believes that a violation described in paragraph
(2) has been committed with respect to an election during the
90-day period preceding the date of the election, the
candidate or committee may institute a civil action on behalf
of the Commission for relief (including injunctive relief)
against the alleged violator in the same manner and under the
same terms and conditions as an action instituted by the
Commission under subsection (a)(6), except that the court
involved shall issue a decision regarding the action as soon
as practicable after the action is instituted and to the
greatest extent possible issue the decision prior to the date
of the election involved.
``(2) Violations.--A violation described in this paragraph
is a violation of this Act or of chapter 95 or chapter 96 of
the Internal Revenue Code of 1986 relating to--
``(A) whether a contribution is in excess of an applicable
limit or is otherwise prohibited under this Act; or
``(B) whether an expenditure is an independent expenditure
under section 301(17).''.
(b) Effective Date.--The amendments made by this section
shall apply with respect to elections occurring after the
date of enactment of this Act.

SEC. 413. CONSPIRACY TO VIOLATE PRESIDENTIAL CAMPAIGN
SPENDING LIMITS.

(a) In General.--Section 9003 of the Internal Revenue Code
of 1986 (relating to condition for eligibility for payments)
is amended by adding at the end the following:
``(f) Prohibiting Conspiracy To Violate Limits.--
``(1) Violation of limits described.--If a candidate for
election to the office of President or Vice President who
receives amounts from the Presidential Election Campaign Fund
under chapter 95 or 96 of the Internal Revenue Code of 1986,
or the agent of such a candidate, seeks to avoid the spending
limits applicable to the candidate under such chapter or
under the Federal Election Campaign Act of 1971 by
soliciting, receiving, transferring, or directing funds from
any source other than such Fund for the direct or indirect
benefit of such candidate's campaign, such candidate or agent
shall be fined not more than $1,000,000, or imprisoned for a
term of not more than 3 years, or both.
``(2) Conspiracy to violate limits defined.--If two or more
persons conspire to commit a violation described in paragraph
(1), and one or more of such persons do any act to effect the
object of the conspiracy, each shall be fined not more than
$1,000,000, or imprisoned for a term of not more than 3
years, or both.''.
(b) Effective Date.--The amendment made by this section
shall apply with respect to elections occurring on or after
the date of enactment of this Act.

SEC. 414. DEPOSIT OF CERTAIN CONTRIBUTIONS AND DONATIONS IN
TREASURY ACCOUNT.

(a) In General.--Title III of the Federal Election Campaign
Act of 1971 (2 U.S.C. 431 et seq.), as amended by sections
101, 407, and 410, is amended by adding at the end the
following:

``SEC. 326. TREATMENT OF CERTAIN CONTRIBUTIONS AND DONATIONS
RETURNED TO DONORS.

``(a) Transfer to Commission.--
``(1) In general.--Notwithstanding any other provision of
this Act, if a political committee intends to return any
contribution or donation given to the political committee,
the committee shall transfer the contribution or donation to
the Commission if--
``(A) the contribution or donation is in an amount equal to
or greater than $500 (other than a contribution or donation
returned within 60 days of receipt by the committee); or
``(B) the contribution or donation was made in violation of
section 315, 316, 317, 319, 320, or 325 (other than a
contribution or donation returned within 30 days of receipt
by the committee).
``(2) Information included with transferred contribution or
donation.--A political committee shall include with any
contribution or donation transferred under paragraph (1)--
``(A) a request that the Commission return the contribution
or donation to the person making the contribution or
donation; and
``(B) information regarding the circumstances surrounding
the making of the contribution or donation and any opinion of
the political committee concerning whether the contribution
or donation may have been made in violation of this Act.
``(3) Establishment of escrow account.--
``(A) In general.--The Commission shall establish a single
interest-bearing escrow account for deposit of amounts
transferred under paragraph (1).
``(B) Disposition of amounts received.--On receiving an
amount from a political committee under paragraph (1), the
Commission shall--
``(i) deposit the amount in the escrow account established
under subparagraph (A); and
``(ii) notify the Attorney General and the Commissioner of
the Internal Revenue Service of the receipt of the amount
from the political committee.
``(C) Use of interest.--Interest earned on amounts in the
escrow account established under subparagraph (A) shall be
applied or used for the same purposes as the donation or
contribution on which it is earned.
``(4) Treatment of returned contribution or donation as a
complaint.--The transfer of any contribution or donation to
the Commission under this section shall be treated as the
filing of a complaint under section 309(a).
``(b) Use of Amounts Placed in Escrow To Cover Fines and
Penalties.--The Commission or the Attorney General may
require any amount deposited in the escrow account under
subsection (a)(3) to be applied toward the payment of any
fine or penalty imposed under this Act or title 18, United
States Code, against the person making the contribution or
donation.
``(c) Return of Contribution or Donation After Deposit in
Escrow.--
``(1) In general.--The Commission shall return a
contribution or donation deposited in the escrow account
under subsection (a)(3) to the person making the contribution
or donation if--
``(A) within 180 days after the date the contribution or
donation is transferred, the

[[Page S228]]

Commission has not made a determination under section
309(a)(2) that the Commission has reason to investigate
whether that the making of the contribution or donation was
made in violation of this Act; or
``(B)(i) the contribution or donation will not be used to
cover fines, penalties, or costs pursuant to subsection (b);
or
``(ii) if the contribution or donation will be used for
those purposes, that the amounts required for those purposes
have been withdrawn from the escrow account and subtracted
from the returnable contribution or donation.
``(2) No effect on status of investigation.--The return of
a contribution or donation by the Commission under this
subsection shall not be construed as having an effect on the
status of an investigation by the Commission or the Attorney
General of the contribution or donation or the circumstances
surrounding the contribution or donation, or on the ability
of the Commission or the Attorney General to take future
actions with respect to the contribution or donation.''.
(b) Amounts Used To Determine Amount of Penalty for
Violation.--Section 309(a) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 437g(a)) is amended by inserting after
paragraph (9) the following:
``(10) Amount of donation.--For purposes of determining the
amount of a civil penalty imposed under this subsection for
violations of section 326, the amount of the donation
involved shall be treated as the amount of the contribution
involved.''.
(c) Disgorgement Authority.--Section 309 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 437g), as amended by
section 412(a), is amended by adding at the end the
following:
``(f) Deposit in Escrow.--Any conciliation agreement, civil
action, or criminal action entered into or instituted under
this section may require a person to forfeit to the Treasury
any contribution, donation, or expenditure that is the
subject of the agreement or action for transfer to the
Commission for deposit in accordance with section 326.''.
(d) Effective Date.--The amendments made by subsections (a)
and (b) shall apply to contributions or donations refunded on
or after the date of enactment of this Act, without regard to
whether the Federal Election Commission or Attorney General
has issued regulations to carry out section 326 of the
Federal Election Campaign Act of 1971 (as added by subsection
(a)) by such date.

SEC. 415. ESTABLISHMENT OF A CLEARINGHOUSE OF INFORMATION ON
POLITICAL ACTIVITIES WITHIN THE FEDERAL
ELECTION COMMISSION.

(a) Establishment.--There shall be established within the
Federal Election Commission a clearinghouse of public
information regarding the political activities of foreign
principals and agents of foreign principals. The information
comprising this clearinghouse shall include only the
following:
(1) All registrations and reports filed pursuant to the
Lobbying Disclosure Act of 1995 (2 U.S.C. 1601 et seq.)
during the preceding 5-year period.
(2) All registrations and reports filed pursuant to the
Foreign Agents Registration Act (22 U.S.C. 611 et seq.)
during the preceding 5-year period.
(3) The listings of public hearings, hearing witnesses, and
witness affiliations printed in the Congressional Record
during the preceding 5-year period.
(4) Public information disclosed pursuant to the rules of
the Senate or the House of Representatives regarding
honoraria, the receipt of gifts, travel, and earned and
unearned income.
(5) All reports filed pursuant to title I of the Ethics in
Government Act of 1978 (5 U.S.C. App.) during the preceding
5-year period.
(6) All public information filed with the Federal Election
Commission pursuant to the Federal Election Campaign Act of
1971 (2 U.S.C. 431 et seq.) during the preceding 5-year
period.
(b) Disclosure of Other Information Prohibited.--The
disclosure by the clearinghouse, or any officer or employee
thereof, of any information other than that set forth in
subsection (a) is prohibited, except as otherwise provided by
law.
(c) Director of Clearinghouse.--
(1) Duties.--The clearinghouse shall have a Director, who
shall administer and manage the responsibilities and all
activities of the clearinghouse. In carrying out such duties,
the Director shall--
(A) develop a filing, coding, and cross-indexing system to
carry out the purposes of this section (which shall include
an index of all persons identified in the reports,
registrations, and other information comprising the
clearinghouse);
(B) notwithstanding any other provision of law, make copies
of registrations, reports, and other information comprising
the clearinghouse available for public inspection and
copying, beginning not later than 30 days after the
information is first available to the public, and permit
copying of any such registration, report, or other
information by hand or by copying machine or, at the request
of any person, furnish a copy of any such registration,
report, or other information upon payment of the cost of
making and furnishing such copy, except that no information
contained in such registration or report and no such other
information shall be sold or used by any person for the
purpose of soliciting contributions or for any profit-making
purpose; and
(C) not later than 150 days after the date of enactment of
this Act and at any time thereafter, to prescribe, in
consultation with the Comptroller General, such rules,
regulations, and forms, in conformity with the provisions of
chapter 5 of title 5, United States Code, as are necessary to
carry out the provisions of this section in the most
effective and efficient manner.
(2) Appointment.--The Director shall be appointed by the
Federal Election Commission.
(3) Term of service.--The Director shall serve a single
term of a period of time determined by the Commission, but
not to exceed 5 years.
(d) Penalties for Disclosure of Information.--Any person
who discloses information in violation of subsection (b), and
any person who sells or uses information for the purpose of
soliciting contributions or for any profit-making purpose in
violation of subsection (c)(1)(B), shall be imprisoned for a
period of not more than 1 year, or fined in the amount
provided in title 18, United States Code, or both.
(e) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to conduct
the activities of the clearinghouse.
(f) Foreign Principal.--In this section, the term ``foreign
principal'' shall have the same meaning given the term
``foreign national'' under section 319 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441e), as in effect
as of the date of enactment of this Act.

SEC. 416. ENFORCEMENT OF SPENDING LIMIT ON PRESIDENTIAL AND
VICE PRESIDENTIAL CANDIDATES WHO RECEIVE PUBLIC
FINANCING.

(a) In General.--Section 9003 of the Internal Revenue Code
of 1986, as amended by section 413, is amended by adding at
the end the following:
``(g) Illegal Solicitation of Soft Money.--No candidate for
election to the office of President or Vice President may
receive amounts from the Presidential Election Campaign Fund
under this chapter or chapter 96 unless the candidate
certifies that the candidate shall not solicit any funds for
the purposes of influencing such election, including any
funds used for an independent expenditure under the Federal
Election Campaign Act of 1971, unless the funds are subject
to the limitations, prohibitions, and reporting requirements
of the Federal Election Campaign Act of 1971.''.
(b) Effective Date.--The amendment made by this section
shall apply with respect to elections occurring on or after
the date of the enactment of this Act.

SEC. 417. CLARIFICATION OF RIGHT OF NATIONALS OF THE UNITED
STATES TO MAKE POLITICAL CONTRIBUTIONS.

Section 319(d)(2) of the Federal Election Campaign Act of
1971 (2 U.S.C. 441e(d)(2)), as amended by sections 506(b) and
511(a), is further amended by inserting after ``United
States'' the following: ``or a national of the United States
(as defined in section 101(a)(22) of the Immigration and
Nationality Act)''.

SEC. 418. PROHIBITING USE OF WHITE HOUSE MEALS AND
ACCOMMODATIONS FOR POLITICAL FUNDRAISING.

(a) In General.--Chapter 29 of title 18, United States
Code, is amended by adding at the end the following new
section:

``Sec. 612. Prohibiting use of meals and accommodations at
White House for political fundraising

``(a) It shall be unlawful for any person to provide or
offer to provide any meals or accommodations at the White
House in exchange for any money or other thing of value, or
as a reward for the provision of any money or other thing of
value, in support of any political party or the campaign for
electoral office of any candidate.
``(b) Any person who violates this section shall be fined
under this title or imprisoned not more than 3 years, or
both.
``(c) For purposes of this section, any official residence
or retreat of the President (including private residential
areas and the grounds of such a residence or retreat) shall
be treated as part of the White House.''.
(b) Clerical Amendment.--The table of sections for chapter
29 of title 18, United States Code, is amended by adding at
the end the following new item:

``612. Prohibiting use of meals and accommodations at White House for
political fundraising.''.

SEC. 419. PROHIBITION AGAINST ACCEPTANCE OR SOLICITATION TO
OBTAIN ACCESS TO CERTAIN FEDERAL GOVERNMENT
PROPERTY.

(a) In General.--Chapter 11 of title 18, United States
Code, is amended by adding at the end the following new
section:

``Sec. 226. Acceptance or solicitation to obtain access to
certain Federal Government property

``Whoever solicits or receives anything of value in
consideration of providing a person with access to Air Force
One, Marine One, Air Force Two, Marine Two, the White House,
or the Vice President's residence, shall be fined under this
title, or imprisoned not more than one year, or both.''.
(b) Clerical Amendment.--The table of sections for chapter
11 of title 18, United States Code, is amended by adding at
the end the following new item:

``226. Acceptance or solicitation to obtain access to certain Federal
Government property.''.

SEC. 420. REQUIRING NATIONAL PARTIES TO REIMBURSE AT COST FOR
USE OF AIR FORCE ONE FOR POLITICAL FUNDRAISING.

Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.), as amended

[[Page S229]]

by sections 101, 407, 410, and 415, is amended by adding at
the end the following:

``SEC. 327. REIMBURSEMENT BY POLITICAL PARTIES FOR USE OF AIR
FORCE ONE FOR POLITICAL FUNDRAISING.

``(a) In General.--If the President, Vice President, or the
head of any executive department (as defined in section 101
of title 5, United States Code) uses Air Force One for
transportation for any travel which includes a fundraising
event for the benefit of any political committee of a
national political party, such political committee shall
reimburse the Federal Government for the fair market value of
the transportation of the individual involved, based on the
cost of an equivalent commercial chartered flight.
``(b) Air Force One Defined.--In subsection (a), the term
`Air Force One' means the airplane operated by the Air Force
which has been specially configured to carry out the mission
of transporting the President.''.

SEC. 421. ENHANCING ENFORCEMENT OF CAMPAIGN FINANCE LAW.

(a) Mandatory Imprisonment for Criminal Conduct.--Section
309(e)(1)(A) of the Federal Election Campaign Act of 1971 (2
U.S.C. 437g(e)(1)(A)), as redesignated by section 412, is
amended--
(1) in the first sentence, by striking ``shall be fined, or
imprisoned for not more than one year, or both'' and
inserting ``shall be imprisoned for not fewer than 1 year and
not more than 10 years''; and
(2) by striking the second sentence.
(b) Concurrent Authority of Attorney General To Bring
Criminal Actions.--Section 309(e) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 437g(d)), as so redesignated,
is amended by adding at the end the following:
``(4) Attorney general action.--In addition to the
authority to bring cases referred pursuant to subsection
(a)(5), the Attorney General may at any time bring a criminal
action for a violation of this Act or of chapter 95 or
chapter 96 of the Internal Revenue Code of 1986.''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to actions brought with respect to
elections occurring after January 2001.

SEC. 422. BAN ON COORDINATION OF SOFT MONEY FOR ISSUE
ADVOCACY BY PRESIDENTIAL CANDIDATES RECEIVING
PUBLIC FINANCING.

(a) In General.--Section 9003 of the Internal Revenue Code
of 1986, as amended by section 416, is amended by adding at
the end the following:
``(h) Ban on Coordination of Soft Money for Issue
Advocacy.--
``(1) In general.--No candidate for election to the office
of President or Vice President who is certified to receive
amounts from the Presidential Election Campaign Fund under
this chapter or chapter 96 may coordinate the expenditure of
any funds for issue advocacy with any political party unless
the funds are subject to the limitations, prohibitions, and
reporting requirements of the Federal Election Campaign Act
of 1971.
``(2) Issue advocacy defined.--In this section, the term
`issue advocacy' means any activity carried out for the
purpose of influencing the consideration or outcome of any
Federal legislation or the issuance or outcome of any Federal
regulations, or educating individuals about candidates for
election for Federal office or any Federal legislation, law,
or regulations (without regard to whether the activity is
carried out for the purpose of influencing any election for
Federal office).''.
(b) Effective Date.--The amendment made by this section
shall apply with respect to elections occurring on or after
the date of the enactment of this Act.

SEC. 423. REQUIREMENT THAT NAMES OF PASSENGERS ON AIR FORCE
ONE AND AIR FORCE TWO BE MADE AVAILABLE THROUGH
THE INTERNET.

(a) In General.--The President shall make available through
the Internet the name of any non-Government person who is a
passenger on an aircraft designated as Air Force One or Air
Force Two not later than 30 days after the date that the
person is a passenger on such aircraft.
(b) Exception.--Subsection (a) shall not apply in a case in
which the President determines that compliance with such
subsection would be contrary to the national security
interests of the United States. In any such case, not later
than 30 days after the date that the person whose name will
not be made available through the Internet was a passenger on
the aircraft, the President shall submit to the chairman and
ranking member of the Permanent Select Committee on
Intelligence of the House of Representatives and of the
Select Committee on Intelligence of the Senate--
(1) the name of the person; and
(2) the justification for not making such name available
through the Internet.
(c) Definition of Person.--As used in this section, the
term ``non-Government person'' means a person who is not an
officer or employee of the United States, a member of the
Armed Forces, or a Member of Congress.

TITLE V--ELECTION ADMINISTRATION AND TECHNOLOGY

SEC. 501. FINDINGS.

Congress makes the following findings:
(1) The right to vote is a fundamental and incontrovertible
right under the Constitution.
(2) There is a need for Congress to encourage and enable
every eligible American to vote by reaffirming that the right
to vote is a fundamental right under the Constitution.
(3) There is a need for Congress to encourage and enable
every eligible American to vote by reaffirming that the
United States is a democratic government ``of the people, by
the people and for the people'' where every vote counts.
(4) There is a need for Congress to encourage and enable
every eligible American to vote by eliminating procedural and
technological obstacles to voting.
(5) State governments have already begun to examine ways to
improve the administration of elections and to modernize
mechanisms and machinery for voting.
(6) Congress has authority under section 5 of the
Fourteenth Amendment to the Constitution of the United States
to enact legislation to address the equal protection
violations that may be caused by our current, outdated voting
system.
(7) Congress has an obligation to ensure that the necessary
resources are available to States and localities to improve
election technology and election administration and to ensure
the integrity of the democratic elections process.

Subtitle A--Establishment of Commission on Voting Rights and Procedures

SEC. 511. ESTABLISHMENT.

There is established the Commission on Voting Rights and
Procedures (in this subtitle referred to as the
``Commission'').

SEC. 512. MEMBERSHIP OF THE COMMISSION.

(a) Number and Appointment.--The Commission shall be
composed of 12 members of whom--
(1) 6 members shall be appointed by the President;
(2) 3 members shall be appointed by the Minority Leader of
the Senate (or, if the Minority Leader is a member of the
same political party as the President, by the Majority Leader
of the Senate); and
(3) 3 members shall be appointed by the Minority Leader of
the House of Representatives (or, if the Minority Leader is a
member of the same political party as the President, by the
Majority Leader of the House of Representatives).
(b) Qualifications.--Each member appointed under subsection
(a) shall be chosen on the basis of--
(1) experience with, and knowledge of--
(A) election law;
(B) election technology;
(C) Federal, State, or local election administration;
(D) the United States Constitution; or
(E) the history of the United States; and
(2) integrity, impartiality, and good judgment.
(c) Period of Appointment; Vacancies.--
(1) Period of appointment.--Each member shall be appointed
for the life of the Commission.
(2) Vacancies.--
(A) In general.--A vacancy in the Commission shall not
affect its powers.
(B) Manner of replacement.--A vacancy on the Commission
shall be filled in the same manner which the original
appointment was made and shall be subject to any conditions
which applied with respect to the original appointment not
later than 60 days after the date of the vacancy.
(d) Chairperson; Vice Chairperson.--
(1) In general.--The Commission shall elect a chairperson
and vice chairperson from among its members.
(2) Political affiliation.--The chairperson and vice
chairperson may not be affiliated with the same political
party.
(e) Date of Appointment.--The appointments of the members
of the Commission shall be made not later than 45 days after
the date of enactment of this Act.
(f) Meetings.--
(1) In general.--The Commission shall meet at the call of
the chairperson.
(2) Initial meeting.--Not later than 20 days after the date
on which all members of the Commission have been appointed,
the Commission shall hold its first meeting.
(3) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
(g) Voting.--Each action of the Commission shall be
approved by a majority vote of members. Each member shall
have 1 vote.

SEC. 513. DUTIES OF THE COMMISSION.

(a) Study.--
(1) In general.--The Commission shall conduct a thorough
study of--
(A) election technology and systems;
(B) designs of ballots and the uniformity of ballots;
(C) access to polling places, including matters relating to
access for individuals with disabilities and other
individuals with particular needs;
(D) voter registration and maintenance of voter rolls,
including the use of provisional voting and standards for
reenfranchisement of voters;
(E) alternative voting methods;
(F) accuracy of voting, election procedures, and election
technology;
(G) voter education;
(H) training election personnel and volunteers;
(I)(i) implementation of title I of the Uniformed and
Overseas Absentee Voting Act (42 U.S.C. 1973ff et seq.), and
the amendments made by title II of that Act, by--
(I) the Secretary of Defense;
(II) each other Federal Government official having a
responsibility under that Act; and
(III) each State; and

[[Page S230]]

(ii) whether any legislative or administrative action is
necessary to provide a meaningful opportunity to register to
vote in, and vote in, elections for Federal office (as
defined in paragraph (3) of section 107 of that Act (42
U.S.C. 1973ff-6)) for--
(I) each absent uniformed services voter (as defined in
paragraph (1) of such section); and
(II) each overseas voter (as defined in paragraph (5) of
such section) to register to vote and vote in elections for
Federal office);
(J) the feasibility and advisability of establishing the
date on which elections for Federal office (as so defined)
are held as a Federal or State holiday; and
(K)(i) how the Federal Government can, on a permanent
basis, best provide ongoing assistance to State and local
authorities to improve the administration of Federal
elections; and
(ii) whether an existing or a new Federal agency should
provide such assistance.
(2) Website.--For purposes of conducting the study under
this subsection, the Commission shall establish an Internet
website to facilitate public comment and participation.
(b) Recommendations.--
(1) Recommendations of best practices in voting and
election administration.--The Commission shall develop
recommendations with respect to the matters studied under
subsection (a) that identify those methods of voting and
administering elections studied by the Commission that
would--
(A) be most convenient, accessible, and easy to use for
voters in Federal elections, including voters with
disabilities, absent uniformed services voters, overseas
voters, and other voters with special needs;
(B) yield the broadest participation and most accurate
results in Federal elections;
(C) be the most resource-efficient and cost-effective for
use in Federal elections; and
(D) be the most effective means of ensuring security in
Federal elections.
(2) Recommendations for providing assistance in federal
elections.--The Commission shall develop recommendations with
respect to the matters studied under subsection (a)(1)(K) on
how the Federal Government can, on a permanent basis, best
provide ongoing assistance to State and local authorities to
improve the administration of Federal elections, and identify
whether an existing or a new Federal agency should provide
such assistance.
(3) Recommendations for voter participation in federal
elections.--The Commission shall develop recommendations with
respect to the matters studied under subsection (a) on
methods--
(A) to increase voter registration;
(B) to increase the accuracy of voter rolls;
(C) to improve voter education; and
(D) to improve the training of election personnel and
volunteers.
(c) Reports.--
(1) Interim reports.--Not later than the date on which the
Commission submits the final report under paragraph (2), the
Commission may submit to the President and Congress such
interim reports as a majority of the members of the
Commission determine appropriate.
(2) Final report.--
(A) In general.--Not later than one year after the date of
enactment of this Act, the Commission shall submit to the
President and Congress a final report that has received the
approval of a majority of the members of the Commission.
(B) Content.--The final report shall contain--
(i) a detailed statement of the findings and conclusions of
the Commission on the matters studied under subsection (a);
(ii) a detailed statement of the recommendations developed
under subsection (b); and
(iii) any dissenting or minority opinions of the members of
the Commission.

SEC. 514. POWERS OF THE COMMISSION.

(a) Hearings.--The Commission or, at its direction, any
subcommittee or member of the Commission, may, for the
purpose of carrying out this subtitle--
(1) hold such hearings, sit and act at such times and
places, take such testimony, receive such evidence,
administer such oaths; and
(2) require, by subpoena or otherwise, the attendance and
testimony of such witnesses and the production of such books,
records, correspondence, memoranda, papers, documents, tapes,
and materials as the Commission or such subcommittee or
member considers advisable.
(b) Issuance and Enforcement of Subpoenas.--
(1) Issuance.--Any subpoena issued under subsection (a)
shall be issued by the chairperson and vice chairperson of
the Commission acting jointly. Each subpoena shall bear the
signature of the chairperson of the Commission and shall be
served by any person or class of persons designated by the
chairperson for that purpose.
(2) Enforcement.--In the case of contumacy or failure to
obey a subpoena issued under subsection (a), the United
States district court for the judicial district in which the
subpoenaed person resides, is served, or may be found may
issue an order requiring such person to appear at any
designated place to testify or to produce documentary or
other evidence. Any failure to obey the order of the court
may be punished by the court as a contempt of that court.
(c) Witness Allowances and Fees.--Section 1821 of title 28,
United States Code, shall apply to witnesses requested or
subpoenaed to appear at any hearing of the Commission. The
per diem and mileage allowances for witnesses shall be paid
from funds available to pay the expenses of the Commission.
(d) Information From Federal Agencies.--The Commission may
secure directly from any Federal department or agency such
information as the Commission considers necessary to carry
out this subtitle. Upon request of the chairperson and vice
chairperson of the Commission acting jointly, the head of
such department or agency shall furnish such information to
the Commission.
(e) Postal Services.--The Commission may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
(f) Administrative Support Services.--Upon the request of
the chairperson and vice chairperson of the Commission acting
jointly, the Administrator of the General Services
Administration shall provide to the Commission, on a
reimbursable basis, the administrative support services that
are necessary to enable the Commission to carry out its
duties under this subtitle.
(g) Gifts and Donations.--The Commission may accept, use,
and dispose of gifts or donations of services or property to
carry out this subtitle.

SEC. 515. PERSONNEL MATTERS.

(a) Compensation of Members.--Each member of the Commission
who is not an officer or employee of the Federal Government
shall be compensated at a rate equal to the daily equivalent
of the annual rate of basic pay prescribed for level IV of
the Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during
which such member is engaged in the performance of the duties
of the Commission. All members of the Commission who are
officers or employees of the United States shall serve
without compensation in addition to that received for their
services as officers or employees of the United States.
(b) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Commission.
(c) Staff.--
(1) In general.--The chairperson and vice chairperson of
the Commission, acting jointly, may, without regard to the
civil service laws and regulations, appoint and terminate an
executive director and such other additional personnel as may
be necessary to enable the Commission to perform its duties.
The employment of an executive director shall be subject to
confirmation by the Commission.
(2) Compensation.--The chairperson and vice chairperson of
the Commission, acting jointly, may fix the compensation of
the executive director and other personnel without regard to
chapter 51 and subchapter III of chapter 53 of title 5,
United States Code, relating to classification of positions
and General Schedule pay rates, except that the rate of pay
for the executive director and other personnel may not exceed
the rate payable for level V of the Executive Schedule under
section 5316 of such title.
(d) Detail of Government Employees.--Any Federal Government
employee may be detailed to the Commission without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege.
(e) Procurement of Temporary and Intermittent Services.--
The chairperson and vice chairperson of the Commission,
acting jointly, may procure temporary and intermittent
services under section 3109(b) of title 5, United States
Code, at rates for individuals which do not exceed the daily
equivalent of the annual rate of basic pay prescribed for
level V of the Executive Schedule under section 5316 of such
title.

SEC. 516. TERMINATION OF THE COMMISSION.

The Commission shall terminate 45 days after the date on
which the Commission submits its final report under section
513(c)(2).

SEC. 517. AUTHORIZATION OF APPROPRIATIONS FOR THE COMMISSION.

(a) In General.--There are authorized to be appropriated
such sums as may be necessary to carry out the purposes of
this subtitle.
(b) Availability.--Any sums appropriated under the
authorization contained in this section shall remain
available, without fiscal year limitation, until expended.

Subtitle B--Grant Program

SEC. 521. ESTABLISHMENT OF GRANT PROGRAM.

The Attorney General, subject to the general policies and
criteria established under section 523, in consultation with
the Federal Election Commission, is authorized to make grants
to States to pay the Federal share of the costs of the
activities described in section 522.

SEC. 522. AUTHORIZED ACTIVITIES.

A State may use payments received under this subtitle to--
(1) improve or replace voting equipment or technology;
(2) implement new election administration procedures, such
as ``same-day'' voter registration procedures;
(3) educate voters concerning voting procedures, voting
rights, or voting technology and train election personnel;
and

[[Page S231]]

(4) upon completion of the final report under section
513(c), implement recommendations contained in such report.

SEC. 523. GENERAL POLICIES AND CRITERIA.

(a) General Policies.--The Attorney General shall establish
general policies with respect to the approval of State plans,
awarding of grants, and the use of assistance made available
under this subtitle.
(b) Criteria.--
(1) In general.--The Attorney General shall establish
criteria with respect to the approval of State plans
submitted under section 524, including the requirements under
paragraph (2).
(2) Requirements for approval.--The Attorney General shall
not approve a State plan unless the plan provides for each of
the following:
(A) Uniform standards within the State for election
administration and technology.
(B) Accuracy of the records of eligible voters in the State
to ensure that legally registered voters appear in such
records and prevent any purging of such records to remove
illegal voters that results in the elimination of legal
voters as well.
(C) Voting accessibility standards that ensure--
(i) compliance with the Voting Accessibility for the
Elderly and Handicapped Act (42 U.S.C. 1973ee et seq.);
(ii) compliance with the Voting Rights Act of 1965 (42
U.S.C. 1971 et seq.); and
(iii) that absent uniformed service voters and their
dependents have a meaningful opportunity to exercise their
voting rights as citizens of the United States.
(D) Voter education programs regarding methodology and
procedures for participating in elections and training
programs for election personnel and volunteers.
(c) Consultation.--In establishing the general policies and
criteria under this section, the Attorney General shall
consult with the Federal Election Commission.

SEC. 524. SUBMISSION OF STATE PLANS.

(a) In General.--Subject to subsection (c), the chief
executive officer of each State that desires to receive a
grant under this subtitle shall submit a State plan to the
Attorney General at such time, in such manner, and
accompanied by such additional information as the Attorney
General, in consultation with the Federal Election
Commission, may reasonably require.
(b) Contents.--Each State plan submitted under subsection
(a) shall--
(1) describe the activities for which assistance under this
subtitle is sought;
(2) provide evidence that the State meets the general
policies and criteria established by the Attorney General
under section 523;
(3) provide assurances that the State will pay the non-
Federal share of the activities for which assistance is
sought from non-Federal sources; and
(4) provide such additional assurances as the Attorney
General, in consultation with the Federal Election
Commission, determines to be essential to ensure compliance
with the requirements of this subtitle.
(c) Available for Review and Comment.--A State submitting a
State plan under this section shall make such State plan
publicly available for review and comment prior to
submission.

SEC. 525. APPROVAL OF STATE PLANS.

The Attorney General, in consultation with the Federal
Election Commission, shall approve State plans in accordance
with the general policies and criteria established under
section 523.

SEC. 526. FEDERAL MATCHING FUNDS.

(a) Payments.--The Attorney General shall pay to each State
having a State plan approved under section 525 the Federal
share of the cost of the activities described in the State
plan.
(b) Federal Share.--
(1) In general.--Subject to paragraph (2), for purposes of
subsection (a), the Federal share shall be 80 percent.
(2) Waiver.--The Attorney General may specify a Federal
share greater than 80 percent if the State agrees to comply
with such terms and conditions as the Attorney General may
prescribe.
(c) Non-Federal Share.--The non-Federal share of payments
under this subtitle may be in cash or in kind fairly
evaluated, including planned equipment or services.

SEC. 527. AUDITS AND EXAMINATIONS.

(a) Recordkeeping Requirement.--Each recipient of a grant
under this subtitle shall keep such records as the Attorney
General, in consultation with the Federal Election
Commission, shall prescribe.
(b) Audit and Examination.--
(1) Authority.--Subject to paragraph (2), the Attorney
General and the Comptroller General of the United States, or
any authorized representative of the Attorney General or the
Comptroller General, shall have access to any record of a
recipient of a grant under this subtitle that the Attorney
General or the Comptroller General determines may be related
to a grant received under this subtitle for the purpose of
conducting an audit or examination.
(2) Expiration of authority.--The authority of the Attorney
General and the Comptroller General conduct an audit or
examination under this subsection with respect to the
recipient of a grant under this subtitle shall expire on the
date that is 3 years after the date on which the activity for
which an State plan is approved under section 524 concludes.

SEC. 528. REPORTS.

(a) Reports to Congress.--Not later than January 31, 2003,
and each year thereafter, the Attorney General shall submit
to the President and Congress a report on the program under
this subtitle for the preceding year. Each report shall set
forth the following:
(1) A description and analysis of any activities funded by
a grant awarded under this subtitle.
(2) Any recommendation for legislative or administrative
action that the Attorney General considers appropriate.
(b) Reports to the Attorney General.--The Attorney General
shall require in each grant awarded under this subtitle that
the recipient of such grant submit to the Attorney General,
under a schedule established by the Attorney General, such
information as the Attorney General considers appropriate to
submit reports under subsection (a).

SEC. 529. STATE DEFINED.

In this subtitle, the term ``State'' means each of the
several States, the District of Columbia, the Commonwealth of
Puerto Rico, American Samoa, Guam, and the United States
Virgin Islands.

SEC. 530. AUTHORIZATION OF APPROPRIATIONS.

(a) Authorization.--
(1) In general.--There are authorized to be appropriated to
the Department of Justice--
(A) $500,000,000 for fiscal year 2002;
(B) such amounts as necessary for each of fiscal years
2003, 2004, 2005, and 2006.
(2) Use of amounts.--Amounts appropriated under paragraph
(1) shall be for the purpose of--
(A) awarding grants under this subtitle; and
(B) paying for the costs of administering the program to
award such grants.
(3) Federal election commission.--There are authorized to
be appropriated for each of fiscal years 2002, 2003, 2004,
2005, and 2006 such amounts as necessary to the Federal
Election Commission for the purpose of consultation with the
Attorney General under this subtitle.
(b) Limitation.--Not more than 1 percent of any sums
appropriated under paragraph (1) of subsection (a) may be
used to pay for the administrative costs described in
paragraph (2)(B) of such subsection.
(c) Supplemental Appropriations.--There are authorized to
be appropriated as supplemental appropriations for fiscal
year 2001 such sums as the Department of Justice and the
Federal Election Commission consider necessary to carry out
the provisions of this subtitle.

Subtitle C--Miscellaneous

SEC. 541. RELATIONSHIP TO OTHER LAWS.

Nothing in this title may be construed to authorize,
require, or supersede conduct prohibited under the following
laws, or otherwise affect such laws:
(1) The National Voter Registration Act of 1993 (42 U.S.C.
1973gg et seq.).
(2) The Voting Rights Act of 1965 (42 U.S.C. 1971 et seq.).
(3) The Voting Accessibility for the Elderly and
Handicapped Act (42 U.S.C. 1973ee et seq.).
(4) The Uniformed and Overseas Citizens Absentee Voting Act
(42 U.S.C. 1973ff et seq.).
(5) The Federal Election Campaign Act of 1971 (2 U.S.C. 431
et seq.).

TITLE VI--MILITARY VOTING

SEC. 601. SHORT TITLE.

This title may be cited as the ``Military Voting Rights Act
of 2001''.

SEC. 602. GUARANTEE OF RESIDENCY.

Article VII of the Soldiers' and Sailors' Civil Relief Act
of 1940 (50 U.S.C. 590 et seq.) is amended by adding at the
end the following:
``Sec. 704. (a) For purposes of voting for an office of the
United States or of a State, a person who is absent from a
State in compliance with military or naval orders shall not,
solely by reason of that absence--
``(1) be deemed to have lost a residence or domicile in
that State;
``(2) be deemed to have acquired a residence or domicile in
any other State; or
``(3) be deemed to have become resident in or a resident of
any other State.
``(b) In this section, the term `State' includes a
territory or possession of the United States, a political
subdivision of a State, territory, or possession, and the
District of Columbia.''.

SEC. 603. STATE RESPONSIBILITY TO GUARANTEE MILITARY VOTING
RIGHTS.

(a) Registration and Balloting.--Section 102 of the
Uniformed and Overseas Citizens Absentee Voting Act (42
U.S.C. 1973ff-1) is amended--
(1) by inserting ``(a) Elections for Federal Offices.--''
before ``Each State shall--''; and
(2) by adding at the end the following:
``(b) Elections for State and Local Offices.--Each State
shall--
``(1) permit absent uniformed services voters to use
absentee registration procedures and to vote by absentee
ballot in general, special, primary, and run-off elections
for State and local offices; and
``(2) accept and process, with respect to any election
described in paragraph (1), any otherwise valid voter
registration application from an absent uniformed services
voter if the application is received by the appropriate State
election official not less than 30 days before the
election.''.
(b) Conforming Amendment.--The heading for title I of such
Act is amended by striking out ``FOR FEDERAL OFFICE''.

[[Page S232]]

TITLE VII--SEVERABILITY; CONSTITUTIONALITY; EFFECTIVE DATE; REGULATIONS

SEC. 701. SEVERABILITY.

If any provision of this Act or amendment made by this Act,
or the application of a provision or amendment to any person
or circumstance, is held to be unconstitutional, the
remainder of this Act and amendments made by this Act, and
the application of the provisions and amendment to any person
or circumstance, shall not be affected by the holding.

SEC. 702. REVIEW OF CONSTITUTIONAL ISSUES.

An appeal may be taken directly to the Supreme Court of the
United States from any final judgment, decree, or order
issued by any court ruling on the constitutionality of any
provision of this Act or amendment made by this Act.

SEC. 703. EFFECTIVE DATE.

Except as otherwise provided in this Act, this Act and the
amendments made by this Act shall take effect upon the
expiration of the 90-day period which begins on the date of
the enactment of this Act.

SEC. 704. REGULATIONS.

The Federal Election Commission shall prescribe any
regulations required to carry out this Act and the amendments
made by this Act not later than 45 days after the date of the
enactment of this Act.
______

Mr. DASCHLE (for himself, Mr. Dodd, Mr. Kennedy, Mrs. Murray, Mr.
Wellstone, Mrs. Clinton, Mr. Sarbanes, Mr. Rockefeller, Mr.
Schumer, Mrs. Boxer, Mr. Johnson, Mr. Corzine, and Mr. Breaux):
S. 18. A bill to increase the availability and affordability of
quality child care and early learning services, to amend the Family and
Medical Leave Act of 1993 to expand the scope of the Act, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.

right start act of 2001

Mr. DASCHLE. 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:
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 ``Right Start Act of 2001''.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

TITLE I--INVESTING IN HEAD START PROGRAMS

Sec. 101. Authorization of appropriations.

TITLE II--INVESTING IN QUALITY CHILD CARE

Sec. 201. Authorization of appropriations.

TITLE III--PROMOTING EARLY LEARNING OPPORTUNITIES

Sec. 301. Amendments to the Early Learning Opportunities Act.

TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE

Subtitle A--Dependent Care Tax Credit

Sec. 401. Expanding the dependent care tax credit.
Sec. 402. Minimum credit allowed for stay-at-home parents.
Sec. 403. Credit made refundable.

Subtitle B--Incentives for Employer-Provided Child Care

Sec. 411. Allowance of credit for employer expenses for child care
assistance.

TITLE V--EXPANDING FAMILY AND MEDICAL LEAVE

Subtitle A--Family Income to Respond to Significant Transitions

Sec. 501. Short title.
Sec. 502. Purposes.
Sec. 503. Definitions.
Sec. 504. Demonstration projects.
Sec. 505. Evaluations and reports.
Sec. 506. Authorization of appropriations.

Subtitle B--Family Friendly Workplaces

Sec. 511. Short title.
Sec. 512. Coverage of employees.

Subtitle C--Time for Schools

Sec. 521. Short title.
Sec. 522. General requirements for leave.
Sec. 523. School involvement leave for civil service employees.
Sec. 524. Effective date.

Subtitle D--Employment Protection for Battered Women

Sec. 531. Entitlement to leave for addressing domestic violence for
non-Federal employees.
Sec. 532. Entitlement to leave for addressing domestic violence for
Federal employees.
Sec. 533. Existing leave usable for domestic violence.

TITLE I--INVESTING IN HEAD START PROGRAMS

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--Section 639(a) of the Head Start Act (42
U.S.C. 9834(a)) is amended by striking ``such sums'' and all
that follows and inserting the following: ``$6,500,000,000
for fiscal year 2002, $7,000,000,000 for fiscal year 2003,
$7,750,000,000 for fiscal year 2004, $8,500,000,000 for
fiscal year 2005, and $9,750,000,000 for fiscal year 2006.''.
(b) Conforming Amendments.--
(1) Reservations.--Paragraphs (1) and (3) of section 639(b)
of the Head Start Act (42 U.S.C. 9834(b)) are amended by
striking ``2003'' and inserting ``2006''.
(2) Distribution.--Paragraphs (3)(A)(i)(I) and (6)(A) of
section 640(a) of the Head Start Act (42 U.S.C. 9835(a)) are
amended by striking ``fiscal year 2003'' and inserting ``each
of fiscal years 2003 through 2006''.

TITLE II--INVESTING IN QUALITY CHILD CARE

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

(a) Child Care and Development Block Grant Act of 1990.--
Section 658B of the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858) is amended by striking
``$1,000,000,000'' and all that follows and inserting
``$2,076,000,000 for fiscal year 2002, $2,109,000,000 for
fiscal year 2003, $2,571,000,000 for fiscal year 2004,
$3,051,000,000 for fiscal year 2005, and $3,766,000,000 for
fiscal year 2006.''.
(b) Social Security Act Funding for Child Care.--Section
418(a)(3) of the Social Security Act (42 U.S.C. 618(a)(3)) is
amended--
(1) in subparagraph (E), by striking ``; and'';
(2) in subparagraph (F), by striking the period and
inserting a semicolon; and
(3) by adding at the end the following:
``(G) $2,870,000,000 for fiscal year 2002;
``(H) $2,936,000,000 for fiscal year 2003;
``(I) $3,861,000,000 for fiscal year 2004;
``(J) $4,821,000,000 for fiscal year 2005; and
``(K) $3,766,000,000 for fiscal year 2006.''.

TITLE III--PROMOTING EARLY LEARNING OPPORTUNITIES

SEC. 301. AMENDMENTS TO THE EARLY LEARNING OPPORTUNITIES ACT.

Section 805 of the Early Learning Opportunities Act, as
enacted by title VIII of the Departments of Labor, Health and
Human Services, and Education, and Related Agencies
Appropriations Act, 2001 (as enacted into law by section
1(a)(1) of Public Law 106-554) is amended--
(1) in the matter preceding paragraph (1), by inserting ``,
and there are appropriated,''; and
(2) by striking paragraphs (1) through (4) and inserting
the following:
``(1) $750,000,000 for fiscal year 2002;
``(2) $1,000,000,000 for fiscal year 2003;
``(3) $1,500,000,000 for fiscal year 2004;
``(4) $2,000,000,000 for fiscal year 2005; and
``(5) $2,500,000,000 for fiscal year 2006.''.

TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE

Subtitle A--Dependent Care Tax Credit

SEC. 401. EXPANDING THE DEPENDENT CARE TAX CREDIT.

(a) Percentage of Employment-Related Expenses Determined by
Taxpayer Status.--Section 21(a)(2) of the Internal Revenue
Code of 1986 (defining applicable percentage) is amended to
read as follows:
``(2) Applicable percentage defined.--For purposes of
paragraph (1), the term `applicable percentage' means--
``(A) except as provided in subparagraph (B), 50 percent
reduced (but not below 20 percent) by 1 percentage point for
each $1,000, or fraction thereof, by which the taxpayers's
adjusted gross income for the taxable year exceeds $30,000,
and
``(B) in the case of employment-related expenses described
in subsection (e)(11), 50 percent reduced (but not below
zero) by 1 percentage point for each $800, or fraction
thereof, by which the taxpayers's adjusted gross income for
the taxable year exceeds $30,000.''.
(b) Inflation Adjustment for Allowable Expenses.--Section
21(c) of the Internal Revenue Code of 1986 (relating to
dollar limit on amount creditable) is amended by striking
``The amount determined'' and inserting ``In the case of any
taxable year beginning after 2002, each dollar amount
referred to in paragraphs (1) and (2) shall be increased by
an amount equal to such dollar amount multiplied by the cost-
of-living adjustment determined under section 1(f)(3) for the
calendar year in which the taxable year begins, by
substituting `calendar year 2001' for `calendar year 1992' in
subparagraph (B) thereof. If any dollar amount after being
increased under the preceding sentence is not a multiple of
$10, such dollar amount shall be rounded to the nearest
multiple of $10. The amount determined''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2001.

SEC. 402. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS.

(a) In General.--Section 21(e) of the Internal Revenue Code
of 1986 (relating to special rules) is amended by adding at
the end the following:
``(11) Minimum credit allowed for stay-at-home parents.--
Notwithstanding subsection (d), in the case of any taxpayer
with one or more qualifying individuals described in
subsection (b)(1)(A) under the age of 1 at any time during
the taxable year, such taxpayer shall be deemed to have
employment-related expenses with respect to such qualifying
individuals in an amount equal to the sum of--
``(A) $90 for each month in such taxable year during which
at least one of such qualifying individuals is under the age
of 1, and

[[Page S233]]

``(B) the amount of employment-related expenses otherwise
incurred for such qualifying individuals for the taxable year
(determined under this section without regard to this
paragraph).''.
(b) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2001.

SEC. 403. CREDIT MADE REFUNDABLE.

(a) In General.--Part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1986 (relating to credits
against tax) is amended--
(1) by redesignating section 35 as section 36, and
(2) by redesignating section 21 as section 35.
(b) Advance Payment of Credit.--Chapter 25 of such Code
(relating to general provisions relating to employment taxes)
is amended by inserting after section 3507 the following:

``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

``(a) General Rule.--Except as otherwise provided in this
section, every employer making payment of wages with respect
to whom a dependent care eligibility certificate is in effect
shall, at the time of paying such wages, make an additional
payment equal to such employee's dependent care advance
amount.
``(b) Dependent Care Eligibility Certificate.--For purposes
of this title, a dependent care eligibility certificate is a
statement furnished by an employee to the employer which--
``(1) certifies that the employee will be eligible to
receive the credit provided by section 35 for the taxable
year,
``(2) certifies that the employee reasonably expects to be
an applicable taxpayer for the taxable year,
``(3) certifies that the employee does not have a dependent
care eligibility certificate in effect for the calendar year
with respect to the payment of wages by another employer,
``(4) states whether or not the employee's spouse has a
dependent care eligibility certificate in effect,
``(5) states the number of qualifying individuals in the
household maintained by the employee, and
``(6) estimates the amount of employment-related expenses
for the calendar year.
``(c) Dependent Care Advance Amount.--
``(1) In general.--For purposes of this title, the term
`dependent care advance amount' means, with respect to any
payroll period, the amount determined--
``(A) on the basis of the employee's wages from the
employer for such period,
``(B) on the basis of the employee's estimated employment-
related expenses included in the dependent care eligibility
certificate, and
``(C) in accordance with tables provided by the Secretary.
``(2) Advance amount tables.--The tables referred to in
paragraph (1)(C) shall be similar in form to the tables
prescribed under section 3402 and, to the maximum extent
feasible, shall be coordinated with such tables and the
tables prescribed under section 3507(c).
``(d) Other Rules.--For purposes of this section, rules
similar to the rules of subsections (d) and (e) of section
3507 shall apply.
``(e) Definitions.--For purposes of this section, terms
used in this section which are defined in section 35 shall
have the respective meanings given such terms by section
35.''.
(c) Conforming Amendments.--
(1) Section 35(a)(1) of such Code, as redesignated by
paragraph (1), is amended by striking ``chapter'' and
inserting ``subtitle''.
(2) Section 35(e) of such Code, as so redesignated and
amended by subsection (c), is amended by adding at the end
the following:
``(12) Coordination with advance payments and minimum
tax.--Rules similar to the rules of subsections (g) and (h)
of section 32 shall apply for purposes of this section.''.
(3) Sections 23(f)(1) and 129(a)(2)(C) of such Code are
each amended by striking ``section 21(e)'' and inserting
``section 35(e)''.
(4) Section 129(b)(2) of such Code is amended by striking
``section 21(d)(2)'' and inserting ``section 35(d)(2)''.
(5) Section 129(e)(1) of such Code is amended by striking
``section 21(b)(2)'' and inserting ``section 35(b)(2)''.
(6) Section 213(e) of such Code is amended by striking
``section 21'' and inserting ``section 35''.
(7) Section 995(f)(2)(C) of such Code is amended by
striking ``and 34'' and inserting ``34, and 35''.
(8) Section 6211(b)(4)(A) of such Code is amended by
striking ``and 34'' and inserting ``, 34, and 35''.
(9) Section 6213(g)(2)(H) of such Code is amended by
striking ``section 21'' and inserting ``section 35''.
(10) Section 6213(g)(2)(L) of such Code is amended by
striking ``section 21, 24, or 32'' and inserting ``section
24, 32, or 35''.
(11) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of such Code is amended by striking
the item relating to section 35 and inserting the following:

``Sec. 35. Expenses for household and dependent care services necessary
for gainful employment.
``Sec. 36. Overpayments of tax.''.

(12) The table of sections for subpart A of such part IV is
amended by striking the item relating to section 21.
(13) The table of sections for chapter 25 of such Code is
amended by adding after the item relating to section 3507 the
following:

``Sec. 3507A. Advance payment of dependent care credit.''.

(14) Section 1324(b)(2) of title 31, United States Code, is
amended by striking ``or'' before ``enacted'' and by
inserting before the period at the end ``, or from section 35
of such Code''.
(d) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2001.

Subtitle B--Incentives for Employer-Provided Child Care

SEC. 411. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD
CARE ASSISTANCE.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business related credits) is amended by adding at the end the
following:

``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.

[[Page S234]]

described in subsection (c)(1)(A) with respect to such
facility had been zero.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection, the
applicable recapture percentage shall be determined from the
following table:

The applicable
recapture
``If the recapture evpercentage is:
Years 1-3....................................................100
Year 4........................................................85
Year 5........................................................70
Year 6........................................................55
Year 7........................................................40
Year 8........................................................25
Years 9 and 10................................................10
Years 11 and thereafter........................................0.

``(B) Years.--For purposes of subparagraph (A), year 1
shall begin on the first day of the taxable year in which the
qualified child care facility is placed in service by the
taxpayer.
``(3) Recapture event defined.--For purposes of this
subsection, the term `recapture event' means--
``(A) Cessation of operation.--The cessation of the
operation of the facility as a qualified child care facility.
``(B) Change in ownership.--
``(i) In general.--Except as provided in clause (ii), the
disposition of a taxpayer's interest in a qualified child
care facility with respect to which the credit described in
subsection (a) was allowable.
``(ii) Agreement to assume recapture liability.--Clause (i)
shall not apply if the person acquiring such interest in the
facility agrees in writing to assume the recapture liability
of the person disposing of such interest in effect
immediately before such disposition. In the event of such an
assumption, the person acquiring the interest in the facility
shall be treated as the taxpayer for purposes of assessing
any recapture liability (computed as if there had been no
change in ownership).
``(4) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable year shall
be increased under paragraph (1) only with respect to credits
allowed by reason of this section which were used to reduce
tax liability. In the case of credits not so used to reduce
tax liability, the carryforwards and carrybacks under section
39 shall be appropriately adjusted.
``(B) No credits against tax.--Any increase in tax under
this subsection shall not be treated as a tax imposed by this
chapter for purposes of determining the amount of any credit
under subpart A, B, or D of this part.
``(C) No recapture by reason of casualty loss.--The
increase in tax under this subsection shall not apply to a
cessation of operation of the facility as a qualified child
care facility by reason of a casualty loss to the extent such
loss is restored by reconstruction or replacement within a
reasonable period established by the Secretary.
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons which are treated as
a single employer under subsections (a) and (b) of section 52
shall be treated as a single taxpayer.
``(2) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(3) Allocation in the case of partnerships.--In the case
of partnerships, the credit shall be allocated among partners
under regulations prescribed by the Secretary.
``(f) No Double Benefit.--
``(1) Reduction in basis.--For purposes of this subtitle--
``(A) In general.--If a credit is determined under this
section with respect to any property by reason of
expenditures described in subsection (c)(1)(A), the basis of
such property shall be reduced by the amount of the credit so
determined.
``(B) Certain dispositions.--If, during any taxable year,
there is a recapture amount determined with respect to any
property the basis of which was reduced under subparagraph
(A), the basis of such property (immediately before the event
resulting in such recapture) shall be increased by an amount
equal to such recapture amount. For purposes of the preceding
sentence, the term `recapture amount' means any increase in
tax (or adjustment in carrybacks or carryovers) determined
under subsection (d).
``(2) Other deductions and credits.--No deduction or credit
shall be allowed under any other provision of this chapter
with respect to the amount of the credit determined under
this section.''.
(b) Conforming Amendments.--
(1) Section 38(b) of the Internal Revenue Code of 1986 is
amended by striking ``plus'' at the end of paragraph (12), by
striking the period at the end of paragraph (13) and
inserting ``, plus'', and by adding at the end the following:
``(14) the employer-provided child care credit determined
under section 45E.''.
(2) Subsection (d) of section 39 of such Code is amended by
adding at the end the following new paragraph:
``(10) No carryback of employer-provided child care credit
before january 1, 2002.--No portion of the unused business
credit for any taxable year which is attributable to the
credit under section 45E may be carried back to a taxable
year ending before January 1, 2002.''.
(3) Subsection (c) of section 196 of such Code is amended
by striking ``and'' at the end of paragraph (8), by striking
the period at the end of paragraph (9) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(10) the employer-provided child care credit determined
under section 45E(a).''.
(4) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by adding
at the end the following:

``Sec. 45E. Employer-provided child care credit.''.

(5) Section 1016(a) of such Code is amended by striking
``and'' at the end of paragraph (26), by striking the period
at the end of paragraph (27) and inserting ``, and'', and by
adding at the end the following:
``(28) in the case of a facility with respect to which a
credit was allowed under section 45E, to the extent provided
in section 45E(f)(1).''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

TITLE V--EXPANDING FAMILY AND MEDICAL LEAVE

Subtitle A--Family Income to Respond to Significant Transitions

SEC. 501. SHORT TITLE.

This subtitle may be cited as the ``Family Income to
Respond to Significant Transitions Insurance Act''.

SEC. 502. PURPOSES.

The purposes of this subtitle are--
(1) to establish a demonstration program that supports the
efforts of States and political subdivisions to provide
partial or full wage replacement, often referred to as FIRST
insurance, to new parents so that the new parents are able to
spend time with a new infant or newly adopted child, and to
other employees; and
(2) to learn about the most effective mechanisms for
providing the wage replacement assistance.

SEC. 503. DEFINITIONS.

In this subtitle:
(1) Secretary.--The term ``Secretary'' means the Secretary
of Labor, acting after consultation with the Secretary of
Health and Human Services.
(2) Son or daughter; state.--The terms ``son or daughter''
and ``State'' have the meanings given the terms in section
101 of the Family and Medical Leave Act of 1993 (29 U.S.C.
2611).

SEC. 504. DEMONSTRATION PROJECTS.

(a) Grants.--The Secretary shall make grants to eligible
entities to pay for the Federal share of the cost of carrying
out projects that assist families by providing, through
various mechanisms, wage replacement for eligible individuals
that are responding to caregiving needs resulting from the
birth or adoption of a son or daughter or other family
caregiving needs. The Secretary shall make the grants for
periods of 5 years.
(b) Eligible Entities.--To be eligible to receive a grant
under this section, an entity shall be a State or political
subdivision of a State.
(c) Use of Funds.--
(1) In general.--An entity that receives a grant under this
section may use the funds made available through the grant to
provide partial or full wage replacement as described in
subsection (a) to eligible individuals--
(A) directly;
(B) through an insurance program, such as a State temporary
disability insurance program or the State unemployment
compensation benefit program;
(C) through a private disability or other insurance plan,
or another mechanism provided by a private employer; or
(D) through another mechanism.
(2) Administrative costs.--No entity may use more than 10
percent of the total funds made available through the grant
during the 5-year period of the grant to pay for the
administrative costs relating to a project described in
subsection (a).
(d) Eligible Individuals.--To be eligible to receive wage
replacement under subsection (a), an individual shall--
(1) meet such eligibility criteria as the eligible entity
providing the wage replacement may specify in an application
described in subsection (e); and
(2) be--
(A) an individual who is taking leave, under the Family and
Medical Leave Act of 1993 (29 U.S.C. 2601 et seq.), other
Federal, State, or local law, or a private plan, for a reason
described in subparagraph (A) or (B) of section 102(a)(1) of
the Family and Medical Leave Act of 1993 (29 U.S.C.
2612(a)(1));
(B) at the option of the eligible entity, an individual
who--
(i) is taking leave, under that Act, other Federal, State,
or local law, or a private plan, for a reason described in
subparagraph (C) or (D) of section 102(a)(1) of the Family
and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1)); or
(ii) leaves employment because the individual has elected
to care for a son or daughter under age 1; or
(C) at the option of the eligible entity, an individual
with other characteristics specified by the eligible entity
in an application described in subsection (e).
(e) Application.--To be eligible to receive a grant under
this section, an entity shall submit an application to the
Secretary, at such time, in such manner, and containing such
information as the Secretary may require, including, at a
minimum--
(1) a plan for the project to be carried out with the
grant;

[[Page S235]]

(2) information demonstrating that the applicant consulted
representatives of employers and employees, including labor
organizations, in developing the plan;
(3) estimates of the costs and benefits of the project;
(4)(A) information on the number and type of families to be
covered by the project, and the extent of such coverage in
the area served under the grant; and
(B) information on any criteria or characteristics that the
entity will use to determine whether an individual is
eligible for wage replacement under subsection (a), as
described in paragraphs (1) and (2)(C) of subsection (d);
(5) if the project will expand on State and private systems
of wage replacement for eligible individuals, information on
the manner in which the project will expand on the systems;
(6) information demonstrating the manner in which the wage
replacement assistance provided through the project will
assist families in which an individual takes leave as
described in subsection (d)(1); and
(7) an assurance that the applicant will participate in
efforts to evaluate the effectiveness of the project.
(f) Selection Criteria.--In selecting entities to receive
grants for projects under this section, the Secretary shall--
(1) take into consideration--
(A) the scope of the proposed projects;
(B) the cost-effectiveness, feasibility, and financial
soundness of the proposed projects;
(C) the extent to which the proposed projects would expand
access to wage replacement in response to family caregiving
needs, particularly for low-wage employees, in the area
served by the grant; and
(D) the benefits that would be offered to families and
children through the proposed projects; and
(2) to the extent feasible, select entities proposing
projects that utilize diverse mechanisms, including expansion
of State unemployment compensation benefit programs, and
establishment or expansion of State temporary disability
insurance programs, to provide the wage replacement.
(g) Federal Share.--
(1) In general.--The Federal share of the cost described in
subsection (a) shall be--
(A) 50 percent for the first year of the grant period;
(B) 40 percent for the second year of that period;
(C) 30 percent for the third year of that period; and
(D) 20 percent for each subsequent year.
(2) Non-federal share.--The non-Federal share of the cost
may be in cash or in kind, fairly evaluated, including plant,
equipment, and services and may be provided from State,
local, or private sources, or Federal sources other than this
subtitle.
(h) Supplement Not Supplant.--Funds appropriated pursuant
to the authority of this subtitle shall be used to supplement
and not supplant other Federal, State, and local public funds
and private funds expended to provide wage replacement.
(i) Effect on Existing Rights.--Nothing in this subtitle
shall be construed to supersede, preempt, or otherwise
infringe on the provisions of any collective bargaining
agreement or any employment benefit program or plan that
provides greater rights to employees than the rights
established under this subtitle.

SEC. 505. EVALUATIONS AND REPORTS.

(a) Available Funds.--The Secretary shall use not more than
2 percent of the funds made available under section 5 to
carry out this section.
(b) Evaluations.--The Secretary shall, directly or by
contract, evaluate the effectiveness of projects carried out
with grants made under section 5, including conducting--
(1) research relating to the projects, including research
comparing--
(A) the scope of the projects, including the type of
insurance or other wage replacement mechanism used, the
method of financing used, the eligibility requirements, the
level of the wage replacement benefit provided (such as the
percentage of salary replaced), and the length of the benefit
provided, for the projects;
(B) the utilization of the projects, including the
characteristics of individuals who benefit from the projects,
particularly low-wage workers, and factors that determine the
ability of eligible individuals to obtain wage replacement
through the projects; and
(C) the costs of and savings achieved by the projects,
including the cost-effectiveness of the projects and their
benefits for children and families;
(2) analysis of the overall need for wage replacement; and
(3) analysis of the impact of the projects on the overall
availability of wage replacement.
(c) Reports.--
(1) Initial report.--Not later than 3 years after the
beginning of the grant period for the first grant made under
section 5, the Secretary shall prepare and submit to Congress
a report that contains information resulting from the
evaluations conducted under subsection (b).
(2) Subsequent reports.--Not later than 4 years after the
beginning of that grant period, and annually thereafter, the
Secretary shall prepare and submit to Congress a report that
contains--
(A) information resulting from the evaluations conducted
under subsection (b); and
(B) usage data for the demonstration projects, for the most
recent year for which data are available.

SEC. 506. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out this
subtitle $400,000,000 for fiscal year 2002 and such sums as
may be necessary for each subsequent fiscal year.

Subtitle B--Family Friendly Workplaces

SEC. 511. SHORT TITLE.

This subtitle may be cited as the ``Family and Medical
Leave Fairness Act of 2001''.

SEC. 512. COVERAGE OF EMPLOYEES.

Paragraphs (2)(B)(ii) and (4)(A)(i) of section 101 of the
Family and Medical Leave Act of 1993 (29 U.S.C.
2611(2)(B)(ii) and (4)(A)(i)) are amended by striking ``50''
each place it appears and inserting ``25''.

Subtitle C--Time for Schools

SEC. 521. SHORT TITLE.

This subtitle may be cited as the ``Time for Schools Act of
2001''.

SEC. 522. GENERAL REQUIREMENTS FOR LEAVE.

(a) Entitlement to Leave.--Section 102(a) of the Family and
Medical Leave Act of 1993 (29 U.S.C. 2612(a)) is amended by
adding at the end the following:
``(3) Entitlement to school involvement leave.--
``(A) In general.--Subject to section 103(f), an eligible
employee shall be entitled to a total of 24 hours of leave
during any 12-month period to participate in an academic
activity of a school of a son or daughter of the employee,
such as a parent-teacher conference or an interview for a
school, or to participate in literacy training under a family
literacy program.
``(B) Definitions.--In this paragraph:
``(i) Family literacy program.--The term `family literacy
program' means a program of services that are of sufficient
intensity in terms of hours, and of sufficient duration, to
make sustainable changes in a family and that integrate all
of the following activities:

``(I) Interactive literacy activities between parents and
their sons and daughters.
``(II) Training for parents on how to be the primary
teacher for their sons and daughters and full partners in the
education of their sons and daughters.
``(III) Parent literacy training.
``(IV) An age-appropriate education program for sons and
daughters.

``(ii) Literacy.--The term `literacy', used with respect to
an individual, means the ability of the individual to speak,
read, and write English, and compute and solve problems, at
levels of proficiency necessary--

``(I) to function on the job, in the family of the
individual, and in society;
``(II) to achieve the goals of the individual; and
``(III) to develop the knowledge potential of the
individual.

``(iii) School.--The term `school' means an elementary
school or secondary school (as such terms are defined in
section 14101 of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 8801)), a Head Start program assisted
under the Head Start Act (42 U.S.C. 9831 et seq.), and a
child care facility operated by a provider who meets the
applicable State or local government licensing,
certification, approval, or registration requirements, if
any.
``(4) Limitation.--No employee may take more than a total
of 12 workweeks of leave under paragraphs (1) and (3) during
any 12-month period.''.
(b) Schedule.--Section 102(b)(1) of such Act (29 U.S.C.
2612(b)(1)) is amended by inserting after the second sentence
the following: ``Leave under subsection (a)(3) may be taken
intermittently or on a reduced leave schedule.''.
(c) Substitution of Paid Leave.--Section 102(d)(2)(A) of
such Act (29 U.S.C. 2612(d)(2)(A)) is amended by inserting
before the period the following: ``, or for leave provided
under subsection (a)(3) for any part of the 24-hour period of
such leave under such subsection''.
(d) Notice.--Section 102(e) of such Act (29 U.S.C. 2612(e))
is amended by adding at the end the following:
``(3) Notice for school involvement leave.--In any case in
which the necessity for leave under subsection (a)(3) is
foreseeable, the employee shall provide the employer with not
less than 7 days' notice, before the date the leave is to
begin, of the employee's intention to take leave under such
subsection. If the necessity for the leave is not
foreseeable, the employee shall provide such notice as is
practicable.''.
(e) Certification.--Section 103 of such Act (29 U.S.C.
2613) is amended by adding at the end the following:
``(f) Certification for School Involvement Leave.--An
employer may require that a request for leave under section
102(a)(3) be supported by a certification issued at such time
and in such manner as the Secretary may by regulation
prescribe.''.

SEC. 523. SCHOOL INVOLVEMENT LEAVE FOR CIVIL SERVICE
EMPLOYEES.

(a) Entitlement to Leave.--Section 6382(a) of title 5,
United States Code, is amended by adding at the end the
following:
``(3)(A) Subject to section 6383(f), an employee shall be
entitled to a total of 24 hours of leave during any 12-month
period to participate in an academic activity of a school of
a son or daughter of the employee, such as a parent-teacher
conference or an interview for a school, or to participate in
literacy training under a family literacy program.
``(B) In this paragraph:
``(i) The term `family literacy program' means a program of
services that are of sufficient intensity in terms of hours,
and of sufficient duration, to make sustainable

[[Page S236]]

changes in a family and that integrate all of the following
activities:
``(I) Interactive literacy activities between parents and
their sons and daughters.
``(II) Training for parents on how to be the primary
teacher for their sons and daughters and full partners in the
education of their sons and daughters.
``(III) Parent literacy training.
``(IV) An age-appropriate education program for sons and
daughters.
``(ii) The term `literacy', used with respect to an
individual, means the ability of the individual to speak,
read, and write English, and compute and solve problems, at
levels of proficiency necessary--
``(I) to function on the job, in the family of the
individual, and in society;
``(II) to achieve the goals of the individual; and
``(III) to develop the knowledge potential of the
individual.
``(iii) The term `school' means an elementary school or
secondary school (as such terms are defined in section 14101
of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 8801)), a Head Start program assisted under the Head
Start Act (42 U.S.C. 9831 et seq.), and a child care facility
operated by a provider who meets the applicable State or
local government licensing, certification, approval, or
registration requirements, if any.
``(4) No employee may take more than a total of 12
workweeks of leave under paragraphs (1) and (3) during any
12-month period.''.
(b) Schedule.--Section 6382(b)(1) of such title is amended
by inserting after the second sentence the following: ``Leave
under subsection (a)(3) may be taken intermittently or on a
reduced leave schedule.''.
(c) Substitution of Paid Leave.--Section 6382(d) of such
title is amended by inserting before ``, except'' the
following: ``, or for leave provided under subsection (a)(3)
any of the employee's accrued or accumulated annual leave
under subchapter I for any part of the 24-hour period of such
leave under such subsection''.
(d) Notice.--Section 6382(e) of such title is amended by
adding at the end the following:
``(3) In any case in which the necessity for leave under
subsection (a)(3) is foreseeable, the employee shall provide
the employing agency with not less than 7 days' notice,
before the date the leave is to begin, of the employee's
intention to take leave under such subsection. If the
necessity for the leave is not foreseeable, the employee
shall provide such notice as is practicable.''.
(e) Certification.--Section 6383 of such title is amended
by adding at the end the following:
``(f) An employing agency may require that a request for
leave under section 6382(a)(3) be supported by a
certification issued at such time and in such manner as the
Office of Personnel Management may by regulation
prescribe.''.

SEC. 524. EFFECTIVE DATE.

This subtitle takes effect 120 days after the date of
enactment of this Act.

Subtitle D--Employment Protection for Battered Women

SEC. 531. ENTITLEMENT TO LEAVE FOR ADDRESSING DOMESTIC
VIOLENCE FOR NON-FEDERAL EMPLOYEES.

(a) Definitions.--Section 101 of the Family and Medical
Leave Act of 1993 (29 U.S.C. 2611) is amended by adding at
the end the following:
``(14) Addressing domestic violence and its effects.--The
term `addressing domestic violence and its effects' means--
``(A) being unable to attend or perform work due to an
incident of domestic violence;
``(B) seeking medical attention for or recovering from
injuries caused by domestic violence;
``(C) seeking legal assistance or remedies, including
communicating with the police or an attorney, or
participating in any legal proceeding, related to domestic
violence;
``(D) obtaining services from a domestic violence shelter
or program or rape crisis center as a result of domestic
violence;
``(E) obtaining psychological counseling related to
experiences of domestic violence;
``(F) participating in safety planning and other actions to
increase safety from future domestic violence, including
temporary or permanent relocation; and
``(G) participating in any other activity necessitated by
domestic violence that must be undertaken during the hours of
employment involved.
``(15) Domestic violence.--The term `domestic violence'
means domestic violence, and dating violence, as such terms
are defined in section 2105 of the Omnibus Crime Control and
Safe Streets Act of 1968 (42 U.S.C. 3796hh-4).''.
(b) Leave Requirement.--Section 102 of the Family and
Medical Leave Act of 1993 (29 U.S.C. 2612) is amended--
(1) in subsection (a)(1), by adding at the end the
following:
``(E) In order to care for the son, daughter, or parent of
the employee, if such son, daughter, or parent is addressing
domestic violence and its effects.
``(F) Because the employee is addressing domestic violence
and its effects, which make the employee unable to perform
the functions of the position of such employee.'';
(2) in subsection (b), by adding at the end the following:
``(3) Domestic violence.--Leave under subparagraph (E) or
(F) of subsection (a)(1) may be taken by an eligible employee
intermittently or on a reduced leave schedule. The taking of
leave intermittently or on a reduced leave schedule pursuant
to this paragraph shall not result in a reduction in the
total amount of leave to which the employee is entitled under
subsection (a) beyond the amount of leave actually taken.'';
and
(3) in subsection (d)(2)(B), by striking ``(C) or (D)'' and
inserting ``(C), (D), (E), or (F)''.
(c) Certification.--Section 103 of the Family and Medical
Leave Act of 1993 (29 U.S.C. 2613), as amended by section
522(e), is further amended--
(1) in the title of the section, by inserting before the
period the following: ``; CONFIDENTIALITY''; and
(2) by adding at the end the following:
``(g) Domestic Violence.--In determining if an employee
meets the requirements of subparagraph (E) or (F) of section
102(a)(1), the employer of an employee may require the
employee to provide--
``(1) a written statement describing the domestic violence
and its effects;
``(2) documentation of the domestic violence involved, such
as a police or court record, or documentation from a shelter
worker, an employee of a domestic violence program, an
attorney, a member of the clergy, or a medical or other
professional, from whom the employee has sought assistance in
addressing domestic violence and its effects; or
``(3) other corroborating evidence, such as a statement
from any other individual with knowledge of the circumstances
that provide the basis for the claim of domestic violence, or
physical evidence of domestic violence, such as a photograph,
torn or bloody clothing, or any other damaged property.
``(h) Confidentiality.--All evidence provided to the
employer under subsection (g) of domestic violence
experienced by an employee or the son, daughter, or parent of
an employee, including a statement of an employee, any other
documentation or corroborating evidence, and the fact that an
employee has requested leave for the purpose of addressing,
or caring for a son, daughter, or parent who is addressing,
domestic violence and its effects, shall be retained in the
strictest confidence by the employer, except to the extent
that disclosure is requested, or consented to, by the
employee for the purpose of--
``(1) protecting the safety of the employee or a family
member or co-worker of the employee; or
``(2) assisting in documenting domestic violence for a
court or agency.''.

SEC. 532. ENTITLEMENT TO LEAVE FOR ADDRESSING DOMESTIC
VIOLENCE FOR FEDERAL EMPLOYEES.

(a) Definitions.--Section 6381 of title 5, United States
Code, is amended--
(1) at the end of paragraph (5), by striking ``and'';
(2) in paragraph (6), by striking the period and inserting
a semicolon; and
(3) by adding at the end the following:
``(7) the term `addressing domestic violence and its
effects' has the meaning given the term in section 101 of the
Family and Medical Leave Act of 1993 (29 U.S.C. 2611); and
``(8) the term `domestic violence' means domestic violence,
and dating violence, as such terms are defined in section
2105 of the Omnibus Crime Control and Safe Streets Act of
1968 (42 U.S.C. 3796hh-4).''.
(b) Leave Requirement.--Section 6382 of title 5, United
States Code, is amended--
(1) in subsection (a)(1), by adding at the end the
following:
``(E) In order to care for the son, daughter, or parent of
the employee, if such son, daughter, or parent is addressing
domestic violence and its effects.
``(F) Because the employee is addressing domestic violence
and its effects, which make the employee unable to perform
the functions of the position of such employee.'';
(2) in subsection (b), by adding at the end the following:
``(3) Domestic violence.--Leave under subparagraph (E) or
(F) of subsection (a)(1) may be taken by an employee
intermittently or on a reduced leave schedule. The taking of
leave intermittently or on a reduced leave schedule pursuant
to this paragraph shall not result in a reduction in the
total amount of leave to which the employee is entitled under
subsection (a) beyond the amount of leave actually taken.'';
and
(3) in subsection (d), by striking ``(C), or (D)'' and
inserting ``(C), (D), (E), or (F)''.
(c) Certification.--Section 6383 of title 5, United States
Code, as amended by section 523(e), is further amended--
(1) in the title of the section, by adding at the end the
following: ``; CONFIDENTIALITY''; and
(2) by adding at the end the following:
``(g) In determining if an employee meets the requirements
of subparagraph (E) or (F) of section 6382(a)(1), the
employing agency of an employee may require the employee to
provide--
``(1) a written statement describing the domestic violence
and its effects;
``(2) documentation of the domestic violence involved, such
as a police or court record, or documentation from a shelter
worker, an employee of a domestic violence program, an
attorney, a member of the clergy, or a medical or other
professional, from whom the employee has sought assistance in
addressing domestic violence and its effects; or
``(3) other corroborating evidence, such as a statement
from any other individual with knowledge of the circumstances
that provide the basis for the claim of domestic violence,

[[Page S237]]

or physical evidence of domestic violence, such as a
photograph, torn or bloody clothing, or other damaged
property.
``(h) All evidence provided to the employing agency under
subsection (g) of domestic violence experienced by an
employee or the son, daughter, or parent of an employee,
including a statement of an employee, any other documentation
or corroborating evidence, and the fact that an employee has
requested leave for the purpose of addressing, or caring for
a son, daughter, or parent who is addressing, domestic
violence and its effects, shall be retained in the strictest
confidence by the employing agency, except to the extent that
disclosure is requested, or consented to, by the employee for
the purpose of--
``(1) protecting the safety of the employee or a family
member or co-worker of the employee; or
``(2) assisting in documenting domestic violence for a
court or agency.''.

SEC. 533. EXISTING LEAVE USABLE FOR DOMESTIC VIOLENCE.

(a) Definitions.--In this section:
(1) Addressing domestic violence and its effects.--The term
``addressing domestic violence and its effects'' has the
meaning given the term in section 101 of the Family and
Medical Leave Act of 1993 (29 U.S.C. 2611), as amended in
section 531(a).
(2) Employee.--The term ``employee'' means any person
employed by an employer. In the case of an individual
employed by a public agency, such term means an individual
employed as described in section 3(e) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 203(e)).
(3) Employer.--The term ``employer''--
(A) means any person engaged in commerce or in any industry
or activity affecting commerce who employs individuals, if
such person is also subject to the Family and Medical Leave
Act of 1993 (29 U.S.C. 2601 et seq.) or to any provision of a
State or local law, collective bargaining agreement, or
employment benefits program or plan, addressing paid or
unpaid leave from employment (including family, medical,
sick, annual, personal, or similar leave); and
(B) includes any person acting directly or indirectly in
the interest of an employer in relation to any employee, and
includes a public agency, who is subject to a law, agreement,
program, or plan described in subparagraph (A), but does not
include any labor organization (other than when acting as an
employer) or anyone acting in the capacity of officer or
agent of such labor organization.
(4) Employment benefits.--The term ``employment benefits''
has the meaning given the term in section 101 of the Family
and Medical Leave Act of 1993 (29 U.S.C. 2611).
(5) Parent; son or daughter.--The terms ``parent'' and
``son or daughter'' have the meanings given the terms in
section 101 of the Family and Medical Leave Act of 1993 (29
U.S.C. 2611).
(6) Public agency.--The term ``public agency'' has the
meaning given the term in section 3 of the Fair Labor
Standards Act of 1938 (29 U.S.C. 203).
(b) Use of Existing Leave.--An employee who is entitled to
take paid or unpaid leave (including family, medical, sick,
annual, personal, or similar leave) from employment, pursuant
to State or local law, a collective bargaining agreement, or
an employment benefits program or plan, shall be permitted to
use such leave for the purpose of addressing domestic
violence and its effects, or for the purpose of caring for a
son or daughter or parent of the employee, if such son or
daughter or parent is addressing domestic violence and its
effects.
(c) Certification.--In determining whether an employee
qualifies to use leave as described in subsection (b), an
employer may require a written statement, documentation of
domestic violence, or corroborating evidence consistent with
section 103(g) of the Family and Medical Leave Act of 1993
(29 U.S.C. 2613(g)), as amended by section 531(c).
(d) Confidentiality.--All evidence provided to the employer
under subsection (c) of domestic violence experienced by an
employee or the son or daughter or parent of the employee,
including a statement of an employee, any other documentation
or corroborating evidence, and the fact that an employee has
requested leave for the purpose of addressing, or caring for
a son or daughter or parent who is addressing, domestic
violence and its effects, shall be retained in the strictest
confidence by the employer, except to the extent that
disclosure is requested, or consented to, by the employee for
the purpose of--
(1) protecting the safety of the employee or a family
member or co-worker of the employee; or
(2) assisting in documenting domestic violence for a court
or agency.
(e) Prohibited Acts.--
(1) Interference with rights.--
(A) Exercise of rights.--It shall be unlawful for any
employer to interfere with, restrain, or deny the exercise of
or the attempt to exercise, any right provided under this
section.
(B) Discrimination.--It shall be unlawful for any employer
to discharge or in any other manner discriminate against an
individual for opposing any practice made unlawful by this
section.
(2) Interference with proceedings or inquiries.--It shall
be unlawful for any person to discharge or in any other
manner discriminate against any individual because such
individual--
(A) has filed any charge, or had instituted or caused to be
instituted any proceeding, under or related to this section;
(B) has given, or is about to give, any information in
connection with any inquiry or proceeding relating to any
right provided under this section; or
(C) has testified, or is about to testify, in any inquiry
or proceeding relating to any right provided under this
section.
(f) Enforcement.--
(1) Public enforcement.--The Secretary of Labor shall have
the powers set forth in subsections (b), (c), (d), and (e) of
section 107 of the Family and Medical Leave Act of 1993 (29
U.S.C. 2617) for the purpose of public agency enforcement of
any alleged violation of subsection (e) against any employer.
(2) Private enforcement.--The remedies and procedures set
forth in section 107(a) of the Family and Medical Leave Act
of 1993 (29 U.S.C. 2617(a)) shall be the remedies and
procedures pursuant to which an employee may initiate a legal
action against an employer for alleged violations of
subsection (e).
(3) References.--For purposes of paragraph (1) and (2),
references in section 107 of the Family and Medical Leave Act
of 1993 to section 105 of such Act shall be considered to be
references to subsection (e).
(4) Employer liability under other laws.--Nothing in this
section shall be construed to limit the liability of an
employer to an employee for harm suffered relating to the
employee's experience of domestic violence pursuant to any
other Federal or State law, including a law providing for a
legal remedy.
______

By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Lieberman, Mr.
Leahy, Mr. Biden, Mr. Feingold, Mr. Schumer, Mr. Durbin, Mr.
Akaka, Mrs. Boxer, Mr. Breaux, Mrs. Clinton, Mr. Corzine, Mr.
Dayton, Mr. Edwards, Mr. Harkin, Mr. Levin, Ms. Mikulski, Mr.
Rockefeller, and Mr. Wyden):
S. 19. A bill to protect the civil rights of all Americans, and for
other purposes; to the Committee on the Judiciary.

protecting civil rights for all americans act

Mr. DASCHLE. Mr. President, I ask unanimous consent that the text be
printed in the Record.
There being no objection the bill was ordered to be printed in the
Record as follows:

S. 19

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 ``Protecting
Civil Rights for All Americans Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--LOCAL LAW ENFORCEMENT ENHANCEMENT ACT OF 2001

Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Definition of hate crime.
Sec. 104. Support for criminal investigations and prosecutions by State
and local law enforcement officials.
Sec. 105. Grant program.
Sec. 106. Authorization for additional personnel to assist State and
local law enforcement.
Sec. 107. Prohibition of certain hate crime acts.
Sec. 108. Duties of Federal sentencing commission.
Sec. 109. Statistics.
Sec. 110. Severability.

TITLE II--TRAFFIC STOPS STATISTICS STUDY

Sec. 201. Short title.
Sec. 202. Attorney General to conduct study.
Sec. 203. Grant program.
Sec. 204. Limitation on use of data.
Sec. 205. Definitions.
Sec. 206. Authorization of appropriations.

TITLE III--SUPPORTING INDIGENT REPRESENTATION

Sec. 301. Findings.
Sec. 302. Authorization of appropriations.

TITLE IV--GENETIC NONDISCRIMINATION IN HEALTH INSURANCE AND EMPLOYMENT

Subtitle A--Prohibition of Health Insurance Discrimination on the Basis
of Predictive Genetic Information

Sec. 401. Amendments to Employee Retirement Income Security Act of
1974.
Sec. 402. Amendments to the Public Health Service Act.
Sec. 403. Amendments to Internal Revenue Code of 1986.
Sec. 404. Amendments to title XVIII of the Social Security Act relating
to medigap.

Subtitle B--Prohibition of Employment Discrimination on the Basis of
Predictive Genetic Information

Sec. 411. Definitions.
Sec. 412. Employer practices.
Sec. 413. Employment agency practices.
Sec. 414. Labor organization practices.
Sec. 415. Training programs.

[[Page S238]]

Sec. 416. Maintenance and disclosure of predictive genetic information.
Sec. 417. Civil action.
Sec. 418. Construction.
Sec. 419. Authorization of appropriations.
Sec. 420. Effective date.

TITLE V--EMPLOYMENT NONDISCRIMINATION

Sec. 501. Short title.
Sec. 502. Purposes.
Sec. 503. Definitions.
Sec. 504. Discrimination prohibited.
Sec. 505. Retaliation and coercion prohibited.
Sec. 506. Benefits.
Sec. 507. Collection of statistics prohibited.
Sec. 508. Quotas and preferential treatment prohibited.
Sec. 509. Religious exemption.
Sec. 510. Nonapplication to members of the Armed Forces; veterans'
preferences.
Sec. 511. Construction.
Sec. 512. Enforcement.
Sec. 513. State and Federal immunity.
Sec. 514. Attorneys' fees.
Sec. 515. Posting notices.
Sec. 516. Regulations.
Sec. 517. Relationship to other laws.
Sec. 518. Severability.
Sec. 519. Effective date.

TITLE VI--PROMOTING CIVIL RIGHTS ENFORCEMENT

Sec. 601. Establishment of the National Task Force on Violence Against
Health Care Providers.
Sec. 602. Increase in funding for enforcing civil rights laws.

TITLE I--LOCAL LAW ENFORCEMENT ENHANCEMENT ACT OF 2001

SEC. 101. SHORT TITLE.

This title may be cited as the ``Local Law Enforcement
Enhancement Act of 2001''.

SEC. 102. FINDINGS.

Congress makes the following findings:
(1) The incidence of violence motivated by the actual or
perceived race, color, religion, national origin, gender,
sexual orientation, or disability of the victim poses a
serious national problem.
(2) Such violence disrupts the tranquility and safety of
communities and is deeply divisive.
(3) State and local authorities are now and will continue
to be responsible for prosecuting the overwhelming majority
of violent crimes in the United States, including violent
crimes motivated by bias. These authorities can carry out
their responsibilities more effectively with greater Federal
assistance.
(4) Existing Federal law is inadequate to address this
problem.
(5) The prominent characteristic of a violent crime
motivated by bias is that it devastates not just the actual
victim and the victim's family and friends, but frequently
savages the community sharing the traits that caused the
victim to be selected.
(6) Such violence substantially affects interstate commerce
in many ways, including--
(A) by impeding the movement of members of targeted groups
and forcing such members to move across State lines to escape
the incidence or risk of such violence; and
(B) by preventing members of targeted groups from
purchasing goods and services, obtaining or sustaining
employment or participating in other commercial activity.
(7) Perpetrators cross State lines to commit such violence.
(8) Channels, facilities, and instrumentalities of
interstate commerce are used to facilitate the commission of
such violence.
(9) Such violence is committed using articles that have
traveled in interstate commerce.
(10) For generations, the institutions of slavery and
involuntary servitude were defined by the race, color, and
ancestry of those held in bondage. Slavery and involuntary
servitude were enforced, both prior to and after the adoption
of the 13th amendment to the Constitution of the United
States, through widespread public and private violence
directed at persons because of their race, color, or
ancestry, or perceived race, color, or ancestry. Accordingly,
eliminating racially motivated violence is an important means
of eliminating, to the extent possible, the badges,
incidents, and relics of slavery and involuntary servitude.
(11) Both at the time when the 13th, 14th, and 15th
amendments to the Constitution of the United States were
adopted, and continuing to date, members of certain religious
and national origin groups were and are perceived to be
distinct ``races''. Thus, in order to eliminate, to the
extent possible, the badges, incidents, and relics of
slavery, it is necessary to prohibit assaults on the basis of
real or perceived religions or national origins, at least to
the extent such religions or national origins were regarded
as races at the time of the adoption of the 13th, 14th, and
15th amendments to the Constitution of the United States.
(12) Federal jurisdiction over certain violent crimes
motivated by bias enables Federal, State, and local
authorities to work together as partners in the investigation
and prosecution of such crimes.
(13) The problem of crimes motivated by bias is
sufficiently serious, widespread, and interstate in nature as
to warrant Federal assistance to States and local
jurisdictions.

SEC. 103. DEFINITION OF HATE CRIME.

In this title, the term ``hate crime'' has the same meaning
as in section 280003(a) of the Violent Crime Control and Law
Enforcement Act of 1994 (28 U.S.C. 994 note).

SEC. 104. SUPPORT FOR CRIMINAL INVESTIGATIONS AND
PROSECUTIONS BY STATE AND LOCAL LAW ENFORCEMENT
OFFICIALS.

(a) Assistance Other Than Financial Assistance.--
(1) In general.--At the request of a law enforcement
official of a State or Indian tribe, the Attorney General may
provide technical, forensic, prosecutorial, or any other form
of assistance in the criminal investigation or prosecution of
any crime that--
(A) constitutes a crime of violence (as defined in section
16 of title 18, United States Code);
(B) constitutes a felony under the laws of the State or
Indian tribe; and
(C) is motivated by prejudice based on the victim's race,
color, religion, national origin, gender, sexual orientation,
or disability or is a violation of the hate crime laws of the
State or Indian tribe.
(2) Priority.--In providing assistance under paragraph (1),
the Attorney General shall give priority to crimes committed
by offenders who have committed crimes in more than 1 State
and to rural jurisdictions that have difficulty covering the
extraordinary expenses relating to the investigation or
prosecution of the crime.
(b) Grants.--
(1) In general.--The Attorney General may award grants to
assist State, local, and Indian law enforcement officials
with the extraordinary expenses associated with the
investigation and prosecution of hate crimes. In implementing
the grant program, the Office of Justice Programs shall work
closely with the funded jurisdictions to ensure that the
concerns and needs of all affected parties, including
community groups and schools, colleges, and universities, are
addressed through the local infrastructure developed under
the grants.
(2) Application.--
(A) In general.--Each State desiring a grant under this
subsection shall submit an application to the Attorney
General at such time, in such manner, and accompanied by or
containing such information as the Attorney General shall
reasonably require.
(B) Date for submission.--Applications submitted pursuant
to subparagraph (A) shall be submitted during the 60-day
period beginning on a date that the Attorney General shall
prescribe.
(C) Requirements.--A State or political subdivision of a
State or tribal official applying for assistance under this
subsection shall--
(i) describe the extraordinary purposes for which the grant
is needed;
(ii) certify that the State, political subdivision, or
Indian tribe lacks the resources necessary to investigate or
prosecute the hate crime;
(iii) demonstrate that, in developing a plan to implement
the grant, the State, political subdivision, or tribal
official has consulted and coordinated with nonprofit,
nongovernmental victim services programs that have experience
in providing services to victims of hate crimes; and
(iv) certify that any Federal funds received under this
subsection will be used to supplement, not supplant, non-
Federal funds that would otherwise be available for
activities funded under this subsection.
(3) Deadline.--An application for a grant under this
subsection shall be approved or disapproved by the Attorney
General not later than 30 business days after the date on
which the Attorney General receives the application.
(4) Grant amount.--A grant under this subsection shall not
exceed $100,000 for any single jurisdiction within a 1 year
period.
(5) Report.--Not later than December 31, 2002, the Attorney
General shall submit to Congress a report describing the
applications submitted for grants under this subsection, the
award of such grants, and the purposes for which the grant
amounts were expended.
(6) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $5,000,000
for each of fiscal years 2002 and 2003.

SEC. 105. GRANT PROGRAM.

(a) Authority To Make Grants.--The Office of Justice
Programs of the Department of Justice shall award grants, in
accordance with such regulations as the Attorney General may
prescribe, to State and local programs designed to combat
hate crimes committed by juveniles, including programs to
train local law enforcement officers in identifying,
investigating, prosecuting, and preventing hate crimes.
(b) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
this section.

SEC. 106. AUTHORIZATION FOR ADDITIONAL PERSONNEL TO ASSIST
STATE AND LOCAL LAW ENFORCEMENT.

There are authorized to be appropriated to the Department
of the Treasury and the Department of Justice, including the
Community Relations Service, for fiscal years 2002, 2003, and
2004 such sums as are necessary to increase the number of
personnel to prevent and respond to alleged violations of
section 249 of title 18, United States Code (as added by this
title).

SEC. 107. PROHIBITION OF CERTAIN HATE CRIME ACTS.

(a) In General.--Chapter 13 of title 18, United States
Code, is amended by adding at the end the following:

``Sec. 249. Hate crime acts

``(a) In General.--

[[Page S239]]

``(1) Offenses involving actual or perceived race, color,
religion, or national origin.--Whoever, whether or not acting
under color of law, willfully causes bodily injury to any
person or, through the use of fire, a firearm, or an
explosive or incendiary device, attempts to cause bodily
injury to any person, because of the actual or perceived
race, color, religion, or national origin of any person--
``(A) shall be imprisoned not more than 10 years, fined in
accordance with this title, or both; and
``(B) shall be imprisoned for any term of years or for
life, fined in accordance with this title, or both, if--
``(i) death results from the offense; or
``(ii) the offense includes kidnaping or an attempt to
kidnap, aggravated sexual abuse or an attempt to commit
aggravated sexual abuse, or an attempt to kill.
``(2) Offenses involving actual or perceived religion,
national origin, gender, sexual orientation, or disability.--
``(A) In general.--Whoever, whether or not acting under
color of law, in any circumstance described in subparagraph
(B), willfully causes bodily injury to any person or, through
the use of fire, a firearm, or an explosive or incendiary
device, attempts to cause bodily injury to any person,
because of the actual or perceived religion, national origin,
gender, sexual orientation, or disability of any person--
``(i) shall be imprisoned not more than 10 years, fined in
accordance with this title, or both; and
``(ii) shall be imprisoned for any term of years or for
life, fined in accordance with this title, or both, if--

``(I) death results from the offense; or
``(II) the offense includes kidnaping or an attempt to
kidnap, aggravated sexual abuse or an attempt to commit
aggravated sexual abuse, or an attempt to kill.

``(B) Circumstances described.--For purposes of
subparagraph (A), the circumstances described in this
subparagraph are that--
``(i) the conduct described in subparagraph (A) occurs
during the course of, or as the result of, the travel of the
defendant or the victim--

``(I) across a State line or national border; or
``(II) using a channel, facility, or instrumentality of
interstate or foreign commerce;

``(ii) the defendant uses a channel, facility, or
instrumentality of interstate or foreign commerce in
connection with the conduct described in subparagraph (A);
``(iii) in connection with the conduct described in
subparagraph (A): the defendant employs a firearm, explosive
or incendiary device, or other weapon that has traveled in
interstate or foreign commerce; or
``(iv) the conduct described in subparagraph (A)--

``(I) interferes with commercial or other economic activity
in which the victim is engaged at the time of the conduct; or
``(II) otherwise affects interstate or foreign commerce.

``(b) Certification Requirement.--No prosecution of any
offense described in this subsection may be undertaken by the
United States, except under the certification in writing of
the Attorney General, the Deputy Attorney General, the
Associate Attorney General, or any Assistant Attorney General
specially designated by the Attorney General that--
``(1) he or she has reasonable cause to believe that the
actual or perceived race, color, religion, national origin,
gender, sexual orientation, or disability of any person was a
motivating factor underlying the alleged conduct of the
defendant; and
``(2) he or his designee or she or her designee has
consulted with State or local law enforcement officials
regarding the prosecution and determined that--
``(A) the State does not have jurisdiction or does not
intend to exercise jurisdiction;
``(B) the State has requested that the Federal Government
assume jurisdiction;
``(C) the State does not object to the Federal Government
assuming jurisdiction; or
``(D) the verdict or sentence obtained pursuant to State
charges left demonstratively unvindicated the Federal
interest in eradicating bias-motivated violence.
``(c) Definitions.--In this section--
``(1) the term `explosive or incendiary device' has the
meaning given the term in section 232 of this title; and
``(2) the term `firearm' has the meaning given the term in
section 921(a) of this title.''.
(b) Technical and Conforming Amendment.--The analysis for
chapter 13 of title 18, United States Code, is amended by
adding at the end the following:

``249. Hate crime acts.''.

SEC. 108. DUTIES OF FEDERAL SENTENCING COMMISSION.

(a) Amendment of Federal Sentencing Guidelines.--Pursuant
to its authority under section 994 of title 28, United States
Code, the United States Sentencing Commission shall study the
issue of adult recruitment of juveniles to commit hate crimes
and shall, if appropriate, amend the Federal sentencing
guidelines to provide sentencing enhancements (in addition to
the sentencing enhancement provided for the use of a minor
during the commission of an offense) for adult defendants who
recruit juveniles to assist in the commission of hate crimes.
(b) Consistency With Other Guidelines.--In carrying out
this section, the United States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishments for substantially the
same offense.

SEC. 109. STATISTICS.

Subsection (b)(1) of the first section of the Hate Crimes
Statistics Act (28 U.S.C. 534 note) is amended by inserting
``gender,'' after ``race,''.

SEC. 110. SEVERABILITY.

If any provision of this title, an amendment made by this
title, or the application of such provision or amendment to
any person or circumstance is held to be unconstitutional,
the remainder of this title, the amendments made by this
title, and the application of the provisions of such to any
person or circumstance shall not be affected thereby.

TITLE II--TRAFFIC STOPS STATISTICS STUDY

SEC. 201. SHORT TITLE.

This title may be cited as the ``Traffic Stops Statistics
Study Act of 2001''.

SEC. 202. ATTORNEY GENERAL TO CONDUCT STUDY.

(a) Study.--
(1) In general.--The Attorney General shall conduct a
nationwide study of stops for traffic violations by law
enforcement officers.
(2) Initial analysis.--The Attorney General shall perform
an initial analysis of existing data, including complaints
alleging and other information concerning traffic stops
motivated by race and other bias.
(3) Data collection.--After completion of the initial
analysis under paragraph (2), the Attorney General shall then
gather the following data on traffic stops from a nationwide
sample of jurisdictions, including jurisdictions identified
in the initial analysis:
(A) The traffic infraction alleged to have been committed
that led to the stop.
(B) Identifying characteristics of the driver stopped,
including the race, gender, ethnicity, and approximate age of
the driver.
(C) Whether immigration status was questioned, immigration
documents were requested, or an inquiry was made to the
Immigration and Naturalization Service with regard to any
person in the vehicle.
(D) The number of individuals in the stopped vehicle.
(E) Whether a search was instituted as a result of the stop
and whether consent was requested for the search.
(F) Any alleged criminal behavior by the driver that
justified the search.
(G) Any items seized, including contraband or money.
(H) Whether any warning or citation was issued as a result
of the stop.
(I) Whether an arrest was made as a result of either the
stop or the search and the justification for the arrest.
(J) The duration of the stop.
(b) Reporting.--Not later than 120 days after the date of
enactment of this Act, the Attorney General shall report the
results of its initial analysis to Congress, and make such
report available to the public, and identify the
jurisdictions for which the study is to be conducted. Not
later than 2 years after the date of the enactment of this
Act, the Attorney General shall report the results of the
data collected under this title to Congress, a copy of which
shall also be published in the Federal Register.

SEC. 203. GRANT PROGRAM.

In order to complete the study described in section 202,
the Attorney General may provide grants to law enforcement
agencies to collect and submit the data described in section
202 to the appropriate agency as designated by the Attorney
General.

SEC. 204. LIMITATION ON USE OF DATA.

Information released pursuant to section 202 shall not
reveal the identity of any individual who is stopped or any
law enforcement officer involved in a traffic stop.

SEC. 205. DEFINITIONS.

In this title:
(1) Law enforcement agency.--The term ``law enforcement
agency'' means an agency of a State or political subdivision
of a State, authorized by law or by a Federal, State, or
local government agency to engage in or supervise the
prevention, detection, or investigation of violations of
criminal laws, or a federally recognized Indian tribe.
(2) Indian tribe.--The term ``Indian tribe'' means any
Indian or Alaska Native tribe, band, nation, pueblo, village,
or community that the Secretary of the Interior acknowledges
to exist as an Indian tribe.

SEC. 206. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as may be
necessary to carry out this title.

TITLE III--SUPPORTING INDIGENT REPRESENTATION

SEC. 301. FINDINGS.

Congress finds the following:
(1) There is a need to encourage equal access for
individuals to the system of justice in the United States.
(2) There is a need to encourage the provision of high
quality legal assistance for persons who would otherwise be
unable to afford legal counsel.
(3) Legal Services Corporation programs serve clients with
cases concerning housing, family law, income maintenance,
consumer issues, and employment.
(4) For years the Federal resources available to the Legal
Services Corporation have eroded. Nearly half of all people
who applied

[[Page S240]]

for assistance from local Legal Services Corporation programs
have been turned away in recent years.
(5) Congress must adequately fund Legal Services
Corporation programs to preserve the strength of the
programs.

SEC. 302. AUTHORIZATION OF APPROPRIATIONS.

Section 1010(a) of the Legal Services Corporation Act (42
U.S.C. 2996i(a)) is amended to read as follows:
``(a) There are authorized to be appropriated for the
purpose of carrying out the activities of the Corporation,
$400,000,000 for fiscal year 2002.''.

TITLE IV--GENETIC NONDISCRIMINATION IN HEALTH INSURANCE AND EMPLOYMENT

Subtitle A--Prohibition of Health Insurance Discrimination on the Basis
of Predictive Genetic Information

SEC. 401. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.

(a) Prohibition of Health Insurance Discrimination on the
Basis of Genetic Services or Predictive Genetic
Information.--
(1) No enrollment restriction for genetic services.--
Section 702(a)(1)(F) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1182(a)(1)(F)) is amended by
inserting before the period ``(or information about a request
for or the receipt of genetic services by such individual or
family member of such individual)''.
(2) No discrimination in group rate based on predictive
genetic information.--
(A) In general.--Subpart B of Part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.) is amended by adding at the end the
following:

``SEC. 714. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE
BASIS OF PREDICTIVE GENETIC INFORMATION.

``A group health plan, and a health insurance issuer
offering group health insurance coverage in connection with a
group health plan, shall not deny eligibility to a group or
adjust premium or contribution rates for a group on the basis
of predictive genetic information concerning an individual in
the group (or information about a request for or the receipt
of genetic services by such individual or family member of
such individual).''.
(B) Conforming amendments.--
(i) Section 702(b)(2)(A) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1182(b)) is amended to read
as follows:
``(A) to restrict the amount that an employer may be
charged for coverage under a group health plan, except as
provided in section 714; or''.
(ii) Section 732(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by
striking ``section 711'' and inserting ``subsections
(a)(1)(F), (b) (with respect to cases relating to genetic
information or information about a request or receipt of
genetic services by an individual or family member of such
individual), (c), (d), (e), (f), or (g) of section 702,
section 711 and section 714''.
(b) Limitations on Genetic Testing and on Collection and
Disclosure of Predictive Genetic Information.--Section 702 of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1182) is amended by adding at the end the following:
``(c) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic
testing.--A group health plan, or a health insurance issuer
offering health insurance coverage in connection with a group
health plan, shall not request or require an individual or a
family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Nothing in this part shall be
construed to limit the authority of a health care
professional, who is providing treatment with respect to an
individual and who is employed by a group health plan or a
health insurance issuer, to request that such individual or
family member of such individual undergo a genetic test. Such
a health care professional shall not require that such
individual or family member undergo a genetic test.
``(d) Collection of Predictive Genetic Information.--Except
as provided in subsections (f) and (g), a group health plan,
or a health insurance issuer offering health insurance
coverage in connection with a group health plan, shall not
request, require, collect, or purchase predictive genetic
information concerning an individual (or information about a
request for or the receipt of genetic services by such
individual or family member of such individual).
``(e) Disclosure of Predictive Genetic Information.--A
group health plan, or a health insurance issuer offering
health insurance coverage in connection with a group health
plan, shall not disclose predictive genetic information about
an individual (or information about a request for or the
receipt of genetic services by such individual or family
member of such individual) to--
``(1) any entity that is a member of the same controlled
group as such issuer or plan sponsor of such group health
plan;
``(2) any other group health plan or health insurance
issuer or any insurance agent, third party administrator, or
other person subject to regulation under State insurance
laws;
``(3) the Medical Information Bureau or any other person
that collects, compiles, publishes, or otherwise disseminates
insurance information;
``(4) the individual's employer or any plan sponsor; or
``(5) any other person the Secretary may specify in
regulations.
``(f) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic
services conducted concerning an individual or the
coordination of benefits, a group health plan, or a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may request that the
individual provide the plan or issuer with evidence that such
services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall
be construed to--
``(A) permit a group health plan or health insurance issuer
to request (or require) the results of the services referred
to in such paragraph; or
``(B) require that a group health plan or health insurance
issuer make payment for services described in such paragraph
where the individual involved has refused to provide evidence
of the performance of such services pursuant to a request by
the plan or issuer in accordance with such paragraph.
``(g) Information for Payment of Other Claims.--With
respect to the payment of claims for benefits other than
genetic services, a group health plan, or a health insurance
issuer offering group health insurance coverage in connection
with a group health plan, may request that an individual
provide predictive genetic information so long as such
information--
``(1) is used solely for the payment of a claim;
``(2) is limited to information that is directly related to
and necessary for the payment of such claim and the claim
would otherwise be denied but for the predictive genetic
information; and
``(3) is used only by an individual (or individuals) within
such plan or issuer who needs access to such information for
purposes of payment of a claim.
``(h) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--
The provisions of subsections (d) (regarding collection) and
(e) shall not apply to an individual if the individual (or
legal representative of the individual) provides prior,
knowing, voluntary, and written authorization for the
collection or disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in
this section shall be construed to limit or restrict the
disclosure of predictive genetic information from a health
care provider to another health care provider for the purpose
of providing health care treatment to the individual
involved.
``(i) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means
any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986.
``(2) Group health plan, health insurance issuer.--The
terms `group health plan' and `health insurance issuer'
include a third party administrator or other person acting
for or on behalf of such plan or issuer.''.
(c) Enforcement.--Section 502 (29 U.S.C. 1132) is amended
by adding at the end the following:
``(n) Violation of Genetic Discrimination or Genetic
Disclosure Provisions.--In any action under this section
against any administrator of a group health plan, or health
insurance issuer offering group health insurance coverage in
connection with a group health plan (including any third
party administrator or other person acting for or on behalf
of such plan or issuer) alleging a violation of subsection
(a)(1)(F), (b) (with respect to cases relating to genetic
information or information about a request or receipt of
genetic services by an individual or family member of such
individual), (c), (d), (e), (f), or (g) of section 702, or
section 714, the court may award any appropriate legal or
equitable relief. Such relief may include a requirement for
the payment of attorney's fees and costs, including the costs
of expert witnesses.
``(o) Civil Penalty.--The monetary provisions of section
308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C))
shall apply for purposes of the Secretary enforcing the
provisions referred to in subsection (n), except that any
such relief awarded shall be paid only into the general fund
of the Treasury.''.
(d) Preemption.--Section 731 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1191) is amended--
(1) in subsection (a)(1), by inserting ``or (e)'' after
``subsection (b)''; and
(2) by adding at the end the following:
``(e) Special Rule in Case of Genetic Information.--With
respect to group health insurance coverage offered by a
health insurance issuer, the provisions of this part relating
to genetic information (including information about a request
for or the receipt of genetic services by an individual or a
family member of such individual) shall not be construed to
supersede any provision of State law which establishes,
implements, or continues in effect a standard, requirement,
or remedy that more completely--
``(1) protects the confidentiality of genetic information
(including information about a request for or the receipt of
genetic services by an individual or a family member of such
individual) or the privacy of an individual or a family
member of the individual with respect to genetic information
(including information about a request for or the receipt

[[Page S241]]

of genetic services by an individual or a family member of
such individual) than does this part; or
``(2) prohibits discrimination on the basis of genetic
information than does this part.''.
(e) Definitions.--Section 733(d) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1191b(d)) is amended
by adding at the end the following:
``(5) Family member.--The term `family member' means with
respect to an individual--
``(A) the spouse of the individual;
``(B) a dependent child of the individual, including a
child who is born to or placed for adoption with the
individual; or
``(C) any other individuals related by blood to the
individual or to the spouse or child described in
subparagraph (A) or (B).
``(6) Genetic information.--The term `genetic information'
means information about genes, gene products, or inherited
characteristics that may derive from an individual or a
family member of such individual (including information about
a request for or the receipt of genetic services by such
individual or family member of such individual).
``(7) Genetic services.--The term `genetic services' means
health services, including genetic tests, provided to obtain,
assess, or interpret genetic information for diagnostic and
therapeutic purposes, and for genetic education and
counseling.
``(8) Genetic test.--The term `genetic test' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites in order to detect genotypes, mutations,
or chromosomal changes.
``(9) Predictive genetic information.--
``(A) In general.--The term `predictive genetic
information' means--
``(i) information about an individual's genetic tests;
``(ii) information about genetic tests of family members of
the individual; or
``(iii) information about the occurrence of a disease or
disorder in family members.
``(B) Limitations.--The term `predictive genetic
information' shall not include--
``(i) information about the sex or age of the individual;
``(ii) information about chemical, blood, or urine analyses
of the individual, unless these analyses are genetic tests;
or
``(iii) information about physical exams of the individual,
and other information relevant to determining the current
health status of the individual.''.
(f) Amendment Concerning Supplemental Excepted Benefits.--
Section 732(c)(3) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1191a(c)(3)) is amended by inserting
``, other than the requirements of subsections (a)(1)(F), (b)
(in cases relating to genetic information or information
about a request for or the receipt of genetic services by an
individual or a family member of such individual), (c), (d),
(e), (f) and (g) of section 702 and section 714,'' after
``The requirements of this part''.
(g) Effective Date.--
(1) In general.--Except as provided in this section, this
section and the amendments made by this section shall apply
with respect to group health plans for plan years beginning
after October 1, 2002.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, this section and the
amendments made by this section shall not apply to plan years
beginning before the later of--
(A) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act), or
(B) October 1, 2002.

For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement of the amendments made by this section shall not
be treated as a termination of such collective bargaining
agreement.

SEC. 402. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

(a) Amendments Relating to the Group Market.--
(1) Prohibition of health insurance discrimination on the
basis of predictive genetic information or genetic
services.--
(A) No enrollment restriction for genetic services.--
Section 2702(a)(1)(F) of the Public Health Service Act (42
U.S.C. 300gg-1(a)(1)(F)) is amended by inserting before the
period the following: ``(or information about a request for
or the receipt of genetic services by an individual or a
family member of such individual)''.
(B) No discrimination in group rate based on predictive
genetic information.--
(i) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service (42 U.S.C. 300gg-4 et seq.) is amended
by adding at the end the following:

``SEC. 2707. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE
BASIS OF PREDICTIVE GENETIC INFORMATION.

(I) Section 2702(b)(2)(A) of the Public Health Service Act
(42 U.S.C. 300gg-1(b)(2)(A)) is amended to read as follows:

``(A) to restrict the amount that an employer may be
charged for coverage under a group health plan, except as
provided in section 2707; or''.

(II) Section 2721(a) of the Public Health Service Act (42
U.S.C. 300gg-21(a)) is amended by inserting ``(other than
subsections (a)(1)(F), (b) (with respect to cases relating to
genetic information or information about a request or receipt
of genetic services by an individual or family member of such
individual), (c), (d), (e), (f), or (g) of section 2702 and
section 2707)'' after ``subparts 1 and 3''.

(2) Limitations on genetic testing and on collection and
disclosure of predictive genetic information.--Section 2702
of the Public Health Service Act (42 U.S.C. 300gg-1) is
amended by adding at the end the following:
``(c) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic
testing.--A group health plan, or a health insurance issuer
offering health insurance coverage in connection with a group
health plan, shall not request or require an individual or a
family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Nothing in this title shall be
construed to limit the authority of a health care
professional, who is providing treatment with respect to an
individual and who is employed by a group health plan or a
health insurance issuer, to request that such individual or
family member of such individual undergo a genetic test. Such
a health care professional shall not require that such
individual or family member undergo a genetic test.
``(d) Collection of Predictive Genetic Information.--Except
as provided in subsections (f) and (g), a group health plan,
or a health insurance issuer offering health insurance
coverage in connection with a group health plan, shall not
request, require, collect, or purchase predictive genetic
information concerning an individual (or information about a
request for or the receipt of genetic services by such
individual or family member of such individual).
``(e) Disclosure of Predictive Genetic Information.--A
group health plan, or a health insurance issuer offering
health insurance coverage in connection with a group health
plan, shall not disclose predictive genetic information about
an individual (or information about a request for or the
receipt of genetic services by such individual or family
member of such individual) to--
``(1) any entity that is a member of the same controlled
group as such issuer or plan sponsor of such group health
plan;
``(2) any other group health plan or health insurance
issuer or any insurance agent, third party administrator, or
other person subject to regulation under State insurance
laws;
``(3) the Medical Information Bureau or any other person
that collects, compiles, publishes, or otherwise disseminates
insurance information;
``(4) the individual's employer or any plan sponsor; or
``(5) any other person the Secretary may specify in
regulations.
``(f) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic
services conducted concerning an individual or the
coordination of benefits, a group health plan, or a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may request that the
individual provide the plan or issuer with evidence that such
services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall
be construed to--
``(A) permit a group health plan or health insurance issuer
to request (or require) the results of the services referred
to in such paragraph; or
``(B) require that a group health plan or health insurance
issuer make payment for services described in such paragraph
where the individual involved has refused to provide evidence
of the performance of such services pursuant to a request by
the plan or issuer in accordance with such paragraph.
``(g) Information for Payment of Other Claims.--With
respect to the payment of claims for benefits other than
genetic services, a group health plan, or a health insurance
issuer offering group health insurance coverage in connection
with a group health plan, may request that an individual
provide predictive genetic information so long as such
information--
``(1) is used solely for the payment of a claim;
``(2) is limited to information that is directly related to
and necessary for the payment of such claim and the claim
would otherwise be denied but for the predictive genetic
information; and
``(3) is used only by an individual (or individuals) within
such plan or issuer who needs access to such information for
purposes of payment of a claim.
``(h) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--
The provisions of subsections (d) (regarding collection) and
(e)

[[Page S242]]

shall not apply to an individual if the individual (or legal
representative of the individual) provides prior, knowing,
voluntary, and written authorization for the collection or
disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in
this section shall be construed to limit or restrict the
disclosure of predictive genetic information from a health
care provider to another health care provider for the purpose
of providing health care treatment to the individual
involved.
``(i) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means
any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986.
``(2) Group health plan, health insurance issuer.--The
terms `group health plan' and `health insurance issuer'
include a third party administrator or other person acting
for or on behalf of such plan or issuer.''.
(3) Definitions.--Section 2791(d) of the Public Health
Service Act (42 U.S.C. 300gg-91(d)) is amended by adding at
the end the following new paragraphs:
``(15) Family member.--The term `family member' means with
respect to an individual--
``(A) the spouse of the individual;
``(B) a dependent child of the individual, including a
child who is born to or placed for adoption with the
individual; and
``(C) all other individuals related by blood to the
individual or the spouse or child described in subparagraph
(A) or (B).
``(16) Genetic information.--The term `genetic information'
means information about genes, gene products, or inherited
characteristics that may derive from an individual or a
family member of such individual (including information about
a request for or the receipt of genetic services by such
individual or family member of such individual).
``(17) Genetic services.--The term `genetic services' means
health services, including genetic tests, provided to obtain,
assess, or interpret genetic information for diagnostic and
therapeutic purposes, and for genetic education and
counselling.
``(18) Genetic test.--The term `genetic test' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites in order to detect genotypes, mutations,
or chromosomal changes.
``(19) Predictive genetic information.--
``(A) In general.--The term `predictive genetic
information' means--
``(i) information about an individual's genetic tests;
``(ii) information about genetic tests of family members of
the individual; or
``(iii) information about the occurrence of a disease or
disorder in family members.
``(B) Limitations.--The term `predictive genetic
information' shall not include--
``(i) information about the sex or age of the individual;
``(ii) information about chemical, blood, or urine analyses
of the individual, unless these analyses are genetic tests;
or
``(iii) information about physical exams of the individual,
and other information relevant to determining the current
health status of the individual.''.
(b) Amendment Relating to the Individual Market.--The first
subpart 3 of part B of title XXVII of the Public Health
Service Act (42 U.S.C. 300gg-51 et seq.) is amended--
(1) by redesignating such subpart as subpart 2; and
(2) by adding at the end the following:

``SEC. 2753. PROHIBITION OF HEALTH INSURANCE DISCRIMINATION
AGAINST INDIVIDUALS ON THE BASIS OF PREDICTIVE
GENETIC INFORMATION.

``(a) In Eligibility To Enroll.--A health insurance issuer
offering health insurance coverage in the individual market
shall not establish rules for eligibility to enroll in
individual health insurance coverage that are based on
predictive genetic information concerning the individual (or
information about a request for or the receipt of genetic
services by such individual or family member of such
individual).
``(b) In Premium Rates.--A health insurance issuer offering
health insurance coverage in the individual market shall not
adjust premium rates on the basis of predictive genetic
information concerning an individual (or information about a
request for or the receipt of genetic services by such
individual or family member of such individual).

``SEC. 2754. LIMITATIONS ON GENETIC TESTING AND ON COLLECTION
AND DISCLOSURE OF PREDICTIVE GENETIC
INFORMATION.

``(a) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic
testing.--A health insurance issuer offering health insurance
coverage in the individual market shall not request or
require an individual or a family member of such individual
to undergo a genetic test.
``(2) Rule of construction.--Nothing in this title shall be
construed to limit the authority of a health care
professional, who is providing treatment with respect to an
individual and who is employed by a group health plan or a
health insurance issuer, to request that such individual or
family member of such individual undergo a genetic test. Such
a health care professional shall not require that such
individual or family member undergo a genetic test.
``(b) Collection of Predictive Genetic Information.--Except
as provided in subsections (d) and (e), a health insurance
issuer offering health insurance coverage in the individual
market shall not request, require, collect, or purchase
predictive genetic information concerning an individual (or
information about a request for or the receipt of genetic
services by such individual or family member of such
individual).
``(c) Disclosure of Predictive Genetic Information.--A
health insurance issuer offering health insurance coverage in
the individual market shall not disclose predictive genetic
information about an individual (or information about a
request for or the receipt of genetic services by such
individual or family member of such individual) to--
``(1) any entity that is a member of the same controlled
group as such issuer or plan sponsor of such group health
plan;
``(2) any other group health plan or health insurance
issuer or any insurance agent, third party administrator, or
other person subject to regulation under State insurance
laws;
``(3) the Medical Information Bureau or any other person
that collects, compiles, publishes, or otherwise disseminates
insurance information;
``(4) the individual's employer or any plan sponsor; or
``(5) any other person the Secretary may specify in
regulations.
``(d) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic
services conducted concerning an individual or the
coordination of benefits, a health insurance issuer offering
health insurance coverage in the individual market may
request that the individual provide the plan or issuer with
evidence that such services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall
be construed to--
``(A) permit a health insurance issuer to request (or
require) the results of the services referred to in such
paragraph; or
``(B) require that a health insurance issuer make payment
for services described in such paragraph where the individual
involved has refused to provide evidence of the performance
of such services pursuant to a request by the plan or issuer
in accordance with such paragraph.
``(e) Information for Payment of Other Claims.--With
respect to the payment of claims for benefits other than
genetic services, a health insurance issuer offering health
insurance coverage in the individual market may request that
an individual provide predictive genetic information so long
as such information--
``(1) is used solely for the payment of a claim;
``(2) is limited to information that is directly related to
and necessary for the payment of such claim and the claim
would otherwise be denied but for the predictive genetic
information; and
``(3) is used only by an individual (or individuals) within
such plan or issuer who needs access to such information for
purposes of payment of a claim.
``(f) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--
The provisions of subsections (c) (regarding collection) and
(d) shall not apply to an individual if the individual (or
legal representative of the individual) provides prior,
knowing, voluntary, and written authorization for the
collection or disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in
this section shall be construed to limit or restrict the
disclosure of predictive genetic information from a health
care provider to another health care provider for the purpose
of providing health care treatment to the individual
involved.
``(g) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means
any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986.
``(2) Group health plan, health insurance issuer.--The
terms `group health plan' and `health insurance issuer'
include a third party administrator or other person acting
for or on behalf of such plan or issuer.''.
(c) Enforcement.--
(1) Group plans.--Section 2722 of the Public Health Service
Act (42 U.S.C. 300gg-22) is amended by adding at the end the
following:
``(c) Violation of Genetic Discrimination or Genetic
Disclosure Provisions.--In any action under this section
against any administrator of a group health plan, or health
insurance issuer offering group health insurance coverage in
connection with a group health plan (including any third
party administrator or other person acting for or on behalf
of such plan or issuer) alleging a violation of subsections
(a)(1)(F), (b) (with respect to cases relating to genetic
information or information about a request or receipt of
genetic services by an individual or family member of such
individual), (c), (d), (e), (f), or (g) of section 2702 and
section 2707 the court may award any appropriate legal or
equitable relief. Such relief may include a requirement for
the payment of attorney's fees and costs, including the costs
of expert witnesses.
``(d) Civil Penalty.--The monetary provisions of section
308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C))
shall apply for purposes of the Secretary enforcing the
provisions referred to in subsection (c), except that any
such relief awarded shall be

[[Page S243]]

paid only into the general fund of the Treasury.''.
(2) Individual plans.--Section 2761 of the Public Health
Service Act (42 U.S.C. 300gg-45) is amended by adding at the
end the following:
``(c) Violation of Genetic Discrimination or Genetic
Disclosure Provisions.--In any action under this section
against any health insurance issuer offering health insurance
coverage in the individual market (including any other person
acting for or on behalf of such issuer) alleging a violation
of sections 2753 and 2754 the court in which the action is
commenced may award any appropriate legal or equitable
relief. Such relief may include a requirement for the payment
of attorney's fees and costs, including the costs of expert
witnesses.
``(d) Civil Penalty.--The monetary provisions of section
308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C))
shall apply for purposes of the Secretary enforcing the
provisions referred to in subsection (c), except that any
such relief awarded shall be paid only into the general fund
of the Treasury.''.
(d) Preemption.--
(1) Group market.--Section 2723 of the Public Health
Service Act (42 U.S.C. 300gg-23) is amended--
(A) in subsection (a)(1), by inserting ``or (e)'' after
``subsection (b)''; and
(B) by adding at the end the following:
``(e) Special Rule in Case of Genetic Information.--With
respect to group health insurance coverage offered by a
health insurance issuer, the provisions of this part relating
to genetic information (including information about a request
for or the receipt of genetic services by an individual or a
family member of such individual) shall not be construed to
supersede any provision of State law which establishes,
implements, or continues in effect a standard, requirement,
or remedy that more completely--
``(1) protects the confidentiality of genetic information
(including information about a request for or the receipt of
genetic services by an individual or a family member of such
individual) or the privacy of an individual or a family
member of the individual with respect to genetic information
(including information about a request for or the receipt of
genetic services by an individual or a family member of such
individual); or
``(2) prohibits discrimination on the basis of genetic
information than does this part.''.
(2) Individual market.--Section 2762 of the Public Health
Service Act (42 U.S.C. 300gg-46) is amended--
(A) in subsection (a), by inserting ``and except as
provided in subsection (c),'' after ``Subject to subsection
(b),''; and
(B) by adding at the end the following:
``(c) Special Rule in Case of Genetic Information.--With
respect to individual health insurance coverage offered by a
health insurance issuer, the provisions of this part (or part
C insofar as it applies to this part) relating to genetic
information (including information about a request for or the
receipt of genetic services by an individual or a family
member of such individual) shall not be construed to
supersede any provision of State law (as defined in section
2723(d)) which establishes, implements, or continues in
effect a standard, requirement, or remedy that more
completely--
``(1) protects the confidentiality of genetic information
(including information about a request for or the receipt of
genetic services of an individual or a family member of such
individual) or the privacy of an individual or a family
member of the individual with respect to genetic information
(including information about a request for or the receipt of
genetic services by an individual or a family member of such
individual) than does this part (or part C insofar as it
applies to this part); or
``(2) prohibits discrimination on the basis of genetic
information than does this part (or part C insofar as it
applies to this part).''.
(e) Elimination of Option of Non-Federal Governmental Plans
To Be Excepted From Requirements Concerning Genetic
Information.--Section 2721(b)(2) of the Public Health Service
Act (42 U.S. C. 300gg-21(b)(2)) is amended--
(1) in subparagraph (A), by striking ``If the plan
sponsor'' and inserting ``Except as provided in subparagraph
(D), if the plan sponsor''; and
(2) by adding at the end the following:
``(D) Election not applicable to requirements concerning
genetic information.--The election described in subparagraph
(A) shall not be available with respect to the provisions of
subsections (a)(1)(F), (c), (d), (e), (f), and (g) of section
2702 and section 2707, and the provisions of section 2702(b)
to the extent that they apply to genetic information (or
information about a request for or the receipt of genetic
services by an individual or a family member of such
individual).''.
(f) Amendment Concerning Supplemental Excepted Benefits.--
(1) Group market.--Section 2721(d)(3) of the Public Health
Service Act (42 U.S.C. 300gg-23(d)(3)) is amended by
inserting ``, other than the requirements of subsections
(a)(1)(F), (b) (in cases relating to genetic information or
information about a request for or the receipt of genetic
services by an individual or a family member of such
individual)), (c), (d), (e), (f) and (g) of section 2702 and
section 2707,'' after ``The requirements of this part''.
(2) Individual market.--Section 2763(b) of the Public
Health Service Act (42 U.S.C. 300gg-47(b)) is amended--
(A) by striking ``The requirements of this part'' and
inserting the following:
``(1) In general.--Except as provided in paragraph (2), the
requirements of this part''; and
(B) by adding at the end the following:
``(2) Limitation.--The requirements of sections 2753 and
2754 shall apply to excepted benefits described in section
2791(c)(4).''.
(g) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to--
(A) group health plans, and health insurance coverage
offered in connection with group health plans, for plan years
beginning; and
(B) health insurance coverage offered, sold, issued,
renewed, in effect, or operated in the individual market,
after;
October 1, 2002.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
this section shall not apply to plan years beginning before
the later of--
(A) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act); or
(B) October 1, 2002.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement of the amendments made by this section shall not
be treated as a termination of such collective bargaining
agreement.

SEC. 403. AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.

(a) Prohibition of Health Insurance Discrimination on the
Basis of Genetic Services or Predictive Genetic
Information.--
(1) No enrollment restriction for genetic services.--
Section 9802(a)(1)(F) of the Internal Revenue Code of 1986
(relating to eligibility to enroll) is amended by inserting
before the period ``(or information about a request for or
the receipt of genetic services by such individual or family
member of such individual)''.
(2) No discrimination in group rate based on predictive
genetic information.--
(A) In general.--Subchapter B of chapter 100 of such Code
(relating to other requirements) is amended by adding at the
end the following:

``SEC. 9813. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE
BASIS OF PREDICTIVE GENETIC INFORMATION.

``A group health plan shall not deny eligibility to a group
or adjust premium or contribution rates for a group on the
basis of predictive genetic information concerning an
individual in the group (or information about a request for
or the receipt of genetic services by such individual or
family member of such individual).''.
(B) Conforming amendments.--
(i) Section 9802(b)(2)(A) of such Code is amended to read
as follows:
``(A) to restrict the amount that an employer may be
charged for coverage under a group health plan, except as
provided in section 9813; or''.
(ii) Section 9831(a) of such Code (relating to exception
for certain plans) is amended by inserting ``(other than
subsection (a)(1)(F), (b) (with respect to cases relating to
genetic information or information about a request for or
receipt of genetic services by an individual or family member
of such individual), (d) (e), (f), (g) or (h) of section 9802
or section 9813)'' after ``chapter''.
(iii) The table of sections for subchapter B of chapter 100
of such Code is amended by adding at the end the following
new item:

``Sec. 9813. Prohibiting discrimination against groups on the basis of
predictive genetic information.''.
(b) Limitations on Genetic Testing and on Collection and
Disclosure of Predictive Genetic Information.--Section 9802
of the Internal Revenue Code of 1986 (relating to prohibiting
discrimination against individual participants and
beneficiaries based on health status) is amended by adding at
the end the following new subsections:
``(d) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic
testing.--A group health plan shall not request or require an
individual or a family member of such individual to undergo a
genetic test.
``(2) Rule of construction.--Nothing in this chapter shall
be construed to limit the authority of a health care
professional, who is providing treatment with respect to an
individual and who is employed by a group health plan, to
request that such individual or family member of such
individual undergo a genetic test. Such a health care
professional shall not require that such individual or family
member undergo a genetic test.
``(e) Collection of Predictive Genetic Information.--Except
as provided in subsections (g) and (h), a group health plan
shall not request, require, collect, or purchase predictive
genetic information concerning an individual (or information
about a request for or the receipt of genetic services by
such individual or family member of such individual).

[[Page S244]]

``(f) Disclosure of Predictive Genetic Information.--A
group health plan shall not disclose predictive genetic
information about an individual (or information about a
request for or the receipt of genetic services by such
individual or family member of such individual) to--
``(1) any entity that is a member of the same controlled
group as such issuer or plan sponsor of such group health
plan,
``(2) any other group health plan or health insurance
issuer or any insurance agent, third party administrator, or
other person subject to regulation under State insurance
laws,
``(3) the Medical Information Bureau or any other person
that collects, compiles, publishes, or otherwise disseminates
insurance information,
``(4) the individual's employer or any plan sponsor, or
``(5) any other person the Secretary may specify in
regulations.
``(g) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic
services conducted concerning an individual or the
coordination of benefits, a group health plan may request
that the individual provide the plan with evidence that such
services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall
be construed to--
``(A) permit a group health plan to request (or require)
the results of the services referred to in such paragraph, or
``(B) require that a group health plan make payment for
services described in such paragraph where the individual
involved has refused to provide evidence of the performance
of such services pursuant to a request by the plan in
accordance with such paragraph.
``(h) Information for Payment of Other Claims.--With
respect to the payment of claims for benefits other than
genetic services, a group health plan may request that an
individual provide predictive genetic information so long as
such information--
``(1) is used solely for the payment of a claim,
``(2) is limited to information that is directly related to
and necessary for the payment of such claim and the claim
would otherwise be denied but for the predictive genetic
information, and
``(3) is used only by an individual within such plan or
issuer who needs access to such information for purposes of
payment of a claim.
``(i) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--
The provisions of subsections (e) (regarding collection) and
(f) shall not apply to an individual if the individual (or
legal representative of the individual) provides prior,
knowing, voluntary, and written authorization for the
collection or disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in
this section shall be construed to limit or restrict the
disclosure of predictive genetic information from a health
care provider to another health care provider for the purpose
of providing health care treatment to the individual
involved.
``(j) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means
any group treated as a single employer under subsections (b),
(c), (m), or (o) of section 414.
``(2) Group health plan, health insurance issuer.--The
terms `group health plan' and `health insurance issuer'
include a third party administrator or other person acting
for or on behalf of such plan or issuer.
``(k) Violation of Genetic Discrimination or Genetic
Disclosure Provisions.--In any action under this section
against any administrator of a group health plan (including
any third party administrator or other person acting for or
on behalf of such plan) alleging a violation of subsection
(a)(1)(F), (b) (with respect to cases relating to genetic
information or information about a request or receipt of
genetic services by an individual or family member of such
individual), (d), (e), (f), (g) or (h) or section 9813, the
court may award any appropriate legal or equitable relief.
Such relief may include a requirement for the payment of
attorney's fees and costs, including the costs of expert
witnesses.
``(l) Civil Penalty.--The monetary provisions of section
308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C))
shall apply for purposes of the Secretary enforcing the
provisions referred to in subsection (k), except that any
such relief awarded shall be paid only into the general fund
of the Treasury.''.
(c) Definitions.--Section 9832(d) of the Internal Revenue
Code of 1986 (relating to other definitions) is amended by
adding at the end the following new paragraphs:
``(6) Family member.--The term `family member' means with
respect to an individual--
``(A) the spouse of the individual,
``(B) a dependent child of the individual, including a
child who is born to or placed for adoption with the
individual, or
``(C) any other individuals related by blood to the
individual or to the spouse or child described in
subparagraph (A) or (B).
``(7) Genetic information.--The term `genetic information'
means information about genes, gene products, or inherited
characteristics that may derive from an individual or a
family member of such individual (including information about
a request for or the receipt of genetic services by such
individual or family member of such individual).
``(8) Genetic services.--The term `genetic services' means
health services, including genetic tests, provided to obtain,
assess, or interpret genetic information for diagnostic and
therapeutic purposes, and for genetic education and
counseling.
``(9) Genetic test.--The term `genetic test' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites in order to detect genotypes, mutations,
or chromosomal changes.
``(10) Predictive genetic information.--
``(A) In general.--The term `predictive genetic
information' means--
``(i) information about an individual's genetic tests,
``(ii) information about genetic tests of family members of
the individual, or
``(iii) information about the occurrence of a disease or
disorder in family members.
``(B) Limitations.--The term `predictive genetic
information' shall not include--
``(i) information about the sex or age of the individual,
``(ii) information about chemical, blood, or urine analyses
of the individual, unless these analyses are genetic tests,
or
``(iii) information about physical exams of the individual,
and other information relevant to determining the current
health status of the individual.''.
(d) Effective Date.--
(1) In general.--Except as provided in this section, this
section and the amendments made by this section shall apply
with respect to group health plans for plan years beginning
after October 1, 2002.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, this section and the
amendments made by this section shall not apply to plan years
beginning before the later of--
(A) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act), or
(B) October 1, 2002.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement of the amendments made by this section shall not
be treated as a termination of such collective bargaining
agreement.

SEC. 404. AMENDMENTS TO TITLE XVIII OF THE SOCIAL SECURITY
ACT RELATING TO MEDIGAP.

(a) Nondiscrimination.--
(1) In general.--Section 1882(s)(2) of the Social Security
Act (42 U.S.C. 1395ss(s)(2)) is amended by adding at the end
the following:
``(E)(i) An issuer of a medicare supplemental policy shall
not deny or condition the issuance or effectiveness of the
policy, and shall not discriminate in the pricing of the
policy (including the adjustment of premium rates) of an
eligible individual on the basis of predictive genetic
information concerning the individual (or information about a
request for, or the receipt of, genetic services by such
individual or family member of such individual).
``(ii) For purposes of clause (i), the terms `family
member', `genetic services', and `predictive genetic
information' shall have the meanings given such terms in
subsection (v).''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply with respect to a policy for policy years
beginning after October 1, 2002.
(b) Limitations on Genetic Testing and on Collection and
Disclosure of Predictive Genetic Information.--
(1) In general.--Section 1882 of the Social Security Act
(42 U.S.C. 1395ss) is amended by adding at the end the
following:
``(v) Limitations on Genetic Testing and on Collection and
Disclosure of Predictive Genetic Information.--
``(1) Genetic testing.--
``(A) Limitation on requesting or requiring genetic
testing.--An issuer of a medicare supplemental policy shall
not request or require an individual or a family member of
such individual to undergo a genetic test.
``(B) Rule of construction.--Nothing in this title shall be
construed to limit the authority of a health care
professional, who is providing treatment with respect to an
individual and who is employed by an issuer of a medicare
supplemental policy, to request that such individual or
family member of such individual undergo a genetic test. Such
a health care professional shall not require that such
individual or family member undergo a genetic test.
``(2) Collection of predictive genetic information.--Except
as provided in paragraphs (4) and (5), an issuer of a
medicare supplemental policy shall not request, require,
collect, or purchase predictive genetic information
concerning an individual (or information about a request for
or the receipt of genetic services by such individual or
family member of such individual).
``(3) Disclosure of predictive genetic information.--An
issuer of a medicare supplemental policy shall not disclose
predictive genetic information about an individual (or
information about a request for or the receipt of genetic
services by such individual or family member of such
individual) to--

[[Page S245]]

``(A) any entity that is a member of the same controlled
group as such issuer;
``(B) any issuer of a medicare supplemental policy, group
health plan or health insurance issuer, or any insurance
agent, third party administrator, or other person subject to
regulation under State insurance laws;
``(C) the Medical Information Bureau or any other person
that collects, compiles, publishes, or otherwise disseminates
insurance information;
``(D) the individual's employer or any plan sponsor; or
``(E) any other person the Secretary may specify in
regulations.
``(4) Information for payment for genetic services.--
``(A) In general.--With respect to payment for genetic
services conducted concerning an individual or the
coordination of benefits, an issuer of a medicare
supplemental policy may request that the individual provide
the issuer with evidence that such services were performed.
``(B) Rule of construction.--Nothing in subparagraph (A)
shall be construed to--
``(i) permit an issuer to request (or require) the results
of the services referred to in such subparagraph; or
``(ii) require that an issuer make payment for services
described in such subparagraph where the individual involved
has refused to provide evidence of the performance of such
services pursuant to a request by the issuer in accordance
with such subparagraph.
``(5) Information for payment of other claims.--With
respect to the payment of claims for benefits other than
genetic services, an issuer of a medicare supplemental policy
may request that an individual provide predictive genetic
information so long as such information--
``(A) is used solely for the payment of a claim;
``(B) is limited to information that is directly related to
and necessary for the payment of such claim and the claim
would otherwise be denied but for the predictive genetic
information; and
``(C) is used only by an individual (or individuals) within
such issuer who needs access to such information for purposes
of payment of a claim.
``(6) Rules of construction.--
``(A) Collection or disclosure authorized by individual.--
The provisions of paragraphs (2) (regarding collection) and
(3) shall not apply to an individual if the individual (or
legal representative of the individual) provides prior,
knowing, voluntary, and written authorization for the
collection or disclosure of predictive genetic information.
``(B) Disclosure for health care treatment.--Nothing in
this section shall be construed to limit or restrict the
disclosure of predictive genetic information from a health
care provider to another health care provider for the purpose
of providing health care treatment to the individual
involved.
``(7) Violation of genetic discrimination or genetic
disclosure provisions.--In any action under this subsection
against any administrator of a medicare supplemental policy
(including any third party administrator or other person
acting for or on behalf of such policy) alleging a violation
of this subsection, the court may award any appropriate legal
or equitable relief. Such relief may include a requirement
for the payment of attorney's fees and costs, including the
costs of expert witnesses.
``(8) Civil penalty.--The monetary provisions of section
308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C))
shall apply for purposes of the Secretary enforcing the
provisions of this subsection, except that any such relief
awarded shall be paid only into the general fund of the
Treasury.
``(9) Special rule in case of genetic information.--This
subsection (relating to genetic information or information
about a request for, or the receipt of, genetic services by
an individual or a family member of such individual) shall
not be construed to supersede any provision of State law
which establishes, implements, or continues in effect a
standard, requirement, or remedy that more completely--
``(A) protects the confidentiality of genetic information
(including information about a request for, or the receipt
of, genetic services by an individual or a family member of
such individual) or the privacy of an individual or a family
member of the individual with respect to genetic information
(including information about a request for, or the receipt
of, genetic services by an individual or a family member of
such individual) than does this subsection; or
``(B) prohibits discrimination on the basis of genetic
information than does this subsection.
``(10) Definitions.--In this subsection:
``(A) Controlled group.--The term `controlled group' means
any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986.
``(B) Family member.--The term `family member' means with
respect to an individual--
``(i) the spouse of the individual;
``(ii) a dependent child of the individual, including a
child who is born to or placed for adoption with the
individual; or
``(iii) any other individuals related by blood to the
individual or to the spouse or child described in clause (i)
or (ii).
``(C) Genetic information.--The term `genetic information'
means information about genes, gene products, or inherited
characteristics that may derive from an individual or a
family member of such individual (including information about
a request for, or the receipt of, genetic services by such
individual or family member of such individual).
``(D) Genetic services.--The term `genetic services' means
health services, including genetic tests, provided to obtain,
assess, or interpret genetic information for diagnostic and
therapeutic purposes, and for genetic education and
counseling.
``(E) Genetic test.--The term `genetic test' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites in order to detect genotypes, mutations,
or chromosomal changes.
``(F) Issuer of a medicare supplemental policy.--The term
`issuer of a medicare supplemental policy' includes a third-
party administrator or other person acting for or on behalf
of such issuer.
``(G) Predictive genetic information.--
``(i) In general.--The term `predictive genetic
information' means--

``(I) information about an individual's genetic tests;
``(II) information about genetic tests of family members of
the individual; or
``(III) information about the occurrence of a disease or
disorder in family members.

``(ii) Limitations.--The term `predictive genetic
information' shall not include--

``(I) information about the sex or age of the individual;
``(II) information about chemical, blood, or urine analyses
of the individual, unless these analyses are genetic tests;
or
``(III) information about physical exams of the individual,
and other information relevant to determining the current
health status of the individual.''.

(2) Conforming amendment.--Section 1882(o) of the Social
Security Act (42 U.S.C. 1395ss(o)) is amended by adding at
the end the following:
``(4) The issuer of the medicare supplemental policy
complies with subsection (s)(2)(E) and subsection (v).''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to an issuer of a medicare
supplemental policy for policy years beginning after October
1, 2002.
(c) Transition Provisions.--
(1) In general.--If the Secretary of Health and Human
Services identifies a State as requiring a change to its
statutes or regulations to conform its regulatory program to
the changes made by this section, the State regulatory
program shall not be considered to be out of compliance with
the requirements of section 1882 of the Social Security Act
due solely to failure to make such change until the date
specified in paragraph (4).
(2) NAIC standards.--If, not later than June 30, 2002, the
National Association of Insurance Commissioners (in this
subsection referred to as the ``NAIC'') modifies its NAIC
Model Regulation relating to section 1882 of the Social
Security Act (referred to in such section as the 1991 NAIC
Model Regulation, as subsequently modified) to conform to the
amendments made by this section, such revised regulation
incorporating the modifications shall be considered to be the
applicable NAIC model regulation (including the revised NAIC
model regulation and the 1991 NAIC Model Regulation) for the
purposes of such section.
(3) Secretary standards.--If the NAIC does not make the
modifications described in paragraph (2) within the period
specified in such paragraph, the Secretary of Health and
Human Services shall, not later than October 1, 2002, make
the modifications described in such paragraph and such
revised regulation incorporating the modifications shall be
considered to be the appropriate regulation for the purposes
of such section.
(4) Date specified.--
(A) In general.--Subject to subparagraph (B), the date
specified in this paragraph for a State is the earlier of--
(i) the date the State changes its statutes or regulations
to conform its regulatory program to the changes made by this
section, or
(ii) October 1, 2002.
(B) Additional legislative action required.--In the case of
a State which the Secretary identifies as--
(i) requiring State legislation (other than legislation
appropriating funds) to conform its regulatory program to the
changes made in this section, but
(ii) having a legislature which is not scheduled to meet in
2002 in a legislative session in which such legislation may
be considered,
the date specified in this paragraph is the first day of the
first calendar quarter beginning after the close of the first
legislative session of the State legislature that begins on
or after July 1, 2002. For purposes of the previous sentence,
in the case of a State that has a 2-year legislative session,
each year of such session shall be deemed to be a separate
regular session of the State legislature.

Subtitle B--Prohibition of Employment Discrimination on the Basis of
Predictive Genetic Information

SEC. 411. DEFINITIONS.

In this subtitle:
(1) Employee; employer; employment agency; labor
organization; member.--The terms ``employee'', ``employer'',
``employment agency'', and ``labor organization'' have the
meanings given such terms in section 701 of the Civil Rights
Act of 1964 (42 U.S.C. 2000e), except that the terms
``employee'' and ``employer'' shall also include

[[Page S246]]

the meanings given such terms in section 717 of the Civil
Rights Act of 1964 (42 U.S.C. 2000e-16). The terms
``employee'' and ``member'' include an applicant for
employment and an applicant for membership in a labor
organization, respectively.
(2) Family member.--The term ``family member'' means with
respect to an individual--
(A) the spouse of the individual;
(B) a dependent child of the individual, including a child
who is born to or placed for adoption with the individual; or
(C) any other individuals related by blood to the
individual or to the spouse or child described in
subparagraph (A) or (B).
(3) Genetic monitoring.--The term ``genetic monitoring''
means the periodic examination of employees to evaluate
acquired modifications to their genetic material, such as
chromosomal damage or evidence of increased occurrence of
mutations, that may have developed in the course of
employment due to exposure to toxic substances in the
workplace, in order to identify, evaluate, and respond to the
effects of or control adverse environmental exposures in the
workplace.
(4) Genetic services.--The term ``genetic services'' means
health services, including genetic tests, provided to obtain,
assess, or interpret genetic information for diagnostic and
therapeutic purposes, and for genetic education and
counseling.
(5) Genetic test.--The term ``genetic test'' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites in order to detect genotypes, mutations,
or chromosomal changes.
(6) Predictive genetic information.--
(A) In general.--The term ``predictive genetic
information'' means--
(i) information about an individual's genetic tests;
(ii) information about genetic tests of family members of
the individual; or
(iii) information about the occurrence of a disease or
disorder in family members.
(B) Limitations.--The term ``predictive genetic
information'' shall not include--
(i) information about the sex or age of the individual;
(ii) information about chemical, blood, or urine analyses
of the individual, unless these analyses are genetic tests;
or
(iii) information about physical exams of the individual,
and other information relevant to determining the current
health status of the individual.

SEC. 412. EMPLOYER PRACTICES.

(a) In General.--It shall be an unlawful employment
practice for an employer--
(1) to fail or refuse to hire or to discharge any
individual, or otherwise to discriminate against any
individual with respect to the compensation, terms,
conditions, or privileges of employment of the individual,
because of predictive genetic information with respect to the
individual (or information about a request for or the receipt
of genetic services by such individual or family member of
such individual;
(2) to limit, segregate, or classify the employees of the
employer in any way that would deprive or tend to deprive any
individual of employment opportunities or otherwise adversely
affect the status of the individual as an employee, because
of predictive genetic information with respect to the
individual, or information about a request for or the receipt
of genetic services by such individual or family member of
such individual; or
(3) to request, require, collect or purchase predictive
genetic information with respect to an individual or a family
member of the individual except--
(A) where used for genetic monitoring of biological effects
of toxic substances in the workplace, but only if--
(i) the employee has provided prior, knowing, voluntary,
and written authorization;
(ii) the employee is informed of individual monitoring
results;
(iii) the monitoring conforms to any genetic monitoring
regulations that may be promulgated by the Secretary of Labor
pursuant to the Occupational Safety and Health Act of 1970
(29 U.S.C. 651 et seq.) or the Federal Mine Safety and Health
Act of 1977 (30 U.S.C. 801 et seq.); and
(iv) the employer, excluding any licensed health care
professional that is involved in the genetic monitoring
program, receives the results of the monitoring only in
aggregate terms that do not disclose the identity of specific
employees; or
(B) where genetic services are offered by the employer and
the employee provides prior, knowing, voluntary, and written
authorization, and only the employee or family member of such
employee receives the results of such services.
(b) Limitation.--In the case of predictive genetic
information to which subparagraph (A) or (B) of subsection
(a)(3) applies, such information may not be used in violation
of paragraph (1) or (2) of subsection (a).

SEC. 413. EMPLOYMENT AGENCY PRACTICES.

It shall be an unlawful employment practice for an
employment agency--
(1) to fail or refuse to refer for employment, or otherwise
to discriminate against, any individual because of predictive
genetic information with respect to the individual (or
information about a request for or the receipt of genetic
services by such individual or family member of such
individual);
(2) to limit, segregate, or classify individuals or fail or
refuse to refer for employment any individual in any way that
would deprive or tend to deprive any individual of employment
opportunities or would limit the employment opportunities or
otherwise adversely affect the status of the individual as an
employee, because of predictive genetic information with
respect to the individual (or information about a request for
or the receipt of genetic services by such individual or
family member of such individual);
(3) to request, require, collect or purchase predictive
genetic information with respect to an individual (or
information about a request for or the receipt of genetic
services by such individual or family member of such
individual); or
(4) to cause or attempt to cause an employer to
discriminate against an individual in violation of this
subtitle.

SEC. 414. LABOR ORGANIZATION PRACTICES.

It shall be an unlawful employment practice for a labor
organization--
(1) to exclude or to expel from the membership of the
organization, or otherwise to discriminate against, any
individual because of predictive genetic information with
respect to the individual (or information about a request for
or the receipt of genetic services by such individual or
family member of such individual);
(2) to limit, segregate, or classify the members of the
organization, or fail or refuse to refer for employment any
individual, in any way that would deprive or tend to deprive
any individual of employment opportunities, or would limit
the employment opportunities or otherwise adversely affect
the status of the individual as an employee, because of
predictive genetic information with respect to the individual
(or information about a request for or the receipt of genetic
services by such individual or family member of such
individual);
(3) to request, require, collect or purchase predictive
genetic information with respect to an individual (or
information about a request for or the receipt of genetic
services by such individual or family member of such
individual); or
(4) to cause or attempt to cause an employer to
discriminate against an individual in violation of this
subtitle.

SEC. 415. TRAINING PROGRAMS.

It shall be an unlawful employment practice for any
employer, labor organization, or joint labor-management
committee controlling apprenticeship or other training or
retraining, including on-the-job training programs--
(1) to discriminate against any individual because of
predictive genetic information with respect to the individual
(or information about a request for or the receipt of genetic
services by such individual), in admission to, or employment
in, any program established to provide apprenticeship or
other training or retraining;
(2) to limit, segregate, or classify the members of the
organization, or fail or refuse to refer for employment any
individual, in any way that would deprive or tend to deprive
any individual of employment opportunities, or would limit
the employment opportunities or otherwise adversely affect
the status of the individual as an employee, because of
predictive genetic information with respect to the individual
(or information about a request for or receipt of genetic
services by such individual or family member of such
individual);
(3) to request, require, collect or purchase predictive
genetic information with respect to an individual (or
information about a request for or receipt of genetic
services by such individual or family member of such
individual); or
(4) to cause or attempt to cause an employer to
discriminate against an individual in violation of this
subtitle.

SEC. 416. MAINTENANCE AND DISCLOSURE OF PREDICTIVE GENETIC
INFORMATION.

(a) Maintenance of Predictive Genetic Information.--If an
employer possesses predictive genetic information about an
employee (or information about a request for or receipt of
genetic services by such employee or family member of such
employee), such information shall be treated or maintained as
part of the employee's confidential medical records.
(b) Disclosure of Predictive Genetic Information.--An
employer shall not disclose predictive genetic information
(or information about a request for or receipt of genetic
services by such employee or family member of such employee)
except--
(1) to the employee who is the subject of the information
at the request of the employee;
(2) to an occupational or other health researcher if the
research is conducted in compliance with the regulations and
protections provided for under part 46 of title 45, Code of
Federal Regulations;
(3) under legal compulsion of a Federal court order, except
that if the court order was secured without the knowledge of
the individual to whom the information refers, the employer
shall provide the individual with adequate notice to
challenge the court order unless the court order also imposes
confidentiality requirements; and
(4) to government officials who are investigating
compliance with this Act if the information is relevant to
the investigation.

SEC. 417. CIVIL ACTION.

(a) In General.--One or more employees, members of a labor
organization, or participants in training programs may bring
an action in a Federal or State court of competent
jurisdiction against an employer, employment agency, labor
organization, or joint

[[Page S247]]

labor-management committee or training program who commits a
violation of this subtitle.
(b) Enforcement by the Equal Employment Opportunity
Commission.--The powers, remedies, and procedures set forth
in sections 705, 706, 707, 709, 710, and 717 of the Civil
Rights Act of 1964 (42 U.S.C. 2000e-4, 2000e-5, 2000e-6,
2000e-8, 2000e-9, and 2000e-16) shall be the powers,
remedies, and procedures provided to the Equal Employment
Opportunity Commission to enforce this subtitle. The
Commission may promulgate regulations to implement these
powers, remedies, and procedures.
(c) Remedy.--A Federal or State court may award any
appropriate legal or equitable relief under this section.
Such relief may include a requirement for the payment of
attorney's fees and costs, including the costs of experts.

SEC. 418. CONSTRUCTION.

Nothing in this subtitle shall be construed to--
(1) limit the rights or protections of an individual under
the Americans with Disabilities Act of 1990 (42 U.S.C. 12101
et seq.), including coverage afforded to individuals under
section 102 of such Act;
(2) limit the rights or protections of an individual under
the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.);
(3) limit the rights or protections of an individual under
any other Federal or State statute that provides equal or
greater protection to an individual than the rights accorded
under this Act;
(4) apply to the Armed Forces Repository of Specimen
Samples for the Identification of Remains; or
(5) limit the statutory or regulatory authority of the
Occupational Safety and Health Administration or the Mine
Safety and Health Administration to promulgate or enforce
workplace safety and health laws and regulations.

SEC. 419. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as may be
necessary to carry out this subtitle.

SEC. 420. EFFECTIVE DATE.

This subtitle shall become effective on October 1, 2002.

TITLE V--EMPLOYMENT NONDISCRIMINATION

SEC. 501. SHORT TITLE.

This title may be cited as the ``Employment Non-
Discrimination Act of 2001''.

SEC. 502. PURPOSES.

The purposes of this title are--
(1) to provide a comprehensive Federal prohibition of
employment discrimination on the basis of sexual orientation;
(2) to provide meaningful and effective remedies for
employment discrimination on the basis of sexual orientation;
and
(3) to invoke congressional powers, including the powers to
enforce the 14th amendment to the Constitution and to
regulate interstate commerce, in order to prohibit employment
discrimination on the basis of sexual orientation.

SEC. 503. DEFINITIONS.

In this title:
(1) Commission.--The term ``Commission'' means the Equal
Employment Opportunity Commission.
(2) Covered entity.--The term ``covered entity'' means an
employer, employment agency, labor organization, or joint
labor-management committee.
(3) Employer.--The term ``employer'' means--
(A) a person engaged in an industry affecting commerce (as
defined in section 701(h) of the Civil Rights Act of 1964 (42
U.S.C. 2000e(h))) who has 15 or more employees (as defined in
section 701(f) of such Act (42 U.S.C. 2000e(f)) for each
working day in each of 20 or more calendar weeks in the
current or preceding calendar year, and any agent of such a
person, but does not include a bona fide private membership
club (other than a labor organization) that is exempt from
taxation under section 501(c) of the Internal Revenue Code of
1986;
(B) an employing authority to which section 302(a)(1) of
the Government Employee Rights Act of 1991 (2 U.S.C.
1202(a)(1)) applies;
(C) an employing office, as defined in section 101 of the
Congressional Accountability Act of 1995 (2 U.S.C. 1301) or
section 401 of title 3, United States Code; or
(D) an entity to which section 717(a) of the Civil Rights
Act of 1964 (42 U.S.C. 2000e-16(a)) applies.
(4) Employment agency.--The term ``employment agency'' has
the meaning given the term in section 701(c) of the Civil
Rights Act of 1964 (42 U.S.C. 2000e(c)).
(5) Employment or an employment opportunity.--Except as
provided in section 510(a)(1), the term ``employment or an
employment opportunity'' includes job application procedures,
referral for employment, hiring, advancement, discharge,
compensation, job training, a term, condition, or privilege
of union membership, or any other term, condition, or
privilege of employment, but does not include the service of
a volunteer for which the volunteer receives no compensation.
(6) Labor organization.--The term ``labor organization''
has the meaning given the term in section 701(d) of the Civil
Rights Act of 1964 (42 U.S.C. 2000e(d)).
(7) Person.--The term ``person'' has the meaning given the
term in section 701(a) of the Civil Rights Act of 1964 (42
U.S.C. 2000e(a)).
(8) Religious organization.--The term ``religious
organization'' means--
(A) a religious corporation, association, or society; or
(B) a school, college, university, or other educational
institution or institution of learning, if--
(i) the institution is in whole or substantial part
controlled, managed, owned, or supported by a religion,
religious corporation, association, or society; or
(ii) the curriculum of the institution is directed toward
the propagation of a religion.
(9) Sexual orientation.--The term ``sexual orientation''
means homosexuality, bisexuality, or heterosexuality, whether
the orientation is real or perceived.
(10) State.--The term ``State'' has the meaning given the
term in section 701(i) of the Civil Rights Act of 1964 (42
U.S.C. 2000e(i)).

SEC. 504. DISCRIMINATION PROHIBITED.

(a) Employer Practices.--It shall be an unlawful employment
practice for an employer--
(1) to fail or refuse to hire or to discharge any
individual, or otherwise to discriminate against any
individual with respect to the compensation, terms,
conditions, or privileges of employment of the individual,
because of such individual's sexual orientation; or
(2) to limit, segregate, or classify the employees or
applicants for employment of the employer in any way that
would deprive or tend to deprive any individual of employment
opportunities or otherwise adversely affect the status of the
individual as an employee, because of such individual's
sexual orientation.
(b) Employment Agency Practices.--It shall be an unlawful
employment practice for an employment agency to fail or
refuse to refer for employment, or otherwise to discriminate
against, any individual because of the sexual orientation of
the individual or to classify or refer for employment any
individual on the basis of the sexual orientation of the
individual.
(c) Labor Organization Practices.--It shall be an unlawful
employment practice for a labor organization--
(1) to exclude or to expel from its membership, or
otherwise to discriminate against, any individual because of
the sexual orientation of the individual;
(2) to limit, segregate, or classify its membership or
applicants for membership, or to classify or fail or refuse
to refer for employment any individual, in any way that would
deprive or tend to deprive any individual of employment
opportunities, or would limit such employment opportunities
or otherwise adversely affect the status of the individual as
an employee or as an applicant for employment, because of
such individual's sexual orientation; or
(3) to cause or attempt to cause an employer to
discriminate against an individual in violation of this
section.
(d) Training Programs.--It shall be an unlawful employment
practice for any employer, labor organization, or joint
labor-management committee controlling apprenticeship or
other training or retraining, including on-the-job training
programs, to discriminate against any individual because of
the sexual orientation of the individual in admission to, or
employment in, any program established to provide
apprenticeship or other training.
(e) Association.--An unlawful employment practice described
in any of subsections (a) through (d) shall be considered to
include an action described in that subsection, taken against
an individual based on the sexual orientation of a person
with whom the individual associates or has associated.
(f) Disparate Impact.--Notwithstanding any other provision
of this title, the fact that an employment practice has a
disparate impact, as the term ``disparate impact'' is used in
section 703(k) of the Civil Rights Act of 1964 (42 U.S.C.
2000e-2(k)), on the basis of sexual orientation does not
establish a prima facie violation of this title.

SEC. 505. RETALIATION AND COERCION PROHIBITED.

(a) Retaliation.--A covered entity shall not discriminate
against an individual because such individual opposed any act
or practice prohibited by this title or because such
individual made a charge, assisted, testified, or
participated in any manner in an investigation, proceeding,
or hearing under this title.
(b) Coercion.--A person shall not coerce, intimidate,
threaten, or interfere with any individual in the exercise or
enjoyment of, or on account of such individual's having
exercised, enjoyed, or assisted in or encouraged the exercise
or enjoyment of, any right granted or protected by this
title.

SEC. 506. BENEFITS.

This title does not apply to the provision of employee
benefits to an individual for the benefit of the domestic
partner of such individual.

SEC. 507. COLLECTION OF STATISTICS PROHIBITED.

The Commission shall not collect statistics on sexual
orientation from covered entities, or compel the collection
of such statistics by covered entities.

SEC. 508. QUOTAS AND PREFERENTIAL TREATMENT PROHIBITED.

(a) Quotas.--A covered entity shall not adopt or implement
a quota on the basis of sexual orientation.

[[Page S248]]

(b) Preferential Treatment.--A covered entity shall not
give preferential treatment to an individual on the basis of
sexual orientation.
(c) Orders and Consent Decrees.--Notwithstanding any other
provision of this title, an order or consent decree entered
for a violation of this title may not include a quota, or
preferential treatment to an individual, based on sexual
orientation.

SEC. 509. RELIGIOUS EXEMPTION.

(a) In General.--Except as provided in subsection (b), this
title shall not apply to a religious organization.
(b) Unrelated Business Taxable Income.--This title shall
apply to employment or an employment opportunity for an
employment position of a covered entity that is a religious
organization if the duties of the position pertain solely to
activities of the organization that generate unrelated
business taxable income subject to taxation under section
511(a) of the Internal Revenue Code of 1986.

SEC. 510. NONAPPLICATION TO MEMBERS OF THE ARMED FORCES;
VETERANS' PREFERENCES.

(a) Armed Forces.--
(1) Employment or an employment opportunity.--In this
title, the term ``employment or an employment opportunity''
does not apply to the relationship between the United States
and members of the Armed Forces.
(2) Armed forces.--In paragraph (1), the term ``Armed
Forces'' means the Army, Navy, Air Force, Marine Corps, and
Coast Guard.
(b) Veterans' Preferences.--This title does not repeal or
modify any Federal, State, territorial, or local law creating
a special right or preference concerning employment or an
employment opportunity for a veteran.

SEC. 511. CONSTRUCTION.

Nothing in this title shall be construed to prohibit a
covered entity from enforcing rules regarding nonprivate
sexual conduct, if the rules of conduct are designed for, and
uniformly applied to, all individuals regardless of sexual
orientation.

SEC. 512. ENFORCEMENT.

(a) Enforcement Powers.--With respect to the administration
and enforcement of this title in the case of a claim alleged
by an individual for a violation of this title--
(1) the Commission shall have the same powers as the
Commission has to administer and enforce--
(A) title VII of the Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.); or
(B) sections 302 and 304 of the Government Employee Rights
Act of 1991 (2 U.S.C. 1202 and 1220);
in the case of a claim alleged by such individual for a
violation of such title, or of section 302(a)(1) of the
Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)),
respectively;
(2) the Librarian of Congress shall have the same powers as
the Librarian of Congress has to administer and enforce title
VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.)
in the case of a claim alleged by such individual for a
violation of such title;
(3) the Board (as defined in section 101 of the
Congressional Accountability Act of 1995 (2 U.S.C. 1301))
shall have the same powers as the Board has to administer and
enforce the Congressional Accountability Act of 1995 (2
U.S.C. 1301 et seq.) in the case of a claim alleged by such
individual for a violation of section 201(a)(1) of such Act
(2 U.S.C. 1311(a)(1));
(4) the Attorney General shall have the same powers as the
Attorney General has to administer and enforce--
(A) title VII of the Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.); or
(B) sections 302 and 304 of the Government Employee Rights
Act of 1991 (2 U.S.C. 1202 and 1220);
in the case of a claim alleged by such individual for a
violation of such title, or of section 302(a)(1) of the
Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)),
respectively;
(5) the President, the Commission, and the Merit Systems
Protection Board shall have the same powers as the President,
the Commission, and the Board, respectively, have to
administer and enforce chapter 5 of title 3, United States
Code, in the case of a claim alleged by such individual for a
violation of section 411 of such title;
(6) a court of the United States shall have the same
jurisdiction and powers as the court has to enforce--
(A) title VII of the Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.) in the case of a claim alleged by such
individual for a violation of such title;
(B) sections 302 and 304 of the Government Employee Rights
Act of 1991 (2 U.S.C. 1202 and 1220) in the case of a claim
alleged by such individual for a violation of section
302(a)(1) of such Act (2 U.S.C. 1202(a)(1));
(C) the Congressional Accountability Act of 1995 (2 U.S.C.
1301 et seq.) in the case of a claim alleged by such
individual for a violation of section 201(a)(1) of such Act
(2 U.S.C. 1311(a)(1)); and
(D) chapter 5 of title 3, United States Code, in the case
of a claim alleged by such individual for a violation of
section 411 of such title.
(b) Procedures and Remedies.--The procedures and remedies
applicable to a claim alleged by an individual for a
violation of this title are--
(1) the procedures and remedies applicable for a violation
of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e
et seq.) in the case of a claim alleged by such individual
for a violation of such title;
(2) the procedures and remedies applicable for a violation
of section 302(a)(1) of the Government Employee Rights Act of
1991 (2 U.S.C. 1202(a)(1)) in the case of a claim alleged by
such individual for a violation of such section;
(3) the procedures and remedies applicable for a violation
of section 201(a)(1) of the Congressional Accountability Act
of 1995 (2 U.S.C. 1311(a)(1)) in the case of a claim alleged
by such individual for a violation of such section; and
(4) the procedures and remedies applicable for a violation
of section 411 of title 3, United States Code, in the case of
a claim alleged by such individual for a violation of such
section.
(c) Other Applicable Provisions.--With respect to a claim
alleged by a covered employee (as defined in section 101 of
the Congressional Accountability Act of 1995 (2 U.S.C. 1301))
for a violation of this title, title III of the Congressional
Accountability Act of 1995 (2 U.S.C. 1381 et seq.) shall
apply in the same manner as such title applies with respect
to a claim alleged by such a covered employee for a violation
of section 201(a)(1) of such Act (2 U.S.C. 1311(a)(1)).
(d) Prohibition of Affirmative Action--Notwithstanding any
other provision of this section, affirmative action for a
violation of this title may not be imposed. Nothing in this
section shall prevent the granting of relief to any
individual who suffers a violation of such individual's
rights provided in this title.

SEC. 513. STATE AND FEDERAL IMMUNITY.

(a) State Immunity.--A State shall not be immune under the
11th amendment to the Constitution from an action in a
Federal court of competent jurisdiction for a violation of
this title.
(b) Remedies Against the United States and the States.--
Notwithstanding any other provision of this title, in an
action or administrative proceeding against the United States
or a State for a violation of this title, remedies (including
remedies at law and in equity, and interest) are available
for the violation to the same extent as the remedies are
available for a violation of title VII of the Civil Rights
Act of 1964 (42 U.S.C. 2000e et seq.) by a private entity,
except that--
(1) punitive damages are not available; and
(2) compensatory damages are available to the extent
specified in section 1977A(b) of the Revised Statutes (42
U.S.C. 1981a(b)).

SEC. 514. ATTORNEYS' FEES.

Notwithstanding any other provision of this title, in an
action or administrative proceeding for a violation of this
title, an entity described in section 512(a) (other than
paragraph (4) of such section), in the discretion of the
entity, may allow the prevailing party, other than the
Commission or the United States, a reasonable attorney's fee
(including expert fees) as part of the costs. The Commission
and the United States shall be liable for the costs to the
same extent as a private person.

SEC. 515. POSTING NOTICES.

A covered entity who is required to post notices described
in section 711 of the Civil Rights Act of 1964 (42 U.S.C.
2000e-10) shall post notices for employees, applicants for
employment, and members, to whom the provisions specified in
section 512(b) apply, that describe the applicable provisions
of this title in the manner prescribed by, and subject to the
penalty provided under, section 711 of the Civil Rights Act
of 1964.

SEC. 516. REGULATIONS.

(a) In General.--Except as provided in subsections (b),
(c), and (d), the Commission shall have authority to issue
regulations to carry out this title.
(b) Librarian of Congress.--The Librarian of Congress shall
have authority to issue regulations to carry out this title
with respect to employees of the Library of Congress.
(c) Board.--The Board referred to in section 512(a)(3)
shall have authority to issue regulations to carry out this
title, in accordance with section 304 of the Congressional
Accountability Act of 1995 (2 U.S.C. 1384), with respect to
covered employees, as defined in section 101 of such Act (2
U.S.C. 1301).
(d) President.--The President shall have authority to issue
regulations to carry out this title with respect to covered
employees, as defined in section 401 of title 3, United
States Code.

SEC. 517. RELATIONSHIP TO OTHER LAWS.

This title shall not invalidate or limit the rights,
remedies, or procedures available to an individual claiming
discrimination prohibited under any other Federal law or any
law of a State or political subdivision of a State.

SEC. 518. SEVERABILITY.

If any provision of this title, or the application of the
provision to any person or circumstance, is held to be
invalid, the remainder of this title and the application of
the provision to any other person or circumstance shall not
be affected by the invalidity.

SEC. 519. EFFECTIVE DATE.

This title shall take effect 60 days after the date of
enactment of this Act and shall not apply to conduct
occurring before the effective date.

[[Page S249]]

TITLE VI--PROMOTING CIVIL RIGHTS ENFORCEMENT

SEC. 601. ESTABLISHMENT OF THE NATIONAL TASK FORCE ON
VIOLENCE AGAINST HEALTH CARE PROVIDERS.

(a) Establishment.--There is established in the Department
of Justice a National Task Force on Violence Against Health
Care Providers (referred to in this section as the ``task
force'').
(b) Composition.--The task force shall be composed on one
or more individuals from--
(1) the Department of Justice;
(2) the Federal Bureau of Investigation;
(3) the United States Marshals Service;
(4) the Bureau of Alcohol, Tobacco, and Firearms; and
(5) the United States Postal Inspection Service.
(c) Chairman.--The task force shall be chaired by the
Assistant Attorney General for Civil Rights.
(d) Powers and Duties.--The task force shall--
(1) coordinate the national investigation and prosecution
of incidents of violence and other unlawful acts directed
against reproductive health care providers, with a focus on
connections that may exist between individuals involved in
such unlawful activity;
(2) serve as a clearinghouse of information, for use by
investigators and prosecutors, relating to acts of violence
against reproductive health care providers;
(3) make available security information and recommendations
to enhance the safety and protection of reproductive health
care providers;
(4) provide training to Federal, State, and local law
enforcement on issues relating to clinic violence; and
(5) support Federal civil investigation and litigation of
violence and other unlawful acts directed at reproductive
health care providers.
(e) Authorization of Appropriations.--There are authorized
to be appropriated $1,000,000 for each fiscal year to carry
out this section.

SEC. 602. INCREASE IN FUNDING FOR ENFORCING CIVIL RIGHTS
LAWS.

(a) Increase in Funding.--There are authorized to be
appropriated for fiscal year 2002 for each of the agencies
described in subsection (b) an amount equal to 105 percent of
the amount appropriated for fiscal year 2001.
(b) Agencies.--The agencies referred to in subsection (a)
(with the increase and total amount authorized for fiscal
year 2002) are as follows:
(1) Equal Employment Opportunity Commission (an increase of
$15,200,000 from fiscal year 2001 to $319,200,000 for fiscal
year 2002).
(2) Department of Justice: Civil Rights Division (an
increase of $4,600,000 from fiscal year 2001 to $96,600,000
for fiscal year 2002).
(3) Education: Office of Civil Rights (an increase of
$3,800,000 from fiscal year 2001 to $79,800,000 for fiscal
year 2002).
(4) Department of Labor: Office of Federal Contract
Compliance (an increase of $3,800,000 from fiscal year 2001
to $79,800,000 for fiscal year 2002).
(5) Department of Labor: Civil Rights Center (an increase
of $300,000 from fiscal year 2001 to $6,300,000 for fiscal
year 2002).
(6) Housing and Urban Development: Fair Housing Activities
Grants (an increase of $2,300,000 from fiscal year 2001 to
$48,300,000 for fiscal year 2002).
(7) Health and Human Services: Office for Civil Rights (an
increase of $1,400,000 from fiscal year 2001 to $29,400,000
for fiscal year 2002).
(8) Agriculture: Civil Rights Programs (an increase of
$1,000,000 from fiscal year 2001 to $21,000,000 for fiscal
year 2002).
(9) Transportation: Office of Civil Rights (an increase of
$400,000 from fiscal year 2001 to $8,400,000 for fiscal year
2002).
(10) Environmental Protection Agency: Office of Civil
Rights (an increase of $250,000 from fiscal year 2001 to
$5,250,000 for fiscal year 2002).
______

By Mr. DASCHLE (for himself, Mr. Harkin, Mr. Leahy, Mr. Johnson,
Mr. Baucus, Mr. Rockefeller, Mr. Kohl, Mr. Sarbanes, Mr.
Wellstone, Mr. Dorgan, Mr. Durbin, Mr. Conrad, Mr. Kerry, Mrs.
Carnahan, Mr. Dayton, Mr. Kennedy, and Mr. Akaka):
S. 20. A bill to enhance fair and open competition in the production
and sale of agricultural commodities, and for other purposes; to the
Committee on Agriculture, Nutrition, and Forestry.

securing a future for independent agriculture act of 2001

Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
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 ``Securing a
Future for Independent Agriculture Act of 2001''.
(b) Table of Contents.--The table of contents is as
follows:

Sec. 1. Short title; table of contents.

TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS

Subtitle A--Definitions

Sec. 101. Definitions.

Subtitle B--Protection from Anticompetitive Practices

Sec. 111. Prohibitions against unfair practices in transactions
involving agricultural commodities.
Sec. 112. Reports of the Secretary on potential unfair practices.
Sec. 113. Report on corporate structure.
Sec. 114. Mandatory funding for staff.
Sec. 115. General Accounting Office study.

Subtitle C--Contract Fairness

Sec. 121. Obligation of good faith.
Sec. 122. Disclosure of risks and readability requirements under
agricultural contracts.
Sec. 123. Right of contract producers to cancel production contracts.
Sec. 124. Prohibition of confidentiality provisions.
Sec. 125. Production contract liens.
Sec. 126. Production contracts involving investment requirements.
Sec. 127. Producer rights.
Sec. 128. Mediation.

Subtitle D--Agricultural Fair Practices

Sec. 131. Agricultural fair practices.

Subtitle E--Implementation

Sec. 141. Relationship to State law.
Sec. 142. Regulations.
Sec. 143. Implementation plan.
Sec. 144. Effective date.

TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND

Sec. 201. National Rural Cooperative and Business Equity Fund.

TITLE III--COUNTRY OF ORIGIN LABELING

Sec. 301. Country of origin labeling.

TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION

Sec. 401. Loan rates for marketing assistance loans.
Sec. 402. Term of loans.
Sec. 403. Application.

TITLE V--FARMLAND PROTECTION

Sec. 501. Farmland protection program.

TITLE VI--CIVIL RIGHTS

Sec. 601. Sense of Congress on participation of socially disadvantaged
groups in Department of Agriculture programs.

TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS

Subtitle A--Definitions

SEC. 101. DEFINITIONS.

In this title:
(1) Active contractor.--The term ``active contractor''
means a person (including a processor) that (in accordance
with a production contract) owns, or will own, an
agricultural commodity that is produced by a contract
producer.
(2) Agricultural commodity.--The term ``agricultural
commodity'' has the meaning given the term in section 102 of
the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
(3) Agricultural contract.--The term ``agricultural
contract'' means a marketing contract or a production
contract.
(4) Agricultural cooperative.--The term ``agricultural
cooperative'' means an association of persons engaged in the
production, marketing, or processing of an agricultural
commodity that meets the requirements of the Act entitled
``An Act to authorize association of producers of
agricultural products'' (commonly known as the ``Capper-
Volstead Act'') (7 U.S.C. 291 et seq).
(5) Broker.--The term ``broker'' means any person engaged
in the business of negotiating sales and purchases of any
agricultural commodity in interstate or foreign commerce for
or on behalf of the vendor or the purchaser, except that no
person shall be considered a broker if the person's sales of
such agricultural commodities are not in excess of $1,000,000
per year.
(6) Capital investment.--The term ``capital investment''
means an investment in--
(A) a structure, such as a building or manure storage
structure; or
(B) machinery or equipment associated with producing an
agricultural commodity that has a useful life of more than 1
year.
(7) Commission merchant.--The term ``commission merchant''
means any person engaged in the business of receiving in
interstate or foreign commerce any agricultural commodity for
sale, on commission, or for or on behalf of another person,
except that no person shall be considered a commission
merchant if the person's sales of such agricultural
commodities are not in excess of $1,000,000 per year.
(8) Contract input.--
(A) In general.--The term ``contract input'' means an
agricultural commodity or an organic or synthetic substance
or compound that is used to produce an agricultural
commodity.
(B) Inclusions.--The term ``contract input'' includes
livestock, plants, agricultural seeds, semen or eggs for
breeding stock, fertilizers, soil conditioners, and
pesticides.
(9) Contract livestock facility.--The term ``contract
livestock facility'' means a facility in which livestock or a
product of live livestock is produced under a production
contract by a contract producer.
(10) Contract producer.--The term ``contract producer''
means a producer that produces an agricultural commodity
under a production contract.

[[Page S250]]

(11) Contractor.--The term ``contractor'' means a person
that is an active contractor or a passive contractor.
(12) Covered person.--The term ``covered person'' means a
dealer, processor, commission merchant, and broker.
(13) Crop.--The term ``crop'' means an agricultural
commodity produced from a plant.
(14) Dealer.--The term ``dealer'' means--
(A) any person (except an agricultural cooperative) engaged
in the business of buying, selling, or marketing agricultural
commodities in wholesale or jobbing quantities, as determined
by the Secretary, in interstate or foreign commerce, except
that--
(i) no person shall be considered a dealer with respect to
sales or marketing of any agricultural commodity of that
person's own production if the sales or marketing of such
agricultural commodities do not exceed $10,000,000 per year;
and
(ii) no person shall be considered a dealer who buys,
sells, or markets less than $1,000,000 per year of such
agricultural commodities; and
(B) an agricultural cooperative that sells or markets
agricultural commodities of its members' own production if
the agricultural cooperative sells or markets more than
$1,000,000 of its members' production per year of such
agricultural commodities.
(15) Investment requirement.--The term ``investment
requirement'' means a provision in a production contract that
requires a contract producer to make a capital investment
associated with producing an agricultural commodity subject
to the production contract.
(16) Livestock.--The term ``livestock'' means beef cattle,
dairy cattle, swine, sheep, or poultry.
(17) Marketing contract.--The term ``marketing contract''
means a written agreement between a processor and a producer
for the purchase of an agricultural commodity grown or raised
by the producer.
(18) Passive contractor.--The term ``passive contractor''
means a person that--
(A) provides a management service to a contract producer;
and
(B) does not own an agricultural commodity that is produced
by the contract producer under a production contract.
(19) Processor.--
(A) In general.--The term ``processor'' means--
(i) any person (other than an agricultural cooperative)
engaged in the business of handling, preparing, or
manufacturing (including slaughtering) an agricultural
commodity or the products of an agricultural commodity for
sale or marketing in interstate or foreign commerce for human
consumption; and
(ii) an agricultural cooperative that handles, prepares, or
manufactures (including slaughtering) agricultural
commodities of its members' own production.
(B) Exclusions.--The term ``processor'' does not include--
(i) any person (other than an agricultural cooperative)
with respect to the handling, preparing, or manufacturing
(including slaughtering) of an agricultural commodity that
was produced by the person if the gross revenue derived by
the person from the sales or marketing of the agricultural
commodity is less than $10,000,000 per year; and
(ii) any agricultural cooperative that handles, prepares,
or manufactures (including slaughtering) an agricultural
commodity if the gross revenue derived by the person from the
sales or marketing of the agricultural commodity is less than
$1,000,000 per year.
(20) Produce.--The term ``produce'' means--
(A) to provide feed or services relating to the care and
feeding of livestock, including milking dairy cattle and
storing raw milk; and
(B) to provide for planting, raising, harvesting, and
storing a crop, including preparing soil for planting and
applying a fertilizer, soil conditioner, or pesticide to a
crop.
(21) Producer.--
(A) In general.--The term ``producer'' means a person that
produces an agricultural commodity.
(B) Exclusions.--The term ``producer'' does not include--
(i) a commercial fertilizer or pesticide applicator;
(ii) a feed supplier; or
(iii) a veterinarian.
(22) Production contract.--
(A) In general.--The term ``production contract'' means a
written agreement that provides for--
(i) the production of an agricultural commodity by a
contract producer; or
(ii) the provision of a management service relating to the
production of an agricultural commodity by a contract
producer.
(B) Inclusions.--The term ``production contract''
includes--
(i) a contract between an active contractor and a contract
producer for the production of an agricultural commodity;
(ii) a contract between an active contractor and a passive
contractor for the provision of a management service to a
contract producer in the production of an agricultural
commodity; and
(iii) a contract between a passive contractor and a
contract producer if--

(I) the production contract provides for a management
service furnished by the passive contractor to the contract
producer in the production of an agricultural commodity; and
(II) the passive contractor has a contractual relationship
with the active contractor involving the production of the
agricultural commodity.

(23) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.

Subtitle B--Protection from Anticompetitive Practices

SEC. 111. PROHIBITIONS AGAINST UNFAIR PRACTICES IN
TRANSACTIONS INVOLVING AGRICULTURAL
COMMODITIES.

(a) Prohibitions.--It shall be unlawful in, or in
connection with, any transaction in interstate or foreign
commerce for any covered person or contractor--
(1) to engage in or use any unfair, unreasonable, unjustly
discriminatory, or deceptive practice or device in the
marketing, receiving, purchasing, sale, or contracting for
the production of any agricultural commodity;
(2) to make or give any undue or unreasonable preference or
advantage to any particular person or locality or subject any
particular person or locality to any undue or unreasonable
disadvantage in connection with any transaction involving any
agricultural commodity;
(3) to make any false or misleading statement in connection
with any transaction involving any agricultural commodity
that is purchased or received in interstate or foreign
commerce, or involving any production contract, or to fail,
without reasonable cause, to perform any specification or
duty, express or implied, arising out of any undertaking in
connection with any such transaction or production contract;
(4) to retaliate against or disadvantage, or to conspire to
retaliate against or disadvantage, any person because of
statements or information lawfully provided by the person to
any person (including to the Secretary or to a law
enforcement agency) regarding alleged improper actions or
violations of law by the covered person or contractor (unless
the statements or information are determined to be libelous
or slanderous under applicable State law) involving any
agricultural commodity;
(5) to include as part of any new or renewed agreement or
contract a right of first refusal, or to make any sale or
transaction contingent on the granting of a right of first
refusal, involving any agricultural commodity, before the
date that is 180 days after the study required under section
115 is complete; or
(6) to offer different prices contemporaneously for
agricultural commodities of like grade and quality (except
agricultural commodities covered by the Perishable
Agricultural Commodities Act, 1930 (7 U.S.C. 499a et seq.)),
unless--
(A) the agricultural commodity is purchased in a public
market through a competitive bidding process or under similar
conditions that provide opportunities for multiple
competitors to seek to acquire the agricultural commodity;
(B) the premium or discount reflects the actual cost of
acquiring an agricultural commodity prior to processing; or
(C) the Secretary has determined that such types of offers
do not have a discriminatory impact against small volume
producers of agricultural commodities.
(b) Violations.--
(1) Complaints.--Whenever the Secretary has reason to
believe that any covered person or contractor has violated
subsection (a), the Secretary shall cause a complaint in
writing to be served on the covered person or contractor,
stating the charges in that respect, and requiring the
covered person or contractor to attend and testify at a
hearing to be held not earlier than 30 days after the service
of the complaint.
(2) Hearing.--
(A) In general.--The Secretary may hold hearings, sign and
issue subpoenas, administer oaths, examine witnesses, receive
evidence, and require the attendance and testimony of
witnesses and the production of such accounts, records, and
memoranda, as the Secretary considers necessary, for the
determination of the existence of any violation of this
section.
(B) Right to hearing.--A covered person or contractor may
request a hearing if the covered person or contractor is
subject to penalty for unfair conduct under this section.
(C) Respondents rights.--During a hearing, the covered
person or contractor shall be given, pursuant to regulations
promulgated by the Secretary, the opportunity--
(i) to be informed of the evidence against the covered
person or contractor;
(ii) to cross-examine witnesses; and
(iii) to present evidence.
(D) Hearing limitation.--The issues of any hearing held or
requested under this section shall be limited in scope to
matters directly related to the purpose for which the hearing
was held or requested.
(3) Report of finding and penalties.--
(A) In general.--If, after a hearing, the Secretary finds
that the covered person or contractor has violated subsection
(a), the Secretary shall make a report in writing that states
the findings of fact and includes an order requiring the
covered person or contractor to cease and desist from
continuing the violation.
(B) Civil penalty.--The Secretary may assess a civil
penalty in an amount not to exceed $100,000 for each
violation of subsection (a).
(4) Temporary injunction and finality and appealability of
an order.--

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(A) Temporary injunction.--At any time after a complaint is
filed under paragraph (1), the court, on application of the
Secretary, may issue a temporary injunction, restraining to
the extent the court considers proper, the covered person or
contractor and the officers, directors, agents, and employees
of the covered person or contractor from violating subsection
(a).
(B) Appealability of an order.--An order issued pursuant to
this subsection shall be final and conclusive unless within
30 days after service of the order, the covered person or
contractor petitions to appeal the order to the court of
appeals for the circuit in which the covered person or
contractor resides or has its principal place of business or
the District of Columbia Circuit Court of Appeals.
(C) Delivery of petition.--
(i) In general.--The clerk of the court shall immediately
cause a copy of the petition filed under subparagraph (B) to
be delivered to the Secretary.
(ii) Record.--On receipt of the petition, the Secretary
shall file in the court the record of the proceedings under
this subsection.
(D) Penalty for failure to obey an order.--
(i) In general.--Any covered person or contractor that
fails to obey any order of the Secretary issued under this
section after the order, or the order as modified, has been
sustained by the court or has otherwise become final, shall
be fined not less than $5,000 and not more than $100,000 for
each offense.
(ii) Separate offenses.--Each day during which the failure
continues shall be considered a separate offense.
(5) Records.--
(A) In general.--Each covered person or contractor shall
maintain for a period of not less than 5 years accounts,
records, and memoranda (including marketing agreements,
forward contracts, and formula pricing arrangements) that
fully and correctly disclose all transactions involved in the
business of the covered person or contractor, including the
true ownership of the business.
(B) Failure to keep records or allow the secretary to
inspect records.--Failure to keep, or allow the Secretary to
inspect records as required by this paragraph shall
constitute an unfair practice in violation of subsection
(a)(1).
(C) Inspection of records.--The Secretary shall have the
right to inspect such accounts, records, and memoranda
(including marketing agreements, forward contracts, and
formula pricing arrangements) of any covered person or
contractor as may be material to the investigation of any
alleged violation of this section or for the purpose of
investigating the business conduct or practices of an
organization with respect to the covered person or
contractor.
(c) Compensation for Injury.--
(1) Establishment of the family farmer and rancher claims
commission.--
(A) In general.--The Secretary shall appoint 3 individuals
to a commission to be known as the ``Family Farmer and
Rancher Claims Commission'' (referred to in this subsection
as the ``Commission'') to review claims of family farmers and
ranchers that have suffered financial damages as a result of
any violation of this section as determined by the Secretary
pursuant to subsection (b)(3).
(B) Term of service.--
(i) In general.--Each member of the Commission shall serve
3-year terms which may be renewed.
(ii) Initial members.--The initial members of the
Commission may be appointed for a period of less than 3
years, as determined by the Secretary.
(2) Review of claims.--
(A) Submission of claims.--A family farmer or rancher
damaged as a result of a violation of this section, as
determined by the Secretary pursuant to subsection (b)(3),
may preserve the right to claim financial damages under this
section by filing a claim pursuant to regulations promulgated
by the Secretary.
(B) Determination.--Based on a review of the claim, the
Commission shall determine the amount of damages to be paid,
if any, as a result of the violation.
(C) Review.--The decisions of the Commission under this
paragraph shall not be subject to judicial review except to
determine that the amount of damages to be paid is consistent
with the published regulations of the Secretary that
establish the criteria for implementing this subsection.
(3) Funding.--
(A) In general.--Funds collected from civil penalties
pursuant to this section shall--
(i) be transferred to a special fund in the Treasury;
(ii) be made available to the Secretary without further Act
of appropriation; and
(iii) remain available until expended to pay the expenses
of the Commission and claims described in this subsection.
(B) Authorization of appropriation.--In addition to the
funds described in subparagraph (A), there are authorized to
be appropriated such sums as may be necessary to carry out
this section.

SEC. 112. REPORTS OF THE SECRETARY ON POTENTIAL UNFAIR
PRACTICES.

(a) Filing Premerger Notices With the Secretary.--No
covered person, operator of a warehouse used to store
agricultural commodities, or other agriculture-related
business shall merge or acquire, directly or indirectly, any
voting securities or assets of any other covered person,
operator of a warehouse used to store agricultural
commodities, or other agriculture-related business unless
both persons (or in the case of a tender offer, the acquiring
person) file notification pursuant to rules promulgated by
the Secretary, if--
(1) any voting securities or assets of the covered person,
operator of a warehouse used to store agricultural
commodities, or other agriculture-related business with
annual net sales or total assets of $10,000,000 or more are
being acquired by a covered person, operator of a warehouse
used to store agricultural commodities, or other agriculture-
related business that has total assets or annual net sales of
$100,000,000 or more; or
(2) any voting securities or assets of a covered person,
operator of a warehouse used to store agricultural
commodities, or other agriculture-related business with
annual net sales, or total assets, of $100,000,000 or more
are being acquired by any covered person, operator of a
warehouse used to store agricultural commodities, or
agriculture-related business with annual net sales or total
assets of $10,000,000 or more, if, as a result of the
acquisition, the acquiring person would hold an aggregate
total amount of the voting securities and assets of the
acquired person in excess of $50,000,000.
(b) Review by the Secretary.--
(1) In general.--Except as provided in paragraph (2), the
Secretary may conduct a review of any merger or acquisition
described in subsection (a).
(2) Exception.--The Secretary shall conduct a review of any
merger or acquisition described in subsection (a) on a
request from a member of Congress.
(c) Access to Records.--The Secretary may request any
information, including any testimony, documentary material,
or related information, from a covered person, operator of a
warehouse used to store agricultural commodities, or other
agriculture-related business, pertaining to any merger or
acquisition of any covered person, operator of a warehouse
used to store agricultural commodities, or other agriculture-
related business.
(d) Purpose of Review.--
(1) Findings.--In conducting the review under subsection
(a), the Secretary shall make findings concerning whether the
merger or acquisition could--
(A) be significantly detrimental to the present or future
viability of family farms or ranches or rural communities in
the areas affected by the merger or acquisition, pursuant to
standards established by the Secretary; or
(B) lead to a violation of section 111(a).
(2) Remedies.--The review may include a determination of
possible remedies regarding how the parties of the merger or
acquisition may take steps to modify their operations to
address the findings described in paragraph (1).
(e) Report of Review.--
(1) Preliminary report.--After conducting the review
required under subsection (b), the Secretary shall issue a
preliminary report to the parties of the merger or
acquisition and the Attorney General or the Federal Trade
Commission, as appropriate, which shall include findings and
a description of any remedies described in subsection (d)(2).
(2) Final report.--After affording the parties described in
paragraph (1) an opportunity for a hearing regarding the
findings and any proposed remedies in the preliminary report,
the Secretary shall issue a final report to the President and
the Attorney General or the Federal Trade Commission, as
appropriate, with respect to the merger or acquisition.
(f) Implementation of the Report.--Not later than 120 days
after the issuance of a final report described in subsection
(e)(2), the parties to the merger or acquisition affected by
the report shall--
(1) make changes to their operations or structure to comply
with the findings and implement any suggested remedy or any
agreed-on alternative remedy; and
(2) file a response demonstrating the compliance or
implementation.
(g) Confidentiality of Information.--
(1) In general.--Subject to paragraph (2), information used
by the Secretary to conduct the review required under this
section provided by a party to the merger or acquisition
under review or by a government agency shall be treated by
the Secretary as confidential information pursuant to section
1770 of the Food Security Act of 1985 (7 U.S.C. 2276).
(2) Party to hearing.--The Secretary may share any such
information with the Attorney General, the Federal Trade
Commission, and a party seeking a hearing pursuant to
subsection (e)(2) with respect to information relating to the
party.
(3) Report.--Subject to paragraph (1), the report issued
under subsection (e) shall be available to the public.
(h) Civil Penalties.--
(1) Original penalty.--
(A) In general.--After affording the parties an opportunity
for a hearing, the Secretary may assess a civil penalty in an
amount not to exceed $300,000 for the failure of a person to
comply with the requirements of subsection (a) or (f).
(B) Issue.--Any such hearing shall be limited to the issue
of the amount of the civil penalty.
(2) Additional penalty.--
(A) In general.--If after being assessed a civil penalty
under paragraph (1) a person continues to fail to meet the
requirements of subsection (a) or (f), the Secretary may,

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after affording the parties an opportunity for a hearing,
assess a further civil penalty in an amount not to exceed
$100,000 for each day the person continues the violation.
(B) Issue.--Any such hearing shall be limited to the issue
of the additional civil penalty assessed under this
paragraph.

SEC. 113. REPORT ON CORPORATE STRUCTURE.

(a) In General.--
(1) Report.--A covered person with annual sales in excess
of $100,000,000 shall annually file with the Secretary a
report that describes, with respect to both domestic and
foreign activities, the strategic alliances, ownership in
other agribusiness firms or agribusiness-related firms, joint
ventures, subsidiaries, brand names, and interlocking boards
of directors with other corporations, representatives, and
agents that lobby Congress on behalf of the covered person,
as determined by the Secretary.
(2) Contracts.--Paragraph (1) shall not apply to a
contract.
(b) Civil Penalties.--
(1) Original penalty.--
(A) In general.--After affording the parties an opportunity
for a hearing, the Secretary may assess a civil penalty in an
amount not to exceed $100,000 for the failure of a person to
comply with this section.
(B) Issue.--Any such hearing shall be limited to the issue
of the amount of the civil penalty
(2) Additional penalty.--
(A) In general.--If after being assessed a civil penalty in
accordance with paragraph (1) a person continues to fail to
meet the requirements of this section, the Secretary may,
after affording the parties an opportunity for a hearing,
assess a further civil penalty in an amount not to exceed
$100,000 for each day the person continues the violation.
(B) Issue.--Any such hearing shall be limited to the amount
of the additional civil penalty assessed under this
paragraph.

SEC. 114. MANDATORY FUNDING FOR STAFF.

(a) In General.--Out of the funds in the Treasury not
otherwise appropriated, the Secretary of Treasury shall
provide to the Secretary of Agriculture $7,000,000 for each
of fiscal years 2002 through 2006, to hire, train, and
provide for additional staff to carry out additional
responsibilities under this subtitle, including a Special
Counsel on Fair Markets and Rural Opportunity, additional
attorneys for the Office of General Counsel, investigators,
economists, and support staff.
(b) Availability.--The sums shall be--
(1) made available to the Secretary without further Act of
appropriation; and
(2) in addition to funds otherwise made available to the
Secretary for the purposes described in subsection (a).

SEC. 115. GENERAL ACCOUNTING OFFICE STUDY.

Not later than 1 year after the date of enactment of this
Act, the Comptroller General of the United States, in
consultation with the Attorney General, the Secretary, the
Federal Trade Commission, the National Association of
Attorney's General, and other persons, shall--
(1) study competition in the domestic farm economy with a
special focus on--
(A) protecting family farms and ranches and rural
communities; and
(B) the potential for monopsony and oligopsony nationally
and regionally; and
(2) provide a report to the appropriate committees of
Congress on--
(A) the correlation between increases in the gap between--
(i) retail consumer food prices;
(ii) the prices paid to farmers and ranchers; and
(iii) any increases in concentration among processors,
manufacturers, or other firms that buy from farmers and
ranchers;
(B) the extent to which the use of formula pricing,
marketing agreements, forward contracting, and production
contracts tend to give processors, agribusinesses, and other
buyers of agricultural commodities unreasonable market power
over producers or suppliers in local markets;
(C) whether the granting of process patents relating to
biotechnology research affecting agriculture during the past
20 years has tended to overly restrict related biotechnology
research or has tended to overly limit competition in the
biotechnology industries that affect agriculture in a manner
that is contrary to the public interest, or could do so in
the future;
(D) whether acquisitions of companies that own
biotechnology patents and seed patents by multinational
companies have the potential for reducing competition in the
United States and unduly increasing the market power of the
multinational companies;
(E) whether existing processors or agribusinesses have
disproportionate market power and if competition could be
increased if the processors or agribusinesses were required
to divest assets to ensure that they do not exert the
disproportionate market power over local markets;
(F) the extent of increase in concentration in milk
processing, procurement and handling, and the potential risks
from that increase in concentration on--
(i) the economic well-being of dairy farmers;
(ii) the school lunch program; and
(iii) other Federal nutrition programs;
(G) the impact of mergers, acquisitions, and joint ventures
among dairy cooperatives on dairy farmers, including impacts
on both members and nonmembers of the merging cooperatives;
(H) the impact of the significant increase in the use of
stock as the primary means of effectuating mergers and
acquisitions by large companies;
(I) the increase in the number and size of mergers or
acquisitions in the United States and whether some of the
mergers or acquisitions would have taken place if the merger
or acquisition had to be consummated primarily with cash,
other assets, or borrowing; and
(J) whether agricultural producers typically appear to
derive any benefits (such as higher prices for their products
or any other advantages) from right-of-first-refusal
provisions contained in purchase contracts or other deals
with agribusiness purchasers of the products.

Subtitle C--Contract Fairness

SEC. 121. OBLIGATION OF GOOD FAITH.

An agricultural contract shall carry an obligation of good
faith (as defined in applicable State law provisions of the
Uniform Commercial Code) on all parties to the agricultural
contract with respect to the performance and enforcement of
the agricultural contract.

SEC. 122. DISCLOSURE OF RISKS AND READABILITY REQUIREMENTS
UNDER AGRICULTURAL CONTRACTS.

(a) Readability and Understandability.--
(1) In general.--An agricultural contract shall be readable
and understandable, in that the agricultural contract--
(A) shall be printed in legible type;
(B) shall be appropriately divided into captioned sections;
and
(C) shall be written in clear and coherent language using
words and grammar that are understandable by a person of
average intelligence, education, and experience within the
agricultural industry.
(2) Effect.--Paragraph (1) does not preclude the use of--
(A) a particular word, phrase, provision, or form of
agreement that is specifically required, recommended, or
endorsed by a Federal or State law (including a regulation);
or
(B) a technical term that is used to describe the service
or property that is the subject of the agricultural contract,
if the term is customarily used by producers in the ordinary
course of business in connection with the service or property
described.
(b) Disclosure Statement Requirement.--An agricultural
contract shall--
(1) be accompanied by a clear written disclosure statement
describing the material risks faced by the producer if the
producer enters into the agricultural contract; and
(2) disclose (in a manner consistent with subsection (a)),
provisions of the agricultural contract relating to--
(A) duration;
(B) termination;
(C) renegotiation standards;
(D) responsibility for environmental damage;
(E) factors to be used in determining payment;
(F) responsibility for obtaining and complying with
Federal, State, and local permits;
(G) in the case of a production contract, the right of the
producer to cancel the production contract in accordance with
section 123; and
(H) any other terms that the Secretary determines are
appropriate for disclosure.
(c) Cover Sheet Requirement.--An agricultural contract
entered into, amended, or renewed after the date of enactment
of this Act shall contain as the first page, or first page of
text if it is preceded by a title page, a cover sheet that
complies with subsection (a) and contains the following:
(1) A brief statement that the agricultural contract is a
legal contract between the parties to the agricultural
contract.
(2) The following statement: ``READ YOUR CONTRACT
CAREFULLY. This cover sheet provides only a brief summary of
your contract. This cover sheet is not the contract, and only
the terms of the actual contract are legally binding. The
contract itself sets forth, in detail, the rights and
obligations of both you and the contractor or processor. IT
IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT
CAREFULLY.''.
(3) A written disclosure of risks in accordance with
subsection (b).
(4) In the case of a production contract, a statement
describing, in plain language, the right of the producer to
cancel the production contract in accordance with section
123.
(5) An index of the major provisions of the agricultural
contract and the pages on which the provisions appear,
including--
(A) the name of each party to the agricultural contract;
(B) the definitions section of the agricultural contract;
(C) the provisions governing termination, cancellation,
renewal, and amendment of the agricultural contract by either
party;
(D) the duties and obligations of each party; and
(E) provisions subject to change in the agricultural
contract.
(d) Review by Secretary.--
(1) Submission to secretary.--A contractor may submit an
agricultural contract to the Secretary for review to
determine whether the agricultural contract complies with
this section.
(2) Action by secretary.--The Secretary shall--
(A) in determining whether an agricultural contract or
cover sheet is readable, in accordance with subsection (a),
consider--
(i) the simplicity of the sentence structure;

[[Page S253]]

(ii) the extent to which commonly used and understood words
are employed;
(iii) the extent to which esoteric legal terms are avoided;
(iv) the extent to which references to other sections or
provisions of the agricultural contract are minimized;
(v) the extent to which clear definitions are used; and
(vi) any additional factors relevant to the readability or
understandability of the agricultural contract; and
(B) after reviewing the agricultural contract--
(i) certify that the agricultural contract complies with
this section;
(ii) decline to certify that the agricultural contract
complies with this section and provide specific reasons for
declining to certify the agricultural contract; or
(iii) decline to review the agricultural contract because--

(I) the compliance of the agricultural contract with this
section is subject to pending litigation; or
(II) the agricultural contract is not subject to this
section.

(3) Judicial review.--An action of the Secretary under this
subsection shall not be subject to judicial review.
(4) Certification.--
(A) In general.--An agricultural contract certified under
this subsection shall be considered to comply with
subsections (a), (b), and (c).
(B) No approval of legality or legal effect.--Certification
of an agricultural contract under this subsection shall not
constitute an approval of the legality or legal effect of the
agricultural contract.
(C) Effect of approval; constructive approval.--If the
Secretary certifies an agricultural contract under this
subsection--
(i) the agricultural contract shall be considered to be in
compliance with subsections (a), (b), and (c); and
(ii) the remedies provided under subsection (e) shall not
be available.
(D) Timing.--To the maximum extent practicable, the
Secretary shall make a decision on the certification of an
agricultural contract not later than 30 days after receipt of
the agricultural contract.
(5) Effect of disapproval.--If the Secretary disapproves
the certification of an agricultural contract, the
agricultural contract shall be void.
(6) Effect of failure to submit agricultural contract.--The
failure to submit an agricultural contract to the Secretary
for review under this subsection shall not be considered to
be a lack of good faith or to raise a presumption that the
agricultural contract violates this section.
(e) Remedies for Violations.--In addition to applicable
remedies provided under State law, a court reviewing an
agricultural contract that is not certified under subsection
(d) may change the terms of the agricultural contract, or
limit a provision of the agricultural contract, to avoid an
unfair result if--
(1) the court finds--
(A) a material provision of the agricultural contract
violates subsection (a), (b), or (c);
(B) the violation reasonably caused the producer to be
substantially confused about any of the rights, obligations,
or remedies of any party to the agricultural contract; and
(C) the violation has caused or is likely to cause
financial detriment to the producer; and
(2) the claim is brought before the obligations of any
party to the agricultural contract have been fully performed.
(f) Limitations on Producer Actions.--
(1) In general.--A violation of this section--
(A) shall not entitle a producer to withhold performance of
an otherwise valid contractual obligation when bringing a
claim for relief under this section; and
(B) is not a defense to a claim arising from the breach of
an agricultural contract by a producer.
(2) Actual damages.--A producer may recover actual damages
caused by a violation of this section only if the violation
reasonably caused the producer to fail to understand a right,
obligation, or remedy under the agricultural contract.
(g) Statute of Limitations.--A claim that an agricultural
contract violates this section shall be made not later than 6
years after the date on which the agricultural contract is
executed by the producer.

SEC. 123. RIGHT OF CONTRACT PRODUCERS TO CANCEL PRODUCTION
CONTRACTS.

(a) In General.--A contract producer may cancel a
production contract by mailing a cancellation notice to the
contractor not later than the later of--
(1) the date that is 3 business days after the date on
which the production contract is executed; or
(2) any cancellation date specified in the production
contract.
(b) Disclosure.--A production contract shall clearly
disclose--
(1) the right of the contract producer to cancel the
production contract;
(2) the method by which the contract producer may cancel
the production contract; and
(3) the deadline for canceling the production contract.

SEC. 124. PROHIBITION OF CONFIDENTIALITY PROVISIONS.

(a) Prohibition.--Any provision of an agricultural contract
that provides that information contained in the agricultural
contract (other than a trade secret to which section 552 of
title 5, United States Code, applies) is confidential shall
be void.
(b) Form.--A confidentiality provision described in
subsection (a) shall be void regardless of whether the
provision is--
(1) express or implied;
(2) oral or written;
(3) required or conditional; or
(4) contained in the agricultural contract, another
agricultural contract, or in a related document, policy, or
agreement.
(c) Other Provisions.--This section shall not affect other
provisions of an agricultural contract or a related document,
policy, or agreement that can be given effect without the
voided provision.
(d) Disclosure of Information.--This subsection does not
require a party to an agricultural contract to disclose
information in the agricultural contract to any other person.

SEC. 125. PRODUCTION CONTRACT LIENS.

(a) Definition of Lien Starting Date.--In this section, the
term ``lien starting date'' means--
(1) in the case of an annual crop, the date on which the
annual crop is planted;
(2) in the case of a perennial crop, the starting date on
which the perennial crop is subject to a production contract;
(3) in the case of livestock, the date on which the
livestock arrive at the contract livestock facility; and
(4) in the case of milk or any other product of live
livestock, the date on which the milk or other product is
produced.
(b) Liens.--In the case of a production contract that
provides for producing an agricultural commodity by a
contract producer, the contract producer shall have a lien in
the amount owed to the contract producer under the production
contract on--
(1)(A) the agricultural commodity until the agricultural
commodity is sold or processed (including slaughtered) by the
contractor; and
(B) the cash proceeds of the sale of the agricultural
commodity, including any cash provided as part of the sale;
and
(2) any property of the contractor that may be subject to a
security interest as provided in applicable State law
provisions based on Article 9 of the Uniform Commercial Code.
(c) Lien Period.--A lien for the production of an
agricultural commodity under this section shall apply during
the period--
(1) beginning on the lien starting date; and
(2) ending 1 year after the agricultural commodity is no
longer under the control of the contract producer.
(d) Central Filing System.--The Secretary shall establish a
central filing system for the purposes of perfecting liens
under this section and providing notice of the liens to the
public.
(e) Perfecting Liens.--To perfect a lien for the production
of an agricultural commodity under this section, a contract
producer shall--
(1) not later than 45 days after the lien starting date,
file with the Secretary a lien statement on a form prescribed
by the Secretary that includes--
(A) an estimate of the amount owed under the production
contract;
(B) the lien starting date;
(C) the estimated duration of the period during which the
agricultural commodity will be under the control of the
contract producer;
(D) the name of the party to the production contract whose
agricultural commodity is produced under the production
contract;
(E) a description of the location of the contract
operation, by State, county, and township; and
(F) the printed name and signature of the person filing the
form; and
(2) pay a filing fee in an amount determined by the
Secretary, not to exceed $10.00.
(f) Priority of Lien.--A lien created under this section
shall be superior to, and have priority over, any conflicting
lien or security interest in the agricultural commodity,
including a lien or security interest that was perfected
prior to the creation of the lien under this section.
(g) Enforcement.--
(1) Control.--Before an agricultural commodity leaves the
control of a contract producer, the contract producer may
foreclose a lien created under this section in the manner
provided for the foreclosure of a secured transaction under
applicable State law provisions based on Article 9 of the
Uniform Commercial Code.
(2) Post-control.--After an agricultural commodity leaves
the control of the contract producer, the contract producer
may enforce the lien in the manner provided under applicable
State law provisions based Article 9 of the Uniform
Commercial Code.
(h) Election of Other Remedies.--In lieu of obtaining a
lien under this section, a contract producer described in
subsection (b) may seek to collect funds due under a
production contract in accordance with--
(1) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et
seq.); or
(2) the Perishable Agricultural Commodities Act, 1930 (7
U.S.C. 499a et seq.).

SEC. 126. PRODUCTION CONTRACTS INVOLVING INVESTMENT
REQUIREMENTS.

(a) Applicability.--This section applies only to a
production contract between a contract producer and a
contractor if the production contract requires the contract
producer, together with any other production contract between
the same parties, to make a capital investment of $100,000 or
more.
(b) Restrictions on Contract Termination.--Except as
provided in subsection

[[Page S254]]

(d), a contractor shall not terminate or fail to renew a
production contract until the contractor--
(1) provides the contract producer with written notice of
the intention of the contractor to terminate or not renew the
production contract at least 90 days before the effective
date of the termination or nonrenewal; and
(2) reimburses the contract producer for damages (based on
the value of the remaining useful life of the structures,
machinery, equipment, or other capital investment items)
incurred due to the termination, cancellation, or nonrenewal
of the production contract.
(c) Breach of Investment Requirements.--
(1) In general.--Except as provided in subsection (d), a
contractor shall not terminate or fail to renew a production
contract with a contract producer that materially breaches a
production contract, including the investment requirements of
a production contract, until--
(A) the contractor provides the contract producer with a
written notice of termination or nonrenewal, including a list
of complaints alleging causes for the breach, at least 45
days before the effective date of the termination or
nonrenewal; and
(B) the contract producer fails to remedy each cause of the
breach alleged in the list of complaints provided in the
notice not later than 30 days after receipt of the notice.
(2) Civil actions.--An effort by a contract producer to
remedy a cause of an alleged breach shall not be considered
to be an admission of a breach in a civil action.
(d) Exceptions.--A contractor may terminate or decline to
renew a production contract in accordance with applicable law
without notice or remedy as required in subsections (b) and
(c) if the basis for the termination or nonrenewal is--
(1) a voluntary abandonment of the contractual relationship
by the contract producer, such as a complete failure of the
performance of a contract producer under the production
contract; or
(2) the conviction of a contract producer of an offense of
fraud or theft committed against the contractor.
(e) Penalty.--If a contractor terminates or fails to renew
a production contract other than as provided in this section,
the contractor shall pay the contract producer the value of
the remaining useful life of the structures, machinery,
equipment, or other capital investment items.

SEC. 127. PRODUCER RIGHTS.

(a) In General.--It shall be unlawful, in or in connection
with any transaction in interstate or foreign commerce, for
any covered person or contractor to take an action to coerce,
intimidate, disadvantage, retaliate against, or discriminate
against any producer because the producer exercises, or
attempts to exercise, the right of the producer--
(1)(A) to enter into a membership agreement or marketing
contract with an agricultural cooperative, a processor, or
another producer; and
(B) to exercise contractual rights under the membership
agreement or marketing contract;
(2) to lawfully provide statements or information to the
Secretary, a Federal or State law enforcement agency, or any
other entity or person regarding improper actions or
violations of law by a covered person or contractor under
this subtitle, unless the statements or information are
determined to be libelous or slanderous under applicable
State law;
(3) to cancel a production contract in accordance with
section 123;
(4) to disclose the terms of an agricultural contract under
section 124;
(5) to file, continue, terminate, or enforce a lien under
section 125; and
(6) to enforce other protections provided by this subtitle
or other Federal or State law (including regulations).
(b) Waivers.--Any provision of an agricultural contract
that waives a producer right described in subsection (a), or
an obligation of a covered person or contractor established
by this subtitle, shall be void and unenforceable.
(c) Violations.--Section 111(b) shall apply to a violation
of this section.

SEC. 128. MEDIATION.

(a) Mediation.--
(1) In general.--An agricultural contract shall provide for
resolution of disputes concerning the agricultural contract
by mediation.
(2) Mediation by secretary or state mediation service.--If
there is a dispute involving an agricultural contract, either
party to the agricultural contract may make a written request
to the Secretary for mediation services by the Secretary or
by a designated State mediation service to facilitate
resolution of the dispute.
(3) Hearing.--The parties to the agricultural contract
shall receive a release from the mediation services described
in paragraph (2) before the dispute may be heard by a court.
(b) No Arbitration of Future Controversy.--A provision in
an agricultural contract submitting to arbitration a future
controversy arising between a producer and a covered person
or contractor shall be void.

Subtitle D--Agricultural Fair Practices

SEC. 131. AGRICULTURAL FAIR PRACTICES.

The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301
et seq.) is amended to read as follows:

``SECTION 1. SHORT TITLE.

``This Act may be cited as the `Agricultural Fair Practices
Act of 1967'.

``SEC. 2. FINDINGS AND PURPOSE.

``(a) Findings.--Congress finds that--
``(1) agricultural products are produced in the United
States by many individual farmers and ranchers scattered
throughout the various States of the United States;
``(2) agricultural products in fresh or processed form move
in large part in the channels of interstate and foreign
commerce, and agricultural products that do not move in the
channels directly burden or affect interstate commerce;
``(3) the efficient production and marketing of
agricultural products by farmers and ranchers is of vital
concern to the welfare of farmers and ranchers and to the
general economy of the United States;
``(4) because agricultural products are produced by
numerous individual farmers and ranchers, the marketing and
bargaining position of individual farmers and ranchers will
be adversely affected unless farmers and ranchers are free to
join together voluntarily in cooperative organizations as
authorized by law; and
``(5) interference with the right described in paragraph
(4) is contrary to the public interest and adversely affects
the free and orderly flow of goods in interstate and foreign
commerce.
``(b) Purpose.--The purpose of this Act is to establish
standards of fair practices required of handlers for dealings
in agricultural products.

``SEC. 3. DEFINITIONS.

``In this Act:
``(1) Accredited association.--The term `accredited
association' means an association of producers accredited by
the Secretary in accordance with section 6.
``(2) Association of producers.--
``(A) In general.--The term `association of producers'
means an association of producers of agricultural products
that engages in the marketing of agricultural products or of
agricultural services described in paragraph (6)(B).
``(B) Inclusions.--The term `association of producers'
includes--
``(i) a cooperative association (as defined in section
15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a));
and
``(ii) an association described in the first section of the
Act entitled `An Act to authorize association of producers of
agricultural products' (commonly known as the `Capper-
Volstead Act') (7 U.S.C. 291).
``(3) Bargain; bargaining.--The terms `bargain' and
`bargaining' refers to the performance of the mutual
obligation of a handler and an accredited association to meet
at reasonable times and for reasonable periods of time for
the purpose of negotiating in good faith with respect to the
price, terms of sale, compensation for products produced or
services rendered under contract, or other provisions
relating to the products marketed, or the services rendered,
by the members of the accredited association or by the
accredited association as agent for the members.
``(4) Designated handler.--The term `designated handler'
means a handler that is designated in accordance with section
6.
``(5) Handler.--
``(A) In general.--The term `handler' means any person
engaged in the business or practice of--
``(i) acquiring agricultural products from producers or
associations of producers for processing or sale;
``(ii) grading, packaging, handling, storing, or processing
agricultural products received from producers or associations
of producers;
``(iii) contracting or negotiating contracts or other
arrangements, written or oral, with or on behalf of producers
or associations of producers with respect to the production
or marketing of any agricultural product; or
``(iv) acting as an agent or broker for a handler in the
performance of any function or act described in clause (i),
(ii), or (iii).
``(B) Exclusions.--The term ``handler'' does not include--
``(i) any person (other than an agricultural cooperative)
engaged in a business or practice described in subparagraph
(A) if the gross revenue derived by the person from the
business or activity is less than $10,000,000 per year; or
``(ii) any agricultural cooperative engaged in a business
or practice described in subparagraph (A) if the gross
revenue derived by the person from the business or activity
is less than $1,000,000 per year.
``(6) Producer.--
``(A) In general.--The term `producer' means a person
engaged in the production of agricultural products as a
farmer, planter, rancher, dairyman, poultryman, or fruit,
vegetable, or nut grower.
``(B) Inclusions.--The term `producer' includes a person
that contributes labor, production management, facilities, or
other services for the production of an agricultural product.
``(7) Person.--The term `person' includes an individual,
partnership, corporation, and association.
``(8) Secretary.--The term `Secretary' means the Secretary
of Agriculture.

``SEC. 4. PROHIBITED PRACTICES.

``It shall be unlawful for any handler knowingly to, or
knowingly to permit any employee or agent to--
``(1) interfere with, restrain, or coerce any producer in
the exercise of the right of the producer to join and belong
to, or to refrain

[[Page S255]]

from joining or belonging to, an association of producers, or
to refuse to deal with any producer because of the exercise
of the right of the producer to join and belong to the
association;
``(2) discriminate against any producer with respect to
price, quantity, quality, or other terms of purchase,
acquisition, or other handling of an agricultural product
because of the membership of the producer in, or the contract
of the producer with, an association of producers;
``(3) coerce or intimidate any producer to enter into,
maintain, breach, cancel, or terminate a membership agreement
or marketing contract with an association of producers or a
contract with a handler;
``(4) pay or loan money, give any thing of value, or offer
any other inducement or reward to a producer for refusing to
or ceasing to belong to an association of producers;
``(5) make false reports about the finances, management, or
activities of an association of producers or handlers;
``(6) conspire, combine, agree, or arrange with any other
person to do, or aid or abet the performance of, any act made
unlawful by this Act;
``(7) refuse to bargain in good faith with an accredited
association, if the handler is a designated handler; or
``(8) dominate or interfere with the formation or
administration of any association of producers or to
contribute financial or other support to an association of
producers.

``SEC. 5. BARGAINING IN GOOD FAITH.

``(a) Clarification of Obligation.--
``(1) In general.--The obligation of a designated handler
to bargain in good faith shall apply with respect to an
accredited association and the products or services for which
the accredited association is accredited to bargain.
``(2) Agreements or concessions.--The good faith bargaining
required between a handler and an accredited association
shall not require either party to agree to a proposal or to
make a concession.
``(b) Extension of Same Terms to Accredited Association.--
``(1) In general.--If a designated handler purchases a
product or service from producers under terms more favorable
to the producers than the terms negotiated with an accredited
association for the same type of product or service, the
handler shall offer the same terms to the accredited
association.
``(2) Violations.--Failure to extend the same terms to the
accredited association shall be considered to be a violation
of section 4(g).
``(3) Factors.--In comparing terms, the Secretary shall
consider--
``(A) the stipulated purchase price;
``(B) any bonuses, premiums, hauling, or loading
allowances;
``(C) reimbursement of expenses;
``(D) payment for special services of any character that
may be paid by the handler; and
``(E) any amounts paid or agreed to be paid by the handler
for any designated purpose other than payment of the purchase
price.
``(c) Mediation.--The Secretary may provide mediation
services with respect to bargaining between an accredited
association and a designated handler at the request of the
accredited association or designated handler.

``SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF
HANDLERS.

``(a) Accreditation Petition.--
``(1) In general.--An association of producers seeking
accreditation to bargain on behalf of producers of an
agricultural product or service shall submit to the Secretary
a petition for accreditation.
``(2) Content.--The petition shall--
``(A) specify each agricultural product or service for
which the association seeks accreditation to bargain on
behalf of producers;
``(B) designate the handlers, individually, by production
or marketing area, or by some other appropriate general
classification, with whom the association seeks to be
accredited to bargain; and
``(C) contain such other information and documents as may
be required by the Secretary.
``(b) Notice of Petition; Proceedings.--
``(1) In general.--On receiving a petition under subsection
(a) and any supporting material, the Secretary shall provide
notice of the petition to all handlers designated in the
petition under subsection (a)(2)(B).
``(2) Individual handlers.--The Secretary shall provide
personal notice under this subsection to a handler that has
been designated individually.
``(3) General classifications.--The Secretary shall provide
notice through the Federal Register to handlers that have
been designated by production or marketing area or by some
other general classification.
``(4) Opportunity to respond.--The association of producers
seeking accreditation and the handlers shall have an
opportunity to submit written evidence, views, and arguments
to the Secretary.
``(5) Proceedings.--
``(A) In general.--Except as provided in subparagraph (B),
the Secretary may conduct an informal proceeding on the
petition.
``(B) Formal hearings.--The Secretary shall hold a formal
hearing for the reception of testimony and evidence if the
Secretary finds that there are substantial unresolved issues
of material fact.
``(c) Issuance of Accreditation Order.--On the petition of
an association of producers, the Secretary may issue an order
designating the association of producers as an accredited
association for the purposes of this Act if the Secretary
determines that--
``(1) under the charter documents or bylaws of the
association, the accredited association is owned and
controlled by producers;
``(2) the association has contracts, binding under State
law, with the members of the association empowering the
association to sell or negotiate terms of sale of the
products or services of the members;
``(3) the association represents a sufficient number of
producers, or the members of the association produce a
sufficient quantity of agricultural products or render a
sufficient level of services, to enable the association to
function as an effective agent for producers in bargaining
with designated handlers;
``(4) the functions of the association include acting as
principal or agent for the members of the association in
negotiations with handlers for prices and other terms of
trade with respect to the production, sale, and marketing of
products or services of the members; and
``(5) the association is acting in good faith with respect
to the members of the association and is complying with this
Act.
``(d) Notification of Accreditation Order.--
``(1) In general.--The Secretary shall notify the
petitioning association of producers, and each handler to be
designated as part of the petition, of the decision of the
Secretary regarding the petition and provide a concise
statement of the basis for the decision.
``(2) Other associations.--The Secretary shall provide
notice of an accreditation of an association to all other
associations that have been accredited to bargain with
respect to the product or service with any of the designated
handlers of the association.
``(e) Annual Report.--Each accredited association shall
submit to the Secretary an annual report in such form and
including such information as the Secretary by regulation may
require to enable the Secretary to determine whether the
association is meeting the standards for accreditation.
``(f) Loss of Accreditation.--
``(1) In general.--If the Secretary determines that an
accredited association has ceased to meet the standards for
accreditation under subsection (c), the Secretary shall--
``(A) notify the association of the manner in which the
association is deficient in maintaining the standards for
accreditation; and
``(B) allow the association a reasonable period of time to
answer or correct the deficiencies.
``(2) Hearing.--After providing notice and a corrective
period in accordance with paragraph (1), if the Secretary is
not satisfied that the association is in compliance with
subsection (c), the Secretary shall--
``(A) notify the association of the continued deficiencies;
and
``(B) hold a hearing to consider the revocation of
accreditation.
``(3) Revocation.--If, based on the evidence submitted at
the hearing, the Secretary finds that the association has
ceased to maintain the standards for accreditation, the
Secretary shall revoke the accreditation of the association.
``(g) Amendment.--
``(1) In general.--At the option of the Secretary or on the
petition of an accredited association or a designated
handler, the Secretary may amend an accreditation order with
respect to the product or service specified in the
accreditation order.
``(2) Notice.--The Secretary shall provide--
``(A) notice of any proposed amendment and the reasons for
the amendment to all accredited associations and handlers
that would be directly affected by the amendment; and
``(B) an opportunity for a public hearing.
``(3) Authority.--After providing notice and an opportunity
for a hearing in accordance with paragraph (2), the Secretary
may amend the accreditation order if the Secretary finds that
the amendment will be conducive to more effective bargaining
and orderly marketing by the accredited association of the
product or services of the members of the accredited
association.

``SEC. 7. ASSIGNMENT OF ASSOCIATION DUES AND FEES.

``(a) In General.--A producer of an agricultural product or
service may execute, as a clause in a sales contract or in
another written instrument, an assignment of dues or fees to,
or the deduction of a sum to be retained by, an association
of producers authorized by contract to represent the
producer, under which assignment a handler shall--
``(1) deduct a portion of the amount to be paid for
products or services of the producer under a growing
contract; and
``(2) pay, on behalf of the producer, the portion over to
the association as dues or fees or a sum to be retained by
the association.
``(b) Duty of Handler.--After a handler receives notice
from a producer of an assignment under subsection (a), the
handler shall--
``(1) deduct the amount authorized by the assignment from
the amount paid for any agricultural product sold by the
producer or for any service rendered under any growing
contract; and
``(2) on payment to producers for the product or service,
pay the amount over to the association or the assignee of the
association.

[[Page S256]]

``SEC. 8. POWERS OF SECRETARY.

``(a) Records and Information.--
``(1) Maintenance.--The Secretary may require any person
covered by this Act to establish and maintain such records,
make such reports, and provide such other information as the
Secretary may reasonably require to carry out this Act.
``(2) Access.--The Secretary and any officer or employee of
the Department of Agriculture, on presentation of credentials
and a warrant or such other order of a court--
``(A) shall have a right of entry to, on, or through any
premises in which records required to be maintained under
paragraph (1) are located; and
``(B) may at reasonable times have access to and copy any
records that any person is required to maintain or that
relate to any matter under this Act under investigation or in
question.
``(b) Complaints.--If the Secretary has reason to believe
(whether through investigation or petition by any person)
that any person has violated this Act, the Secretary shall
cause a complaint to be served on the person--
``(1) stating the reasons for the alleged violation of this
Act; and
``(2) requiring the person to attend and testify at a
hearing to be held not earlier than 30 days after the date of
service of the complaint.
``(c) Hearing.--
``(1) In general.--The Secretary may hold hearings, sign
and issue subpoenas, administer oaths, examine witnesses,
receive evidence, and require the attendance and testimony of
witnesses and the production of such accounts, records, and
memoranda, as the Secretary considers necessary to determine
whether a violation of this Act has occurred.
``(2) Right to hearing.--A person may request a hearing if
the person is subject to a penalty under this Act.
``(3) Respondents' rights.--During a hearing, the person
complained of shall be given, in accordance with regulations
promulgated by the Secretary, the opportunity--
``(A) to be informed of the evidence against the person;
``(B) to cross-examine witnesses; and
``(C) to present evidence.
``(4) Hearing limitation.--The issues at any hearing held
or requested under this section shall be limited in scope to
matters directly related to the purpose for which the hearing
was held or requested.
``(d) Report of Finding and Penalties.--
``(1) In general.--If, after a hearing, the Secretary finds
that a person has violated this Act, the Secretary shall
make, and provide to the person, a written report that states
the findings of fact and includes an order requiring the
person to cease and desist from committing the violation.
``(2) Civil penalty.--The Secretary may assess a civil
penalty not to exceed $100,000 for each violation of this
Act.
``(e) Injunctions; Finality and Appealability of an
Order.--
``(1) Injunctions.--At any time after a complaint is served
on a person under subsection (b), the court, on application
of the Secretary, may issue an injunction, restraining to the
extent the court determines to be appropriate, the person and
the officers, directors, agents, and employees of the person
from violating this Act.
``(2) Appealability of an order.--An order issued under
this section shall be final and conclusive unless, within 30
days after service of the order, the affected handler
petitions to appeal the order to the United States court of
appeals for the circuit in which the handler resides or has
its principal place of business or the United States Court of
Appeals for the District of Columbia Circuit.
``(3) Delivery of petition.--
``(A) In general.--The clerk of the court shall immediately
cause a copy of any petition filed under paragraph (2) to be
delivered to the Secretary.
``(B) Record.--On receipt of the petition, the Secretary
shall file in the court the record of the proceedings under
this section.
``(4) Penalty for failure to obey an order.--
``(A) In general.--Any person that fails to obey an order
of the Secretary issued under this section after the order
becomes final shall be fined not less than $5,000 and not
more than $100,000 for each offense.
``(B) Separate offenses.--Each day during which the failure
continues shall be considered to be a separate offense.

``SEC. 9. ENFORCEMENT.

``(a) Civil Actions by Aggrieved Persons.--
``(1) Preventive relief.--Whenever any handler has engaged
or there are reasonable grounds to believe that any handler
is about to engage in any act or practice prohibited by this
Act, a civil action for preventive relief, including an
application for a permanent or temporary injunction,
restraining order, or other order, may be instituted by the
person aggrieved.
``(2) Attorney's fees.--In any action commenced under
paragraph (1), the court may allow the prevailing party a
reasonable attorney's fee as part of the costs.
``(3) Security.--The court may provide that no restraining
order or preliminary injunction shall issue unless security
is provided by the applicant, in such sum as the court
determines to be appropriate, for the payment of such costs
and damages as may be incurred or suffered by any party that
is found to have been wrongfully enjoined or restrained.
``(b) Civil Actions by Injured Persons.--
``(1) In general.--Any person injured in the business or
property of the person by reason of any violation of, or
combination or conspiracy to violate, this Act may--
``(A) sue for the violation in the appropriate United
States district court without respect to the amount in
controversy; and
``(B) recover damages sustained.
``(2) Attorney's fees.--In any action commenced under
paragraph (1), the court may allow the prevailing party a
reasonable attorney's fee as part of the costs.
``(3) Limitation on actions.--Any action to enforce any
cause of action under this subsection shall be barred unless
commenced within 2 years after the cause of action occurred.
``(c) Jurisdiction of District Courts.--
``(1) In general.--A United States district court shall
have jurisdiction over an action brought under this section.
``(2) Limitations.--No action may be commenced under
subsection (a) or (b)--
``(A) prior to 60 days after the plaintiff has given notice
of the alleged violation to the Secretary through a petition
under section 8(b); or
``(B) if the Secretary has commenced and is diligently
prosecuting an action (administrative or judicial) dealing
with the same violation to require compliance with the Act.
``(d) Judicial Review.--An order of the Secretary with
respect to which review could have been obtained under
section 8(e)(2) shall not be subject to judicial review in
any proceeding for enforcement under this section.

``SEC. 10. PREEMPTION.

``(a) In General.--Except as expressly provided in this
Act, this Act does not invalidate the provisions of any State
law dealing with the same subject as this Act.
``(b) State Courts.--This Act shall not deprive a State
court of jurisdiction under a State law dealing with the same
subject as this Act.''.

Subtitle E--Implementation

SEC. 141. RELATIONSHIP TO STATE LAW.

(a) In General.--Except as expressly provided in this
title, this title does not invalidate any provision of State
law dealing with the same subject as this title.
(b) State Courts.--This title does not deprive a State
court of jurisdiction under a State law dealing with the same
subject as this title.

SEC. 142. REGULATIONS.

The Secretary shall promulgate such regulations as are
appropriate to carry out this title and the amendments made
by this title.

SEC. 143. IMPLEMENTATION PLAN.

Not later than 180 days after the date of enactment of this
Act, the Secretary and the Attorney General shall develop and
implement a plan to enable the Secretary, where appropriate,
to file civil actions, including temporary injunctions, to
enforce orders issued by the Secretary under this title and
the Agricultural Fair Practices Act of 1967 (as amended by
section 131).

SEC. 144. EFFECTIVE DATE.

(a) In General.--Except as provided in subsection (b), this
title and the amendments made by this title take effect on
the date of enactment of this Act.
(b) Agricultural Contracts.--
(1) In general.--Except as provided in paragraph (2),
subtitle C applies to an agricultural contract in force on or
after the date of enactment of this Act, regardless of the
date on which the agricultural contract is executed.
(2) Exceptions.--Sections 122, 123, 126, 127(a)(5), and
128(a) shall apply only to an agricultural contract that is
executed or substantively amended after the date of enactment
of this Act.
TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND

SEC. 201. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY
FUND.

The Consolidated Farm and Rural Development Act (7 U.S.C.
1921 et seq.) is amended by adding at the end the following:
``Subtitle F--National Rural Cooperative and Business Equity Fund

``SEC. 391A. SHORT TITLE.

``This subtitle may be cited as the `National Rural
Cooperative and Business Equity Fund Act'.

``SEC. 391B. PURPOSE.

``The purpose of this subtitle is to revitalize rural
communities and enhance farm income through sustainable rural
business development by providing Federal funds and credit
enhancements to a private equity fund in order to encourage
investments by institutional and noninstitutional investors
for the benefit of rural America.

``SEC. 391C. DEFINITIONS.

``In this subtitle:
``(1) Authorized private investor.--The term `authorized
private investor' means an individual, legal entity, or
affiliate or subsidiary of an individual or legal entity
that--
``(A) is eligible to receive a loan guarantee under this
title;
``(B) is eligible to receive a loan guarantee under the
Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.);
``(C) is created under the National Consumer Cooperative
Bank Act (12 U.S.C. 3011 et seq.);
``(D) is an insured depository institution; or
``(E) is determined by the Fund to be an appropriate
investor in the Fund.

[[Page S257]]

``(2) Board.--The term `Board' means the board of directors
of the Fund established under section 391G.
``(3) Fund.--The term `Fund' means the National Rural
Cooperative and Business Equity Fund established under
section 391D.
``(4) Group of similar investors.--The term `group of
similar investors' means any 1 of the following:
``(A) Insured depository institutions with total assets of
more than $250,000,000.
``(B) Insured depository institutions with total assets
equal to or less than $250,000,000.
``(C) Farm Credit System institutions under the Farm Credit
Act of 1971 (12 U.S.C. 2001 et seq.).
``(D) Cooperative financial institutions (other than Farm
Credit System institutions).
``(E) Authorized private investors, other than those
described in subparagraphs (A) through (D).
``(F) Other nonprofit organizations, including credit
unions.
``(5) Insured depository institution.--The term `insured
depository institution' means any bank or savings association
the deposits of which are insured under the Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.).
``(6) Rural area.--The term `rural area' means an area that
is located--
``(A) outside a standard metropolitan statistical area; or
``(B) within a community that has a population of 50,000
individuals or fewer.
``(7) Rural business.--The term `rural business' means a
rural cooperative, a value-added agricultural enterprise, or
any other business located or locating in a rural area.

``SEC. 391D. ESTABLISHMENT OF THE FUND.

``(a) In General.--
``(1) Authority to establish.--A group of authorized
private investors may establish, as a non-Federal entity
under State law, and manage a fund to be known as the
`National Rural Cooperative and Business Equity Fund', to
raise and provide equity capital to rural businesses.
``(2) Composition of group.--The group of authorized
private investors referred to in paragraph (1) shall be
composed, to the maximum extent practicable, of
representatives of a majority of groups of similar investors.
``(b) Purposes.--The purposes of the Fund shall be--
``(1) to strengthen the economy of rural areas;
``(2) to further sustainable rural business development;
``(3) to encourage start-up rural businesses, increased
opportunities for small and minority-owned rural businesses,
and the formation of new rural businesses;
``(4) to enhance rural employment opportunities;
``(5) to provide equity capital to rural businesses that
have been unable to obtain equity capital; and
``(6) to leverage non-Federal funds for rural businesses.
``(c) Articles of Incorporation and By-Laws.--The articles
of incorporation and by-laws of the Fund shall set forth
purposes of the Fund that are consistent with subsection (b).

``SEC. 391E. INVESTMENT IN THE FUND.

``(a) In General.--The Secretary, using funds of the
Commodity Credit Corporation, shall--
``(1) subject to subsection (b)(1), make available to the
Fund $50,000,000 for each of fiscal years 2001 through 2003;
``(2) subject to subsection (c), guarantee 50 percent of
each investment made by an authorized private investor in the
Fund; and
``(3) subject to subsection (d), guarantee the repayment of
principal to authorized private investors in debentures
issued by the Fund.
``(b) Private Investment.--
``(1) Matching requirement.--Under subsection (a)(1), the
Secretary shall make an amount available to the Fund only
after an equal amount has been invested in the Fund by
authorized private investors in accordance with this subtitle
and the terms and conditions set forth in the by-laws of the
Fund.
``(2) Investments by insured depository institutions.--
Investments in the Fund by an insured depository institution
shall be considered part of the record of the insured
depository institution for meeting the credit needs of its
entire community for the purposes of Federal law.
``(c) Guarantee of Private Investments.--
``(1) In general.--The Secretary shall guarantee, under
terms and conditions determined by the Secretary, 50 percent
of any loss of the principal of an investment made in the
Fund by an authorized private investor.
``(2) Maximum total guarantee.--The aggregate liability of
the Secretary with respect to all guarantees under paragraph
(1) shall not apply to more than $300,000,000 in private
investments.
``(3) Redemption of guarantee.--
``(A) Date.--An authorized private investor in the Fund may
redeem a guarantee under paragraph (1), with respect to the
total investments in the Fund and the total losses of the
authorized private investor as of the date of redemption--
``(i) on the date that is 5 years after the date of
incorporation of the Fund; or
``(ii) annually thereafter.
``(B) Effect of redemption.--On redemption of a guarantee
under subparagraph (A)--
``(i) the shares in the Fund of the authorized private
investor shall be redeemed; and
``(ii) the authorized private investor shall be prohibited
from making any future investment in the Fund.
``(d) Debt.--
``(1) In general.--The Fund may, at the discretion of the
Board, raise additional capital through the issuance of
debentures and through other means determined to be
appropriate by the Board.
``(2) Guarantee of debt by secretary.--
``(A) In general.--The Secretary may guarantee 100 percent
of the principal of, and accrued interest on, debentures
issued by the Fund that are approved by the Secretary.
``(B) Maximum debt guaranteed by secretary.--The
outstanding value of debentures issued by the Fund and
guaranteed by the Secretary shall not exceed the lesser of--
``(i) the amount equal to twice the value of the assets
held by the Fund; or
``(ii) $500,000,000.
``(C) Recapture of guarantee payments.--If the Secretary
makes a payment on a debenture issued by the Fund as a result
of a guarantee of the Secretary under this paragraph, the
Secretary shall have priority over other creditors for
repayment of the debenture.
``(3) Authorized private investors.--An authorized private
investor may purchase debentures and other securities issued
by the Fund.

``SEC. 391F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.

``(a) Investments.--
``(1) In general.--
``(A) Types.--Subject to subparagraphs (B) and (C), the
Fund may--
``(i) make equity investments in an entity that meets the
requirements of paragraph (6) and such other requirements as
the Board may establish; and
``(ii) extend credit to such an entity in--

``(I) the form of mezzanine debt or subordinated debt; or
``(II) any other form of quasi-equity.

``(B) Limitation on equity investments.--After the initial
equity investment in an entity described in subparagraph
(A)(i), the Fund may not make additional equity investments
in the entity if the additional equity investments would
result in the Fund owning more than 30 percent of the equity
of the entity.
``(C) Limitation on nonequity investments.--Except in the
case of a project to assist a rural cooperative, the total
amount of nonequity investments described in subparagraph
(A)(ii) that may be provided by the Fund shall not exceed 20
percent of the total investments of the Fund in the project.
``(2) Procedures.--The Fund shall implement procedures to
ensure that--
``(A) the financing arrangements of the Fund meet the
Fund's primary focus of providing equity capital; and
``(B) the Fund does not compete with conventional sources
of credit.
``(3) Diversity of projects.--The Fund--
``(A) shall seek to make equity investments in a variety of
viable projects, with a significant share of investments--
``(i) in smaller projects in rural communities of diverse
sizes; and
``(ii) in cooperative and noncooperative enterprises; and
``(B) shall be managed in such a way as to diversify the
risks to the Fund among a variety of projects.
``(4) Limitation on rural businesses assisted.--The Fund
shall not invest in any rural business that is primarily
retail in nature (as determined by the Board), other than a
purchasing cooperative.
``(5) Interest rate limitations.--Returns on investments in
and by the Fund and returns on the extension of credit by
participants in projects assisted by the Fund, shall not be
subject to any State or Federal law establishing a maximum
allowable interest rate.
``(6) Requirements for recipients.--
``(A) Other investments.--Any recipient of amounts from the
Fund shall make or obtain a significant investment from a
source of capital other than the Fund.
``(B) Sponsorship.--Rural business investment projects to
be considered for an equity investment from the Fund shall be
sponsored by a regional, State, or local sponsoring or
endorsing organization such as--
``(i) a financial institution;
``(ii) a development organization; or
``(iii) any other established entity engaging or assisting
in rural business development, including a rural cooperative.
``(b) Technical Assistance.--The Board shall use not less
than 1 percent of the net earnings of the Fund to provide
technical assistance to rural businesses seeking an equity
investment from the Fund.
``(c) Annual Audit.--
``(1) In general.--The Board shall authorize an annual
audit of the financial statements of the Fund by a nationally
recognized auditing firm using generally accepted auditing
procedures.
``(2) Availability of audit results.--The results of the
audit required by paragraph (1) shall be made available to
investors in the Fund.
``(d) Annual Report.--The Board shall prepare and make
available to the public an annual report that--
``(1) describes the projects funded with amounts from the
Fund;
``(2) specifies the recipients of amounts from the Fund;
``(3) specifies the co-investors in all projects that
receive amounts from the Fund; and

[[Page S258]]

``(4) meets the reporting requirements, if any, of the
State under the law of which the Fund is established.
``(e) Other Authorities.--The Board may exercise such other
authorities as are necessary to carry out this subtitle.

``SEC. 391G. GOVERNANCE OF THE FUND.

``(a) In General.--The Fund shall be governed by a board of
directors that represents all of the authorized private
investors in the Fund and the Federal Government and that
consists of--
``(1) the Secretary or a designee;
``(2) 2 members who are appointed by the Secretary and are
not Federal employees, including--
``(A) 1 member with expertise in venture capital
investment; and
``(B) 1 member with expertise in cooperative development;
``(3) 8 members who are elected by the authorized private
investors with investments in the Fund; and
``(4) 1 member who is appointed by the Board and who is a
community banker from an insured depository institution with
total assets equal to or less than $250,000,000.
``(b) Limitation on Voting Control.--No individual investor
or group of similar investors may control more than 25
percent of the votes on the Board.''.
TITLE III--COUNTRY OF ORIGIN LABELING

SEC. 301. COUNTRY OF ORIGIN LABELING.

The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et
seq.) is amended by adding at the end the following:
``Subtitle C--Country of Origin Labeling

``SEC. 271. DEFINITIONS.

``In this subtitle:
``(1) Beef.--The term `beef' means meat produced from
cattle (including veal).
``(2) Covered commodity.--The term `covered commodity'
means--
``(A) muscle cuts of beef, lamb, and pork;
``(B) ground beef, ground lamb, and ground pork; and
``(C) a perishable agricultural commodity.
``(3) Food service establishment.--The term `food service
establishment' means a restaurant, cafeteria, lunch room,
food stand, saloon, tavern, bar, lounge, or other similar
facility operated as an enterprise engaged in the business of
selling food to the public.
``(4) Lamb.--The term `lamb' means meat, other than mutton,
produced from sheep.
``(5) Packer.--The term `packer' has the meaning given the
term in section 201 of the Packers and Stockyards Act, 1921
(7 U.S.C. 191).
``(6) Perishable agricultural commodity; retailer.--The
terms `perishable agricultural commodity' and `retailer' have
the meanings given the terms in section 1(b) of the
Perishable Agricultural Commodities Act, 1930 (7 U.S.C.
499a(b)).
``(7) Pork.--The term `pork' means meat produced from hogs.
``(8) Secretary.--The term `Secretary' means the Secretary
of Agriculture, acting through the Agricultural Marketing
Service.

``SEC. 272. NOTICE OF COUNTRY OF ORIGIN.

``(a) In General.--
``(1) Requirement.--Except as provided in subsection (b), a
retailer of a covered commodity shall inform consumers, at
the final point of sale of the covered commodity to
consumers, of the country of origin of the covered commodity.
``(2) United states country of origin.--A retailer of a
covered commodity (other than a perishable agricultural
commodity) may designate the covered commodity as having a
United States country of origin only if the covered commodity
is exclusively from an animal that is exclusively born,
raised, and slaughtered in the United States.
``(b) Exemption for Food Service Establishments.--
Subsection (a) shall not apply to a covered commodity if the
covered commodity is--
``(1) prepared or served in a food service establishment;
and
``(2)(A) offered for sale or sold at the food service
establishment in normal retail quantities; or
``(B) served to consumers at the food service
establishment.
``(c) Method of Notification.--
``(1) In general.--The information required by subsection
(a) may be provided to consumers by means of a label, stamp,
mark, placard, or other clear and visible sign on the covered
commodity or on the package, display, holding unit, or bin
containing the commodity at the final point of sale to
consumers.
``(2) Labeled commodities.--If the covered commodity is
already individually labeled for retail sale regarding
country of origin by the packer, importer, or another person,
the retailer shall not be required to provide any additional
information to comply with this section.
``(d) Audit Verification System.--The Secretary may require
by regulation that any person that prepares, stores, handles,
or distributes a covered commodity for retail sale maintain a
verifiable recordkeeping audit trail that will permit the
Secretary to ensure compliance with the regulations
promulgated under section 274.
``(e) Information.--A packer and any other person engaged
in the business of supplying a covered commodity to a
retailer shall provide information to the retailer indicating
the country of origin of the covered commodity.

``SEC. 273. ENFORCEMENT.

``Section 253 shall apply to a violation of this subtitle.

``SEC. 274. REGULATIONS.

``(a) In General.--The Secretary shall promulgate such
regulations as are necessary to carry out this subtitle.
``(b) Partnerships With States.--In promulgating the
regulations, the Secretary shall, to the maximum extent
practicable, enter into partnerships with States with
enforcement infrastructure to carry out this subtitle.

``SEC. 275. APPLICATION.

``This subtitle shall apply to the retail sale of a covered
commodity beginning on the date that is 180 days after the
date of the enactment of this subtitle.''.
TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION

SEC. 401. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

Section 132 of the Agricultural Market Transition Act (7
U.S.C. 7232) is amended to read as follows:

``SEC. 132. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

``(a) Wheat.--The loan rate for a marketing assistance loan
under section 131 for wheat shall be based on 80 percent of
the average full economic cost of production per bushel
(based on yield per planted acre), as determined by the
Secretary, for the immediately preceding 3 crops of wheat.
``(b) Feed Grains.--
``(1) Corn.--The loan rate for a marketing assistance loan
under section 131 for corn shall be based on 80 percent of
the average full economic cost of production per bushel
(based on yield per planted acre), as determined by the
Secretary, for the immediately preceding 3 crops of corn.
``(2) Other feed grains.--
``(A) In general.--Subject to subparagraph (B), the loan
rate for a marketing assistance loan under section 131 for
grain sorghum, barley, and oats, individually, shall be
established at such level as the Secretary determines is fair
and reasonable in relation to the rate that loans are made
available for corn, taking into consideration the feeding
value of the commodity in relation to corn.
``(B) Basis.--The loan rate for a marketing assistance loan
under section 131 for grain sorghum, barley, and oats,
individually, shall be based on 80 percent of the average
full economic cost of production per bushel (based on yield
per planted acre), as determined by the Secretary, for the
immediately preceding 3 crops of grain sorghum, barley, and
oats, respectively.
``(c) Upland Cotton.--The loan rate for a marketing
assistance loan under section 131 for upland cotton shall be
based on 80 percent of the average full economic cost of
production per bushel (based on yield per planted acre), as
determined by the Secretary, for the immediately preceding 3
crops of upland cotton.
``(d) Extra Long Staple Cotton.--The loan rate for a
marketing assistance loan under section 131 for extra long
staple cotton shall be based on 80 percent of the average
full economic cost of production per bushel (based on yield
per planted acre), as determined by the Secretary, for the
immediately preceding 3 crops of extra long staple cotton.
``(e) Rice.--The loan rate for a marketing assistance loan
under section 131 for rice shall be based on 80 percent of
the average full economic cost of production per bushel
(based on yield per planted acre), as determined by the
Secretary, for the immediately preceding 3 crops of rice.
``(f) Oilseeds.--
``(1) Soybeans.--The loan rate for a marketing assistance
loan under section 131 for soybeans shall be based on 80
percent of the average full economic cost of production per
bushel (based on yield per planted acre), as determined by
the Secretary, for the immediately preceding 3 crops of
soybeans.
``(2) Sunflower seed, canola, rapeseed, safflower, mustard
seed, and flaxseed.--The loan rate for a marketing assistance
loan under section 131 for sunflower seed, canola, rapeseed,
safflower, mustard seed, and flaxseed, individually, shall be
based on 80 percent of the average full economic cost of
production per bushel (based on yield per planted acre), as
determined by the Secretary, for the immediately preceding 3
crops of sunflower seed, canola, rapeseed, safflower, mustard
seed, and flaxseed, respectively.
``(3) Other oilseeds.--The loan rates for a marketing
assistance loan under section 131 for other oilseeds shall be
established at such level as the Secretary determines is fair
and reasonable in relation to the loan rate available for
soybeans, except in no event shall the rate for the oilseeds
(other than cottonseed) be less than the rate established for
soybeans on a per-pound basis for the same crop.''.

SEC. 402. TERM OF LOANS.

Section 133 of the Agriculture Market Transition Act (7
U.S.C. 7233) is amended to read as follows:

``SEC. 133. TERM OF LOANS.

``(a) Term of Loan.--In the case of each loan commodity, a
marketing assistance loan under section 131 shall have a term
of 20 months beginning on the first day of the first month
after the month in which the loan is made.
``(b) Extensions Authorized.--The Secretary may extend the
term of a marketing assistance loan for any loan
commodity.''.

[[Page S259]]

SEC. 403. APPLICATION.

This title and the amendments made by this title shall
apply to each of the 2001 and 2002 crops of a loan commodity
(as defined in section 102 of the Agricultural Market
Transition Act (7 U.S.C. 7202).
TITLE V--FARMLAND PROTECTION

SEC. 501. FARMLAND PROTECTION PROGRAM.

Section 388 of the Federal Agriculture Improvement and
Reform Act of 1996 (16 U.S.C. 3830 note; Public Law 104-127)
is amended to read as follows:

``SEC. 388. FARMLAND PROTECTION PROGRAM.

``(a) Definition of Eligible Entity.--In this section, the
term `eligible entity' means--
``(1) any agency of any State or local government, or
federally recognized Indian tribe; and
``(2) any organization that--
``(A) is organized for, and at all times since its
formation has been operated principally for, 1 or more of the
conservation purposes specified in clause (i), (ii), or (iii)
of section 170(h)(4)(A) of the Internal Revenue Code of 1986;
``(B) is an organization described in section 501(c)(3) of
the Code that is exempt from taxation under section 501(a) of
the Code; and
``(C)(i) is described in section 509(a)(2) of the Code of;
or
``(ii) is described in section 509(a)(3) of the Code and is
controlled by an organization described in section 509(a)(2)
of the Code.
``(b) Authority.--The Secretary of Agriculture shall
establish and carry out a farmland protection program under
which the Secretary shall provide grants to eligible
entities, to provide the Federal share of the cost of
purchasing conservation easements or other interests in land
with prime, unique, or other productive soil for the purpose
of protecting topsoil by limiting nonagricultural uses of the
land.
``(c) Federal Share.--The Federal share of the cost of
purchasing a conservation easement or other interest
described in subsection (b) shall be not more than 50
percent.
``(d) Title; Enforcement.--Title to a conservation easement
or other interest described in subsection (b) may be held,
and the conservation requirements of the easement or interest
enforced, by any eligible entity.
``(e) State Certification.--The attorney general of the
State in which land is located shall take such actions as are
necessary to ensure that a conservation easement or other
interest under this section is in a form that is sufficient
to achieve the conservation purpose of the farmland
protection program established under this section, the law of
the State, and the terms and conditions of any grant made by
the Secretary under this section.
``(f) Conservation Plan.--Any land for which a conservation
easement or other interest is purchased under this section
shall be subject to the requirements of a conservation plan
to the extent that the plan does not negate or adversely
affect the restrictions contained in any easement.
``(g) Technical Assistance.--The Secretary may use not more
than 10 percent of the amount that is made available for a
fiscal year under subsection (h) to provide technical
assistance to carry out this section.
``(h) Funding.--For each fiscal year, the Secretary shall
use not more than $250,000,000 of the funds of the Commodity
Credit Corporation to carry out this section.''.
TITLE VI--CIVIL RIGHTS

SEC. 601. SENSE OF CONGRESS ON PARTICIPATION OF SOCIALLY
DISADVANTAGED GROUPS IN DEPARTMENT OF
AGRICULTURE PROGRAMS.

It is the sense of Congress that the Secretary of
Agriculture should take such actions as are necessary to
ensure, to the maximum extent practicable, that members of
socially disadvantaged groups (as defined in section 355(e)
of the Consolidated Farm and Rural Development Act (7 U.S.C.
2003(e))--
(1) are informed of the eligibility requirements to
participate in programs of the Department of Agriculture; and
(2) receive technical support and assistance from the
Department to participate in the programs.

Mr. HARKIN. I am pleased to cosponsor this legislation introduced by
the Democratic leader, Senator Daschle. The bill contains a number of
important features that constitute a strong start for our work toward a
new farm bill.
In particular, I want to call attention to the provisions in this
bill that will address directly the rapid changes occurring in the
structure of our food and agriculture industry and the impact those
changes are having on America's farm and ranch families and rural
communities. This bill will give USDA new authority to deal with
economic concentration and consolidation in agriculture: to prevent
mergers and acquisitions that damage farmers and rural communities and
to prevent and take enforcement action against anti-competitive and
unfair practices in dealings by agribusinesses with farmers.
The legislation also incorporates legislation I introduced in the
previous Congress to establish new protections for agricultural
producers who are involved in contracting arrangements with
agribusiness processors and to establish new protections that will
enhance the ability of agricultural producers to form associations to
bargain effectively with processors and buyers of agricultural
products.
I am also pleased that this bill incorporates my legislation to
create a new fund that will spur new equity capital investment in rural
areas. The legislation has the support of a wide range of the key
interested parties in providing and boosting financing and business
investment in rural America. Clearly, if rural America is to grow, and
if agricultural producers are to develop new value-added businesses,
there will have to be increased levels of equity capital investment in
agricultural processing and other businesses. This bill will go a long
way in putting more investment capital into rural communities.
This bill also makes a strong start toward improving the shortcomings
of the commodity program provisions of the current farm bill. We have
all observed the critical need for emergency assistance packages to
shore up the Freedom to Farm bill over the past several years. But our
farm families and rural communities need a predictable and dependable
system of farm income protection. This bill would provide for loan
rates that are more realistic in light of current production costs in
order to improve the farm income protection. It focuses on providing
better assistance when it is needed, rather than simply making
additional fixed payments regardless of actual market conditions.
As I said, I believe the marketing assistance loan rate provisions in
this bill are a strong start. We recognize that under the current
formula, even without the existing loan rate caps, the marketing loan
rates would have declined quite substantially as market prices suffered
in recent years. That means a less effective system of farm income
protection. However, further work and discussion on loan rate formulas
and program details will be necessary as we work further on the next
farm bill. In particular, it is important that the relative loan rates
among the various commodities are in balance. Of course, that is the
main objective of these provisions: to bring other loan rates into
reasonable equivalence with the loan rates for oilseeds. But we do not
want to create any new inequality while trying to address what is now
felt to be an imbalance.
It is also important for us to contemplate the consequences of any
changes in loan rates that we may ultimately enact, including any
impacts on production levels and patterns, and impacts on the relative
benefits under the program for family-size farms in comparison with
those for much larger operations. For that reason I believe that there
must be some restriction or limitation on the quantity of production
that is eligible for higher loan rates. Otherwise, I am concerned that
we are providing only a small amount of help to family-size farms, but
far more to their larger and already better capitalized neighbors
simply because those larger farms are producing larger quantities of
loan-eligible commodities. Similarly, if the loan rate is increased for
every unit of production of a given commodity on every farm, no matter
how large, we must consider the incentives for higher production that
will be put into markets that are in surplus.
The commodity provisions are, of course, only one part of a
comprehensive approach to a new farm bill. I very strongly believe that
the next farm bill should include a new program of incentives for farm
and ranch conservation practices. In this way we will improve farm
income while also enhancing conservation of natural resources for our
children and succeeding generations. I am not proposing a substitute
for existing conservation programs, nor am I proposing to abandon
commodity and farm income protection programs. But I believe that we
can accomplish a great deal by adding to our farm policy a new
conservation incentive program.
Again, I am pleased to cosponsor this bill and look forward to
working with my colleagues to work further together on crafting a new
farm bill.

[[Page S260]]

______

By Mr. HAGEL (for himself, Ms. Landrieu, Mr. Breaux, Mr. DeWine,
Mrs. Hutchison, Mr. Nelson of Nebraska, Mr. Smith of Oregon,
and Mr. Thomas):
S. 22. A bill to amend the Federal Election Campaign Act of 1971 to
provide meaningful campaign finance reform through requiring better
reporting, decreasing the role of soft money, and increasing individual
contribution limits, and for other purposes; to the Committee on Rules
and Administration.

open and accountable campaign financing act of 2001

Mr. HAGEL. Mr. President, today, I join several of my colleagues,
including the Presiding Officer, in introducing the Open and
Accountable Campaign Financing Act of 2001, S. 22. I am pleased to be
joined by not only the Presiding Officer, my new colleague from
Nebraska, but also by Senators Landrieu, Breaux, DeWine, Hutchison,
Smith of New Hampshire, and Thomas, in introducing this legislation
today.
I also want to acknowledge the two Senators who have led the fight on
campaign finance reform over the years--John McCain and Russ Feingold.
Their commitment to this issue and leadership has elevated the debate
on this very important part of our democratic system. They deserve
recognition and they deserve credit.
Mr. President, S. 22 has three primary components, as you know.
First, it expands and codifies disclosure for candidates, political
parties and all organizations and individuals who participate in the
political process.
Second, it caps and regulates soft money donations to the National
political parties.
Third, it increases hard money contribution limits and then indexes
these limits to inflation for future years.
Our Federal campaign finance system is broken. As all of us know, in
politics, as in life, perception is an important dynamic of reality.
The American people's perception of the integrity of our political
system is directly connected to their confidence in the system.
Americans see a political system controlled by special interests and
those able to pump in millions of unaccountable dollars.
As our citizens become demoralized and detached because they feel
they are powerless, they lower their expectations and standards for
government and our officeholders. As a result, the American people are
losing confidence in our system. They are losing trust in their elected
officials. We need to fix the system.
The Senate will engage in an open, honest and wide-ranging debate on
campaign finance reform this year, as it should be.
The debate must be thoughtful, factual and deliberate. Any
legislative action will have immense consequences for our political
system and all who participate in it. S. 22 represents a strong,
bipartisan foundation from which consensus can be built and real
campaign finance reform can be established.
Our bill is imperfect. It does not address all of the issues. It does
not have all of the answers. But it is a genuine attempt to bring about
real reforms, including greater disclosure and more accountability.
Greater disclosure, I believe, is the heart of campaign finance reform.
We should not fear an educated and informed body politic. We should
encourage it.
In recent years, so-called independent groups and individuals have
played and increasingly dominant role in the political process
launching late TV blitzes, moving poll numbers in the final weeks and
days of a campaign, and then disappearing without the public ever
knowing who they were and how much they spent for or against the
candidate.
There are several provisions in S. 22 that will increase the
disclosure of campaign financing and election activity. But the most
significant is the provision affecting what information is made public
regarding political broadcast ads, especially ads referred to as issue
advocacy ads.
Issue advocacy adds generally refer to a Federal candidate and his or
her positions on issues, but since the ads do not expressly advocate
the election or defeat of a Federal candidate, they don't trigger the
reporting and disclosure requirements of the Federal Election Campaign
Act. Even though these ads don't expressly advocate for or against any
candidate, many people consider the clear intent of these ads, which is
to influence the outcome of elections.
Our legislation addresses the problems associated with the disclosure
of these issue ads by requiring disclosure of the relevant information
at the broadcast stations who broadcast these ads both on radio and TV.
Currently, broadcast stations must comply with Federal communications
regulations requiring them to place in their public file information on
ads run by Federal candidates and political parties. This includes a
record of the times the spots are scheduled to air, the overall amount
of time purchased, and at what rates, and the names of the officers of
the organization placing the ad.

However, presently, there is no requirement that any of this
information be placed in the public file for political ads run by
independent organizations or individuals. Our legislation will codify
these regulations and expand them to cover all political broadcast ads
without violating anyone's constitutional rights. Under this bill, the
American public and the media will know who is buying these ads and how
much they are spending for the ads.
Also, let me make clear one thing this provision does not do. It does
not require organizations to identify individual donors or provide
membership lists. It preserves a reasonable balance between the
public's right to know and the privacy rights of members and donors.
In addition to increased disclosure, this legislation regulates and
caps soft money donations. It limits individuals, independent
organizations, corporations, and unions, to an aggregate of $60,000 per
year in soft money contributions to the national political parties.
These donations are disclosed at the Federal Election Commission.
We already have constitutionally tested limits on hard money.
Political parties have to deal with this. These contributions are
reported from the political parties and from the candidates and their
campaigns. We should look at placing limits on soft money contributions
as well.
This legislation also adjusts the hard money, or Federal
contributions, that is are already fully disclosed to and regulated by
the Federal Election Commission.
Currently, an individual contribution limit is now set at $1,000.
That limit was originally set in 1974. Our legislation would move that
current $1,000 limit to $3,000 per candidate per election. Indexed to
inflation, today a 1974 $1,000 contribution is worth $3,000. In future
years, all individual limits would be indexed to inflation. This would
have a positive effect on the system because more campaign money would
go directly to the candidates, where there is the most disclosure and
accountability.
Any legislation to reform America's campaign finance system needs to
reverse the sharply rising trend of moneys going outside the reportable
system toward unaccountable, independent groups and individuals who do
not report, who are not required to report or disclose. That trend has
been more and more away from the candidates in the political parties.
We must also ensure that any campaign finance reform genuinely
improves the system and doesn't result in unintended consequences that
actually make it worse. The challenge in reforming our campaign finance
system to do so without infringing upon the constitutional rights of
Americans to freely express themselves under the first amendment and
the guarantees of equal protection under the law in the fifth
amendment.
Any effort, no matter how well-intentioned, that doesn't pass
constitutional muster will be an effort in futility, adding further to
the erosion of public confidence in our system. Congress has an
opportunity this year to pass a relevant and responsible campaign
finance reform bill that the President will sign.
My colleagues and I will be fully engaged in this debate this year
with the ultimate goal of making our campaign finance system more open
and accountable--the essence of any reform.
______

Mr. LOTT (for Mr. Specter):

[[Page S261]]

S. 23. A bill to promote a new urban agenda, and for other purposes;
to the Committee on Finance.

the new urban agenda act of 2001

Mr. SPECTER. Mr. President. I have sought recognition to introduce
legislation that will address the plight of our nation's cities. With
80 percent of the U.S. population living in metropolitan areas, there
is an urgent need to improve our urban economies and the quality of
life for the millions of Americans who live and work in cities. By
simply making our cities an appealing place to live, work, and visit,
urban areas can rebound to the vibrant economic centers they once were.
There is a common perception that most urban areas are abandoned and
stripped of their resources, burdened with poverty and crime. However,
cities have a wealth of resources available to not only the urban
dweller, but to cultural centers, business hubs, and some of the finest
educational and medical institutions. The real problem is that we do
not draw upon these riches or strive to better coordinate them to serve
people, especially those in need.
My proposal, the ``New Urban Agenda Act of 2001,'' is based on
legislation which I have endeavored to enact into law since the 103rd
Congress. The bill constitutes an effort to give our cities some much-
needed attention, but reflects the federal budgetary constraints which
govern our actions in Congress. This bill, based in significant part on
suggestions by Former Philadelphia Mayor Edward G. Rendell and the
League of Cities as well as current Philadelphia Mayor John Street and
Pittsburgh Mayor Tom Murphy, offers aid to the cities while containing
federal expenditures and re-instituting important cost-effective tax
breaks.
Urban areas remain integral to America's greatness as centers of
commerce, industry, education, health care, and culture. Yet urban
areas, particularly the inner cities which tend to have a
disproportionate share of our nation's poor, also have special needs
which must be recognized. We must develop ways of aiding our cities
that do not require either new taxes or more government bureaucracy.
With that in mind, I am pleased that Congress recognized included an
initiative to aid our cities in the fiscal year 2001 Omnibus
Appropriations Act. This initiative provides important incentives for
businesses to invest and locate in our nation's cities by stimulating
new private capital investments in economically distressed communities,
expanding empowerment zones, increasing the low income housing tax
credit, creating new market venture capital firms, and creating 40
Renewal Communities, which will provide additional key incentives to
spur investment. I am particularly pleased that a close variation of a
provision from my Urban Agenda bill was included as part of this
initiative, which will provide a 60 percent exclusion for capital gains
tax purposes for any gain resulting from targeted investments in small
businesses located in urban empowerment zones, enterprise communities,
or enterprise zones. A targeted capital gain will serve as a catalyst
for job creation and economic growth in our cities by encouraging
additional private investment in our urban areas. While all of these
initiatives are an important first step in assisting our cities, I
believe that there is still more that needs to be accomplished to
revitalize America's metropolitan areas.
If we are to address many of the serious social issues that we face--
unemployment, drug abuse, juvenile violence, welfare dependency, and
other pressing issues--we cannot give up on our cities. We must
continue to develop new strategies for dealing with the problems of
urban America. The days of creating ``Great Society'' federal aid
programs are clearly past, but that is no excuse for the national
government to ignore the problems of the cities.
As a Philadelphia resident, I have first-hand knowledge of the
growing problems that plague our cities. I have long supported a
variety of programs to assist our cities, such as increased funding for
Community Development Block Grants and legislation to establish
enterprise and empowerment zones. To encourage similar efforts, in
April 1994, I hosted my Senate Republican colleagues on a visit to
explore urban problems in my hometown. We talked with people who wanted
to obtain work, but had discovered few opportunities. We saw a
crumbling infrastructure and its impact on residents and businesses. We
were reminded of the devastating effect that the loss of inner city
businesses and jobs has had on our neighborhoods. What my Republican
colleagues saw in Philadelphia is the urban rule across our country,
not the exception.
There are many who do not know of city life, who are far removed from
the cities and would not be expected to have any key interest in what
goes on in the big cities of America. I cite my own boyhood experience
illustratively: Born in Wichita, Kansas, raised in Russell, a small
town of 5,000 people on the plains of Kansas, where there is not much
detailed knowledge of what goes on in Philadelphia, Pennsylvania, or
other big cities like Los Angeles, San Francisco, New York, Miami,
Pittsburgh, Dallas, Detroit or Chicago.
Those big cities are alien to many in America. But there is a growing
understanding that the problems of big cities contribute significantly
to the general problems affecting our nation as a whole and have an
economic impact, at the very least, on our small towns. For rural
America to prosper, we need to make sure that urban America prospers
and vice-versa. For example, if cities had more economic growth, taxes
could be reduced on all Americans at the federal and state level
because revenues would increase and social welfare spending would be
reduced.

There is indeed a domino effect from our cities to rural communities
throughout the country. Lately, we have witnessed this in the violent
behavior of adolescents. School violence, juvenile crime and drug abuse
are no longer endemic to urban living. Take the Bloods and the Crips
gangs from Los Angeles, California, and similar gangs; that are all
over America. They are in Lancaster, Pennsylvania; Des Moines, Iowa;
Portland, Oregon; Jackson, Mississippi, Racine, Wisconsin; and
Martinsburg, West Virginia. They are literally everywhere, big city and
small city alike. Additionally, while drug abuse among teens has
historically been viewed solely as an inner city problem, recent
statistics indicate that teen drug abuse in the suburbs is an
increasing epidemic. According to an October 10, 1999 Philadelphia
Inquirer article, in the seven county Philadelphia suburbs, the rate of
youths in treatment for heroin jumped from 77 to 84 per 100,000 people
between 1995 and 1998. In the Baltimore suburbs, 25 percent of teens
admitted to drug treatment centers used heroin compared to 17 percent
in inner city Baltimore.
In the U.S. Department of Housing and Urban Development's 2000 report
on the ``State of the Cities,'' findings show that large urban schools
still deal with a higher concentration of violence, and the data only
represents crimes which were serious enough to report to the police. An
estimated 3 million crimes each year are committed in or near the
nation's 85,000 public schools. During the 1996-97 school year alone,
one-fifth of public high schools and middle schools reported at least
one violent crime, such as murder, rape or robbery. More than half
reported less serious crimes. Homicide is now the third leading cause
of death for children age 10 to 14. For more than a decade it has been
the leading cause of death among minority youth between the ages of 15
and 24. The School District of Philadelphia's most recent report on
school violence shows that in the 1994-1995 academic year, students,
teachers and administrators were the victims of 2,147 reported criminal
incidents, up by almost 100% from the previous year. These included
assault, robbery, rape, and students being stabbed or even shot. The
school district also reported troubling news about abysmal attendance
rates. On any given day, more than one in every four students are
absent.
In an effort to seriously address the problem of youth violence,
during the summer of 1999, I convened three extensive roundtable
discussions with experts from the Department of Education, Health and
Human Services, Labor and Justice, who administer programs targeted at
children from prenatal to age seventeen. On June 7, 1999, I chaired a
discussion session on at-risk youth as part of the White House
Conference on Mental Health. As a result of these meeting, $911 million
in

[[Page S262]]

fiscal year 2000 and $1.6 billion in fiscal year 2001 have been
reallocated across government agencies to tackle the problem of youth
violence, focusing on the Safe and Drug Free Schools Program, mental
health services for children, character education, and literacy
programs. These programs pick up on the conclusion that Surgeon General
Koop made in 1982--that juvenile violence is a national health problem.
I am pleased to note that the HUD 2000 ``State of the cities'' report
found that the national poverty rate declined from 13.7% in 1996 to
12.7% in 1998. Encouragingly, the poverty rate also decreased in
central cities during this same period from 19.6% to 18.5%. However,
despite the dramatic record of job gains, one in eight cities still
faces high unemployment and significant population loss or high poverty
rates. The report further found that the overall poverty rate in the
cities remains twice that of the suburbs. In fact, there are 67 large
cities that have an unemployment rate of 50% or higher than the U.S.
rate. These facts emphasize the need for more efforts to be focused on
strengthening our inner city businesses which, in turn, will boost
local economies and serve to provide more jobs, reduce poverty and,
hopefully, reduce crime.
To facilitate economic development and job creation in the United
States, I supported the Balanced Budget Act of 1995, which contained
such provisions as the Job Training Partnership Act and the Targeted
Job Tax Credit. As Congress put the final touches on that legislation,
I circulated a joint letter with several Senators to then-Majority
Leader Dole and Speaker Gingrich which recommended several new urban
initiatives to spur job creation and economic growth in our cities such
as a targeted capital gains exclusion, commercial revitalization tax
credit, historic rehabilitation tax credit, and child care credit. In
1998, I introduced the ``Job Preparation and Retention Training Act,''
which was included in the Workforce Development act of 1998. My
legislation authorized funding for States to enroll long-term welfare
dependents into a training program to provide the necessary skills to
locate and maintain gainful and unsubsidized employment.
A number of jobs are becoming available in the high tech industry and
high tech growth is a substantial contributor to recent economic gains
in cities. According to the HUD 2000 ``State of the Cities'' report,
high tech jobs account for 27% of new employment in cities. However,
there is anew digital divide in high tech jobs between cities and
suburbs. High tech job growth in suburbs is 30% faster than that of
cities. In effort to bridge the digital divide, I was an original
cosponsor with Senator Biden of the ``Kids 2000'' legislation, which
would authorize $120 million to build computer technology centers in
Boys and Girls Clubs nationwide and allow the funds to be used to pay
for computer teachers, who are crucial to the success of this
initiative. The federal funds would be complemented by donations from
private sources. I have also been supportive of collaborative efforts
like PowerUp, founded by America Online (AOL) Chief Executive Steve
Case, which joins non-profit organizations, major corporations, and
Federal agencies to help close the digital divide. The goal of this
initiative is to help ensure that America's underserved youth acquire
the skills, experiences, and resources they need to succeed in the
digital age. Initiatives like Kids 2000 and PowerUp are steps in the
right direction to provide American children with the skills necessary
to compete in an increasingly technologically-advanced workforce. These
initiatives offer training for those segments of the American
population which currently have no opportunity to learn these
technology-based skills, and thus offer extraordinary employment and
earning possibilities.

Each day, small business owners question whether they should remain
in the city because they fear for the safety of their children, their
employees, and, ultimately, their businesses. I have personally met and
spoken with shop owners in the University City section of Philadelphia
who tell me that they look desperately for reasons to stay, but it gets
harder and harder.
I have long supported efforts to encourage the growth of small
business, as small businesses provide the bulk of the jobs in this
country. To that end, I am again introducing legislation to provide
targeted tax incentives for investing in small minority or women-owned
businesses called ``Minority and Women Capital Formation Act.'' Many
minority entrepreneurs, for instance, have told me that they are
dedicated to staying in the cities to continue to provide employment
opportunities, but continue to face difficulty in obtaining the
necessary capital. My legislation would help remove the capital access
barriers, thereby enabling these entrepreneurs to grow their businesses
and payrolls.
The economic problems our cities are facing are not easy to deal with
or answer. Municipal leaders stress many of the same concerns that
business people have voiced. Additionally, in a report by the National
League of Cities entitled ``City Fiscal Conditions in 1996,'' municipal
officials from 381 cities answered questions on the economic state of
their cities. The report found that 21.7 percent of responding cities
reduced municipal employment and 18.5 percent had frozen municipal
employment due to state budgetary problems. Nearly six out of ten
cities raised or imposed new taxes or user fees during the past twelve
months.
These numbers are of concern to me and I believe they highlight the
need for federal legislation to enhance the ability of cities to
achieve competitive economic status. An added concern is that city
managers are forced to balance cuts in services or enact higher taxes.
Neither choice is easy, and it often counteracts municipal efforts to
retain residents or businesses.
One issue in particular that is hurting many cities is the erosion of
their tax bases, evidenced particularly by middle-class flight to the
suburbs. Mr. Ronald Waiters, professor of Political Science at Howard
University, in testimony before the Senate Banking Committee, stated
that in 1950, 23 percent of American's lived outside central cities; by
1998, that number rose to 46 percent. The District of Columbia's
population loss is among the worst in the nation, with a quarter of its
population relocating to the suburbs since the 1970s. This trend of
shrinking urban populations gives no sign of ending. Middle-class
families continue to leave for the suburbs where there are typically
better public services. According to the September 2000 General
Accounting Office Report on Community Development, over 50 percent of
U.S. cities reported that an inadequate tax base for supporting schools
and services was among their top four growth related challenges. As
America's cities struggle with the exodus of residents, businesses and
industry, city, residents who remain are faced with problems ranging
from increased tax burdens and lesser services to dwindling economic
opportunities, leading to welfare dependence and unemployment
assistance.
The September 2000 General Accounting Office Report on Community
Development also found that of the 2000 cities surveyed, 83 percent
reported that revitalizing their downtown areas was their top priority.
The federal government has attempted to revitalize our ailing urban
infrastructure by providing federal funding for transit and sewer
systems, roads and bridges. As a member of the Transportation
Appropriations Subcommittee, I have been a strong supporter of public
transit, which provides critically needed transportation services in
urban areas. Transit helps cities meet clean air standards, reduce
traffic congestion, and allows disadvantaged persons access to jobs.
Federal assistance for urban areas, however, has become increasingly
scarce as we grapple with the nation's deficit and debt. Therefore, we
must find alternatives to reinvigorate out nation's cities so they can
once again become economically productive areas providing promising
opportunities for residents and neighboring areas. To address the need
for reliable transportation systems in our nation's cities and to
provide access to jobs for city residents, I introduced reverse commute
and jobs access legislation, which was successfully included in the
1998 ``TEA-21'' highway and transit reauthorization bill. The bill
authorized over five years access-to-jobs transit grants targeted at
low-income individuals. Up to $10 million per year may be used for
reverse commute projects to move individuals from cities to suburban
job centers.

[[Page S263]]

In addition to support for infrastructure, I believe there are many
other opportunities for Congress to assist the America's urban areas.
Over the past few years, I have worked with Former Mayor Ed Rendell to
develop a legislative package which contains many good ideas. I have
taken many of these suggestions and have since added and revised
provisions to take into account new developments at the federal, state
and local levels to create the ``New Urban Agenda Act of 2001.''

First, recognizing that the federal government is the nation's
largest purchaser of goods and services, my legislation would require
that no less than 15 percent of federal government purchases be made
from businesses and industries within designated urban Empowerment
Zones, Enterprise Communities and Renewal Communities. Similarly, my
bill would required that no less than 15 percent of foreign aid funds
be redeemed through purchases of products manufactured in urban
Empowerment Zones, Enterprise Communities and Renewal Communities. The
General Services Administration would be required to submit to Congress
its assessment of the extent to which federal agencies are committed to
this policy, and in general, economic revitalization in distressed
urban areas.
The second major provision of this bill would commit the federal
government to play an active role in restoring the economic health of
our cities by encouraging the location, or relocation, of all federal
facilities in urban areas. To accomplish this, all federal agencies
would be required to prepare and submit to the President an Urban
Impact Statement detailing the impact that relocation or downsizing
decisions would have on the affected city. Presidential approval would
be required to place a federal facility outside an urban area, or to
downsize a city-based agency.
The third critical component of this bill would revive and expand
federal tax incentives that were eliminated or restricted in the Tax
Relief Act of 1986. Until there is passage of legislation on the flat
tax, which would provide benefits superior to all targeted tax breaks,
I believe America's cities should have the advantages of such tax
benefits. These provisions offer meaningful incentives to businesses to
invest in our cities. I am calling for the restoration of the Historic
Rehabilitation Tax Credit which supports inner city revitalization
projects. According to the September 2000 GAO Report on Community
Development, 32 percent of cities and 22 percent of counties surveyed
strongly supported the extension of federal tax benefits to the
rehabilitation of historic residential properties. The City of
Philadelphia reports that there were 8,640 construction jobs involved
in 356 projects in Philadelphia from 1978 to 1985 stimulated by the
Historic Rehabilitation Tax Credit, which was eliminated in 1986. In
Chicago, 302 projects prior to 1985 generated $524 million in
investment and created 20,695 jobs. In St. Louis, 849 projects
generated $653 million in investment and created 27,735 jobs.
Nationally, according to National Park Service estimates for the 16
years before the 1986 Act, the Historic Rehabilitation Tax Credit
stimulated $16 billion in private investment for the rehabilitation of
24,656 buildings and the creation of 125,306 homes which included
23,377 low and moderate income housing units. The 1986 Tax Act
dramatically reduced the pool of private investment capital available
for rehabilitation projects. In Philadelphia, projects dropped from 356
to 11 by 1988 from 1985 levels. During the same period, investments
dropped 46 percent in Illinois and 92 percent in St. Louis.
Another tool is to expand the authorization of commercial industrial
development bonds. Under the Tax Reform Act of 1986, authorization for
commercial industrial bonds was permitted to expire. Consequently,
private investment in cities declined. For instance, according to the
City of Philadelphia, from 1986--the last year commercial development
bonds were permitted--to 1987, the total number of city-supported
projects in Philadelphia was reduced by more than half.
Industrial development or private activity bonds encourage private
investment by allowing, under certain circumstances, tax-exempt status
for projects where more than 10 percent of the bond proceeds are used
for private business purposes. The availability of tax-exempt
commercial industrial development bonds will encourage private
investment in cities, particularly the construction of sports,
convention and trade show facilities; parking facilities owned and
operated by the private sector; air and water pollution facilities
owned and operated by the private sector and industrial parks. My bill
would also increase the small issue exemption, which provides a way to
help finance private activity in the building of manufacturing
facilities from $10 million to $50 million to allow increased private
investment in our cities.
A minor change in the federal tax code related to arbitrage rebates
on municipal bond interest earnings could also free additional capital
for infrastructure and economic development by cities. Currently,
municipalities are required to rebate to the federal government any
arbitrage--a financial term meaning interest earned in excess of
interest paid on the debt--earned from the issuance of tax-free
municipal bonds. I understand that compliance, or the cost for
consultants to perform the complicated rebate calculations, is actually
costing municipalities more than the actual rebate owed to the
government. This bill would allow cities to keep the arbitrage earned
so that they can use it to fund city projects and for other necessary
purposes.
A fourth provision of this legislation provides needed reforms to
regulations and the financial challenges to obtaining affordable
housing. My proposal provides language to study streamlining federal
housing program assistance to urban areas into a block grant form so
that municipal agencies can better serve local residents. Safe, clean,
and affordable housing is not widely available to most low income
families. According to the National Housing Law Project, in 1996, only
one in four families was eligible to receive HUD assistance with a
waiting period up to five years. This provision of the bill steers the
Secretary of Housing and Urban Development to take a hard look at these
conditions and determine what works and what does not in federally-
subsidized housing and to consider alternatives that will provide
suitable homes for America's families.

I believe that as a nation we should work toward providing
individuals and their families with more opportunities for home
ownership which stabilizes a community and restores our cities. Urban
home ownership, including middle-income home ownership, lags behind the
suburbs. According to the Harvard University Joint Center for Housing
Studies, city residents of all income levels are less likely to own a
home than suburban residents with similar incomes. I hear time and time
again from families starting out that they move out to the suburbs for
better schools, because central cities lack the property tax base to
provide a quality education. Home ownership is key to saving our
cities, both socially and economically. A 1998 Fannie Mae national
housing survey indicated that even though home ownership rates
continued to increase in the late 1990s, six in every ten renters said
that buying a home was a very important priority, if not their number-
one priority in life. Yet for so many families financial barriers make
that dream unattainable. That is why my legislation includes two
provisions to restore the American dream of home ownership.
First, my bill would amend the National Affordable Housing Act and
the Community Development Block Act of 1974 to make municipal employees
such as policemen, firemen, maintenance workers and teachers eligible
for home ownership assistance. Municipal employees and teachers
contribute to the health, safety and vitality of the communities in
which they serve. However, escalating rent and housing prices due to
the booming technology market and rising salaries have made it
particularly difficult for teachers, police officers and city workers
to live where they work. In a growing number of metropolitan areas,
home buyers who make the median income in their region cannot afford
its median-priced housing, and therefore, must live outside the
community in which they work, resulting in longer commutes. According
to the September 2000 GAO Report, the shortage of funding for
affordable housing in urban areas has forced people to move to the
fringes of

[[Page S264]]

metropolitan areas, where housing is typically less expensive. This
provision would seek to remedy this situation by providing communities
with the tools needed to increase home ownership opportunities for
those who form the backbone of our cities and who are an integral
component of our commitment to revitalize our urban areas.
Second, my bill would provide a tax credit for income-eligible
individuals and families to purchase homes in distressed areas. In the
1999 Taxpayer Relief Act, Congress approved such a tax credit for home
buyers in the District of Columbia. While single family home sales can
be attributed to a multitude of factors, such as historically low
interest rates and a strong economy, it is important to note some
interesting statistics related to home ownership since enactment of the
tax credit in the District of Columbia. The Home Purchase Assistance
Program through the District of Columbia's Office of Housing and
Community Development helped 410 families purchase homes. Further, a
group called the ``Washington Partners for Home ownership,'' a
collaboration of realtors, banks, community and faith-based
organizations, set a goal last year to create 1,000 new homeowners in
the District of Columbia for each of the next three years. Remarkably,
the Washington Partners reached that goal before the end of the first
year. I believe that this country will reap extraordinary benefits if
we expand such a credit on a national basis, as I propose in the ``New
Urban Agenda Act of 2001.''
I believe that the revitalization of cities will require social and
economic facets, but is also imperative that our cities are safe and
clean. This last component of my bill helps urban areas to address
their unique environmental challenges and reforms Superfund law. First,
the legislation authorizes a federal brownfields program to help clean
up idle or underused industrial and commercial facilities and waives
federal liability for persons who fully comply with a state cleanup
plan to clean sites in urban and other areas pursuant to state law,
provided that the site is not listed or proposed to be listed on the
National Priorities List. The Environmental Protection Agency currently
operates this pilot program under general authority provided by the
Superfund law. My legislation would make this a permanent program and
substantially increase the funding levels to a $100 million authorized
level for Fiscal Year 2002, $105 million for Fiscal Year 2003, and $110
million for Fiscal Year 2004. The EPA could expend funds to identify
and examine potential idle or underused Brownfield sites and to provide
grants to States and local governments of up to $200,000 per site to
put them back to productive use. One such grant has been used to great
success to Pittsburgh Mayor Tom Murphy, and I hope this provision will
generate additional success stories of redeveloping urban brownfields.
The Brownfields Program allows sites with minor levels of toxic waste
to be cleaned up by State and local governments with federal and other
funding sources. Companies and individuals who are interested in
developing land into industrial, commercial, recreational,
or residential use are often reluctant to purchase property with any
level of toxic waste because of a fear of being saddled with cleanup
liability under the Superfund law. Through expanded Brownfields grants,
cleanup at such sites will be expedited and will encourage
redevelopment of otherwise unusable property.

My bill would also waive federal liability for persons who fully
comply with a state cleanup plan to clean sites in urban or other areas
pursuant to state law, providing that the site is not listed or
proposed to be listed on the National Priorities List. Many states,
including Pennsylvania, have developed their own toxic waste cleanup
programs and have done good work to clean up many of these sites.
Pennsylvania Governor Tom Ridge has developed an extensive plan, where
contaminated sites are made safe based on sound science by returning
the site to productive use through the development of uniform cleanup
standards, by creating a set of standardized review procedures, by
releasing owners and developers from liability who fully comply with
the state cleanup standards and procedures, and by providing financial
assistance. However, the efforts of states like Pennsylvania are often
stifled because the federal government has not been willing to work
with the States to release owners and developers from liability, even
when they fully comply with the state plans.
This section of my bill only applies to sites that are not on the
National Priorities List. These are sites that the state has identified
for which the state has created a comprehensive cleanup plan. If the
federal government has concerns with the cleanup procedure or the
safety of the site, then the government has full authority to place
that site on the National Priority List. The plans, like that developed
by Governor Ridge, deal with sites not controlled by the Superfund law.
By not allowing the individual states to take the initiative to clean
up these sites, and by not providing a waiver for federal liability to
those who fully comply with the procedures and standards of the state
cleanup, the federal government impedes the efforts of the states to
work to clean up their own sites. This provision takes a significant
step toward encouraging states to take the responsibility for their
toxic waste sites and to encourage the effective cleanup of these sites
in our nation's urban areas.
Mr. President, we must take a comprehensive approach to reversing
urban decay. My bill seeks to accomplish this by requiring increased
federal and foreign aid purchases operating in urban zones, a restoring
of the issuance of tax free industrial development bonds, facilitating
home ownership in urban areas, and providing regulatory relief to
redevelop brownfield sites. As one of a handful of United States
Senators who lives in a big city, I have a special understanding of
both the problems and the promise of urban America. I am committed to a
new urban agenda which relies on market forces, not a welfare state,
for urban revitalization. While the issues facing our nation's cities
are indeed difficult, working together with my colleagues I believe we
can fashion a strong plan of action to help cities face their pressing
problems.
I ask unanimous consent that my bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 23

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 ``New Urban
Agenda Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.

TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

Sec. 101. Federal purchases from businesses in empowerment zones,
enterprise communities, and renewal communities.
Sec. 102. Minimum allocation of foreign assistance for purchase of
certain United States goods.
Sec. 103. Preference for location of manufacturing outreach centers in
urban areas.
Sec. 104. Preference for construction and improvement of Federal
facilities in distressed urban areas.
Sec. 105. Definitions.

TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT

Sec. 201. Treatment of rehabilitation credit under passive activity
limitations.
Sec. 202. Rehabilitation credit allowed to offset portion of
alternative minimum tax.
Sec. 203. Commercial industrial development bonds.
Sec. 204. Increase in amount of qualified small issue bonds permitted
for facilities to be used by related principal users.
Sec. 205. Simplification of arbitrage interest rebate waiver.
Sec. 206. Qualified residential rental project bonds partially exempt
from State volume cap.
Sec. 207. Expansion of qualified wages subject to work opportunity
credit.
Sec. 208. Homebuyer credit for empowerment zones, enterprise
communities, and renewal communities.

TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

Sec. 301. Block grant study.
Sec. 302. Homeownership for municipal employees.
Sec. 303. Community development.

[[Page S265]]

TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

Sec. 401. Release from liability of persons that fulfill requirements
of State and local law.
Sec. 402. Brownfield program.

SEC. 2. FINDINGS AND PURPOSES.

(a) Findings.--The Congress finds that--
(1) cities in the United States have been facing an
economic downhill trend in the past several years; and
(2) a new approach to help such cities prosper is
necessary.
(b) Purposes.--It is the purpose of this Act to--
(1) provide various incentives for the economic growth of
cities in the United States;
(2) provide an economic agenda designed to reverse current
urban economic trends; and
(3) revitalize the jobs and tax base of such cities without
significant new Federal outlays.

TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN EMPOWERMENT
ZONES, ENTERPRISE COMMUNITIES, AND RENEWAL
COMMUNITIES.

(a) Requirements.--The Office of Federal Procurement Policy
Act (41 U.S.C. 401 et seq.) is amended by adding at the end
the following new section:

``purchases from businesses in empowerment zones, enterprise
communities, and renewal communities

``Sec. 40. (a) Minimum Purchase Requirement.--Not less than
15 percent of the total amount expended by executive agencies
for the purchase of goods in a fiscal year shall be expended
for the purchase of goods from businesses located in
empowerment zones, enterprise communities, or renewal
communities.
``(b) Recycled Products.--To the maximum extent practicable
consistent with applicable law, the head of an executive
agency shall purchase recycled products that meet the needs
of the executive agency from businesses located in
empowerment zones, enterprise communities, or renewal
communities.
``(c) Regulations.--The Federal Acquisition Regulation
shall include provisions that ensure the attainment of the
minimum purchase requirement set out in subsection (a).
``(d) Definitions.--In this section:
``(1) The term `empowerment zone' means a zone designated
as an empowerment zone pursuant to subchapter U of chapter 1
of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et
seq.).
``(2) The term `enterprise community' means a community
designated as an enterprise community pursuant to subchapter
U of chapter 1 of the Internal Revenue Code of 1986 (26
U.S.C. 1391 et seq.).
``(3) The term `renewal community' means a community
designated as a renewal community pursuant to subchapter X of
chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C.
1400E et seq.).''.
(b) GSA Assessment.--(1) Not later than December 31, 2001,
the Administrator of General Services shall submit to
Congress, in writing, the Administrator's assessment of the
extent to which executive agencies are committed, by policy
and practice, to encouraging and supporting economic renewal
in empowerment zones, enterprise communities, and renewal
communities.
(2) In this subsection, the term ``executive agency'' has
the meaning given such term in section 4(1) of the Office of
Federal Procurement Policy Act (41 U.S.C. 403(1)).
(c) Effective Date.--Section 40 of the Office of Federal
Procurement Policy Act, as added by subsection (a), shall
take effect on the date of enactment of this Act and shall
apply with respect to fiscal years beginning after September
30, 2001.
(d) Conforming Amendment.--The table of contents in section
1(b) of the Office of Federal Procurement Policy Act is
amended by adding at the end the following new item:

``Sec. 40. Purchases from businesses in empowerment zones, enterprise
communities, and renewal communities.''.

SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE FOR
PURCHASE OF CERTAIN UNITED STATES GOODS.

(a) Allocation of Assistance.--Notwithstanding any other
provision of law, effective beginning with fiscal year 2002,
not less than 15 percent of United States assistance provided
in a fiscal year shall be provided in the form of credits
which may only be used for the purchase of United States
goods produced, manufactured, or assembled in empowerment
zones, enterprise communities, or renewal communities within
the United States.
(b) United States Assistance.--As used in this section, the
term ``United States assistance'' means--
(1) any assistance under the Foreign Assistance Act of 1961
(22 U.S.C. 2151 et seq.);
(2) sales or financing of sales under the Arms Export
Control Act (22 U.S.C. 2751 et seq.); and
(3) assistance and other activities under the Support for
East European Democracy (SEED) Act of 1989 (22 U.S.C. 5401 et
seq.).

SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTURING OUTREACH
CENTERS IN URBAN AREAS.

(a) Designation.--In designating an organization as a
manufacturing outreach center under subsection (c)(11) of
section 5 of the Stevenson-Wydler Technology Innovation Act
of 1980 (15 U.S.C. 3704), the Secretary of Commerce shall, to
the maximum extent practicable, designate organizations that
are located in empowerment zones, enterprise communities, or
renewal communities.
(b) Financial Assistance.--In utilizing a competitive,
merit-based review process to determine the manufacturing
outreach centers to which to provide financial assistance
under such section, the Secretary shall give such additional
preference to centers located in empowerment zones,
enterprise communities, and renewal communities as the
Secretary determines appropriate in order to ensure the
continuing existence of such centers in such zones and
communities.

SEC. 104. PREFERENCE FOR CONSTRUCTION AND IMPROVEMENT OF
FEDERAL FACILITIES IN DISTRESSED URBAN AREAS.

(a) Definitions.--In this section:
(1) Distressed urban area.--The term ``distressed urban
area'' means a city having a population of more than 100,000
that, as determined by the Secretary of Housing and Urban
Development, meets the qualifications for making an urban
development action grant to a community experiencing severe
economic distress established for large cities and urban
counties under subpart G of part 570 of title 24, Code of
Federal Regulations (as in effect on April 1, 1998).
(2) Executive agency.--The term ``Federal agency'' means an
Executive agency (as defined in section 105 of title 5,
United States Code).
(3) Facility.--The term ``facility'' means any place where
employees of a Federal agency are regularly employed.
(b) Preference.--Notwithstanding any other provision of
law, in determining the location for the construction of a
new facility of an Executive agency, in determining to
improve an existing facility, or in determining the location
to which to relocate functions of an Executive agency, the
head of the Federal agency making the determination shall
make best efforts to construct or improve the facility or to
relocate the functions in a distressed urban area.
(c) Urban Impact Statement.--A determination to construct a
new facility of an Executive agency, to improve an existing
facility, or to relocate the functions of an Executive agency
shall not be made until the head of the Executive agency
making the determination submits to the President a report
that--
(1) in the case of a facility to be constructed--
(A) identifies at least 1 distressed urban area that would
be an appropriate location for the facility;
(B) describes the costs and benefits arising from the
construction and use of the facility in the distressed urban
area, including the effects of the construction and use on
the rate of unemployment in the distressed urban area; and
(C) describes the effect on the economy of the area of the
closure or consolidation, if any, of facilities located in
the distressed urban area during the 10-year period ending on
the date of the report, including the number of Federal and
non-Federal employment positions terminated in the distressed
urban area as a result of the closure or consolidation;
(2) in the case of a facility to be improved that is not
located in a distressed urban area--
(A) identifies at least 1 facility located in a distressed
urban area that would serve as an appropriate alternative
location for the facility;
(B) describes the costs and benefits arising from the
improvement and use of the facility located in the distressed
urban area as an alternative location for the facility to be
improved, including the effect of the improvement and use of
the facility on the rate of unemployment in the distressed
urban area; and
(C) describes the effect on the economy of the distressed
urban area of the closure or consolidation, if any, of
facilities located in the distressed urban area during the
10-year period ending on the date of the report, including
the number of Federal and non-Federal employment positions
terminated in the distressed urban area as a result of the
closure or consolidation;
(3) in the case of a facility to be improved that is
located in a distressed urban area--
(A) describes the costs and benefits arising from the
improvement and continuing use of the facility in the
distressed urban area, including the effect of the
improvement and continuing use on the rate of unemployment in
the distressed urban area; and
(B) describes the effect on the economy of the distressed
urban area of the closure or consolidation, if any, of
facilities located in the distressed urban area during the
10-year period ending on the date of the report, including
the number of Federal and non-Federal employment positions
terminated in the distressed urban area as a result of the
closure or consolidation; or
(4) in the case of a relocation of functions--
(A) identifies at least 1 distressed urban area that would
serve as an appropriate location for the carrying out of the
functions;
(B) describes the costs and benefits arising from carrying
out the functions in the distressed urban area, including the
effect of carrying out the functions on the rate of
unemployment in the distressed urban area; and
(C) describes the effect on the economy of the distressed
urban area of the closure or consolidation, if any, of
facilities located in the distressed urban area during the
10-year

[[Page S266]]

period ending on the date of the report, including the number
of Federal and non-Federal employment positions terminated in
the distressed urban area as a result of such closure or
consolidation.
(d) Applicability to Department of Defense Facilities.--The
requirements set forth in subsections (b) and (c) shall not
apply to a determination to construct or improve a facility
of the Department of Defense, or to relocate any functions of
the Department of Defense, if the President determines that
the waiver of the application of the requirements to that
facility or relocation is in the national interest.

SEC. 105. DEFINITIONS.

As used in this title:
(1) The term ``empowerment zone'' means a zone designated
as an empowerment zone pursuant to subchapter U of chapter 1
of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et
seq.).
(2) The term ``enterprise community'' means a community
designated as an enterprise community pursuant to subchapter
U of chapter 1 of the Internal Revenue Code of 1986 (26
U.S.C. 1391 et seq.).
(3) The term ``renewal community'' means a community
designated as a renewal community pursuant to subchapter X of
chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C.
1400E et seq.).

TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT

SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE
ACTIVITY LIMITATIONS.

(a) General Rule.--Paragraphs (2) and (3) of section 469(i)
of the Internal Revenue Code of 1986 (relating to $25,000
offset for rental real estate activities) are amended to read
as follows:
``(2) Dollar limitations.--
``(A) In general.--Except as otherwise provided in this
paragraph, the aggregate amount to which paragraph (1)
applies for any taxable year shall not exceed $25,000,
reduced (but not below zero) by 50 percent of the amount (if
any) by which the adjusted gross income of the taxpayer for
the taxable year exceeds $100,000.
``(B) Phaseout not applicable to low-income housing
credit.--In the case of the portion of the passive activity
credit for any taxable year which is attributable to any
credit determined under section 42--
``(i) subparagraph (A) shall not apply, and
``(ii) paragraph (1) shall not apply to the extent that the
deduction equivalent of such portion exceeds--

``(I) $25,000, reduced by
``(II) the aggregate amount of the passive activity loss
(and the deduction equivalent of any passive activity credit
which is not so attributable and is not attributable to the
rehabilitation credit determined under section 47) to which
paragraph (1) applies after the application of subparagraph
(A).

``(C) $55,500 limit for rehabilitation credits.--In the
case of the portion of the passive activity credit for any
taxable year which is attributable to the rehabilitation
credit determined under section 47--
``(i) subparagraph (A) shall not apply, and
``(ii) paragraph (1) shall not apply to the extent that the
deduction equivalent of such portion exceeds--

``(I) $55,500, reduced by
``(II) the aggregate amount of the passive activity loss
(and the deduction equivalent of any passive activity credit
which is not so attributable) to which paragraph (1) applies
for the taxable year after the application of subparagraphs
(A) and (B).

``(3) Adjusted gross income.--For purposes of paragraph
(2)(A), adjusted gross income shall be determined without
regard to--
``(A) any amount includable in gross income under section
86,
``(B) any amount excludable from gross income under section
135, 911, 931, or 933,
``(C) any amount allowable as a deduction under section
219, and
``(D) any passive activity loss.''.
(b) Conforming Amendments.--
(1) Subparagraph (B) of section 469(i)(4) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(B) Reduction for surviving spouse's exemption.--For
purposes of subparagraph (A), the $25,000 amounts under
paragraphs (2)(A) and (2)(B)(ii) and the $55,500 amount under
paragraph (2)(C)(ii) shall each be reduced by the amount of
the exemption under paragraph (1) (determined without regard
to the reduction contained in paragraph (2)(A)) which is
allowable to the surviving spouse of the decedent for the
taxable year ending with or within the taxable year of the
estate.''.
(2) Subparagraph (A) of section 469(i)(5) of such Code is
amended by striking clauses (i), (ii), and (iii) and
inserting the following new clauses:
``(i) `$12,500' for `$25,000' in subparagraphs (A) and
(B)(ii) of paragraph (2),
``(ii) `$50,000' for `$100,000' in paragraph (2)(A)'', and
``(iii) `$27,750' for `$55,500' in paragraph (2)(C)(ii).''.
(3) The subsection heading for subsection (i) of section
469 of such Code is amended by striking ``$25,000''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service on or after the
date of enactment of this Act, in taxable years ending on or
after such date.

SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF
ALTERNATIVE MINIMUM TAX.

(a) In General.--Section 38(c) of the Internal Revenue Code
of 1986 (relating to limitation based on amount of tax) is
amended by redesignating paragraph (3) as paragraph (4) and
by inserting after paragraph (2) the following new paragraph:
``(3) Rehabilitation investment credit may offset portion
of minimum tax.--
``(A) In general.--In the case of the rehabilitation
investment tax credit--
``(i) this section and section 39 shall be applied
separately with respect to such credit, and
``(ii) for purposes of applying paragraph (1) to such
credit--

``(I) the tentative minimum tax under subparagraph (A)
thereof shall be reduced by the minimum tax offset amount
determined under subparagraph (B) of this paragraph, and
``(II) the limitation under paragraph (1) (as modified by
subclause (I)) shall be reduced by the credit allowed under
subsection (a) for the taxable year (other than the
rehabilitation investment tax credit).

``(B) Minimum tax offset amount.--For purposes of
subparagraph (A)(ii)(I), the minimum tax offset amount is an
amount equal to--
``(i) in the case of a taxpayer not described in clause
(ii), the lesser of--

``(I) 25 percent of the tentative minimum tax for the
taxable year, or
``(II) $20,000, or

``(ii) in the case of a C corporation other than a closely
held C corporation (as defined in section 469(j)(1)), 5
percent of the tentative minimum tax for the taxable year.
``(C) Rehabilitation investment tax credit.--For purposes
of this paragraph, the term `regular investment tax credit'
means the portion of the credit under subsection (a) which is
attributable to the credit determined under section 47.''.
(b) Conforming Amendment.--Section 38(d) of the Internal
Revenue Code of 1986 (relating to components of investment
credit) is amended by adding at the end the following new
paragraph:
``(4) Special rule for rehabilitation credit.--
Notwithstanding paragraphs (1) and (2), the rehabilitation
investment tax credit (as defined in subsection (c)(2)(C))
shall be treated as used last.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.

SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT BONDS.

(a) Facility Bonds.--
(1) In general.--Subsection (a) of section 142 of the
Internal Revenue Code of 1986 (relating to exempt facility
bond) is amended by striking ``or'' at the end of paragraph
(11), by striking the period at the end of paragraph (12) and
inserting a comma, and by adding at the end the following new
paragraphs:
``(13) sports facilities,
``(14) convention or trade show facilities,
``(15) freestanding parking facilities,
``(16) air or water pollution control facilities, or
``(17) industrial parks.''.
(2) Industrial parks defined.--Section 142 of such Code is
amended by adding at the end the following new subsection:
``(k) Industrial Parks.--A facility shall be treated as
described in subsection (a)(17) only if all of the property
to be financed by the net proceeds of the issue--
``(1) is--
``(A) land, and
``(B) water, sewage, drainage, or similar facilities, or
transportation, power, or communication facilities incidental
to the use of such land as an industrial park, and
``(2) is not structures or buildings (other than with
respect to facilities described in paragraph (1)(B)).''.
(3) Conforming amendments.--
(A) Section 147(c) of such Code (relating to limitation on
use for land acquisition) is amended by adding at the end the
following new paragraph:
``(4) Special rule for industrial parks.--In the case of a
bond described in section 142(a)(17), paragraph (1)(A) shall
be applied by substituting `50 percent' for `25 percent'.''.
(B) Section 147(e) of such Code (relating to no portion of
bonds may be issued for skyboxes, airplanes, gambling
establishments, etc.) is amended by striking ``A private
activity bond'' and inserting ``Except in the case of a bond
described in section 142(a)(13), a private activity bond''.
(b) Small Issue Bonds.--Section 144(a)(12) of the Internal
Revenue Code of 1986 (relating to termination of qualified
small issue bonds) is amended--
(1) by striking ``any bond'' in subparagraph (A)(i) and
inserting ``any bond described in subparagraph (B)'',
(2) by striking ``a bond'' in subparagraph (A)(ii) and
inserting ``a bond described in subparagraph (B)'', and
(3) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) Bonds for farming purposes.--A bond is described in
this subparagraph if it is issued as part of an issue 95
percent or more of the net proceeds of which are to be used
to provide any land or property not in accordance with
section 147(c)(2).''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after December 31, 2000.

SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL ISSUE BONDS
PERMITTED FOR FACILITIES TO BE USED BY RELATED
PRINCIPAL USERS.

(a) In General.--Clause (i) of section 144(a)(4)(A) of the
Internal Revenue Code of

[[Page S267]]

1986 (relating to $10,000,000 limit in certain cases) is
amended by striking ``$10,000,000'' and inserting
``$50,000,000''.
(b) Clerical Amendment.--The heading of paragraph (4) of
section 144(a) of the Internal Revenue Code of 1986 is
amended by striking ``$10,000,000'' and inserting
``$50,000,000''.
(c) Effective Date.--The amendments made by this section
shall apply to--
(1) obligations issued after the date of enactment of this
Act, and
(2) capital expenditures made after such date with respect
to obligations issued on or before such date.

SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST REBATE WAIVER.

(a) In General.--Clause (ii) of section 148(f)(4)(C) of the
Internal Revenue Code of 1986 (relating to exception from
rebate for certain proceeds to be used to finance
construction expenditures) is amended to read as follows:
``(ii) Spending requirement.--The spending requirement of
this clause is met if 100 percent of the available
construction proceeds of the construction issue are spent for
the governmental purposes of the issue within the 3-year
period beginning on the date the bonds are issued.''.
(b) Conforming Amendments.--
(1) Clause (iii) of section 148(f)(4)(C) of the Internal
Revenue Code of 1986 (relating to exception for reasonable
retainage) is repealed.
(2) Subclause (II) of section 148(f)(4)(C)(vi) of such Code
(relating to available construction proceeds) is amended by
striking ``2-year period'' and inserting ``3-year period''.
(3) Subclause (I) of section 148(f)(4)(C)(vii) of such Code
(relating to election to pay penalty in lieu of rebate) is
amended by striking ``, with respect to each 6-month period
after the date the bonds were issued,'' and ``, as of the
close of such 6-month period,''.
(4) Clause (viii) of section 148(f)(4)(C) of such Code
(relating to election to terminate 1\1/2\ percent penalty) is
amended by striking ``to any 6-month period'' in the matter
preceding subclause (I).
(5) Clause (ii) of section 148(c)(2)(C) of such Code
(relating to bonds used to provide construction financing) is
amended by striking ``2 years'' and inserting ``3 years''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of enactment of
this Act.

SEC. 206. QUALIFIED RESIDENTIAL RENTAL PROJECT BONDS
PARTIALLY EXEMPT FROM STATE VOLUME CAP.

(a) In General.--Section 146(g) of the Internal Revenue
Code of 1986 (relating to exception for certain bonds) is
amended by striking ``and'' at the end of paragraph (3), by
striking the period at the end of paragraph (4) and inserting
``, and'', and by inserting after paragraph (4) the following
new paragraph:
``(5) 75 percent of any exempt facility bond issued as part
of an issue described in section 142(a)(7) (relating to
qualified residential rental projects).''.
(b) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of enactment of
this Act.

SEC. 207. EXPANSION OF QUALIFIED WAGES SUBJECT TO WORK
OPPORTUNITY CREDIT.

(a) Increase in Percentage.--Section 51(a) of the Internal
Revenue Code of 1986 (relating to determination of amount) is
amended by striking ``40 percent'' and inserting ``50
percent''.
(b) First 3 Years of Wages Subject to Credit.--Section 51
of the Internal Revenue Code of 1986 (relating to amount of
credit) is amended--
(1) in subsections (a) and (b)(3), by striking ``first-
year''; and
(2) in subsection (b)--
(A) by striking paragraphs (1) and (2) and inserting the
following new paragraph:
``(1) In general.--The term `qualified wages' means the
wages paid or incurred by the employer during the taxable
year--
``(A) with respect to an individual who is a member of a
targeted group, and
``(B) attributable to service rendered by such individual
during the 3-year period beginning with the day the
individual begins work for the employer.''; and
(B) by redesignating paragraph (3) as paragraph (2).
(b) Effective Date.--The amendments made by this section
shall apply to individuals who begin work for the employer
after the date of enactment of this Act.

SEC. 208. HOMEBUYER CREDIT FOR EMPOWERMENT ZONES, ENTERPRISE
COMMUNITIES, AND RENEWAL COMMUNITIES.

(a) In General.--Part II of subchapter U of chapter 1 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new section:

``SEC. 1395. HOMEBUYER CREDIT.

``(a) Allowance of Credit.--In the case of an individual
who purchases a principal residence in an empowerment zone or
enterprise community during any taxable year, there shall be
allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to so much of the
purchase price of the residence as does not exceed $5,000.
``(b) Limitations.--
``(1) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount allowable as a credit under
subsection (a) (determined without regard to this subsection
and subsection (d)) for the taxable year shall be reduced
(but not below zero) by the amount which bears the same ratio
to the credit so allowable as--
``(i) the excess (if any) of--

``(I) the taxpayer's modified adjusted gross income for
such taxable year, over
``(II) $70,000 ($110,000 in the case of a joint return),
bears to

``(ii) $20,000.
``(B) Modified adjusted gross income.--For purposes of
subparagraph (A), the term `modified adjusted gross income'
means the adjusted gross income of the taxpayer for the
taxable year increased by any amount excluded from gross
income under section 911, 931, or 933.
``(2) Purchase price limitation.--A credit shall not be
allowed under subsection (a) with respect to the purchase of
a residence the purchase price of which exceeds $225,000.
``(c) Principal Residence.--For purposes of this section,
the term `principal residence' has the same meaning as when
used in section 121.
``(d) Carryover of Credit.--If the credit allowable under
subsection (a) exceeds the limitation imposed by section
26(a) for such taxable year reduced by the sum of the credits
allowable under subpart A of part IV of subchapter A (other
than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable
under subsection (a) for such taxable year.
``(e) Special Rules.--For purposes of this section--
``(1) Allocation of dollar limitation.--
``(A) Married individuals filing separately.--In the case
of a married individual filing a separate return, subsection
(a) shall be applied by substituting `$2,500' for `$5,000'.
``(B) Other taxpayers.--If 2 or more individuals who are
not married purchase a principal residence, the amount of the
credit allowed under subsection (a) shall be allocated among
such individuals in such manner as the Secretary may
prescribe, except that the total amount of the credits
allowed to all such individuals shall not exceed $5,000.
``(2) Purchase.--
``(A) In general.--The term `purchase' means any
acquisition, but only if--
``(i) the property is not acquired from a person whose
relationship to the person acquiring it would result in the
disallowance of losses under section 267 or 707(b) (but, in
applying section 267 (b) and (c) for purposes of this
section, paragraph (4) of section 267(c) shall be treated as
providing that the family of an individual shall include only
his spouse, ancestors, and lineal descendants), and
``(ii) the basis of the property in the hands of the person
acquiring it is not determined--

``(I) in whole or in part by reference to the adjusted
basis of such property in the hands of the person from whom
acquired, or
``(II) under section 1014(a) (relating to property acquired
from a decedent).

``(B) Construction.--A residence which is constructed by
the taxpayer shall be treated as purchased by the taxpayer on
the date the taxpayer first occupies such residence.
``(3) Purchase price.--The term `purchase price' means the
adjusted basis of the principal residence on the date such
residence is purchased.
``(f) Reporting.--If the Secretary requires information
reporting under section 6045 by a person described in
subsection (e)(2) thereof to verify the eligibility of
taxpayers for the credit allowable by this section, the
exception provided by section 6045(e)(5) shall not apply.
``(g) Credit Treated as Nonrefundable Personal Credit.--For
purposes of this title, the credit allowed by this section
shall be treated as a credit allowable under subpart A of
part IV of subchapter A of this chapter.
``(h) Basis Adjustment.--For purposes of this subtitle, if
a credit is allowed under this section with respect to the
purchase of any residence, the basis of such residence shall
be reduced by the amount of the credit so allowed.
``(i) Application of Section.--This section shall apply to
property purchased after December 31, 2001, and before
January 1, 2005.''.
(b) Application to Renewal Communities.--Part III of
subchapter X of the Internal Revenue Code of 1986 is amended
by adding at the end the following new section:

``SEC. 1400K. HOMEBUYER CREDIT.

``For purposes of section 1395, a renewal community shall
be treated as an empowerment zone.''.
(c) Conforming Amendments.--
(1) Part II of subchapter U of chapter 1 of the Internal
Revenue Code of 1986 is amended to read as follows:

``PART II--INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE
COMMUNITIES.''.

(2) The table of parts of subchapter U of chapter 1 of such
Code is amended to read as follows:

``Part II. Incentives for empowerment zones and enterprise
communities.''.
(3) The table of sections of part II of subchapter U of
chapter 1 of such Code is amended by adding at the end the
following new item:

``Sec. 1395. Homebuyer credit.''.
(4) The table of sections of part III of subchapter X of
chapter 1 of such Code is amended by adding at the end the
following new item:

``Sec. 1400K. Homebuyer credit.''.

[[Page S268]]

TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

SEC. 301. BLOCK GRANT STUDY.

(a) Study.--
(1) In general.--The Secretary of Housing and Urban
Development shall conduct a study regarding--
(A) the feasibility of consolidating existing public and
low-income housing programs under the United States Housing
Act of 1937 into a comprehensive block grant system of
Federal aid that--
(i) provides assistance on an annual basis;
(ii) maximizes funding certainty and flexibility; and
(iii) minimizes paperwork and delay; and
(B) the possibility of administering future public and low-
income housing programs under the United States Housing Act
of 1937 in accordance with such a block grant system.
(2) Public housing/section 8 moving to work
demonstration.--In conducting the study described in
paragraph (1), the Secretary of Housing and Urban Development
shall consider data from and assessments of the demonstration
program conducted under section 204 of the Omnibus
Consolidated Rescissions and Appropriations Act of 1996
(Public Law 104-134, 110 Stat. 1321).
(b) Report to Comptroller General.--Not later than 18
months after the date of enactment of this Act, the Secretary
of Housing and Urban Development shall submit to the
Comptroller General of the United States a report that
includes--
(1) the results of the study conducted under subsection
(a); and
(2) any recommendations for legislation.
(c) Report to Congress.--Not later than 24 months after the
date of enactment of this Act, the Comptroller General of the
United States shall submit to the Congress a report that
includes--
(1) an analysis of the report submitted under subsection
(b); and
(2) any recommendations for legislation.

SEC. 302. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES.

(a) Eligible Activities.--Section 215(b)(2) of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
12745(b)(2)) is amended to read as follows:
``(2) is the principal residence of an owner who--
``(A) is a member of a family that qualifies as a low-
income family--
``(i) in the case of a contract to purchase existing
housing, at the time of purchase;
``(ii) in the case of a lease-purchase agreement for
existing housing or for housing to be constructed, at the
time the agreement is signed; or
``(iii) in the case of a contract to purchase housing to be
constructed, at the time the contract is signed; or
``(B)(i) is a uniformed employee (which shall include
policemen, firemen, and sanitation and other maintenance
workers) or a teacher who is an employee of the participating
jurisdiction (or an agency or school district serving such
jurisdiction) that is investing funds made available under
this subtitle to support homeownership of the residence; and
``(ii) is a member of a family whose income, at the time
referred to in clause (i), (ii), or (iii) of subparagraph
(A), as appropriate, and as determined by the Secretary with
adjustments for smaller and larger families, does not exceed
115 percent of the median income of the area;''.
(b) Income Targeting.--Section 214(2) of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12744(2))
is amended by inserting before the semicolon the following:
``or families described in section 215(b)(2)(B)''.
(c) Eligible Investments.--Section 212(b) of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12742(b))
is amended by adding at the end the following:
``Notwithstanding the preceding sentence, in the case of
homeownership assistance for residences of owners described
in section 215(b)(2)(B), funds made available under this
subtitle may only be invested (A) to provide amounts for
downpayments on mortgages, (B) to pay reasonable closing
costs normally associated with the purchase of a residence,
(C) to obtain pre- or post-purchase counseling relating to
the financial and other obligations of homeownership, or (D)
to subsidize mortgage interest rates.''.

SEC. 303. COMMUNITY DEVELOPMENT.

(a) Eligible Activities.--Section 105(a) of the Housing and
Community Development Act of 1974 (42 U.S.C. 5305(a)), is
amended--
(1) in paragraph (22)(C), by striking ``and'' at the end;
(2) in paragraph (23), by striking the period at the end
and inserting a semicolon;
(3) in paragraph (24), by striking ``and'' at the end;
(4) in paragraph (25), by striking the period at the end
and inserting ``; and''; and
(5) by adding at the end the following:
``(26) provision of direct assistance to facilitate and
expand homeownership among uniformed employees (including
policemen, firemen, and sanitation and other maintenance
workers) of, and teachers who are employees of, the
metropolitan city or urban county (or an agency or school
district serving such city or county) receiving grant amounts
under this title pursuant to section 106(b), or the unit of
general local government (or an agency or school district
serving such unit) receiving such grant amounts pursuant to
section 106(d), except that, notwithstanding section
102(a)(20)(B) or any other provision of this title, such
assistance may be provided on behalf of such employees whose
family incomes do not exceed 115 percent of the median income
of the area involved, as determined by the Secretary with
adjustments for smaller and larger families, and except that
such assistance shall be used only for acquiring principal
residences for such employees by--
``(A) providing amounts for downpayments on mortgages;
``(B) paying reasonable closing costs normally associated
with the purchase of a residence;
``(C) obtaining pre- or post-purchase counseling relating
to the financial and other obligations of homeownership; or
``(D) subsidizing mortgage interest rates.''.
(b) Primary Objectives.--Section 105(c) of the Housing and
Community Development Act of 1974 (42 U.S.C. 5305(c)) is
amended by adding at the end the following:
``(5) Homeownership assistance for municipal employees.--
Notwithstanding any other provision of this title, any
assisted activity described in subsection (a)(26) shall be
considered, for purposes of this title, to benefit persons of
low and moderate income and shall be directed toward the
objective under section 101(c)(3).''.

TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

SEC. 401. RELEASE FROM LIABILITY OF PERSONS THAT FULFILL
REQUIREMENTS OF STATE AND LOCAL LAW.

Section 107 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9607) is
amended by adding at the end the following:
``(o) Release From Liability of Persons That Fulfill
Requirements of State and Local Law.--
``(1) Definition of urban nonlisted facility.--In this
subsection, the term `urban nonlisted facility' means a
facility that is not listed or proposed for listing on the
National Priorities List.
``(2) Enforcement authority.--Neither the President nor any
other person may bring an administrative or judicial
enforcement action under this Act with respect to an urban
nonlisted facility against a person that has fulfilled all
requirements applicable to the person under State and local
law to conduct a response action at the urban nonlisted
facility, as evidenced by a release from liability issued by
authorized State and local officials, to the extent that the
administrative or judicial action would seek to require
response action that is within the scope of the response
action conducted in accordance with State and local law.''.

SEC. 402. BROWNFIELD PROGRAM.

Title I of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et
seq.) is amended by adding at the end the following:

``SEC. 128. BROWNFIELD PROGRAM.

``(a) Definition of Brownfield Facility.--
``(1) In general.--In this section, the term `brownfield
facility' means a parcel of land that contains an abandoned,
idled, or underused commercial or industrial facility, the
expansion or redevelopment of which is complicated by the
presence or potential presence of a hazardous substance.
``(2) Exclusions.--The term `brownfield facility' does not
include--
``(A) a facility that is the subject of a removal or
planned removal under this title;
``(B) a facility that is listed or has been proposed for
listing on the National Priorities List or that has been
removed from the National Priorities List;
``(C) a facility that is subject to corrective action under
section 3004(u) or 3008(h) of the Solid Waste Disposal Act
(42 U.S.C. 6924(u), 6928(h)) at the time at which an
application for a grant or loan concerning the facility is
submitted under this section;
``(D) a land disposal unit with respect to which--
``(i) a closure notification under subtitle C of the Solid
Waste Disposal Act (42 U.S.C. 6921 et seq.) has been
submitted; and
``(ii) closure requirements have been specified in a
closure plan or permit;
``(E) a facility with respect to which an administrative
order on consent or judicial consent decree requiring cleanup
has been entered into by the United States under--
``(i) the Toxic Substances Control Act (15 U.S.C. 2601 et
seq.);
``(ii) the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.);
``(iii) the Safe Drinking Water Act (42 U.S.C. 300f et
seq.);
``(iv) the Solid Waste Disposal Act (42 U.S.C. 6901 et
seq.); or
``(v) this Act;
``(F) a facility that is owned or operated by a department,
agency, or instrumentality of the United States; or
``(G) a portion of a facility, for which portion,
assistance for response activity has been obtained under
subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et
seq.) from the Leaking Underground Storage Tank Trust Fund
established under section 9508 of the Internal Revenue Code
of 1986.
``(b) Brownfield Program.--
``(1) In general.--There is established within the
Environmental Protection Agency a brownfield program.
``(2) Components.--Under the brownfield program, the
Administrator may--
``(A) expend funds to examine, identify as brownfield
facilities, and include in the brownfield program, idle or
underused industrial and commercial facilities; and
``(B) provide grants to State and local governments to
clean up brownfield facilities

[[Page S269]]

and return brownfield facilities to productive use.
``(c) Maintenance of Preexisting Brownfield Program.--In
carrying out subsection (b), the Administrator shall maintain
any brownfield program established by the Administrator
before the date of enactment of this section.
``(d) Maximum Grant Amount.--A grant under subsection
(b)(2)(B) shall not exceed $200,000 with respect to any
brownfield facility.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated out of the Hazardous Substance
Superfund to carry out this section--
``(1) $100,000,000 for fiscal year 2002;
``(2) $105,000,000 for fiscal year 2003; and
``(3) $110,000,000 for fiscal year 2004.''.
______

By Mr. LOTT (for Mr. Specter):
S. 24. A bill to provide improved access to health care, enhance
informed individual choice regarding health care services, lower health
care costs through the use of appropriate providers, improve the
quality of health care, improve access to long-term care, and for other
purposes; to the Committee on Finance.

health care assurance act of 2001

Mr. SPECTER. Mr. President, as the 107th Congress commences, those of
us elected to serve in the most evenly divided Senate and House in
history recognize that whatever our parties' differences may be, we
have a new opportunity to make a positive impact on the lives of the
American people. The narrow margins in both legislative bodies offer us
a chance to learn from the past, determine how best to respond to the
challenges that are before us, and forge important alliances which will
enable us to pass legislation important to this nation. I believe it is
clear that one of our first priorities must be additional incremental
reforms of our health care system.
There is no time to waste. Many of our nation's health care problems
are getting worse, not better. In its April 2000 report, the Employee
Benefit Research Institute (EBRI) analyzed the March 1999 Current
Population Survey, a document generated yearly by the U.S. Census
Bureau. EBRI's analysis tells us that in 1998, about 194.7 million
working-age Americans derived their health insurance coverage as
follows: approximately 65 percent from employer plans; 10.4 percent
from Medicare and Medicaid within a total of 14.0 percent from public
sources of coverage; and 7 percent from other private insurance. While
this survey shows us where the insured are obtaining their coverage, it
also details a troubling statistic: 43.9 million Americans, or 18
percent of Americans aged 18-64, were uninsured. While the rate of
growth of the number of uninsured is slowing, our goal of actually
reducing the number of people without access to health coverage and
services remains clear.
As I have said many times, we can fix the problems felt by uninsured
Americans without resorting to big government and without completely
overhauling our current system, one that works well for most
Americans--serving 81.6 percent of our non-elderly citizens. We must
enact reforms that improve upon our current market-based health care
system, as it is clearly the best health care system in the world.
Accordingly, today I am introducing the Health Care Assurance Act of
2001, which, if enacted, will take us further down the path of the
incremental reforms started by the Health Insurance Portability and
Accountability Act of 1996 (Kassebaum-Kennedy) and various health care
provisions enacted during the 105th and 106th Congresses. I would note
that the final version of Kassebaum-Kennedy contained many elements
which were in S. 18, the incremental health care reform bill I
introduced when the 104th Congress began on January 4, 1995.
The bill I am introducing today is distinct from my longstanding
efforts regarding managed care reform. During the 105th and 106th
Congresses, I joined a bipartisan group of Senators to introduce the
Promoting Responsible Managed Care Act of 1998 and 1999, balanced
proposals which would ensure that patients receive the benefits and
services to which they are entitled, without compromising the savings
and coordination of care that can be achieved through managed care.
The managed care debate, which aims to improve insurance coverage for
those who already have it, stands in stark contrast to the Health Care
Assurance Act of 2001. My bill is intended to provide access to
insurance coverage for those who have never even had the option to
purchase it--or who simply could not afford it--due to market
constraints.
Given the importance of enacting this type of legislation, it is
worth reviewing recent history which has taught us that bipartisanship
is crucial in accomplishing any goal. In particular, the debate over
President Clinton's Health Security Act during the 103rd Congress is
replete with lessons concerning the pitfalls that inevitably lead to
legislative failure. Several times during the 103rd Congress, I spoke
on the Senate floor to address what seemed to be the wisest course--to
pass incremental health care reforms with which we could all agree.
Unfortunately, what seemed obvious to me, based on comments and
suggestions by a majority of Senators who favored a moderate approach,
was not obvious at the time to the Senate's Democratic leadership.
This failure to understand the merits of an incremental approach was
demonstrated in April 1993, during my attempts to offer a health care
reform amendment based on the text of S. 631, an incremental reform
bill I had introduced earlier in the session. This bill incorporated
moderate, consensus principles in a reasonable reform package. First, I
attempted to offer the bill as an amendment to legislation dealing with
debt ceilings. Subsequently, I was informed that the floor
consideration of this bill would be structured in a way that precluded
my offering an amendment. Therefore, I prepared to offer my health care
bill as an amendment to the fiscal year 1993 Emergency Supplemental
Appropriations bill. To my dismay, then Majority Leader Mitchell, and
Senator Byrd, then Chairman of the Appropriations Committee, worked
together to ensure that I could not offer my amendment by keeping the
Senate in a quorum call, a parliamentary tactic used to delay and
obstruct. I was unable to obtain unanimous consent to end the quorum
call, and thus could not proceed with my amendment.
Three years later, well after the behemoth Clinton health care reform
bill was derailed, the Senate once again endured a lengthy political
battle concerning the Kassebaum-Kennedy bill, which I was pleased to
cosponsor. When enough Senators sensed the growing frustration of the
American people, we achieved a breakthrough in August 1996, and
Kassebaum-Kennedy's vital health insurance market reforms were finally
passed. There is no question that Kassebaum-Kennedy made significant
steps forward in addressing troubling issues in health care--such as
increasing the ease of portability of health insurance coverage--but I
continue to recognize that there is much more to be done. That bill's
incremental approach to health care reform is what allowed it to
generate bipartisan, consensus support in the Senate. We knew that it
did not address every single problem in the health care delivery
system, but it would make life better for millions of American men,
women, and children.
I urge my colleagues to note a most important fact: the Kassebaum-
Kennedy bill was enacted only after Democrats abandoned their hopes for
passing a nationalized, big government health care scheme, and
Republicans abandoned their position that access to health care is not
really a major problem in the United States that demands Federal
action.
Perhaps the greatest recent example of the power of bipartisanship
took place during the 105th Congress, with the passage of the Balanced
Budget Act of 1997. This historic bipartisan agreement between Congress
and the White House to balance the budget by 2002 extended the life of
the vital Medicare hospital trust fund by ten years, while expanding
needed benefits for seniors. The new law created a National Bipartisan
Commission on the Future of Medicare to address the implications of the
retirement of the Baby Boom generation, and marked the first balanced
Federal budget in thirty years. This landmark accomplishment clearly
would not have occurred without all members of Congress and the
Administration crossing party lines, compromising, and doing what was
right for the American people regardless of political affiliations.
Despite the historic nature of the Balanced Budget Act of 1997,
however,

[[Page S270]]

many providers, hospitals, home health agencies, and insurers argued
that the cuts went too deep, and that patient access and care were
being compromised. In both the 105th and 106th Congresses, I supported
bipartisan efforts to carefully relieve and infuse additional dollars
into areas which suffered too greatly from Medicare cuts, without
upsetting the delicate balance of the budget.
We must realize that if we are to continue to be successful in
meeting the nation's health care needs, the solutions to the system's
problems must come from the political center, not from the extremes.
I have advocated health care reform in one form or another throughout
my 18 years in the Senate. My strong interest in health care dates back
to my first term, when I sponsored S. 811, the Health Care for
Displaced Workers Act of 1983, and S. 2051, the Health Care Cost
Containment Act of 1983, which would have granted a limited antitrust
exemption to health insurers, permitting them to engage in certain
joint activities such as acquiring or processing information, and
collecting and distributing insurance claims for health care services
aimed at curtailing then escalating health care costs. In 1985, I
introduced the Community Based Disease Prevention and Health Promotion
Projects Act of 1985, S. 1873, directed at reducing the human tragedy
of low birth weight babies and infant mortality. Since 1983, I have
introduced and cosponsored numerous other bills concerning health care
in our country. A complete list of the 31 health care bills that I have
sponsored since 1983 is included for the Record.
During the 102nd Congress, I pressed the Senate to take action on the
health care market issue. On July 29, 1992, I offered an amendment to
legislation then pending on the Senate floor, which included a change
from 25 percent to 100 percent deductibility for health insurance
purchased by self-employed individuals, and small business insurance
market reforms to make health coverage more affordable for small
businesses. Included in this amendment were provisions from a bill
introduced by the late Senator John Chafee, legislation which I
cosponsored and which was previously proposed by Senators Bentsen and
Durenberger. When then-Majority Leader Mitchell argued that the health
care amendment I was proposing did not belong on that bill, I offered
to withdraw the amendment if he would set a date certain to take up
health care, similar to an arrangement made on product liability
legislation, which had been placed on the calendar for September 8,
1992. The Majority Leader rejected that suggestion and the Senate did
not consider comprehensive health care legislation during the balance
of the 102nd Congress. My July 29, 1992 amendment was defeated on a
procedural motion by a vote of 35 to 60, along party lines.
The substance of that amendment, however, was adopted later by the
Senate on September 23, 1992, when it was included in a Bentsen/
Durenberger amendment which I cosponsored to broader tax legislation
(H.R. 11). This amendment, which included essentially the same self-
employed tax deductibility and small group reforms I had proposed on
July 29th of that year, passed the Senate by voice vote. Unfortunately,
these provisions were later dropped from H.R. 11 in the House-Senate
conference.
On August 12, 1992, I introduced legislation entitled the Health Care
Affordability and Quality Improvement Act of 1992, S. 3176, that would
have enhanced informed individual choice regarding health care services
by providing certain information to health care recipients, would have
lowered the cost of health care through use of the most appropriate
provider, and would have improved the quality of health care.
On January 21, 1993, the first day of the 103rd Congress, I
introduced the Comprehensive Health Care Act of 1993, S. 18. This
legislation was comprised of reforms that our health care system could
have adopted immediately. These initiatives would have both improved
access and affordability of insurance coverage and would have
implemented systemic changes to lower the escalating cost of care in
this country. S. 18 is the principal basis of the legislation I
introduced in the last three Congresses as well as this one.
On March 23, 1993, I introduced the Comprehensive Access and
Affordability Health Care Act of 1993, S. 631, which was a composite of
health care legislation introduced by Senators Cohen, Kassebaum, Bond,
and McCain, and included pieces of my bill, S. 18. I introduced this
legislation in an attempt to move ahead on the consideration of health
care legislation and provide a starting point for debate. As I noted
earlier, I was precluded by Majority Leader Mitchell from obtaining
Senate consideration of my legislation as a floor amendment on several
occasions. Finally, on April 28, 1993, I offered the text of S. 631 as
an amendment to the pending Department of the Environment Act (S. 171)
in an attempt to urge the Senate to act on health care reform. My
amendment was defeated 65 to 33 on a procedural motion, but the Senate
had finally been forced to contemplate action on health care reform.
On the first day of the 104th Congress, January 4, 1995, I introduced
a slightly modified version of S. 18, the Health Care Assurance Act of
1995 (also S. 18), which contained provisions similar to those
ultimately enacted in the Kassebaum-Kennedy legislation, including
insurance market reforms, an extension of the tax deductibility of
health insurance for the self employed, and tax deductibility of long
term care insurance.
I continued these efforts in the 105th Congress, with the
introduction of Health Care Assurance Act of 1997 (S. 24), which
included market reforms similar to my previous proposals with the
addition of a new Title I, an innovative program to provide vouchers to
States to cover children who lack health insurance coverage. I also
introduced Title I of this legislation as a stand-alone bill, the
Healthy Children's Pilot Program of 1997 (S. 435) on March 13, 1997.
This proposal targeted the approximately 4.2 million children of the
working poor who lacked health insurance at that time. These are
children whose parents earn too much to be eligible for Medicaid, but
do not earn enough to afford private health care coverage for their
families. This legislation would have established a $10 billion/5 year
discretionary pilot program to cover these uninsured children by
providing grants to States. Modeled after Pennsylvania's
extraordinarily successful Caring and BlueCHIP programs, this
legislation was the first Republican-sponsored child health insurance
bill during the 105th Congress.
I was encouraged that the Balanced Budget Act of 1997, signed into
law on August 5, 1997, included a combination of the best provisions
from many of the child health insurance proposals throughout this
Congress. The new legislation allocated $24 billion over five years to
establish State Child Health Insurance Programs, funded in part by a
slight increase in the cigarette tax.
On the first day of the 106th Congress, I again introduced the Health
Care Assurance Act of 1999, also designated S. 24. This bill contained
similar insurance market reforms, as well as new provisions to augment
the new State Child Health Insurance Program, to assist individuals
with disabilities in maintaining quality health care coverage, and to
establish a National Fund for Health Research to supplement the funding
of the National Institutes of Health. All these new initiatives, as
well as the market reforms that I supported previously, work toward the
goals of covering more individuals and stemming the tide of rising
health costs.
My commitment to the issue of health care reform across all
populations has been consistently evident during my tenure in the
Senate, as I have taken to this floor and offered health care reform
bills and amendments on countless occasions. I will continue to stress
the importance of the Federal government's investment in and attention
to the system's future.
As my colleagues are aware, I can personally report on the miracles
of modern medicine. Seven and one half years ago, an MRI detected a
benign tumor (meningioma) at the outer edge of my brain. It was removed
by conventional surgery, with five days of hospitalization and five
more weeks of recuperation.
When a small regrowth was detected by a follow-up MRI in June 1996,
it was treated with high powered radiation using a remarkable device
called the

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``Gamma Knife.'' I entered the hospital on the morning of October 11,
1996, and left the same afternoon, ready to resume my regular schedule.
Like the MRI, the Gamma Knife is a recent innovation, coming into
widespread use only in the past decade.
In July 1998, I was pleased to return to the Senate after a
relatively brief period of convalescence following heart bypass
surgery. This experience again led me to marvel at our health care
system and made me more determined than ever to support Federal funding
for biomedical research and to support legislation which will
incrementally make health care available to all Americans.

My concern about health care has long pre-dated my own personal
benefits from the MRI and other diagnostic and curative procedures. As
I have previously discussed, my concern about health care began many
years ago and has been intensified by my service on the Appropriations
Subcommittee on Labor, Health and Human Services, and Education, which
I now have the honor to chair.
My own experience as a patient has given me deeper insights into the
American health care system beyond my perspective from the U.S. Senate.
I have learned: (1) our health care system, the best in the world, is
worth every cent we pay for it; (2) patients sometimes have to press
their own cases beyond doctors' standard advice; (3) greater
flexibility must be provided on testing and treatment; (4) our system
has the resources to treat the 43.9 million Americans currently
uninsured, but we must find the way to pay for it; and (5) all
Americans deserve the access to health care from which I and others
with coverage have benefitted.
I have long been convinced that our Federal budget of $1.8 trillion
could provide sufficient funding for America's needs if we establish
our real priorities. Over the past eight years, I believe we have
learned a great deal about our health care system and what the American
people are willing to accept from the Federal government. The message
we heard loudest was that Americans do not want a massive overhaul of
the health care system. Instead, our constituents want Congress to
proceed at a slower pace and to target what is not working in the
health care system while leaving in place what is working.
As I have said both publicly and privately, I had been willing to
cooperate with the Clinton Administration in solving the health care
problems facing our country. However, I found many important areas
where I differed with President Clinton's approach to solutions and I
did so because I believed that the proposals would have been
deleterious to my fellow Pennsylvanians, to the American people, and to
our health care system as a whole. Most importantly, as the President
proposed in 1993, I did not support creating a large new government
bureaucracy because I believe that savings should go to health care
services and not bureaucracies.
On this latter issue, I first became concerned about the potential
growth in bureaucracy in September 1993 after reading the President's
239-page preliminary health care reform proposal. I was surprised by
the number of new boards, agencies, and commissions, so I asked my
legislative assistant, Sharon Helfant, to make me a list of all of
them. Instead, she decided to make a chart. The initial chart depicted
77 new entities and 54 existing entities with new or additional
responsibilities.
When the President's 1,342-page Health Security Act was transmitted
to Congress on October 27, 1993, my staff reviewed it and found an
increase to 105 new agencies, boards, and commissions and 47 existing
departments, programs and agencies with new or expanded jobs. This
chart received national attention after being used by Senator Bob Dole
in his response to the President's State of the Union address on
January 24, 1994.
The response to the chart was tremendous, with more than 12,000
people from across the country contacting my office for a copy; I still
receive requests for the chart nearly eight years later. Groups and
associations, such as United We Stand America, the American Small
Business Association, the National Federation of Republican Women, and
the Christian Coalition, reprinted the chart in their publications--
amounting to hundreds of thousands more in distribution. Bob Woodward
of the Washington Post later stated that he thought the chart was the
single biggest factor contributing to the demise of the Clinton health
care plan. And, as recently as the November 1996 election, my chart was
used by Senator Dole in his presidential campaign to illustrate the
need for incremental health care reform as opposed to a big government
solution.
With the history of the health care reform debate in mind and
building on my previous efforts, I am again introducing an incremental
bill which would provide quality health care without adversely
affecting the many positive aspects of our health care system. It is
more prudent to implement targeted reforms and then act later to
improve upon what we have done. I call this trial and modification. We
must be careful not to damage the positive aspects of our health care
system upon which more than 194.7 million Americans justifiably rely.
The legislation I am introducing today has three objectives: (1) to
provide affordable health insurance for those now not covered; (2) to
reduce health care costs for all Americans; and (3) to improve coverage
for underinsured individuals, families, and children.
This bill includes provisions to expand the Medicaid program to cover
higher income individuals than currently allowed, to encourage the
formation of small group insurance purchasing arrangements, to expand
access to health insurance for children, to improve health benefits for
individuals with disabilities, to strengthen preventive health benefits
under the Medicare program, to increase access to prenatal care and
outreach for the prevention of low birth weight babies, to strengthen
patients' rights regarding medical care at the end of life, to expand
access to primary and preventive health services, to reform the COBRA
law, to enhance our investment in outcomes research, to reduce the
incidence of medical errors, and to establish a national fund for
health research as a supplement to the National Institutes of Health
budget.

Taken together, I believe the reforms proposed in the Health Care
Assurance Act of 2001 will both improve the quality of health care
delivery and will help ease the escalating costs of health care in this
country.
This new initiative, which was not contained in my previous version
of this legislation, would guarantee coverage for individuals earning
up to 133 percent of the Federal poverty level ($11,105 for a single/
$22,676 for a family of four) and would give states the option to cover
individuals earning up to 200 percent of poverty ($16,700 for a single/
$34,100 for a family of four). This population is generally deemed
undesirable by private insurers, and since these low-income individuals
are ineligible for Medicaid, they currently remain uninsured.
The provisions in this title advance the recent joint proposal by the
Health Insurance Association of America and Families USA, two groups
which have traditionally been on opposing ends of health policy
debates. Recognizing the rising number of Americans who lack health
insurance, these groups took the unprecedented step in crafting a set
of basic policy goals on which Congress may build consensus and get
something done for the uninsured. Currently, Medicaid only guarantees
coverage for pregnant women and infants who earn up to 133 percent of
the poverty level. Beyond that population, the Federal mandate varies
across age, income, and disability status; for instance, there are
different federal mandates for preschool age children than for school-
age children and for disabled individuals. Further, current law does
not allow any Federal contributions for coverage of people ages 16-18
or for adults with children. I recognize that states may certainly
choose to establish programs to cover these and other categories of
low-income people, but usually will not do so without Federal help.
Title II of the bill builds on the State Child Health Insurance
Program (SCHIP), the program established in the Balanced Budget Act of
1997, which allocated $24 billion over five years to increase health
insurance coverage for children. The SCHIP program gives

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States the option to use federally funded grants to provide vouchers to
eligible families to purchase health insurance for their children, or
to expand Medicaid coverage for those uninsured children, or a
combination of both. This title would increase the income eligibility
to families with incomes at or below 235 percent of the Federal poverty
level ($40,067 annually for a family of four). The Health Care
Financing Administration reported that nearly two million children were
enrolled in the SCHIP program during fiscal year 1999. The
Administration's goal is to enroll five million more children in the
program by the end of fiscal year 2002. This provision would allow
eligibility for approximately another 850,000 uninsured children.
Title III assists another of our Nation's most vulnerable populations
by improving the delivery of care for individuals with long-term
disabilities. This title would allow for Medicaid reimbursement for
community-based attendant care services, as an alternative to
institutionalization, for eligible individuals who require such
services based on functional need, without regard to the individual's
age or the nature of the disability. The most recent data available
tell us that 6.64 million individuals receive care for disabilities
under the Medicaid program.
This title builds on S. 1935, legislation I introduced during the
106th Congress with Senator Tom Harkin of Iowa. Such a change in
Medicaid law is desperately needed given the Supreme Court's recent
ruling in Olmstead v. L.C., 119 S. Ct. 2176 (1999): the Americans with
Disabilities Act (ADA) requires States, in some circumstances, to
provide community-based treatment to persons with mental disabilities
rather than placement in institutions. This decision and several lower
court decisions have pointed to the need for a structured Medicaid
attendant-care services benefit in order to meet obligations under the
ADA.
I am pleased to report that my fiscal year 2001 Labor, HHS, and
Education Appropriations bill provided $50 million for ``Real Choice,
Systems Change'' grants for states to fund initiatives for systems
improvements and to provide long term services and supports, including
community-based attendant care. In addition, $20 million was provided
to continue demonstration projects on Medicaid coverage of community-
based attendant care services. Title III of this bill expands and
authorizes the programs we have been funding as demonstration projects
in order to establish a permanent infrastructure for the new benefit.
The next title contains provisions to make it easier for small
businesses to buy health insurance for their workers by establishing
voluntary purchasing groups. It also obligates employers to offer, but
not pay for, at least two health insurance plans that protect
individual freedom of choice and that meet a standard minimum benefits
package. It extends COBRA benefits and coverage options to provide
portability and security of affordable coverage between jobs.

Specifically, Title IV extends the COBRA benefit option from 18
months to 24 months. COBRA refers to a measure which was enacted in
1985 as part of the Consolidated Omnibus Budget Reconciliation Act
(COBRA '85) to allow employees who leave their job, either through a
lay-off or by choice, to continue receiving their health care benefits
by paying the full cost of such coverage. By extending this option,
such unemployed persons will have enhanced coverage options,
particularly when compared to what they would be able to buy in the
individual insurance market.
In addition, options under COBRA are expanded to include plans with
lower premiums and higher deductibles of either $1,000 or $3,000. This
provision is incorporated from legislation introduced in the 103rd
Congress by Senator Phil Gramm and will provide an extra cushion of
coverage options for people in transition. According to Senator Gramm,
with these options, the typical monthly premium paid for a family of
four would drop by as much as 20 percent when switching to a $1,000
deductible and as much as 52 percent when switching to a $3,000
deductible.
This title also includes a provision which would extend to 36 months
the time period for COBRA coverage for a child who is no longer a
dependent under a parent's health insurance policy. Uninsured workers
tend to be concentrated among those under age 35, although the average
age of uninsured workers is increasing. EBRI statistics indicate that
24 percent of young adults between the ages of 18 and 24 were without
coverage in 1998. This provision would allow those who are no longer
dependents on their parents' plan to have a more secure safety net.
With respect to the uninsured and underinsured, my bill would permit
individuals and families to purchase guaranteed, comprehensive health
coverage through purchasing groups. Health insurance plans offered
through the purchasing groups would be required to meet basic,
comprehensive standards with respect to benefits.
My bill would also create health insurance purchasing groups for
individuals wishing to purchase health insurance on their own. In
today's market, such individuals often face a market where coverage
options are not affordable. Purchasing groups will allow small
businesses and individuals to buy coverage by pooling together to form
purchasing groups, and choose from insurance plans that provide
comprehensive benefits, with guaranteed enrollment, renewability, and
equal pricing through community rating, adjusted by age and family
size.
Title IV of my bill also includes an important provision to give the
self employed 100 percent deductibility of their health insurance
premiums. The Kassebaum-Kennedy bill extended the deductibility of
health insurance for the self employed to 80 percent by 2006. The
Balanced Budget Act of 1997 and the Omnibus Appropriations Act for
fiscal year 1999 both contained new phase-in scales for health
insurance deductibility for the self-employed. Currently, self-employed
persons may deduct 60 percent of their health insurance costs through
2002, to be fully deductible in 2003. My bill would speed up the phase-
in: health insurance costs would be 70 percent deductible in 2001 and
fully deductible in 2002, thereby giving the currently 3.1 million
self-employed Americans who are uninsured a better incentive to
purchase coverage.
The provisions contained in this portion of my bill are vital, as
EBRI statistics tell us that 60 percent of all uninsured workers in
1998 were either self-employed or were working in small private-sector
firms. The disparity is further demonstrated by the fact that 31
percent of workers in private-sector firms with fewer than 25 employees
were uninsured, compared with only 13 percent of workers in private-
sector firms with 1000 or more employees.
It is anticipated that the increased costs to employers electing to
cover their employees as provided under Title IV in my bill would be
offset by the administrative savings generated by development of the
small employer purchasing groups. Such savings have been estimated at
levels as high as $9 billion annually. In addition, by addressing some
of the areas within the health care system that have exacerbated costs,
significant savings can be achieved and then redirected toward direct
health care services.
Although our existing health care system suffers from serious
structural problems, common sense steps can be taken to head off the
remaining problems before they reach crisis proportions. Title V of my
bill includes initiatives which will enhance primary and preventive
care services aimed at preventing disease.
Each year about 7.6 percent of babies born in the United States are
born with a low birth weight, multiplying their risk of death and
disability. Most of the deaths which do occur are preventable. Although
the infant mortality rate in the United States fell to an all-time low
in 1989, and the rate decreased by 28 percent between 1988 and 1998,
too many babies continue to be born of low birth weight. The Executive
Director of the National Commission To Prevent Infant Mortality put it
this way: ``More babies are being born at risk and all we are doing is
saving them with expensive technology.''
It is a human tragedy for a child to be born weighing 16 ounces with
attendant problems which last a lifetime. I first saw one pound babies
in 1984 when I was astounded to learn that Pittsburgh, Pennsylvania,
had the highest infant mortality rate of African-American babies of any
city in the

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United States. I wondered how that could be true of Pittsburgh, which
has such enormous medical resources. It was an amazing thing for me to
see a one pound baby, about as big as my hand. However, I am pleased to
report that as a result of successful prevention initiatives like the
federal Healthy Start program, Pittsburgh's infant mortality has
decreased 20 percent.

The Department of Health and Human Services has estimated that
between $1.1 billion and $2.5 billion per year could be saved if the
number of low birth weight children were reduced by 82,000 births. We
know that in most instances, prenatal care is effective in preventing
low birth weight babies. Numerous studies have demonstrated that low
birth weight that does not have a genetic link is most often associated
with inadequate prenatal care or the lack of prenatal care. The short
and long-term costs of saving and caring for infants of low birth
weight is staggering. In the most recent available study on the costs
of low birth weight babies, the Office of Technology Assessment in 1988
concluded that $8 billion was expended in 1987 for the care of 262,000
low birth weight infants in excess of that which would have been spent
on an equivalent number of babies born of normal birth weight, averted
by earlier or more frequent prenatal care.
To improve pregnancy outcomes for women at risk of delivering babies
of low birth weight, my legislation would strengthen the Healthy Start
program to reduce infant mortality and the incidence of low birth
weight births, as well as to improve the health and well-being of
mothers and their families, pregnant women and infants. Funds are
awarded under this program with the goal of developing and coordinating
effective health care and social support services for women and their
babies.
I initiated action that led to the creation of the Healthy Start
program in 1991, working with the Bush Administration and Senator
Harkin. As Chairman of the Appropriations Subcommittee with
jurisdiction over the Department of Health and Human Services, I have
worked with my colleagues to ensure the continued growth of this
important program. In 1991, we allocated $25 million for the
development of 15 demonstration projects. This number grew to 22 in
1994, to 75 projects in 1998, and the Health Resources and Services
Administration expects this number to continue to increase. For both
fiscal years 2000 and 2001, we secured $90 million for this vital
program.
Title V also provides increased support to local educational agencies
to develop and strengthen comprehensive health education programs, and
to Head Start resource centers to support health education training
programs for teachers and other day care workers. Many studies indicate
that poor health and social habits are carried into adulthood and often
passed on to the next generation. To interrupt this tragic cycle, our
nation must invest in proven preventive health education programs.
Title V also expands the authorization of a variety of public health
programs, such as breast and cervical cancer prevention, childhood
immunizations, family planning, and community health centers. These
existing programs are designed to improve public health and prevent
disease through primary and secondary prevention initiatives. It is
essential that we invest more resources in these programs now if we are
to make any substantial progress in reducing the costs of acute care in
this country.
As Chairman of the Labor, HHS and Education Appropriations
Subcommittee, I have greatly encouraged the development of prevention
programs which are essential to keeping people healthy and lowering the
cost of health care in this country. In my view, no aspect of health
care policy is more important. Accordingly, my prevention efforts have
been widespread. Specifically, I joined my colleagues in efforts to
ensure that funding for the Centers for Disease Control and Prevention
(CDC) increased $2.92 billion or 290 percent since 1989, for a fiscal
year 2001 total of $3.92 billion. We have also worked to increase
funding for CDC's breast and cervical cancer early detection program to
$176 million in fiscal year 2001, almost one and a half times its 1993
total.
I have also supported programs at CDC which help children. CDC's
childhood immunization program seeks to eliminate preventable diseases
through immunization and to ensure that at least 90 percent of 2 year
olds are vaccinated. The CDC also continues to educate parents and
caregivers on the importance of immunization for children under two
years. Along with my colleagues on the Appropriations Committee, I have
helped ensure that funding for this important program totaled $532.5
million for fiscal year 2001. The CDC's lead poisoning prevention
program annually identifies about 50,000 children with elevated blood
levels and places those children under medical management. The program
prevents the amount of lead in children's blood from reaching dangerous
levels and is currently funded at $36 million.
In recent years, we have also strengthened funding for Community
Health Centers, which provide immunizations, health advice, and health
professions training. These Centers, administered by the Health
Resources and Services Administration, provide a critical primary care
safety net to rural and medically underserved communities, as well as
uninsured individuals, migrant workers, the homeless, residents of
public housing, and Medicaid recipients. For fiscal year 2001, these
Centers received over $1.2 billion.
As former Chairman of the Select Committee on Intelligence and
current Chairman of the Appropriations Subcommittee with jurisdiction
over non-defense biomedical research, I have worked to transfer CIA
imaging technology to the fight against breast cancer. Through the
Office of Women's Health within the Department of Health and Human
Services, I secured a $2 million contract in fiscal year 1996 for a
research consortium led by the University of Pennsylvania to perform
the first clinical trials testing the use of intelligence technology
for breast cancer detection. My Appropriations Subcommittee has
continued to provide funds to continue these clinical trials.

I have also been a strong supporter of funding for AIDS research,
education, and prevention programs. Funding for Ryan White AIDS
programs has increased from $757.4 million in 1996 to $1.6 billion for
fiscal year 2001. Within the fiscal year 2001 funding, $65 million was
included for pediatric AIDS programs and $589 million for the AIDS Drug
Assistance Program (ADAP). AIDS research at the NIH totaled $742.4
million in 1989, and has increased to an estimated $2.1 billion in
fiscal year 2001.
The health care community continues to recognize the importance of
prevention in improving health status and reducing health care costs.
The Balanced Budget Act of 1997 and the Consolidated Omnibus
Appropriations Act of fiscal year 2001 established new and enhanced
preventive benefits within the Medicare program, such as flu shots,
bone mass measurements, yearly mammograms, biennial pap smears and
pelvic exams, and coverage of colonoscopy for high risk patients.
However, some of these ``wellness'' benefits have cost obligations,
such as copayments or deductibles. In this bill, I have also included
provisions which refine and strengthen preventive benefits within the
Medicare program, including coverage of yearly pap smears, pelvic
exams, and screening and diagnostic mammography with no copayment or
Part B deductible; and coverage of insulin pumps for certain Type I
Diabetics.
The proposed expansions in preventive health services included in
Title V of my bill are conservatively projected to save approximately
$2.5 billion per year or $12.5 billion over five years. It is clearly
difficult to quantify today the savings that will surely be achieved
when future generations of children are truly educated in a range of
health-related subjects.
Title VI of my bill would establish a federal standard and create
uniform national forms concerning a patient's right to decline medical
treatment. Nothing in my bill mandates the use of uniform forms.
Rather, the purpose of this provision is to make it easier for
individuals to make their own choices and determination regarding their
treatment during this vulnerable and highly personal time. Studies have
also indicated that advance directives do

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not increase health care costs. Data indicate that end-of-life costs
account for 10 percent of total health expenditures and 28 percent of
total Medicare expenditures. Loose projections indicate that a 10
percent savings made in the final days of life would result in
approximately $10 billion of savings in medical costs per year, and
about $4.7 billion in savings for Medicare alone.
However, economic considerations are not and should not be the
primary reasons for using advance directives. They provide a means for
patients to exercise their autonomy over end-of-life decisions. A study
done at the Thomas Jefferson University Medical College in Philadelphia
cited research which found that about 90 percent of the American
population has expressed interest in discussing advance directives.
However, even more recent studies indicate that living wills would be
used by many more Americans if they were better understood. My bill
would provide information on an individual's rights regarding living
wills and advanced directives, and would make it easier for people to
have their wishes known and honored. In my view, no one has the right
to decide for anyone else what constitutes appropriate medical
treatment to prolong a person's life. Encouraging the use of advance
directives will ensure that patients are not needlessly and unlawfully
treated against their will. No health care provider would be permitted
to treat an adult contrary to the adult's wishes as outlined in an
advance directive. However, in no way would the use of advance
directives condone assisted suicide or any affirmative act to end human
life.
The next title addresses the unique barriers to coverage which exist
in both rural and urban medically underserved areas. Within
Pennsylvania, such barriers result from a lack of health care providers
in rural areas, and other problems associated with the lack of coverage
for indigent populations living in inner cities. Title VII of my bill
improves access to health care services for these populations by: (1)
expanding Public Health Service programs and training more primary care
providers to serve in such areas; (2) increasing the utilization of
non-physician providers, including nurse practitioners, clinical nurse
specialists and physician assistants, through increased reimbursements
under the Medicare and Medicaid programs; and (3) increasing support
for education and outreach.
I believe these provisions will also yield substantial savings. A
study of the Canadian health system utilizing nurse practitioners
projected savings of 10 to 15 percent of all medical costs. While our
system is dramatically different from that of Canada, it may not be
unreasonable to project annual savings of five percent, or $57.5
billion, from an increased number of primary care providers in our
system. Again, experience will raise or lower this projection.
Outcomes research is another area where we can achieve considerable
long term health care savings while also improving the quality of care.
According to most outcomes management experts, it is estimated that
about 25 to 30 percent of medical care is inappropriate or unnecessary.
Dr. Marcia Angell, former editor-in-chief of the New England Journal of
Medicine, also stated that 20 to 30 percent of health care procedures
are either inappropriate, ineffective or unnecessary.

I joined my colleagues in recognizing this important area of research
by supporting passage of legislation reauthorizing the Agency for
Healthcare Research and Quality (formerly the Agency for Health Care
Policy and Research. The renamed agency, dubbed ``AHRQ,'' is authorized
to expand outcomes research necessary for the development of medical
practice guidelines and for increased access to consumer information.
In order to boost funding for this vital area of research, title VIII
of my bill would establish a trust fund for medical treatment outcomes
research, capitalized by a .001 cent tax on total U.S. health insurance
premiums collected. This trust fund would be specifically authorized
for use by AHRQ to supplement its outcomes research mission. Based on
the Health Care Financing Administration's 1998 health spending review,
private health insurance premiums totaled $375 billion. As provided in
my bill, a surcharge would generate $375 million for an outcomes
research fund.
Also included in this title is my ``Medical Errors Reduction Act,''
which I introduced in the 106th Congress with Senators Harkin and
Inouye, in response to the November 29, 1999, Institute of Medicine
(IOM) report, ``To Err Is Human: Building a Safer Health System.'' The
report concluded that medical mistakes have led to numerous injuries
and deaths, affecting an estimated three to four percent of all
hospital patients. The IOM report also concluded that health care is a
decade or more behind other high-risk industries in its attention to
ensuring basic safety.
According to the IOM, at least 44,000 Americans die each year as a
result of medical errors, and the number may be as high as 98,000--
which catapults medical errors to the fifth leading cause of death
nationwide. This total outnumbers deaths from motor vehicle accidents,
breast cancer, and AIDS. Further, medical errors resulting in injury
are estimated to cost the nation between $17 billion and $29 billion,
including additional health care costs, lost income, lost household
production, and disability costs.
The IOM findings are startling and beg for national attention to
determine ways to reduce the number of medical errors. On December 13,
1999, I chaired a hearing of the Labor, HHS, Education Appropriations
Subcommittee to hear details of IOM's report findings. On January 25,
2000, I chaired a joint Labor, HHS, and Education Appropriations
Subcommittee/Veterans' Affairs Committee hearing to consider mandatory
and voluntary reporting requirements and to begin to determine ways to
reduce medical errors.
Specifically, my proposal would make grants available to states so
they can establish their own error reporting systems and would
establish 15 competitively-awarded research demonstration projects in
rural and urban areas throughout the country. These projects would
employ new and proven technologies and enhance staff training to
determine ways to reduce errors. The provision also requires the
Secretary of HHS to provide patient education programs to all
individuals covered by Federal health plans.
I am pleased to report that my Appropriations Subcommittee has
already taken some critical first steps to reduce the incidence of
deaths and injuries related to medical errors. In fiscal year 2001, $50
million has been provided to explore opportunities for a better
understanding of the systemic problems in health care, in the hope that
we can dramatically reduce the incidence of medical errors. The
research initiatives include a focus on developing guidance to assist
in States' development of data collection systems so that national
trends can be determined and analyzed. In addition, the Committee has
encouraged health care providers to explore the use of technologies and
other methods in reducing medical errors.
Nursing home care is another significant issue which must be
addressed. Spending on long term care totaled $115 billion in 1997, and
over 40 percent of that cost was borne by the Medicaid program. Despite
these large public expenditures, the elderly face significant uncovered
liability for long term care. Title IX of my bill would provide a tax
credit for premiums paid to purchase private long-term care insurance.
Other tax incentives and reforms provided in my bill to make long term
care insurance more affordable include: (1) allowing employees to
select long-term care insurance as part of a cafeteria plan and
allowing employers to deduct this expense; (2) excluding from income
tax the life insurance savings used to pay for long term care; and (3)
setting standards for long term care insurance that reduce the bias
that currently favors institutional care over community and home-based
alternatives.
The final title of my bill would create a national fund for health
research within the Department of the Treasury, to supplement the
monies appropriated for the National Institutes of Health. To
capitalize this fund, health insurance companies would be required to
contribute 1 percent of all health insurance premiums received. This
creative proposal was first developed by my distinguished colleagues,
Senators Mark Hatfield and Tom Harkin. Their idea is a sound one and
ought to be

[[Page S275]]

adopted. To this end, Senator Harkin and I introduced the National Fund
for Health Research Act on March 13, 1997 (S. 441) and August 5, 1999
(S. 1504). I look forward to continuing to work with Senator Harkin to
enact a biomedical research fund this Congress.

While precision is again impossible, my proposal could conceivably
achieve a net annual savings of between $74 billion to $86 billion. The
savings are totaled as follows: $9 billion in small employer market
reforms coupled with employer purchasing groups; $2.5 billion for
preventive health services; $17 to $29 billion for reducing costs
associated with reducing medical errors; $10 billion from advanced
directives; $57.5 billion from increasing primary care providers; and
$2.9 billion by reducing administrative costs. The costs would be
conservatively estimated to be $2.8 billion for long term care tax
credits, approximately $15 billion for community-based attendant care
services under Medicaid, and $7 billion for general Medicaid expansion.
Experience and more detailed analysis of the affected populations will
require modification of these projections, and I am prepared to work
with my colleagues to develop implementing legislation and to press for
further action in the important area of health care reform.
The provisions which I have outlined today contain my ideas for a
framework to provide affordable, high quality health care for all
Americans. I am opposed to rationing health care. I do not want
rationing for myself, for my family, or for America. In my judgment, we
should not scrap, but rather we should build upon our current health
delivery system. We do not need the overwhelming bureaucracy that
President Clinton and other Democratic leaders proposed in 1993 to
accomplish this. I believe we can provide care for the 43.9 million
Americans who are now not covered and reduce health care costs for
those who are covered within the currently growing $1.15 trillion in
health care spending. Mr. President, the time has come for concerted
action in this arena.
I urge the Congressional leadership, including the appropriate
committee chairmen, to move this legislation and other health care
bills forward promptly. I ask unanimous consent that the full text of
the bill, a summary, and a list of my health reform bills be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 24

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 ``Health
Care Assurance Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS

Sec. 101. Expanded medicaid coverage for low-income individuals.

TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM

Sec. 201. Increase in income eligibility.

TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS

Sec. 301. Coverage of community-based attendant services and supports
under the medicaid program.
Sec. 302. Grants to develop and establish real choice systems change
initiatives.
Sec. 303. State option for eligibility for individuals.
Sec. 304. Studies and reports.
Sec. 305. Task force on financing of long-term care services.

TITLE IV--HEALTH CARE INSURANCE COVERAGE

Subtitle A--General Provisions

Sec. 401. Amendments to the Employee Retirement Income Security Act of
1974.
Sec. 402. Amendments to the Public Health Service Act relating to the
group market.
Sec. 403. Amendment to the Public Health Service Act relating to the
individual market.
Sec. 404. Effective date.

Subtitle B--Tax Provisions

Sec. 411. Enforcement with respect to health insurance issuers.
Sec. 412. Enforcement with respect to small employers.
Sec. 413. Enforcement by excise tax on qualified associations.
Sec. 414. Deduction for health insurance costs of self-employed
individuals.
Sec. 415. Amendments to COBRA.

TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES

Sec. 501. Improvement of medicare preventive care services.
Sec. 502. Authorization of appropriations for healthy start program.
Sec. 503. Reauthorization of certain programs providing primary and
preventive care.
Sec. 504. Comprehensive school health education program.
Sec. 505. Comprehensive early childhood health education program.
Sec. 506. Adolescent family life and abstinence.

TITLE VI--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

Sec. 601. Patient's right to decline medical treatment.

TITLE VII--PRIMARY AND PREVENTIVE CARE PROVIDERS

Sec. 701. Increased medicare reimbursement for physician assistants,
nurse practitioners, and clinical nurse specialists.
Sec. 702. Requiring coverage of certain nonphysician providers under
the medicaid program.
Sec. 703. Medical student tutorial program grants.
Sec. 704. General medical practice grants.

TITLE VIII--SAFE AND COST-EFFECTIVE MEDICAL TREATMENT

Sec. 801. Enhancing investment in cost-effective methods of health
care.
Sec. 802. Medical Errors Reduction.

TITLE IX--TAX INCENTIVES FOR PURCHASE OF QUALIFIED LONG-TERM CARE
INSURANCE

Sec. 901. Credit for qualified long-term care premiums.
Sec. 902. Inclusion of qualified long-term care insurance in cafeteria
plans and flexible spending arrangements.
Sec. 903. Exclusion from gross income for amounts received on
cancellation of life insurance policies and used for
qualified long-term care insurance contracts.
Sec. 904. Use of gain from sale of principal residence for purchase of
qualified long-term health care insurance.

TITLE X--NATIONAL FUND FOR HEALTH RESEARCH

Sec. 1001. Establishment of Fund.

TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS

SEC. 101. EXPANDED MEDICAID COVERAGE FOR LOW-INCOME
INDIVIDUALS.

(a) Required Coverage of Individuals Up To 133 Percent of
Poverty.--Section 1902(a)(10)(A)(i) of the Social Security
Act (42 U.S.C. 1396a(a)(10)(A)(i)) is amended--
(1) by striking ``or'' at the end of subclause (VI);
(2) by inserting ``or'' after the semicolon at the end of
subclause (VII); and
(3) by adding at the end the following:

``(VIII) whose family income does not exceed 133 percent of
the income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance
with section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved;''.

(b) Optional Coverage of Individuals Up To 200 Percent of
Poverty.--Section 1902(a)(10)(A)(i)(VIII) of the Social
Security Act, as added by subsection (a)(3), is amended by
inserting ``(200 percent, at State option)'' after ``133
percent''.
(c) Effective Date.--
(1) In general.--The amendments made by this section take
effect on October 1, 2001.
(2) Extension if state law amendment required.--In the case
of a State plan under title XIX of the Social Security Act
which the Secretary of Health and Human Services determines
requires State legislation in order for the plan to meet the
additional requirements imposed by the amendments made by
this section, the State plan shall not be regarded as failing
to comply with the requirements of such title solely on the
basis of its failure to meet these additional requirements
before the first day of the first calendar quarter beginning
after the close of the first regular session of the State
legislature that begins after the date of the enactment of
this Act. For purposes of the previous sentence, in the case
of a State that has a 2-year legislative session, each year
of the session is considered to be a separate regular session
of the State legislature.

TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM

SEC. 201. INCREASE IN INCOME ELIGIBILITY.

(a) Definition of Low-Income Child.--Section 2110(c)(4) of
the Social Security Act (42 U.S.C. 42 U.S.C. 1397jj(c)(4)) is
amended by striking ``200'' and inserting ``235''.
(b) Effective Date.--The amendment made by subsection (a)
takes effect on October 1, 2001.

TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS

SEC. 301. COVERAGE OF COMMUNITY ATTENDANT SERVICES AND
SUPPORTS UNDER THE MEDICAID PROGRAM.

(a) Required Coverage for Individuals Entitled to Nursing
Facility Services or Eligible for Intermediate Care Facility
Services for the Mentally Retarded.--Section 1902(a)(10)(D)
of the Social Security Act (42 U.S.C. 1396a(a)(10)(D)) is
amended--
(1) by inserting ``(i)'' after ``(D)'';
(2) by adding ``and'' after the semicolon; and

[[Page S276]]

(3) by adding at the end the following:
``(ii) subject to section 1935, for the inclusion of
community attendant services and supports for any individual
who is eligible for medical assistance under the State plan
and with respect to whom there has been a determination that
the individual requires the level of care provided in a
nursing facility or an intermediate care facility for the
mentally retarded (whether or not coverage of such
intermediate care facility is provided under the State plan)
and who requires such community attendant services and
supports based on functional need and without regard to age
or disability;''.
(b) Medicaid Coverage of Community Attendant Services and
Supports.--
(1) In general.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended--
(A) by redesignating section 1935 as section 1936; and
(B) by inserting after section 1934 the following:
``community attendant services and supports
``Sec. 1935. (a) Definitions.--In this title:
``(1) Community attendant services and supports.--
``(A) In general.--The term `community attendant services
and supports' means attendant services and supports furnished
to an individual, as needed, to assist in accomplishing
activities of daily living, instrumental activities of daily
living, and health-related functions through hands-on
assistance, supervision, or cueing--
``(i) under a plan of services and supports that is based
on an assessment of functional need and that is agreed to by
the individual or, as appropriate, the individual's
representative;
``(ii) in a home or community setting, which may include a
school, workplace, or recreation or religious facility, but
does not include a nursing facility, an intermediate care
facility for the mentally retarded, or other congregate
facility;
``(iii) under an agency-provider model or other model (as
defined in paragraph (2)(C)); and
``(iv) the furnishing of which is selected, managed, and
dismissed by the individual, or, as appropriate, with
assistance from the individual's representative.
``(B) Included services and supports.--Such term includes--
``(i) tasks necessary to assist an individual in
accomplishing activities of daily living, instrumental
activities of daily living, and health-related functions;
``(ii) acquisition, maintenance, and enhancement of skills
necessary for the individual to accomplish activities of
daily living, instrumental activities of daily living, and
health-related functions;
``(iii) backup systems or mechanisms (such as the use of
beepers) to ensure continuity of services and supports; and
``(iv) voluntary training on how to select, manage, and
dismiss attendants.
``(C) Excluded services and supports.--Subject to
subparagraph (D), such term does not include--
``(i) provision of room and board for the individual;
``(ii) special education and related services provided
under the Individuals with Disabilities Education Act and
vocational rehabilitation services provided under the
Rehabilitation Act of 1973;
``(iii) assistive technology devices and assistive
technology services;
``(iv) durable medical equipment; or
``(v) home modifications.
``(D) Flexibility in transition to community-based home
setting.--Such term may include expenditures for transitional
costs, such as rent and utility deposits, first months's rent
and utilities, bedding, basic kitchen supplies, and other
necessities required for an individual to make the transition
from a nursing facility or intermediate care facility for the
mentally retarded to a community-based home setting where the
individual resides.
``(2) Additional definitions.--
``(A) Activities of daily living.--The term `activities of
daily living' includes eating, toileting, grooming, dressing,
bathing, and transferring.
``(B) Consumer directed.--The term `consumer directed'
means a method of providing services and supports that allow
the individual, or where appropriate, the individual's
representative, maximum control of the community attendant
services and supports, regardless of who acts as the employer
of record.
``(C) Delivery models.--
``(i) Agency-provider model.--The term `agency-provider
model' means, with respect to the provision of community
attendant services and supports for an individual, a method
of providing consumer-directed services and supports under
which entities contract for the provision of such services
and supports.
``(ii) Other models.--The term `other models' means
methods, other than an agency-provider model, for the
provision of consumer-directed services and supports. Such
models may include the provision of vouchers, direct cash
payments, or use of a fiscal agent to assist in obtaining
services.
``(D) Health-related functions.--The term `health-related
functions' means functions that can be delegated or assigned
by licensed health-care professionals under State law to be
performed by an attendant.
``(E) Instrumental activities of daily living.--The term
`instrumental activities of daily living' includes meal
planning and preparation, managing finances, shopping for
food, clothing and other essential items, performing
essential household chores, communicating by phone and other
media, and getting around and participating in the community.
``(F) Individual's representative.--The term `individual's
representative' means a parent, a family member, a guardian,
an advocate, or an authorized representative of an
individual.
``(b) Limitation on Amounts of Expenditures under This
Title.--In carrying out section 1902(a)(10)(D)(ii), a State
shall permit an individual who has a level of severity of
physical or mental impairment that entitles such individual
to medical assistance with respect to nursing facility
services or qualifies the individual for intermediate care
facility services for the mentally retarded to choose to
receive medical assistance for community attendant services
and supports (rather than medical assistance for such
institutional services and supports), in the most integrated
setting appropriate to the needs of the individual, so long
as the aggregate amount of the Federal expenditures for
community attendant services and supports for all such
individuals in a fiscal year does not exceed the total that
would have been expended for such individuals to receive such
institutional services and supports in the year.
``(c) Maintenance of Effort.--With respect to a fiscal year
quarter, no Federal funds may be paid to a State for medical
assistance provided to individuals described in section
1902(a)(10)(D)(ii) for such fiscal year quarter if the
Secretary determines that the total of the State expenditures
for programs to enable such individuals with disabilities to
receive community attendant services and supports (or
services and supports that are similar to such services and
supports) under other provisions of this title for the
preceding fiscal year quarter is less than the total of such
expenditures for the same fiscal year quarter for the
preceding fiscal year.
``(d) State Quality Assurance Program.--In order to
continue to receive Federal financial participation for
providing community attendant services and supports under
this section, a State shall, at a minimum, establish and
maintain a quality assurance program that provides for the
following:
``(1) The State shall establish requirements, as
appropriate, for agency-based and other models that include--
``(A) minimum qualifications and training requirements, as
appropriate for agency-based and other models;
``(B) financial operating standards; and
``(C) an appeals procedure for eligibility denials and a
procedure for resolving disagreements over the terms of an
individualized plan.
``(2) The State shall modify the quality assurance program,
where appropriate, to maximize consumer independence and
consumer direction in both agency-provided and other models.
``(3) The State shall provide a system that allows for the
external monitoring of the quality of services by entities
consisting of consumers and their representatives, disability
organizations, providers, family, members of the community,
and others.
``(4) The State provides ongoing monitoring of the health
and well-being of each recipient.
``(5) The State shall require that quality assurance
mechanisms appropriate for the individual should be included
in the individual's written plan.
``(6) The State shall establish a process for mandatory
reporting, investigation, and resolution of allegations of
neglect, abuse, or exploitation.
``(7) The State shall obtain meaningful consumer input,
including consumer surveys, that measure the extent to which
a participant receives the services and supports described in
the individual's plan and the participant's satisfaction with
such services and supports.
``(8) The State shall make available to the public the
findings of the quality assurance program.
``(9) The State shall establish an on-going public process
for the development, implementation, and review of the
State's quality assurance program.
``(10) The State shall develop and implement a program of
sanctions.
``(e) Federal Role in Quality Assurance.--The Secretary
shall conduct a periodic sample review of outcomes for
individuals based upon the individual's plan of support and
based upon the quality assurance program of the State. The
Secretary may conduct targeted reviews upon receipt of
allegations of neglect, abuse, or exploitation. The Secretary
shall develop guidelines for States to use in developing
sanctions.
``(f) Requirement To Expand Eligibility.--Effective October
1, 2002, a State may not exercise the option of coverage of
individuals under section 1902(a)(10)(A)(ii)(V) without
providing coverage under section 1902(a)(10)(A)(ii)(VI).
``(g) Report on Impact of Section.--The Secretary shall
submit to Congress periodic reports on the impact of this
section on beneficiaries, States, and the Federal
Government.''.
(c) Inclusion in Optional Eligibility Classification.--
Section 1902(a)(10)(A)(ii)(VI) of the Social Security Act (42
U.S.C. 1396a(a)(10)(A)(ii)(VI)) is amended by inserting ``or
community attendant services and supports described in

[[Page S277]]

section 1935'' after ``section 1915'' each place such term
appears.
(d) Coverage as Medical Assistance.--
(1) In general.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d) is amended--
(A) by striking ``and'' at the end of paragraph (26);
(B) by redesignating paragraph (27) as paragraph (28); and
(C) by inserting after paragraph (26) the following:
``(27) community attendant services and supports (to the
extent allowed and as defined in section 1935); and''.
(2) Conforming amendment.--Section 1902(a)(10)(C)(iv) of
the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is
amended by inserting ``and (27)'' after ``(24)''.
(e) Effective Date.--The amendments made by this section
take effect on October 1, 2001, and apply to medical
assistance provided under title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.) on or after that date.

SEC. 302. GRANTS TO DEVELOP AND ESTABLISH REAL CHOICE SYSTEMS
CHANGE INITIATIVES.

(a) Establishment.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
award grants described in subsection (b) to States for a
fiscal year to support real choice systems change initiatives
that establish specific action steps and specific timetables
to provide consumer-responsive long term services and
supports to eligible individuals in the most integrated
setting appropriate based on the unique strengths and needs
of the individual and the priorities and concerns of the
individual (or, as appropriate, the individual's
representative).
(2) Eligibility.--To be eligible for a grant under this
section, a State shall--
(A) establish the Consumer Task Force in accordance with
subsection (d); and
(B) submit an application at such time, in such manner, and
containing such information as the Secretary may determine.
The application shall be jointly developed and signed by the
designated State official and the chairperson of such Task
Force, acting on behalf of and at the direction of the Task
Force.
(3) Definition of state.--In this section, the term
``State'' means each of the 50 States, the District of
Columbia, Puerto Rico, Guam, the United States Virgin
Islands, American Samoa, and the Commonwealth of the Northern
Mariana Islands.
(b) Grants for Real Choice Systems Change Initiatives.--
(1) In general.--From funds appropriated under subsection
(g), the Secretary shall award grants to States for a fiscal
year to--
(A) support the establishment, implementation, and
operation of the State real choice systems change initiatives
described in subsection (a); and
(B) conduct outreach campaigns regarding the existence of
such initiatives.
(2) Determination of awards; state allotments.--The
Secretary shall develop a formula for the distribution of
funds to States for each fiscal year under subsection (a).
Such formula shall give preference to States that have a
relatively higher proportion of long-term services and
supports furnished to individuals in an institutional setting
but who have a plan described in an application submitted
under subsection (a)(2).
(c) Authorized Activities.--A State that receives a grant
under this section shall use the funds made available through
the grant to accomplish the purposes described in subsection
(a) and, in accomplishing such purposes, may carry out any of
the following systems change activities:
(1) Needs assessment and data gathering.--The State may use
funds to conduct a statewide needs assessment that may be
based on data in existence on the date on which the
assessment is initiated and may include information about the
number of individuals within the State who are receiving
long-term services and supports in unnecessarily segregated
settings, the nature and extent to which current programs
respond to the preferences of individuals with disabilities
to receive services in home and community-based settings as
well as in institutional settings, and the expected change in
demand for services provided in home and community settings
as well as institutional settings.
(2) Institutional bias.--The State may use funds to
identify, develop, and implement strategies for modifying
policies, practices, and procedures that unnecessarily bias
the provision of long-term services and supports toward
institutional settings and away from home and community-based
settings, including policies, practices, and procedures
governing statewideness, comparability in amount, duration,
and scope of services, financial eligibility, individualized
functional assessments and screenings (including individual
and family involvement), and knowledge about service options.
(3) Over medicalization of services.--The State may use
funds to identify, develop, and implement strategies for
modifying policies, practices, and procedures that
unnecessarily bias the provision of long-term services and
supports by health care professionals to the extent that
quality services and supports can be provided by other
qualified individuals, including policies, practices, and
procedures governing service authorization, case management,
and service coordination, service delivery options, quality
controls, and supervision and training.
(4) Interagency coordination; single point of entry.--The
State may support activities to identify and coordinate
Federal and State policies, resources, and services, relating
to the provision of long-term services and supports,
including the convening of interagency work groups and the
entering into of interagency agreements that provide for a
single point of entry and the design and implementation of a
coordinated screening and assessment system for all persons
eligible for long-term services and supports.
(5) Training and technical assistance.--The State may carry
out directly, or may provide support to a public or private
entity to carry out training and technical assistance
activities that are provided for individuals with
disabilities, and, as appropriate, their representatives,
attendants, and other personnel (including professionals,
paraprofessionals, volunteers, and other members of the
community).
(6) Public awareness.--The State may support a public
awareness program that is designed to provide information
relating to the availability of choices available to
individuals with disabilities for receiving long-term
services and support in the most integrated setting
appropriate.
(7) Downsizing of large institutions.--The State may use
funds to support the per capita increased fixed costs in
institutional settings directly related to the movement of
individuals with disabilities out of specific facilities and
into community-based settings.
(8) Transitional costs.--The State may use funds to provide
transitional costs described in section 1935(a)(1)(D) of the
Social Security Act, as added by section 301(b) of this Act.
(9) Task force.--The State may use funds to support the
operation of the Consumer Task Force established under
subsection (d).
(10) Demonstrations of new approaches.--The State may use
funds to conduct, on a time-limited basis, the demonstration
of new approaches to accomplishing the purposes described in
subsection (a).
(11) Other activities.--The State may use funds for any
systems change activities that are not described in any of
the preceding paragraphs of this subsection and that are
necessary for developing, implementing, or evaluating the
comprehensive statewide system of long term services and
supports.
(d) Consumer Task Force.--
(1) Establishment and duties.--To be eligible to receive a
grant under this section, each State shall establish a
Consumer Task Force (referred to in this section as the
``Task Force'') to assist the State in the development,
implementation, and evaluation of real choice systems change
initiatives.
(2) Appointment.--Members of the Task Force shall be
appointed by the Chief Executive Officer of the State in
accordance with the requirements of paragraph (3), after the
solicitation of recommendations from representatives of
organizations representing a broad range of individuals with
disabilities and organizations interested in individuals with
disabilities.
(3) Composition.--
(A) In general.--The Task Force shall represent a broad
range of individuals with disabilities from diverse
backgrounds and shall include representatives from
Developmental Disabilities Councils, State Independent Living
Councils, Commissions on Aging, organizations that provide
services to individuals with disabilities and consumers of
long-term services and supports.
(B) Individuals with disabilities.--A majority of the
members of the Task Force shall be individuals with
disabilities or the representatives of such individuals.
(C) Limitation.--The Task Force shall not include employees
of any State agency providing services to individuals with
disabilities other than employees of agencies described in
the Developmental Disabilities Assistance and Bill of Rights
Act (42 U.S.C. 6000 et seq.).
(e) Availability of Funds.--
(1) Funds allotted to states.--Funds allotted to a State
under a grant made under this section for a fiscal year shall
remain available until expended.
(2) Funds not allotted to states.--Funds not allotted to
States in the fiscal year for which they are appropriated
shall remain available in succeeding fiscal years for
allotment by the Secretary using the allotment formula
established by the Secretary under subsection (b)(2).
(f) Annual Report.--A State that receives a grant under
this section shall submit an annual report to the Secretary
on the use of funds provided under the grant. Each report
shall include the percentage increase in the number of
eligible individuals in the State who receive long-term
services and supports in the most integrated setting
appropriate, including through community attendant services
and supports and other community-based settings.
(g) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is authorized to be
appropriated and there is appropriated to make grants under
this section for--
(1) fiscal year 2002, $25,000,000; and
(2) for fiscal year 2003 and each fiscal year thereafter,
such sums as may be necessary to carry out this section.

SEC. 303. STATE OPTION FOR ELIGIBILITY FOR INDIVIDUALS.

(a) In General.--Section 1903(f) of the Social Security Act
(42 U.S.C. 1396b(f)) is amended--

[[Page S278]]

(1) in paragraph (4)(C), by inserting ``subject to
paragraph (5),'' after ``does not exceed'', and
(2) by adding at the end the following:
``(5)(A) A State may waive the income, resources, and
deeming limitations described in paragraph (4)(C) in such
cases as the State finds the potential for employment
opportunities would be enhanced through the provision of
medical assistance for community attendant services and
supports in accordance with section 1935.
``(B) In the case of an individual who is eligible for
medical assistance described in subparagraph (A) only as a
result of the application of such subparagraph, the State
may, notwithstanding section 1916(b), impose a premium based
on a sliding scale related to income.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to medical assistance provided for community
attendant services and supports described in section 1935 of
the Social Security Act, as added by section 301(b) of this
Act, furnished on or after October 1, 2001.

SEC. 304. STUDIES AND REPORTS.

(a) Review of, and Report on, Regulations.--The National
Council on Disability established under title IV of the
Rehabilitation Act of 1973 (29 U.S.C. 780 et seq.) shall
review regulations in existence under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) on the date of
enactment of this Act insofar as such regulations regulate
the provision of home health services, personal care
services, and other services in home and community-based
settings and, not later than 1 year after such date, submit a
report to Congress on the results of such study, together
with any recommendations for legislation that the Council
determines to be appropriate as a result of the study.
(b) Report on Reduced Title XIX Expenditures.--Not later
than 1 year after the date of enactment of this Act, the
Secretary of Health and Human Services shall submit to
Congress a report on how expenditures under the medicaid
program under title XIX of the Social Security Act (42 U.S.C.
1396 et seq.) can be reduced by the furnishing of community
attendant services and supports in accordance with section
1935 of the Social Security Act (as added by section 301(b)
of this Act).

SEC. 305. TASK FORCE ON FINANCING OF LONG-TERM CARE SERVICES.

The Secretary of Health and Human Services shall establish
a task force to examine appropriate methods for financing
long-term services and supports. The task force shall include
significant representation of individuals (and
representatives of individuals) who receive such services and
supports.

TITLE IV--HEALTH CARE INSURANCE COVERAGE

Subtitle A--General Provisions

SEC. 401. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.

(a) In General.--Part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1181 et seq.) is amended--
(1) by redesignating subpart C as subpart D; and
(2) by inserting after subpart B, the following:

``Subpart C--General Insurance Coverage Reforms

``CHAPTER 1--INCREASED AVAILABILITY AND CONTINUITY OF HEALTH COVERAGE

``SEC. 721. DEFINITION.

``As used in this subpart, the term `qualified group health
plan' means a group health plan, and a health insurance
issuer offering group health insurance coverage, that is
designed to provide standard coverage (consistent with
section 721A(b)).

``SEC. 721A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.

``(a) Set of Rules of Actuarial Equivalence.--
``(1) Initial determination.--The NAIC is requested to
submit to the Secretary, within 6 months after the date of
the enactment of this subpart, a set of rules which the NAIC
determines is sufficient for determining, in the case of any
group health plan, or a health insurance issuer offering
group health insurance coverage, and for purposes of this
section, the actuarial value of the coverage offered by the
plan or coverage.
``(2) Certification.--If the Secretary determines that the
NAIC has submitted a set of rules that comply with the
requirements of paragraph (1), the Secretary shall certify
such set of rules for use under this subpart. If the
Secretary determines that such a set of rules has not been
submitted or does not comply with such requirements, the
Secretary shall promptly establish a set of rules that meets
such requirements.
``(b) Standard Coverage.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
shall be considered to provide standard coverage consistent
with this subsection if the benefits are determined, in
accordance with the set of actuarial equivalence rules
certified under subsection (a), to have a value that is
within 5 percentage points of the target actuarial value for
standard coverage established under paragraph (2).
``(2) Initial determination of target actuarial value for
standard coverage.--
``(A) Initial determination.--
``(i) In general.--The NAIC is requested to submit to the
Secretary, within 6 months after the date of the enactment of
this subpart, a target actuarial value for standard coverage
equal to the average actuarial value of the coverage
described in clause (ii). No specific procedure or treatment,
or classes thereof, is required to be considered in such
determination by this subpart or through regulations. The
determination of such value shall be based on a
representative distribution of the population of eligible
employees offered such coverage and a single set of
standardized utilization and cost factors.
``(ii) Coverage described.--The coverage described in this
clause is coverage for medically necessary and appropriate
services consisting of medical and surgical services, medical
equipment, preventive services, and emergency transportation
in frontier areas. No specific procedure or treatment, or
classes thereof, is required to be covered in such a plan, by
this subpart or through regulations.
``(B) Certification.--If the Secretary determines that the
NAIC has submitted a target actuarial value for standard
coverage that complies with the requirements of subparagraph
(A), the Secretary shall certify such value for use under
this chapter. If the Secretary determines that a target
actuarial value has not been submitted or does not comply
with the requirements of subparagraph (A), the Secretary
shall promptly determine a target actuarial value that meets
such requirements.
``(c) Subsequent Revisions.--
``(1) NAIC.--The NAIC may submit from time to time to the
Secretary revisions of the set of rules of actuarial
equivalence and target actuarial values previously
established or determined under this section if the NAIC
determines that revisions are necessary to take into account
changes in the relevant types of health benefits provisions
or in demographic conditions which form the basis for the set
of rules of actuarial equivalence or the target actuarial
values. The provisions of subsection (a)(2) shall apply to
such a revision in the same manner as they apply to the
initial determination of the set of rules.
``(2) Secretary.--The Secretary may by regulation revise
the set of rules of actuarial equivalence and target
actuarial values from time to time if the Secretary
determines such revisions are necessary to take into account
changes described in paragraph (1).

``SEC. 721B. ESTABLISHMENT OF PLAN STANDARDS.

``(a) Establishment of General Standards.--
``(1) Role of naic.--The NAIC is requested to submit to the
Secretary, within 9 months after the date of the enactment of
this subpart, model regulations that specify standards for
making qualified group health plans available to small
employers. If the NAIC develops recommended regulations
specifying such standards within such period, the Secretary
shall review the standards. Such review shall be completed
within 60 days after the date the regulations are developed.
Such standards shall serve as the standards under this
section, with such amendments as the Secretary deems
necessary. Such standards shall be nonbinding (except as
provided in chapter 4).
``(2) Contingency.--If the NAIC does not develop such model
regulations within the period described in paragraph (1), the
Secretary shall specify, within 15 months after the date of
the enactment of this subpart, model regulations that specify
standards for insurers with regard to making qualified group
health plans available to small employers. Such standards
shall be nonbinding (except as provided in chapter 4).
``(3) Effective date.--The standards specified in the model
regulations shall apply to group health plans and health
insurance issuers offering group health insurance coverage in
a State on or after the respective date the standards are
implemented in the State.
``(b) No Preemption of State Law.--A State may implement
standards for group health plans available, and health
insurance issuers offering group health insurance coverage
offered, to small employers that are more stringent than the
standards under this section, except that a State may not
implement standards that prevent the offering of at least one
group health plan that provides standard coverage (as
described in section 721A(b)).

``SEC. 721C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.

[[Page S279]]

``(i) may not identify an area that divides a 3-digit zip
code, a county, or all portions of a metropolitan statistical
area;
``(ii) shall not permit premium rates for coverage offered
in a portion of an interstate metropolitan statistical area
to vary based on the State in which the coverage is offered;
and
``(iii) may, upon agreement with one or more adjacent
States, identify multi-State geographic areas consistent with
clauses (i) and (ii).
``(3) Eligible individuals.--For purposes of this section,
the term `eligible individuals' includes certain uninsured
individuals (as described in section 721G).
``(b) Uniform Premiums Within Community Rating Areas.--
``(1) In general.--Subject to paragraphs (2) and (3), the
standard premium for each group health plan to which this
section applies shall be the same, but shall not include the
costs of premium processing and enrollment that may vary
depending on whether the method of enrollment is through a
qualified small employer purchasing group, through a small
employer, or through a broker.
``(2) Application to enrollees.--
``(A) In general.--The premium charged for coverage in a
group health plan which covers eligible employees and
eligible individuals shall be the product of--
``(i) the standard premium (established under paragraph
(1));
``(ii) in the case of enrollment other than individual
enrollment, the family adjustment factor specified under
subparagraph (B); and
``(iii) the age adjustment factor (specified under
subparagraph (C)).
``(B) Family adjustment factor.--
``(i) In general.--The standards established under section
721B shall specify family adjustment factors that reflect the
relative actuarial costs of benefit packages based on family
classes of enrollment (as compared with such costs for
individual enrollment).
``(ii) Classes of enrollment.--For purposes of this
subpart, there are 4 classes of enrollment:

``(I) Coverage only of an individual (referred to in this
subpart as the `individual' enrollment or class of
enrollment).
``(II) Coverage of a married couple without children
(referred to in this subpart as the `couple-only' enrollment
or class of enrollment).
``(III) Coverage of an individual and one or more children
(referred to in this subpart as the `single parent'
enrollment or class of enrollment).
``(IV) Coverage of a married couple and one or more
children (referred to in this subpart as the `dual parent'
enrollment or class of enrollment).

``(iii) References to family and couple classes of
enrollment.--In this subpart:

``(I) Family.--The terms `family enrollment' and `family
class of enrollment' refer to enrollment in a class of
enrollment described in any subclause of clause (ii) (other
than subclause (I)).
``(II) Couple.--The term `couple class of enrollment'
refers to enrollment in a class of enrollment described in
subclause (II) or (IV) of clause (ii).

``(iv) Spouse; married; couple.--

``(I) In general.--In this subpart, the terms `spouse' and
`married' mean, with respect to an individual, another
individual who is the spouse of, or is married to, the
individual, as determined under applicable State law.
``(II) Couple.--The term `couple' means an individual and
the individual's spouse.

``(C) Age adjustment factor.--The Secretary, in
consultation with the NAIC, shall specify uniform age
categories and maximum rating increments for age adjustment
factors that reflect the relative actuarial costs of benefit
packages among enrollees. For individuals who have attained
age 18 but not age 65, the highest age adjustment factor may
not exceed 3 times the lowest age adjustment factor.
``(3) Administrative charges.--
``(A) In general.--In accordance with the standards
established under section 721B, a group health plan which
covers eligible employees and eligible individuals may add a
separately-stated administrative charge which is based on
identifiable differences in legitimate administrative costs
and which is applied uniformly for individuals enrolling
through the same method of enrollment. Nothing in this
subparagraph may be construed as preventing a qualified small
employer purchasing group from negotiating a unique
administrative charge with an insurer for a group health
plan.
``(B) Enrollment through a qualified small employer
purchasing group.--In the case of an administrative charge
under subparagraph (A) for enrollment through a qualified
small employer purchasing group, such charge may not exceed
the lowest charge of such plan for enrollment other than
through a qualified small employer purchasing group in such
area.
``(c) Treatment of Negotiated Rate as Community Rate.--
Notwithstanding any other provision of this section, a group
health plan and a health insurance issuer offering health
insurance coverage that negotiates a premium rate (exclusive
of any administrative charge described in subsection (b)(3))
with a qualified small employer purchasing group in a
community rating area shall charge the same premium rate to
all eligible employees and eligible individuals.

``SEC. 721D. RATING PRACTICES AND PAYMENT OF PREMIUMS.

``(a) Full Disclosure of Rating Practices.--
``(1) In general.--A group health plan and a health
insurance issuer offering health insurance coverage shall
fully disclose rating practices for the plan to the
appropriate certifying authority.
``(2) Notice on expiration.--A group health plan and a
health insurance issuer offering health insurance coverage
shall provide for notice of the terms for renewal of a plan
at the time of the offering of the plan and at least 90 days
before the date of expiration of the plan.
``(3) Actuarial certification.--Each group health plan and
health insurance issuer offering health insurance coverage
shall file annually with the appropriate certifying authority
a written statement by a member of the American Academy of
Actuaries (or other individual acceptable to such authority)
who is not an employee of the group health plan or issuer
certifying that, based upon an examination by the individual
which includes a review of the appropriate records and of the
actuarial assumptions of such plan or insurer and methods
used by the plan or insurer in establishing premium rates and
administrative charges for group health plans--
``(A) such plan or insurer is in compliance with the
applicable provisions of this subpart; and
``(B) the rating methods are actuarially sound.
Each plan and insurer shall retain a copy of such statement
at its principal place of business for examination by any
individual.
``(b) Payment of Premiums.--
``(1) In general.--With respect to a new enrollee in a
group health plan, the plan may require advanced payment of
an amount equal to the monthly applicable premium for the
plan at the time such individual is enrolled.
``(2) Notification of failure to receive premium.--If a
group health plan or a health insurance issuer offering
health insurance coverage fails to receive payment on a
premium due with respect to an eligible employee or eligible
individual covered under the plan involved, the plan or
issuer shall provide notice of such failure to the employee
or individual within the 20-day period after the date on
which such premium payment was due. A plan or issuer may not
terminate the enrollment of an eligible employee or eligible
individual unless such employee or individual has been
notified of any overdue premiums and has been provided a
reasonable opportunity to respond to such notice.

``SEC. 721E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

[[Page S280]]

``(e) Duties of Qualified Small Employer Purchasing
Groups.--Each qualified small employer purchasing group
shall--
``(1) enter into agreements with insurers offering
qualified group health plans;
``(2) enter into agreements with small employers under
section 721F;
``(3) enroll only eligible employees, eligible individuals,
and certain uninsured individuals in qualified group health
plans, in accordance with section 721G;
``(4) provide enrollee information to the State;
``(5) meet the marketing requirements under section 721I;
and
``(6) carry out other functions provided for under this
subpart.
``(f) Limitation on Activities.--A qualified small employer
purchasing group shall not--
``(1) perform any activity involving approval or
enforcement of payment rates for providers;
``(2) perform any activity (other than the reporting of
noncompliance) relating to compliance of qualified group
health plans with the requirements of this subpart;
``(3) assume financial risk in relation to any such health
plan; or
``(4) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this subpart.
``(g) Rules of Construction.--
``(1) Establishment not required.--Nothing in this section
shall be construed as requiring--
``(A) that a State organize, operate or otherwise establish
a qualified small employer purchasing group, or otherwise
require the establishment of purchasing groups; and
``(B) that there be only one qualified small employer
purchasing group established with respect to a community
rating area.
``(2) Single organization serving multiple areas and
states.--Nothing in this section shall be construed as
preventing a single entity from being a qualified small
employer purchasing group in more than one community rating
area or in more than one State.
``(3) Voluntary participation.--Nothing in this section
shall be construed as requiring any individual or small
employer to purchase a qualified group health plan
exclusively through a qualified small employer purchasing
group.

``SEC. 721F. AGREEMENTS WITH SMALL EMPLOYERS.

``(a) In General.--A qualified small employer purchasing
group shall offer to enter into an agreement under this
section with each small employer that employs eligible
employees in the area served by the group.
``(b) Payroll Deduction.--
``(1) In general.--Under an agreement under this section
between a small employer and a qualified small employer
purchasing group, the small employer shall deduct premiums
from an eligible employee's wages.
``(2) Additional premiums.--If the amount withheld under
paragraph (1) is not sufficient to cover the entire cost of
the premiums, the eligible employee shall be responsible for
paying directly to the qualified small employer purchasing
group the difference between the amount of such premiums and
the amount withheld.

``SEC. 721G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE
INDIVIDUALS, AND CERTAIN UNINSURED INDIVIDUALS
IN QUALIFIED GROUP HEALTH PLANS.

``(a) In General.--Each qualified small employer purchasing
group shall offer--
``(1) eligible employees,
``(2) eligible individuals, and
``(3) certain uninsured individuals,
the opportunity to enroll in any qualified group health plan
which has an agreement with the qualified small employer
purchasing group for the community rating area in which such
employees and individuals reside.
``(b) Uninsured Individuals.--For purposes of this section,
an individual is described in subsection (a)(3) if such
individual is an uninsured individual who is not an eligible
employee of a small employer that is a member of a qualified
small employer purchasing group or a dependent of such
individual.

``SEC. 721H. RECEIPT OF PREMIUMS.

``(a) Enrollment Charge.--The amount charged by a qualified
small employer purchasing group for coverage under a
qualified group health plan shall be equal to the sum of--
``(1) the premium rate offered by such health plan;
``(2) the administrative charge for such health plan; and
``(3) the purchasing group administrative charge for
enrollment of eligible employees, eligible individuals and
certain uninsured individuals through the group.
``(b) Disclosure of Premium Rates and Administrative
Charges.--Each qualified small employer purchasing group
shall, prior to the time of enrollment, disclose to enrollees
and other interested parties the premium rate for a qualified
group health plan, the administrative charge for such plan,
and the administrative charge of the group, separately.

``SEC. 721I. MARKETING ACTIVITIES.

``Each qualified small employer purchasing group shall
market qualified group health plans to members through the
entire community rating area served by the purchasing group.

``SEC. 721J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER
PURCHASING GROUPS.

``(a) In General.--The Secretary shall award grants to
States and small employer purchasing groups to assist such
States and groups in planning, developing, and operating
qualified small employer purchasing groups.
``(b) Application Requirements.--To be eligible to receive
a grant under this section, a State or small employer
purchasing group shall prepare and submit to the Secretary an
application in such form, at such time, and containing such
information, certifications, and assurances as the Secretary
shall reasonably require.
``(c) Use of Funds.--Amounts awarded under this section may
be used to finance the costs associated with planning,
developing, and operating a qualified small employer
purchasing group. Such costs may include the costs associated
with--
``(1) engaging in education and outreach efforts to inform
small employers, insurers, and the public about the small
employer purchasing group;
``(2) soliciting bids and negotiating with insurers to make
available group health plans;
``(3) preparing the documentation required to receive
certification by the Secretary as a qualified small employer
purchasing group; and
``(4) such other activities determined appropriate by the
Secretary.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated for awarding grants under this
section such sums as may be necessary.

``SEC. 721K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS
ESTABLISHED BY A STATE.

``A State may establish a system in all or part of the
State under which qualified small employer purchasing groups
are the sole mechanism through which health care coverage for
the eligible employees of small employers shall be purchased
or provided.

``SEC. 721L. EFFECTIVE DATES.

``(a) In General.--Except as provided in this chapter, the
provisions of this chapter are effective on the date of the
enactment of this subpart.
``(b) Exception.--The provisions of section 721C(b) shall
apply to contracts which are issued, or renewed, after the
date which is 18 months after the date of the enactment of
this subpart.

``CHAPTER 2--REQUIRED COVERAGE OPTIONS FOR ELIGIBLE EMPLOYEES AND
DEPENDENTS OF SMALL EMPLOYERS

``SEC. 722. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR
ELIGIBLE INDIVIDUALS.

``(a) Requirement to Offer.--Each small employer shall make
available with respect to each eligible employee a group
health plan under which--
``(1) coverage of each eligible individual with respect to
such an eligible employee may be elected on an annual basis
for each plan year;
``(2) coverage is provided for at least the standard
coverage specified in section 721A(b); and
``(3) each eligible employee electing such coverage may
elect to have any premiums owed by the employee collected
through payroll deduction.
``(b) No Employer Contribution Required.--An employer is
not required under subsection (a) to make any contribution to
the cost of coverage under a group health plan described in
such subsection.
``(c) Special Rules.--
``(1) Exclusion of new employers and certain very small
employers.--Subsection (a) shall not apply to any small
employer for any plan year if, as of the beginning of such
plan year--
``(A) such employer (including any predecessor thereof) has
been an employer for less than 2 years;
``(B) such employer has no more than 2 eligible employees;
or
``(C) no more than 2 eligible employees are not covered
under any group health plan.
``(2) Exclusion of family members.--Under such procedures
as the Secretary may prescribe, any relative of a small
employer may be, at the election of the employer, excluded
from consideration as an eligible employee for purposes of
applying the requirements of subsection (a). In the case of a
small employer that is not an individual, an employee who is
a relative of a key employee (as defined in section 416(i)(1)
of the Internal Revenue Code of 1986) of the employer may, at
the election of the key employee, be considered a relative
excludable under this paragraph.
``(3) Optional application of waiting period.--A group
health plan and a health insurance issuer offering group
health insurance coverage shall not be treated as failing to
meet the requirements of subsection (a) solely because a
period of service by an eligible employee of not more than 60
days is required under the plan for coverage under the plan
of eligible individuals with respect to such employee.
``(d) Construction.--Nothing in this section shall be
construed as limiting the group health plans, or types of
coverage under such a plan, that an employer may offer to an
employee.

``SEC. 722A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH
MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.

``(a) In General.--In any case in which an eligible
employee is, for any plan year, a participant in a group
health plan which is a multiemployer plan, the requirements
of section 722(a) shall be deemed to be met with respect to
such employee for such plan year if

[[Page S281]]

the employer requirements of subsection (b) are met with
respect to the eligible employee, irrespective of whether, or
to what extent, the employer makes employer contributions on
behalf of the eligible employee.
``(b) Employer Requirements.--The employer requirements of
this subsection are met under a group health plan with
respect to an eligible employee if--
``(1) the employee is eligible under the plan to elect
coverage on an annual basis and is provided a reasonable
opportunity to make the election in such form and manner and
at such times as are provided by the plan;
``(2) coverage is provided for at least the standard
coverage specified in section 721A(b);
``(3) the employer facilitates collection of any employee
contributions under the plan and permits the employee to
elect to have employee contributions under the plan collected
through payroll deduction; and
``(4) in the case of a plan to which part 1 does not
otherwise apply, the employer provides to the employee a
summary plan description described in section 102(a)(1) in
the form and manner and at such times as are required under
such part 1 with respect to employee welfare benefit plans.

``CHAPTER 3--REQUIRED COVERAGE OPTIONS FOR INDIVIDUALS INSURED THROUGH
ASSOCIATION PLANS

``Subchapter A--Qualified Association Plans

``SEC. 723. TREATMENT OF QUALIFIED ASSOCIATION PLANS.

``(a) General Rule.--For purposes of this chapter, in the
case of a qualified association plan--
``(1) except as otherwise provided in this subchapter, the
plan shall meet all applicable requirements of chapter 1 and
chapter 2 for group health plans offered to and by small
employers;
``(2) if such plan is certified as meeting such
requirements and the requirements of this subchapter, such
plan shall be treated as a plan established and maintained by
a small employer, and individuals enrolled in such plan shall
be treated as eligible employees; and
``(3) any individual who is a member of the association not
enrolling in the plan shall not be treated as an eligible
employee solely by reason of membership in such association.
``(b) Election To Be Treated as Purchasing Cooperative.--
Subsection (a) shall not apply to a qualified association
plan if--
``(1) the health insurance issuer makes an irrevocable
election to be treated as a qualified small employer
purchasing group for purposes of section 721D; and
``(2) such sponsor meets all requirements of this subpart
applicable to a purchasing cooperative.

``SEC. 723A. QUALIFIED ASSOCIATION PLAN DEFINED.

``(a) General Rule.--For purposes of this chapter, a plan
is a qualified association plan if the plan is a multiple
employer welfare arrangement or similar arrangement--
``(1) which is maintained by a qualified association;
``(2) which has at least 500 participants in the United
States;
``(3) under which the benefits provided consist solely of
medical care (as defined in section 213(d) of the Internal
Revenue Code of 1986);
``(4) which may not condition participation in the plan, or
terminate coverage under the plan, on the basis of the health
status or health claims experience of any employee or member
or dependent of either;
``(5) which provides for bonding, in accordance with
regulations providing rules similar to the rules under
section 412, of all persons operating or administering the
plan or involved in the financial affairs of the plan; and
``(6) which notifies each participant or provider that it
is certified as meeting the requirements of this chapter
applicable to it.
``(b) Self-Insured Plans.--In the case of a plan which is
not fully insured (within the meaning of
section 514(b)(6)(D)), the plan shall be treated as a
qualified association plan only if--
``(1) the plan meets minimum financial solvency and cash
reserve requirements for claims which are established by the
Secretary and which shall be in lieu of any other such
requirements under this chapter;
``(2) the plan provides an annual funding report (certified
by an independent actuary) and annual financial statements to
the Secretary and other interested parties; and
``(3) the plan appoints a plan sponsor who is responsible
for operating the plan and ensuring compliance with
applicable Federal and State laws.
``(c) Certification.--
``(1) In general.--A plan shall not be treated as a
qualified association plan for any period unless there is in
effect a certification by the Secretary that the plan meets
the requirements of this subchapter. For purposes of this
chapter, the Secretary shall be the appropriate certifying
authority with respect to the plan.
``(2) Fee.--The Secretary shall require a $5,000 fee for
the original certification under paragraph (1) and may charge
a reasonable annual fee to cover the costs of processing and
reviewing the annual statements of the plan.
``(3) Expedited procedures.--The Secretary may by
regulation provide for expedited registration, certification,
and comment procedures.
``(4) Agreements.--The Secretary of Labor may enter into
agreements with the States to carry out the Secretary's
responsibilities under this subchapter.
``(d) Availability.--Notwithstanding any other provision of
this chapter, a qualified association plan may limit coverage
to individuals who are members of the qualified association
establishing or maintaining the plan, an employee of such
member, or a dependent of either.
``(e) Special Rules for Existing Plans.--In the case of a
plan in existence on January 1, 2001--
``(1) the requirements of subsection (a) (other than
paragraphs (4), (5), and (6) thereof) shall not apply;
``(2) no original certification shall be required under
this subchapter; and
``(3) no annual report or funding statement shall be
required before January 1, 2003, but the plan shall file with
the Secretary a description of the plan and the name of the
health insurance issuer.

``SEC. 723B. DEFINITIONS AND SPECIAL RULES.

``(a) Qualified Association.--For purposes of this
subchapter, the term `qualified association' means any
organization which--
``(1) is organized and maintained in good faith by a trade
association, an industry association, a professional
association, a chamber of commerce, a religious organization,
a public entity association, or other business association
serving a common or similar industry;
``(2) is organized and maintained for substantial purposes
other than to provide a health plan;
``(3) has a constitution, bylaws, or other similar
governing document which states its purpose; and
``(4) receives a substantial portion of its financial
support from its active, affiliated, or federation members.
``(b) Coordination.--The term `qualified association plan'
shall not include a plan to which subchapter B applies.

``Subchapter B--Special Rule for Church, Multiemployer, and Cooperative
Plans

``SEC. 723F. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND
COOPERATIVE PLANS.

``(a) General Rule.--For purposes of this chapter, in the
case of a group health plan to which this section applies--
``(1) except as otherwise provided in this subchapter, the
plan shall be required to meet all applicable requirements of
chapter 1 and chapter 2 for group health plans offered to and
by small employers;
``(2) if such plan is certified as meeting such
requirements, such plan shall be treated as a plan
established and maintained by a small employer and
individuals enrolled in such plan shall be treated as
eligible employees; and
``(3) any individual eligible to enroll in the plan who
does not enroll in the plan shall not be treated as an
eligible employee solely by reason of being eligible to
enroll in the plan.
``(b) Modified Standards.--
``(1) Certifying authority.--For purposes of this chapter,
the Secretary shall be the appropriate certifying authority
with respect to a plan to which this section applies.
``(2) Availability.--Rules similar to the rules of
subsection (e) of section 723A shall apply to a plan to which
this section applies.
``(3) Access.--An employer which, pursuant to a collective
bargaining agreement, offers an employee the opportunity to
enroll in a plan described in subsection (c)(2) shall not be
required to make any other plan available to the employee.
``(4) Treatment under state laws.--A church plan described
in subsection (c)(1) which is certified as meeting the
requirements of this section shall not be deemed to be a
multiple employer welfare arrangement or an insurance company
or other insurer, or to be engaged in the business of
insurance, for purposes of any State law purporting to
regulate insurance companies or insurance contracts.
``(c) Plans to Which Section Applies.--This section shall
apply to a health plan which--
``(1) is a church plan (as defined in section 414(e) of the
Internal Revenue Code of 1986) which has at least 100
participants in the United States;
``(2) is a multiemployer plan which is maintained by a
health plan sponsor described in section 3(16)(B)(iii) and
which has at least 500 participants in the United States; or
``(3) is a plan which is maintained by a rural electric
cooperative or a rural telephone cooperative association and
which has at least 500 participants in the United States.''.
(b) Conforming Amendments.--Section 731(d) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1186(d)) is
amended by adding at the end the following:
``(3) Eligible employee.--The term `eligible employee'
means, with respect to an employer, an employee who normally
performs on a monthly basis at least 30 hours of service per
week for that employer.
``(4) Eligible individual.--The term `eligible individual'
means, with respect to an eligible employee, such employee,
and any dependent of such employee.
``(5) NAIC.--The term `NAIC' means the National Association
of Insurance Commissioners.
``(6) Qualified group health plan.--The term `qualified
group health plan' shall have the meaning given the term in
section 721.''.

[[Page S282]]

SEC. 402. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT
RELATING TO THE GROUP MARKET.

(a) In General.--Subpart 2 of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is
amended--
(1) by inserting after the subpart heading the following:

``CHAPTER 1--MISCELLANEOUS REQUIREMENTS'';

and
(2) by adding at the end the following:

``CHAPTER 2--GENERAL INSURANCE COVERAGE REFORMS

``Subchapter A--Increased Availability and Continuity of Health
Coverage

``SEC. 2707. DEFINITION.

``As used in this chapter, the term `qualified group health
plan' means a group health plan, and a health insurance
issuer offering group health insurance coverage, that is
designed to provide standard coverage (consistent with
section 2707A(b)).

``SEC. 2707A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.

``(a) Set of Rules of Actuarial Equivalence.--
``(1) Initial determination.--The NAIC is requested to
submit to the Secretary, within 6 months after the date of
the enactment of this chapter, a set of rules which the NAIC
determines is sufficient for determining, in the case of any
group health plan, or a health insurance issuer offering
group health insurance coverage, and for purposes of this
section, the actuarial value of the coverage offered by the
plan or coverage.
``(2) Certification.--If the Secretary determines that the
NAIC has submitted a set of rules that comply with the
requirements of paragraph (1), the Secretary shall certify
such set of rules for use under this chapter. If the
Secretary determines that such a set of rules has not been
submitted or does not comply with such requirements, the
Secretary shall promptly establish a set of rules that meets
such requirements.
``(b) Standard Coverage.--
``(1) In general.--A a group health plan, and a health
insurance issuer offering group health insurance coverage,
shall be considered to provide standard coverage consistent
with this subsection if the benefits are determined, in
accordance with the set of actuarial equivalence rules
certified under subsection (a), to have a value that is
within 5 percentage points of the target actuarial value for
standard coverage established under paragraph (2).
``(2) Initial determination of target actuarial value for
standard coverage.--
``(A) Initial determination.--
``(i) In general.--The NAIC is requested to submit to the
Secretary, within 6 months after the date of the enactment of
this chapter, a target actuarial value for standard coverage
equal to the average actuarial value of the coverage
described in clause (ii). No specific procedure or treatment,
or classes thereof, is required to be considered in such
determination by this chapter or through regulations. The
determination of such value shall be based on a
representative distribution of the population of eligible
employees offered such coverage and a single set of
standardized utilization and cost factors.
``(ii) Coverage described.--The coverage described in this
clause is coverage for medically necessary and appropriate
services consisting of medical and surgical services, medical
equipment, preventive services, and emergency transportation
in frontier areas. No specific procedure or treatment, or
classes thereof, is required to be covered in such a plan, by
this chapter or through regulations.
``(B) Certification.--If the Secretary determines that the
NAIC has submitted a target actuarial value for standard
coverage that complies with the requirements of subparagraph
(A), the Secretary shall certify such value for use under
this chapter. If the Secretary determines that a target
actuarial value has not been submitted or does not comply
with the requirements of subparagraph (A), the Secretary
shall promptly determine a target actuarial value that meets
such requirements.
``(c) Subsequent Revisions.--
``(1) NAIC.--The NAIC may submit from time to time to the
Secretary revisions of the set of rules of actuarial
equivalence and target actuarial values previously
established or determined under this section if the NAIC
determines that revisions are necessary to take into account
changes in the relevant types of health benefits provisions
or in demographic conditions which form the basis for the set
of rules of actuarial equivalence or the target actuarial
values. The provisions of subsection (a)(2) shall apply to
such a revision in the same manner as they apply to the
initial determination of the set of rules.
``(2) Secretary.--The Secretary may by regulation revise
the set of rules of actuarial equivalence and target
actuarial values from time to time if the Secretary
determines such revisions are necessary to take into account
changes described in paragraph (1).

``SEC. 2707B. ESTABLISHMENT OF PLAN STANDARDS.

``(a) Establishment of General Standards.--
``(1) Role of naic.--The NAIC is requested to submit to the
Secretary, within 9 months after the date of the enactment of
this chapter, model regulations that specify standards for
making qualified group health plans available to small
employers. If the NAIC develops recommended regulations
specifying such standards within such period, the Secretary
shall review the standards. Such review shall be completed
within 60 days after the date the regulations are developed.
Such standards shall serve as the standards under this
section, with such amendments as the Secretary deems
necessary. Such standards shall be nonbinding (except as
provided in chapter 4).
``(2) Contingency.--If the NAIC does not develop such model
regulations within the period described in paragraph (1), the
Secretary shall specify, within 15 months after the date of
the enactment of this chapter, model regulations that specify
standards for insurers with regard to making qualified group
health plans available to small employers. Such standards
shall be nonbinding (except as provided in chapter 4).
``(3) Effective date.--The standards specified in the model
regulations shall apply to group health plans and health
insurance issuers offering group health insurance coverage in
a State on or after the respective date the standards are
implemented in the State.
``(b) No Preemption of State Law.--A State may implement
standards for group health plans available, and health
insurance issuers offering group health insurance coverage
offered, to small employers that are more stringent than the
standards under this section, except that a State may not
implement standards that prevent the offering of at least one
group health plan that provides standard coverage (as
described in section 2707A(b)).

``SEC. 2707C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.

``(a) Standard Premiums With Respect to Community-Rated
Eligible Employees and Eligible Individuals.--
``(1) In general.--Each group health plan offered, and each
health insurance issuer offering group health insurance
coverage, to a small employer shall establish within each
community rating area in which the plan is to be offered, a
standard premium for enrollment of eligible employees and
eligible individuals for the standard coverage (as defined
under section 2707A(b)).
``(2) Establishment of community rating area.--
``(A) In general.--Not later than January 1, 2002, each
State shall, in accordance with subparagraph (B), provide for
the division of the State into 1 or more community rating
areas. The State may revise the boundaries of such areas from
time to time consistent with this paragraph.
``(B) Geographic area variations.--For purposes of
subparagraph (A), a State--
``(i) may not identify an area that divides a 3-digit zip
code, a county, or all portions of a metropolitan statistical
area;
``(ii) shall not permit premium rates for coverage offered
in a portion of an interstate metropolitan statistical area
to vary based on the State in which the coverage is offered;
and
``(iii) may, upon agreement with one or more adjacent
States, identify multi-State geographic areas consistent with
clauses (i) and (ii).
``(3) Eligible individuals.--For purposes of this section,
the term `eligible individuals' includes certain uninsured
individuals (as described in section 2707G).
``(b) Uniform Premiums Within Community Rating Areas.--
``(1) In general.--Subject to paragraphs (2) and (3), the
standard premium for each group health plan to which this
section applies shall be the same, but shall not include the
costs of premium processing and enrollment that may vary
depending on whether the method of enrollment is through a
qualified small employer purchasing group, through a small
employer, or through a broker.
``(2) Application to enrollees.--
``(A) In general.--The premium charged for coverage in a
group health plan which covers eligible employees and
eligible individuals shall be the product of--
``(i) the standard premium (established under paragraph
(1));
``(ii) in the case of enrollment other than individual
enrollment, the family adjustment factor specified under
subparagraph (B); and
``(iii) the age adjustment factor (specified under
subparagraph (C)).
``(B) Family adjustment factor.--
``(i) In general.--The standards established under section
2707B shall specify family adjustment factors that reflect
the relative actuarial costs of benefit packages based on
family classes of enrollment (as compared with such costs for
individual enrollment).
``(ii) Classes of enrollment.--For purposes of this
chapter, there are 4 classes of enrollment:

``(I) Coverage only of an individual (referred to in this
chapter as the `individual' enrollment or class of
enrollment).
``(II) Coverage of a married couple without children
(referred to in this chapter as the `couple-only' enrollment
or class of enrollment).
``(III) Coverage of an individual and one or more children
(referred to in this chapter as the `single parent'
enrollment or class of enrollment).
``(IV) Coverage of a married couple and one or more
children (referred to in this chapter as the `dual parent'
enrollment or class of enrollment).

``(iii) References to family and couple classes of
enrollment.--In this chapter:

[[Page S283]]

``(iv) Spouse; married; couple.--

``(I) In general.--In this chapter, the terms `spouse' and
`married' mean, with respect to an individual, another
individual who is the spouse of, or is married to, the
individual, as determined under applicable State law.
``(II) Couple.--The term `couple' means an individual and
the individual's spouse.

``(C) Age adjustment factor.--The Secretary, in
consultation with the NAIC, shall specify uniform age
categories and maximum rating increments for age adjustment
factors that reflect the relative actuarial costs of benefit
packages among enrollees. For individuals who have attained
age 18 but not age 65, the highest age adjustment factor may
not exceed 3 times the lowest age adjustment factor.
``(3) Administrative charges.--
``(A) In general.--In accordance with the standards
established under section 2707B, a group health plan which
covers eligible employees and eligible individuals may add a
separately-stated administrative charge which is based on
identifiable differences in legitimate administrative costs
and which is applied uniformly for individuals enrolling
through the same method of enrollment. Nothing in this
subparagraph may be construed as preventing a qualified small
employer purchasing group from negotiating a unique
administrative charge with an insurer for a group health
plan.
``(B) Enrollment through a qualified small employer
purchasing group.--In the case of an administrative charge
under subparagraph (A) for enrollment through a qualified
small employer purchasing group, such charge may not exceed
the lowest charge of such plan for enrollment other than
through a qualified small employer purchasing group in such
area.
``(c) Treatment of Negotiated Rate as Community Rate.--
Notwithstanding any other provision of this section, a group
health plan and a health insurance issuer offering health
insurance coverage that negotiates a premium rate (exclusive
of any administrative charge described in subsection (b)(3))
with a qualified small employer purchasing group in a
community rating area shall charge the same premium rate to
all eligible employees and eligible individuals.

``SEC. 2707D. RATING PRACTICES AND PAYMENT OF PREMIUMS.

``(a) Full Disclosure of Rating Practices.--
``(1) In general.--A group health plan and a health
insurance issuer offering health insurance coverage shall
fully disclose rating practices for the plan to the
appropriate certifying authority.
``(2) Notice on expiration.--A group health plan and a
health insurance issuer offering health insurance coverage
shall provide for notice of the terms for renewal of a plan
at the time of the offering of the plan and at least 90 days
before the date of expiration of the plan.
``(3) Actuarial certification.--Each group health plan and
health insurance issuer offering health insurance coverage
shall file annually with the appropriate certifying authority
a written statement by a member of the American Academy of
Actuaries (or other individual acceptable to such authority)
who is not an employee of the group health plan or issuer
certifying that, based upon an examination by the individual
which includes a review of the appropriate records and of the
actuarial assumptions of such plan or insurer and methods
used by the plan or insurer in establishing premium rates and
administrative charges for group health plans--
``(A) such plan or insurer is in compliance with the
applicable provisions of this chapter; and
``(B) the rating methods are actuarially sound.
Each plan and insurer shall retain a copy of such statement
at its principal place of business for examination by any
individual.
``(b) Payment of Premiums.--
``(1) In general.--With respect to a new enrollee in a
group health plan, the plan may require advanced payment of
an amount equal to the monthly applicable premium for the
plan at the time such individual is enrolled.
``(2) Notification of failure to receive premium.--If a
group health plan or a health insurance issuer offering
health insurance coverage fails to receive payment on a
premium due with respect to an eligible employee or eligible
individual covered under the plan involved, the plan or
issuer shall provide notice of such failure to the employee
or individual within the 20-day period after the date on
which such premium payment was due. A plan or issuer may not
terminate the enrollment of an eligible employee or eligible
individual unless such employee or individual has been
notified of any overdue premiums and has been provided a
reasonable opportunity to respond to such notice.

``SEC. 2707E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

``(a) Qualified Small Employer Purchasing Groups
Described.--
``(1) In general.--A qualified small employer purchasing
group is an entity that--
``(A) is a nonprofit entity certified under State law;
``(B) has a membership consisting solely of small
employers;
``(C) is administered solely under the authority and
control of its member employers;
``(D) with respect to each State in which its members are
located, consists of not fewer than the number of small
employers established by the State as appropriate for such a
group;
``(E) offers a program under which qualified group health
plans are offered to eligible employees and eligible
individuals through its member employers and to certain
uninsured individuals in accordance with section 2707D; and
``(F) an insurer, agent, broker, or any other individual or
entity engaged in the sale of insurance--
``(i) does not form or underwrite; and
``(ii) does not hold or control any right to vote with
respect to.
``(2) State certification.--A qualified small employer
purchasing group formed under this section shall submit an
application to the State for certification. The State shall
determine whether to issue a certification and otherwise
ensure compliance with the requirements of this chapter.
``(3) Special rule.--Notwithstanding paragraph (1)(B), an
employer member of a small employer purchasing group that has
been certified by the State as meeting the requirements of
paragraph (1) may retain its membership in the group if the
number of employees of the employer increases such that the
employer is no longer a small employer.
``(b) Board of Directors.--Each qualified small employer
purchasing group established under this section shall be
governed by a board of directors or have active input from an
advisory board consisting of individuals and businesses
participating in the group.
``(c) Domiciliary State.--For purposes of this section, a
qualified small employer purchasing group operating in more
than one State shall be certified by the State in which the
group is domiciled.
``(d) Membership.--
``(1) In general.--A qualified small employer purchasing
group shall accept all small employers and certain uninsured
individuals residing within the area served by the group as
members if such employers or individuals request such
membership.
``(2) Voting.--Members of a qualified small employer
purchasing group shall have voting rights consistent with the
rules established by the State.
``(e) Duties of Qualified Small Employer Purchasing
Groups.--Each qualified small employer purchasing group
shall--
``(1) enter into agreements with insurers offering
qualified group health plans;
``(2) enter into agreements with small employers under
section 2707F;
``(3) enroll only eligible employees, eligible individuals,
and certain uninsured individuals in qualified group health
plans, in accordance with section 2707G;
``(4) provide enrollee information to the State;
``(5) meet the marketing requirements under section 2707I;
and
``(6) carry out other functions provided for under this
chapter.
``(f) Limitation on Activities.--A qualified small employer
purchasing group shall not--
``(1) perform any activity involving approval or
enforcement of payment rates for providers;
``(2) perform any activity (other than the reporting of
noncompliance) relating to compliance of qualified group
health plans with the requirements of this chapter;
``(3) assume financial risk in relation to any such health
plan; or
``(4) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this chapter.
``(g) Rules of Construction.--
``(1) Establishment not required.--Nothing in this section
shall be construed as requiring--
``(A) that a State organize, operate or otherwise establish
a qualified small employer purchasing group, or otherwise
require the establishment of purchasing groups; and
``(B) that there be only one qualified small employer
purchasing group established with respect to a community
rating area.
``(2) Single organization serving multiple areas and
states.--Nothing in this section shall be construed as
preventing a single entity from being a qualified small
employer purchasing group in more than one community rating
area or in more than one State.
``(3) Voluntary participation.--Nothing in this section
shall be construed as requiring any individual or small
employer to purchase a qualified group health plan
exclusively through a qualified small employer purchasing
group.

``SEC. 2707F. AGREEMENTS WITH SMALL EMPLOYERS.

[[Page S284]]

to cover the entire cost of the premiums, the eligible
employee shall be responsible for paying directly to the
qualified small employer purchasing group the difference
between the amount of such premiums and the amount withheld.

``SEC. 2707G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE
INDIVIDUALS, AND CERTAIN UNINSURED INDIVIDUALS
IN QUALIFIED GROUP HEALTH PLANS.

``SEC. 2707H. RECEIPT OF PREMIUMS.

``SEC. 2707I. MARKETING ACTIVITIES.

``Each qualified small employer purchasing group shall
market qualified group health plans to members through the
entire community rating area served by the purchasing group.

``SEC. 2707J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER
PURCHASING GROUPS.

``SEC. 2707K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS
ESTABLISHED BY A STATE.

``SEC. 2707L. EFFECTIVE DATES.

``(a) In General.--Except as provided in this chapter, the
provisions of this chapter are effective on the date of the
enactment of this chapter.
``(b) Exception.--The provisions of section 2707C(b) shall
apply to contracts which are issued, or renewed, after the
date which is 18 months after the date of the enactment of
this chapter.

``Subchapter B--Required Coverage Options for Eligible Employees and
Dependents of Small Employers

``SEC. 2708. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR
ELIGIBLE INDIVIDUALS.

``(a) Requirement To Offer.--Each small employer shall make
available with respect to each eligible employee a group
health plan under which--
``(1) coverage of each eligible individual with respect to
such an eligible employee may be elected on an annual basis
for each plan year;
``(2) coverage is provided for at least the standard
coverage specified in section 2707A(b); and
``(3) each eligible employee electing such coverage may
elect to have any premiums owed by the employee collected
through payroll deduction.
``(b) No Employer Contribution Required.--An employer is
not required under subsection (a) to make any contribution to
the cost of coverage under a group health plan described in
such subsection.
``(c) Special Rules.--
``(1) Exclusion of new employers and certain very small
employers.--Subsection (a) shall not apply to any small
employer for any plan year if, as of the beginning of such
plan year--
``(A) such employer (including any predecessor thereof) has
been an employer for less than 2 years;
``(B) such employer has no more than 2 eligible employees;
or
``(C) no more than 2 eligible employees are not covered
under any group health plan.
``(2) Exclusion of family members.--Under such procedures
as the Secretary may prescribe, any relative of a small
employer may be, at the election of the employer, excluded
from consideration as an eligible employee for purposes of
applying the requirements of subsection (a). In the case of a
small employer that is not an individual, an employee who is
a relative of a key employee (as defined in section 416(i)(1)
of the Internal Revenue Code of 1986) of the employer may, at
the election of the key employee, be considered a relative
excludable under this paragraph.
``(3) Optional application of waiting period.--A group
health plan and a health insurance issuer offering group
health insurance coverage shall not be treated as failing to
meet the requirements of subsection (a) solely because a
period of service by an eligible employee of not more than 60
days is required under the plan for coverage under the plan
of eligible individuals with respect to such employee.
``(d) Construction.--Nothing in this section shall be
construed as limiting the group health plans, or types of
coverage under such a plan, that an employer may offer to an
employee.

``SEC. 2708A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH
MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.

``(a) In General.--In any case in which an eligible
employee is, for any plan year, a participant in a group
health plan which is a multiemployer plan, the requirements
of section 2722(a) shall be deemed to be met with respect to
such employee for such plan year if the employer requirements
of subsection (b) are met with respect to the eligible
employee, irrespective of whether, or to what extent, the
employer makes employer contributions on behalf of the
eligible employee.
``(b) Employer Requirements.--The employer requirements of
this subsection are met under a group health plan with
respect to an eligible employee if--
``(1) the employee is eligible under the plan to elect
coverage on an annual basis and is provided a reasonable
opportunity to make the election in such form and manner and
at such times as are provided by the plan;
``(2) coverage is provided for at least the standard
coverage specified in section 2707A(b);
``(3) the employer facilitates collection of any employee
contributions under the plan and permits the employee to
elect to have employee contributions under the plan collected
through payroll deduction; and
``(4) in the case of a plan to which subchapter A does not
otherwise apply, the employer provides to the employee a
summary plan description described in section 102(a)(1) of
the Employee Retirement Income Security Act of 1974 in the
form and manner and at such times as are required under such
subchapter A with respect to employee welfare benefit plans.

``Subchapter C--Required Coverage Options for Individuals Insured
Through Association Plans

``SEC. 2709. TREATMENT OF QUALIFIED ASSOCIATION PLANS.

``(a) General Rule.--For purposes of this chapter, in the
case of a qualified association plan--
``(1) except as otherwise provided in this subchapter, the
plan shall meet all applicable requirements of chapter 1 and
chapter 2 for group health plans offered to and by small
employers;
``(2) if such plan is certified as meeting such
requirements and the requirements of this subchapter, such
plan shall be treated as a plan established and maintained by
a small employer, and individuals enrolled in such plan shall
be treated as eligible employees; and
``(3) any individual who is a member of the association not
enrolling in the plan shall not be treated as an eligible
employee solely by reason of membership in such association.
``(b) Election To Be Treated as Purchasing Cooperative.--
Subsection (a) shall not apply to a qualified association
plan if--
``(1) the health insurance issuer makes an irrevocable
election to be treated as a qualified small employer
purchasing group for purposes of section 2707D; and
``(2) such sponsor meets all requirements of this chapter
applicable to a purchasing cooperative.

``SEC. 2709A. QUALIFIED ASSOCIATION PLAN DEFINED.

``(a) General Rule.--For purposes of this chapter, a plan
is a qualified association plan

[[Page S285]]

if the plan is a multiple employer welfare arrangement or
similar arrangement--
``(1) which is maintained by a qualified association;
``(2) which has at least 500 participants in the United
States;
``(3) under which the benefits provided consist solely of
medical care (as defined in section 213(d) of the Internal
Revenue Code of 1986);
``(4) which may not condition participation in the plan, or
terminate coverage under the plan, on the basis of the health
status or health claims experience of any employee or member
or dependent of either;
``(5) which provides for bonding, in accordance with
regulations providing rules similar to the rules under
section 412, of all persons operating or administering the
plan or involved in the financial affairs of the plan; and
``(6) which notifies each participant or provider that it
is certified as meeting the requirements of this chapter
applicable to it.
``(b) Self-Insured Plans.--In the case of a plan which is
not fully insured (within the meaning of section
514(b)(6)(D)), the plan shall be treated as a qualified
association plan only if--
``(1) the plan meets minimum financial solvency and cash
reserve requirements for claims which are established by the
Secretary and which shall be in lieu of any other such
requirements under this chapter;
``(2) the plan provides an annual funding report (certified
by an independent actuary) and annual financial statements to
the Secretary and other interested parties; and
``(3) the plan appoints a plan sponsor who is responsible
for operating the plan and ensuring compliance with
applicable Federal and State laws.
``(c) Certification.--
``(1) In general.--A plan shall not be treated as a
qualified association plan for any period unless there is in
effect a certification by the Secretary that the plan meets
the requirements of this subchapter. For purposes of this
chapter, the Secretary shall be the appropriate certifying
authority with respect to the plan.
``(2) Fee.--The Secretary shall require a $5,000 fee for
the original certification under paragraph (1) and may charge
a reasonable annual fee to cover the costs of processing and
reviewing the annual statements of the plan.
``(3) Expedited procedures.--The Secretary may by
regulation provide for expedited registration, certification,
and comment procedures.
``(4) Agreements.--The Secretary of Labor may enter into
agreements with the States to carry out the Secretary's
responsibilities under this subchapter.
``(d) Availability.--Notwithstanding any other provision of
this chapter, a qualified association plan may limit coverage
to individuals who are members of the qualified association
establishing or maintaining the plan, an employee of such
member, or a dependent of either.
``(e) Special Rules for Existing Plans.--In the case of a
plan in existence on January 1, 2001--
``(1) the requirements of subsection (a) (other than
paragraphs (4), (5), and (6) thereof) shall not apply;
``(2) no original certification shall be required under
this subchapter; and
``(3) no annual report or funding statement shall be
required before January 1, 2003, but the plan shall file with
the Secretary a description of the plan and the name of the
health insurance issuer.

``SEC. 2709B. DEFINITIONS AND SPECIAL RULES.

``SEC. 2709C. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND
COOPERATIVE PLANS.

``(a) General Rule.--For purposes of this chapter, in the
case of a group health plan to which this section applies--
``(1) except as otherwise provided in this subchapter, the
plan shall be required to meet all applicable requirements of
subchapter A and subchapter B for group health plans offered
to and by small employers;
``(2) if such plan is certified as meeting such
requirements, such plan shall be treated as a plan
established and maintained by a small employer and
individuals enrolled in such plan shall be treated as
eligible employees; and
``(3) any individual eligible to enroll in the plan who
does not enroll in the plan shall not be treated as an
eligible employee solely by reason of being eligible to
enroll in the plan.
``(b) Modified Standards.--
``(1) Certifying authority.--For purposes of this chapter,
the Secretary shall be the appropriate certifying authority
with respect to a plan to which this section applies.
``(2) Availability.--Rules similar to the rules of
subsection (e) of section 2709A shall apply to a plan to
which this section applies.
``(3) Access.--An employer which, pursuant to a collective
bargaining agreement, offers an employee the opportunity to
enroll in a plan described in subsection (c)(2) shall not be
required to make any other plan available to the employee.
``(4) Treatment under state laws.--A church plan described
in subsection (c)(1) which is certified as meeting the
requirements of this section shall not be deemed to be a
multiple employer welfare arrangement or an insurance company
or other insurer, or to be engaged in the business of
insurance, for purposes of any State law purporting to
regulate insurance companies or insurance contracts.
``(c) Plans to Which Section Applies.--This section shall
apply to a health plan which--
``(1) is a church plan (as defined in section 414(e) of the
Internal Revenue Code of 1986) which has at least 100
participants in the United States;
``(2) is a multiemployer plan which is maintained by a
health plan sponsor described in section 3(16)(B)(iii) of the
Employee Retirement Income Security Act of 1974 and which has
at least 500 participants in the United States; or
``(3) is a plan which is maintained by a rural electric
cooperative or a rural telephone cooperative association and
which has at least 500 participants in the United States.''.
(b) Conforming Amendments.--Section 2791(d) of the Public
Health Service Act (42 U.S.C. 300gg-91(d)) is amended by
adding at the end the following:
``(15) Eligible employee.--The term `eligible employee'
means, with respect to an employer, an employee who normally
performs on a monthly basis at least 30 hours of service per
week for that employer.
``(16) Eligible individual.--The term `eligible individual'
means, with respect to an eligible employee, such employee,
and any dependent of such employee.
``(17) NAIC.--The term `NAIC' means the National
Association of Insurance Commissioners.
``(18) Qualified group health plan.--The term `qualified
group health plan' shall have the meaning given the term in
section 2707.''.

SEC. 403. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING
TO THE INDIVIDUAL MARKET.

The first subpart 3 of part B of title XXVII of the Public
Health Service Act (42 U.S.C. 300gg-51 et seq.) is amended--
(1) by redesignating such subpart as subpart 2; and
(2) by adding at the end the following:

``SEC. 2753. APPLICABILITY OF GENERAL INSURANCE MARKET
REFORMS.

``The provisions of chapter 2 of subpart 2 of part A shall
apply to health insurance coverage offered by a health
insurance issuer in the individual market in the same manner
as they apply to health insurance coverage offered by a
health insurance issuer in connection with a group health
plan in the small or large group market.''.

SEC. 404. EFFECTIVE DATE.

The amendments made by this subtitle shall apply with
respect to health insurance coverage offered, sold, issued,
renewed, in effect, or operated on or after January 1, 2002.

Subtitle B--Tax Provisions

SEC. 411. ENFORCEMENT WITH RESPECT TO HEALTH INSURANCE
ISSUERS.

(a) In General.--Chapter 43 of the Internal Revenue Code of
1986 (relating to qualified pension, etc., plans) is amended
by adding at the end the following:

``SEC. 4980F. FAILURE OF INSURER TO COMPLY WITH CERTAIN
STANDARDS FOR HEALTH INSURANCE COVERAGE.

``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on the
failure of a health insurance issuer to comply with the
requirements applicable to such issuer under--
``(A) chapter 2 of subpart 2 of part A of title XXVII of
the Public Health Service Act;
``(B) section 2753 of the Public Health Service Act; and
``(C) subpart C of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974.
``(2) Exception.--Paragraph (1) shall not apply to a
failure by a health insurance issuer in a State if the
Secretary of Health and Human Services determines that the
State has in effect a regulatory enforcement mechanism that
provides adequate sanctions with respect to such a failure by
such an issuer.
``(b) Amount of Tax.--
``(1) In general.--Subject to paragraph (2), the amount of
the tax imposed by subsection (a) shall be $100 for each day
during which such failure persists for each person to which
such failure relates. A rule similar to the rule of section
4980D(b)(3) shall apply for purposes of this section.
``(2) Limitation.--The amount of the tax imposed by
subsection (a) for a health insurance issuer with respect to
health insurance coverage shall not exceed 25 percent of the
amounts received under the coverage for coverage during the
period such failure persists.

[[Page S286]]

``(c) Liability for Tax.--The tax imposed by this section
shall be paid by the health insurance issuer.
``(d) Limitations on Amount of Tax.--
``(1) Tax not to apply to failures corrected within 30
days.--No tax shall be imposed by subsection (a) on any
failure if--
``(A) such failure was due to reasonable cause and not to
willful neglect, and
``(B) such failure is corrected during the 30-day period
(or such period as the Secretary may determine appropriate)
beginning on the first date the health insurance issuer
knows, or exercising reasonable diligence could have known,
that such failure existed.
``(2) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax
would be excessive relative to the failure involved.
``(e) Definitions.--For purposes of this section, the terms
`health insurance coverage' and `health insurance issuer'
have the meanings given such terms in section 2791 of the
Public Health Service Act and section 733 of the Employee
Retirement Income Security Act of 1974.''.
(b) Conforming Amendment.--The table of sections for such
chapter 43 is amended by adding at the end the following new
item:

``Sec. 4980F. Failure of insurer to comply with certain standards for
health insurance coverage.''.

SEC. 412. ENFORCEMENT WITH RESPECT TO SMALL EMPLOYERS.

(a) In General.--Chapter 47 of the Internal Revenue Code of
1986 (relating to excise taxes on certain group health plans)
is amended by inserting after section 5000 the following new
section:

``SEC. 5000A. SMALL EMPLOYER REQUIREMENTS.

``(a) General Rule.--There is hereby imposed a tax on the
failure of any small employer to comply with the requirements
applicable to such employer under--
``(1) subchapter C of chapter 2 of subpart 2 of part A of
title XXVII of the Public Health Service Act;
``(2) section 2753 of the Public Health Service Act; and
``(3) chapter 2 of subpart C of part 7 of subtitle B of
title I of the Employee Retirement Income Security Act of
1974.
``(b) Amount of Tax.--The amount of tax imposed by
subsection (a) shall be equal to $100 for each day for each
individual for which such a failure occurs.
``(c) Limitation on Tax.--
``(1) Tax not to apply where failures corrected within 30
days.--No tax shall be imposed by subsection (a) with respect
to any failure if--
``(A) such failure was due to reasonable cause and not to
willful neglect, and
``(B) such failure is corrected during the 30-day period
(or such period as the Secretary may determine appropriate)
beginning on the 1st date any of the individuals on whom the
tax is imposed knew, or exercising reasonable diligence would
have known, that such failure existed.
``(2) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax
would be excessive relative to the failure involved.''.
(b) Conforming Amendment.--The table of sections for such
chapter 47 is amended by adding at the end the following new
item:

``Sec. 5000A. Small employer requirements.''.

SEC. 413. ENFORCEMENT BY EXCISE TAX ON QUALIFIED
ASSOCIATIONS.

(a) In General.--Chapter 43 of the Internal Revenue Code of
1986 (relating to qualified pension, etc., plans), as amended
by section 411, is amended by adding at the end the following
new section:

``SEC. 4980G. FAILURE OF QUALIFIED ASSOCIATIONS, ETC., TO
COMPLY WITH CERTAIN STANDARDS FOR HEALTH
INSURANCE COVERAGE.

``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on the
failure of a qualified association (as defined in section
2709A of the Public Health Service Act and section 723A of
the Employee Retirement Income Security Act of 1974), church
plan (as defined in section 414(e)), multiemployer plan, or
plan maintained by a rural electric cooperative or a rural
telephone cooperative association (within the meaning of
section 3(40) of the Employee Retirement Income Security Act
of 1974) to comply with the requirements applicable to such
association or plans under--
``(A) subchapter C of chapter 2 of subpart 2 of part A of
title XXVII of the Public Health Service Act;
``(B) section 2753 of the Public Health Service Act; and
``(C) subchapters A and B of chapter 3 of subpart C of part
7 of the Employee Retirement Income Security Act of 1974.
``(2) Exception.--Paragraph (1) shall not apply to a
failure by a qualified association, church plan,
multiemployer plan, or plan maintained by a rural electric
cooperative or a rural telephone cooperative association in a
State if the Secretary of Health and Human Services
determines that the State has in effect a regulatory
enforcement mechanism that provides adequate sanctions with
respect to such a failure by such a qualified association or
plan.
``(b) Amount of Tax.--The amount of the tax imposed by
subsection (a) shall be $100 for each day during which such
failure persists for each person to which such failure
relates. A rule similar to the rule of section 4980D(b)(3)
shall apply for purposes of this section.
``(c) Liability for Tax.--The tax imposed by this section
shall be paid by the qualified association or plan.
``(d) Limitations on Amount of Tax.--
``(1) Tax not to apply to failures corrected within 30
days.--No tax shall be imposed by subsection (a) on any
failure if--
``(A) such failure was due to reasonable cause and not to
willful neglect, and
``(B) such failure is corrected during the 30-day period
(or such period as the Secretary may determine appropriate)
beginning on the first date the qualified association, church
plan, multiemployer plan, or plan maintained by a rural
electric cooperative or a rural telephone cooperative
association knows, or exercising reasonable diligence could
have known, that such failure existed.
``(2) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax
would be excessive relative to the failure involved.''.
(b) Conforming Amendment.--The table of sections for such
chapter 43, as amended by section 411, is amended by adding
at the end the following new item:

``Sec. 4980G. Failure of qualified associations, etc., to comply with
certain standards for health insurance plans.''.

SEC. 414. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
EMPLOYED INDIVIDUALS.

(a) Full Deduction in 2002.--The table contained in section
162(l)(1)(B) of the Internal Revenue Code of 1986 (relating
to special rules for health insurance costs of self-employed
individuals) is amended--
(1) by striking ``2001'' and inserting ``2000'';
(2) by striking ``2002'' and all that follows; and
(3) by adding at the end the following:

``2001..................................................... 70
``2002 and thereafter...................................100.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.

SEC. 415. AMENDMENTS TO COBRA.

(a) Amendments to Internal Revenue Code of 1986.--
(1) Lower cost coverage options.--Subparagraph (A) of
section 4980B(f)(2) of the Internal Revenue Code of 1986
(relating to continuation coverage requirements of group
health plans) is amended to read as follows:
``(A) Type of benefit coverage.--The coverage must consist
of coverage which, as of the time the coverage is being
provided--
``(i) is identical to the coverage provided under the plan
to similarly situated beneficiaries under the plan with
respect to whom a qualifying event has not occurred,
``(ii) is so identical, except such coverage is offered
with an annual $1,000 deductible, and
``(iii) is so identical, except such coverage is offered
with an annual $3,000 deductible.

``(II) eligible for such employer-based coverage for more
than 90 days, or''.

(3) Reduction of period of coverage.--Clause (i) of section
4980B(f)(2)(B) of the Internal Revenue Code of 1986 (relating
to period of coverage) is amended by striking ``18 months''
each place it appears and inserting ``24 months''.
(4) Continuation coverage for dependent child.--Clause (i)
of section 4980B(f)(2)(B) of the Internal Revenue Code of
1986 is amended by adding at the end the following:

``(VI) Special rule for dependent child.--In the case of a
qualifying event described in paragraph (3)(E), the date that
is 36 months after the date on which the dependent child of
the covered employee ceases to be a dependent child under the
plan.''.

(b) Amendments to Employee Retirement Income Security Act
of 1974.--
(1) Lower cost coverage options.--Paragraph (1) of section
602 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1162(1)) (relating to continuation coverage
requirements of group health plans) is amended to read as
follows:
``(1) Type of benefit coverage.--The coverage must consist
of coverage which, as of the time the coverage is being
provided--
``(A) is identical to the coverage provided under the plan
to similarly situated beneficiaries under the plan with
respect to whom a qualifying event has not occurred,

[[Page S287]]

``(B) is so identical, except such coverage is offered with
an annual $1,000 deductible, and
``(C) is so identical, except such coverage is offered with
an annual $3,000 deductible.

If coverage under the plan is modified for any group of
similarly situated beneficiaries, the coverage shall also be
modified in the same manner for all individuals who are
qualified beneficiaries under the plan pursuant to this
subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for
employer-based coverage for 90 days.--Subparagraph (D) of
section 602(2) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1162(2)(D)) (relating to period of
coverage) is amended--
(A) by striking ``or'' at the end of clause (i);
(B) by redesignating clause (ii) as clause (iii); and
(C) by inserting after clause (i) the following:
``(ii) eligible for such employer-based coverage for more
than 90 days, or''.
(3) Reduction of period of coverage.--Subparagraph (A) of
section 602(2) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1162(2)(A)) (relating to period of
coverage) is amended by striking ``18 months'' each place it
appears and inserting ``24 months''.
(4) Continuation coverage for dependent child.--
Subparagraph (A) of section 602(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1162(2)(A)) is amended
by adding at the end the following:
``(vi) Special rule for dependent child.--In the case of a
qualifying event described in section 603(5), the date that
is 36 months after the date on which the dependent child of
the covered employee ceases to be a dependent child under the
plan.''.
(c) Amendments to Public Health Service Act.--
(1) Lower cost coverage options.--Paragraph (1) of section
2202 of the Public Health Service Act (42 U.S.C. 300bb-2(1))
(relating to continuation coverage requirements of group
health plans) is amended to read as follows:
``(1) Type of benefit coverage.--The coverage must consist
of coverage which, as of the time the coverage is being
provided--
``(A) is identical to the coverage provided under the plan
to similarly situated beneficiaries under the plan with
respect to whom a qualifying event has not occurred,
``(B) is so identical, except such coverage is offered with
an annual $1,000 deductible, and
``(C) is so identical, except such coverage is offered with
an annual $3,000 deductible.

If coverage under the plan is modified for any group of
similarly situated beneficiaries, the coverage shall also be
modified in the same manner for all individuals who are
qualified beneficiaries under the plan pursuant to this
subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for
employer-based coverage for 90 days.--Subparagraph (D) of
section 2202(2) of the Public Health Service Act (42 U.S.C.
300bb-2(2)(D)) (relating to period of coverage) is amended--
(A) by striking ``or'' at the end of clause (i);
(B) by redesignating clause (ii) as clause (iii); and
(C) by inserting after clause (i) the following:
``(ii) eligible for such employer-based coverage for more
than 90 days, or''.
(3) Reduction of period of coverage.--Subparagraph (A) of
section 2202(2) of the Public Health Service Act (42 U.S.C.
300bb-2(2)(A)) (relating to period of coverage) is amended by
striking ``18 months'' each place it appears and inserting
``24 months''.
(4) Continuation coverage for dependent child.--
Subparagraph (A) of section 2202(2) of the Public Health
Service Act (42 U.S.C. 300bb-2(2)(A)) is amended by adding at
the end the following:
``(vi) Special rule for dependent child.--In the case of a
qualifying event described in section 2203(5), the date that
is 36 months after the date on which the dependent child of
the covered employee ceases to be a dependent child under the
plan.''.
(d) Effective Date.--The amendments made by this section
shall apply to qualifying events occurring after the date of
the enactment of this Act.

TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES

SEC. 501. IMPROVEMENT OF MEDICARE PREVENTIVE CARE SERVICES.

(a) Waiver of Coinsurance for Screening and Diagnostic
Mammography.--
(1) In general.--Section 1833(a)(1) of the Social Security
Act (42 U.S.C. 1395l(a)(1)), as amended by section 223(c) of
the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (as enacted into law by section
1(a)(6) of Public Law 106-554), is amended--
(A) by striking ``and (U)'' and inserting ``(U)''; and
(B) by striking the semicolon at the end and inserting the
following: ``, and (V) with respect to screening mammography
(as defined in section 1861(jj)) and diagnostic mammography,
100 percent of the payment basis determined under section
1848;''.
(2) Waiver of coinsurance in outpatient hospital
settings.--The third sentence of section 1866(a)(2)(A) of the
Social Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by
inserting after ``1861(s)(10)(A)'' the following: ``, with
respect to screening mammography (as defined in section
1861(jj)) and diagnostic mammography,''.
(b) Coverage of Insulin Pumps.--
(1) Inclusion as item of durable medical equipment.--
Section 1861(n) of the Social Security Act (42 U.S.C.
1395x(n)) is amended by inserting before the semicolon the
following: ``, and includes insulin infusion pumps (as
defined in subsection (ww)) prescribed by the physician of an
individual with Type I diabetes who is experiencing severe
swings of high and low blood glucose levels and has
successfully completed a training program that meets
standards established by the Secretary or who has used such a
pump without interruption for at least 18 months immediately
before enrollment under part B''.
(2) Definition of insulin infusion pump.--Section 1861 of
the Social Security Act (42 U.S.C. 1395x), as amended by
section 105(b) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law
by section 1(a)(6) of Public Law 106-554), is amended by
adding at the end the following:

``Insulin Infusion Pump

``(ww) The term `insulin infusion pump' means an infusion
pump, approved by the Federal Food and Drug Administration,
that provides for the computerized delivery of insulin for
individuals with diabetes in lieu of multiple daily manual
insulin injections.''.
(3) Payment for supplies relating to infusion pumps.--
Section 1834(a)(2)(A) of the Social Security Act (42 U.S.C.
1395m(a)(2)(A)) is amended--
(A) in clause (ii), by striking ``or'' at the end;
(B) in clause (iii), by inserting ``or'' at the end; and
(C) by inserting after clause (iii) the following:
``(iv) which is an accessory used in conjunction with an
insulin infusion pump (as defined in section 1861(ww)),''.
(c) Annual Screening Pap Smear and Pelvic Exams.--
(1) In general.--Section 1861(nn) of the Social Security
Act (42 U.S.C. 1395x(nn), as amended by section 101(a) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (as enacted into law by section
1(a)(6) of Public Law 106-554), is amended to read as
follows:

``Screening Pap Smear; Screening Pelvic Exam

``(nn)(1) The term `screening pap smear' means a diagnostic
laboratory test consisting of a routine exfoliative cytology
test (Papanicolaou test) provided to a woman for the purpose
of early detection of cervical or vaginal cancer and includes
a physician's interpretation of the results of the test, if
the individual involved has not had such a test during the
preceding year.
``(2) The term `screening pelvic exam' means a pelvic
examination provided to a woman if the woman involved has not
had such an examination during the preceding year, and
includes a clinical breast examination, relevant history-
taking, medical decision-making, and patient counseling.''.
(2) Waiver of coinsurance for pelvic exams.--Section
1833(a)(1) of the Social Security Act (42 U.S.C.
1395l(a)(1)), as amended by subsection (a)(1) and section
223(c) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law
by section 1(a)(6) of Public Law 106-554), is amended--
(A) by striking ``and (V)'' and inserting ``(V)''; and
(B) by striking the semicolon at the end and inserting the
following: ``, and (W) with respect to services described in
section 1861(nn)(2), 100 percent of the payment basis
determined under section 1848;''.
(e) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after the
first day of the first calendar quarter beginning on or after
the date that is 6 months after the date of enactment of this
Act.

SEC. 502. AUTHORIZATION OF APPROPRIATIONS FOR HEALTHY START
PROGRAM.

(a) Authorization of Appropriations.--To enable the
Secretary of Health and Human Services to carry out the
healthy start program established under the authority of
section 301 of the Public Health Service Act (42 U.S.C. 241),
there are authorized to be appropriated $115,000,000 for
fiscal year 2002, $150,000,000 for fiscal year 2003,
$250,000,000 for fiscal year 2004, and $300,000,000 for each
of the fiscal years 2005 through 2007.
(b) Model Projects.--
(1) In general.--Of the amount appropriated under
subsection (a) for a fiscal year, the Secretary of Health and
Human Services shall reserve $50,000,000 for such fiscal year
to be distributed to model projects determined to be eligible
under paragraph (2).
(2) Eligibility.--To be eligible to receive funds under
paragraph (1), a model project shall--
(A) have been one of the original 15 Healthy Start
projects; and
(B) be determined by Secretary of Health and Human Services
to have been successful in serving needy areas and reducing
infant mortality.
(3) Use of projects.--A model project that receives funding
under paragraph (1) shall be utilized as a resource center to
assist in the training of those individuals to be involved in
projects established under subsection (c). It shall be the
goal of such projects to become self-sustaining within the
project area.
(4) Provision of matching funds.--In providing assistance
to a project under this subsection, the Secretary of Health
and Human Services shall ensure that--

[[Page S288]]

(A) with respect to fiscal year 2002, the project shall
make non-Federal contributions (in cash or in-kind) towards
the costs of such project in an amount equal to not less than
20 percent of such costs;
(B) with respect to fiscal year 2003, the project shall
make non-Federal contributions (in cash or in-kind) towards
the costs of such project in an amount equal to not less than
30 percent of such costs;
(C) with respect to fiscal year 2004, the project shall
make non-Federal contributions (in cash or in-kind) towards
the costs of such project in an amount equal to not less than
40 percent of such costs; and
(D) with respect to each of the fiscal years 2005 through
2007, the project shall make non-Federal contributions (in
cash or in-kind) towards the costs of such project in an
amount equal to not less than 50 percent of such costs for
each such fiscal year.
(c) New Projects.--Of the amount appropriated under
subsection (a) for a fiscal year, the Secretary of Health and
Human Services shall allocate amounts remaining after the
reservation under subsection (b) for such fiscal year among
new demonstration projects and existing special projects that
have proven to be successful as determined by the Secretary
of Health and Human Services. Such projects shall be
community-based and shall attempt to replicate healthy start
model projects that have been determined by the Secretary of
Health and Human Services to be successful.

SEC. 503. REAUTHORIZATION OF CERTAIN PROGRAMS PROVIDING
PRIMARY AND PREVENTIVE CARE.

(a) Tuberculosis Prevention Grants.--Section 317(j)(1) of
the Public Health Service Act (42 U.S.C. 247b(j)(1)), as
amended by section 1711 of the Children's Health Act of 2000
(Public Law 106-310), is amended by striking ``2005'' and
inserting ``2007''.
(b) Sexually Transmitted Diseases.--Section 318(e)(1) of
the Public Health Service Act (42 U.S.C. 247c(e)(1)) is
amended--
(1) by striking ``and such sums'' and inserting ``such
sums'';
(2) by striking ``1998'' and inserting ``2001''; and
(3) by inserting before the period the following: ``,
$130,000,000 for each of the fiscal years 2002 and 2003, and
such sums as may be necessary for each of the fiscal years
2004 through 2006''.
(c) Family Planning Project Grants.--Section 1001(d) of the
Public Health Service Act (42 U.S.C. 300(d)) is amended--
(1) by striking ``and $158,400,000'' and inserting
``$158,400,000''; and
(2) by inserting before the period the following: ``;
$430,000,000 for fiscal year 2002; and such sums as may be
necessary for each of the fiscal years 2003 through 2005''.
(d) Breast and Cervical Cancer Prevention.--Section 1510(a)
of the Public Health Service Act (42 U.S.C. 300n-5(a)) is
amended--
(1) by striking ``and such sums'' and inserting ``such
sums''; and
(2) by inserting before the period the following: ``,
$200,000,000 for fiscal year 2002, and such sums as may be
necessary for each of the fiscal years 2003 through 2005''.
(e) Preventive Health and Health Services Block Grant.--
Section 1901(a) of the Public Health Service Act (42 U.S.C.
300w(a)) is amended by striking ``$205,000,000'' and
inserting ``$235,000,000''.
(f) Maternal and Child Health Services Block Grant.--
Section 501(a) of the Social Security Act (42 U.S.C. 701(a))
is amended by striking ``fiscal year 2001 and each fiscal
year thereafter'' and inserting ``each of fiscal years 2001
and 2002, and such sums as may be necessary for each of the
fiscal years 2003 through 2005''.

SEC. 504. COMPREHENSIVE SCHOOL HEALTH EDUCATION PROGRAM.

(a) Purpose.--It is the purpose of this section to
establish a comprehensive school health education and
prevention program for elementary and secondary school
students.
(b) Program Authorized.--The Secretary of Education
(referred to in this section as the ``Secretary''), through
the Office of Comprehensive School Health Education
established in subsection (e), shall award grants to States
from allotments under subsection (c) to enable such States
to--
(1) award grants to local or intermediate educational
agencies, and consortia thereof, to enable such agencies or
consortia to establish, operate, and improve local programs
of comprehensive health education and prevention, early
health intervention, and health education, in elementary and
secondary schools (including preschool, kindergarten,
intermediate, and junior high schools); and
(2) develop training, technical assistance, and
coordination activities for the programs assisted pursuant to
paragraph (1).
(c) Reservations and State Allotments.--
(1) Reservations.--From the sums appropriated pursuant to
the authority of subsection (f) for any fiscal year, the
Secretary shall reserve--
(A) 1 percent for payments to Guam, American Samoa, the
Virgin Islands, the Republic of the Marshall Islands, the
Federated States of Micronesia, the Northern Mariana Islands,
and the Republic of Palau, to be allotted in accordance with
their respective needs; and
(B) 1 percent for payments to the Bureau of Indian Affairs.
(2) State allotments.--From the remainder of the sums not
reserved under paragraph (1), the Secretary shall allot to
each State an amount which bears the same ratio to the amount
of such remainder as the school-age population of the State
bears to the school-age population of all States, except that
no State shall be allotted less than an amount equal to 0.5
percent of such remainder.
(3) Reallotment.--The Secretary may reallot any amount of
any allotment to a State to the extent that the Secretary
determines that the State will not be able to obligate such
amount within 2 years of allotment. Any such reallotment
shall be made on the same basis as an allotment under
paragraph (2).
(d) Use of Funds.--Grant funds provided to local or
intermediate educational agencies, or consortia thereof,
under this section may be used to improve elementary and
secondary education in the areas of--
(1) personal health and fitness;
(2) prevention of chronic diseases;
(3) prevention and control of communicable diseases;
(4) nutrition;
(5) substance use and abuse;
(6) accident prevention and safety;
(7) community and environmental health;
(8) mental and emotional health;
(9) parenting and the challenges of raising children; and
(10) the effective use of the health services delivery
system.
(e) Office of Comprehensive School Health Education.--The
Secretary shall establish within the Office of the Secretary
an Office of Comprehensive School Health Education which
shall have the following responsibilities:
(1) To recommend mechanisms for the coordination of school
health education programs conducted by the various
departments and agencies of the Federal Government.
(2) To advise the Secretary on formulation of school health
education policy within the Department of Education.
(3) To disseminate information on the benefits to health
education of utilizing a comprehensive health curriculum in
schools.
(f) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated
$50,000,000 for fiscal year 2002 and such sums as may be
necessary for each of the fiscal years 2003 and 2004 to carry
out this section.
(2) Availability.--Funds appropriated pursuant to the
authority of paragraph (1) in any fiscal year shall remain
available for obligation and expenditure until the end of the
fiscal year succeeding the fiscal year for which such funds
were appropriated.

SEC. 505. COMPREHENSIVE EARLY CHILDHOOD HEALTH EDUCATION
PROGRAM.

(a) Purpose.--It is the purpose of this section to
establish a comprehensive early childhood health education
program.
(b) Program.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
conduct a program of awarding grants to agencies conducting
Head Start training to enable such agencies to provide
training and technical assistance to Head Start teachers and
other child care providers. Such program shall--
(1) establish a training system through the Head Start
agencies and organizations conducting Head Start training for
the purpose of enhancing teacher skills and providing
comprehensive early childhood health education curriculum;
(2) enable such agencies and organizations to provide
training to day care providers in order to strengthen the
skills of the early childhood workforce in providing health
education;
(3) provide technical support for health education programs
and curricula; and
(4) provide cooperation with other early childhood
providers to ensure coordination of such programs and the
transition of students into the public school environment.
(c) Use of Funds.--Grant funds under this section may be
used to provide training and technical assistance in the
areas of--
(1) personal health and fitness;
(2) prevention of chronic diseases;
(3) prevention and control of communicable diseases;
(4) dental health;
(5) nutrition;
(6) substance use and abuse;
(7) accident prevention and safety;
(8) community and environmental health;
(9) mental and emotional health; and
(10) strengthening the role of parent involvement.
(d) Reservation for Innovative Programs.--The Secretary
shall reserve 5 percent of the funds appropriated pursuant to
the authority of subsection (e) in each fiscal year for the
development of innovative model health education programs or
curricula.
(e) Authorization of Appropriations.--There are authorized
to be appropriated $40,000,000 for fiscal year 2002 and such
sums as may be necessary for each of the fiscal years 2003
and 2004 to carry out this section.

SEC. 506. ADOLESCENT FAMILY LIFE AND ABSTINENCE.

(a) Definitions.--Section 2002(a)(4)(G)(i) of the Public
Health Service Act (42 U.S.C. 300z-1(a)(4)(G)(i)) is amended
by inserting ``and abstinence'' after ``adoption''.
(b) Geographic Diversity.--Section 2005 of the Public
Health Service Act (42 U.S.C. 300z-4) is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:
``(b) In approving applications for grants for
demonstration projects for services under

[[Page S289]]

this title, the Secretary shall, to the maximum extent
practicable, ensure adequate representation of both urban and
rural areas.''.
(c) Simplified Application Process.--Section 2006 of the
Public Health Service Act (42 U.S.C. 300z-5) is amended by
adding at the end following:
``(g) The Secretary shall develop and implement a
simplified and expedited application process for applicants
seeking less than $15,000 of funds available under this title
for a demonstration project.''.
(d) Authorization of Appropriations.--Section 2010(a) of
the Public Health Service Act (42 U.S.C. 300z-9) is amended
to read as follows:
``(a) For the purpose of carrying out this title, there are
authorized to be appropriated $75,000,000 for each of the
fiscal years 2002 through 2006.''.

TITLE VI--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

SEC. 601. PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT.

(a) Right To Decline Medical Treatment.--
(1) Rights of competent adults.--
(A) In general.--Except as provided in subparagraph (B), a
State may not restrict the right of a competent adult to
consent to, or to decline, medical treatment.
(B) Limitations.--
(i) Affect on third parties.--A State may impose
limitations on the right of a competent adult to decline
treatment if such limitations protect third parties
(including minor children) from harm.
(ii) Treatment which is not medically indicated.--Nothing
in this subsection shall be construed to require that any
individual be offered, or to state that any individual may
demand, medical treatment which the health care provider does
not have available, or which is, under prevailing medical
standards, either futile or otherwise not medically
indicated.
(2) Rights of incapacitated adults.--
(A) In general.--Except as provided in subparagraph (B)(i)
of paragraph (1), States may not restrict the right of an
incapacitated adult to consent to, or to decline, medical
treatment as exercised through the documents specified in
this paragraph, or through similar documents or other written
methods of directive which evidence the adult's treatment
choices.
(B) Advance directives and powers of attorney.--
(i) In general.--In order to facilitate the communication,
despite incapacity, of an adult's treatment choices, the
Secretary of Health and Human Services (referred to in this
section as the ``Secretary''), in consultation with the
Attorney General, shall develop a national advance directive
form that--

(I) shall not limit or otherwise restrict, except as
provided in subparagraph (B)(i) of paragraph (1), an adult's
right to consent to, or to decline, medical treatment; and
(II) shall, at minimum--

(aa) provide the means for an adult to declare such adult's
own treatment choices in the event of a terminal condition;
(bb) provide the means for an adult to declare, at such
adult's option, treatment choices in the event of other
conditions which are medically incurable, and from which such
adult likely will not recover; and
(cc) provide the means by which an adult may, at such
adult's option, declare such adult's wishes with respect to
all forms of medical treatment, including forms of medical
treatment such as the provision of nutrition and hydration by
artificial means which may be, in some circumstances,
relatively nonburdensome.
(ii) National durable power of attorney form.--The
Secretary, in consultation with the Attorney General, shall
develop a national durable power of attorney form for health
care decisionmaking. The form shall provide a means for any
adult to designate another adult or adults to exercise the
same decisionmaking powers which would otherwise be exercised
by the patient if the patient were competent.
(iii) Honored by all health care providers.--The national
advance directive and durable power of attorney forms
developed by the Secretary shall be honored by all health
care providers.
(iv) Limitations.--No individual shall be required to
execute an advance directive. This section makes no
presumption concerning the intention of an individual who has
not executed an advance directive. An advance directive shall
be sufficient, but not necessary, proof of an adult's
treatment choices with respect to the circumstances addressed
in the advance directive.
(C) Definition.--For purposes of this paragraph, the term
``incapacity'' means the inability to understand or to
communicate concerning the nature and consequences of a
health care decision (including the intended benefits and
foreseeable risks of, and alternatives to, proposed treatment
options), and to reach an informed decision concerning health
care.
(3) Health care providers.--
(A) In general.--No health care provider may provide
treatment to an adult contrary to the adult's wishes as
expressed personally, by an advance directive as provided for
in paragraph (2)(B), or by a similar written advance
directive form or another written method of directive which
clearly and convincingly evidence the adult's treatment
choices. A health care provider who acts in good faith
pursuant to the preceding sentence shall be immune from
criminal or civil liability or discipline for professional
misconduct.
(B) Health care providers under the medicare and medicaid
programs.--Any health care provider who knowingly provides
services to an adult contrary to the adult's wishes as
expressed personally, by an advance directive as provided for
in paragraph (2)(B), or by a similar written advance
directive form or another written method of directive which
clearly and convincingly evidence the adult's treatment
choices, shall be denied payment for such services under
titles XVIII and XIX of the Social Security Act.
(C) Transfers.--Health care providers who object to the
provision of medical care in accordance with an adult's
wishes shall transfer the adult to the care of another health
care provider.
(4) Definition.--For purposes of this subsection, the term
``adult'' means--
(A) an individual who is 18 years of age or older; or
(B) an emancipated minor.
(b) Federal Right Enforceable in Federal Courts.--The
rights recognized in this section may be enforced by filing a
civil action in an appropriate district court of the United
States.
(c) Suicide and Homicide.--Nothing in this section shall be
construed to permit, condone, authorize, or approve suicide
or mercy killing, or any affirmative act to end a human life.
(d) Rights Granted by States.--Nothing in this section
shall impair or supersede rights granted by State law which
exceed the rights recognized by this section.
(e) Effect on Other Laws.--
(1) In general.--Except as specified in paragraph (2),
written policies and written information adopted by health
care providers pursuant to sections 4206 and 4751 of the
Omnibus Budget Reconciliation Act of 1990 (Public Law 101-
508), shall be modified within 6 months after the enactment
of this section to conform to the provisions of this section.
(2) Delay period for uniform forms.--Health care providers
shall modify any written forms distributed as written
information under sections 4206 and 4751 of the Omnibus
Budget Reconciliation Act of 1990 (Public Law 101-508) not
later than 6 months after promulgation of the forms referred
to in clauses (i) and (ii) of subsection (a)(2)(B) by the
Secretary.
(f) Information Provided to Certain Individuals.--The
Secretary shall provide on a periodic basis written
information regarding an individual's right to consent to, or
to decline, medical treatment as provided in this section to
individuals who are beneficiaries under titles II, XVI,
XVIII, and XIX of the Social Security Act.
(g) Recommendations to Congress on Issues Relating to a
Patient's Right of Self-Determination.--Not later than 180
days after the date of the enactment of this Act, and
annually thereafter for a period of 3 years, the Secretary
shall provide recommendations to Congress concerning the
medical, legal, ethical, social, and educational issues
related to in this section. In developing recommendations
under this subsection the Secretary shall address the
following issues:
(1) The contents of the forms referred to in clauses (i)
and (ii) of subsection (a)(2)(B).
(2) Issues pertaining to the education and training of
health care professionals concerning patients' self-
determination rights.
(3) Issues pertaining to health care professionals' duties
with respect to patients' rights, and health care
professionals' roles in identifying, assessing, and
presenting for patient consideration medically indicated
treatment options.
(4) Issues pertaining to the education of patients
concerning their rights to consent to, and decline,
treatment, including how individuals might best be informed
of such rights prior to hospitalization and how uninsured
individuals, and individuals not under the regular care of a
physician or another provider, might best be informed of
their rights.
(5) Issues relating to appropriate standards to be adopted
concerning decisionmaking by incapacitated adult patients
whose treatment choices are not known.
(6) Such other issues as the Secretary may identify.
(h) Effective Date.--
(1) In general.--Except as provided in paragraph (2), this
section shall take effect on the date that is 6 months after
the date of enactment of this Act.
(2) Subsection (g).--The provisions of subsection (g) shall
take effect on the date of enactment of this Act.

TITLE VII--PRIMARY AND PREVENTIVE CARE PROVIDERS

SEC. 701. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN
ASSISTANTS, NURSE PRACTITIONERS, AND CLINICAL
NURSE SPECIALISTS.

(a) Fee Schedule Amount.--Section 1833(a)(1)(O) of the
Social Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by
striking ``85 percent'' and inserting ``90 percent'' each
place it appears.
(b) Technical Amendment.--Section 1833(a)(1)(O) of the
Social Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by
striking ``clinic'' and inserting ``clinical''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to services furnished and supplies
provided on and after January 1, 2002.

[[Page S290]]

SEC. 702. REQUIRING COVERAGE OF CERTAIN NONPHYSICIAN
PROVIDERS UNDER THE MEDICAID PROGRAM.

(a) In General.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d(a)), as amended by section 301(c)(1), is
amended--
(1) in paragraph (27), by striking ``and'' at the end;
(2) by redesignating paragraph (28) as paragraph (29); and
(3) by inserting after paragraph (27) the following:
``(28) services furnished by a physician assistant, nurse
practitioner, clinical nurse specialist (as defined in
section 1861(aa)(5)), or certified registered nurse
anesthetist (as defined in section 1861(bb)(2)); and''.
(b) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of
the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)), as
amended by section 301(c)(3), is amended by striking ``and
(27)'' and inserting ``, (27), and (28)''.
(c) Effective Date.--The amendments made by this section
shall apply to medical assistance furnished under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.) beginning
with the first fiscal year quarter that begins after the date
of enactment of this Act.

SEC. 703. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

Part C of title VII of the Public Health Service Act (42
U.S.C. 293j et seq.) is amended by adding at the end thereof
the following:

``SEC. 749. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

``(a) Establishment.--The Secretary shall establish a
program to award grants to eligible schools of medicine or
osteopathic medicine to enable such schools to provide
medical students for tutorial programs or as participants in
clinics designed to interest high school or college students
in careers in general medical practice.
``(b) Application.--To be eligible to receive a grant under
this section, a school of medicine or osteopathic medicine
shall prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require, including assurances that the
school will use amounts received under the grant in
accordance with subsection (c).
``(c) Use of Funds.--
``(1) In general.--Amounts received under a grant awarded
under this section shall be used to--
``(A) fund programs under which students of the grantee are
provided as tutors for high school and college students in
the areas of mathematics, science, health promotion and
prevention, first aide, nutrition and prenatal care;
``(B) fund programs under which students of the grantee are
provided as participants in clinics and seminars in the areas
described in paragraph (1); and
``(C) conduct summer institutes for high school and college
students to promote careers in medicine.
``(2) Design of programs.--The programs, institutes, and
other activities conducted by grantees under paragraph (1)
shall be designed to--
``(A) give medical students desiring to practice general
medicine access to the local community;
``(B) provide information to high school and college
students concerning medical school and the general practice
of medicine; and
``(C) promote careers in general medicine.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section,
$5,000,000 for fiscal year 2002, and such sums as may be
necessary for fiscal year 2003.''.

SEC. 704. GENERAL MEDICAL PRACTICE GRANTS.

Part C of title VII of the Public Health Service Act (as
amended by section 703) is further amended by adding at the
end thereof the following:

``SEC. 749A. GENERAL MEDICAL PRACTICE GRANTS.

``(a) Establishment.--The Secretary shall establish a
program to award grants to eligible public or private
nonprofit schools of medicine or osteopathic medicine,
hospitals, residency programs in family medicine or
pediatrics, or to a consortium of such entities, to enable
such entities to develop effective strategies for recruiting
medical students interested in the practice of general
medicine and placing such students into general practice
positions upon graduation.
``(b) Application.--To be eligible to receive a grant under
this section, an entity of the type described in subsection
(a) shall prepare and submit to the Secretary an application
at such time, in such manner, and containing such information
as the Secretary may require, including assurances that the
entity will use amounts received under the grant in
accordance with subsection (c).
``(c) Use of Funds.--Amounts received under a grant awarded
under this section shall be used to fund programs under which
effective strategies are developed and implemented for
recruiting medical students interested in the practice of
general medicine and placing such students into general
practice positions upon graduation.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section,
$25,000,000 for each of the fiscal years 2002 through 2004,
and such sums as may be necessary for fiscal years
thereafter.''.

TITLE VIII--SAFE AND COST-EFFECTIVE MEDICAL TREATMENT

SEC. 801. ENHANCING INVESTMENT IN COST-EFFECTIVE METHODS OF
HEALTH CARE.

(a) Establishment of Trust Fund for Medical Treatment
Outcomes Research.--
(1) In general.--Subchapter A of chapter 98 of the Internal
Revenue Code of 1986 (relating to trust fund code) is amended
by adding at the end the following:

``SEC. 9511. TRUST FUND FOR MEDICAL TREATMENT OUTCOMES
RESEARCH.

``(a) Creation of Trust Fund.--There is established in the
Treasury of the United States a trust fund to be known as the
`Trust Fund for Medical Treatment Outcomes Research'
(referred to in this section as the `Trust Fund'), consisting
of such amounts as may be appropriated or credited to the
Trust Fund as provided in this section or section 9602(b).
``(b) Transfers to Trust Fund.--There is hereby
appropriated to the Trust Fund an amount equivalent to the
taxes received in the Treasury under section 4491 (relating
to tax on health insurance policies).
``(c) Distribution of Amounts in Trust Fund.--On an annual
basis and without further appropriation the Secretary shall
distribute the amounts in the Trust Fund to the Secretary of
Health and Human Services for use by the Agency for
Healthcare Research and Quality. Such amounts shall be
available to pay for research activities related to medical
treatment outcomes and shall be in addition to any other
amounts appropriated for such purposes.''.
(2) Conforming amendment.--The table of sections for
subchapter A of chapter 98 of such Code is amended by adding
at the end the following:

``Sec. 9511. Trust Fund for Medical Treatment Outcomes Research.''.

(b) Imposition of Tax on Health Insurance Policies.--
(1) In general.--Chapter 36 of the Internal Revenue Code of
1986 (relating to certain other excise taxes) is amended by
adding at the end the following:

``Subchapter F--Tax on Health Insurance Policies

``Sec. 4491. Imposition of tax.
``Sec. 4492. Liability for tax.

``SEC. 4491. IMPOSITION OF TAX.

``(a) General Rule.--There is hereby imposed a tax equal to
.001 cent on each dollar, or fractional part thereof, of the
premium paid on a policy of health insurance.
``(b) Definition.--For purposes of subsection (a), the term
`policy of health insurance' means any policy or other
instrument by whatever name called whereby a contract of
insurance is made, continued, or renewed with respect to the
health of an individual or group of individuals.

``SEC. 4492. LIABILITY FOR TAX.

``The tax imposed by this subchapter shall be paid, on the
basis of a return, by any person who makes, signs, issues, or
sells any of the documents and instruments subject to the
tax, or for whose use or benefit the same are made, signed,
issued, or sold. The United States or any agency or
instrumentality thereof shall not be liable for the tax.''.
(2) Conforming amendment.--The table of subchapters for
chapter 36 of such Code is amended by adding at the end the
following:

``Subchapter F. Tax on health insurance policies.''.

SEC. 802. MEDICAL ERRORS REDUCTION.

Title IX of the Public Health Service Act (42 U.S.C. 299 et
seq.) is amended--
(1) by redesignating part C as part D;
(2) by redesignating sections 921 through 928, as sections
931 through 938, respectively;
(3) in section 938(1) (as so redesignated), by striking
``921'' and inserting ``931''; and
(4) by inserting after part B the following:

``PART C--REDUCING ERRORS IN HEALTH CARE

``SEC. 921. DEFINITIONS.

``In this part:
``(1) Adverse event.--The term `adverse event' means an
injury resulting from medical management rather than the
underlying condition of the patient.
``(2) Error.--The term `error' means the failure of a
planned action to be completed as intended or the use of a
wrong plan to achieve the desired outcome.
``(3) Health care provider.--The term `health care
provider' means an individual or entity that provides medical
services and is a participant in a demonstration program
under this part.
``(4) Health care-related error.--The term ``health care-
related error'' means a preventable adverse event related to
a health care intervention or a failure to intervene
appropriately.
``(5) Medication-related error.--The term `medication-
related error' means a preventable adverse event related to
the administration of a medication.
``(6) Safety.--The term `safety' with respect to an
individual means that such individual has a right to be free
from preventable serious injury.
``(7) Sentinel event.--The term `sentinel event' means an
unexpected occurrence involving an individual that results in
death or serious physical injury that is unrelated to the
natural course of the individual's illness or underlying
condition.

``SEC. 922. ESTABLISHMENT OF STATE-BASED MEDICAL ERROR
REPORTING SYSTEMS.

``(a) In General.--The Secretary shall make grants
available to States to enable

[[Page S291]]

such States to establish reporting systems designed to reduce
medical errors and improve health care quality.
``(b) Requirement.--
``(1) In general.--To be eligible to receive a grant under
subsection (a), the State involved shall provide assurances
to the Secretary that amounts received under the grant will
be used to establish and implement a medical error reporting
system using guidelines (including guidelines relating to the
confidentiality of the reporting system) developed by the
Agency for Healthcare Research and Quality with input from
interested, non-governmental parties including patient,
consumer and health care provider groups.
``(2) Guidelines.--Not later than 90 days after the date of
enactment of this part, the Agency for Healthcare Research
and Quality shall develop and publish the guidelines
described in paragraph (1).
``(c) Data.--
``(1) Availability.--A State that receives a grant under
subsection (a) shall make the data provided to the medical
error reporting system involved available only to the Agency
for Healthcare Research and Quality and may not otherwise
disclose such information.
``(2) Confidentiality.--Nothing in this part shall be
construed to supersede any State law that is inconsistent
with this part.
``(d) Application.--To be eligible for a grant under this
section, a State shall prepare and submit to the Secretary an
application at such time, in such manner and containing, such
information as the Secretary shall require.

``SEC. 923. DEMONSTRATION PROJECTS TO REDUCE MEDICAL ERRORS,
IMPROVE PATIENT SAFETY, AND EVALUATE REPORTING.

``(a) Establishment.--The Secretary, acting through the
Director of the Agency for Healthcare Research and Quality
and in conjunction with the Administrator of the Health Care
Financing Administration, may establish a program under which
funding will be provided for not less than 15 demonstration
projects, to be competitively awarded, in health care
facilities and organizations in geographically diverse
locations, including rural and urban areas (as determined by
the Secretary), to determine the causes of medical errors and
to--
``(1) use technology, staff training, and other methods to
reduce such errors;
``(2) develop replicable models that minimize the frequency
and severity of medical errors;
``(3) develop mechanisms that encourage reporting, prompt
review, and corrective action with respect to medical errors;
and
``(4) develop methods to minimize any additional paperwork
burden on health care professionals.
``(b) Activities.--
``(1) In general.--A health care provider participating in
a demonstration project under subsection (a) shall--
``(A) utilize all available and appropriate technologies to
reduce the probability of future medical errors; and
``(B) carry out other activities consistent with subsection
(a).
``(2) Reporting to patients.--In carrying out this section,
the Secretary shall ensure that--
``(A) 5 of the demonstration projects permit the voluntary
reporting by participating health care providers of any
adverse events, sentinel events, health care-related errors,
or medication-related errors to the Secretary;
``(B) 5 of the demonstration projects require participating
health care providers to report any adverse events, sentinel
events, health care-related errors, or medication-related
errors to the Secretary; and
``(C) 5 of the demonstration projects require participating
health care providers to report any adverse events, sentinel
events, health care-related errors, or medication-related
errors to the Secretary and to the patient involved and a
family member or guardian of the patient.
``(3) Confidentiality.--
``(A) In general.--The Secretary and the participating
grantee organization shall ensure that information reported
under this section remains confidential.
``(B) Use.--The Secretary may use the information reported
under this section only for the purpose of evaluating the
ability to reduce errors in the delivery of care. Such
information shall not be used for enforcement purposes.
``(C) Disclosure.--The Secretary may not disclose the
information reported under this section.
``(D) Nonadmissibility.--Information reported under this
section shall be privileged, confidential, shall not be
admissible as evidence or discoverable in any civil or
criminal action or proceeding or subject to disclosure, and
shall not be subject to the Freedom of Information Act (5
U.S.C. App). This paragraph shall apply to all information
maintained by the reporting entity and the entities who
receive such reports.
``(c) Use of Technologies.--The Secretary shall encourage,
as part of the demonstration projects conducted under
subsection (a), the use of appropriate technologies to reduce
medical errors, such as hand-held electronic prescription
pads, training simulators for medical education, and bar-
coding of prescription drugs and patient bracelets.
``(d) Database.--The Secretary shall provide for the
establishment and operation of a national database of medical
errors to be used as provided for by the Secretary. The
information provided to the Secretary under subsection (b)(2)
shall be contained in the database.
``(e) Evaluation.--The Secretary shall evaluate the
progress of each demonstration project established under this
section in reducing the incidence of medical errors and
submit the results of such evaluations as part of the reports
under section 926(b).
``(f) Reporting.--Prior to October 1, of the third fiscal
year for which funds are made available under this section,
the Secretary shall prepare and submit to the appropriate
committees of Congress an interim report concerning the
results of such demonstration projects.

``SEC. 924. PATIENT SAFETY IMPROVEMENT.

``(a) In General.--The Secretary shall provide information
to educate patients and family members about their role in
reducing medical errors. Such information shall be provided
to all individuals who participate in Federally-funded health
care programs.
``(b) Development of Programs.--The Secretary shall develop
programs that encourage patients to take a more active role
in their medical treatment, including encouraging patients to
provide information to health care providers concerning pre-
existing conditions and medications.

``SEC. 925. PRIVATE, NONPROFIT EFFORTS TO REDUCE MEDICAL
ERRORS.

``(a) In General.--The Secretary shall make grants to
health professional associations and other organizations to
provide training in ways to reduce medical errors, including
curriculum development, technology training, and continuing
medical education.
``(b) Application.--To be eligible for a grant under this
section, an entity shall prepare and submit to the Secretary
an application at such time, in such manner and containing,
such information as the Secretary shall require.

``SEC. 926. REPORT TO CONGRESS.

``(a) Initial Report.--Not later than 180 days after the
date of enactment of this part, the Secretary shall prepare
and submit to the appropriate committees of Congress a report
concerning the costs associated with implementing a program
that identifies factors that contribute to errors and which
includes upgrading the health care computer systems and other
technologies in the United States in order to reduce medical
errors, including computerizing hospital systems for the
coordination of prescription drugs and handling of laboratory
specimens, and contains recommendation on ways in which to
reduce those factors.
``(b) Other Reports.--Not later than 180 days after the
completion of all demonstration projects under section 923,
the Secretary shall prepare and submit to the appropriate
committees of Congress a report concerning--
``(1) how successful each demonstration project was in
reducing medical errors;
``(2) the data submitted by States under section 922(c);
``(3) the best methods for reducing medical errors;
``(4) the costs associated with applying such best methods
on a nationwide basis; and
``(5) the manner in which other Federal agencies can share
information on best practices in order to reduce medical
errors in all Federal health care programs.

``SEC. 927. AUTHORIZATION OF APPROPRIATIONS.

``There is authorized to be appropriated such sums as may
be necessary to carry out this part.''.

TITLE IX--TAX INCENTIVES FOR PURCHASE OF QUALIFIED LONG-TERM CARE
INSURANCE

SEC. 901. CREDIT FOR QUALIFIED LONG-TERM CARE PREMIUMS.

(a) General Rule.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 35 as
section 36 and by inserting after section 34 the following:

``SEC. 35. LONG-TERM CARE INSURANCE CREDIT.

``(a) General Rule.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
subtitle for the taxable year an amount equal to the
applicable percentage of the premiums for a qualified long-
term care insurance contract (as defined in section 7702B(b))
paid during such taxable year for such individual or the
spouse of such individual.
``(b) Applicable Percentage.--
``(1) In general.--For purposes of this section, the term
`applicable percentage' means 28 percent reduced (but not
below zero) by 1 percentage point for each $1,000 (or
fraction thereof) by which the taxpayer's adjusted gross
income for the taxable year exceeds the base amount.
``(2) Base amount.--For purposes of paragraph (1) the term
`base amount' means--
``(A) except as otherwise provided in this paragraph,
$25,000,
``(B) $40,000 in the case of a joint return, and
``(C) zero in the case of a taxpayer who--
``(i) is married at the close of the taxable year (within
the meaning of section 7703) but does not file a joint return
for such taxable year, and
``(ii) does not live apart from the taxpayer's spouse at
all times during the taxable year.
``(c) Coordination With Medical Expense Deduction.--Any
amount allowed as a credit

[[Page S292]]

under this section shall not be taken into account under
section 213.''.
(b) Conforming Amendment.--The table of sections for such
subpart C is amended by striking the item relating to section
35 and inserting the following:

``Sec. 35. Long-term care insurance credit.
``Sec. 36. Overpayments of tax.''.

SEC. 902. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE IN
CAFETERIA PLANS AND FLEXIBLE SPENDING
ARRANGEMENTS.

(a) Cafeteria Plans.--The last sentence of section 125(f)
of the Internal Revenue Code of 1986 (defining qualified
benefits) is amended by striking ``shall not'' and inserting
``shall''.
(b) Flexible Spending Arrangements.--Section 106(c) of the
Internal Revenue Code of 1986 (relating to contributions by
employer to accident and health plans) is amended--
(1) in paragraph (1), by striking ``include'' and inserting
``shall not''; and
(2) in the heading, by striking ``Inclusion'' and inserting
``Exclusion''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.

SEC. 903. EXCLUSION FROM GROSS INCOME FOR AMOUNTS RECEIVED ON
CANCELLATION OF LIFE INSURANCE POLICIES AND
USED FOR QUALIFIED LONG-TERM CARE INSURANCE
CONTRACTS.

(a) In General.--
(1) Exclusion from gross income.--
(A) In general.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to items
specifically excluded from gross income) is amended by
redesignating section 139 as section 140 and by inserting
after section 138 the following new section:

``SEC. 139. AMOUNTS RECEIVED ON CANCELLATION, ETC. OF LIFE
INSURANCE CONTRACTS AND USED TO PAY PREMIUMS
FOR QUALIFIED LONG-TERM CARE INSURANCE.

``No amount (which but for this section would be includible
in the gross income of an individual) shall be included in
gross income on the whole or partial surrender, cancellation,
or exchange of any life insurance contract during the taxable
year if--
``(1) such individual has attained age 59\1/2\ on or before
the date of the transaction, and
``(2) the amount otherwise includible in gross income is
used during such year to pay for any qualified long-term care
insurance contract (as defined in section 7702B(b)) which--
``(A) is for the benefit of such individual or the spouse
of such individual if such spouse has attained age 59\1/2\ on
or before the date of the transaction, and
``(B) may not be surrendered for cash.''.
(B) Conforming amendment.--The table of sections for such
part III is amended by striking the item relating to section
139 and inserting the following:

``Sec. 139. Amounts received on cancellation, etc. of life insurance
contracts and used to pay premiums for qualified long-
term care insurance.
``Sec. 140. Cross references to other Acts.''.

(2) Certain exchanges not taxable.--Section 1035(a) of such
Code (relating to certain exchanges of insurance contracts)
is amended by striking the period at the end of paragraph (3)
and inserting ``; or'', and by adding at the end the
following:
``(4) in the case of an individual who has attained age
59\1/2\, a contract of life insurance or an endowment or
annuity contract for a qualified long-term care insurance
contract (as defined in section 7702B(b)), if the qualified
long-term care insurance contract may not be surrendered for
cash.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

SEC. 904. USE OF GAIN FROM SALE OF PRINCIPAL RESIDENCE FOR
PURCHASE OF QUALIFIED LONG-TERM HEALTH CARE
INSURANCE.

(a) In General.--Subsection (d) of section 121 of the
Internal Revenue Code of 1986 (relating to exclusion of gain
from sale of principal) is amended by adding at the end the
following:
``(9) Eligibility of home equity conversion sale-leaseback
transaction for exclusion.--
``(A) In general.--For purposes of this section, the term
`sale or exchange' includes a home equity conversion sale-
leaseback transaction.
``(B) Home equity conversion sale-leaseback transaction.--
For purposes of subparagraph (A), the term `home equity
conversion sale-leaseback' means a transaction in which--
``(i) the seller-lessee--

``(I) sells property which during the 5-year period ending
on the date of the transaction has been owned and used as a
principal residence by such seller-lessee for periods
aggregating 2 years or more,
``(II) uses a portion of the proceeds from such sale to
purchase a qualified long-term care insurance contract (as
defined in section 7702B(b)), which contract may not be
surrendered for cash,

``(III) obtains occupancy rights in such property pursuant
to a written lease requiring a fair rental, and

``(IV) receives no option to repurchase the property at a
price less than the fair market price of the property
unencumbered by any leaseback at the time such option is
exercised, and

``(ii) the purchaser-lessor--

``(I) is a person,
``(II) is contractually responsible for the risks and
burdens of ownership and receives the benefits of ownership
(other than the seller-lessee's occupancy rights) after the
date of such transaction, and
``(III) pays a purchase price for the property that is not
less than the fair market price of such property encumbered
by a leaseback, and taking into account the terms of the
lease.

``(C) Additional definitions.--For purposes of subparagraph
(B)--
``(i) Occupancy rights.--The term `occupancy rights' means
the right to occupy the property for any period of time,
including a period of time measured by the life of the
seller-lessee on the date of the sale-leaseback transaction
(or the life of the surviving seller-lessee, in the case of
jointly held occupancy rights), or a periodic term subject to
a continuing right of renewal by the seller-lessee (or by the
surviving seller-lessee, in the case of jointly held
occupancy rights).
``(ii) Fair rental.--The term `fair rental' means a rental
for any subsequent year which equals or exceeds the rental
for the 1st year of a sale-leaseback transaction.''.
(b) Effective Date.--The amendment made by this section
shall apply to sales after December 31, 2001, in taxable
years beginning after such date.

TITLE X--NATIONAL FUND FOR HEALTH RESEARCH

SEC. 1001. ESTABLISHMENT OF FUND.

(a) Establishment.--There is established in the Treasury of
the United States a fund, to be known as the ``National Fund
for Health Research'' (in this section referred to as the
``Fund''), consisting of such amounts as are transferred to
the Fund under subsection (b) and any interest earned on
investment of amounts in the Fund.
(b) Transfers to Fund.--
(1) In general.--The Secretary of the Treasury shall
transfer to the Fund amounts equivalent to amounts designated
under paragraph (2) and received in the Treasury.
(2) Amounts.--
(A) Health plan set aside.--With respect to each calendar
year beginning with the first full calendar year after the
date of enactment of this Act, each health plan shall set
aside and transfer to the Treasury of the United States an
amount equal to--
(i) for the first full calendar year, 0.25 percent of all
health premiums received with respect to the plan for such
year;
(ii) for the second full calendar year, 0.5 percent of all
health premiums received with respect to the plan for such
year;
(iii) for the third full calendar year, 0.75 percent of all
health premiums received with respect to the plan for such
year; and
(iv) for the fourth and each succeeding full calendar year,
1 percent of all health premiums received with respect to the
plan for such year.
(3) Transfers based on estimates.--The amounts transferred
by paragraph (1) shall annually be transferred to the Fund
within 30 days after the President signs an appropriations
Act for the Departments of Labor, Health and Human Services,
and Education, and related agencies, or by the end of the
first quarter of the fiscal year. Proper adjustment shall be
made in amounts subsequently transferred to the extent prior
estimates were in excess of or less than the amounts required
to be transferred.
(4) Definition.--As used in this subsection, the term
``health plan'' means a group health plan (as defined in
section 2791(a) of the Public Health Service Act and any
individual health insurance (as defined in section 2791(b)(5)
of such Act) operated by a health insurance issuer.
(c) Obligations From Fund.--
(1) In general.--Subject to the provisions of paragraph
(4), with respect to the amounts made available in the Fund
in a fiscal year, the Secretary of Health and Human Services
shall distribute--
(A) 2 percent of such amounts during any fiscal year to the
Office of the Director of the National Institutes of Health
to be allocated at the Director's discretion for the
following activities:
(i) for carrying out the responsibilities of the Office of
the Director, including the Office of Research on Women's
Health and the Office of Research on Minority Health, the
Office of Rare Disease Research, the Office of Behavioral and
Social Sciences Research (for use for efforts to reduce
tobacco use), the Office of Dietary Supplements, and the
Office for Disease Prevention; and
(ii) for construction and acquisition of equipment for or
facilities of or used by the National Institutes of Health;
(B) 2 percent of such amounts for transfer to the National
Center for Research Resources to carry out section 1502 of
the National Institutes of Health Revitalization Act of 1993
concerning Biomedical and Behavioral Research Facilities;
(C) 1 percent of such amounts during any fiscal year for
carrying out section 301 and part D of title IV of the Public
Health Service Act with respect to health information
communications; and
(D) the remainder of such amounts during any fiscal year to
member institutes and centers, including the Office of AIDS
Research, of the National Institutes of Health

[[Page S293]]

in the same proportion to the total amount received under
this section, as the amount of annual appropriations under
appropriations Acts for each member institute and Centers for
the fiscal year bears to the total amount of appropriations
under appropriations Acts for all member institutes and
Centers of the National Institutes of Health for the fiscal
year.
(2) Plans of allocation.--The amounts transferred under
paragraph (1)(D) shall be allocated by the Director of the
National Institutes of Health or the various directors of the
institutes and centers, as the case may be, pursuant to
allocation plans developed by the various advisory councils
to such directors, after consultation with such directors.
(3) Grants and contracts fully funded in first year.--With
respect to any grant or contract funded by amounts
distributed under paragraph (1), the full amount of the total
obligation of such grant or contract shall be funded in the
first year of such grant or contract, and shall remain
available until expended.
(4) Trigger and release of monies and phase-in.--
(A) Trigger and release.--No expenditure shall be made
under paragraph (1) during any fiscal year in which the
annual amount appropriated for the National Institutes of
Health is less than the amount so appropriated for the prior
fiscal year.
(B) Phase-in.--The Secretary of Health and Human Services
shall phase-in the distributions required under paragraph (1)
so that--
(i) 25 percent of the amount in the Fund is distributed in
the first fiscal year for which funds are available;
(ii) 50 percent of the amount in the Fund is distributed in
the second fiscal year for which funds are available;
(iii) 75 percent of the amount in the Fund is distributed
in the third fiscal year for which funds are available; and
(iv) 100 percent of the amount in the Fund is distributed
in the fourth and each succeeding fiscal year for which funds
are available.
(d) Budget Treatment of Amounts in Fund.--The amounts in
the Fund shall be excluded from, and shall not be taken into
account, for purposes of any budget enforcement procedure
under the Congressional Budget Act of 1974 or the Balanced
Budget and Emergency Deficit Control Act of 1985.
____

Health Care Assurance Act of 2001--Summary

Title I: Expanded Medicaid Coverage for Low-Income Individuals

Current law only guarantees coverage for pregnant women and
infants who earn up to 133% of the Federal level poverty
($11,105 for a single/$22,676 for a family of four). Beyond
that population, the Federal mandate varies across age,
income, and disability status; for instance, there are
different federal mandates for preschool age children than
for school-age children and for disabled individuals.
Further, current law does not allow any Federal contributions
for coverage for individuals who earn up to 133% of the
federal poverty line, regardless of age or other status.
States would then have the option, as they have under the
State Child Health Insurance Programs (SCHIP), to cover
individuals all the way up to 200% of the federal poverty
level ($16,700 for a single/$34,100 for a family of four).
Unlike SCHIP, however, the states will not receive an
enhanced Federal match.

Title II: Expanded State Child Health Insurance Program

This title will expand upon the State Child Health
Insurance Program (SCHIP), the new program established in the
Balanced Budget Act of 1997 which allocates $24 billion/five
years to increase health insurance coverage for children. The
SCHIP program gives States the option to use federally funded
grants to provide vouchers to eligible families to purchase
health insurance for their children, or to expand Medicaid
coverage for those uninsured children, or a combination of
both. These grants are distributed to participating States
based on the number of uninsured children residing there.
This title would increase the income eligibility to families
with incomes at or below 235% of the Federal poverty level
($40,067 annually for a family of four).

Title III: Expanded Health Services for Disabled Individuals

Expansion of Community-Based Attendant Care Services and
Supports: Medicaid currently covers the costs associated with
institutional care for disabled individuals. In an effort to
improve the delivery of care and the comfort of those with
long-term disabilities, this section would allow for
reimbursement for community-based attendant care services and
supports, instead of institutionalization, for eligible
individuals who require such services based on functional
need, without regard to the individual's age or the nature of
the disability.

Title IV: General Health Insurance Coverage Provisions

Tax Equity for the Self-Employed: Under current law, self-
employed persons may deduct 60% of their health insurance
costs through 2002, and those costs would be fully deductible
in 2003. However, all other employees may already deduct 100%
of such costs. Title III would speed up the phase-in: health
insurance costs would be 70% deductible in 2001 and fully
deductible in 2002, thereby giving the currently 3.1 million
self-employed Americans who are uninsured a better incentive
to purchase coverage.
Small Employer and Individual Purchasing Groups:
Establishes voluntary small employer and individual
purchasing groups designed to provide affordable,
comprehensive health coverage options for such employers,
their employees, and other uninsured and underinsured
individuals and families. Health plans offering coverage
through such groups will: (1) provide a standard,
actuarially equivalent health benefits package; (2) adjust
community rated premiums by age and family size in order
to spread risk and provide price equity to all; and (3)
meet certain other guidelines involving marketing
practices.
Standard Benefits Package: The standard package of benefits
would include a variation of benefits permitted among
actuarially equivalent plans developed through the National
Association of Insurance Commissioners (NAIC). The standard
plan will consist of the following services when medically
necessary or appropriate: (1) medical and surgical services;
(2) medical equipment; (3) preventive services; and (4)
emergency transportation in frontier areas.
COBRA Portability Reform: For those persons who are
uninsured between jobs and for insured persons who fear
losing coverage should they lose their jobs, Title III
reforms the existing COBRA law by: (1) extending to 24 months
the minimum time period in which COBRA may cover individuals
through their former employers' plan, and extending to 36
months the time period in which a child who is no longer a
dependent under a parent's health insurance policy may
receive coverage; (2) expanding coverage options to include
plans with a lower premium and a $1,000 deductible--saving a
typical family of four 20% in monthly premiums--and plans
with a lower premium and a $3,000 deductible--saving a family
of four 52% in monthly premiums.

Title V: Primary and Preventive Care Services

New Medicare preventive Care Services: The health care
community continues to recognize the importance of prevention
in improving health status and reducing health care costs.
This provision institutes new preventive benefits within the
Medicare program, and refines and strengthens existing ones.
Under this provision, Medicare would cover yearly pap smears,
pelvic exams, and screening and diagnostic mammography for
women, with no copayment of part B deductible; and cover
insulin pumps for certain Type I Diabetics.
Primary Health and Education Assistance Programs: The
Department of Health and Human Service administers many
programs designed to increase access to primary and
preventive care. This provision provides increased
authorization for several existing preventive health programs
such as breast and cervical cancer prevention, Healthy Start
project grants aimed at reducing infant mortality and low
weight births and to improve the health and well-being of
mothers and their families, pregnant women and infants, and
childhood immunizations. This section also authorizes a new
grant program for local education agencies and pre-school
programs to provide comprehensive health education, and
reauthorizes the Adolescent Family Life (AFL) program (Title
XX) for the first time since 1984. The AFL program provides
funding for initiatives focusing directly on abstinence
education.

Title VI: Patient's Right to Decline Medical Treatment

Improves the effectiveness and portability of advance
directives by strengthening the federal law regarding patient
self-determination and establishing uniform federal forms
with regard to self-determination.

Title VII: Primary and Preventive Care Providers

Encourages use of non-physician providers such as nurse
practitioners, physician assistants, and clinical nurse
specialists by increasing direct reimbursement under Medicare
and Medicaid without regard to the setting where services are
provided. Title VI also seeks to encourage students early on
in their medical training to pursue a career in primary care
and it provides assistance to medical training programs to
recruit such students.

Title VIII: Cost Containment

Investment in Outcomes Research: The recently renamed
Agency for Healthcare Research and Quality (formerly the
Agency for Health Care Policy and Research) is authorized to
expand outcomes research necessary for the development of
medical practice guidelines and for increased access to
consumer information. In order to boost funding for this
vital area of research, title VIII of my bill would establish
a trust fund for medical treatment outcomes research,
capitalized by a .001 cent tax on total U.S. health insurance
premiums collected. This trust fund would be specifically
authorized for use by the Agency for Healthcare Research and
Quality to supplement its currently authorized outcomes
research mission.
Reducing Medical Errors: A recently released Institute of
Medicine (IOM) report, ``To Err Is Human: Building a Safer
Health System,'' concluded that medical mistakes have led to
numerous injuries and deaths, affecting an estimated three to
four percent of all hospital patients. The IOM report also
concluded that health care is a decade or more behind other
high-risk industries in its attention to ensuring basic
safety. This provision would make grants available to states
so they can establish their own error reporting systems and
would establish 15 competitively-awarded research
demonstration

[[Page S294]]

projects in rural and urban areas throughout the country. Of
the 15 facilities participating in the demonstrations: 5 will
be required to inform HHS of any medical errors, 5 will not
be required to inform HHS of medical errors, and 5 will be
required to inform HHS as well as the patient and/or his
family of any medical errors.
The Secretary of HHS would be required to report to the
Congress on the results of the demonstration projects,
focusing on best practices and costs/benefits of applying
these practices nationwide. These projects would employ new
and proven technologies and enhance staff training to
determine ways to reduce errors. The provision also requires
the Secretary of HHS to provide patient education programs to
all individuals covered by Federal health plans.

Title IX: Tax Incentives for Purchase of Qualified Long-Term Care
Insurance

Increases access to long-term care by: (1) establishing a
tax credit for amounts paid toward long-term care services of
family members; (2) excluding life insurance savings used to
pay for long-term care from income tax; (3) allowing
employees to select long-term care insurance as part of a
cafeteria plan and allowing employers to deduct this expense;
(4) setting standards that require long-term care to
eliminate the current bias that favors institutional care
over community and home-based alternatives.

Title X: National Fund for Health Research

Authorizes the establishment of a National Fund for Health
Research to supplement biomedical research through the
contributions of 1% of premiums collected by health insurers.
Funds will be distributed to the National Institutes of
Health's member institutes and centers in the same proportion
as the amount of appropriations they receive for the fiscal
year.
____

31 Health Care Bills Introduced by Senator Arlen Specter

98th Congress 1/3/83 through 1/2/85

(1) S. 811: The Health Care for Displaced Workers Act of
1983 (3/15/83)
(2) S. 2051: The Health Care Cost Containment Act of 1983
(11/4/83)

99th Congress 1/3/85 through 1/2/87

(3) S. 379: The Health Care Cost Containment Act of 1985
(2/5/85)
(4) S. 1873: The Community Based Disease Prevention and
Health Promotion Projects Act of 1985 (11/21/85)

100th Congress 1/3/87 through 1/2/89

(5) S. 281: The Aid to Families and Employment Transition
Act (1/6/87)
(6) S. 1871: The Pediatric Acquired Immunodeficiency
Syndrome (AIDS) Resource Centers Act (11/17/87)
(7) S. 1872: The Minority Acquired Immunodeficiency
Syndrome (AIDS) Awareness and Prevention Projects Act (11/17/
87)

101st Congress 1/3/89 through 1/2/91

(8) S. 896: The Pediatric AIDS Resource Centers Act (5/2/
89)
(9) S. 1607: Authorization of the Office of Minority Health
(9/12/89)

102nd Congress 1/3/91 through 1/5/93

(10) S. 1122: The Long-Term Care Incentives Act of 1991 (5/
22/91)
(11) S. 1214: The Change in Designation of Lancaster
County, PA, for Purposes of Medicare Services (6/4/91)
(12) S. 1864: The Children's Hospital of Philadelphia
Medical Research Facility Act (10/23/91)
(13) S. 1995: The Health Care Access and Affordability Act
of 1991 (11/20/91)
(14) S. 2028: The Women Veteran's Health Equity Act of 1991
(11/22/91)
(15) S. 2029: Self-Funding of Veteran's Administrative
Health Care Act (11/22/91)
(16) S. 2188: Rural Veterans Health Care Facilities Act (2/
5/92)
(17) S. 3176: The Health Care Affordability and Quality
Improvement Act of 1992 (8/12/92)
(18) S. 3353: The Deferred Acquisition Cost Act (10/6/92)

103rd Congress 1/5/93 through 12/11/94

(19) S. 18: The Comprehensive Health Care Act of 1993 (1/
21/93)
(20) S. 631: The Comprehensive Access and Affordability
Health Care (3/23/93)

104th Congress 1/4/95 through 10/3/96

(21) S. 18: The Health Care Assurance Act of 1995 (1/4/95)
(22) S. 1716: The Adolescent Family Life and Abstinence
Education Act of 1996 (4/29/96)

105th Congress 1/7/97 through 10/21/98

(23) S. 24: The Health Care Assurance Act of 1997 (1/21/97)
(24) S. 435: The Healthy Children's Pilot Program Act of
1997 (3/13/97)
(25) S. 934: The Adolescent Family Life and Abstinence
Education Act of 1997 (6/18/97)
(26) S. 999: Authorizing the Department of Veteran's
Affairs to Specify the Frequency of Screening Mammograms (7/
9/97)

106th Congress 1/19/99 through 12/15/00

(27) S. 24: The Health Care Assurance Act of 1999 (1/19/99)
(28) S. 836: The Access to Women's Health Care Act of 1999
(4/20/99)
(29) S. 1402: The Veterans Benefits and Health Care
Improvement Act of 2000 (7/20/99)
(30) S. 2015: The Stem Cell Research Act of 2000 (1/31/00)
(31) S. 2038: The Medical Error Reduction Act of 2000 (2/8/
00)
______

By Mrs. FEINSTEIN (for herself, Mr. Schumer, and Mrs. Boxer):
S. 25. A bill to provide for the implementation of a system of
licensing for purchasers of certain firearms and for a record of sale
system for those firearms, and for other purposes; to the Committee on
the Judiciary.

firearm licensing and record of sale act of 2001

Mrs. FEINSTEIN. Mr. President, last year on Mother's Day, supporters
of sensible gun laws came together by the hundreds of thousands to
participate in the Million Mom March and say to Congress: ``Enough is
Enough.''
Those women, men and children all shared a common purpose: The
passage of sensible gun laws--laws that will hopefully help save lives.
The primary stated goal of the Million Mom March was to push for
legislation to license gun owners and keep track of guns. We know it
will be a long process of educating the Congress and the public on this
issue. But we will not give in until we succeed. So today I rise, along
with Senators Schumer and Boxer, to reintroduce the ``Firearm Licensing
and Record of Sale Act,'' which I believe represents a common-sense
approach to guns and gun violence in America.
Mr. President, in this country, when you want to hunt, you get a
hunting license; when you want to fish, you get a fishing license. But
when you want to buy a gun, no license is necessary. That makes no
sense.
We register cars and license drivers. We register pesticides and
license exterminators. We register animal carriers and researchers, we
register gambling devices. And we register a whole host of other goods
and activities--even ``international expositions'' must be registered
with the Bureau of International Expositions!
But when it comes to guns and gun owners--no license and no
registration, despite the loss of more than 32,000 lives a year from
gun violence.
To this end, my staff and I worked for months with law enforcement
officials and other experts in drafting the bill we introduced last
year. And since that time, we have refined the bill, corrected some
vague sections, and made it even more clear what the bill would do, and
what it would not do.
Upon enactment of this legislation, anyone purchasing a handgun or
semi-automatic weapon that takes detachable ammunition magazines will
be required to have a license. Shotguns and a large number of common
hunting guns are not covered by the requirements of this bill.
Current owners of these weapons will have up to 10 years to obtain a
license, on a rolling basis, much like many states now handle drivers
licenses.
The bill sets up a federal system, but allows states to opt out if
they adopt a system at least as effective as the federal program.
Under this bill, anyone wishing to obtain a firearm license will need
to go to a federally licensed firearms dealer. There are currently more
than 100,000 such dealers across the country--to put that in some
perspective, there are four times more gun dealers in America than
there are McDonald's restaurants in the entire world. Operating the
federal licensing system through these licensed dealers will minimize
the burden on those wishing to obtain a license.
If a state opts-out of the federal program, an individual will go to
a State-designated entity, like a local sheriff, local police
department, or even Department of Motor Vehicles. It will all depend on
where the state feels is best.
Either way, the purchaser will then need to:
Provide information as to date and place of birth and name and
address;
Submit a thumb print;
Submit a current photograph;
Sign, under penalty of perjury, that all of the submitted information
is true and that the applicant is qualified under Federal law to
possess a firearm; Pass a written firearms safety test, requiring
knowledge of the safe storage and handling of firearms, the legal
responsibilities of firearm ownership, and other factors as determined
by the state or federal authority;
Sign a pledge to keep any firearm safely stored and out of the hands
of juveniles (this pledge will be backed up by criminal penalties of up
to three years in jail for anyone failing to do so);
Undergo state and federal background checks.

[[Page S295]]

Licenses will be renewable every five years, and can be revoked at
any time if the licensee becomes disqualified under federal law from
owning or possessing a gun.
And Mr. President, the fee for a license cannot exceed $25.
Once the bill takes effect, all future sales and transfers of
firearms falling within the scope of the bill will have to be recorded
through a federally licensed firearms dealer, with an accompanying NICS
background check. That way, law enforcement agencies will have easier
access to information leading to the arrest of persons who use guns in
crime.
The bill covers both handguns and other guns that are semi-automatic
and can accept detachable magazines.
The legislation covers handguns because statistically, these guns are
used in more crimes than any other. In fact, approximately 85 percent
of all firearm homicides involve a handgun.
And the legislation also covers semi-automatic firearms that can
accept detachable magazines, because these are the kind of assault
weapons that have the potential to destroy the largest number of lives
in the shortest period of time.
A gun that can take a detachable magazine can also take a large
capacity magazine. Combine that with semi-automatic, rapid fire, and
you have a deadly combination--as we have seen time and again in recent
years.
Put simply, this legislation will cover those firearms that represent
the greatest threat to the safety of innocent men, women and children
in this nation.
Common hunting rifles, shotguns and other firearms that cannot accept
detachable magazines will remain exempt.
Penalties will vary depending on the severity of the violation. But
in no case will gun owners face jail time simply because they forgot to
get a license:
Those who fail to get a license will face fines of between $500 (for
a first offense) and $5,000 for subsequent offenses.
Failing to report a change of address or the loss of a firearm will
also result in penalties between $500 and $5,000, because this system
works best for law enforcement when the perpetrators of gun crime can
be quickly traced and arrested;
Dealers who fail to maintain adequate records will face up to 2 years
in prison--dealers know their responsibilities, and this will give law
enforcement the tools necessary to root out bad dealers and prevent the
straw purchases and other violations of law that allow criminals easy
access to a continuing flow of guns;
And adults who recklessly or knowingly allow a child access to a
firearm face up to three years in prison if the child uses the gun to
kill or seriously injure another person. In this way, the bill truly
puts a new sense of responsibility onto gun owners in America.
Mr. President, law enforcement in California tells me that a
licensing and record of sale system like the one I am introducing today
will help law enforcement, upon recovery of a firearm used in crime, to
track the gun down to the person who sold it, and then to the person
who bought it.
And this legislation also sets in place a method through which we can
better attempt to ensure that gun owners are responsible and trained in
the use and care of their dangerous possessions.
We have tried to minimize the burden of this bill at every turn:
The licensing process will take place through federally licensed
firearms dealers--as I mentioned earlier, there are currently more than
100,000 in this country;
The fee for a license will be only $25;
Current gun owners will have as many as ten years to get a license,
on a rolling basis, and guns now in homes will not have to be
registered;
Future gun transfers will simply be recorded by licensed dealers--as
they are now--and a system will be put in place to allow the quick
tracing of guns used in crime. Gun owners themselves will not have to
register their old guns or send any paperwork to the government.
This nation is awash in guns--there are more than 200 million of them
in the United States. The problem of gun violence is not going away,
and accidental deaths from firearms rob us of countless innocents each
year.
Too many lives are lost every year simply because gun owners do not
know how to use or store their firearms--particularly around children.
In fact, according to a study released in 1999, in 1996 alone there
were more than 1,100 unintentional shooting deaths and more than 18,000
firearm suicides--many of which might have been prevented if the person
intent on suicide did not have easy access to a gun owned by somebody
else. It is my hope that the provisions of this bill, particularly with
regard to child access prevention, will begin the process of making it
harder for children and others to gain easy access to firearms.
As I said, I know that this bill will not pass overnight. We have a
long process of education ahead of us. But the American people are with
us. The facts are with us. And common sense is with us.
I thank the Senate for its consideration of this measure, and I look
forward to working with each of my colleagues to move this bill forward
in the coming months.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 25

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 ``Firearm
Licensing and Record of Sale Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.

TITLE I--LICENSING

Sec. 101. Licensing requirement.
Sec. 102. Application requirements.
Sec. 103. Issuance of license.
Sec. 104. Renewal of license.
Sec. 105. Revocation of license.

TITLE II--RECORD OF SALE OR TRANSFER

Sec. 201. Sale and transfer requirements for qualifying firearms.
Sec. 202. Firearm records.

TITLE III--ADDITIONAL PROHIBITIONS

Sec. 301. Universal background check requirement.
Sec. 302. Failure to maintain or permit inspection of records.
Sec. 303. Failure to report loss or theft of firearm.
Sec. 304. Failure to provide notice of change of address.
Sec. 305. Child access prevention.

TITLE IV--ENFORCEMENT

Sec. 401. Criminal penalties.
Sec. 402. Regulations.
Sec. 403. Inspections.
Sec. 404. Orders.
Sec. 405. Injunctive enforcement.

TITLE V--FIREARM INJURY INFORMATION AND RESEARCH

Sec. 501. Duties of the Secretary.

TITLE VI--EFFECT ON STATE LAW

Sec. 601. Effect on State law.
Sec. 602. Certification of State firearm licensing and record of sale
systems.

TITLE VII--RELATIONSHIP TO OTHER LAW

Sec. 701. Subordination to Arms Export Control Act.

TITLE VIII--INAPPLICABILITY

Sec. 801. Inapplicability to governmental authorities.

TITLE IX--EFFECTIVE DATE

Sec. 901. Effective date of amendments.

SEC. 2. FINDINGS AND PURPOSES.

(a) Findings.--Congress finds that--
(1) the manufacture, distribution, and importation of
firearms is inherently commercial in nature;
(2) firearms regularly move in interstate commerce;
(3) firearms trafficking is so prevalent and widespread in
and among the States that it is usually impossible to
distinguish between intrastate trafficking and interstate
trafficking;
(4) to the extent that firearms trafficking is intrastate
in nature, it arises out of and is substantially connected
with a commercial transaction, which, when viewed in the
aggregate, substantially affects interstate commerce;
(5) because the intrastate and interstate trafficking of
firearms are so commingled, full regulation of interstate
commerce requires the incidental regulation of intrastate
commerce; and
(6) it is in the national interest and within the role of
the Federal Government to ensure that the regulation of
firearms is uniform among the States, that law enforcement
can quickly and effectively trace firearms used in crime, and
that firearms owners know how to use and safely store their
firearms.

[[Page S296]]

(b) Purposes.--The purposes of this Act and the amendments
made by this Act are--
(1) to protect the public against the unreasonable risk of
injury and death associated with the unrecorded sale or
transfer of qualifying firearms to criminals and youth;
(2) to ensure that owners of qualifying firearms are
knowledgeable in the safe use, handling, and storage of those
firearms;
(3) to restrict the availability of qualifying firearms to
criminals, youth, and other persons prohibited by Federal law
from receiving firearms; and
(4) to facilitate the tracing of qualifying firearms used
in crime by Federal and State law enforcement agencies.

SEC. 3. DEFINITIONS.

(a) In General.--In this Act:
(1) Firearm; licensed dealer; licensed manufacturer.--The
terms ``firearm'', ``licensed dealer'', and ``licensed
manufacturer'' have the meanings given those terms in section
921(a) of title 18, United States Code.
(2) Qualifying firearm.--The term ``qualifying firearm''
has the meaning given the term in section 921(a) of title 18,
United States Code, as amended by subsection (b) of this
section.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(4) State.--The term ``State'' means each of the several
States of the United States and the District of Columbia.
(b) Amendment to Title 18, United States Code.--Section
921(a) of title 18, United States Code, is amended by adding
at the end the following:
``(35) The term `qualifying firearm'--
``(A) means--
``(i) any handgun ; or
``(ii) any semiautomatic firearm that can accept any
detachable ammunition feeding device; and
``(B) does not include any antique.''.

TITLE I--LICENSING

SEC. 101. LICENSING REQUIREMENT.

Section 922 of title 18, United States Code, is amended by
inserting after subsection (y) the following:
``(z) Firearm Licensing Requirement.--
``(1) In general.--It shall be unlawful for any person
other than a licensed importer, licensed manufacturer,
licensed dealer, or licensed collector to possess a
qualifying firearm on or after the applicable date, unless
that person has been issued a firearm license--
``(A) under title I of the Firearm Licensing and Record of
Sale Act of 2001, which license has not been invalidated or
revoked under that title; or
``(B) pursuant to a State firearm licensing and record of
sale system certified under section 602 of the Firearm
Licensing and Record of Sale Act of 2001, which license has
not been invalidated or revoked under State law.
``(2) Applicable date.--In this subsection, the term
`applicable date' means--
``(A) with respect to a qualifying firearm that is acquired
by the person before the date of enactment of the Firearm
Licensing and Record of Sale Act of 2001, 10 years after such
date of enactment; and
``(B) with respect to a qualifying firearm that is acquired
by the person on or after the date of enactment of the
Firearm Licensing and Record of Sale Act of 2001, 1 year
after such date of enactment.''.

SEC. 102. APPLICATION REQUIREMENTS.

(a) In General.--In order to be issued a firearm license
under this title, an individual shall submit to the Secretary
(in accordance with the regulations promulgated under
subsection (b)) an application, which shall include--
(1) a current, passport-sized photograph of the applicant
that provides a clear, accurate likeness of the applicant;
(2) the name, address, and date and place of birth of the
applicant;
(3) any other name that the applicant has ever used or by
which the applicant has ever been known;
(4) a clear thumb print of the applicant, which shall be
made when, and in the presence of the entity to whom, the
application is submitted;
(5) with respect to each category of person prohibited by
Federal law, or by the law of the State of residence of the
applicant, from obtaining a firearm, a statement that the
individual is not a person prohibited from obtaining a
firearm;
(6) a certification by the applicant that the applicant
will keep any firearm owned by the applicant safely stored
and out of the possession of persons who have not attained 18
years of age;
(7) a certificate attesting to the completion at the time
of application of a written firearms examination, which shall
test the knowledge and ability of the applicant regarding--
(A) the safe storage of firearms, particularly in the
vicinity of persons who have not attained 18 years of age;
(B) the safe handling of firearms;
(C) the use of firearms in the home and the risks
associated with such use;
(D) the legal responsibilities of firearms owners,
including Federal, State, and local laws relating to
requirements for the possession and storage of firearms, and
relating to reporting requirements with respect to firearms;
and
(E) any other subjects, as the Secretary determines to be
appropriate;
(8) the date on which the application was submitted; and
(9) the signature of the applicant.
(b) Regulations Governing Submission.--The Secretary shall
promulgate regulations specifying procedures for the
submission of applications to the Secretary under this
section, which regulations shall--
(1) provide for submission of the application through a
licensed dealer or an office or agency of the Federal
Government designated by the Secretary;
(2) require the applicant to provide a valid identification
document (as defined in section 1028(d)(2) of title 18,
United States Code) of the applicant, containing a photograph
of the applicant, to the licensed dealer or to the office or
agency of the Federal Government, as applicable, at the time
of submission of the application to that dealer, office, or
agency; and
(3) require that a completed application be forwarded to
the Secretary not later than 48 hours after the application
is submitted to the licensed dealer or office or agency of
the Federal Government, as applicable.
(c) Fees.--
(1) In general.--The Secretary shall charge and collect
from each applicant for a license under this title a fee in
an amount determined in accordance with paragraph (2).
(2) Fee amount.--The amount of the fee collected under this
subsection shall be not less than the amount determined by
the Secretary to be necessary to ensure that the total amount
of all fees collected under this subsection during a fiscal
year is sufficient to cover the costs of carrying out this
title during that fiscal year, except that such amount shall
not exceed $25.

SEC. 103. ISSUANCE OF LICENSE.

(a) In General.--The Secretary shall issue a firearm
license to an applicant who has submitted an application that
meets the requirements of section 102, if the Secretary
ascertains that the individual is not prohibited by
subsection (g) or (n) of section 922 of title 18, United
States Code, from receiving a firearm.
(b) Effect of Issuance to Prohibited Person.--A firearm
license issued under this section shall be null and void if
issued to a person who is prohibited by subsection (g) or (n)
of section 922 of title 18, United States Code, from
receiving a firearm.
(c) Form of License.--A firearm license issued under this
section shall be in the form of a tamper-resistant card, and
shall include--
(1) the photograph of the licensed individual submitted
with the application;
(2) the address of the licensed individual;
(3) the date of birth of the licensed individual;
(4) a license number, unique to each licensed individual;
(5) the expiration date of the license, which shall be the
date that is 5 years after the initial anniversary of the
date of birth of the licensed individual following the date
on which the license is issued (or in the case of a license
renewal, following the date on which the license is renewed
under section 104);
(6) the signature of the licensed individual provided on
the application, or a facsimile of the application; and
(7) centered at the top of the license, capitalized, and in
bold-face type, the following statement:

``FIREARM LICENSE--NOT VALID FOR ANY OTHER PURPOSE''.

SEC. 104. RENEWAL OF LICENSE.

(a) Application for Renewal.--
(1) In general.--In order to renew a firearm license issued
under this title, not later than 30 days before the
expiration date of the license, the licensed individual shall
submit to the Secretary (in accordance with the regulations
promulgated under paragraph (3)), in a form approved by the
Secretary, an application for renewal of the license.
(2) Contents.--An application submitted under paragraph (1)
shall include--
(A) a current, passport-sized photograph of the applicant
that provides a clear, accurate likeness of the applicant;
(B) current proof of identity of the licensed individual;
and
(C) the address of the licensed individual.
(3) Regulations governing submission.--The Secretary shall
promulgate regulations specifying procedures for the
submission of applications under this subsection.
(b) Issuance of Renewed License.--Upon approval of an
application submitted under subsection (a), the Secretary
shall issue a renewed license, which shall meet the
requirements of section 103(c), except that the license shall
include the current photograph and address of the licensed
individual, as provided in the application submitted under
this section, and the expiration date of the renewed license,
as provided in section 103(c)(5).

SEC. 105. REVOCATION OF LICENSE.

(a) In General.--If an individual to whom a license has
been issued under this title subsequently becomes a person
who is prohibited by subsection (g) or (n) of section 922 of
title 18, United States Code, from receiving a firearm--
(1) the license is revoked; and
(2) the individual shall promptly return the license to the
Secretary.
(b) Administrative Action.--Upon receipt by the Secretary
of notice that an individual to whom a license has been
issued under this title has become a person described in
subsection (a), the Secretary shall ensure that the
individual promptly returns the license to the Secretary.

TITLE II--RECORD OF SALE OR TRANSFER

SEC. 201. SALE OR TRANSFER REQUIREMENTS FOR QUALIFYING
FIREARMS.

Section 922 of title 18, United States Code, is amended by
inserting after subsection (z)

[[Page S297]]

(as added by section 101 of this Act) the following:
``(aa) Unauthorized Sale or Transfer of a Qualifying
Firearm.--It shall be unlawful for any person to sell,
deliver, or otherwise transfer a qualifying firearm to, or
for, any person who is not a licensed importer, licensed
manufacturer, licensed dealer, or licensed collector, or to
receive a qualifying firearm from a person who is not a
licensed importer, licensed manufacturer, licensed dealer, or
licensed collector, unless, at the time and place of the
transfer or receipt--
``(1) the transferee presents to a licensed dealer a valid
firearm license issued to the transferee--
``(A) under title I of the Firearm Licensing and Record of
Sale Act of 2001; or
``(B) pursuant to a State firearm licensing and record of
sale system certified under section 602 of the Firearm
Licensing and Record of Sale Act of 2001 established by the
State in which the transfer or receipt occurs;
``(2) the licensed dealer contacts the Secretary or the
head of the State agency that administers the certified
system described in paragraph (1)(B), as applicable, and
receives notice that the transferee has been issued a firearm
license described in paragraph (1) and that the license
remains valid; and
``(3) the licensed dealer records on a document (which, in
the case of a sale, shall be the sales receipt) a tracking
authorization number provided by the Secretary or the head of
the State agency, as applicable, as evidence that the
licensed dealer has verified the validity of the license.''.

SEC. 202. FIREARM RECORDS.

(a) Submission of Sale or Transfer Reports.--Not later than
14 days after the date on which the transfer of qualifying
firearm is processed by a licensed dealer under section
922(aa) of title 18, United States Code (as added by section
201 of this title), the licensed dealer shall submit to the
Secretary (or, in the case of a licensed dealer located in a
State that has a State firearm licensing and record of sale
system certified under section 602, to the head of the State
agency that administers that system) a report of that
transfer, which shall include information relating to--
(1) the manufacturer of the firearm;
(2) the model name or number of the firearm;
(3) the serial number of the firearm;
(4) the date on which the firearm was received by the
transferee;
(5) the number of a valid firearm license issued to the
transferee under title I; and
(6) the name and address of the individual who transferred
the firearm to the transferee.
(b) Federal Record of Sale System.--Not later than 9 months
after the date of enactment of this Act, the Secretary shall
establish and maintain a Federal record of sale system, which
shall include the information included in each report
submitted to the Secretary under subsection (a).
(c) Elimination of Prohibition on Establishment of System
of Registration.--Section 926(a) of title 18, United States
Code, is amended by striking the second sentence.

TITLE III--ADDITIONAL PROHIBITIONS

SEC. 301. UNIVERSAL BACKGROUND CHECK REQUIREMENT.

Section 922 of title 18, United States Code, is amended by
inserting after subsection (aa) (as added by section 201 of
this Act) the following:
``(bb) Universal Background Check Requirement.--
``(1) Requirement.--Except as provided in paragraph (2), it
shall be unlawful for any person other than a licensed
importer, licensed manufacturer, licensed dealer, or licensed
collector to sell, deliver, or otherwise transfer a firearm
to any person other than such a licensee, unless the transfer
is processed through a licensed dealer in accordance with
subsection (t).
``(2) Exception.--Paragraph (1) shall not apply to the
infrequent transfer of a firearm by gift, bequest, intestate
succession or other means by an individual to a parent,
child, grandparent, or grandchild of the individual, or to
any loan of a firearm for any lawful purpose for not more
than 30 days between persons who are personally known to each
other.''.

SEC. 302. FAILURE TO MAINTAIN OR PERMIT INSPECTION OF
RECORDS.

Section 922 of title 18, United States Code, is amended by
inserting after subsection (bb) (as added by section 301 of
this title) the following:
``(cc) Failure To Maintain or Permit Inspection of
Records.--It shall be unlawful for a licensed manufacturer or
a licensed dealer to fail to comply with section 202 of the
Handgun Licensing and Record of Sale Act of 2001, or to
maintain such records or supply such information as the
Secretary may require in order to ascertain compliance with
such Act and the regulations and orders issued under such
Act.''.

SEC. 303. FAILURE TO REPORT LOSS OR THEFT OF FIREARM.

Section 922 of title 18, United States Code, is amended by
inserting after subsection (cc) (as added by section 302 of
this title) the following:
``(dd) Failure To Report Loss or Theft of Firearm.--It
shall be unlawful for any person who owns a qualifying
firearm to fail to report the loss or theft of the firearm to
the Secretary within 72 hours after the loss or theft is
discovered.''.

SEC. 304. FAILURE TO PROVIDE NOTICE OF CHANGE OF ADDRESS.

Section 922 of title 18, United States Code, is amended by
inserting after subsection (dd) (as added by section 303 of
this title) the following:
``(ee) Failure To Provide Notice of Change of Address.--It
shall be unlawful for any individual to whom a firearm
license has been issued under title I of the Firearm
Licensing and Record of Sale Act of 2001 to fail to report to
the Secretary a change in the address of that individual
within 60 days of that change of address.''.

SEC. 305. CHILD ACCESS PREVENTION.

Section 922 of title 18, United States Code, is amended by
inserting after subsection (ee) (as added by section 304 of
this title) the following:
``(ff) Child Access Prevention.--
``(1) Definition of child.--In this subsection, the term
`child' means an individual who has not attained the age of
18 years.
``(2) Prohibition and penalties.--Except as provided in
paragraph (3), it shall be unlawful for any person to keep a
loaded firearm, or an unloaded firearm and ammunition for the
firearm, any 1 of which has been shipped or transported in
interstate or foreign commerce, within any premises that is
under the custody or control of that person, if--
``(A) that person--
``(i) knows, or recklessly disregards the risk, that a
child is capable of gaining access to the firearm; and
``(ii) either--

``(I) knows, or recklessly disregards the risk, that a
child will use the firearm to cause the death of, or serious
bodily injury (as defined in section 1365 of this title) to,
the child or any other person; or
``(II) knows, or reasonably should know, that possession of
the firearm by a child is unlawful under Federal or State
law; and

``(B) a child uses the firearm and the use of that firearm
causes the death of, or serious bodily injury to, the child
or any other person.
``(3) Exceptions.--Paragraph (2) does not apply if--
``(A) at the time the child obtained access, the firearm
was secured with a secure gun storage or safety device;
``(B) the person is a peace officer, a member of the Armed
Forces, or a member of the National Guard, and the child
obtains the firearm during, or incidental to, the performance
of the official duties of the person in that capacity;
``(C) the child uses the firearm in a lawful act of self-
defense or defense of 1 or more other persons; or
``(D) the person has no reasonable expectation, based on
objective facts and circumstances, that a child is likely to
be present on the premises on which the firearm is kept.''.

TITLE IV--ENFORCEMENT

SEC. 401. CRIMINAL PENALTIES.

(a) Failure To Possess Firearm License; Failure To Comply
With Qualifying Firearm Sale or Transfer Requirements;
Failure To Maintain or Permit Inspection of Records.--Section
924(a) of title 18, United States Code, is amended by adding
at the end the following:
``(7) Whoever knowingly violates subsection (z), (aa), or
(cc) of section 922 shall be fined under this title,
imprisoned not more than 2 years, or both.''.
(b) Failure To Comply With Universal Background Checks;
Failure To Timely Report Loss or Theft of a Qualifying
Firearm; Failure To Provide Notice of Change of Address.--
Section 924(a)(5) of title 18, United States Code, is amended
by striking ``(s) or (t)'' and inserting ``(s), (t), (bb),
(dd), or (ee)''.
(c) Child Access Prevention.--Section 924(a) of title 18,
United States Code, is amended by adding at the end the
following:
``(8) Whoever violates section 105(a)(2) of the Handgun
Licensing and Record of Sale Act of 2001, knowingly or having
reason to believe that the person is prohibited by subsection
(g) or (n) of section 922 of title 18, United States Code,
from receiving a firearm, shall be fined under this title,
imprisoned not more than 2 years, or both.
``(9) Whoever violates section 922(ff) shall be fined under
this title, imprisoned not more than 3 years, or both.''.

SEC. 402. REGULATIONS.

(a) In General.--The Secretary shall issue regulations
governing the licensing of possessors of qualifying firearms
and the recorded sale of qualifying firearms, consistent with
this Act and the amendments made by this Act, as the
Secretary determines to be reasonably necessary to reduce or
prevent deaths or injuries resulting from qualifying
firearms, and to assist law enforcement in the apprehension
of owners or users of qualifying firearms used in criminal
activity.
(b) Maximum Interval Between Issuance of Proposed and Final
Regulation.--Not later than 120 days after the date on which
the Secretary issues a proposed regulation under subsection
(a) with respect to a matter, the Secretary shall issue a
final regulation with respect to the matter.

SEC. 403. INSPECTIONS.

In order to ascertain compliance with this Act, the
amendments made by this Act, and the regulations and orders
issued under this Act, the Secretary may, during regular
business hours, enter any place in which firearms or firearm
products are manufactured, stored, or held, for distribution
in commerce, and inspect those areas where the products are
so manufactured, stored, or held.

[[Page S298]]

SEC. 404. ORDERS.

The Secretary may issue an order prohibiting the sale or
transfer of any firearm that the Secretary finds has been
transferred or distributed in violation of this Act, an
amendment made by this Act, or a regulation issued under this
Act.

SEC. 405. INJUNCTIVE ENFORCEMENT.

Upon the request of the Secretary, the Attorney General may
bring an action to restrain any violation of this Act or an
amendment made by this Act in the district court of the
United States for any district in which the violation has
occurred, or in which the defendant is found or transacts
business.

TITLE V--FIREARM INJURY INFORMATION AND RESEARCH

SEC. 501. DUTIES OF THE SECRETARY.

(a) In General.--The Secretary shall--
(1) establish and maintain a firearm injury information
clearinghouse to collect, investigate, analyze, and
disseminate data and information relating to the causes and
prevention of death and injury associated with firearms;
(2) conduct continuing studies and investigations of
firearm-related deaths and injuries; and
(3) collect and maintain current production and sales
figures for each licensed manufacturer.
(b) Availability of Information.--Periodically, but not
less frequently than annually, the Secretary shall make
available to the public a report on the activities of the
Secretary under subsection (a).

TITLE VI--EFFECT ON STATE LAW

SEC. 601. EFFECT ON STATE LAW.

(a) In General.--This Act and the amendments made by this
Act may not be construed to preempt any provision of the law
of any State or political subdivision of that State, or
prevent a State or political subdivision of that State from
enacting any provision of law regulating or prohibiting
conduct with respect to firearms, except to the extent that
the provision of law is inconsistent with any provision of
this Act or an amendment made by this Act, and then only to
the extent of the inconsistency.
(b) Rule of Interpretation.--A provision of State law is
not inconsistent with this Act or an amendment made by this
Act if the provision imposes a regulation or prohibition of
greater scope or a penalty of greater severity than a
corresponding prohibition or penalty imposed by this Act or
an amendment made by this Act.

SEC. 602. CERTIFICATION OF STATE FIREARM LICENSING SYSTEMS
AND STATE FIREARM RECORD OF SALE SYSTEMS.

Upon a written request of the chief executive officer of a
State, the Secretary may certify--
(1) a firearm licensing system established by a State, if
State law requires the system to satisfy the requirements
applicable to the Federal firearm licensing system
established under title I; or
(2) a firearm record of sale system established by a State,
if State law requires the head of the State agency that
administers the system to submit to the Federal firearm
record of sale system established under section 202(b) a copy
of each report submitted to the head of the agency under
section 202(a), within 7 days after receipt of the report.

TITLE VII--RELATIONSHIP TO OTHER LAW

SEC. 701. SUBORDINATION TO ARMS EXPORT CONTROL ACT.

In the event of any conflict between any provision of this
Act or an amendment made by this Act, and any provision of
the Arms Export Control Act (22 U.S.C. 2751), the provision
of the Arms Export Control Act shall control.

TITLE VIII--INAPPLICABILITY

SEC. 801. INAPPLICABILITY TO GOVERNMENTAL AUTHORITIES.

This Act and the amendments made by this Act do not apply
to any department or agency of the United States, of a State,
or of a political subdivision of a State, or to any official
conduct of any officer or employee of such a department or
agency.

TITLE IX--EFFECTIVE DATE

SEC. 901. EFFECTIVE DATE OF AMENDMENTS.

The amendments made by this Act shall take effect 1 year
after the date of enactment of this Act.
______

By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
S. 26. A bill to amend the Department of Energy Authorization Act to
authorize the Secretary of Energy to impose interim limitations on the
cost of electric energy to protect consumers from unjust and
unreasonable prices in the electric energy market; to the Committee on
Energy and Natural Resources.

amending the department of energy authorization act

Mrs. FEINSTEIN. Mr. President, I am pleased to introduce this bill
today to address problems with the California energy market and the
unwillingness of the Federal Energy Regulatory Commission to take the
necessary action.
Last week, the lights went off in California and the governor
declared a state of emergency. More than 1 million businesses and
homeowners throughout the state lost power. Computers shut off, ATMs
stopped dispensing cash, traffic lights went dark and heaters went
cold, jeopardizing public safety, the economy, and people's lives.
The situation continues to worsen, and the prognosis for the future
is dire. Unfortunately, the problem is not just limited to California.
PG&E and Southern California Edison, our two largest blue chip
utilities are on the brink of bankruptcy and have lost billions. The
state's economy has also lost billions from work stoppages that seem to
occur every single workday.
As goes California so goes the rest of the country, I believe.
California is the 6th largest economy in the world. Already financial
institutions and banks that have underwritten the debts of our
utilities are being saddled with their own problems due to the
uncertainty over whether they will be paid.
Those who believe that California deserves its present plight because
of the state's deregulation bill are near-sighted. California passed a
very flawed de-regulation bill in 1996. It was flawed because it relied
almost entirely on a free market and assumed that there will always be
adequate energy supply. What has resulted is an uncompetitive market
and an absence of adequate supply.
I believe California shares a major responsibility here and I am
encouraged that the state legislature is beginning to take action.
However, the federal government also has a major responsibility because
the Federal Energy Regulatory Commission under the Federal Power Act
holds the only authority over energy generators and marketers. The
state cannot address this.
Unfortunately, the FERC, even after concluding that rates in
California are ``unjust and unreasonable,'' has failed to take the
necessary action to solve the crisis. I am thus proposing legislation
today to empower the Secretary of Energy to take the same action
available to the FERC in instances when FERC has failed to take
decisive action. Individual states would be able to opt out of any
order from the Secretary as this bill is aimed at helping those states
that need and want help.
I urge the Senate to take up and pass this bill as soon as possible.
______

By Mr. McCAIN (for himself, Mr. Feingold, Mr. Cochran, Mr. Levin,
Mr. Thompson, Mr. Lieberman, Ms. Collins, Mr. Schumer, Ms.
Snowe, Mr. Wellstone, Mr. Jeffords, Mr. Reed, Mr. Durbin, Mr.
Wyden, Mr. Kohl, Mrs. Boxer, Mr. Harkin, Ms. Stabenow, and Ms.
Cantwell):
S. 27. A bill to amend the Federal Election Campaign Act of 1971 to
provide bipartisan campaign reform; to the Committee on Rules and
Administration.

campaign reform legislation

Mr. McCain. Mr. President, today we confront yet again a very serious
challenge to our political system, as dangerous in its debasing effect
on our democracy as war and depression have been in the past. And it
will take the best efforts of every public-spirited American to defeat
it. We must overcome the cynicism that is growing rampant in our
society. We must pass campaign reform legislation.
That is why first I want to thank our cosponsors for being here
today. They are proof that momentum is on our side and that we will
pass campaign reform legislation and finally follow the American
people's will. Action on this issue is long overdue and I am hopeful
that this year will present us with our best opportunity yet to achieve
passage of meaningful campaign reform.
Our legislation is simple, bi-partisan, and achieves three primary
objectives that will go far to reform our electoral system.
The bill: Bans soft money for usage in federal elections; Requires
increased disclosure of electioneering communications by so-called
independent organizations in a constitutional and clear manner (the
Snowe-Jeffords language); and Codifies the Supreme Court's Beck
decision, a court decision effectively ignored by the previous Clinton
Administration and now, under this Act, a decision which would be
strictly enforced.
After one of the closest elections in our nation's history, there's
one thing the American people are unanimous about--they want their
government back. We can to that by ridding politics of large,
unregulated contributions

[[Page S299]]

that give special interests a seat at the table while average Americans
are stuck in the back of the room. The Senate needs to act early on
campaign finance reform so we can achieve meaningful reform and restore
the public's faith in their government.
This is not a perfect bill. It does not attempt to solve all the
evils that plague our campaign system. But we will not let perfect be
the enemy of progress. We expect amendments to be offered to this
legislation and we fully expect that many of those amendments will be
constructive and add to our efforts. We look forward to that kind of
positive debate.
Second, whatever bill passes, it must treat our corporate and union
constituencies alike. We must resist any measures that skew this bill
in favor of any one group. The soft money ban in this bill affects both
corporations and unions.
And for my Republican friends, I want to emphasize again, if this
bill passes, the $100,000-plus union soft money checks to the
Democratic Party will no longer exist. According to the Washington
Post, the ``biggest donor of soft money in the (last) campaign was the
American Federal of State, County, and Municipal Employees (which) gave
the Democratic National Committee $1.27 million in last October and
early November. AFSCME's soft money total for the election cycle was
$6.3 million.'' Passage of this bill will end this practice once and
for all.
The key to our success now lies with a fair and open debate on this
subject. In the past, we have been denied any constructive debate on
this matter. I am hopeful that Senators Lott and Daschle and the co-
sponsors of the bill can construct a fair unanimous consent agreement
that will allow the Senate to take up and consider numerous amendments,
work its will, and craft legislation that can and will be signed into
law by the President. That is now our singular goal. And I am confident
it can be achieved.
Mr. President, I hope we can soon take up and pass this crucial
legislation.
Mr. FEINGOLD. Mr. President, I am very pleased to once again
introduce a campaign reform bill with my friend and colleague, the
Senator from Arizona. This year we have an important new cosponsor, the
senior Senator from Mississippi, Senator Thad Cochran, so this bill
will be known as the McCain-Feingold-Cochran campaign reform bill.
This is the fourth Congress in which Senator McCain and I have
introduced a bill. We have made progress each year, and now we are
closer than ever to finishing the job for the American people. The time
for campaign finance reform to pass the Congress and become law has now
come Mr. President. And Senator McCain and I are going to dedicate
ourselves to this issue like never before to make it happen.
The bill we are introducing today is broader than S. 1593, the bill
we took to the floor in October 1999, but narrower than S. 26, the
McCain-Feingold bill that was introduced in the beginning of the last
Congress. Our bill this year consists of a soft money ban, the Snowe-
Jeffords language on issue ads, the Beck provision on union dues, and a
few other provisions that will provide credibility to this reform bill
as it's passed into law. Very significant in my mind is a clear
prohibition on political fundraising in federal office buildings. This
is a strong base bill for reform, but we are ready and willing to
entertain the suggestions and proposals of all 98 other Senators. Each
of us in this body is an expert on this issue, and I know that many of
my colleagues have innovative ideas on how to improve our election
laws. Any amendment that adds to this bill in a positive way and and
doesn't undercut its basic principles will be given every
consideration.
One provision on which we will not compromise is the ban on soft
money. The bill here is as tough and comprehensive as possible, leaving
no room for the soft money abuses we have seen in the last decade.
Obviously, loopholes will develop over time, but I am satisfied that
this bill closes the soft money system down and anticipates at least
some of the clever schemes that might be developed to avoid the ban. In
the last election cycle, we saw over $500 million in soft money raised
by the political parties. This system is a scandal that we must
eliminate now.
The bill includes the Snowe-Jeffords language on issue ads. This
provision will have a major impact on labor union ads, but it is fair
and balanced between unions and corporations. It will have minimal
impact on established advocacy groups like National Right to Life and
the Sierra Club because they have a significant small donor base, but
it will prevent corporations and unions from laundering money through
such groups. It allows groups to continue to run these ads as long as
they use only individual money and disclose the large donors to the
effort. The provision covers only phony issue ads on radio and TV, not
direct mail, phone banks, or newspapers, or the Internet, but we are
open to working with all sides to work out a fair and balanced way to
broaden its coverage if that is what the Senate wants to do.
Similarly, we are open to proposals that will require additional
disclosure of election related spending by unions, corporations, and
advocacy groups. But they must treat all players in this system evenly
and fairly.
That brings me to the issue that has received a lot of attention in
recent weeks, so called ``paycheck protection.'' In the past, this has
been a poison pill to reform, but with the changes in the Senate, we
clearly have the votes to defeat the extreme and one-sided ``paycheck
protection proposals that have been offered in the past. We will hold
the President and those working with him to the standard that he
himself has enunciated any proposal has to be fair and balanced. Our
bill is currently fair and balanced. It treats unions and corporations
equally. The paycheck protection proposals we have seen in the past are
not fair and balanced. They attack only one player in the election
system labor unions.
Mr. President, I look forward to a real debate early this year, not
only on our bill but on amendments that my colleagues want to offer. I
am happy to meet with any Senator who wants to discuss a reform
proposal. If we all work together, this process can yield a campaign
reform bill that we will be proud of, and we can start out this new
Congress by cleaning up our elections and ridding our system of the
corrupting of soft money.
Mr. McCAIN. Mr. President, Senator Feingold and I and others--a
bipartisan group of Senators and friends from the House, Congressman
Shays and Congressman Meehan--just had a press conference announcing
our intentions. I don't intend to make a statement, except to express
my deep and sincere appreciation for my partner, Senator Feingold, who
someday will be written about in another book called profiles in
courage for his willingness to stand up to the special interests at a
time when his own candidacy was at risk if he did not do so.
I thank Senator Feingold, and I look forward to continuing to work
together on this issue. I believe we see a light at the end of the
tunnel, which is an old phrase from the Vietnam war, uttered by one of
our civilian leaders during that war. I remind Senator Feingold that
when told of that, a soldier in the field said, ``Yes, the light at the
end of the tunnel is a train.'' We hope that is not the case in this
particular scenario.
The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
Mr. FEINGOLD. Mr. President, I thank the Senator from Arizona for his
kind remarks. I am happy to be back with him on this effort. As John
McCain has said many times, we know that every Member of the Senate is
an expert on this issue. Every Member has ideas about how we should
reform the campaign finance system. What we want out of this is an
opportunity for an open amending process so the Senate as a whole can
fashion a bill to send to the President.
Mr. McCAIN. I ask unanimous consent that the bill be left open for
further cosponsors throughout the day.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Wisconsin has the floor.
Mr. FEINGOLD. I yield the floor.
The PRESIDING OFFICER. The Senator from Mississippi is recognized.
Mr. COCHRAN. Mr. President, I am pleased to join my friends from
Arizona and from Wisconsin in introducing the McCain-Feingold-Cochran
bill today. They have worked very hard and very

[[Page S300]]

effectively to bring the attention of not only the Senate but the
American people to bear on this issue and this important need for
reform. I am convinced that we are well advised to take this
legislation up at an early date in this session of the Congress.
The impressions of the last election are fresh on everybody's mind.
One that sticks with me very strongly is that candidates were
overwhelmed in this process by the expenditures of soft money by groups
buying ads, some attacking candidates, supporting others, without the
American public knowing who these groups were, what their goals and
intentions were, where the money was coming from, or how it was being
spent. That has to be corrected, and it ought to be corrected.
The purpose of the campaign finance laws was to let the American
people know from where the money was coming, how it was being used, how
much money was being raised by the candidates and spent by the
candidates. We have now lost the right to know because of the loopholes
that have been developed and perfected by those who are involving
themselves in the election process.
I am not against freedom of speech. We want everybody to be able to
have their say, but we have a right to know how much they are spending
and from where the money is coming. I think that is a fundamental part
of this legislation, and I hope the Senate will take it up and pass it
in the near future.
Ms. COLLINS. Mr. President, I rise in support of the McCain-Feingold
bipartisan campaign finance reform bill of 2001. I am very proud to be
an original cosponsor of this legislation which goes a long way towards
reforming our campaign system.
I have long supported campaign finance reform. When I ran for the
Senate from Maine in 1996 I promised my constituents that I would be a
strong advocate for campaign finance reform. That pledge led to my
decision to cosponsor the campaign finance reform that was introduced
in 1997 by Senators McCain and Feingold.
Unfortunately, comprehensive campaign finance reform efforts have
been thwarted in the past two Congresses. This time, though, we have
reason for optimism due to new and renewed support.
The Bipartisan Campaign Reform Act of 2001 takes a number of
important steps towards fixing a broken system. First and foremost, the
bill closes the most glaring loophole in our campaign finance laws by
banning the unlimited, unregulated contributions known as ``soft
money.'' ``Soft money'' has made the current law's restrictions and
contributions from individuals, corporations, and unions essentially
meaningless. Second, the bill requires disclosure by the sponsors of
certain issue ads that corporations and labor unions run in the period
leading up to an election. Third, the bill codifies the Supreme Court's
decision in Communication Workers of America v. Beck to ensure that
nonunion members are not obligated to subsidize the political
activities of labor unions. And finally, the bill makes it clear that
foreign nationals may not contribute any funds--hard or soft--to
federal, state, or local elections.
My home State of Maine has a deep commitment to preserving the
integrity of the electoral system and ensuring that all Mainers have an
equal political voice. Mainers have backed their commitment to an open
political process in both word and deed. In many regions of Maine, town
meetings in which all citizens are invited to debate issues and make
decisions are still prevalent. This is unvarnished, direct democracy.
Maine's tradition of town meetings and equal participation rejects the
notion that wealth dictates political discourse. Maine citizens feel
strongly about reforming our federal campaign laws, as do I.
The problem with soft money was painfully evident during the 1997
hearings by the Senate Committee on Governmental Affairs, chaired by my
good friend, Senator Thompson. During those investigations, we heard
from one individual who gave $325,000 to the Democratic National
Committee in order to secure a picture with the President of the United
States. We also heard from the infamous Roger Tamraz who testified that
the $300,000 he spend to gain access to the White House was not enough
and that, next time, he would spend $600,000. And we heard of
individuals, such as Chinese cigarette magnate Ted Sioeng, who
orchestrated nearly $600,000 in political contributions during the 1996
election cycle. Sioeng, we later discovered, was a self-described agent
of the Chinese government.
Soft money donations soared in the 2000 presidential election cycle,
nearly doubling from $262 million in 1996 to $488 million in 2000. At
the same time, regulated, hard money donations increased a little more
than 10-percent. Soft money, then, is the crest of the wave that has
swamped our campaign finance system and shaken public confidence in our
government. I applaud the bipartisan efforts of Senators McCain and
Feingold and pledge my continued support to see this legislation become
law this year.
Mr. JEFFORDS. Mr. President, I rise today as a proud cosponsor of the
Bipartisan Campaign Reform Act of 2001 to discuss my thoughts and hopes
on the actions the Senate will hopefully be taking in the coming months
on this important issue.
First, let me thank the sponsors of the legislation, Senators McCain
and Feingold, for their tireless perseverance to enact campaign finance
reform. Without their hard work and vast knowledge, we would not be at
this important point. The time has come to schedule a full and open
debate on this important issue. I look forward to hearing and debating
the many ideas of my colleagues and believe the Senate should strive to
show why we are considered the greatest deliberative body in the world
by fully debating this important topic.
Mr. President, I was first elected to Congress following the
Watergate scandal, right around the time Congress last enacted
comprehensive reform of our campaign finance system. I have watched
with growing dismay during my over twenty-five years in Congress as the
number of troubling examples of problems in our current campaign
finance system have increased. These problems have led to a perception
by the public that a disconnect exists between themselves and the
people that they have elected. I believe that this perception is a
pivotal factor behind the disturbingly low voter turnouts that have
plagued national elections.
While some may point to surveys that list campaign finance reform as
a low priority for the electorate, I believe that the public actually
strongly supports Congress debating and enacting comprehensive reform.
It is important to reverse the trend of shrinking voter turnout by re-
establishing the connection between the public and us, their elected
representatives, by passing comprehensive campaign finance reform.
It is time to restore the public's confidence in our political
system.
It is time to increase disclosure requirements and ban soft money.
It is time to work together to pass meaningful campaign finance
reform.
As I said earlier, I look forward to a full and open debate on the
issue of campaign finance reform including the amendments that will be
offered. At the end of this debate, the Senate should be able to pass
comprehensive campaign finance reform. That to me is the most important
aspect of any bill the Senate may pass, it must be comprehensive. If we
fail to address the problems facing our campaign finance system with a
comprehensive balanced package we will ultimately fail in our mission
of reforming the system. Closing one loophole, without addressing the
others in a systematic way, will not do enough to correct the current
deficiencies, and may in fact create new and unintended consequences.
Mr. President, we have all seen first-hand the problems with the
current state of the law as it relates to sham issue advertisements. I
have focused much time and effort on developing a legislative solution
on this topic with my colleague Senator Olympia Snowe, and was pleased
that this solution was adopted by the Senate during the 1998 debate on
campaign finance reform. I was also proud to cosponsor the
comprehensive campaign finance bill Senators McCain and Feingold
introduced last Congress that included this legislative solution.
I feel strongly that the legislation the Senate must ultimately vote
on include some kind of changes to the current law concerning sham
issue advertisements. I feel that we have crafted a

[[Page S301]]

reasonable, constitutional approach to this problem and am extremely
pleased that this legislative solution is again included in the bill we
introduce today.
That does not mean, though, that we will stop working with our
colleagues to craft additional, and perhaps different, ideas to address
the problems with the current law on sham issue advertisements. My
ultimate goal is to create a comprehensive campaign finance bill that
will garner the support of at least 60 Senators, and hopefully more.
Mr. President, I look forward to a full and open debate on this
important issue, and pledge to continue working with my colleagues to
enact comprehensive campaign finance reform into law this year.
______

By Mr. GRAMM (for himself and Mrs. Hutchison):
S. 28. A bill to guarantee the right of all active duty military
personnel, merchant mariners, and their dependents to vote in Federal,
State, and local elections; to the Committee on Rules and
Administration and the Committee on Rules and Administration, jointly.

MILITARY VOTING RIGHTS ACT OF 2001

Mr. GRAMM. Mr. President, along with Senator Kay Bailey Hutchison, I
am introducing legislation today which will ensure that active duty
military personnel and their dependents will never lose their right to
vote in Federal, State, and local elections. The Military Voting Rights
Act of 2001 will guarantee that those men and women who protect our
freedom are not denied one of the basic rights upon which that freedom
is based.
I initially introduced this legislation in response to an outrageous
case in my home state of Texas in which a federal district court, in a
suit brought under federal law and supported by federal tax dollars,
threw out 800 absentee ballots cast by military personnel in two
closely-contested local elections in Val Verde County. While a state
court ultimately restored the military votes, the case clearly
demonstrated that military personnel who are away from their legal
residence on official orders are at risk of losing their right to vote.
In fact, based upon current statistics compiled by the Congressional
Research Service and the Department of Defense, over 40 percent of our
troops on active duty are residents of states that have no specific
legislative provisions protecting their fundamental right to vote in
state and local elections.
As the Val Verde County case demonstrates, absent specific
legislative protection, valid absentee votes cast by military personnel
will be ripe targets for attack by those seeking to overturn the
results of close elections. I find it unconscionable that American
military personnel, who stand ready to fight and die for our nation,
risk losing their right to vote as a consequence of their military
service. To protect our military personnel from any such injustice, I
again introduce this legislation in the Senate and ask my colleagues to
support its immediate passage. Those Americans who volunteer to protect
our freedom by serving in our Armed Forces should not be denied the
right to vote in any election.
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. 28

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 ``Military Voting Rights Act
of 2001''.

SEC. 2. GUARANTEE OF RESIDENCY.

Article VII of the Soldiers' and Sailors' Civil Relief Act
of 1940 (50 U.S.C. 700 et seq.) is amended by adding at the
end the following:
``Sec. 704. (a) For purposes of voting for an office of the
United States or of a State, a person who is absent from a
State in compliance with military or naval orders shall not,
solely by reason of that absence--
``(1) be deemed to have lost a residence or domicile in
that State;
``(2) be deemed to have acquired a residence or domicile in
any other State; or
``(3) be deemed to have become resident in or a resident of
any other State.
``(b) In this section, the term `State' includes a
territory or possession of the United States, a political
subdivision of a State, territory, or possession, and the
District of Columbia.''.

SEC. 3. STATE RESPONSIBILITY TO GUARANTEE MILITARY VOTING
RIGHTS.

(a) Registration and Balloting.--Section 102 of the
Uniformed and Overseas Absentee Voting Act (42 U.S.C. 1973ff-
1) is amended--
(1) by inserting ``(a) Elections for Federal Offices.--''
before ``Each State shall--'';
and
(2) by adding at the end the following:
``(b) Elections for State and Local Offices.--Each State
shall--
``(1) permit absent uniformed services voters to use
absentee registration procedures and to vote by absentee
ballot in general, special, primary, and runoff elections for
State and local offices; and
``(2) accept and process, with respect to any election
described in paragraph (1), any otherwise valid voter
registration application from an absent uniformed services
voter if the application is received by the appropriate State
election official not less than 30 days before the
election.''.
(b) Conforming Amendment.--The heading for title I of such
Act is amended by striking out ``FOR FEDERAL OFFICE''.
______

By Mr. BOND (for himself, Mr. Durbin, Mr. Baucus, Ms. Snowe, Mr.
Kerry, Mr. Jeffords, Mr. Kyl, Mr. Burns, Mr. Dorgan, Mr.
Harkin, Mrs. Lincoln, Mr. Leahy, Mr. Johnson, Mr. Fitzgerald,
Mr. Wellstone, and Mr. Bingaman):
S. 29. A bill to amend the Internal Revenue Code of 1986 to allow a
deduction for 100 percent of the health insurance costs of self-
employed individuals; to the Committee on Finance.

self-employed health insurance fairness act of 2001

Mr. BOND. Mr. President, I rise today to discuss a measure that has
broad bipartisan support. Today, with my colleague from Illinois,
Senator Durbin, I am introducing legislation addressing what is a top
concern of small business owners in this country. That is the
availability of health care.
For the past three Congresses, we have worked to level the playing
field for America's self-employed by ensuring that they can deduct 100
percent of their health insurance premiums. Large corporations,
businesses, and other organizations can deduct 100 percent of what they
pay, but small businesses, up until recently, have been severely
limited in what they can deduct.
The legislation Senator Durbin and I are introducing today, the Self-
Employed Health Insurance Act of 2001, will end finally one of the most
glaring inequities that has existed in our tax law.
I have had the pleasure of serving for over 4 years now as chairman
of the Senate Committee on Small Business. Throughout, one of my top
priorities has been to ensure full deductibility of health insurance
for the self-employed. We have made some progress. Most notably, in the
Taxpayer Relief Act of 1997, we broke through the longstanding cap on
the deduction to provide 100-percent deductibility. In 1998, we passed
legislation to speed up the date that self-employed can fully deduct
their health insurance costs to 2003 and increase the deductible
amounts in the intervening years.
We realize the problem with budget scoring has postponed the
effective date of this measure, but I have talked to too many small
business people who tell us they cannot wait until 2003 to get sick or
to go to 2003 without having coverage for themselves and their
employees. The self-employed still cannot afford, in many instances,
health insurance without 100-percent deductibility. They should not
have to wait any longer. It is time for us to unite behind this
bipartisan issue and get this job done.
Let me give you a fact, Mr. President. With a self-employed able to
deduct only 60 percent of their health insurance costs today and only
70 percent next year, it probably will come as no surprise to any of us
that almost a quarter, 24.2 percent, of the self-employed business
owners in Missouri do not have health insurance. In fact, 4.8 million
Americans live in families headed by a self-employed individual and
have no health insurance. Those families include more than 1 million
children who lack adequate health care insurance coverage.
The bill Senator Durbin and I are introducing today addresses this
situation by making 100-percent deductibility begin this year. Full
deductibility will make health insurance affordable to the self-
employed and help them get themselves and their families

[[Page S302]]

the kind of health insurance coverage they should have.
This measure also corrects another inequity in the law affecting
self-employed who try to provide health insurance for themselves, their
families, and their employees. It deals with an issue I raised in the
last Congress.
Under the current law, the self-employed lose all the health
insurance deduction if they are eligible to participate in another
plan, whether or not they actually participate. This provision affects
self-employed individuals such as Steve Hagan in my hometown of Mexico,
MO. Steve is a financial planner who runs his own small business.
Although he has a group medical plan for his employees, Steve cannot
deduct the medical cost of covering himself or his family simply
because his wife is eligible for health insurance through her employer.

The inequity is clear. Why should he be able to deduct the cost of
health insurance for his employees but not for himself and his family?
What if the insurance available through his wife's employer does not
meet the needs of their family?
Besides being patently unfair, this is also an enormous trap for the
unwary. Imagine the small business owner who learns that she can now
deduct 60 percent of her health insurance costs this year, and with the
extra deduction, she can finally afford a group medical plan for
herself and her employees.
Then later in the year, her husband gets a new job that offers health
insurance. Suddenly, her self-employed health insurance deduction is
gone. Sadly, she is left with two choices. She can bear the entire
burden of her family's coverage, or she can terminate the insurance
coverage for all her employees, which will likely increase due to
coverage of fewer employees under the plan. The Tax Code should not
force small business owners into this kind of ``no win'' situation when
they try to provide insurance coverage for their employees and
themselves.
This bill eliminates this problem by clarifying that the self-
employed health insurance deduction is limited only if the self-
employed person actually participates in a subsidized health insurance
plan offered by a spouse's employer or through a second job. It is
simply a matter of fairness. It makes common sense. We ought to take
this step right now.
It is a commonsense measure that answers the urgent plea of small
businesses for fairness in the Tax Code. It has been on the ``must do''
list of the national small business groups for too long. And when I
hosted the National Women's Small Business Summit this past summer, in
Kansas City, it was at the top of the list among the recommendations we
received.
We have a tremendous opportunity to work together. Let's take this
opportunity and finish the job.
I had initially offered a list of 21 original cosponsors. I ask
unanimous consent that, in addition to those cosponsors, the following
Senators be added: The Senator from Wyoming, Mr. Enzi; the Senator from
Indiana, Mr. Lugar; the Senator from Kansas, Mr. Roberts; the Senator
from Maine, Ms. Collins; the Senator from Pennsylvania, Mr. Specter;
and the Senator from Wisconsin, Mr. Kohl.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. Mr. President, I ask unanimous consent the bill and a
description of its provisions be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 29

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 ``Self-Employed Health
Insurance Fairness Act of 2001''.

SEC. 2. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED
INDIVIDUALS INCREASED.

(a) In General.--Section 162(l)(1) of the Internal Revenue
Code of 1986 (relating to special rules for health insurance
costs of self-employed individuals) is amended to read as
follows:
``(1) Allowance of deduction.--In the case of an individual
who is an employee within the meaning of section 401(c)(1),
there shall be allowed as a deduction under this section an
amount equal to the amount paid during the taxable year for
insurance which constitutes medical care for the taxpayer,
the taxpayer's spouse, and dependents.''
(b) Clarification of Limitations on Other Coverage.--The
first sentence of section 162(l)(2)(B) of the Internal
Revenue Code of 1986 is amended to read as follows:
``Paragraph (1) shall not apply to any taxpayer for any
calendar month for which the taxpayer participates in any
subsidized health plan maintained by any employer (other than
an employer described in section 401(c)(4)) of the taxpayer
or the spouse of the taxpayer.''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.
____

S. 29--Self-Employed Health Insurance Fairness Act of 2001--Description
of Provisions

The bill amends section 162(l)(1) of the Internal Revenue Code to
increase the deduction for health-insurance costs for self-employed
individuals to 100% beginning on January 1, 2001. Currently the self-
employed can only deduct 60% of these costs. The deduction is not
scheduled to reach 100% until 2003, under the provisions of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act of 1998,
which was signed into law in October 1998. The bill is designed to
place self-employed individuals on an equal footing with large
businesses, which can currently deduct 100% of the health-insurance
costs for all of their employees.
The bill also corrects a disparity under current law that bars a
self-employed individual from deducting any of his or her health-
insurance costs if the individual is eligible to participate in another
health-insurance plan. This provision affects self-employed individuals
who are eligible for, but do not participate in, a health-insurance
plan offered through a second job or through a spouse's employer. That
insurance plan may not be adequate for the self-employed business
owner, and this provision prevents the self-employed from deducting the
costs of insurance policies that do meet the specific needs of their
families. In addition, this provision provides a significant
disincentive for self-employed business owners to provide group health
insurance for their employees. The bill ends this disparity by
clarifying that a self-employed person loses the deduction only if he
or she actually participates in another health-insurance plan.
Mr. DURBIN. Mr. President, I rise today with my colleague from
Missouri, to introduce ``The Self-Employed Health Insurance Fairness
Act of 2001'', as our first order of business for the new Congress. We
have both been working on this issue for many years now and are hopeful
that we can finally get the bill fully enacted this year. In past
years, we have each introduced very similar bills and this year we are
combining our efforts by introducing this bipartisan bill, which we
intend to pursue vigorously throughout this Congress.
This bill would allow the self-employed to take a full tax deduction
for their health insurance premiums as of December 31, 2000.
Corporations already can take a full deduction for these expenses and
this bill would level the playing field by allowing the self-employed
to take the same full deduction. This bill would mean that the farmer
and the agribusiness would be treated the same.
Under current law, the self-employed may only deduct 60 percent of
their health insurance premiums this year. The deductibility will
increase to 70 percent in 2002 and 100 percent in 2003. I am committed
to seeing the self-employed receive equal treatment sooner rather than
later.
The self-employed pay over 30 percent more for their health insurance
than those insured by group health plans. This makes it much harder for
them to afford health insurance. More than 22 percent of the self-
employed were without health insurance in 1999, compared to 17.5
percent of other workers. That means that 4.8 million self-employed
Americans went without health insurance in 1999.
In Illinois, 17 percent of the self-employed were without health
insurance in 1999, up from 14 percent in 1996. The vast majority of
these individuals are members of low-income working families. Fifty-
three percent of the self-employed living on less than $20,000 in
Illinois are without health insurance. This compares with 34 percent of
other Illinois working families with the same low income level. Almost
50 percent of those self-employed individuals who were without health
insurance at some

[[Page S303]]

time during 1995, went without health insurance for the entire year. In
comparison, 62 percent of government workers saw their lack of coverage
end within 4 months or less.
Overall, the self-employed pay more for health insurance and are
therefore more likely to be uninsured, and they remain uninsured longer
than other workers. This is exacerbated by their unequal treatment by
the tax code. Congress should move expeditiously to level the playing
field and help more hard-working, self-employed individuals and their
families to afford the health insurance that they need and deserve.
Mr. BAUCUS. Mr. President, I rise today, as an original cosponsor of
S. 29, the Self-Employed Health Insurance Fairness Act of 2001, to
speak about the importance of making health insurance a more affordable
option for self-employed Americans. The legislation moves forward--by
two years--the effective date for making health insurance fully
deductible for self-employed taxpayers. In the early 1990s, I authored
bills to ensure that the deduction--then 25 percent--would not expire.
We won that battle, and throughout the 1990s I consistently fought for
increases in the deductible amount. Finally, in 1997, we enacted
legislation to allow full, 100 percent deductibility of health
insurance for the self-employed, phased in by 2003.
Mr. President, in these times of surpluses, as we reap the benefits
of our fiscal discipline, the self-employed farmers, ranchers, and
entrepreneurs in Montana and across the country deserve this important
tax relief today. My small business and self-employed constituents
constantly tell me that purchasing health insurance is one of the
things they would most like to be able to do at their business. It is
simply unfair that large businesses are allowed to deduct 100 percent
of their employees' health insurance costs, while the self-employed
must wait until 2003 for this privilege. In this country, we have a
system of health insurance that encourages Americans to purchase health
insurance through their employer. Allowing self-employed purchasers of
health insurance the same deduction permitted to large employers
adheres to those concepts and adds a measure of tax equity.
I thank Senators Durbin and Bond for so actively pursuing enactment
of this legislation. I believe the time is right to allow full
deductibility of health insurance for the hard-working self-employed.
______

By Mr. SARBANES (for himself, Mr. Leahy, Mr. Dodd, Mr. Reed, Mr.
Kerry, Mr. Harkin, and Mr. Edwards):
S. 30. A bill to strengthen control by consumers over the use and
disclosure of their personal financial and health information by
financial institutions, and for other purposes; to the Committee on
Banking, Housing, and Urban Affairs.

FINANCIAL INFORMATION PRIVACY PROTECTION ACT

Mr. SARBANES.
Mr. President, I rise today to address a very important issue: the
protection of every American's personal, sensitive, financial
information that is held by their financial institutions.
Few Americans understand that, under Federal law, a financial
institution could take information it obtains about a customer through
his or her transactions, and sell or transfer that information to an
affiliated company without the customer being able to object. And the
customer has no right to get access to or correct that information.
The amount of information that could be disclosed is enormous. It
includes: savings and checking account balances; certificate of deposit
maturity dates and balances; any check an individual writes; any check
that is deposited into a customer's account; stock and mutual fund
purchases and sales; and life insurance payouts.
In considering this issue, I start with the threshold question: whose
information is it? Is it the individual's or the institution's? I
believe this information belongs to the individual.
To help alleviate the concerns of American consumers, I am
introducing legislation that would give customers the right to choose
whether their financial institutions should be allowed to transfer this
date for unintended uses. I am pleased that Senators Leahy, Dodd, Reed,
Kerry, Harkin and Edwards are joining me in co-sponsoring the Financial
Information Privacy Protection Act of 2001. I want to particularly
recognize Senator Leahy, chairman of the Democratic Privacy Caucus, for
his strong leadership on the privacy issue over the years.
This bill seeks to protect a fundamental right of privacy for every
American who entrusts his or her highly sensitive and confidential
financial information to a financial institution. Every American should
at least have the opportunity to say ``no'' if he or she does not want
that nonpublic information disclosed. Every American should have the
right to have especially sensitive information held by his or her
financial institution kept confidential unless consent is given. Every
American should be allowed to make certain that the information is
accurate and, if it is not, have it corrected. And, put quite simply,
these rights should be enforced.
The Financial Information Privacy Protection Act of 2001 would
accomplish these objectives.
Today's technology makes it easier, faster, and less costly than ever
for institutions to have immediate access to large amounts of customer
information; to analyze that data; and to send that data to others.
With the passage of financial services modernization legislation in
1999, banks, securities firms and insurance firms are now allowed to
affiliate and offer their multiple products to each other's customers.
As a result, many financial institutions are warehousing large amounts
of sensitive information and sharing it throughout the affiliate
structure without the customer being fully informed of what financial
information is being disclosed or the purposes for which it will be
used. While cross-marketing can bring new and beneficial products to
receptive consumers, it can also result in unwanted invasions of
personal privacy.
Surveys have consistently shown that the public is widely concerned
about its privacy. For example, a recent AARP survey found that 96% of
respondents were unwilling to let a company freely share their
financial information with other financial companies. The survey also
asked, ``[w]ho owns financial information provided in a business
transaction?'' and 93% of respondents answered that the information
belongs to the ``customer'' while only 4% answered that it belongs to
the `'business'' (and 3% said they did not know).
Congress has already protected citizens' privacy on prior occasions.
In response to public concerns, Congress passed privacy laws
restricting companies' disclosure of customer information without
customer consent, such as in the Cable Communications Policy Act and
the Video Privacy Protection Act. Yet while video rentals and cable
television selections are prohibited by law from being disclosed,
millions of Americans cannot object to disclosure of their financial
transactions to their financial institutions' affiliates and certain
other financial companies for purposes inconsistent with those for
which they gave their data.
Other important privacy concerns, such as the privacy of bankruptcy
court records, fall outside of this bill. Last week, the Clinton
administration published a study ``Financial Privacy in Bankruptcy''
with important recommendations that should be carefully considered. I
commend the Administration for its many efforts to protect individuals'
right to privacy.
Along with medical records, financial records rank among the kinds of
personal data Americans most expect will be kept confidential. However,
the privacy of even highly sensitive financial information has been
increasingly put at risk with the move to an economy in which the
selling or sharing of consumers' personal information is highly
profitable--and legal.
The Financial Information Privacy Protection Act of 2001 contains key
financial privacy protections that are consistent with the expectations
of Americans and good business practices.
The Act would provide consumers with:
An ``opt out'' for affiliate sharing, allowing customers to object to
financial institutions sharing their financial data with all affiliated
firms.

[[Page S304]]

An ``opt in'' for sharing some types of sensitive financial or
medical information. A financial institution would need to have a
consumer's affirmative consent before releasing his or her medical
information or personal spending habits (e.g., credit card charges,
check payees) to either an affiliate or an unaffiliated third party.
Rights of access and correction. A consumer would be able to see the
information to be released and correct material errors. To preclude
abuse of this protection, the bill allows the institution to charge for
access to this information.
The Gramm-Leach-Bliley Act, enacted in November 1999, contains some
limited Federal financial privacy protections for consumers. While an
important beginning, these protections fail to meet the expectations of
Americans. It does not contain the important protections that I have
just referred to. Many groups have criticized the current law as
inadequate. I agree.
This bill would not affect Section 507 of the Gramm-Leach-Bliley Act,
which I authored, which provides that these Federal privacy protections
do not pre-empt stronger State privacy laws. States with citizens who
want stronger privacy protections than contained in Federal law would
still be able to enact such laws.
A number of consumer groups, including Consumers Union, Consumer
Federation of America, Consumer Action, Privacy Times, United Auto
Workers and U.S. Public Interest Research Group, have stated their
support of this bill. Mr. President, I would ask that their letter of
endorsement be included at the end of my remarks. Professor Peter
Swire, Professor of Law at Ohio State University and formerly the
Clinton Administration's Chief Counselor for Privacy, has said: ``The
bill is carefully crafted to provide the greatest protections for the
most sensitive financial information. At the same time, the bill helps
create an efficient financial system by allowing the use of information
in situations where the risk to privacy is minimal.''
The issue of financial privacy cuts across philosophical lines.
For example, Mrs. Phyllis Schlafly and the Eagle Forum have spoken
out for financial privacy protections even stronger than those
contained in this bill. She has written, ``Some banks shamelessly admit
they profile their customers so the bank can advise telemarketers which
products a customer might like. But why should banks be able to make
secret profits off of customers' personal information such as deposits,
checks, phone numbers or credit card numbers? Many of us don't want to
be solicited by any telemarketers.''
Columnist William Safire has written frequently about the need for
stronger privacy protections. For instance, in an editorial in the New
York times of October 30, 2000, Mr. Safire pointed out that many people
are concerned about financial records, and other records, ``being
passed around by conglomerated banks, insurance companies and H.M.O.'s.
Personal freedom is diminished when the most intimate secrets can be
monitored by employers and merchants.''
As we proceed in an age of technological advances and cross-industry
marketing of financial services, we need to be mindful of the privacy
concerns of the American public. Consumers who wish to keep their
sensitive financial information private should be given a right to do
so. The passage of the financial information Privacy Protection Act of
2001 would be a major step toward that goal. Congress can and should
provide that privacy protection by giving consumers, at a minimum, the
rights of consent and access.
I ask unanimous consent that the bill and a letter be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 30

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Financial
Information Privacy Protection Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Opt-out requirement for disclosure to affiliates and
nonaffiliated third parties.
Sec. 3. Restricting the transfer of information about personal spending
habits.
Sec. 4. Restricting the use of health information in making credit and
other financial decisions.
Sec. 5. Limits on redisclosure and reuse of information.
Sec. 6. Consumer rights to access and correct information.
Sec. 7. Improved enforcement authority.
Sec. 8. Enhanced disclosure of privacy policies.
Sec. 9. Limit on disclosure of account numbers.
Sec. 10. General exceptions.
Sec. 11. Definitions.
Sec. 12. Issuance of implementing regulations.
Sec. 13. FTC rulemaking authority under the Fair Credit Reporting Act.

SEC. 2. OPT-OUT REQUIREMENT FOR DISCLOSURE TO AFFILIATES AND
NONAFFILIATED THIRD PARTIES.

Section 502(a) of the Gramm-Leach-Bliley Act (15 U.S.C.
6802(a)) is amended to read as follows:
``(a) Disclosure of Nonpublic Personal Information.--Except
as otherwise provided in this subtitle, a financial
institution may not disclose any nonpublic personal
information to an affiliate or a nonaffiliated third party
unless the financial institution--
``(1) has provided to the consumer a clear and conspicuous
notice, in writing or electronic form or other form permitted
by the regulations implementing this subtitle, of the
categories of information that may be disclosed to the--
``(A) affiliate; or
``(B) nonaffiliated third party;
``(2) has given the consumer an opportunity, before the
time that such information is initially disclosed, to direct
that such information not be disclosed to such--
``(A) affiliate; or
``(B) nonaffiliated third party; and
``(3) has given the consumer the ability to exercise the
nondisclosure option described in paragraph (2) through the
same method of communication by which the consumer received
the notice described in paragraph (1) or another method at
least as convenient to the consumer, and an explanation of
how the consumer can exercise such option.''.

SEC. 3. RESTRICTING THE TRANSFER OF INFORMATION ABOUT
PERSONAL SPENDING HABITS.

Section 502(b) of the Gramm-Leach-Bliley Act (15 U.S.C.
6802(b)) is amended to read as follows:
``(b) Restriction on the Transfer of Information About
Personal Spending Habits.--
``(1) In general.--Notwithstanding subsection (a), if a
financial institution provides a service to a consumer
through which the consumer makes or receives payments or
transfers by check, debit card, credit card, or other similar
instrument, the financial institution shall not transfer to
an affiliate or a nonaffiliated third party--
``(A) an individualized list of that consumer's
transactions or an individualized description of that
consumer's interests, preferences, or other characteristics;
or
``(B) any such list or description constructed in response
to an inquiry about a specific, named individual;
if the list or description is derived from information
collected in the course of providing that service.
``(2) Restriction on transfer of aggregate lists containing
certain health information.--Notwithstanding subsection (a),
a financial institution shall not transfer to an affiliate or
a nonaffiliated third party any aggregate list of consumers
containing or derived from individually identifiable health
information.
``(3) Exceptions.--
``(A) In general.--The financial institution may disclose
the information described in paragraph (1) or (2) to an
affiliate or a nonaffiliated third party if such financial
institution--
``(i) has clearly and conspicuously requested in writing or
in electronic form or other form permitted by the regulations
implementing this subtitle, that the consumer affirmatively
consent to such disclosure; and
``(ii) has obtained from the consumer such affirmative
consent and such consent has not been withdrawn.
``(B) Rule of construction.--This subsection shall not be
construed as preventing a financial institution from
transferring the information described in paragraph (1) or
(2) to an affiliate or a nonaffiliated third party for the
purposes described in paragraph (1), (2), (3), (5), (7), (8),
(9), or (10) of subsection (f).
``(C) Scope of application.--Paragraph (1) shall not apply
to the transfer of aggregate lists of consumers.''.

SEC. 4. RESTRICTING THE USE OF HEALTH INFORMATION IN MAKING
CREDIT AND OTHER FINANCIAL DECISIONS.

(a) Restriction on Use of Consumer Health Information.--
Section 502(c) of the Gramm-Leach-Bliley Act (15 U.S.C.
6802(c)) is amended to read as follows:
``(c) Use of Consumer Health Information Available From
Affiliates and Nonaffiliated Third Parties.--In deciding
whether, or on what terms, to offer, provide, or continue to
provide a financial product or service to a consumer, a
financial institution shall not obtain or receive
individually identifiable health information about the
consumer from an affiliate or nonaffiliated third

[[Page S305]]

party, or evaluate or otherwise consider any such
information, unless the financial institution--
``(1) has clearly and conspicuously requested in writing or
in electronic form or other form permitted by the regulations
implementing this subtitle, that the consumer affirmatively
consent to the transfer and use of that information with
respect to a particular financial product or service;
``(2) has obtained from the consumer such affirmative
consent and such consent has not been withdrawn; and
``(3) requires the same health information about all
consumers as a condition for receiving the financial product
or service.''.
(b) Existing Protections for Health Information Not
Affected.--Subtitle A of title V of the Gramm-Leach-Bliley
Act (15 U.S.C. 6801 et seq.) is amended--
(1) by redesignating section 510 as section 512; and
(2) by inserting after section 509 the following new
section:

``SEC. 510. RELATION TO STANDARDS ESTABLISHED UNDER THE
HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY
ACT OF 1996.

``Nothing in this subtitle shall be construed as--
``(1) modifying, limiting, or superseding standards
governing the privacy and security of individually
identifiable health information promulgated by the Secretary
of Health and Human Services under sections 262(a) and 264 of
the Health Insurance Portability and Accountability Act of
1996; or
``(2) authorizing the use or disclosure of individually
identifiable health information in a manner other than as
permitted by other applicable law.''.
(c) Definition of Individually Identifiable Health
Information.--Section 509 of the Gramm-Leach-Bliley Act (15
U.S.C. 6809) is amended by adding at the end the following
new paragraph:
``(12) Individually identifiable health information.--The
term `individually identifiable health information' means any
information, including demographic information obtained from
or about an individual, that is described in section
1171(6)(B) of the Social Security Act.''.
(d) Technical and Conforming Amendment.--Section 505(a)(6)
of the Gramm-Leach-Bliley Act (15 U.S.C. 6805(a)(6)) is
amended by inserting before the period at the end ``to the
extent that the provisions of such section are not
inconsistent with the provisions of this subtitle''.

SEC. 5. LIMITS ON REDISCLOSURE AND REUSE OF INFORMATION.

Section 502 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802)
is amended--
(1) by redesignating subsections (d) and (e) as subsections
(e) and (f), respectively; and
(2) by inserting after subsection (c) the following new
subsection:
``(d) Limits on Redisclosure and Reuse of Information.--
``(1) In general.--An affiliate or a nonaffiliated third
party that receives nonpublic personal information from a
financial institution shall not disclose such information to
any other person unless such disclosure would be lawful if
made directly to such other person by the financial
institution.
``(2) Disclosure under a general exception.--
Notwithstanding paragraph (1), any person that receives
nonpublic personal information from a financial institution
in accordance with one of the general exceptions in
subsection (f) may use or disclose such information only--
``(A) as permitted under that general exception; or
``(B) under another general exception in subsection (f), if
necessary to carry out the purpose for which the information
was disclosed by the financial institution.''.

SEC. 6. CONSUMER RIGHTS TO ACCESS AND CORRECT
INFORMATION.

Subtitle A of title V of the Gramm-Leach-Bliley Act (15
U.S.C. 6801 et seq.) is amended by inserting after section
510 (as added by section 4(b) of this Act), the following new
section:

``SEC. 511. ACCESS TO AND CORRECTION OF INFORMATION.

``(a) Access.--
(1) In general.--Upon the request of a consumer, a
financial institution shall make available to the consumer
information about the consumer that is under the control of,
and reasonably available to, the financial institution.
``(2) Exceptions.--Notwithstanding paragraph (1), a
financial institution--
``(A) shall not be required to disclose to a consumer any
confidential commercial information, such as an algorithm
used to derive credit scores or other risk scores or
predictors;
``(B) shall not be required to create new records in order
to comply with the consumer's request;
``(C) shall not be required to disclose to a consumer any
information assembled by the financial institution, in a
particular matter, as part of the financial institution's
efforts to comply with laws preventing fraud, money
laundering, or other unlawful conduct; and
``(D) shall not disclose any information required to be
kept confidential by any other Federal law.
``(b) Correction.--A financial institution shall provide a
consumer the opportunity to dispute the accuracy of any
information disclosed to the consumer pursuant to subsection
(a), and to present evidence thereon. A financial institution
shall correct or delete material information identified by a
consumer that is materially incomplete or inaccurate.
``(c) Coordination and Consultation.--In prescribing
regulations implementing this section, the Federal agencies
specified in section 504(a) shall consult with one another to
ensure that the rules--
``(1) impose consistent requirements on the financial
institutions under their respective jurisdictions;
``(2) take into account conditions under which financial
institutions do business both in the United States and in
other countries; and
``(3) are consistent with the principle of technology
neutrality.
``(d) Charges for Disclosures.--A financial institution may
impose a reasonable charge for making a disclosure under this
section, which charge must be disclosed to the consumer
before making the disclosure. ''.

SEC. 7. IMPROVED ENFORCEMENT AUTHORITY.

(a) Compliance With Privacy Policy.--Section 503 of the
Gramm-Leach-Bliley Act (15 U.S.C. 6803) is amended by adding
at the end the following new subsection:
``(c) Compliance With Privacy Policy.--A financial
institution's failure to comply with any of its policies or
practices disclosed to a consumer under this section
constitutes a violation of the requirements of this
section.''.
(b) Unfair and Deceptive Trade Practice.--Section 505(a)(7)
of the Gramm-Leach-Bliley Act (15 U.S.C. 6805(a)(7)) is
amended by adding at the end the following new sentence: ``A
violation of any requirement of this subtitle, or the
regulations of the Federal Trade Commission prescribed under
this subtitle, by a financial institution or other person
described in this paragraph shall constitute an unfair or
deceptive act or practice in commerce in violation of section
5(a) of the Federal Trade Commission Act.''.
(c) Supplemental State Enforcement for FTC Regulated
Entities.--Section 505 of the Gramm-Leach-Bliley Act (15
U.S.C. 6805) is amended by adding at the end the following
new subsection:
``(e) State Action for Violations.--
``(1) Authority of the states.--In addition to such other
remedies as are provided under State law, if the attorney
general of a State, or an officer authorized by the State,
has reason to believe that any financial institution or other
person described in section 505(a)(7) has violated or is
violating this subtitle or the regulations prescribed
thereunder by the Federal Trade Commission, the State may--
``(A) bring an action on behalf of the residents of the
State to enjoin such violation in any appropriate United
States district court or in any other court of competent
jurisdiction; and
``(B) bring an action on behalf of the residents of the
State to enforce compliance with this subtitle and the
regulations prescribed thereunder by the Federal Trade
Commission, to obtain damages, restitution, or other
compensation on behalf of the residents of such State, or to
obtain such further and other relief as the court may deem
appropriate.
``(2) Rights of the federal trade commission.--The State
shall serve prior written notice of any action under
paragraph (1) upon the Federal Trade Commission and shall
provide the Commission with a copy of its complaint; provided
that, if such prior notice is not feasible, the State shall
serve such notice immediately upon instituting such action.
The Federal Trade Commission shall have the right--
``(A) to move to stay the action, pending the final
disposition of a pending Federal matter as described in
paragraph (4);
``(B) to intervene in an action under paragraph (1);
``(C) upon so intervening, to be heard on all matters
arising therein;
``(D) to remove the action to the appropriate United States
district court; and
``(E) to file petitions for appeal.
``(3) Investigatory powers.--For purposes of bringing any
action under this subsection, nothing in this subsection
shall prevent the attorney general, or officers of such State
who are authorized by such State to bring such actions, from
exercising the powers conferred on the attorney general or
such officers by the laws of such State to conduct
investigations or to administer oaths or affirmations or to
compel the attendance of witnesses or the production of
documentary and other evidence.
``(4) Limitation on state action while federal action is
pending.--If the Federal Trade Commission has instituted an
action for a violation of this subtitle, no State may, during
the pendency of such action, bring an action under this
section against any defendant named in the complaint of the
Commission for any violation of this subtitle that is alleged
in that complaint.''.
(d) State Action for Violations of Ban on Pretext
Calling.--Section 522 of the Gramm-Leach-Bliley Act (15
U.S.C. 6822) is amended by adding at the end the following
new subsection:
``(c) State Action for Violations.--
``(1) Authority of the states.--In addition to such other
remedies as are provided under State law, if the attorney
general of a State, or an officer authorized by the State,
has reason to believe that any person (other than a person
described in subsection (b)(1)) has violated or is violating
this subtitle, the State may--

[[Page S306]]

``(A) bring an action on behalf of the residents of the
State to enjoin such violation in any appropriate United
States district court or in any other court of competent
jurisdiction; and
``(B) bring an action on behalf of the residents of the
State to enforce compliance with this subtitle, to obtain
damages, restitution, or other compensation on behalf of the
residents of such State, or to obtain such further and other
relief as the court may deem appropriate.
``(2) Rights of federal agencies.--The State shall serve
prior written notice of any action commenced under paragraph
(1) upon the Attorney General and the Federal Trade
Commission, and shall provide the Attorney General and the
Commission with a copy of the complaint; provided that, if
such prior notice is not feasible, the State shall serve such
notice immediately upon instituting such action. The
Attorney General and the Federal Trade Commission shall
have the right--
``(A) to move to stay the action, pending the final
disposition of a pending Federal matter as described in
paragraph (4);
``(B) to intervene in an action under paragraph (1);
``(C) upon so intervening, to be heard on all matters
arising therein;
``(D) to remove the action to the appropriate United States
district court; and
``(E) to file petitions for appeal.
``(3) Investigatory powers.--For purposes of bringing any
action under this subsection, nothing in this subsection
shall prevent the attorney general, or officers of such State
who are authorized by such State to bring such actions, from
exercising the powers conferred on the attorney general or
such officers by the laws of such State to conduct
investigations or to administer oaths or affirmations or to
compel the attendance of witnesses or the production of
documentary and other evidence.
``(4) Limitation on state action while federal action is
pending.--If the Attorney General has instituted a criminal
proceeding or the Federal Trade Commission has instituted a
civil action for a violation of this subtitle, no State may,
during the pendency of such proceeding or action, bring an
action under this section against any defendant named in the
criminal proceeding or civil action for any violation of this
subtitle that is alleged in that proceeding or action.''.

SEC. 8. ENHANCED DISCLOSURE OF PRIVACY POLICIES.

(a) Timing of Notice to Consumers.--Section 503(a) of the
Gramm-Leach-Bliley Act (15 U.S.C. 6803(a)) is amended to read
as follows:
``(a) Disclosure Required.--
``(1) Time of disclosure.--A financial institution shall
provide a disclosure that complies with paragraph (2)--
``(A) to an individual upon the individual's request;
``(B) as part of an application for a financial product or
service from the financial institution; and
``(C) to a consumer, prior to establishing a customer
relationship with the consumer and not less frequently than
annually during the continuation of such relationship.
``(2) Disclosure format.--The disclosure required by
paragraph (1) shall be a clear and conspicuous notice, in
writing or in electronic form or other form permitted by the
regulations implementing this subtitle, of such financial
institution's policies and practices with respect to--
``(A) disclosing nonpublic personal information to
affiliates and nonaffiliated third parties, consistent with
section 502, including the categories of information that may
be disclosed;
``(B) disclosing nonpublic personal information of persons
who have ceased to be customers of the financial institution;
and
``(C) protecting the nonpublic personal information of
consumers.
Such disclosure shall be made in accordance with the
regulations implementing this subtitle.''.
(b) Notice of Rights to Access and Correct Information.--
Section 503(b)(2) of the Gramm-Leach-Bliley Act (15 U.S.C.
6803(b)(2)) is amended by inserting ``, and a statement of
the consumer's right to access and correct such information,
consistent with section 511'' after ``institution''.
(c) Technical and Conforming Amendment.--Section
503(b)(1)(A) of the Gramm-Leach-Bliley Act (15 U.S.C.
6803(b)(1)(A)) is amended by striking ``502(e)'' and
inserting ``502(f)''.

SEC. 9. LIMIT ON DISCLOSURE OF ACCOUNT NUMBERS.

Section 502 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802)
is amended in subsection (e) (as so redesignated by section
5) by inserting ``affiliate or'' before ``nonaffiliated third
party''.

SEC. 10. GENERAL EXCEPTIONS.

Section 502(f) of the Gramm-Leach-Bliley Act (15 U.S.C.
6802)) (as so redesignated by section 5 of this Act) is
amended--
(1) in the matter preceding paragraph (1), by striking
``Subsections (a) and (b)'' and inserting ``Subsection (a)'';
(2) in paragraph (1)--
(A) by striking ``or'' at the end of subparagraph (B);
(B) by inserting ``or'' after the semicolon at the end of
subparagraph (C); and
(C) by inserting after subparagraph (C) the following new
subparagraph:
``(D) performing services for or functions solely on behalf
of the financial institution with respect to the financial
institution's own customers, including marketing of the
financial institution's own products or services to the
financial institution's customers;'';
(3) in paragraph (4), by striking ``, and the institution's
attorneys, accountants, and auditors'';
(4) in paragraph (5), by inserting ``section 21 of the
Federal Deposit Insurance Act,'' after ``title 31, United
States Code,'';
(5) in paragraph (7), by striking ``or'' at the end;
(6) in paragraph (8), by striking the period and inserting
a semicolon; and
(7) by adding at the end the following new paragraphs:
``(9) in order to facilitate customer service, such as
maintenance and operation of consolidated customer call
centers or the use of consolidated customer account
statements; or
``(10) to the institution's attorneys, accountants, and
auditors.''.

SEC. 11. DEFINITIONS.

Section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)
is amended--
(1) in paragraph (3)--
(A) by striking ``(3) Financial institution'' and all that
follows through ``The term `financial institution' '' and
inserting ``(3) Financial institution.--The term
`financial institution' ''; and
(B) by striking subparagraphs (B), (C), and (D);
(2) by amending paragraph (4) to read as follows:
``(4) Nonpublic personal information.--The term `nonpublic
personal information' means--
``(A) any personally identifiable information, including a
Social Security number--
``(i) provided by a consumer to a financial institution, in
an application or otherwise, to obtain a financial product or
service from the financial institution;
``(ii) resulting from any transaction between a financial
institution and a consumer involving a financial product or
service; or
``(iii) obtained by the financial institution about a
consumer in connection with providing a financial product or
service to that consumer, other than publicly available
information, as such term is defined by the regulations
prescribed under section 504; and
``(B) any list, description or other grouping of one or
more consumers of the financial institution and publicly
available information pertaining to them.''; and
(3) in paragraph (9), by inserting ``applies for or''
before ``obtains''.

SEC. 12. ISSUANCE OF IMPLEMENTING REGULATIONS.

(a) In General.--The Federal agencies specified in section
504(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 6804(a))
shall prescribe regulations implementing the amendments to
subtitle A of title V of the Gramm-Leach-Bliley Act made by
this Act, and shall include such requirements determined to
be appropriate to prevent their circumvention or evasion.
(b) Coordination, Consistency, and Comparability.--The
regulations issued under subsection (a) shall be issued in
accordance with the requirements of section 504(a) of the
Gramm-Leach-Bliley Act (15 U.S.C. 6804(a)), except that the
deadline in section 504(a)(3) shall not apply.

SEC. 13. FTC RULEMAKING AUTHORITY UNDER THE FAIR CREDIT
REPORTING ACT.

Section 621(e) of the Fair Credit Reporting Act (15 U.S.C.
1681s(e)) is amended by adding at the end the following new
paragraph:
``(3) Regulations.--The Federal Trade Commission shall
prescribe such regulations as necessary to carry out the
provisions of this title with respect to any persons
identified under paragraph (1) of subsection (a). Prior to
prescribing such regulations, the Federal Trade Commission
shall consult with the Federal banking agencies referred to
in paragraph (1) of this subsection in order to ensure, to
the extent possible, comparability and consistency with the
regulations issued by the Federal banking agencies under that
paragraph.''.
____

January 22, 2001.
Dear Senator Sarbanes: We are writing in support of the
introduction of the Financial Information Privacy Act of
2001. If passed this legislation will correct many of the
shortcomings of the Gramm-Leach-Biley Act. The Financial
Privacy Act will be a significant improvement for consumers
by requiring financial institutions to obtain a consumer's
consent before sensitive financial and medical data is
shared, extending privacy protections to the sharing of
information among affiliated companies, and allowing
consumers to have access to the information about them that
is held by financial institutions.
The GLB's privacy provisions are grossly inadequate. Mere
notice that data is being collected with a limited ability of
consumers to prevent the sharing of personal data--one that
is riddled with loopholes--fail to provide the privacy
protections that American consumers want and deserve. Instead
of protecting personal privacy, GLB protects the ability of
the financial services industry to collect and use personal
information about their customers with virtually no
restrictions.
As personal privacy continues to erode, it is vital that
consumers be given strong privacy protections. The current
trend of favoring the appetite of business interests over the
privacy of individuals must be reversed.

[[Page S307]]

If a financial institution cannot convince its customers that
the sharing of their personal information will be safe and
beneficial to them, then the financial institution should not
be allowed to share that information.
The Financial Privacy Act is a step in advancing some of
the Fair Information Principles supported by our
organizations in the context of financial services. We will
continue to seek the strongest possible privacy safeguards
for Americans, including expanded medical privacy
protections, limitations on initial collection practices, and
increased enforcement mechanisms. Those protections may even
go beyond those in this bill.
We appreciate your introducing this important legislation
and look forward to working with you on future legislative
efforts to protect the privacy of all Americans.
Ken McEldowney, Consumer Action.
Travis Plunkett, Consumer Federation of America.
Frank Torres, Consumers Union.
Jason Catlett, Junkbusters.
Even Hendricks, Privacy Times.
Mary Rouleau, United Auto Workers.
Edmund Mierzwinski, US Public Interest Research Group.

Mr. LEAHY. Mr. President, I am pleased today to be a original
cosponsor of the Financial Information Privacy Protection Act of 2001.
I am delighted to join Senator Sarbanes, the ranking member of the
Senate Banking Committee, who is a real leader in the Senate on
protecting personal financial information.
In November 1999, President Clinton signed into law the landmark
Financial Modernization Act, which updated our financial laws and opens
up the financial services industry to become more competitive, both at
home and abroad. Many of my colleagues and I supported that legislation
because we believe it will benefit businesses and consumers. It is
already making it easier for banking, securities, and insurance firms
to consolidate their services, cut expenses and offer more products at
a lower cost to all. But this consolidation also raises new concern
about our financial privacy.
New conglomerates in the financial services industry are offering a
widening variety of services, each of which may require a customer to
provide financial, medical or other personal information. Nothing in
the new law prevents these new subsidiaries or affiliates of financial
conglomerates from sharing this information for uses beyond those the
customer thought he or she was providing it. For example, the new law
has no requirement for the consumer to control whether these new
financial subsidiaries or affiliates sell, share, or publish
information on savings account balances, certificates of deposit
maturity dates and balances, stock and mutual fund purchases and sales,
life insurance payouts or health insurance claims. That is wrong.
I believe the Financial Information Privacy Protection Act of 2001
should serve as the foundation for model financial privacy legislation
that Congress enacts into law this year. This bill is a common sense
approach that can attract both consumers and the industry.
Privacy is one of our most vulnerable rights in the information age.
Digitalization of information offers tremendous benefits but also new
threats. Some in Congress are content to punt the privacy issue down
the field for another year. The public disagrees. People know that the
longer we dawdle, the harder it will be to halt the erosion of privacy.
A year is an eternity in the digital age.
The right of privacy is a personal and fundamental right protected by
the Constitution of the United States. But today, the American people
are growing more and more concerned over encroachments on their
personal privacy. To return personal financial privacy to the control
of the consumer, this legislation would create the following rights in
Federal law.
New Right To Opt-out of Information Sharing By Affiliates. The new
financial modernization law permits consumers to say no to information
sharing, selling or publishing among third parties in many cases, but
not among affiliated firms. The Financial Information Privacy Act of
2001 would require financial conglomerates, which will only grow under
the new modernization law, to expand this protection to give consumers
the right to notify it (opt-out) to stop all information sharing,
selling or publishing of personal financial information among all third
parties and affiliates.
New Right For Consumers To Opt-In For Sharing of Medical Information
and Personal Spending Habits. The Financial Information Privacy
Protection Act of 2001 would require financial firms to get the
affirmative consent (opt-in) of consumers before a firm could gain
access to medical information within a financial conglomerate or share
detailed information about a consumer's personal spending habits.
New Right To Access and Correct Financial Information. The Financial
Information Privacy Protection Act of 2001 would give consumers the
right to review and correct their financial records, just like
consumers today may review and correct their credit reports.
New Right To Privacy Policy Up Front. The Financial Information
Privacy Protection Act of 2001 would require financial firms to provide
their privacy policies to consumers before committing to a customer
relationship, not after. In addition, the bill's new rights would be
enforced by federal banking regulators, the Federal Trade Commission
and state attorney generals.
Unfortunately, if you have a checking account, you may have a
financial privacy problem. Your bank may sell or share with business
allies information about who you are writing checks to, when, and for
how much. And even if you tell your bank to stop, it can ignore you
under current law. This legislation returns to consumers the power to
stop the selling or sharing of personal financial information.
Americans ought to be able to enjoy the exciting innovations of this
burgeoning information era without losing control over the use of their
financial information. The Financial Information Privacy Protection Act
of 2001 updates United States privacy laws to provide these
fundamentals protections of personal financial information in the
evolving financial services industry. I urge my colleagues to support
it.
______

By Mr. CAMPBELL:
S. 31. A bill to amend the Internal Revenue Code of 1986 to phase out
the estate and gift taxes over a 10-year period; to the Committee on
Finance.

Estate and Gift Tax Rate Reduction Act of 2001

Mr. CAMPBELL. Mr. President, today I reintroduce a bill that I feel
is of vital importance to farmers and family business owners, the
Estate and Gift Tax Rate Reduction Act of 2001.
This bill is based on legislation I introduced in the 105th Congress
and the 106th Congress. Unfortunately, the 105th Congress adjourned
before we could debate and pass this bill and President Clinton vetoed
similar legislation during the 106th Congress. Since then, I have heard
from numerous Coloradans and National organizations and am fully aware
that the problems the bill would correct still exist. In fact, I have
heard from hundreds of Coloradans and constituents from other states
regarding this burdensome and overreaching tax. I believe that
eliminating this tax is a fundamental issue of fairness. Death should
not be an event government prospers from.
Estate and gift taxes remain a burden on American families,
particularly those who pursue the American dream of owning their own
business. That is because family-owned businesses and farms are hit
with the highest tax rate when they are handed down to descendants--
often immediately following the death of a loved one. Families ought to
be encouraged, not discouraged, from building successful farms, ranches
and businesses and keeping the ownership of those enterprises within
the families that worked to make them successful.
These taxes, and the financial burdens and difficulties they create
come at the worst possible time. Making a terrible situation worse is
the fact that the rate of this estate tax is crushing, reaching as high
as 55 percent for the highest bracket. That's higher than even the
highest income tax rate bracket of 39 percent. Furthermore, the tax is
due as soon as the business is turned over to the heir, allowing no
time for financial planning or the setting aside of money to pay the
tax bills. Estate and gift taxes right now are one of the leading
reasons why the number of family-owned farms and businesses are
declining; the burden of this tax is just too much to bear.
This tax sends the troubling message that families should either sell
the business while they are still alive, in order to spare their
descendants this huge tax after their passing, or run-down the value of
the business, so that

[[Page S308]]

it won't make it into the higher tax brackets. This is not how America
was built. Private investment and initiative have historically been a
strong part of our American heritage and we should encourage those
values, not tax successful family businesses into submission.
That is why I again introduce this bill and will fight for its
passage during the 107th Congress. It will gradually eliminate this tax
by phasing it out--reducing the amount of the tax 5% each year,
beginning with the highest rate bracket of 55%, until the tax rate
reaches zero. Several states have already adopted similar plans, and I
believe we ought to follow their example. We need to change the message
we are sending to farmers and family business owners. Leading
organizations agree, and have continuously endorsed this legislation.
In fact, over 100 organizations, like the National Federation of
Independent Business and the Farm Bureau, have joined together to form
the Family Business Estate Tax Coalition, which strongly endorsed this
bill during the 106th Congress.
Mr. President, this tax should be eliminated across the board, and I
ask my colleagues to help in working to achieve that goal.
I ask unanimous consent that this bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
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 ``Estate and Gift Tax Rate
Reduction Act of 2001''.

SEC. 2. FINDINGS.

The Congress finds and declares that--
(1) estate and gift tax rates, which reach as high as 55
percent of a decedent's taxable estate, are in most cases
substantially in excess of the tax rates imposed on the same
amount of regular income and capital gains income; and
(2) a reduction in estate and gift tax rates to a level
more comparable with the rates of tax imposed on regular
income and capital gains income will make the estate and gift
tax less confiscatory and mitigate its negative impacts on
American families and businesses.

SEC. 3. PHASEOUT OF ESTATE AND GIFT TAXES.

(a) Repeal of Estate and Gift Taxes.--Subtitle B of the
Internal Revenue Code of 1986 (relating to estate and gift
taxes) is repealed effective with respect to estates of
decedents dying, and gifts made, after December 31, 2011.
(b) Phaseout of Tax.--Subsection (c) of section 2001 of
such Code (relating to imposition and rate of tax) is amended
by adding at the end the following new paragraph:
``(3) Phaseout of tax.--In the case of estates of decedents
dying, and gifts made, during any calendar year after 2001
and before 2012--
``(A) In general.--The tentative tax under this subsection
shall be determined by using a table prescribed by the
Secretary (in lieu of using the table contained in paragraph
(1)) which is the same as such table; except that--
``(i) each of the rates of tax shall be reduced (but not
below zero) by the number of percentage points determined
under subparagraph (B), and
``(ii) the amounts setting forth the tax shall be adjusted
to the extent necessary to reflect the adjustments under
clause (i).
``(B) Percentage points of reduction.--

The number of
``For calendar year: percentage points is:
2002...........................................................5 ....

2003..........................................................10 ....

2004..........................................................15 ....

2005..........................................................20 ....

2006..........................................................25 ....

2007..........................................................30 ....

2008..........................................................35 ....

2009..........................................................40 ....

2010..........................................................45 ....

2011..........................................................50.....

``(C) Coordination with paragraph (2).--Paragraph (2) shall
be applied by reducing the 55 percent percentage contained
therein by the number of percentage points determined for
such calendar year under subparagraph (B).
``(D) Coordination with credit for state death taxes.--
Rules similar to the rules of subparagraph (A) shall apply to
the table contained in section 2011(b) except that the number
of percentage points referred to in subparagraph (A)(i) shall
be determined under the following table:

The number of
``For calendar year: percentage points is:
2002......................................................1\1/2\ ....

2003...........................................................3 ....

2004......................................................4\1/2\ ....

2005...........................................................6 ....

2006......................................................7\1/2\ ....

2007...........................................................9 ....

2008.....................................................10\1/2\ ....

2009..........................................................12 ....

2010.....................................................13\1/2\ ....

2011........................................................15.''....

(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying, and gifts made,
after December 31, 2001.
______

By Mr. THURMOND:
S. 32. A bill to amend title 28, United States Code, to clarify the
remedial jurisdiction of inferior Federal courts; to the Committee on
the Judiciary.

judicial taxation prohibition act

Mr. THURMOND. Mr. President, I rise today to introduce legislation to
prohibit Federal judges from imposing a tax increase as a judicial
remedy.
It has always been my firm belief that Federal judges exceed the
boundaries of their limited jurisdiction under the Constitution when
they order new taxes or order increases in existing tax rates.
The Founding Fathers clearly understood that taxation was a role for
the legislative branch and not the judicial branch. Article I of the
Constitution lists the legislative powers, one of which is that ``the
Congress shall have the power to lay and collect taxes.'' Article III
establishes the judicial powers, and the power to tax is nowhere
contained in Article III.
The Federalist Papers are also clear in this regard. in Federalist
No. 48, James Madison explained that ``the legislative branch alone has
access to the pockets of the people.'' In Federalist No. 78, Alexander
Hamilton stated, ``The judiciary . . . has no influence over . . . the
purse, no direction either of the strength or of the wealth of the
society, and can take no active resolution whatever.''
In 1990, in the case of Missouri v. Jenkins, five members of the
Supreme Court stated in dicta that although a Federal judge could not
directly raise taxes, he could order the local government to raise
taxes. There is no difference between a judge raising taxes and a judge
ordering a legislative official to raise taxes. I am hopeful that, if
the issue were directly before the Court today, a majority of the
current membership of the Court would reject that dicta and hold that
Federal judges do not have the power to order that taxes be raised.
However, in the event the Court does not correct this error, I am
introducing the Judicial Taxation Prohibition Act, which would prohibit
judges from raising taxes. I have introduced it in every Congress since
the Supreme Court's misguided decision was issued, and I intend to do
so until it is corrected. This legislation is essential to affirm the
separation of powers.
There is a simple reason why this distinction between the branches of
government is so important and must remain clear. The legislative
branch is responsible to the people through the democratic process.
However, the judicial branch is composed of individuals who are not
elected and have life tenure. By design, the members of the judicial
branch do not depend on the popular will for their offices. They are
not accountable to the people. They simply have no business setting the
rate of taxes the people must pay. For a judge to order that taxes be
increased amounts to taxation without representation. It is entirely
contrary to the understanding of the Founding Fathers.
The phrase ``taxation without representation'' recalls an important
time in American history that is worth repeating in some detail. The
Constitution can best be understood by referencing the era in which it
was adopted.
Not since Great Britain's ministry of George Grenville in 1765 have
the American people faced the assault of taxation without
representation as now authorized in the Jenkins decision. As part of
his imperial reforms to tighten British control in the colonies,
Grenville pushed the Stamp Act through the Parliament in 1765. This Act
required excise duties to be paid by the colonists in the form of
revenue stamps affixed to a variety of legal documents. This action
came at a time when the colonies were in an uproar over the Sugar Act
of 1764 which levied duties on certain imports such as sugar, indigo,
coffee, and linens.
The ensuing firestorm of debate in America centered on the power of
Britain to tax the colonies. James Otis, a young Boston attorney,
echoed the opinion of most colonists stating that the parliament did
not have power to tax the colonies because Americans had no
representation in that body. Mr.

[[Page S309]]

Otis had been attributed with the statement in 1761 that ``taxation
without representation is tyranny.''

In October 1765, delegates from nine states were sent to New York as
part of the Stamp Act Congress to protest the new law. It was during
this time that John Adams wrote in opposition to the Stamp Act, ``we
have always understood it to be a grand and fundamental principle * * *
that no free man shall be subject to any tax to which he has not given
his own consent, in person or by proxy.'' A number of resolutions were
adopted by the Stamp Act Congress protesting the acts of Parliament.
One resolution stated, ``It is inseparably essential to the freedom of
a people * * * that no taxes be imposed on them, but with their own
consent, given personally or by their representatives.'' The
resolutions concluded that the Stamp Act had a ``manifest tendency to
subvert the rights and liberties of the colonists.''
Opposition to the Stamp Act was vehement throughout the colonies.
While Grenville's successor was determined to repeal the law, the
social, economic, and political climate in the colonies brought on the
American Revolution. The principles expressed during the earlier crisis
against taxation without representation became firmly imbedded in our
Federal Constitution of 1787.
I recognize that some say this legislation is unconstitutional. They
argue that the Congress does not have the authority under Article III
to limit and regulate the jurisdiction of the inferior Federal courts.
This argument has no basis in the Constitution or common sense.
Article III, Section 1, of the Constitution provides jurisdiction to
the lower Federal courts as the ``Congress may from time to time ordain
and establish.'' There is no mandate in the Constitution to confer
equity jurisdiction to the inferior Federal courts. Congress has the
flexibility under Article III to ``ordain and establish'' the lower
Federal courts as it deems appropriate. This basic premise has been
upheld by the Supreme Court in a number of cases including Lawcourt v.
Phillips, Lauf v. E.G. Skinner and Co., Kline v. Burke Construction
Co., and Sheldon v. Sill.
In other words, the Congress was expressly granted the authority to
establish lower Federal courts, which it did. What the Congress has
been given the power to do, it can certainly decide to stop doing. By
passing this bill, the Congress would simply be limiting the
jurisdiction of the lower Federal courts in a small area.
It is also important to note that this legislation would not restrict
the power of the Federal courts to remedy Constitutional wrongs.
Clearly, the Court has the power to order a remedy for a Constitutional
violation that may include expenditures of money by Federal, State, or
local governments. This bill simply requires that if the Court orders
that money be spent, it is for the legislative body to decide how to
comply with that order. The legislative body may choose to raise taxes,
but it also may choose to cut spending or sell assets. That choice of
how to come up with the money should always be for the legislature to
decide. I believe it is clear under Article III that the Congress has
the authority to restrict the remedial jurisdiction of the Federal
Courts in this fashion.
Mr. President, the dispositive issue presented by the Jenkins
decision is whether the American people want, as a matter of national
policy, to be exposed to taxation without their consent by an
independent and insulated judiciary. I most assuredly believe they do
not.
Mr. President, how long will it be before a Federal judge orders tax
increases to build new highways or prisons? I do not believe the
Founding Fathers had this type of activism in mind when they
established the judicial branch of government.
Judicial activism is a matter of great concern to me and has been for
many years. I have always felt that Federal judges must strictly adhere
to the principle that it is their role to interpret the law and not
make the law. This simple principle is fundamental to our system of
government.
The American people deserve a response to the Jenkins decision. We
must provide protection against the imposition of taxes by an
unelected, unaccountable judiciary. We must not permit this blatant
violation of the separation of powers. We have a duty to right this
wrong.
Mr. President, I ask unanimous consent that this bill be printed in
the Record following my remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 32

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 ``Judicial Taxation
Prohibition Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1)(A) a variety of effective and appropriate judicial
remedies are available for the full redress of legal and
constitutional violations under existing law; and
(B) the imposition or increase of taxes by courts is
neither necessary nor appropriate for the full and effective
exercise of Federal court jurisdiction;
(2) the imposition or increase of taxes by judicial order--
(A) constitutes an unauthorized and inappropriate exercise
of the judicial power under the Constitution of the United
States; and
(B) is incompatible with traditional principles of law and
government of the United States and the basic principle of
the United States that taxation without representation is
tyranny;
(3) Federal courts exceed the proper boundaries of their
limited jurisdiction and authority under the Constitution of
the United States, and impermissibly intrude on the
legislative function in a democratic system of government,
when they issue orders requiring the imposition of new taxes
or the increase of existing taxes; and
(4) Congress retains the authority under article III,
sections 1 and 2 of the Constitution of the United States to
limit and regulate the jurisdiction of the inferior Federal
courts that Congress has seen fit to establish, and such
authority includes the power to limit the remedial authority
of inferior Federal courts.

SEC. 3. JUDICIAL TAXATION PROHIBITION.

(a) In General.--Chapter 85 of title 28, United States
Code, is amended by inserting after section 1341 the
following:

``Sec. 1341A. Prohibition of judicial imposition or increase
of taxes

``(a) Notwithstanding any other provision of law, no
inferior court established by Congress shall have
jurisdiction to issue any remedy, order, injunction, writ,
judgment, or other judicial decree requiring the Federal
Government or any State or local government to impose any new
tax or to increase any existing tax or tax rate.
``(b) Nothing in this section shall prohibit inferior
Federal courts from ordering duly authorized remedies,
otherwise within the jurisdiction of those courts, that may
require expenditures by a Federal, State, or local government
in any case in which those expenditures are necessary to
effectuate those remedies.
``(c) In this section, the term `tax' includes--
``(1) personal income taxes;
``(2) real and personal property taxes;
``(3) sales and transfer taxes;
``(4) estate and gift taxes;
``(5) excise taxes;
``(6) user taxes;
``(7) corporate and business income taxes; and
``(8) licensing fees or taxes.''.
(b) Table of Sections.--The table of sections for chapter
85 of title 28, United States Code, is amended by inserting
after the item relating to section 1341 the following:

``1341A. Prohibition of judicial imposition or increase of taxes.''.

SEC. 4. APPLICABILITY.

This Act and the amendments made by this Act shall apply to
cases pending or commenced in a Federal court on or after the
date of enactment of this Act.
______

By Mr. THURMOND (for himself and Mr. Helms):
S. 33. A bill to amend title II of the Americans with Disabilities
Act of 1990 and section 504 of the Rehabilitation Act of 1973 to
exclude prisoners from the requirements of that title and section; to
the Committee on Health, Education, Labor, and Pensions.
Mr. THURMOND. Mr. President. I rise today to introduce legislation to
address an undue burden that has arisen out of the Americans with
Disabilities Act.
The purpose of the ADA was to give disabled Americans the opportunity
to fully participate in society and contribute to it. This was a worthy
goal. But even legislation with the best of intentions often has
unintended consequences. I submit that one of those is the application
of the ADA to state and local prisoners throughout America.
In 1998, the Supreme Court ruled in Pennsylvania Department of
Corrections v. Yeskey [118 S.Ct. 1952 (1998)] that the

[[Page S310]]

ADA applies to every state prison and local jail in this country. To no
avail, the Attorneys General of most states, as well as numerous state
and local organizations, had joined with Pennsylvania in court filings
to oppose the ADA applying to prisoners.
Prior to the Supreme Court ruling, the circuit courts were split on
the issue. The Fourth Circuit Court of Appeals, my home circuit, had
forcefully concluded that the ADA, as well as its predecessor and
companion law, the Rehabilitation Act, did not apply to state
prisoners. The decision focused on federalism concerns and the fact
that the Congress did not make clear that it intended to involve itself
to this degree in an activity traditionally reserved to the states.
However, the Supreme Court did not agree, holding that the language
of the Act is broad enough to clearly cover state prisons. It is not an
issue on the Federal level because the Federal Bureau of Prisons
voluntarily complies with the Act. The Supreme Court did not say
whether applying the ADA to state prisons exceeded the Congress's
powers under the Commerce Clause or the Fourteenth Amendment, but we
should not wait on the Supreme Court to consider this argument before
acting. Although it was rational for the Supreme Court to read the
broad language of the ADA the way it did, it is far from clear that we
in the Congress considered the application of this sweeping new social
legislation in the prison environment.
The Seventh Circuit has recognized that the ``failure to exclude
prisoners may well have been an oversight.'' The findings and purpose
of the law seem to support this. The introductory language of the ADA
states, ``The Nation's proper goals regarding individuals with
disabilities are to assure equality of opportunity, full participation,
independent living, and economic self-sufficiency'' to allow ``people
with disabilities * * * to compete on an equal basis and to pursue
those opportunities for which our free society is justifiably famous.''
Of course, a prison is not a free society, as the findings and purpose
of the Act envisioned. Indeed, it is quite the opposite. In short, as
the Ninth Circuit explained, ``The Act was not designed to deal
specifically with the prison environment; it was intended for general
societal application.''
In any event, now that the Supreme Court has spoken, it is time for
the Congress to confront this issue. The Congress should act now to
exempt state and local prisons from the ADA. That is why I am again
introducing the State and Local Prison Relief Act, as I did soon after
the Supreme Court decided the Yeskey case in 1998.
The State and Local Prison Relief Act would exempt prisons from the
requirements of the ADA and the Rehabilitation Act for prisoners. More
specifically, it exempts any services, accommodations, programs,
activities or treatment of any kind regarding prisoners that may
otherwise be required by the Acts. Through this language, I wish to
make entirely clear that the bill is not intended to exempt prisons
from having to accommodate disabled legal counsel, visitors, or others
who are not inmates. Also, the fact that the bill applies to Title II
of the ADA should make clear that it is not intended to exempt prison
hiring practices for non-inmate employees. The bill is intended only to
apply to prisoners.

I firmly believe that if we do not act, the ADA will have broad
adverse implications for the management of penal institutions.
Prisoners will file an endless number of lawsuits demanding special
privileges, which will involve Federal judges in the intricate details
of running our state and local prisons.
Mr. President, we should continuously remind ourselves that the
Constitution created a Federal government of limited, enumerated
powers. Those powers not delegated to the Federal government were
reserved to the states or the people. As James Madison wrote in
Federalist No. 45, ``the powers delegated to the Federal government are
few and definite. . . . [The powers] which are to remain in the State
governments are numerous and indefinite.'' The Federal government
should avoid intrusion into matters traditionally reserved for the
states. We must respect this delicate balance of power. Unfortunately,
federalism is more often spoken about than respected.
Although the entire ADA raises federalism concerns, the problem is
especially acute in the prison context. There are few powers more
traditionally reserved for the states than crime. The criminal laws
have always been the province of the states, and the vast majority of
prisoners have always been housed in state prisons. The First Congress
enacted a law asking the states to house Federal prisoners in their
jails for fifty cents per month. The first Federal prison was not built
until over 100 years later, and only three existed before 1925.
Even today, as the size and scope of the Federal government has grown
immensely, only about 6% of prisoners are housed in Federal
institutions. Managing that other 94% is a core state function. As the
Supreme Court has stated, ``Maintenance of penal institutions is an
essential part of one of government's primary functions--the
preservation of societal order through enforcement of the criminal law.
It is difficult to imagine an activity in which a State has a stronger
interest, or one that is more intricately bound up with state laws,
regulations, and procedures.''
The primary function of prisons is to house criminals. Safety and
security are the overriding concerns of prison administration. The
rules and regulations, the daily schedules, the living and working
arrangements--these all revolve around protecting prison employees,
inmates, and the public. But the goal of the ADA essentially is to take
away any barrier to anyone with any disability. Accommodating inmates
in the manner required by the ADA will interfere with the ability of
prison administrators to keep safety and security their overriding
concern.
For example, a federal court in Pennsylvania ruled that a prisoner
who disobeyed a direct order could not be punished because of the ADA.
The judge said it was okay for a prisoner to return to his cell after
he was told not to by a guard, saying the prisoner was justified in
refusing to comply because he was doing so to relieve stress built up
due to his Tourette's Syndrome.
The practical effect of the ADA will be that prison officials will
have to grant special privileges to certain inmates and to excuse
others from complying with generally-applicable prison rules. For
example, a federal judge ordered an Iowa prison to install cable
television in a disabled inmate's cell because the man had difficulty
going to the common areas to watch TV. After much public protest, the
ruling was eventually reversed.
The ADA presents a perfect opportunity for prisoners to try to beat
the system, and use the courts to do it. There are over 1.7 million
inmates in state prisons and local jails, and the numbers are rising
every year. Indeed, the total prison population has grown about 6.5%
per year since 1990. Prisons have a substantially greater percentage of
persons with disabilities that are covered by the ADA than the general
population, including AIDS, mental retardation, psychological
disorders, learning disabilities, drug addiction, and alcoholism.
Further, administrators control every aspect of prisoners' lives, such
as assigning educational opportunities, recreation, and jobs in prison
industries. Combine these facts, and the possibilities for lawsuits are
endless.
For example, in most state prison systems, inmates are classified and
assigned based in part on their disabilities. This helps administrators
meet the disabled inmates' needs in a cost-effective manner. However,
under the ADA, prisoners probably will be able to claim that they must
be assigned to a prison without regard to their disability. Were it not
for their disability, they may have been assigned to the prison closest
to their home, and in that case, every prison would have to be able to
accommodate every disability. That could mean every prison having, for
example, mental health treatment centers, services for hearing-impaired
inmates, and dialysis treatment. The cost is potentially enormous.

A related expense is attorney's fees. The ADA has incentives to
encourage private litigants to vindicate their rights in court. Any
plaintiff, including an inmate, who is only partially successful can
get generous attorney's fees and monetary damages, possibly including
even punitive damages. In one

[[Page S311]]

ADA class action lawsuit in California, the state has paid the
prisoners' attorneys over $2 million, with hourly fees as high as $300.
Applying the ADA to prisons is the latest unfunded Federal mandate
that we are imposing on the states.
Adequate funding is hard for prisons to achieve, especially in state
and local communities where all government funds are scarce. The public
is angry about how much money must be spent to house prisoners. Even
with prison populations rising, the people do not want more of their
money spent on prisoners. Often, there is simply not enough money to
make the changes in challenged programs to accommodate the disabled. If
prison administrators do not have the money to change a program, they
will probably have to eliminate it. Thus, accommodation could mean the
elimination of worthwhile educational, recreational, and rehabilitative
programs, making all inmates worse off.
Apart from money, accommodation may mean modifying the program in
such a way as to take away its beneficial purpose. A good example is
the Supreme Court's Yeskey case itself. Yeskey was declared medically
ineligible to participate in a boot camp program because he had high
blood pressure. So, he sued under the ADA. The boot camp required
rigorous physical activity, such as work projects. If the program has
to be changed to accommodate his physical abilities, it may not meet
its basic goals, and the authorities may eliminate it. Thus, the result
could be that everyone loses the benefit of an otherwise effective
correctional tool.
Another impact of the ADA may be to make an already volatile prison
environment even more difficult to control. Many inmates are very
sensitive to the privileges and benefits that others get in a world
where privileges are relatively few. Some have irrational suspicions
and phobias. An inmate who is not disabled may be angry if he believes
a disabled prisoner is getting special treatment, without rationally
accepting that the law requires it, and could take out his anger on
others around him, including the disabled prisoner.
We must keep in mind that it is judges who will be making these
policy decisions. To apply the Act and determine what phrases like
``qualified individual with a disability'' mean, judges must involved
themselves in intricate, fact-intensive issues. Essentially, the ADA
requires judges to micromanage prisons. Judges are not qualified to
second-guess prison administrators and make these complex, difficult
decisions. Prisons cannot be run by judicial decree.
In applying Constitutional rights to prisoners, the Supreme Court has
tried to get away from micromanagement and has viewed prisoner claims
deferentially in favor of the expertise of prison officials. It has
stated that we will not ``substitute our judgment on difficult and
sensitive matters of institutional administration for the
determinations of those charged with the formidable task of running a
prison. This approach ensures the ability of corrections officials to
anticipate security problems and to adopt innovative solutions to the
intractable problems of prison administration, and avoids unnecessary
intrusion of the judiciary into problems particularly ill suited to
resolution by decree.''
Take for example a case from the Fourth Circuit, my home circuit,
from 1995. The Court explained that a morbidly obese inmate presented
corrections officials ``with a lengthy and ever-increasing list of
modifications which he insisted were necessary to accommodate his obese
condition. Thus, he demanded a larger cell, a cell closer to support
facilities, handrails to assist him in using the toilet, wider
entrances to his cell and the showers, non-skid matting in the lobby
area, and alternative outdoor recreational activities to accommodate
his inability to stand or walk for long periods.'' It is not workable
for judges to resolve all of these questions.

It is noteworthy that a primary purpose of the Prison Litigation
Reform Act was to stop judges from micromanaging prisons and to reduce
the burdens of prison litigation. As the Chief Justice of the Supreme
Court recognized last year, the PLRA is having some success. However,
this most recent Supreme Court decision will hamper that progress.
Moreover, the ADA delegated to Federal agencies the authority to
create regulations to implement the law. In response, the Federal
bureaucracy has created extremely specific and detailed mandates.
Regarding facilities, they dictate everything from the number of water
fountains to the flash rates of visual alarms. State and local
correctional authorities must fall in line behind these regulations. In
yet another way, we have the Justice Department exercising regulatory
oversight over our state and local communities.
Prisons are fundamentally different from other places in society.
Prisoners are not entitled to all of the rights and privileges of law-
abiding citizens, but they often get them. They have cable television.
They have access to better gyms and libraries than most Americans. The
list goes on.
The public is tired of special privileges for prisoners. Applying the
ADA to prisons is a giant step in the wrong direction. Prisoners will
abuse the ADA to get privileges they were previously denied, and the
reason will be the overreaching hand of the Federal government. We
should not let this happen.
Mr. President, the National Government has gone full circle. We have
gone from asking the states to house Federal prisoners to dictating to
the states how they house their own prisoners. There must be some end
to the powers of the Federal government, and to the privileges it
grants the inmates of this Nation. I propose that we start by passing
this important legislation.
I ask unanimous consent that following my remarks a copy of the bill
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 33

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

SECTION 1. EXCLUSION OF PRISONERS.

(a) Americans With Disabilities Act of 1990.--Section
201(2) of the Americans with Disabilities Act of 1990 (42
U.S.C. 12131(2)) is amended by adding at the end the
following: ``The term shall not include a prisoner in a
prison, as such terms are defined in section 3626(g) of title
18, United States Code, with respect to services, programs,
activities, and treatment (including accommodations) relating
to the prison.''.
(b) Rehabilitation Act of 1973.--Section 7(20) of the
Rehabilitation Act of 1973 (29 U.S.C. 705(20)) is amended--
(1) by redesignating subparagraph (G) as subparagraph (H);
and
(2) by inserting after subparagraph (F) the following:
``(G) Prison programs and activities; exclusion of
prisoners.--For purposes of section 504, the term `individual
with a disability' shall not include a prisoner in a prison,
as such terms are defined in section 3626(g) of title 18,
United States Code, with respect to programs and activities
(including accommodations) relating to the prison.''.
______

By Mr. THURMOND:
S. 34. A bill to eliminate a requirement for a unanimous verdict in
criminal trials in Federal courts; to the Committee on the Judiciary.

LEGISLATION TO ALLOW FEDERAL CRIMINAL CONVICTION ON A 10-2 JURY VOTE

Mr. THURMOND. Mr. President, I rise today to introduce legislation to
allow juries to convict criminals on a 10-2 jury vote rather than a
unanimous vote.
It is my belief that this change to the Federal Rules of Criminal
Procedure will bring about increased efficiency and finality in our
Nation's Federal court system while maintaining the integrity of the
pursuit of justice.
This legislation is consistent with the Supreme Court ruling
concerning unanimity in jury verdicts, specifically in Apodaca v.
Oregon [406 U.S. 404 (1972)]. In that case, the Supreme Court ruled
that the Sixth Amendment guarantee of a jury trial does not require
that the jury's vote be unanimous. The Supreme Court affirmed an Oregon
law that permitted what I am proposing--a 10-2 conviction in criminal
prosecutions.
Mr. President, clearly there is no constitutional mandate for the
current requirement under the Federal Rules of a jury verdict by a
unanimous vote. The origins of the unanimity rule are not easy to
trace, although it may date back to the latter half of the 14th
century. One theory proffered is that defendants had few other rules to
ensure a fair trial and a unanimous jury vote

[[Page S312]]

for conviction compensated for other inadequacies at trial. Of course,
today the entire trial process is heavily tilted towards the accused
with many, many safeguards in place to ensure that the defendant
receives a fair trial.
It is interesting that a unanimity requirement was considered by our
Founding Fathers as part of the Sixth Amendment to the Constitution,
but it was rejected. The proposed language for the Sixth Amendment, as
introduced by James Madison in the House of Representatives, provided
for trial by jury as well as a ``requisite of unanimity for
conviction.'' The language eventually adopted by the Congress and the
States in the Sixth Amendment provides ``the right to a speedy and
public trial, by an impartial jury,'' but does not specify any
requirement on conviction. This was a wise decision.
It is clear that ``trial by jury in criminal cases is fundamental to
the American scheme of justice,'' as the Supreme Court has stated.
Juries are representative of the community and their solemn duty is to
hear the evidence, deliberate, and decide the case after careful review
of the facts and the law. As the Supreme Court has noted, a jury can
responsibly perform this function if allowed to decide the case by a
margin that is less than unanimous.
This change for jury verdicts in the Federal courts will reduce the
likelihood of a single juror corrupting an otherwise thoughtful and
reasonable deliberation of the evidence. It is not easy to adequately
screen a juror for potential bias before they are selected to serve on
a jury. This cannot be done with absolute certainty. We should work to
prevent one such juror from having the power to prevent justice from
being served.
One juror should not have the power to allow a criminal to go free in
the face of considerable opposition from his peers on the jury. Even if
a defendant is tried again after one or two jurors hold out against
conviction, a new trial is very costly and time-consuming. Most
importantly, a new trial substantially delays justice for the victims
and society.
It is important to note that this new rule could also work to the
advantage of someone on trial. Currently, if there is a hung jury, a
prosecutor has the power to retry a defendant. This is true even if
only one juror believed the defendant was guilty. Under this new rule,
if at least ten jurors concluded that the defendant was not guilty, he
would be acquitted and could not be forced to endure a new trial. This
rule has the potential to benefit either side as it brings finality to
a criminal case.
In other words, there are cases where a requirement of unanimity
produced a hung jury where, had there been a non-unanimous allowance,
the jury would have voted to convict or acquit. Yet, in either
instance, the defendant is accorded his constitutional right of a
judgment by his peers. It is my firm belief that this legislation will
not undermine the pillars of justice or result in the conviction of
innocent persons.
Moreover, I believe the American people will strongly support this
reform to allow a 10-2 decision. This is one way the Congress can help
fight crime and promote criminal justice.
Mr. President, I hope the Congress will support this important
proposal. I ask unanimous consent that the bill be printed in its
entirety in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 34

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

SECTION 1. AMENDMENT OF RULE 31 OF THE FEDERAL RULES OF
CRIMINAL PROCEDURE.

(a) In General.--Rule 31(a) of the Federal Rules of
Criminal Procedure is amended by striking ``unanimous'' and
inserting ``by five-sixths of the jury''.
(b) Applicability.--The amendment made by subsection (a)
shall apply to cases pending or commenced on or after the
date of enactment of this Act.
______

By Mr. GRAMM (for himself and Mr. Miller):
S. 35. A bill to provide relief to America's working families and to
promote continued economic growth by returning a portion of the tax
surplus to those who created it; to the Committee on Finance.

Tax cut with a purpose act of 2001

Sen. GRAMM. Mr. President, I am introducing legislation today with my
colleague, Senator Miller of Georgia, to provide tax relief for
America's families by returning a portion of the tax surplus to the
working men and women who are responsible for creating it.
Our proposal consists of the core elements of the plan that President
Bush outlined during his campaign for the Presidency. There are three
principle components: Lower income tax rates for all Americans, relief
from the marriage tax penalty, and repeal of the death tax. The bill
replaces the current tax rate structure with rates of 10, 15, 25, and
33 percent. Lower income Americans get a larger percentage cut in
rates, higher income Americans get a smaller reduction, but obviously
this is a tax cut for taxpayers.
The next provision of the bill begins the effort to repeal the
marriage penalty. There is no reason in America that people who meet
and fall in love should have to pay $1,400 a year in additional taxes
as the price of getting married. Senator Miller and I are for love and
marriage, and we don't think they ought to be taxed.
The final major provision of the bill is repeal of the death tax. A
death tax is double taxation in which people work their whole lives,
build up a business or a family farm, and pay taxes on every penny they
earn. Yet when they die, their children have to sell the business or
the family farm in order to give the government up to 55 cents out of
every dollar of its value. This is fundamentally unfair.
Finally, since our President was elected three things have happened,
and every one of them argues for this package of tax cuts. No. 1, the
economy is weaker and investment is falling off. Secondly, our
estimates of the budget surplus have gone up, not down. And lastly,
that surplus is being spent at an unprecedented rate.
We believe that Congress should enact the Bush tax plan, continue to
pay down the debt, and resist the urge to spend the tax surplus so that
we can return a portion of it to the working men and women who produced
it.
Mr. Miller. Mr. President, I am very pleased to join with Senator
Gramm as a sponsor of this important piece of legislation, first
because it is an opportunity to reach across party lines and really
practice bipartisanship, not just talk about it. But I'm even more
pleased to be a cosponsor because of the far-reaching consequences of
this bill.
Right now, our taxes have never been higher. Right now, our surplus
has never been greater. To me, it's just common sense you deal with the
first by using the second.
Remember that old Elvis Presley song, ``Return to Sender.'' Well,
that's what we want to do with this overpayment of taxes.
As some of you know, I've been in politics for a long time, and I
thought I had seen it all. But when I came to Washington last year I
was not prepared for the shock of just how matter of factly Congress
ate into the surplus, gobbled it up indiscriminately and without
hesitation on both sides of the aisle.
I couldn't believe it and it became clear to me that if we don't send
this overpayment of taxes back to those who paid it, much of it will be
frittered away, and I think most Americans have enjoyed as much of that
as they can stand.
Some of my colleagues talk of ``targeted'' tax cuts, and I respect
their opinion, I respect them. But here's how I think about that: who
are we to pick and choose and cull and select and single out among our
taxpayers.
Who are we to play ``eeny, meany, miney, mo,'' with them. All of them
combined have paid more than it takes to run this government. And all
of them combined should get a break from this oppressive tax structure
of ours.
This plan would make our tax code more progressive by cutting federal
income taxes for people all across the income spectrum, and the largest
percentage cuts would go to those Americans who earn the least. Under
this proposal, six million families will no longer pay any federal
income taxes at all. That's one out of five families with children.

Any time I look at a tax cut, I always apply it to the family I grew
up in: a single parent with two children. Under

[[Page S313]]

the current rate, that single parent begins paying taxes when she earns
$21,300. Under this plan, she would not become a taxpayer until her
earnings reach $31,300.
Lower taxes gives Americans a better chance at a better standard of
living. It can mean the difference between renting or buying a home.
Today, it can be the difference between being able, or not being able,
to pay your heating bill.
No one in America should have to work more than four months out of a
year to pay the IRS, and in peacetime, the federal government should
never take more than 33% out of anyone's pay check.
I also believe this tax cut could help provide some needed insurance
against a long-lasting economic slow down. But most importantly, and
why I'm here, is that I agree with President Bush that the taxpayers
are much better judges of how to spend their own money than we are.
When I was governor of Georgia, I was proud that in my state we cut
taxes by more than a billion dollars. As a U.S. Senator, I'm looking
forward to cutting taxes in this nation by more than a trillion
dollars.
______

Mr. THURMOND:
S. 36. A bill to amend title 1, United States Code, to clarify the
effect and application of legislation; to the Committee on the
Judiciary.

AN ACT TO CLARIFY THE APPLICATION AND EFFECT OF LEGISLATION

Mr. THURMOND. Mr. President, I rise today to introduce a bill to
clarify the application and effect of legislation which the Congress
enacts.
My act is simple and straightforward. It provides that unless future
legislation expressly states otherwise, new enactments shall be applied
prospectively and shall not create private rights of action. This will
significantly reduce unnecessary litigation and court costs, and will
benefit both the public and our judicial system.
The purpose of this legislation is to tackle a persistent problem
that is easy to prevent. When Congress enacts a bill, the legislation
often does not indicate whether it is to be applied retroactively or
whether it creates private rights of action. The failure of the
Congress to address these issues in each piece of legislation results
in unnecessary confusion and uncertainty. This uncertainty leads to
lawsuits, thereby contributing to the high cost of litigation and the
congestion of our courts.
In the absence of clear action by the Congress on its intent
regarding these critical threshold questions, the outcome is left up to
the courts. Whether a law applies to conduct that occurred before the
effective date of the Act and whether a private person has been granted
the right to sue on their own behalf in civil court under an Act can be
critical or even dispositive of a case. Even if the issue is only one
aspect of a case and it is raised early in a lawsuit, a decision that
the lawsuit can proceed generally cannot be appealed until the end of
the case. If the appellate court eventually rules that one of these
issues should have prevented the trial, the litigants have been put to
substantial burden and unnecessary expense which could have been
avoided.
Currently, courts attempt to determine the intent of the Congress in
deciding the effect and application of legislation in this regard.
Thus, courts look first and foremost to the statutory language. If a
statute expressly provides that it is retroactive or creates a private
cause of action, that dictate is followed. Further, courts apply a
presumption that legislation is not retroactive. This is an entirely
appropriate, longstanding rule because, absent mistake or an emergency,
fundamental fairness generally dictates that conduct should be assessed
under the rules that existed at the time the conduct took place. There
is a similar presumption that the Congress did not intend to create
rights beyond those that it expressly includes in its legislation.

If the intent of Congress is not clear from the statute, courts
generally look to legislative history, statutory structure, and
possibly other sources of Congressional intent. This is where the
unnecessary complexity and confusion is created. Sources other than
statutory language are to varying degrees less reliable in predicting
Congressional intent. They are much more difficult to interpret and may
even be contradictory. The more sources for the course to analyze and
the more vague the standard for review, the more likely courts will
reach different results. Under current practice, trial courts around
the country reach conflicting and inconsistent results on these issues,
as do appellate courts when the issues are appealed.
The problem of whether legislation is retroactive was dramatically
illustrated after the passage of the Civil Rights Act of 1991. District
courts and courts of appeal all over the country were required to
resolve whether the 1991 Act should be applied retroactively, and the
issue ultimately was considered by the Supreme Court. However, by the
time the Court resolved the issue in 1994, well over 100 lower courts
had ruled on this question and, although most had not found
retroactivity, their decisions were inconsistent. Countless litigants
across the country expended substantial resources debating this
threshold procedural issue.
All this litigation arose from a statute that contained no language
providing that it be retroactive. To conclude that the provision of the
statute in issue in the case was not to be applied retroactively, the
majority opinion of the Court took 39 pages in the United States
Reporter to explain why. It undertook a detailed analysis that
demonstrates the unnecessary complexity of the current standard. It is
no wonder that some Supreme Court justices argued in this case that a
court should look only to whether the language of the statute expressly
provides for retroactivity. That is what I propose. If my law had been
in effect, the litigation would have been averted, while the outcome
would have been exactly the same as the Supreme Court decided.
Under my bill, newly enacted laws are not to be applied retroactively
and do not create a private right of action, unless the legislation
expressly provides otherwise. It is important to note that my bill does
not in any way restrict the Congress on these important issues. The
Congress may override this presumption by simply stating when it wishes
legislation to be retroactive or create new private rights of action.
It is clear that this legislation would save litigants and our
judicial system millions and millions of dollars by avoiding a great
deal of uncertainty and litigation. The Administrative Office of the
Courts has expressed support for this important clarification to the
law.
Mr. President, if we are truly concerned about relieving the backlog
of cases in our courts and reducing the costs of litigation, we should
help our judicial system to focus its limited time and resources on
resolving the merits of disputes, rather than deciding these
preliminary matters. We hear numerous complaints about overworked
judges and crowded dockets. This is a simple and straightforward way to
do something about it. The Congress can help reduce the Federal
caseload and help simplify the law. We should act on this important
reform promptly.
Mr. President, I ask unanimous consent that the bill be printed in
the Record in its entirety.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 36

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

SECTION 1. CLARIFICATION OF THE EFFECT AND APPLICATION OF
LEGISLATION.

(a) In General.--Chapter 1 of title 1, United States Code
is amended by adding at the end the following:

``Sec. 7. Rules for application and effect of legislation

``Any Act of Congress enacted after the effective date of
this section--
``(1) shall be prospective in application only;
``(2) shall not create a private claim or cause of action;
and
``(3) shall be presumed not to preempt the law of any
State,
unless a provision of the Act expressly specifies
otherwise.''.
(b) Table of Sections.--The table of sections for chapter 1
of title 1, United States Code, is amended by adding at the
end the following:

``7. Rules for application and effect of legislation.''.
(c) Effective Date.--The amendments made by this Act shall
take effect 180 days after the date of enactment of this Act.

[[Page S314]]

______

By Mr. LUGAR (for himself, Mr. Leahy, Mr. Fitzgerald, Mr. Harkin,
Mr. Roberts, Mr. Dodd, Mr. DeWine, Mr. Reid, Mr. Santorum, Mr.
Bayh, and Mr. Johnson):
S. 37. A bill to amend the Internal Revenue Code of 1986 to provide
for a charitable deduction for contributions of food inventory; to the
Committee on Finance.

the good samaritan hunger relief tax incentive act

Mr. LUGAR. Mr. President, I rise today with Senators Leahy,
Fitzgerald, Harkin, Roberts, Dodd, DeWine, Reid, Santorum, and Bayh to
introduce the Good Samaritan Hunger Relief Tax Incentive Act,
bipartisan legislation aimed at increasing food donations to our
nation's food banks. Next week, Congressman Tony Hall, who has been a
leader in Congress in the fight against hunger, will introduce
companion legislation in the House of Representatives. This bill would
provide important incentives for farmers, restaurant owners, and
corporations to donate food to front-line organizations that serve the
hungry.
The demand on our nation's food banks, church pantries, soup kitchens
and shelters continues to rise. According to an August 2000 report on
Hunger Security by the U.S. Department of Agriculture, 31 million
Americans (around 10 percent of our citizens) are living on the edge of
hunger. One segment of our population--families with incomes between 50
and 130 percent of the poverty level--has experienced an increase in
the number of households that are food insecure since 1995. This study
confirms what food bank managers and workers have been telling me--
while many families are moving from welfare to work, these families are
still vulnerable to hunger and are using food banks to supplement their
nutritional needs.
Unfortunately, many food banks cannot meet this increased demand for
food. A December 1999 study by the U.S. Conference of Mayors found that
requests for emergency food assistance increased by an average of 18
percent in American cities over the previous year and that 21 percent
of emergency food requests could not be met.
These figures are troubling because of the enormous amount of food
that goes unused annually. The United States Department of Agriculture
estimates that up to 96 billion pounds of food goes to waste each year
in the United States. If a small percentage of this wasted food could
be redirected to food banks, we could make important strides in our
fight against hunger.
In many ways, current law is a hindrance to food donations. The tax
code provides corporations with a special deduction for donations to
food banks, but it excludes farmers, ranchers, and restaurant owners
from the same tax incentive. For many of these businesses, it is more
cost effective to throw away food than to donate it to charity.
The Good Samaritan Hunger Relief Tax Incentive Act would address this
inequity by extending the special deduction to all business taxpayers
and by increasing it to the fair market value of the donation. The
hunger relief community believes that these changes will markedly
increase food donations. One Hoosier food bank, Second Helpings of
Indianapolis, estimates that this legislation will cause an additional
400,000 pounds of food to be donated to its coffers.
This bipartisan legislation, which enjoys the support of Republicans
and Democrats alike, has been endorsed by a diverse set of
organizations, including America's Second Harvest Food Banks, the
Salvation Army, the American Farm Bureau Federation, the National
Farmers Union, the National Restaurant Association, the Grocery
Manufacturers of America, At-Sea Processors Association, California
Emergency Foodlink, Council of Chain Restaurants, National Cattlemen's
Beef Association, National Fisheries Association, and the National Milk
Producers Federation.
Last year, this legislation unanimously passed the Senate as part of
an agricultural tax amendment offered by Senator Grassley to H.R. 8,
the Death Tax Elimination Act. Although the measure was ultimately
stripped from the underlying legislation, the vote indicated strong
support for this legislation in the Senate.
I am hopeful that Congress will thoughtfully address the hunger
problem in the U.S. by passing this bill into law.
______

By Mr. INOUYE:
S. 38. A bill to amend title 10, United States Code, to permit former
members of the Armed Forces who have a service-connected disability
rated as total to travel on military aircraft in the same manner and to
the same extent as retired members of the Armed Forces are entitled to
travel on such aircraft; to the Committee on Armed Services.

Extend travel on military aircraft to disabled military retirees

Mr. INOUYE. Mr. President today I am reintroducing a bill which is of
great importance to a group of patriotic Americans. This legislation is
designed to extend space-available travel privileges on military
aircraft to those who have been totally disabled in the service of our
country.
Currently, retired members of the Armed Forces are permitted to
travel on a space-available basis on non-scheduled military flights
within the continental United States, and on scheduled overseas flights
operated by the Military Airlift Command. My bill would provide the
same benefits for veterans with 100 percent service-connected
disabilities.
We owe these heroic men and women who have given so much to our
country a debt of gratitude. Of course, we can never repay them for the
sacrifices they have made on behalf of our nation, but we can surely
try to make their lives more pleasant and fulfilling. One way in which
we can help is to extend military travel privileges to these
distinguished American veterans. I have received numerous letters from
all over the country attesting to the importance attached to this issue
by veterans. Therefore, I ask that my colleagues show their concern and
join me in saying ``thank you'' by supporting this legislation.
Mr. President, 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. 38

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

SECTION 1. TRAVEL ON MILITARY AIRCRAFT OF CERTAIN DISABLED
FORMER MEMBERS OF THE ARMED FORCES.

(a) In General.--Chapter 53 of title 10, United States
Code, is amended by adding after section 1060a the following
new section:

``Sec. 1060b. Travel on military aircraft: certain disabled
former members of the armed forces

``The Secretary of Defense shall permit any former member
of the armed forces who is entitled to compensation under the
laws administered by the Secretary of Veterans Affairs for a
service-connected disability rated as total to travel, in the
same manner and to the same extent as retired members of the
armed forces, on unscheduled military flights within the
continental United States and on scheduled overseas flights
operated by the Military Airlift Command. The Secretary of
Defense shall permit such travel on a space-available
basis.''.
(b) Clerical Amendment.--The table of sections at the
beginning of such chapter is amended by adding after the item
relating to section 1060a the following new item:

``1060b. Travel on military aircraft: certain disabled former members
of the armed forces.''.
______

By Mr. STEVENS:
S. 39. A bill to provide a national medal for public safety officers
who act with extraordinary valor above and beyond the call of duty, and
for other purposes; to the Committee on the Judiciary.

public safety medal of valor act

Mr. STEVENS. Mr. President, today I am honored to introduce the
Public Safety Medal of Valor Act.
It is a bill intended to enhance recognition of an important segment
of our public servants.
These are the men and women who engage in the law enforcement and
public safety duties that benefit our communities every day.
I introduced this bill early in the 106th Congress, and the Senate
passed it unanimously in May 1999.
The Senate Judiciary Committee deliberated on a similar piece of
legislation, H.R. 46, and reported a version with amendments.
Unfortunately, after the Senate passed H.R. 46 in the last days of the
106th Congress, there was not time for the House to act.

[[Page S315]]

Today I submit the bill as introduced in the 106th Congress, and hope
my colleagues will join me again in seeking its passage.
______

By Mrs. HUTCHISON (for herself, Mr. Frist, and Mr. Crapo):
S. 40. A bill entitled ``The Careers to Classrooms Act of 2001''; to
the Committee on Health, Education, Labor, and Pensions.

careers to classrooms act of 2001

Mrs. HUTCHISON. Mr. President, I have another bill to introduce. This
is cosponsored by Senators Frist and Crapo. It is the Careers to
Classrooms Act of 2001. Once again, this is a bill that has already
been passed by Congress, but it has never made it into law. I am very
hopeful that this President will sign a comprehensive reauthorization
of the Elementary and Secondary Education Act, and included in that I
hope will be Careers to Classrooms.
There is no question that many, if not most, of our States are facing
huge teacher shortages. This is one of the most critical needs in our
public schools today. It is most pressing in our inner-city and rural
communities.
Ironically, the biggest enemy to hiring a sufficient number of
teachers is our booming economy. A recent college graduate with a
degree in math might expect to make $25,000 to $35,000 in a starting
position as a high school math teacher. That same graduate could easily
make twice that much in the private sector, especially in the red hot
computer field. We have some issues we have to deal with--increasing
teacher salaries, increasing teacher benefits--and we know that, but
there is more we can do.
What we need in our public school systems in America is more
creativity. What we want to do with our reauthorization of the
Elementary and Secondary Education Act is to put more incentives for
creativity in our public schools.
I am a total product of public education. I grew up in La Marque, TX,
a small town of about 15,000 in Galveston County, and attended and
graduated from its public schools. Then I attended the University of
Texas and the University of Texas Law School. You will find no bigger
advocate for public education than this Senator. I owe so much of what
I am to the teachers who took the time to help me become the best that
I could be.
Teachers are the backbone of our schools. You can design a state-of-
the-art, fully computerized school connected to the Internet 24 hours a
day with every modern textbook and piece of science equipment, but at
the end of the day, if you do not have quality teachers, all of that
equipment really does not mean that much.
Adding to the growth in the population of our public schools is an
effort in many public school systems to hire more teachers to reduce
class size. The approach I am putting forth today will ensure that more
teachers are available, more can be hired, and that they are better
teachers, qualified teachers, teachers with real world experience and
knowledge that can be taken into the classroom.
Careers to Classrooms builds upon a tremendously successful
Department of Defense program that takes experienced, qualified
military service men and women and helps them transition into the
classroom as teachers. That program is known as Troops to Teachers. it
has placed over 4,000 qualified, certified teachers in our Nation's
public schools, including over 600 in my home State of Texas.
The Troops to Teachers Program seeks out and helps place into schools
members of the military with at least 10 years of military service and
skills in high-need areas, such as math, science, computers, and
languages. Typically, these experienced service personnel obtain their
certification in a year or less utilizing one of the many different
alternative certification programs now in place in over 40 States.
My provision essentially builds upon this proven model and extends it
to the application in the context of civilian professionals and others
with skills. What we want to do in Careers to Classrooms is take
individuals with demonstrable skills in high-need areas and give them a
chance to go into the teaching profession, especially mid-level
professionals who would like to change careers and go into teaching.
The program would provide limited stipend assistance for individuals
enrolled in State alternative certification programs, and those who
agreed to teach in rural schools, schools with the most pressing
teacher shortages and schools with the highest percentages of students
from low-income families, would also get stipends to help them with
this alternative certification to get them in the classroom faster than
if they were going through the whole college course and curriculum that
includes all of the teacher education courses.
High-need schools would also receive funding assistance to help
compensate for the added teacher mentoring, training, and other costs
associated with bringing-in prospective teachers under an alternative
certification process.
Our legislation specifies priority disciplines in which we want to
focus to recruit teachers. In particular, the proposal emphasizes
sciences, math, computer literacy, and foreign languages. These are
where our teacher shortages are most acute.
I particularly thank my colleague from Tennessee, Senator Frist, who
suggested adding outstanding recent college graduates to be eligible to
participate in the Careers to Classrooms proposal. Senator Frist
correctly pointed out that in addition to encouraging midlevel career
professionals, we want to have these young, top-flight college
graduates who did not go through their college's education degree
program but who do have the academic achievement and the mastery of
these skills to be able to become excellent teachers.
I also thank Senator Crapo of Idaho who has also been helpful in
adding the provision that encourages individuals to go into our rural
areas with this Careers-to-Classrooms-added incentive to become
teaching professionals.
Our Nation's parents and teachers do not need more Federal control,
they do not need more bureaucracy, they do not need more red tape. What
they need is to be empowered with greater choices and options to find
the education path that is best for them. We need to make those options
available to them, to do so in a way that is new, that is innovative,
that is flexible. Simply heaping more money on failed systems and
programs has been exhaustively proven to lead to failure. The policies
of the past have failed.
No. What we need to do is work with our new Secretary of Education,
Rod Paige, who has made creativity the benchmark of his success in the
public schools in Houston, TX. We need to go forward in a bipartisan
Congress, with President Bush, to make public education the best
education in our country.
Careers to Classrooms will put our qualified teachers in the
classroom. It will give them the ability to be certified in an
alternative certification program very quickly so that they will be a
resource to our young people.
We want to encourage more people to go into the teaching profession
because if we do not have good teachers, we are not going to have a
successful country. We will not have young people able to go into our
great economy and the opportunities that our economy would offer if
they do not have the basic skills that are given by good teachers.
I hope this year Careers to Classrooms will become law. I hope we
will see more and more of the qualified people in our country decide to
take up the teaching profession and be mentors and role models and
teachers to our young people.
______

By Mr. HATCH (for himself, Mr. Baucus, Mr. Murkowski, Mr.
Jeffords, Ms. Snowe, Mr. Kyl, Mr. Rockfeller, Mr. Breaux, Mr.
Conrad, Mr. Graham, Mr. Daschle, Mr. Kerry, Mr. Bingaman, Mr.
Torricelli, and Mrs. Lincoln):
S. 41. A bill to amend the Internal Revenue Code of 1986 to
permanently extend the research credit and to increase the rates of the
alternative incremental credit; to the Committee on Finance.

Legislation to Permanently Extend the R&E Tax Credit

Mr. HATCH. Mr. President, I am very pleased to join with my friend
Senator Baucus and many of our Finance Committee colleagues today in
introducing legislation that would permanently extend the research and
experimentation tax credit.

[[Page S316]]

Over the past 10 years, our nation has experienced the longest and
strongest peacetime period of economic expansion in our history. Over
this past decade, the standard of living for all Americans has
increased markedly while millions of new jobs have been created. At the
same time, our federal budget outlook has been transformed from one of
large and increasing deficits into the indefinite future to one of
multitrillion dollar surpluses for at least the next ten years.
Much of the cause of this economic expansion that has so blessed the
United States is due to a strong surge in our productivity rate. This
increase in productivity has allowed the economy to continue to grow at
a rapid pace without the increase in inflation that usually accompanies
such growth.
The Congressional Budget Office, Federal Reserve Chairman Alan
Greenspan, and dozens of leading economists have all heralded the
increase in our productivity as a key to our economic good times--and
to their continuance. A major factor of this increase in productivity,
Mr. President, is spending on research and development. This is what
our bill today is all about.
An August 1999 study commissioned by the National Association of
Manufacturers concluded that as much as two-thirds of productivity
gains is due to technological advances. These advances, in turn, fuel
economic growth. The standard model of economic growth argues that one-
third of growth in private-sector output is attributable to advances in
technology. In the manufacturing sector, as much as two-thirds of
growth can be attributed to technological advances. Moreover, this
contribution is expected to increase over the next decade.
It seems clear to me that if we want to keep our economy strong and
growing, it is vital that we keep up and even increase these advances
in technology. How do we do this? The answer is simple. Our nation must
continue to invest in research and development, both at the public
level, and especially in the private sector.
I believe the best way to ensure that private-sector investment in
research and development continues at the healthy rate needed to fuel
the productivity gains of the future is to permanently extend the
current-law research and experimentation credit. This tax provision is
a proven and a cost-effective incentive to increase private-sector R&D
spending.
Studies have shown that the R&E tax credit significantly increases
research and development expenditures. The marginal effect of one
dollar of the R&E credit stimulates approximately one dollar of
additional private research and development spending over the short-run
and as much as two dollars of extra investment over the long-run.
Congress has recognized the vital role the R&E credit has played in
spurring increased research spending by extending the credit ten times
since its inception in 1981. For most of those years, Congress was
never able to find the funds to pay for a permanent extension of the
credit, due to budget constraints. Fortunately, Congress passed a five-
year extension in 1999 that will keep the credit alive until 2004.
However, Mr. President, permanence is essential to the effectiveness
of this credit. Research and development projects typically take a
number of years and may even last longer than a decade. As our business
leaders plan these projects, they need to know whether or not they can
count on the R&E tax credit. The continual uncertainty surrounding the
credit has induced businesses to allocate significantly less to
research than they otherwise would if they were assured the tax credit
would be available. This uncertainty undermines the entire purpose of
the credit and has stifled its full potential for inducing research
spending. For the government and the American people to maximize the
return on their investment in U.S.-based research spending, this credit
must be made permanent.
In the business community, the development of new products,
technologies, medicines, and ideas can result in either success or
failure. Investments carry a risk. The R&E tax credit helps ease the
cost of incurring these risks. Whereas foreign nations heavily
subsidize research with public dollars, the United States has typically
relied less on direct public funds and more on private sector
incentives. The R&E tax credit has the potential to be an even more
effective incentive if it were made permanent.
I am aware that not every company that invests in research and
development in the U.S. can take advantage of the regular R&E tax
credit. As the credit's base period recedes and business cycles change,
the current credit is out of reach for some companies that still incur
significant research expenditures. To help solve this problem Congress
enacted the Alternative Incremental Research Credit to help businesses
that do not qualify for the R&E tax credit. To improve the
effectiveness of this alternative credit, we have included a proposal
to slightly increase each of its three incentive levels.

A permanent extension of this credit may seem costly in terms of lost
revenue. However, when you consider the value that this investment will
create for our economy, it is a bargain. In fact, one study estimates
that a permanent R&E credit would result in our Gross Domestic Product
increasing by $10 billion after five years and by $31 billion after 20
years.
Moreover, making the credit permanent will encourage more companies
to locate their research activities within the United States. This will
lead to more jobs and higher wages for U.S. workers. We must recognize
that international competition is fierce. Many other countries offer
significant enticements to prompt companies to move research activities
within their borders. If we fail to ensure at least a level playing
field, many companies will begin to consider moving their research
activities abroad and we could lose thousands of precious high-paying
jobs.
Findings from a study conducted by Coopers & Lybrand show that
workers in every state will benefit from higher wages if the R&E tax
credit is made permanent. Payroll increases as a result of gains in
productivity stemming from the credit have been estimated to exceed $60
billion over the next 12 years. Furthermore, greater productivity from
additional R&E will increase overall economic growth in every state in
the Union.
My home state of Utah is a good example of how state economies
benefit from the research tax credit. Utah is home to a large number of
firms who invest a high percentage of their revenue on research and
development.
For example, between Salt Lake City and Provo lies one of the world's
biggest stretches of software and computer engineering firms. This
area, which was named ``Software Valley'' by Business Week, is a
significant example of one of a growing number of thriving high tech
commercial regions outside California's Silicon Valley. Newsweek
magazine included Utah among the top ten information technology centers
in the world. The Utah Information Technologies Association estimates
that Utah's IT industry consists of more than 2,500 IT vendor
enterprises and more than 1,000 eBusiness enterprises, employing tens
of thousands and bringing billions of dollars to Utah's economy.
In addition, Utah is home to about 700 biotechnology and biomedical
firms that employ nearly 9,000 workers. Research and development are
the reasons these companies exist. Not only do these companies need to
continue conducting a high quality level of research, but this research
feeds other industries and, ultimately, consumers. Just ask the
patients who have benefitted from new drugs or therapies.
In all, Mr. President there are more than 80,000 employees working in
Utah's thousands of technology based companies. Many other states have
experienced similar growth in high technology businesses. Research and
development is the lifeblood of these firms and hundreds of thousands
like them throughout the nation.
During the ten times in the past 20 years that Congress has extended
the R&E credit for a short time, the ostensible reason has been a lack
of revenue. The excuse we give to constituents is that we didn't have
the money to extend the bill permanently. Ironically, it costs at least
as much in terms of lost revenue, in the long run, to enact short-term
extensions as it does to extend it permanently.
With the latest projections of the on-budget surplus, for one year,
for five

[[Page S317]]

years, and for ten years, this excuse is gone. There is simply no valid
reason that this credit should not be extended on a permanent basis.
Moreover, now is the time to extend the provision permanently. By
making the research credit permanent now, we will send a strong signal
to the business community that a new era of stronger support for
research has dawned.
The timing could not be better because, as I mentioned, many research
projects, especially those in pharmaceuticals and biotechnology, must
be planned and budgeted for months and even years in advance. The more
uncertain the long-term future of the research credit is, the smaller
the potential of the credit to stimulate increased research. Simply
knowing of the reliability of a permanent research credit will give a
boost to the amount of research performed, even before the current
credit expires in 2004.
A permanent R&E credit has wide support in both the Senate and the
House. Last year, this body passed by a vote of 98-1 an amendment that
would have permanently extended the credit. Unfortunately, all
amendments were ultimately stripped from the underlying bill. The bill
we are introducing today is identical to legislation introduced earlier
this month by Representatives Nancy Johnson and Robert Matsui. The
identical bill in the 106th Congress was cosponsored by 164 other
members of that body. Moreover, the permanent extension of the credit
is a major provision in President Bush's tax cut plan, and was
supported by both former President Clinton and by Al Gore.
In conclusion Mr. President, if we fail to make the R&E tax credit
permanent, we are limiting the potential growth of our economy. How can
we expect the American economy to hold its lead in the global economic
race if we allow other countries to take the edge in innovation? Making
the tax credit permanent will keep American business ahead of the pack.
It will speed economic growth. New technology resulting from American
research and development will continue to improve the standard of
living for every person in the U.S. and also worldwide.
Simply put, the costs of not making the R&E tax credit permanent are
far greater than the costs of making it permanent. As we begin the new
millennium, we cannot afford to let the American economy slow down. Now
is the time to send a strong message to our companies and to the world
that America intends to retain its position as the world's foremost
innovator.
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. 41

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

SECTION 1. PERMANENT EXTENSION OF RESEARCH
CREDIT.

(a) In General.--Section 41 of the Internal Revenue Code of
1986 (relating to credit for increasing research activities)
is amended by striking subsection (h).
(b) Conforming Amendment.--Paragraph (1) of section 45C(b)
of such Code is amended by striking subparagraph (D).
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after the date of the
enactment of this Act.

SEC. 2. INCREASE IN RATES OF ALTERNATIVE INCREMENTAL CREDIT.

(a) In General.--Subparagraph (A) of section 41(c)(4) of
the Internal Revenue Code of 1986 (relating to election of
alternative incremental credit) is amended--
(1) by striking ``2.65 percent'' and inserting ``3
percent'',
(2) by striking ``3.2 percent'' and inserting ``4
percent'', and
(3) by striking ``3.75 percent'' and inserting ``5
percent''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.

Mr. BAUCUS. Mr. President, it is with great pleasure that I join with
my colleague from Utah, Senator Hatch, and my other colleagues on the
Senate Finance Committee, to introduce this bill, which is so vitally
important to American businesses competing in the global marketplace. I
am particularly pleased that this bill includes as original cosponsors
a majority of members of the Senate Finance Committee. This legislation
is bipartisan and bicameral. A companion bill was introduced--on the
very first day of this Congress--in the House of Representatives by
Congresswoman Nancy Johnson and Congressman Robert Matsui.
Our nation is the world's undisputed leader in technological
innovation, a position that would not be possible absent U.S.
companies' commitment to research and development. Investment in
research is an investment in our Nation's economic future, and it is
appropriate that both the public and private sector share the costs
involved, as we share in the benefits. The credit provided through the
tax code for research and experimentation expenses provides a modest
but critical incentive for companies to conduct their research in the
United States, thus creating high-skilled, high-paying jobs for
American workers.
The R&D credit has played a key role in placing the United States
ahead of its competition in developing and marketing new products.
Every dollar that the Federal government spends on the R&D tax credit
is matched by another dollar of spending on research over the short run
by private companies, and two dollars of spending over the long run.
Our global competitors are well aware of the importance of providing
incentives for research, and many provide more generous tax treatment
for research and experimentation expenses than does the United States.
As a result, Japanese and German spending on non-defense R&D as a
percentage of GDP has grown, while U.S. spending has remained
relatively flat since 1985. The R&D credit is instrumental in keeping
research dollars in the United States and we must do all we can to make
sure it remains an effective incentive by eliminating the on-again,
off-again treatment.
The benefits of the credit, though certainly significant, have been
limited over the years by the fact that the credit has been temporary.
In addition to the numerous times that the credit has been allowed to
lapse only to be extended retroactively, the 1996 extension left a 12-
month gap during which the credit was not available. This unprecedented
lapse sent a troubling signal to the U.S. companies and universities
that have come to rely on the government's longstanding commitment to
the credit. Let me be clear: companies are under-investing in research
because there has been continued uncertainty about the credit's life.
Much of the economic gains we enjoy now is the direct result of
research, technology and innovation undertaken in prior decades. If
current indicators are accurate in their warning of a slowdown in our
economy, then now is appropriate time to send a strong signal to our
research-intensive industries. We must demonstrate our long-term
commitment to U.S.-based research by finally putting an end to all
uncertainty and making the R&D credit permanent.

Much research and development takes years to mature. Companies must
make their commitment to research projects often five or ten years into
the future. The more uncertain the future of the credit, the fewer
additional research projects will be started. If companies evaluating
research projects cannot rely on the seamless continuation of the
credit, then they are less likely to invest on research in this country
and less likely to put money into cutting-edge technological innovation
that is critical to keeping us in the forefront of global competition.
Our country is locked in a fierce battle for high-paying
technological jobs in the global economy. As more nations succeed in
creating educationally advanced workforces and join the U.S. as high-
technology manufacturing centers, they become more attractive to
companies trying to penetrate foreign markets. Multinational companies
sometimes find that moving both manufacturing and basic research
activities overseas is necessary if they are to remain competitive. The
uncertainty of the R&D credit factors into their economic calculations,
and makes keeping these jobs in the U.S. more difficult.
According to a 1998 study conducted by Coopers & Lybrand, making the
R&D credit permanent will provide a substantial positive stimulus to
investment, wage-growth, productivity, and overall economic activity
for this country. Payroll increases from gains in productivity are
estimated to total $64 over the period 1998 through 2010. In

[[Page S318]]

the year 2010 alone, the payroll increase is estimated to total nearly
$12 billion.
Also according to the study, Gross State Product, which is the basic
measure of economic activity in a state, will rise overall by nearly
$58 billion between 1998 and 2010 as a result of a permanent credit.
Nearly three-fifths of this increase nationally is attributable to
additional value added by industries that generally do not perform R&D
themselves, but benefit from the R&D done by companies in other
industries.
Gains in payroll and in Gross State Product are not limited to states
regarded as centers for technological innovation. Although such regions
of the country certainly benefit from the credit, each and every state
will profit in some measurable way from the credit since all sectors of
the economy--agriculture, mining, basic manufacturing, and high-tech
services--benefit from productivity improvements resulting from the
additional research and development caused by the credit.
My own state of Montana is an excellent example of this economic
activity. According to the 1998 study, the total increase in payroll
due to the R&D credit for the years 1998-2010 is estimated to be just
over $250 million. Neither of these increases place Montana in the top
tier of states benefitting from the credit. However, looking beyond
these numbers, the impact of the credit in Montana is substantial. In
1995, 12 of every 1,000 private sector workers were employed directly
by high-tech firms in Montana. Almost 400 establishments provided high-
technology services, at an average wage of $34,500 per year. These jobs
paid 77 percent more than the average private sector wage in 1995 of
$19,500 per year. Many of these jobs would never have been created
without the assistance of the R&D credit. And many more jobs in Montana
are dependent upon the growth and stability of the high-tech sector.
Although the cumulative numbers may not be high in comparison with
other states, the impact of the R&D credit on Montana's economy is
clear.

The American Bar Association Section of Taxation, the American
Institute of Certified Public Accountants Tax Division, and the Tax
Executives Institute urge making the credit permanent. In their view,
uncertainty in the tax law breeds complexity. The constant need to
extend the R&D credit and other Code provisions adds confusion to the
law and, in many cases, undermines the policy reasons for enacting the
incentives in the first place. This is so because the provisions are
intended to encourage particular activities but uncertainty surrounding
whether the provisions will be extended leaves taxpayers unable to plan
for those activities. The on-again, off-again nature of these
provisions, coupled in some cases with retroactive enactment (which
often necessitates the filing of an amended return), contributes
mightily to the complexity of the law.
Senator Hatch and I are not newcomers to this issue. We have jointly
introduced bills to make the R&D credit permanent in previous
Congresses only to end up with short-term extensions. Last year, we
came close. During consideration of the bill to repeal the estate tax
(H.R. 8) last July, the Senate voted 98 to 1 in favor of making the R&D
tax credit permanent.
This year, we hope to be successful. The hard work we have done to
bring our budget into balance is finally beginning to pay off, and the
projected budget surpluses gives us an opportunity to think carefully
about how best to allocate our resources. Making the R&D credit
permanent is a wise use of budget dollars because of the direct
positive impact on economic growth and productivity. This is not just a
corporate issue. The real winners from past research investments have
been the American people--in higher wage jobs, higher standards of
living, and better health and lifestyle. This is a use of tax dollars
that benefits all of us who are working to expand employment, increase
wages and keep our Nation at the cutting edge of technological
development. We were gratified to see that a permanent R&D credit was
included in the tax plan on which President Bush campaigned, and I
sincerely hope we can work together to finally make this year the year
we fulfill our commitment to long-term, U.S.-based research.
I urge my colleagues to support this important piece of legislation.
______

By Mr. INOUYE:
S. 43. A bill to amend title 10, United States Code, to authorize
certain disabled former prisoners of war to use Department of Defense
commissary and exchange stores; to the Committee on Armed Services.

MILITARY COMMISSARY AND POST EXCHANGE PRIVILEGES FOR FORMER POWS

Mr. INOUYE. Mr. President, today I am reintroducing legislation to
enable those former prisoners of war who have been separated honorably
from their respective services and who have been rated as having a 30
percent service-connected disability to have the use of both the
military commissary and post exchange privileges. While I realize it is
impossible to adequately compensate one who has endured long periods of
incarceration at the hands of our nation's enemies, I do feel this
gesture is both meaningful and important to those concerned. It also
serves as a reminder that our nation has not forgotten their
sacrifices.
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. 43

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

SECTION 1. USE OF COMMISSARY AND EXCHANGE STORES BY CERTAIN
DISABLED FORMER PRISONERS OF WAR.

(a) In General.--Chapter 54 of title 10, United States
Code, is amended by inserting after section 1064 the
following new section:

``Sec. 1064a. Use of commissary and exchange stores by
certain disabled former prisoners of war

``(a) In General.--Under regulations prescribed by the
Secretary of Defense, former prisoners of war described in
subsection (b) may use commissary and exchange stores.
``(b) Covered Individuals.--Subsection (a) applies to any
former prisoner of war who--
``(1) separated from active duty in the armed forces under
honorable conditions; and
``(2) has a service-connected disability rated by the
Secretary of Veterans Affairs at 30 percent or more.
``(c) Definitions.--In this section:
``(1) The term `former prisoner of war' has the meaning
given that term in section 101(32) of title 38.
``(2) The term `service-connected' has the meaning given
that term in section 101(16) of title 38.''.
(b) Clerical Amendment.--The table of sections at the
beginning of such chapter is amended by inserting after the
item relating to section 1064 the following new item:

``1064a. Use of commissary and exchange stores by certain disabled
former prisoners of war.''.
______

By Mr. INOUYE:
S. 44. A bill to amend title 10, United States Code, to increase the
grade provided for the heads of the nurse corps of the Armed Forces; to
the Committee on Armed Services.

U.S. Military Chief Nurse Corps Amendment Act of 2001

Mr. INOUYE. Mr. President, today I introduce an amendment that would
change the existing law regarding the designated position and grade for
the Chief Nurses of the United States Army, the United States Navy, and
the United States Air Force. Currently, the Chief Nurses of these three
branches of the military are only one-star general officer grades; this
law would change the current grade to Major General in the Army and Air
Force, and Rear Admiral (upper half) in the Navy.
Our military Chief Nurses have a tremendous responsibility--their
scope of duties include peacetime and wartime health care doctrine, and
standards and policy for all nursing personnel within their respective
branches. They are responsible for thousands of Army, Navy, and Air
Force officer and enlisted nursing personnel in the active, reserve,
and guard components of the military. This level of responsibility
certainly supports the need to change the grade for the Chief Nurses,
which would ensure that they have an appropriate voice in Defense
Health Program executive management.
Organizations are best served when the leadership is composed of a
mix of specialties--of equal rank--bring their unique talents to the
policy setting and decision-making process. I believe it is time to
ensure that military health care organizations utilize the expertise
and unique contributions of the military Chief Nurses.

[[Page S319]]

Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 44

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

SECTION 1. INCREASED GRADE FOR HEADS OF NURSE CORPS.

(a) Army.--Section 3069(b) of title 10, United States Code,
is amended by striking ``brigadier general'' in the second
sentence and inserting ``major general''.
(b) Navy.--The first sentence of section 5150(c) of such
title is amended--
(1) by inserting ``rear admiral (upper half) in the case of
an officer in the Nurse Corps or'' after ``for promotion to
the grade of''; and
(2) by inserting ``in the case of an officer in the Medical
Service Corps'' after ``rear admiral (lower half)''.
(c) Air Force.--Section 8069(b) of such title is amended by
striking ``brigadier general'' in the second sentence and
inserting ``major general''.
______

By Mr. INOUYE:
S. 45. A bill to amend title 5, United States Code, to require the
issuance of a prisoner-of-war medal to civilian employees of the
Federal Government who are forcibly detailed or interred by an enemy
government or a hostile force under wartime conditions; to the
Committee on Governmental Affairs.

Prisoner of War Medal

Mr. INOUYE. Mr. President, all too often we find that our nation's
civilian employees of our federal government who have been forcibly
detained or interred by a hostile government do not receive the
recognition they deserve. My bill would correct this inequity and
provide a prisoner of war medal for such citizens.
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. 45

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

SECTION 1. PRISONER-OF-WAR MEDAL FOR CIVILIAN EMPLOYEES OF
THE FEDERAL GOVERNMENT.

(a) Authority To Issue Prisoner-of-War Medal.--(1) Subpart
A of part III of title 5, United States Code, is amended by
inserting after chapter 23 the following new chapter:

``CHAPTER 25--MISCELLANEOUS AWARDS

``Sec.
``2501. Prisoner-of-war medal: issue.

``Sec. 2501. Prisoner-of-war medal: issue

``(a) The President shall issue a prisoner-of-war medal to
any person who, while serving in any capacity as an officer
or employee of the Federal Government, was forcibly detained
or interned, not as a result of the willful misconduct of
such person--
``(1) by an enemy government or its agents, or a hostile
force, during a period of war; or
``(2) by a foreign government or its agents, or a hostile
force, during a period other than a period of war in which
such person was held under circumstances that the President
finds to have been comparable to the circumstances under
which members of the armed forces have generally been
forcibly detained or interned by enemy governments during
periods of war.
``(b) The prisoner-of-war medal shall be of appropriate
design, with ribbons and appurtenances.
``(c) Not more than one prisoner-of-war medal may be issued
to a person under this section or section 1128 of title 10.
However, for each succeeding service that would otherwise
justify the issuance of such a medal, the President (in the
case of service referred to in subsection (a) of this
section) or the Secretary concerned (in the case of service
referred to in section 1128(a) of title 10) may issue a
suitable device to be worn as determined by the President or
the Secretary, as the case may be.
``(d) For a person to be eligible for issuance of a
prisoner-of-war medal, the conduct of the person must have
been honorable for the period of captivity that serves as the
basis for the issuance.
``(e) If a person dies before the issuance of a prisoner-
of-war medal to which he is entitled, the medal may be issued
to the person's representative, as designated by the
President.
``(f) Under regulations to be prescribed by the President,
a prisoner-of-war medal that is lost, destroyed, or rendered
unfit for use without fault or neglect on the part of the
person to whom it was issued may be replaced without charge.
``(g) In this section, the term `period of war' has the
meaning given that term in section 101(11) of title 38.''.
(2) The table of chapters at the beginning of part III of
such title is amended by inserting after the item relating to
chapter 23 the following new item:

``25. Miscellaneous Awards..................................2501''.....

(b) Applicability.--Section 2501 of title 5, United States
Code, as added by subsection (a), applies with respect to any
person who, after April 5, 1917, is forcibly detained or
interned as described in subsection (a) of that section.
______

By Mr. INOUYE:
S. 46. A bill to amend chapter 81 of title 5, United States Code, to
authorize the use of clinical social workers to conduct evaluations to
determine work-related emotional and mental illnesses; to the Committee
on Governmental Affairs.

clinical social workers' recognition act of 2001

Mr. INOUYE. Mr. President, today I rise to introduce the Clinical
Social Workers' Recognition Act of 2001 to correct a continuing problem
in the Federal Employees Compensation Act. This bill will also provide
clinical social workers the recognition they deserve as independent
providers of quality mental health care services.
Clinical social workers are authorized to independently diagnose and
treat mental illnesses through public and private health insurance
plans across the nation. However, Title V, United States Code, does not
permit the use of mental health evaluations conducted by clinical
social workers for use as evidence in determining workers' compensation
claims brought by federal employees. The bill I am introducing corrects
this problem.
It is a sad irony that federal employees may select a clinical social
worker through their health plans to provide mental health services,
but may not go to this professional for workers' compensation
evaluations. The failure to recognize the validity of evaluations
provided by clinical social workers unnecessarily limits federal
employees' selection of a provider to conduct the workers' compensation
mental health evaluations. Lack of this recognition may well impose an
undue burden on federal employees where clinical social workers are the
only available providers of mental health care.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 46

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 ``Clinical Social Workers'
Recognition Act of 2001''.

SEC. 2. EXAMINATIONS BY CLINICAL SOCIAL WORKERS FOR FEDERAL
WORKER COMPENSATION CLAIMS.

Section 8101 of title 5, United States Code, is amended--
(1) in paragraph (2) by striking ``and osteopathic
practitioners'' and inserting ``osteopathic practitioners,
and clinical social workers''; and
(2) in paragraph (3) by striking ``osteopathic
practitioners'' and inserting ``osteopathic practitioners,
clinical social workers,''.
______

By Mr. INOUYE:
S. 47. A bill to amend the Internal Revenue Code of 1986 to exempt
certain helicopter uses from ticket taxes on transportation by air; to
the Committee on Finance.

Airport and Airway Trust Fund Legislation

Mr. INOUYE. Mr. President, I rise to introduce legislation that would
exempt from the Airport and Airway Trust Fund excise taxes air
transportation by helicopters of individuals and cargo for the purpose
of conducting removal and environmental restoration activities relating
to unexploded ordnance on the island of Kahoolawe.
The Kahoolawe Island Unexploded Ordnance Clearance and Environmental
Restoration Project is authorized under Title X of the Fiscal Year 1994
Department of Defense Appropriations Act. The island of Kahoolawe is
uninhabited, and it served as a bombing range for the Department of
Defense until 1990. The Department of Defense is currently in the
process of cleaning up and restoring Kahoolawe for its eventual return
to the State of Hawaii by 2003.
The Airport and Airway Trust Fund excise taxes help support our
nation's air traffic systems and airport infrastructures. However,
there are no airports or landing zones on Kahoolawe that receive
benefits from the Trust Fund. In addition, the taxes place an undue
burden on the air transportation services provided to the Kahoolawe
Clearance Project. Compared to a normal airline whose aircraft make
fewer

[[Page S320]]

trips per day over much longer distances, the services provided to the
project are very frequent, with many trips over very short distances. I
urge my colleagues to support this measure.
Mr. President, I ask unanimous consent that the full 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. 47

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

SECTION 1. EXEMPTION OF CERTAIN HELICOPTER USES FROM TAXES ON
TRANSPORTATION BY AIR.

(a) In General.--Section 4261 of the Internal Revenue Code
of 1986 (relating to imposition of tax) is amended by
redesignating subsection (i) as subsection (j) and by
inserting after subsection (h) the following new subsection:
``(i) Additional Exemption for Certain Helicopter Uses.--No
tax shall be imposed under this section or section 4271 on
air transportation by helicopter for the purpose of
transporting individuals and cargo to and from sites for the
purpose of conducting removal and environmental restoration
activities relating to unexploded ordnance.''.
(b) Conforming Amendment.--Section 4041(l) of the Internal
Revenue Code of 1986 is amended by striking ``(f) or (g)''
and inserting ``(f), (g), or (i)''.
(c) Effective Date.--The amendments made by this section
shall apply to transportation beginning after June 30, 1997,
and before August 1, 2005.
______

By Mr. INOUYE:
S. 48. A bill to amend the Internal Revenue Code of 1986 to provide
tax relief for the conversion of cooperative housing corporations into
condominiums; to the Committee on Finance.

tax relief for the conversion of cooperative housing corporations into
condominiums

Mr. INOUYE. Mr. President, today I rise to introduce legislation that
would amend the Internal Revenue Code of 1986 to allow Cooperative
Housing Corporations (Co-ops) to convert to condominium forms of
ownership without any immediate tax consequences.
Under current law, a conversion from cooperative shareholding to
condominium ownership is taxable at a corporate level as well as an
individual level. The conversion is treated as a corporate liquidation,
and therefore taxed accordingly. In addition, a capital gains tax is
levied on any increase between the owner's basis in the co-op share
pre-conversion and the market value of the condominium conversion
because the owner is being taxed on a transaction that is nothing more
than a change in the form of ownership. While the Internal Revenue
Service concedes that there are no discernible advantages to society
from the cooperative form of ownership, it does not view federal tax
statutes as having the flexibility to allow co-ops to reorganize freely
as condominiums.
In cooperative housing, real property ownership is vested in a
corporation, with shares of stock for each apartment unit, that are
sold to buyers. The corporation then issues a proprietary lease
entitling the owner of the stock to the use of the unit in perpetuity.
Because the investment is in the form of a share of stock, investors
sometimes lose their entire investment as a result of debt incurred by
the corporation in construction and development. In addition, due to
the structure of a cooperative housing corporation, a prospective
purchaser of shares in the corporation from an existing tenant-
stockholder has difficulty obtaining a mortgage financing for the
purchase. Furthermore, tenant-stockholders of cooperative housing also
encounter difficulties in securing bank loans for the full value of
their investment.
As a result, owners of cooperative housing are increasingly looking
toward conversion to condominium ownership regimes. Condominium
ownership permits each owner of a unit to directly own the unit itself,
eliminating the cooperative housing dilemmas of corporate debt that
supersedes the investment of cooperative housing share owners, and
other financial concerns.
The legislation I introduce today will remove the penalty of double
taxation of the conversion from the cooperative housing to condominium
ownership, and will greatly benefit co-op owners across the nation. I
urge my colleagues to consider and support this measure.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 48

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

SECTION 1. NONRECOGNITION OF GAIN OR LOSS ON DISTRIBUTIONS BY
COOPERATIVE HOUSING CORPORATIONS.

(a) In General.--Section 216(e) of the Internal Revenue
Code of 1986 (relating to distributions by cooperative
housing corporations) is amended to read as follows:
``(e) Distributions by Cooperative Housing Corporations.--
``(1) In general.--Except as provided in regulations--
``(A) no gain or loss shall be recognized to a cooperative
housing corporation on the distribution by such corporation
of a dwelling unit to a stockholder in such corporation if
such distribution is in exchange for the stockholder's stock
in such corporation, and
``(B) no gain or loss shall be recognized to a stockholder
of such corporation on the transfer of such stockholder's
stock in an exchange described in subparagraph (A).
``(2) Basis.--The basis of a dwelling unit acquired in a
distribution to which paragraph (1) applies shall be the same
as the basis of the stock in the cooperative housing
corporation for which it is exchanged, decreased in the
amount of any money received by the taxpayer in such
exchange.''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions after the date of the enactment
of this Act.
______

By Mr. STEVENS:
S. 49. A bill to amend the wetlands regulatory program under the
Federal Water Pollution Control Act to provide credit for the low
wetlands loss rate in Alaska and recognize the significant extent of
wetlands conservation in Alaska, to protect Alaskan property owners,
and to ease the burden on overly regulated Alaskan cities, boroughs,
municipalities, and villages; to the Committee on Environment and
Public Works.

Alaska wetlands conservation act

Mr. STEVENS. Mr. President, I am proud to introduce a piece of
legislation important to my State, the ``Alaska Wetlands Conservation
Act.''
The legislation I submit today is identical to that introduced in the
106th Congress, except for a minor addition relative to silviculture.
The new language simply clarifies the existing exemption for normal
silviculture activities as applied to lands owned by Alaska Native
corporations established pursuant to the Alaska Native Claims
Settlement Act (``ANCSA'')
Congress in enacting the ANCSA intended and expected that Native
timber holdings would be subject to harvesting. In fact, most Native
timber lands are former national forest lands that, at the time of the
enactment of ANCSA in 1971, were part of an ``established'' or
``ongoing'' silviculture program for that forest.
I hope my colleagues will support my State and its Native peoples as
we pursue this legislation.
______

By Mr. INOUYE:
S. 51. A bill to amend title XVIII of the Social Security Act to
remove the restriction that a clinical psychologist or clinical social
worker provide services in a comprehensive outpatient rehabilitation
facility to a patient only under care of a physician; to the Committee
on Finance.

autonomous functioning of clinical psychologists and social workers
under medicare

Mr. INOUYE. Mr. President, today, I rise to introduce legislation to
authorize the autonomous functioning of clinical psychologists and
clinical social workers within the Medicare comprehensive outpatient
rehabilitation facility program.
In my judgment, it is unfortunate that Medicare requires clinical
supervision of the services provided by certain health professionals
and does not allow them to function to the full extent of their state
practice licenses. Those who need the services of outpatient
rehabilitation facilities should have access to a wide range of social
and behavioral science expertise. Clinical psychologists and clinical
social workers are recognized as independent providers of mental health
care services under the Federal Employee Health Benefits Program, the
Civilian Health and Medical Program of the Uniformed Services, the
Medicare (Part B) Program, and numerous private insurance plans. This
legislation will ensure that these qualified professionals achieve the
same recognition

[[Page S321]]

under Medicare comprehensive outpatient rehabilitation facility
program.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 51

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

SECTION 1. REMOVAL OF RESTRICTION THAT A CLINICAL
PSYCHOLOGIST OR CLINICAL SOCIAL WORKER PROVIDE
SERVICES IN A COMPREHENSIVE OUTPATIENT
REHABILITATION FACILITY TO A PATIENT ONLY UNDER
THE CARE OF A PHYSICIAN.

(a) In General.--Section 1861(cc)(2)(E) of the Social
Security Act (42 U.S.C. 1395x(cc)(2)(E)) is amended by
striking ``physician'' and inserting ``physician, except that
a patient receiving qualified psychologist services (as
defined in subsection (ii)) may be under the care of a
clinical psychologist with respect to such services to the
extent permitted under State law and except that a patient
receiving clinical social worker services (as defined in
subsection (hh)(2)) may be under the care of a clinical
social worker with respect to such services to the extent
permitted under State law''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to services provided on or after January 1, 2002.
______

By Mr. INOUYE:
S. 52. A bill to amend title XVIII of the Social Security Act to
provide improved reimbursement for clinical social worker services
under the Medicare Program; to the Committee on Finance.

Clinical Social Worker Act of 2001

Mr. INOUYE. Mr. President, today I am introducing legislation to
amend Title XVIII of the Social Security Act to correct discrepancies
in the reimbursement of clinical social workers covered through
Medicare, Part B. The three proposed changes contained in this
legislation clarify the current payment process for clinical social
workers and establish a reimbursement methodology for the profession
that is similar to other health care professionals reimbursed through
the Medicare program.
First, this legislation sets payment for clinical social worker
services according to a fee schedule established by the Secretary.
Second, it explicitly states that services and supplies furnished by a
clinical social worker are a covered Medicare expense, just as these
services are covered for other mental health professionals in Medicare.
Third, the bill allows clinical social workers to be reimbursed for
services provided to a client who is hospitalized.
Clinical social workers are valued members of our health care
provider network. They are legally regulated in every state of the
nation and are recognized as independent providers of mental health
care throughout the health care system. I believe it is time to correct
the disparate reimbursement treatment of this profession under
Medicare.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.

S. 52

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

SECTION 1. IMPROVED REIMBURSEMENT FOR CLINICAL SOCIAL WORKER
SERVICES UNDER MEDICARE.

(a) In General.--Section 1833(a)(1)(F)(ii) of the Social
Security Act (42 U.S.C. 1395l(a)(1)(F)(ii)) is amended to
read as follows: ``(ii) the amount determined by a fee
schedule established by the Secretary,''.
(b) Definition of Clinical Social Worker Services
Expanded.--Section 1861(hh)(2) of the Social Security Act (42
U.S.C. 1395x(hh)(2)) is amended by striking ``services
performed by a clinical social worker (as defined in
paragraph (1))'' and inserting ``such services and such
services and supplies furnished as an incident to such
services performed by a clinical social worker (as defined in
paragraph (1))''.
(c) Clinical Social Worker Services Not To Be Included in
Inpatient Hospital Services.--Section 1861(b)(4) of the
Social Security Act (42 U.S.C. 1395x(b)(4)) is amended by
striking ``and services'' and inserting ``clinical social
worker services, and services''.
(d) Treatment of Services Furnished in Inpatient Setting.--
Section 1832(a)(2)(B)(iii) of the Social Security Act (42
U.S.C. 1395k(a)(2)(B)(iii)) is amended by striking ``and
services'' and inserting ``clinical social worker services,
and services''.
(e) Effective Date.--The amendments made by this section
shall apply to payments made for clinical social worker
services furnished on or after January 1, 2002.
______

By Mr. INOUYE:
S. 53. A bill to amend title XIX of the Social Security Act to
provide for coverage of services provided by nursing school clinics
under State Medicaid programs; to the Committee on Finance.

Nursing School Clinics Act of 2001

Mr. INOUYE. Mr. President, I rise today to introduce the Nursing
School Clinics Act of 2001. This measure builds on our concerted
efforts to provide access to quality health care for all Americans by
offering grants and incentives for nursing schools to establish primary
care clinics in underserved areas where additional medical services are
most needed. In addition, this measure provides the opportunity for
nursing schools to enhance the scope of student training and education
by providing firsthand clinical experience in primary care facilities.
Primary care clinics administered by nursing schools are university
or nonprofit entity primary care centers developed mainly in
collaboration with university schools of nursing and the communities
they serve. These centers are staffed by faculty and staff who are
nurse practitioners and public health nurses. Students supplement
patient care while receiving preceptorships provided by college of
nursing faculty and primary care physicians, often associated with
academic institutions, who serve as collaborators with nurse
practitioners. To date, the comprehensive models of care provided by
nursing clinics have yielded excellent results, including significantly
fewer emergency room visits, fewer hospital inpatient days, and less
use of specialists, as compared to conventional primary health care.
This bill reinforces the principle of combining health care delivery
in underserved areas with education of advanced practice nurses. To
accomplish these objectives, Title XIX of the Social Security Act would
be amended to designate that the services provided in these nursing
school clinics are reimbursable under Medicaid. The combination of
grants and the provision of Medicaid reimbursement furnishes the
incentives and operational resources to establish the clinics.
In order to meet the increasing challenges of bringing cost-effective
and quality health care to all Americans, we must consider and debate
various proposals, both large and small. Most importantly, we must
approach the issue of health care with creativity and determination,
ensuring that all reasonable avenues are pursued. Nurses have always
been an integral part of health care delivery. The Nursing School
Clinics Act of 2001 recognizes the central role they can perform as
care givers to the medically underserved.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record as follows:

S. 53

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

SECTION 1. MEDICAID COVERAGE OF SERVICES PROVIDED BY NURSING
SCHOOL CLINICS.

(a) In General.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d(a)) is amended--
(1) in paragraph (26), by striking ``and'' at the end;
(2) by redesignating paragraph (27) as paragraph (28); and
(3) by inserting after paragraph (26), the following new
paragraph:
``(27) nursing school clinic services (as defined in
subsection (x)) furnished by or under the supervision of a
nurse practitioner or a clinical nurse specialist (as defined
in section 1861(aa)(5)), whether or not the nurse
practitioner or clinical nurse specialist is under the
supervision of, or associated with, a physician or other
health care provider; and''.
(b) Nursing School Clinic Services Defined.--Section 1905
of the Social Security Act (42 U.S.C. 1396d) is amended by
adding at the end the following new subsection:
``(x) The term `nursing school clinic services' means
services provided by a health care facility operated by an
accredited school of nursing which provides primary care,
long-term care, mental health counseling, home health
counseling, home health care, or other health care services
which are within the scope of practice of a registered
nurse.''.
(c) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of
the Social Security Act

[[Page S322]]

(42 U.S.C. 1396a(a)(10)(C)(iv)) is amended by inserting ``and
(27)'' after ``(24)''.
(d) Effective Date.--The amendments made by this section
shall be effective with respect to payments made under a
State plan under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) for calendar quarters commencing with
the first calendar quarter beginning after the date of
enactment of this Act.
______

By Mr. INOUYE:
S. 58. A bill to recognize the organization known as the National
Academies of Practice; to be Committee on the Judiciary.

National Academies of Practice Recognition Act of 2001

Mr. INOUYE. Mr. President, today I am introducing legislation that
would provide a federal charter for the National Academies of Practice.
This organization represents outstanding medical professionals who have
made significant contributions to the practice of applied psychology,
medicine, dentistry, nursing, optometry, podiatry, social work, and
veterinary medicine. When fully established, each of the nine academies
will possess 100 distinguished practitioners selected by their peers.
This umbrella organization will be able to provide the Congress of the
United States and the executive branch with considerable health policy
expertise, especially from the perspective of those individuals who are
in the forefront of actually providing health care.
As we continue to grapple with the many complex issues surrounding
the delivery of health care services, it is clearly in our best
interest to ensure that the Congress has direct and immediate access to
the recommendations of an interdisciplinary body of health care
practitioners.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 58

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

SECTION 1. CHARTER.

The National Academies of Practice organized and
incorporated under the laws of the District of Columbia, is
hereby recognized as such and is granted a Federal charter.

SEC. 2. CORPORATE POWERS.

The National Academies of Practice (referred to in this Act
as the ``corporation'') shall have only those powers granted
to it through its bylaws and articles of incorporation filed
in the State in which it is incorporated and subject to the
laws of such State.

SEC. 3. PURPOSES OF CORPORATION.

The purposes of the corporation shall be to honor persons
who have made significant contributions to the practice of
applied psychology, dentistry, medicine, nursing, optometry,
osteopathy, podiatry, social work, veterinary medicine, and
other health care professions, and to improve the practices
in such professions by disseminating information about new
techniques and procedures.

SEC. 4. SERVICE OF PROCESS.

With respect to service of process, the corporation shall
comply with the laws of the State in which it is incorporated
and those States in which it carries on its activities in
furtherance of its corporate purposes.

SEC. 5. MEMBERSHIP.

Eligibility for membership in the corporation and the
rights and privileges of members shall be as provided in the
bylaws of the corporation.

SEC. 6. BOARD OF DIRECTORS; COMPOSITION; RESPONSIBILITIES.

The composition and the responsibilities of the board of
directors of the corporation shall be as provided in the
articles of incorporation of the corporation and in
conformity with the laws of the State in which it is
incorporated.

SEC. 7. OFFICERS OF THE CORPORATION.

The officers of the corporation and the election of such
officers shall be as provided in the articles of
incorporation of the corporation and in conformity with the
laws of the State in which it is incorporated.

SEC. 8. RESTRICTIONS.

(a) Use of Income and Assets.--No part of the income or
assets of the corporation shall inure to any member, officer,
or director of the corporation or be distributed to any such
person during the life of this charter. Nothing in this
subsection shall be construed to prevent the payment of
reasonable compensation to the officers of the corporation or
reimbursement for actual necessary expenses in amounts
approved by the board of directors.
(b) Loans.--The corporation shall not make any loan to any
officer, director, or employee of the corporation.
(c) Political Activity.--The corporation, any officer, or
any director of the corporation, acting as such officer or
director, shall not contribute to, support, or otherwise
participate in any political activity or in any manner
attempt to influence legislation.
(d) Issuance of Stock and Payment of Dividends.--The
corporation shall have no power to issue any shares of stock
nor to declare or pay any dividends.
(e) Claims of Federal Approval.--The corporation shall not
claim congressional approval or Federal Government authority
for any of its activities.

SEC. 9. LIABILITY.

The corporation shall be liable for the acts of its
officers and agents when acting within the scope of their
authority.

SEC. 10. MAINTENANCE AND INSPECTION OF BOOKS AND RECORDS.

(a) Books and Records of Account.--The corporation shall
keep correct and complete books and records of account and
shall keep minutes of any proceeding of the corporation
involving any of its members, the board of directors, or any
committee having authority under the board of directors.
(b) Names and Addresses of Members.--The corporation shall
keep at its principal office a record of the names and
addresses of all members having the right to vote in any
proceeding of the corporation.
(c) Right To Inspect Books and Records.--All books and
records of the corporation may be inspected by any member
having the right to vote, or by any agent or attorney of such
member, for any proper purpose, at any reasonable time.
(d) Application of State Law.--Nothing in this section
shall be construed to contravene any applicable State law.

SEC. 11. ANNUAL REPORT.

The corporation shall report annually to the Congress
concerning the activities of the corporation during the
preceding fiscal year. The report shall not be printed as a
public document.

SEC. 12. RESERVATION OF RIGHT TO AMEND OR REPEAL CHARTER.

The right to alter, amend, or repeal this Act is expressly
reserved to the Congress.

SEC. 13. DEFINITION.

In this Act, the term ``State'' includes the District of
Columbia, the Commonwealth of Puerto Rico, and the
territories and possessions of the United States.

SEC. 14. TAX-EXEMPT STATUS.

The corporation shall maintain its status as an
organization exempt from taxation as provided in the Internal
Revenue Code of 1986 or any corresponding similar provision.

SEC. 15. TERMINATION.

If the corporation fails to comply with any of the
restrictions or provisions of this Act the charter granted by
this Act shall terminate.
______

By Mr. INOUYE:
S. 59. A bill to allow the psychiatric or psychological examinations
required under chapter 313 of title 18, United States Code, relating to
offenders with mental disease or defect, to be conducted by a clinical
social worker; to the Committee on the Judiciary.

Psychiatric and Psychological Examinations Act of 2001

Mr. INOUYE. Mr. President, today I introduce legislation to amend
Title 18 of the United States Code to allow our nation's clinical
social workers to use their mental health expertise on behalf of the
federal judiciary by conducting psychological and psychiatric exams.
I feel that the time has come to allow our nation's judicial system
to have access to a wide range of behavioral science and mental health
expertise. I am confident that the enactment of this legislation would
be very much in our nation's best interest.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 59

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

SECTION 1. EXAMINATIONS BY CLINICAL SOCIAL WORKERS.

Section 4247(b) of title 18, United States Code, is
amended, in the first sentence, by striking ``psychiatrist or
psychologist'' and inserting ``psychiatrist, psychologist, or
clinical social worker''.
______

By Mr. INOUYE:
S. 61. A bill to restore the traditional day of observance of
Memorial Day; to the Committee on the Judiciary.

Restoration of Memorial Day to May 30

Mr. INOUYE. Mr. President, in our effort to accommodate many
Americans by making Memorial Day the last Monday in May, we have lost
sight of the significance of this day to our nation. My bill would
restore Memorial Day to May 30 and authorize our flag to fly at half
mast on that day. In addition, this legislation would authorize the
President to issue a proclamation designating Memorial Day and Veterans
Day as days for prayer and ceremonies. This legislation would help
restore the recognition our veterans deserve for the sacrifices they
have made on behalf of our nation.

[[Page S323]]

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. 61

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

SECTION 1. RESTORATION OF TRADITIONAL DAY OF OBSERVANCE OF
MEMORIAL DAY.

(a) Designation of Legal Public Holiday.--Section 6103(a)
of title 5, United States Code, is amended in the item
relating to Memorial Day by striking ``the last Monday in
May.'' and inserting ``May 30.''.
(b) Observances and Ceremonies.--Section 116 of title 36,
United States Code, is amended--
(1) in subsection (a), by striking ``The last Monday in
May'' and inserting ``May 30''; and
(2) in subsection (b)--
(A) by striking ``and'' at the end of paragraph (3);
(B) by redesignating paragraph (4) as paragraph (5); and
(C) by inserting after paragraph (3) the following new
paragraph (4):
``(4) calling on the people of the United States to observe
Memorial Day as a day of ceremonies for showing respect for
American veterans of wars and other military conflicts;
and''.
(c) Display of Flag.--Section 6(d) of title 4, United
States Code, is amended by striking ``the last Monday in
May;'' and inserting ``May 30;''.
______

By Mr. INOUYE:
S. 62. A bill to amend title 38, United States Code, to revise
certain provisions relating to the appointment of professional
psychologists in the Veterans Health Administration, and for other
purposes; to the Committee on Veterans' Affairs.

veteran's health administration act of 2001

Mr. INOUYE. Mr. President, I introduce legislation today to amend
Chapter 74 of Title 38, United States Code, to revise certain
provisions relating to the appointment of clinical and professional
psychologists in the Veterans Health Administration (VHA). The VHA has
a long history of maintaining a staff of the very best health care
professionals to provide care to those men and women who have served
our country in the Armed Forces.
Recently, a distressing situation regarding the care of our veterans
has come to my attention: the recruiting and retention of psychologists
in the VHA of the Department of Veterans Affairs has become a
significant problem.
The Congress has recognized the important contribution of the
behavioral sciences in the treatment of several conditions afflicting a
significant portion of our veterans. Programs related to homelessness,
substance abuse, and post traumatic stress disorder (PTSD) have
received funding from the Congress in recent years.
Psychologists, as behavioral science experts, are essential to the
successful implementation of these programs. Consequently, the high
vacancy and turnover rates for psychologists in the VHA might seriously
jeopardize these programs and will negatively impact overall patient
care in the VHA.
Recruitment of psychologists by the VHA is hindered by a number of
factors including a pay scale that is not commensurate with private
sector rates together with a low number of clinical and professional
psychologists appearing on the register of the Office of Personnel
Management (OPM). Most new hires have no post-doctoral experience, and
are hired immediately after a VHA internship. Recruitment, when
successful, takes up to sic months or longer.
Retention of psychologists in the VHA system poses an even more
significant problem. I have been informed that almost 40 percent of VHA
psychologists have five years or less of post-doctoral experience.
Psychologists leave the VHA system after five years because they have
almost reached peak levels for salary and professional advancement.
Under the present system, psychologists cannot be recognized, or
appropriately compensated, for excellence or for taking on additional
responsibilities such as running treatment programs.
In effect, the current system for hiring psychologists in the VHA
supports mediocrity, not excellence and mastery. Our veterans with
behavioral and mental health disorders deserve better psychological
care from more experienced professionals than they are now receiving.
Currently, psychologists are the only doctoral level health care
providers in the VHA who are not included in Title 38. This is without
question a significant factor in the recruitment and retention
difficulties that I have mentioned. Title 38 appointment authority for
psychologists would help ameliorate the recruitment and retention
problems. The length of time needed to recruit psychologists could be
shortened by eliminating the requirement for applicants to be rated by
the OPM. This would also encourage the recruitment of applicants who
are not recent VHA interns by reducing the amount of time between
identifying a desirable applicant and being able to offer that
applicant a position.
It is expected that problems in retention will be greatly alleviated
by the implementation of a Title 38 system that offers financial
incentives for psychologists to pursue professional development.
Achievements that would merit salary increases include such activities
as assuming supervisory responsibilities for clinical programs,
implementing innovative clinical treatments that improve the
effectiveness and efficiency of patient care, making significant
contributions to the science of psychology, earning the ABPP diplomate
state, and becoming a Fellow of the American Psychological Association.
The addition of psychologists to Title 38, as proposed by this
amendment, would provide relief for the retention and recruitment
issues and enhance the quality of care for our veterans and their
families.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 62

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

SECTION 1. REVISION OF AUTHORITY RELATING TO APPOINTMENT OF
PROFESSIONAL PSYCHOLOGISTS IN THE VETERANS
HEALTH ADMINISTRATION.

(a) In General.--Section 7401(3) of title 38, United States
Code, is amended by striking ``who hold diplomas as
diplomates in psychology from an accrediting authority
approved by the Secretary''.
(b) Certain Other Appointments.--Section 7405(a) of such
title is amended--
(1) in paragraph (1)(B), by striking ``Certified or'' and
inserting ``Professional psychologists, certified or''; and
(2) in paragraph (2)(B), by striking ``Certified or'' and
inserting ``Professional psychologists, certified or''.
(c) Effective Date.--The amendments made by subsections (a)
and (b) shall take effect on the date of the enactment of
this Act.
(d) Appointment Requirement.--Notwithstanding any other
provision of law, the Secretary of Veterans Affairs shall
begin to make appointments of professional psychologists in
the Veterans Health Administration under section 7401(3) of
title 38, United States Code (as amended by subsection (a)),
not later than 1 year after the date of the enactment of this
Act.
______

By Mr. INOUYE:
S. 63. A bill for the relief of Donald C. Pence; to the Committee on
Veterans' Affairs.

for the relief of donald c. pence

Mr. INOUYE. Mr. President, today I am introducing a private relief
bill on behalf of Donald C. Pence of Stanford, North Carolina, for
compensation for the failure of the Department of Veterans Affairs to
pay dependency and indemnity compensation to Kathryn E. Box, the now-
deceased mother of Donald C. Pence. It is rare that a federal agency
admits a mistake. In this case, the Department of Veterans Affairs has
admitted that a mistake was made and explored ways to permit payment
under the law, including equitable relief, but has found no provisions
authorizing the Department to release the remaining benefits that were
unpaid to Mrs. Box at the time of her death. My bill would correct this
injustice, and I urge my colleagues to support this measure.
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. 63

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

SECTION 1. RELIEF OF DONALD C. PENCE.

(a) Relief.--The Secretary of the Treasury shall pay, out
of any moneys in the Treasury

[[Page S324]]

not otherwise appropriated, to Donald C. Pence, of Sanford,
North Carolina, the sum of $31,128 in compensation for the
failure of the Department of Veterans Affairs to pay
dependency and indemnity compensation to Kathryn E. Box, the
now-deceased mother of Donald C. Pence, for the period
beginning on July 1, 1990, and ending on March 31, 1993.
(b) Limitation on Fees.--Not more than a total of 10
percent of the payment authorized by subsection (a) may be
paid to or received by agents or attorneys for services
rendered in connection with obtaining such payment, any
contract to the contrary notwithstanding. Any person who
violates this subsection shall be fined not more than $1,000.
______

By Mr. INOUYE:
S. 65. A bill to amend title VII of the Public Health Service Act to
ensure that social work students or social work schools are eligible
for support under the certain programs to assist individuals in
pursuing health careers and programs of grants for training projects in
geriatrics, an to establish a social work training program; to the
Committee on Health, Education, Labor, and Pensions.

Amendment to Title VII of the Public Health Service Act

Mr. INOUYE. Mr. President, on behalf of our nation's clinical social
workers, I am introducing legislation to amend the Public Health
Service Act. This legislation would (1) establish a new social work
training program; (2) ensure that social work students are eligible for
support under the Health Careers Opportunity Program; (3) provide
social work schools with eligibility for support under the Minority
Centers of Excellence programs; (4) permit schools offering degrees in
social work to obtain grants for training projects in geriatrics; and
(5) ensure that social work is recognized as a profession under the
Public Health Maintenance Organization (HMO) Act.
Despite the impressive range of services social workers provide to
people of this national, few federal programs exit to the provide
opportunities for social work training in health and mental health
care. This legislation would (1) provide funding for existing social
work training programs or fellowships for individuals who plan to
specialize in, practice, or teach social work; (2) help disadvantaged
students earn graduate degrees in social work with a concentration in
health or mental health; (3) provide new resources and opportunities in
social work training for minorities; and (4) encourage schools of
social work to expand programs in geriatrics.
Social workers have long provided quality mental health services to
our citizens and continue to be at the forefront of establishing
innovative programs to service our disadvantaged populations. I believe
it is important to ensure that the special expertise social workers
posses continue to be available to the citizens of this nation. This
bill, by providing financial assistance to schools of social work and
social work students, acknowledges the long historic and critical
importance of the services provided by social work professionals. I
believe it is time to provide them with the cognition they deserve.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record as follows:

S. 65

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

SECTION 1. SOCIAL WORK STUDENTS.

(a) Health Professions School.--Section 736(g)(1)(A) of the
Public Health Service Act (42 U.S.C. 293(g)(1)(A)) is amended
by striking ``graduate program in behavioral or mental
health'' and inserting ``graduate program in behavioral or
mental health including a school offering graduate programs
in clinical social work, or programs in social work''.
(b) Scholarships, Generally.--Section 737(d)(1)(A) of the
Public Health Service Act (42 U.S.C. 293a(d)(1)(A)) is
amended by striking ``mental health practice'' and inserting
``mental health practice including graduate programs in
clinical psychology, graduate programs in clinical social
work, or programs in social work''.
(c) Faculty Positions.--Section 738(a)(3) of the Public
Health Service Act (42 U.S.C. 293b(a)(3)) is amended by
striking ``offering graduate programs in behavioral and
mental health'' and inserting ``offering graduate programs in
behavioral and mental health including graduate programs in
clinical psychology, graduate programs in clinical social
work, or programs in social work''.

SEC. 2. GERIATRICS TRAINING PROJECTS.

Section 753(b)(1) of the Public Health Service Act (42
U.S.C. 294c(b)(1)) is amended by inserting ``schools offering
degrees in social work,'' after ``teaching hospitals,''.

SEC. 3. SOCIAL WORK TRAINING PROGRAM.

Subpart 2 of part E of title VII of the Public Health
Service Act (42 U.S.C. 295 et seq.) is amended--
(1) by redesignating section 770 as section 770A;
(2) by inserting after section 769, the following:

``SEC. 770. SOCIAL WORK TRAINING PROGRAM.

``(a) Training Generally.--The Secretary may make grants
to, or enter into contracts with, any public or nonprofit
private hospital, school offering programs in social work, or
to or with a public or private nonprofit entity (which the
Secretary has determined is capable of carrying out such
grant or contract)--
``(1) to plan, develop, and operate, or participate in, an
approved social work training program (including an approved
residency or internship program) for students, interns,
residents, or practicing physicians;
``(2) to provide financial assistance (in the form of
traineeships and fellowships) to students, interns,
residents, practicing physicians, or other individuals, who
are in need thereof, who are participants in any such
program, and who plan to specialize or work in the practice
of social work;
``(3) to plan, develop, and operate a program for the
training of individuals who plan to teach in social work
training programs; and
``(4) to provide financial assistance (in the form of
traineeships and fellowships) to individuals who are
participants in any such program and who plan to teach in a
social work training program.
``(b) Academic Administrative Units.--
``(1) In general.--The Secretary may make grants to or
enter into contracts with schools offering programs in social
work to meet the costs of projects to establish, maintain, or
improve academic administrative units (which may be
departments, divisions, or other units) to provide clinical
instruction in social work.
``(2) Preference in making awards.--In making awards of
grants and contracts under paragraph (1), the Secretary shall
give preference to any qualified applicant for such an award
that agrees to expend the award for the purpose of--
``(A) establishing an academic administrative unit for
programs in social work; or
``(B) substantially expanding the programs of such a unit.
``(c) Duration of Award.--The period during which payments
are made to an entity from an award of a grant or contract
under subsection (a) may not exceed 5 years. The provision of
such payments shall be subject to annual approval by the
Secretary of the payments and subject to the availability of
appropriations for the fiscal year involved to make the
payments.
``(d) Funding.--
``(1) Authorization of appropriations.--For the purpose of
carrying out this section, there is authorized to be
appropriated $10,000,000 for each of the fiscal years 2002
through 2004.
``(2) Allocation.--Of the amounts appropriated under
paragraph (1) for a fiscal year, the Secretary shall make
available not less than 20 percent for awards of grants and
contracts under subsection (b).''; and
(3) in section 770A (as so redesignated) by inserting
``other than section 770,'' after ``carrying out this
subpart,''.

SEC. 4. CLINICAL SOCIAL WORKER SERVICES.

Section 1302 of the Public Health Service Act (42 U.S.C.
300e-1) is amended--
(1) in paragraphs (1) and (2), by inserting ``clinical
social worker,'' after ``psychologist,'' each place it
appears;
(2) in paragraph (4)(A), by striking ``and psychologists''
and inserting ``psychologists, and clinical social workers'';
and
(3) in paragraph (5), by inserting ``clinical social
work,'' after ``psychology,''.
______

By Mr. INOUYE:
S. 66. A bill to amend title VII of the Public Health Service Act to
revise and extend certain programs relating to the education of
individuals as health professionals, and for other purposes; to the
Committee on Health, Education, Labor, and Pensions.

Physical Therapy and Occupational Therapy Education Act of 2001

Mr. INOUYE. Mr. President, today I rise to introduce the Physical and
Occupational Therapy Education Act of 2001. This legislation will
increase educational opportunities for physical therapy and
occupational therapy practitioners in order to meet the growing demand
for the valuable services they provide in our communities.
Several factors contribute to the present need for federal support in
this area. The rapid aging of our nation's population, the demands of
the AIDS crisis, increasing emphasis on health promotion and disease
prevention, and the growth of home health care has increased the demand
for physical and occupational therapy services. This demand has
exceeded our ability to educate an adequate number of physical
therapists and occupational therapists.

[[Page S325]]

In addition, technological advances are allowing injured and disabled
individuals to survive conditions that would have proven fatal in past
years.
An inadequate number of physical therapists has led to an increased
reliance on foreign-educated, non-immigrant temporary workers (H-1B
visa holders). The U.S. Commission on Immigration Reform has identified
physical therapy and occupational therapy as having the highest number
of H-1B visa holders in the United States, second only to computer
specialists.
In addition to the shortage of practitioners, a shortage of faculty
impedes the expansion of established education programs. The critical
shortage of doctoral-prepared occupational therapists and physical
therapists has resulted in a depleted pool of potential faculty. This
bill would assist in the development of qualified faculty by giving
preference to grant applicants seeking to develop and expand post-
professional programs for the advanced training of physical and
occupational therapists.
The legislation I introduce today would provide necessary assistance
to physical and occupational therapy programs throughout the country.
The investment we make will help reduce America's dependence on foreign
labor and create highly-skilled, high-wage employment opportunities for
American citizens.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 66

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 ``Physical Therapy and
Occupational Therapy Education Act of 2001''.

SEC. 2. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

Subpart 2 of part E of title VII of the Public Health
Service Act (42 U.S.C. 295 et seq.) is amended by inserting
after section 769, the following:

``SEC. 769A. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

``(a) In General.--The Secretary may make grants to, and
enter into contracts with, programs of physical therapy and
occupational therapy for the purpose of planning and
implementing projects to recruit and retain faculty and
students, develop curriculum, support the distribution of
physical therapy and occupational therapy practitioners in
underserved areas, or support the continuing development of
these professions.
``(b) Preference in Making Grants.--In making grants under
subsection (a), the Secretary shall give preference to
qualified applicants that seek to educate physical therapists
or occupational therapists in rural or urban medically
underserved communities, or to expand post-professional
programs for the advanced education of physical therapy or
occupational therapy practitioners.
``(c) Peer Review.--Each peer review group under section
799(f) that is reviewing proposals for grants or contracts
under subsection (a) shall include not fewer than 2 physical
therapists or occupational therapists.
``(d) Report to Congress.--
``(1) In general.--The Secretary shall prepare a report
that--
``(A) summarizes the applications submitted to the
Secretary for grants or contracts under subsection (a);
``(B) specifies the identity of entities receiving the
grants or contracts; and
``(C) evaluates the effectiveness of the program based upon
the objectives established by the entities receiving the
grants or contracts.
``(2) Date certain for submission.--Not later than February
1, 2003, the Secretary shall submit the report prepared under
paragraph (1) to the Committee on Commerce and the Committee
on Appropriations of the House of Representatives, the
Committee on Health, Education, Labor, and Pensions and the
Committee on Appropriations of the Senate.
``(e) Authorization of Appropriations.--For the purpose of
carrying out this section, there is authorized to be
appropriated $3,000,000 for each of the fiscal years 2002
through 2005.''.
______

By Mr. INOUYE:
S. 67. A bill to amend title VII of the Public Health Service Act to
establish a psychology post-doctoral fellowship program, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.

Public Health Service Act of 2001

Mr. INOUYE. Mr. President, I am introducing legislation today to
amend Title VII of the Public Health Service Act to establish a
psychology post-doctoral program.
Psychologists have made a unique contribution in reaching out to the
nation's medically underserved populations. Expertise in behavioral
science is useful in addressing grave concerns such as violence,
addiction, mental illness, adolescent and child behavioral disorders,
and family disruption. Establishment of a psychology post-doctoral
program could be an effective way to find solutions to these issues.
Similar programs supporting additional, specialized training in
traditionally underserved settings have been successful in retaining
participants to serve the same populations. For example, mental health
professionals who have participated in these specialized federally
funded programs have tended not only to meet their repayment
obligations, but have continued to work in the public sector or with
the underserved.
While a doctorate in psychology provides broad-based knowledge and
mastery in a wide variety of clinical skills, specialized post-doctoral
fellowship programs help to develop particular diagnostic and treatment
skills required to respond effectively to underserved populations. For
example, what appears to be poor academic motivation in a child
recently relocated from Southeast Asia might actually reflect a
cultural value of reserve rather than a disinterest in academic
learning. Specialized assessment skills enable the clinician to
initiate effective treatment.
Domestic violence poses a significant public health problem and is
not just a problem for the criminal justice system. Violence against
women results in almost 100,000 days of hospitalization, 30,000
emergency room visits and 40,000 visits to physicians each year. Rates
of child and spouse abuse in rural areas are particularly high, as are
the rates of alcohol abuse and depression in adolescents. A post-
doctoral fellowship program in the psychology of the rural populations
could be of special benefit in addressing these problems.
Given the demonstrated success and effectiveness of specialized
training programs, it is incumbent upon us to encourage participation
in post-doctoral fellowships that respond to the needs of the nation's
underserved.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 67

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

SECTION 1. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

Part C of title VII of the Public Health Service Act (42
U.S.C. 293k et seq.) is amended by adding at the end the
following:

``SEC. 749. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

``(a) In General.--The Secretary shall establish a
psychology post-doctoral fellowship program to make grants to
and enter into contracts with eligible entities to encourage
the provision of psychological training and services in
underserved treatment areas.
``(b) Eligible Entities.--
``(1) Individuals.--In order to receive a grant under this
section an individual shall submit an application to the
Secretary at such time, in such form, and containing such
information as the Secretary shall require, including a
certification that such individual--
``(A) has received a doctoral degree through a graduate
program in psychology provided by an accredited institution
at the time such grant is awarded;
``(B) will provide services in a medically underserved
population during the period of such grant;
``(C) will comply with the provisions of subsection (c);
and
``(D) will provide any other information or assurances as
the Secretary determines appropriate.
``(2) Institutions.--In order to receive a grant or
contract under this section, an institution shall submit an
application to the Secretary at such time, in such form, and
containing such information as the Secretary shall require,
including a certification that such institution--
``(A) is an entity, approved by the State, that provides
psychological services in medically underserved areas or to
medically underserved populations (including entities that
care for the mentally retarded, mental health institutions,
and prisons);
``(B) will use amounts provided to such institution under
this section to provide financial assistance in the form of
fellowships to qualified individuals who meet the
requirements of subparagraphs (A) through (C) of paragraph
(1);
``(C) will not use in excess of 10 percent of amounts
provided under this section to pay

[[Page S326]]

for the administrative costs of any fellowship programs
established with such funds; and
``(D) will provide any other information or assurance as
the Secretary determines appropriate.
``(c) Continued Provision of Services.--Any individual who
receives a grant or fellowship under this section shall
certify to the Secretary that such individual will continue
to provide the type of services for which such grant or
fellowship is awarded for at least 1 year after the term of
the grant or fellowship has expired.
``(d) Regulations.--Not later than 180 days after the date
of enactment of this section, the Secretary shall promulgate
regulations necessary to carry out this section, including
regulations that define the terms `medically underserved
areas' or `medically unserved populations'.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section,
$5,000,000 for each of the fiscal years 2002 through 2004.''.
______

By Mr. INOUYE:
S. 68. A bill to amend title VII of the Public Health Service Act to
make certain graduate programs in professional psychology eligible to
participate in various health professions loan programs; to the
Committee on Health, Education, Labor, and Pensions.

U.S. Public Health Service Act Amendment Act of 2001

Mr. INOUYE. Mr. President, I rise to introduce legislation today to
modify Title VII of the U.S. Public Health Service Act in order to
provide students enrolled in graduate psychology programs with the
opportunity to participate in various health professions loan programs.
Providing students enrolled in graduate psychology programs with
eligibility for financial assistance in the form of loans, loan
guarantees, and scholarships will facilitate a much-needed infusions of
behavioral science expertise into our community of public health,
providers. There is a growing recognition of the valuable contribution
being made by psychologists toward solving some of our nation's most
distressing problems.
The participation of students from all backgrounds and clinical
disciplines is vital to the success of health care training. The Title
VII programs play a significant role in providing financial support for
the recruitment of minorities, women, and individuals from economically
disadvantaged backgrounds. Minority therapists have an advantage in the
provision of critical services to minority populations because often
they can communicate with clients in their own language and cultural
framework. Minority therapists are more likely to work in community
settings where ethnic minority and economically disadvantaged
individuals are most likely to seek care. It is critical that continued
support be provided for the training of individuals who provide health
care services to underserved communities.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 68

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

SECTION 1. PARTICIPATION IN VARIOUS HEALTH PROFESSIONS LOAN
PROGRAMS.

(a) Loan Agreements.--Section 721 of the Public Health
Service Act (42 U.S.C. 292q) is amended--
(1) in subsection (a), by inserting ``, or any public or
nonprofit school that offers a graduate program in
professional psychology'' after ``veterinary medicine'';
(2) in subsection (b)(4), by inserting ``, or to a graduate
degree in professional psychology'' after ``or doctor of
veterinary medicine or an equivalent degree''; and
(3) in subsection (c)(1), by inserting ``, or schools that
offer graduate programs in professional psychology'' after
``veterinary medicine''.
(b) Loan Provisions.--Section 722 of the Public Health
Service Act (42 U.S.C. 292r) is amended--
(1) in subsection (b)(1), by inserting ``, or to a graduate
degree in professional psychology'' after ``or doctor of
veterinary medicine or an equivalent degree'';
(2) in subsection (c), in the matter preceding paragraph
(1), by inserting ``, or at a school that offers a graduate
program in professional psychology'' after ``veterinary
medicine''; and
(3) in subsection (k)--
(A) in the matter preceding paragraph (1), by striking ``or
podiatry'' and inserting ``podiatry, or professional
psychology''; and
(B) in paragraph (4), by striking ``or podiatric medicine''
and inserting ``podiatric medicine, or professional
psychology''.

SEC. 2. GENERAL PROVISIONS.

(a) Health Professions Data.--Section 792(a) of the Public
Health Service Act (42 U.S.C. 295k(a)) is amended by striking
``clinical'' and inserting ``professional''.
(b) Prohibition Against Discrimination on Basis of Sex.--
Section 794 of the Public Health Service Act (42 U.S.C. 295m)
is amended in the matter preceding paragraph (1) by striking
``clinical'' and inserting ``professional''.
(c) Definitions.--Section 799B(1)(B) of the Public Health
Service Act (42 U.S.C. 295p(1)(B)) is amended by striking
``clinical'' each place it appears and inserting
``professional''.
______

By Mr. INOUYE:
S. 69. A bill to amend the Public Health Service Act to provide
health care practitioners in rural areas with training in preventive
health care, including both physical and mental care, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.

rural preventive health care training act of 2001

Mr. INOUYE. Mr. President, I rise today to introduce the Rural
Preventive Health Care Training Act of 2001, a bill that responds to
the dire need of our rural communities for quality health care and
disease prevention programs.
Almost one fourth of Americans live in rural areas and frequently
lack access to adequate physical and mental health care. As many as 21
million of the 34 million people living in undeserved rural areas are
without access to a primary care provider. Even in areas where
providers do exist, there are numerous limits to access, such as
geography, distance, lack of transportation, and lack of knowledge
about available resources. Due to the diversity of rural populations,
language and cultural obstacles are often a factor in the access to
medical care.
Compound these problems with limited financial resources, and the
result is that many Americans living in rural communities go without
vital health care, especially preventive care. Children fail to receive
immunizations and routine checkups. Preventable illnesses and injuries
occur needlessly, and lead to expensive hospitalizations. Early
symptoms of emotional problems and substance abuse go undetected, and
often develop into full-blown disorders.
An Institute of Medicine (IOM) report entitled, ``Reducing Risks for
Mental Disorders; Frontiers for Preventive Intervention Research,''
highlights the benefits of preventive care for all health problems. The
training of health care providers in prevention is crucial in order to
meet the demand for care in underserved areas. Currently, rural health
care providers lack preventive care training opportunities.
Interdisciplinary preventive training of rural health care providers
must be encouraged. Through such training, rural health care providers
can build a strong educational foundation from the behavioral,
biological, and psychological sciences. Interdisciplinary team
prevention training will also facilitate operations at sites with both
health and mental health clinics by facilitating routine consultation
between groups. Emphasizing the mental health disciplines and their
services as part of the health care team will contribute to the overall
health of rural communities.
The Rural Preventive Health Care Training Act of 2001 would implement
the risk-reduction model described in the IOM study. This model is
based on the identification of risk factors and targets specific
interventions for those risk factors.
The human suffering caused by poor health is immeasurable, and places
a huge financial burden on communities, families, and individuals. By
implementing preventive measures to reduce this suffering, the
potential psychological and financial savings are enormous.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 69

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 ``Rural Preventive Health Care
Training Act of 2001''.

SEC. 2. PREVENTIVE HEALTH CARE TRAINING.

Part D of title VII of the Public Health Service Act (42
U.S.C. 294 et seq.) is amended by inserting after section 754
the following:

[[Page S327]]

``SEC. 754A. PREVENTIVE HEALTH CARE TRAINING.

``(a) In General.--The Secretary may make grants to, and
enter into contracts with, eligible applicants to enable such
applicants to provide preventive health care training, in
accordance with subsection (c), to health care practitioners
practicing in rural areas. Such training shall, to the extent
practicable, include training in health care to prevent both
physical and mental disorders before the initial occurrence
of such disorders. In carrying out this subsection, the
Secretary shall encourage, but may not require, the use of
interdisciplinary training project applications.
``(b) Limitation.--To be eligible to receive training using
assistance provided under subsection (a), a health care
practitioner shall be determined by the eligible applicant
involved to be practicing, or desiring to practice, in a
rural area.
``(c) Use of Assistance.--Amounts received under a grant
made or contract entered into under this section shall be
used--
``(1) to provide student stipends to individuals attending
rural community colleges or other institutions that service
predominantly rural communities, for the purpose of enabling
the individuals to receive preventive health care training;
``(2) to increase staff support at rural community colleges
or other institutions that service predominantly rural
communities to facilitate the provision of preventive health
care training;
``(3) to provide training in appropriate research and
program evaluation skills in rural communities;
``(4) to create and implement innovative programs and
curricula with a specific prevention component; and
``(5) for other purposes as the Secretary determines to be
appropriate.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section,
$5,000,000 for each of fiscal years 2002 through 2004.''.
______

By Mr. INOUYE:
S. 70. A bill to amend the Public Health Service Act to provide for
the establishment of a National Center for Social Work Research; to the
Committee on Health, Education, Labor, and Pensions.

national center for social work research

Mr. INOUYE. Mr. President, I rise today to introduce legislation to
amend the Public Health Service Act for the establishment of a National
Center for Social Work Research.
Social workers provide a multitude of health care delivery services
throughout America to our children, families, the elderly, and persons
suffering from various forms of abuse and neglect.
The purpose of this center is to support and disseminate information
about basic and clinical social work research, and training, with
emphasis on service to underserved and rural populations.
While the federal government provides funding for various social work
research activities through the National Institutes of Health and other
federal agencies, there presently is no coordination or direction of
these critical activities and no overall assessment of needs and
opportunities for empirical knowledge development. The establishment of
a Center for Social Work Research would result in improved behavioral
and mental health care outcomes for our nation's children, families,
the elderly, and others.
In order to meet the increasing challenges of bringing cost-
effective, research-based, quality health care to all Americans, we
must recognize the important contributions of social work researchers
to health care delivery and the central role that the Center for Social
Work can provide in facilitating their work.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 70

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 ``National Center for Social
Work Research Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) social workers focus on the improvement of individual
and family functioning and the creation of effective health
and mental health prevention and treatment interventions in
order for individuals to become more productive members of
society;
(2) social workers provide front line prevention and
treatment services in the areas of school violence, aging,
teen pregnancy, child abuse, domestic violence, juvenile
crime, and substance abuse, particularly in rural and
underserved communities; and
(3) social workers are in a unique position to provide
valuable research information on these complex social
concerns, taking into account a wide range of social,
medical, economic and community influences from an
interdisciplinary, family-centered and community-based
approach.

SEC. 3. ESTABLISHMENT OF NATIONAL CENTER FOR SOCIAL WORK
RESEARCH.

(a) In General.--Section 401(b)(2) of the Public Health
Service Act (42 U.S.C. 281(b)(2)) is amended by adding at the
end the following:
``(G) The National Center for Social Work Research.''.
(b) Establishment.--Part E of title IV of the Public Health
Service Act (42 U.S.C. 287 et seq.) is amended by adding at
the end the following:

``Subpart 6--National Center for Social Work Research

``SEC. 485G. PURPOSE OF CENTER.

``The general purpose of the National Center for Social
Work Research (referred to in this subpart as the `Center')
is the conduct and support of, and dissemination of targeted
research concerning social work methods and outcomes related
to problems of significant social concern. The Center shall--
``(1) promote research and training that is designed to
inform social work practices, thus increasing the knowledge
base which promotes a healthier America; and
``(2) provide policymakers with empirically-based research
information to enable such policymakers to better understand
complex social issues and make informed funding decisions
about service effectiveness and cost efficiency.

``SEC. 485H. SPECIFIC AUTHORITIES.

``(a) In General.--To carry out the purpose described in
section 485G, the Director of the Center may provide research
training and instruction and establish, in the Center and in
other nonprofit institutions, research traineeships and
fellowships in the study and investigation of the prevention
of disease, health promotion, the association of
socioeconomic status, gender, ethnicity, age and geographical
location and health, the social work care of individuals
with, and families of individuals with, acute and chronic
illnesses, child abuse, neglect, and youth violence, and
child and family care to address problems of significant
social concern especially in underserved populations and
underserved geographical areas.
``(b) Stipends and Allowances.--The Director of the Center
may provide individuals receiving training and instruction or
traineeships or fellowships under subsection (a) with such
stipends and allowances (including amounts for travel and
subsistence and dependency allowances) as the Director
determines necessary.
``(c) Grants.--The Director of the Center may make grants
to nonprofit institutions to provide training and instruction
and traineeships and fellowships under subsection (a).

``SEC. 485I. ADVISORY COUNCIL.

``(a) Duties.--
``(1) In general.--The Secretary shall establish an
advisory council for the Center that shall advise, assist,
consult with, and make recommendations to the Secretary and
the Director of the Center on matters related to the
activities carried out by and through the Center and the
policies with respect to such activities.
``(2) Gifts.--The advisory council for the Center may
recommend to the Secretary the acceptance, in accordance with
section 231, of conditional gifts for study, investigations,
and research and for the acquisition of grounds or
construction, equipment, or maintenance of facilities for the
Center.
``(3) Other duties and functions.--The advisory council for
the Center--
``(A)(i) may make recommendations to the Director of the
Center with respect to research to be conducted by the
Center;
``(ii) may review applications for grants and cooperative
agreements for research or training and recommend for
approval applications for projects that demonstrate the
probability of making valuable contributions to human
knowledge; and
``(iii) may review any grant, contract, or cooperative
agreement proposed to be made or entered into by the Center;
``(B) may collect, by correspondence or by personal
investigation, information relating to studies that are being
carried out in the United States or any other country and,
with the approval of the Director of the Center, make such
information available through appropriate publications; and
``(C) may appoint subcommittees and convene workshops and
conferences.
``(b) Membership.--
``(1) In general.--The advisory council shall be composed
of the ex officio members described in paragraph (2) and not
more than 18 individuals to be appointed by the Secretary
under paragraph (3).
``(2) Ex officio members.--The ex officio members of the
advisory council shall include--
``(A) the Secretary of Health and Human Services, the
Director of NIH, the Director of the Center, the Chief Social
Work Officer of the Veterans' Administration, the Assistant
Secretary of Defense for Health Affairs, the Associate
Director of Prevention Research at the National Institute of
Mental Health, the Director of the Division of Epidemiology
and Services Research, the Assistant Secretary of Health and
Human Services for the Administration for Children and
Families, the

[[Page S328]]

Assistant Secretary of Education for the Office of
Educational Research and Improvement, the Assistant Secretary
of Housing and Urban Development for Community Planning and
Development, and the Assistant Attorney General for Office of
Justice Programs (or the designees of such officers); and
``(B) such additional officers or employees of the United
States as the Secretary determines necessary for the advisory
council to effectively carry out its functions.
``(3) Appointed members.--The Secretary shall appoint not
to exceed 18 individuals to the advisory council, of which--
``(A) not more than two-thirds of such individual shall be
appointed from among the leading representatives of the
health and scientific disciplines (including public health
and the behavioral or social sciences) relevant to the
activities of the Center, and at least 7 such individuals
shall be professional social workers who are recognized
experts in the area of clinical practice, education, or
research; and
``(B) not more than one-third of such individuals shall be
appointed from the general public and shall include leaders
in fields of public policy, law, health policy, economics,
and management.

The Secretary shall make appointments to the advisory council
in such a manner as to ensure that the terms of the members
do not all expire in the same year.
``(4) Compensation.--Members of the advisory council who
are officers or employees of the United States shall not
receive any compensation for service on the advisory council.
The remaining members shall receive, for each day (including
travel time) they are engaged in the performance of the
functions of the advisory council, compensation at rates not
to exceed the daily equivalent of the annual rate in effect
for an individual at grade GS-18 of the General Schedule.
``(c) Terms.--
``(1) In general.--The term of office of an individual
appointed to the advisory council under subsection (b)(3)
shall be 4 years, except that any individual appointed to
fill a vacancy on the advisory council shall serve for the
remainder of the unexpired term. A member may serve after the
expiration of the member's term until a successor has been
appointed.
``(2) Reappointments.--A member of the advisory council who
has been appointed under subsection (b)(3) for a term of 4
years may not be reappointed to the advisory council prior to
the expiration of the 2-year period beginning on the date on
which the prior term expired.
``(3) Vacancy.--If a vacancy occurs on the advisory council
among the members under subsection (b)(3), the Secretary
shall make an appointment to fill that vacancy not later than
90 days after the date on which the vacancy occurs.
``(d) Chairperson.--The chairperson of the advisory council
shall be selected by the Secretary from among the members
appointed under subsection (b)(3), except that the Secretary
may select the Director of the Center to be the chairperson
of the advisory council. The term of office of the
chairperson shall be 2 years.
``(e) Meetings.--The advisory council shall meet at the
call of the chairperson or upon the request of the Director
of the Center, but not less than 3 times each fiscal year.
The location of the meetings of the advisory council shall be
subject to the approval of the Director of the Center.
``(f) Administrative Provisions.--The Director of the
Center shall designate a member of the staff of the Center to
serve as the executive secretary of the advisory council. The
Director of the Center shall make available to the advisory
council such staff, information, and other assistance as the
council may require to carry out its functions. The Director
of the Center shall provide orientation and training for new
members of the advisory council to provide such members with
such information and training as may be appropriate for their
effective participation in the functions of the advisory
council.
``(g) Comments and Recommendations.--The advisory council
may prepare, for inclusion in the biennial report under
section 485J--
``(1) comments with respect to the activities of the
advisory council in the fiscal years for which the report is
prepared;
``(2) comments on the progress of the Center in meeting its
objectives; and
``(3) recommendations with respect to the future direction
and program and policy emphasis of the center.

The advisory council may prepare such additional reports as
it may determine appropriate.

``SEC. 485J. BIENNIAL REPORT.

``The Director of the Center, after consultation with the
advisory council for the Center, shall prepare for inclusion
in the biennial report under section 403, a biennial report
that shall consist of a description of the activities of the
Center and program policies of the Director of the Center in
the fiscal years for which the report is prepared. The
Director of the Center may prepare such additional reports as
the Director determines appropriate. The Director of the
Center shall provide the advisory council of the Center an
opportunity for the submission of the written comments
described in section 485I(g).

``SEC. 485K. QUARTERLY REPORT.

``The Director of the Center shall prepare and submit to
Congress a quarterly report that contains a summary of
findings and policy implications derived from research
conducted or supported through the Center.''.
______

Mr. CRAIG:
S. 71. A bill to amend the Federal Power Act to improve the
hydroelectric licensing process by granting the Federal Energy
Regulatory Commission statutory authority to better coordinate
participation by other agencies and entities, and for other purposes;
to the Committee on Energy and Natural Resources.

HYDROELECTRIC LICENSING PROCESS IMPROVEMENT ACT OF 2001

Mr. CRAIG. Mr. President, I rise to introduce a bill, and I send it
to the desk.
Mr. President, the bill I introduce is the Hydroelectric Licensing
Process Improvement Act of 2001. As its title suggests, the purpose of
the bill is to improve the process by which non-federal hydroelectric
projects are licensed by the Federal Energy Regulatory Commission.
I introduced an identical bill early in the 106th Congress. Several
hearings were held on the bill in both the Senate and House. I
introduce this bill today with the full understanding that the bill may
undergo some changes as a result of collaboration with my colleague
Senator Bingaman and others on the Senate Energy and Natural Resources
Committee. At the end of the last Congress, Senator Bingaman offered to
work with me in a bipartisan fashion to successfully report this bill
out of Committee in the 107th Congress. I enthusiastically look forward
to working with him to ensure that this bill gets the necessary
attention to move smoothly and with appropriate speed through the
Committee process.
Mr. President, hydropower represents ten percent of the energy
produced in the United States, and approximately 85% of all renewable
energy generation. This is a significant portion of our nation's
electricity, produced without air pollution or greenhouse gas
emissions, and it is accomplished at relatively low cost.
The Commission for many years since its creation in 1920, controlled
our nation's water power potential with uncompromising authority.
However, over the years, a number of environmental statutes, amendments
to the Federal Power Act, Commission regulations, licensing and policy
decisions, and several critical court decisions, has made the
Commission's licensing process extremely costly, time consuming, and,
at times, arbitrary. Indeed, the current Commission licensing program
is burdened with mixed mandates and redundant bureaucracy and prone to
gridlock and litigation.
Under current law, several federal agencies are required to set
conditions for licenses without regard to the effects those conditions
have on project economics, energy benefits, impacts on greenhouse gas
emissions and values protected by other statutes and regulations. Far
too often we have agencies fighting agencies and issuing inconsistent
demands.
The consequent delays in processing hydropower applications result in
significant business costs and lost capacity. For example, according to
a September 1997 study of the U.S. Department of Energy, since 1987, of
52 peaking projects relicensed by the Commission, four projects
increased capacity, and 48 decreased capacity. In simple terms, those
48 projects became less productive as a result of the relicensing
process at the Commission than they were prior to relicensing. Ninety-
two percent of the peaking projects since 1987 lost capacity.
In addition, faced with the uncertainties currently plaguing the
relicensing process, some existing licensees are contemplating
abandonment of their projects. This is of concern to the nation because
two-thirds of all non-federal hydropower capacity is up for relicensing
in the next fifteen years. This concern has been exacerbated in the
last several months by the catastrophic energy supply crisis
experienced by California and the rest of the West. By the year 2010,
220 projects will be subject to the relicensing process.
Publicly owned hydropower projects constitute nearly 50% of the total
capacity that will be up for renewal. The problems resulting in lost
capacity, coupled with the momentous changes occurring in the
electricity industry and the increasing need for emission free sources
of power, all underscore

[[Page S329]]

the need for Congressional action to reform hydroelectric licensing.
Moreover, the loss of a hydropower project means more than the loss
of clean, efficient, renewable electric power. Hydropower projects
provide drinking water, flood control, fish and wildlife habitat,
irrigation, transportation, environmental enhancement funding and
recreation benefits. Also, due to its unique load-following capability,
peaking capacity and voltage stability attributes, hydropower plays a
critical role in maintaining our nation's reliable electric service.
My bill will help remedy the inefficient and complex Commission
licensing process by ensuring that federal agencies involved in the
process act in a timely and accountable manner.
My bill does not change or modify any existing environmental laws,
nor remove regulatory authority from various agencies. It does not call
for the repeal of mandatory conditioning authority of appropriate
federal agencies. Rather, it requires participating agencies to
consider, and be accountable for, the full effects of their actions
before imposing mandatory conditions on a Commission issued license.
It is clear to me and many of my colleagues here in the Senate that
hydropower is at risk. Clearly, one of the most important tasks for
energy policymakers in the 21st Century is to develop an energy
strategy that will ensure an adequate supply of reasonably priced,
reliable energy to all American consumers in an environmentally
responsible manner. The relicensing of non-federal hydropower can and
should continue be an important and viable element in this strategy.
Mr. President, I ask unanimous consent that the bill and a section-
by-section analysis appear in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 71

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 ``Hydroelectric Licensing
Process Improvement Act of 2001''.

SEC. 2. FINDINGS.

Congress finds that--
(1) hydroelectric power is an irreplaceable source of
clean, economic, renewable energy with the unique capability
of supporting reliable electric service while maintaining
environmental quality;
(2) hydroelectric power is the leading renewable energy
resource of the United States;
(3) hydroelectric power projects provide multiple benefits
to the United States, including recreation, irrigation, flood
control, water supply, and fish and wildlife benefits;
(4) in the next 15 years, the bulk of all non-Federal
hydroelectric power capacity in the United States is due to
be relicensed by the Federal Energy Regulatory Commission;
(5) the process of licensing hydroelectric projects by the
Commission--
(A) does not produce optimal decisions, because the
agencies that participate in the process are not required to
consider the full effects of their mandatory and recommended
conditions on a license;
(B) is inefficient, in part because agencies do not always
submit their mandatory and recommended conditions by a time
certain;
(C) is burdened by uncoordinated environmental reviews and
duplicative permitting authority; and
(D) is burdensome for all participants and too often
results in litigation; and
(6) while the alternative licensing procedures available to
applicants for hydroelectric project licenses provide
important opportunities for the collaborative resolution of
many of the issues in hydroelectric project licensing, those
procedures are not appropriate in every case and cannot
substitute for statutory reforms of the hydroelectric
licensing process.

SEC. 3. PURPOSE.

The purpose of this Act is to achieve the objective of
relicensing hydroelectric power projects to maintain high
environmental standards while preserving low cost power by--
(1) requiring agencies to consider the full effects of
their mandatory and recommended conditions on a hydroelectric
power license and to document the consideration of a broad
range of factors;
(2) requiring the Federal Energy Regulatory Commission to
impose deadlines by which Federal agencies must submit
proposed mandatory and recommended conditions to a license;
and
(3) making other improvements in the licensing process.

SEC. 4. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF
CONDITIONS TO LICENSES.

(a) In General.--Part I of the Federal Power Act (16 U.S.C.
791a et seq.) is amended by adding at the end the following:

``SEC. 32. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF
CONDITIONS TO LICENSES.

``(a) Definitions.--In this section:
``(1) Condition.--The term `condition' means--
``(A) a condition to a license for a project on a Federal
reservation determined by a consulting agency for the purpose
of the first proviso of section 4(e); and
``(B) a prescription relating to the construction,
maintenance, or operation of a fishway determined by a
consulting agency for the purpose of the first sentence of
section 18.
``(2) Consulting agency.--The term `consulting agency'
means--
``(A) in relation to a condition described in paragraph
(1)(A), the Federal agency with responsibility for
supervising the reservation; and
``(B) in relation to a condition described in paragraph
(1)(B), the Secretary of the Interior or the Secretary of
Commerce, as appropriate.
``(b) Factors To Be Considered.--
``(1) In general.--In determining a condition, a consulting
agency shall take into consideration--
``(A) the impacts of the condition on--
``(i) economic and power values;
``(ii) electric generation capacity and system reliability;
``(iii) air quality (including consideration of the impacts
on greenhouse gas emissions); and
``(iv) drinking, flood control, irrigation, navigation, or
recreation water supply;
``(B) compatibility with other conditions to be included in
the license, including mandatory conditions of other
agencies, when available; and
``(C) means to ensure that the condition addresses only
direct project environmental impacts, and does so at the
lowest project cost.
``(2) Documentation.--
``(A) In general.--In the course of the consideration of
factors under paragraph (1) and before any review under
subsection (e), a consulting agency shall create written
documentation detailing, among other pertinent matters, all
proposals made, comments received, facts considered, and
analyses made regarding each of those factors sufficient to
demonstrate that each of the factors was given full
consideration in determining the condition to be submitted to
the Commission.
``(B) Submission to the commission.--A consulting agency
shall include the documentation under subparagraph (A) in its
submission of a condition to the Commission.
``(c) Scientific Review.--
``(1) In general.--Each condition determined by a
consulting agency shall be subjected to appropriately
substantiated scientific review.
``(2) Data.--For the purpose of paragraph (1), a condition
shall be considered to have been subjected to appropriately
substantiated scientific review if the review--
``(A) was based on current empirical data or field-tested
data; and
``(B) was subjected to peer review.
``(d) Relationship to Impacts on Federal Reservation.--In
the case of a condition for the purpose of the first proviso
of section 4(e), each condition determined by a consulting
agency shall be directly and reasonably related to the
impacts of the project within the Federal reservation.
``(e) Administrative Review.--
``(1) Opportunity for review.--Before submitting to the
Commission a proposed condition, and at least 90 days before
a license applicant is required to file a license application
with the Commission, a consulting agency shall provide the
proposed condition to the license applicant and offer the
license applicant an opportunity to obtain expedited review
before an administrative law judge or other independent
reviewing body of--
``(A) the reasonableness of the proposed condition in light
of the effect that implementation of the condition will have
on the energy and economic values of a project; and
``(B) compliance by the consulting agency with the
requirements of this section, including the requirement to
consider the factors described in subsection (b)(1).
``(2) Completion of review.--
``(A) In general.--A review under paragraph (1) shall be
completed not more than 180 days after the license applicant
notifies the consulting agency of the request for review.
``(B) Failure to make timely completion of review.--If
review of a proposed condition is not completed within the
time specified by subparagraph (A), the Commission may treat
a condition submitted by the consulting agency as a
recommendation is treated under section 10(j).
``(3) Remand.--If the administrative law judge or reviewing
body finds that a proposed condition is unreasonable or that
the consulting agency failed to comply with any of the
requirements of this section, the administrative law judge or
reviewing body shall--
``(A) render a decision that--
``(i) explains the reasons for a finding that the condition
is unreasonable and may make recommendations that the
administrative law judge or reviewing body may have for the
formulation of a condition that would not be found
unreasonable; or
``(ii) explains the reasons for a finding that a
requirement was not met and may describe any action that the
consulting agency should take to meet the requirement; and

[[Page S330]]

``(B) remand the matter to the consulting agency for
further action.
``(4) Submission to the commission.--Following
administrative review under this subsection, a consulting
agency shall--
``(A) take such action as is necessary to--
``(i) withdraw the condition;
``(ii) formulate a condition that follows the
recommendation of the administrative law judge or reviewing
body; or
``(iii) otherwise comply with this section; and
``(B) include with its submission to the Commission of a
proposed condition--
``(i) the record on administrative review; and
``(ii) documentation of any action taken following
administrative review.
``(f) Submission of Final Condition.--
``(1) In general.--After an applicant files with the
Commission an application for a license, the Commission shall
set a date by which a consulting agency shall submit to the
Commission a final condition.
``(2) Limitation.--Except as provided in paragraph (3), the
date for submission of a final condition shall be not later
than 1 year after the date on which the Commission gives the
consulting agency notice that a license application is ready
for environmental review.
``(3) Default.--If a consulting agency does not submit a
final condition to a license by the date set under paragraph
(1)--
``(A) the consulting agency shall not thereafter have
authority to recommend or establish a condition to the
license; and
``(B) the Commission may, but shall not be required to,
recommend or establish an appropriate condition to the
license that--
``(i) furthers the interest sought to be protected by the
provision of law that authorizes the consulting agency to
propose or establish a condition to the license; and
``(ii) conforms to the requirements of this Act.
``(4) Extension.--The Commission may make 1 extension, of
not more than 30 days, of a deadline set under paragraph (1).
``(g) Analysis by the Commission.--
``(1) Economic analysis.--The Commission shall conduct an
economic analysis of each condition submitted by a consulting
agency to determine whether the condition would render the
project uneconomic.
``(2) Consistency with this section.--In exercising
authority under section 10(j)(2), the Commission shall
consider whether any recommendation submitted under section
10(j)(1) is consistent with the purposes and requirements of
subsections (b) and (c) of this section.
``(h) Commission Determination on Effect of Conditions.--
When requested by a license applicant in a request for
rehearing, the Commission shall make a written determination
on whether a condition submitted by a consulting agency--
``(1) is in the public interest, as measured by the impact
of the condition on the factors described in subsection
(b)(1);
``(2) was subjected to scientific review in accordance with
subsection (c);
``(3) relates to direct project impacts within the
reservation, in the case of a condition for the first proviso
of section 4(e);
``(4) is reasonable;
``(5) is supported by substantial evidence; and
``(6) is consistent with this Act and other terms and
conditions to be included in the license.''.
(b) Conforming and Technical Amendments.--
(1) Section 4.--Section 4(e) of the Federal Power Act (16
U.S.C. 797(e)) is amended--
(A) in the first proviso of the first sentence by inserting
after ``conditions'' the following: ``, determined in
accordance with section 32,''; and
(B) in the last sentence, by striking the period and
inserting ``(including consideration of the impacts on
greenhouse gas emissions)''.
(2) Section 18.--Section 18 of the Federal Power Act (16
U.S.C. 811) is amended in the first sentence by striking
``prescribed by the Secretary of Commerce'' and inserting
``prescribed, in accordance with section 32, by the Secretary
of the Interior or the Secretary of Commerce, as
appropriate''.

SEC. 5. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

Part I of the Federal Power Act (16 U.S.C. 791a et seq.)
(as amended by section 4) is amended by adding at the end the
following:

``SEC. 33. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

``(a) Lead Agency Responsibility.--The Commission, as the
lead agency for environmental reviews under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) for
projects licensed under this part, shall conduct a single
consolidated environmental review--
``(1) for each such project; or
``(2) if appropriate, for multiple projects located in the
same area
``(b) Consulting Agencies.--In connection with the
formulation of a condition in accordance with section 32, a
consulting agency shall not perform any environmental review
in addition to any environmental review performed by the
Commission in connection with the action to which the
condition relates.
``(c) Deadlines.--
``(1) In general.--The Commission shall set a deadline for
the submission of comments by Federal, State, and local
government agencies in connection with the preparation of any
environmental impact statement or environmental assessment
required for a project.
``(2) Considerations.--In setting a deadline under
paragraph (1), the Commission shall take into consideration--
``(A) the need of the license applicant for a prompt and
reasonable decision;
``(B) the resources of interested Federal, State, and local
government agencies; and
``(C) applicable statutory requirements.''.

SEC. 6. STUDY OF SMALL HYDROELECTRIC PROJECTS.

(a) In General.--Not later than 18 months after the date of
enactment of this Act, the Federal Energy Regulatory
Commission shall submit to the Committee on Energy and
Natural Resources of the Senate and the Committee on Commerce
of the House of Representatives a study of the feasibility of
establishing a separate licensing procedure for small
hydroelectric projects.
(b) Definition of Small Hydroelectric Project.--The
Commission may by regulation define the term ``small
hydroelectric project'' for the purpose of subsection (a),
except that the term shall include at a minimum a
hydroelectric project that has a generating capacity of 5
megawatts or less.

Section-by-Section Analysis of the Hydroelectric Licensing Process
Improvement Act of 2001

Section 1: Short Title. The legislation may be referred to
as the Hydroelectric Licensing Process Improvement Act of
2001.
Section 2: Findings. Hydropower is a vital renewable energy
resource, providing clean, economic and reliable electricity.
Hydropower projects also provide recreation, irrigation,
flood control, water supply and fish and wildlife benefits.
The bulk of all non-Federal hydro projects are coming up for
relicensing by the Federal Energy Regulatory Commission
(FERC) in the next 15 years. The hydroelectric licensing
process does not produce optimal decisions, because agencies
participating in the process fail to consider the full
effects of mandatory and recommended license conditions. The
process is inefficient, in part because of delays in the
submission of mandatory and recommended conditions, and
environmental reviews are uncoordinated. As a result, the
process is burdensome for all participants, and prone to
litigation. While alternative licensing procedures are
available and can lead to the collaborative resolution of
issues in some relicensings, they are not appropriate in all
circumstances, and are not a substitute for needed statutory
reform.
Section 3: Purpose. The purpose of the legislation is to
achieve the objective of relicensing hydroelectric power
projects to maintain high environmental standards while
preserving low cost power. This purpose will be achieved
through statutory reforms to improve the licensing process by
(1) requiring agencies to consider key factors, and document
their consideration of those factors, when developing
mandatory and recommended license conditions; (2) requiring
FERC to set deadlines for the submission of agency
conditions; and (3) making other process improvements.
Section 4(a): Process for Consideration by Federal Agencies
of Conditions to Licenses. The legislation would create a new
section 32 of the Federal Power Act (FPA), specifying the
process for consideration by Federal agencies of conditions
to hydroelectric project licenses.
Definitions: New FPA section 32(a) would define
``condition'' and ``consulting agency'' as used in section
32. ``Condition'' refers to conditions for projects on
Federal reservations determined under FPA section 4(e) and
fishway prescriptions determined under FPA section 18.
``Consulting agencies'' are the agencies with authority to
determine conditions under sections 4(e) and 18.
Factors to be Considered: New FPA section 32(b) would
require consulting agencies to consider the impact of
conditions on: economic and power values; electric generating
capacity and system reliability; air quality, including
impacts on greenhouse gas emissions; and drinking, flood
control, irrigation, navigation or recreation water supply.
In addition, agencies would be required to consider the
compatibility of their conditions with other conditions that
will be included in the license, including, if available,
mandatory conditions of other agencies. Further, agencies
would be required to consider means to ensure that conditions
address only direct project environmental impacts, and do so
at the lowest cost to the project. Agencies must create
written documentation of their consideration of these issues,
and submit the documentation to FERC along with the
condition.
Scientific Review: New FPA section 32(c) would require that
each condition be subjected to appropriately substantiated
scientific review based on current empirical data or field-
tested data and subjected to peer review.
Relationship to Impacts on Federal Reservation: New FPA
section 32(d) would require that conditions determined under
FPA section 4(e) be directly and reasonably related to the
impacts of the project within the Federal reservation.
Administrative Review: New FPA section 32(e) would require
that proposed conditions be provided to applicants at least
90 days prior to the deadline for filing a license
application. Prior to submitting proposed conditions to the
Commission, consulting agencies must offer the license
applicant an opportunity to obtain administrative review of
the condition before an administrative law

[[Page S331]]

judge or other independent reviewing body. The administrative
review would consider the reasonableness of the proposed
condition, in light of its effects on the energy and economic
values of the project, and the agency's compliance with the
requirements imposed in section 32. Administrative review
must be completed within 180 days of a request for review
from the applicant. If it is not, the Commission is
authorized to treat the condition as a recommendation is
treated under FPA section 10(j). If an agency reviewing body
decides that a proposed condition is unreasonable or that the
requirements of the new FPA section 32 are not met, it must
explain its decision and remand the matter to the agency for
further action. The reviewing body may recommend curative
actions. Finally, the consulting agency, following
administrative review, would be required to either withdraw
the condition, formulate a condition that follows the
recommendations of the administrative review body, or
otherwise comply with section 32. When the condition is
submitted to the Commission, the consulting agency would be
required to include any record on administrative review and
documentation of any action taken after administrative
review.
Submission of Final Condition: After a license application
is filed, new FPA section 32(f) would require FERC to
establish a deadline for the submission to the Commission of
final conditions. The deadline would be no later than one
year after the date on which the Commission gives notice that
the license application is ready for environmental review
(subject to one 30 day extension by FERC). If the consulting
agency fails to comply with the deadline, the agency would
not have authority to recommend or establish a condition. The
legislative language restates FERC's current authority under
its regulations to propose or establish license conditions in
place of the defaulting agency in such a situation.
Analysis by the Commission: New section 32(g) would require
FERC to conduct an economic analysis of conditions to
determine whether a condition would render the project
uneconomic. In addition, in exercising its authority under
section 10(j) to reject a recommendation that is inconsistent
with the Federal Power Act, the Commission would be required
to consider whether 10(j) recommendations are consistent with
the provisions of sections 32 (b) and (c) (consideration
of factors and scientific review).
Commission Determination on Effect of Conditions: New
section 32(h) would require the Commission, if requested on
rehearing by a license applicant, to make a written
determination on whether a condition (1) is in the public
interest (measured by the impact of the condition on the
energy, economic and resource considerations enumerated in
section 32(b); (2) was subject to scientific review as
required in section 32(c); (3) relates to direct project
impacts within the reservation (if applicable); (4) is
reasonable; (5) is supported by substantial evidence; and (6)
is consistent with the Federal Power Act and other license
terms and conditions.
Section 4(b): Conforming and Technical Amendments: This
section makes certain technical changes in FPA sections 4(e)
and 18 to reflect the new requirements of section 32.
Section 5: Coordinated Environmental Review Process: A new
section 33 would be added to the Federal Power Act to confirm
the FERC's responsibilities as the lead agency for
environmental reviews of hydroelectric projects under the
National Environmental Policy Act.
Lead Agency Responsibility: New FPA section 33(a) would
confirm FERC's responsibility to conduct a single,
consolidated environmental review for each project or, if
appropriate, for multiple projects located in the same area.
This language assures that the legislation does not preclude
a single environmental review being done for multiple
projects.
Consulting Agencies: New FPA section 33(b) would impose a
limitation on consulting agencies seeking to perform a
separate environmental review for conditions submitted in
accordance with new FPA section 32. This language is designed
to avert agency reviews that would duplicate the consolidated
environmental review conducted by FERC.
Deadlines: New FPA section 33(c) would require the
Commission to set deadlines that provide opportunity for
input on environmental reviews by federal, state and local
agencies.
Section 6: Study of Small Hydroelectric Projects. Within 18
months of the date of enactment, FERC must complete a study
of the feasibility of establishing a separate licensing
procedure for small hydroelectric projects. The study would
be submitted to the Senate Energy and Natural Resources and
House Commerce Committees. The term ``small hydroelectric
project'' would be defined by FERC, and shall include
projects with generating capacity of 5 megawatts or less.
______

Mr. BINGAMAN:
S. 72. A bill to amend the National Energy Conservation
Policy Act to enhance and extend authority relating to energy
savings performance contracts of the Federal Government; to
the Committee on Energy and Natural Resources.

expanding ESPC authority

Mr. BINGAMAN. Mr. President, I rise today to introduce important
legislation, to amend the National Energy Conservation Policy Act of
1986. This legislation, the ``Energy Efficient Cost Savings Improvement
Act of 2001,'' which I previously introduced on December 14, 2000 as S.
3277 and was accepted by unanimous consent, will improve the current
law by enhancing and extending the authority relating to energy savings
performance contracts of the Federal Government. The benefit to the
taxpayer will be not only the realization of greater cost savings as
they pertain to older, inefficient Federal buildings but, more
importantly, the reduction in the waste of monies spent trying to
improve these buildings when other, more cost effective alternatives
are available.
The National Energy Conservation Policy Act, as amended by the Energy
Policy Act of 1992, established a mandate for energy savings in Federal
buildings and facilities. Aggressive energy conservation goals were
subsequently established by Executive Order 12902, stating that, by
2005, Federal agencies must reduce their energy consumption in their
buildings by 30 percent per square foot when compared to 1985 levels.
Executive Order 13123 increased this goal to 35 percent by 2010.
To help attain these objectives, the Energy Policy Act of 1992
created Energy Savings Performance Contracting (ESPC), which offered a
means of achieving this energy reduction goal at no capital cost to the
government. That's right--no capital cost to the government, since ESPC
is an alternative to the traditional method of Federal appropriations
to finance these types of improvements in Federal buildings. Under the
ESPC authority, Federal agencies contract with energy service companies
(ESCO), which pay all the up-front costs. These costs relate to
evaluation, design, financing, acquisition, installation, and
maintenance of energy efficient equipment; altered operation and
maintenance improvements; and technical services. The ESCO guarantees a
fixed amount of energy cost savings throughout the life of the contract
and is paid directly from those cost savings. Agencies retain the
remainder of the cost savings for themselves and, at the end of the
contract, ownership of all property, along with the additional cost
savings, reverts to the Federal government. Currently, contracts may
range up to 25 years. Over the entire contract period, Federal monies
are neither required nor appropriated for the improvements.
But, as innovative as the ESPC alternative may be, there is one area
in which it falls short--and that is, how to avoid wasting valuable
funds improving energy efficiency in a building that has long since
passed its useful life. How do you justify energy conservation measures
in buildings that are in constant need of maintenance or repair?
Facilities that, no matter how much money is invested for renovation,
will never meet existing building code requirements? You may save money
by improving energy efficiency, but then turn around and reinvest even
larger amounts in operating and maintaining a very old facility.
Somewhere there has to be a point where we decide there must be other
alternatives--and that is exactly what my legislation offers.
Mr. President, the most important element of my legislation is in the
way it proposes to fund the construction of replacement Federal
facilities. The legislation builds upon the existing Energy Savings
Performance Contracting and takes it one logical step further--to
include savings anticipated from operation and maintenance efficiencies
of a new replacement Federal building. Perhaps the easiest way to
explain the benefits of this change is by citing an example. In my home
state of New Mexico, the Department of Energy Albuquerque Operations
office resides in a complex of buildings constructed originally as Army
barracks during the Korean War. Although these facilities have been
renovated and modified throughout the years, they remain energy
inefficient and require high maintenance and operation costs when
compared to more contemporary buildings. What's more, over the next
seven years, the Operations office will institute additional
modifications to meet compliance requirements for seismic, energy
savings, and other facility infrastructure concerns (maintenance,
environmental, safety and health, etc.) at a cost of $34.2 million.
Even with these modifications, we end up with a

[[Page S332]]

modernized 50-year old building that will continue to require expensive
maintenance dollars. The estimate to replace the office complex with a
new facility, by the way, is $35.3 million. While Congress cannot
afford to appropriate funds to build a new facility, we're willing to
spend--no, we're forced to waste--almost as much in maintaining an old
one.
As requested by the National Defense Authorization Act for FY2000,
the Department of Energy conducted a feasibility study for replacing
the Albuquerque Operations office using an ESPC. The results of the
study are enlightening, for it demonstrated that by using anticipated
energy, operations, and maintenance efficiencies of a new replacement
building over the old one, the cost savings alone pay for the new
facility. What's more, the analysis forecasts that after the annual
ESPC loan payment is made to the contractor, there is a $1 million per
year surplus. Over a 25-year contract, the savings to the taxpayer is
$25 million.
Finally, Mr. President, I want to draw your attention to the broader
implications that this legislation has for Federal agencies and
taxpayers alike. The application of authority created by this
legislation in the replacement of other Federal buildings could result
in billions of dollars of avoided waste. Simply by considering
operation and maintenance cost savings, we would reap a double benefit
of newer facilities and much needed improvements to the Federal
infrastructure at a fraction of the cost. And, since ESCOs typically
use local companies to provide construction services, this type of
program would have a very beneficial effect on local economies.
There is certainly enough work within the Federal government to move
forward on this ESPC legislation. To this end, I urge my colleagues to
support the bill.
I ask for 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. 72

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 Efficient Cost
Savings Improvement Act of 2001''.

SEC. 2. ENHANCEMENT AND EXTENSION OF AUTHORITY RELATING TO
ENERGY SAVINGS PERFORMANCE CONTRACTS OF THE
FEDERAL GOVERNMENT.

(a) Energy Savings Through Construction of Replacement
Facilities.--Section 804 of the National Energy Conservation
Policy Act (42 U.S.C. 8287c) is amended--
(1) in paragraph (2)--
(A) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(B) by inserting ``(A)'' after ``(2)''; and
(C) by adding at the end the following new subparagraph:
``(B) The term also means a reduction in the cost of
energy, from such a base cost, that would otherwise be
utilized in a federally owned building or buildings or other
federally owned facilities by reason of the construction and
operation of one or more buildings or facilities to replace
such federally owned building or buildings or other federally
owned facilities.''; and
(2) in paragraph (3), by inserting after the first sentence
the following new sentence: ``The terms also mean a contract
that provides for energy savings through the construction and
operation of one or more buildings or facilities to replace
one or more existing buildings or facilities.''.
(b) Cost Savings From Operation and Maintenance
Efficiencies in Replacement Facilities.--Section 801(a) of
that Act (42 U.S.C. 8287(a)) is amended by adding at the end
the following new paragraph:
``(3)(A) In the case of an energy savings contract or
energy savings performance contract providing for energy
savings through the construction and operation of one or more
buildings or facilities to replace one or more existing
buildings or facilities, benefits ancillary to the purpose of
such contract under paragraph (1) may include savings
resulting from reduced costs of operation and maintenance at
such replacement buildings or facilities when compared with
costs of operation and maintenance at the buildings or
facilities being replaced.
``(B) Notwithstanding paragraph (2)(B), aggregate annual
payments by an agency under an energy savings contract or
energy savings performance contract referred to in
subparagraph (A) may take into account (through the
procedures developed pursuant to this section) savings
resulting from reduced costs of operation and maintenance as
described in that subparagraph.''.
(c) Five-Year Extension of Authority.--Section 801(c) of
that Act (42 U.S.C. 8287(c)) is amended by striking ``October
1, 2003'' and inserting ``October 1, 2008''.
______

By Mr. HELMS:
S. 73. A bill to prohibit the provision of Federal funds to any State
or local educational agency that denies or prevents participation in
constitutional prayer in schools; read the first time.
S. 74. A bill to prohibit the provision of Federal funds to any State
or local educational agency that distributes or provides morning-after
pills to schoolchildren; read the first time.
S. 75. A bill to protect the lives of unborn human beings; read the
first time.
S. 76. A bill to make it a violation of a right secured by the
Constitution and laws of the United States to perform an abortion with
the knowledge that the abortion is being performed solely because of
the gender of the fetus; read the first time.
S. 78. A bill to amend the Civil Rights Act of 1964 to make
preferential treatment an unlawful employment practice, and for other
purposes; read the first time.
S. 79. A bill to encourage drug-free and safe schools; read the first
time.

LEGISLATION TO CORRECT PERMISSIVE SOCIAL POLICIES

Mr. HELMS. Mr. President, it is customary for me to introduce
legislation on the first day of a new Congress that addresses what
countless Americans believe are our Nation's most serious social
problems. These problems are not new--and the solutions are familiar--
but I shall nonetheless devote a few moments to explaining the
importance of these bills, and why, more than ever, it is so crucial to
correct a number of permissive social policies that are creating a
moral and spiritual crisis in our country.
During the past several years, Mr. President, I have been delighted
that the responsible fiscal policies of the Republican Congress,
coupled with strong and stable monetary policy engineered by the
Federal Reserve, has proved a successful combination for the economy.
The resulting expansion--fueled not by government but by the limitless
entrepreneurial energy of the American people--has been highly
gratifying.
But while the American people have been largely optimistic about the
state of the economy, there is a curious dichotomy between those
positive feelings and their unease about the state of American society.
Because for every positive report Americans read on the financial page,
there seems to be utterly horrifying stories elsewhere, stories which
detail a moral sickness at the heart of our culture, stories which
chronicle the devaluation of human life in our society, symbolized by
the tragic 1973 Supreme Court decision, Roe v. Wade.
Two years ago, I told the story of the young New Jersey woman who in
May of 1997 gave birth to an infant in a public bathroom stall during
her senior prom. She promptly strangled her newborn baby boy, placed
his little body in a trash can, adjusted her makeup, and returned to
the dance floor.
The American people were justly shocked by such callousness, and I
was even more stunned to learn that stories of a similar nature are
common.
Consider the following examples reported in the media in December of
the year 2000.
Portland Oregonian, December 5, 2000: ``A teen-ager accused of
drowning her newborn baby in the bathtub at a family gathering in July
in Eagle Creek pleaded guilty on Monday to second-degree
manslaughter.''
Chicago Tribune, December 9, 2000: ``A 21-year-old Fox Lake man
pleaded guilty Friday to first-degree murder in the death of his
girlfriend's 2-month-old daughter, who authorities said was brutally
shaken and thrown during the last days of her life.
Orlando Sentinel, December 24, 2000: ``A 17-month-old baby has died
after his stepfather beat the infant in the head with his fists.
News Tribune (Tacoma, Washington), December 1, 2000: ``A Lakewood
mother and her live-in boyfriend have been charged with homicide-by-
abuse in the mid-September death of the woman's 2-month-old son.''

Salt Lake Tribune, December 5, 2000: The mother of a newborn boy
found dead after being abandoned in a shed at a St. George amusement
park was bound over Monday for trial on a charge of first-degree
murder.
Should we really be surprised, Mr. President, that a Nation that not
only

[[Page S333]]

tolerates, but actively defends the practice of partial birth abortion
would produce these gruesome headlines? And should we be surprised that
the extraordinary level of disrespect for human life to which America
has fallen has not been limited to infant abuse on the part of
caregivers, but now pervades every part of our society?
In fact, Mr. President, the abortion-on-demand zealots holding sway
over the media and much of the intellectual and political establishment
are becoming ever more brazen in their assault on the unborn. Just this
month, the National Abortion Rights Action League, known as NARAL,
began an outrageously offensive television advertising campaign seeking
to cloak the divisive practice of abortion under the guise of
patriotism. Amidst images of families and children, and accompanied by
stirring music, the text of the advertisement falsely treats this
painful procedure as a cause for celebration. ``What's life,'' the
commercial asks, ``without choice?''
The deliberate destruction of the most innocent, most helpless human
beings imaginable has nothing whatsoever to do with ``life.''
We have a moral crisis in our country. But too often, the mainstream
media doesn't seek to remedy our decaying culture; they actually
celebrate it. During the past two years, the FOX network has become
notorious for trivializing our most cherished institutions with so-
called ``reality entertainment'' programs like ``Who Wants to Marry a
Multi-Millionaire'' and its most recent assault on good taste,
``Temptation Island''.
On this program, which debuted just weeks ago, contestants--or
perhaps I should say exhibitionists--exchange their real-life
relationships for promiscuous affairs, solely to divert the viewing
public. And instead of responding with outrage--or at the very least,
indifference--a sizeable portion of the American public rewarded the
program with high ratings.
It is increasingly apparent that American society has lost its
moorings. But too many politicians blithely suggest that government and
morality are not and should not be related; too many producers in
Hollywood claim that the filth that passes for entertainment does not
corrupt our culture; and too many educators claim the academy does not
have a place in addressing the difference between right and wrong.
Mr. President, they are the ones who are wrong. We fool ourselves and
we fool the public if we suggest that there is no connection between
the business we do in Congress and the state of public morality in our
society. We are the caretakers of our own culture. And we must not
shrink from the responsibility of passing laws that promote what is
right and prevent what is wrong in our society.
When we make good choices, such as passing comprehensive welfare
reform, the American people are rewarded with declining welfare
caseloads with a corresponding decrease in crime and poverty. When
Congress pursues responsible fiscal policy and balances the budget, it
is possible to return to the American people more of their hard-earned
money in the form of a tax cut.
In short, Mr. President, good laws help make good societies. And that
is the reason I continue to introduce bills in each and every Congress
that limit the modern tragedy of abortion and its insidious effects;
that allow for voluntary prayer in schools; that take steps to end the
scourge of drug use among our children; and that make sure our civil
rights laws treat Americans as individuals rather than faceless members
of racial groups, religious groups, or of a certain gender.
Mr. President, I ask unanimous consent that these six bills be
printed in the Record.
There being no objection, the bills were ordered to be printed in the
Record, as follows:

S. 73

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 ``Voluntary School Prayer
Protection Act''.

SEC. 2. FUNDING CONTINGENT ON RESPECT FOR CONSTITUTIONAL
SCHOOL PRAYER.

(a) In General.--Notwithstanding any other provision of
law, no funds made available through the Department of
Education shall be provided to any State or local educational
agency that has a policy of denying, or that effectively
prevents participation in, constitutional prayer in public
schools by individuals on a voluntary basis.
(b) Limitation.--No person shall be required to participate
in prayer, or shall influence the form or content of any
constitutional prayer, in a public school.
____

S. 74

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 ``Schoolchildren's Health
Protection Act''.

SEC. 2. SCHOOLCHILDREN'S HEALTH PROTECTION.

(a) In General.--Notwithstanding any other provision of law
(including the specific provisions described in subsection
(b)), no funds made available through the Department of
Education shall be provided to any State or local educational
agency that distributes or provides postcoital emergency
contraception, or distributes or provides a prescription for
postcoital emergency contraception, to an unemancipated
minor, on the premises or in the facilities of any elementary
school or secondary school.
(b) Specific Provisions.--The specific provisions referred
to in subsection (a) are section 330 and title X of the
Public Health Service Act (42 U.S.C. 254b, 300 et seq.) and
title V and XIX of the Social Security Act (42 U.S.C. 701 et
seq., 1396 et seq.).
(c) Definitions.--In this section:
(1) Elementary school; secondary school.--The terms
``elementary school'' and ``secondary school'' have the
meanings given the terms in section 14101 of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 8801).
(2) Unemancipated minor.--The term ``unemancipated minor''
means an unmarried individual who is 17 years of age or
younger and is a dependent, as defined in section 152(a) of
the Internal Revenue Code of 1986.
____

S. 75

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 ``Unborn Children's Civil
Rights Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) scientific evidence demonstrates that abortion takes
the life of an unborn child who is a living human being;
(2) a right to abortion is not secured by the Constitution;
(3) in the cases of Roe v. Wade (410 U.S. 113 (1973)) and
Doe v. Bolton (410 U.S. 179 (1973)) the Supreme Court erred
in not recognizing the humanity of the unborn child and the
compelling interest of the States in protecting the life of
each person before birth.

SEC. 3. PROHIBITION ON USE OF FUNDS FOR ABORTION.

No funds appropriated by Congress shall be used to take the
life of an unborn child, except that such funds may be used
only for those medical procedures required to prevent the
death of either the pregnant woman or her unborn child so
long as every reasonable effort is made to preserve the life
of each.

SEC. 4. PROHIBITION ON USE OF FUNDS TO ENCOURAGE OR PROMOTE
ABORTION.

No funds appropriated by Congress shall be used to promote,
encourage, counsel for, refer for, pay for (including travel
expenses), or do research on, any procedure to take the life
of an unborn child, except that such funds may be used in
connection with only those medical procedures required to
prevent the death of either the pregnant woman or her unborn
child so long as every reasonable effort is made to preserve
the life of each.

SEC. 5. PROHIBITION ON ENTERING INTO CERTAIN INSURANCE
CONTRACTS.

Neither the United States, nor any agency or department
thereof shall enter into any contract for insurance that
provides for payment or reimbursement for any procedure to
take the life of an unborn child, except that the United
States, or an agency or department thereof may enter into
contracts for payment or reimbursement for only those medical
procedures required to prevent the death of either the
pregnant woman or her unborn child so long as every
reasonable effort is made to preserve the life of each.

SEC. 6. LIMITATIONS ON RECIPIENTS OF FEDERAL FUNDS.

No institution, organization, or other entity receiving
Federal financial assistance shall--
(1) discriminate against any employee, applicant for
employment, student, or applicant for admission as a student
on the basis of such person's opposition to procedures to
take the life of an unborn child or to counseling for or
assisting in such procedures;
(2) require any employee or student to participate,
directly or indirectly, in a health insurance program which
includes procedures to take the life of an unborn child or
which provides counseling or referral for such procedures; or
(3) require any employee or student to participate,
directly or indirectly, in procedures to take the life of an
unborn child or in counseling, referral, or any other
administrative arrangements for such procedures.

SEC. 7. LIMITATION ON CERTAIN ATTORNEYS' FEES.

Notwithstanding any other provision of Federal law,
attorneys' fees shall not be allowable in any civil action in
Federal court

[[Page S334]]

involving, directly or indirectly, a law, ordinance,
regulation, or rule prohibiting or restricting procedures to
take the life of an unborn child.

SEC. 8. APPEALS OF CERTAIN CASES.

Chapter 81 of title 28, United States Code, is amended by
inserting after section 1251, the following:

``Sec. 1252. Appeals of certain cases

``Notwithstanding the absence of the United States as a
party, if any State or any subdivision of any State enforces
or enacts a law, ordinance, regulation, or rule prohibiting
procedures to take the life of an unborn child, and such law,
ordinance, regulation, or rule is declared unconstitutional
in an interlocutory or final judgment, decree, or order of
any court of the United States, any party in such a case may
appeal such case to the Supreme Court, notwithstanding any
other provision of law.''.
____

S. 76

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 ``Civil Rights of Infants
Act''.

SEC. 2. DEPRIVING PERSONS OF THE EQUAL PROTECTION OF LAWS
BEFORE BIRTH.

Section 1979 of the Revised Statutes (42 U.S.C. 1983) is
amended--
(1) by inserting ``(a)'' before ``Every person''; and
(2) by adding at the end the following:
``(b) For purposes of subsection (a), it shall be a
deprivation of a `right' secured by the laws of the United
States for an individual to perform an abortion with the
knowledge that the pregnant woman is seeking the abortion
solely because of the gender of the fetus. No pregnant woman
who seeks to obtain an abortion solely because of the gender
of the fetus shall be liable for such abortion in any manner
under this section.''.
____

S. 78

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 ``Civil Rights Restoration Act
of 2001''.

SEC. 2. PREFERENTIAL TREATMENT.

(a) Unlawful Employment Practice.--Section 703(j) of the
Civil Rights Act of 1964 (42 U.S.C. 2000e-2(j) is amended to
read as follows:
``(j)(1) It shall be an unlawful employment practice for
any entity that is an employer, employment agency, labor
organization, or joint labor-management committee subject to
this title to grant preferential treatment to any individual
or group with respect to selection for, discharge from,
compensation for, or the terms, conditions, or privileges of,
employment or union membership, on the basis of the race,
color, religion, sex, or national origin of such individual
or group, for any purpose, except as provided in subsection
(e) or paragraph (2).
``(2) It shall not be an unlawful employment practice for
an entity described in paragraph (1) to recruit individuals
of an underrepresented race, color, religion, sex, or
national origin, to expand the applicant pool of the
individuals seeking employment or union membership with the
entity.''
(b) Construction.--Nothing in the amendment made by
subsection (a) shall be construed to limit the authority of
courts to remedy, under section 706(g) of the Civil Rights
Act of 1964 (42 U.S.C. 2000e-5(g)), intentional
discrimination under title VII of such Act (42 U.S.C. 2000e
et seq.).
____

S. 79

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 ``Safe Schools Act of 2001''.

SEC. 2. SAFE SCHOOLS.

(a) Amendments to the Gun-Free Schools Act of 1994.--Part F
of title XIV of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 8921 et seq.) is amended--
(1) in section 14601 (20 U.S.C. 8921)--
(A) in subsection (a)--
(i) by striking ``Gun-Free'' and inserting ``Safe''; and
(ii) by striking ``1994'' and inserting ``2001'';
(B) in subsection (b)(1), by inserting after ``determined''
the following: ``to be in possession of felonious quantities
of an illegal drug, on school property under the jurisdiction
of, or in a vehicle operated by an employee or agent of, a
local educational agency in that State, or''; and
(C) in subsection (b)(4)--
(i) by striking ``Definitions.--For the purpose of this
section, the'' and inserting the following: ``Definitions.--
For purposes of this section:
``(1) Weapon.--The''; and
(ii) by adding at the end the following:
`'(2) Illegal drug.--The term `illegal drug' means a
controlled substance, as defined in section 102(6) of the
Controlled Substances Act (21 U.S.C. 802(6)), the possession
of which is unlawful under such Act (21 U.S.C. 801 et seq.)
or under the Controlled Substances Import and Export Act (21
U.S.C. 951 et seq.), but does not include a controlled
substance used pursuant to a valid prescription or as
authorized by law.
(3) Illegal drug paraphernalia.--The term `illegal drug
paraphernalia' means drug paraphernalia, as defined in
section 422(d) of the Controlled Substances Act (21 U.S.C.
863(d)), except that the first sentence of that section shall
be applied by inserting `or under the Controlled Substances
Import and Export Act (21 U.S.C. 951 et seq.)' before the
period.
``(4) Felonious quantities of an illegal drug.--The term
`felonious quantities of an illegal drug' means any quantity
of an illegal drug--
``(A) possession of which (quantity) would, under Federal,
State, or local law, either constitute a felony or indicate
an intent to distribute; or
``(B) that is possessed with an intent to distribute.'';
(D) in subsection (d)(2)(C), by inserting ``illegal drugs
or'' before ``weapons''; and
(E) by striking subsection (f);(2) in section 14602(a) (20
U.S.C. 8922(a))--
(A) by inserting after ``who'' the following: ``is in
possession of an illegal drug, or illegal drug paraphernalia,
on school property under the jurisdiction of, or in a vehicle
operated by an employee or agent of, such agency, or who'';
and
(B) by striking ``served by'' and inserting ``under the
jurisdiction of''; and
(3) in section 14603 (20 U.S.C. 8923)--
(A) in paragraph (1)--
(i) by striking ``policy of the Department in effect on the
date of enactment of the Improving America's Schools Act of
1994'' and inserting ``policy in effect on the date of
enactment of the Safe Schools Act of 2001''; and
(ii) by adding ``and'' at the end; (B) in paragraph (2)--
(i) by striking ``engaging'' and inserting ``possessing
illegal drugs, or illegal drug paraphernalia, on school
property, or in vehicles operated by employees or agents of,
schools or local educational agencies, or engaging''; and
(ii) by striking ``; and'' and inserting a period; and
(C) by striking paragraph (3).
(b) Compliance Date Reporting.--
(1) Compliance date.--A State shall have 2 years from the
date of enactment of this Act to comply with the requirements
established under the amendments made by subsection (a).
(2) Reports.--
(A) On approaches for discipline.--Not later than 2 years
after the date of enactment of this Act, the Secretary of
Education shall submit to Congress a report analyzing the
strengths and weaknesses of approaches regarding the
disciplining of children with disabilities.
(B) On compliance.--Not later than 3 years after the date
of enactment of this Act, the Secretary of Education shall
submit to Congress a report on any State that is not in
compliance with the requirements of this part.

voluntary school prayer protection act

Mr. HELMS. Mr. President, the voluntary School Prayer Protection Act
will make sure that student-initiated prayer is treated the same as all
other student-initiated free speech--which the U.S. Supreme Court has
upheld as constitutionally protected so long as it is done in an
appropriate time, place and manner such that it ``does not materially
disrupt the school day.'' [Tinker v. Des Moines School District, 393
U.S. 503.]
Under this bill, school districts could not continue--in
constitutional ignorance--enforcing blanket denials of students' rights
to voluntary prayer and religious activity in the schools. For the
first time, schools would be faced with real consequences for making
uninformed and unconstitutional decisions prohibiting all voluntary
prayer. The bill creates a complete system of checks and balances to
make sure that school districts do not shortchange their students one
way or the other.
This proposal, Mr. President, prevents public schools from
prohibiting constitutionally protected voluntary student-initiated
prayer. It does not mandate school prayer and suggestions to the
contrary are simply in error. Nor does it require schools to write any
particular prayer, or compel any student to participate in prayer. It
does not prevent school districts from establishing appropriate time,
place, and manner restrictions on voluntary prayer--the same kind of
restrictions that are placed on other forms of speech in the schools.
What this proposal will do is prevent school districts from
establishing official policies or procedures with the intent of
prohibiting students from exercising their constitutionally protected
right to lead, or participate in, voluntary prayer in school.

schoolchildren's health protection act

Mr. President, there is a significant question pending before the
Senate: should schools receiving federal funds be able to distribute
``morning after pills''--also identified as abortion pills--to
schoolchildren? The answer is unequivocally no. Which is why I am

[[Page S335]]

introducing the Schoolchildren's Health Protection Act. This pivotal
legislation will put an end to elementary and secondary schools
receiving federal funds from distributing ``morning after pills'' to
schoolchildren as young as 12 years old.
The Congressional Research Service (CRS) has not only confirmed that
Federal law permits school-based health clinics receiving federal
family planning money to distribute ``Morning-after pills,'' but CRS
has also reported that at least 180 schools in America are in fact
distributing these abortion pills to schoolchildren. Obviously, Mr.
President, we are no longer just talking about condoms being handed out
at school.
What's more is that federal law currently allows schools to provide
these abortion-inducing drugs to children behind the backs of parents.
In a handful of cases, the federal courts have struck down parental
consent laws, ruling that any federal family planning program trumps a
state or county parental consent statute because federal law prohibits
parental consent requirements.
Just as disturbing, if not more so, Mr. President, is that schools
distributing ``morning after pills'' are placing the health of these
young children in jeopardy. In fact, the manufacturer--PREVEN--warns
that ``Morning after pills'' can cause severe health risks, such as:
blood clots; liver tumors; elevated blood pressure; heart attacks and
strokes.
It is well worth noting that the current policy in the majority of
U.S. public schools prohibits the distribution of aspirin to
schoolchildren unless parental consent is given. Yet, here we are
legally permitting schools to secretly provide these dangerous abortion
pills to minors without the knowledge of parents.
Under this bill, this unethical practice will no longer continue.
Planned Parenthood and its cronies will no longer be able to use public
school facilities to covertly get abortion pills into the mouths of
children.
As Americans may recall, I offered a similar bill in amendment form
last Congress to the Labor-HHS appropriations bill, which rightfully
passed both the Senate and the House. Even though this language was not
included in the final budget deal struck last year, I am hopeful
Congress will revisit this issue once more, and put a complete end to
the unthinkable practice of giving children abortion pills at school.

Unborn Children's Civil Rights Act

Mr. President, the Unborn Children's Civil Rights Act has several
goals. First, it puts the Senate on record as declaring that one, every
abortion destroys deliberately the life of an unborn child; two, that
the U.S. Constitution sanctions no right to abortion; and three, that
Roe v. Wade was incorrectly decided.
Second, this legislation will prohibit Federal funding to pay for, or
promote, abortion. Further, this legislation proposes to de-fund
abortion permanently, thereby relieving Congress of annual legislative
battles about abortion restrictions in appropriation bills.
Third, the Unborn Children's Civil Rights Act proposes to end
indirect Federal funding for abortions by one, prohibiting
discrimination, at all federally funded institutions, against citizens
who as a matter of conscience object to abortion and two, curtailing
attorney fees in abortion-related cases.
Fourth, this bill proposes that appeals to the Supreme Court be
provided as a right if and when any lower Federal court declares
restrictions on abortion unconstitutional, thus effectively assuring
Supreme Court reconsideration of the abortion issue.
Mr. President, I believe this bill begins to remedy some of the
damage done to America by the Supreme Court's decision in Roe v. Wade.
I continue to believe that a majority of my colleagues will one day
agree, and I will never give up doing everything in my power to protect
the most vulnerable Americans of all: the unborn.

Civil Rights of Infants Act

In 1989, our distinguished colleague from New Hampshire, Senator
Gordon Humphrey, first called attention to the incredibly brutal
practice of abortions performed solely because prospective parents
prefer a child of a gender different from that of the baby in the
mother's womb.
The Civil Rights in Infants Act makes sure nobody could ever act upon
this unthinkable decision by specifically amending title 42 of the
United States Code governing civil rights. Anyone who administers an
abortion for the purpose of choosing the gender of the infant will be
subject to the same laws which protects any other citizen who is a
victim of discrimination.
Nobody--even the most radical feminists--can ignore the absurdity of
denying a child the right to life simply because the parents happened
to prefer a child of the opposite gender. I hope the 106th Congress
will swiftly act to fulfill the desires of the American people, who
rightfully believe it is immoral to destroy unborn babies simply
because the parents demand a child of a different gender.

Civil Rights Restoration Act

Mr. President, the last of these bills is entitled the Civil Rights
Restoration Act. Specifically, this legislation prevents Federal
agencies, and the Federal courts, from interpreting title VII of the
Civil Rights Act of 1964 to allow an employer to grant preferential
treatment in employment to any group or individual on account of race.
This proposal prohibits the use of racial quotas once and for all.
During the past several years, almost every Member of the Senate--and
the President of the United States--have proclaimed that they are
opposed to quotas. This bill will give Senators an opportunity to
reinforce their statements by voting in a rollcall vote against quotas.
Mr. President, this legislation emphasizes that from here on out,
employers must hire on a race neutral basis. They can reach out into
the community to the disadvantaged and they can even have businesses
with 80 percent or 90 percent minority workforces as long as the
motivating factor in employment is not race.
This bill clarifies section 703(j) of title VII of the Civil Rights
Act of 1964 to make it consistent with the intent of its authors,
Hubert Humphrey and Everett Dirksen. Let me state it for the Record:

It shall be an unlawful employment practice for any entity
that is an employer, employment agency, labor organization,
or joint labor-management committee subject to this title to
grant preferential treatment to any individual or group with
respect to selection for, discharge from, compensation for,
or the terms, conditions, or privileges of, employment or
union membership, on the basis of the race, color, religion,
sex, or national origin of such individual or group, for any
person, except as provided in subsection (e) or paragraph
(2).
It shall not be an unlawful employment practice for an
entity described in paragraph (1) to recruit individuals of
an under-represented race, color, religion, sex, or national
origin, to expand the applicant pool of the individuals
seeking employment or union membership with the entity.

Specifically, this bill proposes to make part (j) of Section 703 of
the 1964 Civil Rights Act consistent with subsections (a) and (d) of
that section. It contains the identical language used in those sections
to make preferential treatment on the basis of race (that is, quotas)
an unlawful employment practice.
Mr. President, I want to be clear that this legislation does not make
outreach programs an unlawful employment practice. Under language
suggested years ago by the distinguished Senator from Kansas, Bob Dole,
a company can recruit and hire in the inner city, prefer people who are
disadvantaged, create literacy programs, recruit in the schools,
establish day care programs, and expand its labor pool in the poorest
sections of the community. In other words, expansion of the employee
pool is specifically provided for under this act.
Mr. President, this legislation is necessary because in the 37 years
since the passage of the Civil Rights Act, the Federal Government and
the courts have combined to corrupt the spirit of the Act as enumerated
by both Hubert Humphrey and Everett Dirksen, who made clear that they
were unalterably opposed to racial quotas. Yet in spite of the clear
intent of Congress, businesses large and small must adhere to hiring
quotas in order to keep the all-powerful federal government off their
backs. This bill puts an end to that sort of nonsense once and for all.

safe schools act of 2001

Mr. President, the protection of the most vulnerable among us--our
children--is the highest responsibility of government. Government's
obligation to protect our children from harm is

[[Page S336]]

nowhere more important than while they are in the care of public
employees at school. Tragically, in too many of America's classrooms,
this fundamental responsibility is not being met.
That is why I have worked with other concerned Senators in recent
years to introduce and promote the Safe Schools Act. During the 106th
Congress, the Senate passed the Act as an amendment to other
legislation. Regrettably, neither of the bills it was attached to
successfully navigated both the conference and final floor
consideration processes.
The Safe Schools Act directly confronts the issue of illegal drug use
and juvenile violence by equalizing the treatment of students who
choose to carry either felonious quantities of illegal drugs or
firearms to a public school. When enacted, this legislation will
provide a consistent federal policy with respect to the possession of
both firearms and illegal drugs in America's public school classrooms.
For students and parents, the message of the Safe Schools Act is that
there are serious consequences for anyone willingly choosing to violate
the law and to jeopardize the safety and security of their fellow
students, teachers, and school personnel.
Mr. President, by enacting the Gun-Free Schools Act in 1994, the
federal government encouraged states to adopt a stringent uniform
standard with respect to students who willingly chose to carry a
firearm to school. The act did this by conditioning eligibility for
federal education dollars on state adoption of a policy requiring the
expulsion for not less than one year of any student who brought a
firearm to school. The Safe Schools Act extends this same common sense
policy to any student who willingly takes a felonious quantity of
illegal drugs to school.
Recently, some authorities have reported a modest reduction in
criminal activity at our schools. While this news is encouraging, we
can not satisfy ourselves with modest reductions. Instead, we should
demand that every student be educated in a safe and crime-free
classroom. Achieving this goal requires that we do more to eliminate
drug-related activity from our nation's classrooms.
Anyone who doubts this need only review the latest results from the
National Parents' Resource Institute for Drug Education survey, or
PRIDE survey as it is called, which found that:
Gun-toting students were twenty-four times more likely to use cocaine
than those who didn't bring a gun to school;
Gang members were nineteen times more likely to use cocaine than non-
gang members;
Students who threatened others were six times more likely to be
cocaine users than others.
Faced with the clear relationship between school violence and drugs
in our classrooms, it should be evident that we must do more to protect
America's school children.
In deciding what to do, I believe that we should respect the advice
of those who are daily confronted with the variety of evils that result
from the increasing availability of drugs in our classrooms--our
students, teachers and school administrators. When surveyed, these
groups have reported overwhelming support for the approach embodied in
the Safe Schools Act.
Mr. President, students consistently say that the number one problem
they face is the scourge of illegal drugs. Perhaps even more disturbing
is the fact that students of all ages, including elementary ages,
report that drugs are readily available to them.
The Center on Addiction and Substance Abuse (CASA) at Columbia
University has documented the extent of this national tragedy by
documenting that two-thirds (66%) of students report going to schools
where students keep, use and sell drugs and that over half (51%) of
high school students believe that the drug problem is getting worse.
Mr. President, I invite my colleagues to join with me and build on
the progress that we made last Congress in addressing this vital issue.
It is undeniable that reducing drug activity at schools will result in
a better learning environment, increased discipline, and a reduction in
violence. It is long past time to take action to restore schools that
are secure and conducive to the education of the vast majority of
students who are eager to learn. America's students and teachers
deserve nothing less.
Mr. President, I do not pretend that enacting this legislation will
solve all of the pathologies of modern society. But taken as a whole,
they seek to turn the tide of the increasing apathy--and in some cases,
outright hostility--toward moral and spiritual principles that have
marked social policy at the turn of the century.
The Founding Fathers knew what would become of a society that ignores
traditional morality. I have often quoted the parting words of advice
our first President, George Washington, left his beloved new Nation. He
reminded his fellow citizens:

Of all the dispensations and habits which lead to political
prosperity, religion and morality are indispensable supports.
In vain would that man claim the tribute to patriotism who
should labor to subvert these great pillars of human
happiness.

Mr. President, that distinguished world leader, Margaret Thatcher,
highlighted for us the words of Washington's successor, John Adams, who
said ``our Constitution was designed only for a moral and religious
people. It is wholly inadequate for the government of any other.''
Our Founding Fathers understood well the intricate relationship
between freedom of responsibility. They knew that the blessings of
liberty engendered certain obligations on the part of a free people--
namely, that citizens conduct their actions in such a way that society
can remain cohesive without excessive government intrusion. The
American experiment would never have succeeded without the traditional
moral and spiritual values of the American people--values that allow
people to govern themselves, rather than be governed.
______

By Mr. DASCHLE (for himself, Ms. Mikulski, Mr. Kennedy, Mr.
Harkin, Mr. Wellstone, Ms. Landrieu, Mrs. Lincoln, Mr. Akaka,
Mr. Breaux, Mr. Cleland, Mr. Durbin, Mr. Inouye, Mr. Kerry, Mr.
Leahy, Mr. Reid, Mr. Sarbanes, Mr. Schumer, and Mr. Johnson):
S. 77. A bill to amend the Fair Labor Standards Act of 1938 to
provide more effective remedies to victims of discrimination in the
payment of wages on the basis of sex, and for other purposes; to the
Committee on Health, Education, Labor, and Pensions.

paycheck fairness act

Mr. DASCHLE. 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. 77

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 ``Paycheck Fairness Act''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Women have entered the workforce in record numbers.
(2) Even today, women earn significantly lower pay than men
for work on jobs that require equal skill, effort, and
responsibility and that are performed under similar working
conditions. These pay disparities exist in both the private
and governmental sectors. In many instances, the pay
disparities can only be due to continued intentional
discrimination or the lingering effects of past
discrimination.
(3) The existence of such pay disparities--
(A) depresses the wages of working families who rely on the
wages of all members of the family to make ends meet;
(B) prevents the optimum utilization of available labor
resources;
(C) has been spread and perpetuated, through commerce and
the channels and instrumentalities of commerce, among the
workers of the several States;
(D) burdens commerce and the free flow of goods in
commerce;
(E) constitutes an unfair method of competition in
commerce;
(F) leads to labor disputes burdening and obstructing
commerce and the free flow of goods in commerce;
(G) interferes with the orderly and fair marketing of goods
in commerce; and
(H) in many instances, may deprive workers of equal
protection on the basis of sex in violation of the 5th and
14th amendments.
(4)(A) Artificial barriers to the elimination of
discrimination in the payment of wages on the basis of sex
continue to exist more than 3 decades after the enactment of
the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.)
and the Civil Rights Act of 1964 (42 U.S.C. 2000a et seq.).
(B) Elimination of such barriers would have positive
effects, including--

[[Page S337]]

(i) providing a solution to problems in the economy created
by unfair pay disparities;
(ii) substantially reducing the number of working women
earning unfairly low wages, thereby reducing the dependence
on public assistance; and
(iii) promoting stable families by enabling all family
members to earn a fair rate of pay;
(iv) remedying the effects of past discrimination on the
basis of sex and ensuring that in the future workers are
afforded equal protection on the basis of sex; and
(v) ensuring equal protection pursuant to Congress' power
to enforce the 5th and 14th amendments.
(5) With increased information about the provisions added
by the Equal Pay Act of 1963 and wage data, along with more
effective remedies, women will be better able to recognize
and enforce their rights to equal pay for work on jobs that
require equal skill, effort, and responsibility and that are
performed under similar working conditions.
(6) Certain employers have already made great strides in
eradicating unfair pay disparities in the workplace and their
achievements should be recognized.

SEC. 3. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.

(a) Required Demonstration for Affirmative Defense.--
Section 6(d)(1) of the Fair Labor Standards Act of 1938 (29
U.S.C. 206(d)(1)) is amended by striking ``(iv) a
differential'' and all that follows through the period and
inserting the following: ``(iv) a differential based on a
bona fide factor other than sex, such as education, training
or experience, except that this clause shall apply only if--
``(I) the employer demonstrates that--

``(aa) such factor--

``(AA) is job-related with respect to the position in
question; or
``(BB) furthers a legitimate business purpose, except that
this item shall not apply where the employee demonstrates
that an alternative employment practice exists that would
serve the same business purpose without producing such
differential and that the employer has refused to adopt such
alternative practice; and

``(bb) such factor was actually applied and used reasonably
in light of the asserted justification; and

``(II) upon the employer succeeding under subclause I, the
employee fails to demonstrate that the differential produced
by the reliance of the employer on such factor is itself the
result of discrimination on the basis of sex by the employer.

``An employer that is not otherwise in compliance with this
paragraph may not reduce the wages of any employee in order
to achieve such compliance.''.
(b) Application of Provisions.--Section 6(d)(1) of the Fair
Labor Standards Act of 1938 (29 U.S.C. 206(d)(1)) is amended
by adding at the end the following: ``The provisions of this
subsection shall apply to applicants for employment if such
applicants, upon employment by the employer, would be subject
to any provisions of this section.''.
(c) Elimination of Establishment Requirement.--Section 6(d)
of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(d)) is
amended--
(1) by striking ``, within any establishment in which such
employees are employed,''; and
(2) by striking ``in such establishment'' each place it
appears.
(d) Nonretaliation Provision.--Section 15(a)(3) of the Fair
Labor Standards Act of 1938 (29 U.S.C. 215(a)(3)) is
amended--
(1) by striking ``or has'' each place it appears and
inserting ``has''; and
(2) by inserting before the semicolon the following: ``, or
has inquired about, discussed, or otherwise disclosed the
wages of the employee or another employee, or because the
employee (or applicant) has made a charge, testified,
assisted, or participated in any manner in an investigation,
proceeding, hearing, or action under section 6(d)''.
(e) Enhanced Penalties.--Section 16(b) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 216(b)) is amended--
(1) by inserting after the first sentence the following:
``Any employer who violates section 6(d) shall additionally
be liable for such compensatory or punitive damages as may be
appropriate, except that the United States shall not be
liable for punitive damages.'';
(2) in the sentence beginning ``An action to'', by striking
``either of the preceding sentences'' and inserting ``any of
the preceding sentences of this subsection'';
(3) in the sentence beginning ``No employees shall'', by
striking ``No employees'' and inserting ``Except with respect
to class actions brought to enforce section 6(d), no
employee'';
(4) by inserting after the sentence referred to in
paragraph (3), the following: ``Notwithstanding any other
provision of Federal law, any action brought to enforce
section 6(d) may be maintained as a class action as provided
by the Federal Rules of Civil Procedure.''; and
(5) in the sentence beginning ``The court in''--
(A) by striking ``in such action'' and inserting ``in any
action brought to recover the liability prescribed in any of
the preceding sentences of this subsection''; and
(B) by inserting before the period the following: ``,
including expert fees''.
(f) Action by Secretary.--Section 16(c) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 216(c)) is amended--
(1) in the first sentence--
(A) by inserting ``or, in the case of a violation of
section 6(d), additional compensatory or punitive damages,''
before ``and the agreement''; and
(B) by inserting before the period the following: ``, or
such compensatory or punitive damages, as appropriate'';
(2) in the second sentence, by inserting before the period
the following: ``and, in the case of a violation of section
6(d), additional compensatory or punitive damages'';
(3) in the third sentence, by striking ``the first
sentence'' and inserting ``the first or second sentence'';
and
(4) in the last sentence--
(A) by striking ``commenced in the case'' and inserting
``commenced--
``(1) in the case'';
(B) by striking the period and inserting
``; or''; and
(C) by adding at the end the following:
``(2) in the case of a class action brought to enforce
section 6(d), on the date on which the individual becomes a
party plaintiff to the class action''.

SEC. 4. TRAINING.

The Equal Employment Opportunity Commission and the Office
of Federal Contract Compliance Programs, subject to the
availability of funds appropriated under section 9(b), shall
provide training to Commission employees and affected
individuals and entities on matters involving discrimination
in the payment of wages.

SEC. 5. RESEARCH, EDUCATION, AND OUTREACH.

The Secretary of Labor shall conduct studies and provide
information to employers, labor organizations, and the
general public concerning the means available to eliminate
pay disparities between men and women, including--
(1) conducting and promoting research to develop the means
to correct expeditiously the conditions leading to the pay
disparities;
(2) publishing and otherwise making available to employers,
labor organizations, professional associations, educational
institutions, the media, and the general public the findings
resulting from studies and other materials, relating to
eliminating the pay disparities;
(3) sponsoring and assisting State and community
informational and educational programs;
(4) providing information to employers, labor
organizations, professional associations, and other
interested persons on the means of eliminating the pay
disparities;
(5) recognizing and promoting the achievements of
employers, labor organizations, and professional associations
that have worked to eliminate the pay disparities; and
(6) convening a national summit to discuss, and consider
approaches for rectifying, the pay disparities.

SEC. 6. TECHNICAL ASSISTANCE AND EMPLOYER RECOGNITION
PROGRAM.

(a) Guidelines.--
(1) In general.--The Secretary of Labor shall develop
guidelines to enable employers to evaluate job categories
based on objective criteria such as educational requirements,
skill requirements, independence, working conditions, and
responsibility, including decisionmaking responsibility
and de facto supervisory responsibility.
(2) Use.--The guidelines developed under paragraph (1)
shall be designed to enable employers voluntarily to compare
wages paid for different jobs to determine if the pay scales
involved adequately and fairly reflect the educational
requirements, skill requirements, independence, working
conditions, and responsibility for each such job with the
goal of eliminating unfair pay disparities between
occupations traditionally dominated by men or women.
(3) Publication.--The guidelines shall be developed under
paragraph (1) and published in the Federal Register not later
than 180 days after the date of enactment of this Act.
(b) Employer Recognition.--
(1) Purpose.--It is the purpose of this subsection to
emphasize the importance of, encourage the improvement of,
and recognize the excellence of employer efforts to pay wages
to women that reflect the real value of the contributions of
such women to the workplace.
(2) In general.--To carry out the purpose of this
subsection, the Secretary of Labor shall establish a program
under which the Secretary shall provide for the recognition
of employers who, pursuant to a voluntary job evaluation
conducted by the employer, adjust their wage scales (such
adjustments shall not include the lowering of wages paid to
men) using the guidelines developed under subsection (a) to
ensure that women are paid fairly in comparison to men.
(3) Technical assistance.--The Secretary of Labor may
provide technical assistance to assist an employer in
carrying out an evaluation under paragraph (2).
(c) Regulations.--The Secretary of Labor shall promulgate
such rules and regulations as may be necessary to carry out
this section.

SEC. 7. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN
THE WORKPLACE.

(a) In General.--There is established the Alexis Herman
National Award for Pay Equity in the Workplace, which shall
be evidenced by a medal bearing the inscription ``Alexis
Herman National Award for Pay Equity in the Workplace''. The
medal shall be of such design and materials, and bear such

[[Page S338]]

additional inscriptions, as the Secretary of Labor may
prescribe.
(b) Criteria for Qualification.--To qualify to receive an
award under this section a business shall--
(1) submit a written application to the Secretary of Labor,
at such time, in such manner, and containing such information
as the Secretary may require, including at a minimum
information that demonstrates that the business has made
substantial effort to eliminate pay disparities between men
and women, and deserves special recognition as a consequence;
and
(2) meet such additional requirements and specifications as
the Secretary of Labor determines to be appropriate.
(c) Making and Presentation of Award.--
(1) Award.--After receiving recommendations from the
Secretary of Labor, the President or the designated
representative of the President shall annually present the
award described in subsection (a) to businesses that meet the
qualifications described in subsection (b).
(2) Presentation.--The President or the designated
representative of the President shall present the award under
this section with such ceremonies as the President or the
designated representative of the President may determine to
be appropriate.
(d) Business.--In this section, the term ``business''
includes--
(1)(A) a corporation, including a nonprofit corporation;
(B) a partnership;
(C) a professional association;
(D) a labor organization; and
(E) a business entity similar to an entity described in any
of subparagraphs (A) through (D);
(2) an entity carrying out an education referral program, a
training program, such as an apprenticeship or management
training program, or a similar program; and
(3) an entity carrying out a joint program, formed by a
combination of any entities described in paragraph (1) or
(2).

SEC. 8. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION.

Section 709 of the Civil Rights Act of 1964 (42 U.S.C.
2000e-8) is amended by adding at the end the following:
``(f)(1) Not later than 18 months after the date of
enactment of this subsection, the Commission shall--
``(A) complete a survey of the data that is currently
available to the Federal Government relating to employee pay
information for use in the enforcement of Federal laws
prohibiting pay discrimination and, in consultation with
other relevant Federal agencies, identify additional data
collections that will enhance the enforcement of such laws;
and
``(B) based on the results of the survey and consultations
under subparagraph (A), issue regulations to provide for the
collection of pay information data from employers as
described by the sex, race, and national origin of employees.
``(2) In implementing paragraph (1), the Commission shall
have as its primary consideration the most effective and
efficient means for enhancing the enforcement of Federal laws
prohibiting pay discrimination. For this purpose, the
Commission shall consider factors including the imposition of
burdens on employers, the frequency of required reports
(including which employers should be required to prepare
reports), appropriate protections for maintaining data
confidentiality, and the most effective format for the data
collection reports.''.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as may be
necessary to carry out this Act.
______

By Mrs. BOXER (for herself and Mrs. Feinstein):
S. 80. A bill to require the Federal Energy Regulatory Commission to
order refunds of unjust, unreasonable, unduly discriminatory or
preferential rates or changes for electricity, to establish cost-based
rates for electricity sold at wholesale in the Western Systems
Coordinating Council, and for other purposes; to the Committee on
Energy and Natural Resources.

california electricity crisis legislation

Mrs. BOXER. Mr. President, today I am introducing a bill relating to
the electricity crisis in California. As a result of deregulation,
Californians are confronting higher electricity prices and an
unreliable supply
Last week, Northern California experienced rolling blackouts.
Children were trapped in elevators. Manufacturing plans had to shut
down, costing millions of dollars. Entire agricultural crops can be
destroyed with a blackout. Obviously, this situation does not just
affect Californians but can impact the entire nation's economy.
The bill I am introducing today is similar to legislation I
introduced last fall with Representative Bob Filner. The California
Electricity Consumers Relief Act would establish a Western Regional Cap
for electricity rates.
The electricity shortage experienced by California in recent months,
clearly demonstrates that a price cap must be imposed on the entire
Western United States to be effective. If the price for electricity is
higher in other Western states than California, then a generator
chooses to sell power outside of California. A regional price cap will
being some stability to the market by ensuring a reliable supply for
the entire Western region, so that no state will confront a shortage.
I urge Congress to bring an end to this crisis. We must now act to
bring Californians and other Western states what they need--an adequate
supply of electricity at a fair and reasonable price. By implementing
this region-wide cap, we can address a major cause of California's
energy crisis.
______

By Mr. AKAKA (for himself and Mr. Inouye):
S. 81. A bill to express the policy of the United States regarding
the United States relationship with Native Hawaiians, to provide a
process for the reorganization of a Native Hawaiian government and the
recognition by the United States of the Native Hawaiian government, and
for other purposes; to the Committee on Indian Affairs.

NATIVE HAWAIIANS LEGISLATION

Mr. AKAKA. Mr. President, I rise today to introduce a bill on behalf
of myself and my friend and colleague, Senator Inouye. This measure is
of significant importance to the people of Hawaii, particularly to the
indigenous peoples of Hawaii, Native Hawaiians. This measure clarifies
the political relationship between Native Hawaiians and the United
States by extending the federal policy of self-determination and self-
governance to Native Hawaiians.
The United States has declared a special responsibility for the
welfare of the native peoples of the United States, including Native
Hawaiians. Congress has recognized Native Hawaiians as the aboriginal,
indigenous, native peoples of Hawaii and has passed over 150 statutes
addressing the conditions of Native Hawaiians. The measure that we are
introducing today extends the federal policy of self-determination and
self-governance to Native Hawaiians by authorizing a process of
reorganization of a Native Hawaiian government for the purposes of a
federally recognized government-to-government relationship with the
United States. This measure establishes parity in federal policies
towards American Indians, Alaska Natives and Native Hawaiians.
The political relationship between Native Hawaiians and the United
States has been a topic of discussion in Hawaii for many, many years. A
significant portion of the discussion has centered around the history
of Hawaii's indigenous peoples and the role of the United States in
that history. In 1993, Congress passed Public Law 103-150, the Apology
Resolution, which extended an apology on behalf of the United States to
Native Hawaiians for the United States' role in the overthrow of the
Kingdom of Hawaii. The Apology Resolution also expressed the commitment
of Congress and the President to acknowledge the ramifications of the
overthrow of the Kingdom of Hawaii and to support reconciliation
efforts between the United States and Native Hawaiians.
Mr. President, I am pleased to inform you that the reconciliation
process is ongoing. The reconciliation process is an incremental
process of dialogue between Native Hawaiians and the United States to
address a number of longstanding issues arising out of the overthrow of
the Kingdom of Hawaii. I look forward to working with the Bush
Administration as we continue this important process.
On October 23, 2000, a joint report was issued by the Departments of
the Interior and Justice on the reconciliation process. The report was
based on public consultations held in Hawaii in December 1999 between
officials from the Interior and Justice Departments and Native
Hawaiians. The report recommends that Native Hawaiians have self-
determination over their own affairs within the framework of federal
law, as do Native American tribes. The measure we are introducing
today, Mr. President is consistent with this recommendation.
This measure does not create a political relationship between Native
Hawaiians and the United States. The political relationship has existed
since Hawaii's inception as a territory. Rather, the measure we
introduce today clarifies the existing political relationship between
Hawaii's indigenous peoples and the United States.

[[Page S339]]

This measure authorizes a process for the reorganization of the
Native Hawaiian government for the purposes of a federally recognized
government-to-government relationship. The measure authorizes Native
Hawaiians to resolve many issues in developing the organic governing
documents, including the issue of membership or citizenship in the
reorganized government. This bill also establishes an office within the
Department of the Interior to focus on Native Hawaiian issues. The
office would serve as a liaison between Native Hawaiians and the United
States during the reconciliation process and would provide assistance
during the process of reorganization of the Native Hawaiian government.
Federal programs currently administered with other federal agencies
would remain with those agencies.
An identical version of the measure was introduced during the 106th
Congress. The House of Representatives passed the measure with
bipartisan support. The Senate Committee on Indian Affairs reported the
measure favorably. Unfortunately, the Senate did not consider the
measure prior to the adjournment of the last Congress.
Mr. President, I would like to clarify some misconceptions regarding
this important measure. First, this measure is not being introduced to
circumvent the 1999 United States Supreme Court decision in the case of
Rice v. Cayetano. The Rice case was a voting rights case whereby the
Supreme Court held that the State of Hawaii must allow all citizens of
Hawaii to vote for the Board of Trustees of a quasi-state agency, the
Office of Hawaiian Affairs.
The Office of Hawaiian Affairs was established by citizens of the
State of Hawaii as part of the 1978 State of Hawaii Constitutional
Convention. The State constitution was amended to create the Office of
Hawaiian Affairs as a means to give expression to the right of self-
determination and self-governance for Hawaii's indigenous peoples,
Native Hawaiians. The Office of Hawaiian Affairs administers programs
and services for Native Hawaiians. The State constitution provided for
9 trustees who were Native Hawaiian to be elected by Native Hawaiians.
Following the Supreme court's ruling in Rice v. Cayetano, the elections
were not only open to all citizens in the State of Hawaii, but non-
Hawaiians were deemed eligible to serve on the Board of Trustees.
Whereas the Rice case dealt with voting rights and the State of Hawaii,
the measure we introduce today addresses the federal policy of self-
determination and self-governance and does not involve the Office of
Hawaiian Affairs.

This measure does not establish entitlements or special treatment for
Native Hawaiians based on race. This measure focuses on the political
relationship afforded to Native Hawaiians based on the United States'
recognition of Native Hawaiians as the aboriginal, indigenous peoples
of Hawaii. As we all know, the United States' history with its
indigenous peoples has been dismal. In recent decades, however, the
United States has engaged in a policy of self-determination and self-
governance with its indigenous peoples. Government-to-government
relationships provide indigenous peoples with the opportunity to work
directly with the federal government on policies affecting their lands,
natural resources and many other aspects of their well-being. While
federal policies towards Native Hawaiians have paralleled that of
Native American Indians and Alaska Natives, the federal policy of self-
determination and self-governance, has not yet been extended to Native
Hawaiians. This measure extends this policy to Native Hawaiians, thus
furthering the process of reconciliation between Native Hawaiians and
the United States.
This measure does not impact program funding for American Indians and
Alaska Natives. Federal programs for Native Hawaiian health, education
and housing are already administered by the Departments of Health and
Human Services, Education, and Housing and Urban Development.
In addition, this measure has strong support from indigenous peoples
within the United States. The National Congress of American Indians and
Alaska Federation of Natives have both passed resolutions in support of
a government-to-government relationship between Native Hawaiians and
the United States. Similar resolutions have been passed by the Japanese
American Citizens' League and the National Education Association. The
measure is also supported by the Hawaii State Legislature, which passed
a resolution supporting a federally recognized government-to-government
relationship.
This measure does not preclude Native Hawaiians from seeking
alternatives in the international arena. Instead, this measure focuses
on self-determination within the framework of federal law and seeks to
establish equality in the federal policies extended towards American
Indians, Alaska Natives and Native Hawaiians.
This measure is critical to the people in Hawaii because it begins a
process to address many longstanding issues facing Hawaii's indigenous
peoples and the State of Hawaii. By resolving these matters, we begin a
process of healing, a process of reconciliation not only within the
United States, but within the State of Hawaii. These issues are deeply
rooted in the history of Hawaii. The time has come for us to begin to
resolve these differences in order to be able to move forward together
as one.
Mr. President, I cannot emphasize enough how significant this measure
is for the State of Hawaii. I look forward to working with my
colleagues to enact this critical measure for the State of Hawaii and
indigenous peoples in the United States.
Mr. President, I request unanimous consent that the text of this
measure be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 81

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

SECTION 1. FINDINGS.

Congress makes the following findings:
(1) The Constitution vests Congress with the authority to
address the conditions of the indigenous, native people of
the United States.
(2) Native Hawaiians, the native people of the Hawaiian
archipelago which is now part of the United States, are
indigenous, native people of the United States.
(3) The United States has a special trust relationship to
promote the welfare of the native people of the United
States, including Native Hawaiians.
(4) Under the treaty making power of the United States,
Congress exercised its constitutional authority to confirm a
treaty between the United States and the government that
represented the Hawaiian people, and from 1826 until 1893,
the United States recognized the independence of the Kingdom
of Hawaii, extended full diplomatic recognition to the
Hawaiian government, and entered into treaties and
conventions with the Hawaiian monarchs to govern commerce and
navigation in 1826, 1842, 1849, 1875, and 1887.
(5) Pursuant to the provisions of the Hawaiian Homes
Commission Act, 1920 (42 Stat. 108, chapter 42), the United
States set aside 203,500 acres of land in the Federal
territory that later became the State of Hawaii to address
the conditions of Native Hawaiians.
(6) By setting aside 203,500 acres of land for Native
Hawaiian homesteads and farms, the Act assists the Native
Hawaiian community in maintaining distinct native settlements
throughout the State of Hawaii.
(7) Approximately 6,800 Native Hawaiian lessees and their
family members reside on Hawaiian Home Lands and
approximately 18,000 Native Hawaiians who are eligible to
reside on the Home Lands are on a waiting list to receive
assignments of land.
(8) In 1959, as part of the compact admitting Hawaii into
the United States, Congress established the Ceded Lands Trust
for 5 purposes, 1 of which is the betterment of the
conditions of Native Hawaiians. Such trust consists of
approximately 1,800,000 acres of land, submerged lands, and
the revenues derived from such lands, the assets of which
have never been completely inventoried or segregated.
(9) Throughout the years, Native Hawaiians have repeatedly
sought access to the Ceded Lands Trust and its resources and
revenues in order to establish and maintain native
settlements and distinct native communities throughout the
State.
(10) The Hawaiian Home Lands and the Ceded Lands provide an
important foundation for the ability of the Native Hawaiian
community to maintain the practice of Native Hawaiian
culture, language, and traditions, and for the survival of
the Native Hawaiian people.
(11) Native Hawaiians have maintained other distinctly
native areas in Hawaii.
(12) On November 23, 1993, Public Law 103-150 (107 Stat.
1510) (commonly known as the Apology Resolution) was enacted
into law, extending an apology on behalf of the United States
to the Native people of Hawaii for the United States role in
the overthrow of the Kingdom of Hawaii.
(13) The Apology Resolution acknowledges that the overthrow
of the Kingdom of Hawaii occurred with the active
participation of agents and citizens of the United States and

[[Page S340]]

further acknowledges that the Native Hawaiian people never
directly relinquished their claims to their inherent
sovereignty as a people over their national lands to the
United States, either through their monarchy or through a
plebiscite or referendum.
(14) The Apology Resolution expresses the commitment of
Congress and the President to acknowledge the ramifications
of the overthrow of the Kingdom of Hawaii and to support
reconciliation efforts between the United States and Native
Hawaiians; and to have Congress and the President, through
the President's designated officials, consult with Native
Hawaiians on the reconciliation process as called for under
the Apology Resolution.
(15) Despite the overthrow of the Hawaiian government,
Native Hawaiians have continued to maintain their separate
identity as a distinct native community through the formation
of cultural, social, and political institutions, and to give
expression to their rights as native people to self-
determination and self-governance as evidenced through their
participation in the Office of Hawaiian Affairs.
(16) Native Hawaiians also maintain a distinct Native
Hawaiian community through the provision of governmental
services to Native Hawaiians, including the provision of
health care services, educational programs, employment and
training programs, children's services, conservation
programs, fish and wildlife protection, agricultural
programs, native language immersion programs and native
language immersion schools from kindergarten through high
school, as well as college and master's degree programs in
native language immersion instruction, and traditional
justice programs, and by continuing their efforts to enhance
Native Hawaiian self-determination and local control.
(17) Native Hawaiians are actively engaged in Native
Hawaiian cultural practices, traditional agricultural
methods, fishing and subsistence practices, maintenance of
cultural use areas and sacred sites, protection of burial
sites, and the exercise of their traditional rights to gather
medicinal plants and herbs, and food sources.
(18) The Native Hawaiian people wish to preserve, develop,
and transmit to future Native Hawaiian generations their
ancestral lands and Native Hawaiian political and cultural
identity in accordance with their traditions, beliefs,
customs and practices, language, and social and political
institutions, and to achieve greater self-determination over
their own affairs.
(19) This Act provides for a process within the framework
of Federal law for the Native Hawaiian people to exercise
their inherent rights as a distinct aboriginal, indigenous,
native community to reorganize a Native Hawaiian government
for the purpose of giving expression to their rights as
native people to self-determination and self-governance.
(20) The United States has declared that--
(A) the United States has a special responsibility for the
welfare of the native peoples of the United States, including
Native Hawaiians;
(B) Congress has identified Native Hawaiians as a distinct
indigenous group within the scope of its Indian affairs
power, and has enacted dozens of statutes on their behalf
pursuant to its recognized trust responsibility; and
(C) Congress has also delegated broad authority to
administer a portion of the Federal trust responsibility to
the State of Hawaii.
(21) The United States has recognized and reaffirmed the
special trust relationship with the Native Hawaiian people
through--
(A) the enactment of the Act entitled ``An Act to provide
for the admission of the State of Hawaii into the Union'',
approved March 18, 1959 (Public Law 86-3; 73 Stat. 4) by--
(i) ceding to the State of Hawaii title to the public lands
formerly held by the United States, and mandating that those
lands be held in public trust for 5 purposes, one of which is
for the betterment of the conditions of Native Hawaiians; and
(ii) transferring the United States responsibility for the
administration of the Hawaiian Home Lands to the State of
Hawaii, but retaining the authority to enforce the trust,
including the exclusive right of the United States to consent
to any actions affecting the lands which comprise the corpus
of the trust and any amendments to the Hawaiian Homes
Commission Act, 1920 (42 Stat. 108, chapter 42) that are
enacted by the legislature of the State of Hawaii affecting
the beneficiaries under the Act.
(22) The United States continually has recognized and
reaffirmed that--
(A) Native Hawaiians have a cultural, historic, and land-
based link to the aboriginal, native people who exercised
sovereignty over the Hawaiian Islands;
(B) Native Hawaiians have never relinquished their claims
to sovereignty or their sovereign lands;
(C) the United States extends services to Native Hawaiians
because of their unique status as the aboriginal, native
people of a once sovereign nation with whom the United States
has a political and legal relationship; and
(D) the special trust relationship of American Indians,
Alaska Natives, and Native Hawaiians to the United States
arises out of their status as aboriginal, indigenous, native
people of the United States.

SEC. 2. DEFINITIONS.

In this Act:
(1) Aboriginal, indigenous, native people.--The term
``aboriginal, indigenous, native people'' means those people
whom Congress has recognized as the original inhabitants of
the lands and who exercised sovereignty prior to European
contact in the areas that later became part of the United
States.
(2) Adult members.--The term ``adult members'' means those
Native Hawaiians who have attained the age of 18 at the time
the Secretary publishes the final roll, as provided in
section 7(a)(3) of this Act.
(3) Apology resolution.--The term ``Apology Resolution''
means Public Law 103-150 (107 Stat. 1510), a joint resolution
offering an apology to Native Hawaiians on behalf of the
United States for the participation of agents of the United
States in the January 17, 1893 overthrow of the Kingdom of
Hawaii.
(4) Ceded lands.--The term ``ceded lands'' means those
lands which were ceded to the United States by the Republic
of Hawaii under the Joint Resolution to provide for annexing
the Hawaiian Islands to the United States of July 7, 1898 (30
Stat. 750), and which were later transferred to the State of
Hawaii in the Act entitled ``An Act to provide for the
admission of the State of Hawaii into the Union'' approved
March 18, 1959 (Public Law 86-3; 73 Stat. 4).
(5) Commission.--The term ``Commission'' means the
commission established in section 7 of this Act to certify
that the adult members of the Native Hawaiian community
contained on the roll developed under that section meet the
definition of Native Hawaiian, as defined in paragraph
(7)(A).
(6) Indigenous, native people.--The term ``indigenous,
native people'' means the lineal descendants of the
aboriginal, indigenous, native people of the United States.
(7) Native hawaiian.--
(A) Prior to the recognition by the United States of a
Native Hawaiian government under the authority of section
7(d)(2) of this Act, the term ``Native Hawaiian'' means the
indigenous, native people of Hawaii who are the lineal
descendants of the aboriginal, indigenous, native people who
resided in the islands that now comprise the State of Hawaii
on or before January 1, 1893, and who occupied and exercised
sovereignty in the Hawaiian archipelago, including the area
that now constitutes the State of Hawaii, and includes all
Native Hawaiians who were eligible in 1921 for the programs
authorized by the Hawaiian Homes Commission Act (42 Stat.
108, chapter 42) and their lineal descendants.
(B) Following the recognition by the United States of the
Native Hawaiian government under section 7(d)(2) of this Act,
the term ``Native Hawaiian'' shall have the meaning given to
such term in the organic governing documents of the Native
Hawaiian government.
(8) Native hawaiian government.--The term ``Native Hawaiian
government'' means the citizens of the government of the
Native Hawaiian people that is recognized by the United
States under the authority of section 7(d)(2) of this Act.
(9) Native hawaiian interim governing council.--The term
``Native Hawaiian Interim Governing Council'' means the
interim governing council that is organized under section
7(c) of this Act.
(10) Roll.--The term ``roll'' means the roll that is
developed under the authority of section 7(a) of this Act.
(11) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(12) Task force.--The term ``Task Force'' means the Native
Hawaiian Interagency Task Force established under the
authority of section 6 of this Act.

SEC. 3. UNITED STATES POLICY AND PURPOSE.

(a) Policy.--The United States reaffirms that--
(1) Native Hawaiians are a unique and distinct aboriginal,
indigenous, native people, with whom the United States has a
political and legal relationship;
(2) the United States has a special trust relationship to
promote the welfare of Native Hawaiians;
(3) Congress possesses the authority under the Constitution
to enact legislation to address the conditions of Native
Hawaiians and has exercised this authority through the
enactment of--
(A) the Hawaiian Homes Commission Act, 1920 (42 Stat. 108,
chapter 42);
(B) the Act entitled ``An Act to provide for the admission
of the State of Hawaii into the Union'', approved March 18,
1959 (Public Law 86-3; 73 Stat. 4); and
(C) more than 150 other Federal laws addressing the
conditions of Native Hawaiians;
(4) Native Hawaiians have--
(A) an inherent right to autonomy in their internal
affairs;
(B) an inherent right of self-determination and self-
governance;
(C) the right to reorganize a Native Hawaiian government;
and
(D) the right to become economically self-sufficient; and
(5) the United States shall continue to engage in a process
of reconciliation and political relations with the Native
Hawaiian people.
(b) Purpose.--It is the intent of Congress that the purpose
of this Act is to provide a process for the reorganization of
a Native Hawaiian government and for the recognition by the
United States of the Native Hawaiian government for purposes
of continuing a government-to-government relationship.

[[Page S341]]

SEC. 4. ESTABLISHMENT OF THE UNITED STATES OFFICE FOR NATIVE
HAWAIIAN AFFAIRS.

(a) In General.--There is established within the Office of
the Secretary the United States Office for Native Hawaiian
Affairs.
(b) Duties of the Office.--The United States Office for
Native Hawaiian Affairs shall--
(1) effectuate and coordinate the special trust
relationship between the Native Hawaiian people and the
United States through the Secretary, and with all other
Federal agencies;
(2) upon the recognition of the Native Hawaiian government
by the United States as provided for in section 7(d)(2) of
this Act, effectuate and coordinate the special trust
relationship between the Native Hawaiian government and the
United States through the Secretary, and with all other
Federal agencies;
(3) fully integrate the principle and practice of
meaningful, regular, and appropriate consultation with the
Native Hawaiian people by providing timely notice to, and
consulting with the Native Hawaiian people prior to taking
any actions that may affect traditional or current Native
Hawaiian practices and matters that may have the potential to
significantly or uniquely affect Native Hawaiian resources,
rights, or lands, and upon the recognition of the Native
Hawaiian government as provided for in section 7(d)(2) of
this Act, fully integrate the principle and practice of
meaningful, regular, and appropriate consultation with the
Native Hawaiian government by providing timely notice to, and
consulting with the Native Hawaiian people and the Native
Hawaiian government prior to taking any actions that may have
the potential to significantly affect Native Hawaiian
resources, rights, or lands;
(4) consult with the Native Hawaiian Interagency Task
Force, other Federal agencies, and with relevant agencies of
the State of Hawaii on policies, practices, and proposed
actions affecting Native Hawaiian resources, rights, or
lands;
(5) be responsible for the preparation and submittal to the
Committee on Indian Affairs of the Senate, the Committee on
Energy and Natural Resources of the Senate, and the Committee
on Resources of the House of Representatives of an annual
report detailing the activities of the Interagency Task Force
established under section 6 of this Act that are undertaken
with respect to the continuing process of reconciliation and
to effect meaningful consultation with the Native Hawaiian
people and the Native Hawaiian government and providing
recommendations for any necessary changes to existing Federal
statutes or regulations promulgated under the authority of
Federal law;
(6) be responsible for continuing the process of
reconciliation with the Native Hawaiian people, and upon the
recognition of the Native Hawaiian government by the United
States as provided for in section 7(d)(2) of this Act, be
responsible for continuing the process of reconciliation with
the Native Hawaiian government; and
(7) assist the Native Hawaiian people in facilitating a
process for self-determination, including but not limited to
the provision of technical assistance in the development of
the roll under section 7(a) of this Act, the organization of
the Native Hawaiian Interim Governing Council as provided for
in section 7(c) of this Act, and the recognition of the
Native Hawaiian government as provided for in section 7(d) of
this Act.
(c) Authority.--The United States Office for Native
Hawaiian Affairs is authorized to enter into a contract with
or make grants for the purposes of the activities authorized
or addressed in section 7 of this Act for a period of 3 years
from the date of enactment of this Act.

SEC. 5. DESIGNATION OF DEPARTMENT OF JUSTICE REPRESENTATIVE.

The Attorney General shall designate an appropriate
official within the Department of Justice to assist the
United States Office for Native Hawaiian Affairs in the
implementation and protection of the rights of Native
Hawaiians and their political, legal, and trust relationship
with the United States, and upon the recognition of the
Native Hawaiian government as provided for in section 7(d)(2)
of this Act, in the implementation and protection of the
rights of the Native Hawaiian government and its political,
legal, and trust relationship with the United States.

SEC. 6. NATIVE HAWAIIAN INTERAGENCY TASK FORCE.

(a) Establishment.--There is established an interagency
task force to be known as the ``Native Hawaiian Interagency
Task Force''.
(b) Composition.--The Task Force shall be composed of
officials, to be designated by the President, from--
(1) each Federal agency that establishes or implements
policies that affect Native Hawaiians or whose actions may
significantly or uniquely impact on Native Hawaiian
resources, rights, or lands;
(2) the United States Office for Native Hawaiian Affairs
established under section 4 of this Act; and
(3) the Executive Office of the President.
(c) Lead Agencies.--The Department of the Interior and the
Department of Justice shall serve as the lead agencies of the
Task Force, and meetings of the Task Force shall be convened
at the request of either of the lead agencies.
(d) Co-Chairs.--The Task Force representative of the United
States Office for Native Hawaiian Affairs established under
the authority of section 4 of this Act and the Attorney
General's designee under the authority of section 5 of this
Act shall serve as co-chairs of the Task Force.
(e) Duties.--The responsibilities of the Task Force shall
be--
(1) the coordination of Federal policies that affect Native
Hawaiians or actions by any agency or agencies of the Federal
Government which may significantly or uniquely impact on
Native Hawaiian resources, rights, or lands;
(2) to assure that each Federal agency develops a policy on
consultation with the Native Hawaiian people, and upon
recognition of the Native Hawaiian government by the United
States as provided in section 7(d)(2) of this Act,
consultation with the Native Hawaiian government; and
(3) to assure the participation of each Federal agency in
the development of the report to Congress authorized in
section 4(b)(5) of this Act.

SEC. 7. PROCESS FOR THE DEVELOPMENT OF A ROLL FOR THE
ORGANIZATION OF A NATIVE HAWAIIAN INTERIM
GOVERNING COUNCIL, FOR THE ORGANIZATION OF A
NATIVE HAWAIIAN INTERIM GOVERNING COUNCIL AND A
NATIVE HAWAIIAN GOVERNMENT, AND FOR THE
RECOGNITION OF THE NATIVE HAWAIIAN GOVERNMENT.

(a) Roll.--
(1) Preparation of roll.--The United States Office for
Native Hawaiian Affairs shall assist the adult members of the
Native Hawaiian community who wish to participate in the
reorganization of a Native Hawaiian government in preparing a
roll for the purpose of the organization of a Native Hawaiian
Interim Governing Council. The roll shall include the names
of the--
(A) adult members of the Native Hawaiian community who wish
to become citizens of a Native Hawaiian government and who
are--
(i) the lineal descendants of the aboriginal, indigenous,
native people who resided in the islands that now comprise
the State of Hawaii on or before January 1, 1893, and who
occupied and exercised sovereignty in the Hawaiian
archipelago; or
(ii) Native Hawaiians who were eligible in 1921 for the
programs authorized by the Hawaiian Homes Commission Act (42
Stat. 108, chapter 42) or their lineal descendants; and
(B) the children of the adult members listed on the roll
prepared under this subsection.
(2) Certification and submission.--
(A) Commission.--
(i) In general.--There is authorized to be established a
Commission to be composed of 9 members for the purpose of
certifying that the adult members of the Native Hawaiian
community on the roll meet the definition of Native Hawaiian,
as defined in section 2(7)(A) of this Act.
(ii) Membership.--

(I) Appointment.--The Secretary shall appoint the members
of the Commission in accordance with subclause (II). Any
vacancy on the Commission shall not affect its powers and
shall be filled in the same manner as the original
appointment.
(II) Requirements.--The members of the Commission shall be
Native Hawaiian, as defined in section 2(7)(A) of this Act,
and shall have expertise in the certification of Native
Hawaiian ancestry.
(III) Congressional submission of suggested candidates.--In
appointing members of the Commission, the Secretary may
choose such members from among--

(aa) five suggested candidates submitted by the Majority
Leader of the Senate and the Minority Leader of the Senate
from a list of candidates provided to such leaders by the
Chairman and Vice Chairman of the Committee on Indian Affairs
of the Senate; and
(bb) four suggested candidates submitted by the Speaker of
the House of Representatives and the Minority Leader of the
House of Representatives from a list provided to the Speaker
and the Minority Leader by the Chairman and Ranking member of
the Committee on Resources of the House of Representatives.
(iii) Expenses.--Each member of the Commission shall be
allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Commission.
(B) Certification.--The Commission shall certify that the
individuals listed on the roll developed under the authority
of this subsection are Native Hawaiians, as defined in
section 2(7)(A) of this Act.
(3) Secretary.--
(A) Certification.--The Secretary shall review the
Commission's certification of the membership roll and
determine whether it is consistent with applicable Federal
law, including the special trust relationship between the
United States and the indigenous, native people of the United
States.
(B) Publication.--Upon making the determination authorized
in subparagraph (A), the Secretary shall publish a final
roll.
(C) Appeal.--
(i) Establishment of mechanism.--The Secretary is
authorized to establish a mechanism for an appeal of the
Commission's determination as it concerns--

(I) the exclusion of the name of a person who meets the
definition of Native Hawaiian, as defined in section 2(7)(A)
of this Act, from the roll; or
(II) a challenge to the inclusion of the name of a person
on the roll on the grounds that the person does not meet the
definition of Native Hawaiian, as so defined.

[[Page S342]]

(ii) Publication; update.--The Secretary shall publish the
final roll while appeals are pending, and shall update the
final roll and the publication of the final roll upon the
final disposition of any appeal.
(D) Failure to act.--If the Secretary fails to make the
certification authorized in subparagraph (A) within 90 days
of the date that the Commission submits the membership roll
to the Secretary, the certification shall be deemed to have
been made, and the Commission shall publish the final roll.
(4) Effect of publication.--The publication of the final
roll shall serve as the basis for the eligibility of adult
members listed on the roll to participate in all referenda
and elections associated with the organization of a Native
Hawaiian Interim Governing Council and the Native Hawaiian
government.
(b) Recognition of Rights.--The right of the Native
Hawaiian people to organize for their common welfare and to
adopt appropriate organic governing documents is hereby
recognized by the United States.
(c) Organization of the Native Hawaiian Interim Governing
Council.--
(1) Organization.--The adult members listed on the roll
developed under the authority of subsection (a) are
authorized to--
(A) develop criteria for candidates to be elected to serve
on the Native Hawaiian Interim Governing Council;
(B) determine the structure of the Native Hawaiian Interim
Governing Council; and
(C) elect members to the Native Hawaiian Interim Governing
Council.
(2) Election.--Upon the request of the adult members listed
on the roll developed under the authority of subsection (a),
the United States Office for Native Hawaiian Affairs may
assist the Native Hawaiian community in holding an election
by secret ballot (absentee and mail balloting permitted), to
elect the membership of the Native Hawaiian Interim Governing
Council.
(3) Powers.--
(A) In general.--The Native Hawaiian Interim Governing
Council is authorized to represent those on the roll in the
implementation of this Act and shall have no powers other
than those given to it in accordance with this Act.
(B) Funding.--The Native Hawaiian Interim Governing Council
is authorized to enter into a contract or grant with any
Federal agency, including but not limited to, the United
States Office for Native Hawaiian Affairs within the
Department of the Interior and the Administration for Native
Americans within the Department of Health and Human Services,
to carry out the activities set forth in subparagraph (C).
(C) Activities.--
(i) In general.--The Native Hawaiian Interim Governing
Council is authorized to conduct a referendum of the adult
members listed on the roll developed under the authority of
subsection (a) for the purpose of determining (but not
limited to) the following:

(I) The proposed elements of the organic governing
documents of a Native Hawaiian government.
(II) The proposed powers and authorities to be exercised by
a Native Hawaiian government, as well as the proposed
privileges and immunities of a Native Hawaiian government.
(III) The proposed civil rights and protection of such
rights of the citizens of a Native Hawaiian government and
all persons subject to the authority of a Native Hawaiian
government.

(ii) Development of organic governing documents.--Based
upon the referendum, the Native Hawaiian Interim Governing
Council is authorized to develop proposed organic governing
documents for a Native Hawaiian government.
(iii) Distribution.--The Native Hawaiian Interim Governing
Council is authorized to distribute to all adult members of
those listed on the roll, a copy of the proposed organic
governing documents, as drafted by the Native Hawaiian
Interim Governing Council, along with a brief impartial
description of the proposed organic governing documents.
(iv) Consultation.--The Native Hawaiian Interim Governing
Council is authorized to freely consult with those members
listed on the roll concerning the text and description of the
proposed organic governing documents.
(D) Elections.--
(i) In general.--The Native Hawaiian Interim Governing
Council is authorized to hold elections for the purpose of
ratifying the proposed organic governing documents, and upon
ratification of the organic governing documents, to hold
elections for the officers of the Native Hawaiian government.
(ii) Assistance.--Upon the request of the Native Hawaiian
Interim Governing Council, the United States Office of Native
Hawaiian Affairs may assist the Council in conducting such
elections.
(4) Termination.--The Native Hawaiian Interim Governing
Council shall have no power or authority under this Act after
the time at which the duly elected officers of the Native
Hawaiian government take office.
(d) Recognition of the Native Hawaiian Government.--
(1) Process for recognition.--
(A) Submittal of organic governing documents.--The duly
elected officers of the Native Hawaiian government shall
submit the organic governing documents of the Native Hawaiian
government to the Secretary.
(B) Certifications.--Within 90 days of the date that the
duly elected officers of the Native Hawaiian government
submit the organic governing documents to the Secretary, the
Secretary shall certify that the organic governing
documents--
(i) were adopted by a majority vote of the adult members
listed on the roll prepared under the authority of subsection
(a);
(ii) are consistent with applicable Federal law and the
special trust relationship between the United States and the
indigenous native people of the United States;
(iii) provide for the exercise of those governmental
authorities that are recognized by the United States as the
powers and authorities that are exercised by other
governments representing the indigenous, native people of the
United States;
(iv) provide for the protection of the civil rights of the
citizens of the Native Hawaiian government and all persons
subject to the authority of the Native Hawaiian government,
and to assure that the Native Hawaiian government exercises
its authority consistent with the requirements of section 202
of the Act of April 11, 1968 (25 U.S.C. 1302);
(v) prevent the sale, disposition, lease, or encumbrance of
lands, interests in lands, or other assets of the Native
Hawaiian government without the consent of the Native
Hawaiian government;
(vi) establish the criteria for citizenship in the Native
Hawaiian government; and
(vii) provide authority for the Native Hawaiian government
to negotiate with Federal, State, and local governments, and
other entities.
(C) Failure to act.--If the Secretary fails to act within
90 days of the date that the duly elected officers of the
Native Hawaiian government submitted the organic governing
documents of the Native Hawaiian government to the Secretary,
the certifications authorized in subparagraph (B) shall be
deemed to have been made.
(D) Resubmission in case of noncompliance with federal
law.--
(i) Resubmission by the secretary.--If the Secretary
determines that the organic governing documents, or any part
thereof, are not consistent with applicable Federal law, the
Secretary shall resubmit the organic governing documents to
the duly elected officers of the Native Hawaiian government
along with a justification for each of the Secretary's
findings as to why the provisions are not consistent with
such law.
(ii) Amendment and resubmission by the native hawaiian
government.--If the organic governing documents are
resubmitted to the duly elected officers of the Native
Hawaiian government by the Secretary under clause (i), the
duly elected officers of the Native Hawaiian government
shall--

(I) amend the organic governing documents to ensure that
the documents comply with applicable Federal law; and
(II) resubmit the amended organic governing documents to
the Secretary for certification in accordance with
subparagraphs (B) and (C).

(2) Federal recognition.--
(A) Recognition.--Notwithstanding any other provision of
law, upon the election of the officers of the Native Hawaiian
government and the certifications (or deemed certifications)
by the Secretary authorized in paragraph (1), Federal
recognition is hereby extended to the Native Hawaiian
government as the representative governing body of the Native
Hawaiian people.
(B) No diminishment of rights or privileges.--Nothing
contained in this Act shall diminish, alter, or amend any
existing rights or privileges enjoyed by the Native Hawaiian
people which are not inconsistent with the provisions of this
Act.

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated such sums as may be
necessary to carry out the activities authorized in this Act.

SEC. 9. REAFFIRMATION OF DELEGATION OF FEDERAL AUTHORITY;
NEGOTIATIONS.

(a) Reaffirmation.--The delegation by the United States of
authority to the State of Hawaii to address the conditions of
Native Hawaiians contained in the Act entitled ``An Act to
provide for the admission of the State of Hawaii into the
Union'' approved March 18, 1959 (Public Law 86-3; 73 Stat. 5)
is hereby reaffirmed.
(b) Negotiations.--Upon the Federal recognition of the
Native Hawaiian government pursuant to section 7(d)(2) of
this Act, the United States is authorized to negotiate and
enter into an agreement with the State of Hawaii and the
Native Hawaiian government regarding the transfer of lands,
resources, and assets dedicated to Native Hawaiian use under
existing law as in effect on the date of enactment of this
Act to the Native Hawaiian government.

SEC. 10. DISCLAIMER.

Nothing in this Act is intended to serve as a settlement of
any claims against the United States, or to affect the rights
of the Native Hawaiian people under international law.

SEC. 11. REGULATIONS.

The Secretary is authorized to make such rules and
regulations and such delegations of authority as the
Secretary deems necessary to carry out the provisions of this
Act.

SEC. 12. SEVERABILITY.

In the event that any section or provision of this Act, or
any amendment made by this Act is held invalid, it is the
intent of Congress that the remaining sections or provisions
of this Act, and the amendments made by this Act, shall
continue in full force and effect.

[[Page S343]]

______

By Mr. LUGAR:
S. 82. A bill to repeal the Federal estate and gift taxes and the tax
on generation-skipping transfers; to the Commitee on Finance.
S. 83. A bill to phase-out and repeal the Federal estate and gift
taxes and the tax on generation-skipping transfers; to the Committee on
Finance.
S. 84. A bill to increase the unified estate and gift taxes and the
tax credit to exempt small businesses and farmers from estate taxes; to
the Committee on Finance
S. 85. A bill to amend the Internal Revenue Code of 1986 to increase
the gift tax exclusion to $25,000; to the Committee on Finance.

Estate Taxes

Mr. LUGAR. Mr. President, I am pleased to introduce a series of bills
intended to address the burden that estate taxes place on our economy.
The estate tax hinders entrepreneurial activity and job creation in
many economic sectors.
As Chairman of the Senate Agriculture Committee, I have held hearings
on the impact of the estate tax on farmers, ranchers, and rural
communities. The effects of inheritance taxes are far reaching in the
agricultural community. Citing personal experiences, witnesses
described how the estate tax discourages savings, capital investment,
and job formation.
One such story came from a Hoosier, Mr. Woody Barton. He is a fifth
generation tree farmer living in the house his great grandparents built
in 1885. I visited his 300 acres of forested property recently and can
attest to their beauty. Typical of many farmers, Mr. Barton is over 65
years old and wants to leave this legacy to his four children. But he
fears that the estate tax may cause his children to strip the timber
and then sell the land in order to pay the estate tax bill. His
grandmother logged a portion of the land in 1939 to pay the debts that
came from the death of her husband. In essence, each generation must
buy back the hard work and dedication of their ancestors from the
federal government. Mr. Barton believes, and I agree, that the actions
of Congress have more impact on the outcome of his family's land than
his own planning and investment. This should not be the case.
The estate tax falls disproportionately on our agricultural
producers. Ninety-five percent of farms and ranch operations are sold
proprietorships or family partnerships, subjecting a vast majority of
these businesses to the threat of inheritance taxes. According to USDA
figures farmers are six times more likely to face inheritance taxes
than other Americans. And commercial farm estates--those core farms
that produce 85 percent of our nation's agricultural products-are
fifteen times more likely to pay inheritance taxes than other
individuals.
The threat of estate taxes to family farms will become even more
prevalent if nothing is done. With the average farmer approaching 60
years of age, farm families throughout the country are about to
confront the burden of estate taxes as they prepare to pass their farm
onto the next generation. Recently, the USDA estimated that between
1992 and 2002, more than 500,000 farmers will have retired. Demographic
studies indicate that a quarter of all farmers could confront the
inheritance tax during the next 20 years.
In light of this problem, today I offer several bills to provide
relief to those impacted by the estate tax. This is the third
consecutive Congress that I have offered this series of bills on the
first day of bill introduction. I am optimistic that this will be the
Congress that will finally repeal the estate tax.
My first bill would repeal the estate and gift taxes outright. My
second bill would phase out the estate tax over five years by gradually
raising the unified credit each year until the tax is repealed after
the fifth year. My third bill would immediately raise the effective
unified credit to $5 million. My last bill would raise the gift tax
exemption from $10,000 to $25,000.
I believe that the best option is a simple repeal of the estate tax.
However, even if the estate tax is not repealed, the unified credit
must be raised significantly. Despite our most recent success in
raising the exemption level, inflation has caused a growing percentage
of estates to be subjected to the estate tax. My second bill is
intended to highlight this point and provide a gradual path to repeal.
My third bill focuses on relieving the estate tax burden that falls
disproportionately on farmers and small business owners. By raising the
exemption amount to $5 million, 96 percent of estates with farm assets
and 90 percent of estates with non-corporate business assets would not
have to pay estate taxes, according to the IRS. The final bill raising
the gift tax exemption from $10,000 to $25,000 would provide Americans
with an additional tool for passing productive assets to the next
generation. This level has not been adjusted since 1982.
Despite its modest beginnings in 1916, the estate tax has mushroomed
into an exorbitant tax on death that discourages savings, economic
growth, and job formation by blocking the accumulation of
entrepreneurial capital and by breaking up family businesses and farms.
With the highest marginal rate at 55 percent, more than half of an
estate can go directly to the government. By the time the inheritance
tax is levied on families, their assets have already been taxed at
least once. This form of double taxation violates perceptions of
fairness in our tax system.
If we are sincere about boosting economic growth, we must consider
what effect the estate tax has on a business owner deciding whether to
invest in new capital goods or hire a new employee. The Heritage
Foundation estimates that repealing the estate tax would annually boost
our economic output by $11 billion, create 145,000 new jobs and raise
personal income by $8 billion. These figures underscore the current
weight of this tax on our economy.
One might expect that for all the economic disincentives caused by
the estate tax, it must at least provide a sizable contribution to the
U.S. Treasury. But in reality, the estate tax only accounts for about 1
percent of federal taxes. It cannot be justified as an indispensable
revenue raiser. Given the blow delivered to job formation and economic
growth, the estate tax may even cost the Treasury money. Our nation's
ability to crease new jobs, new opportunities, and new wealth is
damaged as a result of our insistence on collecting a tax that earns
less than 1 percent of our revenue.
But this tax affects more than just the national economy. It affects
how we as a nation think about community, family, and work. Small
businesses and farms represent much more than assets. They represent
years of toil and entrepreneurial risk taking. They also represent the
hopes that families have for their children. Part of the American Dream
has always been to build up a business, farm, or ranch so that economic
opportunities and a way of life can be passed on to one's children and
grandchildren.
I know first-hand about the dangers of this tax to agriculture. My
father died when I was 24, leaving his 604-acre farm in Marion County,
Indiana, to his family. I helped manage the farm, which had built up
considerable debts during my father's illness. Fortunately, after a
number of years, we were successful in working out the financial
problems and repaying the money. We were lucky; that farm remains in
our family. But many of today's farmers and small business owners are
not so fortunate. Only about 30 percent of businesses are transferred
from parent to child, and only about 12 percent of businesses make it
to a grandchild.
Mr. President, I was delighted that during the last Congress we were
able to pass the Death Tax Elimination Act. Despite its ultimate veto,
this legislative step was an important one and will hopefully carry
over momentum to this congress. As we take up this issue again in the
coming months, the bills that I have introduced will provide
policymakers with a range of options as they seek to mitigate the
burdens of the estate tax. Doing so will lead to expanded investment
incentives and job creation and will reinvigorate an important part of
the American Dream. I am hopeful that Senators will join me in the
effort to free small businesses, family farms, and our economy from
this counterproductive tax. I ask unanimous consent that my four bills
be printed in the Record.

[[Page S344]]

There being no objection, the bills were ordered to be printed in the
Record, as follows:

S. 82

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 ``Estate and Gift Tax Repeal
Act of 2001''.

SEC. 2. FINDINGS.

SEC. 3. REPEAL OF FEDERAL TRANSFER TAXES.

(a) In General.--Subtitle B of the Internal Revenue Code of
1986 is repealed.
(b) Effective Date.--The repeal made by subsection (a)
shall apply to the estates of decedents dying, and gifts and
generation-skipping transfers made, after the date of the
enactment of this Act.
(c) Technical and Conforming Changes.--The Secretary of the
Treasury or the Secretary's delegate shall, as soon as
practicable but in any event not later than 90 days after the
date of the enactment of this Act, submit to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a draft of any technical
and conforming changes in the Internal Revenue Code of 1986
which are necessary to reflect throughout such Code the
changes in the substantive provisions of law made by this
Act.
____

S. 83

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 ``Estate and Gift Tax Phase-
Out Act of 2001''.

SEC. 2. FINDINGS.

SEC. 3. PHASE-OUT OF ESTATE AND GIFT TAXES THROUGH INCREASE
IN UNIFIED ESTATE AND GIFT TAX CREDIT.

(a) In General.--The table in section 2010(c) of the
Internal Revenue Code (relating to applicable credit amount)
is amended to read as follows:

``In the case of estates of decedentThe applicable exclusion amount is:
2002..................................................$1,000,000
2003..................................................$1,500,000
2004..................................................$2,000,000
2005..................................................$2,500,000
2006...............................................$5,000,000.''.
(b) Effective Date.--The amendment made by this section
shall apply to the estates of decedents dying, and gifts
made, after December 31, 2001.

SEC. 4. REPEAL OF FEDERAL TRANSFER TAXES.

(a) In General.--Subtitle B of the Internal Revenue Code of
1986 is repealed.
(b) Effective Date.--The repeal made by subsection (a)
shall apply to the estates of decedents dying, and gifts and
generation-skipping transfers made, after December 31, 2006.
(c) Technical and Conforming Changes.--The Secretary of the
Treasury or the Secretary's delegate shall not later than 90
days after the effective date of this section, submit to the
Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate a draft of any
technical and conforming changes in the Internal Revenue Code
of 1986 which are necessary to reflect throughout such Code
the changes in the substantive provisions of law made by this
Act.
____

S. 84

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 ``Farmer and Entrepreneur
Estate Tax Relief Act of 2001''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) The economy of the United States cannot achieve strong,
sustained growth without adequate levels of savings to fuel
productive activity. Inadequate savings have been shown to
lead to lower productivity, stagnating wages and reduced
standards of living.
(2) Savings levels in the United States have steadily
declined over the past 25 years, and have lagged behind the
industrialized trading partners of the United States.
(3) These anemic savings levels have contributed to the
country's long-term downward trend in real economic growth,
which averaged close to 3.5 percent over the last 100 years
but has slowed to 2.4 percent over the past quarter century.
(4) Congress should work toward reforming the entire
Federal tax code to end its bias against savings.
(5) Repealing the estate and gift tax would contribute to
the goals of expanding savings and investment, boosting
entrepreneurial activity, and expanding economic growth. The
estate tax is harmful to the economy because of its high
marginal rates and its multiple taxation of income.
(6) The repeal of the estate tax would increase the growth
of the small business sector, which creates a majority of new
jobs in our Nation. Estimates indicate that as many as 70
percent of small businesses do not make it to a second
generation and nearly 90 percent do not make it to a third.
(7) Eliminating the estate tax would lift the compliance
burden from farmers and family businesses. On average,
family-owned businesses spent over $33,000 on accountants,
lawyers, and financial experts in complying with the estate
tax laws over a 6.5-year period.
(8) Abolishing the estate tax would benefit the
preservation of family farms. Nearly 95 percent of farms and
ranches are owned by sole proprietors or family partnerships,
subjecting most of this property to estate taxes upon the
death of the owner. Due to the capital intensive nature of
farming and its low return on investment, farmers are 15
times more likely to be subject to estate taxes than other
Americans.
(9) As the average age of farmers approaches 60 years, it
is estimated that a quarter of all farmers could confront the
estate tax over the next 20 years. The auctioning of these
productive assets to finance tax liabilities destroys jobs
and harms the economy.
(10) Abolishing the estate taxes would restore a measure of
fairness to our Federal tax system. Families should be able
to pass on the fruits of the labor to the next generation
without realizing a taxable event.
(11) Despite this heavy burden on entrepreneurs, farmers,
and our entire economy, estate and gift taxes collect only
about 1 percent of our Federal tax revenues. In fact, the
estate tax may not raise any revenue at all, because more
income tax is lost from individuals attempting to avoid
estate taxes than is ultimately collected at death.
(12) Repealing estate and gift taxes is supported by the
White House Conference on Small Business, the Kemp Commission
on Tax Reform, and 60 small business advocacy organizations.

SEC. 3. INCREASE IN UNIFIED ESTATE AND GIFT TAX CREDIT.

(a) In General.--The table in section 2010(c) of the
Internal Revenue Code (relating to applicable credit amount)
is amended--
(1) by striking ``2002 and 2003'' and inserting ``2002 or
thereafter'',
(2) by striking ``$700,000'' and inserting ``$5,000,000'',
and

[[Page S345]]

(3) by striking all matter beginning with the item relating
to 2004 through the end of the table.
(b) Effective Date.--The amendments made by this section
shall apply to the estates of decedents dying, and gifts
made, after December 31, 2001.
____

S. 85

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

SECTION 1. INCREASE IN GIFT TAX EXCLUSION.

(a) In General.--Section 2503(b) of the Internal Revenue
Code of 1986 (relating to exclusions from gifts) is amended--
(1) by striking ``$10,000'' each place it appears and
inserting ``$25,000'',
(2) by striking ``1998'' in paragraph (2) and inserting
``2002'', and
(3) by striking ``1997'' in paragraph (2)(B) and inserting
``2001''.
(b) Effective Date.--The amendments made by this section
shall apply to gifts made after December 31, 2001.
______

By Mr. ROCKEFELLER (for himself, Ms. Snowe, Mr. Kerry, Mr. Hatch,
Mr. Baucus, Mr. Burns, Mr. Hollings, Mr. Bayh, Mrs. Boxer, Mr.
Brownback, Mr. Cleland, Mrs. Clinton, Mr. Craig, Mr. Daschle,
Mr. DeWine, Mr. Dodd, Mr. Edwards, Mr. Enzi, Mr. Johnson, Mr.
Kennedy, Ms. Landrieu, Mrs. Lincoln, Mr. Miller, Mrs. Murray,
Mr. Roberts, Mr. Schumer, Mr. Thomas, Mr. Wyden, Mr. Helms, Mr.
Leahy, Mr. Conrad, Mr. Reid, and Mr. Harkin):
S. 88. A bill to amend the Internal Revenue Code of 1986 to provide
an incentive to ensure that all Americans gain timely and equitable
access to the Internet over current and future generations of broadband
capability; to the Committee on Finance.

Broadband Tax Credit Legislation

Mr. ROCKEFELLER. Mr. President, I rise today to introduce the
Broadband Internet Access Act of 2001. The convergence of computing and
communications has changed the way America interacts and does business.
Individuals, businesses, schools, libraries, hospitals, and many
others, reap the benefits of networked communications more and more
each year. However, where in the past access to low bandwidth telephone
facilities met our communications needs, today many people and
organizations need the ability to transmit and receive large amounts of
data quickly--as part of electronic commerce, distance learning,
telemedicine, and even for mere access to many web sites.
In some areas of the country companies are building networks that
meet today's broadband need as fast as they can. Technology companies
are fighting to roll out the current generation of broadband facilities
as quickly as they can in urban and suburban areas. They are tearing up
streets to install fiber optics, converting cable TV facilities to
broadband telecom applications, developing incredible new DSL
technologies that convert regular copper telephone wires into broadband
powerhouses.
Other areas are not as fortunate. In rural and inner city areas
access to even the current generation of broadband communications is
harder to come by. In fact, there are only a few broadband providers
outside the prosperous areas of big cities and suburban areas
nationwide. This is because in many cases rural areas are more
expensive to serve. Terrain is difficult. Populations are widely
dispersed. Importantly, many of our current broadband technologies
cannot serve people who live more than eighteen thousand feet from a
phone company's central office--which is the case for most rural
Americans. In inner cities, companies may believe that lower household
income levels will not support a market for their services, so they
chose not to invest in these communities.
The implications for the country if we allow this broadband disparity
to continue are alarming. Organizations in traditional robust
communications and computing regions, often located in prosperous urban
and suburban communities, will be able to reap the rewards of a
networked economy. Organizations in other areas, often in rural areas
as in inner cities, including many areas in my State of West Virginia,
will suffer the consequences of being unable to take advantage of the
astounding power of broadband networked computing.
Just as companies that employ technological advances are decimating
their less technologically savvy competitors, businesses in
infrastructure-rich areas may soon decimate competitors in
infrastructure-poor areas. This is just as true as rural and inner city
students, workers trying to gain new skills, and regular individuals
who want to participate in the New Economy in other ways compete
against their non-rural peers. The result could be disastrous for
Americans who live in rural areas or in our inner cities: job loss, tax
revenue loss, brain drain, and business failure concentrated in their
communities.
Denying Americans who live in rural areas and inner cities a chance
to participate in the New Economy is also bad for the national economy.
Businesses will be forced to locate their operations and hire their
employees in urban locations that have adequate broadband
infrastructure, rather than in rural or inner city locations that are
otherwise more efficient due to the location of their customers or
suppliers, a stable or better workforce, and cheaper production
environments. Additionally, without adequate infrastructure, the
businesses and individuals in these communications infrastructure poor
areas are less likely to be integrated into the national electronic
marketplace. Their absence would put a damper on the growth of the
digital economy for everyone--not just for those in rural areas.
Therefore, we must do everything we can to ensure that broadband
communications are available to all areas of the country--rural and
inner city as well as the prosperous urban and suburban communities.
The Broadband Internet Access Act of 2001 addresses this problem.
The Act would give companies the incentive to build current
generation broadband facilities in rural areas by using a very focused
tax credit. It would offer any company that invests in broadband
facilities in rural or inner city areas a ten percent tax credit over
the next five years. This tax credit will help fight the growing
disparity in technology I just described.
The credit is also restricted to investments needed for high-speed
broadband telecommunications services. This means that only powerful
broadband services are covered. Companies cannot claim that inferior
services qualify for the credit. Only facilities that can download data
at a rate of speed of 1.5 megabytes per second, and upload data at 200
kilobytes per second qualify.
In addition, the bill provides a 20 percent tax credit for companies
that invest in next generation broadband services. These powerful new
services, that can deliver data capacities of 22 megabytes per second
download and 5 megabytes per second upload will be the infrastructure
the new economy depends as the digital economy matures. We need to
reward the companies who have the foresight to invest in these next
generation broadband services--they will benefit the whole country.
The Broadband Internet Access Act of 2000 is part of the solution to
the critically important digital divide problem. Rural Americans and
Americans living in inner cities deserve the chance to participate in
the New Economy. Without access to broadband services they will not
have this chance. I hope that the Members of this body will support
this important bill.
For those who want even more details, I ask unanimous consent that
Attachment One to this statement, titled Broadband Internet Access Tax
Credit, be made part of the Record. This attachment is a detailed
explanation of the tax credit based on an analysis of the similar
Broadband Internet Access Act of 2000, from the 106th Congress. We will
hopefully have a more updated explanation that reflects changes to the
bill for the 107th Congress very soon.
There being no objection, the attachment ordered to be printed in the
Record, as follows:

Broadband Internet Access Tax Credit

(New sec. 48A of the Code)

present law

Present law does not provide a credit for investments in
telecommunications infrastructure.

explanation of provision

The bill provides a credit to 10 percent of the qualified
expenditures incurred by the taxpayer with respect to
qualified equipment

[[Page S346]]

with which ``current generation'' broadband services are
delivered to subscribers in rural and underserved areas. In
the addition, the bill provides a credit equal to 20 percent
of the qualified expenditures incurred by the taxpayer with
respect to qualified equipment with which ``next generation''
broadband services are delivered to subscribers in rural
areas, underserved areas, and to residential subscribers.
Current generation broadband services is defined as the
transmission of signals at a rat of at least 1.5 million bits
per second to the subscriber and at a rate of at least
200,000 bits per second from the subscriber. Next generation
broadband services is defined as the transmission of signals
at a rate of at least 22 million bits per second to the
subscriber and at a rate of at least 5 million bits per
second from the subscriber. Taxpayers will be permitted to
substantiate their satisfaction of the required transmission
rates through statistically significant test data
demonstrating satisfaction of the required transmission
rates, by providing evidence that all relevant subscribers
were provided with a written guarantee that the required
transmission rates would be satisfied, or through any other
reasonable method. For this purpose, the fact that certain
subscribers are not able to access such services at the
required transmission rates due to limitations in equipment
outside of the control of the provider, or in equipment other
than qualified equipment, shall not be taken into account.
A rural area is any census tract which is not within 10
miles of any incorporated or census designated place with a
population of more than 25,000 and which is not within a
county with a population density of more than 500 people per
square mile. An underserved area is any census tract which is
located in an empowerment zone, enterprise community, renewal
zone or low-income community. A residential subscriber is any
individual who purchases broadband services to be delivered
to his or her dwelling.
Qualified expenditures
Qualified expenditures are those amounts otherwise
chargeable to the capital account with respect to the
purchase and installation of qualified equipment for which
depreciation is allowable under section 168. Qualified
expenditures are those that are incurred by the taxpayer
after December 31, 2001, and before January 1, 2006.
The expenditures are taken into account for purposes of
claiming the credit in the first taxable year in which
broadband service is delivered to at least 10 percent of the
specified type of subscribers which the qualified equipment
is capable of serving in an area in which the provider has
legal or contractual area access rights or obligations. For
this purpose, it is intended that the subscribers which the
equipment is capable of serving will be determined by the
least capable link in the system. For example, if a system
has a packet switch capable of serving 10,000 subscribers,
followed by a digital subscriber line access multiplexer
(``DSLAM'') capable of serving only 2,000 subscribers, then
the area which the equipment is capable of serving is the
area served by the 2,000 DSLAM lines.
Although the credit only applies with respect to qualified
expenditures incurred during specified periods, the fact that
the expenditures are not taken into account until a later
period will not affect the taxpayer's eligibility for the
credit. For example, if a taxpayer incurs qualified
expenditures with respect to equipment providing next
generation broadband services in 2004, but the taxpayer
does not satisfy the 10 percent subscription threshold
until 2005, the taxpayer will be eligible for the credit
in 2005 (assuming the other requirements of the bill are
satisfied). To substantiate their satisfaction of the 10
percent subscription threshold, taxpayers will be required
to provide such information as is required by the
Secretary, which may include relevant customer date or
evidence of independent certification.
In the case of a taxpayer that incurs expenditures for
equipment capable of serving both subscribers in qualifying
areas and other areas, qualified expenditures are determined
by multiplying otherwise qualified expenditures by the ratio
of the number of potential qualifying subscribers to all
potential subscribers the qualified equipment would be
capable of serving, as determined by the least capable link
in the system. Taxpayers may use any reasonable method to
determine the relevant total potential subscriber population,
based on the most recently published census data. In
addition, for purposes of substantiating the total potential
subscriber population which equipment is capable of serving,
taxpayers will be required to provide such information as is
required by the Secretary, which may include manufacturer's
equipment ratings or evidence of independent certification.
Qualified equipment
Qualified equipment must be capable of providing broadband
services at any time to each subscriber who is utilizing such
services. It is intended that this standard would be
satisfied if a subscriber utilizing broadband services
through the equipment is able to receive the specified
transmission rates in at least 99 out of 100 attempts.
In the case of a telecommunications carrier, qualified
equipment is equipment that extends from the last point of
switching to the outside of the building in which the
subscriber is located. In the case of a commercial mobile
service carrier, qualified equipment that extends from the
customer side of a mobile telephone switching office to a
transmission/reception antenna (including the antenna) of the
subscriber. In the case of a cable operator or open video
system operator, qualified equipment is equipment that
extends from the customer side of the headend to the outside
of the building in which the subscriber is located. In the
case of a satellite carrier or other wireless carrier (other
than a telecommunications carrier), qualified equipment is
equipment that extends from a transmission/reception antenna
(including the antenna) to a transmission/reception antenna
on the outside of the building used by the subscriber. In
addition, any packet switching equipment deployed in
connection with other qualified equipment is qualified
equipment, regardless of location, provided that it is the
last such equipment in a series as part of transmission of a
signal to a subscriber or the first in a series in the
transmission of a signal from a subscriber. Finally,
multiplexing and demultiplexing equipment and other equipment
making associated applications deployed in connection with
other qualified equipment is qualified equipment only if it
is located between qualified packet switching equipment and
the subscriber's premises.
Although a taxpayer must incur the expenditures directly in
order to qualify for the credit, the taxpayer may provide the
requisite broadband services either directly or indirectly.
For example, if a partnership constructs qualified equipment
or otherwise incurs expenditures, but the requisite services
are provided by one or more of its partners, the partnership
will be eligible for the credit (assuming the other
requirements of the bill are satisfied). It is anticipated
that the Secretary will issue regulations or other published
guidance demonstrating how the requirements of the bill are
satisfied in such situations.

effective date

The provision is effective for expenditures incurred after
December 31, 2001.

Mr. BURNS. Mr. President, I rise today in support of a bill I
supported last Congress along with over half of the members in this
body. The bill, the Broadband Internet Access Act of 2001, creates tax
incentives for the deployment of broadband (high-speed) Internet
services to rural, low-income, and residential areas.
This bill will ensure that all Americans gain timely and equitable
access to the Internet over current and future generations of broadband
capability.
The legislation provides graduated tax credits to companies that
bring qualified telecommunication capabilities to targeted areas. It
grants a 10-percent credit for expenditures on equipment that provide
current generation bandwidth of 1.5 million bits per second (mbps)
downstream and .2 mbps upstream to subscribers in rural and low-income
areas, and a 20-percent credit for delivery of next generation 22 mbps
downstream and 5 mbps upstream to these customers and other residential
subscribers.
This bill has been endorsed by a number of organizations, including
Bell Atlantic, MCI/Worldcom, Corning Incorporated, the National
Telephone Cooperative Association, the Association for Local
Telecommunications Services, the United States Distance Learning
Association, and the Imaging Science and Information Systems Center at
Georgetown University Medical Center.
Mr. President, in a few short years, the Internet has grown
exponentially to become a mass medium used daily by over 100 million
people worldwide. The explosion of information technology has created
opportunities undreamed of by previous generations. In my home state of
Montana, companies such as Healthdirectory.com and Vanns.com are taking
advantage of the global markets made possible by the stunning reach of
the Internet.
The pace of broadband deployment to rural America must be accelerated
for electronic commerce to meet its full potential however. Broadband
access is as important to our small businesses in Montana as water is
to agribusiness.
I am aware of all of the recent discussion regarding the ``digital
divide'' and I am very concerned that the pace of broadband deployment
is greater in urban than rural areas. However, there is some positive
and exciting news on this front as well. The reality on the ground
shows that some of the ``gloom and doom'' scenarios are far from the
case. By pooling their limited resources, Montana's independent and
cooperative telephone companies are doing great things. I encourage my
colleagues to support this bill.
______

Mr. GRASSLEY:
S. 89. A bill to enhance the illegal narcotics control activities of
the United States, and for other purposes; to the Committee on the
Judiciary.

[[Page S347]]

Drug-Free America Act of 2001

Mr. GRASSLEY. Mr. President. I rise today to introduce the ``Drug-
Free America Act of 2001.'' As many of my colleagues know, drug use by
the children in our country continues to be a serious concern of mine.
The ``Drug-Free America Act'' offers a series of initiatives that I
believe will support efforts across the board to discourage drug use at
all levels in America.
Mr. President, I've said it before, but it bears repeating. Somewhere
along the way, we lost the clear, consistent message that the only
proper response to drugs is to say an emphatic ``no.'' We're supposed
to be more sophisticated. More tolerant. More willing to listen to
notions of making dangerous drugs more available. What all of this
``more'' has meant is that we have more young people using more drugs
at younger ages. Today we are competing with a drug culture that tells
our children ``drugs are cool,'' that ``drug are safe.'' Drugs are
being more aggressively marketed, and are presented as being ``user
friendly''.
We cannot remain silent. I look forward with working with President
Bush in providing the resources and message necessary to let everyone
know that drugs are bad, that drugs will damage your brain and your
body, and that drug use will hurt you, your friends, your family, your
community, and your future.
The drug problem confronting our country is not static.
Methamphetamine, Ecstasy, and other new drugs pose different challenges
and require different solutions than the heroin and cocaine epidemics.
Treatment, education, prevention, and law enforcement efforts must all
be strengthened and updated. The National Institutes of Health have
some exciting research efforts underway that could really make a
difference as we try to reclaim the lives of our fellow citizens who
have been seduced by the false pleasures of drug use. There are several
education and prevention initiatives that we can strengthen to support
the educators, counselors, community activists, and parents who work
hard every day to keep our children and our communities drug free. We
should support ongoing efforts by the National Guard Counterdrug
Directorate, and re-authorize the U.S. Customs Service, our Nation's
oldest law enforcement agency. We need to believe in our future. I
believe that by working together, we can, we will make a difference. I
hope my colleagues will join me in working to address this important
problem before it becomes any worse.
Left unanswered, we will see another generation of young lives
blighted. We will see families torn up by a widening circle of hurt
from drug use. We saw what a similar wave of drug use did to us and to
a generation of young people in the 1960s and 1970s. We are smarter
now, we have better tools and better knowledge. We cannot afford to go
through this again. I hope we can begin today to renew our commitment
to a drug free future for our young people. I have said this in
numerous town meetings, and I now say it here, ``working together, we
can make a difference.''
I urge my colleagues to join me in supporting the Drug-Free America
Act, and look forward to working with my colleagues on these important
initiatives.
Mr. President, I send this bill to the desk, and request that it be
printed in the appropriate place in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 89

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 ``Drug-Free
America Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.

TITLE I--DOMESTIC DEMAND REDUCTION

Sec. 101. Short title.

Subtitle A--Drug Treatment and Research

Sec. 111. Short title.
Sec. 112. Amendments to the Public Health Service Act.
Sec. 113. Adolescent therapeutic community treatment programs.
Sec. 114. Residential treatment program in Federal prisons.
Sec. 115. Counter-Drug Technology Assessment Center.
Sec. 116. Sense of Congress on research by the National Institutes of
Health.

Subtitle B--Drug-Free Communities

Sec. 121. Findings.
Sec. 122. Drug-free communities support program.

Subtitle C--Drug-Free Families

Sec. 131. Short title.
Sec. 132. Findings.
Sec. 133. Purposes.
Sec. 134. Definitions.
Sec. 135. Establishment of drug-free families support program.
Sec. 136. Authorization of appropriations.

Subtitle D--National Community Antidrug Coalition Institute

Sec. 141. Short title.
Sec. 142. Establishment.
Sec. 143. Authorization of appropriations.

TITLE II--DOMESTIC LAW ENFORCEMENT

Subtitle A--National Guard Matters

Sec. 201. Minimum number of members of the National Guard on duty to
perform drug interdiction or counter-drug activities.
Sec. 202. National Guard counterdrug schools.

Subtitle B--Customs Matters

Sec. 211. Short title.

Part I--Authorization of Appropriations for United States Customs
Service for Enhanced Inspection, Trade Facilitation, and Drug
Interdiction

Sec. 221. Authorization of appropriations.
Sec. 222. Cargo inspection and narcotics detection equipment for the
United States-Mexico border, United States-Canada border,
and Florida and Gulf Coast seaports; internal management
improvements.
Sec. 223. Peak hours and investigative resource enhancement for the
United States-Mexico and United States-Canada borders,
Florida and Gulf Coast seaports, and the Bahamas.
Sec. 224. Agent rotations; elimination of backlog of background
investigations.
Sec. 225. Air and marine operation and maintenance funding.
Sec. 226. Compliance with performance plan requirements.
Sec. 227. Report on intelligence requirements.

Part II--Customs Management

Sec. 231. Term and salary of the Commissioner of Customs.
Sec. 232. Internal compliance.
Sec. 233. Report on personnel flexibility.
Sec. 234. Report on personnel allocation model.
Sec. 235. Report on detection and monitoring requirements along the
southern tier and northern border.

Part III--Marking Violations

Sec. 241. Civil penalties for marking violations.

Subtitle C--Miscellaneous

Sec. 251. Tethered Aerostat Radar System.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Illegal drugs cost America more than $70,000,000,000
annually. These costs include lost productivity, as well as
money spent for drug treatment, illnesses related to drug
use, crime prevention and enforcement, and welfare.
(2) Federal, State, and local governments spend more than
$30,000,000,000 annually to combat illegal drugs and the
consequences of illegal drugs.
(3) The estimated total expenditure by Americans on illicit
drugs in 1993 was $48,700,000,000. The vast majority of these
illegal drugs are produced overseas and then smuggled into
the United States by major criminal organizations.
(4) The estimated worldwide potential of coca net
production in 1996 was 303,600 metric tons, and in the same
year, the worldwide coca cultivation was 209,700 hectares.
(5) The production of opium has also been increasing for at
least the past 10 years, and reached a new high in 1996 of
4,212 metric tons. Production throughout the world has led to
an increase in the heroin addict population of the United
States, bringing it to a new high of more than 600,000
people.
(6) Money laundering constitutes a serious challenge to the
maintenance of law and order throughout the hemisphere and
poses a threat to stability, reliability, and the integrity
of governments, financial systems, and commerce.
(7) Money laundering of illegal drug profits is an integral
part of the drug trafficking process, creating an obstacle in
fighting drugs. It is estimated that $100,000,000,000 to
$300,000,000,000 in United States currency is laundered each
year.
(8) Certification pursuant to the Foreign Assistance Act of
1961 is an essential tool in United States foreign policy.
Through the certification process there has been improvement
in cooperation levels that demonstrates the importance of
holding countries responsible for being major producing,
transit, and money laundering countries.
(9) The major criminal organizations that traffic in
illegal narcotics are international in scope and extremely
flexible in their activities, and are becoming increasingly
sophisticated in their methods of operation. Their influence
reaches to the highest levels of some foreign governments.

[[Page S348]]

(10) The threat of corruption at all levels of government
remains a significant concern when dealing with many nations.
Explosive corruption in a number of countries is undermining
domestic processes and the rule of law. United States
assistance and the pressure of decertification have
encouraged many countries to take corruption seriously.
(11) The production and trafficking of illegal narcotics
presents a threat to United States interests, both domestic
and foreign. Drugs are a corrosive influence on our children,
our values, and our Government.

TITLE I--DOMESTIC DEMAND REDUCTION

SEC. 101. SHORT TITLE.

This title may be cited as the ``Domestic Narcotic Demand
Reduction Act of 2001''.

Subtitle A--Drug Treatment and Research

SEC. 111. SHORT TITLE.

This subtitle may be cited as the ``Drug Treatment and
Research Enhancement Act of 2001''.

SEC. 112. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

(a) Short Title.--This section may be cited as the ``Key
Professionals Education Act''.
(b) Core Competencies.--Subpart 2 of part B of title V of
the Public Health Service Act (42 U.S.C. 290bb-21 et seq.),
as amended by the Youth Drug and Mental Health Services Act
(Public Law 106-310), is amended by adding at the end the
following:

``SEC. 519F. CORE COMPETENCIES.

``(a) Findings.--Congress makes the following findings:
``(1) According to a 1999 Monitoring the Future Report,
heroin use doubled among youth in the United States between
1991 and 1995. Since that time, such heroin use among such
youth has remained at the high level reached in 1995.
``(2) The sharp increase in heroin use during the 1990's
may be a result of the introduction into the market of heroin
of a higher purity.
``(3) According to the National Center on Addiction and
Substance Abuse, 29.9 percent of the population living in
rural areas, 32.4 percent of the population living in small
cities, and 30.2 percent of the population living in big
cities found heroin very easy or fairly easy to procure.
``(4) Studies show a high correlation between drug use,
availability of drugs, and violence.
``(5) A March 2000 report by the Office of National Drug
Control Policy reported that in 1999 persons using illegal
drugs were 16 times more likely than nonusers to be arrested
for larceny or theft, at least 14 times more likely to be
arrested for driving under the influence, drunkenness, and
liquor law violations, and at least 9 times more likely to be
arrested for assault.
``(b) Purpose.--The purpose of this section is--
``(1) to educate, train, motivate, and engage key
professionals to identify and intervene with children in
families affected by substance abuse and to refer members of
such families to appropriate programs and services in the
communities of such families;
``(2) to encourage professionals to collaborate with key
professional organizations representing the targeted
professional groups, such as groups of educators, social
workers, faith community members, and probation officers, for
the purposes of developing and implementing relevant core
competencies; and
``(3) to encourage professionals to develop networks to
coordinate local substance abuse prevention coalitions.
``(c) Program Authorized.--The Secretary shall award grants
to leading nongovernmental organizations with an expertise in
aiding children of substance abusing parents or experience
with community antidrug coalitions to help professionals
participate in such coalitions and identify and help youth
affected by familial substance abuse.
``(d) Duration of Grants.--No organization shall receive a
grant under subsection (c) for more than 5 consecutive years.
``(e) Application.--Any organization desiring a grant under
subsection (c) shall prepare and submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require, including a plan
for the evaluation of the project involved, including both
process and outcome evaluation, and the submission of the
evaluation at the end of the project period.
``(f) Use of Funds.--Grants awarded under subsection (c)
shall be used to--
``(1) develop core competencies with various professional
groups that the professionals can use in identifying and
referring children affected by substance abuse;
``(2) widely disseminate the competencies to professionals
and professional organizations through publications and
journals that are widely read and respected;
``(3) develop training modules around the competencies; and
``(4) develop training modules for community coalition
leaders to enable such leaders to engage professionals from
identified groups at the local level in community-wide
prevention and intervention efforts.
``(g) Definition.--In this section, the term `professional'
includes a physician, student assistance professional, social
worker, youth and family social service agency counselor,
Head Start teacher, clergy, elementary and secondary school
teacher, school counselor, juvenile justice worker, child
care provider, or a member of any other professional group in
which the members provide services to or interact with
children, youth, or families.
``(h) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section,
$5,000,000 for fiscal year 2002, and such sums as may be
necessary for each of fiscal years 2003 through 2006.''.
(c) National Institute on Drug Abuse.--Subpart 15 of part C
of title IV of the Public Health Service Act (42 U.S.C. 285o
et seq.) is amended by adding at the end the following:

``SEC. 464Q. NATIONAL DRUG ABUSE TREATMENT CLINICAL TRIALS
NETWORK.

``(a) Program Authorized.--The Director of the Institute
shall establish a National Drug Abuse Treatment Clinical
Trials Network (referred to in this section as the
`Network'), and provide support to such Network, to conduct
large scale drug abuse treatment studies in community
settings using broadly diverse patient populations.
``(b) Activities of Network.--The Network described in
subsection (a) shall use the support provided under
subsection (a) to--
``(1) conduct coordinated, multisite, clinical trials of
behavioral and pharmacological approaches and combined
therapies for drug abuse and addiction;
``(2) conduct a research practice initiative to--
``(A) identify factors that affect successful adoption of
new treatments in order to transport research findings into
real-life practice; and
``(B) rapidly and efficiently disseminate scientific
findings to the field and to communities in need.
``(c) Members of Network.--The Network described in
subsection (a) shall consist of research and training centers
that are linked with community-based treatment programs that
represent a diversity of treatment settings and patient
populations in the regions of such centers.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section such
sums as may be necessary for each of fiscal years 2002
through 2007.''.
(d) Survey.--Title II of the Public Health Service Act (42
U.S.C. 202 et seq.) is amended by adding at the end the
following:

``SEC. 247. SURVEYS.

``The results of any federally funded survey under this Act
shall be made available in at least a preliminary format to
the public not later than 1 year after the date on which any
such survey is complete.''.
(e) Practice/Research Collaboratives.--Part A of title V of
the Public Health Service Act (42 U.S.C. 290aa et seq.), as
amended by the Youth Drug and Mental Health Services Act
(Public Law 106-310), is amended by adding the following:

``SEC. 506C. PRACTICE/RESEARCH COLLABORATIVES.

``(a) In General.--The Secretary shall award grants,
cooperative agreements, or contracts to public or private
nonprofit entities for the purpose of assisting local
communities and regions within States in improving the
quality of substance abuse treatment and clinical preventive
services provided in such communities and regions by
increasing interaction and knowledge exchange among key
community-based stakeholders, including substance abuse
treatment providers, community-based organizations that
provide support services to substance abusers, researchers,
and policymakers including managed care plan managers and
purchasers of substance abuse treatment services.
``(b) Eligibility.--To be eligible to receive a grant,
contract, or cooperative agreement under this section an
entity shall--
``(1) be a public or private nonprofit entity;
``(2) prepare and submit to the Secretary an application,
at such time, in such manner, and containing such information
as the Secretary may require; and
``(3) demonstrate that the entity has developed a full
partnership among--
``(A) community-based treatment and prevention service
providers that provide treatment services representing a
variety of modalities and including both for profit and
nonprofit private entities and programs that serve diverse
populations;
``(B) researchers on substance abuse prevention and
treatment issues;
``(C) government officials from the community involved in
the grant application;
``(D) State officials involved in the funding of substance
abuse prevention and treatment services;
``(E) service organizations that serve substance abusers
including organizations providing health and mental health
services, child welfare, law enforcement, social services,
education, and other such services; and
``(F) policymakers.
``(c) Use of Funds.--Amounts awarded under a grant,
contract, or cooperative agreement under subsection (a) may
be used to--
``(1) develop ongoing communications for the entities
described in subsection (b)(3) to support the establishment
of an infrastructure for community-based studies and
knowledge transfer;
``(2) share evaluation and applied research results in
seminars and publications;
``(3) identify areas of particularly local concern for
further study;
``(4) determine, in consultation with appropriate agencies
(including the National Institutes of Health), public policy
issues of interest to be included in an applied research
agenda;
``(5) identify and describe existing prevention and
intervention strategies;
``(6) improve methods for evaluating prevention and
treatment strategies;

[[Page S349]]

``(7) recruit or retain substance abuse educators and
practitioners to participate in specialized training programs
to improve knowledge exchange and transfer;
``(8) provide for the implementation of training programs
to sustain the adoption of community-based treatment study
findings; and
``(9) provide public policymakers and State officials with
appropriate information.
``(d) Conditions.--The Secretary shall ensure that awards
made under subsection (a) are distributed among urban and
rural areas and address the needs of vulnerable populations
including ethnic and racial minorities, women of childbearing
age, individuals with sexually transmitted diseases or HIV.
``(e) Duration of Awards.--With respect to grants,
cooperative agreements, or contracts awarded under this
section, the period during which payments under such awards
are made to the recipient may not exceed 5 years.
``(f) Report.--A recipient of a grant, contract, or
cooperative agreement under this section shall prepare and
submit to the Secretary a report for each year under the
grant, contract, or cooperative agreement of the grant a
report that details the activities of the recipient under the
grant, contract, or cooperative agreement, and makes
recommendations for a research agenda for future years based
on the information received from those assisted under the
grant, contract, or cooperative agreement.
``(g) Evaluation.--The Secretary shall evaluate each
project carried out under subsection (a) and shall
disseminate the findings with respect to each such evaluation
to appropriate public and private entities.
``(h) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section, $20,000,000 for
fiscal year 2002, and such sums as may be necessary for each
of fiscal years 2003 and 2004.''.

SEC. 113. ADOLESCENT THERAPEUTIC COMMUNITY TREATMENT
PROGRAMS.

(a) Short Title.--This section may be cited as the
``Adolescent Therapeutic Community Treatment Programs Act''.
(b) Findings.--Congress makes the following findings:
(1) Of the adolescents that currently need substance abuse
treatment services, only 20 percent of such adolescents are
receiving such services.
(2) Providing alcohol and drug treatment services reduces
health care, welfare, and criminal justice costs.
(3) Studies have found that completion of substance abuse
treatment services produces sustained reductions in drug use,
welfare dependency, crime, and unemployment.
(4) The National Institute of Justice Arrestee Drug Abuse
Monitoring drug testing program found that more than half of
juvenile male arrestees tested positive for at least 1 drug
in 1998.
(5) The 1999 Monitoring the Future study showed that more
than half of the teenagers in the United States have tried an
illicit drug by the time such teenagers finish high school,
and more than 28 percent of such teenagers have tried an
illicit drug by the time such teenagers are in eighth grade.
(6) According to the 1999 National Household Survey on Drug
Abuse, the average age of new heroin users has dropped from
26.0 years of age in 1992 to 21.3 years of age in 1998.
(7) Studies have shown that intervention at an early stage
of addiction is essential in stopping an increasingly
frequent drug user from becoming an addict. Whether
voluntarily or through legal or parental pressure, the sooner
a drug user enters into a well-designed treatment program,
the more likely such treatment is to be effective. Voluntary
participation in substance abuse programs is not necessary in
order to successfully treat a drug user.
(c) Program Authorized.--The Secretary shall award
competitive grants to treatment providers who administer
treatment programs to enable such providers to establish
adolescent residential substance abuse treatment programs
that provide services for individuals who are between the
ages of 14 and 21.
(d) Preference.--In awarding grants under subsection (c),
the Secretary shall consider the geographic location of each
treatment provider and give preference to such treatment
providers that are geographically located in such a manner as
to provide services to addicts from non-metropolitan areas.
(e) Duration of Grants.--For awards made under subsection
(c), the period during which payments are made may not exceed
5 years.
(f) Restrictions.--A treatment provider receiving a grant
under subsection (c) shall not use any amount of the grant
under this section for land acquisition or a construction
project.
(g) Construction.--Nothing in this subsection shall be
construed to preclude qualifying faith-based treatment
providers from receiving a grant under subsection (c).
(h) Application.--A treatment provider that desires a grant
under subsection (c) shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
(i) Use of Funds.--A treatment provider that receives a
grant under subsection (c) shall use funds received under
such grant to provide substance abuse services for
adolescents, including--
(1) a thorough psychosocial assessment;
(2) individual treatment planning;
(3) a strong education component integral to the treatment
regimen;
(4) life skills training;
(5) individual and group counseling;
(6) family services;
(7) daily work responsibilities; and
(8) community-based aftercare, providing 6 months of
treatment following discharge from a residential facility.
(j) Treatment Type.--The Therapeutic Community model shall
be used as a basis for all adolescent residential substance
abuse treatment programs established under this section,
which shall be characterized by--
(1) the self-help dynamic, requiring youth to participate
actively in their own treatment;
(2) the role of mutual support and the therapeutic
importance of the peer therapy group;
(3) a strong focus on family involvement and family
strengthening;
(4) a clearly articulated value system emphasizing both
individual responsibility and responsibility for the
community; and
(5) an emphasis on development of positive social skills.
(k) Report by Provider.--Not later than 1 year after
receiving a grant under this section, and annually
thereafter, a treatment provider shall prepare and submit to
the Secretary a report describing the services provided
pursuant to this section.
(l) Report by Secretary.--
(1) In general.--Not later than 3 months after receiving
all reports by providers under subsection (k), and annually
thereafter, the Secretary shall prepare and submit a report
containing information described in paragraph (2) to--
(A) the Committee on Health, Education, Labor, and Pensions
of the Senate;
(B) the Committee on Appropriations of the Senate;
(C) the United States Senate Caucus on International
Narcotics Control;
(D) the Committee on Commerce of the House of
Representatives;
(E) the Committee on Appropriations of the House of
Representatives; and
(F) the Committee on Government Reform of the House of
Representatives.
(2) Content.--The report described in paragraph (1) shall--
(A) outline the services provided by providers pursuant to
this section;
(B) evaluate the effectiveness of such services;
(C) identify the geographic distribution of all treatment
centers provided pursuant to this section, and evaluate the
accessibility of such centers for addicts from rural areas
and small towns; and
(D) make recommendations to improve the programs carried
out pursuant to this section.
(m) Definitions.--In this section:
(1) Adolescent residential substance abuse treatment
program.--The term ``adolescent residential substance abuse
treatment program'' means a program that provides a regimen
of individual and group activities, lasting ideally not less
than 12 months, in a community-based residential facility
that provides comprehensive services tailored to meet the
needs of adolescents and designed to return youth to their
families in order that such youth may become capable of
enjoying and supporting positive, productive, drug-free
lives.
(2) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(3) Therapeutic community.--The term ``Therapeutic
Community'' means a highly structured residential treatment
facility that--
(A) employs a treatment methodology;
(B) relies on self-help methods and group process, a view
of drug abuse as a disorder affecting the whole person, and a
comprehensive approach to recovery;
(C) maintains a strong educational component; and
(D) carries out activities that are designed to help youths
address alcohol or other drug abuse issues and learn to act
in their own best interests, as well as in the best interests
of their peers and families.
(n) Authorization of appropriations.--There are authorized
be appropriated to carry out this section--
(1) $21,000,000 for fiscal year 2002;
(2) $42,000,000 for fiscal year 2003;
(3) $63,000,000 for fiscal year 2004;
(4) $84,000,000 for fiscal year 2005; and
(5) $105,000,000 for fiscal year 2006.

SEC. 114. RESIDENTIAL TREATMENT PROGRAM IN FEDERAL PRISONS.

(a) Findings.--Congress makes the following findings:
(1) In April 2000, there were more than 140,000 inmates in
the Federal prison system.
(2) In April 2000, nearly 30 percent of Federal inmates
were serving sentences ranging between 5 and 10 years, and
just over 58 percent of such inmates, or 61,547 persons, were
serving time for a drug related offense.
(3) A March 2000 report by the Office of National Drug
Control Policy reported that in 1999 illicit drug users--
(A) were 16 times more likely than non-users to be arrested
and booked for larceny or theft;
(B) were more than 14 times more likely to be arrested and
booked for driving under the influence, drunkenness, and
liquor law violations; and
(C) were more than 9 times more likely to be arrested and
booked for assault.
(4) According to the Federal Bureau of Investigation's
Uniform Crime Reports, drugs

[[Page S350]]

are one of the main factors leading to the total number of
all homicides.
(5) In a 1999 study, the Bureau of Prisons reported that--
(A) offenders who completed a residential drug abuse
treatment program and had been released for a minimum of 6
months were less likely to be arrested and use illegal drugs
than inmates who did not participate in such program; and
(B) only 3.3 percent of such offenders who completed such
program were likely to be arrested within the first 6 months
that such offenders were in the community.
(b) Purpose.--The purpose of this section is to increase
residential drug abuse treatment units in Federal prisons to
reduce the number of criminal offenders who are rearrested or
who use illegal drugs after release from prison.
(c) Program Authorized.--The Director of the Federal Bureau
of Prisons shall use funds made available under this section
to establish residential drug abuse treatment units in
Federal prisons.
(d) Requirements.--A residential drug abuse treatment unit
that receives funds under this section shall--
(1) maintain not less than 1,000 hours of activities during
a 1-year period;
(2) maintain a staff of such unit in which there is not
more than 1 staff member per 12 inmates;
(3) provide intensive treatment activities for all inmates
in the residential drug treatment program, including
individual and group therapy, specialty seminars, self
improvement group counseling, and education, work skills
training, and other programs; and
(4) have frequent, regular, and random drug testing for
inmates and staff.
(e) Authorization of appropriations.--There is authorized
to be appropriated to carry out this section $2,500,000 for
each of fiscal years 2002 and 2003.

SEC. 115. COUNTER-DRUG TECHNOLOGY ASSESSMENT CENTER.

(a) Study of Heroin Use in the United States.--
(1) In general.--Using amounts appropriated pursuant to the
authorization of appropriations in subsection (c)(1), the
Counter-Drug Technology Assessment Center (CTAC) of the
Office of National Drug Control Policy shall carry out a
study on the number of individuals in the United States who
engaged in sustained use of heroin.
(2) Basis for study.--The study under paragraph (1) shall
be based on the study entitled ``A Plan for Estimated the
Number of `Hardcore' Drug Users in the United States''.
(b) Counter-Drug Technology Initiatives.--Using amounts
appropriated pursuant to the authorization of appropriations
in subsection (c)(2), the Counter-Drug Technology Assessment
Center of the Office of National Drug Control Policy shall--
(1) conduct outreach for purposes of reducing duplication
of activities among Federal, State, and local entities
regarding counterdrug technologies;
(2) develop and implement mechanisms for monitoring and
coordinating such activities; and
(3) assist in the transfer of such technologies to State
and local law enforcement agencies under the Technology
Transfer Program.
(c) Authorization of Appropriations.--There is hereby
authorized to be appropriated for the Counter-Drug Technology
Assessment Center of the Office of National Drug Control
Policy for fiscal year 2002 the following:
(1) $15,000,000 for purposes of the study required by
subsection (a).
(2) $15,000,000 for purposes of activities under subsection
(b).

SEC. 116. SENSE OF CONGRESS ON RESEARCH BY THE NATIONAL
INSTITUTES OF HEALTH.

It is the sense of Congress that the National Institutes of
Health should work with or collaborate with experts from
private industry to promote research regarding
pharmacological options that may be employed to support drug
treatment efforts.

Subtitle B--Drug-Free Communities

SEC. 121. FINDINGS.

Congress makes the following findings:
(1) A child that has a positive relationship with both
parents is less likely to use illegal drugs.
(2) Family activities, such as eating dinners together and
spending quality time together, can reduce the risk that a
child engaged by such activities will use illegal drugs.
(3) Most parents today work and have little opportunity to
spend quality time with their children.
(4) Many families are headed by single parents who work all
day and do not have enough time to spend with their children.
(5) The 1999 Parent's Resource Institute for Drug Education
study (referred to in this section as the ``PRIDE study'')
reported that more than 4,000,000 students who are between
the ages 11 and 18 used drugs regularly, and more than
1,000,000 of such students used an illegal drug every day.
(6) The PRIDE study found that students with parents who
talked to them about drug use had a 37 percent lower drug use
rate than students with parents who did not talk to them
about drug use.
(7) The 1999 Monitoring the Future study found that nearly
55 percent of high school seniors in the United States had
used an illicit drug in the past month.
(8) A 1999 Mellman Group study found that--
(A) 56 percent of the population in the United States
believed that drug use was increasing in 1999;
(B) 92 percent of the population viewed illegal drug use as
a serious problem in the United States; and
(C) 73 percent of the population viewed illegal drug use as
a serious problem in their communities.

SEC. 122. DRUG-FREE COMMUNITIES SUPPORT PROGRAM.

(a) Extension and Increase of Program.--Section 1024(a) of
the National Narcotics Leadership Act of 1988 (21 U.S.C.
1524(a)) is amended--
(1) by striking ``and'' at the end of paragraph (4);
(2) by striking the period at the end of paragraph (5) and
inserting a semicolon; and
(3) by adding at the end the following new paragraphs:
``(6) $46,000,000 for fiscal year 2003;
``(7) $48,500,000 for fiscal year 2004;
``(8) $51,000,000 for fiscal year 2005;
``(9) $53,500,000 for fiscal year 2006; and
``(10) $56,000,000 for fiscal year 2007.''.
(b) Extension of Limitation on Administrative Costs.--
Section 1024(b) of that Act (21 U.S.C. 1524(b)) is amended by
adding at the end the following new paragraph:
``(6) 8 percent for each of fiscal years 2003 through
2007.''.
(c) Modification of Eligibility Criteria or Amount for
Grant Renewals.--Section 1032 of that Act (21 U.S.C. 1532) is
amended by adding at the end the following new subsection:
``(c) Modification of Eligibility Criteria or Amount for
Grant Renewals.--The Administrator may not implement any
modification in the criteria for eligibility for the renewal
of a grant under this section, or any modification in grant
amount upon renewal of a grant under this section, until one
year after the date on which the Administrator notifies the
recipient of the grant concerned of such modification.''.
(d) Source of Funds for Evaluation of Program by
Administrator.--Section 1033(b) of that Act (21 U.S.C.
1533(b)) is amended by adding at the end the following new
paragraph:
``(3) Source of funds for evaluation of program.--Amounts
for activities under paragraph (2)(B) shall be derived from
amounts under section 1024(a) that are available under
section 1024(b) for administrative costs.''.

Subtitle C--Drug-Free Families

SEC. 131. SHORT TITLE.

This subtitle may be cited as the ``Drug-Free Families Act
of 2001''.

SEC. 132. FINDINGS.

Congress makes the following findings:
(1) The National Institute on Drug Abuse estimates that in
1962, less than 1 percent of the nation's adolescents had
ever tried an illicit drug. By 1979, drug use among young
people had escalated to the highest levels in history: 34
percent of adolescents (ages 12-17), 65 percent of high
school seniors (age 18), and 70 percent of young adults (ages
18-25) had used an illicit drug in their lifetime.
(2) Drug use among young people was not confined to initial
trials. By 1979, 16 percent of adolescents, 39 percent of
high school seniors, and 38 percent of young adults had used
an illicit drug in the past month. Moreover, 1 in 9 high
school seniors used marijuana daily.
(3) In 1979, the year the largest number of seniors used
marijuana, their belief that marijuana could hurt them was at
its lowest (35 percent) since surveys have tracked these
measures.
(4) Three forces appeared to be driving this escalation in
drug use among children and young adults. Between 1972 and
1978, a nationwide political campaign conducted by drug
legalization advocates persuaded 11 State legislatures to
``decriminalize'' marijuana. (Many of those States have
subsequently ``recriminalized'' the drug.) Such legislative
action reinforced advocates' assertion that marijuana was
``relatively harmless.''
(5) The decriminalization effort gave rise to the emergence
of ``head shops'' (shops for ``heads,'' or drug users--``coke
heads,'' ``pot heads,'' ``acid heads,'' etc.) which sold drug
paraphernalia--an array of toys, implements, and
instructional pamphlets and booklets to enhance the use of
illicit drugs. Some 30,000 such shops were estimated to be
doing business throughout the nation by 1978.
(6) In the absence of Federal funding for drug education
then, most of the drug education materials that were
available proclaimed that few illicit drugs were addictive
and most were ``less harmful'' than alcohol and tobacco and
therefore taught young people how to use marijuana, cocaine,
and other illicit drugs ``responsibly''.
(7) Between 1977 and 1980, 3 national parent drug-
prevention organizations--National Families in Action, PRIDE,
and the National Federation of Parents for Drug-Free Youth
(now called the National Family Partnership)--emerged to help
concerned parents form some 4,000 local parent prevention
groups across the nation to reverse all of these trends in
order to prevent children from using drugs. Their work
created what has come to be known as the parent drug-
prevention movement, or more simply, the parent movement.
This movement set 3 goals: to prevent the use of any illegal
drug, to persuade those who had started using drugs to stop,
and to obtain treatment for

[[Page S351]]

those who had become addicted so that they could return to
drug-free lives.
(8) The parent movement pursued a number of objectives to
achieve these goals. First, it helped parents educate
themselves about the harmful effects of drugs, teach that
information to their children, communicate that they expected
their children not to use drugs, and establish consequences
if children failed to meet that expectation. Second, it
helped parents form groups with other parents to set common
age-appropriate social and behavioral guidelines to protect
their children from exposure to drugs. Third, it encouraged
parents to insist that their communities reinforce parents'
commitment to protect children from drug use.
(9) The parent movement stopped further efforts to
decriminalize marijuana, both in the States and at the
Federal level.
(10) The parent movement worked for laws to ban the sale of
drug paraphernalia. If drugs were illegal, it made no sense
to condone the sale of toys and implements to enhance the use
of illegal drugs, particularly when those products targeted
children. As town, cities, counties, and States passed anti-
paraphernalia laws, drug legalization organizations
challenged their Constitutionality in Federal courts until
the early 1980's, when the United States Supreme Court upheld
Nebraska's law and established the right of communities to
ban the sale of drug paraphernalia.
(11) The parent movement insisted that drug-education
materials convey a strong no-use message in compliance with
both the law and with medical and scientific information that
demonstrates that drugs are harmful, particularly to young
people.
(12) The parent movement encouraged others in society to
join the drug prevention effort and many did, from First Lady
Nancy Reagan to the entertainment industry, the business
community, the media, the medical community, the educational
community, the criminal justice community, the faith
community, and local, State, and national political leaders.
(13) The parent movement helped to cause drug use among
young people to peak in 1979. As its efforts continued
throughout the next decade, and as others joined parents to
expand the drug-prevention movement, between 1979 and 1992
these collaborative prevention efforts contributed to
reducing monthly illicit drug use by two-thirds among
adolescents and young adults and reduced daily marijuana use
among high-school seniors from 10.7 percent to 1.9 percent.
Concurrently, both the parent movement and the larger
prevention movement that evolved throughout the 1980's,
working together, increased high school seniors' belief that
marijuana could hurt them, from 35 percent in 1979 to 79
percent in 1991.
(14) Unfortunately, as drug use declined, most of the 4,000
volunteer parents groups that contributed to the reduction in
drug use disbanded, having accomplished the job they set out
to do. But the absence of active parent groups left a vacuum
that was soon filled by a revitalized drug-legalization
movement. Proponents began advocating for the legalization of
marijuana for medicine, the legalization of all Schedule I
drugs for medicine, the legalization of hemp for medicinal,
industrial and recreational use, and a variety of other
proposals, all designed to ultimately attack, weaken, and
eventually repeal the nation's drug laws.
(15) Furthermore, legalization proponents are also
beginning to advocate for treatment that maintains addicts on
the drugs to which they are addicted (heroin maintenance for
heroin addicts, controlled drinking for alcoholics, etc.),
for teaching school children to use drugs ``responsibly,''
and for other measures similar to those that produced the
drug epidemic among young people in the 1970's.
(16) During the 1990's, the message embodied in all of this
activity has once again driven down young people's belief
that drugs can hurt them. As a result, the reductions in drug
use that occurred over 13 years reversed in 1992, and
adolescent drug use has more than doubled.
(17) In 1970, 40.5 percent of women in the workforce were
married. By 1997, that percentage has climbed to 61.6
percent, meaning fewer parents have time to volunteer. Many
families are headed by single parents. In some families no
parents are available, and grandparents, aunts, uncles, or
foster parents are raising the family's children.
(18) Recognizing that these challenges make it much more
difficult to reach parents today, several national parent and
family drug-prevention organizations have formed the Parent
Collaboration to address these issues in order to build a new
parent and family movement to prevent drug use among
children.
(19) Motivating parents and parent groups to coordinate
with local community anti-drug coalitions is a key goal of
the Parent Collaboration, as well as coordinating parent and
family drug-prevention efforts with Federal, State, and local
governmental and private agencies and political, business,
medical and scientific, educational, criminal justice,
religious, and media and entertainment industry leaders.

SEC. 133. PURPOSES.

The purposes of this subtitle are to--
(1) build a movement to help parents and families prevent
drug use among their children and adolescents;
(2) help parents and families reduce drug abuse and drug
addiction among adolescents who are already using drugs, and
return them to drug-free lives;
(3) increase young people's perception that drugs are
harmful to their health, well-being, and ability to function
successfully in life;
(4) help parents and families educate society that the best
way to protect children from drug use and all of its related
problems is to convey a clear, consistent, no-use message;
(5) strengthen coordination, cooperation, and collaboration
between parents and families and all others who are
interested in protecting children from drug use and all of
its related problems;
(6) help parents strengthen their families, neighborhoods,
and school communities to reduce risk factors and increase
protective factors to ensure the healthy growth of children;
and
(7) provide resources in the fiscal year 2002 Federal drug
control budget for a grant to the Parent Collaboration to
conduct a national campaign to mobilize today's parents and
families through the provision of information, training,
technical assistance, and other services to help parents and
families prevent drug use among their children and to build a
new parent and family drug-prevention movement.

SEC. 134. DEFINITIONS.

In this subtitle:
(1) Administrative costs.--The term ``administrative
costs'' means those costs that the assigned Federal agency
will incur to administer the grant to the Parent
Collaboration.
(2) No-use message.--The term ``no-use message'' means a
message advocating no use of any illegal drug and no illegal
use of any legal drug or substance that is sometimes used
illegally, such as prescription drugs, inhalants, and alcohol
and tobacco for children and adolescents under the legal
purchase age.
(3) Parent collaboration.--The term ``Parent
Collaboration'' means a legal entity, that is exempt from
income taxation under section 501(c)(3) of the Internal
Revenue Code of 1986, and is created by 3 or more groups
that--
(A) have a primary mission of helping parents prevent drug
use, drug abuse, and drug addiction among their children,
their families, and their communities;
(B) have carried out this mission for a minimum of 5
consecutive years; and
(C) base their drug-prevention missions on the foundation
of a strong, no-use message in compliance with international,
Federal, State, and local treaties and laws that prohibit the
possession, production, cultivation, distribution, sale, and
trafficking in illegal drugs;
in order to build a new parent and family movement to prevent
drug use among children and adolescents.

SEC. 135. ESTABLISHMENT OF DRUG-FREE FAMILIES SUPPORT
PROGRAM.

(a) In General.--The Attorney General shall make a grant to
the Parents Collaboration to conduct a national campaign to
build a new parent and family movement to help parents and
families prevent drug abuse among their children.
(b) Termination.--The period of the grant under this
section shall be 5 years.

SEC. 136. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There is authorized to be appropriated to
carry out this subtitle, $5,000,000 for each of fiscal years
2002 through 2006 for a grant to the Parent Collaboration to
conduct the national campaign to mobilize parents and
families.
(b) Administrative Costs.--Not more than 5 percent of the
total amount made available under subsection (a) in each
fiscal year may be used to pay administrative costs of the
Parent Collaboration.

Subtitle D--National Community Antidrug Coalition Institute

SEC. 141. SHORT TITLE.

This subtitle may be cited as the ``National Community
Antidrug Coalition Institute Act of 2001''.

SEC. 142. ESTABLISHMENT.

(a) In General.--The Director of the Office of National
Drug Control Policy may make grants to an organization to
provide for the establishment of a National Community
Antidrug Coalition Institute.
(b) Requirements.--The organization receiving a grant under
subsection (a) shall--
(1) be a national nonprofit organization that represents,
provides technical assistance and training to, and has
special expertise and broad, national-level experience in
community anti-drug coalitions; and
(2) establish a National Community Antidrug Coalition
Institute that will--
(A) provide education, training, and technical assistance
for coalition leaders and community teams;
(B) conduct evaluation, testing, and diffusion of tools,
mechanisms, and measures to better assess and document
coalition performance measures and outcomes; and
(C) bridge the gap between research and practice by
translating knowledge from research into practical
information.
(c) Discharge of Responsibilities.--The Director may employ
such staff and enter into such contracts and agreements,
including agreements or memoranda of understanding with other
governmental agencies, as the Director considers appropriate
for purposes of making grants under this section and
otherwise carrying out the responsibilities of the Director
under this subtitle.

SEC. 143. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated $2,000,000 for each
of fiscal years 2002 and 2003

[[Page S352]]

for purposes of making grants as provided in section 142.

TITLE II--DOMESTIC LAW ENFORCEMENT

Subtitle A--National Guard Matters

SEC. 201. MINIMUM NUMBER OF MEMBERS OF THE NATIONAL GUARD ON
DUTY TO PERFORM DRUG INTERDICTION OR COUNTER-
DRUG ACTIVITIES.

(a) Findings.--Congress makes the following findings
regarding members of the National Guard who participate in
drug interdiction and counter-drug activities of the National
Guard:
(1) Such members have significantly higher rates of
attendance at inactive duty training and annual training than
members of the National Guard who do not participate in such
activities.
(2) Such members attend significantly more military
training than members of the National Guard who do not
participate in such activities, thereby putting such members
at a higher state of military readiness.
(3) Such members attend significantly more non-military
training designed to enhance support of law enforcement and
community-based agencies than members of the National Guard
who do not participate in such activities.
(4) Such members are above-average soldiers and airmen who
maintain a high level of individual combat readiness.
(5) This high level of individual combat readiness has a
positive effect on individual combat readiness in the
National Guard as a whole and contributes to the success of
unit training and evaluations and unit readiness.
(6) Such members evoke positive comments regarding their
qualifications and performance in the National Guard.
(b) Minimum Number of Members on Duty.--Section 112(f) of
title 32, United States Code, is amended--
(1) by striking ``End Strength Limitation.--(1) Except as
provided in paragraph (2), at the end of a fiscal year there
may not be more than 4000 members'' and inserting ``Minimum
Number of Members on Duty Performing Activities.--(1) At the
end of a fiscal year there may not be less than 4,000
members'';
(2) by striking paragraph (2); and
(3) by adding at the end the following new paragraph (2):
``(2) The President may waive the minimum in paragraph (1)
in the event that the armed forces are involved in
hostilities or that imminent involvement by the armed forces
in hostilities is clearly indicated by the circumstances.''.
(c) Applicability.--The amendments made by subsection (b)
shall take effect on October 1, 2001, and shall apply with
respect to fiscal years ending after that date.

SEC. 202. NATIONAL GUARD COUNTERDRUG SCHOOLS.

(a) Authority To Operate.--Under such regulations as the
Secretary of Defense may prescribe, the Chief of the National
Guard Bureau may establish and operate not more than five
schools (to be known generally as ``National Guard
counterdrug schools'') for the provision by the National
Guard of training in drug interdiction and counter-drug
activities, and drug demand reduction activities, to the
personnel of the following:
(1) Federal agencies.
(2) State and local law enforcement agencies.
(3) Community-based organizations engaged in such
activities.
(4) Other non-Federal governmental and private entities and
organizations engaged in such activities.
(b) Counterdrug Schools Specified.--The National Guard
counterdrug schools operated under the authority in
subsection (a) are as follows:
(1) The National Interagency Civil-Military Institute
(NICI), San Luis Obispo, California.
(2) The Multi-Jurisdictional Counterdrug Task Force
Training (MCTFT), St. Petersburg, Florida.
(3) The Midwest Counterdrug Training Center (MCTC), to be
established in Johnston, Iowa.
(4) The Regional Counterdrug Training Academy (RCTA),
Meridian, Mississippi.
(5) The Northeast Regional Counterdrug Training Center
(NCTC), Fort Indiantown Gap, Pennsylvania.
(c) Use of National Guard Personnel.--(1) To the extent
provided for in the State drug interdiction and counter-drug
activities plan of a State in which a National Guard
counterdrug school is located, personnel of the National
Guard of that State who are ordered to perform full-time
National Guard duty authorized under section 112(b) of that
title 32, United States Code, may provide training referred
to in subsection (a) at that school.
(2) In this subsection, the term ``State drug interdiction
and counter-drug activities plan'', in the case of a State,
means the current plan submitted by the Governor of the State
to the Secretary of Defense under section 112 of title 32,
United States Code.
(d) Annual Reports on Activities.--(1) Not later than
February 1, 2002, and annually thereafter, the Secretary of
Defense shall submit to Congress a report on the activities
of the National Guard counterdrug schools.
(2) Each report under paragraph (1) shall set forth the
following:
(A) The amount made available for each National Guard
counterdrug school during the fiscal year ending in the year
preceding the year in which such report is submitted.
(B) A description of the activities of each National Guard
counterdrug school during the year preceding the year in
which such report is submitted.
(3) The report under paragraph (1) in 2002 shall set forth,
in addition to the matters described in paragraph (2), a
description of the activities relating to the establishment
of the Midwest Counterdrug Training Center in Johnston, Iowa.
(e) Authorization of Appropriations.--(1) There is hereby
authorized to be appropriated for the Department of Defense
for the National Guard for fiscal year 2002, $25,000,000 for
purposes of the National Guard counterdrug schools in that
fiscal year.
(2) The amount authorized to be appropriated by paragraph
(1) is in addition to any other amount authorized to be
appropriated for the Department of Defense for the National
Guard for fiscal year 2002.
(f) Availability of Funds.--(1) Of the amount authorized to
be appropriated by subsection (e)(1)--
(A) $4,000,000 shall be available for the National
Interagency Civil-Military Institute, San Luis Obispo,
California;
(B) $8,000,000 shall be available for the Multi-
Jurisdictional Counterdrug Task Force Training, St.
Petersburg, Florida;
(C) $3,000,000 shall be available for the Midwest
Counterdrug Training Center, Johnston, Iowa;
(D) $5,000,000 shall be available for the Regional
Counterdrug Training Academy, Meridian, Mississippi; and
(E) $5,000,000 shall be available for the Northeast
Regional Counterdrug Training Center, Fort Indiantown Gap,
Pennsylvania.
(2) Amounts available under paragraph (1) shall remain
available until expended.
(g) Funding for Fiscal Years After Fiscal Year 2002.--(1)
The budget of the President that is submitted to Congress
under section 1105 of title 31, United States Code, for any
fiscal year after fiscal year 2002 shall set forth as a
separate budget item the amount requested for such fiscal
year for the National Guard counterdrug schools.
(2) It is the sense of Congress that--
(A) the amount authorized to appropriated for the National
Guard counterdrug schools for any fiscal year after fiscal
year 2002 should not be less than the amount authorized to be
appropriated for those schools for fiscal year 2002 by
subsection (e)(1), in constant fiscal year 2002 dollars; and
(B) the amount made available to each National Guard
counterdrug school for any fiscal year after fiscal year 2002
should not be less than the amount made available for such
school for fiscal year 2002 by subsection (f)(1), in constant
fiscal year 2002 dollars, except that the amount made
available for the Midwest Counterdrug Training School should
not be less than $5,000,000, in constant fiscal year 2002
dollars.

Subtitle B--Customs Matters

SEC. 211. SHORT TITLE.

This subtitle may be cited as the ``Customs Authorization
Act of 2001''.

PART I--AUTHORIZATION OF APPROPRIATIONS FOR UNITED STATES CUSTOMS
SERVICE FOR ENHANCED INSPECTION, TRADE FACILITATION, AND DRUG
INTERDICTION

SEC. 221. AUTHORIZATION OF APPROPRIATIONS.

(a) Drug Enforcement and Other Noncommercial Operations.--
Subparagraphs (A) and (B) of section 301(b)(1) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)) are amended to read as follows:
``(A) $1,029,608,384 for fiscal year 2002.
``(B) $1,111,450,668 for fiscal year 2003.''.
(b) Commercial Operations.--Clauses (i) and (ii) of section
301(b)(2)(A) of such Act (19 U.S.C. 2075(b)(2)(A)) are
amended to read as follows:
``(i) $1,251,794,435 for fiscal year 2002.
``(ii) $1,348,676,435 for fiscal year 2003.''.
(c) Air and Marine Interdiction.--Subparagraphs (A) and (B)
of section 301(b)(3) of such Act (19 U.S.C. 2075(b)(3)) are
amended to read as follows:
``(A) $229,001,000 for fiscal year 2002.
``(B) $176,967,000 for fiscal year 2003.''.
(d) Submission of Budget Projections.--Section 301(a) of
such Act (19 U.S.C. 2075(a)) is amended by adding at the end
the following:
``(3) By no later than the date on which the President
submits to Congress the budget of the United States
Government for a fiscal year, the Commissioner of Customs
shall submit to the Committee on Appropriations and the
Committee on Ways and Means of the House of Representatives
and the Committee on Appropriations and the Committee on
Finance of the Senate the budget request submitted to the
Secretary of the Treasury estimating the amount of funds for
that fiscal year that will be necessary for the operations of
the Customs Service as provided for in subsection (b).''.
(e) Authorization of Appropriations for Modernizing Customs
Service Computer Systems.--
(1) Establishment of automation modernization working
capital fund.--There is established within the United States
Customs Service an Automation Modernization Working Capital
Fund (in this section referred to as the ``Fund''). The Fund
shall consist of the amounts authorized to be appropriated
under paragraph (2) and shall be available as follows:
(A) To implement a program for modernizing the Customs
Service computer systems.
(B) To maintain the existing computer systems of the
Customs Service until a modernized computer system is fully
implemented.

[[Page S353]]

(C)For related computer system modernization activities of
the Customs Service.
(2) Authorization of appropriations.--There are authorized
to be appropriated for the Fund $242,000,000 for fiscal year
2002 and $336,000,000 for fiscal year 2003. The amounts
authorized to be appropriated under this paragraph shall
remain available until expended.
(3) Report and audit.--
(A) Report.--The Commissioner of Customs shall, not later
than March 31 and September 30 of each year, submit to the
Comptroller General of the United States, the Committee on
Appropriations and the Committee on Ways and Means of the
House of Representatives and the Committee on Appropriations
and the Committee on Finance of the Senate a report on the
progress being made in the modernization of the Customs
Service computer systems. Each such report shall--
(i) include explicit criteria used to identify, evaluate,
and prioritize investments for computer systems modernization
planned for the Customs Service for each of fiscal years 2002
through 2006;
(ii) provide a schedule for mitigating any deficiencies
identified by the Comptroller General and for developing and
implementing all computer systems modernization projects;
(iii) provide a plan for expanding the utilization of
private sector sources for the development and integration of
computer systems; and
(iv) contain timely schedules and resource allocations for
implementing the modernization of the Customs Service
computer systems.
(B) Audit.--Not later than 30 days after a report described
in subparagraph (A) is received, the Comptroller General
shall audit the report and shall provide the results of the
audit to the Commissioner of Customs, the Committee on
Appropriations and the Committee on Ways and Means of the
House of Representatives, and the Committee on Appropriations
and the Committee on Finance of the Senate.
(C) Cessation of report.--No report is required under this
paragraph after September 30, 2006.

SEC. 222. CARGO INSPECTION AND NARCOTICS DETECTION EQUIPMENT
FOR THE UNITED STATES-MEXICO BORDER, UNITED
STATES-CANADA BORDER, AND FLORIDA AND GULF
COAST SEAPORTS; INTERNAL MANAGEMENT
IMPROVEMENTS.

(a) Fiscal Year 2002.--Of the amounts made available for
fiscal year 2002 under section 301(b)(1)(A) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)(A)), as amended by section 221(a) of this Act,
$118,936,000 shall be available until expended for
acquisition and other expenses associated with implementation
and deployment of narcotics detection equipment along the
United States-Mexico border, the United States-Canada border,
and Florida and the Gulf Coast seaports, and for internal
management improvements as follows:
(1) United states-mexico border.--For the United States-
Mexico border, the following amounts shall be available:
(A) $6,000,000 for 8 Vehicle and Container Inspection
Systems (VACIS).
(B) $11,000,000 for 5 mobile truck x-rays with transmission
and backscatter imaging.
(C) $12,000,000 for the upgrade of 8 fixed-site truck x-
rays from the present energy level of 450,000 electron volts
to 1,000,000 electron volts (1-MeV).
(D) $7,200,000 for 8 1-MeV pallet x-rays.
(E) $1,000,000 for 200 portable contraband detectors
(busters) to be distributed among ports where the current
allocations are inadequate.
(F) $600,000 for 50 contraband detection kits to be
distributed among all southwest border ports based on traffic
volume.
(G) $500,000 for 25 ultrasonic container inspection units
to be distributed among all ports receiving liquid-filled
cargo and to ports with a hazardous material inspection
facility.
(H) $2,450,000 for 7 automated targeting systems.
(I) $360,000 for 30 rapid tire deflator systems to be
distributed to those ports where port runners are a threat.
(J) $480,000 for 20 portable Treasury Enforcement
Communications Systems (TECS) terminals to be moved among
ports as needed.
(K) $1,000,000 for 20 remote watch surveillance camera
systems at ports where there are suspicious activities at
loading docks, vehicle queues, secondary inspection lanes, or
areas where visual surveillance or observation is obscured.
(L) $1,254,000 for 57 weigh-in-motion sensors to be
distributed among the ports with the greatest volume of
outbound traffic.
(M) $180,000 for 36 AM traffic information radio stations,
with 1 station to be located at each border crossing.
(N) $1,040,000 for 260 inbound vehicle counters to be
installed at every inbound vehicle lane.
(O) $950,000 for 38 spotter camera systems to counter the
surveillance of customs inspection activities by persons
outside the boundaries of ports where such surveillance
activities are occurring.
(P) $390,000 for 60 inbound commercial truck transponders
to be distributed to all ports of entry.
(Q) $1,600,000 for 40 narcotics vapor and particle
detectors to be distributed to each border crossing.
(R) $400,000 for license plate reader automatic targeting
software to be installed at each port to target inbound
vehicles.
(S) $1,000,000 for a demonstration site for a high-energy
relocatable rail car inspection system with an x-ray source
switchable from 2,000,000 electron volts (2-MeV) to 6,000,000
electron volts (6-MeV) at a shared Department of Defense
testing facility for a two-month testing period.
(T) $2,500,000 for a demonstration project for passive
detection technology.
(2) United states-canada border.--For the United States-
Canada border, the following amounts shall be available:
(A) $3,000,000 for 4 Vehicle and Container Inspection
Systems (VACIS).
(B) $8,800,000 for 4 mobile truck x-rays with transmission
and backscatter imaging.
(C) $3,600,000 for 4 1-MeV pallet x-rays.
(D) $250,000 for 50 portable contraband detectors (busters)
to be distributed among ports where the current allocations
are inadequate.
(E) $300,000 for 25 contraband detection kits to be
distributed among ports based on traffic volume.
(F) $240,000 for 10 portable Treasury Enforcement
Communications Systems (TECS) terminals to be moved among
ports as needed.
(G) $400,000 for 10 narcotics vapor and particle detectors
to be distributed to each border crossing based on traffic
volume.
(H) $600,000 for 30 fiber optic scopes.
(I) $250,000 for 50 portable contraband detectors (busters)
to be distributed among ports where the current allocations
are inadequate.
(J) $3,000,000 for 10 x-ray vans with particle detectors.
(K) $40,000 for 8 AM loop radio systems.
(L) $400,000 for 100 vehicle counters.
(M) $1,200,000 for 12 examination tool trucks.
(N) $2,400,000 for 3 dedicated commuter lanes.
(O) $1,050,000 for 3 automated targeting systems.
(P) $572,000 for 26 weigh-in-motion sensors.
(Q) $480,000 for 20 portable Treasury Enforcement
Communication Systems (TECS).
(3) Florida and gulf coast seaports.--For Florida and the
Gulf Coast seaports, the following amounts shall be
available:
(A) $4,500,000 for 6 Vehicle and Container Inspection
Systems (VACIS).
(B) $11,800,000 for 5 mobile truck x-rays with transmission
and backscatter imaging.
(C) $7,200,000 for 8 1-MeV pallet x-rays.
(D) $250,000 for 50 portable contraband detectors (busters)
to be distributed among ports where the current allocations
are inadequate.
(E) $300,000 for 25 contraband detection kits to be
distributed among ports based on traffic volume.
(4) Internal management improvements.--For internal
management improvements, the following amounts shall be
available:
(A) $2,500,000 for automated systems for management of
internal affairs functions.
(B) $700,000 for enhanced internal affairs file management
systems.
(C) $2,700,000 for enhanced financial asset management
systems.
(D) $6,100,000 for enhanced human resources information
system to improve personnel management.
(E) $2,700,000 for new data management systems for improved
performance analysis, internal and external reporting, and
data analysis.
(F) $1,700,000 for automation of the collection of key
export data as part of the implementation of the Automated
Export system.
(b) Textile Transshipment.--Of the amounts made available
for fiscal years 2002 and 2003 under section 301(b)(1)(B) of
the Customs Procedural Reform and Simplification Act of 1978
(19 U.S.C. 2075(b)(1)(B)), as amended by section 221(a) of
this Act, $3,364,435 shall be available for each such fiscal
year for textile transshipment enforcement.
(c) Fiscal Year 2003.--Of the amounts made available for
fiscal year 2003 under section 301(b)(1)(B) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)(B)), as amended by section 221(a) of this Act,
$9,923,500 shall be available for the maintenance and support
of the equipment and training of personnel to maintain and
support the equipment described in subsection (a).
(d) Acquisition of Technologically Superior Equipment;
Transfer of Funds.--
(1) In general.--The Commissioner of Customs may use
amounts made available for fiscal year 2002 under section
301(b)(1)(A) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 2075(b)(1)(A)), as
amended by section 221(a) of this Act, for the acquisition of
equipment other than the equipment described in subsection
(a) if such other equipment--
(A)(i) is technologically superior to the equipment
described in subsection (a); and
(ii) will achieve at least the same results at a cost that
is the same or less than the equipment described in
subsection (a); or
(B) is technologically equivalent to the equipment
described in subsection (a) and can be obtained at a lower
cost than the equipment described in subsection (a).
(2) Transfer of funds.--Notwithstanding any other provision
of this section, the Commissioner of Customs may reallocate
an amount not to exceed 25 percent of--
(A) the amount specified in any of subparagraphs (A)
through (R) of subsection (a)(1)

[[Page S354]]

for equipment specified in any other of such subparagraphs
(A) through (R);
(B) the amount specified in any of subparagraphs (A)
through (Q) of subsection (a)(2) for equipment specified in
any other of such subparagraphs (A) through (Q); and
(C) the amount specified in any of subparagraphs (A)
through (E) of subsection (a)(3) for equipment specified in
any other of such subparagraphs (A) through (E).

SEC. 223. PEAK HOURS AND INVESTIGATIVE RESOURCE ENHANCEMENT
FOR THE UNITED STATES-MEXICO AND UNITED STATES-
CANADA BORDERS, FLORIDA AND GULF COAST
SEAPORTS, AND THE BAHAMAS.

(a) In General.--Of the amounts made available for fiscal
years 2002 and 2003 under subparagraphs (A) and (B) of
section 301(b)(1) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 2075(b)(1)), as amended
by section 221(a) of this Act, $181,864,800 for fiscal year
2002 (including $5,673,600 until expended for investigative
equipment) and $230,983,340 for fiscal year 2003 shall be
available for the following:
(1) A net increase of 535 inspectors, 120 special agents,
and 10 intelligence analysts for the United States-Mexico
border, and 375 inspectors for the United States-Canada
border, in order to open all primary lanes on such borders
during peak hours and enhance investigative resources.
(2) A net increase of 285 inspectors and canine enforcement
officers to be distributed at large cargo facilities as
needed to process and screen cargo (including rail cargo) and
reduce commercial waiting times on the United States-Mexico
border and a net increase of 125 inspectors to be distributed
at large cargo facilities as needed to process and screen
cargo (including rail cargo) and reduce commercial waiting
times on the United States-Canada border.
(3) A net increase of 40 special agents and 10 intelligence
analysts to facilitate the activities of the additional
inspectors authorized under paragraphs (1) and (2).
(4) A net increase of 40 inspectors at sea ports in
southeast Florida to process and screen cargo.
(5) A net increase of 70 special agent positions, 23
intelligence analyst positions, 9 support staff positions,
and the necessary equipment to enhance investigation efforts
targeted at internal conspiracies at the Nation's seaports.
(6) A net increase of 360 special agents, 30 intelligence
analysts, and additional resources to be distributed among
offices that have jurisdiction over major metropolitan drug
or narcotics distribution and transportation centers for
intensification of efforts against drug smuggling and money-
laundering organizations.
(7) A net increase of 2 special agent positions to re-
establish a Customs Attache office in Nassau.
(8) A net increase of 62 special agent positions and 8
intelligence analyst positions for maritime smuggling
investigations and interdiction operations.
(9) A net increase of 50 positions and additional resources
to the Office of Internal Affairs to enhance investigative
resources for anticorruption efforts.
(10) The costs incurred as a result of the increase in
personnel hired pursuant to this section.
(b) Relocation of Personnel.--Notwithstanding any other
provision of this section, the Commissioner of Customs may
reduce the amount of additional personnel provided for in any
of paragraphs (1) through (9) of subsection (a) by not more
than 25 percent, if the Commissioner of Customs makes a
corresponding increase in the personnel provided for in one
or more of such paragraphs (1) through (9).
(c) Net Increase.--In this section, the term ``net
increase'' means an increase in the number of employees in
each position described in this section over the number of
employees in each such position that was provided for in
fiscal year 2000.

SEC. 224. AGENT ROTATIONS; ELIMINATION OF BACKLOG OF
BACKGROUND INVESTIGATIONS.

Of the amounts made available for fiscal years 2002 and
2003 under subparagraphs (A) and (B) of section 301(b)(1) of
the Customs Procedural Reform and Simplification Act of 1978
(19 U.S.C. 2075(b)(1)), as amended by section 221(a) of this
Act, $16,000,000 for fiscal year 2002 (including $10,000,000
until expended) and $6,000,000 for fiscal year 2003 shall be
available to--
(1) provide additional funding to clear the backlog of
existing background investigations and to provide for
background investigations during extraordinary recruitment
activities of the agency; and
(2) provide for the interoffice transfer of up to 100
special agents, including costs related to relocations,
between the Office of Investigations and Office of Internal
Affairs, at the discretion of the Commissioner of Customs.

SEC. 225. AIR AND MARINE OPERATION AND MAINTENANCE FUNDING.

(a) Fiscal Year 2002.--Of the amounts made available for
fiscal year 2002 under subparagraphs (A) and (B) of section
301(b)(3) of the Customs Procedural Reform and Simplification
Act of 1978 (19 U.S.C. 2075(b)(3)), as amended by section
221(c) of this Act, $130,513,000 shall be available until
expended for the following:
(1) $96,500,000 for Customs Service aircraft restoration
and replacement initiative.
(2) $15,000,000 for increased air interdiction and
investigative support activities.
(3) $19,013,000 for marine vessel replacement and related
equipment.
(b) Fiscal Year 2003.--Of the amounts made available for
fiscal year 2003 under subparagraphs (A) and (B) of section
301(b)(3) of the Customs Procedural Reform and Simplification
Act of 1978 (19 U.S.C. 2075(b)(3)) as amended by section
221(c) of this Act, $75,524,000 shall be available until
expended for the following:
(1) $36,500,000 for Customs Service aircraft restoration
and replacement.
(2) $15,000,000 for increased air interdiction and
investigative support activities.
(3) $24,024,000 for marine vessel replacement and related
equipment.

SEC. 226. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS.

(a) In General.--As part of the annual performance plan for
each of fiscal years 2002 and 2003, as required under section
1115 of title 31, United States Code, the Commissioner of
Customs shall evaluate the benefits of the activities
authorized to be carried out pursuant to sections 222 through
225 of this Act.
(b) Enforcement Performance Measures.--The Commissioner of
Customs is authorized to contract for the review and
assessment of enforcement performance goals and indicators
required by section 1115 of title 31, United States Code,
with experts in the field of law enforcement, from academia,
and from the research community. Any contract for review or
assessment conducted pursuant to this subsection shall
provide for recommendations of additional measures that would
improve the enforcement strategy and activities of the
Customs Service.
(c) Report to Congress.--The Commissioner of Customs shall
submit any assessment, review, or report provided for under
this section to the Committee on Finance of the Senate and
the Committee on Ways and Means of the House of
Representatives.

SEC. 227. REPORT ON INTELLIGENCE REQUIREMENTS.

The Commissioner of Customs shall, not later than one year
of the date of the enactment of this Act, submit to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives a report containing
the following:
(1) An assessment of the intelligence-gathering and
information-gathering capabilities and needs of the Customs
Service.
(2) An assessment of the impact of any limitations on the
intelligence-gathering and information-gathering capabilities
necessary for adequate enforcement of the customs laws of the
United States and other laws enforced by the Customs Service.
(3) The Commissioner's recommendations for improving the
intelligence-gathering and information-gathering capabilities
of the Customs Service.

PART II--CUSTOMS MANAGEMENT

SEC. 231. TERM AND SALARY OF THE COMMISSIONER OF CUSTOMS.

(a) Term.--
(1) General requirements.--The first section of the Act
entitled ``An Act to create a Bureau of Customs and a Bureau
of Prohibition in the Department of the Treasury'', approved
March 3, 1927 (19 U.S.C. 2071), is amended--
(A) by striking ``There shall be'' and inserting ``(a) In
General.--There shall be'';
(B) in the second sentence--
(i) by inserting ``for a term of 5 years'' after
``Senate'';
(ii) by striking ``and'' at the end of paragraph (2);
(iii) by striking the period at the end of paragraph (3)
and inserting ``; and''; and
(iv) by adding at the end the following new paragraph:
``(4) have demonstrated ability in management.''; and
(C) by adding at the end the following:
``(b) Vacancy.--Any individual appointed to fill a vacancy
in the position of Commissioner occurring before the
expiration of the term for which the individual's predecessor
was appointed shall be appointed only for the remainder of
that term.
``(c) Removal.--The Commissioner may be removed at the will
of the President.
``(d) Reappointment.--The Commissioner may be appointed to
more than one 5-year term.''.
(2) Current office holder.-- In the case of an individual
serving as the Commissioner of Customs on the date of the
enactment of this Act, who was appointed to such position
before such date, the 5-year term required by the first
section of the Act entitled ``An Act to create a Bureau of
Customs and a Bureau of Prohibition in the Department of the
Treasury'', as amended by this section, shall begin as of the
date of such appointment.
(b) Salary.--
(1) In general.--
(A) Section 5315 of title 5, United States Code, is amended
by striking the following item:
``Commissioner of Customs, Department of the Treasury.''.
(B) Section 5314 of title 5, United States Code, is amended
by inserting at the end the following item:
``Commissioner of Customs, Department of the Treasury.''.
(2) Effective date.--The amendments made by this subsection
shall take effect on October 1, 2001.

SEC. 232. INTERNAL COMPLIANCE.

(a) Establishment of Internal Compliance Program.--The
Commissioner of Customs shall--

[[Page S355]]

(1) establish, within the Office of Internal Affairs, a
program of internal compliance designed to enhance the
performance of the basic mission of the Customs Service to
ensure compliance with all applicable laws and, in
particular, with the implementation of title VI of the North
American Free Trade Agreement Implementation Act (commonly
referred to as the ``Customs Modernization Act'');
(2) institute a program of ongoing self-assessment and
conduct a review on an annual basis of the performance of all
core functions of the Customs Service;
(3) identify deficiencies in the current performance of the
Customs Service with respect to commercial operations,
enforcement, and internal management and propose specific
corrective measures to address such concerns; and
(4) not later than 6 months after the date of the enactment
of this Act, and annually thereafter, submit to the Committee
on Finance of the Senate and the Committee on Ways and Means
of the House of Representatives a report on the programs and
reviews conducted under this subsection.
(b) Evaluation and Report on Best Practices.--The
Commissioner of Customs shall, as part of the development of
an improved system of internal compliance, initiate a review
of current best practices in internal compliance programs
among government agencies and private sector organizations
and, not later than 18 months after the date of the enactment
of this Act, report on the results of the review to the
Committee on Governmental Affairs and the Committee on
Finance of the Senate and the Committee on Government Reform
and the Committee on Ways and Means of the House of
Representatives.
(c) Review by Inspector General.--The Inspector General of
the Department of the Treasury shall review and audit the
implementation of the programs described in subsection (a) as
part of the Inspector General's report required under the
Inspector General Act of 1978 (5 U.S.C. App).

SEC. 233. REPORT ON PERSONNEL FLEXIBILITY.

Not later than 6 months after the date of the enactment of
this Act, the Commissioner of Customs shall submit to the
Committee on Governmental Affairs and the Committee on
Finance of the Senate and the Committee on Government Reform
and the Committee on Ways and Means of the House of
Representatives a report on the Commissioner's
recommendations for modifying existing personnel rules to
permit more effective management of the resources of the
Customs Service and for improving the ability of the Customs
Service to fulfill its mission. The report shall also include
an analysis of why the flexibility provided under existing
personnel rules is insufficient to meet the needs of the
Customs Service.

SEC. 234. REPORT ON PERSONNEL ALLOCATION MODEL.

Not later than 6 months after the date of the enactment of
this Act, the Commissioner of Customs shall submit to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives a report on the
following:
(1) The resources and personnel requirements under the
personnel allocation model under development in the Customs
Service.
(2) The implementation of the personnel allocation model.

SEC. 235. REPORT ON DETECTION AND MONITORING REQUIREMENTS
ALONG THE SOUTHERN TIER AND NORTHERN BORDER.

Not later than 6 months after the date of the enactment of
this Act, the Commissioner of Customs shall submit to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives a report on the
requirements of the Customs Service for counterdrug detection
and monitoring of the arrival zones along the southern tier
and northern border of the United States. The report shall
include an assessment of--
(1) the performance of existing detection and monitoring
equipment, technology, and personnel;
(2) any gaps in radar coverage of the arrival zones along
the southern tier and northern border of the United States;
and
(3) any limitations imposed on the enforcement activities
of the Customs Service as a result of the reliance on
detection and monitoring equipment, technology, and personnel
operated under the auspices of the Department of Defense.

PART III--MARKING VIOLATIONS

SEC. 241. CIVIL PENALTIES FOR MARKING VIOLATIONS.

Section 304(l) of the Tariff Act of 1930 (19 U.S.C.
1304(l)) is amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(2) by striking ``Any person'' and inserting ``(1) In
general.--Any person'';
(3) by moving the remaining text 2 ems to the right; and
(4) by adding at the end the following new paragraph:
``(2) Civil penalties.--Any person who defaces, destroys,
removes, alters, covers, obscures, or obliterates any mark
required under this section shall be liable for a civil
penalty of not more than $10,000 for each violation. The
civil penalty imposed under this subsection shall be in
addition to any marking duties owed under subsection (i).''.

Subtitle C--Miscellaneous

SEC. 251. TETHERED AEROSTAT RADAR SYSTEM.

(a) Findings.--Congress makes the following findings:
(1) Drug traffickers exploit openings in the United States
detection and monitoring network. Tethered Aerostat Radar
Systems (TARS) are a critical element in closing potential
routes for drug smuggling.
(2) The Tethered Aerostat Radar System, a network of 11
radar sites, serves as an important component of the
counterdrug mission of the United States by providing low
altitude radar surveillance, detection, and monitoring
capabilities to military and law enforcement entities.
Failure to operate the TARS system results in a degraded
counterdrug capability for the United States.
(3) Most of the illicit drugs consumed in the United States
enter the country over the Southwest, Gulf of Mexico, or
Florida borders. The United States will not have complete
coastal radar coverage to combat counterdrug threats unless
the entire Tethered Aerostat Radar System network is
standardized and maintained, including the Tethered Aerostat
Radar System sites in Matagorda, Texas, Morgan City,
Louisiana, and Horseshoe Beach, Florida.
(4) The Department of Defense, the lead Federal agency for
detection and monitoring, is responsible for fulfilling the
surveillance, detection, and monitoring mission in support of
counterdrug operations.
(5) The Department of Defense's current budget allocation
for the Tethered Aerostat Radar System is inadequate. At
present, 3 sites are not in operation because of the
expiration of their life cycle.
(b) Responsibility for Tethered Aerostat Radar System.--The
Secretary of Defense shall take all necessary actions to
ensure that the 11 sites that comprise the Tethered Aerostat
Radar System network are placed under the policy direction of
the Drug Enforcement Policy and Support office of the
Assistant Secretary of Defense for Special Operations and Low
Intensity Conflict.
(c) Limitation on Transfer.--The Secretary shall cease all
activities relating to the transfer of responsibility for the
Tethered Aerostat Radar System program to any entity outside
the Department of Defense.
(d) Report on Status.--(1) The Secretary shall annually
submit to the congressional defense committees and the United
States Senate Caucus on International Narcotics Control a
report on the status of the Tethered Aerostat Radar System
network.
(2) In this subsection, the term ``congressional defense
committees'' means the following:
(A) The Committees on Armed Services and Appropriations of
the Senate.
(B) The Committees on Armed Services and Appropriations of
the House of Representatives.
(e) Authorization.--There is hereby authorized to be
appropriated for the requirements of the 11-site network of
the Tethered Aerostat Radar System, including standardization
of the sites located along the Gulf of Mexico of the United
States, amounts as follows:
(1) For fiscal year 2002, $76,000,000.
(2) For fiscal year 2003, $48,500,000.
(2) For fiscal year 2004, $40,500,000.
(3) For fiscal year 2005, $44,700,000.
______

By Mr. BINGAMAN:
S. 90. A bill authorizing funding for nanoscale science and
engineering research and development at the Department of Energy for
fiscal years 2002 through 2006; to the Committee on Energy and Natural
Resources.

NANOSCIENCE AND NANOENGINEERING

Mr. BINGAMAN. Mr. President. I rise today to introduce a bill
authorizing the Secretary of Energy to provide for a long term
commitment in its Office of Science to the area of nanoscience and
nanoengineering. This new area is of fundamental importance for
maintaining our global economic leadership in energy technology as well
in areas such as microchip design, space and transportation, medicines
and biomedical devices. The fields of nanoscience and nanoengineering
as so new and broad in their reach that no one industry can support
them. They are a perfect example how we in Congress can make a
difference to support our nation's technological leadership, a key
element of the 21st century global economy.
The fields of nanoscience and engineering encompass the ability to
create new states of matter by prepositioning the atoms that make up
their structure. The physical features that nanoscale R&D will develop
are on the order of about 10 nanometers or 1000 times smaller than the
diameter of a human hair. What we are talking about is making materials
and devices not be miniaturization, which is a top down approach.
Nanoscience is the bottom up fabrication of materials, atom by atom.
When you build materials at this level, amazing things begin to happen.
We are talking about microchips whose features will shrink by a factor
of 100 below where industry projects they will be in the year 2010.
These chip features will lead to radical breakthroughs in

[[Page S356]]

speed, cost and density of information storage. In the field of
medicine and health, we are talking about drugs whose routes of
delivery are literally at the molecular level. It will be possible to
custom build proteins and other biological materials for future
biomedical devices. In the field of energy efficiency, batteries and
fuel cells can be built with storage capacities far exceeding our
current state of the art. In the transportation industry, it will be
possible to make ultra strong and light materials reducing the weight
in airplanes, cars and space vehicles. All these breakthroughs in the
diverse industries I have discussed will keep the United States' as a
global leader in the 21st century economy.
The Department of Energy and its Office of Science are uniquely
suited to support this critical research. The Office of Science has
been at the forefront of conducting nanotechnology research for the
past decade through its broad array of materials, physics, chemistry
and biology programs. This authorization bill will carry forth four
broad objectives of the Office of Science's existing nanotechnology
effort, (1) attain a fundamental understanding of nanoscale phenomena,
(2) achieve the ability to design bulk materials with desired
properties using nanoscale manipulation, (3) study how living organisms
produce materials naturally by arranging their atomic structure and
implement it into the design process for nanomaterials, (4) develop
experimental and computer tools with a national infrastructure to carry
out nanoscience. Let me briefly comment on the fourth area in this
list. The Office of Science is the nation's leader in developing and
managing national user facilities across the broad range of physical
sciences. It would be a natural progression for the Office of Science
to develop similar user facilities to advance nanoscience. These
facilities, located across the United States, will contain unique
equipment and computers which will be accessible to individuals as well
as multi-disciplinary teams. In the past, Office of Science national
user facilities have served as crossing points between the transition
from fundamental science to industrial capability. I expect that these
nanoscience user facilities will serve as a similar transition point
from long term fundamental research into applied industrial know-how.
Accordingly, in this authorization bill I have allotted portions of the
yearly budget towards developing these unique user facilities.
This bill is an important first step in a combined national
nanoscience effort which will help to maintain the technological edge
of our U.S. industry. I encourage my House colleagues in the Science
Committee to also consider this bill with the possibility of joint
hearings so that we may be enlightened on nanoscience's full potential.
I also hope that the other federal R&D agencies will make similar
commitments in their areas of expertise. Maintaining this edge, by
promoting these long term and high risk investigations is something
which we cannot expect in the short time frame world of today's
industry. It is critical that our U.S. government step into this void,
particularly in the area of nanoscience, and provide the necessary
intellectual capital to propel our national economy as a leader in the
21st century.
______

By Mr. Gramm (for himself, Mrs. Hutchison, Mr. Bingaman, Mr.
Domenici, Mr. Kyl, Mr. McCain, and Mrs. Boxer):
S. 92. A bill to authorize appropriations for the United States
Customs Service for fiscal years 2002 and 2003, and for other purposes;
to the Committee on Finance.

PROTECTION OF U.S. BORDERS

Mr. GRAMM. Mr. President, on behalf of Senators Hutchison, Bingaman,
Domenici, Kyl, McCain, and Boxer, I am introducing legislation today
which will authorize the United States Customs Service to acquire the
necessary personnel and technology to reduce delays at our border
crossings with Mexico and Canada to no more than 20 minutes, while
strengthening our commitment to interdict illegal narcotics and other
contraband.
This bill represents the progress that we made in this regard in the
last Congress, and it builds on efforts that we first initiated in the
105th Congress. This legislation passed the Senate unanimously on
August 5, 1999, and a similar bill passed the House of Representatives
on May 25, 1999, by a vote of 410-2. In addition to the resources
dedicated to our nation's land borders, this bill also incorporates the
efforts of Senators Grassley and Graham in adding resources for
interdiction efforts in the air and along our coastline, provisions
that were passed by the Senate in last year's bill.
I am very concerned about the impact of narcotics trafficking on
Texas and the nation and have worked closely with federal and state law
enforcement officials to identify and secure the necessary resources to
battle the onslaught of illegal drugs. At the same time, however, our
current enforcement strategy is burdened by insufficient staffing, a
gross underuse of vital interdiction technology, and is effectively
closing the door to legitimate trade.
At a time when NAFTA and the expanding world marketplace are making
it possible for us to create more commerce, freedom and opportunity for
people on both sides of the border, it is important that we eliminate
the border crossing delays that are stifling these goals. In order for
all Americans to fully enjoy the benefits of growing trade with Mexico
and Canada, we must ensure that the Customs Service has the resources
necessary to accomplish its mission. Customs inspections should not be
obstacles to legitimate trade and commerce. Customs staffing needs to
be increased significantly to facilitate the flow of substantially
increased traffic on both the Southwestern and Northern borders, and
these additional personnel need the modern technology that will allow
them to inspect more cargo, more efficiently. The practical effect of
these increases will be to open all the existing primary inspection
lanes where congestion is a problem during peak hours and to enhance
investigative capabilities on the Southwest border.
Long traffic lines at our international crossings are
counterproductive to improving our trade relationship with Mexico and
Canada. This bill is designed to shorten those lines and promote
legitimate commerce, while providing the customs Service with the means
necessary to tackle the drug trafficking operations that are now
rampant along the 1,200-mile border that my State shares with Mexico. I
will be speaking further to my colleagues about this initiative and
urge their support for this bill.
______

By Ms. SNOWE (for herself and Mr. Jeffords):
S. 93. A bill to amend the Federal Election Campaign Act of 1971 to
require disclosure of certain disbursements made for electioneering
communications, and for other purposes; to the Committee on Rules and
Administration.

campaign reform

Ms. SNOWE. Mr. President, I rise to introduce a bill along with my
friend and colleague from Vermont, Senator Jeffords, to ensure that we
will have balanced, comprehensive campaign finance reform that doesn't
close one loophole while leaving another open. It is a bipartisan
approach to a burgeoning segment of undisclosed and unregulated
campaign activity that will only get worse if left unchecked.
Mr. President, the bill I am offering is based on a provision this
body added to the McCain-Feingold bill three years ago, and a bill we
introduced in the 106th Congress. With that amendment, the Senate
finally went on record as having a majority in support of campaign
finance reform. In fact, 53 senators cast a vote supporting the
combined approach of a soft money ban and a sound, constitutional
approach to addressing a veritable explosion in unregulated, so-called
``issue ads''.
Senator Jeffords and I crafted this measure because we wanted
campaign finance reform; we wanted a bill that represented the best
possible policy; and we wanted a package that could bridge the
political gap that had opened between supporters and opponents.
On the one hand, we had Republicans concerned that McCain-Feingold,
as it stood, might not have done enough to focus on the use of the
union dues for political purposes. On the other hand, we had Democrats
who didn't want unions signaled out and wanted corporate money to be
addressed as well.

[[Page S357]]

That's the context in which we set out to carefully construct a
measure that would withstand constitutional scrutiny, address some of
the most egregious abuses, and focus on areas where we know the Supreme
Court has already allowed us to go--disclosure, and a prohibition on
union and corporation money for electioneering. Indeed, the compromise
language eventually adopted was supported by groups like Common Cause
and Public Citizen, and by the bill's sponsors themselves.
I would also like to enter into the record a portion of a March 1,
1998 Washington Post editorial that said,'' The (Snowe-Jeffords)
amendment was a reminder of how good a bill might be in reach if only
there were the political will, and willing leadership, to write it.''
The editorial went on to say that ``that's the sort of compromise that
the legislative process at its best produces.''
I am pleased that a provision based directly on that amendment is now
included in the McCain-Feingold bill being introduced today, and of
which I am an original cosponsor. I think the provision strengthens the
McCain-Feingold bill in terms of providing balance and more
comprehensive approach to reform.
Mr. President, I have stood on the Senate floor and spoken of the
burgeoning problem this bill seeks to address. And I have said that, if
we do nothing, the situation will only get worse. Well, it has gotten
worse, and let me just take a moment before describing what the bill
will do to detail why this bill is necessary in the first place.

What I'm talking about here are broadcast advertisements the sole
purpose of which is to influence federal elections, but that require no
disclosure and have none of the restrictions that for decades have been
placed on other forms of campaigning. These are broadcast ads that
masquerade as informational or educational, but are really ``stealth
advocacy'' ads for or against candidates.
According to estimates by the Annenberg Public Policy center which
has been extensively studying this trend, in the 2000 elections over
$400 million was spent on these so-called ``issue ads''--many of which
are blatant attempts to influence federal elections, and everyone knows
it. And that number--which is four times what was estimated for the
last presidential election cycle, I might add, may be just the tip of
the iceberg. Because we simply don't know all the money that's being
spent.
So how do we address the problem?
The Snowe-Jeffords approach is simple and straightforward. First, we
require disclosure on all groups and individuals running broadcast ads
within 30 days of a primary and 60 days of any election that mention
the name of a federal candidate. And second, a ban on the use of union
or corporate treasury money to pay for these ads.
That's what this boils down to, Mr. President. Disclosure,
disclosure, disclosure. In fact, nothing in this bill prevents anyone
from running any ads at any time saying anything they want.
All we say is, if you spend more than $10,000 per year on these
broadcast ads you can't use union or corporation money. That's the only
ban on anything in this bill. And we require you to disclose who is
bankrolling the ads if they give $500 or more.
We developed this approach in consultation with noted constitutional
scholars and reformers such as Norm Ornstein of the American Enterprise
Institute Joshua Rosenkrantz, Director of the Brennan Center for
Justice at NYU, and Daniel Ortiz, John Allan Love Professor of Law at
the University of Virginia School of Law. The bill is narrowly and
carefully crafted, and based on the precept that the Supreme Court has
made clear that, for constitutional purposes, campaigning--which make
no mistake, these ads do--is different from other speech.
Corporations have been banned from direct involvement in campaigns
since the Tillman Act of 1907--unions were first addressed in the
Smith-Connally Act of 1943 and the prohibition was finally made
permanent in 1947 with the Taft-Hartley Act.
Under Snowe-Jeffords, unions and corporations still have a voice in
federal elections through the appropriate avenue--a political action
committee to which individuals voluntarily contribute up to the amount
allowed by law. They just can't use unlimited shareholder monies or
money from union coffers to fund the ads--a logical extension of
current law.
As for disclosure, the Brennan Center analysis has concluded that,
``Congress is permitted to demand that the sponsor of an electioneering
message disclose the amount spent on the message and the sources of the
funds.''
It has been said in the past that this measure prohibits running
these ads altogether. In point of fact, anyone can run any ad saying
anything they want at any time. They simply must not use union or
corporate treasury money within 30 days of a primary or 60 days before
a general election, and they must let us know who paid for them. Is
that too much to ask?
The fact is, Mr. President, we are burying our heads in the sand if
we do nothing about this problem. It is clearly taking elections out of
the hands of individuals and of candidates.
Certainly, there are some legitimate issue ads out there. They are
truly designed to inform the public, or advocate a particular position.
We don't effect these ads one iota. We don't want to effect these ads.
And certainly, people have a right to disagree with candidates, and
even attack their positions. That is why nothing in this bill prevents
people from doing so. All we say is that we ought to know who is paying
for these ads, and that they should not be paid for with union or
corporation money--like any other activity that is influencing a
federal election.

Again, the bill only requires disclosure for large donors to all
groups spending more than $10,000 on ads running 30 days before a
primary and 60 days before a general election. And it only bans union
and corporation treasury money from funding such ads, based on the 1907
and 1947 laws I mention earlier.
This approach has garnered majority support from the Senate in the
past and in light of the previous elections it deserves even greater
support today. We need balanced, meaningful, and comprehensive campaign
finance reform, and this bill is a vital component. I urge its
consideration.
Mr. JEFFORDS. Mr. President, I rise today to express my strong
support for the bill Senator Snowe and I are introducing and urge my
Senate colleagues to join as cosponsors of this important legislation.
Throughout the last Congress the Senate spent many legislative hours
debating campaign finance reform. In fact, since my election to the
House in the wake of the Watergate scandal, I have spent many long
hours working with my colleagues to craft campaign finance reform
legislation that could ensure the legislative process and survive a
constitutional challenge. We have come close in the past, and I believe
circumstances still remain right for enactment of meaningful campaign
finance reform during this Congress.
I believe that the irregularities associated with our recent
campaigns point out the fact that current election laws are not being
strongly enforced or working to achieve the goals that we all have for
campaign finance reform. Without action, these abuses will become more
pronounced and widespread as we go from election to election.
The Snowe-Jeffords bill, the Advancing Truth and Accountability of
Campaign Communications Act (ATACC), will boost disclosure requirements
and tighten the rules on expenditures of corporate and union treasury
funds in the weeks preceding a primary and general election.
I would like to begin with a story that may help my colleagues
understand the need for this legislation, and that many of my
colleagues may understand from their own campaigns. Two individuals are
running for the Senate and have spent the last few months holding
debates, talking to the voters and traveling around the state. Both
candidates feel that they have informed the voters of their thoughts,
views and opinions on the issues, and that the voters can use this
information to decide on which candidate they will support.
Two weeks before the day of the election a group called the People
for the Truth and the American Way, let's say, begins to run television
advertisements which include the picture of one of the

[[Page S358]]

candidates and that candidate's name. However, these advertisements do
not use the express terms of ``vote for'' or ``vote against.'' These
advertisements discuss personal and family issues.
The voters do not know who this group is, who are its financial
backers and why they have an interest in this specific election, and
under our current election law the voters will not find out. Thus, even
though the candidates have attempted to provide the voters with all the
information concerning the candidate's views on the issues, they
will be casting their vote lacking critical information concerning
these advertisements.

Some people may say that voters do not need this information. But as
James Madison said, ``A popular government without popular information
is but a prologue to a tragedy or a farce or perhaps both. Knowledge
will forever govern ignorance and a people who mean to be their own
governors must arm themselves with the power which knowledge gives.''
Mr. President, the ATACC act will arm the people with the knowledge
they need in order to sustain our popular government. And the need to
arm the people with this knowledge is becoming greater every year. The
amount of money spent on issue advocacy advertising is increasing over
time at an alarming rate. In the 1995-1996 election cycle an estimated
$135-150 million was spent on issue advocacy, while in the 1997-1998
cycle an estimated $275-340 million was expended on these types of
advertisements. There appears to have been no slowing of expenditures
during the 1999-2000 election cycle as the most recent estimates show
the previous election cycle's total being surpassed with the final two
months of campaigning, where a large proportion of these advertisements
are run, remaining.
I have long believed in Justice Brandeis' statement that, ``Sunlight
is said to be the best of disinfectants.'' The disclosure requirements
in the ATACC act are narrow and tailored to provide the electorate with
the important pertinent information they will need to make an informed
decision. Information included on the disclosure statement includes the
sponsor of the advertisement, amount spent, and the identity of the
contributors who donated more than $500. Getting the public this
information will greatly help the electorate evaluate those who are
seeking federal office.
Additionally, this disclosure, or disinfectant as Justice Brandeis
puts it, will also help deter actual corruption and avoid the
appearance of corruption that many already feel pervades our campaign
finance system. This, too, is an important outcome of the disclosure
requirements of this bill. Getting this information into the public
purview would enable the press, the FEC and interest groups to help
ensure that our federal campaign finance laws are obeyed. If the public
doesn't feel that the laws Congress passes in this area are being
followed, this will lead to a greater level of disillusionment in their
elected representatives. Exposure to the light of day of any corruption
by this required disclosure will help reassure our public that the laws
will be followed and enforced.
While our bill focuses on disclosure, it will also prohibit
corporations and unions from using general treasury monies to fund
these types of electioneering communications in a defined period close
to an election. Since 1907, federal law has banned corporations from
engaging in electioneering. In 1947, that ban was extended to prohibit
unions from electioneering as well. The Supreme Court has upheld these
restrictions in order to avoid the deleterious influences on federal
elections resulting from the use of money by those who exercise control
over large aggregations of capital. By treating both corporations and
unions similarly we extend current regulation cautiously and fairly.
I feel that this prohibition, coupled with the disclosure requirements,
will address many of the concerns my colleagues from both sides of the
aisle have raised with regards to our current campaign finance laws.

Mr. President, I think it is important to clarify at this time some
of the things that this bill will not do. It will not prevent grass-
roots lobbying communications, it does not cover printed material, nor
require the text or a copy of the advertisement to be disclosed.
Finally, it does not restrict how much money can be spent on ads, nor
restrict how much money a group raises. These points must be expressed
early on to ensure that my colleagues can clearly understand what we
are and are not attempting to do with our legislation.
We have taken great care with our bill to avoid violating the
important principles in the First Amendment of our Constitution. This
has required us to review the seminal cases in this areas, including
Buckley v. Valeo. Limiting corporate and union spending and disclosure
rules has been an area that the Supreme Court has been most tolerant of
regulation. We also strove to make the requirements sufficiently clear
and narrow to overcome unconstitutional claims of vagueness and
overbreadth.
Mr. President, I wish I could guarantee to my colleagues that these
provisions would be held constitutional, but as we found out with the
Religious Freedom Restoration Act, even with near unanimous support, it
is difficult to gauge what the Supreme Court will decide on
constitutional issues. However, I feel that the provisions we have
created follow closely the constitutional roadmap established by the
Supreme Court by the decisions in this area, and that it would be
upheld.
I know that campaign finance reform is an area of diverse viewpoints
and beliefs. However, I feel that the ATACC act offers a constructive
and constitutional solution that addresses some of the problems that
have been expressed concerning our current campaign finance system. The
American people are watching and hoping that we will have a fair,
informative and productive debate on campaign finance reform. I know
that the proposal that Senator Snowe and I have put forward will do
just that.
The electorate has grown more and more disappointed with the tenor of
campaigns over the last few years, and this disappointment is reflected
in the low number of people that actually participate in what makes
this country and democracy great, voting. I feel that giving the voters
the additional information required by our legislation will help dispel
some of the disillusionment the electorate feels with our campaign
system and reinvigorate people to participate again in our democratic
system.
In conclusion, the very basis of our democracy requires that an
informed electorate participate by going to the polls and voting. The
ATACC act will through its disclosure requirements inform our
electorate and lead people to again participate in our democratic
system.
______

By Mr. DORGAN:
S. 94. A bill to amend the Internal Revenue Code of 1986 to provide a
5-year extension of the credit for electricity produced from wind; to
the Commission on Finance.

extending wind power incentives

Mr. DORGAN. Mr. President, today I am introducing a bill that
would extend for five additional years the Federal tax incentive that
is currently available for facilities that produce electricity from
wind.
Despite all of its promise, wind energy is still a relatively
untapped clean source of energy in our region and across the country.
U.S. wind energy capacity in today's electricity marketplace is about
2,600 megawatts. That's enough to serve about 600,000 typical American
households. In 1999, the Administration committed our country to a goal
of producing five percent of our total electricity needs--about 80,000
megawatts--from wind power by the year 2020.
Wind energy is one of the world's fastest growing energy
technologies. As a result, wind energy can--and should--play a larger
role in helping this country move toward greater energy independence.
Soaring energy prices over the past year provide a stark reminder of
the importance of reducing our reliance on foreign energy sources and
keeping a diverse energy supply here at home. In addition, for states
like North Dakota, wind energy offers needed economic opportunities for
farmers and other rural landowners.
North Dakota is the top-ranked state for wind energy potential and is
often referred to as the ``Saudi Arabia'' of wind by industry experts.
Together, North and South Dakota could supply two-thirds of the
nation's current electricity supply with their wind energy

[[Page S359]]

capacity, according to a Department of Energy analysis.
Greater wind development would also bring new jobs to many rural
communities. Moreover, struggling family farmers could earn an extra
$2,000-$3,000 annually for each 750 kilowatt wind turbine placed on the
farm, while removing only a small fraction of land from the farmer's
overall operation.
Congress and the Administration have made some important progress in
the effort to promote greater wind energy development. Congress has
increased federal funding for wind and other renewable energy research
and development at the Department of Energy over the past several
years. It also has provided a substantial federal income tax credit
that is vital for continued private sector investment in wind
generation facilities. Most recently, the U.S. Department of
Agriculture's Rural Utilities Service awarded its first-ever wind
energy loan a rural electric cooperative serving the Upper Midwest will
use to finance the construction of wind turbine generators and power
lines to help distribute wind-generated power to rural communities.
Regrettably, Congress and the Administration have undermined their
very own efforts by failing to ensure that the federal income tax
credit provided to facilities producing electricity from wind is
available over the long term.
I recently cosponsored a wind energy conference in North Dakota. It
was attended by more than five hundred people, including developers,
industry experts, utility executives, rural landowners, public
officials and others. This was double the number of expected
participants, which demonstrates the growing interest in this renewable
energy resource.
Among other things, I heard from wind energy developers who
emphasized that one of the major obstacles to greater deployment of new
wind technologies is the continued uncertainty surrounding the
availability of the wind energy production tax credit. This credit is
now scheduled to expire at the end of the year. Industry experts tell
me that financial lenders will soon stop providing needed capital to
new wind initiatives. As a result, projects already underway will
quickly come to a halt. Many developers will simply be unable to build
and purchase equipment, secure financing, obtain the required
environmental permits and bring wind turbine generators on-line by
year's end.
One of the best ways to give developers the certainty and help they
need to bring new state-of-the-art wind turbines to the marketplace at
a competitive rate is to provide a sufficiently long period of time for
them to access the credit. That's exactly what the bill I'm introducing
today would do. Specifically, my bill would extend the current
production tax credit for qualifying wind facilities that are placed in
service on or before December 31, 2006.
The wind energy production tax credit has had broad bipartisan
support in the Senate and the House of Representatives in previous
years, so I am optimistic that we can pass this legislation quickly in
this new Congress. I urge my Senate colleagues to cosponsor this
legislation and work with me to get it enacted into law as soon as
possible. If we don't, many new wind energy initiatives will come to a
standstill at a time when this country can least afford it.
______

Mr. KOHL (for himself and Mr. Feingold):
S. 95. A bill to promote energy conservation investments in Federal
facilities, and for other purposes; to the Committee on Energy and
Natural Resources.

Federal Energy Bank Legislation

Mr. KOHL. Mr. President, I rise today to introduce legislation
entitled ``The Federal Energy Bank Act.'' The purpose of this
legislation is to provide a stable long term source of funding for
energy efficiency projects throughout the Federal Government. If we are
to start the Nation on the road toward increased energy conservation we
must begin with the Federal Government. This bill will help provide the
necessary investments to make this first step toward long term energy
conservation possible.
Energy policy is a raging issue for our country at this time. Natural
gas prices are at all time highs at a time when we are becoming more
and more dependent on gas because of its minimal impact on the
environment. Gas has become of victim of its own success, as our demand
for the commodity has outstripped our ability in the short term to
bring the supply to market.
While I do not oppose continuing fossil fuel exploration and
extraction, we cannot drill our way out of the tight energy market. We
must also consider other options including conservation. Conservation
often gets a bad rap as people think politicians are simply telling
them to turn down the heat and shut off the lights they aren't using.
Conservation doesn't necessarily mean hardship and darkness, it can
also mean new technologies that do not require us to change our habits.
It means using energy smarter, using it when we need it, and only as
much as we need. Conservation means holding on to the energy we have,
and not wasting it.
Conservation is the compliment to production. If we do a better job
of saving energy, that means megawatts of generation that will not need
to be built. That does not mean we do not need additional generation,
the situation in California makes the clear the danger of not keeping
up with the demand, it just means that less capacity will be necessary.
Anyone who has ever grappled with the siting issues involved with a
power plant knows it will be difficult to build even the bare minimum
of power generation and transmission.
I have long believed that our Nation must implement a sensible
national energy policy which emphasizes greater energy conservation and
efficiency, as well as the development of renewable resources. This
bill is just one step of many that need to be taken to reduce our
energy consumption problems. The events in the Middle East, coupled
with the environmental problems associated with the use of fossil
fuels, have only increased the need for improved energy conservation.
Simply put, we cannot continue to rely on imported oil to meet such a
large part of our Nation's energy needs. This dependence places our
economic security at great risk. In addition, the use of oil and other
fossil fuels contributes to global climate change, air pollution, and
acid rain.
Mr. President out attempts to remedy this situation are nothing new.
In fact, the laws requiring significant energy use reductions are
already in place. The Energy Policy Act of 1992 mandated that Federal
agencies use cost-effective measures, with less than a 10-year payback,
to reduce energy consumption in their facilities. President Clinton,
with Executive Order 13123, extended the mandate by requiring Federal
agencies to reduce energy consumption by 35 percent by the year 2010
compared to 1985 energy uses. If accomplished, this would save the
American taxpayer millions in annual energy costs and in turn put us on
the road to future energy savings. This would also improve our
environment, our balance of trade, and our national security.
Mr. President, my business background has taught me that most large
paybacks come from positive long-term investments. Unfortunately, the
Federal Government does not traditionally take this approach. More
often than not, it seeks short-term savings and cuts which do not
address the problem of energy consumption or encourage future energy
conservation.
Mr. President, my bill will help address this funding shortfall. The
bill creates a bank to fund the purchase of energy efficiency projects
by Federal agencies and in the long run will reduce the overall amount
of money spent on energy consumption by the Federal Government. For
each of the fiscal years 1999, 2000, 2001, each Federal agency will
contribute an amount equal to 5 percent of its previous year's utility
costs into a fund or bank managed by the Secretary of the Treasury.
The Secretary of Energy will authorize loans from the bank to any
Federal agency for use toward investment in energy efficiency projects.
The agency will then repay the loan, making the bank self-supporting
after a few years. The Secretary of Energy will also establish
selection criteria for each energy efficiency project, determining the
project is cost-effective and produces a payback in 3 years or less.
Agencies will be required to report the progress of each project with a
cost of more than $1 million to the Secretary 1 year after
installation. The Secretary will then report to Congress each year on
all the operations of the bank.

[[Page S360]]

Mr. President, this bill will provide the real dollars required to
make the Executive order goals a reality.
Mr. President, in closing I would like to thank Johnson Controls, the
largest public company in Wisconsin, for their continued leadership and
input on this bill. As a maker of energy conservation systems, Johnson
has provided me with the real world insights that have helped me draft
a bill that attempts to address our energy conservation needs.
Mr. President, I ask unanimous consent the full text of the bill be
printed in full in the Record. I urge my colleagues to support this
bill and will push for its early enactment.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 95

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Federal Energy Bank Act''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress finds that--
(1) energy conservation is a cornerstone of national energy
security policy;
(2) the Federal Government is the largest consumer of
energy in the economy of the United States;
(3) many opportunities exist for significant energy cost
savings within the Federal Government; and
(4) to achieve the energy savings required by Executive
Order, the Federal Government must make significant
investments in energy savings systems and products, including
energy management control systems.
(b) Purpose.--The purpose of this Act is to promote energy
conservation investments in Federal facilities.

SEC. 3. DEFINITIONS.

In this Act:
(1) Agency.--The term ``agency'' means--
(A) an Executive agency (as defined in section 105 of title
5, United States Code, except that the term also includes the
United States Postal Service);
(B) Congress and any other entity in the legislative
branch; and
(C) a court and any other entity in the judicial branch.
(2) Bank.--The term ``Bank'' means the Federal Energy Bank
established by section 4.
(3) Energy efficiency project.--The term ``energy
efficiency project'' means a project that assists an agency
in meeting or exceeding the energy efficiency requirements
of--
(A) part 3 of title V of the National Energy Conservation
Policy Act (42 U.S.C. 8251 et seq.);
(B) subtitle F of title I of the Energy Policy Act of 1992
and the amendments made by that subtitle (106 Stat. 2843);
and
(C) applicable Executive orders, including Executive Order
Nos. 12759 and 12902.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(5) Total utility payments.--The term ``total utility
payments'' means payments made to supply electricity, natural
gas, and any other form of energy to provide the heating,
ventilation, air conditioning, lighting, and other energy
needs of an agency facility.

SEC. 4. ESTABLISHMENT OF BANK.

(a) In General.--There is established in the Treasury of
the United States a trust fund to be known as the ``Federal
Energy Bank'', consisting of--
(1) such amounts as are appropriated to the Bank under
section 8;
(2) such amounts as are transferred to the Bank under
subsection (b);
(3) such amounts as are repaid to the Bank under section
5(b)(4); and
(4) any interest earned on investment of amounts in the
Bank under subsection (c).
(b) Transfers to Bank.--
(1) In general.--At the beginning of each of fiscal years
2002, 2003, and 2004, each agency shall transfer to the
Secretary of the Treasury, for deposit in the Bank, an amount
equal to 5 percent of the total utility payments paid by the
agency in the preceding fiscal year.
(2) Utilities paid for as part of rental payments.--The
Secretary shall by regulation establish a formula by which
the appropriate portion of a rental payment that covers the
cost of utilities shall be considered to be a utility payment
for the purposes of paragraph (1).
(c) Investment of Funds.--The Secretary of the Treasury
shall invest such portion of funds in the Bank as is not, in
the Secretary's judgment, required to meet current
withdrawals. Investments may be made only in interest-bearing
obligations of the United States.

SEC. 5. LOANS FROM THE BANK.

(a) In General.--The Secretary of the Treasury shall
transfer from the Bank to the Secretary such amounts as are
appropriated to carry out the loan program under subsection
(b).
(b) Loan Program.--
(1) In general.--In accordance with section 6, the
Secretary shall establish a program to loan amounts from the
Bank to any agency that submits an application satisfactory
to the Secretary in order to finance an energy efficiency
project.
(2) Performance contracting funding.--To the extent
practicable, an agency shall not submit a project for which
performance contracting funding is available.
(3) Purposes of loan.--
(A) In general.--A loan under this section may be made to
pay the costs of--
(i) an energy efficiency project; or
(ii) development and administration of a performance
contract.
(B) Limitation.--An agency may use not more than 15 percent
of the amount of a loan under subparagraph (A)(i) to pay the
costs of administration and proposal development (including
data collection and energy surveys).
(4) Repayments.--
(A) In general.--An agency shall repay to the Bank the
principal amount of the energy efficiency project loan plus
interest at a rate determined by the President, in
consultation with the Secretary and the Secretary of the
Treasury.
(B) Waiver.--The Secretary may waive the requirement of
subparagraph (A) if the Secretary determines that payment of
interest by an agency is not required to sustain the needs of
the Bank in making energy efficiency project loans.
(5) Agency energy budgets.--Until a loan is repaid, an
agency budget submitted to Congress for a fiscal year shall
not be reduced by the value of energy savings accrued as a
result of the energy conservation measure implemented with
funds from the Bank.
(6) Availability of funds.--An agency shall not rescind or
reprogram funds made available by this Act. Funds loaned to
an agency shall be retained by the agency until expended,
without regard to fiscal year limitation.

SEC. 6. SELECTION CRITERIA.

(a) In General.--The Secretary shall establish criteria for
the selection of energy efficiency projects to be awarded
loans in accordance with subsection (b).
(b) Selection Criteria.--The Secretary may make loans only
for energy efficiency projects that--
(1) are technically feasible;
(2) are determined to be cost-effective using life cycle
cost methods established by the Secretary by regulation;
(3) include a measurement and management component to--
(A) commission energy savings for new Federal facilities;
and
(B) monitor and improve energy efficiency management at
existing Federal facilities; and
(4) have a project payback period of 3 years or less.

SEC. 7. REPORTS AND AUDITS.

(a) Reports to the Secretary.--Not later than 1 year after
the installation of an energy efficiency project that has a
total cost of more than $1,000,000, and each year thereafter,
an agency shall submit to the Secretary a report that--
(1) states whether the project meets or fails to meet the
energy savings projections for the project; and
(2) for each project that fails to meet the savings
projections, states the reasons for the failure and describes
proposed remedies.
(b) Audits.--The Secretary may audit any energy efficiency
project financed with funding from the Bank to assess the
project's performance.
(c) Reports to Congress.--At the end of each fiscal year,
the Secretary shall submit to Congress a report on the
operations of the Bank, including a statement of the total
receipts into the Bank, and the total expenditures from the
Bank to each agency.

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as are
necessary to carry out this Act.

Mr. FEINGOLD. Mr. President, I am delighted to join with my
colleague, the Senior Senator from Wisconsin (Mr. Kohl) as an original
cosponsor of the Federal Energy Bank Act.
As a politician, the idea of the federal government ``leading by
example'' in the area of energy efficiency has made sense to me for a
long time, so much so, in fact, that in campaigning for the Senate in
1992, I included energy efficiency in my campaign platform. I proposed
an 82-point plan to reduce the deficit, a series of specific spending
reductions and revenue changes which, if enacted in sum total, would
have eliminated the deficit.
Among those items, as I was a candidate for office after the passage
of the 1992 Energy Policy Act and after the United States' signing of
the Framework Convention on Climate Change in Rio De Janeiro, Brazil,
was one to encourage the federal government to implement a
comprehensive energy savings program for the federal government through
energy efficiency investments.
After all, I believe that if Wisconsin consumers and business have
been converted to the wisdom of compact fluorescent light bulbs,
efficient heating and cooling systems, weatherization, and energy
saving computers, among the wide range of potential efficiency
improvements, that the federal government promoting those actions
should

[[Page S361]]

also make the same investments to the taxpayers' benefit.
Section 152 of the Energy Policy Act mandated that Federal agencies
use all cost-effective measures that could be implemented with less
than a 10-year payback to reduce energy consumption in their facilities
by 20 percent by the year 2000 compared to 1985 consumption levels.
Both of the two previous Administrations have been committed to these
types of common sense ``no-regrets'' energy savings strategies. After
taking office, I have learned that among the most significant
constraints to implementing more energy efficient practices in the
federal government is the lack of sufficient funds to invest in energy
efficient equipment.
Section 162 of the Energy Policy Act of 1992 directed the Secretary
of Energy to conduct a detailed study of options for financing energy
and water conservation measures in Federal facilities as required under
the Act and by subsequent Executive Orders. On June 3, 1997, the then
Secretary of Energy (Mr. Pena) released that study. It documented a
need for a $5.7 billion financial investment between 1996 and 2005 to
meet the Energy Policy Act and Executive Order goals, a value which
could vary from a low of $4.4 billion to a high of $7.1 billion given
variability in both energy and water investment requirements.
The best estimate, according to the same study of the total federal
funding available to spend on energy and water efficiency improvements
from various sources, including direct agency appropriations, energy
savings performance contracts, and utility demand-side management
programs, and appropriations to the Federal Energy Efficiency Fund, to
the federal government to meet those needs over the same time period is
$3.7 billion. Thus, under DOE's best estimate, at the federal level we
face a potential shortfall of funds necessary to achieve our federal
energy and water conservation objectives of $2 billion.
In order to address this shortfall, I am pleased to join as a co-
sponsor of this legislation to create a federal energy revolving fund
or ``energy bank.'' I hope this legislation can be one of the items on
which we can reach bipartisan consensus in our efforts to develop a
national energy strategy this Congress.
Some in this body may be concerned that the existence of the current
Federal Energy Efficiency Fund alleviates the need for additional
federal conservation investment. The problem with the current fund,
which operates as a grant program for agencies to make efficiency
improvements, is that it does not contribute to the replenishment of
capital resources because it does not have to be paid back and is
therefore dependent upon appropriations.
Under the legislation, I join in cosponsoring with my colleague from
Wisconsin today, federal agencies will be required, to deposit 5
percent of their total utility payments in the proceeding fiscal year
to capitalize the fund. After 2001, the Secretary of Energy will
determine an amount necessary to ensure that the fund meets its
obligations.
Agencies will then be able to get a loan from the fund to finance
efficiency projects, which they will be responsible for repaying with
interest. The projects must use off-the-shelf technologies and must be
cost effective. The best part of this approach is that the technologies
are required to have a three-year pay back period, and, therefore, this
legislation achieves some modest savings for the taxpayer. CBO scores
this measure as saving $3 million over 5 years.
There is a need to improve federal procurement of energy efficient
technologies, and this measure is a positive, proactive measure to
ensure that federal agencies specifically set aside funds to achieve
this goal. The Senior Senator from Wisconsin (Mr. Kohl) and I look
forward to working with the administration to advance this legislation
as a piece of the country's overall greenhouse gas reductions strategy.
In conclusion, I look forward to working with my Senior Senator on
this issue. I believe that this is a unique opportunity for Senate
colleagues to support legislation that is both fiscally responsible and
environmentally sound.
______

By Mr. KOHL:
S. 96. A bill to ensure that employees of traveling sales crews are
protected under the Fair Labor Standards Act of 1938 and under other
provisions of law; to the Committee on Health, Education, Labor, and
Pensions.

Traveling sales crew protection act

Mr. KOHL. Mr. President almost two years have gone by since the
tragic accident in Janesville, WI, that brought to light the abuse of
workers in the magazine sales industry. Since 1992, forty-two sales
people have been killed or injured in similar crashes. Unfortunately
deaths and injuries still occur. Parents are still separated from their
children without knowing where they are or whether they are safe. Young
people are not being paid for their work, and are being falsely listed
as independent contractors. Roving sweatshops continue to travel our
highways and solicit unlicenced in our neighborhoods.
My legislation would go a long way toward ending this sad state of
affairs.
Today I have introduced legislation to crack down on abuses in the
traveling sales crew industry. These companies employ crews who travel
from city to city selling products door to door. Often times, however,
these companies mistreat their workers and violate local, state, and
federal labor law. Because they rapidly move from state to state,
enforcement efforts are difficult if not impossible for local
authorities.
In 1987 former Senator Roth, as part of the Permanent Subcommittee on
Investigations looked into this industry, and was appalled at what he
found. Incidents of verbal and physical abuse of workers were
widespread. Young people were coerced into continuing to sell long
after they wanted to leave through threats and taunts from their
employers. When sellers were able to get free they were often unpaid or
denied the bus ticket home they were promised when they signed up.
The compensation system for the workers was also rigged to ensure
that workers could not leave. Prospective sellers were promised big
bucks when they were recruited, but soon found that decent pay was
difficult to come by. Sellers were paid on a commission basis according
to their sales, but they were also charged by the company for their
accommodations and fined for small infractions like showing up late to
meetings or sleeping on the van. Salespeople were not paid in a timely
manner, but their earnings were kept on ``paper'' and the employees
only drew a daily allowance to pay for food. Employees were seldom
allowed to see the paper work that tracked their earnings so they had
little idea about how much they are entitled. Many found that they were
not able to keep up with the sales and fell in debt to the company.
After working 12 hour days, six days a week for months, employees
actually owed the company money! These young people became indentured
servants, working long hours for only room and board.
In the thirteen years since Senator Roth's investigation, nothing has
changed. These abuses continue, and Congress should act.
I am not one to frivolously engage in regulating business, but in
this case the need for federal involvement is clear. Because of the
mobility of these companies, states cannot crack down on these groups
alone. They need federal help to eliminate the unscrupulous actors in
the industry.
The Traveling Sales Crew Protection Act would take important steps to
eliminate employers who abuse their workers. First, it would no longer
allow minors to be employed in this line of work. Door to door sales
can be dangerous work and combined with the long hours and hazardous
travel, creates a job too dangerous for children. Second, the bill
would narrowly eliminate the exemption under the Fair Labor Standards
Act for these specific kinds of operations. Covering these employees
with minimum wages laws and overtime requirements protects them from
becoming indentured servants to their employers through complex
compensation systems. This provision is carefully crafted to cover only
traveling sales crews, individuals who sell over the road, or at trade
shows would be unaffected. Lastly the bill creates a licensing
procedure through the Department of Labor to monitor those engaged in
supervising and running these operations.

[[Page S362]]

These measures are important steps forward in a nationwide effort to
eliminate this particularly abusive form of worker exploitation. I hope
I will have my colleagues' support as I try to make the painful crash
in Janesville, the last chapter in this shameful story.
Mr. President, I ask unanimous consent that the text of my
legislation be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 96

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 ``Traveling Sales Crew
Protection Act''.

TITLE I--FAIR LABOR STANDARDS ACT OF 1938

SEC. 101. APPLICATION OF PROVISIONS TO CERTAIN OUTSIDE
SALESMAN.

(a) In General.--Section 13 of the Fair Labor Standards Act
of 1938 (29 U.S.C. 213) is amended by adding at the end the
following:
``(k) For purposes of subsection (a)(1), and
notwithstanding any other provision of law, the term `outside
salesman' shall not include any individual employed in the
position of a salesman where the individual travels with a
group of salespeople, including a supervisor, team leader or
crew leader, and the employees in the group do not return to
their permanent residences at the end of the work day.''.
(b) Limitation on Child Labor.--Section 12 of the Fair
Labor Standards Act of 1938 (29 U.S.C. 212) is amended by
adding at the end the following:
``(e) No individual under 18 years of age may be employed
in a position requiring the individual to engaged in door to
door sales or in related support work in a manner that
requires the individual to remain away from his or her
permanent residence for more than 24 hours.''.
(c) Rules and Regulations.--The Secretary of Labor may
issue such rules and regulations as are necessary to carry
out the amendments made by this section, consistent with the
requirements of chapter 5 of title 5, United States Code.

TITLE II--PROTECTION OF TRAVELING SALES CREWS

SEC. 201. PURPOSE.

It is the purpose of this title--
(1) to remove the restraints on interstate commerce caused
by activities detrimental to traveling sales crew workers;
(2) to require the employers of such workers to register
under this Act; and
(3) to assure necessary protections for such employees.

SEC. 202. DEFINITIONS.

In this title:
(1) Certificate of registration.--The term ``Certificate of
Registration'' means a Certificate issued by the Secretary
under section 203(c)(1).
(2) Employ.--The term ``employ'' has the meaning given such
term by section 3(g) of the Fair Labor Standards Act of 1938
(29 U.S.C. 201(g)).
(3) Goods.--The term ``goods'' means wares, products,
commodities, merchandise, or articles or subjects of
interstate commerce of any character, or any part or
ingredient thereof.
(4) Person.--The term ``person'' means any individual,
partnership, association, joint stock company, trust,
cooperative, or corporation.
(5) Sale, sell.--The terms ``sale'' or ``sell'' include any
sale, exchange, contract to sell, consignment for sale,
shipment for sale, or other disposition of goods.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Labor.
(7) Traveling sales crew worker.--
(A) In general.--Except as provided in subparagraph (B),
the term ``traveling sales crew worker'' means an individual
who--
(i) is employed as a salesperson or in related support
work;
(ii) travels with a group of salespersons, including a
supervisor; and
(iii) is required to be absent overnight from his or her
permanent place of residence.
(B) Limitation.--The term ``traveling sales crew worker''
does not include--
(i) any individual who meets the requirements of
subparagraph (A) if such individual is traveling to a trade
show or convention; or
(ii) any immediate family member of a traveling sales crew
employer.

SEC. 203. REGISTRATION OF EMPLOYERS AND SUPERVISORS OF
TRAVELING SALES CREW WORKERS.

(a) Registration Requirement.--
(1) In general.--No person shall engage in any form of
employment of traveling sales crew workers, unless such
person has a Certificate of Registration from the Secretary.
(2) Supervisors.--A traveling sales crew employer shall not
hire, employ, or use any individual as a supervisor of a
traveling sales crew, unless such individual has a
Certificate of Registration from the Secretary.
(3) Display of certificate of registration.--Each
registered traveling sales crew employer and each registered
traveling sales crew supervisor shall carry at all times
while engaging in traveling sales crew activities a
Certificate of Registration from the Secretary and, upon
request, shall exhibit that certificate to all persons with
whom they intend to deal.
(b) Application for Registration.--Any person desiring to
be issued a Certificate of Registration from the Secretary,
as either a traveling sales crew employer or traveling sales
crew supervisor, shall file with the Secretary a written
application that contains the following:
(1) A declaration, subscribed and sworn to by the
applicant, stating the applicant's permanent place of
residence, the type or types of sales activities to be
performed, and such other relevant information as the
Secretary may require.
(2) A statement identifying each vehicle to be used to
transport any member of any traveling sales crew and, if the
vehicle is or will be owned or controlled by the applicant,
documentation showing that the applicant is in compliance
with the requirements of section 204(d) with respect to each
such vehicle.
(3) A statement identifying, with as much specificity as
the Secretary may require, each facility or real property to
be used to house any member of any traveling sales crew and,
if the facility or real property is or will be owned or
controlled by the applicant, documentation showing that the
applicant is in compliance with section 204(e) with respect
to each such facility or real property.
(4) A set of fingerprints of the applicant.
(5) A declaration, subscribed and sworn to by the
applicant, consenting to the designation by a court of the
Secretary as an agent available to accept service of summons
in any action against the applicant, if the applicant has
left the jurisdiction in which the action is commenced or
otherwise has become unavailable to accept service.
(c) Issuance of Certificate of Registration.--
(1) In general.--In accordance with regulations, and after
any investigation which the Secretary may deem appropriate,
the Secretary shall issue a Certificate of Registration, as
either a traveling sales crew employer or traveling sales
crew supervisor, to any person who meets the standards for
such registration.
(2) Refusal to issue or renew, suspension and revocation.--
The Secretary may refuse to issue or renew, or may suspend or
revoke, a Certificate of Registration if the applicant for or
holder or the Certificate--
(1) has knowingly made any misrepresentation in the
application for such Certificate of Registration;
(2) is not the real party in interest with respect to the
application or Certificate of Registration and the real party
in interest is a person who--
(A) has been refused issuance or renewal of a Certificate;
(B) has had a Certificate suspended or revoked; or
(C) does not qualify for a Certificate under this section;
(3) has failed to comply with this title or any regulation
promulgated under this title;
(4) has failed--
(A) to pay any court judgment obtained by the Secretary or
any other person under this title or any regulation
promulgated under this title; or
(B) to comply with any final order issued by the Secretary
as a result of a violation of this title or any regulation
promulgated under this title;
(5) has been convicted within the 5 years preceding the
date on which the application was filed or the Certificate
was issued--
(A) of any crime under Federal or State law relating to the
sale, distribution or possession of alcoholic beverages or
narcotics, in connection with or incident to any traveling
sales crew activities;
(B) of any crime under Federal or State law relating to
child abuse, neglect, or endangerment; or
(C) of any felony under Federal or State law involving
robbery, bribery, extortion, embezzlement, grand larceny,
burglary, arson, murder, rape, assault with intent to kill,
assault which inflicts grievous bodily injury, prostitution,
peonage, or smuggling or harboring individuals who have
entered the United States illegally;
(6) has been found to have violated paragraph (1) or (2) of
section 274A(a) of the Immigration and Nationality Act (8
U.S.C. 1324a(a)(1) or (2));
(7) has failed to comply with any bonding or security
requirements as the Secretary may establish; or
(8) has failed to satisfy any other requirement which the
Secretary may by regulation establish.
(d) Administrative Proceedings and Judicial Review.--
(1) In general.--A person who is refused the issuance or
renewal of a Certificate or Registration, or whose
Certificate of Registration is suspended or revoked, shall be
afforded an opportunity for an agency hearing, upon a request
made within 30 days after the date of issuance of the notice
of refusal, suspension, or revocation. If no hearing is
requested as provided for in this subsection, the refusal,
suspension, or revocation shall constitute a final and
unappealable order.
(2) Hearing.--If a hearing is requested under paragraph
(1), the initial agency decision shall be made by an
administrative law judge, with all issues to be determined on
the record pursuant to section 554 of title 5, United States
Code, and such decision shall become the final order unless
the Secretary modifies or vacates the decision. Notice of
intent to modify or vacate the decision of the administrative
law judge shall be issued to the parties within 90 days after
the decision of the administrative law judge. A final

[[Page S363]]

order which takes effect under this paragraph shall be
subject to review only as provided under paragraph (3).
(3) Review by court.--Any person against whom an order has
been entered after an agency hearing under this subsection
may obtain review by the United States district court for any
district in which the person is located, or the United States
District Court for the District of Columbia, by filing a
notice of appeal in such court within 30 days from the date
of such agency order, and simultaneously sending a copy of
such notice by registered mail to the Secretary. The
Secretary shall promptly certify and file in such court the
record upon which the agency order was based. The findings of
the Secretary shall be set aside only if found to be
unsupported by substantial evidence as provided by section
706(2)(E) of title 5, United States code. Any final decision,
order, or judgment of such District Court concerning such
review shall be subject to appeal as provided for in chapter
83 of title 28, United States Code.
(e) Transfer or Assignment of Certificate; Expiration;
Renewal.--
(1) Limitation.--A Certificate of Registration may not be
transferred or assigned.
(2) Expiration and extension.--
(A) Expiration.--Unless earlier suspended or revoked, a
Certificate of Registration shall expire 12 months from the
date of issuance.
(B) Extension.--A Certificate of Registration may be
temporarily extended, at the Secretary's discretion, by the
filing of an application with the Secretary at least 30 days
prior to the Certificate's expiration date.
(3) Renewal.--A Certificate of Registration may be renewed
through the application process provided for in subsections
(b) and (c).
(f) Notice of Address Change; Amendment of Certificate of
Registration.--During the period for which a Certificate of
Registration is in effect, the traveling sales crew employer
or supervisor named on the Certificate shall--
(1) provide to the Secretary within 30 days a notice of
each change of permanent place of residence; and
(2) apply to the Secretary to amend the Certificate of
Registration whenever the person intends to--
(A) engage in any form of traveling sales crew activity not
identified on the Certificate;
(B) use or cause to be used any vehicle not covered by the
Certificate to transport any traveling sales crew worker; or
(C) use or cause to be used any facility or real property
not covered by the Certificate to house any traveling sales
crew worker.
(g) Filing Fee.--The Secretary shall require the payment of
a fee by an employer filing an application for the issuance
or renewal of a Certificate of Registration. The amount of
the fee shall be $500 for a Certificate for an employer and
$50 for a Certificate for a supervisor. Sums collected
pursuant to this section shall be applied by the Secretary
toward reimbursement of the costs of administering this
title.

SEC. 204. OBLIGATIONS OF EMPLOYERS OF TRAVELING SALES CREW
WORKERS.

(a) Disclosure of Terms and Conditions of Employment.--
(1) Written disclosure.--At the time of recruitment, each
traveling sales crew worker shall be provided with a written
disclosure of the following information, which shall be
accurate and complete to the best of the employer's
knowledge:
(A) The place or places of employment, stated with as much
specificity as possible.
(B) The wage rate or rates to be paid.
(C) The type or types of work on which the worker may be
employed.
(D) The period of employment.
(E) The transportation, housing, and any other employee
benefit to be provided, and any costs to be charged to the
worker for each such benefit.
(F) The existence of any strike or other concerted work
stoppage, slowdown, or interruption of operations by
employees at the place of employment.
(G) Whether State workers' compensation insurance is
provided and, if so, the name of the State workers'
compensation insurance carrier, the name of the policyholder
of such insurance, the name and the telephone number of each
person who must be notified of an injury or death, and the
time period within which such notice must be given.
(2) Records and statements.--Each employer of traveling
sales crew workers shall--
(A) with respect to each such worker, make, keep, and
preserve records for 3 years of the--
(i) basis on which wages are paid;
(ii) number of piecework units earned, if paid on a
piecework basis;
(iii) number of hours worked;
(iv) total pay period earnings;
(v) specific sums withheld and the purpose of each sum
withheld; and
(vi) net pay; and
(B) provide to each worker for each pay period, an itemized
written statement of the information required under
subparagraph (A).
(b) Payment of Wages When Due.--Each traveling sales crew
worker shall be paid the wages owed that worker when due. The
payment of wages shall be in United States currency or in a
negotiable instrument such as a bank check. The payment of
wages shall be accompanied by the written disclosure required
by subsection (a)(2)(B).
(c) Costs of Goods, Services, and Business Expenses.--
(1) Prohibition.--No employer of traveling sales crew
workers shall--
(A) require any worker to purchase any goods or services
solely from such employer; or
(B) impose on any worker any of the employer's business
expenses, such as the cost of maintaining and operating a
vehicle used to transport the traveling sales crew.
(2) Inclusion as part of wages.--An employer may include as
part of the wages paid to a traveling sales crew worker the
reasonable cost to the employer of furnishing board, lodging,
or other facilities to such worker, so long as--
(A) such facilities are customarily furnished by such
employer to the employees of the employer; and
(B) such cost does not exceed the fair market value of such
facility and does not include any profit to the employer.
(d) Safety and Health in Transportation.--
(1) Standards.--An employer of traveling sales crew workers
shall provide transportation for such workers in a manner
that is consistent with the following standards:
(A) The employer shall ensure that each vehicle which the
employer uses or causes to be used for such transportation
conforms to the standards prescribed by the Secretary under
paragraph (2) and conforms to other applicable Federal and
State safety standards.
(B) The employer shall ensure that each driver of each such
vehicle has a valid and appropriate license, as provided by
State law, to operate the vehicle.
(C) The employer shall have an insurance policy or fidelity
bond in accordance with subsection (c).
(2) Promulgation by secretary.--The Secretary shall
prescribe, by regulation, such safety and health standards as
may be appropriate for vehicles used to transport traveling
sales crew workers. In establishing such standards, the
Secretary shall consider--
(A) the type of vehicle used;
(B) the passenger capacity of the vehicle;
(C) the distance which such workers will be carried in the
vehicle;
(D) the type of roads and highways on which such workers
will be carried in the vehicle;
(E) the extent to which a proposed standard would cause an
undue burden on an employer of traveling sales crew workers;
and
(F) any standard prescribed by the Secretary of
Transportation under part II of the Interstate Commerce Act
(49 U.S.C. 301 et seq.) or any successor provision of
subtitle IV of title 49, United States Code.
(e) Safety and Health in Housing.--An employer of traveling
sales crew workers shall provide housing for such workers in
a manner that is consistent with the following standards:
(1) If the employer owns or controls the facility or real
property which is used for housing traveling sales crew
workers, the employer shall be responsible for ensuring that
the facility or real property complies with substantive
Federal and State safety and health standards applicable to
that housing. Prior to occupancy by such workers, the
facility or real property shall be certified by a State or
local health authority or other appropriate agency as meeting
applicable safety and health standards. Written notice shall
be posted in the facility or real property, prior to and
throughout the occupancy by such workers, informing such
workers that the applicable safety and health standards are
met.
(2) If the employer does not own or control the facility or
real property which is used for housing traveling sales crew
workers, the employer shall be responsible for ensuring that
the owner or operator of such facility or real property
complies with substantive Federal and State safety and health
standards applicable to that housing. Such assurance by the
employer shall include the verification that the owner or
operator of such facility or real property is licensed and
insured in accordance with all applicable State and local
laws. The employer shall obtain such assurance prior to
housing any workers in the facility or real property.
(f) Insurance of Vehicles; Workers' Compensation
Insurance.--
(1) Insurance.--An employer of traveling sales crew workers
shall ensure that there is in effect, for each vehicle used
to transport such workers, an insurance policy or a liability
bond which insures the employer against liability for damage
to persons and property arising from the ownership,
operation, or the causing to be operated of such vehicle for
such purpose. The level of insurance or liability bond
required shall be determined by the Secretary considering at
least the factors set forth in subsection (d)(2) and any
relevant State law.
(2) Workers' compensation.--If an employer of traveling
sales crew workers is the employer of such workers for
purposes of a State workers' compensation law and such
employer provides workers' compensation coverage for such
workers as provided for by such State law, the following
modifications to the requirements of paragraph (1) shall
apply:
(A) No insurance policy or liability bond shall be required
of the employer if such workers are transported only under
circumstances for which there is workers' compensation
coverage under such State law.

[[Page S364]]

(B) An insurance policy or liability bond shall be required
of the employer for all circumstances under which workers'
compensation coverage for the transportation of such workers
is not provided under such State law.

SEC. 205. ENFORCEMENT PROVISIONS.

(a) Criminal Sanctions.--An employer who willfully and
knowingly violates this title, or any regulation promulgated
under this title, shall be fined not more than $10,000 or
imprisoned for not to exceed 1 year, or both. Upon conviction
for any subsequent violation of this title, or any such
regulation, an employer shall be fined not more than $50,000
or imprisoned for not to exceed 3 years, or both.
(b) Judicial Enforcement.--
(1) Injunctive relief.--The Secretary may petition any
appropriate district court of the United States for temporary
or permanent injunctive relief if the Secretary determines
that this title, or any regulation promulgated under this
title, has been violated.
(2) Solicitor of labor.--Except as provided in section
518(a) of title 28, United States Code, relating to
litigation before the Supreme Court, the Solicitor of Labor
may appear for and represent the Secretary in any civil
litigation brought under this title, but all such litigation
shall be subject to the direction and control of the Attorney
General.
(c) Administrative Sanctions; Proceedings.--
(1) Civil money penalty.--Subject to paragraph (2), an
employer that violates this title, or any regulation
promulgated under this title, may be assessed a civil money
penalty of not more than $10,000 for each such violation.
(2) Determination of penalty.--In determining the amount of
any penalty to be assessed under paragraph (1), the Secretary
shall take into account--
(A) the previous record of the employer in terms of
compliance with this title and the regulations promulgated
under this title; and
(B) the gravity of the violation.
(3) Proceedings.--
(A) In general.--An employer that is assessed a civil money
penalty under this subsection shall be afforded an
opportunity for an agency hearing, upon request made within
30 days after the date of issuance of the notice of
assessment. In such hearing, all issues shall be determined
on the record pursuant to section 554 of title 5, United
States Code. If no hearing is requested as provided for in
this paragraph, the assessment shall constitute a final and
unappealable order.
(B) Administrative law judge.--If a hearing is requested
under subparagraph (A), the initial agency decision shall be
made by an administrative law judge, and such decision shall
become the final order unless the Secretary modifies or
vacates this decision. Notice of intent to modify or vacate
the decision of the administrative law judge shall be issued
to the parties within 90 days after the decision of the
administrative law judge. A final order which takes effect
under this paragraph shall be subject to review only as
provided for under subparagraph (C).
(C) Review.--An employer against whom an order imposing a
civil money penalty has been entered after an agency hearing
under this section may obtain review by the United States
district court for any district in which the employer is
located, or the United States District Court for the District
of Columbia, by filing a notice of appeal in such court
within 30 days from the date of such order and simultaneously
sending a copy of such notice by registered mail to the
Secretary. The Secretary shall promptly certify and file in
such court the record upon which the penalty was imposed. The
findings of the Secretary shall be set aside only if found to
be unsupported by substantial evidence as provided by section
706(2)(E) of title 5, United States Code. Any final decision,
order, or judgment of such District Court concerning such
review shall be subject to appeal as provided in chapter 83
of title 28, United States Code.
(D) Failure to pay.--If any person fails to pay an
assessment after it has become a final and unappealable order
under this paragraph, or after the court has entered final
judgment in favor of the agency, the Secretary shall refer
the matter to the Attorney General, who shall recover the
amount assessed by action in the appropriate United States
district court. In such action, the validity and
appropriateness of the final order imposing the penalty shall
not be subject to review.
(E) Payment of penalties.--All penalties collected under
authority of this section shall be paid into the Treasury of
the United States.
(d) Private Right of Action.--
(1) in general.--Any traveling sales crew worker aggrieved
by a violation of this title, or any regulation promulgated
under this title, by an employer may file suit in any
district court of the United States having jurisdiction over
the parties, without respect to the amount in controversy and
without regard to exhaustion of any alternative
administrative remedies provided for in this title.
(2) Damages.--
(A) In general.--If the court in an action under paragraph
(1) finds that the defendant intentionally violated a
provision of this Act, or a regulation promulgated under this
Act, the court may award--
(i) damages up to and including an amount equal to the
amount of actual damages;
(ii) statutory damages of not more than $1,000 per
plaintiff per violation or, if such complaint is certified as
a class action, not more than $1,000,000 for all plaintiffs
in the class; or
(iii) other equitable relief.
(B) Determination of amount.--In determining the amount of
damages to be awarded under subparagraph (A), the court may
consider whether an attempt was made to resolve the issues in
dispute before the resort to litigation.
(C) Workers' compensation.--
(i) In general.--Notwithstanding any other provision of
this title, where a State workers' compensation law is
applicable and coverage is provided for a traveling sales
crew worker, the workers' compensation benefits shall be the
exclusive remedy for loss of such worker under this title in
the case of bodily injury or death in accordance with such
State's workers' compensation law.
(ii) Limitation.--The exclusive remedy provided for under
clause (i) precludes the recovery under subparagraph (A) of
actual damages for loss from an injury or death but does not
preclude recovery under such subparagraph for statutory
damages (as provided for in clause (iii)) or equitable
relief, except that such relief shall not include back or
front pay or in any manner, directly or indirectly, expand or
otherwise alter or affect--

(I) a recovery under a State workers' compensation law; or
(II) rights conferred under a State workers' compensation
law.

(iii) Statutory damages.--In an action in which a claim for
actual damages is precluded as provided for in clause (ii),
the court shall award statutory damages of not more than
$20,000 per plaintiff per violation or, in the case of a
class action, not more than $1,000,000 for all plaintiffs in
the class, if the court finds any of the following:

(I) The defendant violated section 204(d) by knowingly
requiring or permitting a driver to drive a vehicle for the
transportation of the plaintiff or plaintiffs while under the
influence of alcohol or a controlled substance (as defined in
section 102 of the Controlled Substances Act (21 U.S.C.
802)), the defendant had actual knowledge of the driver's
condition, such violation resulted in the injury or death of
the plaintiff or plaintiffs, and such injury or death arose
out of and in the course of employment as defined under the
State worker's compensation law.
(II) The defendant was found by the court or was determined
in a previous administrative or judicial proceeding to have
violated a safety standard prescribed by the Secretary under
section 204 and such violation resulted in the injury or
death of the plaintiff or plaintiffs.
(III) The defendant willfully disabled or removed a safety
device prescribed by the Secretary under section 204, or the
defendant in conscious disregard of the requirements of such
section failed to provide a safety device required by the
Secretary, and such disablement, removal, or failure to
provide a safety device resulted in the injury or death of
the plaintiff or plaintiffs.
(IV) At the time of the violation of section 204, which
resulted in the injury or death of the plaintiff or
plaintiffs, the employer or the supervisor of the traveling
sales crew did not have a Certificate of Registration in
accordance with section 203.

(iv) Determination of amount.--For purposes of determining
the amount of statutory damages due to a plaintiff under this
subparagraph, multiple infractions of a single provision of
this title, or of regulations promulgated under this title,
shall constitute a single violation.
(D) Attorney's fee.--The court shall, in addition to any
judgment awarded to the plaintiff or plaintiffs under this
paragraph, allow a reasonable attorney's fee to be paid by
the defendant or defendants, and costs of the action.
(E) Appeals.--Any civil action brought under this
subsection shall be subject to appeal as provided for in
chapter 83 of title 28, United States Code.
(e) Discrimination Prohibited.--
(1) In general.--No person shall intimidate, threaten,
restrain, coerce, blacklist, discharge, or in any manner
discriminate against any traveling sales crew worker because
such worker has, with just cause, filed any complaint or
instituted, or caused to be instituted, any proceeding under
or related to this title, or has testified or is about to
testify in any such proceedings, or because of the exercise,
with just cause, by such worker on behalf of the worker or
others of any right or protection afforded by this title.
(2) Complaint.--
(A) In general.--A traveling sales crew worker who
believes, with just cause, that such worker has been
discriminated against in violation of this subsection may,
within 12 months of the date of such violation, file a
complaint with the Secretary alleging such discrimination.
(B) Investigation.--Upon receipt of a complaint under
subparagraph (A), the Secretary shall cause such
investigation to be made as the determines to be appropriate.
(C) Actions.--If upon an investigation under subparagraph
(B), the Secretary determines that the provisions of this
subsection have been violated, the Secretary shall bring an
action in any appropriate United States district court
against the person involved.
(D) Relief.--In any action under subparagraph (C), the
United States district court

[[Page S365]]

shall have jurisdiction, for cause shown, to restrain
violations of this subsection and order all appropriate
relief, including rehiring or reinstatement of the worker,
with back pay, or damages.
(f) Waiver of Rights.--Agreements by workers purporting to
waive or to modify their rights under this title shall be
void as contrary to public policy, except that a waiver or
modification of rights in favor of the Secretary shall be
valid for purposes of enforcement of this title.
(g) Authority to Obtain Information.--
(1) In general.--To carry out this title, the Secretary,
either pursuant to a complaint or otherwise, shall, as may be
appropriate, investigate and, in connection with such
investigation, enter and inspect such places (including
housing and vehicles) and such records (and make
transcriptions thereof), question such persons and gather
such information to determine compliance with this title, or
regulations promulgated under this title.
(2) Production and receipt of evidence.--The Secretary may
issue subpoenas requiring the attendance and testimony of
witnesses or the production of any evidence in connection
with investigations under paragraph (1). The Secretary may
administer oaths, examine witnesses, and receive evidence.
For the purpose of any hearing or investigation provided for
in this title, the authority contained in sections 9 and 10
of the Federal Trade Commission Act (15 U.S.C. 49 and 50),
relating to the attendance of witnesses and the production of
books, papers, and documents, shall be available to the
Secretary.
(3) Confidentiality.--The Secretary shall conduct
investigations under paragraph (1) in a manner which protects
the confidentiality of any complainant or other party who
provides information to the Secretary in good faith.
(4) Violation.--It shall be violation of this title for any
person to unlawfully resist, oppose, impede, intimidate, or
interfere with any official of the Department of Labor
assigned to perform any investigation, inspection, or law
enforcement function pursuant to this title during the
performance of such duties.
(h) State Laws and Regulations; Government Agencies.--
(1) Relation to state laws.--This title is intended to
supplement State law, and compliance with this title shall
not be construed to excuse any person from compliance with
appropriate State laws and regulations.
(2) Agreements.--The Secretary may enter into agreements
with Federal and State agencies--
(A) to use their facilities and services;
(B) to delegate to Federal and State agencies such
authority, other than rulemaking, as may be useful in
carrying out this title; and
(C) to allocate or transfer funds to, or otherwise pay or
reimburse, such agencies for expenses incurred pursuant to
agreements under this paragraph.
(i) Rules and Regulations.--The Secretary may issue such
rules and regulations as may be necessary to carry out this
title, consistent with the requirements of chapter 5 of title
5, United States Code.
______

By Mr. KOHL:
S. 97. A bill to amend the Internal Revenue Code of 1986 with respect
to the eligibility of veterans for mortgage revenue bond financing, and
for other purposes; to the Commission on Finance.

veterans home loan bill

Mr. KOHL. Mr. President, I rise today to introduce legislation that
will help Wisconsin and several other States, including Oregon, Texas,
Alaska, and California, extend one of our most successful veterans
programs to Persian Gulf war participants and others. This bill will
amend the eligibility requirements for mortgage revenue bond financing
for State veterans housing programs.
State run plans do an excellent job of helping vets bridge the gap to
home ownership, and are often more successful than our own federal
plan. This bill gives states the tools they need to help veterans.
Wisconsin uses this tax-exempt bond authority to assist veterans in
purchasing their first home. Under rules adopted by Congress in 1984,
this program excluded from eligibility veterans who served after 1977.
This bill would simply remove that restriction.
At a time when everyone is looking for ways to make military service
more appealing, we should not overlook the role state sponsored
benefits, like home loan programs, can reward our veterans. Wisconsin
and the other eligible States simply want to maintain a principle that
we in the Senate have also strived to uphold--that veterans of the
Persian Gulf war should not be treated less generously than those of
past wars. This bill meets a commitment to our service members and
levels the benefits between Persian Gulf vets and the vets of the Cold
War era.
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. 97

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

SECTION 1. ELIGIBILITY OF VETERANS FOR MORTGAGE REVENUE BONDS
DETERMINED BY STATES.

(a) In General.--Paragraph (4) of section 143(l) of the
Internal Revenue Code of 1986 (defining qualified veteran) is
redesignated as paragraph (6) of such section and amended to
read as follows:
``(6) Qualified veteran.--For purposes of this subsection,
the term ``qualified veteran'' means any veteran--
``(A) who meets such requirements as may be imposed by the
State law pursuant to which qualified veterans' mortgage
bonds are issued,
``(B) who applied for the financing before the date 30
years after the last date on which such veteran left active
service, and
``(C) in the case of financing provided by the proceeds of
bonds issued during the period beginning July 19, 1984, and
ending June 30, 2001, who served on active duty at some time
before January 1, 1977.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to bonds issued after the date of the enactment
of this Act.

SEC. 2. STATE CAP RESTRICTIONS.

(a) In General.--Section 143(l) of the Internal Revenue
Code of 1986 (relating to additional requirements for
qualified veterans' mortgage bonds), as amended by section
1(a), is amended by inserting after paragraph (3) the
following new paragraph:
``(4) Subcap restriction.--
``(A) In general.--An issue meets the requirements of this
paragraph only if the amount of bonds issued pursuant thereto
that is to be used to provide financing to mortgagors who
have not served on active duty at some time before January 1,
1977, when added to the amount of the aggregate qualified
veterans' mortgage bonds previously issued by the State
during the calendar year that is to be so used, does not
exceed the subcap amount.
``(B) Subcap amount.--
``(i) In general.--The subcap amount for any calendar year
is an amount equal to the applicable percentage of the State
veterans limit for such year.
``(ii) Applicable percentage.--For purposes of clause (i),
the applicable percentage shall be determined under the
following table:

Applicable
``Calendar year: Percentage:
2002..........................................................10 ....

2003..........................................................20 ....

2004..........................................................30 ....

2005..........................................................40 ....

2006 and thereafter........................................50.''.....

(b) Restriction on Overall State Cap.--Paragraph (3)(B) of
section 143(l) of such Code (relating to State veterans
limit) is amended by adding at the end the following flush
sentence:

``But in no event shall the State veterans limit exceed
$340,000,000 for any calendar year after 2002.''.
(c) Conforming Amendment.--The matter preceding paragraph
(1) of section 143(l) of such Code is amended by striking
``and (3)'' and inserting ``, (3), and (4)''.
(d) Effective Date.--The amendments made by this section
shall apply to bonds issued after December 31, 2001.
______

Mr. KOHL (for himself and Mr. Graham):
S. 99. A bill to amend the Internal Revenue Code of 1986 to provide a
credit against tax for employers who provide child care assistance for
dependents of their employees, and for other purposes; to the Committee
on Finance.

child care infrastructure act of 2001.

Mr. KOHL. Mr. President, I rise today to reintroduce the Child Care
Infrastructure Act, along with Senator Graham of Florida. Senator
Graham and I have both worked on child care issues for many years, and
I am pleased that we have combined our efforts to introduce this bill
together.
Mr. President, we have talked a great deal in recent years, as well
as in the recent campaign, about giving working families the tools they
need to succeed. And while some of us may disagree on the details, I
think we can all agree upon one basic premise: Working couples who
decide to have a family should not be penalized because they both also
choose to keep working. But unfortunately today, many working parents
do not have access to one of the critical tools they need to succeed at
work: quality child care.
Working families spend a large proportion of their income on child
care--from 8 percent for families above the

[[Page S366]]

poverty line to 18 percent for those below. And nothing adds more to
these high costs than the dramatic shortage of quality child care in
this country. The Children's Defense Fund states in a recent report
that ``parents and experts report that child care is in short supply--
particularly for some age groups and for certain types of care--and
that some communities have little or no licensed care.''
This shortage of quality child care is not just inconvenient. It is
dangerous, and could jeopardize the ability of children to succeed
later in life. Research on the brain has confirmed that the most
significant period in a child's development and education is between
the years 0-3. Good early childhood programs can improve children's
chances of long-term success in school, higher earnings as adults, and
decreased involvement with the criminal justice system.
But the lack of quality child care is not only harmful to children.
It places a tremendous strain on parents. Full-time child care can cost
$4,000 to $6,000 per year, and many working families simply cannot find
affordable, quality child care for their young children.
And make no mistake: the lack of reliable child care has a direct
impact on businesses and our economy. Parents who can't find reliable
child care are more likely to miss work, and the lack of stable child
care makes it more difficult for parents to be productive while at
work.
Clearly, we all have a stake in increasing the supply of quality
child care for families. It will take a sustained effort from families,
from government--and yes, from businesses too--to build the child care
infrastructure necessary to make sure children, parents, and businesses
succeed.
My legislation brings all these players together in a simple, common-
sense way. We provide a tax credit to businesses who are willing to
take action to increase the supply of quality child care. The credit is
available for child care activities such as:
Expenses related to the acquisition, expansion, or repair of an on-
or near-site day care center, after-hours care facility, or sick-child
facility. This credit would also be available for a consortium of
businesses that joined together to create a child care center.
Direct company subsidization of the operating costs of a child care
facility.
Direct company payments or reimbursements to employees for their
child care expenses.
A company's reservation for their employees of child care slots in a
licensed child care facility.
Company expenditures on training and continuing education for child
care workers.
The credit would be 25 percent for these activities, and 10 percent
for the cost of a company's contract with a non-profit Child Care
Resource and Referral service, which help parents locate child care in
their communities. The credit is capped at $150,000 per year.
Safeguards in the legislation ensure that the companies receive the tax
credits for capital expenditures that go toward facilities that stay in
operation for several years.
In 1997, the Senate passed a similar proposal by a bipartisan vote of
72-28. Versions of this tax credit have been included in most major
child care legislation introduced by Democrats and Republicans in the
106th Congress, including the tax bill passed by the Senate in July of
1999.
This bill makes us all partners in ensuring we have enough quality
child care for working families. I hope my colleagues will continue
their long-time support of the child care infrastructure tax credit,
and I look forward to working with all of you to pass it this year.
Mr. President, I ask unanimous consent that the full text of the bill
be printed in the Record following my remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 99

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 ``Child Care Infrastructure
Act of 2001''.

SEC. 2. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD
CARE ASSISTANCE.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business related credits) is amended by adding at the end the
following:

``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.

Clause (i) shall not apply to a facility which is the
principal residence (within the meaning of section 121) of
the operator of the facility.
``(B) Special rules with respect to a taxpayer.--A facility
shall not be treated as a qualified child care facility with
respect to a taxpayer unless--
``(i) enrollment in the facility is open to employees of
the taxpayer during the taxable year,
``(ii) if the facility is the principal trade or business
of the taxpayer, at least 30 percent of the enrollees of such
facility are dependents of employees of the taxpayer, and
``(iii) the use of such facility (or the eligibility to use
such facility) does not discriminate in favor of employees of
the taxpayer who are highly compensated employees (within the
meaning of section 414(q)).
``(3) Qualified child care resource and referral
expenditure.--
``(A) In general.--The term `qualified child care resource
and referral expenditure' means any amount paid or incurred
under a contract to provide child care resource and referral
services to an employee of the taxpayer.
``(B) Nondiscrimination.--The services shall not be treated
as qualified unless the provision of such services (or the
eligibility to use such services) does not discriminate in
favor of employees of the taxpayer who are highly compensated
employees (within the meaning of section 414(q)).
``(d) Recapture of Acquisition and Construction Credit.--
``(1) In general.--If, as of the close of any taxable year,
there is a recapture event with respect to any qualified
child care facility of the taxpayer, then the tax of the
taxpayer under this chapter for such taxable year shall be
increased by an amount equal to the product of--
``(A) the applicable recapture percentage, and
``(B) the aggregate decrease in the credits allowed under
section 38 for all prior taxable years which would have
resulted if the qualified child care expenditures of the
taxpayer described in subsection (c)(1)(A) with respect to
such facility had been zero.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection, the
applicable recapture percentage shall be determined from the
following table:

The applicable
recapture
``If the recapture evpercentage is:
Years 1-3....................................................100
Year 4........................................................85

[[Page S367]]

Year 5........................................................70
Year 6........................................................55
Year 7........................................................40
Year 8........................................................25
Years 9 and 10................................................10
Years 11 and thereafter........................................0.
``(B) Years.--For purposes of subparagraph (A), year 1
shall begin on the first day of the taxable year in which the
qualified child care facility is placed in service by the
taxpayer.
``(3) Recapture event defined.--For purposes of this
subsection, the term `recapture event' means--
``(A) Cessation of operation.--The cessation of the
operation of the facility as a qualified child care facility.
``(B) Change in ownership.--
``(i) In general.--Except as provided in clause (ii), the
disposition of a taxpayer's interest in a qualified child
care facility with respect to which the credit described in
subsection (a) was allowable.
``(ii) Agreement to assume recapture liability.--Clause (i)
shall not apply if the person acquiring such interest in the
facility agrees in writing to assume the recapture liability
of the person disposing of such interest in effect
immediately before such disposition. In the event of such an
assumption, the person acquiring the interest in the facility
shall be treated as the taxpayer for purposes of assessing
any recapture liability (computed as if there had been no
change in ownership).
``(4) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable year shall
be increased under paragraph (1) only with respect to credits
allowed by reason of this section which were used to reduce
tax liability. In the case of credits not so used to reduce
tax liability, the carryforwards and carrybacks under section
39 shall be appropriately adjusted.
``(B) No credits against tax.--Any increase in tax under
this subsection shall not be treated as a tax imposed by this
chapter for purposes of determining the amount of any credit
under subpart A, B, or D of this part.
``(C) No recapture by reason of casualty loss.--The
increase in tax under this subsection shall not apply to a
cessation of operation of the facility as a qualified child
care facility by reason of a casualty loss to the extent such
loss is restored by reconstruction or replacement within a
reasonable period established by the Secretary.
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons which are treated as
a single employer under subsections (a) and (b) of section 52
shall be treated as a single taxpayer.
``(2) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(3) Allocation in the case of partnerships.--In the case
of partnerships, the credit shall be allocated among partners
under regulations prescribed by the Secretary.
``(f) No Double Benefit.--
``(1) Reduction in basis.--For purposes of this subtitle--
``(A) In general.--If a credit is determined under this
section with respect to any property by reason of
expenditures described in subsection (c)(1)(A), the basis of
such property shall be reduced by the amount of the credit so
determined.
``(B) Certain dispositions.--If, during any taxable year,
there is a recapture amount determined with respect to any
property the basis of which was reduced under subparagraph
(A), the basis of such property (immediately before the event
resulting in such recapture) shall be increased by an amount
equal to such recapture amount. For purposes of the preceding
sentence, the term `recapture amount' means any increase in
tax (or adjustment in carrybacks or carryovers) determined
under subsection (d).
``(2) Other deductions and credits.--No deduction or credit
shall be allowed under any other provision of this chapter
with respect to the amount of the credit determined under
this section.''.
(b) Conforming Amendments.--
(1) Section 38(b) of the Internal Revenue Code of 1986 is
amended by striking ``plus'' at the end of paragraph (12), by
striking the period at the end of paragraph (13) and
inserting ``, plus'', and by adding at the end the following:
``(14) the employer-provided child care credit determined
under section 45E.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by adding
at the end the following:

``Sec. 45E. Employer-provided child care credit.''
(3) Section 1016(a) of such Code is amended by striking
``and'' at the end of paragraph (26), by striking the period
at the end of paragraph (27) and inserting ``, and'', and by
adding at the end the following:
``(28) in the case of a facility with respect to which a
credit was allowed under section 45E, to the extent provided
in section 45E(f)(1).''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2001.

Mr. GRAHAM. Mr. President, I am extremely pleased to join my
colleague Senator Kohl in introducing the Child Care Infrastructure Act
of 2001. This measure will make child care more accessible and
affordable to the many millions of Americans who find it not only
important, but necessary, to work.
This legislation grants tax credits to employers who assist their
employees with child care expenses, either by providing child care on-
site, reimbursing employees for the cost of child care, or establishing
a referral service to help employees locate a child care provider.
An employer is eligible for an income tax credit equal to 25 percent
of its child care expenses. Expenses eligible for the credit include:
The cost of acquiring, constructing, rehabilitating or expanding
employer property used to provide employees with child care;
the cost of operating an employer child care facility;
costs incurred under a contract with a qualified child care facility
to provide child care services to employees; and
to reimburse employees for the cost of child care.
Employers may also be eligible for a separate credit equal to 10
percent of child care resource and referral expenses.
The bill establishes an overall limit on the amount of child care
credits an employer can qualify to receive. That limit is $150,000 per
year.
Why is this legislation important?
First, the workplace has changed over the years. In 1947, one in four
mothers with children between the ages of 6 and 17 were in the labor
force. By 1996, their labor force participation rate had tripled to
nearly three in four.
Indeed, the Bureau of Labor Statistics reports that 65 percent of all
women with children under 18 years of age are now working and that the
growth in the number of working women will continue into the next
century.
Second, child care is one of the most pressing social issues of the
day. It impacts every family, rich or poor.
In June of 1998, I hosted a Florida statewide summit on child care
where over 500 residents of my State shared with me their concerns and
frustrations on child care issues. They told me that quality child care
is either unavailable or unaffordable.
Those who had found affordable child care often were faced with long
waiting lists.
They told me that working parents struggle to cope with the often
conflicting time demands of work and child care.
They told me of their concerns with school-age children who often are
at risk because before and after-school supervised care programs are
not readily available.
Mr. President, quality child care should be a concern to all
Americans. The care and nurturing that children receive early in life
has a profound influence on their future--and their future is our
future.
In the 21st century, women will comprise more than 60 percent of all
new entrants into the labor market. A large proportion of these women
are expected to be mothers of children under the age of 6.
The implications for employers are clear. They understand the rapidly
changing nature of our Nation's work force and that those employers who
can help their employees with child care will have a competitive
advantage.
Many smaller businesses would like to join them, but do not have the
resources to offer child care to their employees. Our legislation would
help to lower the obstacle to on-site child care.
Mr. President, we believe that this legislation will assist
businesses in providing attractive, cost-effective tools for recruiting
and retaining employees in a tight labor market.
We believe that encouraging businesses to help employees care for
children will make it easier for parents to be more involved in their
children's education.
Most of all, Mr. President, we believe that this bill is good for
employers and families and will go far in addressing the issue of child
care for working families of America. I urge all of my colleagues to
support this important legislation.
______

By Mr. ALLARD:
S. 100. A bill to amend the Internal Revenue Code of 1986 to repeal
the state and gift taxes; to the Committee on Finance.

[[Page S368]]

time to end the death tax

Mr. ALLARD. Mr. President, today I am introducing legislation to
immediately eliminate the estate tax. I fundamentally oppose the estate
tax. I call it the ``death tax.'' This unfair tax has been a concern of
mine for some time now.
Congress has clearly demonstrated its support for easing this burden.
The Taxpayer Relief Act of 1997 gradually increases the exemption. Last
year, Congress decided that further action was needed and passed a bill
that would have eliminated the federal estate tax. Unfortunately,
President Clinton chose to veto that bill. I look forward to the
opportunity to work with the new Administration to repeal this unfair
tax by passing my bill.
The United States has one of the highest estate taxes in the world.
While income tax rates have declined in recent decades, estate taxes
have remained high. Today, the death tax is imposed on estates with
assets of more than $675,000. The rates begin at 37% and very rapidly
rise to 55%. Some estates even pay a marginal rate of 60%.
This issue really hits home for me. Family farms and small businesses
are two of the groups most affected by the estate tax. I grew up on my
family's farm in Colorado, and I owned a small business before I came
to Washington. So, I truly understand the concerns of those who live in
fear of the impact that this tax will have on their legacy to their
children.
The estate tax has resulted in the loss of family farms and family
businesses across the nation. Many people work their entire lives to
build a business that they can pass on to their children. When these
hard-working businessmen and farmers pass away, their families are
often forced to sell off the business to pay the estate tax. I see this
as an affront to those who try to pass on the fruits of their lives'
work to their children.
The people affected by this tax are not necessarily wealthy. Many
small business people are cash poor, but asset rich. For example, the
owner of a small restaurant might have $800,000 of assets, but not much
cash on hand. Her children will still have to pay an excessive tax on
the assets. The beer wholesaler, who has invested all of his revenue in
trucks and storage, might have more than $675,000 in assets. That does
not make him a cash-wealthy man. Yet, he is still subject to this so-
called ``tax on the wealthy.''
The death tax also impacts employment and the economy. When a family-
owned farm or a small business closes, the workers lose their jobs.
Conversely, leaving resources in the economy can create jobs. A recent
George Mason study found that if the estate tax were phased out over
five years, the economy would create 198,895 more jobs, and grow by an
additional $509 billion over a ten-year period.
Additionally, the estate tax is a disincentive for Americans to save
their earnings. The government has created a number of tax breaks and
other incentives for those who save their money: 401(k)s and IRAs--to
name a few. Yet, the estate tax sends a contradictory message.
Basically, it says, ``If you don't spend all your savings by the time
you die, the government will penalize you.'' This tax is no small
penalty, either. We are talking about some very high tax rates.
The death tax also represents an unjust double taxation. The savings
were taxed initially when they were earned. Then, when the saver passes
away, the government comes along and takes a second cut. There is no
good reason for the current system--other than the government's desire
to make a profit at the already trying time of the death of a dear one.
The current death tax law has a greater effect on the lower end of
the scale than the higher. Wealthy people can afford lawyers and
planners to help them plan their estate. Those at the lower end of the
estate tax scale are often unable to afford sophisticated estate
planning. So the current law also makes the tax somewhat regressive,
which is not fair.
Planning and compliance with the estate tax can consume substantial
resources. In 1995, the Gallup organization surveyed family firms.
Twenty-three percent of owners of companies valued over $10 million
said that they pay more than $50,000 per year in insurance premiums on
policies to help them pay the eventual bill. To plan for the estate
tax, the firms also spent an average of $33,000 on lawyers, accountants
and financial planners, over a period of several years. This is money
that could have been better spent to expand the business and create new
jobs--rather than dealing with the death tax.
The estate tax only raises one percent of federal revenue, yet it
costs farms, businesses and jobs. No American family should lose their
farm or business because of the federal government. I support full
repeal of the federal estate tax.
Mr. President, I ask unanimous consent that the text of my bill, as
well as an article that I recently wrote, be entered into the Record.
There being no objection, the additional material was ordered to be
printed in the Record, as follows:

S. 100

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Death Tax Termination Act of
2001.''

SEC. 2. REPEAL OF ESTATE AND GIFT TAXES.

Subtitle B of the Internal Revenue Code of 1986 (relating
to estate, gift, and generation-skipping taxes) is repealed
effective with respect to estates of decedents dying, and
gifts made, after December 31, 2000.
____

[From the Roll Call, Apr. 27, 1998]

Estate Tax Reform Must Be First Step to Fixing System

(By Sen. Wayne Allard)

As we approach the new millennium, a consensus has emerged
in favor of significant tax reform. Some prefer the flat tax;
others advocate the sales tax. A third camp argues that
Congress should avoid a complete overhaul and instead work to
improve the existing system.
Whatever path is chosen, it should include elimination of
the federal estate tax. Repeal of the estate tax is the first
step toward a fairer and flatter tax system.
Congress has levied estate taxes at various times
throughout US history, particularly during war. The current
estate tax dates back to 1916, a time when many in Congress
were looking for ways to redistribute some of the wealth held
by a small number of super-rich families. This first
permanent estate tax had a top rate of only 10 percent, and
the threshold was high enough to ensure that the tax affected
only a tiny fraction of the population.
Like the rest of our tax code, it did not take long for
this limited tax to evolve into a more substantial burden. In
only the second year of the tax, the top rate was increased
to 25 percent. By 1935, the top rate was 70 percent, and in
1941, it reached an all-time high of 77 percent.
While income tax rates have declined in recent decades,
estate taxes have remained high. Today, the top estate tax
rate is 55 percent (a top marginal rate of 60 percent is paid
by some estates), and the tax is imposed on amounts above the
1998 exemption level of $625,000 (value above $625,000 is
taxed at an initial rate of 37 percent).
Generally, the value of all assets held at death is
included in the estate for purposes of assessing the tax--
this includes residences, business assets, stocks, bonds,
savings, personal property, etc. Estate tax returns are due
within nine months of the decedent's death (a six-month
extension is available), and with the exception of certain
closely held businesses, the tax is due when the return is
filed. The tax is paid by the estate rather than by the
beneficiary (in contrast to an inheritance tax).
Last year's tax bill increased the unified estate and gift
tax exemption from $600,000 to $1 million. However, this is
done very gradually and does not reach the $1 million level
until 2006. The bill also increased the exemption amount for
a qualified family-owned business to $1.3 million.
While both actions are a good first step, they barely
compensate for the effects of inflation. The $600,000
exemption level was last set in 1987; just to keep pace with
inflation the exemption should have risen to $850,000 by
1997. Incremental improvements help, but we need more
substantial reform.
The United States retains among the highest estate taxes in
the world. Among industrial nations, only Japan has a higher
top rate than we do. But Japan's 70 percent rate applies to
an inheritance of $16 million or more. The US top rate of 55
percent kicks in on estates of $3 million or more. France,
the United Kingdom and Ireland all have top rates of 40
percent, and the average top rate of Organization for
Economic Cooperation and Development countries is only 29
percent. Australia, Canada and Mexico presently have no
estate taxes.
The strongest argument that supporters of the estate tax
make is that most American families will never have to pay an
estate tax. While this is true, it does not justify retention
of a tax that causes great harm to family businesses and
farms, often constitutes double taxation, limits economic
growth

[[Page S369]]

consumes significant resources in unproductive tax compliance
activities and raises only a tiny portion of federal tax
revenues. In other words, the estate tax is not worth all the
trouble.
The estate tax can destroy a family business. This is the
most disturbing aspect of the tax. No American family should
lose its business or farm because of the estate tax. Current
estimates are that more than 70 percent of family businesses
do not survive the second generation, and 87 percent do not
survive the third generation.
While there are many reasons for these high numbers, the
estate tax is certainly one of them. The estate tax fails to
distinguish between cash and non-liquid assets, and since
family businesses are often asset-rich and cash poor, they
can be forced to sell assets in order to pay the tax. This
practice can destroy the business outright, or leave it so
strapped for capital that long-term survival is jeopardized.
Similarly, more and more large ranches and farms are facing
the prospect of break-up and sale to developers in order to
pay the estate tax. In addition to destroying a family
business, this harms the environment.
The accounting firm Price Waterhouse recently calculated
the taxable components of 1995 estates. While 21 percent of
assets were corporate stocks and bonds, and another 21
percent were mutual fund assets, fully 32 percent of gross
estates consisted of ``business assets'' such as stock in
closely held businesses, interests in non-corporate
businesses and farms and interests, in limited partnerships.
In larger estates, this portion rose to 55 percent. Clearly,
a substantial portion of taxable estates consists of family
businesses.
The National Center for Policy Analysis reports that a 1995
survey by Travis Research Associates found that 51 percent of
family businesses would have significant difficulty surviving
the estate tax, and 30 percent of respondents said they would
have to sell part or all of their business. This is supported
by a 1995 Family Business Survey conducted by Matthew
Greenwald and Associates which found that 33 percent of
family businesses anticipate having to liquidate or sell part
of their business to pay the estate tax.
While some businesses are destroyed by the estate tax, many
more expend substantial resources in tax planning and
compliance. Those that survive the estate tax often do so by
purchasing expensive insurance. A 1995 Gallup survey of
family firms found that 23 percent of the owners of companies
valued at more than $10 million pay $50,000 or more per year
in insurance premiums on policies designed to help them pay
the eventual tax bill. The same survey found that family
firms estimated they had spent on average more than $33,000
on lawyers, accountants and financial planners over a period
of six and a half years in order to prepare for the estate
tax.
In fact, one of the great ironies of the estate tax is that
an extensive amount of tax planning can very nearly eliminate
the tax. This results in a situation in which the very
wealthy can end up paying less estate tax than those of more
modest means.
As noted above, life insurance can play a big role in
estate planning, but there are also mechanisms such as
qualified personal residence trusts, charitable remainder
trusts, charitable lead trusts, generation-skipping trusts
and the effective use of annual gifts. While these mechanisms
may reduce the tax, they waste resources that could be put to
much better use growing businesses and creating jobs.
One of the tenets of a fair tax system is that income is
taxed only once. Income should be taxed when it is first
earned or realized; it should not be repeatedly retaxed by
government. The estate tax violates this tenet. At the time
of a person's death, much of his or her savings, business
assets or farm assets have already been subjected to federal,
state and local tax. These same assets are then taxed again
under the estate tax. Price Waterhouse has calculated that
those families who will be liable for the estate tax face the
prospect of nearly 73 percent of every dollar being taxed
away.
Repeal of the estate tax would benefit the economy. Without
the estate tax, greater business resources could be put
toward productive economic activities. Recently, the Center
for the Study of Taxation commissioned George Mason
University professor Richard Wagner to estimate the economic
impact of a phase-out of the estate tax.
Wagner estimated that if the tax is phased out over five
years beginning in 1999, the economy would create 189,900
more jobs and would grow by an additional $509 billion over a
ten-year-period. Similarly, a recent Heritage Foundation
study simulated the results of an estate tax repeal under two
respected economic models, the Washington University Macro
Model, and the Wharton Econometric Model. Under both models,
a repeal of the tax is forecast to increase jobs and gross
domestic product, as well as reduce the cost of capital.
One might expect that with all the economic dislocation
associated with the estate tax that it raises a significant
amount of revenue or accomplishes a redistributionist social
policy. In fact, the revenue take is quite modest--
approximately one percent of federal revenue or $14.7 billion
in 1995. And as for social policy, the ability of the federal
government to equalize wealth through the estate tax may be
quite limited. A 1995 study published by the Rand Corporation
found that for the very wealthiest Americans, only 7.5
percent of their wealth is attributable to inheritance--the
other 92.5 percent is from earnings.
America is a nation of tremendous economic opportunity.
Success is determined principally through hard work and
individual initiative. Our tax policy should focus on
encouraging greater initiative rather than on attempts to
limit inherited wealth.
The estate tax is a relic. It damages family businesses,
harms the economy and constitutes double taxation. It is time
for the estate tax to go.
______

By Mr. BINGAMAN:
S. 101. A bill to improve teacher quality, and for other purposes; to
the Committee on Health, Education, Labor, and Pensions.

QUALITY TEACHERS FOR ALL ACT

Mr. BINGAMAN. Mr President, today I am pleased to introduce a package
of bills related to education for consideration in the context of the
reauthorization of the Elementary and Secondary Education Act
(``ESEA''). I believe the issue of accountability for results will be
at the center of our debate this year so I will introduce and speak
about that bill separately. Nevertheless, I believe that we need to
increase our investment in education while increasing our expectations
for results from our schools. In that context, we should be sure to
target that investment on problems with national implications and
strategies and programs that we know work. At this time, I am
introducing three bills that I believe meet that criteria: The Quality
Teachers for All Act, The National Dropout Prevention Act and the
Access to High Standards Act. All of these bills provide support for
efforts on the local level to raise standards for our schools, our
teachers and our students.
Improving teacher quality continues to be one of my top priorities in
the Senate because research indicates that teacher quality is one of
the most important factors in student achievement. The Quality Teachers
for All Act addresses the fact that, although the vast majority of our
teacher's are dedicated, professional and competent, far too many
schools in America allow classrooms to be lead by teachers with
insufficient training and qualifications. Unfortunately, it is the
schools and classrooms with the neediest children who have the largest
number of unqualified teachers. While we are demanding increased levels
of performance for our schools and our children, we must also set high
standards for all our teachers, including those who instruct student
who must overcome the greatest barriers to learning.
The Quality Teachers for All Act requires that all teachers in
schools that receive Title 1 funds be fully qualified. This means that
they possess necessary teaching skills and demonstrate mastery in the
subjects that they teach. It provides that an elementary school teacher
must have state certification, hold a bachelor's degree and demonstrate
subject matter knowledge, teaching knowledge and teaching skills
required to teach effectively in reading, writing, mathematics, social
studies, science and other elements of a liberal arts education. Middle
and secondary school teachers must have state certification, hold a
bachelor's degree, and demonstrate competence in all subject areas that
they teach. This demonstration of competence may be achieved by a high
level of performance on a rigorous academic subject area test,
completion of an academic major (or an equal number of courses). The
bill ensures that low income students are not disproportionately
impacted by low teaching standards by requiring that teachers in high
poverty schools be at least as well-qualified, in terms of experience
and credentials as the instructional staff in schools served by the
same local educational agency that are not high poverty schools.
In order to help states and LEAs meet these requirements, the bill
will provide grants to assist states and LEAs in providing the
necessary education or training for individuals who are teaching
without full qualifications. In addition, recognizing that some
communities have difficulty attracting qualified teachers, the bill
allows funds to be used to provide financial incentives (i.e., signing
bonuses) for fully qualified teachers. In addition, the bill supports
efforts to recruit new teachers by providing allowing funds to be used
to develop alternative means of certification for highly qualified
individuals with college degrees

[[Page S370]]

wishing to teach, including mid-career professionals and former
military personnel. The bill also authorizes funds to support State
efforts to increase the portability of teacher's pensions,
certification and years of experience so that teachers have greater
mobility and school districts can fill vacant teaching positions with
teachers who are fully-qualified. The funds may also be used for
programs of support for new teachers to ensure that they are more
likely to remain in the nation's teaching force.
In order to make parents our partners in our efforts to raise
teaching standards, this bill requires districts and schools to provide
parents with information about the qualifications of their child's
teacher. These provisions build on legislation I authored that became
part of the Higher Education Act of 1998 requiring a national report
card on teacher training programs. The parental right to know provision
in the Quality Teachers for All Act will empower parents by informing
them of the strengths and weaknesses of their children's teachers,
helping them to support the push for fully-qualified teachers in every
classroom.
The National Dropout Prevention Act is a bill designed to reduce the
dropout rate in our nation's schools through the use and dissemination
of effective dropout prevention programs. While much progress has been
made in encouraging all student to complete high school, the nation
remains far from its goal of a 90 percent graduation rate for students,
a goal that was to be attained in the year 2000. In fact, none of the
states with large and diverse populations have yet come close to this
goal and dropout rates approaching 50 percent between ninth grade and
the senior year are commonplace in some of the most disadvantaged of
our nation's communities. This bill is based on many of the findings of
the National Hispanic Dropout Project, a group of nationally recognized
experts assembled in 1996-97 to help find ways of reducing the high
dropout rates among Hispanic and other at-risk students. The group
pointed out that there are widespread misconceptions about why so many
student drop out of school and that there is little familiarity with
proven drop out prevention programs. Most problematic is the fact that
there is currently no concerted federal effort to provide or coordinate
effective and proven dropout prevention programs or oversee the
multitude of programs that include dropout prevention as a component.
The Act makes lowering the dropout rate a national priority. A
national clearinghouse on effective school drop out prevention,
intervention and reentry programs would be created and efforts to
prevent students from dropping out would be identified and
disseminated. The bill provides support and recognition for schools
engaged in effective dropout prevention efforts. In addition, this bill
provides funds to pay the startup and implementation costs of
effective, sustainable, coordinated and whole school dropout prevention
programs. Funds can be used to implement comprehensive school wide
reforms, create alternative school programs or create smaller learning
communities. In addition, grant recipients could contract with
community-based organizations to assist them in implementing necessary
services.
The Access to High Standards Act is intended to help foster the
continued growth of advanced placement programs throughout the nation
and to help ensure equal access to these programs for low income
students. Advanced placement programs already provide rigorous
academics and valuable college credits at half the high schools in the
United states, serving over 1.5 million students last year. Many states
that have advanced placement incentive programs have already had
tremendous success in increasing participation rates, raising
achievement and increasing the involvement of low-income and under
served students. Nevertheless, students, especially low-income
students, continue to be denied or have limited access to this
important educational resource. Over forty percent of our nation's
public schools still do not offer any Advanced Placement courses. As
many of my colleagues know, college costs have risen many times faster
than inflation over the last decade, making it difficult for many
students to afford the high costs of obtaining a college education.
Advanced placement programs address this issue by giving students an
opportunity to earn college credit in high school by preparing for and
passing AP exams. In fact, a single AP English test score of 3 or
better is worth approximately $500 in tuition at the University of New
Mexico and the credits granted to AP students nationwide are worth
billions of dollars in savings each year.
By promoting AP courses, we also address the need to raise academic
standards. AP courses provide schools with high academic standards and
standardized achievement measures. Participating in AP courses helps
student prepare for college as they serve to connect curriculum between
high school and post secondary institutions. And, because the vast
majority of AP teachers teach several non-AP courses as well, AP
programs have the effect of raising school wide standards and
achievement. Of course, there is no single remedy or federal program
that can hope to address all of the issues that public education must
face in order to improve the achievement of our students. However, I
believe that high college costs and low academic standards deserve our
close attention and I am confident that expansion of advanced placement
programs will help states address these issues effectively.
In order to ensure that our children are well-prepared to meet the
challenges of an increasingly complex and challenging world, it is
critical to address improving our nation's school with a comprehensive
effort. The bills I introduce today are designed to build on the
progress we have made in the past few years to raise standards and
increase accountability in America's schools. I ask unanimous consent
to have the bills printed in the record at the conclusion of my
remarks. I urge my colleagues to carefully consider supporting passage
of these bills.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 101

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 ``Quality Teachers for All
Act''.

TITLE I--PARENTAL RIGHTS

SEC. 101. PARENTAL RIGHT TO KNOW.

Part E of title XIV of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 8891 et seq.) is amended by
adding at the end the following:

``SEC. 14515. TEACHER QUALIFICATIONS.

``Any public elementary school or secondary school that
receives funds under this Act shall provide to the parents of
each student enrolled in the school information regarding--
``(1) the professional qualifications of each of the
student's teachers, both generally and with respect to the
subject area in which the teacher provides instruction; and
``(2) the minimum professional qualifications required by
the State for teacher certification or licensure.''.

TITLE II--TEACHER QUALITY

SEC. 201. TEACHER QUALITY.

(a) In General.--Section 1111 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6311) is amended--
(1) by redesignating subsections (c) through (g) as
subsections (f) through (j), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Teacher Quality.--
``(1) State standards and policies.--Each State plan shall
contain assurances, with respect to schools served under this
part, that--
``(A) no student in those schools in the State will be
taught for more than 1 year by an elementary school teacher,
or for more than 2 consecutive years in the same subject by a
secondary school teacher, who has not demonstrated the
subject matter knowledge, teaching knowledge, and teaching
skill necessary to teach effectively in the subject in which
the teacher provides instruction;
``(B) the State provides incentives for teachers in those
schools to pursue and achieve advanced teaching and subject
area content standards;
``(C) the State has in place effective mechanisms to ensure
that local educational agencies and schools served under this
part are able--
``(i) to recruit effectively fully qualified teachers;
``(ii) to reward financially those teachers and principals
whose students have made significant progress toward high
academic performance, such as through performance-based
compensation systems and access to ongoing professional
development opportunities for teachers and administrators;
and
``(iii) to remove expeditiously incompetent or unqualified
teachers consistent with procedures to ensure due process for
teachers;

[[Page S371]]

``(D) the State aggressively helps those schools,
particularly in high need areas, recruit and retain fully
qualified teachers;
``(E) during the period that begins on the date of
enactment of the Quality Teachers for All Act and ends 4
years after such date, elementary school and secondary school
teachers in those schools will be at least as well qualified,
in terms of experience and credentials, as the instructional
staff in schools served by the same local educational agency
that are not schools served under this part; and
``(F) any teacher who meets the standards set by the
National Board for Professional Teaching Standards will be
considered fully qualified to teach in those schools in any
school district or community in the State.
``(2) Qualifications of certain instructional staff.--
``(A) In general.--Each State plan shall contain assurances
that, not later than 4 years after the date of enactment of
the Quality Teachers for All Act--
``(i) all instructional staff who provide services to
students under section 1114 or 1115 will have demonstrated
the subject matter knowledge, teaching knowledge, and
teaching skill necessary to teach effectively in the subject
in which the staff provides instruction, according to the
criteria described in this paragraph; and
``(ii) funds provided under this part will not be used to
support instructional staff--

``(I) who provide services to students under section 1114
or 1115; and
``(II) for whom State qualification or licensing
requirements have been waived or who are teaching under an
emergency or other provisional credential.

``(B) Elementary school instructional staff.--For purposes
of making the demonstration described in subparagraph (A)(i),
each member of the instructional staff who teaches elementary
school students shall, at a minimum--
``(i) have State certification (which may include
certification obtained through alternative means) or a State
license to teach; and
``(ii) hold a bachelor's degree and demonstrate subject
matter knowledge, teaching knowledge, and teaching skill
required to teach effectively in reading, writing,
mathematics, social studies, science, and other elements of a
liberal arts education.
``(C) Middle school and secondary school instructional
staff.--For purposes of making the demonstration described in
subparagraph (A)(i), each member of the instructional staff
who teaches in middle schools and secondary schools shall, at
a minimum--
``(i) have State certification (which may include
certification obtained through alternative means) or a State
license to teach; and
``(ii) hold a bachelor's degree or higher degree and
demonstrate a high level of competence in all subject areas
in which the staff member teaches through--

``(I) achievement of a high level of performance on
rigorous academic subject area tests;
``(II) completion of an academic major (or courses totaling
an equivalent number of credit hours) in each of the subject
areas in which the staff member provides instruction; or
``(III) achievement of a high level of performance in
relevant subject areas through other professional employment
experience.

``(D) Teacher aides and other paraprofessionals.--For
purposes of subparagraph (A) funds provided under this part
may be used to employ teacher aides or other
paraprofessionals who do not meet the requirements under
subparagraphs (B) and (C) only if such aides or
paraprofessionals--
``(i) provide instruction only when under the direct and
immediate supervision, and in the immediate presence, of
instructional staff who meet the criteria of this paragraph;
and
``(ii) possess particular skills necessary to assist
instructional staff in providing services to students served
under this Act.
``(E) Use of funds.--Each State plan shall contain
assurances that, beginning on the date of enactment of the
Quality Teachers for All Act, no school served under this
part will use funds received under this Act to hire
instructional staff who do not fully meet all the criteria
for instructional staff described in this paragraph.
``(F) Definition.--In this paragraph, the term
`instructional staff' includes any individual who has
responsibility for providing any student or group of students
with instruction in any of the core academic subject areas,
including reading, writing, language arts, mathematics,
science, and social studies.
``(d) Assistance by State Educational Agency.--Each State
plan shall describe how the State educational agency will
help each local educational agency and school in the State
develop the capacity to comply with the requirements of this
section.
``(e) Corrective Action.--The appropriate State educational
agency shall take corrective action consistent with section
1116(c)(5)(B)(i), against any local educational agency that
does not make sufficient effort to comply with subsection
(c). Such corrective action shall be taken regardless of the
conditions set forth in section 1116(c)(5)(B)(ii). In a case
in which the State fails to take the corrective action, the
Secretary shall withhold funds from such State up to an
amount equal to that reserved under sections 1003(a) and
1603(c).''.
(b) Instructional Aides.--Section 1119 of Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6320) is amended
by striking subsection (i).

SEC. 202. FULLY QUALIFIED TEACHER IN EVERY CLASSROOM.

Title I of the Elementary and Secondary Education Act of
1965 is amended by inserting after section 1119 (20 U.S.C.
6320) the following new sections:

``SEC. 1119A. A FULLY QUALIFIED TEACHER IN EVERY CLASSROOM.

``(a) Grants.--
``(1) In general.--The Secretary may make grants, on a
competitive basis, to States or local educational agencies,
to assist schools that receive assistance under this part
by carrying out the activities described in paragraph (3).
``(2) Application.--To be eligible to receive a grant under
paragraph (1), a State or local educational agency shall
submit an application to the Secretary at such time, in such
manner, and containing such information as the Secretary may
require.
``(3) Uses of funds.--
``(A) States.--In order to meet the goal under section
1111(c)(2) of ensuring that all instructional staff in
schools served under this part have the subject matter
knowledge, teaching knowledge, and teaching skill necessary
to teach effectively in the subject in which the staff
provides instruction, a State may use funds received under
this section--
``(i) to collaborate with programs that recruit, place, and
train fully qualified teachers;
``(ii) to provide the necessary education and training,
including establishing continuing education programs and
paying the costs of tuition at an institution of higher
education and other student fees (for programs that meet the
criteria under section 203(b)(2)(A)(i) of the Higher
Education Act of 1965 (20 U.S.C. 1023(b)(2)(A)(i))), to help
teachers or other school personnel who do not meet the
necessary qualifications and licensing requirements to meet
the requirements, except that in order to qualify for a
payment of tuition or fees under this clause an individual
shall agree to teach for each of at least 2 subsequent
academic years after receiving such degree in a school that--

``(I) is located in a school district served by a local
educational agency that is eligible in that academic year for
assistance under this title; and
``(II) for that academic year, has been determined by the
Secretary to be a school in which the enrollment of children
counted under section 1124(c) exceeds 50 percent of the total
enrollment of that school;

``(iii) to establish, expand, or improve alternative means
of State certification of teachers for highly qualified
individuals with a minimum of a baccalaureate degree,
including mid-career professionals from other occupations,
paraprofessionals, former military personnel, and recent
graduates of an institution of higher education with records
of academic distinction who demonstrate the potential to
become highly effective teachers;
``(iv) for projects to increase the portability of teacher
pensions or credited years of experience or to promote
reciprocity of teacher certification or licensure between or
among States, except that no reciprocity agreement developed
under this clause or developed using funds provided under
this part may lead to the weakening of any State teaching
certification or licensing requirement; or
``(v) to establish, expand, or improve induction programs
designed to support new teachers and promote retention of new
teachers in schools served under this part.
``(B) Local educational agencies.--In order to meet the
goal described in subparagraph (A), a local educational
agency may use funds received under this section--
``(i) to recruit fully qualified teachers, including
through the use of signing bonuses or other financial
incentives; and
``(ii) to carry out the activities described in clauses
(i), (ii), and (v) of subparagraph (A).
``(4) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$500,000,000 for fiscal year 2002 and such sums as may be
necessary for each subsequent fiscal year.
``(b) Other Assistance.--Notwithstanding any other
provision of law, in order to meet the goal described in
subsection (a)(3)(A)--
``(1) a State receiving assistance under title II, title
VI, title II of the Higher Education Act of 1965 (20 U.S.C.
1021 et seq.), or the Goals 2000: Educate America Act (20
U.S.C. 5801 et seq.) may use such assistance for the
activities described in subsection (a)(3)(A); and
``(2) a local educational agency receiving assistance under
an authority described in paragraph (1) may use such
assistance for the activities described in subsection
(a)(3)(B).

``SEC. 1119B. CERTIFICATION GRANTS.

``(a) Grants.--The Secretary may make grants to State
educational agencies, local educational agencies, or schools
that receive assistance under this part to pay for the
Federal share of the cost of providing financial assistance
to teachers in such schools who obtain certification from the
National Board of Professional Teaching Standards.
``(b) Application.--To be eligible to receive a grant under
this section an agency or school shall submit an application
to the Secretary at such time, in such manner, and containing
such information as the Secretary may require.

[[Page S372]]

``(c) Eligible Teachers.--To be eligible to receive
financial assistance under subsection (a), a teacher shall
obtain the certification described in subsection (a).
``(d) Federal Share.--The Federal share of the cost
described in subsection (a) shall be 50 percent.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$10,000,000 for fiscal year 2002 and such sums as may be
necessary for each subsequent fiscal year.''.

SEC. 203. LIMITATION.

Part E of title XIV of the Elementary and Secondary
Education Act of 1965, as amended in section 101, is further
amended by adding at the end the following:

``SEC. 14516. PROHIBITION REGARDING PROFESSIONAL DEVELOPMENT
SERVICES.

``None of the funds provided under this Act may be used for
any professional development services for a teacher that are
not directly related to the curriculum and subjects in which
the teacher provides or will provide instruction.''.
______

By Mr. BINGAMAN (for himself and Mr. Reid):
S. 102. A bill to provide assistance to address school dropout
problems; to the Committee on Health, Education, Labor, and Pensions.

dropout prevention legislation

Mr. BINGAMAN. 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. 102

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

SECTION 1. ASSISTANCE TO ADDRESS SCHOOL DROPOUT PROBLEMS.

Part D of title I of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 6421 et seq.) is amended by adding at
the end the following:

``Subpart 4--Assistance to Address School Dropout Problems

``SEC. 1441. SHORT TITLE.

``This subpart may be cited as the `Dropout Prevention
Act'.

``SEC. 1442. PURPOSE.

``The purpose of this subpart is to provide for school
dropout prevention and reentry and to raise academic
achievement levels by providing grants, to schools through
State educational agencies, that--
``(1) challenge all children to attain their highest
academic potential; and
``(2) ensure that all students have substantial and ongoing
opportunities to do so through schoolwide programs proven
effective in school dropout prevention.

``Chapter 1--Coordinated National Strategy

``SEC. 1451. NATIONAL ACTIVITIES.

``(a) In General.--The Secretary is authorized--
``(1) to collect systematic data on the participation in
the programs described in paragraph (2)(C) of individuals
disaggregated within each State, local educational agency,
and school by gender, by each major racial and ethnic group,
by English proficiency status, by migrant status, by students
with disabilities as compared to nondisabled students, and by
economically disadvantaged students as compared to students
who are not economically disadvantaged;
``(2) to establish and to consult with an interagency
working group which shall--
``(A) address inter- and intra-agency program coordination
issues at the Federal level with respect to school dropout
prevention and middle school and secondary school reentry,
assess the targeting of existing Federal services to students
who are most at risk of dropping out of school, and the cost-
effectiveness of various programs and approaches used to
address school dropout prevention;
``(B) describe the ways in which State and local agencies
can implement effective school dropout prevention programs
using funds from a variety of Federal programs, including the
programs under title I and the School-to-Work Opportunities
Act of 1994; and
``(C) address all Federal programs with school dropout
prevention or school reentry elements or objectives, programs
under title I of this Act, the School-to-Work Opportunities
Act of 1994, subtitle C of title I of the Workforce
Investment Act of 1998, and other programs; and
``(3) carry out a national recognition program in
accordance with subsection (b) that recognizes schools that
have made extraordinary progress in lowering school dropout
rates under which a public middle school or secondary school
from each State will be recognized.
``(b) Recognition Program.--
``(1) National guidelines.--The Secretary shall develop
uniform national guidelines for the recognition program which
shall be used to recognize schools from nominations submitted
by State educational agencies.
``(2) Eligible schools.--The Secretary may recognize under
the recognition program any public middle school or secondary
school (including a charter school) that has implemented
comprehensive reforms regarding the lowering of school
dropout rates for all students at that school.
``(3) Support.--The Secretary may make monetary awards to
schools recognized under the recognition program in amounts
determined by the Secretary. Amounts received under this
section shall be used for dissemination activities within the
school district or nationally.
``(c) Capacity Building.--
``(1) In general.--The Secretary, through a contract with a
non-Federal entity, may conduct a capacity building and
design initiative in order to increase the types of proven
strategies for dropout prevention and reentry that address
the needs of an entire school population rather than a subset
of students.
``(2) Number and duration.--
``(A) Number.--The Secretary may award not more than 5
contracts under this subsection.
``(B) Duration.--The Secretary may award a contract under
this subsection for a period of not more than 5 years.
``(d) Support for Existing Reform Networks.--
``(1) In general.--The Secretary may provide appropriate
support to eligible entities to enable the eligible entities
to provide training, materials, development, and staff
assistance to schools assisted under this chapter.
``(2) Definition of eligible entity.--In this subsection,
the term `eligible entity' means an entity that, prior to the
date of enactment of the Dropout Prevention Act--
``(A) provided training, technical assistance, and
materials to 100 or more elementary schools or secondary
schools; and
``(B) developed and published a specific educational
program or design for use by the schools.

``Chapter 2--National School Dropout Prevention Initiative

``SEC. 1461. PROGRAM AUTHORIZED.

``(a) Grants.--
``(1) Discretionary grants.--If the sum appropriated under
section 1472 for a fiscal year is less than $250,000,000,
then the Secretary shall use such sum to award grants, on a
competitive basis, to State educational agencies to enable
the State educational agencies to award grants under
subsection (b).
``(2) Formula.--If the sum appropriated under section 1472
for a fiscal year equals or exceeds $250,000,000, then the
Secretary shall use such sum to make an allotment to each
State in an amount that bears the same relation to the sum as
the amount the State received under part A of title I for the
preceding fiscal year bears to the amount received by all
States under such part for the preceding fiscal year.
``(3) Definition of state.--In this chapter, the term
`State' means each of the several States of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands, Guam, American Samoa,
the Commonwealth of the Northern Mariana Islands, the
Republic of the Marshall Islands, the Federated States of
Micronesia, and the Republic of Palau.
``(b) Grants.--From amounts made available to a State under
subsection (a), the State educational agency may award grants
to public middle schools or secondary schools that serve
students in grades 6 through 12, that have school dropout
rates which are the highest of all school dropout rates in
the State, to enable the schools to pay only the startup and
implementation costs of effective, sustainable, coordinated,
and whole school dropout prevention programs that involve
activities such as--
``(1) professional development;
``(2) obtaining curricular materials;
``(3) release time for professional staff;
``(4) planning and research;
``(5) remedial education;
``(6) reduction in pupil-to-teacher ratios;
``(7) efforts to meet State student achievement standards;
``(8) counseling and mentoring for at-risk students; and
``(9) comprehensive school reform models.
``(c) Amount.--
``(1) In general.--Subject to subsection (d) and except as
provided in paragraph (2), a grant under this chapter shall
be awarded--
``(A) in the first year that a school receives a grant
payment under this chapter, based on factors such as--
``(i) school size;
``(ii) costs of the model or set of prevention and reentry
strategies being implemented; and
``(iii) local cost factors such as poverty rates;
``(B) in the second such year, in an amount that is not
less than 75 percent of the amount the school received under
this chapter in the first such year;
``(C) in the third year, in an amount that is not less than
50 percent of the amount the school received under this
chapter in the first such year; and
``(D) in each succeeding year in an amount that is not less
than 30 percent of the amount the school received under this
chapter in the first such year.
``(2) Increases.--The Secretary shall increase the amount
awarded to a school under this chapter by 10 percent if the
school creates smaller learning communities within the school
and the creation is certified by the State educational
agency.
``(d) Duration.--A grant under this chapter shall be
awarded for a period of 3 years, and

[[Page S373]]

may be continued for a period of 2 additional years if the
State educational agency determines, based on the annual
reports described in section 1467(a), that significant
progress has been made in lowering the school dropout rate
for students participating in the program assisted under this
chapter compared to students at similar schools who are not
participating in the program.

``SEC. 1462. STRATEGIES AND CAPACITY BUILDING.

``Each school receiving a grant under this chapter shall
implement research-based, sustainable, and widely replicated,
strategies for school dropout prevention and reentry that
address the needs of an entire school population rather than
a subset of students. The strategies may include--
``(1) specific strategies for targeted purposes, such as
effective early intervention programs designed to identify
at-risk students, effective programs encompassing
traditionally underserved students, including racial and
ethnic minorities and pregnant and parenting teenagers,
designed to prevent such students from dropping out of
school, and effective programs to identify and encourage
youth who have already dropped out of school to reenter
school and complete their secondary education; and
``(2) approaches such as breaking larger schools down into
smaller learning communities and other comprehensive reform
approaches, creating alternative school programs, developing
clear linkages to career skills and employment, and
addressing specific gatekeeper hurdles that often limit
student retention and academic success.

``SEC. 1463. SELECTION OF SCHOOLS.

``(a) School Application.--
``(1) In general.--Each school desiring a grant under this
chapter shall submit an application to the State educational
agency at such time, in such manner, and accompanied by such
information as the State educational agency may require.
``(2) Contents.--Each application submitted under paragraph
(1) shall--
``(A) contain a certification from the local educational
agency serving the school that--
``(i) the school has the highest number or rates of school
dropouts in the age group served by the local educational
agency;
``(ii) the local educational agency is committed to
providing ongoing operational support, for the school's
comprehensive reform plan to address the problem of school
dropouts, for a period of 5 years; and
``(iii) the local educational agency will support the plan,
including--

``(I) release time for teacher training;
``(II) efforts to coordinate activities for feeder schools;
and
``(III) encouraging other schools served by the local
educational agency to participate in the plan;

``(B) demonstrate that the faculty and administration of
the school have agreed to apply for assistance under this
chapter, and provide evidence of the school's willingness and
ability to use the funds under this chapter, including
providing an assurance of the support of 80 percent or more
of the professional staff at the school;
``(C) describe the instructional strategies to be
implemented, how the strategies will serve all students, and
the effectiveness of the strategies;
``(D) describe a budget and timeline for implementing the
strategies;
``(E) contain evidence of coordination with existing
resources;
``(F) provide an assurance that funds provided under this
chapter will supplement and not supplant other Federal,
State, and local funds;
``(G) describe how the activities to be assisted conform
with research-based knowledge about school dropout prevention
and reentry; and
``(H) demonstrate that the school and local educational
agency have agreed to conduct a schoolwide program under
section 1114.
``(b) State Agency Review and Award.--The State educational
agency shall review applications and award grants to schools
under subsection (a) according to a review by a panel of
experts on school dropout prevention.
``(c) Eligibility.--A school is eligible to receive a grant
under this chapter if the school is--
``(1) a public school (including a public alternative
school)--
``(A) that is eligible to receive assistance under part A
of title I, including a comprehensive secondary school, a
vocational or technical secondary school, or a charter
school; and
``(B)(i) that serves students 50 percent or more of whom
are low-income individuals; or
``(ii) with respect to which the feeder schools that
provide the majority of the incoming students to the school
serve students 50 percent or more of whom are low-income
individuals; or
``(2) participating in a schoolwide program under section
1114 during the grant period.
``(d) Community-Based Organizations.--A school that
receives a grant under this chapter may use the grant funds
to secure necessary services from a community-based
organization, including private sector entities, if--
``(1) the school approves the use;
``(2) the funds are used to provide school dropout
prevention and reentry activities related to schoolwide
efforts; and
``(3) the community-based organization has demonstrated the
organization's ability to provide effective services as
described in section 122 of the Workforce Investment Act of
1998.
``(e) Coordination.--Each school that receives a grant
under this chapter shall coordinate the activities assisted
under this chapter with other Federal programs, such as
programs assisted under chapter 1 of subpart 2 of part A of
title IV of the Higher Education Act of 1965 and the School-
to-Work Opportunities Act of 1994.

``SEC. 1464. DISSEMINATION ACTIVITIES.

``Each school that receives a grant under this chapter
shall provide information and technical assistance to other
schools within the school district, including presentations,
document-sharing, and joint staff development.

``SEC. 1465. PROGRESS INCENTIVES.

``Notwithstanding any other provision of law, each local
educational agency that receives funds under title I shall
use such funding to provide assistance to schools served by
the agency that have not made progress toward lowering school
dropout rates after receiving assistance under this chapter
for 2 fiscal years.

``SEC. 1466. SCHOOL DROPOUT RATE CALCULATION.

``For purposes of calculating a school dropout rate under
this chapter, a school shall use--
``(1) the annual event school dropout rate for students
leaving a school in a single year determined in accordance
with the National Center for Education Statistics' Common
Core of Data, if available; or
``(2) in other cases, a standard method for calculating the
school dropout rate as determined by the State educational
agency.

``SEC. 1467. REPORTING AND ACCOUNTABILITY.

``(a) Reporting.--In order to receive funding under this
chapter for a fiscal year after the first fiscal year a
school receives funding under this chapter, the school shall
provide, on an annual basis, to the Secretary and the State
educational agency a report regarding the status of the
implementation of activities funded under this chapter, the
outcome data for students at schools assisted under this
chapter disaggregated in the same manner as information under
section 1451(a) (such as dropout rates), and certification of
progress from the eligible entity whose strategies the school
is implementing.
``(b) Accountability.--On the basis of the reports
submitted under subsection (a), the Secretary shall evaluate
the effect of the activities assisted under this chapter on
school dropout prevention compared to a control group.

``SEC. 1468. STATE RESPONSIBILITIES.

``(a) Uniform Data Collection.--Within 1 year after the
date of enactment of the Dropout Prevention Act, a State
educational agency that receives funds under this chapter
shall report to the Secretary and statewide, all school
district and school data regarding school dropout rates in
the State disaggregated in the same manner as information
under section 1451(a), according to procedures that conform
with the National Center for Education Statistics' Common
Core of Data.
``(b) Attendance-Neutral Funding Policies.--Within 2 years
after the date of enactment of the Dropout Prevention Act, a
State educational agency that receives funds under this
chapter shall develop and implement education funding formula
policies for public schools that provide appropriate
incentives to retain students in school throughout the school
year, such as--
``(1) a student count methodology that does not determine
annual budgets based on attendance on a single day early in
the academic year; and
``(2) specific incentives for retaining enrolled students
throughout each year.
``(c) Suspension and Expulsion Policies.--Within 2 years
after the date of enactment of the Dropout Prevention Act, a
State educational agency that receives funds under this
chapter shall develop uniform, long-term suspension and
expulsion policies (that in the case of a child with a
disability are consistent with the suspension and expulsion
policies under the Individuals with Disabilities Education
Act) for serious infractions resulting in more than 10 days
of exclusion from school per academic year so that similar
violations result in similar penalties.
``(d) Regulations.--The Secretary shall promulgate
regulations implementing subsections (a) through (c).

``Chapter 3--Definitions; Authorization of Appropriations

``SEC. 1471. DEFINITIONS.

``In this subpart:
``(1) Low-income.--The term `low-income', used with respect
to an individual, means an individual determined to be low-
income in accordance with measures described in section
1113(a)(5).
``(2) School dropout.--The term `school dropout' has the
meaning given the term in section 4(17) of the School-to-Work
Opportunities Act of 1994.

``SEC. 1472. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this
subpart, $250,000,000 for fiscal year 2001 and such sums as
may be necessary for each of the 4 succeeding fiscal years,
of which--
``(1) 10 percent shall be available to carry out chapter 1;
and
``(2) 90 percent shall be available to carry out chapter
2.''.
______

Mr. BINGAMAN (for himself, Mrs. Hutchison, and Ms. Collins):

[[Page S374]]

S. 103. A bill to provide for advanced placement programs; to the
Committee on Health, Education, Labor, and Pensions.

advanced placement programs

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

SECTION 1. ADVANCED PLACEMENT PROGRAMS.

Title X of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 8001 et seq.) is amended by adding at the end
the following:

``PART L--ADVANCED PLACEMENT PROGRAMS

``SEC. 10995A. SHORT TITLE.

``This part may be cited as the `Access to High Standards
Act'.

``SEC. 10995B. FINDINGS AND PURPOSES.

``(a) Findings.--Congress finds that--
``(1) far too many students are not being provided
sufficient academic preparation in secondary school, which
results in limited employment opportunities, college dropout
rates of over 25 percent for the first year of college, and
remediation for almost one-third of incoming college
freshmen;
``(2) there is a growing consensus that raising academic
standards, establishing high academic expectations, and
showing concrete results are at the core of improving public
education;
``(3) modeling academic standards on the well-known program
of advanced placement courses is an approach that many
education leaders and almost half of all States have
endorsed;
``(4) advanced placement programs already are providing 30
different college-level courses, serving almost 60 percent of
all secondary schools, reaching over 1,000,000 students (of
whom 80 percent attend public schools, 55 percent are
females, and 30 percent are minorities), and providing test
scores that are accepted for college credit at over 3,000
colleges and universities, every university in Germany,
France, and Austria, and most institutions in Canada and the
United Kingdom;
``(5) 24 States are now funding programs to increase
participation in advanced placement programs, including 19
States that provide funds for advanced placement teacher
professional development, 3 States that require that all
public secondary schools offer advanced placement courses, 10
States that pay the fees for advanced placement tests for
some or all students, and 4 States that require that their
public universities grant uniform academic credit for scores
of 3 or better on advanced placement tests; and
``(6) the State programs described in paragraph (5) have
shown the responsiveness of schools and students to such
programs, raised the academic standards for both students
participating in such programs and other children taught by
teachers who are involved in advanced placement courses, and
shown tremendous success in increasing enrollment,
achievement, and minority participation in advanced placement
programs.
``(b) Purposes.--The purposes of this part are--
``(1) to encourage more of the 600,000 students who take
advanced placement courses but do not take advanced placement
exams each year to demonstrate their achievements through
taking the exams;
``(2) to build on the many benefits of advanced placement
programs for students, which benefits may include the
acquisition of skills that are important to many employers,
Scholastic Aptitude Tests (SAT) scores that are 100 points
above the national averages, and the achievement of better
grades in secondary school and in college than the grades of
students who have not participated in the programs;
``(3) to support State and local efforts to raise academic
standards through advanced placement programs, and thus
further increase the number of students who participate and
succeed in advanced placement programs;
``(4) to increase the availability and broaden the range of
schools that have advanced placement programs, which programs
are still often distributed unevenly among regions, States,
and even secondary schools within the same school district,
while also increasing and diversifying student participation
in the programs;
``(5) to build on the State programs described in
subsection (a)(5) and demonstrate that larger and more
diverse groups of students can participate and succeed in
advanced placement programs;
``(6) to provide greater access to advanced placement
courses for low-income and other disadvantaged students;
``(7) to provide access to advanced placement courses for
secondary school juniors at schools that do not offer
advanced placement programs, increase the rate of secondary
school juniors and seniors who participate in advanced
placement courses to 25 percent of the secondary school
student population, and increase the numbers of students who
receive advanced placement test scores for which college
academic credit is awarded; and
``(8) to increase the participation of low-income
individuals in taking advanced placement tests through the
payment or partial payment of the costs of the advanced
placement test fees.

``SEC. 10995C. FUNDING DISTRIBUTION RULE.

``From amounts appropriated under section 10995H for a
fiscal year, the Secretary shall give first priority to
funding activities under section 10995F, and shall distribute
any remaining funds not so applied according to the following
ratio:
``(1) Seventy percent of the remaining funds shall be
available to carry out section 10995D.
``(2) Thirty percent of the remaining funds shall be
available to carry out section 10995E.

``SEC. 10995D. ADVANCED PLACEMENT PROGRAM GRANTS.

``(a) Grants Authorized.--
``(1) In general.--From amounts appropriated under section
10995H and made available under section 10995C(1) for a
fiscal year, the Secretary shall award grants, on a
competitive basis, to eligible entities to enable the
eligible entities to carry out the authorized activities
described in subsection (c).
``(2) Duration and payments.--
``(A) Duration.--The Secretary shall award a grant under
this section for a period of 3 years.
``(B) Payments.--The Secretary shall make grant payments
under this section on an annual basis.
``(3) Definition of eligible entity.--In this section, the
term `eligible entity' means a State educational agency, or a
local educational agency, in the State.
``(b) Priority.--In awarding grants under this section the
Secretary shall give priority to eligible entities submitting
applications under subsection (d) that demonstrate--
``(1) a pervasive need for access to advanced placement
incentive programs;
``(2) the involvement of business and community
organizations in the activities to be assisted;
``(3) the availability of matching funds from State or
local sources to pay for the cost of activities to be
assisted;
``(4) a focus on developing or expanding advanced placement
programs and participation in the core academic areas of
English, mathematics, and science; and
``(5)(A) in the case of an eligible entity that is a State
educational agency, the State educational agency carries out
programs in the State that target--
``(i) local educational agencies serving schools with a
high concentration of low-income students; or
``(ii) schools with a high concentration of low-income
students; or
``(B) in the case of an eligible entity that is a local
educational agency, the local educational agency serves
schools with a high concentration of low-income students.
``(c) Authorized Activities.--An eligible entity may use
grant funds under this section to expand access for low-
income individuals to advanced placement incentive programs
that involve--
``(1) teacher training;
``(2) preadvanced placement course development;
``(3) curriculum coordination and articulation between
grade levels that prepare students for advanced placement
courses;
``(4) curriculum development;
``(5) books and supplies; and
``(6) any other activity directly related to expanding
access to and participation in advanced placement incentive
programs particularly for low-income individuals.
``(d) Application.--Each eligible entity desiring a grant
under this section shall submit an application to the
Secretary at such time, in such manner, and accompanied by
such information as the Secretary may require.
``(e) Data Collection and Reporting.--
``(1) Data collection.--Each eligible entity receiving a
grant under this section shall annually report to the
Secretary--
``(A) the number of students taking advanced placement
courses who are served by the eligible entity;
``(B) the number of advanced placement tests taken by
students served by the eligible entity;
``(C) the scores on the advanced placement tests; and
``(D) demographic information regarding individuals taking
the advanced placement courses and tests disaggregated by
race, ethnicity, sex, English proficiency status, and
socioeconomic status.
``(2) Report.--The Secretary shall annually compile the
information received from each eligible entity under
paragraph (1) and report to Congress regarding the
information.

``SEC. 10995E. ONLINE ADVANCED PLACEMENT COURSES.

``(a) Grants Authorized.--From amounts appropriated under
section 10995H and made available under section 10995C(2) for
a fiscal year, the Secretary shall award grants to State
educational agencies to enable such agencies to award grants
to local educational agencies to provide students with online
advanced placement courses.
``(b) State Educational Agency Applications.--
``(1) Application required.--Each State educational agency
desiring a grant under this section shall submit an
application to the Secretary at such time, in such manner,
and accompanied by such information as the Secretary may
require.
``(2) Award basis.--The Secretary shall award grants under
this section on a competitive basis.
``(c) Grants to Local Educational Agencies.--Each State
educational agency receiving a grant award under subsection
(b) shall

[[Page S375]]

award grants to local educational agencies within the State
to carry out activities described in subsection (e). In
awarding grants under this subsection, the State educational
agency shall give priority to local educational agencies
that--
``(1) serve high concentrations of low-income students;
``(2) serve rural areas; and
``(3) the State educational agency determines will not have
access to online advanced placement courses without
assistance provided under this section.
``(d) Contracts.--A local educational agency that receives
a grant under this section may enter into a contract with a
nonprofit or for-profit organization to provide the online
advanced placement courses, including contracting for
necessary support services.
``(e) Uses.--Grant funds provided under this section may be
used to purchase the online curriculum, to train teachers
with respect to the use of online curriculum, or to purchase
course materials.

``SEC. 10995F. ADVANCED PLACEMENT INCENTIVE PROGRAM.

``(a) Grants Authorized.--From amounts appropriated under
section 10995H and made available under section 10995C for a
fiscal year, the Secretary shall award grants to State
educational agencies having applications approved under
subsection (c) to enable the State educational agencies to
reimburse low-income individuals to cover part or all of the
costs of advanced placement test fees, if the low-income
individuals--
``(1) are enrolled in an advanced placement class; and
``(2) plan to take an advanced placement test.
``(b) Award Basis.--In determining the amount of the grant
awarded to each State educational agency under this section
for a fiscal year, the Secretary shall consider the number of
children eligible to be counted under section 1124(c) in the
State in relation to the number of such children so counted
in all the States.
``(c) Information Dissemination.--A State educational
agency shall disseminate information regarding the
availability of advanced placement test fee payments under
this section to eligible individuals through secondary school
teachers and guidance counselors.
``(d) Applications.--Each State educational agency desiring
a grant under this section shall submit an application to the
Secretary at such time, in such manner, and accompanied by
such information as the Secretary may require. At a minimum,
each State educational agency application shall--
``(1) describe the advanced placement test fees the State
educational agency will pay on behalf of low-income
individuals in the State from grant funds made available
under this section;
``(2) provide an assurance that any grant funds received
under this section, other than funds used in accordance with
subsection (e), shall be used only to pay for advanced
placement test fees; and
``(3) contain such information as the Secretary may require
to demonstrate that the State will ensure that a student is
eligible for payments under this section, including
documentation required under chapter 1 of subpart 2 of part A
of title IV of the Higher Education Act of 1965.
``(e) Additional Uses of Funds.--If each eligible low-
income individual in a State pays not more than a nominal fee
to take an advanced placement test in a core subject, then a
State educational agency may use grant funds made available
under this section that remain after advanced placement test
fees have been paid on behalf of all eligible low-income
individuals in the State, for activities directly related to
increasing--
``(1) the enrollment of low-income individuals in advanced
placement courses;
``(2) the participation of low-income individuals in
advanced placement courses; and
``(3) the availability of advanced placement courses in
schools serving high-poverty areas.
``(f) Supplement, Not Supplant.--Grant funds provided under
this section shall supplement, and not supplant, other non-
federal funds that are available to assist low-income
individuals in paying for the cost of advanced placement test
fees.
``(g) Regulations.--The Secretary shall prescribe such
regulations as are necessary to carry out this section.
``(h) Report.--Each State educational agency annually shall
report to the Secretary information regarding--
``(1) the number of low-income individuals in the State who
received assistance under this section; and
``(2) any activities carried out pursuant to subsection
(e).
``(i) Definitions.--In this section:
``(1) Advanced placement test.--The term `advanced
placement test' includes only an advanced placement test
approved by the Secretary for the purposes of this section.
``(2) Low-income individual.--The term `low-income
individual' has the meaning given the term in section
402A(g)(2) of the Higher Education Act of 1965.

``SEC. 10995G. DEFINITIONS.

``In this part:
``(1) Advanced placement incentive program.--The term
`advanced placement incentive program' means a program that
provides advanced placement activities and services to low-
income individuals.
``(2) Advanced placement test.--The term `advanced
placement test' means an advanced placement test administered
by the College Board or approved by the Secretary.
``(3) High concentration of low-income students.--The term
`high concentration of low-income students', used with
respect to a State educational agency, local educational
agency or school, means an agency or school, as the case may
be, that serves a student population 40 percent or more of
whom are from families with incomes below the poverty level,
as determined in the same manner as the determination is made
under section 1124(c)(2).
``(4) Low-income individual.--The term `low-income
individual' means, other than for purposes of section 10995F,
a low-income individual (as defined in section 402A(g)(2) of
the Higher Education Act of 1965 who is academically prepared
to take successfully an advanced placement test as determined
by a school teacher or advanced placement coordinator taking
into consideration factors such as enrollment and performance
in an advanced placement course or superior academic ability.
``(5) Institution of higher education.--The term
`institution of higher education' has the meaning given the
term in section 101(a) of the Higher Education Act of 1965.
``(6) State.--The term `State' means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, American Samoa, the United
States Virgin Islands, the Republic of the Marshall Islands,
the Federated States of Micronesia, and the Republic of
Palau.

``SEC. 10995H. AUTHORIZATION OF APPROPRIATIONS.

``For the purpose of carrying out this part, there are
authorized to be appropriated $50,000,000 for fiscal year
2001, and such sums as may be necessary for each of the 4
succeeding fiscal years.''.
By Ms. SNOWE (for herself, Mr. Reid, Mr. Warner, Ms. Mikulski,
Mr. Jeffords, Mrs. Boxer, Mr. Specter, Mrs. Murray, Ms.
Collins, Mr. Johnson, Mr. Wellstone, Mr. Leahy, Mr. Kerry, Mr.
Durbin, Mr. Inouye, Mr. Akaka, Mr. Sarbanes, Mr. Schumer, Mr.
Harkin, Mrs. Clinton, and Mr. Corzine):
S. 104. A bill to require equitable coverage of prescription
contraceptive drugs and devices, and contraceptive services under
health plans; to the Committee on Health, Education, Labor, and
Pensions.

equitable coverage under health plans

Mr. REID. Mr. President, I am proud to introduce today, with Senator
Snowe, the Equity in Prescription and Contraception Coverage Act of
2001 (EPICC).
Our legislation would require insurers, HMOs and employee health
benefit plans that offer prescription drug benefits to cover
contraceptive drugs and devices approved by the FDA. Further, it would
require these insurers to cover outpatient contraceptive services if a
plan covers other outpatient services. Lastly, it would prohibit the
imposition of copays and deductibles for prescription contraceptives or
outpatient services that are greater than those for other prescription
drugs.
Our bill gives Americans on both sides of the abortion debate the
opportunity to join together in the common goal of preventing
unintended pregnancies. I am pleased that we have support from both
pro-life and pro-choice Senators for this bill.
We are introducing EPICC today--the first legislative day of the
107th Congress--because equity in prescription contraception coverage
is long overdue. Senator Snowe and I first introduced this bill in
1997. Since this time, the Viagra pill went on the market, and one
month later was covered by most indemnity policies. Birth control
pills, which have been on the market since 1960, are covered by only
thirty-three percent of insurance plans.
Most recently, the U.S. Equal Employment Opportunity Commission
(EEOC) issued a decision finding that an employer's failure to include
insurance coverage for prescription contraceptives in an employee
health benefits plan, when it covers other prescription drugs and
devices, constitutes unlawful sex discrimination under Title VII of the
Civil Rights Act of 1964.
The EEOC ruling is an important step toward ensuring that women have
access to affordable contraceptives. At the same time, it highlights
the importance of our legislation because title VII applies only to
employers; it does not cover insurance providers. An estimated 16
million Americans obtain health insurance from private insurance other
than employer-provided plans. Only the enactment of EPICC will ensure
that contraceptive coverage is offered by insurance providers.
Our efforts have not been entirely without results. For the past
three consecutive years, we have passed a provision in the Treasury-
Postal Appropriations bill that requires Federal

[[Page S376]]

health plans to cover prescription contraceptives. It is time to pass
EPICC and extend this law to all Americans.
It is time to pass EPICC because EPICC is about equality for women.
For all the advances women have made, they still earn 74 cents for
every dollar a man makes and on top of that, they pay 68 percent more
in out of pocket costs for health care than men. Reproductive health
care services account for much of this 68 percent difference. You can
be sure, if men had to pay for contraceptive drugs and devices, the
insurance industry would cover them.
It is time to pass EPICC because the health industry has done a poor
job of responding to women's health needs. According to a study done by
the Alan Guttmacher Institute, 49 percent of all large-group health
care plans do not routinely cover any contraceptive method at all, and
only 15 percent cover all five of the most common contraceptive
methods. Women are forced to use disposable income to pay for family
planning services not covered by their health insurance. ``The Pill''--
one of the most common birth control methods, can cost over $300 a
year. Women who lack disposable income are forced to use less reliable
methods of contraception.
It is time to pass EPICC because each year approximately 3 million
pregnancies, or 50 percent of all pregnancies, in this country are
unintended. Of these unintended pregnancies, about half end in
abortion. Reliable family planning methods must be made available if we
wish to reduce this disturbing number.
It is time to pass EPICC because insurance companies routinely cover
more expensive services, including abortions, sterilizations and tubal
ligations. Yet according to one study in the American Journal of Public
Health, health plans would accrue enough savings in pregnancy care
costs to cover oral contraceptives for all users under the plan by
increasing the number of women who use oral contraceptives by 15
percent. Studies indicate that for every dollar of public funds
invested in family planning, four to fourteen dollars of public funds
is saved in pregnancy and health care-related costs. Not only will a
reduction in unintended pregnancies reduce abortion rates, it will also
lead to a reduction in low-birth weight, infant mortality and maternal
morbidity.
It is time to pass EPICC because access to contraception will bring
down the unintended pregnancy rate, ensure good reproductive health for
women, and reduce the number of abortions. It is vitally important to
the health of our country that quality contraception is not beyond the
financial reach of women. Regardless of where you stand on the abortion
issue, prevention is the common ground on which we can all stand. I
urge you to join me in supporting EPICC.
Ms. SNOWE. Mr. President, I rise today with my colleague form Nevada,
Senator Harry Reid, to reintroduce the Equity in Prescription Insurance
and Contraceptive Coverage Act.
Today is the 28th anniversary of the landmark Roe v. Wade decision--
an anniversary which makes it especially poignant to reintroduce EPICC
today. There are three million unintended pregnancies every year--half
of all pregnancies that occur every year in this country. And
frighteningly, approximately half of all unintended pregnancies end in
abortion.
I am firmly pro-choice and I believe in a woman's right to a safe and
legal abortion when she needs this procedure. But I want abortion to be
an option that a woman rarely needs.
The simplest and most effective means of reducing the number of
abortions is to reduce the number of unintended pregnancies in America.
And the safest and most effective means of preventing unintended
pregnancies are with prescription contraceptives. Unfortunately, while
the vast majority of insurers cover prescription drugs, they treat
prescription contraceptives very differently. In fact, half of large
group plans exclude coverage of contraceptives. And only one-third
cover oral contraceptives--the most popular form of reversible birth
control.
When one realizes the insurance ``carve-out'' for these prescriptions
and related outpatient treatments, it is no longer a mystery why women
spend 68 percent more than men in out-of-pocket health care costs. No
woman should have to forgo or rely on inexpensive and less effective
contraceptives for purely economic reasons, knowing that she risks an
unintended pregnancy.
For the last three years Congress has required the health plans
participating in the Federal Employees Heath Benefit Program--the
largest employer-sponsored health insurance plan in the country--to
provide prescription contraceptive coverage if they cover prescription
drugs as a part of their benefits package. The protections we afford to
Members of Congress, their staff, other federal employees and
annuitants, and to the approximately two million women of reproductive
age who are participating in FEHBP need and deserve to be extended to
the rest of the country.
Last December 13, the Equal Employment Opportunity Commission ruled
that excluding contraceptives from health insurance plans is a
violation of the 1978 Pregnancy Discrimination Act, which requires
equal treatment of women ``affected by pregnancy, childbirth or related
medical conditions,'' in all aspects of employment, including fringe
benefits.
The EEOC said that the Act also protects women against discrimination
because they have the ability to become pregnant, not just because they
are already pregnant. According to the EEOC's ruling, excluding
contraceptives also amounts to sex discrimination because these
prescriptions are available only for women. Furthermore, excluding
contraceptives due to possible increased costs is not valid--under the
Pregnancy Discrimination Act Congress specifically rejected costs as a
defense.
Unfortunately, the ruling only applies to the two cases examined by
the EEOC and is not a general ``policy guidance'' that would apply to
all employers. These two particular health plans must cover
contraceptives, the ruling said, because they already cover a wide
range of preventive services, including vaccinations, drugs to control
blood pressure, weight loss medication and preventive dental care.
Another health plan--one that doesn't cover these services--might not
be in violation of the law. But most health plans cover similar
services, and the decision announced in December could be used by other
women who seek coverage from their employers.
The Pregnancy Discrimination Act--and this EEOC decision--only
reaches employers of 15 people or more. The Equity in Prescription
Insurance Contraceptive Coverage Act reaches all insurance plans, no
matter the size, and includes individual insurance--not just employer-
sponsored insurance plans.
The time has come for Congress to act, once and for all, to ensure
equity in prescription insurance coverage. The EEOC's decision provides
a powerful impetus for action in Congress, and demonstrates the degree
of concern through the nation about unfair and discriminatory
prescription practices. The EEOC decision highlights the problem; I
believe passage of our legislation in Congress is the solution.
Unfortunately, the lack of contraceptive coverage in health insurance
is not news to most women. Countless American women have been shocked
to learn that their insurance does not cover contraceptives, one of
their most basic health care needs, even though other prescription
drugs which are equally valuable to their lives are routinely covered.
Less than half--49 percent--of all large-group health care plans cover
any contraceptive method at all and only 15 percent cover the five most
common reversible birth control methods. HMOs are more likely to cover
contraceptives, but only 39 percent cover all five reversible methods.
And ironically, 86 percent of large group plans, preferred provider
organizations, and HMOs cover sterilization and between 66 and 70
percent of these different plans do cover abortion.
Thirteen states require their state-regulated health plans to
coverage prescription contraceptive: Maryland, Connecticut, Georgia,
Hawaii, New Hampshire, Nevada, North Carolina, Vermont, California,
Delaware, Iowa, Rhode Island, and my home state of Maine. We need to
ensure that this protection is expanded to all states.
The concept underlying EPICC is simple. This legislation says that if
insurers cover prescription drugs and devices, they must also cover
FDA-approved prescription contraceptives.

[[Page S377]]

And in conjunction with this, EPICC requires health plans which already
cover basic health care services to also cover outpatient services
related to prescription contraceptives.
The bill does not require insurance companies to cover prescription
drugs. What the bill does say is that if insurers cover prescription
drugs, they cannot carve prescription contraceptives out of their
formularies. And it says that insurers which cover outpatient health
care services cannot limit or exclude coverage of the medical and
counseling services necessary for effective contraceptive use.
This bill is good health policy. By helping families to adequately
space their pregnancies, contraceptives contribute to healthy
pregnancies and healthy births, reduce rates of maternal complications,
and reduces the possibility of low-birthweight births.
Furthermore, the Equity in Prescription Insurance and Contraceptive
Coverage Act makes good economic sense. We know that contraceptives are
cost-effective: in the public sector, for every dollar invested in
family planning, $4 to $14 is saved in health care and related costs.
And all methods of reversible contraceptives are cost-effective when
compared to the cost of unintended pregnancy. A sexually active women
who uses no contraception costs the health care provider an average of
$3,225 in a given year. The average cost of an uncomplicated vaginal
delivery in 1993 was approximately $6,400. and for every 100 women who
do not use contraceptives in a given year, 85 percent will become
pregnant.
Why do insurance companies exclude prescription contraceptive
coverage from their list of covered benefits--especially when they
cover other prescription drugs? The tendency of insurance plans to
cover sterilization and abortion reflects, in part, their long-standing
tendency to cover surgery and treatment over prevention. But insurers
do not feel compelled to cover prescription contraceptives because they
know that most women who lack contraceptive coverage will simply pay
for them out of pocket. And in order to prevent an unintended
pregnancy, a women needs to be on some from of birth control for almost
30 years of her life.
The Equity in Prescription Insurance and Contraceptive Coverage Act
tells insurance companies that we can no longer tolerate policies that
disadvantage women and disadvantage our nation. When our bill is
passed, women will finally be assured of equity in prescription drug
coverage and health care services. And America's unacceptably high
rates of unintended pregnancies and abortions will be reduced in the
process.
The philosophy behind the bill is that contraceptives should be
treated no differently than any other prescription drug or device. It
does not give contraceptives any type of special insurance coverage,
but instead seeks to achieve equity of treatment and parity of
coverage. For that reason, the bill specifies that if a plan imposes a
deductible or cost-sharing requirement on prescription drugs or
devices, it can impose the same deductible or cost-sharing requirement
on prescription contraception. But it cannot charge a higher cost-
sharing requirement or deductible on contraceptives. Outpatient
contraceptive services must also be treated similarly to general
outpatient health care services.
Time and time again Americans have expressed the desire for their
leaders to come together to work on the problems that face us. This
bill exemplifies that spirit of cooperation. It crosses some very wide
gulfs and makes some very meaningful changes in policy that will
benefit countless Americans.
______

By Mr. FEINGOLD:
S. 105. A bill to amend the Agricultural Adjustment Act to prohibit
the Secretary of Agriculture from basing minimum prices for Class I
milk on the distance or transportation costs from any location that is
not within a marketing area, except under certain circumstances, and
for other purposes; to the Committee on Agriculture, Nutrition, and
Forestry.

dairy legislation

Mr. FEINGOLD. Mr. President, I rise today to offer a measure which
will serve as a first step towards eliminating the inequities borne by
the dairy farmers of Wisconsin and the upper Midwest under the Federal
Milk Marketing Order system.
The Federal Milk Marketing Order system, created nearly 60 years ago,
establishes minimum prices for milk paid to producers throughout
various marketing areas in the U.S. For sixty years, this system has
discriminated against producers in the Upper Midwest by awarding a high
price to dairy farmers in proportion to the distance of their farms
from Eau Claire, Wisconsin.
This legislation is very simple. It identifies the single most
harmful and unjust feature of the current system, and corrects it.
Under the current archaic law, the price for fluid milk increases
depending on the distance from Eau Claire, Wisconsin, even though most
milk marketing orders do not receive any milk from Wisconsin.
The bill I introduce today will prohibit the Secretary of Agriculture
from using distance or transportation costs from any location as the
basis for pricing milk, unless significant quantities of milk are
actually transported from that location into the recipient market. The
Secretary will have to comply with the statutory requirement that
supply and demand factors be considered as specified in the
Agricultural Marketing Agreement Act when setting milk prices in
marketing orders. The fact remains that single-basing-point pricing
simply cannot be justified based on supply and demand for milk both in
local and national markets.
This bill also requires the Secretary to report to Congress on
specifically which criteria are used to set milk prices. Finally, the
Secretary will have to certify to Congress that the criteria used by
the Department do not in any way attempt to circumvent the prohibition
on using distance or transportation cost as basis for pricing milk.
This one change is so crucial to Upper Midwest producers, because the
current system has penalized them for many years. By providing
disparate profits for producers in other parts of the country and
creating artificial economic incentives for milk production, Wisconsin
producers have seen national surpluses rise, and milk prices fall.
Rather than providing adequate supplies of fluid milk in some parts of
the country, the prices have led to excess production.
The prices have provided production incentives beyond those needed to
ensure a local supply of fluid milk in some regions, leading to an
increase in manufactured products in those marketing orders. Those
manufactured products directly compete with Wisconsin's processed
products, eroding our markets and driving national prices down.
The perverse nature of this system is further illustrated by the fact
that since 1995 some regions of the U.S., notably the Central states
and the Southwest, are producing so much milk that they are actually
shipping fluid milk north to the Upper Midwest. The high fluid milk
prices have generated so much excess production, that these markets
distant from Eau Claire are now encroaching upon not only our
manufactured markets, but also our markets for fluid milk, further
eroding prices in Wisconsin.
The market distorting effects of the fluid price differentials in
federal orders are manifest in the Congressional Budget Office estimate
that eliminating the orders would save $669 million over five years.
Government outlays would fall, CBO concludes, because production would
fall in response to lower milk prices and there would be fewer
government purchases of surplus milk. The regions which would gain and
lose in this scenario illustrate the discrimination inherent to the
current system. Economic analyses show that farm revenues in a market
undisturbed by Federal Orders would actually increase in the Upper
Midwest and fall in most other milk-producing regions.
While this system has been around since 1937, the practice of basing
fluid milk price differentials on the distance from Eau Claire was
formalized in the 1960's, when the Upper Midwest arguably was the
primary reserve for additional supplies of milk. The idea was to
encourage local supplies of fluid milk in areas of the country that did
not traditionally produce enough fluid milk to meet their own needs.
Mr. President, that is no longer the case. The Upper Midwest is
neither the

[[Page S378]]

lowest cost production area nor a primary source of reserve supplies of
milk. In many of the markets with higher fluid milk differentials, milk
is produced efficiently, and in some cases, at lower cost than the
upper Midwest. Unfortunately, the prices didn't adjust with changing
economic conditions, most notably the shift of the dairy industry away
from the Upper Midwest and towards the Southwest, specifically
California, which now leads the nation in milk production.
Fluid milk prices should have been lowered to reflect that trend.
Instead, in 1985, the prices were increased for markets distant from
Eau Claire. USDA has refused to use the administrative authority
provided by Congress to make the appropriate adjustments to reflect
economic realities. They continue to stand behind single-basing-point
pricing.
The result has been a decline in the Upper Midwest dairy industry,
not because they can't produce a product that can compete in the market
place, but because the system discriminates against them. Today,
Wisconsin loses dairy farmers at a rate of more than 5 per day. The
Upper Midwest, with the lowest fluid milk prices, is shrinking as a
dairy region despite the dairy-friendly climate of the region. Other
regions with higher fluid milk prices are growing rapidly.
In an unregulated market with a level playing field, these shifts in
production might be fair. But in a market where the government is
setting the prices and providing that artificial advantage to regions
outside the Upper Midwest, the current system is unconscionable.
I urge my colleagues to do the right thing and bring reform to this
out-dated system and work to eliminate the inequities in the current
milk marketing order pricing system. 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. 105

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

SECTION 1. LOCATION ADJUSTMENTS FOR MINIMUM PRICES FOR CLASS
I MILK.

Section 8c(5) of the Agricultural Adjustment Act (7 U.S.C.
608c(5)), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is amended--
(1) in paragraph (A)--
(A) in clause (3) of the second sentence, by inserting
after ``the locations'' the following: ``within a marketing
area subject to the order''; and
(B) by striking the last 2 sentences and inserting the
following: ``Notwithstanding subsection (18) or any other
provision of law, when fixing minimum prices for milk of the
highest use classification in a marketing area subject to an
order under this subsection, the Secretary may not, directly
or indirectly, base the prices on the distance from, or all
or part of the costs incurred to transport milk to or from,
any location that is not within the marketing area subject to
the order, unless milk from the location constitutes at least
50 percent of the total supply of milk of the highest use
classification in the marketing area. The Secretary shall
report to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate on the criteria that are used as
the basis for the minimum prices referred to in the preceding
sentence, including a certification that the minimum prices
are made in accordance with the preceding sentence.''; and
(2) in paragraph (B)(c), by inserting after ``the
locations'' the following: ``within a marketing area subject
to the order''.
______

By Mr. FEINGOLD (for himself and Mr. Hutchinson):
S. 106. A bill to amend the provisions of titles 5 and 28, United
States Code, relating to equal access to justice, award of reasonable
costs and fees, taxpayers' recovery of costs, fees, and expenses,
administrative settlement offers, and for other purposes; to the
Committee on the Judiciary.

equal access to justice reform legislation

Mr. FEINGOLD. Mr. President, I rise today to introduce the Equal
Access to Justice Reform Amendments of 2001. This legislation contains
adjustments to the Equal Access to Justice Act (EAJA) that will
streamline and improve the process of awarding attorney's fees to
private parties who prevail in litigation against the Federal
government. This is the now the fourth Congress in which I have
introduced this legislation. I believe these reforms are an important
step in reducing the burden of defending government litigation for many
individuals and small businesses.
I am very pleased to be joined in introducing this legislation once
again this year by my friend from Arkansas, Sen. Tim Hutchinson. We
hope that by working on a bipartisan basis on this important project we
can improve the chances that it can become law.
Over the years, members of Congress often speak of ``getting
government off the backs of the American people.'' Sometimes we
disagree about when government is a burden and when it is giving a
helping hand. But all of us in the Senate want to reform government in
ways that will improve the lives of people all across this nation. The
legislation we are proposing today deals directly with a problem that
affects everyday Americans who face legal battles with the federal
government and prevail. Even if they win in court, they may still lose
financially because of the expense of paying their attorneys.
At the outset, it is important to understand what the Equal Access to
Justice Act is, and why it exists. The premise of this statute is very
simple. EAJA places individuals and small businesses who face the
United States Government in litigation on more equal footing with the
government by establishing guidelines for the award of attorney's fees
when the individual or small business prevails. Quite simply, EAJA
acknowledges that the resources available to the federal government in
a legal dispute far outweigh those available to most Americans. This
disparity is lessened by requiring the government in certain instances
to pay the attorneys' fees of successful private parties. By giving
successful parties the right to seek attorneys' fees from the United
States, EAJA seeks to prevent small business owners and individuals
from having to risk their companies or their family savings in order to
seek justice.
My interest in this issue predates my election to the Senate. It
arises from my experience both as a private attorney and a Member of
the state Senate in my home state of Wisconsin. While in private
practice, I became aware of how the ability to recoup attorney's fees
is a significant factor, and often one of the first considered, when
deciding whether or not to seek redress in the courts or to defend a
case. Upon entering the Wisconsin State Senate, I authored legislation
modeled on the federal law, which had been championed by one of my
predecessors in this body from Wisconsin, Senator Gaylord Nelson.
Today, section 814.246 of the Wisconsin statutes contains provisions
similar to the federal EAJA statute.
It seemed to me then, as it does now, that we should do all that we
can to help ease the financial burdens on people who need to have their
claims reviewed and decided by impartial decision makers. To this end,
I have reviewed the existing federal statutes with an eye toward
improving them and making them work better. The bill Sen. Hutchinson
and I are introducing today does a number of things to make EAJA more
effective for individuals and small business men and women all across
this country.
First and most important, this legislation eliminates the provision
in current law that allows the government to avoid paying attorneys'
fees when it loses a suit if it can show that its position was
substantially justified. I believe that this high threshold for
obtaining attorneys' fees is unfair. If an individual or small business
battles the federal government in an adversarial proceeding and
prevails, the government should simply pay the fees incurred. Imagine
the scenario of a small business that spends time and money dueling
with the government and wins, only to find out that it must now
undertake the additional step of litigating the justification of
government's litigation position. For the government, with its vast
resources, this second litigation over fees poses little difficulty,
but for the citizen or small business it may simply not be financially
feasible.
Not only is this additional step a financial burden on the private
litigant, but a 1992 study also reveals that it is unnecessary and a
waste of government resources. University of Virginia Professor Harold
Krent on behalf of the Administrative Conference of the

[[Page S379]]

United States found that only a small percentage of EAJA awards were
denied because of the substantial justification defense. While it is
impossible to determine the exact cost of litigating the issue of
subtantial justification, it is Prof. Krent's opinion, based upon
review of cases in 1989 and 1990, that while the substantial
justification defense may save some money, it was not enough to justify
the cost of the additional litigation. In short, eliminating this often
burdensome second step is a cost effective step which will streamline
recovery under EAJA and may very well save the government money in the
long run.
The second part of this legislation that will streamline and improve
EAJA is a provision designed to encourage settlement and avoid costly
and protracted litigation. Under the bill, the government can make an
offer of settlement after an application for fees and other expenses
has been filed. If the government's offer is rejected and the
prevailing party seeking recovery ultimately wins a smaller award, that
party is not entitled to the attorneys' fees and costs incurred after
the date of the government's offer. Again, this will encourage
settlement, speed the claims process, and thereby reduce the time and
expense of the litigation.
The final improvement to EAJA included in this legislation is the
removal of the carve out of cases where the prevailing party is
eligible to get attorneys fees under section 7430 of the Internal
Revenue Code. Under current law, EAJA is inapplicable in cases where a
taxpayer prevails against the government. I was an original cosponsor
of a bill that suggested a similar reform introduced by Senator Leahy
of Vermont in the 105th Congress. This provision helps to level the
playing field between the IRS and everyday citizens. There is no reason
that taxpayers should be treated differently than any other party that
prevails in a case against the government. They deserve to have their
fees paid if they win.
We all know that the American small business owner has a difficult
road to make ends meet and that unnecessary or overly burdensome
government regulation can be a formidable obstacle to doing business.
It can be the difference between success or failure. The Equal Access
to Justice Act was conceived and implemented to help balance the
formidable power of the federal government. It has already helped many
Americans. The legislation we are offering today will make EAJA more
effective for more Americans while at the same time helping to deter
the government from acting in an indefensible and unwarranted manner.
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. 106

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

SECTION 1. EQUAL ACCESS TO JUSTICE REFORM.

(a) Short Title.--This Act may be cited as the ``Equal
Access to Justice Reform Amendments of 2001''.
(b) Award of Costs and Fees.--
(1) Administrative proceedings.--Section 504(a)(2) of title
5, United States Code, is amended by inserting after ``(2)''
the following: ``At any time after the commencement of an
adversary adjudication covered by this section, the
adjudicative officer may ask a party to declare whether such
party intends to seek an award of fees and expenses against
the agency should such party prevail.''.
(2) Judicial proceedings.--Section 2412(d)(1)(B) of title
28, United States Code, is amended by inserting after ``(B)''
the following: ``At any time after the commencement of an
adversary adjudication covered by this section, the court may
ask a party to declare whether such party intends to seek an
award of fees and expenses against the agency should such
party prevail.''.
(c) Payment From Agency Appropriations.--
(1) Administrative proceedings.--Section 504(d) of title 5,
United States Code, is amended by adding at the end the
following: ``Fees and expenses awarded under this subsection
may not be paid from the claims and judgments account of the
Treasury from funds appropriated pursuant to section 1304 of
title 31.''.
(2) Judicial proceedings.--Section 2412(d)(4) of title 28,
United States Code, is amended by adding at the end the
following: ``Fees and expenses awarded under this subsection
may not be paid from the claims and judgments account of the
Treasury from funds appropriated pursuant to section 1304 of
title 31.''.
(d) Taxpayers' Recovery of Costs, Fees, and Expenses.--
(1) Administrative proceedings.--Section 504 of title 5,
United States Code, is amended by striking subsection (f).
(2) Judicial proceedings.--Section 2412 of title 28, United
States Code, is amended by striking subsection (e).
(e) Offers of Settlement.--
(1) Administrative proceedings.--Section 504 of title 5,
United States Code (as amended by subsection (d) of this
section), is amended by adding at the end the following:
``(f)(1) At any time after the filing of an application for
fees and other expenses under this section, an agency from
which a fee award is sought may serve upon the applicant an
offer of settlement of the claims made in the application. If
within 10 days after service of the offer the applicant
serves written notice that the offer is accepted, either
party may then file the offer and notice of acceptance
together with proof of service thereof.
``(2) An offer not accepted shall be deemed withdrawn. The
fact that an offer is made but not accepted shall not
preclude a subsequent offer. If any award of fees and
expenses for the merits of the proceeding finally obtained by
the applicant is not more favorable than the offer, the
applicant shall not be entitled to receive an award for
attorneys' fees or other expenses incurred in relation to the
application for fees and expenses after the date of the
offer.''.
(2) Judicial proceedings.--Section 2412 of title 28, United
States Code (as amended by subsection (d) of this section),
is amended by inserting after subsection (d) the following:
``(e)(1) At any time after the filing of an application for
fees and other expenses under this section, an agency of the
United States from which a fee award is sought may serve
upon the applicant an offer of settlement of the claims
made in the application. If within 10 days after service
of the offer the applicant serves written notice that the
offer is accepted, either party may then file the offer
and notice of acceptance together with proof of service
thereof.
``(2) An offer not accepted shall be deemed withdrawn. The
fact that an offer is made but not accepted shall not
preclude a subsequent offer. If any award of fees and
expenses for the merits of the proceeding finally obtained by
the applicant is not more favorable than the offer, the
applicant shall not be entitled to receive an award for
attorneys' fees or other expenses incurred in relation to the
application for fees and expenses after the date of the
offer.''.
(f) Elimination of Substantial Justification Standard.--
(1) Administrative proceedings.--Section 504 of title 5,
United States Code, is amended--
(A) in subsection (a)(1), by striking all beginning with
``, unless the adjudicative officer'' through ``expenses are
sought''; and
(B) in subsection (a)(2), by striking ``The party shall
also allege that the position of the agency was not
substantially justified.''.
(2) Judicial proceedings.--Section 2412(d) of title 28,
United States Code, is amended--
(A) in paragraph (1)(A), by striking ``, unless the court
finds that the position of the United States was
substantially justified or that special circumstances make an
award unjust'';
(B) in paragraph (1)(B), by striking ``The party shall also
allege that the position of the United States was not
substantially justified. Whether or not the position of the
United States was substantially justified shall be determined
on the basis of the record (including the record with respect
to the action or failure to act by the agency upon which the
civil action is based) which is made in the civil action for
which fees and other expenses are sought.''; and
(C) in paragraph (3), by striking ``, unless the court
finds that during such adversary adjudication the position of
the United States was substantially justified, or that
special circumstances make an award unjust''.
(g) Reports to Congress.--
(1) Administrative proceedings.--Not later than 180 days
after the date of the enactment of this Act, the
Administrative Conference of the United States shall submit a
report to Congress--
(A) providing an analysis of the variations in the
frequency of fee awards paid by specific Federal agencies
under the provisions of section 504 of title 5, United States
Code; and
(B) including recommendations for extending the application
of such sections to other Federal agencies and administrative
proceedings.
(2) Judicial proceedings.--Not later than 180 days after
the date of the enactment of this Act, the Department of
Justice shall submit a report to Congress--
(A) providing an analysis of the variations in the
frequency of fee awards paid by specific Federal districts
under the provisions of section 2412 of title 28, United
States Code; and
(B) including recommendations for extending the application
of such sections to other Federal judicial proceedings.
(h) Effective Date.--The provisions of this Act and the
amendments made by this Act shall take effect 30 days after
the date of the enactment of this Act and shall apply only to
an administrative complaint filed with a Federal agency or a
civil action filed

[[Page S380]]

in a United States court on or after such date.

Mr. HUTCHINSON. Mr. President, I rise today, with my colleague
Senator Feingold, to introduce the Equal Access to Justice (EAJA)
Reform Amendments of 2001. I do so because it is my sincere hope that
the 107th Congress will work in a bi-partisan manner to provide small
business owners and individuals who prevail in court against the
federal government with automatic reimbursement for their legal
expenses--thereby fulfilling the true intent of EAJA when passed in
1980.
EAJA's initial premise was to reduce the vast disparity in resources
and expertise which exists between small business owners or individuals
and federal agencies and to encourage the government to ensure that the
claims it pursues are worthy of its efforts. Twenty years ago, former
Senator Gaylord Nelson, the author of the original, bipartisan EAJA
bill, clearly explained EAJA's intent when he stated, ``All I can say
is the taxpayer is injured, and if the taxpayer was correct, and that
is the finding, then we ought to make the taxpayer whole.'' I commend
former Senator Nelson. His steadfast commitment to our nation's
businesses as Chairman of the Senate Small Business Committee is worthy
of admiration. As a result of a political compromise, however, the
final version of EAJA does not provide for an automatic award of
attorneys' fees. Rather, it provides for an award of attorneys' fees
only when an agency or a court determines that the government's
position was not ``substantially justified'' or that ``special
circumstances'' exist which would make an award unjust.
Agencies and courts have strayed far from the original intent of EAJA
by repeatedly using these provisions to avoid awarding attorneys' fees
to small businesses and individuals who have successfully defended
themselves. The bill that Senator Feingold and I are introducing today,
the Equal Access to Justice Reform Amendments of 2001, would amend EAJA
to provide that a small business owner or individual prevailing against
the government will be automatically entitled to recover their
attorneys' fees and expenses incurred in their defense.
Unfortunately, EAJA is not making the taxpayers of this nation whole
after they defend themselves against government action. Thus, I ask
that my colleagues join Senator Feingold and myself in our effort to
make these American taxpayers whole by cosponsoring and supporting the
Equal Access to Justice Reform Amendments of 2001.
______

By Mr. FEINGOLD:
S. 107. A bill to allow modified bloc voting by cooperative
associations of milk producers in connection with a referendum on
Federal Milk Marketing Order reform; to the Committee on Agriculture,
Nutrition, and Forestry.

democracy for dairy producers act of 2001

Mr. FEINGOLD. Mr. President, I rise to introduce a measure that will
begin to restore to many dairy farmers throughout the nation, part of
the market power they have lost in recent years.
Mr. President, when dairy farmers across the country voted on a
referendum two years ago--perhaps the most significant change in dairy
policy in sixty years--they didn't actually get to vote. Instead, their
dairy marketing cooperatives will cast their votes for them.
This procedure is called bloc voting and it is used all the time.
Basically, a Cooperative's Board of Directors decides that, in the
interest of time, bloc voting will be implemented for that particular
vote. In the interest of time, but not always in the interest of their
producer owner-members.
Mr. President, I do think that bloc voting can be a useful tool in
some circumstances, but I have serious concerns about its use in every
circumstance. Farmers in Wisconsin and in other states tell me that
they do not agree with their Cooperative's view on every vote. Yet,
they have no way to preserve their right to make their single vote
count.
After speaking to farmers and officials at USDA, I have learned that
if a Cooperative bloc votes, individual members simply have no
opportunity to voice opinions separately. That seems unfair when you
consider what a monumental issue is at stake. Coops and their members
do not always have identical interests. We shouldn't ask farmers to
ignore that fact.
Mr. President, the Democracy for Dairy Producers Act of 2001 is
simple and fair. It provides that a cooperative cannot deny any of its
members a ballot if one or two or ten or all of the members chose to
vote on their own.
This will in no way slow down the process at USDA; implementation of
any rule or regulation would be able to proceed on schedule. Also, I do
not expect that this would change the final outcome of any given vote.
Coops could still cast votes for their members who do not exercise
their right to vote individually. And to the extent that coops
represent farmers interest, farmers are likely to vote along with the
coops, but whether they join the coops or not, farmers deserve the
right to vote according to their own views.
I urge my colleagues to return just a little bit of power to
America's farmers, and a little bit of pure democracy to the vote on
issues that have such an impact on their future.
I urge my colleagues to support the Democracy for Dairy Producers
Act, a dairy bill without regional bias.
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. 107

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

SECTION 1. SHORT TITLE.

The Act may be cited as the ``Democracy for Dairy Producers
Act of 2001''.

SEC. 2. MODIFIED BLOC VOTING.

(a) In General.--Notwithstanding paragraph (12) of section
8c of the Agricultural Adjustment Act (7 U.S.C. 608c),
reenacted with amendments by the Agricultural Marketing
Agreement Act of 1937, in the case of the referendum
conducted as part of the consolidation of Federal milk
marketing orders and related reforms under section 143 of the
Agricultural Market Transition Act (7 U.S.C. 7253), if a
cooperative association of milk producers elects to hold a
vote on behalf of its members as authorized by that
paragraph, the cooperative association shall provide to each
producer, on behalf of which the cooperative association is
expressing approval or disapproval, written notice
containing--
(1) a description of the questions presented in the
referendum;
(2) a statement of the manner in which the cooperative
association intends to cast its vote on behalf of the
membership; and
(3) information regarding the procedures by which a
producer may cast an individual ballot.
(b) Tabulation of Ballots.--At the time at which ballots
from a vote under subsection (a) are tabulated by the
Secretary of Agriculture, the Secretary shall adjust the vote
of a cooperative association to reflect individual votes
submitted by producers that are members of, stockholders in,
or under contract with, the cooperative association.
______

By Mr. FEINGOLD:
S. 108. A bill to reduce the number of executive branch political
appointees; to the Committee on Governmental Affairs.

legislation to Reduce the Number of Executive Branch Political
Appointments

Mr. FEINGOLD. Mr. President, I am pleased to reintroduce legislation
to reduce the number of presidential political appointees.
Specifically, the bill caps the number of political appointees at
2,000. The most recent Congressional Budget Office (CBO) estimates of
this measure is that it would save $382 million over the next five
years, and $872 million over the next 10 years.
The bill is based on the recommendations of a number of distinguished
panels, including most recently, the Twentieth Century Fund Task Force
on the Presidential Appointment Process. The task force findings are
only the latest in a long line of recommendations that we reduce the
number of political appointees in the Executive Branch. For many years,
the proposal has been included in CBO's annual publication Reducing the
Deficit: Spending and Revenue Options, and it was one of the central
recommendations of the National Commission on the Public Service,
chaired by former Federal Reserve Board Chairman Paul Volcker.
Between 1980 and 1992, the ranks of political appointees grew 17
percent, over three times as fast as the total number of Executive
Branch employees and looking back to 1960 their growth is even more
dramatic. In his book Thickening Government: Federal Government and the
Diffusion of Accountability, author Paul Light reports a startling 430
percent increase in the

[[Page S381]]

number of political appointees and senior executives in Federal
government between 1960 and 1992.
Mr. President, it is essential that any Administration be able to
implement the policies that brought it into office in the first place.
Government must be responsive to the priorities of the electorate. But
as the Volcker Commission noted, the great increase in the number of
political appointees in recent years has not made government more
effective or more responsive to political leadership. Indeed, in their
report, the Volcker Commission argued that the growing number of
presidential appointees may ``actually undermine effective presidential
control of the executive branch.'' The report went on to note that the
large number of presidential appointees simply cannot be managed
effectively by any President or White House. The Commission argued that
this lack of control and political focus ``may actually dilute the
President's ability to develop and enforce a coherent, coordinated
program and to hold cabinet secretaries accountable.''
Adding organizational layers of political appointees can also
restrict access to important resources, while doing nothing to reduce
bureaucratic impediments.
In commenting on this problem, author Light noted, ``As this sediment
has thickened over the decades, presidents have grown increasingly
distant from the lines of government, and the front lines from them.''
Light added that ``Presidential leadership, therefore, may reside in
stripping government of the barriers to doing its job effectively. .
.''
The Volcker Commission also asserted that this thickening barrier of
temporary appointees between the President and career officials can
undermine development of a proficient civil service by discouraging
talented individuals from remaining in government service or even
pursuing a career in government in the first place.
Mr. President, former Attorney General Elliot Richardson put it well
when he noted:

But a White House personnel assistant sees the position of
deputy assistant secretary as a fourth-echelon slot. In his
eyes that makes it an ideal reward for a fourth-echelon
political type - a campaign advance man, or a regional
political organizer. For a senior civil servant, it's irksome
to see a position one has spent 20 or 30 years preparing for
preempted by an outsider who doesn't know the difference
between an audit exception and an authorizing bill.

Mr. President, the report of the Twentieth Century Fund Task Force on
the Presidential Appointment Process identified another problem
aggravated by the excessive number of political appointees, namely the
increasingly lengthy process of filling these thousands of positions.
As the Task Force reported, both President Bush and President Clinton
were into their presidencies for many months before their leadership
teams were fully in place. The Task Force noted that ``on average,
appointees in both administrations were confirmed more than eight
months after the inauguration--one-sixth of an entire presidential
term.'' By contrast, the report noted that in the presidential
transition of 1960, ``Kennedy appointees were confirmed, on average,
two and a half months after the inauguration.''
In addition to leaving vacancies among key leadership positions in
government, the appointment process delays can have a detrimental
effect on potential appointees. The Twentieth Century Fund Task Force
reported that appointees can ``wait for months on end in a limbo of
uncertainty and awkward transition from the private to the public
sector.''
Mr. President, as we reduce the number of government employees,
streamline agencies, and make government more responsive, we should
also right size the number of political appointees, ensuring a
sufficient number to implement the policies of any Administration
without burdening the Federal budget with unnecessary, possibly
counterproductive political jobs.
Mr. President, I ask unanimous consent that the bill be printed in
the Record immediately following my remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 108

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

SECTION 1. REDUCTION IN NUMBER OF POLITICAL APPOINTEES.

(a) Definition.--In this section, the term ``political
appointee'' means any individual who--
(1) is employed in a position on the executive schedule
under sections 5312 through 5316 of title 5, United States
Code;
(2) is a limited term appointee, limited emergency
appointee, or noncareer appointee in the senior executive
service as defined under section 3132(a) (5), (6), and (7) of
title 5, United States Code, respectively; or
(3) is employed in a position in the executive branch of
the Government of a confidential or policy-determining
character under Schedule C of subpart C of part 213 of title
5 of the Code of Federal Regulations.
(b) Limitation.--The President, acting through the Office
of Management and Budget and the Office of Personnel
Management, shall take such actions as necessary (including
reduction in force actions under procedures established under
section 3595 of title 5, United States Code) to ensure that
the total number of political appointees shall not exceed
2,000.
(c) Effective Date.--This section shall take effect on
October 1, 2001.
______

By Mr. FEINGOLD (for himself, Mr. Jeffords, and Mr. Kohl):
S. 109. A bill to establish the Dairy Farmer Viability Commission, to
the Committee on Agriculture, Nutrition, and Forestry.

Dairy Farmer Viability Act

Mr. FEINGOLD. Mr. President, I rise today to introduce the Dairy
Farmers Viability Act, legislation to establish a Commission to provide
Congress with legislative and administrative recommendations to address
dairy farming prices, stability, and marketplace competition and
concentration.
As Congress moves to revise the 1996 farm bill, it is of paramount
importance that we fashion dairy policies to meet the needs of all
dairy farmers. I have taken the floor a number of times to talk about
the challenges facing Wisconsin's dairy farmers, and many of those
challenges are a result of inequities in the current pricing structure
of milk. While I may disagree on many levels with my friend from
Vermont, Senator Jeffords, there are a number of issues that face all
dairy farmers, whether they are in Vermont, Idaho or Wisconsin.
This commission will help Congress address many of these common
concerns, such as reducing the concentration in the marketplace,
increasing competition in rural America, and improving farm-gate
prices. I hope my colleagues will work with us to move this commission
forward quickly and help to address the concerns of dairy farmers
nationwide.
Mr. President, I ask that the full 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. 109

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 ``Dairy Farmer Viability
Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the farm-retail price spread (the difference between
farm and retail values) for dairy products has doubled since
the early 1980's;
(2) the price of raw milk sent to the market by dairy
producers has fallen to levels received in 1978; and
(3) the number of family-sized dairy operations has
decreased by almost 75 percent in the last 2 decades, with
some States losing nearly 10 percent of their dairy farmers
in recent months.

SEC. 3. ESTABLISHMENT OF COMMISSION.

(a) Establishment.--There is established a commission to be
known as the ``Dairy Farmer Viability Commission'' (referred
to in this Act as the ``Commission'').
(b) Membership.--
(1) Composition.--The Commission shall be composed of 15
members appointed by the Secretary.
(2) Prohibition on federal government employment.--A member
of the Commission appointed under paragraph (1) shall not be
an employee or former employee of the Federal Government.
(3) Date of appointments.--The appointment of a member of
the Commission shall be made as soon as practicable after the
date of enactment of this Act.
(c) Term; Vacancies.--
(1) Term.--A member shall be appointed for the life of the
Commission.
(2) Vacancies.--A vacancy on the Commission--
(A) shall not affect the powers of the Commission; and
(B) shall be filled in the same manner as the original
appointment was made.

[[Page S382]]

(d) Initial Meeting.--Not later than 30 days after the date
on which all members of the Commission have been appointed,
the Commission shall hold the initial meeting of the
Commission.
(e) Meetings.--The Commission shall meet at the call of the
Chairperson.
(f) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
(g) Chairperson and Vice Chairperson.--The Commission shall
select a Chairperson and Vice Chairperson from among the
members of the Commission.

SEC. 4. DUTIES.

(a) Study.--The Commission shall conduct a study on matters
relating to improving the viability of dairy farming.
(b) Recommendations.--The Commission shall develop
recommendations to improve the viability of dairy farming
after considering, with respect to dairy industry--
(1) farm prices;
(2) competition;
(3) leverage;
(4) stability; and
(5) concentration in the marketplace.
(c) Report.--Not later than 1 year after the date of
enactment of this Act, the Commission shall submit to the
President and Congress a report that contains--
(1) a detailed statement of the findings and conclusions of
the Commission; and
(2) the recommendations of the Commission for such
legislation and administrative actions as the Commission
considers appropriate.

SEC. 5. POWERS.

(a) Hearings.--The Commission may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Commission considers advisable
to carry out this Act.
(b) Information From Federal Agencies.--
(1) In general.--The Commission may secure directly from a
Federal agency such information as the Commission considers
necessary to carry out this Act.
(2) Provision of information.--On request of the
Chairperson of the Commission, the head of the agency shall
provide the information to the Commission.
(c) Postal Services.--The Commission may use the United
States mails in the same manner and under the same conditions
as other agencies of the Federal Government.
(d) Gifts.--The Commission may accept, use, and dispose of
gifts or donations of services or property.

SEC. 6. COMMISSION PERSONNEL MATTERS.

(a) Compensation of Members.--A member of the Commission
shall be compensated at a rate equal to the daily equivalent
of the annual rate of basic pay prescribed for level IV of
the Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during
which the member is engaged in the performance of the duties
of the Commission.
(b) Travel Expenses.--A member of the Commission shall be
allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for an employee of an agency
under subchapter I of chapter 57 of title 5, United States
Code, while away from the home or regular place of business
of the member in the performance of the duties of the
Commission.
(c) Staff.--
(1) In general.--The Chairperson of the Commission may,
without regard to the civil service laws (including
regulations), appoint and terminate an executive director and
such other additional personnel as are necessary to enable
the Commission to perform the duties of the Commission.
(2) Confirmation of executive director.--The employment of
an executive director shall be subject to confirmation by the
Commission.
(3) Compensation.--
(A) In general.--Except as provided in subparagraph (B),
the Chairperson of the Commission may fix the compensation of
the executive director and other personnel without regard to
the provisions of chapter 51 and subchapter III of chapter 53
of title 5, United States Code, relating to classification of
positions and General Schedule pay rates.
(B) Maximum rate of pay.--The rate of pay for the executive
director and other personnel shall not exceed the rate
payable for level V of the Executive Schedule under section
5316 of title 5, United States Code.
(d) Detail of Federal Government Employees.--
(1) In general.--An employee of the Federal Government may
be detailed to the Commission without reimbursement.
(2) Civil service status.--The detail of the employee shall
be without interruption or loss of civil service status or
privilege.
(e) Procurement of Temporary and Intermittent Services.--
The Chairperson of the Commission may procure temporary and
intermittent services in accordance with section 3109(b) of
title 5, United States Code, at rates for individuals that do
not exceed the daily equivalent of the annual rate of basic
pay prescribed for level V of the Executive Schedule under
section 5316 of that title.

SEC. 7. FUNDING.

The Secretary of Agriculture shall provide to the
Commission for each fiscal year such sums as are necessary to
carry out this Act, to be derived by transfer of a
proportionate amount of funds for administrative expenses
from each other account for which funds are made available to
the Department of Agriculture for administrative expenses for
the fiscal year.

SEC. 8. TERMINATION OF COMMISSION.

The Commission shall terminate 90 days after the date on
which the Commission submits the report of the Commission
under section 4(c).
______

By Mr. FEINGOLD:
S. 110. A bill to repeal the provision of law that provides automatic
pay adjustments for Members of Congress; to the Committee on
Governmental Affairs.

eliminating the automatic pay raise for congress

Mr. FEINGOLD. Mr. President, I am pleased to re-introduce legislation
that would put an end to automatic cost-of-living adjustments for
Congressional pay.
As my Colleagues are aware, it is an unusual thing to have the power
to raise our own pay. Few people have that ability. Most of our
constituents do not have that power. And that this power is so unusual
is good reason for the Congress to exercise that power openly, and to
exercise it subject to regular procedures that include debate,
amendment, and a vote on the Record.
Last year, the Senate initially voted down the conference report on
the Legislative Branch Appropriations bill. As I noted during the
debate on that bill, by considering the Treasury-Postal appropriations
bill as part of that conference report, shielded as it was from
amendment, the Senate blocked any opportunity to force an open debate
of a $3,800 pay raise for every Member of the Senate and the House of
Representatives. This process of pay raises without accountability must
end.
The stealth pay raise technique began with a change Congress enacted
in the Ethics Reform Act of 1989. In section 704 of that Act, Members
of Congress voted to make themselves entitled to an annual raise equal
to half a percentage point less than the employment cost index, one
measure of inflation. Many times, Congress has voted to deny itself the
raise, and Congress traditionally does that on the Treasury-Postal
Appropriations bill.
And by bringing the Treasury-Postal Appropriations bill to the Senate
floor for the first time last year in a conference report, without
Senate floor consideration, the majority leadership prevented anyone
from offering an amendment on that bill to block the pay raise. The
majority leadership tried to make it impossible even to put Senators on
record in an up-or-down vote directly for or against the pay raise,
nearly perfecting the technique of the stealth pay raise.
The question of how and whether Members of Congress can raise their
own pay was one that our Founders considered from the beginning of our
Nation. In August of 1789, as part of the package of 12 amendments
advocated by James Madison that included what has become our Bill of
Rights, the House of Representatives passed an amendment to the
Constitution providing that Congress could not raise its pay without an
intervening election. Almost exactly 211 years ago, on September 9,
1789, the Senate passed that amendment. In late September of 1789,
Congress submitted the amendments to the states.
Although the amendment on pay raises languished for two centuries, in
the 1980s, a campaign began to ratify it. While I was a member of the
Wisconsin state Senate, I was proud to help ratify the amendment. Its
approval by the Michigan legislature on May 7, 1992, gave it the needed
approval by three-fourths of the states.
The 27th Amendment to the Constitution now states: ``No law, varying
the compensation for the services of the senators and representatives,
shall take effect, until an election of representatives shall have
intervened.''
I try to honor that limitation in my own practices. In my own case,
throughout my 6-year term, I accept only the rate of pay that Senators
receive on the date on which I was sworn in as a Senator. And I return
to the Treasury any additional income Senators get, whether from a
cost-of-living adjustment or a pay raise we vote for ourselves. I don't
take a raise until my bosses, the people of Wisconsin, give me one at
the ballot box. That is the spirit of the 27th Amendment. The stealth
pay raises like the one that Congress allowed last year, at a minimum,
certainly violate the spirit of that amendment.

[[Page S383]]

Mr. President, this practice must end. To address it, I am re-
introducing this bill to end the automatic cost-of-living adjustment
for Congressional pay. Senators and Congressmen should have to vote up-
or-down to raise Congressional pay. My bill would simply require us to
vote in the open. We owe our constituents no less.
Mr. President, I ask unanimous consent that the bill be printed in
the Record immediately following my remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 110

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

SECTION 1. ELIMINATION OF AUTOMATIC PAY ADJUSTMENTS FOR
MEMBERS OF CONGRESS.

(a) In General.--Paragraph (2) of section 601(a) of the
Legislative Reorganization Act of 1946 (2 U.S.C. 31) is
repealed.
(b) Technical and Conforming Amendments.--Section 601(a)(1)
of such Act is amended--
(1) by striking ``(a)(1)'' and inserting ``(a)'';
(2) by redesignating subparagraphs (A), (B), and (C) as
paragraphs (1), (2), and (3), respectively; and
(3) by striking ``as adjusted by paragraph (2) of this
subsection'' and inserting ``adjusted as provided by law''.
(c) Effective Date.--This section shall take effect on
February 1, 2003.
______

By Mr. FEINGOLD (for himself and Mr. Kohl):
S. 111. A bill to amend the Dairy Production Stabilization Act of
1983 to ensure that all persons who benefit from the dairy promotion
and research program contribute to the cost of the program; to the
Committee on Agriculture, Nutrition, and Forestry.

dairy promotion fairness act

Mr. FEINGOLD. Mr. President, I rise today with my colleague Senator
Kohl to introduce the ``Dairy Promotion Fairness Act.'' This
legislation provides equity to domestic producers who have been paying
into the Promotion Program while importers have gotten a free ride.
Since the National Dairy Promotion and Research Board conducts only
generic promotion and general product research, domestic farmers and
importers alike benefit from these actions. The Dairy Promotion
Fairness Act requires that all dairy product importers contribute to
the program.
This bill supports the dairy marketing board's efforts to educate
consumers on the nutritional value of dairy products. It also treats
our farmers fairly--by asking them not to bear the entire financial
burden for a promotional program that benefits importers and domestic
producers alike. We have put our own producers at a competitive
disadvantage for far too long. It's high time importers paid for their
fair share of the program.
Mr. President, I ask unanimous consent that the full 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. 111

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 ``Dairy Promotion Fairness
Act''.

SEC. 2. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM.

(a) Declaration of Policy.--Section 110(b) of the Dairy
Production Stabilization Act of 1983 (7 U.S.C. 4501(b)) is
amended in the first sentence--
(1) by inserting after ``commercial use'' the following:
``and on imported dairy products''; and
(2) by striking ``products produced in the United States.''
and inserting ``products.''.
(b) Definitions.--Section 111 of the Dairy Production
Stabilization Act of 1983 (7 U.S.C. 4502) is amended--
(1) in subsection (k), by striking ``and'' at the end;
(2) in subsection (l), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(m) the term `imported dairy product' means any dairy
product that is imported into the United States, including
dairy products imported into the United States in the form
of--
``(1) milk and cream and fresh and dried dairy products;
``(2) butter and butterfat mixtures;
``(3) cheese; and
``(4) casein and mixtures; and
``(n) the term `importer' means a person that imports an
imported dairy product into the United States.''.
(c) Contingent Representation of Importers on Board.--
Section 113(b) of the Dairy Production Stabilization Act of
1983 (7 U.S.C. 4504(b)) is amended--
(1) by inserting ``National Dairy Promotion and Research
Board.--'' after ``(b)'';
(2) by designating the first through ninth sentences as
paragraphs (1) through (5) and paragraphs (7) through (10),
respectively, and indenting appropriately;
(3) in paragraph (2) (as so designated), by striking
``Members'' and inserting ``Except as provided in paragraph
(6), the members''; and
(4) by inserting after paragraph (5) (as so designated) the
following:
``(6) Importers.--
``(A) In general.--If representation of importers of
imported dairy products is required on the Board by another
law or a treaty to which the United States is a party, the
Secretary shall appoint not more than 2 members who are
representatives of importers.
``(B) Additional members; procedures.--The members
appointed under this paragraph--
``(i) shall be in addition to the members appointed under
paragraph (2); and
``(ii) shall be appointed from nominations submitted by
importers under such procedures as the Secretary determines
to be appropriate.''.
(d) Importer Assessment.--Section 113(g) of the Dairy
Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is
amended--
(1) by inserting ``Assessments.--'' after ``(g)'';
(2) by designating the first through fifth sentences as
paragraphs (1) through (5), respectively, and indenting
appropriately; and
(3) by adding at the end the following:
``(6) Importers.--
``(A) In general.--The order shall provide that each
importer of imported dairy products shall pay an assessment
to the Board in the manner prescribed by the order.
``(B) Rate.--The rate of assessment on imported dairy
products shall be determined in the same manner as the rate
of assessment per hundredweight or the equivalent of milk.
``(C) Value of products.--For the purpose of determining
the assessment on imported dairy products under subparagraph
(B), the value to be placed on imported dairy products shall
be established by the Secretary in a fair and equitable
manner.''.
(e) Records.--Section 113(k) of the Dairy Production
Stabilization Act of 1983 (7 U.S.C. 4504(k)) is amended in
the first sentence by striking ``person receiving'' and
inserting ``importer of imported dairy products, each person
receiving''.
______

By Mr. FEINGOLD (for himself, Mr. Kohl, and Mr. Wyden):
S. 112. A bill to terminate operation of the Extremely Low Frequency
Communication System of the Navy; to the Committee on Armed Services.
______

By Mr. FEINGOLD (for himself, Mr. Harkin, Mr. Wellstone, and Mr.
Wyden):
S. 113. A bill to terminate production under the D5 submarine-
launched ballistic missile program and to prohibit the backfit of
certain Trident I ballistic missile submarines to carry D5 submarine-
launched ballistic missiles; to the Committee on Armed Services.

DEFENSE LEGISLATION

Mr. FEINGOLD. Mr. President, today I am introducing two bills that I
hope will be a first step in helping to change fundamentally the way we
think about our national defense.
As I have said time and again, I strongly support our Armed Forces
and the excellent work they are doing to combat the new threats of the
21st century and beyond. I am concerned, however, that we are not
giving our forces the tools they need to combat these emerging threats.
Instead, a Cold War mentality continues to permeate the United States
defense establishment and we still cling to the strategies and weapons
that we used to fight--and win--the Cold War.
We have an historic opportunity, Mr. President. There is a new
President, a new Congress, and a pending Quadrennial Defense Review--
all at the dawn of a new millennium. We should take advantage of this
opportunity by restructuring our national defense policy to combat the
threats of the new century instead of continuing to guard against the
long-defeated perils of the last one.
In the coming months, I will introduce and support a number of
initiatives that I hope will help to turn the focus of our national
defense policy away from the Cold War that has already been won and
toward fielding a strong, agile force that can meet the emerging
threats of the new century head on.
The two bills I am introducing today are a first step toward this
goal. One of these bills would terminate the operation of the Navy's
Extremely Low Frequency communications system (Project ELF). The other
would end production of the Navy's Trident II submarine-launched
ballistic missile and would prohibit certain back-fits of Trident I
submarines.

[[Page S384]]

Both of these systems were designed to protect the United States
against an attack by the Soviet Union. Trident submarines, and the
deadly submarine-launched ballistic missiles they carry, were designed
specifically to attack targets inside the Soviet Union from waters off
the continental United States. Project ELF was designed to send short
one-way messages to ballistic and attack submarines that are submerged
in deep waters.
The first bill I am introducing today would terminate operations
under Project ELF, which is located in Clam Lake, Wisconsin, and
Republic, Michigan. I would like to thank the senior Senator from
Wisconsin [Mr. Kohl] and the Senator from Oregon [Mr. Wyden] for
cosponsoring this bill.
This bill would terminate operations at Project ELF, while
maintaining the infrastructure in Wisconsin and Michigan in the event
that a resumption in operations becomes necessary. If enacted, this
bill would save taxpayers nearly $14 million per year.
Project ELF is ineffective and unnecessary in the post-Cold War era.
Since ELF cannot transmit detailed messages, it serves as an expensive
``beeper'' system to tell submarines to come to the surface to receive
messages from other sources, and the subs cannot send a return message
to ELF in the event of an emergency. It takes ELF four minutes to send
a three-letter message to a deeply submerged submarine.
With the end of the Cold War, Project ELF becomes harder and harder
to justify. Our submarines no longer need to take that extra precaution
against Soviet nuclear forces. They can now surface on a regular basis
with less danger of detection or attack. They can also receive more
complicated messages through very low frequency (VLF) radio waves or
lengthier messages through satellite systems. It is hard to understand
why the taxpayers continue to be asked to pay $14 million a year for
what amounts to a beeper system that tells our submarines to come to
the surface to receive orders from another, more sophisticated source.
Further, continued operation of this facility is opposed by most
residents in my state. The members of the Wisconsin delegation have
fought hard for years to close down Project ELF; I have introduced
legislation during each Congress since taking office in 1993 to
terminate it; and I have even recommended it for closure to the Defense
Base Closure and Realignment Commission.
Project ELF has had a turbulent history. Since the idea for ELF was
first proposed in 1958, the project has been changed or canceled
several times. Residents of Wisconsin have opposed ELF since its
inception, but for years we were told that the national security
considerations of the Cold War outweighed our concerns about this
installation in our state. Ironically, this system became fully
operational in 1989--the same year the tide of democracy began to sweep
across Eastern Europe and the Soviet Union. Now, twelve years later,
the hammer and sickle has fallen and the Russian submarine fleet is in
disarray. But Project ELF still remains as a constant, expensive
reminder to the people of my state that the Department of Defense
remains focused on the past.
There also continue to be a number of public health and environmental
concerns associated with Project ELF. For almost two decades, we have
received inconclusive data on this project's effects on Wisconsin and
Michigan residents. In 1984, a U.S. District Court ordered that ELF be
shut down because the Navy paid inadequate attention to the system's
possible health effects and violated the National Environmental Policy
Act. Interestingly, that decision was overturned because U.S. national
security, at the time, prevailed over public health and environmental
concerns.
Numerous medical studies point to a possible link between exposure to
extremely low frequency electromagnetic fields and a variety of human
health effects and abnormalities in both animal and plant species.
In 1999, after six years of research, the National Institute of
Environmental Health Sciences released a report that did not prove
conclusively a link between electromagnetic fields and cancer, but the
report did not disprove it, either. Serious questions remain, Mr.
President, and many of my constituents are rightly concerned about this
issue.
In addition, I have heard from a number of dairy farmers who are
convinced that the stray voltage associated with ELF transmitters has
demonstrably reduced milk production. As we continue our efforts to
produce a sustainable balanced federal budget and reduce the national
debt, and as the Department of Defense continues to struggle to address
readiness and other concerns, it is clear that outdated programs such
as Project ELF should be closed down.
The second bill I am introducing today would terminate production
under the Navy's Trident II submarine-launched ballistic missile
program. It would also prohibit the Navy from moving forward with the
planned back-fits of two Trident I submarines to carry Trident II
missiles, which are currently scheduled for 2005 and 2006.
I am pleased to be joined in this effort by the Senator from Iowa
[Mr. Harkin], the Senator from Minnesota [Mr. Wellstone], and the
Senator from Oregon [Mr. Wyden].
Let me say at the outset that my bill will in no way prevent the Navy
from maintaining the current arsenal of Trident II missiles. Nor will
it affect those Trident II missiles that are currently in production.
Mr. President, the Navy currently has ten Trident II submarines, each
of which carries 24 Trident II (D5) missiles. Each of these missiles
contains eight independently targetable nuclear warheads, for a total
of 192 warheads per submarine. Each warhead packs between 300 to 450
kilotons of explosive power.
By comparison, the first atomic bomb that the United States dropped
on Hiroshima generated 15 kilotons of force. Let's do the math for just
one fully-equipped Trident II submarine.
Each warhead can generate up to 450 kilotons of force.
Each missile has eight warheads, and each submarine has 24 missiles.
That equals 86.4 megatons of force per submarine. That means that
each Trident II submarine carries the power to deliver devastation
which is the equivalent of 5,760 Hiroshimas.
And that is just one fully equipped submarine. As I noted earlier,
the Navy currently has ten such submarines.
Through fiscal year 2001, the Navy will have been authorized to
purchase 384 Trident II missiles for these submarines. Even taking into
account the 78 Trident II missiles that have been expended through
testing through calendar year 2000 and the four more that are scheduled
to be expended this year, the Navy will still have 302 missiles in
stock once those authorized to be purchased during FY2001 are
completed.
The Navy needs 240 missiles to fully equip ten Trident II submarines
with 24 missiles each. That leaves 62 ``extra'' missiles in the Navy's
inventory. And the Navy still plans to buy 41 more missiles over the
next four years, for a total purchase of 425 missiles. My bill would
terminate production of these missiles after the currently authorized
384.
In addition to the ten Trident II submarines, the Navy also has eight
Trident I submarines. The Navy plans to remove four of these submarines
(the Ohio, the Florida, the Michigan, and the Georgia) from strategic
service in 2003 and 2004 in order to comply with the provisions of the
START II treaty. Current plans call for the other four Trident I
submarines to be back-fitted to carry Trident II missiles. One of these
back-fits began in May 2000 (the Alaska); another is scheduled to begin
in February 2001 (the Nevada). The Navy wants to back-fit the last two
Trident I submarines (the Henry M. Jackson and the Alabama) in 2005 and
2006. My bill would prohibit those last two back-fits. It would not
affect the back-fits of the Alaska and the Nevada.
Thus, once the back-fits of the Alaska and the Nevada are completed,
the Navy will have a fleet of twelve submarines capable of carrying
Trident II missiles. This is more than enough firepower to be an
effective deterrent against the moth-balled Russian submarine fleet and
against the ballistic missile aspirations of rogue states including
China and North Korea.
I recognize that there is still a potential threat from rogue states
and from independent operators who seek to acquire ballistic missiles
and other weapons of mass destruction. I also recognize that our
submarine fleet and our

[[Page S385]]

arsenal of strategic nuclear weapons still have an important role to
play in warding off these threats. Their role, however, has diminished
dramatically from what it was at the height of the Cold War. Our
missile procurement and equipment upgrade decisions should reflect that
change and should reflect the realities of the post-Cold War world.
Our current ballistic missile capability is far superior to that of
any other country on the globe. And the capability of the Russian
military--the very force which these missiles were designed to
counter--is seriously degraded.
I cannot understand the need for more Trident II missiles and more
submarines to carry them at a time when the Governments of the United
States and Russia are in negotiations to implement START II and are
also discussing a framework for START III. These agreements call for
reductions in our nuclear arsenal, not increases. To spend scarce
resources on building more missiles now and on back-fitting two more
submarines to carry them in the coming years is short-sighted and could
seriously undermine our efforts to negotiate further arms reductions
with Russia.
In conclusion, Mr. President, we should reexamine our national
defense policy at the earliest possible date. The forthcoming
Quadrennial Defense Review presents an excellent opportunity to do just
that. We should not miss this opportunity to begin to transform our
Armed Forces from the structure and strategies that won the Cold War to
a fiscally responsible force that is adequately trained and equipped to
combat the new challenges of the 21st century and beyond. The
legislation I am introducing today is a step in that direction.
Mr. President, I ask unanimous consent that both of these bills be
printed in the Record at the conclusion of my remarks.
There being no objection, the bills were ordered to be printed in the
Record, as follows:

S. 112

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

SECTION 1. TERMINATION OF OPERATION OF THE EXTREMELY LOW
FREQUENCY COMMUNICATION SYSTEM.

(a) Termination Required.--The Secretary of the Navy shall
terminate the operation of the Extremely Low Frequency
Communication System of the Navy.
(b) Maintenance of Infrastructure.--The Secretary shall
maintain the infrastructure necessary for resuming operation
of the Extremely Low Frequency Communication System.

S. 113

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

SECTION 1. TERMINATION OF D5 SUBMARINE-LAUNCHED BALLISTIC
MISSILE PROGRAM.

(a) Termination of Program.--The Secretary of Defense shall
terminate production of D5 submarine-launched ballistic
missiles under the D5 submarine-launched ballistic missile
program.
(b) Payment of Termination Costs.--Funds available on or
after the date of the enactment of this Act for obligation
for the D5 submarine-launched ballistic missile program may
be obligated for production under that program only for
payment of the costs associated with the termination of
production under this Act.

SEC. 2. PROHIBITION ON D5 TRIDENT II BACKFIT SCHEDULED TO
COMMENCE IN 2005 AND 2006.

(a) Prohibition on Backfit of Certain Submarines.--The
Secretary of Defense may not carry out the modifications of
two Trident I submarines to enable such submarines to be
deployed with Trident II D5 submarine-launched ballistic
missiles that are currently scheduled to commence in 2005 and
2006, respectively.
(b) Prohibition on Use of Funds.--Notwithstanding any other
provision of law, no funds appropriated or otherwise made
available to the Department of Defense may be obligated or
expended for purposes of carrying out the modifications of
Trident I submarines described in subsection (a).

SEC. 3. CURRENT PROGRAM ACTIVITIES.

Nothing in sections 1 and 2 shall be construed to prohibit
or otherwise affect the availability of funds for the
following:
(1) Production of D5 submarine-launched ballistic missiles
in production on the date of the enactment of this Act.
(2) Maintenance after the date of the enactment of this Act
of the arsenal of D5 submarine-launched ballistic missiles in
existence on such date, including the missiles described in
paragraph (1).
______

By Mr. FEINGOLD:
S. 114. A bill to terminate the Uniformed Services University of the
Health Sciences; to the Committee on Armed Services.

terminating the uniformed services university of the health sciences

Mr. FEINGOLD. Mr. President, I am today re-introducing legislation
terminating the Uniformed Services University of the Health Sciences
(USUHS), a medical school run by the Department of Defense. The measure
is one I proposed when I ran for the U.S. Senate, and was part of a
larger, 82 point plan to reduce the Federal budget deficit. The most
recent estimates of the Congressional Budget Office (CBO) project that
terminating the school would save $273 million over the next five
years, and when completely phased-out, would generate $450 million in
savings over five years.
USUHS was created in 1972 to meet an expected shortage of military
medical personnel. Today, however, USUHS accounts for only a small
fraction of the military's new physicians, less than 12 percent in 1994
according to CBO. This contrasts dramatically with the military's
scholarship program which provided over 80 percent of the military's
new physicians in that year.
Mr. President, what is even more troubling is that USUHS is also the
single most costly source of new physicians for the military. CBO
reports that based on figures from 1995, each USUHS trained physician
costs the military $615,000. By comparison, the scholarship program
cost about $125,000 per doctor, with other sources providing new
physicians at a cost of $60,000. As CBO has noted, even adjusting for
the lengthier service commitment required of USUHS trained physicians,
the cost of training them is still higher than that of training
physicians from other sources, an assessment shared by the Pentagon
itself. Indeed, CBO's estimate of the savings generated by this measure
also includes the cost of obtaining physicians from other sources.
The House of Representatives has voted to terminate this program on
several occasions, and the Vice President's National Performance Review
joined others, ranging from the Grace Commission to the CBO, in raising
the question of whether this medical school, which graduated its first
class in 1980, should be closed because it is so much more costly than
alternative sources of physicians for the military.
Mr. President, the real issue we must address is whether USUHS is
essential to the needs of today's military structure, or if we can do
without this costly program. The proponents of USUHS frequently cite
the higher retention rates of USUHS graduates over physicians obtained
from other sources as a justification for continuation of this program,
but while a greater percentage of USUHS trained physicians may remain
in the military longer than those from other sources, the Pentagon
indicates that the alternative sources already provide an appropriate
mix of retention rates. Testimony by the Department of Defense before
the Subcommittee on Force Requirements and Personnel noted that the
military's scholarship program meets the retention needs of the
services.
And while USUHS only provides a small fraction of the military's new
physicians, it is important to note that relying primarily on these
other sources has not compromised the ability of military physicians to
meet the needs of the Pentagon. According to the Office of Management
and Budget, of the approximately 2,000 physicians serving in Desert
Storm, only 103, about 5%, were USUHS trained.
Mr. President, let me conclude by recognizing that USUHS has some
dedicated supporters in the U.S. Senate, and I realize that there are
legitimate arguments that those supporters have made in defense of this
institution. The problem, however, is that the federal government
cannot afford to continue every program that provides some useful
function.
This is especially true in the area of defense spending. Many in this
body argue that the Defense budget is too tight, that a significant
increase in spending is needed to address concerns about shortfalls in
recruitment and retention, maintenance backlogs, and other indicators
of a lower level of readiness.
Mr. President, the debate over our level of readiness is certainly
important, and it may well be that more Defense funding should be
channeled to

[[Page S386]]

these specific areas of concern. But before advocates of an increased
Defense budget ask taxpayers to foot the bill for hundreds of billions
more in spending, they owe it to those taxpayers to trim Defense
programs that are not justified.
In the face of our staggering national debt, we must prioritize and
eliminate programs that can no longer be sustained with limited federal
dollars, or where a more cost-effective means of fulfilling those
functions can be substituted. The future of USUHS continues to be
debated precisely because it does not appear to pass the higher
threshold tests which must be applied to all federal spending programs.
Mr. President, I ask unanimous consent that the text of the
legislation be printed in the Record immediately following my remarks.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 114

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 ``Uniformed Services
University of the Health Sciences Termination and Deficit
Reduction Act of 2001''.

SEC. 2. TERMINATION OF THE UNIFORMED SERVICES UNIVERSITY OF
THE HEALTH SCIENCES.

(a) Termination.--
(1) In general.--The Uniformed Services University of the
Health Sciences is terminated.
(2) Conforming amendments.--
(A) Chapter 104 of title 10, United States Code, is
repealed.
(B) The table of chapters at the beginning of subtitle A of
such title, and at the beginning of part III of such
subtitle, are each amended by striking out the item relating
to chapter 104.
(b) Effective Dates.--
(1) Termination.--The termination of the Uniformed Services
University of the Health Sciences under subsection (a)(1)
shall take effect on the day after the date of the graduation
from the university of the last class of students that
enrolled in such university on or before the date of the
enactment of this Act.
(2) Amendments.--The amendments made by subsection (a)(2)
shall take effect on the date of the enactment of this Act,
except that the provisions of chapter 104 of title 10, United
States Code, as in effect on the day before such date, shall
continue to apply with respect to the Uniformed Services
University of the Health Sciences until the termination of
the university under this section.
______

By Mr. FEINGOLD (for himself, Mr. Leahy, and Mr. Jeffords):
S. 115. A bill to amend the Internal Revenue Code of 1986 to repeal
the percentage depletion allowance for certain hardrock mines, and for
other purposes; to the Committee on Finance.

legislation to eliminate percentage depletion allowances on public
lands

Mr. FEINGOLD. Mr. President, today I am reintroducing legislation to
eliminate from the federal tax code percentage depletion allowances for
hardrock minerals mined on federal public lands. I am joined in
introducing this legislation by my colleagues from Vermont, the senior
Senator (Mr. Leahy) and the junior Senator (Mr. Jeffords).
President Clinton proposes the elimination of the percentage
depletion allowance on public lands in his FY 2001 budget. The
President's FY 2001 budget estimated that, under this legislation,
income to the federal treasury from the elimination of percentage
depletion allowances for hardrock mining on public lands would total
$410 million over five years, and $823 million over ten years. These
savings are calculated as the excess amount of federal revenues above
what would be collected if depletion allowances were limited to sunk
costs in capital investments. Percentage depletion allowances are
contained in the tax code for extracted fuel, minerals, metal and other
mined commodities. These allowances have a combined value, according to
estimates by the Joint Committee on Taxation, of $4.8 billion.
Mr. President, these percentage depletion allowances were initiated
by the Corporation Excise Act of 1909. That's right, Mr. President,
initiated in 1909. Provisions for a depletion allowance based on the
value of the mine were made under a 1912 Treasury Department
regulation, but difficulty in applying this accounting principle to
mineral production led to the initial codification of the mineral
depletion allowance in the Tariff Act of 1913. The Revenue Act of 1926
established percentage depletion much in its present form for oil and
gas. The percentage depletion allowance was then extended to metal
mines, coal, and other hardrock minerals by the Revenue Act of 1932,
and has been adjusted several times since.
Percentage depletion allowances were historically placed in the tax
code to reduce the effective tax rates in the mineral and extraction
industries far below tax rates on other industries, providing
incentives to increase investment, exploration and output. However,
percentage depletion also makes it possible to recover many times the
amount of the original investment.

There are two methods of calculating a deduction to allow a firm to
recover the costs of their capital investment: cost depletion, and
percentage depletion. Cost depletion for the recovery of the actual
capital investment--the costs of discovery, purchasing, and developing
a mineral reserve--over the period during which the reserve produces
income. Using cost depletion, a company would deduct a portion of its
original capital investment minus any previous deductions, in an amount
that is equal to the fraction of the remaining recoverable reserves.
Under this method, the total deductions cannot exceed the original
capital investment.
However, under percentage depletion, the deduction for recovery of a
company's investment is a fixed percentage of ``gross income''--namely,
sales revenue--from the sale of the mineral. Under this method, total
deductions typically exceed, let me be clear on that point, Mr.
President, exceed the capital that the company invested.
The rates for percentage depletion are quite significant. Section 613
of the U.S. Code contains depletion allowances for more than 70 metals
and minerals, at rates ranging from 10 percent to 22 percent.
In addition to repealing the percentage depletion allowances for
minerals mined on public lands, Mr. President, my bill also creates a
new fund, called the Abandoned Mine Reclamation Fund. One fourth of the
revenue raised by the bill, or approximately $120 million dollars, will
be deposited into an interest bearing fund in the Treasury to be used
to clean up abandoned hardrock mines in states that are subject to the
1872 Mining Law. The Mineral Policy Center estimates that there are
557,650 hardrock abandoned mine sites nationwide and the cost of
cleaning them up will range from $32.7 billion to $71.5 billion.
There are currently no comprehensive federal or state programs to
address the need to clean up old mine sites. Reclaiming these sites
requires the enactment of a program with explicit authority to clean up
abandoned mine sites and the resources to do it. My legislation is a
first step toward providing the needed authority and resources.
Mr. President, in today's budget climate we are faced with the
question of who should bear the costs of exploration, development, and
production of natural resources: all taxpayers, or the users and
producers of the resource? For more than a century, the mining industry
has been paying next to nothing for the privilege of extracting
minerals from public lands and then abandoning its mines. Now those
mines are adding to the nation's environmental and financial burdens.
We face serious budget choices this fiscal year, yet these subsidies
remain a persistent tax expenditure that raise the deficit for all
citizens or shift a greater tax burden to other taxpayers to compensate
for the special tax breaks provided to the mining industry.
Mr. President, the measure I am introducing is fairly
straightforward. It eliminates the percentage depletion allowance for
hardrock minerals mined on public lands while continuing to allow
companies to recover reasonable cost depletion.
Though at one time there may have been an appropriate role for a
government-driven incentive for enhanced mineral production, there is
now sufficient reason to adopt a more reasonable depletion allowance
that is consistent with those given to other businesses.
Mr. President, the time has come for the Federal Government to get
out of the business of subsidizing business. We can no longer afford
its costs in dollars or its cost to the health of our citizens.

[[Page S387]]

This legislation is one step toward the goal of ending these corporate
welfare subsidies.
I ask unanimous consent that a copy of the legislation be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 115

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 ``Elimination of Double
Subsidies for the Hardrock Mining Industry Act of 2001''.

SEC. 2. REPEAL OF PERCENTAGE DEPLETION ALLOWANCE FOR CERTAIN
HARDROCK MINES.

(a) In General.--Section 613(a) of the Internal Revenue
Code of 1986 (relating to percentage depletion) is amended by
inserting ``(other than hardrock mines located on lands
subject to the general mining laws or on land patented under
the general mining laws)'' after ``In the case of the
mines''.
(b) General Mining Laws Defined.--Section 613 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``(f) General Mining Laws.--For purposes of subsection (a),
the term `general mining laws' means those Acts which
generally comprise chapters 2, 12A, and 16, and sections 161
and 162 of title 30 of the United States Code.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.

SEC. 3. ABANDONED MINE RECLAMATION FUND.

(a) In General.--Subchapter A of chapter 98 of the Internal
Revenue Code of 1986 (relating to establishment of trust
funds) is amended by adding at the end the following:

``SEC. 9511. ABANDONED MINE RECLAMATION FUND.

``(a) Creation of Trust Fund.--There is established in the
Treasury of the United States a trust fund to be known as the
`Abandoned Mine Reclamation Trust Fund' (in this section
referred to as `Trust Fund'), consisting of such amounts as
may be appropriated or credited to the Trust Fund as provided
in this section or section 9602(b).
``(b) Transfers to Trust Fund.--There are hereby
appropriated to the Trust Fund amounts equivalent to 25
percent of the additional revenues received in the Treasury
by reason of the amendments made by section 2 of the
Elimination of Double Subsidies for the Hardrock Mining
Industry Act of 2001.
``(c) Expenditures From Trust Fund.--
``(1) In general.--Amounts in the Trust Fund shall be
available, as provided in appropriation Acts, to the
Secretary of the Interior for--
``(A) the reclamation and restoration of lands and water
resources described in paragraph (2) adversely affected by
mineral (other than coal and fluid minerals) and mineral
material mining, including--
``(i) reclamation and restoration of abandoned surface mine
areas and abandoned milling and processing areas,
``(ii) sealing, filling, and grading abandoned deep mine
entries,
``(iii) planting on lands adversely affected by mining to
prevent erosion and sedimentation,
``(iv) prevention, abatement, treatment, and control of
water pollution created by abandoned mine drainage, and
``(v) control of surface subsidence due to abandoned deep
mines, and
``(B) the expenses necessary to accomplish the purposes of
this section.
``(2) Lands and water resources.--
``(A) In general.--The lands and water resources described
in this paragraph are lands within States that have land and
water resources subject to the general mining laws or lands
patented under the general mining laws--
``(i) which were mined or processed for minerals and
mineral materials or which were affected by such mining or
processing, and abandoned or left in an inadequate
reclamation status before the date of the enactment of this
section,
``(ii) for which the Secretary of the Interior makes a
determination that there is no continuing reclamation
responsibility under State or Federal law, and
``(iii) for which it can be established to the satisfaction
of the Secretary of the Interior that such lands or resources
do not contain minerals which could economically be extracted
through remining of such lands or resources.
``(B) Certain sites and areas excluded.--The lands and
water resources described in this paragraph shall not include
sites and areas which are designated for remedial action
under the Uranium Mill Tailings Radiation Control Act of 1978
(42 U.S.C. 7901 et seq.) or which are listed for remedial
action under the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. 9601 et
seq.).
``(3) General mining laws.--For purposes of paragraph (2),
the term `general mining laws' means those Acts which
generally comprise chapters 2, 12A, and 16, and sections 161
and 162 of title 30 of the United States Code.''.
(b) Conforming Amendment.--The table of sections for
subchapter A of chapter 98 of the Internal Revenue Code of
1986 is amended by adding at the end the following:

``Sec. 9511. Abandoned Mine Reclamation Trust Fund.''.
______

By Mr. FEINGOLD:
S. 116. A bill to amend the Reclamation Reform Act of 1982 to clarify
the acreage limitations and incorporate a means test for certain farm
operations, and for other purposes; to the Committee on Energy and
Natural Resources.

irrigation subsidy reduction act of 2001

Mr. FEINGOLD. Mr. President, today I am reintroducing a measure that
I sponsored in the 106th Congress to reduce the amount of federal
irrigation subsidies received by large agribusiness interests. I
believe that reforming federal water pricing policy by reducing
subsidies is important as a means to achieve our broader objectives of
achieving a truly balanced budget. This legislation is also needed to
curb fundamental abuses of reclamation law that cost the taxpayer
millions of dollars every year.
In 1901, President Theodore Roosevelt proposed legislation, which
came to be known as the Reclamation Act of 1902, to encourage
development of family farms throughout the western United States. The
idea was to provide needed water for areas that were otherwise dry and
give small farms--those no larger than 160 acres--a chance, with a
helping hand from the federal government, to establish themselves.
According to a 1996 General Accounting Office report, since the passage
of the Reclamation Act, the federal government has spent $21.8 billion
to construct 133 water projects in the west which provide water for
irrigation. Irrigators, and other project beneficiaries, are required
under the law to repay to the federal government their allocated share
of the costs of constructing these projects.
However, as a result of the subsidized financing provided by the
federal government, some of the beneficiaries of federal water projects
repay considerably less than their full share of these costs. According
to the 1996 GAO report, irrigators generally receive the largest amount
of federal financial assistance. Since the initiation of the irrigation
program in 1902, construction costs associated with irrigation have
been repaid without interest. The GAO further found, in reviewing the
Bureau of Reclamation's financial reports, that $16.9 billion, or 78
percent, of the $21.8 billion of federal investment in water projects
is considered to be reimbursable. Of the reimbursable costs, the
largest share--$7.1 billion--is allocated to irrigators. As of
September 30, 1994 irrigators have repaid only $941 million of the $7.1
billion they owe. GAO also found that the Bureau of Reclamation will
likely shift $3.4 billion of the debt owed by irrigators to other users
of the water projects for repayment.
There are several reasons why irrigators continue to receive such
significant subsidies. Under the Reclamation Reform Act of 1982,
Congress acted to expand the size of the farms that could receive
subsidized water from 160 acres to 960 acres. The RRA of 1982 expressly
prohibits farms that exceed 960 acres in size from receiving federally-
subsidized water. These restrictions were added to the Reclamation law
to close loopholes through which federal subsidies were flowing to
large agribusinesses rather than the small family farmers that
Reclamation projects were designed to serve. Agribusinesses were
expected to pay full cost for all water received on land in excess of
their 960 acre entitlement. Despite the express mandate of Congress,
regulations promulgated under the Reclamation Reform Act of 1982 have
failed to keep big agricultural water users from receiving federal
subsidies. The General Accounting Office and the Inspector General of
the Department of the Interior continue to find that the acreage limits
established in law are circumvented through the creation of
arrangements such as farming trusts. These trusts, which in total
acreage well exceed the 960 acre limit, are comprised of smaller units
that are not subject to the reclamation acreage cap. These smaller
units are farmed under a single management agreement often through a
combination of leasing and ownership.
In a 1989 GAO report, the activities of six agribusiness trusts were
fully explored. According to GAO, one 12,345

[[Page S388]]

acre cotton farm (roughly 20 square miles), operating under a single
partnership, was reorganized to avoid the 960 acre limitation into 15
separate land holdings through 18 partnerships, 24 corporations, and 11
trusts which were all operated as one large unit. A seventh very large
trust was the sole topic of a 1990 GAO report. The Westhaven trust is a
23,238 acre farming operation in California's Central Valley. It was
formed for the benefit of 326 salaried employees of the J.G. Boswell
Company. Boswell, GAO found, had taken advantage of section 214 of the
RRA, which exempts from its 960 acre limit land held for beneficiaries
by a trustee in a fiduciary capacity, as long as no single
beneficiary's interest exceeds the law's ownership limits. The RRA, as
I have mentioned, does not preclude multiple land holdings from being
operated collectively under a trust as one farm while qualifying
individually for federally subsidized water. Accordingly, the J.G.
Boswell Company re-organized 23,238 acres it held as the Boston Ranch
by selling them to the Westhaven Trust, with the land holdings
attributed to each beneficiary being eligible to receive federally
subsidized water.
Before the land was sold to Westhaven Trust, the J.G. Boswell Company
operated the acreage as one large farm and paid full cost for the
federal irrigation water delivered for the 18-month period ending in
May 1989. When the trust bought the land, due to the loopholes in the
law, the entire acreage became eligible to receive federally subsidized
water because the land holding attributed to the 326 trust
beneficiaries range from 21 acres to 547 acres--all well under the 960
acre limit.
In the six cases the GAO reviewed in 1989, owners or lessees paid a
total of about $1.3 million less in 1987 for federal water then they
would have paid if their collective land holdings were considered as
large farms subject to the Reclamation Act acreage limits. Had
Westhaven Trust been required to pay full cost, GAO estimated in 1990,
it would have paid $2 million more for its water. The GAO also found,
in all seven of these cases, that reduced revenues are likely to
continue unless Congress amends the Reclamation Act to close the
loopholes allowing benefits for trusts.
The Department of the Interior has acknowledged that these problems
do exist. Interior published a final rulemaking in 1998 to require farm
operators who provide services to more than 960 nonexempt acres
westwide, held by a single trust or legal entity or any combination of
trusts and legal entities to submit RRA forms to the district(s) where
such land is located. Water districts are now required to provide
specific information about farm operators to Interior annually. This
information is an important step toward enforcing the legislation that
I am reintroducing today.
This legislation combines various elements of proposals introduced by
other members of Congress to close loopholes in the 1982 legislation
and to impose a $500,000 means-test. This new approach limits the
amount of subsidized irrigation water delivered to any operation in
excess of the 960 acre limit which claimed $500,000 or more in gross
income, as reported on their most recent IRS tax form. If the $500,000
threshold were exceeded, an income ratio would be used to determine how
much of the water should be delivered to the user at the full-cost
rate, and how much at the below-cost rate. For example, if a 961 acre
operation earned $1 million, a ratio of $500,000 (the means-test value)
divided by their gross income would determine the full cost rate, thus
the water user would pay the full cost rate on half of their acreage
and the below cost rate on the remaining half.
This means-testing proposal was featured, for the fifth year in a
row, in the 2000 Green Scissors report. This report is compiled
annually by Friends of the Earth and Taxpayers for Common Sense and
supported by a number of environmental, consumer and taxpayer groups.
The premise of the report is that there are a number of subsidies and
projects that could be cut to both reduce the deficit and benefit the
environment. This report underscores what I and many others in the
Senate have long known: we must eliminate practices that can no longer
be justified in light of our effort to achieve a truly balanced budget
and eliminate our national debt. The Green Scissors recommendation on
means-testing water subsidies indicates that if a test is successful in
reducing subsidy payments to the highest grossing 10% of farms, then
the federal government would recover between $440 million and $1.1
billion per year, or at least $2.2 billion over five years.
When countless federal program are subjected to various types of
means-test to limit benefits to those who truly need assistance, it
makes little sense to continue to allow large business interests to dip
into a program intended to help small entities struggling to survive.
Taxpayers have legitimate concerns when they learn that their hard
earned tax dollars are being expended to assist large corporate
interests in select regions of the country who benefit from these
loopholes, particularly in tight budgetary times. Other users of
federal water projects, such as the power recipients, should also be
concerned when they learn that they will be expected to pick up the tab
for a portion of the funds that irrigators were supposed to pay back.
The federal water program was simply never intended to benefit these
large interests, and I hope that legislative efforts, such as the
measure I am introducing today, will prompt Congress to fully
reevaluate our federal water pricing policy.
In conclusion, Mr. President, it is clear that the conflicting
policies of the federal government in this area are in need of reform,
and that Congress should act. Large agribusinesses should not be able
to continue to soak the taxpayers, and should pay their fair share. We
should act to close these loopholes and increase the return to the
treasury from irrigators as soon as possible. I ask unanimous consent
that the text of the measure be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 116

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 ``Irrigation Subsidy Reduction
Act of 2001''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the Federal reclamation program has been in existence
for over 90 years, with an estimated taxpayer investment of
over $70,000,000,000;
(2) the program has had and continues to have an enormous
effect on the water resources and aquatic environments of the
western States;
(3) irrigation water made available from Federal water
projects in the West is a very valuable resource for which
there are increasing and competing demands;
(4) the justification for providing water at less than full
cost was to benefit and promote the development of small
family farms and exclude large corporate farms, but this
purpose has been frustrated over the years due to inadequate
implementation of subsidy and acreage limits;
(5) below-cost water prices tend to encourage excessive use
of scarce water supplies in the arid regions of the West, and
reasonable price increases to the wealthiest western farmers
would provide an economic incentive for greater water
conservation;
(6) the Federal Government has increasingly applied
eligibility tests based on income for Federal entitlement and
subsidy programs, measures that are consistent with the
historic approach of the reclamation program's acreage
limitations that seek to limit water subsidies to smaller
farms; and
(7) including a means test based on gross income in the
reclamation program will increase the effectiveness of
carrying out the family farm goals of the Federal reclamation
laws.

SEC. 3. AMENDMENTS.

(a) Definitions.--Section 202 of the Reclamation Reform Act
of 1982 (43 U.S.C. 390bb) is amended--
(1) by redesignating paragraphs (7), (8), (9), (10), and
(11) as paragraphs (9), (10), (11), (12), and (13),
respectively;
(2) in paragraph (6), by striking ``owned or operated under
a lease which'' and inserting ``that is owned, leased, or
operated by an individual or legal entity and that'';
(3) by inserting after paragraph (6) the following:
``(7) Legal entity.--The term `legal entity' includes a
corporation, association, partnership, trust, joint tenancy,
or tenancy in common, or any other entity that owns, leases,
or operates a farm operation for the benefit of more than 1
individual under any form of agreement or arrangement.
``(8) Operator.--
``(A) In general.--The term `operator'--
``(i) means an individual or legal entity that operates a
single farm operation on a parcel (or parcel) of land that is
owned or leased by another person (or persons) under any form
of agreement or arrangement (or agreements or arrangements);
and

[[Page S389]]

``(ii) if the individual or legal entity--

``(I) is an employee of an individual or legal entity,
includes the individual or legal entity; or
``(II) is a legal entity that controls, is controlled by,
or is under common control with another legal entity,
includes each such other legal entity.

``(B) Operation of a farm operation.--For the purposes of
subparagraph (A), an individual or legal entity shall be
considered to operate a farm operation if the individual or
legal entity is the person that performs the greatest
proportion of the decisionmaking for and supervision of the
agricultural enterprise on land served with irrigation
water.''; and
(4) by adding at the end the following:
``(14) Single farm operation.--
``(A) In general.--The term `single farm operation' means
the total acreage of land served with irrigation water for
which an individual or legal entity is the operator.
``(B) Rules for determining whether separate parcels are
operated as a single farm operation.--
``(i) Equipment- and labor-sharing activities.--The conduct
of equipment- and labor-sharing activities on separate
parcels of land by separate individuals or legal entities
shall not by itself serve as a basis for concluding that the
farming operations of the individuals or legal entities
constitute a single farm operation.
``(ii) Performance of certain services.--The performance by
an individual or legal entity of an agricultural chemical
application, pruning, or harvesting for a farm operation on a
parcel of land shall not by itself serve as a basis for
concluding that the farm operation on that parcel of land is
part of a single farm operation operated by the individual or
entity on other parcels of land.''.
(b) Identification of Owners, Lessees, and Operators and of
Single Farm Operations.--The Reclamation Reform Act of 1982
(43 U.S.C. 390aa et seq.) is amended by inserting after
section 201 the following:

``SEC. 201A. IDENTIFICATION OF OWNERS, LESSEES, AND OPERATORS
AND OF SINGLE FARM OPERATIONS.

``(a) In General.--Subject to subsection (b), for each
parcel of land to which irrigation water is delivered or
proposed to be delivered, the Secretary shall identify a
single individual or legal entity as the owner, lessee, or
operator.
``(b) Shared Decisionmaking and Supervision.--If the
Secretary determines that no single individual or legal
entity is the owner, lessee, or other individual that
performs the greatest proportion of decisionmaking for and
supervision of the agricultural enterprise on a parcel of
land--
``(1) all individuals and legal entities that own, lease,
or perform a proportion of decisionmaking and supervision
that is equal as among themselves but greater than the
proportion performed by any other individual or legal entity
shall be considered jointly to be the owner, lessee, or
operator; and
``(2) all parcels of land of which any such individual or
legal entity is the owner, lessee, or operator shall be
considered to be part of the single farm operation of the
owner, lessee, or operator identified under subsection (1).
(c) Pricing.--Section 205 of the Reclamation Reform Act of
1982 (43 U.S.C. 390ee) is amended by adding at the end the
following:
``(d) Single Farm Operations Generating More Than $500,000
in Gross Farm Income.--
``(1) In general.--Notwithstanding subsections (a), (b),
and (c), in the case of--
``(A) a qualified recipient that reports gross farm income
from a single farm operation in excess of $500,000 for a
taxable year; or
``(B) a limited recipient that received irrigation water on
or before October 1, 1981, and that reports gross farm income
from a single farm operation in excess of $500,000 for a
taxable year;

irrigation water may be delivered to the single farm
operation of the qualified recipient or limited recipient at
less than full cost to a number of acres that does not exceed
the number of acres determined under paragraph (2).
``(2) Maximum number of acres to which irrigation water may
be delivered at less than full cost.--The number of acres
determined under this subparagraph is the number equal to the
number of acres of the single farm operation multiplied by a
fraction, the numerator of which is $500,000 and the
denominator of which is the amount of gross farm income
reported by the qualified recipient or limited recipient in
the most recent taxable year.
``(3) Inflation adjustment.--
``(A) In general.--The $500,000 amount under paragraphs (1)
and (2) for any taxable year beginning in a calendar year
after 2000 shall be equal to the product of--
``(i) $500,000, multiplied by
``(ii) the inflation adjustment factor for the taxable
year.
``(B) Inflation adjustment factor.--The term `inflation
adjustment factor' means, with respect to any calendar year,
a fraction the numerator of which is the GDP implicit price
deflator for the preceding calendar year and the denominator
of which is the GDP implicit price deflator for 2000. Not
later than April 1 of any calendar year, the Secretary shall
publish the inflation adjustment factor for the preceding
calendar year.
``(C) GDP implicit price deflator.--For purposes of
subparagraph (B), the term `GDP implicit price deflator'
means the first revision of the implicit price deflator for
the gross domestic product as computed and published by the
Secretary of Commerce.
``(D) Rounding.--If any increase determined under
subparagraph (A) is not a multiple of $100, the increase
shall be rounded to the next lowest multiple of $100.''.
(d) Certification of Compliance.--Section 206 of the
Reclamation Reform Act of 1982 (43 U.S.C. 390ff) is amended
to read as follows:

``SEC. 206. CERTIFICATION OF COMPLIANCE.

``(a) In General.--As a condition to the receipt of
irrigation water for land in a district that has a contract
described in section 203, each owner, lessee, or operator in
the district shall furnish the district, in a form prescribed
by the Secretary, a certificate that the owner, lessee, or
operator is in compliance with this title, including a
statement of the number of acres owned, leased, or operated,
the terms of any lease or agreement pertaining to the
operation of a farm operation, and, in the case of a lessee
or operator, a certification that the rent or other fees paid
reflect the reasonable value of the irrigation water to the
productivity of the land.
``(b) Documentation.--The Secretary may require a lessee or
operator to submit for the Secretary's examination--
``(1) a complete copy of any lease or other agreement
executed by each of the parties to the lease or other
agreement; and
``(2) a copy of the return of income tax imposed by chapter
1 of the Internal Revenue Code of 1986 for any taxable year
in which the single farm operation of the lessee or operator
received irrigation water at less than full cost.''.
(e) Trusts.--Section 214 of the Reclamation Reform Act of
1982 (43 U.S.C. 390nn) is repealed.
(f) Administrative Provisions.--
(1) Penalties.--Section 224(c) of the Reclamation Reform
Act of 1982 (43 U.S.C. 390ww(c)) is amended--
(A) by striking ``(c) The Secretary'' and inserting the
following:
``(c) Regulations; Data Collection; Penalties.--
``(1) Regulations; data collection.--The Secretary''; and
(B) by adding at the end the following:
``(2) Penalties.--Notwithstanding any other provision of
law, the Secretary shall establish appropriate and effective
penalties for failure to comply with any provision of this
Act or any regulation issued under this Act.''.
(2) Interest.--Section 224(i) of the Reclamation Reform Act
of 1982 (43 U.S.C. 390ww(i)) is amended by striking the last
sentence and inserting the following: ``The interest rate
applicable to underpayments shall be equal to the rate
applicable to expenditures under section 202(3)(C).''.
(g) Reporting.--Section 228 of the Reclamation Reform Act
of 1982 (43 U.S.C. 390zz) is amended by inserting ``operator
or'' before ``contracting entity'' each place it appears.
(h) Memorandum of Understanding.--The Reclamation Reform
Act of 1982 (43 U.S.C. 390aa et seq.) is amended--
(1) by redesignating sections 229 and 230 as sections 230
and 231; and
(2) by inserting after section 228 the following:

``SEC. 229. MEMORANDUM OF UNDERSTANDING.

``The Secretary, the Secretary of the Treasury, and the
Secretary of Agriculture shall enter into a memorandum of
understanding or other appropriate instrument to permit the
Secretary, notwithstanding section 6103 of the Internal
Revenue Code of 1986, to have access to and use of available
information collected or maintained by the Department of the
Treasury and the Department of Agriculture that would aid
enforcement of the ownership and pricing limitations of
Federal reclamation law.''.
______

By Mr. FEINGOLD (for himself and Mr. Jeffords):
S. 117. A bill to prohibit products that contain dry ultra-filtered
milk products or casein from being labeled as domestic natural cheese,
and for other purposes; to the Committee on Agriculture, Nutrition, and
Forestry.

quality cheese act

Mr. FEINGOLD. Mr. President, I am pleased to introduce the Quality
Cheese Act of 2000. This legislation will protect the consumer, save
taxpayer dollars and provide support to America's dairy farmers, who
have taken a beating in the marketplace in recent years.
When Wisconsin consumers have the choice, they will choose natural
Wisconsin cheese, but the Food and Drug Administration (FDA) and the
U.S. Department of Agriculture (USDA) may change current law, and
consumers won't know whether cheese is really all natural or not.
If the federal government creates a loophole for imitation cheese
ingredients to be used in U.S. cheese vats, cheese bearing the labels
``domestic'' and ``natural'' will no longer be truly accurate.
If USDA and FDA allow a change in federal rules, imitation milk
proteins known as milk protein concentrate or casein, could be used to
make cheese in

[[Page S390]]

place of the wholesome natural milk produced by cows in Wisconsin or
other part of the U.S.
Mr. President, I am deeply concerned by recent efforts to change
America's natural cheese standard. This effort to allow milk protein
concentrate and casein into natural cheese products flies in the face
of logic and could create a loophole for unlimited amounts of
substandard imported milk proteins to enter U.S. cheese vats.
My legislation will close this loophole and ensure that consumers can
be confident that they are buying natural cheese when they see the
natural label.
Our dairy farmers have invested heavily in processes that make the
best quality cheese ingredients, and I am concerned about recent
efforts to change the law that would penalize them for those efforts by
allowing lower quality ingredients to flood the U.S. market.
Over the past decade, cheese consumption has risen at a strong pace
due to promotional and marketing efforts and investments by dairy
farmers across the country. Year after year, per capita cheese
consumption has risen at a steady rate.
Back in the 1980's, when I served in the Wisconsin State Senate,
cheese consumption topped 20 pounds per person. During the 1990s
consumption increased by over 25 percent, and passed 25 pounds per
person. Last year we saw an even more dramatic increase when per capita
cheese consumption rose an amazing 1.5 pounds to reach 29.8 pounds.
This one-year increase amounts to the largest expansion since 1982! I
am proud to say that my home state of Wisconsin, America's dairyland,
was one of the main engines behind this growth. After all, when
consumers see the label ``Wisconsin Cheese,'' they know that it is
synonymous with quality.
Over the past two decades consumers have increased their cheese
consumption due to their understanding, and taste for the quality
natural cheese produced by America's dairy industry.
Recent proposals to change to our natural cheese standard could
decrease consumption of natural cheese. These declines could result
from concerns about the origin of casein and other forms of dry UF
milk.
The vast majority of dry ultra filtered milk originates from
countries with State Trading Enterprises. Many of these countries
subsidize their dairy exports through these trading mechanisms, and
have quality standards that are well below those of the United States.
While it is difficult to obtain specific numbers about the amount of
dry UF milk produced in foreign countries, I have heard disturbing
stories about the conditions under which the casein and milk proteins
are sometimes produced.
For the most part, dry UF milk is not produced in the US. In fact, it
is, for the most part, produced in countries where sanitary standards
are well below those of the United States.
These products are sold on the international market, and under the
proposed rule they could be labeled as natural cheese. This cheap, low
quality dry UF milk tends to leave cheese greasy and increases
separation problems.
The addition of this kind of milk will certainly leave the wholesome
reputation of ``natural cheese'' significantly tarnished in the eyes of
the consumer.
This change would seriously compromise decades of work by America's
dairy farmers to build up domestic cheese consumption levels. It is
simply not fair to America's farmers!
Mr. President, consumers have a right to know if the cheese they buy
is unnatural. And by allowing unnatural dry UF milk into cheese, we are
denying consumers the entire picture.
This legislation will paint the entire picture for the consumer, and
allow them enough information to select cheese made from truly natural
ingredients.
Allowing dry Ultra-Filtered milk into cheeses will have a significant
adverse impact on dairy producers throughout the United States. Some
estimate that the annual effect of the change on the dairy farm sector
of the economy could be more than $100 million.
The proposed change to our natural cheese standard would also harm
the American taxpayer.
If we allow dry UF milk to be used in cheese we will effectively
permit unrestricted importation of these ingredients into the United
States. Because there are no tariffs and quotas on these ingredients,
these heavily subsidized products will displace natural domestic dairy
ingredients.
These unnatural domestic dairy products will enter our domestic
cheese market and may further depress dairy prices paid to American
dairy producers.
Low dairy prices result in increased costs to the dairy price support
program. So, at the same time that U.S. dairy farmers are receiving
lower prices, the U.S. taxpayer will be paying more for the dairy price
support program.
Mr. President, this change does not benefit the dairy farmer,
consumer or taxpayer. Who then is it good for?
The obvious answer is nobody.
America's farmers have invested a tremendous amount of time and
effort to create the best cheese industry in the world. They should not
be penalized for their efforts.
This legislation addresses the concerns of farmers, consumers and
taxpayers by prohibiting dry ultra-filtered milk from being included in
America's natural cheese standard.
Congress must shut the door on any backdoor efforts to stack the deck
against America's dairy farmers. And we must pass my legislation that
prevents a loophole that would allow changes that hurt the consumer,
taxpayer and dairy farmer.
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. 117

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 ``Quality Cheese Act of
2001''.

SEC. 2. NATURAL CHEESE STANDARD.

(a) Findings.--Congress finds that--
(1)(A) any change in domestic natural cheese standards to
allow dry ultra-filtered milk products or casein to be
labeled as domestic natural cheese would result in increased
costs to the dairy price support program; and
(B) that change would be unfair to taxpayers, who would be
forced to pay more program costs;
(2) any change in domestic natural cheese standards to
allow dry ultra-filtered milk products or casein to be
labeled as domestic natural cheese would result in lower
revenues for dairy farmers;
(3) any change in domestic natural cheese standards to
allow dry ultra-filtered milk products or casein to be
labeled as domestic natural cheese would cause dairy products
containing dry ultra-filtered milk or casein to become
vulnerable to contamination and would compromise the
sanitation, hydrosanitary, and phytosanitary standards of the
United States dairy industry; and
(4) changing the labeling standard for domestic natural
cheese would be misleading to the consumer.
(b) Prohibition.--Section 401 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 341) is amended--
(1) by striking ``Whenever'' and inserting ``(a)
Whenever''; and
(2) by adding at the end the following:
``(b) The Commissioner may not use any Federal funds to
amend section 133.3 of title 21, Code of Federal Regulations
(or any corresponding similar regulation or ruling), to
include dry ultra-filtered milk or casein in the definition
of the term `milk' or `nonfat milk', as specified in the
standards of identity for cheese and cheese products
published at part 133 of title 21, Code of Federal
Regulations (or any corresponding similar regulation or
ruling).''.
______

By Mrs. FEINSTEIN:
S. 118. A bill to strengthen the penalties for violations of plant
quarantine laws; to the Committee on Agriculture, Nutrition, and
Forestry.

fruit, vegetable, and plant smuggling prevention act of 2001

Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation
to strengthen the penalties for organized smuggling of fruits, plants,
and vegetables into the United States. A felony statute for agriculture
product smuggling is needed to reflect the serious impact these crimes
have on our farmers and the entire agriculture industry.
Recent breaches of the agriculture safeguarding system have proven
the need for strong criminal penalties for organized smuggling:
multiple exotic fruit fly infestations have decimated California and
Florida; the Asian longhorn beetle has been found in New

[[Page S391]]

York and Illinois; the Asian gypsy moth has been introduced in North
Carolina and Oregon; and plum pox from Western Europe has devastated
peach production in Pennsylvania.
This widespread invasion of foreign species requires a strong federal
response. The consequences of failing to adequately combat agriculture
smuggling are clear.
Until recently, a 72 square mile area of San Diego was under
quarantine due to an infestation of Mexican Fruit Flies. The quarantine
effected 1,470 growers of at least 20 specialty crops. The Department
of Agriculture has encouraged California producers to grow specialty
fruits and vegetables in an effort to reduce the risk of exotic pest
introduction from smuggled fruit. Yet, no pre or post harvest treatment
for many of these crops has been provided by the USDA. As a result of 2
fruit flies, roughly 150 growers lost virtually their entire harvest--
estimated more than $3 million.

Problems with existing laws

The current system that charges low fines and encourages few
prosecutions is not a meaningful deterrent for violators. The USDA can
assess a maximum fine of $1,000 for passenger and cargo violations. For
an illegal shipper, this is simply a minor cost of doing business and
not an effective deterrent.
In addition, the lack of serious penalties for such crimes has
resulted in a reduced number of criminal investigations, violators
prosecuted, and sentences given to those convicted.
The Office of the Inspector General (OIG) of the USDA, the law
enforcement arm of the Department, has placed a low priority on
agriculture smuggling violations because they are only misdemeanors and
the OIG is forced to devote the bulk of its resources to felony
violations. Of the 4,400 investigations completed since October 1,
1994, fewer than 50 involved smuggling.
The sentences given to the relatively few convicted smugglers is also
effected by the attitude that this is not a serious crime.
In the State of Washington, two people were caught smuggling
agricultural products into the country on numerous occasions. Their
third arrest came after 400 pounds of illegal and infested fruit was
found in the walls of their station wagon. Despite their repeated
crimes, the smugglers received only two days of jail time and a fine of
$1,000.

penalties for violations

This legislation would make it a felony to knowingly and willfully
smuggle large amounts of agriculture products into the country. Persons
caught smuggling foreign plant pests, more than 50 pounds of plants,
more than 5 pounds of plant products, more than 50 pounds of noxious
weeds, or possession with intent to distribute these products, would be
punished with imprisonment for up to 5 years, a fine of as much as
$25,000, or both. Repeat violators would face 10 years of jail time
and/or a fine of $50,000.
The legislation would also make smuggling lesser amounts of products
a misdemeanor crime punishable by one year in jail and/or a $1,000
fine. Subsequent violations would result in three years of jail time
and/or a fine of $10,000.
These penalties will provide law enforcement with the needed tools to
investigate, arrest, and prosecute individuals and organizations
engaged in the organized smuggling of agriculture products.

property forfeitures

Another inadequacy in current law is the lack of a specific
forfeiture provision for agriculture product smuggling. I have been
told of cases at the San Diego border in which a person has been caught
smuggling fruits or vegetables across the border. After receiving a
slap on the wrist from the judicial system, his truck was returned to
him, and he was allowed to return to his criminal occupation with the
tools of his trade intact. It is astonishing to me that, not only is
the government incapable of punishing illegal traffickers of
agriculture products, but we are unable to take even modest steps to
prevent recurrences of the same crime.
According to this legislation, anyone convicted of violating the law
would forfeit any property used to commit or facilitate the violation.
They would also forfeit any money acquired through a violation of the
law. The proceeds of the sale of forfeited property would be used to
reimburse the costs of the prosecution. Any additional funds would go
towards the USDA's interdiction efforts.
I believe that Congress must send a message to our farmers and
growers that the federal government is committed to protecting the
agriculture sector from invasive species. We can do this by passing
this legislation as quickly as possible.
Mr. President, I ask unanimous consent that the bill be printed in
the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 118

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 ``Fruit, Vegetable, and Plant
Smuggling Prevention Act of 2001''.

SEC. 2. DEFINITIONS.

In this Act:
(1) Plant quarantine law.--The term ``plant quarantine
law'' means any of the following provisions of law:
(A) Subsections (a) through (e) of section 102 of the
Department of Agriculture Organic Act of 1944 (7 U.S.C.
147a).
(B) Section 1773 of the Food Security Act of 1985 (7 U.S.C.
148f).
(C) The Golden Nematode Act (7 U.S.C. 150 et seq.).
(D) The Federal Plant Pest Act (7 U.S.C. 150aa et seq.).
(E) The Joint Resolution of April 6, 1937 (56 Stat. 57,
chapter 69; 7 U.S.C. 148 et seq.).
(F) The Act of January 31, 1942 (56 Stat. 40, chapter 31; 7
U.S.C. 149).
(G) The Act of August 20, 1912 (commonly known as the
``Plant Quarantine Act'') (37 Stat. 315, chapter 308; 7
U.S.C. 151 et seq.).
(H) The Halogeton Glomeratus Control Act (7 U.S.C. 1651 et
seq.).
(I) The Act of August 28, 1950 (64 Stat. 561, chapter 815;
7 U.S.C. 2260).
(J) The Federal Noxious Weed Act of 1974 (7 U.S.C. 2801 et
seq.), other than the first section and section 15 of that
Act (7 U.S.C. 2801 note, 2814).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.

SEC. 3. PENALTIES FOR VIOLATION.

(a) Criminal Penalties.--
(1) In general.--A person that knowingly violates a plant
quarantine law shall be subject to criminal penalties in
accordance with this subsection.
(2) Felonies.--
(A) In general.--Subject to subparagraphs (B) and (C), a
person shall be imprisoned not more than 5 years, fined not
more than $25,000, or both, in the case of a violation of a
plant quarantine law involving--
(i) plant pests;
(ii) more than 50 pounds of plants;
(iii) more than 5 pounds of plant products;
(iv) more than 50 pounds of noxious weeds;
(v) possession with intent to distribute or sell items
described in clause (i), (ii), (iii), or (iv), knowing the
items have been involved in a violation of a plant quarantine
law; or
(vi) forging, counterfeiting, or without authority from the
Secretary, using, altering, defacing, or destroying a
certificate, permit, or other document provided under a plant
quarantine law.
(B) Multiple violations.--On the second and any subsequent
conviction of a person of a violation of a plant quarantine
law described in subparagraph (A), the person shall be
imprisoned not more than 10 years or fined not more than
$50,000, or both.
(C) Intent to harm agriculture of united states.--In the
case of a knowing movement in violation of a plant quarantine
law by a person of a plant, plant product, biological control
organism, plant pest, noxious weed, article, or means of
conveyance into, out of, or within the United States, with
the intent to harm the agriculture of the United States by
introduction into the United States or dissemination of a
plant pest or noxious weed within the United States, the
person shall be imprisoned not less than 10 nor more than 20
years, fined not more than $500,000, or both.
(3) Misdemeanors.--
(A) In general.--Subject to subparagraph (B), a person
shall be imprisoned not more than 1 year, fined not more than
$1,000, or both, in the case of a violation of a plant
quarantine law involving--
(i) 50 pounds or less of plants;
(ii) 5 pounds or less of plant products; or
(iii) 50 pounds or less of noxious weeds.
(B) Multiple violations.--On the second and any subsequent
conviction of a person of a violation of a plant quarantine
law described in subparagraph (A), the person shall be
imprisoned not more than 3 years, fined not more than
$10,000, or both.
(b) Criminal Forfeiture.--
(1) In general.--In imposing a sentence on a person
convicted of a violation of a plant quarantine law, in
addition to any other penalty imposed under this section and
irrespective of any provision of State law, a court shall
order that the person forfeit to the United States--
(A) any of the property of the person used to commit or to
facilitate the commission of

[[Page S392]]

the violation (other than a misdemeanor); and
(B) any property, real or personal, constituting, derived
from, or traceable to any proceeds that the person obtained
directly or indirectly as a result of the violation.
(2) Procedures.--All property subject to forfeiture under
this subsection, any seizure and disposition of the property,
and any proceeding relating to the forfeiture shall be
subject to the procedures of section 413 of the Comprehensive
Drug Abuse Prevention and Control Act of 1970 (21 U.S.C.
853), other than subsections (d) and (q).
(3) Proceeds.--The proceeds from the sale of any forfeited
property, and any funds forfeited, under this subsection
shall be used--
(A) first, to reimburse the Department of Justice, the
United States Postal Service, and the Department of the
Treasury for any costs incurred by the Departments and the
Service to initiate and complete the forfeiture proceeding;
(B) second, to reimburse the Office of Inspector General of
the Department of Agriculture for any costs incurred by the
Office in the law enforcement effort resulting in the
forfeiture;
(C) third, to reimburse any Federal or State law
enforcement agency for any costs incurred in the law
enforcement effort resulting in the forfeiture; and
(D) fourth, by the Secretary to carry out the functions of
the Secretary under a plant quarantine law.
(c) Civil Penalties.--
(1) In general.--A person that violates a plant quarantine
law, or that forges, counterfeits, or, without authority from
the Secretary, uses, alters, defaces, or destroys a
certificate, permit, or other document provided under a plant
quarantine law may, after notice and opportunity for a
hearing on the record, be assessed a civil penalty by the
Secretary that does not exceed the greater of--
(A) $50,000 in the case of an individual (except that the
civil penalty may not exceed $1,000 in the case of an initial
violation of the plant quarantine law by an individual moving
regulated articles not for monetary gain), or $250,000 in the
case of any other person for each violation, except the
amount of penalties assessed under this subparagraph in a
single proceeding shall not exceed $500,000; or
(B) twice the gross gain or gross loss for a violation or
forgery, counterfeiting, or unauthorized use, defacing or
destruction of a certificate, permit, or other document
provided for in the plant quarantine law that results in the
person's deriving pecuniary gain or causing pecuniary loss to
another person.
(2) Factors in determining civil penalty.--In determining
the amount of a civil penalty, the Secretary--
(A) shall take into account the nature, circumstance,
extent, and gravity of the violation; and
(B) may take into account the ability to pay, the effect on
ability to continue to do business, any history of prior
violations, the degree of culpability of the violator, and
any other factors the Secretary considers appropriate.
(3) Settlement of civil penalties.--The Secretary may
compromise, modify, or remit, with or without conditions, a
civil penalty that may be assessed under this subsection.
(4) Finality of orders.--
(A) In general.--An order of the Secretary assessing a
civil penalty shall be treated as a final order reviewable
under chapter 158 of title 28, United States Code.
(B) Collection action.--The validity of an order of the
Secretary may not be reviewed in an action to collect the
civil penalty.
(C) Interest.--A civil penalty not paid in full when due
under an order assessing the civil penalty shall (after the
due date) accrue interest until paid at the rate of interest
applicable to a civil judgment of the courts of the United
States.
(5) Guidelines for civil penalties.--The Secretary shall
coordinate with the Attorney General to establish guidelines
to determine under what circumstances the Secretary may issue
a civil penalty or suitable notice of warning in lieu of
prosecution by the Attorney General of a violation of a plant
quarantine law.
(d) Civil Forfeiture.--
(1) In general.--There shall be subject to forfeiture to
the United States any property, real or personal--
(A) used to commit or to facilitate the commission of a
violation (other than a misdemeanor) described in subsection
(a); or
(B) constituting, derived from, or traceable to proceeds of
a violation described in subsection (a).
(2) Procedures.--
(A) In general.--Subject to subparagraph (B), the
procedures of chapter 46 of title 18, United States Code,
relating to civil forfeitures shall apply to a seizure or
forfeiture under this subsection, to the extent that the
procedures are applicable and consistent with this
subsection.
(B) Performance of duties.--Duties imposed on the Secretary
of the Treasury under chapter 46 of title 18, United States
Code, shall be performed with respect to seizures and
forfeitures under this subsection by officers, employees,
agents, and other persons designated by the Secretary of
Agriculture.
(e) Liability for Acts of an Agent.--For the purposes of a
plant quarantine law, the act, omission, or failure of an
officer, agent, or person acting for or employed by any other
person within the scope of employment or office of the
officer, agent, or person, shall be considered to be the act,
omission, or failure of the other person.
______

By Ms. SNOWE (for herself and Mr. Chafee):
S. 119. A bill to provide States with funds to support State,
regional, and local school construction; to the Committee on Health,
Education, Labor, and Pensions.

building, renovating, and constructing kids' schools act

Ms. SNOWE. Mr. President, I rise today with my friend and colleague,
Senator Chafee, to introduce the Building, Renovating, Improving, and
Constructing Kids' Schools (BRICKS) Act--legislation that would address
our nation's burgeoning need for K-12 school construction, renovation,
and repair.
The legislation--which is endorsed by the National Education
Association and National PTA, and the National Association of State
Boards of Education--would accomplish this in a fiscally-responsible
manner while seeking to find the middle ground between those who
support a very direct, active federal role in school construction, and
those who are concerned about an expanded federal role in what has
been--and remains--a state and local responsibility.
Mr. President, the condition of many of our nation's existing public
schools is abysmal even as the need for additional schools and
classroom space grows. Specifically according to reports issued by the
General Accounting Office in 1995 and 1996, fully one-third of all
public schools need extensive repair or replacement.
As further evidence of this problem, an issue brief prepared by the
National Center for Education Statistics (NCES) in 1999 stated that the
average public school in America is 42 years old, with school buildings
beginning rapid deterioration after 40 years. In addition, the NCES
brief found that 29 percent of all public schools are in the ``oldest
condition,'' which means that they were build prior to 1970 and have
either never been renovated or were renovated prior to 1980.
Not only are our nation's schools in need of repair and renovation,
but there is a growing demand for additional schools and classrooms due
to an ongoing surge in student enrollment. Specifically, according to
the NCES, at least 2,400 new public schools will need to be built by
the year 2003 to accommodate our nation's burgeoning school rolls,
which will grow from a record 52.7 million children today to 54.3
million by 2008.
Needless to say, the cost of addressing our nation's need for school
renovations and construction is enormous. In fact, according to the
General Accounting Office (GAO), it will cost $112 billion just to
bring our nation's schools into good overall condition, and a recent
report by the NEA identified $322 billion in unmet school modernization
needs. Nowhere is this cost better understood than in my home state of
Maine, where a 1996 study by the Maine Department of Education and the
State Board of Education determined that the cost of addressing the
state's school building and construction needs stood at $637 million.
Mr. President, we simply cannot allow our nation's schools to fall
into utter disrepair and obsolescence with children sitting in
classrooms that have leaky ceilings or rotting walls. We cannot ignore
the need for new schools as the record number of children enrolled in
K-12 schools continues to grow.
Accordingly, because the cost of repairing and building these
facilities may prove to be more than many state and local governments
can bear in a short period of time, I believe the federal government
can and should assist Maine and other state and local governments in
addressing this growing national crisis.
Admittedly, not all members support strong federal intervention in
what has been historically a state and local responsibility. In fact,
many argue with merit that the best form of federal assistance for
school construction or other local educational needs would be for the
federal government to fulfill its commitment to fund 40 percent of the
cost of special education. This long-standing commitment was made when
the Individuals with Disabilities Education (IDEA) Act was signed into
law

[[Page S393]]

more than 20 years ago, but the federal government has fallen woefully
short in upholding its end of the bargain, only recently increasing its
share above 10 percent.
Needless to say, I strongly agree with those who argue that the
federal government's failure to fulfill this mandate represents nothing
less than a raid on the pocketbook of every state and local government.
Accordingly, I am pleased that recent efforts in the Congress have
increased federal funding for IDEA by approximately $3.8 billion over
the past five years, and I support ongoing efforts to achieve the 40
percent federal commitment in the near future.
Yet, even as we work to fulfill this long-standing commitment and
thereby free-up local resources to address local needs, I believe the
federal government can do more to assist state and local governments in
addressing their school construction needs without infringing on local
control.
Mr. President, the legislation we are offering today--the ``BRICKS
Act''--will do just that. Specifically, it addresses our nation's
school construction needs in a responsible fiscal manner while bridging
the gap between those who advocate a more activist federal role in
school construction and those who do not.
First, our legislation will provide $20 billion in federal loans to
support school construction, renovation, and repair at the local level.
By designating that at least one-half of these loan monies must be used
to pay the interest owed to bondholders on new school construction
bonds that are issued through the year 2003, the federal government
will leverage the issuing of new bonds by states and localities that
would not otherwise be made. In addition, by providing that up to one-
half of the monies may be used for state-wide school construction
initiatives, the bill provides needed flexibility to ensure that unique
state and local approaches to school construction will also be
supported, such as revolving loan funds.

Of importance, these loan monies--which will be distributed on an
annual basis using the Title I distribution formula--will become
available to each state at the request of a Governor. While the federal
loans can only be used to support bond issues that will supplement, and
not supplant, the amount of school construction that would have
occurred in the absence of the loans, there will be no requirement that
states engage in a lengthy application process that does not even
assure them of their rightful share of the $20 billion pot.
Second, our bill ensures that these loans are made by the federal
government in a fiscally responsible manner that does not cut into the
Social Security surplus or claim a portion of non-Social Security
surpluses that may prove ephemeral in the future.
Specifically, our bill would make these loans to states from the
Exchange Stabilization Fund (ESF)--a fund that was created through the
Gold Reserve Act of 1934 and has grown to hold more than $40 billion in
assets. The principal activity of the fund--which is controlled solely
by the Secretary of the Treasury--is foreign exchange intervention that
is intended to limit fluctuations in exchange rates. However, the fund
has also been used to provide stabilization loans to foreign countries,
including a $20 billion line of credit to Mexico in 1995 to support the
peso.
In light of the controversial manner in which the ESF has been used,
some have argued that additional constraints should be placed on the
fund. Still others--including former Federal Reserve Board Governor
Lawrence B. Lindsey--have stated that, for various reasons, the fund
should be liquidated.
Regardless of how one feels about exercising greater constraint over
the ESF or liquidating it, I believe that if this $40 billion fund can
be used to bailout foreign currencies, it certainly can be used to help
America's schools.
Accordingly, I believe it is appropriate that the $20 billion in
loans provided by my legislation will be made from the ESF--an amount
identical to the line of credit that was extended to Mexico by the
Secretary of the Treasury in 1995. Of importance, these loans will be
made from the ESF on a progressive, annual basis--not in a sudden or
immediate manner. Furthermore, these monies will be repaid to the fund
to ensure that the ESF is compensated for the loans it makes.
Although the ESF will recoup all of the monies it lends, it should
also be noted that my proposal ensures that states and local
governments will not be forced to pay excessive interest, or that they
will be forced to repay over an unreasonable period of time. In fact,
if the federal government fails to substantially increase its share of
IDEA funding, states will incur no interest at all!
Specifically, to encourage the federal government to meet its funding
commitment for IDEA--and to compensate states for the fact that every
dollar in forgone IDEA funding is a dollar less that they have for
school construction or other local needs--our bill would impose no
interest on BRICKS loans during the first five years provided the 40
percent funding commitment is not met.
Thereafter, the interest rate is pegged to the federal share of IDEA:
zero in any year that the federal government fails to fund at least 20
percent of the cost of IDEA; 2.5 percent--the long-term projected
inflation rate--in years that the federal share falls between 20 and 30
percent; 3.5 percent in years the federal share is 30 to 40 percent;
and 4.5 percent in years the full 40 percent share is achieved.
Combined, these provisions will minimize the cost of these loans to
the states, and maximize the utilization of these loans for school
construction, renovation, and repair.
Mr. President, by providing low-interest loans to states and local
governments to support school construction, I believe that our bill
represents a fiscally-responsible, centrist solution to a national
problem.
For those who support a direct, active federal role in school
construction, our bill provides substantial federal assistance by
dedicating $20 billion to leverage a significant amount of new school
construction bonds. For those who are concerned about the federal
government becoming overly-engaged in an historically state and local
responsibility--and thereby stepping on local control--my bill directs
that the monies provided to states will be repaid, and that no onerous
applications or demands are placed on states to receive their share of
these monies.
Mr. President, I urge that my colleagues support the ``BRICKS Act''--
legislation that is intended to bridge the gap between competing
philosophies on the federal role in school construction. Ultimately, if
we work together, we can make a tangible difference in the condition of
America's schools without turning it into a partisan or ideological
battle that is better suited to sound bites than actual solutions.
Thank you, Mr. President. I ask unanimous consent that the letters of
support from the NEA, PTA, NASBE, and Jim Rier, the Chairman of the
Maine State Board of Education, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

National Education Association,

Washington, DC, July 13, 2000.
Sen. Olympia Snowe,
U.S. Senate, Washington, DC.
Dear Senator Snowe: On behalf of the National Education
Association's (NEA) 2.5 million members, we would like to
thank you for your leadership in introducing a revised
version of the Building, Renovating, Improving, and
Constructing Kids' Schools (BRICKS) Act.
As you known, our nation's schools are in desperate need of
repair and renovation. Too many students attend classes in
overcrowded buildings with leaky roofs, faulty wiring, and
outdated plumbing. A recently-released NEA study documents
more than $300 billion in unmet infrastructure and technology
needs, nearly three times the level estimated in previous
research by the General Accounting Office.
NEA believes the revised BRICKS Act offers a meaningful
avenue for assisting schools. The bill would make available
$20 billion in guaranteed funding over 15 years to provide
low-interest--and in many cases zero interest--school
modernization loans to states and schools. According to a
preliminary Department of Education analysis, the BRICKS Act
would provide schools with a benefit of $465 for each $1,000
in bonds.
We are pleased that the BRICKS Act would allow up to 50
percent of federal funds to be used for payment of actual
construction costs or the principal portion of loans, as well
as the interest costs. We also appreciate the provision
allowing those states with laws that prohibit borrowing to
pay the interest costs on school bonds to use 100 percent of
their BRICKS loans for state revolving loan

[[Page S394]]

funds or other state administered school modernization
programs.
NEA believes it is essential to enact meaningful school
modernization assistance this year. We thank you for your
leadership in this area and look forward to continuing to
work with you toward passage of bipartisan school
modernization legislation.
Sincerely,
Mary Elizabeth Teasley,
Director of Government Relations.
____

National PTA,

Chicago, IL, July 7, 2000.
Hon. Lincoln D. Chafee,
U.S. Senate, Washington, DC.
Hon. Olympia J. Snowe,
U.S. Senate, Washington, DC.
Dear Senators Chafee and Snowe: On behalf of the 6.5
million parents, teachers, students, and other child
advocates who are members of the National PTA, I am writing
to support the Building, Renovating, Improving, and
Constructing Kids' Schools (BRICKS) Act, which you plan to
introduce next week.
We thank you for your leadership in proposing this
initiative, which acknowledges the federal government's
responsibility to help schools repair and renovate their
facilities. As you are aware, the U.S. General Accounting
Office has estimated that the cost of fixing the structural
problems in schools across the nation will cost more than
$112 billion. If new schools are built to accommodate
overcrowding, and if schools's technology, wiring, and
infrastructure needs are added in, this estimate would exceed
$200 billion dollars.
This is a problem schools cannot address without a
partnership with the federal government, and National PTA
supports a variety of approaches to address this growing
crisis. In addition to endorsing the BRICKS bill, National
PTA is supporting the Public School Repair and Renovation
Act, which would provide tax credits to pay the interest on
school modernization bonds and create a grant and loan
program for emergency repairs in high-need districts; and
also the America's Better Classrooms Act, which would provide
$22 billion over two years in zero interest school
construction and modernization bonds.
Under BRICKS, nearly $20 billion would be available over 15
years to provide low interest, and in many cases zero
interest, loans to States for interest payments on their
school modernization bonds. We are pleased that the proposal
will allow increased flexibility in using the federal funds
for interest payments, as well as for other state-
administered programs that assist state entities or local
governments pay for the construction or repair of schools.
National PTA is committed to helping enact a federal school
modernization proposal this Congress. We believe the BRICKS
Act should be promoted as one of the ways the federal
government can assist schools, and we thank you for your
leadership in this area. We look forward to continuing to
work with you toward formulation and passage of bipartisan
school modernization legislation.
Sincerely,
Vicki Rafel,
Vice President for Legislation.
____

National Association of State Boards of Education,
Alexandria, VA, July 18, 2000.
Hon. Olympia Snowe,
U.S. Senate, Washington, DC.
Dear Senator Snowe: The National Association of State
Boards of Education (NASBE) is a private nonprofit
association representing state and territorial boards of
education. Our principal objectives are to strengthen state
leadership in education policy-making, promote excellence in
the education of all students, advocate equality of access to
educational opportunity, and assure responsible governance of
public education.
We are writing to applaud your efforts to provide federal
assistance to states for school construction. The
deterioration of America's school infrastructure has reached
crisis proportions. At least one-third of all U.S. schools
are in need of extensive repairs or replacement and 60% have
at least one major building deficiency such as cracked
foundations, leaky roofs, or crumbling walls. We cannot
expect our children to learn much less excel in such decrepit
and unsafe environments.
The more than $112 billion needed to renovate and/or repair
existing school facilities has simply overwhelmed state and
local resources. This national problem demands federal
attention and we are encouraged that your office is
attempting to address this need by proposing a $20 billion
federal loan program.
Your legislation, the Building, Renovating, Improving, and
Constructing Kids' Schools Act (BRICKS), will leverage new
school construction expenditures at the state and local
levels and provides flexibility to integrate this assistance
with the variety of solutions states have already undertaken,
such as revolving funds, to enhance the financing of school
construction.
We appreciate your efforts and attention to address this
critical situation. NASBE is encouraged by your actions and
we look forward to working with your office to foster a
partnership between federal, state and local entities to
improve the learning conditions of American children.
Sincerely,
Brenda Lilienthal Welburn,
Executive Director.
____

State Board of Education,

Augusta, ME, April 29, 2000.
Sen. Olympia J. Snowe,
U.S. Senate, Washington, DC.
Dear Senator Snowe: The age and condition of our nation's
public schools are an expanding crisis and should be of great
concern to all. Decades of neglect, unfunded maintenance
programs, constrained state and municipal budgets, shifting
populations, technology requirements, and programmatic
changes have combined to weaken the infrastructure of public
education. As you are well aware, a 1995 GAO report estimated
that just repairing existing school facilities would cost
$112 billion. In addition, building new facilities to meet
the demands of program and increased enrollments could cost
another $73 billion. We have allowed the condition of our
schools to deteriorate to a point that there are now critical
implications for the health and safety of our students and
staff who occupy those buildings. A number of states have
launched major efforts to address their school facilities
needs. The task is huge and beyond the ability of most local
and even state resources.
Unfortunately, Maine mirrors the nation. A Facilities
Inventory Study, conducted in 1996 by the Department of
Education and the University of Maine's Center for Research
and Evaluation, identified approximately $650 million in
needed facility improvements. Of particular concern was the
need for over $60 million in serious health and safety
related improvements as well as an additional $150 million in
other renovation and upgrades required.
In response to Maine's survey of over 700 buildings,
Governor King appointed a Commission to develop a plan to
address the needs identified. Their report was delivered to
the Maine Legislature in February 1998, and the
recommendations were enacted in April 1998. Maine has
responded to address the identified needs with significant
state and local resources. However, even as we develop policy
and resources to aggressively address those needs, our
concern grows.
Progressing from the condition survey to a detailed
engineering and environmental analysis of the conditions
causes even greater alarm. Roofs that were reported as
leaking in the survey are found to have serious structural
integrity problems with greater safety risks for occupants as
well as more complex and costly solutions. indoor air quality
problems in the survey grow from increased air exchange
solutions to more complex ones due to mold and microbial
growth in the interior walls. Again, this poses increased
health risk for students and staff. As we learn more about
the problems, our concerns grow and the necessary resources
increase. The critical health and safety needs from the 1996
survey ($60 million) have grown to over $86 million in our
latest project estimates. Many more projects are yet to be
identified.
Applications for Major Capital Construction projects were
received in August of 1999 from over 100 buildings throughout
Maine. Even with a major new commitment of over $200 million
from this Session of the Maine Legislature we will only be
able to address approximately 20 of those projects over the
next two years. More will be applying in the next two-year
cycle that begins in July 2001.
Although school construction and modernization is and
should remain primarily a state and local responsibility,
states and school districts cannot meet the current urgent
needs alone. Federal assistance in the form of reduced or low
interest loans as you have included in S1992, the BRICKS ACT,
responds to the urgent need and could provide a critical
component to a comprehensive but flexible approach to address
Maine's, as well as the nation's, school facilities needs. As
currently proposed, your legislation would allow the
flexibility to address the renovation and upgrade of existing
facilities as well as provide relief for overcrowding and
insufficient program space where major capital construction
is required. It creates an effective local/state/federal
partnership, while leaving decisions about which schools to
build or repair up to states and local school units. In
Maine, that would allow us to strengthen our Revolving
Renovation Fund (created to aid local units in the upgrade
and renovation of existing buildings), and it would enhance
our bonding capacity for long term debt commitment to major
capital construction projects.
Structurally unfit, environmentally deficient, or
overcrowded classrooms impair student achievement, diminish
student discipline, and compromise student safety. Although
not cited often, the learning environment does affect the
quality of education and our ability to help students achieve
high standards.
The National Association of State Boards of Education has
identified school construction as one of its priority issues.
I serve as Vice-Chair of their Governmental Affairs Committee
and would be happy to enlist their help in focusing the
nation's attention on the poor condition of our schools and
the need for comprehensive federal assistance. If you have
questions or need information from NASBE please contact David
Griffith, Director of Governmental Affairs at 703-684-4000.
As Chairman of the Maine State Board of Education and the
Governor's School Facilities Commission I am available and
would be pleased to participate in any way you think
appropriate to outline Maine's innovative and comprehensive
school facilities program,

[[Page S395]]

and to elaborate on how federal assistance could best
complement state and local efforts to address our school
construction needs.
It was an honor to meet you in March during NASBE's
Legislative Conference. I look forward to working with you in
support of a federal partnership with state and local school
units to provide a safe, healthy, and effective learning
environment for all.
Sincerely,
James E. Rier, Jr., Chair,
Maine State Board of Education.
______

By Mrs. FEINSTEIN:
S. 120. A bill to establish a demonstration project to increase
teacher salaries and employee benefits for teachers who enter into
contracts with local educational agencies to serve as master teachers;
to the Committee on Health, Education, Labor, and Pensions.

master teacher bill

Mrs. FEINSTEIN. Mr. President, today I am introducing a bill to
create a demonstration grant program to help school districts create
master teacher positions.
The bill authorizes $100 million for a five-year demonstration
program under which the Secretary of Education would award competitive
grants to school districts to create master teacher positions. Federal
funds would be equally matched by states and local governments so that
$200 million total would be available. Under the bill, 6,600 master
teacher positions could be created if each master teacher were paid
$30,000 on top of the current average teacher's salary.
As defined in this bill, a master teacher is one who is credentialed;
has at least five years of teaching experience; is judged to be an
excellent teacher by administrators and teachers who are knowledgeable
about the individual's performance; is currently teaching; and enters
into a contract and agrees to serve at least five more years.
The master teacher would help other teachers to improve instruction,
strengthen other teachers' skills, mentor less experienced teachers,
develop curriculum, and provide other professional development.
The goal of this bill is for districts to pay each master teacher up
to $30,000 on top of his or her regular salary. Nationally, the average
teacher salary is $40,574. In California, it is $45,317. School
principals receive $76,768 on average nationally and $72,805 in
California. School superintendents nationally earn $106,122 and in
California, $102,054. The purpose of the master teacher concept in this
bill is to pay teachers a salary closer to that of an administrator to
keep good teachers in teaching.
The bill requires State and/or local districts to match federal funds
dollar for dollar. It requires the U.S. Department of Education to give
priority to school districts with a high proportion of economically
disadvantaged students and to ensure that grants are awarded to a wide
range of districts in terms of the size and location of the school
district, the ethnic and economic composition of students, and the
experience of the districts' teachers.
There are several reasons we need this bill.
Beginning teachers face overwhelming challenges in their first year,
but in the real world, they get little guidance or support, in a year
that will have a profound impact on the rest of their professional
career. They often feel ``out there'' and ``alone,'' thrown into an
unfamiliar school and classroom with a room full of new faces. By the
current sink-or-swim method, new teachers often find themselves ill
equipped to deal with the educational and disciplinary tasks of their
first year.
A new teacher can get experienced guidance from a master teacher who
is paired with the new teacher. The master teacher can help plan
lessons, improve instructional methods, and deal with discipline
problems. Having this kind of professional support can give these new
teachers the skills and confidence to stay in teaching.
Second, master teacher programs can bring more prestige to teaching
as a profession, by increasing the teacher's salary, by rewarding
experience, and by giving teachers opportunities to supervise others. A
master teacher designation is a way to recognize outstanding ability
and performance, and to reward the good teachers. A master teacher
position can give teachers a professional goal, a higher level to
pursue. A 1996 report by the National Commission for Teaching and
American's Future said that creating new career paths for teachers is
one of the best ways to give educators the respect they deserve and to
ensure that proven teaching methods spread quickly and broadly.

In one survey of teachers which asked which factors make teachers
stay in teaching, 79 percent of teachers said that respect for the
teaching profession is needed in order to retain qualified teachers.
Eighty percent said that formal mentoring programs for beginning
teachers is key (Scholastic/Chief State School Officers' Teacher Voices
Survey, 2000). Over 70 percent of teachers said that more planning time
with peers is needed to keep teachers in the classroom. This amendment
should help.
Because of the higher pay and enhanced prestige, a master teacher
program can help to recruit and retain teachers. Mentor systems provide
new teachers with a support network, someone to turn to. Studies
indicate higher retention rates among new teachers who participate in
mentoring programs. According to Yvonne Gold of California State
University-Long Beach, 25 percent of beginning teachers do not teach
more than two years and nearly 40 percent leave in the first five
years. In the Rochester, New York, system, the teacher retention rate
was nearly double the national average five years after establishing a
mentoring program.
As Jay Matthews wrote in the May 16, 2000, Washington Post, programs
like this ``can provide a large boost to the profession's image for a
relatively small amount of money.'' These programs can keep good
teachers in the classroom, instead of losing them to school
administration or industry.
Higher salaries and prestige for master teachers could deter the
drain from the classrooms.
Another reason for this bill is that teacher mentoring programs can
make teacher performance more accountable. A master teacher can help
novice teachers improve their teaching and get better student
achievement. ``Teachers cannot be held accountable for knowledge based,
client-oriented decisions if they do not have access to knowledge, as
well as opportunities for consultation and evaluation of their work,''
said Adam Urbanski, President of the Rochester, New York, Teachers
Association. He went on: ``Unsatisfactory teacher performance often
stems from inadequate and incompetent supervision. Administrators often
lack the training and the resources to supervise teachers and improve
the performance of those who are in serious trouble.''
Good teachers are key to learning. Lower math test scores have been
correlated with the percentage of math teachers on emergency permits
and higher math test scores were linked both to the teachers'
qualifications and to their years of teaching experience, according to
``Professional Development for Teachers, 2000.''
This bill could be very helpful in California where one-fifth of our
teachers will leave the profession in three years, according to an
article in the February 9, 2000, Los Angeles Times. One-half of our
teachers are over age 44.
California will need 300,000 new teachers by 2010. ``More students to
teach, smaller classes, and teachers leaving or retiring means that
California school districts are now having to hire a record 26,000 new
teachers each year,'' says the report, ``Teaching and California's
Future, 2000.'' California's enrollment is growing at three times the
national rate. With these kinds of demands, understaffing often leads
to under qualified and new teachers entering the classroom. We have to
do all we can to attract and retain good teachers.
The true beneficiaries of master teacher programs are the students
and that is, of course, my fundamental goal. As stated in Rochester's
teaching manual, the goal is ``to improve student outcomes by
developing and maintaining the highest quality of teaching, providing
teachers with career options that do not require them to leave teaching
to assume additional responsibilities and leadership roles.''

[[Page S396]]

I believe this bill can begin to provide teachers the real
professional support they need, can attract and retain teachers and can
bring to the teaching profession the prestige it deserves.
I urge my colleagues to join us in support of this bill.
I ask unanimous consent that this bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 120

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 ``Master Teacher Act of
2001''.

SEC. 2. MASTER TEACHER DEMONSTRATION PROJECT.

(a) Definitions.--In this section:
(1) Local educational agency.--The term ``local educational
agency'' has the meaning given the term in section 14101 of
the Elementary and Secondary Education Act of 1965 (20 U.S.C.
8801).
(2) Master teacher.--The term ``master teacher'' means a
teacher who--
(A) is licensed or credentialed under State law;
(B) has been teaching for at least 5 years in a public or
private school or institution of higher education;
(C) is selected upon application, is judged to be an
excellent teacher, and is recommended by administrators and
other teachers who are knowledgeable of the individual's
performance;
(D) at the time of submission of such application, is
teaching and based in a public school;
(E) assists other teachers in improving instructional
strategies, improves the skills of other teachers, performs
mentoring, develops curriculum, and offers other professional
development; and
(F) enters into a contract with the local educational
agency to continue to teach and serve as a master teacher for
at least 5 additional years.
(3) Secretary.--The term ``Secretary'' means the Secretary
of Education.
(b) Establishment of Demonstration Project.--
(1) In general.--Not later than July 1, 2002, the Secretary
shall conduct a demonstration project under which the
Secretary shall award competitive grants to local educational
agencies to increase teacher salaries and employee benefits
for teachers who enter into contracts with the local
educational agencies to serve as master teachers.
(2) Requirements.--In awarding grants under the
demonstration project, the Secretary shall--
(A) ensure that grants are awarded under the demonstration
project to a diversity of local educational agencies in terms
of size of school district, location of school district,
ethnic and economic composition of students, and experience
of teachers; and
(B) give priority to local educational agencies in school
districts that have schools with a high proportion of
economically disadvantaged students.
(c) Applications.--In order to receive a grant under the
demonstration project, a local educational agency shall
submit an application to the Secretary that contains--
(1) an assurance that funds received under the grant will
be used in accordance with this section; and
(2) a detailed description of how the local educational
agency will use the grant funds to pay the salaries and
employee benefits for positions designated by the local
educational agency as master teacher positions.
(d) Matching Requirement.--The Secretary may not award a
grant to a local educational agency under the demonstration
project unless the local educational agency agrees that, with
respect to costs to be incurred by the agency in carrying out
activities for which the grant was awarded, the agency shall
provide (directly, through the State, or through a
combination thereof) in non-Federal contributions an amount
equal to the amount of the grant awarded to the agency.
(e) Study and Report.--
(1) In general.--Not later than July 1, 2005, the Secretary
shall conduct a study and transmit a report to Congress
analyzing the results of the demonstration project conducted
under this section.
(2) Contents of report.--The report shall include--
(A) an analysis of the results of the project on--
(i) the recruitment and retention of experienced teachers;
(ii) the effect of master teachers on teaching by less
experienced teachers;
(iii) the impact of mentoring new teachers by master
teachers; and
(iv) the impact of master teachers on student achievement;
and
(B) recommendations regarding--
(i) continuing or terminating the demonstration project;
and
(ii) establishing a grant program to expand the project to
additional local educational agencies and school districts.
(f) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section, $100,000,000,
for the period of fiscal years 2002 through 2006.
______

By Mrs. FEINSTEIN (for herself and Mr. Graham):
S. 121. A bill to establish an Office of Children's Services within
the Department of Justice to coordinate and implement Government
actions involving unaccompanied alien children, and for other purposes;
to the Committee on the Judiciary.

Unaccompanied Alien Child Protection Act

Mrs. FEINSTEIN. Mr. President. I rise today to introduce legislation
to change the way unaccompanied immigrant children are treated while in
the custody of the Immigration and Naturalization Service (INS). If
enacted, the Unaccompanied Alien Child Protection Act of 2001 would
ensure that the federal government addresses the special needs of
thousands of unaccompanied alien children who enter the U.S. It will
ensure that these children have a fair opportunity to obtain
humanitarian relief.
Central throughout this legislation are two concepts: The United
States government has a fundamental responsibility to protect
unaccompanied children in its custody; and in all proceedings and
actions, the government's ultimate priority should be to protect the
best interests of children.
The Unaccompanied Alien Child Protection Act of 2001 would ensure
that children who are apprehended by the INS are treated humanely and
appropriately by transferring jurisdiction over their welfare from the
INS Detention and Deportation division to a newly created Office of
Children's Services within the Department of Justice.
This legislation would also centralize responsibility for the care
and custody of unaccompanied children in this new Office of Children's
Services. By doing so, it would resolve the conflict of interest
inherent in the current system--that is, the INS retains custody of
children and is charged with their care while, at the same time, it
seeks their deportation.
Under this bill, the Office of Children's Services would be required
to establish standards for the custody, release, and detention of
children, ensuring that children are housed in appropriate shelters or
foster care rather than juvenile jails. In 1999, the INS held some
2,000 children in juvenile jails even though they had never committed a
crime. Equally as important, the bill would require the Office to
establish clear guidelines and uniformity for detention alternatives
such as shelter care, foster care, and other child custody
arrangements.
The bill would improve unaccompanied aliens' access to existing
options for permanent protection when U.S. immigration and child
welfare authorities believe such protection is warranted.
Finally, the Unaccompanied Alien Child Protection Act would provide
unaccompanied minors with access to legal counsel, who would ensure
that the children appear at all immigration proceedings and assist them
as the INS and immigration court consider their cases. The bill would
also provide the children with access to a guardian ad litem to ensure
that they are properly placed in a safe and caring environment. The
guardian ad litem would also work to ensure that each child's best
interests are protected throughout the process.
Let me turn for a moment to the issue of access to counsel. Children,
even more than adults, have incredible difficulty understanding the
complexities of the asylum system without the assistance of counsel.
Despite this reality, most children in INS detention are overlooked and
unrepresented. Without legal representation, children are at risk of
being returned to their home countries where they may face further
human rights abuses.
I am aware of two cases that demonstrate the compelling need for
counsel on behalf of these children. The first case involves two 17-
year old boys from China. Li and Wang, who were apprehended on an
island near Guam and had been in INS custody for almost two years.
During their detention in Guam, the two boys testified in federal court
against the smugglers who brought them to Guam. In their testimony,
they described being beaten by the smugglers even before leaving China,
and stated that others were beaten during the trip to Guam. In the
spring of 2000, the two boys were brought to a corrections facility in
Los Angeles and

[[Page S397]]

detained in the INS section of that facility. This is where the
similarity in their cases end.
Mr. President, while both of the boys would face danger from the
smugglers if they returned to China because of their testimony, only
one was granted asylum. Li applied for asylum and was denied. He was
not represented by counsel at his hearing. Despite the fact that the
INS trial attorney mentioned that Li had testified in federal court
against the smugglers, the judge did not include this information in
her decision on the claim. Luckily for Li, an attorney overheard the
hearing, and after speaking with Li, agreed to appeal his asylum claim.
Li is still being held in a Los Angeles corrections facility. The story
is different for Wang. Wang had an attorney and won his asylum hearing.
But INS is appealing the decision so Wang remains in a Los Angeles
corrections facility, as well.
Mr. President, these cases demonstrate the pressing need for legal
representation of children. Had he been represented by counsel and if
his testimony would have been incorporated into his case, Li may have
won his asylum claim. Instead, a 17-year-old boy unfamiliar with our
immigration system and our language was forced to navigate the complex
court system alone.
According to Human Rights Watch, children detained by the INS,
whether in secure detention or less restrictive settings, often have
great difficulty obtaining information about their legal rights. On a
1998 visit to the Berks County Juvenile Detention Center in Reading,
Pennsylvania, Human Rights Watch staff found that none of the children
they interviewed had received information from the INS or the
facility's staff about their rights or the legal services available to
them.
Unaccompanied alien children are among the most vulnerable of the
immigrant population; many have often entered the country under
traumatic circumstances. They are young and alone, subject to abuse and
exploitation. These unaccompanied children are unable to articulate
their fears, their views, or testify to their needs as accurately as
adults can.
Despite these facts, U.S. immigration laws and policies have been
developed and implemented without caring about their effect on
children, particularly on unaccompanied alien children.
Sadly, the INS detains more than 5,000 children nationwide each year.
They are apprehended for not having proper documentation at ports-of-
entry into the United States. Their detention may last for months--or
sometimes for years--as they undergo complex and arduous immigration
proceedings.
Under current immigration law, these children are forced to struggle
through a system designed primarily for adults, even though they lack
the capacity to understand nuanced legal principles and procedures.
Children who may very well be eligible for relief are often vulnerable
to being deported back to the very abusive situations from which they
fled before they are able to make their case before the INS or an
immigration judge.
Under current law, the INS is responsible for the apprehension,
detention, care, placement, legal protection, and deportation of
unaccompanied children. I believe that these are conflicting
responsibilities that undercut the best interests of the child. Too
often, the INS has fallen short in fulfilling the protection side of
these responsibilities.
The INS uses a variety of facilities to house children. Some are held
in children's shelters in which children are offered some of the
services they need but still may experience prolonged detention, lack
of access to counsel, and other troubling conditions.
The INS relies on juvenile correctional facilities to house many
children, even in the absence of any criminal wrongdoing. Today, one
out of every three children in INS custody is detained in secure, jail-
like facilities. These facilities are highly inappropriate,
particularly for children who have already experienced painful trauma
in their homelands.
There is currently no provision of federal law providing guidance for
the placement of unaccompanied alien children. In 1987, the Flores v.
Reno settlement agreement on behalf of minors in INS detention
established the nationwide policy for the detention, release, and
treatment of children in the custody of INS. The Flores agreement
requires that the INS treat minors with dignity, respect, and special
concern for their particular vulnerability. It also requires the INS to
place each detained minor in the least restrictive setting appropriate
to the child's age and special needs.

In response to Flores, the INS issued regulations that permitted its
officers to detain children in secure facilities only in limited
circumstances. The INS officers were required to provide written notice
to the child of the reasons for such placement. More importantly, the
regulations required the INS to segregate immigration detainees from
juvenile criminal offenders.
Although INS officials have contended that these children are placed
in these facilities largely because they are charged with other
offenses, the INS statistics do not bear out this claim. In fiscal year
1999, only 19 percent of the children placed in secure detention were
chargeable or adjudicated as delinquents.
According to non-governmental organizations (NGOs) such as Human
Rights Watch and the Women's Commission on Refugee Women and Children,
the INS regularly violates these regulations. The NGOs contend that all
too often children are placed in jail-like facilities for seemingly
arbitrary reasons, seldom notified of the reasons why, and forced to
share rooms and have extensive contact with convicted juvenile
offenders.
I was also astonished to learn that many of these children, some as
young as four and five years old, are placed behind multiple layers of
locked doors, surrounded by walls and barbed wire. They are strip
searched, patted down, placed in solitary confinement for punishment,
forced to wear prison uniforms and shackles, and are forbidden to keep
personal objects. Often they have no one to speak with because of the
language barrier.
The Unaccompanied Alien Child Protection Act of 2001 would ensure
that the particular needs of the thousands of unaccompanied alien
children who enter INS custody each year are met and that these
children have a fair opportunity to obtain immigration relief when
eligible.
In 1999, the INS held approximately 4,600 children under the age of
18 in its custody. Some of these children fled human rights abuses or
armed conflict in their home countries, some were victims of child
abuse or had otherwise lost the support and protection of their
families, some came to the United States to join family members, and
some came to escape economic deprivation.
Many of these children came from troubled and war-torn countries
around the world, including the Peoples Republic of China, Honduras,
Afghanistan, Somalia, Sierra Leone, Colombia, Guatemala, Cuba, former
Yugoslavia, and others. They range in age from toddlers to teenagers.
Some traveled to the United States alone, while others were accompanied
by unrelated adults.
Sadly, a significant number are victims of smuggling or trafficking
rings. In one recent instance, Phanupong Khaisri, a two-year old Thai
child, was brought to the U.S. by two individuals falsely claiming to
be his parents, but who were actually part of a major alien trafficking
ring. The INS was prepared to deport the child back to Thailand. It was
not until Members of Congress and the local Thai community had
intervened, however, that the INS decided to allow the child to remain
in the U.S. until the agency could provide proper medical attention and
determine what course of action would be in his best interest. Now his
case is before a federal district court judge who will determine
whether he should be eligible to apply for asylum.
The Unaccompanied Alien Child Protection Act aims to prevent
situations like this from recurring by centralizing the care and
custody of unaccompanied children into a new Office of Children's
Services within the INS, but outside the jurisdiction of the District
Directors. By doing so, the Act resolves the conflict of interest
inherent in the current system--that is, the INS retains custody of
children and is charged with their care while, at the same time, it
seeks their deportation.
Mr. President, I would like to take a moment to share with you a few
other examples of how the federal government has fallen short in the
manner in

[[Page S398]]

which we handle vulnerable unaccompanied minors. One would think that
our country would treat unaccompanied minors with the sensitivity and
care their situations demand. Unfortunately, in too many instances,
that has not been the case. Too often, these children are often treated
like adults and, under the worst circumstances, like criminals.

Xaio Ling, a young girl from China who spoke no English, was detained
by the INS at the Berks County Juvenile Detention Center. The INS
placed her among children guilty of violent crimes, including rape and
murder. Xaio was never guilty of any crime, and yet she slept in a
small concrete cell, was subjected to humiliating strip searches, and
forced to wear handcuffs. She was forbidden to keep any of her clothes
or possessions and, under the policies of the Berks Center, Xaio was
not allowed to laugh--not that she had anything to laugh about.
Imagine the fear this child had to endure: thrust into a system she
did not understand, given no legal aid, placed in jail that housed
juveniles with serious criminal convictions, including murder, car
jacking, rape, and drug trafficking. She did not speak English and was
unable to speak to any staff who knew her language, and she had to
submit to strip searches. It is hard to believe that our country would
have allowed this innocent child to be treated in such a horrible
manner.
Situations like that of this young Chinese girl make a compelling
case for changes in the way our nation treats unaccompanied alien
children. Under the legislation I have introduced today, this youngster
never would have been placed in a detention center with criminal
offenders. Rather, she would have immediately been placed in shelter
care, foster care, or a home more appropriate for her situation. She
would have been provided an attorney for her immigration proceedings
and a social worker would have been appointed as guardian ad litem to
ensure that her needs were being met. Sadly, this young girl was given
none of these options.
Neither was a 16 year-old boy from Colombia, who fled Colombia to
escape a life of violence on the streets of Bogota, where FARC
guerillas attempted to recruit him and the F-2 branch of the Colombian
government harassed him in its attempt to get rid of street children.
Fearing for his life, he fled Colombia for Venezuela where he lived
without shelter or sufficient food. In search of a safer life, he
sneaked into the machine room of a cargo ship bound for the United
States. He was lucky to survive; many other stowaways were thrown
overboard when discovered by the ship's crew.
The boy remained on the ship from November 1998 until March 1999,
when he arrived in Philadelphia. He was soon turned over to the INS and
placed into the same detention center in which the young Chinese girl
was held. He, too, was kept with criminal offenders. He did not
understand English, which created a myriad of problems because he was
unable to understand what was expected of him in the detention center.
He was held in an inappropriately punitive environment for six months.
I have one last story to share with you today. Placed on a boat bound
for the United States by her very own parents, a 15-year-old girl fled
China's rigid family planning laws. Under these laws she was denied
citizenship, education, and medical care. She came to this country
alone and desperate. And what did our immigration authorities do when
they found her? They held her in a juvenile jail in Portland, Oregon.
She was held for eight months and was detained for an additional four
months after being granted political asylum. At her asylum hearing, the
young girl could not wipe away the tears from her face because her
hands were chained to her waist. According to her lawyer, ``her only
crime was that her parents had put her on a boat so she could get a
better life over here.''
Mr. President, for years children's rights and human rights activists
have implored Congress to improve the way our immigration system
handles unaccompanied minors--just like the ones whose stories I have
just told. I believe my bill would do just that.
We cannot continue to allow children, who come to our country, often
traumatized and guilty of no crime, to be held in jails and treated
like criminals. We cannot continue to allow children, scared and
helpless, to be thrown into a system they do not understand without
sufficient legal aid and a guardian to look after their best interests.
We must adhere to the principles of our justice system. What kind of
message do we send when we deprive children who come to our country
seeking refuge of their basic rights and protections?
As a nation that holds our democratic ideals and constitutional
rights paramount, how then can we continue to avert our attention from
repeated violations of some of the most basic human rights against
children who have no voice in the immigration system? We should be
outraged that children who come to the U.S. alone, many against their
will, are subjected to such inhumane, excessive conditions.
I am proud to have the support of the United States Catholic
Conference and the Women's Commission on Refugee Women and Children,
with whom I have worked closely to develop this legislation.
I urge my colleagues to join with me by cosponsoring this important
measure.
______

Mr. CAMPBELL:
S. 122. A bill to prohibit a State from determining that a ballot
submitted by an absent uniformed services voter was improperly or
fraudulently cast unless that State finds clear and convincing evidence
of fraud, and for other purposes; to the Committee on Rules and
Administration.

Armed Services Voting Rights Protection Act

Mr. CAMPBELL. Mr. President, today I introduce the ``Armed Services
Voting Rights Protection Act of 2001.''
This important legislation takes a two pronged approach to help
address the technical problems that resulted in far too many of the
ballots cast by those serving in our nation's Armed Services being
thrown out in the last election.
The first part of the bill would amend the Uniformed and Overseas
Citizens Absentee Voting Act of 1986 to help protect the voting rights
of our armed services members. This first part is companion language to
a bill, H.R. 159, that has been introduced in the 107th Congress by
Representative Bob Riley of Alabama.
Specifically, this part of the bill would prohibit a state from
determining that an absentee ballot submitted by a uniformed services
voter has been improperly cast unless the state finds clear and
convincing evidence of fraud. It states that the lack of a witness
signature, address, postmark, or other identifying information cannot
not be considered clear and convincing evidence of fraud unless there
is other evidence or information. Further, it is designed to have no
effect on filing deadlines as determined by the states.
The second part of the Armed Services Voting Rights Protection Act
directs the United States Postal Service to conduct joint studies with
each of the branches of our Armed Services to examine what went wrong
during the last election that caused so many of the ballots cast by our
nation's Soldiers, Sailors, Airmen and Marines to be thrown out, often
for minor technical reasons. It directs the U.S. Postal Service and the
Armed Services to report back to congress within 120 days of the
enactment of this Act with recommendations about how to improve the
U.S. Post Office's interface with the Armed Services and help prevent a
repeat performance where so many overseas military ballots were thrown
out. It also directs them to implement the changes that can be done
without changing current law and recommend further changes in law that
Congress may want to consider. These efforts should also help improve
the overall day-to-day relationship between the Armed Services and
Postal Service.

The need for this bill is clear. While ballots were being counted
during the most recent presidential election, an army of trial lawyers
was sent out in a coordinated effort to systematically eliminate many
of the votes cast by Americans serving in our nation's Armed Services
overseas. These efforts to throw out ballots, usually for minor
technical reasons, were all too successful. We need to do what we can
to make sure it does not happen again.
As a veteran and a member of the Senate Veterans Affairs Committee, I

[[Page S399]]

believe throwing out votes cast by those serving in the Armed Services
over technicalities is simply wrong on the most fundamental level. Our
nation's Marines, Sailors, Airmen and Soldiers serve on the front lines
in the defense of our great nation and constitutional democracy. To
toss out so many of their ballots, and especially those cast by those
serving at the forefront of our defense by being underway at sea or
serving in remote hardship posts, is no way to show appreciation for
their service.
Many Americans, myself included, are deeply concerned that the last
election sent a clear signal to those serving in the Armed Forces that
even though they may be putting their very lives on the line in the
defense of our nation, and are duty bound to obey orders issued by
their Commander in Chief, the President of the United States, there is
a good chance that their right to have a voice, through a vote, in the
selection of that President may be eliminated by the most minor of
technicalities. This situation is made even worse by the fact that the
very technical problems that may disqualify their ballots, like lack of
access to postal marks, are often well beyond the control of individual
Sailors, Soldiers, Marines and Airmen.
In order to vote, most of our fellow Americans serving in the Armed
Services already have to jump through more hoops that the average
citizen. We must do what we can to make it easier for them to jump
through those hoops, rather that using these hoops as a way to trip up
their right to vote.
Late last year, our nation witnessed an unprecedented assault on
votes cast by our nation's Soldiers, Sailors, Airmen and Marines, and
especially those serving overseas. The Armed Services Voting Rights
Protection Act would be an important step in making sure that it does
not happen again. I urge my colleagues to support this legislation.
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. 122

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 ``Armed Services Voting Rights
Protection Act of 2001''.

SEC. 2. STANDARD FOR INVALIDATION OF BALLOTS CAST BY ABSENT
UNIFORMED SERVICES VOTERS IN FEDERAL ELECTIONS.

(a) In General.--Section 102 of the Uniformed and Overseas
Citizens Absentee Voting Act (42 U.S.C. 1973ff-1) is
amended--
(1) by striking ``Each State'' and inserting ``(a) In
General.--Each State''; and
(2) by adding at the end the following new subsection:
``(b) Standards for Invalidation of Certain Ballots.--
``(1) In general.--A State may not refuse to count a ballot
submitted in an election for Federal office by an absent
uniformed services voter on the grounds that the ballot was
improperly or fraudulently cast unless the State finds clear
and convincing evidence of fraud in the preparation or
casting of the ballot by the voter.
``(2) Clear and convincing evidence.--For purposes of this
subsection, the lack of a witness signature, address,
postmark, or other identifying information may not be
considered clear and convincing evidence of fraud (absent any
other information or evidence).
``(3) No effect on filing deadlines under state law.--
Nothing in this subsection may be construed to affect the
application to ballots submitted by absent uniformed services
voters of any ballot submission deadline applicable under
State law.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply with respect to ballots described in section
102(b) of the Uniformed and Overseas Citizens Absentee Voting
Act (as added by such subsection) that are submitted with
respect to elections that occur after the date of enactment
of this Act.

SEC. 3. STUDY AND REPORT BY THE POSTAL SERVICE ON IMPROVING
THE SUBMISSION OF ABSENTEE BALLOTS BY ABSENT
UNIFORMED SERVICES VOTERS IN ELECTIONS FOR
FEDERAL OFFICE.

(a) Study.--
(1) In General.--The Postal Service shall conduct a study
to determine each reason for which an absentee ballot of an
absent uniformed services voter (as defined in paragraph (1)
of section 107 of the Uniformed and Overseas Citizens
Absentee Voting Act (42 U.S.C. 1973ff-6)) was not counted in
the general election for Federal office (as defined in
paragraph (3) of such section) held in 2000.
(2) Consultation.--In conducting the study under this
subsection, the Postal Service shall consult with the head of
the executive department designated under section 101(a) of
the Uniformed and Overseas Citizens Absentee Voting Act (42
U.S.C. 1973ff), and the Secretaries of Defense,
Transportation, Commerce, and Health and Human Services.
(b) Unpostmarked Ballots.--In conducting the study under
subsection (a), if the Postal Service finds that a reason for
which an absentee ballot was not counted is that the ballot
was not postmarked, then the Postal Service shall--
(1) determine the reason that the ballot was not
postmarked; and
(2) develop recommendations on ways to ensure that such
ballots will be postmarked in the future.
(c) Report.--Not later than 120 days after the date of
enactment of this Act, the Postal Service shall submit to
Congress a report on the study conducted under subsection (a)
that contains--
(1) any reason determined under paragraph (1) of subsection
(b) and any recommendations developed under paragraph (2) of
such subsection; and
(2) such recommendations for legislative or administrative
action as the Postal Service determines appropriate.
Mrs. FEINSTEIN (for herself and Mr. Voinovich):
S. 123. A bill to amend the Higher Education Act of 1965 to extend
loan forgiveness for certain loans to Head Start teachers; to the
Committee on Health, Education, Labor, and Pensions.

head start teachers act of 2001

Mrs. FEINSTEIN. Mr. President: I rise today with my colleague from
Ohio, Senator Voinovich, to introduce legislation to expand the federal
loan forgiveness program to include Head Start teachers.
Head Start is one of the most important federal programs because it
has the potential to reach children early in their formative years when
their cognitive skills are just developing. We know that poor children
disproportionately start school behind their peers--they are less
likely to count to 10 or to recite the alphabet.
Providing low-income children with access to programs that encourage
cognitive learning and prepare them to enter school ready to learn is
important. Head Start is one example of a Federal program that has the
potential to reach every low-income child; to help every eligible child
learn to count to ten and begin to recite the alphabet.
Many of our Nation's youngsters, however, enter elementary school
without the basic skills necessary to succeed. Often these children lag
behind their peers throughout their academic career.
As taxpayers, we will spend millions on efforts to help these
children catch up. Many of these children will never catch up.
Several studies confirm the importance of providing low-income
children with the opportunity early on to gain basic cognitive skills:

A study conducted on a preschool program in Chicago showed that for
every dollar invested, $8 was saved by society in projected costs.
Additionally, 26 percent more children were likely to finish high
school and 40 percent were less likely to repeat a grade.
The National Head Start Association found that for every dollar
invested in Head Start, at least $2.50 is saved because these children
need less remedial education and are less likely to be on welfare
programs or involved with the juvenile justice system than non-Head
Start peers.
The Rand Corporation found that for every dollar invested in early
childhood learning programs, taxpayers save between $4 and $7 later by
reducing the need for alcohol and drug treatment programs, special
education programs, mental health services, and the likelihood of
incarceration.

We can save millions by providing low-income children with access to
quality preschool where they will gain the necessary cognitive skills
to succeed in school and life.
In order to give every child a head start in life, we must continue
to recruit qualified teachers to the Head Start field who have
demonstrated knowledge and teaching skills in reading, writing, early
childhood development, and other areas of the preschool curriculum with
a particular focus on cognitive learning. Obtaining and maintaining
teachers with such qualifications is the only way to jump-start
cognitive learning and to ensure that our youngsters start elementary
school ready to learn.
Several recent studies confirm the importance of investing in the
education and training of those who work with preschoolers.

[[Page S400]]

A study conducted by the National Research Council at the request of
the U.S. Department of Education recommends that:

Each group of children in an early childhood education and
care program should be assigned a teacher who has a
bachelor's degree with specialized education related to
early childhood. . . . Progress toward a high-quality
teaching force will require substantial public and private
support and incentive programs, including innovative
education programs, scholarship and loan programs, and
compensation commensurate with the expectations of college
graduates.

The Head Start 2010 National Advisory Panel presided over fifteen
national hearings and open forums. The panel found:

There was a tremendous amount of testimony about the fact
that, despite increases resulting from Federal quality set-
aside funding, relatively low salaries and poor or non-
existent benefits make it difficult to attract and retain
qualified staff over the long term. Witnesses stated that
many staff positions remain vacant and turnover is likely to
worsen if compensation does not improve significantly . . .
comments included passionate exhortations for greater
investment in staff, observing that, in Head Start . . . the
quality of the program is tied directly to the quality of the
staff.

Many Head Start programs are losing qualified teachers to local
school districts because the pay is better, and working in an
elementary or secondary school assists these teachers in qualifying to
receive up to $5,000 of their federal loans forgiven. Every teacher
Head Start loses impacts access to services for our nation's most
vulnerable youngsters.
I believe that leveling the playing field by offering Head Start
teachers the same loan forgiveness benefit currently afforded to
elementary and secondary school teachers could encourage more college
graduates to enter the field.
Following the recommendations of the Head Start 2010 National
Advisory Panel and the National Research Council, I believe we must
create programs to encourage highly educated and trained individuals to
commit to long-term careers in the Head Start arena.
To encourage recent graduates, current Head Start teachers without a
degree, and college students to enter and remain in the Head Start
field, I am introducing legislation that will expand the federal loan
forgiveness program to include Head Start teachers. In exchange for 5
years of service, a Head Start teacher could receive up to $5,000 of
their federal Stafford loan forgiven.
I believe we must continue to improve the Head Start program such
that children leave the program able to count to ten, to recognize
sizes and colors, and can begin to recite the alphabet, to name a few
indicators of cognitive learning. To ensure cognitive learning, we must
also continue to raise the standards for Head Start teachers. Offering
Head Start teachers similar compensation for their educational
achievements and expenses afforded to other teachers should be a
priority of this Congress.
Mr. President, I ask unanimous consent that the text of the bill now
appear in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 123

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

SECTION 1. LOAN FORGIVENESS FOR HEAD START TEACHERS.

(a) Short Title.--This section may be cited as the ``Loan
Forgiveness for Head Start Teachers Act of 2001''.
(b) Head Start Teachers.--Section 428J of the Higher
Education Act of 1965 (20 U.S.C 1078-10) is amended--
(1) in subsection (b), by amending paragraph (1) to read as
follows:
``(1)(A) has been employed--
``(i) as a full-time teacher for 5 consecutive complete
school years in a school that qualifies under section
465(a)(2)(A) for loan cancellation for Perkins loan
recipients who teach in such a school; or
``(ii) as a Head Start teacher for 5 consecutive complete
program years under the Head Start Act; and
``(B)(i) if employed as a secondary school teacher, is
teaching a subject area that is relevant to the borrower's
academic major as certified by the chief administrative
officer of the public or nonprofit private secondary school
in which the borrower is employed;
``(ii) if employed as an elementary school teacher, has
demonstrated, as certified by the chief administrative
officer of the public or nonprofit private elementary school
in which the borrower is employed, knowledge and teaching
skills in reading, writing, mathematics, and other areas of
the elementary school curriculum; and
``(iii) if employed as a Head Start teacher, has
demonstrated knowledge and teaching skills in reading,
writing, early childhood development, and other areas of a
preschool curriculum, with a focus on cognitive learning;
and'';
(2) in subsection (g), by adding at the end the following:
``(3) Head start.--An individual shall be eligible for loan
forgiveness under this section for service described in
clause (ii) of subsection (b)(1)(A) only if such individual
received a baccalaureate or graduate degree on or after the
date of enactment of the Loan Forgiveness for Head Start
Teachers Act of 2001.''; and
(3) by adding at the end the following:
``(i) Authorization of Appropriations.--There are
authorized to be appropriated such sums as may be necessary
for fiscal year 2007 and succeeding fiscal years to carry out
loan repayment under this section for service described in
clause (ii) of subsection (b)(1)(A).''.
(c) Conforming Amendments.--Section 428J of such Act (20
U.S.C. 1078-10) is amended--
(1) in subsection (c)(1), by inserting ``or fifth complete
program year'' after ``fifth complete school year of
teaching'';
(2) in subsection (f), by striking ``subsection (b)'' and
inserting ``subsection (b)(1)(A)(i)'';
(3) in subsection (g)(1)(A), by striking ``subsection
(b)(1)(A)'' and inserting ``subsection (b)(1)(A)(i)''; and
(4) in subsection (h), by inserting ``except as part of the
term `program year','' before ``where''.

Mr. VOINOVICH. Mr. President, I rise today to join my friend and
colleague, Senator Feinstein, in introducing legislation which will
encourage young teachers to go into early childhood education,
encourage further learning and credentialing of early learning
educators, and lead to better education for our nation's youngest
children.
There is no more important time in a child's life than their earliest
years. Scientific research tells us that babies are born with 100
billion neurons, or brain cells, that are waiting to make connections,
or synapses, with one another. These synapses empower the brain and
dictate healthy development and future learning. By the time a baby is
three, 1,000 trillion connections have been made--twice as many
synapses as most adults have.
However, at age 11, children start eliminating those brain
connections that have not been used, thus decreasing their potential
for learning and development.
To maximize their learning potential, we must begin to teach our
children the necessary skills before they reach kindergarten.
Researchers have found that focusing on these earliest years can make
the greatest difference in a child's development and learning, and I
know of few other programs that provide the same focus as Head Start.
Our bill, the Loan Forgiveness for Head Start Teachers Act of 2001,
is designed to encourage currently enrolled and incoming college
students working on a Bachelor's or a Master's degree to pursue a
career as a Head Start teacher. In exchange for a 5-year teaching
commitment in a qualified Head Start program, a college graduate with a
minimum of a bachelor's degree could receive up to $5,000 in
forgiveness for their federal Stafford student loan.
When I was Governor of Ohio, we invested heavily in Head Start so
that there was room for every eligible child in Ohio. Because of our
efforts, Ohio is 4th in the nation in terms of children served by Head
Start with nearly 38,000 students served in the year 2000.
I have carried my passion for early childhood education with me to
the U.S. Senate. I continue to believe that it is absolutely critical
that we do more to help our young people prepare to begin school and it
is why I was pleased to work with Senators Jeffords and Stevens to help
pass the Early Learning Opportunities Act of 2000. Still, we must now
do more to help those teachers who educate our youngest children.
The results of a survey undertaken by the U.S. Department of Health
and Human Services over the past two years has shown a significant
correlation between the quality of education a child receives and the
amount of education that child's teacher possesses. That is, the more
education a teacher has, the more effectively they teach their students
cognitive skills, and the more likely that students are to act upon
those skills.
Current federal law requires that 50 percent of all Head Start
teachers must

[[Page S401]]

have an associate, bachelor's, or advanced degree in early childhood
education or a related field with teaching experience by 2003. Under
Ohio law, by 2007, all Head Start teachers must have at least an
associates degree. The more education our teachers have, the better off
our children will be. Unfortunately, as we all know, education is
expensive.
In Ohio today, only 11.3 percent (242) of the 2,126 Head Start
teachers employed in the state have a bachelor's degree. Additionally,
less than one percent (20) of Ohio's Head Start teachers have a
graduate degree. We must do more to help our teachers afford the
education that will be used to help educate our children.
Recruiting and retaining Head Start and early childhood teachers
continues to be a challenge for Ohio and other states. The Loan
Forgiveness for Head Start Teachers Act of 2001 will help communities,
schools and other funded Head Start providers to meet the challenge of
recruiting and retaining high quality teachers. It is one of the best
ways that I know of where we can make a real difference in the lives of
our most precious resource--our children.
I am pleased to have been able to work with the National Head Start
Association and Ohio Head Start Association, and my colleague Senator
Feinstein, on this legislation, and I urge my colleagues to join as co-
sponsors of this bill.
______

By Mr. JOHNSON (for himself, Mr. Kennedy, Mr. Dorgan, Mr.
Bingaman, Mr. Feingold, Mr. Leahy, Mr. Inouye, Mr. Kerry, and
Mr. Daschle):
S. 125. A bill to provide substantial reductions in the price of
prescription drugs for Medicare beneficiaries; to the Committee on
Finance.
Mr. JOHNSON. Mr. President, I am pleased to introduce the
``Prescription Drug Fairness for Seniors Act of 2001'', legislation
that addresses the critical issue facing our older Americans--the cost
of their prescription drugs. Studies have shown that older Americans
spend almost three times as much of their income on health care than
those under the age of 65, and more than three-quarters of Americans
aged 65 and over are taking prescription drugs. Even more alarming is
the fact that seniors and others who buy their own prescription drugs,
are forced to pay over twice as much for their drugs as are the drug
manufactures' most favored customers, such as the federal government
and large HMOs.
The ``Prescription Drug Fairness for Seniors Act'' will protect
senior citizens and disabled individuals from drug price discrimination
and make prescription drugs available to Medicare beneficiaries at
substantially reduced prices. The legislation achieves these goals by
allowing pharmacies that serve Medicare beneficiaries to purchase
prescription drugs at prices equal to those of the pharmaceutical
companies' most favored customers. Estimated to reduce prescription
drug prices for seniors by over 40%, this bill will help those seniors
who often times have to make devastating choices between buying food or
medications. Choices that no human being should have to make.
Research and development of new drug therapies is an important and
necessary tool towards improving a person's quality of life. But due to
the high price tag that often accompanies the latest drug therapies,
seniors are often left without access to these new therapies, and
ultimately, in far too many instances, without access to medication at
all. This legislation is an important step towards restoring the access
to affordable medications for our Medicare beneficiaries.
While this may not be the magic bullet that meets all of the long
term needs of providing Medicare prescription drug coverage, it does
provide a mechanism for immediate relief from rising drug costs.
Working together, reaching across the aisle, we can use this time of
unparalleled prosperity to do the right thing by our seniors. We should
do it this year for their sake, and for the sake of the future of
Medicare.
I look forward to working on this important issue in the months to
come and hope that Congress will work swiftly in a bipartisan manner to
enact legislation that will benefit millions of senior citizens and
disabled individuals across our nation.
______

By Mr. CLELAND (for himself, Mr. Miller, Mr. Inouye, Mr.
Torricelli, Mr. Bingaman, and Mr. Harkin):
S. 126. A bill to authorize the President to present a gold medal on
behalf of Congress to former President Jimmy Carter and his wife
Rosalynn Carter in recognition of their service to the Nation; to the
Committee on Banking, Housing, and Urban Affairs.

Authorizing the President to present the Gold Medal on behalf of
Congress to Former President Jimmy Carter and Former First Lady
Rosalynn Carter

Mr. CLELAND. Mr. President, I rise today to introduce a bill that
would authorize the President to present a Gold Medal on behalf of
Congress to former President Jimmy Carter and former First Lady
Rosalynn Carter in recognition of their service to the Nation. I would
like to thank Senators Miller, Inouye, Torricelli, Bingaman and Harkin
for co-sponsoring this bill and extend an invitation to all our other
colleagues to join us in supporting this legislation to award these two
great Americans with Congress' highest honor.
It is widely agreed that President Jimmy Carter and his wife Rosalynn
Carter have distinguished records of public service to the American
people and the international community. Internationally, the Carters
have been involved in a number of public service initiatives ranging
from combating famine in Sub-Sahara Africa and encouraging better
health care in Third World nations to serving as mediators in an effort
to end civil wars in half a dozen countries. President Carter has
monitored numerous foreign elections in an effort to spread democracy
throughout the world.
A Congressional Gold Medal awarded by Congress will show the
appreciation of the American public for the many contributions that
President and Mrs. Carter have made, including service in public office
from the state legislature to the White House. Jimmy and Rosalynn
continue to promote human rights worldwide due to their active
involvement in the nonprofit Carter Center in Atlanta that has
initiated projects in more than 65 countries to resolve conflicts,
promote human rights, build democracy, improve health care worldwide,
and revitalize urban areas. In addition, the Carters serve as
volunteers for Habitat for Humanity, which helps low income families
build their own homes.
I hope that other members of Congress will join me and Senators
Miller, Inouye, Torricelli, Bingaman, and Harkin in recognizing
President and Mrs. Carter for their distinguished records of public
service by awarding them the Congressional Gold Medal. Thank you, Mr.
President.
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. 126

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

SECTION 1. FINDINGS.

The Congress finds that--
(1) both former President Jimmy Carter and his wife
Rosalynn Carter have distinguished records of public service
to the American people and to the international community;
(2) the peacemaking efforts of President Jimmy Carter as a
mediator in the Arab-Israeli dispute culminated in the Camp
David Accords signed by Egypt and Israel, which provided the
foundation for a settlement of the Middle East dispute that
had eluded peacemakers for more than 3 decades;
(3) President Jimmy Carter was instrumental in the passage
of the Alaska National Interest Lands Conservation Act (16
U.S.C. 3101 et seq.), one of the most significant pieces of
environmental legislation ever approved by Congress;
(4) in establishing his presidential library, President
Jimmy Carter sought to create a center for the service of
humanity in areas as diverse as politics, health care, human
rights, and democracy;
(5) Jimmy and Rosalynn Carter epitomize the American
quality of voluntarism in action through their countless
public service activities in their home State of Georgia, the
rest of the United States, and throughout the world,
including their work for Habitat for Humanity, which helps
needy people in the United States and other countries
renovate and build homes for themselves; and
(6) together, Jimmy and Rosalynn Carter have dedicated
their lives to promoting national pride and to bettering the
quality of

[[Page S402]]

life in the United States and throughout the world.

SEC. 2. CONGRESSIONAL GOLD MEDAL.

(a) Presentation Authorized.--The President is authorized
to present at the Capitol, on behalf of the Congress, a gold
medal of appropriate design to former President Jimmy Carter
and his wife Rosalynn Carter in recognition of their service
to the Nation.
(b) Design and Striking.--For the purpose of the
presentation referred to in subsection (a), the Secretary of
the Treasury (hereafter in this Act referred to as the
``Secretary'') shall strike a gold medal with suitable
emblems, devices, and inscriptions, to be determined by the
Secretary.
(c) Subsequent Arrangements for Presentation.--Subsection
(a) shall not be construed as providing the consent of the
House of Representatives or the Senate for the use of any
particular part of the Capitol or the grounds of the Capitol
for purposes of the presentation referred to in subsection
(a).

SEC. 3. DUPLICATE MEDALS.

Under such regulations as the Secretary may prescribe, the
Secretary may strike and sell duplicates in bronze of the
gold medal struck pursuant to section 2 at a price sufficient
to cover the costs of the medals (including labor, materials,
dies, use of machinery, and overhead expenses) and the cost
of the gold medal.

SEC. 4. NATIONAL MEDALS.

The medals struck under this Act are national medals for
purposes of chapter 51 of title 31, United States Code.

SEC. 5. FUNDING AND PROCEEDS OF SALE.

(a) Authorization.--There is hereby authorized to be
charged against the United States Mint Public Enterprise Fund
an amount not to exceed $30,000 to pay for the cost of the
medals authorized by this Act.
(b) Proceeds of Sale.--Amounts received from the sale of
duplicate bronze medals under section 3 shall be deposited in
the United States Mint Public Enterprise Fund.
______

Mr. McCAIN (for himself, Mr. Cleland, Mrs. Hutchison, and Mr.
Murkowski):
S. 127. A bill to give American companies, American workers, and
American ports the opportunity to compete in the United States cruise
market; to the Committee on Commerce, Science, and Transportation.

the united states ship cruise vessel act

Mr. McCAIN. Mr. President, today Senators Hutchison, Cleland,
Murkowski, and I are introducing the United States Cruise Vessel Act.
The purpose of this bill is to provide increased domestic cruise
opportunities for the American cruising public by temporarily reducing
barriers to operation in the domestic cruise market. I want to start by
thanking Senators Hutchison, Cleland, and Murkowski for once again
joining me in an effort to rebuild our nation's cruise ship industry.
While we made great progress in advancing our goals during the last
Congress, our efforts were blocked by the special interests of a small
group of shipbuilders who prefer the status quo that allows them to
dominate the small market for large U.S.-built cruise ships without the
fear of competition. The bill that we are introducing today was passed
out of the Senate Commerce Committee unanimously during the last
Congress. It represents months, if not years, of work by a large cross
section of our nation's maritime industry to reach agreement on how
best to jump-start our nation's fleet of U.S. flagged cruise vessels
and provide them the tools they need to compete in the world market.
The measure we are introducing today would allow for the immediate
expansion of the domestic fleet by allowing operators to bring existing
cruise ships under the U.S. flag as long as they agree to build
additional vessels in the United States. The measure would also provide
increased opportunities for U.S. mariners to serve at sea. This becomes
more critical annually, as we face greater difficulties in meeting our
national defense sealift need for qualified merchant mariners. We need
to provide more opportunities for U.S. merchant mariners to serve at
sea and this measure can lead to those opportunities. Finally, the
measure would lead to increased work for our nation's shipyards and
build on the limited construction plans for large cruise ships
currently underway.
I want to highlight some of the major provisions of the bill in order
to ensure that the legislation we are introducing today is not confused
with previous measures that allowed for the operation of foreign
flagged vessels in the U.S. domestic market. The bill we are
introducing today provides a two-year window of opportunity to
encourage the immediate reflagging of large cruise vessels under the
United States flag for operation in the domestic cruise trades. The
bill would allow the Secretary of Transportation to issue permits for
the limited operation of foreign-built cruise vessels in the domestic
trades if applications are received within two years of the date of
enactment of this legislation.
To be eligible for reflagging and operation in the U.S. domestic
cruise trades, a cruise vessel must have been delivered after January
1, 1980, and be at least 20,000 gross registered tons, have no fewer
than 800 passenger berths, provide a full range of
overnight accommodations, dining, and entertainment services, comply
with the Safety of Life at Sea requirements for a fixed smoke detection
and sprinkler system in the accommodation areas, and be constructed
according to internationally accepted construction standards. This will
help ensure that any foreign flag vessels reflagged to take advantage
of the bill are modern and safe.

To be eligible to enter the domestic market, the vessel must be owned
by a citizen of the United States as defined in section 2 of the
Shipping Act, 1916 (46 U.S.C. 802) or section 12106(e) of title 46
United States Code.
The bill would assist the U.S. ship repair industry and would require
foreign built cruise vessels entering the domestic market to have all
repair, maintenance, alteration and other work required for operation
under the U.S. flag, as well as regular repair and maintenance work,
performed in a U.S. shipyard.
Prior to allowing a foreign built vessel to be reflagged and utilized
in the domestic market, the bill would require the operator of a
reflagged vessel to enter into a binding contract with U.S. shipyards
for the construction of at least one more vessel than the total number
of vessels they will operate in the domestic cruise market. The
contract must provide for a total number of passenger berths equal to
or greater than the number operated in the domestic market by that
operator. Additionally, the replacement vessels must be at least 20,000
gross registered tons and have no fewer than 800 passenger berths.
The bill would require the first replacement vessel to be delivered
within five years of the date the foreign-built vessel commences
operation in the domestic trade and that each additional vessel be
delivered within two years of the preceding vessel. Foreign built
vessels are required to leave the domestic market two years after the
replacement vessel or vessels are delivered.
The bill would require the Secretary to Transportation to insure that
the coastwise business of a U.S. built vessel operator is not harmed by
the operation of a foreign-built vessel in the domestic market. The
Secretary, after reviewing the proposed itineraries of foreign-built
vessels in the domestic market, as well as taking into consideration
public comments, is required to determine if there will be an adverse
impact on the operation of a U.S.-built vessel. The Secretary is
required to consider the scope of the vessel's itineraries, the
duration of the cruise, the size of the vessel and the retail per diem
of the vessel. If there is a conflict, the operator of a foreign-built
vessel must change the vessel's itinerary in order to remove the
conflict to the satisfaction of the Secretary.
The slow and limited growth of the U.S. domestic cruise market
demands that we put aside special interests and pass this measure at
the first available opportunity. I can assure my colleagues that as
Chairman, the Senate Committee will continue to work with all members
interested in the future of a U.S. flagged cruise fleet to further
address any concerns with the bill. But I would also ask all members to
compare the limited growth of our domestic fleet to the dynamic growth
in the international cruise market in hopes that they will realize that
without actions soon, the U.S. fleet will be left behind.
The bill we are introducing today will stimulate growth and
opportunity within the domestic cruise ship trade with the
beneficiaries being U.S. port cities and business, and as I have often
said, the millions of American citizens who want to be able to enjoy
cruising between U.S. ports.
I hope my colleagues will join Senators Hutchison, Cleland,
Murkowski,

[[Page S403]]

and me to help advance this legislation.
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. 127

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 SECTIONS.

(a) Short Title.--This Act may be cited as the ``United
States Cruise Vessel Act''.
(b) Table of Sections.--The table of sections for this Act
is as follows:

Sec. 1. Short title; table of sections.
Sec. 2. Definitions.

TITLE I--OPERATIONS UNDER CERTIFICATE OF DOCUMENTATION

Sec. 101. Domestic cruise vessel.
Sec. 102. Repairs requirement.
Sec. 103. Construction requirement.
Sec. 104. Certain operations prohibited.
Sec. 105. Priorities within domestic markets.
Sec. 106. Report.
Sec. 107. Enforcement

TITLE II--OTHER PROVISIONS

Sec. 201. Application with Jones Act and other Acts.
Sec. 202. Glacier Bay and other National Park Service area permits.

SEC. 2. DEFINITIONS.

In this Act:
(1) Eligible cruise vessel.--The term ``eligible cruise
vessel'' means a cruise vessel that--
(A) was delivered after January 1, 1980;
(B) is at least 20,000 gross registered tons;
(C) has no fewer than 800 passenger berths;
(D) is owned by a person that is a citizen of the United
States for the purpose of operating a vessel in the coastwise
trade within the meaning of section 2 of the Shipping Act,
1916 (46 U.S.C. 802) or section 12106(e) of title 46, United
States Code;
(E) provides a full range of overnight accommodations,
entertainment, dining, and other services for its passengers;
(F) has a fixed smoke detection and sprinkler system
installed throughout the accommodation and service spaces, or
will have such a system installed within the time period
required by the 1992 Amendments to the Safety of Life at Sea
Convention of 1974; and
(G) meets the eligibility requirements for a certificate of
inspection under section 1137(a) of the Coast Guard
Authorization Act of 1996 (46 U.S.C. App. 1187 nt.), and
complies with the applicable international agreements and
associated guidelines referred to in section 1137(a)(2) of
that Act (46 U.S.C. 1187 nt.).
(2) Itinerary.--The term ``itinerary'' means the route
travelled by a cruise vessel on a single voyage that begins
at the first port at which passengers on that voyage embark,
includes each port at which the vessel calls before the last
port at which passengers on that voyage disembark, and ends
at that last port of disembarkation. For purposes of this
paragraph, the term ``embark'' and ``disembark'' have the
meaning given those terms in section 4.80a(a)(4) of title 19,
Code of Federal Regulations (as such section is in effect on
the date of enactment of this Act).
(3) Operator.--The term ``operator'' means the owner,
operator, or charterer.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.
(5) United States shipyard.--The term ``United States
shipyard'' means a shipyard located in the United States.
(6) United States.--The term ``United States'' has the
meaning given that term in section 2101(44) of title 46,
United States Code.

TITLE I--OPERATIONS UNDER CERTIFICATE OF DOCUMENTATION

SEC. 101. DOMESTIC CRUISE VESSEL.

(a) In General.--Notwithstanding the provisions of section
8 of the Act of June 19, 1886 (46 U.S.C. App. 289), section
27 of the Act of June 5, 1920, commonly known as the Jones
Act, (46 U.S.C. App. 883), section 27A of that Act, (46
U.S.C. App. 883-1), and section 12106 of title 46, United
States Code, the Secretary shall issue a certificate of
documentation with a temporary coastwise endorsement for an
eligible cruise vessel not built in the United States to
operate in domestic itineraries in the transportation of
passengers in the coastwise trade between ports in the United
States if the vessel meets the requirements of this title.
(b) Termination of Authority.--The authority of the
Secretary to issue a certificate of documentation under
subsection (a) begins on the day after the date of enactment
of this Act and terminates on the day that is 24 months after
that date.
(c) Application Only Required.--Notwithstanding subsection
(b), the Secretary may issue a certificate of documentation
under subsection (a) more than 24 months after the date of
enactment of this Act if--
(1) the Secretary received the application for the
certificate of documentation before the end of that 24-month
period; and
(2) the vessel otherwise meets the requirements of this
title.
(d) Rights under Application Not Transferrable.--The right
to receive a certification of documentation pursuant to an
application described in subsection (c) may not be
transferred by the applicant to any other person. For
purposes of this subsection, the transfer of that right to a
successor in interest to the applicant in connection with the
reorganization, restructuring, acquisition, or sale of the
applicant's business shall not be considered another person.

SEC. 102. REPAIRS REQUIREMENT.

(a) In General.--The Secretary may not issue a certificate
of documentation under section 101(a) for an eligible cruise
vessel unless the operator establishes to the satisfaction of
the Secretary that--
(1) any repair, maintenance, alteration, or other
preparation of the vessel for operation under a certificate
of documentation issued under section 101(a) have been, or
will be, performed in a United States shipyard; and
(2) any repair, maintenance, or alteration of the vessel
after a certificate of documentation is issued under that
section will be performed in a United States shipyard.
(b) Waiver.--The Secretary may waive the requirements of
subsection (a) if the Secretary finds that the repair,
maintenance, alterations, or other preparation services are
not available in the United States or if an emergency
dictates that the vessel proceed to a foreign port.

SEC. 103. CONSTRUCTION REQUIREMENT.

(a) Construction Contract Required.--
(1) In general.--Except as provided in paragraph (2), a
vessel for which a certificate of documentation has been
issued under section 101(a) may not commence operations in
the coastwise trade until the operator of that vessel
executes a contract with one or more United States shipyards
for the construction of a total of 2 or more cruise vessels
with a total combined berth or stateroom capacity equal to at
least the total combined berth or stateroom capacity of that
vessel. If certificates of documentation are issued under
section 101(a) for more than 1 vessel for an operator, the
construction contract required by the preceding sentence
shall provide for the construction of 1 more vessel than the
number of vessels for which certificates of documentation are
issued with a total combined berth or stateroom capacity
equal to at least the total combined berth or stateroom
capacity of the vessels for which the certificates of
documentation are issued.
(2) Demonstration of Capability Required.--For purposes of
this subsection, a construction contract for which financing
is not provided under title XI of the Merchant Marine Act,
1936 (46 U.S.C. App. 1101 et seq.) shall not be recognized as
meeting the requirements of paragraph (1) unless both the
operator and the shipyard are capable of completing the
contract. For purposes of this paragraph--
(A) an operator shall be considered to be capable of
completing such a contract if the operator meets the
standards set forth in sections 298.12, 298.13, and 298.14 of
title 46, Code of Federal Regulations; and
(B) a shipyard shall be considered to be capable of
completing such a contract if the shipyard meets the
standards set forth in section 298.32(a) of that title.
(b) Minimum Size Requirement.--For purposes of this
section, a contract for the construction of a vessel shall be
disregarded if that vessel--
(1) will be less than 20,000 gross registered tons; or
(2) will have fewer than 800 passenger berths.
(c) Contract Terms.--
(1) In general.--The contract required by subsection (a)
shall provide for delivery of the first such vessel not later
than 60 months after the date on which operations of the
vessel for which the certificate of documentation was issued
commence, and shall contain any other provisions required by
the Secretary for purposes of this subsection. If the
contract provides for the construction of more than 1 vessel,
it shall provide for delivery of each vessel subsequent to
the first not later than 24 months after delivery of the
immediately preceding vessel.
(2) Extension of time periods for impossibility of
performance.--If the commencement of construction or the
completion of construction is prevented or delayed by
circumstances that would be recognized as providing a defense
of impossibility-of-performance by the shipyard under
applicable contract law, each time period in this Act related
to delivery of a vessel by that shipyard shall be extended
for whatever period of time the circumstance on which the
defense is predicated continues to exist.
(d) Expiration of Coastwise Endorsement.--The coastwise
endorsement for an eligible cruise vessel under section
101(a) shall expire 24 months after the delivery date for the
replacement vessel or vessels for that eligible cruise
vessel. For purposes of this subsection, the term
``replacement vessel or vessels'' means 1 or more vessels the
operator of the eligible cruise vessel is obligated to
construct in the United States under the contract described
in subsection (a) with respect to the eligible cruise vessel
that have at least the same number of passenger berths as the
eligible cruise vessel, or they, replace.
(e) Reflagging Under Foreign Registry.--Notwithstanding
section 9(c) of the Shipping Act, 1916 (46 U.S.C. App. 808),
the operator of an eligible cruise vessel issued a
certificate of documentation with a temporary coastwise
endorsement under section 101(a), or a cruise vessel
constructed under a contract described in subsection (a) of
this section, may place that vessel under foreign registry.

SEC. 104. CERTAIN OPERATIONS PROHIBITED.

Neither an eligible cruise vessel operating in domestic
itineraries under a certificate of

[[Page S404]]

documentation issued under section 101(a) nor a vessel
constructed under a contract described in section 103(a)
may--
(1) operate as a ferry;
(2) regularly carry for hire both passengers and vehicles
or other cargo; or
(3) operate between or among the islands of Hawaii.

SEC. 105. PRIORITIES WITHIN DOMESTIC MARKETS.

(a) Notification of Secretary.--
(1) New vessels.--Any person eligible under section 12102
of title 46, United States Code, to document a vessel under
chapter 121 of that title that enters into a contract with a
United States shipyard for the construction of a cruise
vessel that--
(A) will be at least 20,000 gross registered tons,
(B) will have no fewer than 800 passenger berths, and
(C) is otherwise eligible for a certificate of
documentation and a coastwise trade endorsement,
shall notify the Secretary, at such time and in such manner
and form as the Secretary may require, of the construction of
that vessel not less than 2 full calendar years before the
earliest date on which the vessel is intended to commence
operations.
(2) Reconstruction.--The notification requirement of
paragraph (1) also applies to any such person that enters
into a contract with a United States shipyard for the
reconstruction of any vessel, including a vessel that has a
certificate of documentation under chapter 121 of title 46,
United States Code, will, after reconstruction, will be that
size and capacity and be eligible for such an endorsement.
(b) Priority to U.S.-Built Vessels.--The Secretary shall
give priority to any cruise vessel described in subsection
(a) over any other cruise vessel of comparable operations in
a comparable market under a certificate of documentation
issued under section 101(a) if the Secretary, after notice
and an opportunity for public comment, determines that the
employment in the coastwise trade of the vessel issued a
certificate of documentation under section 101(a) will
adversely affect the coastwise trade business of any person
operating a vessel not documented under section 101(a) in the
coastwise trade.
(c) Factors Considered.--In determining and assigning
priorities, the Secretary shall consider, among other factors
determined by the Secretary to be appropriate--
(A) the scope of a vessel's itinerary, including--
(i) the ports between which it operates; and
(ii) the duration of the cruise;
(B) the time frame within which the vessel will serve a
particular itinerary;
(C) the size of the vessel; and
(D) the retail per diem of the vessel.
(d) Implementation.--
(1) Intinerary submission required.--The Secretary shall
require the operator of each vessel issued a certificate of
documentation under section 101(a) to submit, in April of
each year, a proposed itinerary for that vessel for cruise
itineraries for the calendar year beginning 20 months after
the date on which the itinerary is required to be submitted.
(2) Publication and Comment.--
(A) Publication.--The Secretary shall cause any itinerary
submitted under paragraph (1), and any late submission or
revision submitted under paragraph (3), to be published in
the Federal Register.
(B) Comment Period.--The Secretary shall receive and
consider comments from the public on any itinerary published
under subparagraph (A) for a period of 30 days after the date
on which the itinerary is published.
(3) Revisions and later submissions.--The Secretary shall
permit late submissions and revisions of submissions after
the final list of approved itineraries is published under
paragraph (4)(C)(iii) and before the start date of a
requested itinerary.
(4) Scheduling.--
(A) Action by secretary.--Within 30 days after the close of
the comment period on an itinerary published under paragraph
(2)(A), the Secretary shall--
(i) review the itineraries submitted to the Secretary for
compliance with the priorities established by this section;
(ii) advise affected cruise vessel operators of any
specific itinerary that is not available and the reason it is
not available; and
(iii) publish a proposed list of approved itineraries.
(B) Operators' appeals.--The operator of any eligible
cruise vessel may appeal the Secretary's decision under
subparagraph (A)(ii) within 30 days after the Secretary
advises the operator of the decision.
(C) Resolution of conflicts.--As soon as practicable after
the end of the 30-day period described in subparagraph (B),
the Secretary shall--
(i) resolve any appeals and consider new itinerary
proposals;
(ii) advise cruise vessel operators who responded under
subparagraph (B) of the Secretary's decision with respect to
the appeal or the new itinerary proposal; and
(iii) publish a final list of approved itineraries.

SEC. 106. REPORT.

The Secretary shall issue an annual report on the number of
vessels operating under certificate of documentations granted
under section 101(a), and on the progress of construction on
vessels to replace those vessels under section 103.

SEC. 107. ENFORCEMENT.

(a) Breach of Construction Contract by Operator.--The
Secretary shall revoke a temporary coastwise endorsement
issued under section 101(a)(2) for a vessel if the operator
of that vessel commits a serious breach of the construction
contract required by section 103(a). The revocation shall
take effect at the conclusion of the last voyage on the last
cruise itinerary approved by the Secretary before the
Secretary made the determination to revoke the endorsement.
(b) Breach of Construction Contract by Shipyard.--
(1) In general.--If a shipyard commits a serious breach of
a construction contract required by section 103(a) with an
operator of a vessel for which a certificate of documentation
granted under section 101(a)--
(A) the operator shall notify the Secretary immediately of
the breach; and
(B) the operator may continue to operate that vessel as if
the contract were in effect for a period of 24 months after
notification of the Secretary on the condition that the
operator will make good faith efforts during that 24-month
period to execute a contract with a United States shipyard
for the construction of the vessels that were to have been
constructed under that contract.
(2) Good faith effort required.--If the Secretary
determines at any time during that 24-month period that the
operator has ceased to make good faith efforts to execute
such a contract, then the Secretary shall immediately
terminate the operator's authority to continue operations
under this paragraph.
(c) Substantial Breaches Only.--For purposes of subsections
(a) and (b), the term ``serious breach of contract'' means a
breach of contract for which an appropriate remedy under
section 2-703 or 2-711 of the Uniform Commercial Code, as
promulgated by the National Conference of Commissioners on
Uniform State Law, is cancellation by the seller or buyer,
respectively.

TITLE II--OTHER PROVISIONS

SEC. 201. APPLICATION WITH JONES ACT AND OTHER ACTS.

(a) In General.--Nothing in this Act affects or otherwise
modifies the authority contained in--
(1) Public Law 87-77 (46 U.S.C. App. 289b) authorizing the
transportation of passengers and merchandise in Canadian
vessels between ports in Alaska and the United States; or
(2) Public Law 98-563 (46 U.S.C. App. 289c) permitting the
transportation of passengers between Puerto Rico and other
United States ports.
(3) Section 27A of the Act of the Merchant Marine Act, 1920
(46 U.S.C. App. 883-1).
(4) Section 8109 of the Department of Defense
Appropriations Act, 1998.
(b) Jones Act.--Except as in section 101(a), nothing in
this Act affects or modifies the Merchant Marine Act, 1920
(46 U.S.C. App. 861 et seq.).

SEC. 202. GLACIER BAY AND OTHER NATIONAL PARK SERVICE AREA
PERMITS.

(a) In General.--The Secretary of the Interior, after
consultation with the Secretary of Transportation, shall
issue new or otherwise available permits to United States-
flag vessels carrying passengers for hire to enter Glacier
Bay or any other area within the jurisdiction of the National
Park Service. Any such permit shall not affect the rights of
any person that, on the date of enactment of this Act, holds
a valid permit to enter Glacier Bay or such other area.
(b) New Permits Not Authorized.--Subsection (a) does not
authorize the Secretary of the Interior to issue new permits,
but, if new permits are authorized under any other provision
of law, they shall be awarded in accordance with subsection
(a).
______

By Mr. CLELAND:
S. 129. A bill to amend title 38, United States Code, to provide for
the payment of a monthly stipend to the surviving parents (known as
``Gold Star Parents'') of members of the Armed Forces who die during a
period of war; to the Committee on Veterans' Affairs.

gold star parents annuity act

Mr. CLELAND. Mr. President, I rise today to introduce the Gold Star
Parents Annuity Act. The use of the Gold Star to denote the death of a
service member or members in a family was started during World War I by
President Woodrow Wilson. The idea behind the Gold Star was that it
could symbolize the family's devotion and pride in the ultimate
sacrifice for their country made by their family member instead of the
sense of personal loss that is represented by the traditional mourning
symbols.
The Gold Star Parents Annuity Act provides for an annuity of $125 a
month payable to each individual who has received a Gold Star Lapel
pin, which is awarded to parents who have had a child die honorably in
service to our country. Payments are to be divided equally among
parents when there is more than one surviving parent. The receipt of
this pension will not deprive anyone of the right to any other
pensions, benefit, right or privilege that

[[Page S405]]

they are entitled to under any existing or future law. Furthermore,
these special pension payments will not be subject to any attachment,
execution, levy, tax lien or detention under any process. I believe
this measure would provide a needed increase in income for many parents
who have lost children in service to our 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. 129

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 ``Gold Star Parents Annuity
Act''.

SEC. 2. SPECIAL PENSION FOR GOLD STAR PARENTS.

(a) In General.--(1) Chapter 15 of title 38, United States
Code, is amended by adding at the end the following new
subchapter:

``SUBCHAPTER V--SPECIAL PENSION FOR GOLD STAR PARENTS

``Sec. 1571. Gold Star parents

``(a) The Secretary shall pay monthly to each person who
has received a Gold Star lapel button under section 1126 of
title 10 as a parent of a person who died in a manner
described in subsection (a) of that section a special pension
in an amount determined under subsection (b).
``(b) The amount of special pension payable under this
section with respect to the death of any person shall be $125
per month. In any case in which there is more than one parent
eligible for special pension under this section with respect
to the death of a person, the Secretary shall divide the
payment equally among those eligible parents.
``(c) The receipt of special pension under this section
shall not deprive any person of any other pension or other
benefit, right, or privilege to which such person is or may
hereafter be entitled under any existing or subsequent law.
Special pension under this section shall be paid in addition
to all other payments under laws of the United States.
``(d) Special pension under this section shall not be
subject to any attachment, execution, levy, tax lien, or
detention under any process whatever.
``(e) For purposes of this section, the term `parent' has
the meaning provided in section 1126(d)(2) of title 10.''.
(2) The table of sections at the beginning of such chapter
is amended by adding at the end the following:

``subchapter v--special pension for gold star parents

``1571. Gold Star parents.''.
(b) Effective Date.--Section 1571 of title 38, United
States Code, as added by subsection (a), shall take effect on
October 1, 2001.
______

By Mr. JOHNSON (for himself and Ms. Collins):
S. 131. A bill to amend title 38, United States Code, to modify the
annual determination of the rate of the basic benefit of active duty
educational assistance under the Montgomery GI Bill, and for other
purposes; to the Committee on Veterans' Affairs.

VETERANS' HIGHER EDUCATION OPPORTUNITIES ACT

Mr. JOHNSON. Mr. President, I am pleased today to join Senator Susan
Collins (R-ME) in introducing the Veterans' Higher Education
Opportunities Act. Last year, Senator Collins and I introduced similar
legislation, S. 2419, that received broad, bipartisan support in
Congress and among the veterans and higher education communities. Our
goal with this year's legislation remains the same: to modernize the
Montgomery GI Bill and help veterans achieve their goals of higher
education.
The 1944 GI Bill of Rights is one of the most important pieces of
legislation ever passed by Congress. No program has been more
successful in increasing educational opportunities for our country's
veterans while also providing a valuable incentive for the best and
brightest to make a career out of military service. This bill has
allowed eight million veterans to finish high school and 2.3 million
service members to attend college.
Unfortunately, the current GI Bill can no longer deliver these
results and fails in its promise to veterans, new recruits and the men
and women of the armed services. The Veterans' Higher Education
Opportunities Act will modernize the GI Bill and ensure its viability
as education costs continue to increase.
Over 96 percent of recruits currently sign up for the Montgomery GI
Bill and pay $1,200 out of their first year's pay to guarantee
eligibility. But only one-half of these military personnel use any of
the current Montgomery GI Bill benefits. This is evidence that the
current GI Bill simply does not meet their needs. The main reason why
military personnel no longer use the GI Bill is because GI Bill
benefits have not kept pace with increased costs of education.
There is consensus among national higher education and veterans
associations that at a minimum, the GI Bill should pay the costs of
attending the average four-year public institution as a commuter
student. The current Montgomery GI Bill benefit pays a little more than
half of that cost.
The Veterans' Higher Education Opportunities Act creates that
benchmark by indexing the GI Bill to the costs of attending the average
four-year public institution as a commuter student. This benchmark cost
will be updated annually by the College Board in order for the GI Bill
to keep pace with increasing costs of education.
The Veterans' Higher Education Opportunities Act is truly a
bipartisan effort to address recruitment and retention in the armed
forces. In addition, the Veterans' Higher Education Opportunities Act
has the overwhelming support of the Partnership for Veterans'
Education--a coalition of the nation's leading veterans groups and
higher education organizations including the VFW, the American Council
on Education, the Non Commissioned Officers Association, the National
Association of State Universities and Land Grant Colleges, and The
Retired Officers Association.
As the parent of a son who serves in the Army, these military
``quality of life'' issues are of particular concern to me. Making the
GI Bill pay for viable educational opportunity makes as much sense
today as it did following World War II. In fact, a study conducted on
beneficiaries of the original GI Bill shows that the cost to benefit
ratio of the GI Bill was an astounding 12.5 to 1. That means that our
nation gained more than $12.50 in benefits for every dollar invested in
college or graduate education for veterans.
Congress and the President took an important step last year toward
improving the Montgomery GI Bill by passing into law the Veterans
Benefits and Health Care Improvement Act of 2000. This law increases
the monthly education benefit to $650 and increases educational
benefits of veterans survivors and dependents. These changes are long
overdue, and the next step in restoring the effectiveness of the
Montgomery GI Bill is through the Veterans' Higher Education
Opportunities Act and the creation of a true benchmark for veterans
educational benefits.
The very modest cost of improving the GI Bill will help our military
and our society. I look forward to working with incoming Veterans
Administration Secretary Anthony Principi, Senator Collins and my
colleagues in the Senate, and interested members of the House of
Representatives on passage of the Veterans' Higher Education
Opportunities Act.
I ask unanimous consent that a copy of the legislation be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 131

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 ``Veterans' Higher Education
Opportunities Act of 2001''.

SEC. 2. MODIFICATION OF ANNUAL DETERMINATION OF BASIC BENEFIT
OF ACTIVE DUTY EDUCATIONAL ASSISTANCE UNDER THE
MONTGOMERY GI BILL.

(a) Basic Benefit.--Section 3015 of title 38, United States
Code, is amended--
(1) in subsection (a)(1), by striking ``of $650 (as
increased from time to time under subsection (h))'' and
inserting ``equal to the average monthly costs of tuition and
expenses for commuter students at public institutions of
higher education that award baccalaureate degrees (as
determined under subsection (h))''; and
(2) in subsection (b)(1) by striking ``of $528 (as
increased from time to time under subsection (h))'' and
inserting ``equal to 75 percent of the average monthly costs
of tuition and expenses for commuter students at public
institutions of higher education that award baccalaureate
degrees (as determined under subsection (h))''.
(b) Determination of Average Monthly Costs.--Subsection (h)
of that section is amended to read as follows:
``(h)(1) Not later than September 30 each year, the
Secretary shall determine the average monthly costs of
tuition and expenses for commuter students at public
institutions

[[Page S406]]

of higher education that award baccalaureate degrees for
purposes of subsections (a)(1) and (b)(1) for the succeeding
fiscal year. The Secretary shall determine such costs
utilizing information obtained from the College Board or
information provided annually by the College Board in its
annual survey of institutions of higher education.
``(2) In determining the costs of tuition and expenses
under paragraph (1), the Secretary shall take into account
the following:
``(A) Tuition and fees.
``(B) The cost of books and supplies.
``(C) The cost of board.
``(D) Transportation costs.
``(E) Other nonfixed educational expenses.
``(3) A determination made under paragraph (1) in a year
shall take effect on October 1 of that year and apply with
respect to basic educational assistance allowances payable
under this section for the fiscal year beginning in that
year.
``(4) Not later than September 30 each year, the Secretary
shall publish in the Federal Register the average monthly
costs of tuition and expenses as determined under paragraph
(1) in that year.
``(5) For purposes of this section, the term `institution
of higher education' has the meaning given that term in
section 101 of the Higher Education Act of 1965 (20 U.S.C.
1001).''.
(c) Stylistic Amendment.--Subsection (b) of that section is
further amended in the matter preceding paragraph (1) by
striking ``as provided in the succeeding subsections of this
section'' and inserting ``as otherwise provided in this
section''.
(d) Effective Date.--(1) Except as provided in paragraph
(2), the amendments made by this section shall take effect on
October 1, 2001.
(2) The Secretary of Veterans Affairs shall make the
determination required by subsection (h) of section 3015 of
title 38, United States Code (as amended by subsection (b) of
this section), and such determination shall go into effect,
for fiscal year 2002.

Ms. COLLINS. Mr. President, I am delighted to join with my friend and
colleague, Senator Johnson, in introducing the Veterans' Higher
Education Opportunities Act of 2001. This legislation, which is an
updated version of the measure we introduced in the 106th Congress,
will provide our veterans with expanded educational opportunities at a
reasonable cost. Endorsed by the Partnership for Veterans Education, a
broad coalition including over 40 veterans service organizations and
education associations, our legislation provides a new model for
today's G.I. Bill that is logical, fair, and worthy of a nation that
values both higher education and our veterans.
The original G.I. Bill was enacted in 1944. As a result of this
initiative, 7.8 million World War II veterans were able to take
advantage of post-service education and training opportunities,
including more than 2 million veterans who went on to college. My own
father was among those veterans who served bravely in World War II and
then came back home to resume his education with assistance from the
G.I. Bill.
Since that time, the G.I. Bill has seen a number of changes but has
continued to assist millions of veterans in taking advantage of the
educational opportunities they put on hold in order to serve their
country. New laws were enacted to provide educational assistance to
those who served in Korea and Vietnam, as well as to those who served
during the period in between. Since the change to an all-volunteer
service, additional adjustments to these programs were made, leading up
to the enactment of the Montgomery G.I. Bill in 1985.
The Montgomery G.I. Bill has served our country well over the past 15
years. However, the value of the educational benefit assistance it
provides has greatly eroded over time due to inflation and the
escalating cost of higher education. Military recruiters indicate that
the program's benefits no longer serve as a strong incentive to join
the military; nor do they serve as a retention tool valuable enough to
persuade men and women to stay in the military and defer the full or
part-time pursuit of their higher education until a later date. Perhaps
most important, the program is losing its value as a means to help our
men and women in uniform readjust to civilian life after military
service.
This point really hit home for me when I met last year with
representatives of the Maine State Approving Agency (SAA) for Veterans
Education Programs. They told me of the ever-increasing difficulties
that service members are facing in using the G.I. Bill's benefits for
education and training.
For example, the Maine representatives told me that the majority of
today's veterans are married and have children. Yet, the Montgomery
G.I. Bill often does not cover the cost of tuition to attend a public
institution, let alone the other costs associated with the pursuit of
higher education and those required to help support a family.
The basic benefit program of the Vietnam era G.I. Bill provided $493
per month in 1981 to a veteran with a spouse and two children. Before
the reforms of last year, a veteran in identical circumstances received
only $43 more, a mere 8% increase over a time period when inflation has
nearly doubled, and a dollar buys only half of what it once purchased.
In constant dollars, the amount was the second-lowest level of
assistance ever extended under the G.I. Bill to those who served in the
defense of our country.
While we made progress last year in increasing stipend levels under
the G.I. Bill, the reforms fell drastically short of allocating
sufficient funds to cover the current cost of higher education.
Moreover, the increase failed to address the structural reforms needed
to ensure that the G.I. Bill provides sufficient funds for the
education of our nation's veterans long into the 21st Century.
To address these problems, we are offering a modern version of the
Montgomery G.I. Bill. Our new model establishes a sensible, easily
understood benchmark for G.I. Bill benefits. The benchmark sets G.I.
Bill benefits at ``the average monthly costs of tuition and expenses
for commuter students at public institutions of higher education that
award baccalaureate degrees.'' This common sense provision would serve
as the foundation upon which future education stipends for all veterans
would be based and would set benefits at a level sufficient to provide
veterans the education promised to them at recruitment.
The current G.I. Bill now provides nine monthly $650 stipends per
year for four years. The total benefit is $23,400. Under the new
benchmark established by this legislation, the monthly stipend for this
academic year would be $1025, producing a new total benefit of $36,900
for the four academic years. By using our benchmark, which is updated
annually by the College Board, the G.I. Bill benefits will truly
reflect the current cost of higher education.
Mr. President, today's G.I. Bill is woefully under-funded and does
not provide the financial support necessary for our veterans to meet
their educational goals. The legislation that we are proposing would
fulfill the promise made to our nation's veterans, help with recruiting
and retention of men and women in our military, and reflect current
costs of higher education. Now is the time to enact these modest
improvements to the basic benefit program of the Montgomery G.I. Bill.
I urge all members of the Senate to join Senator Johnson and myself in
support of the Veterans' Higher Education Opportunities Act.
______

Mr. JOHNSON (for himself, Mr. Inouye, Mr. Kennedy, Mr. Baucus,
Mr. Reid, Mr. Dorgan, Mr. Daschle, Ms. Snowe and Mr. Conrad)
S. 132. A bill to amend the International Revenue Code of 1986 to
provide that housing assistance provided under the Native American
Housing Assistance and Self-Determination Act of 1996 be treated for
purposes of the low-income housing credit in the same manner as
comparable assistance; to the Committee on Finance.

low income housing tax credits

Mr. JOHNSON. Mr. President, I rise today to introduce legislation
which will correct an unintended oversight in the federal
administration of Native American housing programs, allowing Indian
tribes to once again access Low-Income Housing Tax Credits (LIHTCs) for
housing development in some of this nation's most under-served
communities.
In the 104th Congress, the Native American Housing Assistance and
Self-Determination Act (NAHASDA) was signed into law, separating Indian
housing from public housing and providing block grants to tribes and
their tribally designated housing authorities. Prior to passage of
NAHASDA, Indian tribes receiving HOME block grant funds were able to
use those funds to leverage the Low Income Housing Tax Credits
distributed by states on a competitive basis. Unfortunately, unlike
HOME funds, block

[[Page S407]]

grants to tribes under the new NAHASDA are defined as federal funds and
cannot be used for accessing LIHTCs.
The fact that tribes cannot use their new block grant funds to access
a program (LIHTC) which they formerly could access is an unintended
consequence of taking Indian Housing out of Public Housing at HUD and
setting up the otherwise productive and much needed NAHASDA system. The
legislation I am introducing today is limited in scope and redefines
NAHASDA funds, restoring tribal eligibility for the LIHTC by putting
NAHASDA funds on the same footing as HOME funds. With this technical
correction, there would be no change to the LIHTC programs--tribes
would compete for LIHTCs with all other entities at the state level,
just as they did prior to NAHASDA.
This technical corrections legislation is a minor but much needed fix
to a valuable program that will restore equity to housing development
across the country. The South Dakota Housing Development Authority has
enthusiastically endorsed this legislation out of concern for equitable
treatment of every resident of our state and to reinforce the proven
success of the LIHTC program for housing development in rural and lower
income communities.
I have joined many of my colleagues in past efforts to preserve and
increase the Low-Income Housing Tax Credit program which benefits every
state, and I ask my colleagues to recognize the importance of
maintaining fairness in access to this program emphasized through this
legislation and encourage my colleagues to support passage of this
vital legislation.
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. 132

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 ``Low Income Housing Tax
Credit for Native Americans Act''.

SEC. 2. CERTAIN NATIVE AMERICAN HOUSING ASSISTANCE
DISREGARDED IN DETERMINING WHETHER BUILDING IS
FEDERALLY SUBSIDIZED FOR PURPOSES OF THE LOW-
INCOME HOUSING CREDIT.

(a) In General.--Subparagraph (E) of section 42(i)(2) of
the Internal Revenue Code of 1986 (relating to determination
of whether building is federally subsidized) is amended--
(1) in clause (i), by inserting ``or the Native American
Housing Assistance and Self-Determination Act of 1996 (25
U.S.C. 4101 et seq.) (as in effect on the date of the
enactment of the Low Income Housing Tax Credit for Native
Americans Act)'' after ``this subparagraph)'', and
(2) in the subparagraph heading, by inserting ``or native
american housing assistance'' after ``home assistance''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to taxable years beginning after the date of the
enactment of this Act.
______

By Mr. BAUCUS:
S. 133. A bill to amend the Internal Revenue code of 1986 to make
permanent the exclusion for employer-provided educational assistance
programs, and for other purposes; to the Committee on Finance.

Employee educational assistance act

Mr. BAUCUS. Mr. President, I rise today to introduce legislation to
make permanent a temporary tax code provision that permits employers to
pay for their employees' college tuition costs without the employee
having to pay tax on the amount of the assistance. Senator Grassley
joins me as an original co-sponsor of the legislation.
Since its inception in 1979, section 127 of the tax code has enabled
thousands of employers to promote continuing education among their
employees and enabled millions of workers to advance their job skills
without incurring additional taxes.
Under current law, an employer may provide up to $5,250 per year in
tuition assistance to its employees without any reduction in the
employee's take-home pay. This simple rule applies regardless of
whether the classes undertaken are necessary to maintain an employee's
job or to qualify for a new job. Without section 127, only those
courses that directly relate to the employee's current job can be
subsidized without additional taxes.
Section 127 has increased upward mobility for workers in an efficient
manner that is supported by workers, educators and business. Workers
can improve their job skills and prepare themselves for increased
responsibility. Businesses can maintain qualified employees and help
them advance within the organization. Educators and other students
benefit from having students with real world experience participating
in the classroom.
Congress has recognized the strength of section 127. In 1997 the
Senate voted to make the provision permanent. In the 106th Congress,
all 20 members of the Finance Committee sponsored legislation to make
section 127 permanent. So why hasn't the legislation been enacted?
While it is difficult to be sure, bills including permanent extension
always come back from a conference with the House of Representatives as
a short extension with no coverage for graduate courses. Our hope is
that this year will be different.
There are two principal flaws in section 127. First, the benefit is
scheduled to expire on December 31, 2001. The provision has been
extended ten times since it original enactment. During 1995, the
provision was expired and, even though reenacted in 1996, employers
were not sure at the end of 1995 whether or not to report as income
their employee-assistance program. We have had this provision in the
Code long enough to know that it works and we should make it permanent.
The bill Senator Grassley and I introduce today would do just that.
The second flaw is that the program is limited to employer assistance
for undergraduate courses. If an employer wants to provide funds for
its employees to attend graduate school, then the employee has to
increase his or her wages income and tax liability. For example,
suppose a bank has an employee who wants to pursue an MBA. The employee
earns $30,000 per year and pays $3,000 in federal income taxes. If the
tuition costs $4,000, all of which is paid by the employer, then the
worker has to pay 15 percent of the value of the assistance, or $600 in
income taxes. This can be a strong disincentive for low and moderate
income workers to accept an employer-sponsored tuition assistance
offer.
The importance of graduate education has increased dramatically in
the past two decades. For an increasing number of positions, graduate
coursework is essential. For an increasing number of employers,
providing graduate education is necessary to retain employees who are
capable of doing work at higher levels, for more compensation. The bill
would permit exclusion of employer-provided tuition benefits for
undergraduate and graduate education.
Section 127 is one of the most successful education programs the
federal government has ever undertaken. The legislation I am
introducing today expands the program to graduate education and makes
the provision permanent. I urge my colleagues to work with Senator
Grassley and me as we seek to enact this legislation.
Mr. GRASSLEY: Mr. President, today I am joining with Senator Max
Baucus in introducing a bill that would make permanent the exclusion
for employer-provided educational assistance under Sec. 127 of the
Internal Revenue Code. Section 127 allows public or private employers
to provide up to $5,250 per year to each of their employees in tax-free
reimbursement for tuition, books and fees for job or non-job related
education. Section 127 is a purely private-sector initiative and the
one vehicle that encourages employer investment and assistance in
providing educational assistance to its workers. There is no
bureaucracy administering this program--it is run through the
generosity of private sector employers who provide educational
opportunities to their employees in the interest of raising workforce
productivity and making their businesses more competitive. Like other
types of benefits, Sec. 127 employer-provided educational assistance
must be provided on a nondiscriminatory basis and may not favor highly-
compensated employees.
The Revenue Act of 1978 created Sec. 127 and established employer-
provided educational assistance as excludable for any type of course,
other than a hobby or a sport. Prior to 1978, only specific ``job-
related'' education was excludable from taxable income. The provision
has

[[Page S408]]

been extended numerous times since its inception. It is time for the
exclusion to become permanent.
I commend the leadership of Senator Max Baucus for bringing this bill
before the Senate and I am proud to be a cosponsor of the bill. I hope
the rest of our colleagues in the Senate will join in supporting the
enactment of this bill.
______

By Mrs. FEINSTEIN:
S. 134. A bill to ban the importation of large capacity ammunition
feeding devices; to the Committee on the Judiciary.

large capacity ammunition magazine import ban act of 2001

Mrs. FEINSTEIN. Mr. President, I rise to re-introduce the same ban on
importing large capacity ammunition magazines that passed both Houses
of Congress in 1999 during the Juvenile Justice debate.
That amendment passed the Senate by voice vote after a Motion to
Table failed 59-39.
The same provision, offered by then-Judiciary Chairman Henry Hyde on
the House floor, passed by voice vote as an amendment to the House
Juvenile Justice Gun Bill.
Nevertheless, these clips continue to flood into the country, because
the Juvenile Justice bill became stalled in Conference, and never got
to the President's desk.
It is time to take care of this once and for all--outside of
politics, and outside of partisan bickering over other provisions. We
simply cannot stand by and watch millions of these killer clips flood
our shores.
Large-capacity ammunition clips are ammunition feeding devices, such
as clips, magazines, drums and belts, which hold more than ten rounds
of ammunition.
The 1994 assault weapons ban prohibited the domestic manufacture of
these devices, but foreign companies are still sending them to our
shores by the hundreds of thousands.
As the author of the 1994 provision, I can assure you that this was
not our intent. We intended to ban the future manufacture of all high
capacity clips, leaving only a narrow clause allowing for the
importation of clips already on their way to this country.
Instead, due to the grandfather clause inserted into the 1994
legislation, BATF has allowed millions of foreign clips into this
country, with no true method of determining date of manufacture.
Between March 1998 and March 1999, BATF approved more than 11.4 million
large-capacity clips for importation into America.
By voting for the amendment to the Juvenile Justice bill in 1999, a
significant majority of this body has already agreed that it is both
illogical and irresponsible to permit foreign companies to sell items
to the American public--particularly items that are so often used for
deadly purposes--that U.S. companies are prohibited from selling.
Supporting this legislation once again will simply finish what we
already started during the juvenile justice debate, and bring foreign
companies into greater compliance with the original intent of the 1994
law.
Opposing this bill would effectively allow foreign companies to
continue to flout our laws, while domestic companies remain in
compliance.
Let me just outline a bit of the history behind this issue.
Because of strong NRA opposition to the 1994 assault weapons ban and
fears that businesses with inventories of the newly illegal products
would be adversely impacted, we carved out a clause during negotiations
to allow pre-existing guns and clips to remain on the shelves of stores
across this country.
This so-called ``grandfather clause'' was also meant to allow guns
and clips already on their way to this country to get here. Some
Senators did not want to penalize companies that already had shipments
in transit.
But it has now been more than six years, and these companies have had
more than enough time to ship their pre-existing supplies of clips to
the United States. Without question, many of these clips now flooding
this country were made after the 1994 ban took effect. But because the
ATF cannot tell when the clips were made, they must allow their import.
In 1998, President Clinton stopped the importation of most copycat
assault weapons to this country with an Executive Order. However, the
Justice Department advised us that the President does not have the
authority to ban importation of big clips. As a result, millions of
high capacity ammunition magazines continue to flow onto our shores and
into the hands of criminals and, indeed, our children.
These clips come from at least 17 different countries, from Austria
to Zimbabwe.
They come in sizes ranging from 15 rounds per clip to 30, 75, 90, or
even 250 rounds per clip. In one recent one-year period:

20,000 clips of 250-rounds came from England;
Two million 15-round magazines came from Italy;
5,000 clips of 70-rounds came from the Czech Republic.

And the list goes on, and on, and on.
Mr. President, 75, 90 and even 250-round clips have no sporting
purpose. They are not used for self defense. They have only one use--
the purposeful killing of other men, women and children.
The legislation I re-introduce today will stop the flow of these
clips into this country. I know that we cannot eliminate these clips
from existence. But we can make them harder to obtain and, over time,
dry up their supply.
These big clips allow disgruntled workers, angry children and
psychopathic killers to exponentially increase the damage of their
crimes. Let me give you just two examples.
In the now famous Springfield, Oregon shooting, a 15 year-old gunman
with a 30-round clip killed two people and injured 22 more. Two dead,
22 wounded, all from one ammunition clip. It was only when his clip was
finally empty and he had to pause to change clips that a fellow student
was able to tackle and subdue him. Just imagine if the clip had held 75
rounds. Or 90. Or 250.
In the Jonesboro, Arkansas shooting, the two boys were armed with ten
guns, one of which was a Universal carbine equipped with a 15-round
killer clip. All 15 of the bullets in the killer clip were fired--more
rounds than in all of the other nine guns combined. Five people were
killed, ten other wounded.
Mr. President, in passing this legislation, we will not put an end to
all incidents of gun violence now or in the near future. But we will
begin to limit the destructive power of that violence. It will not stop
every troubled child or adult who decides to commit an act of violence
from doing so, but we can limit the tools used to carry out that act.
Passing this bill will not infringe on the legitimate rights of any
adult gun owner or prevent a son or daughter from protecting the family
from harm. It will not create a new category of banned guns.
But it will save some lives. It is just that simple. So let us do our
best to ensure that the next time a troubled or vengeful child decides
to strike out at his classmates, he cannot so easily find a gun that
fires a hundred rounds a minute, or holds dozens of armor-piercing
bullets.
Mr. President, I urge any of my colleagues who remain skeptical to
look beyond the opposition rhetoric and into the heart of this
legislation. And I urge them to look into their own hearts, and to
realize that there are some things we can do to keep future Littletons
from happening. This legislation is one of them.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record following the statement.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 134

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 ``Large Capacity Ammunition
Magazine Import Ban Act of 2001''.

SEC. 2. BAN ON IMPORTING LARGE CAPACITY AMMUNITION FEEDING
DEVICES.

Section 922(w) of title 18, United States Code, is
amended--
(1) in paragraph (1), by striking ``(1) Except as provided
in paragraph (2)'' and inserting ``(1)(A) Except as provided
in subparagraph (B)'';
(2) in paragraph (2), by striking ``(2) Paragraph (1)'' and
inserting ``(B) Subparagraph (A)'';

[[Page S409]]

(3) by inserting before paragraph (3) the following new
paragraph:
``(2) It shall be unlawful for any person to import a large
capacity ammunition feeding device.''; and
(4) in paragraph (4)--
(A) by striking ``(1)'' each place it appears and inserting
``(1)(A)''; and
(B) by striking ``(2)'' and inserting ``(1)(B)''.

SEC. 3. CONFORMING AMENDMENT.

Section 921(a)(31) of title 18, United States Code, is
amended by striking ``manufactured after the date of
enactment of the Violent Crime Control and Law Enforcement
Act of 1994''.
______

By Mrs. FEINSTEIN (for herself, Mr. Jeffords, Mr. Cochran, Mrs.
Boxer, and Ms. Landrieu):
S. 135. A bill to amend title XVIII of the Social Security Act to
improve payments for direct graduate, medical education under the
medicare program; to the Committee on Finance.

correcting the direct graduate medical education formula

Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation
to reform the longstanding inequity in the Medicare Direct Graduate
Medical Education (DGME) formula that has unfairly compensated many
teaching hospitals across the country in the past 15 years.
The Medicare DGME payment compensates teaching hospitals for many of
the costs related to the graduate training of physicians.
This legislation is timely as many of our nation's 400 teaching
hospitals are in the midst of a serious financial crisis.
Over 72 percent of all teaching hospitals are currently operating
with negative margins, according to the Association of American Medical
Colleges. Approximately 42 percent of the 100 major teaching hospitals
could be operating at a loss by 2002.
Teaching hospitals are losing millions of dollars annually.
The University of Pennsylvania reported a $200 million deficit in
1999.
In Massachusetts, Beth Israel Deaconess Medical Center, Brigham and
Women's Hospital, Massachusetts General Hospital, and the New England
Medical Center posted operating losses for the six month period of
October 1998 to March 1999 totaling more than $63 million.
The University of Minnesota sold its hospital to a private company in
1997 because ``it was bleeding red ink,'' according to the university's
senior Vice-President for health sciences.
Wayne State University in Michigan lost nearly $200 million in 1998
and 1999.
Georgetown University lost $83 million in 1999, $62 million in 1998,
and $57 million in 1997.
In my State, the University of California Los Angeles (UCLA) has seen
its net income plunge $50 million and bottom out close to zero.
The University of California San Francisco faces a $25 million loss
over the next year.
Excluding the University of California San Francisco, all University
of California teaching hospitals collectively lost $90 million in net
income since 1997.
Many factors are to blame for the financial crisis of our nation's
teaching hospitals.
Balanced Budget Act of 1997:
The Balanced Budget Act (BBA) of 1997 took a major blow at teaching
hospitals, significantly cutting federal Medicare payments.
The cuts included in BBA 1997, for example, has meant a loss of $25
million over three years to UCLA.
Penetration of Managed Care:
Managed care payments to many teaching hospitals barely cover costs.
Twenty-eight percent of all privately insured Americans are enrolled in
an HMO. In California, this number is 88 percent.
For example, California's capitation rate is one of the lowest in the
nation. The average capitation rate in the State reached its peak in
1993 at $45 per month. Last year, the rate sunk to $29, while the cost
of living jumped 25.2 percent.
Increasing Number of Uninsured:
The number of uninsured has exploded. Today, 44 million Americans are
without health insurance, California alone has 7 million uninsured
residents.
The high rate of uninsured impacts teaching hospitals because they
are a major safety net provider--teaching hospitals provide
approximately 44 percent of all care to the indigent. This means that
when our nation's uninsured require medical care for complicated and
complex pathologies, they find their way to teaching hospitals.
Academic medical centers affiliated with the University of
California, for example, are the second largest safety net for a State
that has the fourth highest uninsured rate in the country.
These are three examples of the forces behind the financial crisis of
our nation's teaching hospitals. Low DGME payments further erode and
destabilize the health care system.
Academic medical centers have three major responsibilities and
missions--teaching, research, and patient care--which cause them to
incur costs unique to such facilities. ``If just one leg of that three-
legged stool is weak, it [academic medical centers] becomes
destabilized,'' said Dr. Gerald Levey, UCLA's provost for health
sciences. Low DGME payments are weakening teaching hospitals' ability
to train future physicians.
Teaching hospitals account for only 6 percent of the nation's 5,000
hospitals. Despite the small number of teaching hospitals, they are a
major provider of care. Teaching hospitals house: Forty percent of all
neonatal intensive care units; fifty-three percent of pediatric
intensive care units; and seventy percent of all burn units.

Teaching hospitals also handle: Twenty percent of all inpatient
admissions; twenty-two percent of outpatient visits; nineteen percent
of surgical operations, including 82 percent of all open heart
surgeries; sixteen percent of emergency visits; and nineteen percent of
all births.
The bottom line is that the financial crisis faced by teaching
hospitals is impacting patient access to and quality of care.
California has been particularly impacted by this financial crisis.
Let me tell you how an outpatient eye clinic at the University of
California, San Francisco has been impacted by the financial crisis
facing teaching hospitals.
The clinic has a patient mix that is approximately 70 percent
Medicare and 30 percent Medi-Cal. Due in part to historically low DGME
payments, the clinic has had to decrease the number of staff, increase
patient load, and cut faculty salaries by 15 percent. The number of
patients seen on an average day, for example, has increased from 12 per
half day to 18. Less time with each patient compromises quality of
care.
According to a 1965 Medicare rule, Medicare paid for its share of
DGME costs based on each hospital's ``Medicare allowable costs.'' This
allowed for open-ended reimbursement.
Congress changed the methodology used to determine payments in 1986,
and retroactively established Fiscal Year 1985 as the base year for all
future calculations for DGME payments. The problem, which created this
disparity in payments, is that some teaching hospitals narrowly
interpreted the law and did not claim such expenses as faculty costs
and benefits in 1985.
Submitted claims for 1985 were then used to determine a ``base
formula'' for each teaching hospital. The base formula determined for
each teaching hospital in 1985 has been used to determine all DGME
payments since 1985 and disadvantages many teaching hospitals.
To give you an idea of the large variation in payments, 10 percent of
teaching hospitals had per-resident payments of more than $98,800 in
1995, whereas the average payment for another 10 percent was below
$37,400. The national mean in 1995 was $62,700.
A study conducted last year based on data from the Health Care
Financing Administration (HCFA) further highlights the variations among
teaching hospitals. The study shows that: Beth Israel Medical Center in
Manhattan received an average Medicare payment of $57,010 a year for
each resident it trains. In comparison, Columbia-Presbyterian Medical
Center in Manhattan received an average of $24,444 per resident.
Even when cost-of-living and training expenses are presumably similar
(both hospitals are in Manhattan), there is great variation in the
payment received by hospitals for training residents.
Additional examples of variations in payments include: Montefiore
Medicare

[[Page S410]]

Center in the Bronx received an average of $55,073 per resident;
Massachusetts General Hospital in Boston received an average of $29,843
per resident; Cleveland Clinic Hospital received an average of $16,118
per resident, and the University of California, Los Angeles Medical
Center received an average of $11,908 per resident.
In an attempt to level the playing field, the Balanced Budget
Refinement Act of 1999 (BRA) contained provision that created a 70
percent floor and a 140 percentage ceiling for Medicare DGME payments.
The Medicare, Medicaid, and SCHIP Improvement Act of 2000 also
contained provision to increase the floor to 85 percent in 2002.
While Congress has begun to address the tissue of variations in DGME
payments by implementing a floor and a ceiling for payments in 1999 and
2000, more must be done.
I believe all teaching hospitals should receive reimbursement from
Medicare that equal the national average. Bringing all teaching
hospitals up to the national average, without undermining the financial
stability of those teaching hospitals currently receiving payments
above the national average, could help stabilize our nation's health
care system.
The legislation that I am introducing today takes good steps to
reduce variations in DGME and restore stability to the system.
As established in current law, the floor for Medicare reimbursements
for teaching hospitals would equal 85 percent by Fiscal Year 2002. Over
a period of four years (from FY 2003-2006), this legislation would
bring teaching hospitals that are currently reimbursed by Medicare
below the national average up to the national average.
The phase in is as follows:
Beginning in Fiscal Year 2003 and 2004, the floor would be increased
to 90 percent.
In Fiscal Year 2005 the floor would be increased to 95 percent.
By Fiscal Year 2006, all teaching hospitals would be receiving per
resident payments that equal at least 100 percent of the national
average. Those teaching hospitals receiving payments above the national
average would be held harmless.
Approximately thirty-eight States benefit under the proposed
legislation. Teaching hospitals in several states will benefit over the
next several years due in combination to the proposed legislation and
the changes made in both 1999 and 2000 to increase the floor for DGME
payments.
California to Benefit:
California will gain approximately $61.5 million over the next 6
years as a result of this legislation and the changes made to the DGME
floor in 1999 and 2000.
For example, the University of California Medical Centers will gain
$16.3 million over six years. The medical center at the University of
Davis will gain $3.2 million; the medical center at the University of
Irvine will gain $1.6 million; UCLA's medical center will gain $5.8
million; the medical center at the University of San Diego will gain
$1.8 million; and the medical center at the University of San Francisco
will gain approximately $3.9 million.
This is merely an example of State impact under the proposed
legislation. These numbers are significant. Many of our nation's
teaching hospitals would greatly benefit under the proposed
legislation.
The proposed legislation would use new money to move teaching
hospitals below the national average up to the average. Less than $500
million over 4 years would be borrowed from the Medicare Part A Trust
fund to pay for the increase in Medicare payments to direct graduate
medical education. So as to keep the Medicare Part A Trust Fund solvent
beyond 2025, this legislation authorizes the Senate to appropriate to
the Trust Fund annually an amount equal to what is taken out to
reimburse teaching hospitals at this higher rate.
Teaching hospitals rely heavily on DGME payments to train and support
their medical students and faculty.
For example, medical education funding in California helps support
108 hospitals that train more than 6,700 residents over three-to-five
year periods. California received $75.1 million in DGME payments in
1997.
Many of the nation's teaching hospitals will be forced to close down
beds and lower the quality of care they provide. UCLA has had to lay
off 300 employees in the past few years due to budget constraints.
In a statement issued April 2000 by the Association of American
Medical Colleges (AMC), the association said that:

To enhance the credibility of the payment system and to
eliminate inequities in payment levels, the AMC believes that
payments to any hospital whose per resident DGME amount is
below the national average per resident DGME payment levels
(adjusted for local variability in cost of living wages)
should be raised closer to the national average; additional
funding resources should be used to accomplish this
adjustment.

This legislation does just that--over a period of four years,
teaching hospitals receiving payments below the national average will
be brought up to the national average using new money. It is that
simple.
``Teaching hospitals are a national resource,'' says Albert
Carnesale, Chancellor of UCLA. I agree with Chancellor Carnesale. I
believe that the vitality of our nation's teaching hospitals should be
of highest concern to Congress.
As our nation's uninsured rate continues to grow and the population
continues to explode, we must work to ensure that we have an adequate
supply of physicians to provide medical care. Training physicians and
providing teaching hospitals with the funds necessary to offer this
training should be of highest priority.
I believe that a teaching hospital's ability to serve their
communities and train physicians will be further compromised if we do
not enact this legislation.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 135

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 ``Direct Graduate Medical
Education Improvement Act of 2001''.

SEC. 2. ESTABLISHMENT OF A FLOOR FOR THE LOCALITY ADJUSTED
NATIONAL AVERAGE PER RESIDENT AMOUNT DURING
FISCAL YEARS 2003 THROUGH 2006.

(a) In General.--Section 1886(h)(2)(D)(iii) of the Social
Security Act (42 U.S.C. 1395ww(h)(2)(D)(iii)), as amended by
section 511 of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law
by section 1(a)(6) of Public Law 106-554), is amended to read
as follows:
``(iii) Floor for locality adjusted national average per
resident amount.--

``(I) In general.--The approved FTE resident amount for a
hospital for a cost reporting period beginning during a
fiscal year shall not be less than the applicable percentage
of the locality adjusted national average per resident amount
computed under subparagraph (E) for the hospital for that
period.
``(II) Applicable percentage.--In this clause, the term
`applicable percentage' means, in the case of a cost
reporting period beginning during--

``(aa) fiscal year 2001, 70 percent;
``(bb) fiscal year 2002, 85 percent;
``(cc) fiscal year 2003 or 2004, 90 percent;
``(dd) fiscal year 2005, 95 percent; and
``(ee) fiscal year 2006, 100 percent.''.
(b) Authorization of Appropriations.--For each fiscal year
(beginning with fiscal year 2003), there are authorized to be
appropriated to the Federal Hospital Insurance Trust Fund
established under section 1817 of the Social Security Act (42
U.S.C. 1395i) an amount equal to the amount by which
expenditures under such Trust Fund are increased for the
fiscal year by reason of the enactment of items (cc), (dd),
and (ee) of section 1886(h)(2)(D)(iii)(II) of such Act (42
U.S.C. 1395ww(h)(2)(D)(iii)(II)), as added by subsection (a).
______

By Mr. GRAMM:
S. 136. A bill to amend the Omnibus trade and Competitiveness Act of
1988 to extend trade negotiating and trade agreement implementing
authority; to the Committee on Finance.
S. 137. A bill to authorize negotiation of free trade agreements with
countries of the Americas, and for other purposes; to the Committee on
Finance.
S. 138. A bill to authorize negotiation for the accession of Chile to
the North American Free Trade. Agreement, and for other purposes; to
the Committee on Finance.
S. 140. A bill to authorize negotiation for the accession of United
Kingdom to the North American Free Trade Agreement, and for other
purposes; to the Committee on Finance.

[[Page S411]]

FOUR TRADE POLICY INITIATIVES

Mr. GRAMM. Mr. President, trade has been very good for America and
her people. Trade is our game, and we excel at it. In 1999, Americans
exported a record $956 billion in goods and services. No other country
even came close.
Trade has brought untold benefits to our people not the least of
which are high-paying jobs, increased consumer choice, increased
economic competitiveness. When Pericles spoke of Athens in his Funeral
Oration, he might well have been speaking of us: ``The magnitude of our
city draws the produce of the world into our harbor, so that to the
Athenian the fruits of other countries are as familiar a luxury as
those of his own.'' Those who peddle defeatism as they clamor for
protectionist measures are subverting our best means of growth. As
President Reagan warmed in 1988, ``protectionism is destructionism.''
Let me point out to my colleagues that it is not just the United
States that profits. The whole world has benefitted from the expansion
of trade among nations. Trade has been a wealth-generating machine the
likes of which the world has never seen. By committing ourselves to an
open world trade system, the US and its partners unleashed increasing
economic growth and prosperity and brought hope and freedom to more
people than any victory in any war in history. It is no wonder that the
world trading system we know of as the WTO--formerly the GATT--has gone
from a handful of nations in 1948 to some 140 nations today.
My fervent goal has been to keep world trade expanding so that more
people in more nations can enjoy what Pericles aptly called the
``fruits'' of trade. We in America have been at the vanguard of trade
liberalization efforts, both globally and regionally. We must continue
that trend. Unfortunately, over recent years this nation has slid into
an unwise hiatus in moving new global or regional trade liberalization
initiatives. But this year, with a new President, committed to trade,
we have a new opportunity before us. Now is the time for us to reassert
our leadership, to set the pace for trade expansion throughout our
hemisphere and throughout the world.
Today I am introducing four pieces of legislation intended to get us
started. The first bill, the Fast-Track Trade Negotiating Authority
Act, would provide the President with much-needed fast track authority,
so that he may expand trade by entering into trade agreements with our
partners around the world. Fast track is key to unleashing the wealth-
generating machine of trade still further, to all corners of the world.
It is long past time to reauthorize this critical provision.
The second measure, the Americas Free Trade Act, would lead to the
extension of free trade from Alaska to Cape Horn in our own hemisphere.
It would provide the President with fast track authority for
implementation of free trade agreements with any or all of the 33 other
nations of the Western Hemisphere, for the benefit of its more than 800
million residents. According to the 1994 agreement among the leaders of
the Western Hemisphere, the Free Trade Agreement of the Americas should
be concluded by 2005. Having fast track authority in hand will give our
President the ability to move the FTAA talks forward dramatically and
successfully.
Both the third bill, the Chile NAFTA Accession Act, and the fourth
bill, the United Kingdom NAFTA Accession Act, seek to build bridges
with key trading partners in order to spur larger trade liberalization
efforts. Chile is a critical trading partner in South America who has
been knocking at the NAFTA door for some time. The United Kingdom is a
key partner in Western Europe who by joining NAFTA can help keep Europe
from erecting protectionist walls against the rest of the world.
Agreements with these two important nations can keep trade
liberalization moving forward.

Mr. President, my commitment to this cause is longstanding. In 1986 I
introduced legislation to begin negotiations for a free trade agreement
with Mexico. In 1987, I introduced a bill that laid out a framework for
negotiating a North American free trade area--a bill which later served
as the basis for an amendment I offered to the 1988 trade bill and
adopted by the Senate that authorized the negotiation of the NAFTA. In
1989, I once again introduced trade legislation and called for a free
agreement encompassing the entire Western Hemisphere. I have introduced
similar legislation in each Congress since then. It is my hope that the
bills I am introducing today will serve as the basis for successful
trade legislation in the 107th Congress.
I ask unanimous consent that the text of the Fast Track Trade
Negotiating Authority Act, the Americas Free Trade Act, the Chile NAFTA
Accession Act, and the United Kingdom NAFTA Accession Act, together
with a summary of these bills, be printed in the Record.
There being no objection, the materials were ordered to be printed in
the Record, as follows:
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 ``Fast Track Trade Negotiating
Authority Act''.

SEC 2. AMENDMENTS TO TRADE NEGOTIATING AUTHORITY.

(a) Extension.--Section 1102(a)(1)(A), (b)(1), and (c)(1)
of the Omnibus Trade and Competitiveness Act of 1988 (19
U.S.C. 2902(a)(1)(A), (b)(1), and (c)(1)) are amended by
striking ``June 1, 1993'' each place it appears and inserting
``December 31, 2004''.
(b) Conforming Amendment.--
(1) Section 1102(a)(1) and (b)(1) of such Act are amended
by striking ``purposes, policies, and objectives of this
title'' each place it appears and inserting ``policies and
objectives of the United States''.
(2) Section 1102(a)(2)(A) of such Act is amended by
striking ``August 23, 1988'' each place it appears and
inserting ``January 22, 2001''.
(3) Subsections (b)(2) and (c)(3)(A) of section 1102 of
such Act are amended by striking ``applicable objectives
described in section 1101 of this title'' each place it
appears and inserting ``policies and objectives of the United
States''.
(4) Subsection (d)(2)(B) of section 1102 of such Act is
amended by striking ``applicable purposes, policies, and
objectives of this title'' and inserting ``policies and
objectives of the United States''.
(5) Section 1103(b)(1)(A) of such Act is amended by
striking ``June 1, 1991'' and inserting ``December 31,
2004''.
(6) Subsection (a)(2)(B)(i) of section 1103 of such Act is
amended by striking ``applicable purposes, policies, and
objectives of this title'' and inserting ``policies and
objectives of the United States''.
____

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 ``Americas Free Trade Act''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) The countries of the Western Hemisphere have enjoyed
more success in the twentieth century in the peaceful conduct
of their relations among themselves than have the countries
in the rest of the world.
(2) The economic prosperity of the United States and its
trading partners in the Western Hemisphere is increased by
the reduction of trade barriers.
(3) Trade protection endangers economic prosperity in the
United States and throughout the Western Hemisphere and
undermines civil liberty and constitutionally limited
government.
(4) The successful establishment of a North American Free
Trade Area sets the pattern for the reduction of trade
barriers throughout the Western Hemisphere, enhancing
prosperity in place of the cycle of increasing trade barriers
and deepening poverty that results from a resort to
protectionism and trade retaliation.
(5) The reduction of government interference in the foreign
and domestic sectors of a nation's economy and the
concomitant promotion of economic opportunity and freedoms
promote civil liberty and constitutionally limited
government.
(6) Countries that observe a consistent policy of free
trade, the promotion of free enterprise and other economic
freedoms (including effective protection of private property
rights), and the removal of barriers to foreign direct
investment, in the context of constitutionally limited
government and minimal interference in the economy, will
follow the surest and most effective prescription to
alleviate poverty and provide for economic, social, and
political development.

SEC. 3. FREE TRADE AREA FOR THE WESTERN HEMISPHERE.

(a) In General.--The President shall take action to
initiate negotiations to obtain trade agreements with the
sovereign countries located in the Western Hemisphere, the
terms of which provide for the reduction and ultimate
elimination of tariffs and other nontariff barriers to trade,
for the purpose of promoting the eventual establishment of a
free trade area for the entire Western Hemisphere.
(b) Reciprocal Basis.--An agreement entered into under
subsection (a) shall be reciprocal and provide mutual
reductions in trade barriers to promote trade, economic
growth, and employment.
(c) Bilateral or Multilateral Basis.--Agreements may be
entered into under subsection (a) on a bilateral basis with
any foreign country described in that subsection or

[[Page S412]]

on a multilateral basis with all of such countries or any
group of such countries.

SEC. 4. FREE TRADE WITH FREE CUBA.

(a) Restrictions Prior to Restoration of Freedom in Cuba.--
The provisions of this Act shall not apply to Cuba unless the
President certifies to Congress that--
(1) freedom has been restored in Cuba; and
(2) the claims of United States citizens for compensation
for expropriated property have been appropriately addressed.
(b) Standards for the Restoration of Freedom in Cuba.--The
President shall not make the certification that freedom has
been restored in Cuba, for purpose of subsection (a), unless
the President determines that--
(1) a constitutionally guaranteed democratic government has
been established in Cuba with leaders chosen through free and
fair elections;
(2) the rights of individuals to private property have been
restored and are effectively protected and broadly exercised
in Cuba;
(3) Cuba has a currency that is fully convertible
domestically and internationally;
(4) all political prisoners have been released in Cuba; and
(5) the rights of free speech and freedom of the press in
Cuba are effectively guaranteed.
(c) Priority for Free Trade With Free Cuba.--Upon making
the certification described in subsection (a), the President
shall give priority to the negotiation of a free trade
agreement with Cuba.

SEC. 5 INTRODUCTION AND FAST-TRACK CONSIDERATION OF
IMPLEMENTING BILLS.

(a) Introduction in House and Senate.--When the President
submits to Congress a bill to implement a trade agreement
described in section 3, the bill shall be introduced (by
request) in the House and the Senate as described in section
151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
(b) Restrictions on Content.--A bill to implement a trade
agreement described in section 3--
(1) shall contain only provisions that are necessary to
implement the trade agreement; and
(2) may not contain any provision that establishes (or
requires or authorizes the establishment of) a labor or
environmental protection standard or amends (or requires or
authorizes an amendment of) any labor or environmental
protection standard set forth in law or regulation.
(c) Point of Order in Senate--
(1) Applicability to all legislative forms of implementing
bill.--For the purposes of this subsection, the term
``implementing bill'' means the following:
(A) The bill.--A bill described in subsection (a), without
regard to whether that bill originated in the Senate or the
House of Representatives.
(B) Amendment.--An amendment to a bill referred to in
subparagraph (A).
(C) Conference report.--A conference report on a bill
referred to in subparagraph (A).
(D) Amendment between houses.--An amendment between the
Houses of Congress in relation to a bill referred to in
subparagraph (A).
(E) Motion.--A motion in relation to an item referred to in
subparagraph (A), (B), (C), or (D).
(2) Making of point of order.--
(A) Against single item.--When the Senate is considering an
implementing bill, a Senator may make a point of order
against any part of the implementing bill that contains
material in violation of a restriction under subsection (b).
(B) Against several items.--Notwithstanding any other
provision of law or rule of the Senate, when the Senate is
considering an implementing bill, it shall be in order for a
Senator to raise a single point of order that several
provisions of the implementing bill violate subsection (b).
The Presiding Officer may sustain the point of order as to
some or all of the provisions against which the Senator
raised the point of order.
(3) Effect of sustainment of point of order.--
(A) Against single item.--If a point of order made against
a part of an implementing bill under paragraph (2)(A) is
sustained by the Presiding Officer, the part of the
implementing bill against which the point of order is
sustained shall be deemed stricken.
(B) Against several items.--In the case of a point of order
made under paragraph (2)(B) against several provisions of an
implementing bill, only those provisions against which the
Presiding Officer sustains the point of order shall be deemed
stricken.
(C) Stricken matter not in order as amendment.--Matter
stricken from an implementing bill under this paragraph may
not be offered as an amendment to the implementing bill (in
any of its forms described in paragraph (1)) from the floor.
(4) Waivers and appeals.--
(A) Waivers.--Before the Presiding Officer rules on a point
of order under this subsection, any Senator may move to waive
the point of order as it applies to some or all of the
provisions against which the point of order is raised. Such a
motion to waive is amendable in accordance with the rules and
precedents of the Senate.
(B) Appeals.--After the Presiding Officer rules on a point
of order under this subsection, any Senator may appeal the
ruling of the Presiding Officer on the point of order as it
applies to some or all of the provisions on which the
Presiding Officer ruled.
(C) Three-fifths majority required.--
(i) Waivers.--A point of order under this subsection is
waived only by the affirmative vote of at least the requisite
majority.
(ii) Appeals.--A ruling of the Presiding Officer on a point
of order under this subsection is sustained unless at least
the requisite majority votes not to sustain the ruling.
(iii) Requisite majority.--For purposes of clauses (i) and
(ii), the requisite majority is three-fifths of the Members
of the Senate, duly chose and sworn.
(d) Applicability of Fast Track Procedures.--Section 151 of
the Trade Act of 1974 (19 U.S.C. 2191) is amended--
(1) in subsection (b)(1)--
(A) by inserting ``section 5 of the Americas Free Trade
Act,'' after ``the Omnibus Trade and Competitiveness Act of
1988,''; and
(B) by amending subparagraph (C) to read as follows:
``(C) if changes in existing laws or new statutory
authority is required to implement such trade agreement or
agreements or such extension, provisions, necessary to
implement such trade agreement or agreements or such
extension, either repealing or amending existing laws or
providing new statutory authority.''; and
(2) in subsection (c)(1), in inserting ``or under section 5
of the Americas Free Trade Act,'' after ``the Uruguay Round
Agreements Act,''.
____

S. 138

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 ``Chile-NAFTA Accession Act''.

SEC. 2. ACCESSION OF CHILE TO THE NORTH AMERICAN FREE TRADE
AGREEMENT.

(a) In General.--Subject to section 3, the President is
authorized to enter into an agreement described in subsection
(b) and the provisions of section 151(c) of the Trade Act of
1974 (19 U.S.C. 2191(c)) shall apply with respect to a bill
to implement such agreement if such agreement is entered into
on or before December 31, 2002.
(b) Agreement Described.--An agreement described in this
subsection means an agreement that--
(1) provides for the accession of Chile to the North
American Free Trade Agreement; or
(2) is a bilateral agreement between the United States and
Chile that provides for the reduction and ultimate
elimination of tariffs and other nontariff barriers to trade
and the eventual establishment of a free trade area between
the United States and Chile.

SEC. 3. INTRODUCTION AND FAST-TRACK CONSIDERATION OF
IMPLEMENTING BILL.

[[Page S413]]

the implementing bill against the point of order is sustained
shall be deemed stricken.
(B) Against several items.--In the case of a point of order
made under paragraph (2)(B) against several provisions of an
implementing bill, only those provisions against which the
Presiding Officer sustains the point of order shall be deemed
stricken.
(C) Stricken matter not in order as amendment.--Matter
stricken from an implementing bill under this paragraph may
not be offered as an amendment to the implementing bill (in
any of its forms described in paragraph (1)) from the floor.
(4) Waivers and appeals.--
(A) Waivers.--Before the Presiding Officer rules on a point
of order under this subsection, any Senator may move to waive
the point of order as it applies to some or all of the
provisions against which the point of order is raised. Such a
motion to waive is amendable in accordance with the rules and
precedents of the Senate.
(B) Appeals.--After the Presiding Officer rules on a point
of order under this subsection, any Senator may appeal the
ruling of the Presiding Officer on the point of order as it
applies to some or all of the provisions on which the
Presiding Officer ruled.
(C) Three-fifths majority required.--
(i) Waivers.--A point of order under this subsection is
waived only by the affirmative vote of at least the requisite
majority.
(ii) Appeals.--A ruling of the Presiding Officer on a point
of order under this subsection is sustained unless at least
the requisite majority votes not to sustain the ruling.
(iii) Requisite majority.--For purposes of clauses (i) and
(ii), the requisite majority is three-fifths of the Members
of the Senate, duly chosen and sworn.
(d) Applicability of Fast Track Procedures.--Section 151 of
the Trade Act of 1974 (19 U.S.C. 2191) is amended--
(1) in subsection (b)(1)--
(A) by inserting ``section 3 of the Chile-NAFTA Accession
Act,'' after ``the Omnibus Trade and Competitiveness Act of
1988,''; and
(B) by amending subparagraph (C) to read as follows:
``(C) if changes in existing laws or new statutory
authority is required to implement such trade agreement or
agreements or such extension, provisions, necessary to
implement such trade agreement or agreements or such
extension, either repealing or amending existing laws or
providing new statutory authority.''; and
(2) in subsection (c)(1), by inserting ``or under section 3
of the Chile-NAFTA Accession Act,'' after ``the Uruguay Round
Agreements Act,''.
____

S. 140

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 ``United Kingdom-NAFTA
Accession Act''.

SEC. 2. ACCESSION OF UNITED KINGDOM TO THE NORTH AMERICAN
FREE TRADE AGREEMENT.

(a) In General.--Subject to section 3, the President is
authorized to enter into an agreement described in subsection
(b) and the provisions of section 151(c) of the Trade Act of
1974 (19 U.S.C. 2191(c)) shall apply with respect to a bill
to implement such agreement if such agreement is entered into
on or before December 31, 2003.
(b) Agreement Described.--An agreement described in this
subsection means an agreement that--
(1) provides for the accession of United Kingdom to the
North American Free Trade Agreement; or
(2) is a bilateral agreement between the United States and
United Kingdom that provides for the reduction and ultimate
elimination of tariffs and other nontariff barriers to trade
and the eventual establishment of a free trade area between
the United States and United Kingdom.

SEC. 3. INTRODUCTION AND FAST-TRACK CONSIDERATION OF
IMPLEMENTING BILL.

(a) Introduction in House and Senate.--When the President
submits to Congress a bill to implement a trade agreement
described in section 2, the bill shall be introduced (by
request) in the House and the Senate as described in section
151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
(b) Restrictions on Content.--A bill to implement a trade
agreement described in section 2--
(1) shall contain only provisions that are necessary to
implement the trade agreement; and
(2) may not contain any provision that establishes (or
requires or authorizes the establishment of) a labor or
environmental protection standard or amends (or requires or
authorizes an amendment of) any labor or environmental
protection standard set forth in law or regulation.
(c) Point of Order in Senate--
(1) Applicability to all legislative forms of implementing
bill.--For the purposes of this subsection, the term
``implementing bill'' means the following:
(A) The bill.--A bill described in subsection (a), without
regard to whether that bill originated in the Senate or the
House of Representatives.
(B) Amendment.--An amendment to a bill referred to in
subparagraph (A).
(C) Conference Report.--A conference report on a bill
referred to in subparagraph (A).
(D) Amendment between houses.--An amendment between the
Houses of Congress in relation to a bill referred to in
subparagraph (A).
(E) Motion.--A motion in relation to an item referred to in
subparagraph (A), (B), (C), or (D).
(2) Making of point of order.--
(A) Against single item.--When the Senate is considering an
implementing bill, a Senator may make a point of order
against any part of the implementing bill that contains
material in violation of a restriction under subsection (b).
(B) Against several items.--Notwithstanding any other
provision of law or rule of the Senate, when the Senate is
considering an implementing bill, it shall be in order for a
Senator to raise a single point of order that several
provisions of the implementing bill violate subsection (b).
The Presiding Officer may sustain the point of order as to
some or all of the provisions against which the Senator
raised the point of order.
(3) Effect of sustainment of point of order.--
(A) Against single item.--If a point of order made against
a part of an implementing bill under paragraph (2)(A) is
sustained by the Presiding Officer, the part of the
implementing bill against which the point of order is
sustained shall be deemed stricken.
(B) Against several items.--In the case of a point of order
made under paragraph (2)(B) against several provisions of an
implementing bill, only those provisions against which the
Presiding Officer sustains the point of order shall be deemed
stricken.
(C) Stricken matter not in order as amendment.--Matter
stricken from an implementing bill under this paragraph may
not be offered as an amendment to the implementing bill (in
any of its forms described in paragraph (1)) from the floor.
(4) Waivers and appeals.--
(A) Waivers.--Before the Presiding Officer rules on a point
of order under this subsection, any Senator may move to waive
the point of order as it applies to some or all of the
provisions against which the point of order is raised. Such a
motion to waive is amendable in accordance with the rules and
precedents of the Senate.
(B) Appeals.--After the Presiding Officer rules on a point
of order under this subsection, any Senator may appeal the
ruling of the Presiding Officer on the point of order as it
applies to some or all of the provisions on which the
Presiding Officer ruled.
(C) Three-fifths majority required.--
(i) Waivers.--A point of order under this subsection is
waived only by the affirmative vote of at least the requisite
majority.
(ii) Appeals.--A ruling of the Presiding Officer on a point
of order under this subsection is sustained unless at least
the requisite majority votes not to sustain the ruling.
(iii) Requisite majority.--For purposes of clauses (i) and
(ii), the requisite majority is three-fifths of the Members
of the Senate, duly chosen and sworn.
(d) Applicability of Fast Track Procedures.--Section 151 of
the Trade Act of 1974 (19 U.S.C. 2191) is amended--
(1) in subsection (b)(1)--
(A) by inserting ``section 3 of the United Kingdom-NAFTA
Accession Act,'' after ``the Omnibus Trade and
Competitiveness Act of 1988,''; and
(B) by amending subparagraph (C) to read as follows:
``(C) if changes in existing laws or new statutory
authority is required to implement such trade agreement or
agreements or such extension, provisions, necessary to
implement such trade agreement or agreements or such
extension, either repealing or amending existing laws or
providing new statutory authority.''; and
(2) in subsection (c)(1), by inserting ``or under section 3
of the United Kingdom-NAFTA Accession Act,'' after ``the
Uruguay Round Agreements Act,''.
____

Summary of Four Trade Policy Initiatives

fast track trade negotiating authority act

Authorizes the President to enter into bilateral or
multilateral trade agreements.
Reauthorizes traditional fast track authority procedures
for implementing legislation for such agreements as long as
agreements are entered into by December 31, 2004.
Updates existing outdated negotiating objectives to
encompass policies and objectives of the United States.

americas free trade act

Directs the President to initiate negotiations for trade
agreements with the nations of the Western Hemisphere to
promote a free trade area for the Hemisphere.
Bars the application of the Act to Cuba until the President
certifies that freedom has been restored in Cuba and US
expropriation claims have been addressed, at which time
priority is given to a trade agreement with Cuba.
Applies fast-track procedures to implementing legislation
for such agreements.
Limits implementing legislation to those provisions
necessary to implement an agreement, and bars the inclusion
of provisions setting labor or environmental standards or
amending existing labor or environmental law.
Provides a point of order against provisions that do not
meet these two limitations.

chile nafta accession act

Authorizes the President to enter into an agreement with
Chile that provides for

[[Page S414]]

Chile's accession into NAFTA, or consists of a US/Chile
bilateral free trade agreement.
Applies fast-track procedures to implementing legislation
for such an agreement as long as the agreement is entered
into by December 31, 2002.
Limits implementing legislation to those provisions
necessary to implement the agreement, and bars the inclusion
of provisions setting labor or environmental standards or
amending existing labor or environmental law.
Provides a point of order against provisions that do not
meet these two limitations.

united kingdom nafta accession act

Authorizes the President to enter into an agreement with
the United Kingdom that provides for the United Kingdom's
accession into NAFTA, or consists of a US/UK bilateral free
trade agreement.
Applies fast-track procedures to implementing legislation
for such an agreement as long as the agreement is entered
into by December 31, 2003.
Limits implementing legislation to those provisions
necessary to implement the agreement, and bars the inclusion
of provisions setting labor or environmental standards or
amending existing labor or environmental law.
Provides a point of order against provisions that do not
meet these two limitations.
______

By Mr. BENNETT:
S. 139. A bill to assist in the preservation of archaeological,
paleontological, zoological, geological, and botanical artifacts
through construction of a new facility for the University of Utah
Museum of Natural History, Salt Lake City, Utah; to the Committee on
Energy and Natural Resources.

utah public lands artifact preservation act of 2001

Mr. BENNETT. Mr. President, I rise today to introduce my first bill
of the 107th Congress, the ``Utah Public Lands Artifact Preservation
Act of 2001.''
Utah's public lands are a treasure trove of the natural and cultural
history of the west. Over a century of scientific exploration and
research of these public lands have unearthed Native American
artifacts, fossilized remains of prehistoric life-forms, and other
objects of botanical and geological significance. Fortunately, these
unique and remarkable finds now comprise a substantial portion of the
collection of the University of Utah Museum of Natural History.
The University of Utah Museum of Natural History collection contains
more than one million objects and artifacts from the field of
archaeology, botany, geology, paleontology, and zoology. It is one of
the largest and most comprehensive collections in the region and is
internationally significant. Over 75 percent of the collection was
recovered from lands managed by the Bureau of Land Management, Bureau
of Reclamation, National Park Service, United States Fish and Wildlife
Service, and United States Forest Service.
Currently the home of the Museum of Natural History is the library
where I studied while I was a student at the University of Utah.
Although I have fond memories of the time I spent in the library, it is
an unfit home for the museum. As we all know, the needs of a library
and the needs of a museum are very different. The current facility is
not large enough to accommodate the museum's annual level of
visitation. Additionally, space to display the collection is severely
limited and the facilities to store the collection are unsuitable for a
museum, Clearly, the Museum of Natural History needs an appropriate
structure to exhibit, research, and house its collection.
This legislation will result in an enhanced museum experience that
will be more meaningful, educational, and accessible to the public and
scientific researchers. Furthermore, the collection will no longer be
jeopardized by inadequate facilities. The new museum will contain
proper facilities for storage and research.
I believe the strength of this project lies in the fact that its
success will rely upon a public-private partnership among the state of
Utah, the federal government, and hundreds of private individuals and
foundations. Already, unprecedented support has been given by the Emma
Eccles Jones Foundation for this project. I expect there will be many
generous offers of support in the near future to make this project a
success.
I believe that this legislation is an exciting opportunity to
showcase the many treasures that Utah's public lands contain. I look
forward to working with my colleagues in the Senate and the new
administration to pass this legislation this session.
______

By Mr. McCAIN:
S. 141. A bill to provide for enhanced safety, public awareness, and
environmental protection in pipeline transportation, and for other
purposes; to the Committee on Commerce, Science, and Transportation.

pipeline safety improvement act

Mr. McCAIN. Mr. President, today I am introducing the Pipeline Safety
Improvement Act of 2001. I am very pleased to be joined in sponsoring
this important transportation safety legislation by Senators Murray,
Hollings, Hutchison, Bingaman, Domenici, and Breaux. This bill, which
is identical to the measure approved unanimously by the Senate last
year but which failed to be sent to the President, is being introduced
today to demonstrate our strong, continued commitment to improving
pipeline transportation safety. We urge our colleagues to join us in
our efforts to help remedy identified safety problems and improve
pipeline safety for all Americans.
As most of my colleagues well know, the Senate worked long and hard
during the last Congress to produce comprehensive pipeline safety
legislation. As a result of our bipartisan efforts, we unanimously
approved pipeline safety improvement legislation last September.
Unfortunately, the House failed to approve a pipeline safety measure
and the Congress thus failed in its efforts to improve pipeline safety.
As a result, the unacceptable status quo under which at least 16
fatalities have occurred remains the law of the land. I am hopeful that
this new Congress will act quickly to take the overdue action necessary
to improve pipeline safety before any more lives are lost.
Mr. President, let me be clear from the outset that I continue to
support passage of the strongest pipeline safety bill possible. As
such, I will be very eager to receive safety improvement
recommendations from the new Administration. Indeed, I look forward to
working with the Administration, the House of Representatives, safety
advocates, industry and other concerned citizens to advance a sound
legislative proposal that can be signed into law.
Although pipeline safety legislation was not enacted last year as we
had hoped, the President did issue an executive order requiring a
number of safety actions by pipeline operators. Further, the Department
of Transportation (DOT) also issued a number of regulations during the
past few months. The Administration's actions will be carefully
considered by the Commerce Committee and we will work to ensure our
legislation reflects the Administration's actions, as appropriate, as
we advance the legislation to the full Senate.
The following highlights some of the major provisions of the
legislation we are reintroducing today:
The bill would require the implementation of pipeline safety
recommendations issued last March by the Department of Transportation
Inspector General to the Research and Special Programs Administration
(RSPA). The legislation would statutorily require the Secretary of
Transportation, the RSPA Administrator and the Director of the Office
of Pipeline Safety to respond to NTSB pipeline safety recommendations
within 90 days of receipt. The bill would require pipeline operators to
submit to the Secretary of Transportation a plan designed to improve
the qualifications for pipeline personnel. At a minimum, the
qualification plan would have to demonstrate that pipeline employees
have the necessary knowledge to safely and properly perform their
assigned duties and would require testing and periodic reexamination of
the employees' qualifications.

The legislation would require DOT to issue regulations mandating
pipeline operators to periodically determine the adequacy of their
pipelines to safely operate and to implement integrity management
programs to reduce those identified risks. The regulations would, at a
minimum, require operators to: base their integrity management plans on
risk assessments that they conduct; periodically assess the integrity
of their pipelines; and, take steps to prevent and mitigate unintended
releases, such as improving leak detection capabilities or installing
restrictive flow devices.

[[Page S415]]

The bill also would require pipeline operators to carry out a
continuing public education program that would include activities to
advise municipalities, school districts, businesses, and residents of
pipeline facility locations on a variety of pipeline safety-related
matters. It would also direct pipeline operators to initiate and
maintain communication with State emergency response commissions and
local emergency planning committees and to share with these entities
information critical to addressing pipeline safety issues, including
information on the types of product transported and efforts by the
operator to mitigate safety risks.
The legislation directs the Secretary to develop and implement a
comprehensive plan for the collection and use of pipeline data in a
manner that would enable incident trend analysis and evaluations of
operator performance. Operators would be required to report incident
releases greater than five gallons, compared to the current reporting
requirement of 42 gallons. In addition, the Secretary would be directed
to establish a national depository of data to be administered by the
Bureau of Transportation Statistics in cooperation with RSPA.
Given the critical importance of technology applications in promoting
transportation safety across all modes of transportation, the
legislation directs the Secretary to include as part of the
Department's research and development (R&D) efforts a focus on
technologies to improve pipelines safety, such as through internal
inspection devices and leak detection. Further, the legislation
includes provisions advanced last year by Senator Bingaman, myself, and
others, to provide for a collaborative R&D effort directed by the
Department of Transportation with the assistance of the Department of
Energy and the National Academy of Sciences.
The bill provides for a three year authorization in funding for
federal pipeline safety activities and the pipeline state grant
program. The authorization levels in particular will be carefully
reviewed as the bill proceeds through the legislation process. We must
ensure sufficient funding is authorized to carry out critical pipeline
safety activities and to advance research and development efforts.
The legislation requires operators, in the event of an accident, to
make available to the DOT or NTSB all records and information
pertaining to the accident and to assist in the investigation to the
extent reasonable. It also includes provisions to ensure that if an
accident occurs, a review is carried out to ensure the operator's
employees can safely perform their duties.
Finally, to ensure pipeline employees are afforded the same whistle-
blower protections as are provided to employees in other modes of
transportation, the legislation includes protections for pipeline
personnel, similar to those protections provided to aviation-related
employees last year in the Wendell H. Ford Aviation and Investment
Reform Act for the 21st Century, P.L. 106-181.
Again Mr. President, I will be interested in receiving additional
recommendations to further strengthen federal pipeline safety policy. I
hope this Congress can act expeditiously to approve comprehensive
pipeline safety legislation. We simply cannot afford another missed
opportunity to address identified pipeline safety shortcomings.
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. 141

(Data not available at time of printing, the bill will print in a
subsequent issue of the Record.)
______

By Mr. JOHNSON (for himself, Mr. Grassley, Mr. Thomas, and Mr.
Daschle)
S. 142. A bill to amend the Packers and Stockyards Act, 1921, to make
unlawful for a packer to own, feed, or control livestock intended for
slaughter, to the Committee on Agriculture, Nutrition, and Forestry.

amending the packers and stockyards act

S. 142

Mr. JOHNSON. 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. 142

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

SECTION 1. PROHIBITION ON PACKERS OWNING, FEEDING, OR
CONTROLLING LIVESTOCK.

(a) In General.--Section 202 of the Packers and Stockyards
Act, 1921 (7 U.S.C. 192), is amended--
(1) by redesignating subsections (f) and (g) as subsections
(g) and (h), respectively;
(2) by inserting after subsection (e) the following:
``(f) Own, feed, or control livestock intended for
slaughter (for more than 14 days prior to slaughter and
acting through the packer or a person that directly or
indirectly controls, or is controlled by or under common
control with, the packer), except that this subsection shall
not apply to--
``(1) a cooperative, if a majority of the ownership
interest in the cooperative is held by active cooperative
members that--
``(A) own, feed, or control livestock; and
``(B) provide the livestock to the cooperative for
slaughter; or
``(2) a packer that is owned or controlled by producers of
a type of livestock, if during a calendar year the packer
slaughters less than 2 percent of the head of that type of
livestock slaughtered in the United States; or''; and
(3) in subsection (h) (as so redesignated), by striking
``or (e)'' and inserting ``(e), or (f)''.
(b) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendments
made by subsection (a) take effect on the date of enactment
of this Act.
(2) Transition rules.--In the case of a packer that on the
date of enactment of this Act owns, feeds, or controls
livestock intended for slaughter in violation of section
202(f) of the Packers and Stockyards Act, 1921 (as amended by
subsection (a)), the amendments made by subsection (a) apply
to the packer--
(A) in the case of a packer of swine, beginning on the date
that is 18 months after the date of enactment of this Act;
and
(B) in the case of a packer of any other type of livestock,
beginning as soon as practicable, but not later than 180
days, after the date of enactment of this Act, as determined
by the Secretary of Agriculture.
______

By Mr. GRAMM (for himself, Mr. Schumer, Mr. Hagel, Mr. Enzi, Mr.
Bennett, Mr. Bunning, Mr. Bond, Mr. Torricelli, Mr. Allard, and
Mr. Crapo):
S. 143. A bill to amend the Securities Act of 1933 and the Securities
Exchange Act of 1934, to reduce securities fees in excess of those
requires to fund the operations of the Securities and Exchange
Commission, to adjust compensation provisions for employees of the
Commission, and for other purposes; to the Committee on Banking,
Housing, and Urban Affairs.

competitive market supervision act of 2001

Mr. GRAMM. Mr. President, today I am joined by Senator Schumer,
together with Senators Hagel, Enzi, Bennett, Bunning, Bond, Torricelli,
Allard, and Crapo in introducing the Competitive Market Supervision Act
of 2001. This important legislation will reduce the excess fees
collected by the Securities and Exchange Commission (SEC). At the same
time, the legislation will guarantee that the SEC is fully funded by
fee collections, allowing fee adjustments to meet appropriated amounts.
This legislation, moreover, will level unaffected the funds available
for appropriations purposes by walling off the offsetting fee
collections that are expected under current law.
Under current budget estimates, this legislation will result in a
reduction of fee collections by more than $1 billion in the first year
and by about $8 billion over the next 5 years.
A second key element of the bill is that it will extend to the SEC
the same salary authority for its employees as is exercised by the
Federal banking agencies.
A similar bill, S. 2107, which included the identical provisions of
the bill I am introducing today, was approved by the Senate Banking,
Housing, and Urban Affairs Committee last year.

reduction of securities user fees

The original objective of the user fees collected by the Commission
was to provide a funding source for the agency's operations. However,
increases in stock market volume and valuation have spawned revenues
that far surpass what is needed to operate the agency. In fiscal year
2000, to fund a budget of $375 million, the SEC collected $2.27
billion. According to the most recent Congressional Budget Office (CBO)
projections, the savings to

[[Page S416]]

investors and issuers from this legislation will be approximately $8
billion over 5 years, and nearly $14 billion over ten years, without
reducing funds available for the SEC or for necessary appropriations.
Rather than user fees, these revenues have become taxes on savings
and investment, taxes that lower the returns of every investor who buys
stock, owns a mutual fund, or plans to use Individual Retirement
Accounts, 401(k) plans, or pensions to fund retirement. Furthermore,
excess Section 6(b) fees are particularly harmful since these taxes are
imposed at the beginning of the investment cycle, subtracting from the
economy monies that could be leveraged into several times their value
to finance efforts to create jobs, develop new products, and build
America.
Section 2 of the bill amends Section 6(b) of the Securities Act of
1933 to lower registration fee rates. In addition, this section
eliminates the general revenue portion of the registration fee. The
offsetting collection rate is set at $67 per $1 million of securities
registered for FY 2002-06, and at $33 per $1 million for FY 2007 and
thereafter. Section 3 reduces merger and tender fee rates in Section
13(e)(3) and Section 14(g) of the Securities Exchange Act of 1934 from
one fiftieth percent under current law to $67 per $1 million of
securities involved for the period FY 2002-06, and reduces rates
further to $33 per $1 million for FY 2007 and thereafter, and all fees
are also reclassified from general revenues to offsetting collections.
It is important to harmonize the fee registration, and merger and
tender fee rates so as to provide no distortions or inject any
unintended incentives into the managerial decision as to when a merger
should occur.

Under Section 4, all transactions included in Section 31 of the
Securities Exchange Act of 1934 are consolidated, with the same fee
rate applied to each as an offsetting collection. Transaction fees in
any particular fiscal year will be set in appropriations acts at a rate
estimated to collect the target dollar amount set in Section 4 for that
year. The target dollar amount is calculated to approximate the amount
of transaction fees required so that, when combined with anticipated
registration and merger/tender fees, total offsetting collections will
approximately equal the offsetting collections anticipated under
current law. If the most recent projections prove accurate, this will
reduce transaction fee rates by as much as two-thirds.
I would note that the fee targets established under Section 4 are
based upon the most recent budget estimates available. It is my
intention to adjust those targets prior to Committee action on the bill
as new budget estimates become available in the next few weeks.

authority of sec to adjust to fee rates

Given the difficulty in predicting fee revenues, it is also important
to provide a framework that ensures full funding for the SEC.
Therefore, Section 5 of this legislation provides the Commission with
the authority to adjust fee rates to ensure that the agency is fully
funded in the event that reductions in market valuations or volume
produce revenues below the legislated targets. In addition, Section 5
requires the agency to lower fee rates when fees are projected to bring
in revenues that are in excess of the cap on fee collections laid out
in the bill. To provide a safeguard against misuse of the authority
granted in Section 5, the legislation requires the agency to report to
Congress before it exercises any authority to adjust fees.

sec pay comparability

Section 6 of the bill amends the Securities Exchange Act of 1934 to
extend to the SEC the same authority provided to the federal bank
regulators to adjust base rates of compensation for all of its
employees. Under existing law, the Commission may do this only for its
economists. The provisions allow parity among the Commission and
Federal banking agency compensation programs. This change is
particularly timely since under the terms of the Gramm-Leach-Bliley
Act, in many institutions, examiners from the SEC will be working along
side examiners from the federal banking regulators. Without this pay
comparability, we could witness a drain of talent from the SEC toward
the other examiners. An amendment also is made to the Federal Deposit
Insurance Act to bring the SEC within the consultation and information-
sharing requirements of other agencies mentioned at 12 U.S.C. 1833b
with respect to rates of employee compensation. A further technical
amendment to section 1833b deletes references to entities that have
been abolished.
The legislation assures that reductions, if any, in the base pay of a
Commission employee represented by a labor organization with exclusive
recognition in accordance with Chapter 71 of Title 5 of the United
States Code, result from negotiations between such organization and
Commission management, rather than by reason of the enactment of this
amendment.
Mr. President, I look forward to early and favorable consideration of
the Competitive Market Supervision Act of 2001. I ask that a summary of
the provisions of the bill and bill text be included in the Record.
There being no objection, the additional material was ordered to be
printed in the Record, as follows:

S. 143

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
``Competitive Market Supervision Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Reduction in registration fee rates; elimination of general
revenue component.
Sec. 3. Reduction in merger and tender fee rates; reclassification as
offsetting collections.
Sec. 4. Reduction in transaction fees; elimination of general revenue
component.
Sec. 5. Adjustments to fee rates.
Sec. 6. Comparability provisions.
Sec. 7. Effective date.

SEC. 2. REDUCTION IN REGISTRATION FEE RATES; ELIMINATION OF
GENERAL REVENUE COMPONENT.

Section 6(b) of the Securities Act of 1933 (15 U.S.C.
77f(b)) is amended--
(1) by striking paragraph (2) and inserting the following:
``(2) Fee payment required.--At the time of filing a
registration statement, the applicant shall pay to the
Commission a fee that shall be equal to the amount determined
under the rate established by paragraph (3). The Commission
shall publish in the Federal Register notices of the fee rate
applicable under this section for each fiscal year.'';
(2) by striking paragraph (3);
(3) by redesignating paragraphs (4) and (5) as paragraphs
(3) and (4), respectively;
(4) in paragraph (3), as redesignated--
(A) by striking subparagraph (A) and inserting the
following:
``(A) In general.--Except as provided in subparagraphs (B)
and (C), the rate determined under this paragraph is a rate
equal to the following amount per $1,000,000 of the maximum
aggregate price at which the securities are proposed to be
offered:
``(i) $67 for each of fiscal years 2002 through 2006.
``(ii) $33 for fiscal year 2007 and each fiscal year
thereafter.''; and
(B) in subparagraph (B), by striking ``this paragraph (4)''
and inserting ``this paragraph''; and
(5) by striking paragraph (4), as redesignated, and
inserting the following:
``(4) Pro rata application of rate.--The rate required by
this subsection shall be applied pro rata to amounts and
balances equal to or less than $1,000,000.''.

SEC. 3. REDUCTION IN MERGER AND TENDER FEE RATES;
RECLASSIFICATION AS OFFSETTING COLLECTIONS.

(a) Section 13.--Section 13(e)(3) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(e)(3)) is amended to read
as follows:
``(3) Fees.--
``(A) In general.--At the time of the filing of any
statement that the Commission may require by rule pursuant to
paragraph (1), the person making the filing shall pay to the
Commission a fee equal to--
``(i) $67 for each $1,000,000 of the value of the
securities proposed to be purchased, for each of fiscal years
2002 through 2006; and
``(ii) $33 for each $1,000,000 of the value of securities
proposed to be purchased, for fiscal year 2007 and each
fiscal year thereafter.
``(B) Reduction.--The fee required by this paragraph shall
be reduced with respect to securities in an amount equal to
any fee paid with respect to any securities issued in
connection with the proposed transaction under section 6(b)
of the Securities Act of 1933, or the fee paid under that
section shall be reduced in an amount equal to the fee paid
to the Commission in connection with such transaction under
this paragraph.
``(C) Limitation; deposit of fees.--
``(i) Limitation.--Except as provided in subparagraph (D),
no amounts shall be collected pursuant to this paragraph for
any fiscal year, except to the extent provided in advance in
appropriations Acts.
``(ii) Deposit of fees.--Fees collected during any fiscal
year pursuant to this paragraph shall be deposited and
credited as offsetting collections in accordance with
appropriations Acts.

[[Page S417]]

``(D) Lapse of appropriations.--If, on the first day of a
fiscal year, a regular appropriation to the Commission has
not been enacted for that fiscal year, the Commission shall
continue to collect fees (as offsetting collections) under
this paragraph at the rate in effect during the preceding
fiscal year, until such a regular appropriation is enacted.
``(E) Pro rata application of rate.--The rate required by
this paragraph shall be applied pro rata to amounts and
balances equal to or less than $1,000,000.''.
(b) Section 14.--
(1) Preliminary proxy solicitations.--Section 14(g)(1) of
the Securities Exchange Act of 1934 (15 U.S.C. 78n(g)(1)) is
amended--
(A) in subparagraph (A), by striking ``Commission the
following fees'' and all that follows through the end of the
subparagraph and inserting ``Commission--
``(i) for preliminary proxy solicitation material involving
an acquisition, merger, or consolidation, if there is a
proposed payment of each or transfer of securities or
property to shareholders, a fee equal to--

``(I) $67 for each $1,000,000 of such proposed payment, or
of the value of such securities or other property proposed to
be transferred, for each of fiscal years 2002 through 2006;
and
``(II) $33 for each $1,000,000 of such proposed payment, or
of the value of such securities or other property proposed to
be transferred, for fiscal year 2007 and each fiscal year
thereafter; and

``(ii) for preliminary proxy solicitation material
involving a proposed sale or other disposition of
substantially all of the assets of a company, a fee equal
to--

``(I) $67 for each $1,000,000 of the cash or of the value
of any securities or other property proposed to be received
upon such sale or disposition, for each of fiscal years 2002
through 2006; and
``(II) $33 for each $1,000,000 of the cash or of the value
of any securities or other property proposed to be received
upon such sale or disposition, for fiscal year 2007 and each
fiscal year thereafter.'';

(B) in subparagraph (B), by inserting ``Reduction.--''
before ``The fee''; and
(C) by adding at the end the following:
``(C) Limitation; deposit of fees.--
``(i) Limitation.--Except as provided in subparagraph (D),
no amounts shall be collected pursuant to this paragraph for
any fiscal year, except to the extent provided in advance in
appropriations Acts.
``(ii) Deposit of fees.--Fees collected during any fiscal
year pursuant to this paragraph shall be deposited and
credited as offsetting collections in accordance with
appropriations Acts.
``(D) Lapse of appropriations.--If, on the first day of a
fiscal year, a regular appropriation to the Commission has
not been enacted for that fiscal year, the Commission shall
continue to collect fees (as offsetting collections) under
this paragraph at the rate in effect during the preceding
fiscal year, until such a regular appropriation is enacted.
``(E) Pro rata application of rate.--The rate required by
this paragraph shall be applied pro rata to amounts and
balances equal to or less than $1,000,000.''.
(2) Other filings.--Section 14(g)(3) of the Securities
Exchange Act of 1934 (15 U.S.C. 78n(g)(3)) is amended--
(A) by striking ``At the time'' and inserting the
following: ``Other filings.--
``(A) Fee rate.--At the time'';
(B) by striking ``the Commission a fee of'' and all that
follows through ``The fee'' and inserting the following:
``the Commission a fee equal to--
``(i) $67 for each $1,000,000 of the aggregate amount of
cash or of the value of securities or other property proposed
to be offered, for each of fiscal years 2002 through 2006;
and
``(ii) $33 for each $1,000,000 of the aggregate amount of
cash or of the value of securities or other property proposed
to be offered, for fiscal year 2007 and each fiscal year
thereafter.
``(B) Reduction.--The fee required under subparagraph
(A)''; and
(C) by adding at the end the following:
``(C) Limitation; deposit of fees.--
``(i) Limitation.--Except as provided in subparagraph (D),
no amounts shall be collected pursuant to this paragraph for
any fiscal year, except to the extent provided in advance in
appropriations Acts.
``(ii) Deposit of fees.--Fees collected during any fiscal
year pursuant to this paragraph shall be deposited and
credited as offsetting collections in accordance with
appropriations Acts.
``(D) Lapse of appropriations.--If, on the first day of a
fiscal year, a regular appropriation to the Commission has
not been enacted for that fiscal year, the Commission shall
continue to collect fees (as offsetting collections) under
this paragraph at the rate in effect during the preceding
fiscal year, until such a regular appropriation is enacted.
``(E) Pro rata application of rate.--The rate required by
this paragraph shall be applied pro rata to amounts and
balances equal to or less than $1,000,000.''.

SEC. 4. REDUCTION IN TRANSACTION FEES; ELIMINATION OF GENERAL
REVENUE COMPONENT.

Section 31 of the Securities Exchange Act of 1934 (15
U.S.C. 78ee) is amended--
(1) by striking subsections (b) through (d) and inserting
the following:
``(b) Transaction Fees.--
``(1) In general.--Each national securities exchange and
national securities association shall pay to the Commission a
fee at a rate equal to the transaction offsetting collection
rate described in paragraph (2) of the aggregate dollar
amount of sales of securities (other than bonds, debentures,
and other evidences of indebtedness)--
``(A) transacted on such national securities exchange;
``(B) transacted by or through any member of such
association otherwise than on a national securities exchange
of securities registered on such an exchange; and
``(C) transacted by or through any member of such
association otherwise than on a national securities exchange
of securities that are subject to prompt last sale reporting
pursuant to the rules of the Commission or a registered
national securities association, excluding any sales for
which a fee is paid under subparagraph (B).
``(2) Fee rate.--
``(A) Transaction offsetting collection rate.--For purposes
of this subsection, the `transaction offsetting collection
rate' for a fiscal year--
``(i) is the uniform rate required to reach the transaction
fee cap for that fiscal year; and
``(ii) shall become effective on the later of the beginning
of that fiscal year or the date of enactment of
appropriations legislation setting such rate.
``(B) Transaction fee cap.--For purposes of this paragraph,
the `transaction fee cap' shall be equal to--
``(i) $497,000,000 for fiscal year 2002;
``(ii) $607,000,000 for fiscal year 2003;
``(iii) $706,000,000 for fiscal year 2004;
``(iv) $896,000,000 for fiscal year 2005;
``(v) $1,094,000,000 for fiscal year 2006;
``(vi) $554,000,000 for fiscal year 2007;
``(vii) $580,000,000 for fiscal year 2008;
``(viii) $719,000,000 for fiscal year 2009; and
``(ix) $884,000,000 for fiscal year 2010 and each fiscal
year thereafter.
``(c) Limitation; Deposit of Fees.--
``(1) Limitation.--Except as provided in subsection (d), no
amount may be collected pursuant to subsection (b) for any
fiscal year, except to the extent provided in advance in
appropriation Acts.
``(2) Deposit of fees.--Fees collected during any fiscal
year pursuant to this section shall be deposited and credited
as offsetting collections in accordance with appropriations
Acts.
``(d) Lapse of Appropriations.--If, on the first day of a
fiscal year, a regular appropriation to the Commission has
not been enacted for that fiscal year, the Commission shall
continue to collect fees (as offsetting collections) under
this section at the rate in effect during the preceding
fiscal year (prior to adjustments, if any, under subsections
(b) and (c) of section 5 of the Competitive Market
Supervision Act), until such a regular appropriation is
enacted.'';
(2) in subsection (e), by striking ``subsections (b), (c),
and (d)'' and inserting ``subsection (b)''; and
(3) in subsection (g), by striking ``rates'' and inserting
``rate''.

SEC. 5. ADJUSTMENTS TO FEE RATES.

(a) Estimates of Collections.--
(1) Fee projections.--The Securities and Exchange
Commission (hereafter in this Act referred to as the
``Commission'') shall, 1 month after submission of its
initial report under subsection (e)(1) and on a monthly basis
thereafter, project the aggregate amount of fees from all
sources likely to be collected by the Commission during the
current fiscal year.
(2) Submission of information.--Each national securities
exchange and national securities association shall file with
the Commission, not later than 10 days after the end of each
month--
(A) an estimate of the fee required to be paid pursuant to
section 31 of the Securities Exchange Act of 1934 by such
national securities exchange or national securities
association for transactions and sales occurring during such
month; and
(B) such other information and documents as the Commission
may require, as necessary or appropriate to project the
aggregate amount of fees pursuant to paragraph (1).
(b) Floor for Total Fee Collections.--If, at any time after
the end of the first half of the fiscal year, the Commission
projects under subsection (a) that the aggregate amount of
fees collected by the Commission will, during that fiscal
year, fall below an amount equal to the floor for total fee
collections, the Commission may by order, subject to
subsection (e), increase the fee rate established under
section 31 of the Securities Exchange Act of 1934 to the
extent necessary to bring estimated collections to an amount
equal to the floor for total fee collections. Such increase
shall apply only to transactions and sales occurring on or
after the effective date specified in such order through
August 31 of that fiscal year. Such increase shall not affect
the obligation of each national securities exchange and
national securities association to pay the Commission the fee
required by section 31 of the Securities Exchange Act of 1934
at the fee rate in effect prior to the effective date of such
order for transactions and sales occurring prior to the
effective date of such order. In exercising its authority
under this subsection, the Commission shall not be required
to comply with the provisions of section 553 of title 5,
United States Code.
(c) Cap on Total Fee Collections.--If, at any time after
the end of the first half of the fiscal year, the Commission
projects under subsection (a) that the aggregate amount of
fees collected by the Commission will exceed the cap on total
fee collections by more than

[[Page S418]]

5 percent during any fiscal year, the Commission shall by
order, subject to subsection (e), decrease the fee rate or
suspend collection of fees under section 31 of the Securities
Exchange Act of 1934 to the extent necessary to bring
estimated collections to an amount equal to the cap on total
fee collections. Such decrease or suspension shall apply only
to transactions and sales occurring on or after the effective
date specified in such order through August 31 of that fiscal
year. Such decrease or suspension shall not affect the
obligation of each national securities exchange and national
securities association to pay the Commission the fee required
by section 31 of the Securities Exchange Act of 1934 at the
fee rate in effect prior to the effective date of such order
for transactions and sales occurring prior to the effective
date of such order. In exercising its authority under this
subsection, the Commission shall not be required to comply
with the provisions of section 553 of title 5, United States
Code.
(d) Definitions.--For purposes of this section--
(1) the term ``floor for total fee collections'' means the
greater of--
(A) the total amount appropriated to the Commission for
fiscal year 2002 (adjusted annually, based on the annual
percentage change, if any, in the Consumer Price Index for
all urban consumers, as published by the Department of
Labor); or
(B) the amount authorized for the Commission pursuant to
section 35 of the Securities Exchange Act of 1934 (15 U.S.C.
78kk), if applicable; and
(2) the term ``cap on total fee collections'' means--
(A) for fiscal years 2002 through 2010, the baseline amount
for aggregate offsetting collections for such fiscal year
under section 6(b) of the Securities Act of 1933 and section
31 of the Securities Exchange Act of 1934, as projected for
such fiscal year by the Congressional Budget Office pursuant
to section 257 of the Balanced Budget and Emergency Deficit
Control Act of 1985 in its most recently published report of
its baseline projection before the date of enactment of this
Act; and
(B) for fiscal years 2011 and thereafter, the amount
authorized for the Commission pursuant to section 35 of the
Securities Exchange Act of 1934 (15 U.S.C. 78kk).
(e) Reports to Congress; Judicial Review; Notice.--
(1) Initial report.--Not later than 90 days after the date
of enactment of this Act, the Commission shall report to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives to explain the methodology used by the
Commission to make projections under subsection (a). Not
later than 30 days after the beginning of each fiscal year,
the Commission may report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives on
revisions to the methodology used by the Commission to make
projections under subsection (a) for such fiscal year and
subsequent fiscal years.
(2) Judicial review; reports of intent to act.--The
determinations made and the actions taken by the Commission
under this subsection shall not be subject to judicial
review. Not later than 45 days before taking action under
subsection (b) or (c), the Commission shall report to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives on its intent to take such action.
(3) Notice.--Not later than 30 days before taking action
under subsection (b) or (c), the Commission shall notify each
national securities exchange and national securities
association of its intent to take such action.

SEC. 6. COMPARABILITY PROVISIONS.

(a) Securities and Exchange Commission Employees.--
(1) In general.--Section 4(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78d(b)) is amended--
(A) by striking paragraphs (1) and (2) and inserting the
following:
``(1) Appointment and compensation.--
``(A) In general.--The Commission may appoint and fix the
compensation of such officers, attorneys, economists,
examiners, and other employees as may be necessary for
carrying out its functions under this Act.
``(B) Rates of pay.--Rates of basic pay for all employees
of the Commission may be set and adjusted by the Commission
without regard to the provisions of chapter 51 or subchapter
III of chapter 53 of title 5, United States Code.
``(C) Comparability.--The Commission may provide additional
compensation and benefits to employees of the Commission if
the same type of compensation or benefits are then being
provided by any agency referred to under section 1206(a) of
the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 1833b) or, if not then being provided,
could be provided by such an agency under applicable
provisions of law, rule, or regulation. In setting and
adjusting the total amount of compensation and benefits for
employees, the Commission shall consult with, and seek to
maintain comparability with, the agencies referred to under
section 1206(a) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b).'';
and
(B) by redesignating paragraph (3) as paragraph (2).
(2) Employees represented by labor organizations.--To the
extent that any employee of the Commission is represented by
a labor organization with exclusive recognition in accordance
with chapter 71 of title 5, United States Code, no reduction
in base pay of such employee shall be made by reason of
enactment of this subsection.
(b) Reporting on Information by the Commission.--Section
1206 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b) is amended--
(1) by inserting ``(a) In General.--'' before ``The Federal
Deposit'';
(2) by striking ``the Thrift Depositor Protection Oversight
Board of the Resolution Trust Corporation''; and
(3) by adding at the end the following:
``(b) In establishing and adjusting schedules of
compensation and benefits for employees of the Securities and
Exchange Commission under applicable provisions of law, the
Commission shall inform the heads of the agencies referred to
under subsection (a) and Congress of such compensation and
benefits and shall seek to maintain comparability with such
agencies regarding compensation and benefits.''.
(c) Technical Amendments.--
(1) Section 3132(a)(1) of title 5, United States Code, is
amended--
(A) in subparagraph (C), by striking ``or'' after the
semicolon;
(B) in subparagraph (D), by inserting ``or'' after the
semicolon; and
(C) by adding at the end the following:
``(E) the Securities and Exchange Commission.''.
(2) Section 5373(a) of title 5, United States Code, is
amended--
(A) in paragraph (2), by striking ``or'' after the
semicolon;
(B) in paragraph (3), by striking the period and inserting
``; or''; and
(C) by adding at the end the following:
``(4) section 4(b) of the Securities Exchange Act of
1934.''.

SEC. 7. EFFECTIVE DATE.

(a) In General.--Subject to subsection (b), this Act and
the amendments made by this Act shall become effective on
October 1, 2001.
(b) Exceptions.--The authorities provided by section
13(e)(3)(D), section 14(g)(1)(D), section 14(g)(3)(D), and
section 31(d) of the Securities Exchange Act of 1934, as so
designated by this Act, shall not apply until October 1,
2002.
____

Section-by-Section Analysis of the Competitive Market Supervision Act
of 2001

Section 1. Short title
Designates this title as the ``Competitive Market
Supervision Act of 2001.''
Section 2. Reduction in registration fees; elimination of
general revenue component
Registration fee rates in Section 6(b) of the Securities
Act of 1933 (15 U.S.C. 77f(b)) are reduced. The general
revenue portion of the registration fee is eliminated. The
offsetting collection rate is set at $67 per $1 million of
securities registered for FY 2002-2006, and at $33 per $1
million for FY 2007 and thereafter.
Section 3. Reduction in merger and tender fees;
reclassification as offsetting collections
Section 3 reduces merger and tender fee rates in Section
13(e)(3) and Section 14(g) of the Securities Exchange Act of
1934 (15 U.S.C. 78m(e)(3) and 78n(g), respectively) from one
fiftieth percent under current law, to $67 per $1 million of
securities involved for the period FY 2002-2006, and reduces
rates further to $33 per $1 million for FY 2007 and
thereafter. All fees are reclassified from general revenues
to offsetting collections.
Section 4. Reduction in transaction fees; elimination of
general revenue component
Under this section, all transactions included in Section 31
of the Securities Exchange Act of 1934 are consolidated, with
the same fee rate applied to each as an offsetting
collection. Transaction fees in any particular fiscal year
will be set in appropriations acts at a rate estimated to
collect the target dollar amount set for that year. The
target dollar amount is calculated to appropriate the amount,
when combined with anticipated registration and merger/tender
fees, that will approximately equal the offsetting
collections anticipated to be produced under current law.
Section 5. Adjustment to fee rates
The Commission is given authority to increase or decrease
transaction fee rates after the first half of the fiscal year
if projections show that either the cap or floor for total
fee collections will be breached. To provide a safeguard
against misuse of the authority granted in Section 5, the
legislation requires the agency to report to Congress before
it exercises any authority to adjust fees.
Section 6. Comparability provisions
Section 6(a) amends Section 4(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78d(b)) to authorize, but not require,
the SEC to compensate its employees according to a scale
outside the Federal Government's General Schedule (GS) rates.
Pursuant to this authority, the SEC may provide additional
compensation and benefits to its employees on the same
comparable basis as do the agencies referred to under Section
1206(a) of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b). Such agencies
include the Federal banking agencies, the National Credit
Union Administration, the Federal Housing Finance Board, and
the Farm Credit Administration.

[[Page S419]]

The amendment ensures that reductions, if any, in base pay
for an employee of the SEC represented by a labor
organization with exclusive recognition in accordance with
Chapter 71 of Title 5 of the United States Code, result from
negotiations between such organizations and SEC management,
as opposed to by reason of the enactment of this amendment.
In establishing and adjusting schedules of compensation and
benefits for its employees, Section 6(b) requires the SEC to
inform the heads of the agencies mentioned above and must
seek to maintain comparability with such agencies regarding
compensation and benefits. A technical change is made to
strike from Section 1206(a) the reference to the Thrift
Depositor Protection Oversight Board of the Resolution Trust
Corporation, which was abolished on December 31, 1995.
Section 6(c) provides certain conforming amendments to Title
5 of the United States Code to reflect changes made under
subsection (a).
Section 7. Effective date
In general, the effective date is October 1, 2001. However,
certain fee reductions will not become effective until
October 1, 2002.
______

By Mr. THURMOND:
S.J. Res. 1. A joint resolution proposing an amendment to the
Constitution of the United States relating to voluntary school prayer;
to the Committee on the Judiciary.
Mr. THURMOND. Mr. President, today, I am introducing the voluntary
school prayer constitutional amendment. This bill is identical to S.J.
Res. 73, which I introduced in the 98th Congress at the request of
then-President Reagan and have reintroduced every Congress since.
This proposal has received strong support from both sides of the
aisle and is of vital importance to our Nation. It would restore the
right to pray voluntarily in public schools--a right which was freely
exercised under our Constitution until the 1960's, when the Supreme
Court ruled to the contrary.
Also, in 1985, the Supreme Court ruled an Alabama statute
unconstitutional which authorized teachers in public schools to provide
``a period of silence . . . for meditation or voluntary prayer'' at the
beginning of each day. As I stated when that opinion was issued and
repeat again: the Supreme Court has too broadly interpreted the
Establishment Clause of the First Amendment and, in doing so, has
incorrectly infringed on the rights of those children--and their
parents--who wish to observe a moment of silence for religious or other
purposes.
Until the Supreme Court ruled in the Engel and Abington School
District decisions, the Establishment Clause of the First Amendment was
generally understood to prohibit the Federal Government from officially
approving, or holding in special favor, any particular religious faith
or denomination. In crafting that clause, our Founding Fathers sought
to prevent what had originally caused many colonial Americans to
emigrate to this country--an official, State religion. At the same
time, they sought, through the Free Exercise Clause, to guarantee to
all Americans the freedom to worship God without government
interference or restraint. In their wisdom, they recognized that true
religious liberty precludes the government from both forcing and
preventing worship.
As Supreme Court Justice William Douglas once stated: ``We are a
religious people whose institutions presuppose a Supreme Being.''
Nearly every President since George Washington has proclaimed a day of
public prayer. Moreover, we, as a Nation, continue to recognize the
Deity in our Pledge of Allegiance by affirming that we are a Nation
``under God.'' Our currency is inscribed with the motto, ``In God We
Trust''. In this Body, we open the Senate and begin our workday with
the comfort and stimulus of voluntary group prayers. I would note that
this practice has been upheld as constitutional by the Supreme Court.
It is unreasonable that the opportunity for the same beneficial
experience is denied to the boys and girls who attend public schools.
This situation simply does not comport with the intentions of the
framers of the Constitution and is, in fact, antithetical to the rights
of our youngest citizens to freely exercise their respective religions.
It should be changed, without further delay.
The Congress should swiftly pass this resolution and send it to the
States for ratification. This amendment to the Constitution would
clarify that it does not prohibit vocal, voluntary prayer in the public
school and other public institutions. It emphatically states that no
person may be required to participate in any prayer. The government
would be precluded from drafting school prayers. This well-crafted
amendment enjoys the support of an overwhelming number of Americans.
I strongly urge my colleagues to support prompt consideration and
approval of this legislation during this Congress.
I ask unanimous consent that the legislation be printed in the
Record.
There being no objection, the joint resolution was ordered to be
printed in the Record, as follows:

S.J. Res. 1

Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled (two-thirds of
each House concurring therein), That the following article is
proposed as an amendment to the Constitution of the United
States, which shall be valid to all intents and purposes as
part of the Constitution when ratified by the legislatures of
three-fourths of the several States within seven years after
the date of its submission by the Congress:

``Article --

``Nothing in this Constitution shall be construed to
prohibit individual or group prayer in public schools or
other public institutions. No person shall be required by the
United States or by any State to participate in prayer.
Neither the United States nor any State shall compose the
words of any prayer to be said in public schools.''.

____________________