[Congressional Record Volume 147, Number 71 (Tuesday, May 22, 2001)]
[Senate]
[Pages S5441-S5469]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. BIDEN (for himself, Mr. Akaka, Mr. Baucus, Mr. Bayh, Mr.
Bingaman, Mrs. Boxer, Mr. Breaux, Mr. Byrd, Ms. Cantwell, Mrs.
Carnahan, Mr. Carper, Mr. Cleland, Mrs. Clinton, Ms. Collins,
Mr. Corzine, Mr. Daschle, Mr. Dayton, Mr. Dodd, Mr. Dorgan, Mr.
Durbin, Mr. Edwards, Mrs. Feinstein, Mr. Graham, Mr. Harkin,
Mr. Hollings, Mr. Inouye, Mr. Jeffords, Mr. Johnson, Mr.
Kennedy, Mr. Kerry, Mr. Kohl, Ms. Landrieu, Mr. Leahy, Mr.
Levin, Mr. Lieberman, Mrs. Lincoln, Ms. Mikulski, Mrs. Murray,
Mr. Nelson of Florida, Mr. Nelson of Nebraska, Mr. Reed, Mr.
Reid, Mr. Rockefeller, Mr. Sarbanes, Mr. Schumer, Ms. Snowe,
Mr. Specter, Ms. Stabenow, Mr. Torricelli, and Mr. Wellstone):
S. 924. A bill to provide reliable officers, technology, education,
community prosecutors, and training in our neighborhoods; to the
Committee on the Judiciary.
Mr. BIDEN. Mr. President, authority for the community policing
program has expired, and I rise today to introduce legislation to
extend that hugely successful program for another six years.
We created this program in 1994 as part of that year's crime bill.
The COPS program has worked better than any of us could have hoped.
Crime has gone down every year since the program has been in existence.
We have invested over $7.5 billion to make our streets safer. 115,000
officers will be funded by the end of this fiscal year. 73,600 of those
officers are on the beat today, over 200 of them in my own state of
Delaware. Grants have been issued to more than 12,400 law enforcement
agencies. Big cities and small towns have benefitted, and more than 82
percent of all COPS grants have gone to departments serving populations
of 50,000 or less.
Community policing methods are taking hold across the country. A
recent Justice Department study revealed that the number of community
police officers nationwide increased by 400 percent between 1997 and
1999. Schools are benefitting: by the end of this fiscal year COPS will
have funded almost 5,000 school resource officers. These are specially
trained officers who work in schools to prevent crimes before they
occur, mentor students, and assist school administrators in creating a
safe learning environment. Since COPS started funding school resource
officers, their numbers across
[[Page S5442]]
the country have shot up more than 40 percent.
When we passed the crime bill in 1994, we set a goal of funding
100,000 officers by 2000. That goal has been met. But the need for more
officers, for technology to help those officers do their job more
efficiently, and for more prosecutors so the cases investigated by the
police can effectively be brought, continues unabated. The Justice
Department reports that in the last two fiscal years, demand for new
police hiring grants has outstripped available funds by a factor of
almost three to one. To meet this need, the legislation I introduce
today authorizes $600 million per year over the next 6 years, enough to
hire up to 50,00 more officer. We have made this portion of the program
more flexible: up to half of these hiring dollars can be use to help
police departments retain those community police officers currently on
payroll. In another change from current law, portion of these funds can
be used for officer training and education.
The legislation also provides funding for new technologies, so law
enforcement can have access to the latest high-tech crime fighting
equipment to keep pace with today's sophisticated criminals. Also
included are funds to help local district attorneys hire more community
prosecutors. These prosecutors will expand the community justice
concept and engage the entire community in preventing and fighting
crime. The statistics we have on community prosecutions are quite
promising, and we should increase the funds available to local
prosecutors, a piece of our criminal justice puzzle that has too often
gone overlooked.
We need to pass this bill. Already the administration has announced
its intention to end the police hiring program, to dramatically scale
back the community prosecution program, and to cut other critical state
and local law enforcement programs. That is not the right approach.
Crime is down, but it will not stay down. Preliminary FBI crime reports
for 2000 indicate that we may be reaching the end of our eight straight
years of decreasing crime. Last December, the FBI reported that crime
was down in most big cities, but up in cities of less than 50,000
people. It was up 1.2 percent in the South, the nation's most populous
region. Several of our largest cities have reported increases in their
murder rates. Crime will not stay down, unless we dedicate the
resources necessary for state and local law enforcement to do their job
effectively.
This bill has the support of every major law enforcement organization
in the country. Fifty senators are original cosponsors of the
legislation, including five Republicans. I want to pay a special
tribute to my friends on the other side of the aisle and thank them for
listening to their mayors, police chiefs, and officers who told them
this is the right thing to do. We should not play politics with public
safety, and I hope we can pursue common-sense crime-fighting proposals
without regard to party.
I would like to thank the men and women of law enforcement for their
service and heroism in bringing about the longest lasting decrease in
crime in this nation's history. Let's build on that success, and let's
continue to give them the support they deserve, by reauthorizing the
COPS program.
I ask unanimous consent that the text of the bill, as well as several
letters supporting its introduction, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 924
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 ``Providing Reliable Officers,
Technology, Education, Community Prosecutors, and Training In
Our Neighborhoods Act of 2001'' or ``PROTECTION Act''.
SEC. 2. PROVIDING RELIABLE OFFICERS, TECHNOLOGY, EDUCATION,
COMMUNITY PROSECUTORS, AND TRAINING IN OUR
NEIGHBORHOOD INITIATIVE.
(a) COPS Program.--Section 1701(a) of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3796dd(a)) is amended by--
(1) inserting ``and prosecutor'' after ``increase police'';
and
(2) inserting ``to enhance law enforcement access to new
technologies, and'' after ``presence,''.
(b) Hiring and Redeployment Grant Projects.--Section
1701(b) of title I of the Omnibus Crime Control and Safe
Streets Act of 1968 (42 U.S.C. 3796dd(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (B)--
(i) by inserting after ``Nation'' the following: ``, or pay
overtime to existing career law enforcement officers to the
extent that such overtime is devoted to community policing
efforts''; and
(ii) by striking ``and'' at the end;
(B) in subparagraph (C), by--
(i) striking ``or pay overtime''; and
(ii) striking the period at the end and inserting ``;
and''; and
(C) by adding at the end the following:
``(D) promote higher education among in-service State and
local law enforcement officers by reimbursing them for the
costs associated with seeking a college or graduate school
education.''; and
(2) in paragraph (2) by striking all that follows Support
Systems.--'' and inserting ``Grants pursuant to--
``(A) paragraph (1)(B) for overtime may not exceed 25
percent of the funds available for grants pursuant to this
subsection for any fiscal year;
``(B) paragraph (1)(C) may not exceed 20 percent of the
funds available for grants pursuant to this subsection in any
fiscal year; and
``(C) paragraph (1)(D) may not exceed 5 percent of the
funds available for grants pursuant to this subsection for
any fiscal year.''.
(c) Additional Grant Projects.--Section 1701(d) of title I
of the Omnibus Crime Control and Safe Streets Act of 1968 (42
U.S.C. 3796dd(d)) is amended--
(1) in paragraph (2)--
(A) by inserting ``integrity and ethics'' after
``specialized''; and
(B) by inserting ``and'' after ``enforcement officers'';
(2) in paragraph (7) by inserting ``school officials,
religiously-affiliated organizations,'' after ``enforcement
officers'';
(3) by striking paragraph (8) and inserting the following:
``(8) establish school-based partnerships between local law
enforcement agencies and local school systems, by using
school resource officers who operate in and around elementary
and secondary schools to serve as a law enforcement liaison
with other Federal, State, and local law enforcement and
regulatory agencies, combat school-related crime and disorder
problems, gang membership and criminal activity, firearms and
explosives-related incidents, illegal use and possession of
alcohol, and the illegal possession, use, and distribution of
drugs;'';
(4) in paragraph (10) by striking ``and'' at the end;
(5) in paragraph (11) by striking the period that appears
at the end and inserting ``; and''; and
(6) by adding at the end the following:
``(12) develop and implement innovative programs (such as
the TRIAD program) that bring together a community's sheriff,
chief of police, and elderly residents to address the public
safety concerns of older citizens.''.
(d) Technical Assistance.--Section 1701(f) of title I of
the Omnibus Crime Control and Safe Streets Act of 1968 (42
U.S.C. 3796dd(f)) is amended--
(1) in paragraph (1)--
(A) by inserting ``use up to 5 percent of the funds
appropriated under subsection (a) to'' after ``The Attorney
General may'';
(B) by inserting at the end the following: ``In addition,
the Attorney General may use up to 5 percent of the funds
appropriated under subsections (d), (e), and (f) for
technical assistance and training to States, units of local
government, Indian tribal governments, and to other public
and private entities for those respective purposes.'';
(2) in paragraph (2) by inserting ``under subsection (a)''
after ``the Attorney General''; and
(3) in paragraph (3)--
(A) by striking ``the Attorney General may'' and inserting
``the Attorney General shall'';
(B) by inserting ``regional community policing institutes''
after ``operation of''; and
(C) by inserting ``representatives of police labor and
management organizations, community residents,'' after
``supervisors,''.
(e) Technology and Prosecution Programs.--Section 1701 of
title I of the Omnibus Crime Control and Safe Streets Act of
1968 (42 U.S.C. 3796dd) is amended by--
(1) striking subsection (k);
(2) redesignating subsections (f) through (j) as
subsections (g) through (k); and
(3) striking subsection (e) and inserting the following:
``(e) Law Enforcement Technology Program.--Grants made
under subsection (a) may be used to assist police
departments, in employing professional, scientific, and
technological advancements that will help them--
``(1) improve police communications through the use of
wireless communications, computers, software, videocams,
databases and other hardware and software that allow law
enforcement agencies to communicate more effectively across
jurisdictional boundaries and effectuate interoperability;
``(2) develop and improve access to crime solving
technologies, including DNA analysis, photo enhancement,
voice recognition, and other forensic capabilities; and
``(3) promote comprehensive crime analysis by utilizing new
techniques and technologies, such as crime mapping, that
allow law enforcement agencies to use real-time
[[Page S5443]]
crime and arrest data and other related information--
including non-criminal justice data--to improve their ability
to analyze, predict, and respond pro-actively to local crime
and disorder problems, as well as to engage in regional crime
analysis.
``(f) Community-Based Prosecution Program.--Grants made
under subsection (a) may be used to assist State, local or
tribal prosecutors' offices in the implementation of
community-based prosecution programs that build on local
community policing efforts. Funds made available under this
subsection may be used to--
``(1) hire additional prosecutors who will be assigned to
community prosecution programs, including programs that
assign prosecutors to handle cases from specific geographic
areas, to address specific violent crime and other local
crime problems (including intensive illegal gang, gun and
drug enforcement projects and quality of life initiatives),
and to address localized violent and other crime problems
based on needs identified by local law enforcement agencies,
community organizations, and others;
``(2) redeploy existing prosecutors to community
prosecution programs as described in paragraph (1) of this
section by hiring victim and witness coordinators,
paralegals, community outreach, and other such personnel; and
``(3) establish programs to assist local prosecutors'
offices in the implementation of programs that help them
identify and respond to priority crime problems in a
community with specifically tailored solutions.
At least 75 percent of the funds made available under this
subsection shall be reserved for grants under paragraphs (1)
and (2) and of those amounts no more than 10 percent may be
used for grants under paragraph (2) and at least 25 percent
of the funds shall be reserved for grants under paragraphs
(1) and (2) to units of local government with a population of
less than 50,000.''.
(f) Retention Grants.--Section 1703 of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3796dd-2) is amended by inserting at the end the following:
``(d) Retention Grants.--The Attorney General may use no
more than 50 percent of the funds under subsection (a) to
award grants targeted specifically for retention of police
officers to grantees in good standing, with preference to
those that demonstrate financial hardship or severe budget
constraint that impacts the entire local budget and may
result in the termination of employment for police officers
funded under subsection (b)(1).''.
(g) Definitions.--
(1) Career law enforcement officer.--Section 1709(1) of
title I of the Omnibus Crime Control and Safe Streets Act of
1968 (42 U.S.C. 3796dd-8) is amended by inserting after
``criminal laws'' the following: ``including sheriffs
deputies charged with supervising offenders who are released
into the community but also engaged in local community
policing efforts.''.
(2) School resource officer.--Section 1709(4) of title I of
the Omnibus Crime Control and Safe Streets Act of 1968 (42
U.S.C. 3796dd-8) is amended--
(A) by striking subparagraph (A) and inserting the
following:
``(A) to serve as a law enforcement liaison with other
Federal, State, and local law enforcement and regulatory
agencies, to address and document crime and disorder problems
including gangs and drug activities, firearms and explosives-
related incidents, and the illegal use and possession of
alcohol affecting or occurring in or around an elementary or
secondary school;
(B) by striking subparagraph (E) and inserting the
following:
``(E) to train students in conflict resolution, restorative
justice, and crime awareness, and to provide assistance to
and coordinate with other officers, mental health
professionals, and youth counselors who are responsible for
the implementation of prevention/intervention programs within
the schools;''; and
(C) by adding at the end the following:
``(H) to work with school administrators, members of the
local parent teacher associations, community organizers, law
enforcement, fire departments, and emergency medical
personnel in the creation, review, and implementation of a
school violence prevention plan;
``(I) to assist in documenting the full description of all
firearms found or taken into custody on school property and
to initiate a firearms trace and ballistics examination for
each firearm with the local office of the Bureau of Alcohol,
Tobacco, and Firearms;
``(J) to document the full description of all explosives or
explosive devices found or taken into custody on school
property and report to the local office of the Bureau of
Alcohol, Tobacco, and Firearms; and
``(K) to assist school administrators with the preparation
of the Department of Education, Annual Report on State
Implementation of the Gun-Free Schools Act which tracks the
number of students expelled per year for bringing a weapon,
firearm, or explosive to school.''.
(h) Authorization of Appropriations.--Section 1001(a)(11)
of title I of the Omnibus Crime Control and Safe Streets Act
of 1968 (42 U.S.C. 3793(a)(11)) is amended--
(1) by amending subparagraph (A) to read as follows:
``(A) There are authorized to be appropriated to carry out
part Q, to remain available until expended--
``(i) $1,150,000,000 for fiscal year 2002;
``(ii) $1,150,000,000 for fiscal year 2003;
``(iii) $1,150,000,000 for fiscal year 2004;
``(iv) $1,150,000,000 for fiscal year 2005;
``(v) $1,150,000,000 for fiscal year 2006; and
``(vi) $1,150,000,000 for fiscal year 2007.''; and
(2) in subparagraph (B)--
(A) by striking ``3 percent'' and inserting ``5 percent'';
(B) by striking ``1701(f)'' and inserting ``1701(g)'';
(C) by striking the second sentence and inserting ``Of the
remaining funds, if there is a demand for 50 percent of
appropriated hiring funds, as determined by eligible hiring
applications from law enforcement agencies having
jurisdiction over areas with populations exceeding 150,000,
no less than 50 percent shall be allocated for grants
pursuant to applications submitted by units of local
government or law enforcement agencies having jurisdiction
over areas with populations exceeding 150,000 or by public
and private entities that serve areas with populations
exceeding 150,000, and no less than 50 percent shall be
allocated for grants pursuant to applications submitted by
units of local government or law enforcement agencies having
jurisdiction over areas with populations less than 150,000 or
by public and private entities that serve areas with
populations less than 150,000.'';
(D) by striking ``85 percent'' and inserting
``$600,000,000''; and
(E) by striking ``1701(b),'' and all that follows through
``of part Q'' and inserting the following: ``1701 (b) and
(c), $350,000,000 to grants for the purposes specified in
section 1701(e), and $200,000,000 to grants for the purposes
specified in section 1701(f).''.
____
Police Executive Research Forum,
Washington, DC, May 17, 2001.
Hon. Joseph Biden, Jr.,
U.S. Senate,
Washington, DC.
Dear Joe: On behalf of the members of the Police Executive
Research Forum (PERF), a national organization of police
professionals who serve more than 50 percent of our nation's
population, I wish to express our continued support of your
plans to adequately fund and reauthorize the COPS Office and
its many critical programs.
The COPS program has been a highly successful crime-
fighting initiative. The vast majority of COPS grant
recipients have put those funds to unprecedented good use.
With COPS funding, PERF members have hired more officers,
purchased critical technology, implemented innovative
problem-solving programs, and received valuable training and
technical assistance, all of which have played an important
role in advancing community policing across the country. But
the COPS Office's work is far from over.
Providing the citizens in our jurisdictions with safe
communities requires resources beyond local reach. The COPS
program's sole mission is to respond to the needs of local
law enforcement and it has delivered much-needed resources in
the fight against crime. Through this partnership with the
federal government, we have made tremendous advances in
community policing. We have always called for multi-year
reauthorization and full funding for this critical program.
PERF would welcome the opportunity to work with you to
increase the flexibility of COPS hiring funds and otherwise
ensure the COPS programs' long-term success. We thank you for
your tireless support of law enforcement.
Sincerely,
Chuck Wexler,
Executive Director.
____
National Association of Police
Organizations, Inc.,
Washington, DC, May 3, 2001.
Hon. Joseph R. Biden, Jr.,
U.S. Senate,
Washington, DC.
Dear Joe: Please be advised that the National Association
of Police Organizations (NAPO) will be strongly supporting
your reintroduction of S. 1760, the ``PROTECTION Act.'' NAPO,
representing 4,000 unions and associations and 230,000 sworn
law enforcement officers, truly appreciates your effort to
reauthorize and continue the success of the COPS program.
As you know, NAPO strongly supported the passage of the
1994 Crime bill creating the COPS program. Since its
inception the COPS program has funded grants for over 110,000
community police officers. Most law enforcement officials and
the public recognize the benefits of putting more cops on the
street. The steady decline of violent crime over the last few
years is evidence of the success of this program.
We support your legislation that will extend the COPS
program for another six years and put up to 50,000 more
police officers on our streets and in our neighborhoods to
continue the success of community policing. We also strongly
support the funding of educational scholarships for active
law enforcement officers and new technology to help fight
crime.
NAPO is cognizant of the fact that we must not become
complacent with our past success. There is still a lot of
work to be done and we will continue to fight with you for
the resources needed to serve our communities adequately.
NAPO's position is that the declining crime rate is not an
excuse to disband the COPS program, but an opportunity to
hire more officers to further fight
[[Page S5444]]
and decrease violent crime that still permeates many of
America's communities.
If I can be of assistance on this or any other matter,
please have your staff contact me at (202) 842-4420.
Sincerely,
Robert T. Scully,
Executive Director.
____
International Brotherhood of
Police Officers,
Alexandria, VA, May 4, 2001.
Hon. Joe Biden,
U.S. Senate,
Washington, DC.
Dear Senator Biden: On behalf of the entire membership of
the International Brotherhood of Police Officers (IBPO), I
want to thank you for introducing legislation to reauthorize
the Community Oriented Policing Services (COPS) program.
As the author of the 1994 Crime Bill you understand the
significance of the COPS program. Every crime statistic
available shows that America is a safer place to live since
we implemented the COPS program. The COPS program enables
communities to combat crime in the most effective way
possible--by putting more officers on the street.
I understand that they are opponents to the COPS program. I
urge them to talk to police officers in their states. The
IBPO believes that public safety is far too important to be
caught up in political debate. It would be a tragedy to cut
back on any efforts to fight crime at this critical juncture.
As the largest police union in the AFL-CIO, we have first
hand knowledge of what a success the COPS program is. We look
forward to working with you on this most important piece of
legislation.
Sincerely,
Kenneth T. Lyons,
National President.
____
National Sheriffs' Association,
Alexandria, VA, May 21, 2001.
Hon. Joseph Biden,
U.S. Senate,
Washington, DC.
Dear Senator Biden: I am writing to you regarding the
Community Oriented Policing Services (COPS) program and your
bill, the Protection Act. We at the National Sheriffs'
Association (NSA) support COPS and we appreciate the
commitment made to law enforcement by Congress.
As you may know, sheriffs around the nation depend on the
COPS program to supplement their law enforcement
capabilities. Sheriffs need the additional funding provided
so that they can better protect and serve their communities.
The COPS program has been an overwhelming success and has had
a tangible and positive impact on crime reduction. Nearly
two-thirds of the sheriffs offices in the Nation have
benefited from grant funding from this program and the added
funding has made a significant difference in how we enforce
the law. A sheriff with a COPS grant can fight and control
crime while a sheriff without a grant is at the mercy of the
criminal. With the added capability that a COPS grant
provides, we have reduced crime, streets are safer and honest
law-abiding people feel secure in their communities.
NSA supports a flexible COPS program that allows sheriffs
to determine their own needs and apply for funds accordingly.
Sheriffs have overwhelming technology needs that can be
addressed through the COPS technology grant programs. These
programs have helped sheriffs purchase state-of-the-art
computer technology and communications equipment. In this
information age, it is more important than ever that we
strive to achieve telecommunications and systems
compatibility among criminal justice agencies, improve our
forensic sciences capability at the state and local level and
encourage the use of technologies to predict and prevent
crime. All of these will give law enforcement the advantage
over criminals. The total package of law enforcement support
that COPS provides is an integral part of crime control in
America.
In our view, COPS is a program that is vital to effective
law enforcement and to sheriffs in both rural and urban
jurisdictions. Without COPS, I firmly believe our communities
would be a little less safe and a little more dangerous.
Thank you again for your commitment to reducing crime. Know
that NSA will do our part in the fight against crime and
given the proper resources, we can truly make a difference.
Sincerely,
Jerry ``Peanuts'' Gaines,
President.
______
By Mr. WELLSTONE:
S. 925. A bill to amend the title XVIII of the Social Security Act to
provide a prescription benefit program for all medicare beneficiaries;
to the Committee on Finance.
Mr. WELLSTONE. Mr. President, I rise to introduce long overdue
legislation that will bring affordable prescription drugs to all
Medicare beneficiaries. This legislation is the Medicare Extension of
Drugs to Seniors, MEDS, Act of 2001.
For a good period of the time that I have been a Senator, the Federal
Government has operated with budget deficits. The goal during that
period was deficit reduction, while protecting the programs that are
important for people. I had hoped that when the economy began to do
better, and we began to see surpluses, that finally, as a Senator from
Minnesota, I would be able to do really well for people. It would not
just be stopping the worst, it would be doing the better.
Unfortunately, what we have this year in Washington instead is a
choice. Either you are in favor of Robin-Hood-in-reverse tax cuts, with
as much as 40 percent of the benefits going to the top 1 percent of
earners. Or you are in favor of making an investment above and beyond
reducing the debt and protecting Social Security and Medicare. I am one
who favors making investments in people, for making sure that there is
opportunity for all, quality education for all our children and young
people, quality and affordable housing, that we honor our commitments
to our veterans, that we reform mental health and achieve parity for
mental health and addiction treatment services, that we help women out
of domestic violence. And that we make sure that the senior citizens
who built this country are able to afford prescription drugs.
Everyone in Congress knows there is a need for more affordable
prescription drugs. Everyone in Congress knows that the surplus is
large enough to afford both a fair tax cut and better prescription drug
coverage for seniors. The surplus is largely thanks to sound budget
decisions made in the early 1990s, which promoted economic growth and
greatly expanded tax revenues. Those surpluses now make it not only
possible, but imperative that we address the prescription drug cost
crisis. We must remember that Congress also made mistakes during the
1990s. The Balanced Budget Act of 1997 brought cuts in Medicare
spending, cuts that I opposed and that will total over $600 billion. It
is only fair, now that there is a surplus, to return those cuts in
health care spending back into the health care system where there is
need. And I don't have to tell colleagues about the need. We all know
it from our own families and our constituents.
When Medicare was first enacted in 1965 the program ``mimicked''
typical private insurance which often did not include outpatient
prescription drugs. Times have changed, but in that regard Medicare has
not. Virtually all employment based insurance now includes outpatient
prescription drug coverage. Fully 99 percent of state and local
government employees have this coverage. The federal employees program
requires all plans to cover out patient prescription drugs, and
Medicaid in every state does the same. Its time to bring Medicare up to
date with a prescription drug plan available to all beneficiaries.
You don't have to tell people that prescription drugs are the largest
out-of-pocket health care cost for seniors. They know. Over 85 percent
of Medicare beneficiaries take at least one prescription medicine, and
the average senior citizen fills eighteen prescriptions per year.
Nationally, more than half of the cost of these drugs comes directly
out of seniors' pockets. In Minnesota the number is even higher.
Seniors who cannot afford drug coverage often do not take the drugs
their doctors prescribe. One of every eight senior citizens at some
time is forced to choose between buying food and buying medicine.
That's not right.
Charles Van Guilder, a Minnesota senior, was faced with the
devastating option of having to divorce his wife in order to protect
their assets which might be stripped away by high-rising Medicare HMO
costs. Struggling with Parkinson's Disease, she was faced with an $850
monthly charge for prescription drugs and home health premiums.
Rose Grigsby was faced with a choice of living in Arizona where
because of disparities in Medicare + Choice reimbursements she payed
$17.50 a month for her healthcare including prescription drugs and even
a health club membership and moving back home to Minnesota where she
would have to pay $270 a month for 80 percent drug coverage. Despite
wanting to be with family, she couldn't afford to move. Where's the
fairness in that? It is time we add prescription drug coverage to
Medicare so it is available on an equal basis to every senior in every
state.
The drug industry America's most profitable has never wanted a
prescription drug benefit included in Medicare.
[[Page S5445]]
The industry is interested in protecting its very large profits. The
most recent annual Fortune 500 report on American business showed once
again as it has in each of the last 19 years that the pharmaceutical
industry ranks first in profits. In the words of the editors of Fortune
Magazine, ``Whether you gauge profitability by median return on
revenues, assets or equity, pharmaceuticals had a Viagra kind of
year.''
Where the average Fortune 500 industry in the United States returned
5 percent profits as a percentage of revenue, the pharmaceutical
industry returned 18.6 percent. Where the average Fortune 500 industry
returned 3.8 percent profits as a percentage of their assets, the
pharmaceutical industry returned 16.5 percent. Where the average
Fortune 500 industry returned 15 percent profits as a percentage of
shareholders equity, the pharmaceutical industry returned 36 percent.
The richest pharmaceutical company, Merck, pulled in nearly $6
billion in profits, more than the entire Fortune 500 airline industry
and registered twice the profits of the engineering construction
industry. The 12 major companies of the pharmaceutical industry made
$10 Billion more in total profits than the 24 companies of the motor
vehicle and parts industry, including Ford, GM and others.
Those record profits are no surprise to America's senior citizens.
Medicare beneficiaries without prescription drug coverage are being
gouged every day of the week by a pharmaceutical industry that charges
higher prices in the United States than in any other country of the
world. So, America's seniors know where those record profits come
from--they come from their own pocketbooks.
Year after year, the pharmaceutical industry rakes in record profits,
much at the expense of America's most vulnerable citizens: the elderly,
frail and ill. The high price of drugs forces seniors to chose between
food and life preserving medications. Last year, when a Medicare
prescription drug benefit available to all Senior Citizens seemed
within reach, the pharmaceutical industry dipped into its coffers and
forked over millions of dollars to fund a stealth campaign to defeat
any such proposal.
Nowhere in its campaign against a Medicare prescription drug benefit
did the pharmaceutical industry tell people that it was the
prescription-drug companies that were paying for the campaign. The
industry's front organization is called Citizens for Better Medicare.
That is like Foxes for Better Chickens. A more accurate description
would be Pharmaceutical Companies for Higher Profits. But drug
companies would rather hide behind a false shield, count their profits
and count the ways they can continue to extract high profits from the
American public, especially from the elderly.
Indeed, according to a report from the Boston University School of
Public Health, the pharmaceutical industry has encouraged the spread of
seven interlocking myths that have ``permeated, paralyzed and
poisoned'' public discourse of prescription drug policy. Let me just
share 2 of those myths:
Myth #1: High prices and profits are bestowed on the drug industry by
a legitimate and bountiful free market. In reality, little of a free
market is present in the world of patented prescription drugs. Today's
prices and profits are therefore not justified by a legitimate free
market.
Myth #2: If government interferes with today's high price and
profits, ``The lights go out in the labs, and there is no R&D,''
according to PhRMA, the drug industry's lobbying arm. As the Boston
University researchers noted, that is like saying ``give us all of your
money or we'll let you die.'' The researchers call that PhRMA's Fog of
Fear. But the reality is the drug makers' profit-maximization is not to
increase research. The facts are: Analysis of 1999 data shows that the
six major drug makers spent 11 percent of their revenue on research and
development, while 16 percent went to profits and 31 percent went to
marketing and administration. These data closely parallel those
collected in earlier years. Looking at the main task of drug company
employees, as of June 1998: Fully 35 percent of drug makers' employees
were engaged in marketing, with an additional 13 percent in
administration. Producing and developing drugs each occupied only about
one-quarter of employees. Looking at changes in employment of PhRMA
members, from 1995 to 1999: The number of production workers fell,
research workers rose slightly, while marketing employment rose by one-
third.
The fact is there is plenty of room for the pharmaceutical industry
to make a good profit without gouging the American consumer.
The fact also is that with each passing year, the need for Medicare
prescription drug coverage has become more acute. The reasons are well
known.
First, the cost of prescription drugs has skyrocketed in recent
years. Direct to consumer advertising has increased demand, and drug
companies have responded by raising prices and putting life saving
drugs even further out of reach of the average senior citizen. Last
year alone drug prices increased an estimated 17 percent. And there is
no relief in sight. This year drug costs will increase another 18
percent.
Second, these increases hit seniors disproportionately: A 1998 study
by the minority staff of the House Government Reform Committee found
that older Americans without prescription drug insurance pay on average
twice as much as the discounted prices drug companies offer large scale
purchasers like HMOs and government agencies. The PRIME Institute,
headed by Steve Schondelmeyer, at the University of Minnesota found
what Minnesota seniors already know, that pharmaceutical prices
overseas are far less then we pay in the United States. Statistics say
that for every dollar we spend in the United States, Canadians spend on
average just 64 cents; Italians spend just 51 cents; the English 65
cents and Swedes 68 cents. They say statistics often lie. Well, from
what I have seen and heard, the drugs seniors need most are even more
expensive in the United States than those statistics tell us. Even more
astounding than the average figures are some specific comparisons:
Synthroid for thyroid disease costs seniors 14 times the discounted
price to favored customers; and Micronase for diabetes costs over 3\1/
2\ times as much. So not only are seniors forced the pay out of pocket
for these drugs, but the price they are charged is a national disgrace.
Furthermore, prescription drug spending accounts for 19 percent of
the out of pocket costs for senior citizens and is the largest spending
category after premium payments. Beneficiaries were projected to spend
an average of $480 out-of-pocket on prescription drugs in 2000. Average
out-of-pocket prescription drug spending is even higher for
beneficiaries in poor health, $685, those without drug coverage, $715,
and those who are severely limited in their activities of daily living,
$725.
The high cost of drugs puts Americans in all income groups at risk.
Of those seniors with incomes below 250 percent of poverty about 38
percent, 7.6 million, lack Rx drug coverage. Of those with higher
incomes 28 percent, 5.4 million, have no drug coverage.
The increase in drugs cost and utilization is far outpacing the
overall increase in the cost of living. A national study by Brandeis
University and PCS Health Systems published in May 2000 found that
prescription drug expenditure trends were even higher than previously
estimated. They found that: Prescription drug costs grew at an annual
rate of 24.8 percent per year from 1996 to 1999. Prescriptions per
enrollee grew 14 percent per year. And not surprisingly, the number of
prescriptions per person is rising fastest in the 65+ age group, from
an average of 16 prescriptions in 1996 to an average of 23 by 1999.
Rural Americans are hardest hit of all. In June 2000 the National
Economic Council published a report on prescription drug coverage for
rural Medicare beneficiaries. Among its findings: Rural beneficiaries
are over 60 percent more likely to fail to get needed prescription
drugs due to cost. A greater proportion of rural elderly spend a
greater percent of their income on prescription drugs. Rural
beneficiaries use nearly 10 percent more prescriptions. Rural
beneficiaries pay over 25 percent more out-of-pocket for prescription
drugs than urban beneficiaries but they are 50 percent less likely to
have any prescription drug coverage.
[[Page S5446]]
For Minnesotans, the lack of a Medicare prescription drug benefit
hits especially hard because there are few alternatives. Only 19
percent of Minnesota firms offer retiree health insurance and the
number has been dropping. Medicare's HMO reimbursement in Minnesota is
so low that no basic Medicare Managed Care Plans can include Rx Drug
coverage. Even with the increased Medicare + Choice capitation payment
floor we voted in last year, it is not enough for these plans to offer
prescription drug coverage. When a comprehensive benefit without a cap
is available, the costs become prohibitive--up to $130 per month, just
for the pharmacy benefit. The cost of prescription drug coverage under
the average Medigap policy in Minnesota is $90 per month, and that is
only for limited benefits. Because of this, in Minnesota, 65 percent of
seniors have no prescription drug coverage. That's twice the national
average. But the fact is over half of the Seniors in the United States
have either no prescription drug coverage or totally inadequate
coverage.
Both the high cost of drugs and lack of coverage have severe
consequences. People discontinue their medications against medical
advice, thereby placing themselves at risk for problems like heart
attacks, cancer recurrence, depression and complications of diabetes.
People lower the dose they take to make their prescriptions last
longer. When I was in Duluth, Minnesota, meeting with seniors to
discuss this very issue, one of my constituents told me about a
neighbor who cut his pills in quarters because he couldn't afford to
refill the prescription and wound up with an unnecessary
hospitalization. People take their medicines as prescribed but then
skimp on food and other necessities. Ray Erlandson, a retired steel
worker from West Duluth was at that meeting in Duluth. Ray was spending
about $300 a month for prescription drugs for he and his wife. He had
nearly run out of savings. What does Ray say? ``People have to choose
between food and buying their drugs. That shouldn't happen in this
country. It's a dirty rotten shame. I'd like to ask the VIPs of the
drug companies, Do you go to church? Do you know what you are doing to
the elderly people?''
How can the richest country on earth force its senior citizens to
choose between the medicines they need to survive and the foods they
need to stay healthy? We shouldn't allow it. The answer is to provide a
prescription drug benefit for all seniors that includes a pricing
policy that keeps costs affordable.
In the 1960s when barely half the nation's senior citizens could
afford health insurance, and far more were at risk for the loss of
their life savings, we as a country responded and created Medicare.
Today, at the beginning of a new century, when only half the nation's
seniors--at best--have close to adequate prescription drug coverage, we
are again called upon as a nation to respond. The beauty of it all is
that we have a surplus that allows us to respond with a prescription
drug program that we can all be proud of. The tragedy of it all is that
we are not doing it. We have an administration that is more concerned
with giving huge tax cuts to the wealthiest 1 percent of Americans than
it is with providing the life sustaining medications our seniors need.
We have a pharmaceutical industry that is more concerned with
maximizing profits and making campaign contributions than it is with
maximizing access to life saving medications and making prescription
drugs affordable.
The administration's prescription drug proposal is a clear
demonstration of just where their priorities are. Republicans want to
give $550 billion in tax cuts just to the wealthiest 1 percent of
American families, leaving a pittance for Medicare prescription drugs.
And the effect of those priorities will be seen in their as yet
undisclosed plan: high premiums for beneficiaries; high deductibles, up
to $2000; high co-pay; or a benefit available to only a fraction of the
seniors who need it. In short, a benefit that isn't worth much.
Millions of seniors will be left still holding the bag. You can't
provide the kind of Medicare Rx Drug benefit that everyone on Medicare
deserves with a tin-cup budget.
Any meaningful prescription drug benefit passed by this Congress
should reflect key principles: universality; low cost to beneficiaries;
and serious efforts to reduce the price of prescription drugs. To
remedy the high cost of prescription drugs and to provide comprehensive
coverage, I am proud to introduce the Medicare Extension of Drugs to
Seniors, MEDS, Act of 2001.
Specifically, under this proposal, seniors and the disabled would
have a 20-percent co-pay on all prescription drugs and a small, $24
monthly premium. Every person would receive the same voluntary benefit,
regardless of income or geographical location. Under the MEDS plan, no
beneficiary would ever have to spend more than $2,000 out-of-pocket on
their medications. Low-income beneficiaries would have no out-of-pocket
expense. By contrast, other plans that have been proposed would have
seniors paying up to $6,000 a year. Still, they would not necessarily
cover everyone currently eligible for Medicare
How can the MEDS plan provide such a strong benefit without busting
the budget? By including provisions which seriously address the
outrageously high prices that Americans are forced to pay for
prescription drugs.
First, the MEDS plan includes strong, loophole-free language to allow
American pharmacists, wholesalers and distributors to purchase FDA-
approved prescription drugs at the lower prices charged abroad. Last
year, a version of this legislation passed both Houses of Congress with
solid bipartisan majorities. Unfortunately, at the last minute, the
pharmaceutical industry was successful in adding loopholes to the bill
that essentially make it unworkable. With strong reimportation language
like that included in the MEDS plan, Americans would save 30-50 percent
on the price of prescription drugs without any government subsidy.
Second, the MEDS plan includes a provision, originally proposed by
Representative Tom Allen, that would permit Medicare beneficiaries to
purchase their prescription drugs at the same price other government
agencies such as the VA does. MEDS also creates a so-called ``global
budget'' which would allow Medicare to negotiate on behalf of all
Medicare beneficiaries and work to restrain costs in the long term.
Finally, the MEDS plan would ensure that when taxpayers foot the bill
for research and development of a prescription drug, the pharmaceutical
industry must offer that drug at a fair and reasonable price. Today,
the federal government spends billions of dollars a year on research
and development of medicines. Most often, this R&D is then given over
to the pharmaceutical industry, which charges Americans any price they
want for the final product. If we change this absurd system, we would
ensure that new medicines would be affordable in the years ahead.
You can expect the pharmaceutical industry to protest loudly. And you
can expect the industry to increase its campaign contributions, which
totaled $19 million last year alone, its lobbying spending, which
reached $91 million in 1999, and its advertising budget.
It is interesting. One pharmaceutical company executive recently said
that no senior citizen should be forced to choose between his or her
prescription and other vital needs. But the high prices his company
charges and the high-priced lobbyists who do its bidding on Capitol
Hill are forcing that very choice on many senior citizens. While paying
lip service to seniors, according to a published news story, that same
executive was earning over $6 million in salary, plus stock options
worth more than $10 million.
The drug companies will say that reductions in price will dry up
research. I believe that is nonsense. Drug companies put billions more
dollars into profits, marketing and administration than they do into
research, based on information in their own annual reports. Just how
hard would this most profitable of American industries be hit if we
enacted a universal Medicare prescription drug benefit that required
the drug companies to offer seniors the best price they now offer other
Federal government programs? According to Merrill Lynch, only by about
3 percent.
In a June 23, 1999 report entitled A Medicare Drug Benefit: May Not
Be So Bad, Merrill Lynch debunked the notion that a Medicare
prescription drug benefit would seriously damage the
[[Page S5447]]
pharmaceutical industry's profitability. Merrill Lynch's analysis
concludes that the toughest proposal on the table in Washington, the
Prescription Drug Fairness for Seniors Act, (The Allen Bill), the
provisions of which are included in this bill, and which provides a 40
percent discount on drug costs for all 39 million Medicare
beneficiaries, would cut just 3.3 percent from total pharmaceutical
industry revenues because volume increases would offset much of the
lost revenue due to the lower prices. According to Merrill Lynch:
Volume is more important than price in driving pharmaceutical company
sales growth. Between 1994 and 1998, the impact of volume on sales
growth outpaced price by better than a 4-to-1 ratio. Medicare
beneficiaries who either lack or have inadequate drug coverage
underutilize prescription drugs because they cannot afford them. With a
40-percent price discount, the one-third of beneficiaries who lack any
drug coverage would increase their consumption by 45 percent, and the
two-thirds with some coverage would see a 10-percent increase in drug
purchases. This increased utilization reduces the lost revenue that
would otherwise result from a 40-percent price discount for Medicare
beneficiaries by almost one-half. Without adjusting for volume
increases, a 40-percent price discount for Medicare beneficiaries would
reduce total pharmaceutical industry revenues by 5.9 percent. But after
adjusting for increased utilization, the net drop in sales is just 3.3
percent. And that is from just a reduction in price, not an increase in
coverage. If you factor in the coverage provided by the MEDS Act which
all Seniors will have, drug company revenues will increase.
It is time to get our priorities straight. Millions of hard-working
Americans go to work every day and pay their taxes so that when they
hit 65, they can retire in a country they can be proud of, a country
that offers basic security for all an even better life for their
children. Each day they read in the paper about scientific
breakthroughs: the genome project and new advances in the treatment of
cancer, heart disease, and diabetes, all being carried out at the
National Institutes of Health, one of our nation's jewels. They turn on
the television and see drug company advertisements that extol new and
expensive medications. But what good is that medical research and those
expensive drugs if they are unaffordable and out of reach of millions
of Americans. That is the situation we have today. And it is
unacceptable!
The time has come to support a comprehensive, affordable, 20-percent
co-pay, $2000-cap, prescription drug benefit for all seniors, a plan
that does not favor the health insurance or pharmaceutical industries
over our own parents and grandparents. The MEDS Act provides such a
benefit, and I ask my colleagues to join me in supporting this
legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 925
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medicare
Extension of Drugs to Seniors (MEDS) Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Prescription medicine benefit program.
``Part D--Prescription Medicine Benefit for the Aged and Disabled
``Sec. 1860. Establishment of prescription medicine benefit program for
the aged and disabled.
``Sec. 1860A. Scope of benefits.
``Sec. 1860B. Payment of benefits; benefit limits.
``Sec. 1860C. Eligibility and enrollment.
``Sec. 1860D. Premiums.
``Sec. 1860E. Special eligibility, enrollment, and copayment rules for
low-income individuals.
``Sec. 1860F. Prescription Medicine Insurance Account.
``Sec. 1860G. Administration of benefits.
``Sec. 1860H. Employer incentive program for employment-based retiree
medicine coverage.
``Sec. 1860I. Promotion of pharmaceutical research on break-through
medicines while providing program cost containment.
``Sec. 1860J. Appropriations to cover Government contributions.
``Sec. 1860K. Prescription medicine defined.''.
Sec. 4. Substantial reductions in the price of prescription drugs for
medicare beneficiaries.
Sec. 5. Amendments to program for importation of certain prescription
drugs by pharmacists and wholesalers.
Sec. 6. Reasonable price agreement for federally funded research.
Sec. 7. GAO ongoing studies and reports on program; miscellaneous
reports.
Sec. 8. Medigap transition provisions.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Prescription medicine coverage was not a standard part
of health insurance when the medicare program under title
XVIII of the Social Security Act was enacted in 1965. Since
1965, however, medicine coverage has become a key component
of most private and public health insurance coverage, except
for the medicare program.
(2) At least \2/3\ of medicare beneficiaries have
unreliable, inadequate, or no medicine coverage at all.
(3) Seniors who do not have medicine coverage typically
pay, at a minimum, 15 percent more than people with coverage.
(4) Medicare beneficiaries at all income levels lack
prescription medicine coverage, with more than \1/2\ of such
beneficiaries having incomes greater than 150 percent of the
poverty line.
(5) The number of private firms offering retiree health
coverage is declining.
(6) Medigap premiums for medicines are too expensive for
most beneficiaries and are highest for older senior citizens,
who need prescription medicine coverage the most and
typically have the lowest incomes.
(7) All medicare beneficiaries should have access to a
voluntary, reliable, affordable, and defined outpatient
medicine benefit as part of the medicare program that assists
with the high cost of prescription medicines and protects
them against excessive out-of-pocket costs.
SEC. 3. PRESCRIPTION MEDICINE BENEFIT PROGRAM.
(a) In General.--Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) is amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:
``Part D--Prescription Medicine Benefit for the Aged and Disabled
``establishment of prescription medicine benefit program for the aged
and disabled
``Sec. 1860. There is established a voluntary insurance
program to provide prescription medicine benefits, including
pharmacy services, in accordance with the provisions of this
part for individuals who are aged or disabled or have end-
stage renal disease and who elect to enroll under such
program, to be financed from premium payments by enrollees
together with contributions from funds appropriated by the
Federal Government.
``scope of benefits
``Sec. 1860A. (a) In General.--The benefits provided to an
individual enrolled in the insurance program under this part
shall consist of--
``(1) payments made, in accordance with the provisions of
this part, for covered prescription medicines (as specified
in subsection (b)) dispensed by any pharmacy participating in
the program under this part (and, in circumstances designated
by the Secretary, by a nonparticipating pharmacy), including
any specifically named medicine prescribed for the individual
by a qualified health care professional regardless of whether
the medicine is included in any formulary established under
this part if such medicine is certified as medically
necessary by such health care professional (except that the
Secretary shall encourage to the maximum extent possible the
substitution and use of lower-cost generics), up to the
benefit limits specified in section 1860B; and
``(2) charging by pharmacies of the negotiated price--
``(A) for all covered prescription medicines, without
regard to such benefit limit; and
``(B) established with respect to any drugs or classes of
drugs described in subparagraphs (A), (B), (D), (E), or (F)
of section 1927(d)(2) that are available to individuals
receiving benefits under this title.
``(b) Covered Prescription Medicines.--
``(1) In general.--Covered prescription medicines, for
purposes of this part, include all prescription medicines (as
defined in section 1860K(1)), including smoking cessation
agents, except as otherwise provided in this subsection.
``(2) Exclusions from coverage.--Covered prescription
medicines shall not include drugs or classes of drugs
described in subparagraphs (A) through (D) and (F) through
(H) of section 1927(d)(2) unless--
``(A) specifically provided otherwise by the Secretary with
respect to a drug in any of such classes; or
``(B) a drug in any of such classes is certified to be
medically necessary by a health care professional.
``(3) Exclusion of prescription medicines to the extent
covered under part a or b.--
[[Page S5448]]
A medicine prescribed for an individual that would otherwise
be a covered prescription medicine under this part shall not
be so considered to the extent that payment for such medicine
is available under part A or B, including all injectable
drugs and biologicals for which payment was made or should
have been made by a carrier under section 1861(s)(2) (A) or
(B) as of the date of enactment of the Medicare Extension of
Drugs to Seniors (MEDS) Act of 2001. Medicines otherwise
covered under part A or B shall be covered under this part to
the extent that benefits under part A or B are exhausted.
``(4) Study on inclusion of home infusion therapy
services.--Not later than 1 year after the date of enactment
of the Medicare Extension of Drugs to Seniors (MEDS) Act of
2001, the Secretary shall submit to Congress a legislative
proposal for the delivery of home infusion therapy services
under this title and for a system of payment for such a
benefit that coordinates items and services furnished under
part B and under this part.
``payment of benefits; benefit limits
``Sec. 1860B. (a) Payment of Benefits.--
``(1) In general.--There shall be paid from the
Prescription Medicine Insurance Account within the
Supplementary Medical Insurance Trust Fund, in the case of
each individual who is enrolled in the insurance program
under this part and who purchases covered prescription
medicines in a calendar year--
``(A) with respect to costs incurred for covered
prescription medicine furnished during a year, before the
individual has incurred out-of-pocket expenses under this
subsection equal to the catastrophic out-of-pocket limit
specified in subsection (b), an amount equal to the
applicable percentage (specified in paragraph (2)) of the
negotiated price for each such covered prescription medicine
or such higher percentage as is proposed under section
1860G(b)(7); and
``(B) with respect to costs incurred for covered
prescription medicine furnished during a year, after the
individual has incurred out-of-pocket expenses under this
subsection equal to the catastrophic out-of-pocket limit
specified in subsection (b), an amount equal to 100 percent
of the negotiated price for each such covered prescription
medicine.
``(2) Applicable percentage.--The applicable percentage
specified in this paragraph is 80 percent or such higher
percentage as is proposed under section 1860G(b)(7), if the
Secretary finds that such higher percentage will not increase
aggregate costs to the Prescription Medicine Insurance
Account.
``(b) Catastrophic Limit on Out-of-Pocket Expenses.--
``(1) In general.--The catastrophic limit on out-of-pocket
expenses specified in this subsection for--
``(A) for each of calendar years 2003 and 2004, $2,000; and
``(B) subject to paragraph (2), for calendar year 2005 and
each subsequent calendar year is equal to the limit for the
preceding year under this paragraph adjusted by the
sustainable growth rate percentage (determined under section
1861I(b)) for the year involved.
``(2) Rounding.--Any amount determined under paragraph
(1)(E) that is not a multiple of $10 shall be rounded to the
nearest multiple of $10.
``eligibility and enrollment
``Sec. 1860C. (a) Eligibility.--Every individual who, in or
after 2003, is entitled to hospital insurance benefits under
part A or enrolled in the medical insurance program under
part B is eligible to enroll, in accordance with the
provisions of this section, in the insurance program under
this part, during an enrollment period prescribed in or under
this section, in such manner and form as may be prescribed by
regulations.
``(b) Enrollment.--
``(1) In general.--Each individual who satisfies subsection
(a) shall be enrolled (or eligible to enroll) in the program
under this part in accordance with the provisions of section
1837, as if that section applied to this part, except as
otherwise explicitly provided in this part.
``(2) Single enrollment period.--Except as provided in
section 1837(i) (as such section applies to this part),
1860E, or 1860H(e), or as otherwise explicitly provided, no
individual shall be entitled to enroll in the program under
this part at any time after the initial enrollment period
without penalty, and in the case of all other late
enrollments, the Secretary shall develop a late enrollment
penalty for the individual that fully recovers the
additional actuarial risk involved providing coverage for
the individual.
``(3) Special enrollment period for 2003.--
``(A) In general.--An individual who first satisfies
subsection (a) in 2003 may, at any time on or before December
31, 2003--
``(i) enroll in the program under this part; and
``(ii) enroll or reenroll in such program after having
previously declined or terminated enrollment in such program.
``(B) Effective date of coverage.--An individual who
enrolls under the program under this part pursuant to
subparagraph (A) shall be entitled to benefits under this
part beginning on the first day of the month following the
month in which such enrollment occurs.
``(c) Period of Coverage.--
``(1) In general.--Except as otherwise provided in this
part, an individual's coverage under the program under this
part shall be effective for the period provided in section
1838, as if that section applied to the program under this
part.
``(2) Part d coverage terminated by termination of coverage
under parts a and b.--In addition to the causes of
termination specified in section 1838, an individual's
coverage under this part shall be terminated when the
individual retains coverage under neither the program under
part A nor the program under part B, effective on the
effective date of termination of coverage under part A or (if
later) under part B.
``premiums
``Sec. 1860D. (a) Annual Establishment of Monthly Premium
Rates.--
``(1) In general.--The Secretary shall, during September of
2002 and of each succeeding year, determine and promulgate a
monthly premium rate for the succeeding year in accordance
with the provisions of this subsection.
``(2) Initial premiums.--For months in 2003, the monthly
premium rate under this subsection shall be--
``(A) $24, in the case of premiums paid by an individual
enrolled in the program under this part; and
``(B) $32, in the case of premiums paid for such an
individual by a former employer (as defined in section
1860H(f)(2)).
``(3) Subsequent years.--
``(A) In general.--For months in a year after 2003, the
monthly premium under this subsection shall be (subject to
subparagraph (B)) the monthly premium (computed under this
subsection without regard to subparagraph (B)) for the
previous year increased by the annual percentage increase in
average per capita aggregate expenditures for covered
outpatient medicines in the United States for medicare
beneficiaries, as estimated and published by the Secretary in
September before the year and for the year involved.
``(B) Rounding.--The monthly premium determined under
subparagraph (A) shall be rounded to the nearest multiple of
10 cents if it is not a multiple of 10 cents.
``(C) Publication of assumptions.--The Secretary shall
publish, together with the promulgation of the monthly
premium rates under this paragraph, a statement setting forth
the actuarial assumptions and bases employed in arriving at
the monthly premium under subparagraph (A).
``(b) Payment of Premiums.--
``(1) Payments by deduction from social security, railroad
retirement benefits, or benefits administered by opm.--
``(A) Deduction from benefits.--In the case of an
individual who is entitled to or receiving benefits as
described in subsection (a), (b), or (d) of section 1840,
premiums payable under this part shall be collected by
deduction from such benefits at the same time and in the same
manner as premiums payable under part B are collected
pursuant to section 1840.
``(B) Transfers to prescription medicine insurance
account.--The Secretary of the Treasury shall, from time to
time, but not less often than quarterly, transfer premiums
collected pursuant to subparagraph (A) to the Prescription
Medicine Insurance Account from the appropriate funds and
accounts described in subsections (a)(2), (b)(2), and (d)(2)
of section 1840, on the basis of the certifications described
in such subsections. The amounts of such transfers shall be
appropriately adjusted to the extent that prior transfers
were too great or too small.
``(2) Direct payments to secretary.--
``(A) Additional payment by enrollee.--An individual to
whom paragraph (1) applies (other than an individual
receiving benefits as described in section 1840(d)) and who
estimates that the amount that will be available for
deduction under such paragraph for any premium payment period
will be less than the amount of the monthly premiums for such
period may (under regulations) pay to the Secretary the
estimated balance, or such greater portion of the monthly
premium as the individual chooses.
``(B) Payments by other enrollees.--An individual enrolled
in the insurance program under this part with respect to whom
none of the preceding provisions of this subsection applies
(or to whom section 1840(c) applies) shall pay premiums to
the Secretary at such times and in such manner as the
Secretary shall by regulations prescribe.
``(C) Deposit of premiums.--Amounts paid to the Secretary
under this paragraph shall be deposited in the Treasury to
the credit of the Prescription Medicine Insurance Account
in the Supplementary Medical Insurance Trust Fund.
``(c) Certain Low-Income Individuals.--For rules concerning
premiums for certain low-income individuals, see section
1860E.
``special eligibility, enrollment, and copayment rules for low-income
individuals
``Sec. 1860E. (a) State Agreements for Coverage.--
``(1) In general.--The Secretary shall, at the request of a
State, enter into an agreement with the State under which all
individuals described in paragraph (2) are enrolled in the
program under this part, without regard to whether any such
individual has previously declined the opportunity to enroll
in such program.
``(2) Eligibility groups.--The individuals described in
this paragraph, for purposes of paragraph (1), are
individuals who satisfy section 1860C(a) and who are--
``(A)(i) eligible individuals within the meaning of section
1843; and
[[Page S5449]]
``(ii) in a coverage group or groups permitted under
section 1843 (as selected by the State and specified in the
agreement); or
``(B) qualified medicare medicine beneficiaries (as defined
in subsection (e)(1)).
``(3) Coverage period.--The period of coverage under this
part of an individual enrolled under an agreement under this
subsection shall be as follows:
``(A) Individuals eligible (at state option) for part b
buy-in.--In the case of an individual described in subsection
(a)(2)(A), the coverage period shall be the same period that
applies (or would apply) pursuant to section 1843(d).
``(B) Qualified medicare medicine beneficiaries.--In the
case of an individual described in subsection (a)(2)(B)--
``(i) the coverage period shall begin on the latest of--
``(I) January 1, 2003;
``(II) the first day of the third month following the month
in which the State agreement is entered into; or
``(III) the first day of the first month following the
month in which the individual satisfies section 1860C(a); and
``(ii) the coverage period shall end on the last day of the
month in which the individual is determined by the State to
have become ineligible for medicare medicine cost-sharing.
``(4) Alternative enrollment methods.--In the process of
enrolling low-income individuals under this part, the
Secretary shall use the system provided under section 154 of
the Social Security Act Amendments of 1994 for newly eligible
medicare beneficiaries and shall apply a similar system for
other medicare beneficiaries. Such system shall use existing
Federal Government databases to identify eligibility. Such
system shall not require that beneficiaries apply for, or
enroll through, State medicaid systems in order to obtain
low-income assistance described in this section.
``(b) Special Part D Enrollment Opportunity for Individuals
Losing Medicaid Eligibility.--In the case of an individual
who--
``(1) satisfies section 1860C(a); and
``(2) loses eligibility for benefits under the State plan
under title XIX after having been enrolled under such plan or
having been determined eligible for such benefits;
the Secretary shall provide an opportunity for enrollment
under the program under this part during the period that
begins on the date that such individual loses such
eligibility and ends on the date specified by the Secretary.
``(c) State Option To Buy-In Dually Eligible Individuals.--
``(1) Coverage of premiums as medical assistance.--For
purposes of applying the second sentence of section 1905(a),
any reference to premiums under part B shall be considered to
include a reference to premiums under this part.
``(2) State commitment to continue participation in part d
after benefit limit reached.--As a condition of additional
funding to a State under subsection (d), the State, in its
State plan under title XIX, shall provide that in the case of
any individual whose eligibility for medical assistance under
title XIX is not limited to medicare cost-sharing and for
whom the State elects to pay premiums under this part
pursuant to this section, the State will purchase all
prescription medicines for such individual in accordance with
the provisions of this part without regard to whether the
benefit limit for such individual under section 1860B(b)
has been reached.
``(3) Medicare cost-sharing required for qualified medicare
beneficiaries.--In applying title XIX, the term `medicare
cost-sharing' (as defined in section 1905(p)(3)) is deemed to
include--
``(A) premiums under section 1860D; and
``(B) the difference between the amount that is paid under
section 1860B and the amount that would be paid under such
section if any reference to `80 percent' in subsection (a)(2)
of such section were deemed a reference to `100 percent' (or,
if the Secretary approves a higher percentage under such
section, if such percentage were deemed to be 100 percent).
``(d) Payment to States for Coverage of Certain Medicare
Cost-Sharing.--
``(1) In general.--The Secretary shall provide for payment
under this subsection to each State that provides for--
``(A) medicare cost-sharing described in section
1905(p)(3)(A)(ii) for individuals who would be qualified
medicare beneficiaries described in section 1905(p)(1) but
for the fact that their income exceeds the income level
established by the State under section 1905(p)(2) and is at
least 120 percent, but less than 135 percent, of the official
poverty line (referred to in such section) for a family of
the size involved and who are not otherwise eligible for
medical assistance under the State plan; and
``(B) medicare medicine cost-sharing (as defined in
subsection (e)(2)) for qualified medicare medicine
beneficiaries described in subsection (e)(1).
``(2) Amount of payment.--The amount of payment under
paragraph (1) shall equal 100 percent of the cost-sharing
described in such paragraph, except that, in the case of an
individual whose eligibility for medical assistance under
title XIX is not limited to medicare cost-sharing or medicare
medicine cost-sharing, the amount of payment under paragraph
(1)(B) shall be equal to the Federal medical assistance
percentage described in section 1905(b)) of amounts as
expended for such cost-sharing.
``(3) Method of payment; relation to other payments.--
Amounts shall be paid to States under this subsection in a
manner similar to that provided under section 1903(d).
Payments under this subsection shall be made in lieu of any
payments that otherwise may be made for medical assistance
provided under section 1902(a)(10)(E)(iv).
``(4) Treatment of territories.--
``(A) In general.--Subject to subparagraph (B), this
subsection shall not apply to States other than the 50 States
and the District of Columbia.
``(B) Payments.--In the case of a State (other than the 50
States and the District of Columbia) that develops and
implements a plan of assistance for pharmaceuticals provided
to low-income medicare beneficiaries, the Secretary shall
provide for payment to the State in an amount that is
reasonable in relation to the payment levels provided to
other States under paragraph (2).
``(e) Definitions; Special Rules.--For purposes of this
section:
``(1) Qualified medicare medicine beneficiary.--The term
`qualified medicare medicine beneficiary' means an
individual--
``(A) who is entitled to hospital insurance benefits under
part A (including an individual entitled to such benefits
pursuant to an enrollment under section 1818, but not
including an individual entitled to such benefits only
pursuant to an enrollment under section 1818A);
``(B) whose income (as determined under section 1612 for
purposes of the supplemental security income program, except
as provided in section 1905(p)(2)(D)) is above 100 percent
but below 150 percent of the official poverty line (as
defined by the Office of Management and Budget, and revised
annually in accordance with section 673(2) of the Omnibus
Budget Reconciliation Act of 1981) applicable to a family of
the size involved; and
``(C) whose resources (as determined under section 1613 for
purposes of the supplemental security income program) do not
exceed twice the maximum amount of resources that an
individual may have and obtain benefits under that program.
``(2) Medicare medicine cost-sharing.--The term `medicare
medicine cost-sharing' means the following costs incurred
with respect to a qualified medicare medicine beneficiary,
without regard to whether the costs incurred were for items
and services for which medical assistance is otherwise
available under a State plan under title XIX:
``(A) In the case of a qualified medicare medicine
beneficiary whose income (as determined under paragraph (1))
is less than 135 percent of the official poverty line--
``(i) premiums under section 1860D; and
``(ii) the difference between the amount that is paid under
section 1860B and the amount that would be paid under such
section if any reference to `50 percent' therein were deemed
a reference to `100 percent' (or, if the Secretary approves a
higher percentage under such section, if such percentage were
deemed to be 100 percent).
``(B) In the case of a qualified medicare medicine
beneficiary whose income (as determined under paragraph (1))
is at least 135 percent but less than 150 percent of the
official poverty line, a percentage of premiums under section
1860D, determined on a linear sliding scale ranging from 100
percent for individuals with incomes at 135 percent of
such line to 0 percent for individuals with incomes at 150
percent of such line.
``(3) State.--The term `State' has the meaning given such
term under section 1101(a) for purposes of title XIX.
``(4) Treatment of drugs purchased.--The provisions of
section 1927 shall not apply to prescription drugs purchased
under this part pursuant to an agreement with the Secretary
under this section (including any drugs so purchased after
the limit under section 1860B(b) has been exceeded).
``prescription medicine insurance account
``Sec. 1860F. (a) Establishment.--There is created within
the Federal Supplemental Medical Insurance Trust Fund
established by section 1841 an account to be known as the
`Prescription Medicine Insurance Account' (in this section
referred to as the `Account').
``(b) Amounts in Account.--
``(1) In general.--The Account shall consist of--
``(A) such amounts as may be deposited in, or appropriated
to, such fund as provided in this part; and
``(B) such gifts and bequests as may be made as provided in
section 201(i)(1).
``(2) Separation of funds.--Funds provided under this part
to the Account shall be kept separate from all other funds
within the Federal Supplemental Medical Insurance Trust Fund.
``(c) Payments From Account.--The Managing Trustee shall
pay from time to time from the Account such amounts as the
Secretary certifies are necessary to make the payments
provided for by this part, and the payments with respect to
administrative expenses in accordance with section 201(g).
``administration of benefits
``Sec. 1860G. (a) Through HCFA.--The Secretary shall
provide for administration of the benefits under this part
through the Health Care Financing Administration in
accordance with the provisions of this section. The
Administrator of such Administration may enter into contracts
with carriers to administer this part in the same manner as
the Administrator enters into such contracts to administer
part B. Any such contract shall
[[Page S5450]]
be separate from any contract under section 1842.
``(b) Administration Functions.--In carrying out this part,
the Administrator (or a carrier under a contract with the
Administrator) shall (or in the case of the function
described in paragraph (9), may) perform the following
functions:
``(1) Participation agreements, prices, and fees.--
``(A) Negotiated prices.--Establish, through negotiations
with medicine manufacturers and wholesalers and pharmacies, a
schedule of prices for covered prescription medicines.
``(B) Agreements with pharmacies.--Enter into participation
agreements under subsection (c) with pharmacies, that include
terms that--
``(i) secure the participation of sufficient numbers of
pharmacies to ensure convenient access (including adequate
emergency access);
``(ii) permit the participation of any pharmacy in the
service area that meets the participation requirements
described in subsection (c); and
``(iii) allow for reasonable dispensing and consultation
fees for pharmacies.
``(C) Lists of prices and participating pharmacies.--Ensure
that the negotiated prices established under subparagraph (A)
and the list of pharmacies with agreements under subsection
(c) are regularly updated and readily available to health
care professionals authorized to prescribe medicines,
participating pharmacies, and enrolled individuals.
``(2) Tracking of covered enrolled individuals.--Maintain
accurate, updated records of all enrolled individuals (other
than individuals enrolled in a plan under part C).
``(3) Payment and coordination of benefits.--
``(A) Payment.--
``(i) Administer claims for payment of benefits under this
part and encourage, to the maximum extent possible, use of
electronic means for the submissions of claims.
``(ii) Determine amounts of benefit payments to be made.
``(iii) Receive, disburse, and account for funds used in
making such payments, including through the activities
specified in the provisions of this paragraph.
``(B) Coordination.--Coordinate with other private benefit
providers, pharmacies, and other relevant entities as
necessary to ensure appropriate coordination of benefits with
respect to enrolled individuals, including coordination of
access to and payment for covered prescription medicines
according to an individual's in-service area plan provisions,
when such individual is traveling outside the home service
area, and under such other circumstances as the Secretary may
specify.
``(C) Explanation of benefits.--Furnish to enrolled
individuals an explanation of benefits in accordance with
section 1806(a), and a notice of the balance of benefits
remaining for the current year, whenever prescription
medicine benefits are provided under this part (except that
such notice need not be provided more often than monthly).
``(4) Rules relating to provision of benefits.--
``(A) In general.--In providing benefits under this part,
the Secretary (directly or through contracts) shall employ
mechanisms to provide benefits economically, including the
use of--
``(i) formularies (consistent with subparagraph (B));
``(ii) automatic generic medicine substitution (unless the
physician specifies otherwise, in which case a 30-day
prescription may be dispensed pending a consultation with the
physician on whether a generic substitute can be dispensed in
the future);
``(iii) tiered copayments (which may include copayments at
a rate lower than 20 percent) to encourage the use of the
lowest cost, on-formulary product in cases where there is no
restrictive prescription (described in subparagraph (D)(i));
and
``(iv) therapeutic interchange.
``(B) Requirements with respect to formularies.--If a
formulary is used to contain costs under this part--
``(i) use an advisory committee (or a therapeutics
committee) comprised of licensed practicing physicians,
pharmacists, and other health care practitioners to develop
and manage the formulary;
``(ii) include in the formulary at least 1 medicine from
each therapeutic class and, if available, a generic
equivalent thereof; and
``(iii) disclose to current and prospective enrollees and
to participating providers and pharmacies, the nature of the
formulary restrictions, including information regarding the
medicines included in the formulary and any difference in
cost-sharing amounts.
``(C) Construction.--Nothing in this subsection shall be
construed to prevent the Secretary (directly or through
contracts) from using incentives (including a lower
beneficiary coinsurance) to encourage enrollees to select
generic or other cost-effective medicines, so long as--
``(i) such incentives are designed not to result in any
increase in the aggregate expenditures under the Federal
Medicare Prescription Medicine Trust Fund;
``(ii) the average coinsurance charged to all beneficiaries
by the Secretary (directly or through contractors) shall seek
to approximate (but in no case exceed) 20 percent for on-
formulary medicines;
``(iii) a beneficiary's coinsurance shall be no greater
than 20 percent if the prescription is a restrictive
prescription; and
``(iv) the reimbursement for a prescribed nonformulary
medicine without a restrictive prescription in no case shall
be more than the lowest reimbursement for a formulary
medicine in the therapeutic class of the prescribed medicine.
``(D) Restrictive prescription.--For purposes of this
section:
``(i) Written prescriptions.--In the case of a written
prescription for a medicine, it is a restrictive prescription
only if the prescription indicates, in the writing of the
physician or other qualified person prescribing the medicine
and with an appropriate phrase (such as `brand medically
necessary') recognized by the Secretary, that a particular
medicine product must be dispensed based upon a belief by the
physician or person prescribing the medicine that the
particular medicine will provide even marginally superior
therapeutic benefits to the individual for whom the medicine
is prescribed or would have marginally fewer adverse
reactions with respect to such individual.
``(ii) Telephone prescriptions.--In the case of a
prescription issued by telephone for a medicine, it is a
restrictive prescription only if the prescription cannot be
longer than 30 days and the physician or other qualified
person prescribing the medicine (through use of such an
appropriate phrase) states that a particular medicine product
must be dispensed, and the physician or other qualified
person submits to the pharmacy involved, within 30 days after
the date of the telephone prescription, a written
confirmation from the physician or other qualified person
prescribing the medicine and which indicates with such
appropriate phrase that the particular medicine product was
required to have been dispensed based upon a belief by the
physician or person prescribing the medicine that the
particular medicine will provide even marginally superior
therapeutic benefits to the individual for whom the medicine
is prescribed or would have marginally fewer adverse
reactions with respect to such individual. Such written
confirmation is required to refill the prescription.
``(iii) Review of restrictive prescriptions.--The advisory
committee (established under subparagraph (B)(i)) may decide
to review a restrictive prescription and, if so, it may
approve or disapprove such restrictive prescription. It may
not disapprove such restrictive prescription unless it finds
that there is no clinical evidence or peer reviewed medical
literature that supports a determination that the particular
medicine provides even marginally superior therapeutic
benefits to the individual for whom the medicine is
prescribed or would have marginally fewer adverse reactions
with respect to such individual. If it disapproves, upon
request of the prescribing physician or the enrollee, the
committee must provide for a review by an independent
contractor of such decision within 48 hours of the time of
submission of the prescription, to determine whether the
prescription is an eligible benefit under this part. The
Secretary shall ensure that independent contractors so
used are completely independent of the contractor or its
advisory committee.
``(5) Cost and utilization management; quality assurance.--
Have in place effective cost and utilization management, drug
utilization review, quality assurance measures, and systems
to reduce medical errors, including at least the following,
together with such additional measures as the Administrator
may specify:
``(A) Drug utilization review.--A drug utilization review
program conforming to the standards provided in section
1927(g)(2) (with such modifications as the Administrator
finds appropriate).
``(B) Fraud and abuse control.--Activities to control
fraud, abuse, and waste, including prevention of diversion of
pharmaceuticals to the illegal market.
``(C) Medication therapy management.--
``(i) In general.--A program of medicine therapy management
and medication administration that is designed to assure that
covered outpatient medicines are appropriately used to
achieve therapeutic goals and reduce the risk of adverse
events, including adverse drug interactions.
``(ii) Elements.--Such program may include--
``(I) enhanced beneficiary understanding of such
appropriate use through beneficiary education, counseling,
and other appropriate means; and
``(II) increased beneficiary adherence with prescription
medication regimens through medication refill reminders,
special packaging, and other appropriate means.
``(iii) Development of program in cooperation with licensed
pharmacists.--The program shall be developed in cooperation
with licensed pharmacists and physicians.
``(iv) Considerations in pharmacy fees.--There shall be
taken into account, in establishing fees for pharmacists and
others providing services under the medication therapy
management program, the resources and time used in
implementing the program.
``(6) Education and information activities.--Have in place
mechanisms for disseminating educational and informational
materials to enrolled individuals and health care providers
designed to encourage effective and cost-effective use of
prescription medicine benefits and to ensure that enrolled
individuals understand their rights and obligations under the
program.
``(7) Beneficiary protections.--
[[Page S5451]]
``(A) Confidentiality of health information.--Have in
effect systems to safeguard the confidentiality of health
care information on enrolled individuals, which comply with
section 1106 and with section 552a of title 5, United States
Code, and meet such additional standards as the Administrator
may prescribe.
``(B) Grievance and appeal procedures.--Have in place such
procedures as the Administrator may specify for hearing and
resolving grievances and appeals, including expedited
appeals, brought by enrolled individuals against the
Administrator or a pharmacy concerning benefits under this
part, which shall include procedures equivalent to those
specified in subsections (f) and (g) of section 1852.
``(8) Records, reports, and audits.--
``(A) Records and audits.--Maintain adequate records, and
afford the Administrator access to such records (including
for audit purposes).
``(B) Reports.--Make such reports and submissions of
financial and utilization data as the Administrator may
require taking into account standard commercial practices.
``(9) Proposal for alternative coinsurance amount.--
``(A) Submission.--The Administrator may provide for
increased Government cost-sharing for generic prescription
medicines, prescription medicines on a formulary, or
prescription medicines obtained through mail order
pharmacies.
``(B) Contents.--The proposal submitted under subparagraph
(A) shall contain evidence that such increased cost-sharing
would not result in an increase in aggregate costs to the
Account, including an analysis of differences in projected
drug utilization patterns by beneficiaries whose cost-sharing
would be reduced under the proposal and those making the
cost-sharing payments that would otherwise apply.
``(10) Other requirements.--Meet such other requirements as
the Secretary may specify.
The Administrator shall negotiate a schedule of prices under
paragraph (1)(A), except that nothing in this sentence shall
prevent a carrier under a contract with the Administrator
from negotiating a lower schedule of prices for covered
prescription medicines.
``(c) Pharmacy Participation Agreements.--
``(1) In general.--A pharmacy that meets the requirements
of this subsection shall be eligible to enter an agreement
with the Administrator to furnish covered prescription
medicines and pharmacists' services to enrolled individuals.
``(2) Terms of agreement.--An agreement under this
subsection shall include the following terms and
requirements:
``(A) Licensing.--The pharmacy and pharmacists shall meet
(and throughout the contract period will continue to meet)
all applicable State and local licensing requirements.
``(B) Limitation on charges.--Pharmacies participating
under this part shall not charge an enrolled individual more
than the negotiated price for an individual medicine as
established under subsection (b)(1), regardless of whether
such individual has attained the benefit limit under section
1860B(b), and shall not charge an enrolled individual more
than the individual's share of the negotiated price as
determined under the provisions of this part.
``(C) Performance standards.--The pharmacy and the
pharmacist shall comply with performance standards relating
to--
``(i) measures for quality assurance, reduction of medical
errors, and participation in the drug utilization review
program described in subsection (b)(3)(A);
``(ii) systems to ensure compliance with the
confidentiality standards applicable under subsection
(b)(5)(A); and
``(iii) other requirements as the Secretary may impose to
ensure integrity, efficiency, and the quality of the program.
``(D) Disclosure of price of generic medicine.--A pharmacy
participating under this part shall inform an enrollee of the
difference in price between generic and nongeneric
equivalents.
``(d) Special Attention to Rural and Hard-To-Serve Areas.--
``(1) In general.--The Secretary shall ensure that all
beneficiaries have access to the full range of
pharmaceuticals under this part, and shall give special
attention to access, pharmacist counseling, and delivery in
rural and hard-to-serve areas (as the Secretary may define by
regulation).
``(2) Special attention defined.--For purposes of paragraph
(1), the term `special attention' may include bonus payments
to retail pharmacists in rural areas and any other actions
the Secretary determines are necessary to ensure full access
to rural and hard-to-serve beneficiaries.
``(3) GAO report.--Not later than 2 years after the
implementation of this part the Comptroller General of the
United States shall submit to Congress a report on the access
of medicare beneficiaries to pharmaceuticals and pharmacists'
services in rural and hard-to-serve areas under this part
together with any recommendations of the Comptroller General
regarding any additional steps the Secretary may need to take
to ensure the access of medicare beneficiaries to
pharmaceuticals and pharmacists' services in such areas under
this part.
``(e) Incentives for Cost and Utilization Management and
Quality Improvement.--The Secretary is authorized to include
in a contract awarded under subsection (b) with a carrier
such incentives for cost and utilization management and
quality improvement as the Secretary may deem appropriate,
including--
``(1) bonus and penalty incentives to encourage
administrative efficiency;
``(2) incentives under which carriers share in any benefit
savings achieved;
``(3) risk-sharing arrangements related to initiatives to
encourage savings in benefit payments;
``(4) financial incentives under which savings derived from
the substitution of generic medicines in lieu of nongeneric
medicines are made available to carriers, pharmacies, and the
Prescription Medicine Insurance Account; and
``(5) any other incentive that the Secretary deems
appropriate and likely to be effective in managing costs or
utilization.
``employer incentive program for employment-based retiree medicine
coverage
``Sec. 1860H. (a) Program Authority.--The Secretary shall
develop and implement a program under this section called the
`Employer Incentive Program' that encourages employers and
other sponsors of employment-based health care coverage to
provide adequate prescription medicine benefits to retired
individuals and to maintain such existing benefit programs,
by subsidizing, in part, the sponsor's cost of providing
coverage under qualifying plans.
``(b) Sponsor Requirements.--In order to be eligible to
receive an incentive payment under this section with respect
to coverage of an individual under a qualified retiree
prescription medicine plan (as defined in subsection (f)(3)),
a sponsor shall meet the following requirements:
``(1) Assurances.--The sponsor shall--
``(A) annually attest, and provide such assurances as the
Secretary may require, that the coverage offered by the
sponsor is a qualified retiree prescription medicine plan,
and will remain such a plan for the duration of the
sponsor's participation in the program under this section;
and
``(B) guarantee that it will give notice to the Secretary
and covered retirees--
``(i) at least 120 days before terminating its plan; and
``(ii) immediately upon determining that the actuarial
value of the prescription medicine benefit under the plan
falls below the actuarial value of the insurance benefit
under this part.
``(2) Other requirements.--The sponsor shall provide such
information, and comply with such requirements, including
information requirements to ensure the integrity of the
program, as the Secretary may find necessary to administer
the program under this section.
``(c) Incentive Payment.--
``(1) In general.--A sponsor that meets the requirements of
subsection (b) with respect to a quarter in a calendar year
shall have payment made by the Secretary on a quarterly basis
(to the sponsor or, at the sponsor's direction, to the
appropriate employment-based health plan) of an incentive
payment, in the amount determined as described in paragraph
(2), for each retired individual (or spouse) who--
``(A) was covered under the sponsor's qualified retiree
prescription medicine plan during such quarter; and
``(B) was eligible for but was not enrolled in the
insurance program under this part.
``(2) Amount of incentive.--The payment under this section
with respect to each individual described in paragraph (1)
for a month shall be equal to \2/3\ of the monthly premium
amount payable from the Prescription Medicine Insurance
Account for an enrolled individual, as set for the calendar
year pursuant to section 1860D(a)(2).
``(3) Payment date.--The incentive under this section with
respect to a calendar quarter shall be payable as of the end
of the next succeeding calendar quarter.
``(d) Civil Money Penalties.--A sponsor, health plan, or
other entity that the Secretary determines has, directly or
through its agent, provided information in connection with a
request for an incentive payment under this section that the
entity knew or should have known to be false shall be subject
to a civil monetary penalty in an amount equal to $2,000 for
each false representation plus an amount not to exceed 3
times the total incentive amounts under subsection (c) that
were paid (or would have been payable) on the basis of such
information.
``(e) Part D Enrollment for Certain Individuals Covered by
Employment-Based Retiree Health Coverage Plans.--
``(1) Eligible individuals.--An individual shall be given
the opportunity to enroll in the program under this part
during the period specified in paragraph (2) if--
``(A) the individual declined enrollment in the program
under this part at the time the individual first satisfied
section 1860C(a);
``(B) at that time, the individual was covered under a
qualified retiree prescription medicine plan for which an
incentive payment was paid under this section; and
``(C)(i) the sponsor subsequently ceased to offer such
plan; or
``(ii) the value of prescription medicine coverage under
such plan is reduced below the value of the coverage provided
at the time the individual first became eligible to
participate in the program under this part.
``(2) Special enrollment period.--An individual described
in paragraph (1) shall be eligible to enroll in the program
under this
[[Page S5452]]
part during the 6-month period beginning on the first day of
the month in which--
``(A) the individual receives a notice that coverage under
such plan has terminated (in the circumstance described in
paragraph (1)(C)(i)) or notice that a claim has been denied
because of such a termination; or
``(B) the individual received notice of the change in
benefits (in the circumstance described in paragraph
(1)(C)(ii)).
``(f) Definitions.--In this section:
``(1) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health
insurance or other coverage of health care costs for retired
individuals (or for such individuals and their spouses and
dependents) based on their status as former employees or
labor union members.
``(2) Employer.--The term `employer' has the meaning given
to such term by section 3(5) of the Employee Retirement
Income Security Act of 1974 (except that such term shall
include only employers of 2 or more employees).
``(3) Qualified retiree prescription medicine plan.--The
term `qualified retiree prescription medicine plan' means
health insurance coverage included in employment-based
retiree health coverage that--
``(A) provides coverage of the cost of prescription
medicines whose actuarial value to each retired beneficiary
equals or exceeds the actuarial value of the benefits
provided to an individual enrolled in the program under this
part; and
``(B) does not deny, limit, or condition the coverage or
provision of prescription medicine benefits for retired
individuals based on age or any health status-related factor
described in section 2702(a)(1) of the Public Health Service
Act.
``(4) Sponsor.--The term `sponsor' has the meaning given
the term `plan sponsor' by section 3(16)(B) of the Employee
Retirement Income Security Act of 1974.
``promotion of pharmaceutical research on break-through medicines while
providing program cost containment
``Sec. 1860I. (a) Monitoring Expenditures.--The Secretary
shall monitor expenditures under this part. On October 1,
2003, the Secretary shall estimate total expenditures under
this part for 2003.
``(b) Establishment of Sustainable Growth Rate.--
``(1) In general.--The Secretary shall establish a
sustainable growth rate prescription medicine target system
for expenditures under this part for each year after 2003.
``(2) Initial computation.--Such target shall equal the
amount of total expenditures estimated for 2003 adjusted by
the Secretary's estimate of a sustainable growth rate (in
this section referred to as an `SGR') percentage between 2003
and 2004. Such SGR shall be estimated based on the following:
``(A) Reasonable changes in the cost of production or price
of covered pharmaceuticals, but in no event more than the
rate of increase in the Consumer Price Index for all urban
consumers for the period involved.
``(B) Population enrolled in this part, both in numbers and
in average age and severity of chronic and acute illnesses.
``(C) Appropriate changes in utilization of
pharmaceuticals, as determined by the Drug Review Board
(established under subsection (c)(3)) and based on best
estimates of utilization change if there were no direct-to-
consumer advertising or promotions to providers.
``(D) Productivity index of manufacturers and distributors.
``(E) Percentage of products with patent and market
exclusivity protection versus products without patent
protection and changes in the availability of generic
substitutes.
``(F) Such other factors as the Secretary may determine are
appropriate.
In no event may the sustainable growth rate exceed 120
percent of the estimated per capita growth in total spending
under this title.
``(3) Computation for subsequent years.--In October of 2004
and each year thereafter, for purposes of setting the SGRs
for the succeeding year, the Secretary shall adjust each
current year's estimated expenditures by the estimated SGR
for the succeeding year, further adjusted for corrections in
earlier estimates and the receipt of additional data on
previous years spending as follows:
``(A) Error estimates.--An adjustment (up or down) for
errors in the estimate of total expenditures under this part
for the previous year.
``(B) Costs.--An adjustment (up or down) for corrections in
the cost of production of prescriptions covered under this
part between the current calendar year and the previous year.
``(C) Target.--An adjustment for any amount (over or under)
that expenditures in the current year under this part are
estimated to differ from the target amount set for the year.
If expenditures in the current year are estimated to be--
``(i) less than the target amount, future target amounts
will be adjusted downward; or
``(ii) more than the target amount, the Secretary shall
notify all pharmaceutical manufacturers with sales of
pharmaceutical prescription medicine products to medicare
beneficiaries under this part, of a rebate requirement
(except as provided in this subparagraph) to be deposited in
the Federal Medicare Prescription Medicine Trust Fund.
``(D) Rebate determination.--The amount of the rebate
described in subparagraph (C)(ii) may vary among
manufacturers and shall be based on the manufacturer's
estimated contribution to the expenditure above the target
amount, taking into consideration such factors as--
``(i) above average increases in the cost of the
manufacturer's product;
``(ii) increases in utilization due to promotion activities
of the manufacturer, wholesaler, or retailer;
``(iii) launch prices of new drugs at the same or higher
prices as similar drugs already in the marketplace (so-called
`me too' or `copy-cat' drugs);
``(iv) the role of the manufacturer in delaying the entry
of generic products into the market; and
``(v) such other actions by the manufacturer that the
Secretary may determine has contributed to the failure to
meet the SGR target.
The rebates shall be established under such subparagraph so
that the total amount of the rebates is estimated to ensure
that the amount the target for the current year is estimated
to be exceeded is recovered in lower spending in the
subsequent year; except that, no rebate shall be made in any
manufacturer's product which the Food and Drug Administration
has determined is a breakthrough medicine (as determined
under subsection (c)) or an orphan medicine.
``(c) Breakthrough Medicines.--
``(1) Determination.--For purposes of this section, a
medicine is a `breakthrough medicine' if the Drug Review
Board (established under paragraph (3)) determines--
``(A) it is a new product that will make a significant and
major improvement by reducing physical or mental illness,
reducing mortality, or reducing disability; and
``(B) that no other product is available to beneficiaries
that achieves similar results for the same condition at a
lower cost.
``(2) Condition.--An exemption from rebates under
subsection (b)(3) for a breakthrough medicine shall continue
as long as the medicine is certified as a breakthrough
medicine but shall be limited to 7 calendar years from 2003
or 7 calendar years from the date of the initial
determination under paragraph (1), whichever is later.
``(3) Drug review board.--The Drug Review Board under this
paragraph shall consist of the Commissioner of Food and
Drugs, the Directors of the National Institutes of Health,
the Director of the National Science Foundation, and 10
experts in pharmaceuticals, medical research, and clinical
care, selected by the Commissioner of Food and Drugs from the
faculty of academic medical centers, except that no person
who has (or who has an immediate family member that has) any
conflict of interest with any pharmaceutical manufacturer
shall serve on the Board.
``(d) No Review.--The Secretary's determination of the
rebate amounts under this section, and the Drug Review
Board's determination of what is a breakthrough drug, are not
subject to administrative or judicial review.
``appropriations to cover government contributions
``Sec. 1860J. (a) In General.--There are authorized to be
appropriated from time to time, out of any moneys in the
Treasury not otherwise appropriated, to the Prescription
Medicine Insurance Account, a Government contribution equal
to--
``(1) the aggregate premiums payable for a month pursuant
to section 1860D(a)(2) by individuals enrolled in the program
under this part; plus
``(2) one-half the aggregate premiums payable for a month
pursuant to such section for such individuals by former
employers; plus
``(3) the benefits payable by reason of the application of
paragraph (2) of section 1860B(a) (relating to catastrophic
benefits).
``(b) Appropriations To Cover Incentives for Employment-
Based Retiree Medicine Coverage.--There are authorized to be
appropriated to the Prescription Medicine Insurance Account
from time to time, out of any moneys in the Treasury not
otherwise appropriated, such sums as may be necessary for
payment of incentive payments under section 1860H(c).
``prescription medicine defined
``Sec. 1860K. As used in this part, the term `prescription
medicine' means--
``(1) a drug that may be dispensed only upon a
prescription, and that is described in subparagraph (A)(i),
(A)(ii), or (B) of section 1927(k)(2); and
``(2) insulin certified under section 506 of the Federal
Food, Drug, and Cosmetic Act, and needles, syringes, and
disposable pumps for the administration of such insulin.''.
(b) Conforming Amendments.--
(1) Amendments to federal supplementary health insurance
trust fund.--Section 1841 of the Social Security Act (42
U.S.C. 1395t) is amended--
(A) in the last sentence of subsection (a)--
(i) by striking ``and'' after ``section 201(i)(1)''; and
(ii) by inserting before the period the following: ``, and
such amounts as may be deposited in, or appropriated to, the
Prescription Medicine Insurance Account established by
section 1860F'';
(B) in subsection (g), by inserting after ``by this part,''
the following: ``the payments provided for under part D (in
which case the payments shall come from the Prescription
Medicine Insurance Account in the Supplementary Medical
Insurance Trust Fund),'';
[[Page S5453]]
(C) in the first sentence of subsection (h), by inserting
before the period the following: ``and section 1860D(b)(4)
(in which case the payments shall come from the Prescription
Medicine Insurance Account in the Supplementary Medical
Insurance Trust Fund)''; and
(D) in the first sentence of subsection (i)--
(i) by striking ``and'' after ``section 1840(b)(1)''; and
(ii) by inserting before the period the following: ``,
section 1860D(b)(2) (in which case the payments shall come
from the Prescription Medicine Insurance Account in the
Supplementary Medical Insurance Trust Fund)''.
(2) Prescription medicine option under medicare+choice
plans.--
(A) Eligibility, election, and enrollment.--Section 1851 of
the Social Security Act (42 U.S.C. 1395w-21) is amended--
(i) in subsection (a)(1)(A), by striking ``parts A and B''
and inserting ``parts A, B, and D''; and
(ii) in subsection (i)(1), by striking ``parts A and B''
and inserting ``parts A, B, and D''.
(B) Voluntary beneficiary enrollment for medicine
coverage.--Section 1852(a)(1)(A) of such Act (42 U.S.C.
1395w-22(a)(1)(A)) is amended by inserting ``(and under part
D to individuals also enrolled under that part)'' after
``parts A and B''.
(C) Access to services.--Section 1852(d)(1) of such Act (42
U.S.C. 1395w-22(d)(1)) is amended--
(i) in subparagraph (D), by striking ``and'' at the end;
(ii) in subparagraph (E), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following new subparagraph:
``(F) the plan for prescription medicine benefits under
part D guarantees coverage of any specifically named covered
prescription medicine for an enrollee, when prescribed by a
physician in accordance with the provisions of such part,
regardless of whether such medicine would otherwise be
covered under an applicable formulary or discount
arrangement.''.
(D) Payments to organizations.--Section 1853(a)(1)(A) of
such Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended--
(i) by inserting ``determined separately for benefits under
parts A and B and under part D (for individuals enrolled
under that part)'' after ``as calculated under subsection
(c)'';
(ii) by striking ``that area, adjusted for such risk
factors'' and inserting ``that area. In the case of payment
for benefits under parts A and B, such payment shall be
adjusted for such risk factors as''; and
(iii) by inserting before the last sentence the following:
``In the case of the payments for benefits under part D, such
payment shall initially be adjusted for the risk factors of
each enrollee as the Secretary determines to be feasible and
appropriate. By 2006, the adjustments would be for the same
risk factors applicable for benefits under parts A and B.''.
(E) Calculation of annual medicare +choice capitation
rates.--Section 1853(c) of such Act (42 U.S.C. 1395w-23(c))
is amended--
(i) in paragraph (1), in the matter preceding subparagraph
(A), by inserting ``for benefits under parts A and B'' after
``capitation rate'';
(ii) in paragraph (6)(A), by striking ``rate of growth in
expenditures under this title'' and inserting ``rate of
growth in expenditures for benefits available under parts A
and B''; and
(iii) by adding at the end the following new paragraph:
``(8) Payment for prescription medicines.--The Secretary
shall determine a capitation rate for prescription
medicines--
``(A) dispensed in 2003, which is based on the projected
national per capita costs for prescription medicine benefits
under part D and associated claims processing costs for
beneficiaries under the original medicare fee-for-service
program; and
``(B) dispensed in each subsequent year, which shall be
equal to the rate for the previous year updated by the
Secretary's estimate of the projected per capita rate of
growth in expenditures under this title for an individual
enrolled under part D.''.
(F) Limitation on enrollee liability.--Section 1854(e) of
such Act (42 U.S.C. 1395w-24(e)) is amended by adding at the
end the following new paragraph:
``(5) Special rule for provision of part d benefits.--In no
event may a Medicare+Choice organization include as part of a
plan for prescription medicine benefits under part D a
requirement that an enrollee pay a deductible, or a
coinsurance percentage that exceeds 20 percent.''.
(G) Requirement for additional benefits.--Section
1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is amended
by adding at the end the following new sentence: ``Such
determination shall be made separately for benefits under
parts A and B and for prescription medicine benefits under
part D.''.
(3) Exclusions from coverage.--
(A) Application to part d.--Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)) is amended in the matter
preceding paragraph (1) by striking ``part A or part B'' and
inserting ``part A, B, or D''.
(B) Prescription medicines not excluded from coverage if
appropriately prescribed.--Section 1862(a)(1) of such Act (42
U.S.C. 1395y(a)(1)) is amended--
(i) in subparagraph (H), by striking ``and'' at the end;
(ii) in subparagraph (I), by striking the semicolon at the
end and inserting ``, and''; and
(iii) by adding at the end the following new subparagraph:
``(J) in the case of prescription medicines covered under
part D, which are not prescribed in accordance with such
part;''.
SEC. 4. SUBSTANTIAL REDUCTIONS IN THE PRICE OF PRESCRIPTION
DRUGS FOR MEDICARE BENEFICIARIES.
(a) Participating Manufacturers.--
(1) In general.--Each participating manufacturer of a
covered outpatient drug shall make available for purchase by
each pharmacy such covered outpatient drug in the amount
described in paragraph (2) at the price described in
paragraph (3).
(2) Description of amount of drugs.--The amount of a
covered outpatient drug that a participating manufacturer
shall make available for purchase by a pharmacy is an amount
equal to the aggregate amount of the covered outpatient drug
sold or distributed by the pharmacy to medicare
beneficiaries.
(3) Description of price.--The price at which a
participating manufacturer shall make a covered outpatient
drug available for purchase by a pharmacy is the price equal
to the lowest of the following:
(A) The lowest price paid for the covered outpatient drug
by any agency or department of the United States.
(B) The manufacturer's best price for the covered
outpatient drug, as defined in section 1927(c)(1)(C) of the
Social Security Act (42 U.S.C. 1396r-8(c)(1)(C)).
(C) The lowest price at which the drug is available (as
determined by the Secretary) through importation consistent
with the provisions of section 804 of the Federal Food, Drug,
and Cosmetic Act.
(b) Special Provision With Respect to Hospice Programs.--
For purposes of determining the amount of a covered
outpatient drug that a participating manufacturer shall make
available for purchase by a pharmacy under subsection (a),
there shall be included in the calculation of such amount the
amount of the covered outpatient drug sold or distributed by
a pharmacy to a hospice program. In calculating such amount,
only amounts of the covered outpatient drug furnished to a
medicare beneficiary enrolled in the hospice program shall be
included.
(c) Administration.--The Secretary shall issue such
regulations as may be necessary to implement this section.
(d) Reports to Congress Regarding Effectiveness of
Section.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, and annually thereafter, the Secretary
shall report to Congress regarding the effectiveness of this
section in--
(A) protecting medicare beneficiaries from discriminatory
pricing by drug manufacturers; and
(B) making prescription drugs available to medicare
beneficiaries at substantially reduced prices.
(2) Consultation.--In preparing such reports, the Secretary
shall consult with public health experts, affected
industries, organizations representing consumers and older
Americans, and other interested persons.
(3) Recommendations.--The Secretary shall include in such
reports any recommendations they consider appropriate for
changes in this section to further reduce the cost of covered
outpatient drugs to medicare beneficiaries.
(e) Definitions.--For purposes of this section:
(1) Participating manufacturer.--The term ``participating
manufacturer'' means any manufacturer of drugs or biologicals
that, on or after the date of enactment of this Act, enters
into a contract or agreement with the United States for the
sale or distribution of covered outpatient drugs to the
United States.
(2) Covered outpatient drug.--The term ``covered outpatient
drug'' has the meaning given that term in section 1927(k)(2)
of the Social Security Act (42 U.S.C. 1396r-8(k)(2)).
(3) Medicare beneficiary.--The term ``medicare
beneficiary'' means an individual entitled to benefits under
part A of title XVIII of the Social Security Act or enrolled
under part B of such title, or both.
(4) Hospice program.--The term ``hospice program'' has the
meaning given that term under section 1861(dd)(2) of the
Social Security Act (42 U.S.C. 1395x(dd)(2)).
(5) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(f) Effective Date.--The Secretary shall implement this
section as expeditiously as practicable and in a manner
consistent with the obligations of the United States.
SEC. 5. AMENDMENTS TO PROGRAM FOR IMPORTATION OF CERTAIN
PRESCRIPTION DRUGS BY PHARMACISTS AND
WHOLESALERS.
Section 804 of the Federal Food, Drug, and Cosmetic Act (as
added by section 745(c)(2) of Public Law 106-387) is
amended--
(1) by striking subsections (e) and (f) and inserting the
following subsections:
``(e) Testing; Approved Labeling.--
``(1) Testing.--Regulations under subsection (a)--
``(A) shall require that testing referred to in paragraphs
(6) through (8) of subsection (d) be conducted by the
importer of the covered product pursuant to subsection (a),
or the manufacturer of the product;
``(B) shall require that, if such tests are conducted by
the importer, information needed to authenticate the product
being tested be supplied by the manufacturer of such product
to the importer; and
[[Page S5454]]
``(C) shall provide for the protection of any information
supplied by the manufacturer under subparagraph (B) that is a
trade secret or commercial or financial information that is
privileged or confidential.
``(2) Approved labeling.--For purposes of importing a
covered product pursuant to subsection (a), the importer
involved may use the labeling approved for the product under
section 505, notwithstanding any other provision of law.
``(f) Discretion of Secretary Regarding Testing.--The
Secretary may waive or modify testing requirements described
in subsection (d) if, with respect to specific countries or
specific distribution chains, the Secretary has entered into
agreements or otherwise approved arrangements that the
Secretary determines ensure that the covered products
involved are not adulterated or in violation of section
505.'';
(2) by striking subsections (h) and (i) and inserting the
following subsections:
``(h) Prohibited Agreements; Nondiscrimination.--
``(1) Prohibited agreements.--No manufacturer of a covered
product may enter into a contract or agreement that includes
a provision to prevent the sale or distribution of covered
products imported pursuant to subsection (a).
``(2) Nondiscrimination.--No manufacturer of a covered
product may take actions that discriminate against, or cause
other persons to discriminate against, United States
pharmacists, wholesalers, or consumers regarding the sale or
distribution of covered products.
``(i) Study and Report.--
``(1) Study.--The Comptroller General of the United States
shall conduct a study on the imports permitted under this
section, taking into consideration the information received
under subsection (a). In conducting such study, the
Comptroller General shall--
``(A) evaluate importers' compliance with regulations,
determine the number of shipments, if any, permitted under
this section that have been determined to be counterfeit,
misbranded, or adulterated; and
``(B) consult with the United States Trade Representative
and United States Patent and Trademark Office to evaluate the
effect of importations permitted under this section on trade
and patent rights under Federal law.
``(2) Report.--Not later than 5 years after the effective
date of final regulations issued pursuant to this section,
the Comptroller General of the United States shall prepare
and submit to Congress a report containing the study
described in paragraph (1).'';
(3) in subsection (k)(2)--
(A) by redesignating subparagraphs (A) through (E) as
subparagraphs (B) through (F), respectively; and
(B) by inserting before subparagraph (B) (as so
redesignated) the following subparagraph:
``(A) The term `discrimination' includes a contract
provision, a limitation on supply, or other measure which has
the effect of providing United States pharmacists,
wholesalers, or consumers access to covered products on terms
or conditions that are less favorable than the terms or
conditions provided to any foreign purchaser of such
products.'';
(4) by striking subsection (m); and
(5) by inserting after subsection (l) the following
subsection:
``(m) Funding.--For the purpose of carrying out this
section, there are authorized to be appropriated such sums as
may be necessary for fiscal year 2002 and each subsequent
fiscal year.''.
SEC. 6. REASONABLE PRICE AGREEMENT FOR FEDERALLY FUNDED
RESEARCH.
(a) In General.--If any Federal agency or any non-profit
entity undertakes federally funded health care research and
development and is to convey or provide a patent or other
exclusive right to use such research and development for a
drug or other health care technology, such agency or entity
shall not make such conveyance or provide such patent or
other right until the person who will receive such conveyance
or patent or other right first agrees to a reasonable pricing
agreement with the Secretary of Health and Human Services or
the Secretary makes a determination that the public interest
is served by a waiver of the reasonable pricing agreement
provided in accordance with subsection (c).
(b) Consideration of Competitive Bidding.--In cases where
the Federal Government conveys or licenses exclusive rights
to federally funded research under subsection (a),
consideration shall be given to mechanisms for determining
reasonable prices which are based upon a competitive bidding
process. When appropriate, the mechanisms should be
considered where--
(1) qualified bidders compete on the basis of the lowest
prices that will be charged to consumers;
(2) qualified bidders compete on the basis of the least
sales revenues before prices are adjusted in accordance with
a cost-based reasonable pricing formula;
(3) qualified bidders compete on the basis of the least
period of time before prices are adjusted in accordance with
a cost-based reasonable pricing formula;
(4) qualified bidders compete on the basis of the shortest
period of exclusivity; or
(5) qualified bidders compete under other competitive
bidding systems.
Such competitive bidding process may incorporate requirements
for minimum levels of expenditures on research, marketing,
maximum price, or other factors.
(c) Waiver.--No waiver shall take effect under subsection
(a) before the public is given notice of the proposed waiver
and provided a reasonable opportunity to comment on the
proposed waiver. A decision to grant a waiver shall set out
the Secretary's finding that such a waiver is in the public
interest.
SEC. 7. GAO ONGOING STUDIES AND REPORTS ON PROGRAM;
MISCELLANEOUS REPORTS.
(a) Ongoing Study.--The Comptroller General of the United
States shall conduct an ongoing study and analysis of the
prescription medicine benefit program under part D of the
medicare program under title XVIII of the Social Security Act
(as added by section 3 of this Act), including an analysis of
each of the following:
(1) The extent to which the administering entities have
achieved volume-based discounts similar to the favored price
paid by other large purchasers.
(2) Whether access to the benefits under such program are
in fact available to all beneficiaries, with special
attention given to access for beneficiaries living in rural
and hard-to-serve areas.
(3) The success of such program in reducing medication
error and adverse medicine reactions and improving quality of
care, and whether it is probable that the program has
resulted in savings through reduced hospitalizations and
morbidity due to medication errors and adverse medicine
reactions.
(4) Whether patient medical record confidentiality is being
maintained and safe-guarded.
(5) Such other issues as the Comptroller General may
consider.
(b) Reports.--The Comptroller General shall issue such
reports on the results of the ongoing study described in
subsection (a) as the Comptroller General shall deem
appropriate and shall notify Congress on a timely basis of
significant problems in the operation of the part D
prescription medicine program and the need for legislative
adjustments and improvements.
(c) Miscellaneous Studies and Reports.--
(1) Study on methods to encourage additional research on
breakthrough pharmaceuticals.--
(A) In general.--The Secretary of Health and Human Services
shall seek the advice of the Secretary of the Treasury on
possible tax and trade law changes to encourage increased
original research on new pharmaceutical breakthrough products
designed to address disease and illness.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include recommended methods to encourage the
pharmaceutical industry to devote more resources to research
and development of new covered products than it devotes to
overhead expenses.
(2) Study on pharmaceutical sales practices and impact on
costs and quality of care.--
(A) In general.--The Secretary of Health and Human Services
shall conduct a study on the methods used by the
pharmaceutical industry to advertise and sell to consumers
and educate and sell to providers.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include the estimated direct and indirect costs of the
sales methods used, the quality of the information conveyed,
and whether such sales efforts leads (or could lead) to
inappropriate prescribing. Such report may include
legislative and regulatory recommendations to encourage more
appropriate education and prescribing practices.
(3) Study on cost of pharmaceutical research.--
(A) In general.--The Secretary of Health and Human Services
shall conduct a study on the costs of, and needs for, the
pharmaceutical research and the role that the taxpayer
provides in encouraging such research.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include a description of the full-range of taxpayer-
assisted programs impacting pharmaceutical research,
including tax, trade, government research, and regulatory
assistance. The report may also include legislative and
regulatory recommendations that are designed to ensure that
the taxpayer's investment in pharmaceutical research results
in the availability of pharmaceuticals at reasonable prices.
(4) Report on pharmaceutical prices in major foreign
nations.--Not later than January 1, 2003, the Secretary of
Health and Human Services shall submit to Congress a report
on the retail price of major pharmaceutical products in
various developed nations, compared to prices for the same or
similar products in the United States. The report shall
include a description of the principal reasons for any price
differences that may exist.
SEC. 8. MEDIGAP TRANSITION PROVISIONS.
(a) In General.--Notwithstanding any other provision of
law, no new medicare supplemental policy that provides
coverage of expenses for prescription drugs may be issued
under section 1882 of the Social Security Act on or after
January 1, 2003, to an individual unless it replaces a
medicare supplemental policy that was issued to that
individual and that provided some coverage of expenses for
prescription drugs.
[[Page S5455]]
(b) Issuance of Substitute Policies if Prescription Drug
Coverage Is Obtained Through Medicare.--
(1) In general.--The issuer of a medicare supplemental
policy--
(A) may not deny or condition the issuance or effectiveness
of a medicare supplemental policy that has a benefit package
classified as ``A'', ``B'', ``C'', ``D'', ``E'', ``F'', or
``G'' (under the standards established under subsection
(p)(2) of section 1882 of the Social Security Act, 42 U.S.C.
1395ss) and that is offered and is available for issuance to
new enrollees by such issuer;
(B) may not discriminate in the pricing of such policy,
because of health status, claims experience, receipt of
health care, or medical condition; and
(C) may not impose an exclusion of benefits based on a
preexisting condition under such policy,
in the case of an individual described in paragraph (2) who
seeks to enroll under the policy not later than 63 days after
the date of the termination of enrollment described in such
paragraph and who submits evidence of the date of termination
or disenrollment along with the application for such medicare
supplemental policy.
(2) Individual covered.--An individual described in this
paragraph is an individual who--
(A) enrolls in a prescription drug plan under part D of
title XVIII of the Social Security Act; and
(B) at the time of such enrollment was enrolled and
terminates enrollment in a medicare supplemental policy which
has a benefit package classified as ``H'', ``I'', or ``J''
under the standards referred to in paragraph (1)(A) or
terminates enrollment in a policy to which such standards do
not apply but which provides benefits for prescription drugs.
(3) Enforcement.--The provisions of paragraph (1) shall be
enforced as though they were included in section 1882(s) of
the Social Security Act (42 U.S.C. 1395ss(s)).
(4) Definitions.--For purposes of this subsection, the term
``medicare supplemental policy'' has the meaning given such
term in section 1882(g) of the Social Security Act (42 U.S.C.
1395ss(g)).
______
By Mr. HARKIN (for himself, Mr. Helms, Mr. Schumer, Mr. Hollings,
and Mrs. Feinstein):
S. 926. A bill to prohibit the importation of any article that is
produced, manufactured, or grown in Burma; to the Committee on
Environment and Public Works.
Mr. HARKIN. Mr. President, the people of Burma continue to suffer at
the hands of the world's most brutal military dictatorship which
cynically calls itself the State Peace and Development Council, (SPDC).
Now more than ever, as a nation committed to internationally-recognized
human rights and worker rights, democracy, and freedom, America must
heed the call of the International Labor Organization, (ILO), and
support stronger, coordinated multilateral actions against Burma's
repressive regime. In the face of overwhelming evidence of continued,
systematic use of forced labor, including forced child labor in Burma,
we must do all we can to deny any material support to the military
dictators who rule that country with an iron fist.
Furthermore, there is no clear and tangible evidence that the latest
informal, closed-door dialogue between the Burmese generals on one side
and Aung San Suu Kyi and the other duly-elected leaders of the pro-
democracy movement on the other side is bearing fruit. Therefore, we
must demonstrate anew to the Burmese people our recognition of their
nightmarish plight as well as our support for their noble struggle to
achieve democratic governance.
In 1997, a strong, bipartisan majority of the Congress enacted some
sanctions and former President Clinton issued an Executive Order in
response to a prolonged pattern of egregious human rights violations in
Burma. At the heart of those measures is the existing prohibition on
U.S. private companies making new investments in Burma's
infrastructure. Many other national governments, as well as scores of
city and State governments in the U.S. followed suit and adopted their
own sanctions.
Nevertheless, the ruling military junta in Burma has clung to power
and continues to blatantly violate internationally-recognized human and
worker rights. The 1999 State Department Human Rights Country Report on
Burma cited ``credible reports that Burmese Army soldiers have
committed rape, forced porterage, and extrajudicial killing.'' It
referred to arbitrary arrests and the detention of at least 1300
political prisoners.
The following excerpts from the most recent 2000 State Department
Human Rights Country Report paint an even more disturbing reality:
The Burmese Government's extremely poor human rights record
and longstanding severe repression of its citizens continued
during the year. Citizens continued to live subject at any
time and without appeal to the arbitrary and sometimes brutal
dictates of the military regime. Citizens did not have the
right to change their government. There continued to be
credible reports, particularly in ethnic minority areas, that
security forces committed serious human rights abuses,
including extrajudicial killings and rape. Disappearances
continued, and members of the security forces tortured, beat,
and otherwise abused prisoners and detainees.
The judiciary is not independent and there is no effective
rule of law.
The Government continued to restrict worker rights, ban
unions, and use forced labor for public works and for the
support of military garrisons. Forced labor, including forced
child labor, remains a serious problem. The use of forced
labor as porters by the army--with attendant mistreatment,
illness, and sometimes death--remain a common practice. In
November, 2000 the International Labor Organization ILO
Governing Body judged that the Government had not taken
effective action to deal with `widespread and systematic' use
of forced labor in the country and, for the first time in its
history, called on all ILO members to apply sanctions to
Burma. Child labor is also a problem and varies in severity
depending on the country's region. Trafficking in persons,
particularly in women and girls to Thailand and China, mostly
for the purposes of prostitution, remain widespread.
As of September, 2000, the International Committee of the
Red Cross had visited more than 35,000 prisoners in at least
30 prisons, including more than 1,800 political prisoners.
The ICRC also has begun tackling the problem of the roughly
36,000 persons in forced labor camps.
The Government continued to infringe on citizens' privacy
rights, and security forces continued to monitor citizens'
movements and communications systematically, to search homes
without warrants, and to relocate persons forcibly without
just compensation or due process.
The SPDC continued to restrict severely freedom of speech,
press assembly, and association. It has pressured many
thousands of members to resign from the National League for
Democracy, NLD, and closed party offices nationwide. Since
1990 the junta frequently prevented the NLD and other pro-
democracy parties from conducting normal political
activities. The junta recognizes the NLD as a legal entity;
however, it refuses to accept the legal political status of
key NLD party leaders, particularly the party's general
secretary and 1991 Nobel Laureate, Aung San Suu Kyi, and
restrict her activities severely through security measures
and threats.
Furthermore, Human Rights Watch/Asia reports that children from
ethnic minorities are forced to work under inhumane conditions for the
Burmese Army, lacking adequate medical care and sometimes dying from
beatings.
Last year, the UN Special Rapporteur on Burma, in a chilling and
alarming account, puts the number of child soldiers at 50,000, the
highest in the world. Sadly, the children most vulnerable to
recruitment into the military are orphans, street children, and the
children of ethnic minorities.
The same UN report also discusses the dire state of minorities in
Burma who continue to be the targets of violence. Specifically, it
details that the most frequently observed human rights violations aimed
at minorities include extortion, rape, torture and other forms of
physical abuse, forced labor, ``portering'', arbitrary arrests, long-
term imprisonment, forcible relocation, and in some cases,
extrajudicial executions. It also cites reports of massacres in the
Shan state in the months of January, February, and May of 2000.
A 1998 International Labor Organization Commission of Inquiry
determined that forced labor in Burma is practiced in a ``widespread
and systematic manner, with total disregard for the human dignity,
safety, health and basic needs of the people.''
Last August, California District Court Judge Ronald Lew found in one
high-profile court case ``ample evidence in the record linking the
Burmese Government's use of forced labor to human rights abuses.''
In sum, the Burmese military junta continues to commit such horrific
and appalling human rights and worker rights violations that we have no
choice but to unite with other nations around the world and take
stronger action.
Even though the Burmese military junta has been terrorizing the 48
million people of Burma since it came to power in 1988 and has vowed to
destroy the National League for Democracy, NLD, Aung San Suu Kyi, a
remarkably courageous leader and very brave woman, manages to stand
steadfast,
[[Page S5456]]
like a living Statue of Liberty, in her undaunted quest and that of the
Burmese people for democracy. We must never forget that she and her NLD
colleagues won 392 of 485 seats in a democratic election held in 1990.
But they have never been allowed to take office.
Aung San Suu Kyi, the 1991 Nobel Peace Prize winner, and countless
others are denied freedom of association, speech and movement on a
daily basis. Last summer, she came under renewed threats and
intimidation. For example, her vehicle was forced off the road last
August by Burmese security forces when she tried to travel outside
Rangoon to meet with her NLD colleagues. She sat in her car on the
roadside for a week until a midnight raid of 200 riot police forced her
back to her home and placed her under house arrest until September 14,
2000. Nevertheless, she tried again on September 21st, but she was
prevented from boarding a train. The pathetic excuse from the
authorities for abridging her freedom to travel within Burma, on that
occasion, was that all tickets had been sold out.
This Congress must answer anew the cry of the Burmese people and
their courageous freedom-fighters. That is why I am introducing
bipartisan legislation today, along with Senator Jessee Helms and
several of our colleagues, to ban soaring imports from Burma, most of
which are apparel and textiles sold by many brand-name American
retailers. I am equally pleased that U.S. Congressman Tom Lantos from
California is introducing the companion bill in the U.S. House of
Representatives this week.
Most Americans think that a trade ban with Burma already exists.
Nothing could be further from the truth. When I began investigating
U.S. trade with Burma last summer in concern with the National Labor
Committee, I was chocked and alarmed to discover skyrocketing U.S.
apparel and textile imports for example.
Last November I requested cable traffic between the U.S. Embassy in
Burma and the U.S. State Department at Foggy Bottom to see exactly what
officials in Washington, D.C. knew about soaring imports from Burma. It
took nearly four months for me to get this unclassified cable traffic.
But now I know why. Its contents are very troubling. It constitutes
irrefutable evidence that current U.S. sanctions with Burma are far
more apparent than real. They are far more bluster than bite. Consider
the fact that the U.S. Government currently provides the Burmese
military junta with very easy access to the U.S. apparel market because
95 percent of their exports are under no practical import restrictions
at all.
Due to rising imports of apparel and textiles from Burma alone, more
than $400 million dollars are now flowing into the coffers of the
Burmese military dictatorship. These ruthless military dictators and
their drug-trafficking cohorts are spending this hard currency to
purchase more guns from China and to buy loyalty among their troops to
continue their policy of extreme repression and human cruelty.
In other words, American consumers are unwittingly helping to sustain
the repressive military junta's grip on power when buying travel and
sports bags, women's underwear, jumpers, shorts, tank tops and towels
made in the Burmese gulag. It is outrageous that many brand-name U.S.
apparel companies such as FILA, Jordache, and Arrow Golf are making
more and more of their clothes in the Burmese gulag where many workers
earn as little as 7 cent/hour or $3.23/week and where production is
non-stop--24 hours/day and 7 days/week.
Make no mistake about it. U.S. apparel imports from Burma are
providing the SPDC with a growing source of critically-needed hard
currency because the military dictators directly own or have taken de
facto control of production in many apparel and textile factories. They
are further enriched by a 5 percent export tax. As I said earlier, this
hard currency is used to finance the purchase of new weapons and
ammunition from China and elsewhere, thus helping to underwrite the
perpetuation of modern-day slavery, forced labor and forced child labor
in Burma.
But you don't have to take my work for it. U Maung Maung, the General
Secretary of the Federation of Trade Unions in Burma, decried at a
recent news conference in Washington, D.C., that ``the practice of
purchasing garments made in Burma extends the continued exploitation of
my people, including the use of slave labor by the regime, by further
delaying the return of democratic government in Burma.'' At grave
personal risk, he and other NLD leaders have disclosed the growing
importance of exports to America and other foreign markets in helping
sustain the Burmese military junta in power.
Some may question whether a ban on Burmese trade, including apparel
and textile imports, might not harm American companies and consumers?
Nothing could be further from the truth. Currently, U.S. apparel and
textile imports from Burma account for less than one-half of one
percent of total U.S. apparel and textile imports.
Others may assert that enactment of this legislation would violate
WTO rules. Yes, Burma does belong to the WTO. Accordingly, the SPDC
would have the standing technically to bring a formal complaint when
this legislation is enacted. But our response to such a development
should be bring it on. Let the Burmese generals argue before the WTO
that they have the right to export products made by forced labor and
child slaves and in flagrant violation of other internationally-
recognized worker rights. This would clearly bring into focus the folly
of writing rules for global trade that don't include enforceable worker
rights, thus compelling workers in civilized trading nations to have to
compete for their jobs de facto with forced labor in Burma.
America must answer the clarion call of the ILO and take a stronger
stand in solidarity with the Burmese people and in defense of universal
human rights and worker rights in that besieged nation. A trade ban
with Burma will reaffirm the belief of the American people that
increased trade with foreign countries must promote respect for human
rights and worker rights as well as property rights. It will also
signal American readiness to join in a new and stronger course of
coordinated, multilateral action that is designed to force the Burmese
generals from power once and for all and to satisfy the yearning of the
Burmese people for democratic, self-government.
In closing, I also ask unanimous consent that the text of the bill be
printed in the Record and that four recent editorials from the
Washington Post, the New York Times, and the Boston Globe calling
attention to the profound and prolonged suffering of the Burmese people
and the need for stronger action in the U.S. and around the world also
be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 926
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. FINDINGS.
Congress makes the following findings:
(1) The International Labor Organization (ILO), invoking an
extraordinary constitutional procedure for the first time in
its 82-year history, adopted in 2000 a resolution calling on
the State Peace and Development Council to take concrete
actions to end forced labor in Burma.
(2) In this resolution, the ILO recommended that
governments, employers, and workers organizations take
appropriate measures to ensure that their relations with the
State Peace and Development Council do not abet the system of
forced or compulsory labor in that country, and that other
international bodies reconsider any cooperation they may be
engaged in with Burma and, if appropriate, cease as soon as
possible any activity that could abet the practice of forced
or compulsory labor.
SEC. 2. UNITED STATES SUPPORT FOR MULTILATERAL ACTION TO END
FORCED LABOR AND THE WORST FORMS OF CHILD LABOR
IN BURMA.
(a) Trade Ban.--
(1) In general.--Notwithstanding any other provision of
law, until such time as the President determines and
certifies to Congress that Burma has met the conditions
described in paragraph (2), no article that is produced,
manufactured, or grown in Burma may be imported into the
United States.
(2) Conditions described.--The conditions described in this
paragraph are the following:
(A) The State Peace and Development Council in Burma has
made measurable and substantial progress in reversing the
persistent pattern of gross violations of internationally-
recognized human rights and worker rights, including the
elimination of forced labor and the worst forms of child
labor.
(B) The State Peace and Development Council in Burma has
made measurable and
[[Page S5457]]
substantial progress toward implementing a democratic
government including--
(i) releasing all political prisoners; and
(ii) deepening, accelerating, and bringing to a mutually-
acceptable conclusion the dialogue between the State Peace
and Development Council (SPDC) and democratic leadership
within Burma (including Aung San Suu Kyi and the National
League for Democracy (NLD) and leaders of Burma's ethnic
peoples).
(C) The State Peace and Development Council in Burma has
made measurable and substantial progress toward full
cooperation with United States counter-narcotics efforts
pursuant to the terms of section 570(a)(1)(B) of Public Law
104-208, the Foreign Operations, Export Financing, and
Related Programs Appropriations Act, 1997.
(b) Effective Date.--The provisions of this section shall
apply to any article entered, or withdrawn from warehouse for
consumption, on or after the 15th day after the date of
enactment of this Act.
____
[From the New York Times, May 11, 2001]
Myanmar's Incorrigible Leaders
A few months ago it looked as if the military junta in
Myanmar might ease its repressive rule slightly. The regime
was talking with the country's courageous pro-democracy
leader, Daw Aung San Suu Kyi, and there even seemed to be a
possibility that she would be liberated from the prolonged
house arrest the government has enforced. But those hopes
have all but vanished. If the Bush administration means to
speak out against human rights abuses abroad and pressure
governments to treat their citizens humanely, Myanmar would
be a fine place to start.
The military leaders of Myanmar, formerly called Burma, are
among the world's cruelest violators of human rights. The
junta has tortured and executed political opponents,
exploited forced labor and condoned a burgeoning traffic in
heroin and amphetamines. In the clearest indication that the
regime has little intention of reforming, the United Nations
special envoy who acted as a catalyst for the talks between
the government and Mrs. Aung San Suu Kyi has been denied
permission to visit the country since January. Also, an
anticipated release of political prisoners has failed to
materialize, as has a pledge by the junta that Mrs. Aung San
Suu Kyi's party, the National League for Democracy, would be
allowed to resume activity.
Earlier this year the junta released 120 mostly youthful
members of the party who had been imprisoned the previous
year, but it is still believed to be holding as many as 1,700
political prisoners, including 35 people who were elected to
Parliament in 1990. Mrs. Aung San Suu Kyi's party won more
than three-quarters of the seats in that election, but the
junta annulled the results.
The United States and the European Union have cooperated to
isolate Myanmar, and in 1997 the Clinton administration
banned new American investments there. But some Asian
countries have been reluctant to join in sanctions. China, in
particular, has helped sustain the junta with military aid.
Regrettably, last month Japan broke ranks with a Western-led
12-year ban on non-humanitarian assistance to Myanmar by
approving a $29 million grant for a hydroelectric dam.
Last year the International Labor Organization, responding
to concerns about forced labor, voted to urge governments and
international donors to impose further sanctions on Myanmar.
Washington should consider a ban on imports from that nation,
including textiles. Myanmar is rapidly increasing apparel
exports to the United States. Mrs. Aung San Suu Kyi's allies
have argued that the hard-currency earnings primarily benefit
the military, not the laborers who make the garments.
Washington should certainly be using its influence with Japan
and other Asian countries to deter any further
nonhumanitarian assistance.
____
[From the Boston Globe, May 7, 2001]
Burma Sanctions' Value
When it comes to the military dictatorship ruling Burma,
President Bush has an opportunity he should welcome to
demonstrate the realism his advisers commend and,
simultaneously, a firm commitment to America's democratic
ideals.
The Burmese junta stands condemned by much of the world for
its horrendous abuse of human rights, its complicity in the
trafficking of heroin and methamphetamines, and its thwarting
of the democratic government that was elected with 80 percent
of the seats in Parliament in Burma's last free election, in
1990.
Currently, there are varying sanctions on the junta. The
International Labor Organization, for the first time in its
81-year history, asked its members to sanction the regime for
the continuing, brutal imposition of forced labor on Burmese
and minority ethnic groups.
There are also European Union sanctions and restrictions
imposed by the Clinton administration that prohibit new U.S.
investment in Burma and ban senior officials in the regime
from obtaining visas to enter the United States.
Although it is far from clear that the junta intends to
permit a revival of democracy, there is little doubt that it
has engaged in talks with Nobel Peace Prize winner Aung San
Suu Kyi--who is held under virtual house arrest in Rangoon--
in large part because of the unremitting pressure of
sanctions.
As a result of sanctions, the officers in power cannot
disguise their bankrupting of what had been one of Asia's
most literate and resource-rich countries. Even the junta's
principal sponsor for membership in the Association of
Southeast Asian Nations, Prime Minister Mahathir Mohammad of
Malaysia, has counseled Burma's ruling officers to ease the
embarrassment of their fellow ASEAN members by opening a
dialogue with Suu Kyi.
In a letter last month to Bush, 35 senators including
Edward Kennedy and John Kerry made a strong case for
maintaining sanctions, noting that ``the sanctions have been
partially responsible for prompting the regime to engage in
political dialogue with Aung San Suu Kyi and her
supporters.'' The letter also said there is ``strong evidence
directly linking members of the regime to'' the trafficking
of ``the heroin which plagues our communities.''
Bush should insist that the junta take measurable steps
toward the retrieval of democracy in Burma, and not merely
for altruistic reasons. Next to the regime in North Korea,
the Burmese junta has been Beijing's chummiest ally,
permitting China to project its burgeoning power into the Bay
of Bengal, to the dismay of India.
Were a democratic government to replace the junta,
neighboring Thailand, which is now suffering from an influx
of drugs from Burma, would join India and the rest of the
region in breathing a sigh of relief.
____
[From the Washington Post, Nov. 26, 2000]
A Rebuke to Forced Labor
Not in 81 years had the International Labor Organization
imposed such sanctions; but Burma is a special case. The ILO,
a United Nations arm in which unions, businesses and
governments participate, found that the Asian nation also
known as Myanmar has so flagrantly violated international
norms that sanctions had to be imposed. In particular, its
ruling generals were found guilty of encouraging forced and
slave labor in ``a culture of fear.''
Burma is a special case in part because its dictators
cannot even pretend to reflect the will of their people. In
1990, they permitted a national election. A pro-democracy
party headed by Aung San Suu Kyi, daughter of Burma's hero of
independence, won four out of five parliamentary seats. But
parliament never met; the generals refused to accept the
results. Aung San Suu Kyi, who won the Nobel peace prize in
1991, is under house arrest; most of her party colleagues are
in prison. The generals grow more corrupt while Burma grows
ever poorer.
The ILO sanctions approved last week are, as AFL-CIO
president John Sweeney said, ``only a starting point.''
Nations are ``urged to halt any aid, trade or relationship
that helps Burmese leaders remain in power,'' he said. The
United States already has imposed restrictions on investment,
but that hasn't stopped companies such as Unocal from
mounting major efforts in the country. Nor has it prevented
trade, much of which enriches only the generals.
Companies that do business in Burma now more than ever will
have to explain themselves. So will nations that sought to
water down the ILO action, including fellow autocracies like
Malaysia and China and, more surprisingly, democracies like
India and Japan. Those nations, though, found themselves very
much in the minority, just as Burma finds itself more
isolated than ever.
____
[From the New York Times, Nov. 19, 2000]
The Ruin of Myanmar
The Southeast Asian nation of Myanmar is a case study in
repression and misgovernment. For 12 years a secretive
military junta has ground down the liberties and living
standards of 50 million people. By banning most contact with
the outside world and buying off the leadership of restive
ethnic minorities, the junta has deflected serious challenges
to its rule, despite the dismal failure of its economic
policies and spreading social ills.
The military has ruled Myanmar since 1962, when it was
known as Burma. After the violent suppression of democracy
movement in 1988, an even more ruthless set of generals took
charge. They permitted elections in 1990, then ignored the
results when democratic forces led by Daw Aung Sang Suu Kyi
won an overwhelming victory. She has spent 6 of the past 11
years under house arrest. Other leaders of her party have
been relentlessly persecuted, university students have been
relocated from the cities, and unions and civic associations
have been prohibited. The junta has banned computer modems,
e-mail and the Internet and made it a crime for people to
invite foreigners into their homes.
The Times's Blaine Harden recently reported that Myanmar,
which a half-century ago had one of Asia's best health care
systems and highest literacy rates, is now near the bottom in
these and many other measures of development as government
spending has been diverted from schools and health care to
the military. Most people now live on less than a dollar a
day. Drug smuggling and AIDS have grown explosively and
threaten to spill over to neighboring countries like China
and Thailand.
The United States has led international efforts to isolate
Myanmar through economic sanctions, including a ban on new
investment. But other Asian countries have been reluctant to
apply pressure. China, in particular, has helped sustain the
junta through
[[Page S5458]]
military aid. But an increasing number of countries are
losing patience. Last week the 175-member International Labor
Organization took the unusual step of condemning the junta's
use of forced labor and invited member countries to impose
sanctions. A good start would be restricting trade and
investment in areas of the economy that profit from forced
labor. Washington too should consider additional steps like
encouraging disinvestment by American companies. Myanmar's
people deserve international support in their struggle
against a destructive tyranny.
______
By Mr. CORZINE:
S. 927. A bill to amend title 23, United States Code, to provide for
a prohibition on use of mobile telephones while operating a motor
vehicle; to the Committee on Environment and Public Works.
Mr. CORZINE. Mr. President, today I am introducing a bill, the Mobile
Telephone Driving Safety Act of 2001, to enhance highway safety by
encouraging States to restrict the use of cell phones while operating a
motor vehicle.
The cell phone is an important and valuable type of technology that
has grown increasingly popular throughout our nation. But as cell phone
use has grown, so has a related problem, the increasing number of
traffic accidents caused by drivers who are distracted by cell phone
use.
The risks of driving while talking on the phone were made very clear
to many Americans when on April 29, 2001 a car containing model Nikki
Taylor crashed into a utility pole. The driver of the car admitted that
he had been distracted from operating the car when he tried to answer
his cellular telephone. That few second distraction was all that was
necessary to cause the crash. As a result, Ms. Taylor suffered severe
and life-threatening injuries.
Unfortunately, Ms. Taylor's case is just the most visible recent
example of a much broader problem. Several studies have established
that using a cell phone while driving substantially increases the risk
of an accident. One, published in the New England Journal of Medicine,
concluded that ``use of cellular telephones in motor vehicles is
associated with a quadrupling of the risks of a collision during the
brief period of a call''. The study goes on to say ``this relative risk
is similar to the hazard associated with driving with a blood alcohol
level at the legal limit''.
In response to the growing problem of cell phone use while driving,
counties and municipalities around the country, including two
municipalities in my own State of New Jersey, have banned the use of
cell phones while driving on their roads. Just recently, Governor
Pataki of New York endorsed similar statewide legislation. Yet, at this
point, no State has actually enacted such a law. Many cite strong
industry resistance to explain the failure of state legislatures to
act.
While some wireless industry representatives may resist cell phone
driving safety legislation, the American people strongly support the
idea. A recent poll by Quinnipiac University showed that 87 percent of
New York voters support such a ban. This survey echoes the results from
other surveys taken nationwide.
In addition to preventing accidents and saving lives, a ban on cell
phone use while driving also would help lower the cost of auto
insurance. That is especially important to me because I represent a
state in which insurance premiums are among the highest in the nation.
The Mobile Telephone Driving Safety Act of 2001 is structured in a
manner similar to other Federal laws designed to promote highway
safety, such as laws that encourage states to enact tough drunk driving
standards. Under the legislation, a portion of Federal highway funds
would be withheld from States that do not enact a ban on cell phone use
while driving. Initially, this funding could be restored if states act
to move into compliance. Later, the highway funding forfeited by one
state would be distributed to other states that are in compliance.
Experience has shown that the threat of losing highway funding is very
effective in ensuring that states comply.
To meet the bill's requirements, States would have to ban cell phone
use while driving. However, such a ban need not be absolute. It could
include an exception where there are exceptional circumstances, such as
the use of a phone to report a disabled vehicle or medical emergency.
In addition, if a state makes a determination that the use of ``hands
free'' cell phones does not pose a threat to public safety, such use
could be exempted from the ban, as well.
This is a necessary bill to keep our streets and highways safe. I
urge my colleagues to support this legislation.
______
By Mr. JEFFORDS (for himself, Mr. Kennedy, and Mr. Feingold):
S. 928. A bill to amend the Age Discrimination in Employment Act of
1967 to require, as a condition of receipt or use of Federal financial
assistance, that States waive immunity to suit for certain violations
of that Act, and to affirm the availability of certain suits for
injunctive relief to ensure compliance with that Act; to the Committee
on Health, Education, Labor, and Pensions.
Mr. JEFFORDS. Mr. President, I am pleased to be here today to
introduce legislation that will restore to state employees the ability
to bring claims of age discrimination against their employers under the
Age Discrimination and Employment Act of 1967. The Older Workers Rights
Restoration Act of 2001 seeks to provide state employees who allege age
discrimination the same procedures and remedies as those afforded to
other employees with respect to ADEA.
This legislation is needed to protect older workers like Professor
Dan Kimel, who has taught physics Florida State University for nearly
35 years. Professor Kimel testified at a recent hearing before the
Senate Health, Education, Labor and Pensions Committee that, despite
his years of faithful service, in 1992 he was earning less in real
dollars than his starting salary. To add insult to injury, his employer
was hiring younger faculty out of graduate schools at salaries that
were higher than he and other long-service faculty members were
earning. In 1995, Professor Kimel and 34 colleagues brought a claim of
age discrimination against the Florida Board of Regents.
Dan Kimel and his colleagues brought their cases under the Age
Discrimination and Employment Act of 1967, ADEA. In 1974, Congress
amended the ADEA to ensure that state employees, such as Dan Kimel had
full protection against age discrimination. I stand before you today
because this past year the Supreme Court ruled that Dan Kimel and other
affected faculty do not have the right to bring their ADEA claims
against their employer. The Court in Kimel v. Florida Board of Regents,
held that Congress did not have the power to abrogate state sovereign
immunity to individuals under the ADEA. As a result of the decision,
state employees, who are victims of age discrimination, no longer have
the remedies that are available to individuals who work in the private
sector, for local governments or for the federal government. Indeed,
unless a state chooses to waive its sovereign immunity or the Equal
Employment Opportunity Commission decides to bring a suit, state
workers no longer have a federal remedy for their claims of age
discrimination. In effect, this decision has transformed older state
employees into second class citizens.
For a right without a remedy is no right at all. Employees should not
have to lose their right to redress simply because they happen to work
for a state government. And a considerable portion of our workforce has
been impacted. In Vermont, for example, the State is one of our largest
employers. We cannot and should not permit these state workers to lose
the right to redress age discrimination.
This legislation will resolve this problem. The Older Workers Rights
Restoration Act of 2001 will restore the full protections of the ADEA
to Dan Kimel and countless other state employees in federally assisted
programs. The legislation will do this by requiring the states to waive
their sovereign immunity as a condition of receiving federal funds for
their programs or activities. The Older Workers Rights Restoration Act
of 2001 follows the framework of many other civil rights laws,
including the Civil Rights Restoration Act of 1987. Under this
framework, immunity is only waived with regard to the program or
activity actually receiving federal funds. States are not obligated to
accept such funds; and if they do not they are immune from private ADEA
suits. The legislation also
[[Page S5459]]
confirms that these employees may bring actions for equitable relief
under the ADEA.
I urge all my colleagues to join me in supporting this bill.
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. 928
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 ``Older Workers' Rights
Restoration Act of 2001''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Since 1974, the Age Discrimination in Employment Act of
1967 (29 U.S.C. 621 et seq.) has prohibited States from
discriminating in employment on the basis of age. In EEOC v.
Wyoming, 460 U.S. 226 (1983), the Supreme Court upheld
Congress' constitutional authority to prohibit States from
discriminating in employment on the basis of age. The
prohibitions of the Age Discrimination in Employment Act of
1967 remain in effect and continue to apply to the States, as
the prohibitions have for more than 25 years.
(2) Age discrimination in employment remains a serious
problem both nationally and among State agencies, and has
invidious effects on its victims, the labor force, and the
economy as a whole. For example, age discrimination in
employment--
(A) increases the risk of unemployment among older workers,
who will as a result be more likely to be dependent on
government resources;
(B) prevents the best use of available labor resources;
(C) adversely effects the morale and productivity of older
workers; and
(D) perpetuates unwarranted stereotypes about the abilities
of older workers.
(3) Private civil suits by the victims of employment
discrimination have been a crucial tool for enforcement of
the Age Discrimination in Employment Act of 1967 since the
enactment of that Act. In Kimel v. Florida Board of Regents,
120 S. Ct. 631 (2000), however, the Supreme Court held that
Congress lacks the power under the 14th amendment to the
Constitution to abrogate State sovereign immunity to suits by
individuals under the Age Discrimination in Employment Act of
1967. The Federal Government has an important interest in
ensuring that Federal financial assistance is not used to
subsidize or facilitate violations of the Age Discrimination
in Employment Act of 1967. Private civil suits are a critical
tool for advancing that interest.
(4) As a result of the Kimel decision, although age-based
discrimination by State employers remains unlawful, the
victims of such discrimination lack important remedies for
vindication of their rights that are available to all other
employees covered under that Act, including employees in the
private sector, local government, and the Federal Government.
Unless a State chooses to waive sovereign immunity, or the
Equal Employment Opportunity Commission brings an action on
their behalf, State employees victimized by violations of the
Age Discrimination in Employment Act of 1967 have no adequate
Federal remedy for violations of that Act. In the absence of
the deterrent effect that such remedies provide, there is a
greater likelihood that entities carrying out programs and
activities receiving Federal financial assistance will use
that assistance to violate that Act, or that the assistance
will otherwise subsidize or facilitate violations of that
Act.
(5) Federal law has long treated nondiscrimination
obligations as a core component of programs or activities
that, in whole or part, receive Federal financial assistance.
That assistance should not be used, directly or indirectly,
to subsidize invidious discrimination. Assuring
nondiscrimination in employment is a crucial aspect of
assuring nondiscrimination in those programs and activities.
(6) Discrimination on the basis of age in programs or
activities receiving Federal financial assistance is, in
contexts other than employment, forbidden by the Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.). Congress
determined that it was not necessary for the Age
Discrimination Act of 1975 to apply to employment
discrimination because the Age Discrimination in Employment
Act of 1967 already forbade discrimination in employment by,
and authorized suits against, State agencies and other
entities that receive Federal financial assistance. In
section 1003 of the Rehabilitation Act Amendments of 1986 (42
U.S.C. 2000d-7), Congress required all State recipients of
Federal financial assistance to waive any immunity from suit
for discrimination claims arising under the Age
Discrimination Act of 1975. The earlier limitation in the Age
Discrimination Act of 1975, originally intended only to avoid
duplicative coverage and remedies, has in the wake of the
Kimel decision become a serious loophole leaving millions of
State employees without an important Federal remedy for age
discrimination, resulting in the use of Federal financial
assistance to subsidize or facilitate violations of the Age
Discrimination in Employment Act of 1967.
(7) The Supreme Court has upheld Congress' authority to
condition receipt of Federal financial assistance on
acceptance by the States or other recipients of conditions
regarding or related to the use of that assistance, as in
Cannon v. University of Chicago, 441 U.S. 677 (1979). The
Court has further recognized that Congress may require a
State, as a condition of receipt of Federal financial
assistance, to waive the State's sovereign immunity to
suits for a violation of Federal law, as in College
Savings Bank v. Florida Prepaid Postsecondary Education
Expense Board, 527 U.S. 666 (1999). In the wake of the
Kimel decision, in order to assure compliance with, and to
provide effective remedies for violations of, the Age
Discrimination in Employment Act of 1967 in State programs
or activities receiving or using Federal financial
assistance, and in order to ensure that Federal financial
assistance does not subsidize or facilitate violations of
the Age Discrimination in Employment Act of 1967, it is
necessary to require such a waiver as a condition of
receipt or use of that assistance.
(8) A State's receipt or use of Federal financial
assistance in any program or activity of a State will
constitute a limited waiver of sovereign immunity under
section 7(g) of the Age Discrimination in Employment Act of
1967 (as added by section 4 of this Act). The waiver will not
eliminate a State's immunity with respect to programs or
activities that do not receive or use Federal financial
assistance. The State will waive sovereign immunity only with
respect to suits under the Age Discrimination in Employment
Act of 1967 brought by employees within the programs or
activities that receive or use that assistance. With regard
to those programs and activities that are covered by the
waiver, the State employees will be accorded only the same
remedies that are accorded to other covered employees under
the Age Discrimination in Employment Act of 1967.
(9) The Supreme Court has repeatedly held that State
sovereign immunity does not bar suits for prospective
injunctive relief brought against State officials, as in Ex
parte Young, 209 U.S. 123 (1908). Clarification of the
language of the Age Discrimination in Employment Act of 1967
will confirm that that Act authorizes such suits. The
injunctive relief available in such suits will continue to be
no broader than the injunctive relief that was available
under that Act before the Kimel decision, and that is
available to all other employees under that Act.
SEC. 3. PURPOSES.
The purposes of this Act are--
(1) to provide to State employees in programs or activities
that receive or use Federal financial assistance the same
rights and remedies for practices violating the Age
Discrimination in Employment Act of 1967 as are available to
other employees under that Act, and that were available to
State employees prior to the Supreme Court's decision in
Kimel v. Florida Board of Regents, 120 S. Ct. 631 (2000);
(2) to provide that the receipt or use of Federal financial
assistance for a program or activity constitutes a State
waiver of sovereign immunity from suits by employees within
that program or activity for violations of the Age
Discrimination in Employment Act of 1967; and
(3) to affirm that suits for injunctive relief are
available against State officials in their official
capacities for violations of the Age Discrimination in
Employment Act of 1967.
SEC. 4. REMEDIES FOR STATE EMPLOYEES.
Section 7 of the Age Discrimination in Employment Act of
1967 (29 U.S.C. 626) is amended by adding at the end the
following:
``(g)(1)(A) A State's receipt or use of Federal financial
assistance for any program or activity of a State shall
constitute a waiver of sovereign immunity, under the 11th
amendment to the Constitution or otherwise, to a suit brought
by an employee of that program or activity under this Act for
equitable, legal, or other relief authorized under this Act.
``(B) In this paragraph, the term `program or activity' has
the meaning given the term in section 309 of the Age
Discrimination Act of 1975 (42 U.S.C. 6107).
``(2) An official of a State may be sued in the official
capacity of the official by any employee who has complied
with the procedures of subsections (d) and (e), for
injunctive relief that is authorized under this Act. In such
a suit the court may award to the prevailing party those
costs authorized by section 722 of the Revised Statutes (42
U.S.C. 1988).''.
SEC. 5. SEVERABILITY.
If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be invalid, the remainder
of this Act, the amendments made by this Act, and the
application of such provision or amendment to another person
or circumstance shall not be affected.
SEC. 6. EFFECTIVE DATE.
(a) Waiver of Sovereign Immunity.--With respect to a
particular program or activity, section 7(g)(1) of the Age
Discrimination in Employment Act of 1967 (29 U.S.C.
626(g)(1)) applies to conduct occurring on or after the day,
after the date of enactment of this Act, on which a State
first receives or uses Federal financial assistance for that
program or activity.
(b) Suits Against Officials.--Section 7(g)(2) of the Age
Discrimination in Employment Act of 1967 (29 U.S.C.
626(g)(2)) applies to any suit pending on or after the date
of enactment of this Act.
[[Page S5460]]
Mr. KENNEDY. Mr. President, I am honored today to join Chairman
Jeffords and Senator Feingold to introduce the Older Workers' Rights
Restoration Act of 2001. Our goal is to restore to older state
government workers the right to seek remedies for age discrimination. A
recent decision by the Supreme Court took that right away. State
workers now have fewer federal protections against age discrimination
than other employees in the country. This bill will remedy that
injustice.
In 1967, Congress outlawed age discrimination in employment in the
private sector by passing the Age Discrimination in Employment Act. In
1974, recognizing that employees of state government agencies were also
often subject to pervasive and arbitrary age discrimination, Congress
extended the Act to cover state governments. For more than 25 years,
state employees were protected from age discrimination, and had the
same remedies as all other employees covered by this law.
But in Kimel v. Florida Board of Regents, decided last year, the
Supreme Court held that Congress lacked the power to subject states to
suits under the federal age discrimination laws. As a result, unless a
state agrees to allow suits against its agencies in such cases, state
employees cannot seek relief on their own behalf to remedy age
discrimination.
In a recent hearing before the Labor Committee, I was privileged to
hear the eloquent testimony of Dr. J. Daniel Kimel, the plaintiff in
the Supreme Court case. Dr. Kimel has been a professor of physics at
Florida State University for 35 years and is paid less than younger
faculty. Because of the Supreme Court's ruling, Dr. Kimel has been
unable to seek any remedy at all for this age-based salary
discrimination.
Large numbers of State employees, those who work for State colleges
and universities, State police forces, State departments of
transportation, State environmental protection agencies and many other
State agencies, lack effective Federal remedies for age discrimination.
That result is unfair. These State workers are vulnerable to age
discrimination, which wastes valuable talent and adversely affects
morale.
No worker should be subject to discriminatory hiring, firing, or
other job action based on age or any other characteristic that has
nothing to do with job performance. We must act to see that workers are
adequately protected against this threat.
The bill that Chairman Jeffords, Senator Feingold and I are
introducing today is in the best tradition of the nation's civil rights
laws. It provides that when a State program receives Federal tax
dollars, the program must permit its employees to seek remedies under
the Federal age discrimination law. The courts have long recognized
that Congress can act to see that Federal funds are not used to
subsidize discrimination, and this is what our bill will do. In fact,
all of the scholars who testified in our Committee hearing agree that
this is an appropriate and constitutional use of Congress' power.
This important bill will help to ensure that all Americans are
protected from age discrimination in employment. I urge my colleagues
to join me in supporting this needed legislation.
______
By Mr. HUTCHINSON:
S. 929. A bill to amend the National Labor Relations Act to preserve
charitable giving; to the Committee on Health, Education, Labor, and
Pensions.
Mr. HUTCHINSON. Mr. President, I rise today to introduce the Preserve
Charitable Giving Act. I am proud of this legislation but am profoundly
saddened that it has become necessary.
Aggressive union organizing tactics have made this legislation
necessary because those tactics have forced many of our nation's
largest retailers who allow charities to solicit donations on their
premises to also give unions access to their premises for the express
purpose of organizing or face a flurry of unfair labor practice
charges. When faced with this situation, these retailers are thus
forced to deny access to everyone, resulting in a loss of charitable
donations. The magnitude of this loss cannot be overstated, as
charitable donations raised through Wal*Mart alone are over $127
million annually. This means that there are now fewer hot meals for the
hungry, fewer toys for poor children, and less clothing and shelter for
the homeless.
This is unacceptable. Companies should not be forced to choose
between furthering charity or increasing union membership. The Preserve
Charitable Giving Act will clarity the National Labor Relations Act so
that retailers who choose to allow access to their premises for
charitable solicitations will not also be forced to give access for
union organizing purposes. Thus, I ask my colleagues to preserve
charitable giving by helping to enact this legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 929
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 ``Preserve Charitable Giving
Act''.
SEC. 2. PROPERTY ACCESS.
Section 8(a)(1) of the National Labor Relations Act is
amended by adding after ``section 7'' the following:
``Provided, That in the case of a published, written, or
posted no solicitation or no access rule, an exception for
charitable, eleemosynary, or other beneficent purposes shall
not be grounds for finding an unfair labor practice''.
______
By Mr. McCAIN:
S. 930. A bill to authorize the Secretary of the Interior to set
aside up to $2 per person from park entrance fees or assess up to $2
per person visiting the Grand Canyon National Park to secure bonds for
capital improvements, and for other purposes; to the Committee on
Energy and Natural Resources.
Mr. McCAIN. Mr. President, I rise today to introduce legislation that
will authorize the Secretary of Interior to develop and implement a
bonding program to help finance capital improvement projects at the
Grand Canyon National Park in Arizona.
For the past few years, I have worked on legislation to implement a
national parks bonding program to benefit the National Parks system by
proposing a unique public-private partnership mechanism to finance
capital improvements through bond revenues. This legislation has
received substantial support by many of the organizations working with
the National Parks system. The legislation I am introducing today is
similar to the National Parks Capital Improvements Act of 2001, but it
specifically authorizes a park-specific bonding program for the Grand
Canyon National Park in my home state of Arizona.
This park-specific proposal is similar to actions taken back in the
late 1980's to legislate a solution to the air traffic and noise
pollution problems affecting the Grand Canyon National Park caused by
overflights over the canyon. Congress enacted legislation to require
specific measures to mitigate air traffic through the National Parks
Overflights Act. Once a framework for the Grand Canyon National Park
was established, it became clear that broader legislation was necessary
to address similar overflights issues to promote safety and quiet in
the entire national parks system.
Much in the same way, I am proposing to allow the Secretary of
Interior to utilize the bonding mechanism at the Grand Canyon National
Park, in partnership with a supporting organization. Bonding has worked
well in other governmental sectors to leverage additional financing for
local projects where federal or state resources are not otherwise
sufficient or available.
This bonding legislation, as well as the broader national parks
bonding bill, would allow the Grand Canyon National Park to utilize up
to $2 of its existing fee structure to dedicate to securing bonds to
finance capital improvement projects. For example, based on current
visitation rates at the Grand Canyon, a $2 surcharge would enable us to
raise $100 million from a bond issue amortized over 20 years. That is a
significant amount of money which could be used to accomplish many
critical park projects. With approximately 1.2 million acres to
protect, this type of financial tool would go far to help redress the
backlog of needed repairs, maintenance and other
[[Page S5461]]
approved projects at the Grand Canyon National Park.
I remain committed to broader legislation to implement a park-wide
bonding program. However, I am proposing that we should also consider
testing this innovative approach by authorizing its use to help protect
one of the nation's largest and most magnificent parks, the Grand
Canyon.
I ask unanimous consent to print the text of this bill in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 930
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Grand
Canyon Capital Improvements Act of 2001''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Fundraising organization.
Sec. 4. Memorandum of agreement.
Sec. 5. Park surcharge or set-aside.
Sec. 6. Use of bond proceeds.
Sec. 7. Report.
Sec. 8. Regulations.
SEC. 2. DEFINITIONS.
In this Act:
(1) Fundraising organization.--The term ``fundraising
organization'' means an entity authorized to act as a
fundraising organization under section 3(a).
(2) Memorandum of agreement.--The term ``memorandum of
agreement'' means a memorandum of agreement entered into by
the Secretary under section 3(a) that contains the terms
specified in section 4.
(3) Park.--The term ``Park'' means the Grand Canyon
National Park.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 3. FUNDRAISING ORGANIZATION.
(a) In General.--The Secretary may enter into a memorandum
of agreement under section 4 with an entity to act as an
authorized fundraising organization for the benefit of the
Park.
(b) Bonds.--The fundraising organization for the Park shall
issue taxable bonds in return for the surcharge or set-aside
for the Park collected under section 5.
(c) Professional Standards.--The fundraising organization
shall abide by all relevant professional standards regarding
the issuance of securities and shall comply with all
applicable Federal and State law.
(d) Audit.--The fundraising organization shall be subject
to an audit by the Secretary.
(e) No Liability for Bonds.--The United States shall not be
liable for the security of any bonds issued by the
fundraising organization.
SEC. 4. MEMORANDUM OF AGREEMENT.
The fundraising organization shall enter into a memorandum
of agreement that specifies--
(1) the amount of the bond issue;
(2) the maturity of the bonds, not to exceed 20 years;
(3) the per capita amount required to amortize the bond
issue, provide for the reasonable costs of administration,
and maintain a sufficient reserve consistent with industry
standards;
(4) the project or projects at the Park that will be funded
with the bond proceeds and the specific responsibilities of
the Secretary and the fundraising organization with respect
to each project; and
(5) procedures for modifications of the agreement with the
consent of both parties based on changes in circumstances,
including modifications relating to project priorities.
SEC. 5. PARK SURCHARGE OR SET-ASIDE.
(a) In General.--Notwithstanding any other provision of
law, the Secretary may authorize the Superintendent of the
Park--
(1) to charge and collect a surcharge in an amount not to
exceed $2 for each individual otherwise subject to an
entrance fee for admission to the Park; or
(2) to set aside not more than $2 for each individual
charged the entrance fee.
(b) Surcharge in Addition to Entrance Fees.--The Park
surcharge under subsection (a) shall be in addition to any
entrance fee collected under--
(1) section 4 of the Land and Water Conservation Fund Act
of 1965 (16 U.S.C. 460l-6a);
(2) the recreational fee demonstration program authorized
by section 315 of the Department of the Interior and Related
Agencies Appropriations Act, 1996 (as contained in Public Law
104-134; 110 Stat. 1321-156; 1321-200; 16 U.S.C. 460l-6a
note); or
(3) the national park passport program established under
title VI of the National Parks Omnibus Management Act of 1998
(16 U.S.C. 5991 et seq.).
(c) Limitation.--The total amount charged or set aside
under subsection (a) may not exceed $2 for each individual
charged an entrance fee.
(d) Use.--A surcharge or set-aside under subsection (a)
shall be used by the fundraising organization to--
(1) amortize the bond issue;
(2) provide for the reasonable costs of administration; and
(3) maintain a sufficient reserve consistent with industry
standards, as determined by the bond underwriter.
SEC. 6. USE OF BOND PROCEEDS.
(a) Eligible Projects.--
(1) In general.--Subject to paragraph (2), bond proceeds
under this Act may be used for a project for the design,
construction, operation, maintenance, repair, or replacement
of a facility in the Park.
(2) Project limitations.--A project referred to in
paragraph (1) shall be consistent with--
(A) the laws governing the National Park System;
(B) any law governing the Park; and
(C) the general management plan for the Park.
(3) Prohibition on use for administration.--Other than
interest as provided in subsection (b), no part of the bond
proceeds may be used to defray administrative expenses.
(b) Interest on Bond Proceeds.--Any interest earned on bond
proceeds may be used by the fundraising organization to--
(1) meet reserve requirements; and
(2) defray reasonable administrative expenses incurred in
connection with the management and sale of the bonds.
SEC. 7. REPORT.
(a) In general.--Not later than 2 years after the
promulgation of regulations under section 8, the Secretary
shall submit to Congress a report on the bond program.
(b) Requirements.--The report shall include--
(1) a review of the bond program carried out under this Act
at the Park; and
(2) recommendations to Congress on whether to establish a
bond program at all units of the National Park System.
SEC. 8. REGULATIONS.
The Secretary, in consultation with the Secretary of
Treasury, shall promulgate regulations to carry out this Act.
______
By Mr. HARKIN (for himself, Mr. Smith of Oregon, Mr. Johnson, Mr.
Daschle, Mr. Leahy, Mr. Schumer, Mr. Dorgan, Mr. Dayton, Mrs.
Clinton, Ms. Stabenow, Mr. Kennedy, Mr. Kohl, Mr. Kerry, Mr.
Sarbanes. Mr. Wellstone, Mr. Durbin, and Mrs. Boxer):
S. 932. A bill to amend the Food Security Act of 1985 to establish
the conservation security program; to the Committee on Agriculture,
Nutrition, and Forestry.
Mr. HARKIN. Mr. President, today I am introducing the Conservation
Security Act of 2001, a bill that represents a fresh bipartisan farmer-
friendly approach to farm policy and agricultural conservation. I am
pleased to be joined by my colleague Senator Gordan Smith from Oregon,
as well as Senators Daschle, Leahy, Dorgan, Johnson, Dayton, Schumer,
Clinton, Stabenow, Kohl, Sarbanes, Kerry, Kennedy, Wellstone, Durbin,
and Boxer.
America's farmers and ranches produce a bountiful, safe, and
nourishing food supply, and they also protect our natural resources,
environment and wildlife habitat. Farmers and ranches have a long
history of stewardship of private lands. They are the key to enhancing
conservation of resources for future generations.
Private land conservation became a national priority in the days of
the Dust Bowl, leading to the creation in the 1930s of the Soil
Conservation Service, (now the Natural Resources Conservation Service),
at the Department of Agriculture. With the very foundation of our food
supply at risk, the federal government stepped forward with billions of
dollars in assistance to help farmers conserve their precious soils.
Since that time, total federal spending on conservation has steadily
declined in inflation-adjusted dollars. Funds for lands in production
have been especially hard hit. Yet today, agriculture faces a wide
range of environmental challenges, from overgrazing and manure
management to cropland runoff and air quality impairment. Urban and
rural citizens alike are increasingly interested in supporting
conservation on agricultural lands.
Farmers and ranchers pride themselves on being good stewards of the
land, but they are limited by financial constraints. Every dollar spent
on constructing a filter strip or developing a nutrient management plan
is a dollar unavailable for other purposes. And even in better times,
there is a lot of competition for each dollar in a farm's budget.
Who benefits from conservation on agricultural lands? As much or more
than farmers, all of us, depend on the careful stewardship of our air,
water, soil and other natural resources. Farmers and ranchers tend not
only to their crops and animals, but also to our nation's natural
resources.
Since all Americans share in these benefits, it is only right that we
contribute to conserving private lands. It
[[Page S5462]]
is time to enter into a true conservation partnership with farmers and
ranchers to help ensure hat conservation is an integral and permanent
part of our agricultural policy nationwide.
In the 1985 farm bill, we required farmers who wanted to participate
in USDA farm programs to develop soil conservation plans for their
highly erodible land. This provision helped put new conservation plans
in place for our most fragile farmlands. In the most recent farm bill,
we streamlined conservation programs and established new cost-share and
incentive payments for certain practices. These measures have helped
enhance the environment and natural resources, but we still have more
to do.
The Conservation Security Act of 2001 builds on our past successes
and takes a bold step forward in farm and conservation policy.
The Conservation Security Act would establish a universal and
voluntary incentive payment program, the Conservation Security Program,
to support and encourage conservation activities by farmers and
ranchers. Under this program, farmers and ranchers could receive as
much as $50,000 a year in-conservation payments by entering into 5- to
10-year agreements with USDA and carrying out eligible conservation
practices. Moreover, the program is designed to encourage
implementation of practices that address local conservation priorities.
Payments are based on the number and types of practices and level of
conservation carried out on their lands in agricultural production.
Farmers and ranchers may choose to implement practices from one or more
of the following three tiers of practices.
In Tier I, participating farmers would adopt or maintain basic
individual practices, including nutrient management, soil conservation,
and wildlife habitat management on part or all of their operation. Tier
I plans are for 5-year periods. Based on enrolled acreage, practices
and the level of conservation, farmers or ranchers in Tier I would
receive annual payments that could reach as much as $20,000. A one-time
advance payment could be made of the greater of $1,000 or 20 percent of
the annual payment.
Farmers or ranchers in Tier II would implement more extensive
conservation practices on their working lands. They could choose from
Tier I practices and practices II practices, including controlled
rotational grazing, partial field practices like buffers strips and
windbreaks, wetland restoration and wildlife habitat enhancement, for a
period of 5 to 10 years, at the farmer's discretion. The practices
adopted in Tier II must address at least one resource of concern (i.e.
water quality, air quality, soil quality, wildlife habitat, etc.) for
the entire operation. For adopting or maintaining Tier II practices,
farmers or ranchers would receive up to $35,000 a year with access to a
one-time advance payment of the greater of $2,000 or 20 percent of the
annual payment.
To qualify under Tier III, farmers and ranchers would adopt a
comprehensive set of conservation practices on the entire operation.
The Practices would address all resources of concern on the operation,
including air, land, water and wildlife. For carrying out a Tier III
plan of practices, farmers and ranchers would receive up to $50,000 a
year with access to a one-time advance payment of the greater of $3,000
or 20 percent of the annual payment.
Again, I emphasize, the Conservation Security Program would be
totally voluntary. Farmers and ranchers would decide if they want to
participate and to what extent they want to participate. The more
conservation they do, the greater the payment. Many farmers are already
using many of these practices, but they receive little or no financial
support. This legislation changes that by rewarding those farmers and
ranchers who have already implemented these practices through payments
for maintaining them.
In addition, the Conservation Security Act provides a strong
incentive to go beyond the farm's current level of conservation. And it
does so in a way that is compatible with our international trade
obligations. The payments received under the Conservation Security
Program would fit into the ``Green Box'' under the WTO Uruguay Round.
Payments received under the Conservation Security Program are not
linked to participation in commodity programs, and farmers don't have
to participate in the Conservation Security Program to be eligible for
commodity payments. Further, the Conservation Security Act, which
focuses on land in production, complements and does not interfere with
the existing conservation programs. A farmer or rancher may participate
in these programs, including the Conservation Reserve Program, the
Wetlands Reserve Program, and the Farmland Protection Program and still
participate in the Conservation Security Program. We need to support
these and the other conservation programs, but to truly benefit
agriculture and address the public's desire to enhance the environment,
natural resources and wildlife habitat on agricultural land we must
also address conservation needs on land in production.
Farmers and ranchers across our country want to take actions to
enhance the environment, but they need financial and technical
assistance. The Conservation Security Act provides that needed
assistance. Further, the Conservation Security Act was crafted to
include opportunities for all producers nationwide, including producers
of fruits, vegetables, speciality crops, row crops and livestock to
participate in the Conservation Security Program.
Our private lands are a national treasure, and conservation on farm
and ranchlands provides environmental benefits that are just as
important as the production of abundant and safe food. The Conservation
Security Act will help secure the economic future of our farmers and
ranchers by providing them the means to increase their income while
conserving our natural resources, the environment, and wildlife habitat
for today and for future generations.
I thank the Chair.
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. 932
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 ``Conservation Security Act of
2001''.
SEC. 2. FINDINGS.
Congress finds that--
(1) in addition to producing food and fiber, agricultural
producers can contribute to the public good by providing
improved soil productivity, clean air and water, fish and
wildlife habitat, landscape and recreational amenities, and
other natural resources and environmental benefits;
(2) agricultural producers in the United States have a long
history of embracing environmentally friendly conservation
practices and desire to continue those practices and engage
in new and additional conservation practices;
(3) agricultural producers that engage in conservation
practices--
(A) may not receive economic rewards for implementing
conservation practices; and
(B) should be encouraged to engage in good stewardship, and
should be rewarded for doing so;
(4) despite significant progress in recent years,
significant environmental challenges on agricultural land
remain;
(5) since the 1930's, when agricultural conservation became
a national priority, Federal resources for conservation
assistance have declined over 50 percent, when adjusted for
inflation;
(6) existing conservation programs do not provide
opportunities for all interested agricultural producers to
participate;
(7) a voluntary, incentive-based conservation program open
to all agricultural producers that qualify and desire to
participate would--
(A) encourage greater improvement of natural resources and
the environment;
(B) address the economic implications of conservation
practices in a manner consistent with international
obligations of the United States;
(C) enable United States farmers and ranchers to produce
food for a growing world population; and
(D) encourage conservation practices that provide a public
benefit while not infringing on the freedom of an
agricultural producer to manage agricultural operations as
the agricultural producer chooses;
(8) total farm conservation planning can help producers
increase profitability, enhance resource protection, and
improve quality of life;
(9) on-farm practices may help deter invasive species that
jeopardize native species or impair agricultural land of the
United States; and
(10) a conservation program described in paragraph (7)
would help achieve a better
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balance between Federal payments supporting conservation on
land used for agricultural production and Federal payments
for the purpose of retiring agricultural land from
production.
SEC. 3. CONSERVATION SECURITY PROGRAM.
(a) In General.--Subtitle D of title XII of the Food
Security Act of 1985 (16 U.S.C. 3830 et seq.) is amended by
adding at the end the following:
``CHAPTER 6--CONSERVATION SECURITY PROGRAM
``SEC. 1240P. DEFINITIONS.
``In this chapter:
``(1) Conservation practice.--The term `conservation
practice' means a land-based farming technique that--
``(A) requires planning, implementation, management, and
maintenance; and
``(B) promotes 1 or more of the purposes described in
section 1240Q(a).
``(2) Conservation security contract.--The term
`conservation security contract' means a contract described
in section 1240Q(e).
``(3) Conservation security plan.--The term `conservation
security plan' means a plan described in section 1240Q(c).
``(4) Conservation security program.--The term
`conservation security program' means the program established
under section 1240Q(a).
``(5) Nutrient management.--The term `nutrient management'
means management of the quantity, source, placement, form,
and timing of the land application of nutrients on land
enrolled in the conservation security program and other
additions to soil--
``(A) to achieve or maintain adequate soil fertility for
agricultural production; and
``(B) to minimize the potential for loss of environmental
quality, including soil, water, fish and wildlife habitat,
and air quality impairment.
``(6) Resource of concern.--The term `resource of concern'
means a conservation priority of the State and locality under
section 1240Q(c)(3).
``(7) Resource-conserving crop.--The term `resource-
conserving crop' means--
``(A) a perennial grass;
``(B) a legume grown for use as forage, seed for planting,
or green manure;
``(C) a legume-grass mixture;
``(D) a small grain grown in combination with a grass or
legume, whether interseeded or planted in succession; and
``(E) such other plantings, including trees and annual
grasses, as the Secretary considers appropriate for a
particular area.
``(8) Resource-conserving crop rotation.--The term
`resource-conserving crop rotation' means a crop rotation
that--
``(A) includes at least 1 resource-conserving crop;
``(B) reduces erosion;
``(C) improves soil fertility and tilth; and
``(D) interrupts pest cycles.
``(9) Resource management system.--The term `resource
management system' means a system of conservation practices
and management relating to land or water use that is designed
to prevent resource degradation and permit sustained use of
the land and water, as defined in the Natural Resource
Conservation Service technical guidance handbooks.
``SEC. 1240Q. CONSERVATION SECURITY PROGRAM.
``(a) In General.--The Secretary shall establish a
conservation security program to assist owners and operators
of agricultural operations to promote, as is applicable for
each operation--
``(1) conservation of soil, water, energy, and other
related resources;
``(2) soil quality protection and improvement;
``(3) water quality protection and improvement;
``(4) air quality protection and improvement;
``(5) soil, plant, or animal health and well-being;
``(6) diversity of flora and fauna;
``(7) on-farm conservation and regeneration of biological
resources, including plant and animal germplasm;
``(8) wetland restoration, conservation, and enhancement;
``(9) wildlife habitat management, with special emphasis on
species identified by the Natural Heritage Program of the
State;
``(10) reduction of greenhouse gas emissions and
enhancement of carbon sequestration;
``(11) systems that protect human health and safety;
``(12) environmentally sound management of invasive
species; or
``(13) any similar conservation purpose (as determined by
the Secretary).
``(b) Eligibility.--
``(1) Eligible owners and operators.--To be eligible to
participate in the conservation security program (other than
to receive technical assistance under subsection (h)(6) for
the development of conservation security contracts), an owner
or operator shall--
``(A) develop and submit to the Secretary, and obtain the
approval of the Secretary of, a conservation security plan
that meets the requirements of subsection (c)(1); and
``(B) enter into a conservation security contract with the
Secretary to carry out the conservation security plan.
``(2) Eligible land.--
``(A) In general.--Except as provided in subparagraph
(C)(iii), private agricultural land (including cropland,
rangeland, grassland, and pasture land) that is entirely used
as part of the agricultural operation of an owner or operator
on the date of enactment of this chapter shall be eligible
for enrollment in the conservation security program.
``(B) Forested land.--Private forested land shall be
eligible for enrollment in the conservation security program
if the forested land is integrated into the agricultural
operation, including land that is used for--
``(i) alleycropping;
``(ii) forest farming;
``(iii) forest buffers;
``(iv) windbreaks;
``(v) silvopasture systems; and
``(vi) such other uses as the Secretary may determine
appropriate.
``(C) Exclusions.--
``(i) Conservation reserve program.--Land enrolled in the
conservation reserve program under subchapter B of chapter I
shall not be eligible for enrollment in the conservation
security program except for land enrolled in partial field
conservation practice enrollment options.
``(ii) Wetlands reserve program.--Land enrolled in the
wetlands preserve program established under subchapter C of
chapter 1 of subtitle D shall not be eligible for enrollment
in the conservation security program.
``(iii) Tolerance level.--The Secretary shall promulgate
regulations to ensure that land shall not be eligible for
enrollment in the conservation security program if the land--
``(I) is initially used for the production of an
agricultural commodity after the date of enactment of this
chapter; and
``(II) cannot be used for the production of an agricultural
commodity without resulting in the loss of soil at a level
that exceeds the soil loss tolerance level.
``(c) Conservation Security Plans.--
``(1) In general.--A conservation security plan shall--
``(A) identify the resources and designated land to be
conserved under the conservation security plan;
``(B) describe the tier of conservation practices, and the
particular conservation practices to be implemented,
maintained, or improved, in accordance with subsection (d) on
the land covered by the conservation security contract for
the specified term;
``(C) contain a schedule for the implementation,
maintenance, or improvement of the conservation practices
described in the conservation security plan during the term
of the conservation security contract;
``(D) meet the requirements of the highly erodible land and
wetland conservation requirements of subtitles B and C; and
``(E) contain such other terms as the Secretary determines
to be appropriate.
``(2) Comprehensive planning.--The Secretary shall
encourage owners and operators that enter into conservation
security contracts--
``(A) to undertake a comprehensive examination of the
opportunities for conserving natural resources and improving
the profitability, environmental health, and quality of life
in relation to their entire agricultural operations;
``(B) to develop a long-term strategy for implementing,
monitoring, and evaluating conservation practices and
environmental results in the entire agricultural operation;
``(C) to participate in other Federal, State, local, or
private conservation programs;
``(D) to maintain the agricultural integrity of the land;
and
``(E) to adopt innovative conservation technologies and
management practices.
``(3) State and local conservation priorities.--To the
maximum extent practicable and in a manner consistent with
the conservation security program, each conservation security
plan shall address the conservation priorities of the State
and locality in which the agricultural operation is located
(as determined by the State conservationist in consultation
with the State technical committee established under subtitle
G and the local working groups of the State technical
committee).
``(d) Conservation Practices.--
``(1) In general.--
``(A) Establishment of tiers.--The Secretary shall
establish 3 tiers of conservation practices that are eligible
for payment under a conservation security contract.
``(B) Eligible conservation practices.--
``(i) In general.--The Secretary shall make eligible for
payment under a conservation security contract land
management, vegetative, and structural practices that--
``(I) are necessary to achieve the objectives of the
conservation security plan; and
``(II) primarily provide for and have as the primary
purpose resource protection and environmental improvement.
``(ii) Determination.--
``(I) In general.--In determining the eligibility of a
practice described in clause (i), the Secretary shall require
the lowest cost alternatives be used to fulfill the
objectives of the conservation security plan.
``(II) Limitation.--Notwithstanding subclause (I), the
adoption of innovative technologies shall, to the maximum
extent practicable, not be limited.
``(2) Sustainable economic uses.--With respect to land
enrolled in the conservation security program, including all
land use adjustment activities specified under Tier II, the
Secretary shall permit economic uses of the land that--
``(A) maintain the agricultural nature of land;
``(B) achieve the natural resource and environmental
benefits of the plan; and
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``(C) are approved as part of the conservation security
plan.
``(3) On-farm research and demonstration.--With respect to
land enrolled in the conservation security program that will
be maintained using a Tier II or Tier III conservation
practice established under paragraph (5), the Secretary may
approve a conservation security plan that includes on-farm
research and demonstration activities, including innovative
approaches to--
``(A) total farm planning;
``(B) total resource management;
``(C) integrated farming systems;
``(D) germplasm conservation and regeneration;
``(E) greenhouse gas reduction and carbon sequestration;
``(F) agro-ecological restoration and wildlife habitat
restoration;
``(G) agro-forestry;
``(H) invasive species control;
``(I) energy conservation and management; or
``(J) farm and environmental results monitoring and
evaluation.
``(4) Use of handbook and guides.--
``(A) In general.--In determining eligible conservation
practices under the conservation security program, the
Secretary shall use the National Handbook of Conservation
Practices and the field office technical guides of the
Natural Resources Conservation Service.
``(B) Conservation practice standards.--To the maximum
extent practicable, the Secretary shall establish guidance
standards for implementation of eligible conservation
practices that shall include measurable goals for enhancing
and preventing degradation of resources.
``(C) Adjustments.--After providing notice and an
opportunity for public participation, the Secretary shall
make such adjustments to the National Handbook of
Conservation Practices as are necessary to carry out this
chapter.
``(D) Pilot testing.--
``(i) In general.--Under any of the 3 tiers of conservation
practices established under paragraph (5), the Secretary may
approve requests by an owner or operator for pilot testing of
new technologies and innovative conservation practices and
systems.
``(ii) Incorporation into standards.--After evaluation by
the Secretary and provision of notice and an opportunity for
public participation, the Secretary may incorporate new
technologies and innovative conservation practices and
systems into the standards for implementation of conservation
practices established under paragraph (1)(C).
``(5) Tiers.--To carry out this subsection, the Secretary
shall establish the following 3 tiers of conservation
practices:
``(A) Tier i.--
``(i) In general.--A conservation security plan for land
enrolled in the conservation security program that will be
maintained using Tier I conservation practices shall--
``(I) if applicable, address at least 1 resource of concern
to the particular agricultural operation;
``(II) apply to the total agricultural operation or to a
particular unit of the agricultural operation;
``(III) cover both--
``(aa) conservation practices that are being implemented as
of the date on which the conservation security contract is
entered into; and
``(bb) conservation practices that are newly implemented
under the conservation security contract; and
``(IV) meet applicable standards for implementation of
conservation practices established under paragraph (4);
``(ii) Conservation practices.--Tier I conservation
practices shall consist of, as appropriate for the
agricultural operation of an owner or operator, 1 or more of
the following basic conservation activities:
``(I) Soil conservation, quality, and residue management.
``(II) Nutrient management.
``(III) Pest management.
``(IV) Invasive species management.
``(V) Irrigation water conservation and water quality
management.
``(VI) Grazing, pasture, and rangeland management.
``(VII) Fish and wildlife habitat management, with special
emphasis on species identified by the Natural Heritage
Program of the State or the appropriate State agency.
``(VIII) Fish and wildlife protection and enhancement.
``(IX) Air quality management.
``(X) Energy conservation measures.
``(XI) Biological resource conservation and regeneration.
``(XII) Worker health and safety protection measures.
``(XIII) Animal welfare management.
``(XIV) Plant and animal germplasm conservation,
evaluation, and development.
``(XV) Contour farming.
``(XVI) Strip cropping.
``(XVII) Cover cropping.
``(XVIII) Sediment dams.
``(XIX) Recordkeeping.
``(XX) Monitoring and evaluation.
``(XXI) Any other conservation practice that the Secretary
determines to be appropriate and comparable to other
conservation practices described in this clause.
``(iii) Tier ii practices.--A conservation security plan
for land enrolled in the conservation security program that
will be maintained using Tier I conservation practices may
include Tier II conservation practices.
``(B) Tier ii.--
``(i) In general.--A conservation security plan for land
enrolled in the conservation security program that will be
maintained using Tier II conservation practices shall--
``(I) address at least 1 resource of concern as specified
in the conservation security plan covering the total
agricultural operation;
``(II) cover both--
``(aa) conservation practices that are being implemented as
of the date on which the conservation security contract is
entered into; and
``(bb) conservation practices that are newly implemented
under the conservation security contract; and
``(III) meet applicable resource management system criteria
for the chosen resource of concern of the agricultural
operation;
``(ii) Conservation practices.--Tier II conservation
practices shall consist of, as appropriate for the
agricultural operation of an owner or operator, any of the
Tier I conservation practices and 1 or more of the following
land use adjustment or protection practices:
``(I) Resource-conserving crop rotations.
``(II) Controlled, rotational grazing.
``(III) Conversion of portions of cropland from a soil-
depleting use to a soil-conserving use, including production
of cover crops.
``(IV) Partial field conservation practices (including
windbreaks, grass waterways, shelter belts, filter strips,
riparian buffers, wetland buffers, contour buffer strips,
living snow fences, crosswind trap strips, field borders,
grass terraces, wildlife corridors, and critical area
planting appropriate to the agricultural operation).
``(V) Fish and wildlife habitat protection and restoration.
``(VI) Native grassland and prairie protection and
restoration.
``(VII) Wetland protection and restoration.
``(VIII) Agroforestry practices and systems.
``(IX) Any other conservation practice involving
modification of the use of land that the Secretary determines
to be appropriate and comparable to other conservation
practices described in this clause.
``(C) Tier iii.--
``(i) In general.--A conservation security plan for land
enrolled in the conservation security program that will be
maintained using Tier III conservation practices shall--
``(I) address all resources of concern in the total
agricultural operation;
``(II) cover both--
``(aa) conservation practices that are being implemented as
of the date on which the conservation security contract is
entered into; and
``(bb) conservation practices that are newly implemented
under the conservation security contract; and
``(III) meet applicable resource management system
criteria;
``(ii) Conservation practices.--Tier III conservation
practices shall consist of, as appropriate for the
agricultural operation of an owner or operator--
``(I) appropriate Tier I and Tier II conservation
practices; and
``(II) development, implementation, and maintenance of a
conservation security plan that, over the term of the
conservation security contract--
``(aa) integrates a full complement of conservation
practices to foster environmental enhancement and the long-
term sustainability of the natural resource base of an
agricultural operation; and
``(bb) improves profitability and quality of life
associated with the agricultural operation.
``(e) Conservation Security Contracts.--
``(1) In general.--On approval of a conservation security
plan of an owner or operator, the Secretary shall enter into
a conservation security contract with the owner or operator
to enroll the land covered by the conservation security plan
in the conservation security program.
``(2) Term.--Subject to paragraphs (3) and (4)--
``(A) a conservation security contract for land enrolled in
the conservation security program that will be maintained
using 1 or more Tier I conservation practices shall have a
term of 5 years; and
``(B) a conservation security contract for land enrolled in
the conservation security program that implements a
conservation security plan that meets the requirements of
subparagraph (B) or (C) of subsection (d)(5) shall have a
term of 5 to 10 years, at the option of the owner or
operator.
``(3) Modifications.--
``(A) Optional modifications.--
``(i) In general.--An owner or operator may apply to the
Secretary to modify the conservation security plan in a
manner consistent with the purposes of the conservation
security program.
``(ii) Approval by the secretary.--Any modification under
clause (i)--
``(I) shall be approved by the Secretary; and
``(II) shall authorize the Secretary to redetermine, if
necessary, the amount and timing of the payments pursuant to
the conservation security contract under subsection
(h)(2)(C).
``(B) Other modifications.--
``(i) In general.--The Secretary may in writing require an
owner or operator to modify a conservation security contract
before the expiration of the conservation security contract
if the Secretary determines that a change made to the type,
size, management,
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or other aspect of the agricultural operation of the owner or
operator would, without the modification, significantly
interfere with achieving the purposes of the conservation
security program.
``(ii) Payments.--The Secretary may adjust the amount and
timing of the payment schedule under the conservation
security contract to reflect any modifications required under
this subparagraph.
``(iii) Deadline.--The Secretary may terminate a
conservation security contract if a modification required
under this subparagraph is not submitted to the Secretary in
the form of an amended conservation security contract by the
date that is 90 days after the date of receipt of the written
request for the modification.
``(iv) Termination.--An owner or operator that is required
to modify a conservation security contract under this
subparagraph may, in lieu of modifying the contract--
``(I) terminate the conservation security contract; and
``(II) retain payments received under the conservation
security contract, if the owner or operator fully complied
with the obligations of the owner or operator under the
conservation security contract.
``(4) Renewal.--
``(A) In general.--At the option of an owner or operator,
the conservation security contract of the owner or operator
may be renewed, for a term described in subparagraph (B),
if--
``(i) the owner or operator agrees to any modification of
the applicable conservation security contract that the
Secretary determines to be necessary to achieve the purposes
of the conservation security program;
``(ii) the Secretary determines that the owner or operator
has complied with the terms and conditions of the
conservation security contract, including the conservation
security plan; and
``(iii) in the case of a conservation security contract for
land previously enrolled at the tier I level in the
conservation security program, the owner or operator shall
increase the level of conservation treatment on lands
enrolled in the conservation security program by--
``(I) adopting new conservation practices; or
``(II)expanding existing practices to meet the resource
management systems criteria.
``(B) Terms of renewal.--Under subparagraph (A)--
``(i) a conservation security contract for land enrolled in
the conservation security program that will be maintained
using a Tier I conservation practice may be renewed for 5-
year terms;
``(ii) a conservation security contract for land enrolled
in the conservation security program that will be maintained
using a Tier II or Tier III conservation practice may be
renewed for 5-year to 10-year terms, at the option of the
owner or operator; and
``(iii) previous participation in the conservation security
program does not bar renewal more than once.
``(f) No Violation for Noncompliance Due to Circumstances
Beyond the Control of the Owner or Operator.--The Secretary
shall include in the conservation security contract a
provision, and may modify a conservation security contract
under subsection (e)(3)(B), to ensure that an owner or
operator shall not be considered in violation of a
conservation security contract for failure to comply with the
conservation security contract due to circumstances beyond
the control of the owner or operator, including a disaster or
related condition.
``(g) Duties of Owners and Operators.--Under a conservation
security contract, an owner or operator shall agree, during
the term specified under the conservation security contract--
``(1) to implement the applicable conservation security
plan approved by the Secretary;
``(2) to keep appropriate records showing the effective and
timely implementation of the conservation security plan;
``(3) not to engage in any activity that would interfere
with the purposes of the conservation security plan;
``(4) at the option of the Secretary, to refund all or a
portion of the payments to the Secretary if the owner or
operator fails to maintain a conservation practice, as
specified in the conservation security contract; and
``(5) on the violation of a term or condition of the
conservation security contract--
``(A) if the Secretary determines that the violation
warrants termination of the conservation security contract--
``(i) to forfeit all rights to receive payments under the
conservation security contract; and
``(ii) to refund to the Secretary all or a portion of the
payments received by the owner or operator under the
conservation security contract, including an advance payment
and interest on the payments, as determined by the Secretary;
or
``(B) if the Secretary determines that the violation does
not warrant termination of the conservation security
contract, to refund to the Secretary, or accept adjustments
to, the payments provided to the owner or operator, as the
Secretary determines to be appropriate.
``(h) Duties of the Secretary.--
``(1) Advance payment.--At the time at which a person
enters into a conservation security contract, the Secretary
shall make an advance payment to the person in an amount not
to exceed--
``(A) in the case of a contract to maintain Tier I
conservation practices described in subsection (d)(5)(A), the
greater of--
``(i) $1,000; or
``(ii) 20 percent of the value of the annual payment under
the contract, as determined by the Secretary;
``(B) in the case of a contract to maintain Tier II
conservation practices described in subsection (d)(5)(B), the
greater of--
``(i) $2,000; or
``(ii) 20 percent of the value of the annual payment under
the contract, as determined by the Secretary; or
``(C) in the case of a contract to maintain Tier III
conservation practices described in subsection (d)(5)(C), the
greater of--
``(i) $3,000; or
``(ii) 20 percent of the value of the annual payment under
the contract, as determined by the Secretary.
``(2) Annual payments.--
``(A) In general.--Subject to subparagraphs (B) through
(F), under a conservation security contract, the Secretary
shall, in amounts and for a period of years specified in the
conservation security contract and taking into account any
advance payments, make an annual payment to the person in an
amount not to exceed--
``(i) in the case of a contract to maintain Tier I
conservation practices described in subsection (d)(5)(A),
$20,000;
``(ii) in the case of a contract to maintain Tier II
conservation practices described in subsection (d)(5)(B),
$35,000; or
``(iii) in the case of a contract to maintain Tier III
conservation practices described in subsection (d)(5)(C),
$50,000.
``(B) Inflation adjustment.--The Secretary may
periodically, including at the time at which a conservation
security contract is renewed, adjust the payment and payment
limitations under subparagraph (A) to reflect changes in the
Prices Paid by Farmers Index.
``(C) Time of payment.--The Secretary shall provide payment
under a conservation security contract as soon as practicable
after October 1 of each calendar year.
``(D) Criteria for determining amount of payments.--Subject
to subparagraphs (A) and (F), the Secretary shall establish
criteria for determining the amount of an annual payment to a
person under this paragraph that--
``(i) shall be as objective and transparent as practicable;
and
``(ii) shall be based on--
``(I) to the maximum extent practicable, outcome-based
factors related to the natural resource and environmental
benefits that result from the adoption, maintenance, and
improvement in implementation of the conservation practices
carried out by the person;
``(II) practice-based factors, including--
``(aa) the number of eligible practices established or
maintained;
``(bb) the schedule for the conservation practices
described in subsection (c)(1)(C);
``(cc) the cost of the adoption, maintenance, and
improvement in implementation of conservation practices that
are newly implemented under the conservation security
contract;
``(dd) the extent to which compensation will ensure
maintenance and improvement of conservation practices that
are or have been implemented;
``(ee) the extent to which the conservation security plan
meets applicable resource management system standards;
``(ff) the extent to which the conservation security plan
addresses State and local conservation priorities as provided
for under subsection (c)(3); and
``(gg) the extent of activities undertaken beyond what is
required to comply with any applicable Federal agricultural
law;
``(III) additional cost factors, including--
``(aa) the income loss or economic value forgone by the
person due to land use adjustments resulting from the
adoption, maintenance, and improvement of conservation
practices;
``(bb) the costs associated with any on-farm research,
demonstration, or pilot testing components of the
conservation security plan; and
``(cc) the costs associated with monitoring and evaluating
results under the conservation security plan; and
``(IV) such other factors as the Secretary determines to be
appropriate to encourage participation in the conservation
security program and to reward environmental stewardship.
``(E) Bonus payment.--Subject to subparagraph (A), the
Secretary shall offer bonus payments based on--
``(i) participation in a watershed or regional resource
conservation plan involving at least 75 percent of landowners
in the targeted area; and
``(ii) the special considerations associated with an owner
or operator that is a qualified beginning farmer or rancher
(as defined in section 343(a) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1991(a))).
``(F) Land enrolled in other conservation programs.--
``(i) In general.--Notwithstanding any other provision of
law, if an owner or operator has land enrolled in another
conservation program administered by the Secretary and has
applied to enroll the same land in the conservation security
program, the owner or operator may elect to--
``(I) convert the contract under the other conservation
program to a conservation security contract, without penalty,
except
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that this subclause shall not apply to a long-term permanent
conservation or easement; or
``(II) have each annual payment to the owner or operator
under this paragraph reduced to reflect payment for practices
the owner or operator receives under the other conservation
program, except that the annual payment under this paragraph
may include incentives for qualified practices that enhance
or extend the conservation benefit achieved under the other
conservation program.
``(ii) Payment limitations.--If an owner or operator has
identical land enrolled in the conservation security program
and 1 or more other conservation programs administered by the
Secretary, the Secretary shall include all payments, other
than easement or rental payments, from the conservation
security program and the other conservation programs in
applying the annual payment limitations under subparagraph
(A).
``(iii) Payment from non-federal agricultural programs.--
Payments received from a Federal program administered by the
Secretary, or any State, local, or private agricultural
program, shall not be considered an annual payment for
purposes of the annual payment limitations under subparagraph
(A).
``(G) Waste storage or treatment facilities.--An annual
payment to an owner or operator under this paragraph shall
not be provided for the purpose of construction or
maintenance of animal waste storage or treatment facilities
or associated waste transport or transfer devices for animal
feeding operations.
``(3) Regulations.--
``(A) In general.--The Secretary shall issue regulations--
``(i) defining the term `person' for the purposes of this
chapter--
``(I) which regulations shall conform, to the extent
practicable, to the regulations defining the term `person'
issued under section 1001; and
``(II) which term shall be defined so that no individual
directly or indirectly may receive payments exceeding the
applicable amount specified in paragraph (1) or (2);
``(ii) providing adequate safeguards to protect the
interests of tenants and sharecroppers, including provision
for sharing, on a fair and equitable basis; and
``(iii) prescribing such other rules as the Secretary
determines to be necessary to ensure a fair and reasonable
application of the limitations established under paragraphs
(1) and (2).
``(B) Penalties for schemes or devices.--
``(i) In general.--If the Secretary determines that a
person has adopted a scheme or device to evade, or that has
the purpose of evading, the regulations issued under
subparagraph (A), the person shall be ineligible to
participate in the conservation security program for the year
for which the scheme or device was adopted and each of the
following 5 years.
``(ii) Fraud.--If the Secretary determines that fraud was
committed in connection with the scheme or device, the person
shall be ineligible to participate in the conservation
security program for the year for which the scheme or device
was adopted and each of the following 10 years.
``(4) Termination.--
``(A) In general.--Subject to subsection (g), the Secretary
shall allow an owner or operator to terminate the
conservation security contract.
``(B) Payments.--The owner or operator may retain any or
all payments received under a terminated conservation
security contract if--
``(i) the owner or operator is in full compliance with the
terms and conditions, including any maintenance requirements,
of the conservation security contract; and
``(ii) the Secretary determines that retention of payment
will not defeat the goals enumerated in the conservation
security plan of the owner or operator.
``(5) Transfer or change of interest in land subject to
conservation security contract.--
``(A) In general.--Except as provided in subparagraph (B),
the transfer, or change in the interest, of an owner or
operator in land subject to a conservation security contract
shall result in the termination of the conservation security
contract.
``(B) Transfer of duties and rights.--Subparagraph (A)
shall not apply if, not later than 60 days after the date of
the transfer or change in the interest in land, the
transferee of the land provides written notice to the
Secretary that all duties and rights under the conservation
security contract have been transferred to the transferee.
``(6) Technical assistance.--
``(A) In general.--For each fiscal year, the Secretary
shall use such sums as are necessary from funds of the
Commodity Credit Corporation to provide technical assistance
to owners and operators for the development and
implementation of conservation security contracts.
``(B) Technical assistance provided by persons not employed
by the department of agriculture.--
``(i) In general.--Under subparagraph (A), subject to
clause (ii), technical assistance provided by qualified
persons not employed by the Department of Agriculture,
including farmers, ranchers, and local conservation district
personnel, may include--
``(I) conservation planning;
``(II) design, installation, and certification of
conservation practices;
``(III) training for producers; and
``(IV) such other activities as the Secretary determines to
be appropriate.
``(ii) Outside assistance.--
``(I) In general.--The Secretary may contract directly with
qualified persons not employed by the Department of
Agriculture to provide technical assistance.
``(II) Payment by secretary.--The Secretary may provide a
payment or voucher to an owner or operator enrolled in the
conservation security program if the owner or operator
chooses to contract with qualified persons not employed by
the Department of Agriculture.
``(iii) Coordination by the secretary.--The Secretary shall
provide overall technical coordination and leadership for the
conservation security program, including final approval of
all conservation security plans.
``(7) Education, outreach, monitoring, and evaluation.--
``(A) In general.--
``(i) Funding.--In addition to the amounts made available
under paragraph (6), for each fiscal year, the Secretary
shall use such sums as are necessary from funds of the
Commodity Credit Corporation to carry out education,
outreach, monitoring, and evaluation activities in support of
the conservation security program, of which not less than 50
percent of the sums shall be used for monitoring and
evaluation activities.
``(ii) Amount.--For each fiscal year, the amount made
available under clause (i) shall be not less than 40 percent
of the amount made available for technical assistance under
paragraph (6) for the fiscal year.
``(B) Use of persons not affiliated with department of
agriculture.--
``(i) In general.--In carrying out activities described in
subparagraph (A), the Secretary may use persons not employed
by the Department of Agriculture, including networks of
agricultural producers operating in a small watershed, local
conservation district personnel, or other appropriate local
entity.
``(ii) Education, outreach, and monitoring.--The Secretary
may contract with private non-profit, community-based
organizations, and educational institutions with demonstrated
experience in providing education, outreach, monitoring,
evaluation, or related services to agricultural producers
(including owners and operators of small and medium-size
farms, socially disadvantaged agricultural producers, and
limited resource agricultural producers).
``(C) Included activities.--Activities described in
subparagraph (A) may include innovative uses of computer
technology and remote sensing to monitor and evaluate
resource and environmental results on a local, regional, or
national level.
``(8) Socially disadvantaged and limited resource owners
and operators.--The Secretary shall provide outreach,
training, and technical assistance specifically to encourage
and assist socially disadvantaged owners and operators to
participate in the conservation security program.
``(9) Program evaluation.--The Secretary shall maintain
data concerning conservation security plans, conservation
practices planned or implemented, environmental outcomes,
economic costs, and related matters under this section.
``(10) Confidentiality.--To maintain confidentiality, the
Secretary shall not release or disclose publicly the
conservation security plan of an owner or operator under this
chapter unless the Secretary--
``(A) obtains the authorization of the owner or operator
for the release or disclosure;
``(B) releases the information in an anonymous or
aggregated form; or
``(C)(i) is otherwise required by law to release or
disclose the plan and;
``(ii) releases the plan in an anonymous or aggregated
form.
``(11) Mediation and informal hearings.--If the Secretary
makes a decision under this chapter that is adverse to an
owner or operator, at the request of the owner or operator,
the Secretary shall provide the owner or operator with
mediation services or an informal hearing on the decision.
``(i) Reports.--Not later than 18 months after the date of
enactment of this chapter and at the end of each 2-year
period thereafter, the Secretary shall submit to Congress a
report evaluating the results of the conservation security
program, including--
``(1) an evaluation of the scope, quality, and outcomes of
the conservation practices carried out under this section;
and
``(2) recommendations for achieving specific and
quantifiable improvements for each of the purposes specified
in subsection (a).
``(j) Funding.--Of the funds of the Commodity Credit
Corporation, the Corporation shall make available to carry
out this chapter such sums as are necessary, to remain
available until expended.
``(k) Exemption From Automatic Sequester.--Notwithstanding
any other provision of law, no order issued for any fiscal
year under section 252 of the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 902) shall affect any
payment under this chapter.''.
(b) Administration.--Section 1243(a) of the Food Security
Act of 1985 (16 U.S.C. 3843(a)) is amended--
(1) in paragraph (1)(C), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
[[Page S5467]]
``(3) the conservation security program established under
chapter 6 of subtitle D.''.
(c) State Technical Committees.--Section 1262(c)(8) of the
Food Security Act of 1985 (16 U.S.C. 3862(c)(8)) is amended
by striking ``chapter 4'' and inserting ``chapters 4 and 6''.
SEC. 4. REGULATIONS.
The Secretary of Agriculture shall promulgate such
regulations as are necessary to carry out this Act and the
amendments made by this Act.
1_____
By Mr. JEFFORDS (for himself, Mrs. Clinton, Mr. Leahy, Mr.
Lieberman, and Mr. Schumer):
S. 933. A bill to amend the Federal Power Act to encourage the
development and deployment of innovative and efficient energy
technologies; to the Committee on Energy and Natural Resources.
Mr. JEFFORDS. Mr. President, I rise today to introduce, with Senators
Clinton, Leahy, Lieberman, and Schumer, the Combined Heat and Power
Advancement Act of 2001. This legislation ensures that highly efficient
sources of electricity, such as combined heat and power systems, are
able to interconnect nationwide with the electricity grid by
establishing uniform and nondiscriminatory interconnection standards.
Enabling these innovative, clean, and efficient technologies to come
online will reduce energy costs and help protect public health and the
environment.
Last week, President bush released the National Energy Policy
Development Group's comprehensive energy plan. I am pleased this plan
includes recommendations related to increasing energy conservation and
efficiency. Specially, the plan recommends the development of well-
designed combined heat and power, CHP, systems.
I am heartened that President Bush recognizes the positive impact
that CHP systems can have on our nation's energy needs. These
innovative systems produce both electricity and steam from a single
fuel source in a facility located near the consumer. By recovering and
utilizing waste heat, these systems save fuel that would otherwise be
needed to produce heat or steam in a separate unit. CHP systems can
reach energy efficiency levels in excess of 80 percent. This is well
above the 33 percent average for conventional electrical generation
technologies. In short, the U.S. can obtain more than twice the power
from the same amount of energy by widely implementing combined heat and
power technologies and applications.
Unfortunately, several regulatory and policy barriers block the
widespread use of these innovative technologies. The bill would ensure
that CHP systems and other innovative technologies can interconnect
with a local distribution utility and that the costs of such
interconnections shall be just reasonable, and not unduly
discriminatory.
Currently, there are roughly 50 Gigawatts, GW, of energy produced
from CHP systems annually. If this barrier is removed, 50 GW of
additional CHP electrical generating capacity could be brought to
market by 2010. To illustrate the magnitude of potential savings to the
entire nation, the result of this additional capacity is equal to all
the energy needed to power Massachusetts. Most of these systems are
targeted for industry, where thermal and electrical needs are most
often located close together. However, there is also tremendous
potential for CHP in homes. Fifty GW of CHP could light and heat 50
million homes, or 43 percent of all U.S. homes, for the same energy
that the central station plans could only light the homes. With removal
of regulatory barriers, these efficient systems may begin to be
economical at the small sizes suitable for homes.
We cannot solve today's energy problems with yesterday's solutions.
CHP represents an innovative approach to expanding energy supply by
maximizing energy efficiency. These systems will encourage
technological innovations, reduce energy prices, spur economic
development, enhance productivity, increase employment, improve
environmental quality, and advance energy security and reliability in
the United States.
I invite my colleagues to join me in my efforts to promote combined
heat and power by co-sponsoring this important legislation. I ask 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. 933
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 ``Combined Heat and Power
Advancement Act of 2001''.
SEC. 2. FINDINGS.
Congress finds that--
(1) the removal of barriers to the development and
deployment of combined heat and power technologies and
systems, an example of an array of innovative energy-supply
and energy-efficient technologies and systems, would--
(A) encourage technological innovation;
(B) reduce energy prices;
(C) spur economic development;
(D) enhance productivity;
(E) increase employment; and
(F) improve environmental quality and energy self-
sufficiency;
(2) the level of efficiency of the United States
electricity-generating system has been stagnant over the past
several decades;
(3) technologies and systems available as of the date of
enactment of this Act, including a host of innovative onsite,
distributed generation technologies, could--
(A) dramatically increase productivity;
(B) double the efficiency of the United States electricity-
generating system; and
(C) reduce emissions of regulated pollutants and greenhouse
gases;
(4) innovative electric technologies emit a much lower
level of pollutants as compared to the average quantity of
pollutants generated by United States electric generating
plants as of the date of enactment of this Act;
(5) a significant proportion of the United States energy
infrastructure will need to be replaced by 2010;
(6) the public interest would best be served if that
infrastructure were replaced by innovative technologies that
dramatically increase productivity, improve efficiency, and
reduce pollution;
(7) financing and regulatory practices in effect as of the
date of enactment of this Act do not recognize the
environmental and economic benefits to be obtained from the
avoidance of transmission and distribution losses, and the
reduced load on the electricity-generating system, provided
by onsite, combined heat and power production;
(8) many legal, regulatory, informational, and perceptual
barriers block the development and dissemination of combined
heat and power and other innovative energy technologies; and
(9) because of those barriers, United States taxpayers are
not receiving the benefits of the substantial research and
development investment in innovative energy technologies made
by the Federal Government.
SEC. 3. PURPOSE.
The purpose of this Act is to encourage energy productivity
and efficiency increases by removing barriers to the
development and deployment of combined heat and power
technologies and systems.
SEC. 4. INTERCONNECTION.
(a) Definitions.--Section 3 of the Federal Power Act (16
U.S.C. 796) is amended--
(1) by striking paragraph (23) and inserting the following:
``(23) Transmitting utility.--The term `transmitting
utility' means any entity (notwithstanding section 201(f))
that owns, controls, or operates an electric power
transmission facility that is used for the sale of electric
energy.''; and
(2) by adding at the end the following:
``(26) Appropriate regulatory authority.--The term
`appropriate regulatory authority' means--
``(A) the Commission;
``(B) a State commission;
``(C) a municipality; or
``(D) a cooperative that is self-regulating under State law
and is not a public utility.
``(27) Generating facility.--The term `generating facility'
means a facility that generates electric energy.
``(28) Local distribution utility.--The term `local
distribution utility' means an entity that owns, controls, or
operates an electric power distribution facility that is used
for the sale of electric energy.
``(29) Non-federal regulatory authority.--The term `non-
Federal regulatory authority' means an appropriate regulatory
authority other than the Commission.''.
(b) Interconnection to Distribution Facilities.--Section
210 of the Federal Power Act (16 U.S.C. 824i) is amended--
(1) by redesignating subsection (e) as subsection (g); and
(2) by inserting after subsection (d) the following:
``(e) Interconnection to Distribution Facilities.--
``(1) Interconnection.--
``(A) In general.--A local distribution utility shall
interconnect a generating facility with the distribution
facilities of the local distribution utility if the owner of
the generating facility--
``(i) complies with the final rule promulgated under
paragraph (2); and
``(ii) pays the costs of the interconnection.
``(B) Costs.--The costs of the interconnection--
``(i) shall be just and reasonable, and not unduly
discriminatory, as determined by the appropriate regulatory
authority; and
``(ii) shall be comparable to the costs charged by the
local distribution utility for interconnection by any
similarly situated
[[Page S5468]]
generating facility to the distribution facilities of the
local distribution utility.
``(C) Applicable requirements.--The right of a generating
facility to interconnect under subparagraph (A) does not--
``(i) relieve the generating facility or the local
distribution utility of other Federal, State, or local
requirements; or
``(ii) provide the generating facility with transmission or
distribution service.
``(2) Rule.--
``(A) In general.--Not later than 1 year after the date of
enactment of this subparagraph, the Commission shall
promulgate a final rule to establish reasonable and
appropriate technical standards for the interconnection of a
generating facility with the distribution facilities of a
local distribution utility.
``(B) Process.--To the extent feasible, the Commission
shall develop the standards through a process involving
interested parties.
``(C) Advisory committee.--The Commission shall establish
an advisory committee composed of qualified experts to make
recommendations to the Commission concerning development of
the standards.
``(D) Administration.--
``(i) By a non-federal regulatory authority.--Except where
subject to the jurisdiction of the Commission pursuant to
provisions other than clause (ii), a non-Federal regulatory
authority may administer and enforce the rule promulgated
under subparagraph (A).
``(ii) By the commission.--To the extent that a non-Federal
regulatory authority does not administer and enforce the
rule, the Commission shall administer and enforce the rule
with respect to interconnection in that jurisdiction.
``(3) Right to backup power.--
``(A) In general.--In accordance with subparagraph (B), a
local distribution utility shall offer to sell backup power
to a generating facility that has interconnected with the
local distribution utility to the extent that the local
distribution utility--
``(i) is not subject to an order of a non-Federal
regulatory authority to provide open access to the
distribution facilities of the local distribution utility;
``(ii) has not offered to provide open access to the
distribution facilities of the local distribution utility; or
``(iii) does not allow a generating facility to purchase
backup power from another entity using the distribution
facilities of the local distribution utility.
``(B) Rates, terms, and conditions.--A sale of backup power
under subparagraph (A) shall be at such a rate, and under
such terms and conditions, as are just and reasonable and not
unduly discriminatory or preferential, taking into account
the actual incremental cost, whenever incurred by the local
distribution utility, to supply such backup power service
during the period in which the backup power service is
provided, as determined by the appropriate regulatory
authority.
``(C) No requirement for certain sales.--A local
distribution utility shall not be required to offer backup
power for resale to any entity other than the entity for
which the backup power is purchased.
``(D) New or expanded loads.--To the extent backup power is
used to serve a new or expanded load on the distribution
system, the generating facility shall pay any reasonable
costs associated with any transmission, distribution, or
generation upgrade required to provide such service.''.
(c) Interconnection to Transmission Facilities.--Section
210 of the Federal Power Act (16 U.S.C. 824i) is amended by
inserting after subsection (e) (as added by subsection (b))
the following:
``(f) Interconnection to Transmission Facilities.--
``(1) Interconnection.--
``(A) In general.--Notwithstanding subsections (a) and (c),
a transmitting utility shall interconnect a generating
facility with the transmission facilities of the transmitting
utility if the owner of the generating facility--
``(i) complies with the final rule promulgated under
paragraph (2); and
``(ii) pays the costs of the interconnection.
``(B) Costs.--
``(i) In general.--Subject to clause (ii), the costs of the
interconnection--
``(I) shall be just and reasonable and not unduly
discriminatory; and
``(II) shall be comparable to the costs charged by the
transmitting utility for interconnection by any similarly
situated generating facility to the transmitting facilities
of the transmitting utility.
``(ii) Effect of ferc lite.--A non-Federal regulatory
authority that, under any provision of Federal law enacted
before, on, or after the date of enactment of this
subparagraph, is authorized to determine the rates for
transmission service shall be authorized to determine the
costs of any interconnection under this subparagraph in
accordance with that provision of Federal law.
``(C) Applicable requirements.--The right of a generating
facility to interconnect under subparagraph (A) does not--
``(i) relieve the generating facility or the transmitting
utility of other Federal, State, or local requirements; or
``(ii) provide the generating facility with transmission or
distribution service.
``(2) Rule.--
``(A) In general.--Not later than 1 year after the date of
enactment of this subparagraph, the Commission shall
promulgate a final rule to establish reasonable and
appropriate technical standards for the interconnection of a
generating facility with the transmission facilities of a
transmitting utility.
``(B) Process.--To the extent feasible, the Commission
shall develop the standards through a process involving
interested parties.
``(C) Advisory committee.--The Commission shall establish
an advisory committee composed of qualified experts to make
recommendations to the Commission concerning development of
the standards.
``(3) Right to backup power.--
``(A) In general.--In accordance with subparagraph (B), a
transmitting utility shall offer to sell backup power to a
generating facility that has interconnected with the
transmitting utility unless--
``(i) Federal or State law (including regulations) allows a
generating facility to purchase backup power from an entity
other than the transmitting utility; or
``(ii) a transmitting utility allows a generating facility
to purchase backup power from an entity other than the
transmitting utility using--
``(I) the transmission facilities of the transmitting
utility; and
``(II) the transmission facilities of any other
transmitting utility.
``(B) Rates, terms, and conditions.--A sale of backup power
under subparagraph (A) shall be at such a rate, and under
such terms and conditions, as are just and reasonable and not
unduly discriminatory or preferential, taking into account
the actual incremental cost, whenever incurred by the local
distribution utility, to supply such backup power service
during the period in which the backup power service is
provided, as determined by the appropriate regulatory
authority.
``(C) No requirement for certain sales.--A transmitting
utility shall not be required to offer backup power for
resale to any entity other than the entity for which the
backup power is purchased.
``(D) New or expanded loads.--To the extent backup power is
used to serve a new or expanded load on the transmission
system, the generating facility shall pay any reasonable
costs associated with any transmission, distribution, or
generation upgrade required to provide such service.''.
(d) Conforming Amendments.--Section 210 of the Federal
Power Act (16 U.S.C. 824i) is amended--
(1) in subsection (a)(1)--
(A) by inserting ``transmitting utility, local distribution
utility,'' after ``electric utility,''; and
(B) in subparagraph (A), by inserting ``any transmitting
utility,'' after ``small power production facility,'';
(2) in subsection (b)(2), by striking ``an evidentiary
hearing'' and inserting ``a hearing'';
(3) in subsection (c)(2)--
(A) in subparagraph (B), by striking ``or'' at the end;
(B) in subparagraph (C), by striking ``and'' at the end and
inserting ``or''; and
(C) by adding at the end the following:
``(D) promote competition in electricity markets, and'';
and
(4) in subsection (d), by striking the last sentence.
______
By Mr. BURNS (for himself and Mr. Baucus):
S. 934. A bill to require the Secretary of the Interior to construct
the Rocky Boy's North Central Montana Regional Water System in the
State of Montana, to offer to enter into an agreement with the Chippewa
Cree Tribe to plan, design, construct, operate, maintain and replace
the rocky Boy's Rural Water System, and to provide assistance to the
North Central Montana Regional Water Authority for the planning,
design, and construction of the noncore system, and for other purposes;
to the Committee on Indian Affairs.
Mr. BURNS. Mr. President, I am pleased today to join my colleague
from Montana, Senator Baucus, in introducing the Rocky Boy's/North
Central Montana Regional Water System Act of 2001. The purpose of this
bill is to authorize a regional water delivery system which will serve
both the Rocky Boy's Reservation and the surrounding region in north
central Montana. For the last few years I have been working on this
bill with the members of the Chippewa Cree Tribe, the citizens of the
six towns affected, and the users of the eight water districts who have
joined together to bring clean, safe drinking water to their families.
More than 30,000 people would be serviced by this rural water system.
This bill is needed now for a number of reasons. First, it will
provide a means to import water to the Rocky Boy's Reservation for
drinking and for other everyday needs. Over the last decade, the
population of the Rocky Boy's Reservation has grown by 40 percent,
leaving existing water infrastructure insufficient. Secondly, there are
[[Page S5469]]
three small water systems in the region which are currently operating
out of compliance with the EPA's Surface Water Treatment Rule. Others
are nearing non-compliance, and one has been issued an administrative
rule by the Montana Department of Environmental Quality to begin water
treatment as soon as possible.
This bill helps us to realize that simply maintaining a small town or
district's water system can be so expensive and filled with red tape
that its users can hardly afford it. Under current law even if small
systems are able to be developed, they must be continually monitored
and the results reported. That may not be a problem in a larger
community with a sizeable tax base and a labor pool, but in a rural
setting those expenses and responsibilities are spread between so few
people that it can quickly become a major problem. I know rural
Montana. I can tell you our very smallest towns are hurting. They are
deeply affected by a lagging agricultural economy, and the inability to
provide water for any number of reasons could be enough to shut a small
town down. Is that what we want? I don't think so. One of the ways we
can address that problem is with the development of regional water
systems, which are more efficient, and easier to manage.
I truly believe it is time to stand up and face our commitments to
Indian Country and rural America head on. This bill is the perfect
opportunity for that, because it uses the teamwork of committed
citizens and builds on the system they have developed. This is a very
good example of cooperation between tribal and non-tribal entities, and
of what happens when people come to the table ready to find a solution.
This project has been a long time coming. The State of Montana
committed to it in 1997 with a promise of $10 million for construction,
and by providing technical assistance through the Montana Department of
Environmental Quality. Initial federal assistance followed in the form
of an appropriation of $300,000 for engineering and planning for fiscal
year 2000. The report was completed and the preliminary engineering is
complete. With the passage of the water compact settling the water
rights between the Chippewa Cree Tribe and Montana, P.L. 106-163 signed
by President Clinton in 1999, the stage was set for this project to be
built.
All the bases have been covered and it is time to authorize this
project. There is a real need for a less burdensome way to manage the
water needs of the area. The Rocky Boy's Reservation is in need of an
expanded water source and system, and smaller water districts and
municipalities are also struggling to stay in operation. The best way
to solve both these problems at once is to build an efficient regional
water system. I propose we do just that and show our commitment to
rural America.
____________________