Congressional Record, Volume 147 Issue 24 (Tuesday, February 27, 2001)

[Congressional Record Volume 147, Number 24 (Tuesday, February 27, 2001)]
[Senate]
[Pages S1618-S1638]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. SARBANES (for himself, Mr. Warner, Mrs. Murray, and Mr.
Campbell):
S. 392. A bill to grant a Federal Charter to Korean War Veterans
Association, Incorporated, and for other purposes; to the Committee on
the Judiciary.
Mr. SARBANES. Mr. President, today I am introducing legislation
together with Senators Warner, Campbell, and Murray, which would grant
a Federal Charter to the Korean War Veterans Association, Incorporated.
This legislation recognizes and honors the 5.7 million Americans who
fought and served during the Korean War for their struggles and
sacrifices on behalf of freedom and the principles and ideals of our
nation.
The year 2000 marked the 50th Anniversary of the Korean War. In June
1950 when the North Korea People's Army swept across the 38th Parallel
to occupy Seoul, South Korea, members of our Armed Forces--including
many from the State of Maryland--immediately answered the call of the
U.N. to repel this forceful invasion. Without hesitation, these
soldiers traveled to an unfamiliar corner of the world to join an
unprecedented multinational force comprised of 22 countries and risked
their lives to protect freedom. The Americans who led this
international effort were true patriots who fought with remarkable
courage.
In battles such as Pork Chop Hill, the Inchon Landing and the frozen
Chosin Reservoir, which was fought in temperatures as low as fifty-
seven degrees below zero, they faced some of the most brutal combat in
history. By the time the fighting had ended, 8,176 Americans were
listed as missing or prisoners of war--some of whom are still missing--
and over 36,000 Americans had died. One hundred and thirty-one Korean
War Veterans were awarded the nation's highest commendation for combat
bravery, the Medal of Honor. Ninety-four of these soldiers gave their
lives in the process. There is an engraving on the Korean War Veterans
Memorial which reflects these losses and how brutal a war this was. It
reads, ``Freedom is not Free.'' Yet, as a Nation, we have done little
more than establish this memorial to publicly acknowledge the bravery
of those who fought the Korean War. The Korean War has been termed by
many as the ``Forgotten War.'' Freedom is not free. We owe our Korean
War Veterans a debt of gratitude. Granting this Federal charter--at no
cost to the government--is a small expression of appreciation that we
as a Nation can offer to these men and women, one which will enable
them to work as a unified front to ensure that the ``Forgotten War'' is
forgotten no more.
The Korean War Veterans Association was originally incorporated on
June 25, 1985. Since its first annual reunion and memorial service in
Arlington, Virginia, where its members decided to develop a national
focus and strong commitment to service, the association has grown
substantially to a membership of over 17,000. A Federal charter would
allow the Association to continue and grow its mission and further its
charitable and benevolent causes. Specifically, it will afford the
Korean War Veterans' Association the same status as other major
veterans organizations and allow it to participate as part of select
committees with other congressionally chartered veterans and military
groups. A Federal charter will also accelerate the Association's
``accreditation'' with the Department of Veterans Affairs which will
enable its members to assist in processing veterans' claims.
The Korean War Veterans have asked for very little in return for
their service and sacrifice. I urge my colleagues to join me in
supporting this legislation and ask that the text of the measure be
printed in the Record immediately following my comments.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 392

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

SECTION 1. GRANT OF FEDERAL CHARTER TO KOREAN WAR VETERANS
ASSOCIATION, INCORPORATED.

(a) Grant of Charter.--Part B of subtitle II of title 36,
United States Code, is amended--
(1) by striking the following:

``CHAPTER 1201--[RESERVED]''; and

(2) by inserting the following:

``CHAPTER 1201--KOREAN WAR VETERANS ASSOCIATION, INCORPORATED

``Sec.
``120101. Organization.
``120102. Purposes.
``120103. Membership.
``120104. Governing body.
``120105. Powers.
``120106. Restrictions.
``120107. Duty to maintain corporate and tax-exempt status.
``120108. Records and inspection.
``120109. Service of process.
``120110. Liability for acts of officers and agents.
``120111. Annual report.

``Sec. 120101. Organization

``(a) Federal Charter.--Korean War Veterans Association,
Incorporated (in this chapter, the `corporation'),
incorporated in the State of New York, is a federally
chartered corporation.
``(b) Expiration of Charter.--If the corporation does not
comply with the provisions of this chapter, the charter
granted by subsection (a) expires.

``Sec. 120102. Purposes

``The purposes of the corporation are as provided in its
articles of incorporation and include--
``(1) organizing, promoting, and maintaining for benevolent
and charitable purposes an association of persons who have
seen honorable service in the Armed Forces during the Korean
War, and of certain other persons;
``(2) providing a means of contact and communication among
members of the corporation;
``(3) promoting the establishment of, and establishing, war
and other memorials commemorative of persons who served in
the Armed Forces during the Korean War; and
``(4) aiding needy members of the corporation, their wives
and children, and the widows and children of persons who were
members of the corporation at the time of their death.

``Sec. 120103. Membership

``Eligibility for membership in the corporation, and the
rights and privileges of members of the corporation, are as
provided in the bylaws of the corporation.

``Sec. 120104. Governing body

``(a) Board of Directors.--The board of directors of the
corporation, and the responsibilities of the board of
directors, are as provided in the articles of incorporation
of the corporation.

[[Page S1619]]

``(b) Officers.--The officers of the corporation, and the
election of the officers of the corporation, are as provided
in the articles of incorporation.

``Sec. 120105. Powers

``The corporation has only the powers provided in its
bylaws and articles of incorporation filed in each State in
which it is incorporated.

``Sec. 120106. Restrictions

``(a) Stock and Dividends.--The corporation may not issue
stock or declare or pay a dividend.
``(b) Political Activities.--The corporation, or a director
or officer of the corporation as such, may not contribute to,
support, or participate in any political activity or in any
manner attempt to influence legislation.
``(c) Loan.--The corporation may not make a loan to a
director, officer, or employee of the corporation.
``(d) Claim of Governmental Approval or Authority.--The
corporation may not claim congressional approval, or the
authority of the United States, for any of its activities.

``Sec. 120107. Duty to maintain corporate and tax-exempt
status

``(a) Corporate Status.--The corporation shall maintain its
status as a corporation incorporated under the laws of the
State of New York.
``(b) Tax-Exempt Status.--The corporation shall maintain
its status as an organization exempt from taxation under the
Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.).

``Sec. 120108. Records and inspection

``(a) Records.--The corporation shall keep--
``(1) correct and complete records of account;
``(2) minutes of the proceedings of its members, board of
directors, and committees having any of the authority of its
board of directors; and
``(3) at its principal office, a record of the names and
addresses of its members entitled to vote on matters relating
to the corporation.
``(b) Inspection.--A member entitled to vote on matters
relating to the corporation, or an agent or attorney of the
member, may inspect the records of the corporation for any
proper purpose, at any reasonable time.

``Sec. 120109. Service of process

``The corporation shall have a designated agent in the
District of Columbia to receive service of process for the
corporation. Notice to or service on the agent is notice to
or service on the Corporation.

``Sec. 120110. Liability for acts of officers and agents

``The corporation is liable for the acts of its officers
and agents acting within the scope of their authority.

``Sec. 120111. Annual report

``The corporation shall submit an annual report to Congress
on the activities of the corporation during the preceding
fiscal year. The report shall be submitted at the same time
as the report of the audit required by section 10101 of this
title. The report may not be printed as a public document.''.
(b) Clerical Amendment.--The table of chapters at the
beginning of subtitle II of title 36, United States Code, is
amended by striking the item relating to chapter 1201 and
inserting the following new item:

``1201. Korean War Veterans Association, Incorporated.....120101''.....

______

By Mr. FRIST (for himself and Mr. Torricelli):
S. 393. A bill to amend the Internal Revenue Code of 1986 to
encourage charitable contributions to public charities for use in
medical research, to the Committee on Finance.
Mr. FRIST. Mr. President, I rise today to introduce bipartisan
legislation, the Paul Coverdell Medical Research Investment Act.
Under the current tax code, deductible charitable cash gifts to
support medical research are limited to 50% of an individual's adjusted
gross income. This bill would simply increase the deductibility of cash
gifts for medical research to 80 percent of an individual's adjusted
gross income. For those individuals who are willing and able to give
more than 80 percent of their income, the bill also extends the period
an individual can carry the deduction forward for excess charitable
gifts from five years to ten years.
In what is perhaps the most important change for today's economy, the
bill allows taxpayers to donate stock without being penalized for it.
Americans regularly donate stock acquired through a stock option plan
to their favorite charity. And often they make the donation within a
year of exercising their stock options. But current law penalizes these
donations by taxing them as ordinary income or as capital gain. These
taxes can run as high as 40 percent, which acts as a disincentive to
contribute to charities. How absurd that someone who donates $1,000 to
a charity has to sell $1,400 of stock to pay for it. The person could
wait a year and give the stock then, but why delay the contribution
when that money can be put to work curing disease today. The Paul
Coverdell MRI Act is premised on a simple truth: people should not be
penalized for helping others.
PriceWaterhouseCoopers, relying on IRS data and studies of charitable
giving, conducted a study on the effects of the Paul Coverdell MRI Act.
It concluded that if the proposal were in effect last year there would
have been a 4.0 percent to 4.5 percent increase in individual giving in
2000. This amounts to $180.4 million additional dollars in charitable
donations for medical research dollars that would result in tangible
health benefits to all Americans. If the additional giving grew every
year over five years at the same rate as national income, a billion
dollars more would be put to work to cure disease. Over the course of
ten years, the number jumps to $2.3 billion in new money for medical
research. For many research efforts, that money could mean the
difference between finding a cure or not finding a cure.
The returns from increased funding of medical research not only in
economic sayings to the country, but in terms of curing disease and
finding new treatments could be enormous. The amount and impact of
disease in this country is staggering. Each day more than 1,500
Americans die of cancer. Sixteen million people have diabetes, their
lives are shortened by an average of fifteen years. Cardiovascular
diseases take approximately one million American lives a year. One and
a half million people have Parkinson's Disease. Countless families
suffer with the pain of a loved one who has Alzheimer's. And yet these
diseases go without a cure. We must work towards the day when they are
cured, prevented, or eliminated--just like polio and smallpox were
years ago.
Increased funding of medical research by the private sector is needed
to save and improve American lives. New discoveries in science and
technology are creating even greater opportunities than in the past for
large returns from money invested in medical research. The mapping of
the human genome is but one example. Dr. Abraham Lieberman, a
neurologist at the National Parkinson's Foundation, was quoted in
Newsweek as saying that the medical research community today is
``standing at the same threshold that we reached with infectious
disease 100 years ago.''
The Paul Coverdell MRI Act encourages the financial gifts that will
enable that threshold to be overcome. I hope you will join me in
supporting it.
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. 393

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 ``Paul Coverdell Medical
Research Investment Act of 2001''.

SEC. 2. INCREASE IN LIMITATION ON CHARITABLE DEDUCTION FOR
CONTRIBUTIONS FOR MEDICAL RESEARCH.

(a) In General.--Paragraph (1) of section 170(b) of the
Internal Revenue Code of 1986 (relating to percentage
limitations) is amended by adding at the end the following
new subparagraph:
``(G) Special limitation with respect to certain
contributions for medical research.--
``(i) In general.--Any medical research contribution shall
be allowed to the extent that the aggregate of such
contributions does not exceed the lesser of--

``(I) 80 percent of the taxpayer's contribution base for
any taxable year, or
``(II) the excess of 80 percent of the taxpayer's
contribution base for the taxable year over the amount of
charitable contributions allowable under subparagraphs (A)
and (B) (determined without regard to subparagraph (C)).

``(ii) Carryover.--If the aggregate amount of contributions
described in clause (i) exceeds the limitation of such
clause, such excess shall be treated (in a manner consistent
with the rules of subsection (d)(1)) as a medical research
contribution in each of the 10 succeeding taxable years in
order of time.
``(iii) Treatment of capital gain property.--In the case of
any medical research contribution of capital gain property
(as defined in subparagraph (C)(iv)), subsection (e)(1) shall
apply to such contribution.
``(iv) Medical research contribution.--For purposes of this
subparagraph, the term `medical research contribution' means
a charitable contribution--

``(I) to an organization described in clauses (ii), (iii),
(v), or (vi) of subparagraph (A), and

[[Page S1620]]

``(II) which is designated for the use of conducting
medical research.

``(v) Medical research.--For purposes of this subparagraph,
the term `medical research' has the meaning given such term
under the regulations promulgated under subparagraph (A)(ii),
as in effect on the date of the enactment of this
subparagraph.''.
(b) Conforming Amendments.--
(1) Section 170(b)(1)(A) of the Internal Revenue Code of
1986 is amended in the matter preceding clause (i) by
inserting ``(other than a medical research contribution)''
after ``contribution''.
(2) Section 170(b)(1)(B) of such Code is amended by
inserting ``or a medical research contribution'' after
``applies''.
(3) Section 170(b)(1)(C)(i) of such Code is amended by
striking ``subparagraph (D)'' and inserting ``subparagraph
(D) or (G)''.
(4) Section 170(b)(1)(D)(i) of such Code is amended--
(A) in the matter preceding subclause (I), by inserting
``or a medical research contribution'' after ``applies'', and
(B) in the second sentence, by inserting ``(other than
medical research contributions)'' before the period.
(5) Section 545(b)(2) of such Code is amended by striking
``and (D)'' and inserting ``(D), and (G)''.
(6) Section 556(b)(2) of such Code is amended by striking
``and (D)'' and inserting ``(D), and (G)''.
(c) Effective Date.--The amendments made by this section
shall apply--
(1) to contributions made in taxable years beginning after
December 31, 2001, and
(2) to contributions made on or before December 31, 2001,
but only to the extent that a deduction would be allowed
under section 170 of the Internal Revenue Code of 1986 for
taxable years beginning after December 31, 2000, had section
170(b)(1)(G) of such Code (as added by this section) applied
to such contributions when made.

SEC. 3. TREATMENT OF CERTAIN INCENTIVE STOCK OPTIONS.

(a) AMT Adjustments.--Section 56(b)(3) of the Internal
Revenue Code of 1986 (relating to treatment of incentive
stock options) is amended--
(1) by striking ``Section 421'' and inserting the
following:
``(A) In general.--Except as provided in subparagraph (B),
section 421'', and
(2) by adding at the end the following new subparagraph:
``(B) Exception for certain medical research stock.--

``(i) In general.--This paragraph shall not apply in the
case of a medical research stock transfer.
``(ii) Medical research stock transfer.--For purposes of
clause (i), the term `medical research stock transfer' means
a transfer--

``(I) of stock which is traded on an established securities
market,
(II) of stock which is acquired pursuant to the exercise of
an incentive stock option within the same taxable year as
such transfer occurs, and
``(III) which is a medical research contribution (as
defined in section 170(b)(1)(G)(iv)).''.
(b) Nonrecognition of Certain Incentive Stock Options.--
Section 422(c) of the Internal Revenue Code of 1986 (relating
to special rules) is amended by adding at the end the
following new paragraph:
``(8) Medical research contributions.--For purposes of this
section and section 421, the transfer of a share of stock
which is a medical research stock transfer (as defined in
section 56(b)(3)(B)) shall be treated as meeting the
requirements of subsection (a)(1).''.
(c) Effective Date.--The amendments made by this section
shall apply to transfers of stock made after the date of the
enactment of this Act.
______

By Mr. DOMENICI:
S. 394. A bill to make an urgent supplemental appropriation for
fiscal year 2001 for the Department of Defense for the Defense Health
Program; to the Committee on Appropriations.
Mr. DOMENICI. Mr. President, as many Senators know, there has been a
major problem in funding for health care for military families and
military retirees since 1993. Budgets for the Defense Health Program
have been submitted to Congress without requesting enough spending to
cover all known medical and health care expenses.
This problem has been recurring year after year because budget
officials in the Department of Defense had been ``low balling'' their
predictions of inflation in DoD's Defense Health Program; they have
projected medical inflation at or below the overall economy's rate.
Meanwhile, medical care costs have grown well above the national
inflation rate.
Since 1996 DoD has projected an average annual inflation rate of 1.8
percent in the Defense Health Program, but the actual average rate over
that time period is 4.9 percent.
Just last year, DoD predicted 2.1 percent inflation for the Defense
Health Program in 2001; experts are predicting the rate to be 7.9
percent.
This unacceptable budgeting practice has resulted in expenses being
incurred but no funds to pay the bills. Congress has responded by
funding these gaps with additional spending, usually in emergency
supplemental appropriations bills.
While we have addressed the problem when we ultimately learn the size
of the funding gap, the inappropriate budgeting practices of the past
have had a major negative impact on military service men and women,
military retirees, and the dependents of both.
When military medical personnel and civilian providers do not know if
or when they will receive full funding, appointments for healthcare can
be complicated, and the services rendered can be delayed or degraded. A
system that many already find troublesome can become exasperating.
This problem is not small; it directly affects an active beneficiary
population of almost six million, including 1.5 million active duty
servicemen and women, 1 million retirees, and 3.3 family dependents.
For several years the problem has been growing, from approximately
$240 million in 1994 to as much as $1.3 billion in fiscal year 2000.
Coincident with the enactment of ``Tricare for Life'' and other new
health care benefits in the Defense Authorization Act for 2001, the
problem has remained at this all time high level and is currently
estimated to be $1.2 billion for 2001. Some predict it may ultimately
be $1.4 billion before the year is over.
President Bush has already pledged that he will fully fund Tricare
costs in 2002 at an estimated $3.9 billion, and I have every
expectation that with the proper advice he will also fully fund all
2002 Defense Health Program costs. However, the earlier 2001 funding
gap remains, and I believe Congress can and should act as promptly as
possible to fully fund all known costs.
Accordingly, I am introducing legislation to provide a supplemental
appropriation of the currently estimated $1.2 billion for the Defense
Health Program for 2001.
Because the money is needed on an urgent basis, I will discuss how we
can address this matter with the Chairman of the Senate Appropriations
Committee when he convenes a meeting of the Defense Subcommittee on
February 28 to conduct hearings on the Military Health System. I fully
expect that we will act as promptly as possible and in time to address
real needs.

I am also announcing four specific recommendations for the Defense
Health Program I will make as Chairman of the Senate Budget Committee
for the 2002 congressional budget resolution:
Sufficient budget authority and outlays to enable the enactment of
the 2001 appropriations legislation I am introducing today.
An additional $1.4 billion in fiscal year 2002 to accommodate actual
inflation in DoD health care, rather than the unrealistic under-
estimate left by the officials of the outgoing Administration.
To accommodate future inflation, the budget resolution will also
provide the requisite amounts of budget authority and outlays to
accommodate 5 percent inflation for the next ten years. While I have
every expectation that President Bush and Secretary of Defense Rumsfeld
will address this underfunding in the 2002 budget, I am adding these
amounts, totaling $18 billion over 10 years, just in case their review
of the defense budget has not yet addressed the unacceptable budgeting
practices of the past.
In its current estimates, the Congressional Budget Office has not
included additional discretionary spending in its ``baseline'' for the
``Tricare for Life'' program. The technical reasons for this are
esoteric, but the money is substantial, $9.8 billion over 10 years. If
this money were not also added now, we would just be engaging in
another form of underfunding.
Congress and the executive branch have made various promises to both
active duty and retired military personnel for their healthcare and the
healthcare of their dependents. It is unacceptable to make these
promises but not to include in the budget the money required to make
good on them. The steps I am taking today are the first steps toward
making that happen.
______

By Mr. BOND (for himself and Mr. Kerry):
S. 395. A bill to ensure the independence and nonpartisan operation
of the

[[Page S1621]]

Office of Advocacy of the Small Business Administration; to the
Committee on Small Business.
Mr. BOND. Mr. President, I rise in support of the Independent Office
of Advocacy Act of 2001. This bill is designed to build on the success
achieved by the Office of Advocacy over the past 24 years. It is
intended to strengthen that foundation to make the Office of Advocacy a
stronger, more effective advocate for all small businesses throughout
the United States. This bill was approved unanimously by the Senate
during the 106th Congress; however, it was not taken up in the House of
Representatives prior to the adjournment last month. It is my
understanding the House Committee on Small Business under its new
chairman, Don Manzullo, is likely to act on similar legislation this
year.
The Office of Advocacy is a unique office within the Federal
Government. It is part of the Small Business Administration, SBA/
Agency, and its director, the Chief Counsel for Advocacy, is nominated
by the President and confirmed by the Senate. At the same time, the
Office is also intended to be the independent voice for small business
within the Federal Government. It is supposed to develop proposals for
changing government policies to help small businesses, and it is
supposed to represent the views and interests of small businesses
before other Federal agencies.
As the director of the Office of Advocacy, the Chief Counsel for
Advocacy has a dual responsibility. On the one hand, he is the
independent watchdog for small business. On the other hand, he is also
a part of the President's administration. As you can imagine, those are
sometimes difficult roles to play simultaneously.
The Independent Office of Advocacy Act of 2001 would make the Office
of Advocacy and the Chief Counsel for Advocacy a fully independent
advocate within the executive branch acting on behalf of the small
business community. The bill would establish a clear mandate that the
Office of Advocacy will fight on behalf of small businesses regardless
of the position taken on critical issues by the President and his
administration.
The Independent Office of Advocacy Act of 2001 would direct the Chief
Counsel to submit an annual report on Federal agency compliance with
the Regulatory Flexibility Act to the President and the Senate and
House Committees on Small Business. The Reg Flex Act is a very
important weapon in the war against the over-regulation of small
businesses. When the Senate first debated this bill in the 106th
Congress, I offered an amendment at the request of Senator Fred
Thompson, chairman of the Government Affairs Committee, that would
direct the Chief Counsel for Advocacy to send a copy of the report to
the Senate Government Affairs Committee. In addition, my amendment also
required that copies of the report be sent to the House Committee on
Government Reform and the House and Senate Committees on the Judiciary.
I believe these changes make good sense for each of the committees to
receive this report on Reg Flex compliance, and I have included them in
the version of the bill being introduced and debated today.
The Office of Advocacy as envisioned by the Independent Office of
Advocacy Act 2001 would be unique within the executive branch. The
Chief Counsel for Advocacy would be a wide-ranging advocate, who would
be free to take positions contrary to the administration's policies and
to advocate change in government programs and attitudes as they impact
small businesses. During its consideration of the bill in 1999, the
Committee on Small Business adopted unanimously an amendment I offered,
which was cosponsored by Senator John Kerry, the committee's ranking
Democrat, to require the Chief Counsel to be appointed ``from civilian
life.'' This qualification is intended to emphasize that the person
nominated to serve in this important role should have a strong small
business background.
In 1976, Congress established the Office of Advocacy in the SBA to be
the eyes, ears and voice for small business within the Federal
Government. Over time, it has been assumed that the Office of Advocacy
is the ``independent'' voice for small business. While I strongly
believe that the Office of Advocacy and the Chief Counsel should be
independent and free to advocate or support positions that might be
contrary to the administration's policies, I have come to find that the
Office has not been as independent as necessary to do the job for small
business.
For example, funding for the Office of Advocacy comes from the
salaries and expense account of the SBA's budget. Staffing is allocated
by the SBA Administrator to the Office of Advocacy from the overall
staff allocation for the Agency. In 1990, there were 70 full-time
employees working on behalf of small businesses in the Office of
Advocacy. Today's allocation of staff is 49, and fewer are actually on-
board as the result of the longstanding hiring freeze at the SBA. The
independence of the Office is diminished when the Office of Advocacy
staff is reduced to allow for increased staffing for new programs and
additional initiatives in other areas of SBA, at the discretion of the
Administrator.
In addition, the General Accounting Office, GAO, undertook a report
for me on personnel practices at the SBA, GAO/GGD-99-68. I was alarmed
by the GAO's finding that during the past eight years, the Assistant
Advocates and Regional Advocates hired by the Office of Advocacy shared
many of the attributes of schedule C political appointees. In fact
Regional Advocates are frequently cleared by the White House personnel
office--the same procedure followed for approving Schedule C political
appointees.

The facts discussed in the GAO report cast the Office of Advocacy in
a whole new light. The report raised questions, concerns and suspicions
regarding the independence of the Office of Advocacy. Has there been a
time when the Office did not pursue a matter as vigorously as it might
have were it not for direct or indirect political influence? Prior to
receipt of the GAO Report, my response was a resounding ``No.'' But
since receipt of the GAO report, a question mark arises.
Let me take a moment and note that I will be unrelenting in my
efforts to insure the complete independence of the Office of Advocacy
in all matters, at all times, for the continued benefit of all small
businesses. However, so long as the administration controls the budget
allocated to the Office of Advocacy and controls who is hired, the
independence of the Office may be in jeopardy. We must correct this
situation, and the sooner we do it, the better it will be for the small
business community. As our government is changing over to President
Bush's administration, this would be a opportune time to establish,
once and for all, the actual independence of the Office of Advocacy.
The Independent Office of Advocacy Act of 2001 builds a firewall to
prevent the political intrusion into the management of day-to-day
operations of the Office of Advocacy. The bill would require that the
SBA's budget include a separate account for the Office of Advocacy. No
longer would its funds come from the general operating account of the
Agency. The separate account would also provide for the number of full-
time employees who would work within the Office of Advocacy. No longer
would the Chief Counsel for Advocacy have to seek approval from the SBA
Administrator to hire staff for the Office of Advocacy.
The bill would also continue the practice of allowing the Chief
Counsel to hire individuals critical to the mission of the Office of
Advocacy without going through the normal competitive procedures
directed by federal law and the Office of Personnel Management, (OPM).
I believe this special hiring authority, which is limited only to
employees within the Office of Advocacy, is beneficial because it
allows the Chief Council to hire quickly those persons who can best
asset the Office in responding to changing issues and problems
confronting small businesses.
Mr. President, the Independent Office of Advocacy Act is a sound
bill. It is the product of a great deal of thoughtful, objective review
and consideration by me, the staff of the Committee on Small Business,
representatives of the small business community, former Chief Counsels
for Advocacy and others. These individuals have also devoted much time
and effort in actively participating in a committee roundtable
discussion on the Office of Advocacy, which my committee held on April
21, 1999. As I stated earlier, the

[[Page S1622]]

Committee on Small Business approved this bill by a unanimous 17-0
vote, and it was later approved unanimously by the Senate. I urge each
of my colleagues to review this legislation closely.
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. 395

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 ``Independent Office of
Advocacy Act of 2001''.

SEC. 2. FINDINGS.

The Congress finds that--
(1) excessive regulations continue to burden United States
small businesses;
(2) Federal agencies are reluctant to comply with the
requirements of chapter 6 of title 5, United States Code, and
continue to propose regulations that impose disproportionate
burdens on small businesses;
(3) the Office of Advocacy of the Small Business
Administration (referred to in this Act as the ``Office'') is
an effective advocate for small businesses that can help to
ensure that agencies are responsive to small businesses and
that agencies comply with their statutory obligations under
chapter 6 of title 5, United States Code, and under the Small
Business Regulatory Enforcement Fairness Act of 1996 (Public
Law 104-121; 106 Stat. 4249 et seq.);
(4) the independence of the Office is essential to ensure
that it can serve as an effective advocate for small
businesses without being restricted by the views or policies
of the Small Business Administration or any other executive
branch agency;
(5) the Office needs sufficient resources to conduct the
research required to assess effectively the impact of
regulations on small businesses; and
(6) the research, information, and expertise of the Office
make it a valuable adviser to Congress as well as the
executive branch agencies with which the Office works on
behalf of small businesses.

SEC. 3. PURPOSES.

The purposes of this Act are--
(1) to ensure that the Office has the statutory
independence and adequate financial resources to advocate for
and on behalf of small business;
(2) to require that the Office report to the Chairmen and
Ranking Members of the Committees on Small Business of the
Senate and the House of Representatives and the Administrator
of the Small Business Administration in order to keep them
fully and currently informed about issues and regulations
affecting small businesses and the necessity for corrective
action by the regulatory agency or the Congress;
(3) to provide a separate authorization for appropriations
for the Office;
(4) to authorize the Office to report to the President and
to the Congress regarding agency compliance with chapter 6 of
title 5, United States Code; and
(5) to enhance the role of the Office pursuant to chapter 6
of title 5, United States Code.

SEC. 4. OFFICE OF ADVOCACY.

(a) In General.--Title II of Public Law 94-305 (15 U.S.C.
634a et seq.) is amended by striking sections 201 through 203
and inserting the following:

``SEC. 201. SHORT TITLE.

``This title may be cited as the `Office of Advocacy Act'.

``SEC. 202. DEFINITIONS.

``In this title--
``(1) the term `Administration' means the Small Business
Administration;
``(2) the term `Administrator' means the Administrator of
the Small Business Administration;
``(3) the term `Chief Counsel' means the Chief Counsel for
Advocacy appointed under section 203; and
``(4) the term `Office' means the Office of Advocacy
established under section 203.

``SEC. 203. ESTABLISHMENT OF OFFICE OF ADVOCACY.

``(a) Establishment.--
``(1) In general.--There is established in the
Administration an Office of Advocacy.
``(2) Appropriation requests.--Each appropriation request
prepared and submitted by the Administration under section
1108 of title 31, United States Code, shall include a
separate request relating to the Office.
``(b) Chief Counsel for Advocacy.--
``(1) In general.--The management of the Office shall be
vested in a Chief Counsel for Advocacy, who shall be
appointed from civilian life by the President, by and with
the advice and consent of the Senate, without regard to
political affiliation and solely on the ground of fitness to
perform the duties of the office.
``(2) Employment restriction.--The individual appointed to
the office of Chief Counsel may not serve as an officer or
employee of the Administration during the 5-year period
preceding the date of appointment.
``(3) Removal.--The Chief Counsel may be removed from
office by the President, and the President shall notify the
Congress of any such removal not later than 30 days before
the date of the removal, except that 30-day prior notice
shall not be required in the case of misconduct, neglect of
duty, malfeasance, or if there is reasonable cause to believe
that the Chief Counsel has committed a crime for which a
sentence of imprisonment can be imposed.
``(c) Primary Functions.--The Office shall--
``(1) examine the role of small business concerns in the
economy of the United States and the contribution that small
business concerns can make in improving competition,
encouraging economic and social mobility for all citizens,
restraining inflation, spurring production, expanding
employment opportunities, increasing productivity, promoting
exports, stimulating innovation and entrepreneurship, and
providing the means by which new and untested products and
services can be brought to the marketplace;
``(2) assess the effectiveness of Federal subsidy and
assistance programs for small business concerns and the
desirability of reducing the emphasis on those programs and
increasing the emphasis on general assistance programs
designed to benefit all small business concerns;
``(3) measure the direct costs and other effects of
government regulation of small business concerns, and make
legislative, regulatory, and nonlegislative proposals for
eliminating the excessive or unnecessary regulation of small
business concerns;
``(4) determine the impact of the tax structure on small
business concerns and make legislative, regulatory, and other
proposals for altering the tax structure to enable all small
business concerns to realize their potential for contributing
to the improvement of the Nation's economic well-being;
``(5) study the ability of financial markets and
institutions to meet small business credit needs and
determine the impact of government demands on credit for
small business concerns;
``(6) determine financial resource availability and
recommend, with respect to small business concerns, methods
for--
``(A) delivery of financial assistance to minority and
women-owned enterprises, including methods for securing
equity capital;
``(B) generating markets for goods and services;
``(C) providing effective business education, more
effective management and technical assistance, and training;
and
``(D) assistance in complying with Federal, State, and
local laws;
``(7) evaluate the efforts of Federal agencies and the
private sector to assist minority and women-owned small
business concerns;
``(8) make such recommendations as may be appropriate to
assist the development and strengthening of minority, women-
owned, and other small business concerns;
``(9) recommend specific measures for creating an
environment in which all businesses will have the
opportunity--
``(A) to compete effectively and expand to their full
potential; and
``(B) to ascertain any common reasons for small business
successes and failures;
``(10) to determine the desirability of developing a set of
rational, objective criteria to be used to define small
business, and to develop such criteria, if appropriate;
``(11) make recommendations and submit reports to the
Chairmen and Ranking Members of the Committees on Small
Business of the Senate and the House of Representatives and
the Administrator with respect to issues and regulations
affecting small business concerns and the necessity for
corrective action by the Administrator, any Federal
department or agency, or the Congress; and
``(12) evaluate the efforts of each department and agency
of the United States, and of private industry, to assist
small business concerns owned and controlled by veterans, as
defined in section 3(q) of the Small Business Act (15 U.S.C.
632(q)), and small business concerns owned and controlled by
serviced-disabled veterans, as defined in such section 3(q),
and to provide statistical information on the utilization of
such programs by such small business concerns, and to make
appropriate recommendations to the Administrator and to the
Congress in order to promote the establishment and growth of
those small business concerns.
``(d) Additional Functions.--The Office shall, on a
continuing basis--
``(1) serve as a focal point for the receipt of complaints,
criticisms, and suggestions concerning the policies and
activities of the Administration and any other department or
agency of the Federal Government that affects small business
concerns;
``(2) counsel small business concerns on the means by which
to resolve questions and problems concerning the relationship
between small business and the Federal Government;
``(3) develop proposals for changes in the policies and
activities of any agency of the Federal Government that will
better fulfill the purposes of this title and communicate
such proposals to the appropriate Federal agencies;
``(4) represent the views and interests of small business
concerns before other Federal agencies whose policies and
activities may affect small business;
``(5) enlist the cooperation and assistance of public and
private agencies, businesses, and other organizations in
disseminating information about the programs and services
provided by the Federal Government that are of benefit to
small business concerns, and information on the means by
which small

[[Page S1623]]

business concerns can participate in or make use of such
programs and services; and
``(6) carry out the responsibilities of the Office under
chapter 6 of title 5, United States Code.
``(e) Overhead and Administrative Support.--The
Administrator shall provide the Office with appropriate and
adequate office space at central and field office locations
of the Administration, together with such equipment, office
supplies, and communications facilities and services as may
be necessary for the operation of such offices, and shall
provide necessary maintenance services for such offices and
the equipment and facilities located therein.''.
(b) Reports to Congress.--Title II of Public Law 94-305 (15
U.S.C. 634a et seq.) is amended by striking section 206 and
inserting the following:

``SEC. 206. REPORTS TO CONGRESS.

``(a) Annual Reports.--Not less than annually, the Chief
Counsel shall submit to the President and to the Committees
on Small Business of the Senate and the House of
Representatives, the Committee on Governmental Affairs of the
Senate, the Committee on Government Reform of the House of
Representatives, and the Committees on the Judiciary of the
Senate and the House of Representatives a report on agency
compliance with chapter 6 of title 5, United States Code.
``(b) Additional Reports.--In addition to the reports
required under subsection (a) of this section and section
203(c)(11), the Chief Counsel may prepare and publish such
reports as the Chief Counsel determines to be appropriate.
``(c) Prohibition.--No report under this title shall be
submitted to the Office of Management and Budget or to any
other department or agency of the Federal Government for any
purpose before submission of the report to the President and
to the Congress.''.
(c) Authorization of Appropriations.--Title II of Public
Law 94-305 (15 U.S.C. 634a et seq.) is amended by striking
section 207 and inserting the following:

``SEC. 207. AUTHORIZATION OF APPROPRIATIONS.

``(a) In General.--There are authorized to be appropriated
to the Office to carry out this title such sums as may be
necessary for each fiscal year.
``(b) Availability.--Any amount appropriated under
subsection (a) shall remain available, without fiscal year
limitation, until expended.''.
(d) Incumbent Chief Counsel for Advocacy.--The individual
serving as the Chief Counsel for Advocacy of the Small
Business Administration on the date of enactment of this Act
shall continue to serve in that position after such date in
accordance with section 203 of the Office of Advocacy Act, as
amended by this section.

Mr. KERRY. Mr. President, I am pleased to join with my friend and
colleague, Chairman of the Senate Committee on Small Business, Kit
Bond, in introducing the ``Independent Office of Advocacy Act.'' This
legislation will help ensure the Small Business Administration's (SBA)
Office of Advocacy has the necessary autonomy to remain an independent
voice for America's small businesses. I would like to thank the
Chairman and his staff for working with me and my staff to make the
necessary changes to this legislation to garner bipartisan support.
This legislation is similar to a bill introduced by Chairman Bond,
which I supported, during the 106th Congress. While this legislation
received strong support in the Senate Committee on Small Business and
on the floor of the Senate, the House did not take any action. I am
hopeful that this legislation will be enacted during the 107th
Congress.
The Independent Office of Advocacy Act rewrites the law that created
the Small Business Administration's Office of Advocacy to allow for
increased autonomy. It reaffirms the Office's statutory and financial
independence by preventing the President from firing the advocate
without 30 days prior notice to Congress and by creating a separate
authorization for the Office from that of SBA's. It also states that
the Chief Counsel shall be appointed without regard to political
affiliation, and shall not have served in the Administration for a
period of 5 years prior to the date of appointment.
The legislation also makes women-owned businesses an equal priority
of the Office of Advocacy by adding women-owned business to the primary
functions of the Office of Advocacy, wherever minority owned business
appears. It also adds new reporting requirements and additional
functions to the Office of Advocacy with regard to enforcement of the
Small Business Regulatory Enforcement Fairness Act, SBREFA. The
provisions regarding SBREFA are already a part of existing law in
Chapter 6 Title 5 of US Code, and will now, rightly, be added to the
statute establishing the Office of Advocacy.
But at its heart, this legislation will allow the Office of Advocacy
to better represent small business interests before Congress, Federal
agencies, and the Federal Government without fear of reprisal for
disagreeing with the position of the current Administration.
For those of my colleagues without an intimate knowledge of the
important role the Office of Advocacy and its Chief Counsel play in
protecting and promoting America's small businesses, I will briefly
elaborate its important functions and achievements. From studying the
role of small business in the U.S. economy, to promoting small business
exports, to lightening the regulatory burden of small businesses
through the Regulatory Flexibility Act (RFA) and the Small Business
Regulatory Enforcement Fairness Act, SBREFA, the Office of Advocacy has
a wide scope of authority and responsibility.
The U.S. Congress created the Office of Advocacy, headed by a Chief
Counsel to be appointed by the President from the private sector and
confirmed by the Senate, in June of 1976. The rationale was to give
small businesses a louder voice in the councils of government.
Each year, the Office of Advocacy works to facilitate meetings for
small business people with congressional staff and executive branch
officials, and convenes ad hoc issue-specific meetings to discuss small
business concerns. It has published numerous reports, compiled vast
amounts of data and successfully lightened the regulatory burden on
America's small businesses. In the area of contracting, the Office of
Advocacy developed PRO- Net, a database of small businesses used by
contracting officers to find small businesses interested in selling to
the Federal government.
The U.S. Congress, the Administration and of course, small
businesses, have all benefitted from the work of the Office of
Advocacy. For example, between 1998 and 2000, regulatory changes
supported by the Office of Advocacy saved small businesses around $20
billion in annual and one-time compliance costs.
Mr. President, small businesses remain the backbone of the U.S.
economy, accounting for 99 percent of all employers, providing 75
percent of all net new jobs, and accounting for 51 percent of private-
sector output. In fact, and this may surprise some of my colleagues,
small businesses employ 38 percent of high-tech workers, an
increasingly important sector in our economy.
Small businesses have also taken the lead in moving people from
welfare to work and an increasing number of women and minorities are
turning to small business ownership as a means to gain economic self-
sufficiency. Put simply, small businesses represent what is best in the
United States economy, providing innovation, competition and
entrepreneurship.
Their interests are vast, their activities divergent, and the
difficulties they face to stay in business are numerous. To provide the
necessary support to help them, SBA's Office of Advocacy needs our
support.
The responsibility and authority given the Office of Advocacy and the
Chief Counsel are crucial to their ability to be an effective
independent voice in the Federal Government for small businesses. When
the Senate Committee on Small Business held a Roundtable meeting about
the Office of Advocacy with small business concerns on April 21, 1999,
every person in the room was concerned about the present and future
state of affairs for the Office of Advocacy. These small businesses
asked us to do everything we could to protect and strengthen this
important office. I believe this legislation accomplishes this
important goal.
I have always been a strong supporter of the Office of Advocacy and I
am pleased to join with Chairman Bond in introducing this legislation,
which will ensure that it remains an independent and effective voice
representing America's small businesses.
______

By Mr. BOND (for himself and Mr. Kerry):
S. 396. A bill to provide for national quadrennial summits on small
business and State summits on small business, to establish the White
House Quadrennial Commission on Small Business, and for other purposes;
to the Committee on Small Business.
Mr. BOND. Mr. President, it is with great pleasure that I am
introducing

[[Page S1624]]

the White House Quadrennial Small Business Summit Act of 2001. This
bill is designed to create a permanent independent commission that will
carry-on the extraordinary work that has been accomplished by three
White House Conferences on Small Business. The Small Business
Commission will direct national and state Small business summits, and
small business delegates from every state will attend the summits.
Last year, representatives of small businesses and organizers of
prior White House Conferences on Small Business worked closely with the
Committee on Small Business to develop legislation similar to the bill
I am introducing today. The bill passed the Senate last year as part of
the Small Business Reauthorization Act of 2000, S. 3121; however, it
was dropped in Conference.
For the past 15 years, small businesses have been the fastest growing
sector of the U.S. economy. When large businesses were restructuring
and laying off significant numbers of workers, small businesses not
only filled the gap, but their growth actually caused a net increase in
new jobs. Today, small businesses employ over one-half of all workers
in the United States, and they generate nearly 55 percent of the gross
domestic product. Were it not for small businesses, our country could
not have experienced the sustained economic upsurge that has been
ongoing since 1992.
Because small businesses play such a significant role in our economy,
in both rural towns and bustling inner cities, I believe it is
important that the Federal government sponsor a national conference
every four years to highlight the successes of small businesses and to
focus national attention on the problems that may be hindering the
ability of small businesses to start up and grow.
Small business ownership is, has been, and will continue to be the
dream of millions of Americans. Countries from all over the world send
delegations to the United states to study why our system of small
business ownership is so successful, all the while looking for a way to
duplicate our success in their countries. Because we see and experience
the successes of small businesses on a daily basis, it is easy to lose
sight of the very special thing we have going for us in the United
States, where each of us can have the opportunity to own and run our
own business.
The White House Quadrennial Small Business Summit Act of 2001 is
designed to capture and focus our attention on small business every
four years. In this way, we will take the opportunity to study what is
happening throughout the United States to small businesses. In one
sense, the bill is designed to put small business on a pinnacle so we
can appreciate what they have accomplished. At the same time, and just
as important, every four years we will have an opportunity to learn
from small businesses in each state what is not going well for them,
such as, actions by the Federal government that hinder small business
growth or state and local regulations that are a deterrent to starting
a business.
My bill creates an independent, bipartisan White House Quadrennial
Commission on Small Business, which will be made up of 8 small business
advocates and the Small Business Administration's Chief Counsel for
Advocacy. Every four years, during the first year following a
presidential election, the President will name four
National Commissioners. In the U.S. Senate and the House of
Representatives, the Majority Leader and Minority Leader of each body
will each name one National Commissioner.

Widespread participation from small businesses in each state will
contribute to the work leading up to the national Small Business
Summit. Under the bill, the Small Business Summit will take place one
year after the Quadrennial Commissioners are appointed. The first act
of the Commissioners will be to request that each Governor and each
U.S. Senator name a small business delegate and alternate delegate from
their respective states to the National Convention. Each U.S.
Representative will be asked to name a small business delegate and
alternative from his or her Congressional district. And the President
will name a delegate and alternate from each state.
The delegates to the Small Business Summit must be owners or officers
of small businesses. Prior to the national Small Business Summit, there
will be individual State Summits at which additional delegates will be
elected to attend the national Summit. Three delegates and three
alternates will be elected from each Congressional district within the
state.
The small busines delegates will play a major role leading up to the
Small Business Summit. We will be looking to the small business
delegates to develop and highlight issues of critical concern to small
businesses. The work at the state level by the small business delegates
will need to be thorough and thoughtful to make the Small Business
Summit a success.
My goal will be for the small business delegates to think broadly,
that is, to think ``out of the box.'' Their attention should include
but not be restricted to the traditional issues associated with small
business concerns, such as access to capital, tax reform and regulatory
reform. In my role as Chairman of the Committee on Small Business, I
will urge the delegates to focus on a wide array of issues that impact
significantly on small businesses, including the importance of a solid
education and the need for skilled, trained workers.
Once the small business delegates are selected, the Small Business
Commission will serve as a resource to the delegates for issue
development and for planning the State Conferences. The Small Business
Commission will have a modest staff, including an Executive Director,
that will work full time to make the State and National Summits
successes. A major resource to the Small Business Commission and its
staff will be the Chief Counsel for Advocacy from the SBA. The Chief
Counsel and the Office of Advocacy will serve as a major resource to
the Small Business Commission, and in turn, to the small business
delegates, by providing them with both substantive background
informaiton and other administrative materials in support of the State
and National Summits.
Mr. President, small businesses generally do not have the resources
to maintain full time representatives to lobby our Federal government.
They are too busy running their businesses to devote much attention to
educating government officials as to what is going well, what is going
poorly, and what needs improvement for the small business community.
The White House Quadrennial Small Business Summit will give small
businesses an opportunity every four years to make its mark on the
Congress and the Executive Branch. I urge each of my colleagues to
review their proposal, and I hope they will agree to join me as
cosponsors of the ``White House Quadrennial Small Busines Summit Act of
2001.''
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. 396

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 ``White House Quadrennial
Small Business Summit Act of 2001''.

SEC. 2. DEFINITIONS.

In this Act--
(1) the term ``Administrator'' means the Administrator of
the Small Business Administration;
(2) the term ``Chief Counsel'' means the Chief Counsel for
Advocacy of the Small Business Administration;
(3) the term ``Small Business Commission'' means the
national White House Quadrennial Commission on Small Business
established under section 6;
(4) the term ``Small Business Summit''--
(A) means the White House Quadrennial Summit on Small
Business conducted under section 3(a); and
(B) includes the last White House Conference on Small
Business occurring before 2002;
(5) the term ``small business'' has the meaning given the
term ``small business concern'' in section 3 of the Small
Business Act;
(6) the term ``State'' means any of the 50 States of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, and the United States Virgin Islands; and
(7) the term ``State Summit'' means a State Summit on Small
Business conducted under section 3(b).

SEC. 3. NATIONAL AND STATE QUADRENNIAL SUMMITS ON SMALL
BUSINESS.

(a) Quadrennial Summits.--There shall be a national White
House Quadrennial Summit

[[Page S1625]]

on Small Business once every 4 years, to be held during the
second year following each Presidential election, to carry
out the purposes set forth in section 4.
(b) State Summits.--Each Small Business Summit referred to
in subsection (a) shall be preceded by a State Summit on
Small Business, with not fewer than 1 such summit held in
each State, and with not fewer than 2 such summits held in
any State having a population of more than 10,000,000.

SEC. 4. PURPOSES OF SMALL BUSINESS SUMMITS.

The purposes of each Small Business Summit shall be--
(1) to increase public awareness of the contribution of
small business to the national economy;
(2) to identify the problems of small business;
(3) to examine the status of minorities and women as small
business owners;
(4) to assist small business in carrying out its role as
the Nation's job creator;
(5) to assemble small businesses to develop such specific
and comprehensive recommendations for legislative and
regulatory action as may be appropriate for maintaining and
encouraging the economic viability of small business and
thereby, the Nation; and
(6) to review the status of recommendations adopted at the
immediately preceding Small Business Summit.

SEC. 5. SUMMIT PARTICIPANTS.

(a) In General.--To carry out the purposes set forth in
section 4, the Small Business Commission shall conduct Small
Business Summits and State Summits to bring together
individuals concerned with issues relating to small business.
(b) Summit Delegates.--
(1) Qualification.--Only individuals who are owners or
officers of a small business shall be eligible for
appointment or election as delegates (or alternates) to the
Small Business Summit, or be eligible to vote in the
selection of delegates at the State Summits pursuant to this
subsection.
(2) Appointed delegates.--Two months before the date of the
first State Summit, there shall be--
(A) 1 delegate (and 1 alternate) appointed by the Governor
of each State;
(B) 1 delegate (and 1 alternate) appointed by each Member
of the House of Representatives, from the congressional
district of that Member;
(C) 1 delegate (and 1 alternate) appointed by each Member
of the Senate from the home State of that Member; and
(D) 53 delegates (and 53 alternates) appointed by the
President, 1 from each State.
(3) Elected delegates.--The participants at each State
Summit shall elect 3 delegates and 3 alternates to the Small
Business Summit for each congressional district within the
State, or part of the State represented at the Summit, or not
fewer than 9 delegates, pursuant to rules developed by the
Small Business Commission.
(4) Powers and duties.--Delegates to each Small Business
Summit shall--
(A) attend the State summits in his or her respective
State;
(B) elect a delegation chairperson, vice chairperson, and
other leadership as may be necessary;
(C) conduct meetings and other activities at the State
level before the date of the Small Business Summit, subject
to the approval of the Small Business Commission; and
(D) direct such State level summits, meetings, and
activities toward the consideration of the purposes set forth
in section 4, in order to prepare for the next Small Business
Summit.
(5) Alternates.--Alternates shall serve during the absence
or unavailability of the delegate.
(c) Role of the Chief Counsel.--The Chief Counsel shall,
after consultation and in coordination with the Small
Business Commission, assist in carrying out the Small
Business Summits and State Summits required by this Act by--
(1) preparing and providing background information and
administrative materials for use by participants in the
summits;
(2) distributing issue information and administrative
communications, electronically where possible through an
Internet web site and e-mail, and in printed form if
requested;
(3) maintaining an Internet web site and regular e-mail
communications after each Small Business Summit to inform
delegates and the public of the status of recommendations and
related governmental activity; and
(4) maintaining, between summits, an active interim
organization of delegate representatives from each region of
the Administration, to advise the Chief Counsel on each of
the major small business issue areas, and monitor the
progress of the Summits' recommendations.
(d) Expenses.--Each delegate (and alternate) to each Small
Business Summit and State Summit--
(1) shall be responsible for the expenses of that delegate
related to attending the summits; and
(2) shall not be reimbursed either from funds made
available pursuant to this section or the Small Business Act.
(e) Advisory Committee.--
(1) In general.--The Small Business Commission shall
appoint a Summit Advisory Committee, which shall be composed
of 10 individuals who were participants at the most recently
preceding Small Business Summit, to advise the Small Business
Commission on the organization, rules, and processes of the
Summits.
(2) Preference.--Preference for appointment under this
subsection shall be given to individuals who have been active
participants in the implementation process following the most
recently preceding Small Business Summit.
(f) Public Participation.--Small Business Summits and State
Summits shall be open to the public, and no fee or charge may
be imposed on any attendee, other than an amount necessary to
cover the cost of any meal provided, plus, with respect to
State Summits, a registration fee to defray the expense of
meeting rooms and materials of not to exceed $20 per person.

SEC. 6. WHITE HOUSE QUADRENNIAL COMMISSION ON SMALL BUSINESS.

(a) Establishment.--There is established the White House
Quadrennial Commission on Small Business.
(b) Membership.--
(1) Appointment.--The Small Business Commission shall be
composed of 9 members, including--
(A) the Chief Counsel;
(B) 4 members appointed by the President;
(C) 1 member appointed by the Majority Leader of the
Senate;
(D) 1 member appointed by the Minority Leader of the
Senate;
(E) 1 member appointed by the Majority Leader of the House
of Representatives; and
(F) 1 member appointed by the Minority Leader of the House
of Representatives.
(2) Selection.--Members of the Small Business Commission
described in subparagraphs (B) through (F) of paragraph (1)
shall be selected from among distinguished individuals noted
for their knowledge and experience in fields relevant to the
issue of small business and the purposes set forth in section
4.
(3) Time of appointment.--The appointments required by
paragraph (1)--
(A) shall be made not later than 18 months before the
opening date of each Small Business Summit; and
(B) shall expire 6 months after the date on which each
Small Business Summit is convened.
(c) Election of Chairperson.--At the first meeting of the
Small Business Commission, a majority of the members present
and voting shall elect a member of the Small Business
Commission to serve as the Chairperson.
(d) Powers and Duties of Commission.--The Small Business
Commission--
(1) may enter into contracts with public agencies, private
organizations, and academic institutions to carry out this
Act;
(2) shall consult, coordinate, and contract with an
independent, nonpartisan organization that--
(A) has both substantive and logistical experience in
developing and organizing conferences and forums throughout
the Nation with elected officials and other government and
business leaders;
(B) has experience in generating private resources from
multiple States in the form of event sponsorships; and
(C) can demonstrate evidence of a working relationship with
Members of Congress from the majority and minority parties,
and at least 1 Federal agency; and
(3) shall prescribe such financial controls and accounting
procedures as needed for the handling of funds from fees and
charges and the payment of authorized meal, facility, travel,
and other related expenses.
(e) Planning and Administration of Summits.--In carrying
out the Small Business Summits and State Summits, the Small
Business Commission shall consult with--
(1) the Chief Counsel;
(2) Congress; and
(3) such other Federal agencies as the Small Business
Commission determines to be appropriate.
(f) Reports Required.--Not later than 6 months after the
date on which each Small Business Summit is convened, the
Small Business Commission shall submit to the President and
to the Chairpersons and Ranking Members of the Committees on
Small Business of the Senate and the House of Representatives
a final report, which shall--
(1) include the findings and recommendations of the Small
Business Summit and any proposals for legislative action
necessary to implement those recommendations; and
(2) be made available to the public.
(g) Quorum.--Four voting members of the Small Business
Commission shall constitute a quorum for purposes of
transacting business.
(h) Meetings.--The Small Business Commission shall meet not
later than 20 calendar days after the appointment of the
initial members of the Small Business Commission, and not
less frequently than every 30 calendar days thereafter.
(i) Vacancies.--Any vacancy on the Small Business
Commission shall not affect its powers, but shall be filled
in the manner in which the original appointment was made.
(j) Executive Director and Staff.--The Small Business
Commission may appoint and compensate an Executive Director
and such other personnel to conduct the Small Business
Summits and State Summits as the Small Business Commission
may determine to be advisable, without regard to title 5,
United States Code, governing appointments in the competitive
service, and without regard to chapter 51 and subchapter III
of chapter 53 of such title, relating to classification and
General Schedule pay rates, except that the rate of pay for
the Executive

[[Page S1626]]

Director and other personnel may not exceed the rate payable
for level V of the Executive Schedule under section 5316 of
such title.
(k) Funding.--Members of the Small Business 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 Small
Business Commission.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS; AVAILABILITY OF
FUNDS.

(a) Authorization of Appropriations.--There is authorized
to be appropriated to carry out each Small Business Summit
and the State Summits required by this Act, $5,000,000, which
shall remain available until expended. New spending authority
or authority to enter contracts as provided in this title
shall be effective only to such extent and in such amounts as
are provided in advance in appropriations Acts.
(b) Specific Earmark.--No amount made available to the
Small Business Administration may be made available to carry
out this title, other than amounts made available
specifically for the purpose of conducting the Small Business
Summits and State Summits.
______

By Mr. McCAIN (for himself, Mr. Levin, Mr. Hagel, Mr. Lieberman,
Mr. Kyl, Mr. Reed, Mr. Voinovich, Mr. Feingold, Mr. Jeffords,
Mr. DeWine, and Mr. Kohl):
S. 397. A bill to amend the Defense Base Closure and Realignment Act
of 1990 to authorize additional rounds of base closures and
realignments under the Act in 2003 and 2005, to modify certain
authorities relating to closures and realignments under that Act; to
the Committee on Armed Services.
Mr. McCAIN. Mr. President, I rise today to introduce legislation that
would authorize two rounds of U.S. military installation realignment
and closures to occur in 2003 and 2005. I am pleased to have Senators
Levin, Hagel, Lieberman, Kyl, Reed, Kohl, Voinovich, Feingold, Jeffords
and DeWine as co-sponsors of this bill.
Although I would prefer to say that this is a new idea--it isn't. In
1970, the Blue Ribbon Defense Panel, ``Fithugh Commission'') made
reference to ``consolidation of military activities at fewer
installations would contribute to more efficient operations and would
produce substantial savings.'' In 1983, the President's Private Sector
Survey on Cost Control, ``Grace Commission'' made strong
recommendations for military base closures. In 1997, the Quadrennial
Defense Review recommended that, even after four base closure rounds in
1988, 1991, 1993 and 1995, the Armed Forces ``must shed excess
infrastructure.'' Likewise, the 1997 Defense Reform Initiative and the
National Defense Panel ``strongly urged Congress and the Department of
Defense to move quickly to restore the base realignment and closure,
BRAC, process.''
Mr. President, we have too many military bases. The cold war is over.
We will never have a requirement for as many bases as we have today.
Clearly we could save, according to most conservative estimates,
somewhere between $3 and $4 billion a year of taxpayer dollars that are
now expended unnecessarily on keeping military bases open.
The Congressional Budget Office, former Secretaries Dick Cheney and
William Cohen, nearly all the Service Chiefs and other respected
defense experts have been consistent in their plea that the Pentagon be
permitted to divest themselves of excess infrastructure beyond what was
eliminated during the prior rounds of base closings. Through the end of
1998, the Pentagon had closed 97 major bases in the United States after
four previous rounds of BRAC. Since then, it has closed none. Moreover,
the savings from closing additional unneeded bases should be used for
force modernization purposes.
We have heard over the last several years of the dire situation of
our military forces. We have heard testimony of plunging readiness,
modernization programs that are decades behind schedule, and quality of
life deficiencies that are so great we cannot retain or recruit the
personnel we need. As a result of this realization, there has been a
groundswell of support in Congress for the Armed Forces, including a
number of pay, retirement and medical benefit initiatives and the
promise of a significant increase in defense spending.
All of these proposals are excellent starting points to help rebuild
our military, but we must not forget that much of it will be in vain if
the Department of Defense is obligated to maintain 23 percent excess
capacity in infrastructure. When we actually look for the dollars to
pay for these initiatives, it is unconscionable that some would not
look to the billions of dollars to be saved by base realignment and
closure. Only 30 percent of the defense budget funds combat forces,
while the remaining 70 percent is devoted to support functions such as
bases. Continuing to squander precious dollars in this manner will make
it impossible for us to adequately modernize our forces for the future.
The Joint Chiefs of Staff have stated repeatedly that they desire more
opportunities to streamline the military's infrastructure. We cannot
sit idly by and throw money and ideas at the problem when part of the
solution is staring us in the face.

This proposed legislation offers a significant change to present law.
Under this legislation, privatization in-place would be permitted only
when explicitly recommended by the Commission. Additionally, the
Secretary of Defense must consider local government input in preparing
his list of desired base closures.
Total BRAC savings realized from the four previous closure rounds
exceed total costs to date. Department of Defense figures suggest
previous base closures will save, after one-time closing costs, $15
billion through fiscal year 2001, $25 billion through fiscal year 2003
and $6.1 billion a year thereafter. Additional needed closures can save
$20 billion by 2015, and $3 billion a year thereafter. Sooner or later
these surplus bases will be closed anyway. The sooner the issue is
addressed, the greater will be the savings that will ultimately go
toward defense modernization and greater pay raises for service
members.
Previous base closure rounds have had many success stories. For
example, after England Air Force Base closed in 1992, Alexandria,
Louisiana benefitted from the creation of over 1,400 jobs--nearly
double the number of jobs lost. Across the U.S. about 60,000 new jobs
have been created at closing military bases. At bases closed more than
2 years, nearly 75 percent of the civilian jobs have been replaced.
In Charleston, South Carolina, where the number of defense job
losses, as a percentage of the work force, was greater than at any
other base closure location, 23 major entities are reusing the former
Navy facilities and providing more than 3,300 jobs and another 13 more
civilian industrial applications are pending adding soon even more
newly created jobs to that number. Additionally, roughly 75 percent of
the 6 million square feet of leasable space on the base is occupied.
This is comparable to the successes in my home state of Arizona with
the closure of Williams Air Force Base in the Phoenix East Valley. This
is not to say that base closures are easy for any community, but it
does suggest that communities can and will continue to thrive.
We can continue to maintain a military infrastructure that we do not
need, or we can provide the necessary funds to ensure our military can
fight and win future wars. Every dollar we spend on bases we do not
need is a dollar we cannot spend on training our troops, keeping
personnel quality of life at an appropriate level, maintaining force
structure, replacing old weapons systems, and advancing our military
technology.
We must finish the job we started by authorizing these two final
rounds of base realignment and closure. I urge my colleagues to join us
in support of this critical bill and to work diligently throughout the
year to put aside local politics for what is clearly in the best
interest of our military forces.
Mr. President, I believe this measure is long overdue. I believe the
additional $3 to $4 billion a year we could save by closing unnecessary
bases could be used for the betterment of the quality of life of our
men and women in the military. I believe it is hard to understand why,
when the overwhelming majority of outside opinion, whether it be
liberal or conservative organizations that are watchdogs of our defense
policies and programs, all agree we have too many bases. We needed
these bases during the cold war and we needed them very badly. They
obviously contributed enormously to our ability to win the cold war. No
one envisions future threats that would require the

[[Page S1627]]

number of bases that are part of our military establishment today.
I hope that the chairmen of the Armed Services Committee in past
years who have strongly opposed base closing rounds will now join with
me and others in seeing this legislation through the Armed Services
Committee and to the floor of the Senate.
It makes sense. I believe that the record is replete with examples of
bases that have been closed which ultimately after a period of a few
years have ended up of greater benefit to the surrounding communities
than when the bases were military bases. But more importantly than
that, we simply can't afford some of them as we make the tough
decisions and follow the President's guidance on the fundamental
reevaluation of our systems technology and weapons systems that we need
to make in order to meet the challenges of the post-cold-war era. A
part of that is to make available as much funding as possible not only
for the quality of life of the men and women in the military but for
our ability to develop a viable missile defense system, and to bring to
our military the best equipment that this Nation's technology can
provide.
I hope we will move on this issue. I anticipate, hopefully, that the
administration will also, again as past administrations have, support
another round of base closings.
I ask unanimous consent the bill be referred to the Committee on
Armed Services.
The PRESIDING OFFICER. Without objection, it is so ordered. The bill
will be appropriately referred.
Mr. McCAIN. Mr. President, I ask unanimous consent that the bill to
authorize two additional base realignment and closure rounds be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 397

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

SECTION 1. AUTHORITY TO CARRY OUT BASE CLOSURE ROUNDS IN 2003
AND 2005.

(a) Commission Matters.--
(1) Appointment.--Subsection (c)(1) of section 2902 of the
Defense Base Closure and Realignment Act of 1990 (part A of
title XXIX of Public Law 101-510; 10 U.S.C. 2687 note) is
amended--
(A) in subparagraph (B)--
(i) by striking ``and'' at the end of clause (ii);
(ii) by striking the period at the end of clause (iii) and
inserting a semicolon; and
(iii) by adding at the end the following new clauses (iv)
and (v):
``(iv) by no later than January 24, 2003, in the case of
members of the Commission whose terms will expire at the end
of the first session of the 108th Congress; and
``(v) by no later than March 15, 2005, in the case of
members of the Commission whose terms will expire at the end
of the first session of the 109th Congress.''; and
(B) in subparagraph (C), by striking ``or for 1995 in
clause (iii) of such subparagraph'' and inserting ``, for
1995 in clause (iii) of that subparagraph, for 2003 in clause
(iv) of that subparagraph, or for 2005 in clause (v) of that
subparagraph''.
(2) Meetings.--Subsection (e) of that section is amended by
striking ``and 1995'' and inserting ``1995, 2003, and 2005''.
(3) Staff.--Subsection (i)(6) of that section is amended in
the matter preceding subparagraph (A) by striking ``and
1994'' and inserting ``, 1994, and 2004''.
(4) Funding.--Subsection (k) of that section is amended by
adding at the end the following new paragraph (4):
``(4) If no funds are appropriated to the Commission by the
end of the second session of the 107th Congress for the
activities of the Commission in 2003 or 2005, the Secretary
may transfer to the Commission for purposes of its activities
under this part in either of those years such funds as the
Commission may require to carry out such activities. The
Secretary may transfer funds under the preceding sentence
from any funds available to the Secretary. Funds so
transferred shall remain available to the Commission for such
purposes until expended.''.
(5) Termination.--Subsection (l) of that section is amended
by striking ``December 31, 1995'' and inserting ``December
31, 2005''.
(b) Procedures.--
(1) Force-structure plan.--Subsection (a)(1) of section
2903 of that Act is amended by striking ``and 1996,'' and
inserting ``1996, 2004, and 2006,''.
(2) Selection criteria.--Subsection (b) of such section
2903 is amended--
(A) in paragraph (1), by inserting ``and by no later than
December 31, 2001, for purposes of activities of the
Commission under this part in 2003 and 2005,'' after
``December 31, 1990,''; and
(B) in paragraph (2)(A)--
(i) in the first sentence, by inserting ``and by no later
than February 15, 2002, for purposes of activities of the
Commission under this part in 2003 and 2005,'' after
``February 15, 1991,''; and
(ii) in the second sentence, by inserting ``, or enacted on
or before March 31, 2002, in the case of criteria published
and transmitted under the preceding sentence in 2001'' after
``March 15, 1991''.
(3) Department of defense recommendations.--Subsection
(c)(1) of such section 2903 is amended by striking ``and
March 1, 1995,'' and inserting ``March 1, 1995, March 14,
2003, and May 16, 2005,''.
(4) Commission review and recommendations.--Subsection (d)
of such section 2903 is amended--
(A) in paragraph (2)(A), by inserting ``or by no later than
July 7 in the case of recommendations in 2003, or no later
than September 8 in the case of recommendations in 2005,''
after ``pursuant to subsection (c),'';
(B) in paragraph (4), by inserting ``or after July 7 in the
case of recommendations in 2003, or after September 8 in the
case of recommendations in 2005,'' after ``under this
subsection,''; and
(C) in paragraph (5)(B), by inserting ``or by no later than
May 1 in the case of such recommendations in 2003, or no
later than July 1 in the case of such recommendations in
2005,'' after ``such recommendations,''.
(5) Review by president.--Subsection (e) of such section
2903 is amended--
(A) in paragraph (1), by inserting ``or by no later than
July 22 in the case of recommendations in 2003, or no later
than September 23 in the case of recommendations in 2005,''
after ``under subsection (d),'';
(B) in the second sentence of paragraph (3), by inserting
``or by no later than August 18 in the case of 2003, or no
later than October 20 in the case of 2005,'' after ``the year
concerned,''; and
(C) in paragraph (5), by inserting ``or by September 3 in
the case of recommendations in 2003, or November 7 in the
case of recommendations in 2005,'' after ``under this
part,''.
(c) Relationship to Other Base Closure Authority.--Section
2909(a) of that Act is amended by striking ``December 31,
1995,'' and inserting ``December 31, 2005,''.

SEC. 2. MODIFICATION OF BASE CLOSURE AUTHORITIES UNDER 1990
BASE CLOSURE LAW.

(a) Cost Savings and Return on Investment under Secretary
of Defense Selection Criteria.--Subsection (b) of section
2903 of the Defense Base Closure and Realignment Act of 1990
(part A of title XXIX of Public Law 101-510; 10 U.S.C. 2867
note) is amended by adding at the end the following:
``(3) Any selection criteria proposed by the Secretary
relating to the cost savings or return on investment from the
proposed closure or realignment of a military installation
shall be based on the total cost and savings to the Federal
Government that would result from the proposed closure or
realignment of such military installation.''.
(b) Department of Defense Recommendations to Commission.--
Subsection (c) of such section 2903 is amended--
(1) by redesignating paragraphs (4), (5), and (6) as
paragraphs (5), (6), and (7), respectively;
(2) by inserting after paragraph (3) the following new
paragraph (4):
``(4)(A) In making recommendations to the Commission under
this subsection in any year after 2000, the Secretary shall
consider any notice received from a local government in the
vicinity of a military installation that the government would
approve of the closure or realignment of the installation.
``(B) Notwithstanding the requirement in subparagraph (A),
the Secretary shall make the recommendations referred to in
that subparagraph based on the force-structure plan and final
criteria otherwise applicable to such recommendations under
this section.
``(C) The recommendations made by the Secretary under this
subsection in any year after 2000 shall include a statement
of the result of the consideration of any notice described in
subparagraph (A) that is received with respect to an
installation covered by such recommendations. The statement
shall set forth the reasons for the result.''; and
(3) in paragraph (7), as so redesignated--
(A) in the first sentence, by striking ``paragraph (5)(B)''
and inserting ``paragraph (6)(B)''; and
(B) in the second sentence, by striking ``24 hours'' and
inserting ``48 hours''.
(c) Privatization in Place.--Section 2904(a) of that Act is
amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively; and
(2) by inserting after paragraph (2) the following new
paragraph (3):
``(3) carry out the privatization in place of a military
installation recommended for closure or realignment by the
Commission in each such report after 2000 only if
privatization in place is a method of closure or realignment
of the installation specified in the recommendation of the
Commission in such report and is determined to be the most-
cost effective method of implementation of the
recommendation;''.

SEC. 3. TECHNICAL AND CLARIFYING AMENDMENTS.

(a) Commencement of Period for Notice of Interest in
Property for Homeless.--Section 2905(b)(7)(D)(ii)(I) of the
Defense Base Closure and Realignment Act of 1990 (part A of
title XXIX of Public Law 101-510; 10 U.S.C. 2867 note) is
amended by striking ``that date'' and inserting ``the date of
publication of such determination in a newspaper

[[Page S1628]]

of general circulation in the communities in the vicinity of
the installation under subparagraph (B)(i)(IV)''.
(b) Other Clarifying Amendments.--
(1) That Act is further amended by inserting ``or
realignment'' after ``closure'' each place it appears in the
following provisions:
(A) Section 2905(b)(3).
(B) Section 2905(b)(5).
(C) Section 2905(b)(7)(B)(iv).
(D) Section 2905(b)(7)(N).
(E) Section 2910(10)(B).
(2) That Act is further amended by inserting ``or
realigned'' after ``closed'' each place in appears in the
following provisions:
(A) Section 2905(b)(3)(C)(ii).
(B) Section 2905(b)(3)(D).
(C) Section 2905(b)(3)(E).
(D) Section 2905(b)(4)(A).
(E) Section 2905(b)(5)(A).
(F) Section 2910(9).
(G) Section 2910(10).
(3) Section 2905(e)(1)(B) of that Act is amended by
inserting ``, or realigned or to be realigned,'' after
``closed or to be closed''.

Mr. LEVIN. Mr. President, I am pleased to once again join my
colleague from the Armed Services Committee, Senator McCain, along with
our cosponsors Senators Lieberman, Voinovich, Reed, Kyl, Hagel, Kohl,
Feingold, DeWine, and Jeffords in introducing legislation that allows
the Department of Defense to close excess, unneeded military bases.
For the past four years, former Secretary of Defense Bill Cohen asked
the Congress to authorize two additional base closure rounds. But
Congress did not act.
We have a new Congress, a new President, and a new Secretary of
Defense, but we also have some unfinished business to attend to. Base
closure is one of the most important examples. And as we promised we
would be, Senator McCain and I and our cosponsors are back.
General Shelton, the Chairman of the Joint Chiefs of Staff, and the
other chiefs have repeatedly said we need to close more military bases,
and I expect they will once again tell us we need to realign or close
more bases when the President's budget is submitted later this year.
The legislation we are introducing today is intended to start the
debate, and I hope the administration will make a similar legislative
proposal to the Congress.
This legislation calls for two additional base closure rounds, in
2003 and 2005, that would basically follow the same procedures that
were used in 1991, 1993 and 1995, with two notable exceptions.
First, the whole process would start and finish two months later in
2005 than it would in 2003 and did in previous rounds, to give a new
President, if there is one in 2005, sufficient time to nominate
commissioners.
Second, under our legislation, privatization in place would not be
permitted at closing installation unless the Base Closure Commission
expressly recommends it.
In a November 1998 report, the General Accounting Office listed five
key elements of the base closure process that ``contributed to the
success of prior rounds''. Our legislation retains all of those key
elements. GAO also stated that they ``have not identified any long-term
readiness problems that were related to domestic base realignments and
closures, that ``DOD continues to retain excess capacity'' and that
``substantial savings are expected'' from base closures.
Mr. President, every expert and every study agrees on the basic
facts--the Defense Department has more bases than it needs, and closing
bases saves substantial money over time, usually within a few years.
The April 1998 report the Department of Defense provided to the
Congress clearly demonstrated that we have excess capacity. For
example, the report showed that by 2003:
The Army will have reduced its classroom training personnel by 43
percent, while classroom space will have been reduced by only 7
percent.
The Air Force will have reduced the number of fighters and other
small aircraft by 53 percent since 1989, while the base structure for
those aircraft will be only 35 percent smaller.
The Navy will have 33 percent more hangars for its aircraft than it
requires.
Experts inside and outside of Government agree with the Defense
Department on this issue. As the Congressional Budget Office stated in
a letter to me, ``the [DoD] report's basic message is consistent with
CBO's own conclusions: past and future BRAC rounds will lead to
significant savings for DoD.''
Every year we delay another base closure round, we waste about $1.5
billion in annual savings that we can never recoup. And every dollar we
waste on bases we do not need is a dollar we cannot spend on things we
do need.
The new administration is now undertaking several strategy reviews.
It is possible that those reviews will conclude that the military we
want for the future needs exactly the base structure we have today and
that all our forces are in exactly the right place and none of them
need to be realigned to different locations. It is possible that they
will conclude Secretary Cohen and General Shelton didn't know what they
were talking about and we really don't have any excess infrastructure.
I will be astounded if any serious defense review reaches such a
conclusion. But even if it did, it is important to understand that this
legislation does not prejudge or pre-empt these reviews. What it does
is prepare us to act whatever the result of those reviews.
Should the new administration decide they don't want to propose any
closures or realignments, this bill would not force them to. It
authorizes two more rounds; it does not require them. And the Defense
Department would have ample time to conclude their reviews before the
first round would start in 2003, so the results of their strategy
reviews could be fully incorporated into the force structure plan the
new rounds would be based on.
I urge my colleagues to support this legislation.
______

By Mr. KERRY (for himself, Mr. Grassley, Mr. Sarbanes, Mr. Levin,
and Mr. Rockefeller):
S. 398. A bill to combat international money laundering and to
protect the United States financial system, and for other purposes; to
the Committee on Banking, Housing, and Urban Affairs.
Mr. KERRY. Mr. President, I believe the United States must do more to
stop international criminals from legitimizing their profits from the
sale of drugs, from terror or from organized crime by laundering money
into the United States financial system.
That is why today, along with Senators Grassley, Sarbanes, Levin and
Rockefeller, I am introducing the International Counter-Money
Laundering and Foreign Anticorruption Act of 2001, which will give the
Secretary of the Treasury the tools to crack down on international
money laundering havens and protect the integrity of the U.S. financial
system from the influx of tainted money from abroad. During the 106th
Congress, the House Banking Committee reported out this legislation
with a bipartisan 33-1 vote.
Money laundering is the financial side of international crime. It
occurs when criminals seek to disguise money that was illegally
obtained. It allows terrorists, drug cartels, organized crime groups,
corrupt foreign government officials and others to preserve the profit
from their illegal activities and to finance new crimes. Money
laundering provides the fuel that allows criminal organizations to
conduct their ongoing affairs. It has a corrosive effect on
international markets and financial institutions. Money launderers rely
upon the existence of jurisdictions outside the United States that
offer bank secrecy and special tax or regulatory advantages to non
residents, and often complement those advantages with weak financial
supervision and regulatory regimes.
Today, the global volume of laundered money is estimated to be 2-5
percent of global Gross Domestic Product, between $600 billion and $1.5
trillion. The effects of money laundering extend far beyond the
parameters of law enforcement, creating international political issues
while generating domestic political crises.
International criminals have taken advantage of the advances in
technology and the weak financial supervision in some jurisdictions to
smuggle their illicit funds into the United States financial system.
Globalization and advances in communications and technologies allow
criminals to move their illicit gains faster and farther than ever
before. The ability to launder money into the United States through
these jurisdictions has allowed corrupt

[[Page S1629]]

foreign officials to systematically divert public assets for their
personal use, which in turn undermines U.S. efforts to promote stable
democratic institutions and vibrant economies abroad.
In December 2000, a federal interagency working group in support of
the President's International Crime Control Strategy released an
International Crime Threat Assessment. This report states that
international banking and financial systems are currently being used to
legitimize and transfer criminal proceeds and that huge sums of money
are laundered in the world's largest financial markets including the
United States. The report warns that international criminal groups will
use changes in technology and the world economy to enhance their
capability to launder and move money and may be able to cause
significant disruption to international financial systems.
In October 2000, the General Accounting Office determined that Euro-
American Corporate Services, Inc. had formed more than 2,000
corporations for Russian brokers. From 1991 through January 2000, more
than $1.4 billion in wire transfer transactions was deposited into 236
accounts for these corporations opened at two United States banks. More
than half of these funds were then transferred out of the U.S. banking
system. The GAO believes that these banking activities raise questions
about whether the U.S. banks were used to launder money.
In February 2000, State and Federal regulators formally sanctioned
the Bank of New York for ``deficiencies'' in its anti-money laundering
practices including lax auditing and risk management procedures
involving their international banking business. The sanctions were
based on the Bank of New York's involvement in an alleged money
laundering scheme where more than $7 billion in funds were transmitted
from Russia into the bank. Federal investigators are currently
attempting to tie the $7 billion to criminal activities in Russia such
as corporate theft, political graft or racketeering.
In November 1999, the minority staff of the Senate Governmental
Affairs Subcommittee on Investigations released a report on private
banking and money laundering. The report describes a number of
incidences where high level government officials have used private
banking accounts with U.S. financial institutions to launder millions
of dollars from foreign governments. The report details how Raul
Salinas, brother of former President of Mexico, Carlos Salinas, used
private bank accounts to launder money out of Mexico. Representatives
from Citigroup testified at a Subcommittee hearing that the bank had
been slow to correct controls over their private banking accounts.
Earlier this month, the Minority Staff of the U.S. Senate Permanent
Subcommittee on Investigations, headed by Senator Carl Levin, released
a report that reveals that most U.S. banks lack appropriate anti-money
laundering safeguards on their correspondent accounts. This report
proves that high risk foreign banks that are denied their own
correspondent accounts at U.S. banks can get the same access by opening
correspondent accounts at other foreign banks that have U.S. accounts.
The report recommends that U.S. regulators and law enforcement offer
increased assistance to help banks identify high-risk foreign banks.
During the 1980s, as Chairman of the Senate Permanent Subcommittee on
Investigations, I began an investigation of the Bank of Credit and
Commerce International (BCCI), and uncovered a complex money laundering
scheme. Unlike any ordinary bank, BCCI was from its earliest days made
up of multiplying layers of entities, related to one another through an
impenetrable series of holding companies, affiliates, subsidiaries,
banks-within-banks, insider dealings and nominee relationships.
By fracturing corporate structure, record keeping, regulatory review,
and audits, the complex BCCI family of entities was able to evade
ordinary legal restrictions on the movement of capital and goods as a
matter of daily practice and routine. In designing BCCI as a vehicle
fundamentally free of government control, its creators developed an
ideal mechanism for facilitating illicit activity by others.
BCCI's used this complex corporate structure to commit fraud
involving billions of dollars; and launder money for their clients in
Europe, Africa, Asia and the Americas. Fortunately, we were able to
bring many of those involved in BCCI to justice. However, my
investigation clearly showed that rogue financial institutions have the
ability to circumvent the laws designed to stop financial crimes.
In recent years, the U.S. and other well-developed financial centers
have been working together to improve their anti-money laundering
regimes and to set international anti-money laundering standards. Back
in 1988, I included a provision in the State Department Reauthorization
bill that requires major money laundering countries to adopt laws
similar to our own on reporting currency or face sanctions. This
provision led to Panama and Venezuela negotiating what were called
Kerry agreements with the United States decreasing their vulnerability
to the placement of U.S. currency by drug traffickers in the process.
Unfortunately, other nations--some small, remote islands--have moved
in the other direction. Many have passed laws that provide for
excessive bank secrecy, anonymous company incorporation, economic
citizenship, and other provisions that directly conflict with well-
established international anti-money laundering standards. In doing so,
they have become money laundering havens for international criminal
networks. Some even blatantly advertise the fact that their laws
protect anyone doing business from U.S. law enforcement.

Last year, the Financial Action Task Force, an intergovernmental body
established to develop and promote policies to combat financial crime,
released a report naming fifteen jurisdictions--including the Bahamas,
The Cayman Islands, Russia, Israel, and the Philippines--that have
failed to take adequate measures to combat international money
laundering. This is a clear warning to financial institutions in the
United States that they must begin to scrutinize many of their
financial transactions with customers in these countries. Soon, the
Financial Action Task Force will develop bank advisories and criminal
sanctions that effectively drive legitimate financial business from
these nations, depriving them of a lucrative source of tax revenue.
This report has provided important information that governments and
financial institutions around the world should learn from in developing
their own anti-money laundering laws and policies.
Last year, the Financial Stability Forum released a report that
categorizes offshore financial centers according to their perceived
quality of supervision and degree of regulatory cooperation. The
Organization of Economic Cooperation and Development (OECD) began a new
crackdown on harmful tax competition. Members of the European Union
reached an agreement in principle on sweeping changes to bank secrecy
laws, intended to bring cross-border investment income within the net
of tax authorities.
The actions by the Financial Action Task Force, the European Union
and others show a renewed international focus and commitment to curbing
financial abuse around the world. I believe the United States has a
similar obligation to use this new information to update our anti-money
laundering statutes.
The International Counter-Money Laundering and Anticorruption Act of
2001, which I am introducing today, would provide the tools the U.S.
needs to crack down on international money laundering havens and
protect the integrity of the U.S. financial system from the influx of
tainted money from abroad. The bill provides for actions that will be
graduated, discretionary, and targeted, in order to focus actions on
international transactions involving criminal proceeds, while allowing
legitimate international commerce to continue to flow unimpeded. It
will give the Secretary of the Treasury--acting in consultation with
other senior government officials and the Congress--the authority to
designate a specific foreign jurisdiction, foreign financial
institution, or class of international transactions as being of
``primary money laundering concern.''

[[Page S1630]]

Then, on a case-by-case basis, the Secretary will have the option to
use a series of new tools to combat the specific type of foreign money
laundering threat we face. In some cases, the Secretary will have the
option to require banks to pierce the veil of secrecy behind which
foreign criminals hide. In other cases, the Secretary will have the
option to require the identification those using a foreign bank's
correspondent or payable-through accounts. If these transparency
provisions were deemed to be inadequate to address the specific problem
identified, the Secretary would have the option to restrict or prohibit
U.S. banks from continuing correspondent or payable-through banking
relationships with money laundering havens and rogue foreign banks.
Through these steps, the Secretary will help prevent laundered money
from slipping undetected into the U.S. financial system and, as a
result, increase the pressure on foreign money laundering havens to
bring their laws and practices into line with international anti-money
laundering standards. The passage of this legislation will make it much
more difficult for international criminal organizations to launder the
proceeds of their crimes into the United States.
This bill fills in the current gap between bank advisories and
International Emergency Economic Powers Act, IEEPA, sanctions by
providing five new intermediate measures. Under current law, the only
counter-money laundering tools available to the federal government are
advisories, an important but relatively limited measure instructing
banks to pay close attention to transactions that involve a given
country, and full-blown economic sanctions under the IEEPA. This
legislation gives five additional measures to increase the government's
ability to apply pressure effectively against targeted jurisdictions or
institutions.
This legislation will in no way jeopardize the privacy of the
American public. The focus is on foreign jurisdictions, financial
institutions and classes of transactions that present a threat to the
United States, not on American citizens. The actions that the Secretary
of the Treasury is authorized to take are designated solely to combat
the abuse of our banks by specifically identified foreign money
laundering threats. This legislation is in no way similar to the Know-
Your-Customer regulations that were proposed by bank regulators in
1999. Further, the intent of this legislation is not to add additional
regulatory burdens on financial institutions, but, to give the
Secretary of the Treasury the ability to take action against existing
money laundering threats.
Let me repeat, this legislation only gives the discretion to use
these tools to the Secretary of the Treasury. There is no automatic
trigger that forces action whenever evidence of money laundering is
determined. Before any action is taken, the Secretary of the Treasury,
in consultation with other key government officials, must first
determine whether a specific country, financial institution or type of
transaction is of primary money laundering concern. The Treasury
Secretary will develop a calibrated response that will consider the
effectiveness of the measure to address the threat, whether other
countries are taking similar steps, and whether the response will cause
harm to U.S. financial institutions and other firms.
This legislation will strengthen the ability of the Secretary to
combat international money laundering and help protect the integrity of
the U.S. financial system. This bill has been supported by the heads of
all the major federal law enforcement agencies.
Today, advances in technology are bringing the world closer together
than ever before and opening up new opportunities for economic growth.
However, with these new advantages come equally important obligations.
We must do everything possible to insure that the changes in technology
do not give comfort to international criminals by giving them new ways
to hide the financial proceeds of their crimes. This legislation is a
first step toward limiting the scourge of money laundering and will
help stop the development of international criminal organizations. I
believe this legislation deserves consideration by the Senate during
the 107th Congress.
Mr. SARBANES. Mr. President, I am pleased to join Senators Kerry,
Grassley, and Levin in introducing the International Counter-Money
Laundering and Foreign Anti-Corruption Act of 2001, ``ICMLA''. This
legislation is identical to a bill I co-sponsored last year.
Money laundering poses an ongoing threat to the financial stability
of the U.S. It is estimated by the Department of the Treasury that the
global volume of laundered money accounts for between 2-5 percent of
the global GDP. Although serious efforts to combat international money
laundering began in the mid-1980's, recent scandals about the
involvement of some the most prominent U.S. banks in money laundering
schemes have highlighted key weaknesses in current laws.
The ICMLA is designed to bolster the United States' ability to
counter the laundering of the proceeds of drug trafficking, organized
crime, terrorism and official corruption from abroad. The bill broadens
the authority of the Secretary of the Treasury, ensures that banking
transactions and financial relationship do not contravene the purposes
of current anti-money laundering statutes, provides a clear mandate for
subjecting foreign jurisdictions that facilitate money laundering to
special scrutiny, and enhances reporting of suspicious activities. The
bill similarly strengthens current measures to prevent the use of the
U.S. financial system for personal gain by corrupt foreign officials
and to facilitate the repatriation of any stolen assets to the citizens
of countries to whom such assets belong.
First, Section 101 of the ICMLA gives the Secretary of the Treasury,
in consultation with other key government officials, discretionary
authority to impose five new ``special measures'' against foreign
jurisdictions and entities that are of ``primary money laundering
concern'' to the United States. Under current law, the only counter-
money laundering tools available to the federal government are
advisories, an important but relatively limited measure instructing
banks to pay close attention to transactions that involve a given
country, and full-blown economic sanctions under the International
Emergency Economic Powers Act, ``IEEPA''. The five new intermediate
measures will increase the government's ability to apply well-
calibrated pressure against targeted jurisdictions or institutions.
These new measures include: 1. requiring additional record keeping/
reporting on particular transactions, 2. requiring the identification
of the beneficial foreign owner of a U.S. bank account, 3. requiring
the identification of those individuals using a U.S. bank account
opened by a foreign bank to engage in banking transactions a ``payable-
through account'', 4. requiring the identification of those using a
U.S. bank account established to receive deposits and make payments on
behalf of a foreign financial institution, a ``correspondent account'',
and 5. restricting or prohibiting the opening or maintaining of certain
correspondent accounts. The Democratic staff of the Permanent
Subcommittee on Investigations of the Senate Governmental Affairs
Committee recently completed an investigation and published results
critical of certain correspondent banking activities.
Second, the bill seeks to enhance oversight into illegal activities
by clarifying that the ``safe harbor'' from civil liability for filing
a Suspicious Activity Report, ``SAR'', applies in any litigation,
including suit for breach of contract or in an arbitration proceeding.
Under the Bank Secrecy Act, ``BSA'', any financial institution or
officer, director, employee, or agent of a financial institution is
protected against private civil liability for filing a SAR. Section 201
of the bill amends the BSA to clarify the prohibition on disclosing
that a SAR has been filed. These reports are the cornerstone of our
nation's money-laundering efforts because they provide the information
necessary to alert law enforcement to illegal activity.
Third, the bill enhances enforcement of Geographic Targeting Orders,
``GTO''. These orders lower the dollar thresholds for reporting
transactions within a defined geographic area. Section 202 of the bill
clarifies that civil and criminal penalties for violations of the Bank
Secrecy Act and its regulations also apply to reports required by

[[Page S1631]]

GTO's. In addition, the section clarifies that structuring a
transaction to avoid a reporting requirement by a GTO is a criminal
offense and extends the presumptive GTO period from 60 to 180 days.
Fourth, Section 203 of the bill permits a bank, upon request of
another bank, to include suspicious illegal activity in written
employment references. Under this provision, banks would be permitted
to share information concerning the possible involvement of a current
or former officer or employee in potentially unlawful activity without
fear of civil liability for sharing the information.
Finally, Title III of the bill addresses corruption by foreign
officials and ruling elites. Earlier this year, the Secretary of the
Treasury, in consultation with the Attorney General and the financial
services regulators, issued guidelines to financial institutions
operating in the U.S. on appropriate practices and procedures to reduce
the likelihood that such institutions could facilitate proceeds
expropriated by or on behalf of foreign senior government officials.
Title III would help build upon efforts to combat corruption by foreign
officials and ruling elites. It provides that the U.S. government
should make clear that it will take all steps necessary to identify the
proceeds of foreign government corruption which have been deposited in
U.S. financial institutions and return such proceeds to the citizens of
the country to whom such assets belong. It also encourages the U.S. to
continue to actively and publicly support the objectives of the
Financial Action Task Force on Money Laundering with regard to
combating international money laundering.
The ICMLA addresses many of the shortcomings of current law. the
Secretary of Treasury is granted additional authority to require
greater transparency of transactions and accounts as well as to
narrowly target penalties and sanctions. The reporting and collection
of additional information on suspected illegal activity will greatly
enhance the ability of bank regulators and law enforcement to combat
the laundering of drug money, proceeds from corrupt regimes, and other
illegal activities.
The House Banking Committee passed the identical anti-money
laundering bill by a vote of 31 to 1 on June 8, 2000. I hope that we
can move this legislation expeditiously in the Senate.
______

By Mr. EDWARDS (for himself and Mr. Dodd):
S. 399. A bill to provide for fire sprinkler systems, or other fire
suppression or prevention technologies, in public and private college
and university housing and dormitories, including fraternity and
sorority housing and dormitories; to the Committee on Health,
Education, Labor, and Pensions.
Mr. EDWARDS. Mr. President, I rise today along with my colleague
Senator Dodd to re-introduce the College Fire Prevention Act. This
measure would provide federal matching grants for the installation of
fire sprinkler systems in college and university dormitories and
fraternity and sorority houses. I believe the time is now to address
the sad situation of deadly fires that occur in our children's college
living facilities.
The tragic fire that occurred at Seton Hall University on Wednesday
January 19th, 2000 will not be long forgotten. Sadly, three freshman,
all 18 years old, died. Fifty-four students, two South Orange
firefighters and two South Orange police officers were injured. The
dormitory, Boland Hall, was a six-story, 350 room structure built in
1952 that housed approximately 600 students. Astonishingly, the fire
was contained to the third floor lounge of Boland Hall. This dormitory
was equipped with smoke alarms but no sprinkler system.
Unfortunately, the Boland Hall fire was not the first of its kind.
And it reminded many people in North Carolina of their own tragic
experience with dorm fires. In 1996, on Mother's Day and Graduation
Day, a fire in the Phi Gamma Delta fraternity house at the University
of North Carolina at Chapel Hill killed five college juniors and
injured three others. The 3-story plus basement fraternity house was 70
years old. The National Fire Protection Association identified several
factors that contributed to the tragic fire, including the lack of fire
sprinkler protection.
Sadly, there have been countless other dorm fires. On December 9,
1997, a student died in a dormitory fire at Greenville College in
Greenville, Illinois. The dormitory, Kinney Hall, was built in the
1960s and had no fire sprinkler system. On January 10, 1997, a student
died at the University of Tennessee at Martin. The dormitory, Ellington
Hall, had no fire sprinkler system. On January 3, 1997 a student died
in a dormitory fire at Central Missouri State University in
Warrensburg, Missouri. On October 21, 1994, five students died in a
fraternity house fire in Bloomsburg, Pennsylvania. The list goes on and
on. In a typical year between 1980 and 1998, the National Fire
Protection Association estimates there were an average of 1,800 fires
at dormitories, fraternities, and sororities, involving 1 death, 70
injuries, and 8 million dollars in property damage.
So now we must ask, what can be done? What can we do to curtail these
tragic fires from taking the lives of our children, our young adults?
We should focus our attention on the lack of fire sprinklers in college
dormitories and fraternity and sorority houses. Sprinklers save lives.
Indeed, the National Fire Protection Association has never recorded a
fire that killed more than 2 people in a public assembly, educational,
institutional, or residential building where a sprinkler system was
operating properly.
Despite the clear benefits of sprinklers, many college dorms do not
have them. New dormitories are generally required to have advanced
safety systems such as fire sprinklers. But such requirements are
rarely imposed retroactively on existing buildings. In 1998, 93 percent
of the campus building fires reported to fire departments occurred in
buildings where there were smoke alarms present. However, only 34
percent of them had fire sprinklers present.
At my state's flagship university at Chapel Hill, for example, only
six of the 29 residence halls have sprinklers. A report published by
The Raleigh News & Observer in the wake of the Seton Hall fire also
noted that only seven of 19 dorms at North Carolina State University
are equipped with the life-saving devices, and there are sprinklers in
two of the 10 dorms at North Carolina Central University. At Duke
University, only five of 26 dorms have sprinklers.
The legislation I introduce today authorizes the Secretary of
Education, in consultation with the United States Fire Administration,
to award grants to States, private or public colleges or universities,
fraternities, or sororities to assist them in providing fire sprinkler
systems for their student housing and dormitories. These entities would
be required to produce matching funds equal to one-half of the cost.
This legislation authorizes $100 million for fiscal years 2002 through
2006.
In North Carolina, we decided to initiate a drive to install
sprinklers in our public college and university dorms. The overall cost
is estimated at 57.5 million dollars. Given how much it is going to
cost North Carolina's public colleges and universities to install
sprinklers, I think it's clear that the $100 million that this measure
authorizes is just a drop in the bucket. But my hope is that by
providing this small incentive we can encourage more colleges to
institute a comprehensive review of their dorm's fire safety and to
install sprinklers. All they need is a helping hand. With this modest
measure of prevention, we can help prevent the needless and tragic loss
of young lives.
Parents should not have to worry about their children living in fire
traps. When we send our children away to college, we are sending them
to a home away from home where hundreds of other students eat, sleep,
burn candles, use electric appliances and smoke. We must not compromise
on their safety. In short, the best way to ensure the protection of our
college students is to install fire sprinklers in our college
dormitories and fraternity and sorority houses. I ask all of my
colleagues to join me in supporting this important legislation. Thank
you.
Mr. President, I ask unanimous consent that 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:

[[Page S1632]]

S. 399

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 ``College Fire Prevention
Act''.

SEC 2. FINDINGS.

Congress makes the following findings:
(1) On Wednesday, January 19, 2000, a fire occurred at a
Seton Hall University dormitory. Three male freshmen, all 18
years of age, died. Fifty-four students, 2 South Orange
firefighters, and 2 South Orange police officers were
injured. The dormitory was a 6-story, 350-room structure
built in 1952, that housed approximately 600 students. It was
equipped with smoke alarms but no fire sprinkler system.
(2) On Mother's Day 1996 in Chapel Hill, North Carolina, a
fire in the Phi Gamma Delta Fraternity House killed 5 college
juniors and injured 3. The 3-story plus basement fraternity
house was 70 years old. The National Fire Protection
Association identified several factors that contributed to
the tragic fire, including the lack of fire sprinkler
protection.
(3) It is estimated that between 1980 and 1998, an average
of 1,800 fires at dormitories, fraternities, and sororities,
involving 1 death, 70 injuries, and $8,000,000 in property
damage were reported to public fire departments.
(4) Within dormitories, fraternities, and sororities the
number 1 cause of fires is arson or suspected arson. The
second leading cause of college building fires is cooking,
while the third leading cause is smoking.
(5) The National Fire Protection Association has no record
of a fire killing more than 2 people in a completely fire
sprinklered public assembly, educational, institutional, or
residential building where the sprinkler system was operating
properly.
(6) New dormitories are generally required to have advanced
safety systems such as fire sprinklers. But such requirements
are rarely imposed retroactively on existing buildings.
(7) In 1998, 93 percent of the campus building fires
reported to fire departments occurred in buildings where
there were smoke alarms present. However, only 34 percent had
fire sprinklers present.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out this
Act $100,000,000 for each of the fiscal years 2002 through
2006.

SEC. 4. GRANTS AUTHORIZED.

(a) Program Authority.--The Secretary of Education, in
consultation with the United States Fire Administration, is
authorized to award grants to States, private or public
colleges or universities, fraternities, and sororities to
assist them in providing fire sprinkler systems, or other
fire suppression or prevention technologies, for their
student housing and dormitories.
(b) Matching Funds Requirement.--The Secretary of Education
may not award a grant under this section unless the entity
receiving the grant provides, from State, local, or private
sources, matching funds in an amount equal to not less than
one-half of the cost of the activities for which assistance
is sought.

SEC. 5. PROGRAM REQUIREMENTS.

(a) Application.--Each entity desiring a grant under this
Act shall submit to the Secretary of Education an application
at such time and in such manner as the Secretary may require.
(b) Priority.--In awarding grants under this Act, the
Secretary shall give priority to applicants that demonstrate
in the application submitted under subsection (a) the
inability to fund the sprinkler system, or other fire
suppression or prevention technology, from sources other than
funds provided under this Act.
(c) Limitation on Administrative Expenses.--An entity that
receives a grant under this Act shall not use more than 4
percent of the grant funds for administrative expenses.

SEC. 6. DATA AND REPORT.

The Comptroller General shall--
(1) gather data on the number of college and university
housing facilities and dormitories that have and do not have
fire sprinkler systems and other fire suppression or
prevention technologies; and
(2) report such data to Congress.

SEC. 7. ADMISSIBILITY.

Notwithstanding any other provision of law, any application
for assistance under this Act, any negative determination on
the part of the Secretary of Education with respect to such
application, or any statement of reasons for the
determination, shall not be admissible as evidence in any
proceeding of any court, agency, board, or other entity.
______

By Mr. BAUCUS (for himself, Mr. Roberts, Mrs. Lincoln, and Mr.
Dorgan):
S. 400. A bill to lift the trade embargo on Cuba, and for other
purposes; to the Committee on Finance.
______

By Mr. BAUCUS (for himself, Mr. Roberts, and Mrs. Lincoln):
S. 401. A bill to normalize trade relations with Cuba, and for other
purposes; to the Committee on Finance.
S. 402. A bill to make an exception to the United States embargo on
trade with Cuba for the export of agricultural commodities, medicines,
medical supplies, medical instruments, or medical equipment and for
other purposes; to the Committee on Finance.
Mr. BAUCUS. Mr. President, I am introducing today a series of bills
that would end the embargo on trade with Cuba and normalize our
economic relations with this country that is a mere ninety miles off
our shore. I should add that Congressman Charles Rangel is offering a
set of companion bills in the House today.
Last July, I led a small group of Senators to Havana. During our
brief visit, we met with Fidel Castro. But we also spent three hours
with a group of six dissidents who had spent years in prison, yet have
chosen heroically to continue their dissent from within Cuba. We met
with the leader of Cuba's largest independent NGO. It was clear to me
that our Cuba policy was outdated and needed fundamental change.
I have long fought against unilateral economic sanctions, unless our
national security was at stake. The Cuba embargo is a unilateral
sanction, but our national security is not at stake. The Defense
Department has concluded that Cuba does not represent any security
threat to this nation. None of our closest allies supports the embargo.
Nor do any of our trading partners in the Americas.
Unilateral sanctions do not work. The embargo has not changed the
behavior of the Cuban government and its leadership. It has not changed
the behavior of Fidel Castro. But the embargo has hurt the people of
Cuba. And the embargo has hurt American farmers and businesses, as our
Asian, European, and Canadian competitors have rushed in to fill the
gap in the Cuban market.
The U.S. International Trade Commission released a report on the
economic impact of U.S. sanctions on Cuba. The ITC found that the
embargo costs US exporters, farmers, manufacturers, and service
providers between $650 million and one billion dollars a year in lost
sales. This is intolerable.
We should lift the embargo. We should engage Cuba economically. We
should engage the people of Cuba.
The bills I am introducing today do just that. The first bill, on
which I am joined by Senators Roberts, Lincoln, and Dorgan, is the
``Free Trade with Cuba Act'', that would lift the embargo completely.
The second bill, on which I am joined by Senators Roberts and Lincoln,
is the ``United States-Cuba Trade Act of 2001'', that would remove Cuba
from Jackson-Vanik treatment and provide normal trade relations status
on a permanent basis. The third bill, on which I am also joined by
Senators Roberts and Lincoln, is the ``Cuban Humanitarian Trade Act of
2001'', that removes the restrictions on food and medicine exports
imposed in the last Congress, repeals the codification of travel
restrictions, and removes limitations on remittances to individual
Cuban citizens.
I am not suggesting that we embrace Fidel Castro. Far from it! His
leadership, his treatment of his own people, his failed economic,
political, and social policies--these are unacceptable to all
Americans. But the world has changed since the United States initiated
the embargo forty years and ten Presidents ago. It does us no good to
wait until Castro is gone from the scene before we begin to develop
normal relations with the Cuban people and with Cuba's future leaders.
If we fail to develop those relationships now, the inevitable
transition to democracy and a market economy will be much harder on all
of the Cuban people. And events in Cuba could easily escalate out of
control and put the United States in the middle of a dangerous domestic
crisis on the island.
Jim Hoagland, in a recent Washington Post column, wrote about his
concern ``when sanctions linger too long and become a political
football and a substitute for policy, as is the case today in Cuba.''
This accurately describes where we are today.
To help further edify my colleagues on this issue, I would like to
enter into the record a column from the February 9 Wall Street Journal
by Philip Peters, Vice President of the Lexington Institute, who
explains how changes in U.S. policy can help the Cuban people who
continue to suffer under Castro's policies of political and economic
repression.
The three bills that I am offering today serve our national interest,
will

[[Page S1633]]

help us move toward a peaceful transition in the post-Castro era, and
will help the Cuban people now. I urge support from all my colleagues.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Wall Street Journal, February 9, 2001]

``Let Yankee Tourists Shower Dollars on Cuba's Poor"

(By Philip Peters)

In her final press conference as Secretary of State,
Madeleine Albright's message to the Cuban people was
succinct. In reference to the aging Fidel Castro she said,
``I wish them the actuarial tables.'' It was an odd statement
on behalf of a superpower that could have used the previous
eight years to exercise considerable influence on its small
island neighbor.
It was also a fitting end to the Clinton administration's
passive approach to Cuba policy, where the impulse to
reassess strategy was nearly always trumped by the imperative
of avoiding political risk in Florida. Even in 1998, when
Republican leaders such as Sen. John Warner and former
Secretary of State George Shultz urged the creation of a
presidential bipartisan commission--a golden opportunity to
conduct a long overdue post-Cold War review that could have
included the full range of Cuban-American voices--politics
held the Clinton White House back.
President Bush has an opportunity to make a fresh start.
Today's strict embargo policy, based on the goal of denying
hard currency to the Cuban government, made sense during the
Cold War when Cuba was a genuine security threat and
Washington had reason to make Cuba an expensive satellite for
the Soviet Union to maintain.
Today, with sanctions twice tightened during the 1990s,
Fidel Castro remains firmly in power. With the Soviet-era
security threat gone, it is time to recognize that isolating
Cuba from commerce and contact with Americans is
counterproductive because it reduces American influence in
Cuba. President Bush's Cuba policy is not yet defined, but
Secretary of State Colin Powell has said that ``We will only
participate in those activities with Cuba that benefit the
people directly and not the government.''
This standard sounds good in theory, but in practice it is
impossible to achieve. Virtually every form of economic
activity with Cuba benefits both the people and the
government. Today, European and Canadian trade, investment
and tourism benefit Cuban state enterprises. But they also
increase the earnings of Cuban workers, expose Cubans to
foreigners and non-socialist ideas, bring capitalist business
practices, and reshape the Cuban economy to fit its
comparative advantages in the global system. This adds up to
humanitarian benefits for the Cuban people, and a head start
on a future transition to a more market-oriented economy.
U.S. economic activity also benefits both the state and the
people of Cuba. Family remittances, estimated by the United
Nations at over $700 million annually, bring more foreign
exchange than sugar exports. Many of these dollars land in
the Cuban treasury when Cubans spend them in state retail
stores. U.S.-Cuba phone connections allow families to
communicate, but generate over $70 million a year for the
state phone company. A strict application of Secretary
Powell's own standard would cut off these valuable benefits.
The trick, then, for an administration that seems to want
to end unilateral trade sanctions everywhere but Cuba, will
not be to reach for Secretary Powell's unattainable standard.
Rather, it will be to choose among forms of engagement that
serve America's humanitarian interest in helping Cubans to
prosper, our long-term economic interest of nudging Cuba
toward a market economy, and our political interest in
exposing Cubans to Americans and American ideas.
President Bush could begin by supporting the congressional
consensus, expressed last year by greater than three-to-one
majorities in the House and Senate, to lift all restrictions
on food and medicine sales. This step would begin to reverse
the implicit assumption in U.S. policy that American
interests are somehow served if products such as rice,
powdered milk, and drugs are more scarce or expensive for
Cubans to acquire. It would also support the calls by Cuban
dissidents such as Elizardo Sanchez and the Christian
Liberation Movement for an end to this part of the embargo.
It ``hurts the people, not the regime,'' Mr. Sanchez says,
and is ``an odd way of demonstrating support for human
rights.''
President Bush could then end all restrictions on Cuban-
American remittances, now limited to $1,200 a year, and on
family visits, which are permitted only in cases of
``humanitarian emergency'' a cruel regulation that forces
families to lie by the thousands each December when they
visit relatives at Christmas.
Finally, the president could support an end to the travel
ban imposed on Americans--a mistaken policy that treats free
contact between American and Cuban societies as a detriment
rather than an opportunity. ``If we have a million Americans
walking on the streets of Havana, you will have something
like the pope's visit multiplied by 10,'' independent
journalist Manuel David Orrio told the Chicago Tribune in
1999. A Havana clergyman told me last month that visiting
Americans ``would permeate this place with the idea of a free
society.''
Like other international travelers, Americans' spending
would boost Cubans' earnings in hotels and restaurants and
expand Cuba's incipient private sector. An influx of U.S.
travelers would immediately create a shortage of lodging that
would be filled partially by Cubans who legally rent rooms in
their homes. Demand for the services of artisans, taxis and
private restaurants would also increase, adding to the
disposable income that sustains other entrepreneurs, from
carpenters and repairmen to food vendors and tutors.
As this sector, now 150,000 strong, gains income and
expands, demand would increase for the freely priced,
privately sold produce in Cuba's 300 farmers markets,
benefitting farmers across Cuba who have no contact with
tourists. Americans would experience ``the interface between
the entrepreneurial folks'' that President Bush lauds as a
virtue of open trade with communist China, to say nothing of
the value of their personal contact with Cubans. This may be
why a Florida International University poll shows a slim
majority of Cuban-Americans, and three fourths of the most
recent Cuban immigrants, supporting an end to the travel ban.
A policy opening of this type would leave the trade embargo
largely intact for future review, and it would do nothing to
diminish America's stark opposition to Cuban human rights
practices. However, it would increase concrete support to the
Cuban people, and it would spur the development of free-
market activity in the post-Castro Cuba that is now taking
shape.
______

By Mr. COCHRAN:
S. 403. A bill to improve the National Writing Project; to the
Committee on Health, Education, Labor, and Pensions.
Mr. COCHRAN. Mr President, today, I am introducing legislation
reauthorizing the National Writing Project, the only Federal program to
improve the teaching of writing in America's classrooms.
Literacy is at the foundation of school and workplace success, of
citizenship in a democracy, and of learning in all disciplines. The
National Writing Project has been instrumental in helping teachers
develop better teaching skills so they can help our children improve
their ability to read, write, and think.
The National Writing Project is a twenty-seven-year old national
network of university-based teacher training programs designed to
improve the teaching of writing and student achievement in writing and
has had federal support since 1991. Successful writing teachers attend
Invitational Summer Institutes at their local universities. During the
school year these teachers provide workshops for other teachers in the
schools. At 167 sites in 49 states, the National Writing Project trains
over 100,000 teachers every year.
The program has become a national model for other disciplines and is
now recognized by the Department of Education as an important part of
national education policy. The program also generates an average of
$6.32 in private, state, and local funds for every federal dollar
appropriated. The National Writing Project is making teachers better at
their jobs.
I introduced the National Writing Project Act for the first time in
1990. Since then, I have worked with other Senators to ensure that it
has remained a program that supports states and local schools in their
efforts to have better teachers. Last Congress when I introduced this
bill, it was cosponsored by 52 Senators. I hope it will receive even
greater support in the 107th Congress. I invite other Senators to join
me in sponsoring this legislation.
______

By Mr. McCAIN:
S. 404. A bill to provide for the technical integrity of the FM radio
band, and for other purposes; to the Committee on Commerce, Science,
and Transportation.
Mr. McCAIN. Mr. President, I rise today to introduce a bill that will
allow our communities and churches to benefit from low-power radio
service.
Mr. President, low-power FM radio service provides community based
organizations, churches, and other non-profit groups with a new,
affordable opportunity to reach out to the public, helping to promote a
greater awareness of local issues important to our communities. As
such, low-power FM is supported by many national and local
organizations who seek to provide the public with increased sources of
news

[[Page S1634]]

and perspectives in an otherwise increasingly consolidated medium.
Last Congress, special interests forces opposed to low-power FM
radio, most notably the National Association of Broadcasters and
National Public Radio, mounted a vigorous behind-the-scenes campaign to
kill low-power FM radio. And unfortunately, these special interests
succeeded in attaching an appropriations rider in the dead of the
night--without a single debate on the floor of the Senate--that
effectively did just that.
Mr. President, the Low Power Radio Act of 2001 seeks to remedy this
derailment of the democratic process. The Low Power Radio Act of 2001
will allow the FCC to license low-power FM radio service, while at the
same time protecting existing full-power stations from interference.
Specifically, the legislation directs the FCC--the expert agency with
the experience and engineering resources to make such a determination--
to determine which, if any, low-power radio stations are causing
interference to existing full-power stations, and determine what the
low-power FM station must do to alleviate it. Thus, this legislation
strikes a fair balance by allowing non-interfering low-power FM
stations to operate without further delay, while affecting only those
low-power stations that the FCC finds to be causing harmful
interference in their actual, everyday operations. This is totally
consistent with the fact that low-power FM is a secondary service
which, by law, must cure any interference caused to any primary, full-
power service.
This legislation will provide an efficient and effective means to
detect and resolve harmful interference. By providing a procedural
remedy that authorizes the FCC to impose damages on frivolous
complaints, the bill will discourage the creation of low-power stations
most likely to cause harmful interference while at the same time
discouraging full-power broadcasters from making unwarranted
interference claims.
In the interests of would-be new broadcasters, existing broadcasters,
but, most of all, the listening public, I urge the enactment of the Low
Power Radio Act of 2001.
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. 404

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 Power Radio Act of
2001''.

SEC. 2. PURPOSE.

It is the purpose of this Act to ensure the technical
integrity of the FM radio band, while permitting the
introduction of low power FM transmitters into such band
without causing harmful interference.

SEC. 3. HARMFUL INTERFERENCE PROHIBITED.

(a) In General.--Any low-power FM radio licensee determined
by the Federal Communications Commission to be transmitting a
signal causing harmful interference to one or more licensed
radio services shall, if so ordered by the Commission, cease
the transmission of the interfering signal, and may not
recommence transmitting such signal until it has taken
whatever action the Commission may prescribe in order to
assure that the radio licensee that has sustained the
interference remains able to serve the public interest,
convenience and necessity as required by the Commission's
rules.
(b) Complaint.--Any radio service licensee or subcarrier
program provider may file a complaint with the Commission
against any low-power FM radio licensee for transmitting a
signal that is alleged to cause harmful interference. The
complaint shall be filed in a form, and contain such
information as, prescribed by the Commission.
(c) Expedited Consideration.--In any complaint filed
pursuant to the provisions of subsection (b), the Commission
shall render a final decision no later than 90 calendar days
after the date on which the complaint was received by the
Commission.
(d) Punitive Damages.--In any final decision rendered
pursuant to this section, the Commission is authorized to
impose punitive damages not to exceed 5 times the low-power
FM station's costs if the Commission finds that the complaint
was frivolous and without any merit or purpose other than to
impede the provision of non-interfering low-power FM service.
(e) Section 316(a)(3) of Communications Act.--Section
316(a)(3) of the Communications Act of 1934 (47 U.S.C.
316(a)(3)) shall not apply to a complaint filed pursuant to
this section.
(f) Rules.--The Commission shall adopt rules implementing
the provisions of this section within 45 days after the date
of enactment of this Act.
(g) Harmful Interference Defined.--For purposes of this
section, the term ``harmful interference'' means interference
which endangers the functioning of a radio navigation service
or of other safety services or that seriously degrades,
obstructs, or repeatedly interrupts a radio service operating
in accordance with the rules and regulations of the Federal
Communications Commission.
(h) Repeal of Certain Provisions.--
(1) Restoration of Communications Act.--Section 336 of the
Communications Act of 1934 (47 U.S.C. 336) is amended by
striking subsection (h) and redesignating subsection (i) as
subsection (h).
(2) Nullification of action under repealed provision.--Any
action taken by the Federal Communications Commission under
section 336(h) of the Communications Act of 1934 (47 U.S.C.
336(h)) as added by section 143(a) of Division B of A Bill
Making miscellaneous appropriations for the fiscal year
ending September 30, 2001, and for other purposes (106 Pub.
L. 554; Appendix-H.R. 5666) before the date of enactment of
this Act is null and void.
(3) Repeal.--The Act entitled A Bill Making miscellaneous
appropriations for the fiscal year ending September 30, 2001,
and for other purposes (106 Pub. L. 554; Appendix-H.R. 5666)
is amended by striking section 143.

SEC. 4. DIGITAL RADIO TRANSITION.

The Federal Communications Commission shall complete all
rulemakings necessary to implement the transition to digital
radio no later than February 23, 2002.
______

By Mr. LEAHY (for himself and Mr. Hatch):
S. 407. A bill to amend the Trademark Act of 1946 to provide for the
registration and protection of trademarks used in commerce, in order to
carry out provisions of certain international conventions, and for
other purposes; to the Committee on the Judiciary.
Mr. LEAHY. Mr. President, I am pleased to introduce implementing
legislation for the Protocol Relating to the Madrid Agreement
Concerning the International Registration of Marks, Protocol. I have
introduced identical bills in the last two Congresses, but the Senate
unfortunately did not consider those bills. Chairman Hatch has joined
me in introducing this legislation, and I thank him for his leadership
on this and other intellectual property matters of such critical
importance to the economy and industry of our country.
This bill is part of my ongoing effort to update American
intellectual property law to ensure that it serves to advance and
protect American interests both here and abroad. The Protocol would
help American businesses, and especially small and medium-sized
companies, protect their trademarks as they expand into international
markets. Specifically, this legislation will conform American trademark
application procedures to the terms of the Protocol in anticipation of
the U.S.'s eventual ratification of the treaty. Ratification by the
United States of this treaty would help create a ``one stop''
international trademark registration process, which would be an
enormous benefit for American businesses. This bill is one of many
measures I have introduced and supported over the past few years to
ensure that American trademark holders receive strong protection in
today's world of changing technology and complex international markets.
Over the past few years, Senator Hatch and I have worked together
successfully on a number of initiatives to bolster trademark protection
and keep our trademark laws up-to-date. For example, in the 104th
Congress, we supported the Federal Trademark Dilution Act of 1995,
enacted to provide intellectual property rights holders with the power
to enjoin another person's commercial use of famous marks that would
cause dilution of the mark's distinctive quality. In the 105th
Congress, we introduced legislation, S. 2193, to implement the
Trademark Law Treaty. S. 2193 simplified trademark registration
requirements around the world by establishing a list of maximum
requirements which Treaty member countries can impose on trademark
applicants. The bill passed the Senate on September 17, 1998, and was
signed by the President on October 30, 1998. I am proud of this
legislation since all American businesses, and particularly small
American businesses, will benefit as a result.
Also, in the 105th Congress, I introduced S. 1727 to authorize a
comprehensive study of the effects of adding new generic Top Level
Domains on trademark and other intellectual property rights. This bill
became law as part of

[[Page S1635]]

the Next Generation Internet Research Act, S. 1609, which was signed
into law on October 28, 1998.
In the 106th Congress, Senator Hatch and I worked together for
enactment of the Anticybersquatting Consumer Protection Act, which
protects against the registration, in bad faith with intent to profit,
as a domain name of another person's trademark or the name of a living
person. This bill was passed as part of the FY 2000 Omnibus
Appropriations bill on November 29, 1999.
Also in the 106th Congress, we worked to pass the Trademark
Amendments Act, which enhanced protection for trademark owners and
consumers by making it possible to prevent trademark dilution before it
occurs, by clarifying the remedies available under the Federal
trademark dilution statute, by providing recourse against the Federal
Government for its infringement of others' trademarks, and by creating
greater certainty and uniformity in the area of trade dress protection.
The bill passed the Senate on July 1, 1999, and was enacted on August
5, 1999.
Together, these measures represent significant steps in our efforts
to ensure that American trademark law adequately serves and promote
American interests.
The legislation I introduce today with Senator Hatch would ease the
trademark registration burden on small and medium-sized businesses by
enabling them to obtain trademark protection in all signatory countries
with a single trademark application filed with the Patent and Trademark
Office. Currently, in order for American companies to protect their
trademarks abroad, they must register their trademarks in each and
every country in which protection is sought. Registering in multiple
countries is a time-consuming, complicated and expensive process--a
process which places a disproportionate burden on smaller American
companies seeking international trademark protection.
I first introduced the Madrid Protocol Implementation Act in the
105th Congress as S. 2191, then again in the 106th Congress as S. 671.
The Judiciary Committee reported S. 671 favorably and unanimously, on
February 10, 2000. In the House of Representatives, Congressmen Coble
and Berman sponsored and passed an identical bill, H.R. 769, on April
13, 1999.
Since 1891, the Madrid Agreement Concerning the International
Registration of Marks, Agreement has provided an international
trademark registration system. However, prior to adoption of the
Protocol, the U.S. declined to join the Agreement because it contained
terms deemed inimical to American intellectual property interests. In
1989, the terms of the Agreement were modified by the Protocol, which
corrected the objectionable terms of the Agreement and made American
participation a possibility. For example, under the Protocol,
applications for international trademark extension can be completed in
English; formerly, applications were required to be completed in
French.
Another stumbling block to the United States joining the Protocol was
resolved last year. Specifically, the European Community, EC, had taken
the position that under the Protocol, the EC, as an intergovernmental
member of the Protocol, received a separate vote in the Assembly
established by the agreement in addition to the votes of its member
states. The State Department opposed this position as a contravention
of the democratic concept of one-vote-per-country.
On February 2, 2000, the Assembly of the Madrid Protocol expressed
its intent ``to use their voting rights in such a way as to ensure that
the number of votes cast by the European Community and its member
States does not exceed the number of the European Community's Member
States.'' In short, this letter appeared to resolve differences between
the Administration and the European Community, EC, regarding the voting
rights of intergovernmental members of the Protocol in the Assembly
established by the agreement.
Shortly after this letter was forwarded by the Assembly, I wrote to
then Secretary of State Madeleine Albright requesting information on
the Administration's position in light of the resolution of the voting
dispute. At a hearing of the Foreign Operations Subcommittee on April
14, 2000, I further inquired of Secretary Albright about the progress
the Administration was making on this matter, particularly in light of
the fact that differences over the voting rights of the European Union
and participation of intergovernmental organizations in this
intellectual property treaty were resolved in accordance with the U.S.
position.
Subsequently, President Clinton transmitted Treaty Document 106-41,
the Protocol Relating to the Madrid Agreement to the Senate for
ratification on September 5, 2000. Shortly after transmittal, on
September 13, 2000, the Foreign Relations Committee held a hearing to
consider Protocol. Unfortunately, no further action was taken on the
Protocol or the implementing legislation before the Congress adjourned.
United States membership in the Protocol would greatly enhance the
ability of any U.S. business, whether large or small, to protect its
trademarks in other countries more quickly, cheaply and easily. That,
in turn, will make it easier for American businesses to enter foreign
markets and to protect their trademarks in those markets. The Protocol
would not require substantive changes to American trademark law, but
merely to certain procedures for registering trademarks. Passage of
this implementing legislation will help to ensure timely accession to
and implementation of the Madrid Protocol, and it will send a clear
signal to the international community, U.S. businesses, and trademark
owners that Congress is serious about our Nation becoming part of a
low-cost, efficient system to promote the international registration of
marks. I look forward to working with Senator Hatch and my other
colleagues for ratification of the Protocol and passage of the
implementing legislation.
I ask unanimous consent that a copy of the bill and the sectional
analysis be placed in the RECORD after my statement, as well as any
additional statements regarding this bill.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 407

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 ``Madrid Protocol
Implementation Act''.

SEC. 2. PROVISIONS TO IMPLEMENT THE PROTOCOL RELATING TO THE
MADRID AGREEMENT CONCERNING THE INTERNATIONAL
REGISTRATION OF MARKS.

The Act entitled ``An Act to provide for the registration
and protection of trademarks used in commerce, to carry out
the provisions of certain international conventions, and for
other purposes'', approved July 5, 1946, as amended (15
U.S.C. 1051 and following) (commonly referred to as the
``Trademark Act of 1946'') is amended by adding after section
51 the following new title:

``TITLE XII--THE MADRID PROTOCOL

``SEC. 60. DEFINITIONS.

``For purposes of this title:
``(1) Madrid protocol.--The term `Madrid Protocol' means
the Protocol Relating to the Madrid Agreement Concerning the
International Registration of Marks, adopted at Madrid,
Spain, on June 27, 1989.
``(2) Basic application.--The term `basic application'
means the application for the registration of a mark that has
been filed with an Office of a Contracting Party and that
constitutes the basis for an application for the
international registration of that mark.
``(3) Basic registration.--The term `basic registration'
means the registration of a mark that has been granted by an
Office of a Contracting Party and that constitutes the basis
for an application for the international registration of that
mark.
``(4) Contracting party.--The term `Contracting Party'
means any country or inter-governmental organization that is
a party to the Madrid Protocol.
``(5) Date of recordal.--The term `date of recordal' means
the date on which a request for extension of protection that
is filed after an international registration is granted is
recorded on the International Register.
``(6) Declaration of bona fide intention to use the mark in
commerce.--The term `declaration of bona fide intention to
use the mark in commerce' means a declaration that is signed
by the applicant for, or holder of, an international
registration who is seeking extension of protection of a mark
to the United States and that contains a statement that--
``(A) the applicant or holder has a bona fide intention to
use the mark in commerce;
``(B) the person making the declaration believes himself or
herself, or the firm, corporation, or association in whose
behalf he or she makes the declaration, to be entitled to use
the mark in commerce; and

[[Page S1636]]

``(C) no other person, firm, corporation, or association,
to the best of his or her knowledge and belief, has the right
to use such mark in commerce either in the identical form of
the mark or in such near resemblance to the mark as to be
likely, when used on or in connection with the goods of such
other person, firm, corporation, or association, to cause
confusion, or to cause mistake, or to deceive.
``(7) Extension of protection.--The term `extension of
protection' means the protection resulting from an
international registration that extends to a Contracting
Party at the request of the holder of the international
registration, in accordance with the Madrid Protocol.
``(8) Holder of an international registration.--A `holder'
of an international registration is the natural or juristic
person in whose name the international registration is
recorded on the International Register.
``(9) International application.--The term `international
application' means an application for international
registration that is filed under the Madrid Protocol.
``(10) International bureau.--The term `International
Bureau' means the International Bureau of the World
Intellectual Property Organization.
``(11) International register.--The term `International
Register' means the official collection of such data
concerning international registrations maintained by the
International Bureau that the Madrid Protocol or its
implementing regulations require or permit to be recorded,
regardless of the medium which contains such data.
``(12) International registration.--The term `international
registration' means the registration of a mark granted under
the Madrid Protocol.
``(13) International registration date.--The term
`international registration date' means the date assigned to
the international registration by the International Bureau.
``(14) Notification of refusal.--The term `notification of
refusal' means the notice sent by an Office of a Contracting
Party to the International Bureau declaring that an extension
of protection cannot be granted.
``(15) Office of a contracting party.--The term `Office of
a Contracting Party' means--
``(A) the office, or governmental entity, of a Contracting
Party that is responsible for the registration of marks; or
``(B) the common office, or governmental entity, of more
than 1 Contracting Party that is responsible for the
registration of marks and is so recognized by the
International Bureau.
``(16) Office of origin.--The term `office of origin' means
the Office of a Contracting Party with which a basic
application was filed or by which a basic registration was
granted.
``(17) Opposition period.--The term `opposition period'
means the time allowed for filing an opposition in the Patent
and Trademark Office, including any extension of time granted
under section 13.

``SEC. 61. INTERNATIONAL APPLICATIONS BASED ON UNITED STATES
APPLICATIONS OR REGISTRATIONS.

``The owner of a basic application pending before the
Patent and Trademark Office, or the owner of a basic
registration granted by the Patent and Trademark Office,
who--
``(1) is a national of the United States;
``(2) is domiciled in the United States; or
``(3) has a real and effective industrial or commercial
establishment in the United States,

may file an international application by submitting to the
Patent and Trademark Office a written application in such
form, together with such fees, as may be prescribed by the
Director.

``SEC. 62. CERTIFICATION OF THE INTERNATIONAL APPLICATION.

``Upon the filing of an application for international
registration and payment of the prescribed fees, the Director
shall examine the international application for the purpose
of certifying that the information contained in the
international application corresponds to the information
contained in the basic application or basic registration at
the time of the certification. Upon examination and
certification of the international application, the Director
shall transmit the international application to the
International Bureau.

``SEC. 63. RESTRICTION, ABANDONMENT, CANCELLATION, OR
EXPIRATION OF A BASIC APPLICATION OR BASIC
REGISTRATION.

``With respect to an international application transmitted
to the International Bureau under section 62, the Director
shall notify the International Bureau whenever the basic
application or basic registration which is the basis for the
international application has been restricted, abandoned, or
canceled, or has expired, with respect to some or all of the
goods and services listed in the international registration--
``(1) within 5 years after the international registration
date; or
``(2) more than 5 years after the international
registration date if the restriction, abandonment, or
cancellation of the basic application or basic registration
resulted from an action that began before the end of that 5-
year period.

``SEC. 64. REQUEST FOR EXTENSION OF PROTECTION SUBSEQUENT TO
INTERNATIONAL REGISTRATION.

``The holder of an international registration that is based
upon a basic application filed with the Patent and Trademark
Office or a basic registration granted by the Patent and
Trademark Office may request an extension of protection of
its international registration by filing such a request--
``(1) directly with the International Bureau; or
``(2) with the Patent and Trademark Office for transmittal
to the International Bureau, if the request is in such form,
and contains such transmittal fee, as may be prescribed by
the Director.

``SEC. 65. EXTENSION OF PROTECTION OF AN INTERNATIONAL
REGISTRATION TO THE UNITED STATES UNDER THE
MADRID PROTOCOL.

``(a) In General.--Subject to the provisions of section 68,
the holder of an international registration shall be entitled
to the benefits of extension of protection of that
international registration to the United States to the extent
necessary to give effect to any provision of the Madrid
Protocol.
``(b) If United States Is Office of Origin.--An extension
of protection resulting from an international registration of
a mark shall not apply to the United States if the Patent and
Trademark Office is the office of origin with respect to that
mark.

``SEC. 66. EFFECT OF FILING A REQUEST FOR EXTENSION OF
PROTECTION OF AN INTERNATIONAL REGISTRATION TO
THE UNITED STATES.

``(a) Requirement for Request for Extension of
Protection.--A request for extension of protection of an
international registration to the United States that the
International Bureau transmits to the Patent and Trademark
Office shall be deemed to be properly filed in the United
States if such request, when received by the International
Bureau, has attached to it a declaration of bona fide
intention to use the mark in commerce that is verified by the
applicant for, or holder of, the international registration.
``(b) Effect of Proper Filing.--Unless extension of
protection is refused under section 68, the proper filing of
the request for extension of protection under subsection (a)
shall constitute constructive use of the mark, conferring the
same rights as those specified in section 7(c), as of the
earliest of the following:
``(1) The international registration date, if the request
for extension of protection was filed in the international
application.
``(2) The date of recordal of the request for extension of
protection, if the request for extension of protection was
made after the international registration date.
``(3) The date of priority claimed pursuant to section 67.

``SEC. 67. RIGHT OF PRIORITY FOR REQUEST FOR EXTENSION OF
PROTECTION TO THE UNITED STATES.

``The holder of an international registration with an
extension of protection to the United States shall be
entitled to claim a date of priority based on the right of
priority within the meaning of Article 4 of the Paris
Convention for the Protection of Industrial Property if--
``(1) the international registration contained a claim of
such priority; and
``(2)(A) the international application contained a request
for extension of protection to the United States; or
``(B) the date of recordal of the request for extension of
protection to the United States is not later than 6 months
after the date of the first regular national filing (within
the meaning of Article 4(A)(3) of the Paris Convention for
the Protection of Industrial Property) or a subsequent
application (within the meaning of Article 4(C)(4) of the
Paris Convention).

``SEC. 68. EXAMINATION OF AND OPPOSITION TO REQUEST FOR
EXTENSION OF PROTECTION; NOTIFICATION OF
REFUSAL.

``(a) Examination and Opposition.--(1) A request for
extension of protection described in section 66(a) shall be
examined as an application for registration on the Principal
Register under this Act, and if on such examination it
appears that the applicant is entitled to extension of
protection under this title, the Director shall cause the
mark to be published in the Official Gazette of the Patent
and Trademark Office.
``(2) Subject to the provisions of subsection (c), a
request for extension of protection under this title shall be
subject to opposition under section 13. Unless successfully
opposed, the request for extension of protection shall not be
refused.
``(3) Extension of protection shall not be refused under
this section on the ground that the mark has not been used in
commerce.
``(4) Extension of protection shall be refused under this
section to any mark not registrable on the Principal
Register.
``(b) Notification of Refusal.--If, a request for extension
of protection is refused under subsection (a), the Director
shall declare in a notification of refusal (as provided in
subsection (c)) that the extension of protection cannot be
granted, together with a statement of all grounds on which
the refusal was based.
``(c) Notice to International Bureau.--(1) Within 18 months
after the date on which the International Bureau transmits to
the Patent and Trademark Office a notification of a request
for extension of protection, the Director shall transmit to
the International Bureau any of the following that applies to
such request:
``(A) A notification of refusal based on an examination of
the request for extension of protection.
``(B) A notification of refusal based on the filing of an
opposition to the request.
``(C) A notification of the possibility that an opposition
to the request may be filed after the end of that 18-month
period.

[[Page S1637]]

``(2) If the Director has sent a notification of the
possibility of opposition under paragraph (1)(C), the
Director shall, if applicable, transmit to the International
Bureau a notification of refusal on the basis of the
opposition, together with a statement of all the grounds for
the opposition, within 7 months after the beginning of the
opposition period or within 1 month after the end of the
opposition period, whichever is earlier.
``(3) If a notification of refusal of a request for
extension of protection is transmitted under paragraph (1) or
(2), no grounds for refusal of such request other than those
set forth in such notification may be transmitted to the
International Bureau by the Director after the expiration of
the time periods set forth in paragraph (1) or (2), as the
case may be.
``(4) If a notification specified in paragraph (1) or (2)
is not sent to the International Bureau within the time
period set forth in such paragraph, with respect to a request
for extension of protection, the request for extension of
protection shall not be refused and the Director shall issue
a certificate of extension of protection pursuant to the
request.
``(d) Designation of Agent for Service of Process.--In
responding to a notification of refusal with respect to a
mark, the holder of the international registration of the
mark shall designate, by a written document filed in the
Patent and Trademark Office, the name and address of a person
resident in the United States on whom may be served notices
or process in proceedings affecting the mark. Such notices or
process may be served upon the person so designated by
leaving with that person, or mailing to that person, a copy
thereof at the address specified in the last designation so
filed. If the person so designated cannot be found at the
address given in the last designation, such notice or process
may be served upon the Director.

``SEC. 69. EFFECT OF EXTENSION OF PROTECTION.

``(a) Issuance of Extension of Protection.--Unless a
request for extension of protection is refused under section
68, the Director shall issue a certificate of extension of
protection pursuant to the request and shall cause notice of
such certificate of extension of protection to be published
in the Official Gazette of the Patent and Trademark Office.
``(b) Effect of Extension of Protection.--From the date on
which a certificate of extension of protection is issued
under subsection (a)--
``(1) such extension of protection shall have the same
effect and validity as a registration on the Principal
Register; and
``(2) the holder of the international registration shall
have the same rights and remedies as the owner of a
registration on the Principal Register.

``SEC. 70. DEPENDENCE OF EXTENSION OF PROTECTION TO THE
UNITED STATES ON THE UNDERLYING INTERNATIONAL
REGISTRATION.

``(a) Effect of Cancellation of International
Registration.--If the International Bureau notifies the
Patent and Trademark Office of the cancellation of
an international registration with respect to some or all
of the goods and services listed in the international
registration, the Director shall cancel any extension of
protection to the United States with respect to such goods
and services as of the date on which the international
registration was canceled.
``(b) Effect of Failure To Renew International
Registration.--If the International Bureau does not renew an
international registration, the corresponding extension of
protection to the United States shall cease to be valid as of
the date of the expiration of the international
registration.
``(c) Transformation of an Extension of Protection Into a
United States Application.--The holder of an international
registration canceled in whole or in part by the
International Bureau at the request of the office of origin,
under Article 6(4) of the Madrid Protocol, may file an
application, under section 1 or 44 of this Act, for the
registration of the same mark for any of the goods and
services to which the cancellation applies that were covered
by an extension of protection to the United States based on
that international registration. Such an application shall be
treated as if it had been filed on the international
registration date or the date of recordal of the request for
extension of protection with the International Bureau,
whichever date applies, and, if the extension of
protection enjoyed priority under section 67 of this
title, shall enjoy the same priority. Such an application
shall be entitled to the benefits conferred by this
subsection only if the application is filed not later than
3 months after the date on which the international
registration was canceled, in whole or in part, and only
if the application complies with all the requirements of
this Act which apply to any application filed pursuant to
section 1 or 44.

``SEC. 71. AFFIDAVITS AND FEES.

``(a) Required Affidavits and Fees.--An extension of
protection for which a certificate of extension of protection
has been issued under section 69 shall remain in force for
the term of the international registration upon which it is
based, except that the extension of protection of any mark
shall be canceled by the Director--
``(1) at the end of the 6-year period beginning on the date
on which the certificate of extension of protection was
issued by the Director, unless within the 1-year period
preceding the expiration of that 6-year period the holder of
the international registration files in the Patent and
Trademark Office an affidavit under subsection (b) together
with a fee prescribed by the Director; and
``(2) at the end of the 10-year period beginning on the
date on which the certificate of extension of protection was
issued by the Director, and at the end of each 10-year period
thereafter, unless--
``(A) within the 6-month period preceding the expiration of
such 10-year period the holder of the international
registration files in the Patent and Trademark Office an
affidavit under subsection (b) together with a fee prescribed
by the Director; or
``(B) within 3 months after the expiration of such 10-year
period, the holder of the international registration files in
the Patent and Trademark Office an affidavit under subsection
(b) together with the fee described in subparagraph (A) and
an additional fee prescribed by the Director.
``(b) Contents of Affidavit.--The affidavit referred to in
subsection (a) shall set forth those goods or services
recited in the extension of protection on or in connection
with which the mark is in use in commerce and the holder of
the international registration shall attach to the affidavit
a specimen or facsimile showing the current use of the mark
in commerce, or shall set forth that any nonuse is due to
special circumstances which excuse such nonuse and is not due
to any intention to abandon the mark. Special notice of the
requirement for such affidavit shall be attached to each
certificate of extension of protection.

``SEC. 72. ASSIGNMENT OF AN EXTENSION OF PROTECTION.

``An extension of protection may be assigned, together with
the goodwill associated with the mark, only to a person who
is a national of, is domiciled in, or has a bona fide and
effective industrial or commercial establishment either in a
country that is a Contracting Party or in a country that is a
member of an intergovernmental organization that is a
Contracting Party.

``SEC. 73. INCONTESTABILITY.

``The period of continuous use prescribed under section 15
for a mark covered by an extension of protection issued under
this title may begin no earlier than the date on which the
Director issues the certificate of the extension of
protection under section 69, except as provided in section
74.

``SEC. 74. RIGHTS OF EXTENSION OF PROTECTION.

``An extension of protection shall convey the same rights
as an existing registration for the same mark, if--
``(1) the extension of protection and the existing
registration are owned by the same person;
``(2) the goods and services listed in the existing
registration are also listed in the extension of protection;
and
``(3) the certificate of extension of protection is issued
after the date of the existing registration.''.

SEC. 3. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take
effect on the date on which the Madrid Protocol (as defined
in section 60(1) of the Trademark Act of 1946) enters into
force with respect to the United States.
____

Madrid Protocol Implementation Act--Section-by-Section Analysis

SECTION 1. SHORT TITLE

This section provides a short title: the ``Madrid Protocol
Implementation Act.''

SECTION 2. AMENDMENTS TO THE TRADEMARK ACT OF 1946

This section amends the ``Trademark Act of 1946'' by adding
a new Title XII with the following provisions:
The owner of a registration granted by the Patent and
Trademark Office (PTO) or the owner of a pending application
before the PTO may file an international application for
trademark protection at the PTO.
After receipt of the appropriate fee and inspection of the
application, the PTO Director is charged with the duty of
transmitting the application to the WIPO International
Bureau.
The Director is also obliged to notify the International
Bureau whenever the international application has been ``. .
. restricted, abandoned, canceled, or has expired . . .''
within a specified time period.
The holder of an international registration may request an
extension of its registration by filing with the PTO or the
International Bureau.
The holder of an international registration is entitled to
the benefits of extension in the United States to the extent
necessary to give effect to any provision of the Protocol;
however, an extension of an international registration shall
not apply to the United States if the PTO is the office of
origin with respect to that mark.
The holder of an international registration with an
extension of protection in the United States may claim a date
of priority based on certain conditions.
If the PTO Director believes that an applicant is entitled
to an extension of protection, he or she publishes the mark
in the ``Official Gazette'' of the PTO. This serves notice to
third parties who oppose the extension. Unless an official
protest conducted pursuant to existing law is successful, the
request for extension may not be refused. If the request for
extension is denied, however, the Director notifies the
International Bureau of such action and sets forth the
reason(s) why. The Director must also apprise

[[Page S1638]]

the International Bureau of other relevant information
pertaining to requests for extension within the designated
time periods.
If an extension for protection is granted, the Director
issues a certificate attesting to such action, and publishes
notice of the certificate in the ``Gazette.'' Holders of
extension certificates thereafter enjoy protection equal to
that of other owners of registration listed on the Principal
Register of the PTO.
If the International Bureau notifies the PTO of a
cancellation of some or all of the goods and services listed
in the international registration, the Director must cancel
an extension of protection with respect to the same goods and
services as of the date on which the international
registration was canceled. Similarly, if the International
Bureau does not renew an international registration, the
corresponding extension of protection in the United States
shall cease to be valid. Finally, the holder of an
international registration canceled in whole or in part by
the International Bureau may file an application for the
registration of the same mark for any of the goods and
services to which the cancellation applies that were covered
by an extension of protection to the United States based on
that international registration.
The holder of an extension of protection must, within
designated time periods and under certain conditions, file an
affidavit setting forth the relevant goods or services
covered an any explanation as to why their nonuse in commerce
is related to ``special circumstances,'' along with a filing
fee.
The right to an extension of protection may be assigned to
a third party so long as the individual is a national of, or
is domiciled in, or has a ``bona fide'' business located in a
country that is a member of the Protocol; or has such a
business in a country that is a member of an
intergovernmental organization (like the E.U.) belonging to
the Protocol.
An extension of protection conveys the same rights as an
existing registration for the same mark if the extension and
existing registration are owned by the same person, and
extension of protection and the existing registration cover
the same goods or services, and the certificate of extension
is issued after the date of the existing registration.

SECTION 3. EFFECTIVE DATE

This section states that the effective date of the act
shall commence on the date on which the Madrid Protocol takes
effect in the United States.
Mr. HATCH. Mr. President, today I am pleased to introduce with my
distinguished colleague, Senator Leahy, legislation that will, for the
first time, enable American businesses to obtain international
trademark protection with the filing of a single application and the
payment of a single fee.
For many businesses, a company's trademark is its most valuable
asset. This is illustrated now as never before in the growth of the new
Internet economy, where so-called ``branding'' is the name of the game
and the cornerstone of any business plan. Whether a business is an e-
business or a more traditional Main Street storefront, United States
trademark law has proven to be a powerful tool for these businesses in
protecting their marks against domestic misappropriation. However, as
global trading increases and multinational businesses grow, worldwide
trademark protection is becoming extremely important and desirable.
Unfortunately, achieving similar protection on an international scale
has always been a much more difficult task. This difficulty stems in
large part from the diversity among national trademark laws, as well as
the sometimes prohibitive costs of filing individual registrations and
seeking foreign representation in each and every country for which
trademark protection is sought. As a result, American businesses, and
small businesses in particular, are often forced to pick only a handful
of countries in which to seek protection for their brand names and hope
for the best in the rest of the world.
In the past, Senator Leahy and I have sponsored a number of bills
addressing the international protection of intellectual property. In
the trademark arena, we strongly supported legislation implementing the
Trademark Law Treaty. That treaty serves to streamline the trademark
registration process in member countries around the world and to
minimize the hurdles faced by American trademark owners in securing
international protection of their marks. The legislation we introduce
today will build upon those improvements by allowing trademark owners
to seek international protection with a single application filed in the
English language with the United States Patent and Trademark Office,
USPTO, and with the payment of a single fee. Most important, it paves
the way for the USPTO to act as a one-stop shop for international
trademark protection without making substantive changes to United
States trademark law. Foreign trademark owners must still meet all of
the substantive requirements of United States trademark law in order to
gain protection in the United States based on an international
application filed under the Madrid Protocol. In short, it is a win-win
situation for American trademark owners.
As my colleagues here know, United States adherence to the Madrid
Protocol was stalled for years over administrative provisions--
unrelated to the substance of the Protocol itself--relating to voting
rights. Since 1994, the Administration voiced objections to these
provisions, which would allow an intergovernmental organization, e.g.,
the European Union, a vote in certain treaty matters taken before the
Assembly, separate and apart from the votes of its member states.
Although matters before the Assembly would largely be limited to
administrative matters, e.g., those involving formalities and fee
changes, the concern expressed has been that these provisions, which
appear to violate the democratic principle of one vote for each state,
would create an undesirable precedent in future international
agreements.
While this stumbling block to United States accession to the Protocol
has been the subject of much negotiation between the United States and
the European Union, I am pleased that a successful resolution on this
issue of voting rights has been reached, and I was pleased that the
Senate finally received the Administration's request for its advice and
consent last year. By passing The Madrid Protocol Implementation Act,
we will take an important step in making sure that American trademark
owners will be able to take full advantage of the benefits of the
Protocol as soon as it comes into force with respect to the United
States. This is a particularly important measure for American
competitiveness, and for the individual businesses in each of our
states. I want to thank Senator Leahy for his leadership with respect
to this legislation, and I look forward to my colleagues' support for
it.
______

By Mrs. BOXER (for herself and Mrs. Feinstein):
S. 408. A bill to provide emergency relief to small businesses
affected by significant increases in the price of electricity; to the
Committee on Small Business.
Mrs. BOXER. Mr. President, today, I am introducing the Small Business
Electricity Emergency Relief Act. As the electricity crisis in
California continues, small businesses are being hit hard by the
increase in electricity prices.
Across California, small business owners are opening their
electricity bills only to be in a state of shock. In some cases they
find that their bills have doubled, and sometimes even tripled. This
has resulted in many small businesses having to close their doors and
many more facing severe economic hardship.
Under the Small Business Electricity Emergency Relief Act of 2001,
the Small Business Administration could make loans to small businesses
that have suffered economic injury due to a ``sharp and significant
increase'' in their electricity bills.
This legislation will provide California's small businesses with some
much needed financial relief. This will greatly assist small businesses
in the San Diego region that suffered dramatic increases in their
electricity bills last summer.
Small businesses represent the heart of our great state's thriving
economy. This legislation will ensure that these small businesses are
provided assistance to help keep their lights on.

____________________