Congressional Record, Volume 148 Issue 62 (Wednesday, May 15, 2002)

[Congressional Record Volume 148, Number 62 (Wednesday, May 15, 2002)]
[Senate]
[Pages S4391-S4404]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS--MAY 15, 2002

______

By Mr. HATCH (for himself, Mr. Leahy, Mr. Sessions, Mr.
Hutchinson, Mr. Brownback, Mr. Edwards, and Mr. DeWine):
S. 2520. A bill to amend title 18, United States Code, with respect
to the sexual exploitation of children; to the Committee on the
Judiciary.
Mr. HATCH. Mr. President, every decent American joins with me in
seeking to rid our country of child pornography. Unfortunately, the
growth of technology and the rise of the internet have flooded our
nation with it. Child pornography is inherently repulsive, but even
more damaging are the purposes for which it routinely is used. Perverts
and pedophiles not only use child pornography to whet their sick
desires, but also to lure our defenseless children into unspeakable
acts of sexual exploitation.
There is no place for child pornography even in our free society. Mr.
President, I have long championed legislation designed to punish those
who produce, peddle or possess this reprehensible material. As I stated
in introducing the Child Pornography Prevention Act of 1996 (``CPPA''),
we have both the constitutional right and moral obligation to protect
our children from the horrors of child pornography.

[[Page S4392]]

I remain fully committed to these principles today. We were
disappointed some weeks ago, when a majority of the Supreme Court
struck down some key provisions of the CPPA under the first amendment.
While I firmly respect the Supreme Court's role in interpreting the
Constitution, the decision left some gaping holes in our nation's
ability to prosecute child pornography effectively. We must now act
quickly to repair our child pornography laws to provide for effective
law enforcement in a manner that accords with the Court's ruling.
Mr. President, the legislation I introduce today strikes a necessary
balance between the first amendment and our nation's critically
important interest in protecting children. This Act does many things to
aid the prosecution of child pornography, and I highlight some of its
most significant provisions here.
First, the act plugs the loophole that exists today where child
pornographers can escape prosecution by claiming that their sexually
explicit material did not actually involve real children. Technology
has advanced so far that even experts often cannot say with absolute
certainty that an image is real or a ``virtual'' computer creation. If
our criminal laws fail to take account of such advances in technology,
they become completely worthless. For this reason, the act permits a
prosecution to proceed when the child pornography includes persons who
appear virtually indistinguishable from actual minors. And even when
this occurs, the accused is afforded a complete affirmative defense by
showing that the child pornography did not involve a minor.
Second, the act prohibits the pandering or solicitation of anything
represented to be obscene child pornography. The Supreme Court has
ruled that this type of conduct does not constitute protected speech.
Congress, moreover, should severely punish those who would try to
profit or satisfy their depraved desires by dealing in such filth.
Third, the act prohibits any depictions of minors, or apparent
minors, in actual--not simulated--acts of bestiality, sadistic or
masochistic abuse, or sexual intercourse, when such depictions lack
literary, artistic, political or scientific value. This type of
hardcore sexually explicit material merits our highest form of disdain
and disgust and is something that our society ought to try hard to
eradicate. Nor does the first amendment bar us from banning the
depictions of children actually engaging in the most explicit and
disturbing forms of sexual activity.
Fourth, the act beefs up existing record keeping requirements for
those who chose to produce sexually explicit materials. These record
keeping requirements are unobjectionable since they do not ban
anything. Rather, the act simply requires such producers to keep
records confirming that no actual minors were involved in the making of
the sexually explicit materials. In light of the difficulty experts
face in determining an actor's true age and identity just by viewing
the material itself, increasing the criminal penalties for failing to
maintain these records are vital to ensuring that only adults appear in
such productions.
Finally, the act creates a new civil action for those aggrieved by
the depraved acts of those who violate our child pornography laws. Mr.
President, this is one area of the law where society as a whole can
benefit from more vigorous enforcement, both on the criminal and civil
fronts.
Mr. President, we will not need to wait long before those who deal in
child pornography will take advantage of the Supreme Court's decision.
Congress can and should act, promptly and decisively, to close any gaps
in current law to protect our children from the immeasurable harms
posed by child pornography.
I strongly urge my colleagues to join with me in promptly passing
this important 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. 2520

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 ``Prosecutorial Remedies and
Tools Against the Exploitation of Children Today Act of
2002''.

SEC. 2. CERTAIN ACTIVITIES RELATING TO MATERIAL CONSTITUTING
OR CONTAINING CHILD PORNOGRAPHY.

Section 2252A of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) by striking paragraph (3) and inserting the following:
``(3) knowingly--
``(A) reproduces any child pornography for distribution
through the mails, or in interstate or foreign commerce by
any means, including by computer; or
``(B) advertises, promotes, presents, describes,
distributes, or solicits through the mails, or in interstate
or foreign commerce by any means, including by computer, any
material in a manner that conveys the impression that the
material is, or contains, an obscene visual depiction of a
minor engaging in sexually explicit conduct;'';
(B) in paragraph (4), by striking ``or'' at the end;
(C) in paragraph (5), by striking the period at the end and
inserting ``; or''; and
(D) by adding at the end the following:
``(6) knowingly distributes, offers, sends, or provides to
a minor any visual depiction, including any photograph, film,
video, picture, or computer generated image or picture,
whether made or produced by electronic, mechanical, or other
means, of sexually explicit conduct where such visual
depiction is, or appears to be, of a minor engaging in
sexually explicit conduct--
``(A) that has been mailed, shipped, or transported in
interstate or foreign commerce by any means, including by
computer;
``(B) that was produced using materials that have been
mailed, shipped, or transported in interstate or foreign
commerce by any means, including by computer; or
``(C) which distribution, offer, sending, or provision is
accomplished using the mails or by transmitting or causing to
be transmitted any wire communication in interstate or
foreign commerce, including by computer,
for purposes of inducing or persuading such minor to
participate in any activity that is illegal.'';
(2) in subsection (b)(1), by striking ``(1), (2), (3), or
(4)'' and inserting ``(1), (2), (3), (4), or (6)''; and
(3) by striking subsection (c) and inserting the following:
``(c) It shall be an affirmative defense to a charge of
violating paragraph (1), (2), (3), (4), or (5) of subsection
(a) that--
``(1)(A) the alleged child pornography was produced using
an actual person or persons engaging in sexually explicit
conduct; and
``(B) each such person was an adult at the time the
material was produced; or
``(2) the alleged child pornography was not produced using
any actual minor or minors.
No affirmative defense shall be available in any prosecution
that involves obscene child pornography or child pornography
as described in section 2256(8)(D). A defendant may not
assert an affirmative defense to a charge of violating
paragraph (1), (2), (3), (4), or (5) of subsection (a)
unless, within the time provided for filing pretrial motions
or at such time prior to trial as the judge may direct, but
in no event later than 10 days before the commencement of the
trial, the defendant provides the court and the United States
with notice of the intent to assert such defense and the
substance of any expert or other specialized testimony or
evidence upon which the defendant intends to rely. If the
defendant fails to comply with this subsection, the court
shall, absent a finding of extraordinary circumstances that
prevented timely compliance, prohibit the defendant from
asserting a defense to a charge of violating paragraph (1),
(2), (3), (4), or (5) of subsection (a) or presenting any
evidence for which the defendant has failed to provide proper
and timely notice.''.

SEC. 3. ADMISSIBILITY OF EVIDENCE.

Section 2252A of title 18, United States Code, is amended
by adding at the end the following:
``(e) Admissibility of Evidence.--In any prosecution under
this chapter, the name, address, or other identifying
information, other than the age or approximate age, of any
minor who is depicted in any child pornography shall not be
admissible and the jury shall be instructed, upon request of
the United States, that it can draw no inference from the
absence of such evidence in deciding whether the child
pornography depicts an actual minor .''.

SEC. 4. DEFINITIONS.

Section 2256 of title 18, United States Code, is amended--
(1) in paragraph (1), by inserting before the semicolon the
following: ``and shall not be construed to require proof of
the actual identity of the person'';
(2) in paragraph (8)--
(A) in subparagraph (B), by inserting ``is obscene and''
before ``is'';
(B) in subparagraph (C), by striking ``or'' at the end; and
(C) by striking subparagraph (D) and inserting the
following:
``(D) such visual depiction--
``(i) is of a minor, or an individual who appears to be a
minor, actually engaging in bestiality, sadistic or
masochistic abuse, or sexual intercourse, including genital-
genital, oral-genital, anal-genital, or oral-anal, whether
between persons of the same or opposite sex; and
``(ii) lacks serious literary, artistic, political, or
scientific value; or

[[Page S4393]]

``(E) the production of such visual depiction involves the
use of an identifiable minor engaging in sexually explicit
conduct; and''; and
(3) in paragraph (9)(A)(ii)--
(A) by striking ``(ii) who is'' and inserting the
following:
``(ii)(I) who is''; and
(B) by striking ``and'' at the end and inserting the
following: ``or
``(II) who is virtually indistinguishable from an actual
minor; and''.

SEC. 5. RECORDKEEPING REQUIREMENTS.

Section 2257 of title 18, United States Code, is amended--
(1) in subsection (d)(2), by striking ``of this section''
and inserting ``of this chapter or chapter 71,'';
(2) in subsection (h)(3), by inserting ``, computer
generated image or picture,'' after ``video tape''; and
(3) in subsection (i)--
(A) by striking ``not more than 2 years'' and inserting
``not more than 5 years''; and
(B) by striking ``5 years'' and inserting ``10 years''.

SEC. 6. FEDERAL VICTIMS' PROTECTIONS AND RIGHTS.

Section 227(f)(1)(D) of the Victims of Child Abuse Act of
1990 (42 U.S.C. 13032(f)(1)(D)) is amended to read as
follows:
``(D) where the report discloses a violation of State
criminal law to an appropriate official of that State or
subdivision of that State for the purpose of enforcing such
State law.''.

SEC. 7. CONTENTS DISCLOSURE OF STORED COMMUNICATIONS.

Section 2702 of title 18, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (5), by striking ``or'' at the end;
(B) in paragraph (6)--
(i) in subparagraph (A)(ii), by inserting ``or'' at the
end;
(ii) by striking subparagraph (B); and
(iii) by redesignating subparagraph (C) as subparagraph
(B);
(C) by redesignating paragraph (6) as paragraph (7); and
(D) by inserting after paragraph (5) the following:
``(6) to the National Center for Missing and Exploited
Children, in connection with a report submitted under section
227 of the Victims of Child Abuse Act of 1990 (42 U.S.C.
13032); or''; and
(2) in subsection (c)--
(A) in paragraph (4), by striking ``or'' at the end;
(B) by redesignating paragraph (5) as paragraph (6); and
(C) by inserting after paragraph (4) the following:
``(5) to the National Center for Missing and Exploited
Children, in connection with a report submitted under section
227 of the Victims of Child Abuse Act of 1990 (42 U.S.C.
13032); or''.

SEC. 8. EXTRATERRITORIAL PRODUCTION OF CHILD PORNOGRAPHY FOR
DISTRIBUTION IN THE UNITED STATES.

Section 2251 of title 18, United States Code, is amended--
(1) by striking ``subsection (d)'' each place that term
appears and inserting ``subsection (e)'';
(2) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(3) by inserting after subsection (b) the following:
``(c)(1) Any person who, in a circumstance described in
paragraph (2), employs, uses, persuades, induces, entices, or
coerces any minor to engage in, or who has a minor assist any
other person to engage in, any sexually explicit conduct
outside of the United States, its territories or possessions,
for the purpose of producing any visual depiction of such
conduct, shall be punished as provided under subsection (e).
``(2) The circumstance referred to in paragraph (1) is
that--
``(A) the person intends such visual depiction to be
transported to the United States, its territories or
possessions, by any means, including by computer or mail; or
``(B) the person transports such visual depiction to the
United States, its territories or possessions, by any means,
including by computer or mail.''.

SEC. 9. CIVIL REMEDIES.

Section 2252A of title 18, United States Code, as amended
by this Act, is amended by adding at the end the following:
``(f) Civil Remedies.--
``(1) In general.--Any person aggrieved by reason of the
conduct prohibited under subsection (a) or (b) may commence a
civil action for the relief set forth in paragraph (2).
``(2) Relief.--In any action commenced in accordance with
paragraph (1), the court may award appropriate relief,
including--
``(A) temporary, preliminary, or permanent injunctive
relief;
``(B) compensatory and punitive damages; and
``(C) the costs of the civil action and reasonable fees for
attorneys and expert witnesses.''.

SEC. 10. ENHANCED PENALTIES FOR RECIDIVISTS.

Sections 2251(d), 2252(b), and 2252A(b) of title 18, United
States Code, are amended by inserting ``chapter 71,'' before
``chapter 109A,'' each place it appears.

SEC. 11. SENTENCING ENHANCEMENTS FOR INTERSTATE TRAVEL TO
ENGAGE IN SEXUAL ACT WITH A JUVENILE.

Pursuant to its authority under section 994(p) of title 18,
United States Code, and in accordance with this section, the
United States Sentencing Commission shall review and, as
appropriate, amend the Federal Sentencing Guidelines and
policy statements to ensure that guideline penalties are
adequate in cases that involve interstate travel with the
intent to engage in a sexual act with a juvenile in violation
of section 2423 of title 18, United States Code, to deter and
punish such conduct.

SEC. 12. MISCELLANEOUS PROVISIONS.

(a) Appointment of Trial Attorneys.--Not later than 6
months after the date of enactment of this Act, the Attorney
General shall appoint 25 additional trial attorneys to the
Child Exploitation and Obscenity Section of the Criminal
Division of the Department of Justice or to appropriate U.S.
Attorney's Offices, and those trial attorneys shall have as
their primary focus, the investigation and prosecution of
Federal child pornography laws.
(b) Report to Congressional Committees.--
(1) In general.--Not later than 9 months after the date of
enactment of this Act, and every 2 years thereafter, the
Attorney General shall report to the Chairpersons and Ranking
Members of the Committees on the Judiciary of the Senate and
the House of Representatives on the Federal enforcement
actions under chapter 110 of title 18, United States Code.
(2) Contents.--The report required under paragraph (1)
shall include--
(A) an evaluation of the prosecutions brought under chapter
110 of title 18, United States Code;
(B) an outcome-based measurement of performance; and
(C) an analysis of the technology being used by the child
pornography industry.
(c) Sentencing Guidelines.--Pursuant to its authority under
section 994(p) of title 18, United States Code, and in
accordance with this section, the United States Sentencing
Commission shall review and, as appropriate, amend the
Federal Sentencing Guidelines and policy statements to ensure
that the guidelines are adequate to deter and punish conduct
that involves a violation of paragraph (3)(B) or (6) of
section 2252A(a) of title 18, United States Code, as created
by this Act. With respect to the guidelines for section
2252A(a)(3)(B), the Commission shall consider the relative
culpability of promoting, presenting, describing, or
distributing material in violation of that section as
compared with solicitation of such material.

SEC. 13. 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 unconstitutional, the
remainder of this Act, the amendments made by this Act, and
the application of the provisions of such to any person or
circumstance shall not be affected thereby.

Mr. LEAHY. Mr. President, today I join Senator Hatch in introducing
the PROTECT Act of 2002. This bill is intended to protect our Nation's
children from exploitation and protect our constitution at the same
time.
In the Free Speech Coalition case, seven Justices of the Supreme
Court ruled that the definition of child pornography in the CPPA was
overbroad and covered such non-obscene movies as Traffic, Romeo and
Juliet, and American Beauty. No one intended that.
It also ruled that Congress could not broadly ban all ``virtual child
pornography,'' which may make prosecutors' jobs very tough in the
internet age.
The Court in Free Speech faced a difficult task--as do we here--
applying the time honored principles of the first amendment to the
computer age. I join Senator Hatch today in introducing a bill
carefully drawn to stick. As a former prosecutor, I am more interested
in making real cases that protect children than making new first
amendment law. There are many people who do not agree with the Supreme
Court's decision in Free Speech, but that will not erase it from the
books. Everyone wants to protect our children, but we need to do it
with cases and laws that don't get tossed out in court. It is tempting
to rush to come up with a ``quick fix,'' but we owe our children more
than just a press conference on this matter. We owe them careful and
thoughtful action.
My initial review of the administration's proposal, now working its
way through the House, gives me serious concern. Already I have a
letter from six constitutional experts--prominent practitioners and law
professors alike--that expresses ``grave concern'' about the Department
of Justice's proposal from a first amendment perspective. I will put
that statement in the Record at the conclusion of my remarks.
Indeed, the entire approach that the administration has taken in this
matter is to reach as far as possible, not to hedge its bets, and
simply to throw

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down the gauntlet on the steps of the Supreme Court, daring it to
strike down the law yet again. That will help no one. In contrast, the
bipartisan bill we introduce today is not an attempt to ``get around''
the Supreme Court's decision, or to ignore that decision.
Instead, Senator Hatch and I have together to craft a bill that
attempts to work within the limits set by the Supreme Court. At the
same time, the bill contains tough enforcement tools which are not in
the administration's bill. For instance, it creates a new crime aimed
at people who actually use child pornography, whether real or virtual,
to entice children to do illegal acts. This crime carries a tough 15-
year maximum prison sentence for a first offense. Second, the bill
requires the U.S. Sentencing Commission to address a disturbing
disparity in the current Sentencing Guidelines.
The current sentences for a person who actually travels across state
lines to have sex with a child are not as high as for producing child
pornography. The Commission needs to correct this disparity
immediately, so that prosecutors are able to deal just as effectively
with dangerous sexual predators off the street as with child
pornographers.
Third, this bill has several provisions designed to protect the
children so that they are not victimized again in the criminal process.
This bill provides for the first time ever a ``shield law'' that
prohibits the name or other identifying information of the child victim
from being admitted at any child pornography trial.
Next, this bill also provides a new private right of action for the
victims of child pornography. This provision has teeth, including
punitive damages that will put those who produce child pornography out
of business. I commend Senator Hatch for including this provision. None
of these new prosecutorial tools presents first amendment issues. They
are not going to result in Supreme Court arguments--all they will do is
get bad guys in jail and protect children. Other parts of the bill are
closer to the first amendment line, and I expect that the debate on the
constitutional issues raised by this bill will be vigorous. That being
said, this bill reflects a good faith attempt to protect children to
the greatest extent possible while not crossing that line.
I look forward to the debate on these issues, and I do not pretend
that I or any of us here have a monopoly on wisdom when it comes to
such important constitutional questions. For all of these reasons, I am
pleased to introduce this legislation with Senator Hatch.
To reiterate, this bill is intended to protect our nation's children
from exploitation by those who produce and distribute child
pornography, within the parameters of the first amendment. Just last
month, the Supreme Court in Ashcroft v. Free Speech Coalition, 122 S.
Ct. 1389 (April 16, 2002) (``Free Speech''), struck down portions of
the 1996 Child Pornography Protection Act (``CPPA'') as being in
violation of the first amendment. I voted for that act when it became
law in 1996, and I join Senator Hatch today in introducing a bill
carefully drawn to square with the Supreme Court's decision and protect
our children with a law that when used by prosecutors, will produce
convictions that will stick. While that task is not an easy one,
Senator Hatch and I are working together to do all we can to protect
our children and protect our Constitution at the same time.
In Free Speech, the Supreme Court voided two provisions of the CPPA
as being overbroad and imposing substantial restrictions on protected
speech. The specific provisions struck down in that case targeted No. 1
virtual child pornography--that is, child porn made not using real
children but with computer images or adults and No. 2 material which is
``pandered'' as child pornography (though the material may not in fact
be as advertised). In a complex and divided opinion, seven Justices
ruled that some part of the CPPA was unconstitutional as currently
drafted. Only Chief Justice Rehnquist and Justice Scalia, in dissent,
would have upheld the CPPA in its entirety and only by reading the
statute more narrowly than it appears on its face.
The Court in Free Speech faced a difficult task--applying the time
honored principles of the first amendment to the computer age. The
Internet provides many opportunities for doing good, but also for doing
harm. Over the past few years, the Congress has paid a lot of attention
to how the Internet is being used to purvey child pornography
manufactured through the sexual abuse of children, and has not always
been successful in crafting legislation to address this problem that
passes constitutional muster. Past efforts, such as the Communications
Decency Act, the CPPA and the Child Online Protection Act have all had
difficulty overcoming constitutional challenges.
The majority opinion in Free Speech is grounded on two basic
premises. First, the Court ruled that the definition of child
pornography in the CPPA was overbroad and covered a substantial amount
of material that was not ``obscene'' under the Supreme Court's
traditional obscenity test. The Supreme Court's Miller test provides
that only ``obscene'' pornographic images can be prohibited without
violating the first amendment. See Miller v. California, 413 U.S. 15
(1973). Under the Miller test, the material must be viewed as a whole,
and not judged by any single scene so that material with serious
literary, artistic, or scientific value cannot be banned in a blanket
manner. Thus, the Court ruled in the Free Speech case that the CPPA
went well beyond Miller and covered such non-obscene movies as Traffic,
Romeo and Juliet, and American Beauty.

Second, the Court ruled that the CPPA could not be saved by the so-
called ``child pornography doctrine,'' which excludes yet another class
of speech from first amendment protection. Because the CPPA covers a
broad array of pornographic material that only ``appears to be'' of
children, such as computer images or youthful adults, the Court ruled
that such material could not be banned and criminalized under the child
porn doctrine first articulated in New York v. Feber, 458 U.S. 747
(1982) (``Ferber''). The Court ruled that the Ferber doctrine was
justified based on the harm to real children, and that ``virtual
porn,'' or material that ``appeared to be'' child pornography under the
CPPA was not sufficiently lined to real child abuse to justify the
CPPA's complete ban on it. In reaching this decision the Court
considered and rejected some of the government's forceful arguments
regarding the harmful secondary effects of even virtual child
pornography, finding them insufficient under the first amendment to
justify a comprehensive ban. Since certain provisions of the CPPA were
overboard and covered such ``protected'' speech, however offensive, the
Court struck those provisions down. The Court also struck down the
CPPA's definition of ``pandered'' child pornography as overbroad,
finding that it criminalized possession of non-obscene material not
just by the so-called ``panderer,'' but by downstream possessors who
might not have any knowledge as to how it was originally sold or
marketed.
The Free Speech decision has placed prosecutors in a difficult
position. With key portions of the CPPA gone, the decision invites all
child porn defendants, even those who exploit real children, to assert
a ``virtual porn'' defense in which they claim that the material at
issue is not illegal because no real child was used in its creation.
the increasing technological ability to create computer images closely
resembling real children may make it difficult for prosecutors to
obtain prompt guilty pleas in clear-cut child porn cases and even to
defeat such a defense at trial, even in cases where real children were
victimized in producing the sexually explicit material. In short,
unless we attempt to rewrite portions of the CPPA, the future bodes
poorly for the ability of the federal government to combat a wave of
child pornography made ever more accessible over the Internet.
The bill we introduce today is not an attempt to ``get around'' the
Supreme court's decision, or to ignore that decision, as do sizable
portions of the administration's bill, which has been introduced in the
House of Representatives. Ignoring the law will simply land America's
children right back where they started--unprotected.
Instead, Senator Hatch and I have together crafted a bipartisan bill
that works within the limits set by the Supreme court. I expect that
the debate on the complicated constitutional issues raised by this bill
will be vigorous, and I appreciate that they may

[[Page S4395]]

be isolated provisions of the bill that some may think crosses the
first amendment line drawn by the court in the Free Speech case. That
being said, this bill reflects a good faith attempt to protect children
to the greatest extent possible by going up to that line, but not
crossing it. I look forward to the debate on these issues as the
legislative process moves forward, and I do not pretend that I or any
Member of this body has a monopoly on wisdom when it comes to such
important and complex constitutional questions. Let me summarize some
of the bill's provisions.

Section 2 of the bill creates two new crimes aimed at people who
distribute child pornography and those who use such material to entice
children to do illegal acts. Each of these new crimes carry a 15-year
maximum prison sentence for a first offense and double that term for
repeat offenders. First, the bill criminalizes the pandering of child
pornography, creating a new crime to respond to the Supreme Court's
recent ruling striking down the CPPA's definition of pandering. This
provision is narrower than the old ``pandering'' definition for two
reasons, both of which respond to specific Court criticisms: First, the
new crime only applies to the people who actually pander the child
pornography or solicit it, not to all those who possess the material
``downstream.'' The bill also contains a directive to the Sentencing
Commission which asks them to distinguish between those who pander or
distribute such material who are more culpable than those who solicit
the material. Second, the pandering in this provision must be linked to
``obscene'' material, which is totally unprotected speech under Miller.
Thus, while I acknowledge that this provision may well be challenged on
some of the same grounds as the prior CPPA provision, it responds to
specific concerns raised by the Supreme Court and is significantly
narrower than the CPPA's definition of pandering.
Second, the bill creates a new crime to take direct aim at one of the
chief evils of child pornography: namely, its use by sexual predators
to entice minors either to engage in sexual activity or the production
of more child pornography. This was one of the compelling arguments
made by the government before the Supreme Court in support of the CPPA,
but the Court rejected that argument as an insufficient basis to ban
the production, distribution or possession of ``virtual'' child
pornography. This bill addresses that same harm in a more targeted
manner. It creates a new felony, which applies to both actual and
virtual child pornography, for people who use such material to entice
minors to participate in illegal activity. This will provide
prosecutors a potent new tool to put away those who prey upon children
using such pornography--whether the child pornography is virtual or
not.
Next, this bill attempts to revamp the existing affirmative defense
in child pornography cases both in response to criticisms of the
Supreme Court and so that the defense does not erect unfair hurdles to
the prosecution of cases involving real children. Responding directly
to criticisms of the Court, the new affirmative defense applies equally
to those who are charged with possessing child pornography and to those
who actually produce it, a change from current law. It also allows,
again responding to specific Supreme Court criticisms, for a defense
that no actual children were used in the production of the child
pornography--i.e. that it was made using computers. At the same time,
this provision protects prosecutors from unfair surprise in the use of
this affirmative defense by requiring that a defendant give advance
notice of his intent to assert it, just as defendants are currently
required to give if they plan to assert an alibi or insanity defense.
As a former prosecutor I suggested this provision because it effects
the real way that these important trials are conducted. With the
provision, the government can marshal the expert testimony that may be
needed to rebut this ``virtual porn'' defense in cases where real
children were victimized.

This improved affirmative defense provides important support for the
constitutionality of much of this bill after the Free Speech decision.
Even Justice Thomas specifically wrote that it would be a key factor
for him. This is one reason for making the defense applicable to all
non-obscene, child pornography, as defined in 18 U.S.C. Sec. 2256. In
the bill's current form, however, the affirmative defense is not
available in one of the new proposed classes of virtual child
pornography, which would be found at 18 U.S.C. Sec. 2256(8)(D). This
omission may render that provision unconstitutional under the first
Amendment, and I hope that, as the legislative process continues, we
can work with constitutional experts to improve the bill in this and
other ways. I do not want to be here again in five years, after yet
another Supreme Court decision striking this law down.
The bill also provides needed assistance to prosecutors in rebutting
the virtual porn defense by removing a restriction on the use of
records of performers portrayed in certain sexually explicit conduct
that are required to be maintained under 18 U.S.C. Sec. 2257, and
expanding such records to cover computer images. These records, which
will be helpful in proving that the material in question is not
``virtual'' child pornography, may be used in federal child pornography
and obscenity prosecutions under this act. The purpose of this
provision is to protect real children from exploitation. It is
important that prosecutors have access to this information in both
child pornography and obscenity prosecutions, since the Supreme Court's
recent decision has had the effect of narrowing the child pornography
laws, making more likely that the general obscenity statutes will be
important tools in protecting children from exploitation. In addition,
the act raises the penalties for not keeping accurate records, further
deterring the exploitation of minors and enhancing the reliability of
the records.
Next, this bill contains several provisions altering the definition
of ``child pornography'' in response to the Free Speech case. One
approach would have been simply to add an ``obscenity'' requirement to
the child pornography definitions. Outlawing all obscene child
pornography--real and virtual; minor and ``youthful-adult;'' simulated
and real--would clearly pass a constitutional challenge because obscene
speech enjoys no protection at all. Under the Miller test, such
material (1) ``appeals to the prurient interest,'' (2) is utterly
``offensive'' in any ``community,'' and (3) has absolutely no
``literary, artistic or scientific value.''
Some new provisions of this bill do take this ``obscenity'' approach,
like the new Sec. 2256(8)(B). Other provisions, however, take a
different approach. They attempt to address the fatal flaws identified
by the Supreme Court in the CPPA with more narrow definitions of what
the Court found were overbroad definitions of ``child pornography,''
which still might not be obscene speech under the test set forth by the
Supreme Court. While these new provisions are more narrowly tailored
than both the original CPPA and the administration's proposal
introduced in the House, these provisions may continue to benefit from
further examination by constitutional scholars.
Specifically, the CPPA's definition of ``identifiable minor'' has
been modified in the bill to include a prong for persons who are
``virtually indistinguishable from an actual minor.'' This adopts
language from Justice O'Connor's concurrence in the Free Speech case.
Thus, while this language is defensible, I predict that this provision
will be the center of much constitutional debate. Unlike Senator Hatch,
I believe that this new prong may not be needed, and may both confuse
the statute unnecessarily and endanger the already upheld ``morphing''
section of the CPPA because it applies to that provision as well. This
new definition may create both overbreadth and vagueness problems in a
later constitutional challenge both the new and existing parts of the
``child pornography'' definition. In short, while these new
definitional provisions are a good faith effort to go as far as the
Constitution allows, they risk crossing the line.
It does not do America's children any good to write a law that might
get struck down by our courts in order to prove an ideological point.
Since most all the real cases being prosecuted even under the CPPA
involve clearly obscene material, by anyone's standard, one could
legitimately ask, `Why push the envelope and risk cases getting thrown
out of court?' These provisions should be fully debated and examined
during the legislative process.

[[Page S4396]]

The bill also contains a variety of other measures designed to
increase jail sentences in cases where children are victimized by
sexual predators. First, it enhances penalties for repeat offenders of
child sex offenses by expanding the predicate crimes which trigger
tough, mandatory minimum sentences. Second, the bill requires the U.S.
Sentencing Commission to address a disturbing disparity in the current
Sentencing Guidelines. The current sentences for a person who actually
travels across state lines to have sex with a child are not as high as
for child pornography. The Commission needs to correct this oversight
immediately, so that prosecutors can take these dangerous sexual
predators off the street. These are all strong measures designed to
protect children and increase prison sentences for child molesters and
those who otherwise exploit children.
The act also has several provisions designed to protect the children
who are victims in these horrible cases. Privacy of the children must
be paramount. It is important that they not be victimized yet again in
the criminal process. This bill provides for the first time ever an
explicit shield law that prohibits the name or other identifying
information of the child victim (other than the age or approximate age)
from being admitted at any child pornography trial. It is also intended
that judges will take appropriate steps to ensure that such information
as the child's name, address or other identifying information not be
publicly disclosed during the pretrial phase of the case or at
sentencing. The bill also contains a provision requiring the judge to
instruct the jury, upon request of the government, that no inference
should be drawn against the United States because of information
inadmissible under the new shield law.
The act also amends certain reporting provisions governing child
pornography. Specifically, it allows federal authorities to report
information they receive from the Center from Missing and Exploited
Children (``CMEC'') to state and local police without a court order. In
addition, the bill removes the restrictions under the Electronic
Communications Privacy Act (ECPA) for reporting the contents of, and
information pertaining to, a subscriber of stored electronic
communications to the CMEC when a mandatory child porn report is filed
with the CMEC pursuant to 42 U.S.C. Sec. 13032. This change may invite
federal, state or local authorities to circumvent all subpoena and
court order requirements under ECPA and allow them to obtain subscriber
e-mails and information by triggering the initial report to the CMEC
themselves. To the extent that these changes in ECPA may have that
unintended effect, as this bill is considered in the Judiciary
Committee and on the floor, we should consider mechanisms to guard
against subverting the safeguards in ECPA from government officials
going on fishing expeditions for stored electronic communications under
the rubric of child porn investigations. This may include clarifying 42
U.S.C. Sec. 13032 that the initial tip triggering the report may not be
generated by the government itself. A tip line to the CMEC is just
that--a way for outsiders to report wrongdoing to the CMEC and the
government, not for the government to generate a report to itself
without following otherwise required lawful process.

The bill provides for extraterritorial jurisdiction where a defendant
induces a child to engage in sexually explicit conduct outside the
United States for the purposes of producing child pornography which
they intend to transport to the United States. The provision is crafted
to require the intent of actual transport of the material into the
United States, unlike the House bill which criminalizes even an intent
to make such material ``accessible.'' Under that overly broad wording,
any material posted on a web site internationally could be covered,
whether or not it was ever intended that the material be downloaded in
the United States.
Finally, the bill provides also a new private right of action for the
victims of child pornography. This provision has teeth, including
injunctive relief and punitive damages that will help to put those who
produce child pornography out of business for good. I commend Senator
Hatch for his leadership on this provision.
There are many people who do not agree with the Supreme Court's
decision in Free Speech, but that will not erase it from the books. It
is the law of the land, and resulted from seven Justices who had
problems with the overbreadth of the last child pornography law passed
by Congress. That alone should counsel a thoughtful approach this time
around. Everyone wants to protect our children, but we need to do it
with cases and laws that stick.
It is tempting to rush to come up with a ``quick fix,'' but we owe
our children more than a press conference on this matter. My initial
review of the administration's proposal, now working its way through
the House of Representatives, gives me serious concern. Already, the
constitutional law experts and law professors with whom I have
consulted on this matter have expressed a near consensus that large
parts of that proposal will not withstand scrutiny under the first
amendment after the Free Speech case.
Indeed, the entire approach that the administration has taken in this
matter is to reach as far as possible, not to hedge its bets, and
simply to throw down the gauntlet on the steps of the Supreme Court,
daring it to strike down the law yet again. That does not serve
anyone's interest, least of all the real victims of child pornography.
Criminal prosecution is not about making an ideological point--whether
one agrees with it or not--that is for speeches and law review
articles. Criminal prosecution should be about helping victims and
punishing criminals with cases that do not get thrown out of court.

Let me discuss a couple of the most problematic aspects of the
Department's proposal. First, it sweepingly rejects any attempt to
incorporate the Supreme Court's doctrine of ``obscenity'' into the
definition of child pornography. Not even one provision takes that
approach, which would at least ensure that some of the law was upheld.
Instead, in its new 2256(8)(B) definition of ``child pornography,'' the
Department simply changes the words ``appears to be'' in the current
statute to ``appears virtually indistinguishable from'' in the new
provision. The problem with that approach is this is the same argument
that was tried by the Department in the Free Speech case and
overwhelmingly lost. Although Justice O'Connor wrote that such an
approach might satisfy her, she was not the deciding vote in the case--
indeed she was the seventh vote to strike down the statute.
Second, the administration's proposal regarding the new crime for
child pornography involving ``prepubescent'' children is also
problematic under the Court's Free Speech case. Although the section is
entitled ``Obscene visual depictions of young children'' the Department
has assiduously avoided any ``obscenity'' requirement in the provision
itself. I recognize that headlines and titles like ``prepubescent'' and
``obscene'' are popular, but one has to ask if the Department of
Justice really believes that it can fool our federal judges with such
linguistic sleight of hand when there is no obscenity requirement in
the statute itself, only the title? Or perhaps it is only the public
that is supposed to be fooled.
In any event, as a legal matter, the provision contains absolutely no
requirement that the material be judged as a whole for artistic,
literary, or scientific value. That was a point that the Supreme Court
repeatedly pounded home in the Free Speech case, yet it is simply
ignored in this provision. This approach is especially frustrating
because in the cases that the Department is likely to actually
prosecute, it would be easy to meet the obscenity test. Under the
Department's current approach, however, one can already predict the
parade of legitimate movies and scientific or educational materials
that those challenging the act will produce which meet the new
definition. In addition, no affirmative defense is available under this
new crime, so it cannot be saved from the Free Speech case on that
basis either.
There are other problematic provisions in the administration
proposal, but I simply raise these two in order to make the point that
the Department's proposal seems to be more concerned with making a
public point than with making successful cases. If the Department's
proposal becomes law, it will result in yet another round of court

[[Page S4397]]

cases, followed by another round of cases being thrown out, followed by
another round of legislation. America's children deserve better, and I
think that, while we may disagree on some of the specifics, that
Senator Hatch and I have made a good faith and bipartisan effort to
come up with a law that will survive judicial scrutiny and protect them
for years to come.
For all of these reasons, I am pleased to introduce this legislation
with Senator Hatch to help protect our nation's children. I hope that
we can continue to work together to address the complex constitutional
issues raised in this area. Mr. President, I ask unanimous consent that
the letter from constitutional scholars to which I referred be printed
in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
May 13, 2002.
Chairman Patrick J. Leahy,
U.S. Senate Judiciary Committee, Dirksen Senate Office
Building, Washington, DC.
Dear Chairman Leahy: We write to express our grave concern
with the legislation recently proposed by the Department of
Justice in response to the Supreme Court's decision in
Ashcroft, et. al. v. The Free Speech Coalition, et al., No.
00-795 (Apr. 16, 2002). In particular, the pornography
(indeed, the bill expressly targets images that do not
involve real human beings at all). Accordingly, in our view,
it suffers from the same infirmities that led the Court to
invalidate the statute at issue in Ashcroft.
We emphasize that we share the revulsion all Americans feel
toward those who harm children, and fully support legitimate
efforts to eradicate child pornography. As the Court in
Ashcroft emphasized, however, in doing so Congress must act
within the limits of the First Amendment, in our view, the
bill proposed by the Department of Jutice fails to do so.
Respectfully submitted,
Jodie L. Kelley,
Partner, Jenner & Block, LLC, Washington, DC.
Erwin Chemerinsky,
Sydney M. Irmas Professor of Public Interest Law, Legal
Ethics and Political Science, University of Southern
California Law School, Los Angeles, CA.
Paul Hoffman,
Partner, Schonbrun, DeSimone, Seplow, Harris & Hoffman,
LLP, Venice, CA. Adjunct Professor, University of Southern
California Law School, Los Angeles, CA.
Gregory P. Magarian,
Assistant Professor of Law, Villanova, University School of
Law, Villanova, PA.
Jamin Raskin,
Professor of Law, American University, Washington College
of Law, Washington, DC.
Donald B. Verrili, Jr.,
Partner, Jenner & Block, LLC, Washington, DC.

Mr. HUTCHINSON. Mr. President, I am pleased to join with my
colleagues, Senators Hatch and Leahy, in introducing the Prosecutorial
Remedies and Tools Against the Exploitation of Children Today Act of
2002, PROTECT, S. 2520. The spread of child pornography is one of the
gravest dangers in our society because it harms the weakest among us,
our children.
Since the Supreme Court's April 16, 2002, decision in Ashcroft v.
Free Speech Coalition, I have been extremely concerned that those who
would prey on our children through the Internet have a shield from
prosecution. They can simply claim the images they are posting, often
computer files which are difficult to closely examine, are not of
actual children but rather are computer generated. As the law currently
stands, it is offering protection to the predators, not to the child
victims.
Those who collect and engage in child pornography are oftentimes
full-fledged sexual predators themselves who have abused real children.
This has been proven by the highly successful Federal Bureau of
Investigation operation, Operation Candyman. Investigators found 7,200
Internet child pornography traffickers. At this point, of the 90 people
arrested through Operation Candyman in March of 2002, 13 have admitted
to molesting a total of 48 different children.
There is an achievable balance between preserving our first amendment
right to freedom of speech and protecting children from Internet
predators. I believe this bill strikes that balance, and I have
confidence that the Supreme Court will agree.
I would also like to thank Attorney General John Ashcroft for working
with Congress to draft this legislation.
______

By Mr. BINGAMAN (for himself and Mrs. Hutchison):
S. 2522. A bill to establish the Southwest Regional Border Authority;
to the Committee on Environment and Public Works.
Mr. BINGAMAN. Mr. President, I rise today to introduce legislation
along with Senator Kay Bailey Hutchison that will help raise the
standard of living for hundreds of thousands of Americans who live near
the United States-Mexico border. The Southwest Regional Border
Authority Act would create an economic development authority for the
Southwest border region, charged with awarding grants to border
communities in support of their local economic development projects.
The need for a regional border authority is acute: The poverty rate
in the Southwest border region is 20 percent--nearly double the
national average; unemployment rates in Southwest border counties often
reach as high as five times the national unemployment rate; per capita
personal income in the region is greatly below the national average;
and lack of adequate access to capital has made it difficult for
businesses to start up in the region.
In addition, the development of key infrastructures--such as water
and wastewater, transportation, public health, and telecommunications--
has not kept pace with the population explosion and the increase in
cross-border commerce.
The counties in the Southwest border region are among the most
economically distressed in the Nation. In fact, there are only a few
such regions of economic distress throughout the country--almost all of
which are currently served by regional economic development
commissions. These commissions, which are authorized by Congress,
include the Appalachian Regional Commission, the Delta Regional
Authority, and the Denali Commission. In order to address the needs of
the border region in a similar fashion, I propose the creation of a
regional economic development authority for the Southwest border.
My bill, which is modeled after the Appalachian Regional Commission,
is based on four guiding principles. First, it starts from the premise
that the people who live in the Southwest border region know best when
it comes to making decisions that affect their communities. Second, it
employs a regional approach to economic development and encourages
communities to work across county and State lines when appropriate. All
too often, past efforts to improve the Southwest border region have hit
roadblocks as a result of poor coordination and communication between
communities.
Third, it creates an economic development entity that is independent,
meaning it will be able to make decisions that are in the best interest
of border communities, without being subject to the politics of Federal
agencies. Finally, it brings together representatives of the four
Southwest border States and the Federal Government as equal partners,
all of whom will work to improve the quality of life and standard of
living for border residents.
This is not just another commission, and it is certainly not just
another grant program. I believe the Southwest Regional Border
Authority not only will help leverage new private sector funding, but
also will help better target Federal funding to those projects that are
most likely to achieve the desired outcome of increased economic
development.
The legislation accomplishes this through a sensible mechanism of
development planning. Under the bill, communities in each of the four
border States will work through local development districts to create
development plans that reflect the needs and priorities specific to
each locality. These local development plans then go to the State in
which the communities are located, where they become the basis for a
State development plan. The four State development plans, in turn, form
the basis for a regional development

[[Page S4398]]

plan, which is put together by the Authority. The purpose of this
planning process is to ensure that local priorities are reflected in
the projects funded by the Authority, while also providing flexibility
to the Authority to fund projects that are regional in nature.

This process has several advantages. First, by ensuring that Federal
dollars are targeted to projects that have gone through thorough
planning at the local level, we will greatly improve the probability of
success for those projects--thereby increasing the Federal Government's
return on its investment. Second, local development plans are essential
to attracting private sector funding. Increased private investment
means less need for Federal, State, and local public sector funding.
Third, combining resources in such a way will help communities get more
funding than they can currently get from any one program. This is
particularly important now as we in Congress grapple with how to fund
the needs of the border in the current budget climate.
I believe there are additional benefits to be derived from the Border
Authority. As the only independent, quasi-Federal entity charged with
economic development for the entire Southwest border region, the
Authority will become a clearinghouse of sorts on all the funding
available to the border region. This will enable the Authority to help
border communities learn which programs are best suited to their needs
and most likely to achieve the goals of their local development plans.
Another benefit is its focus on economically distressed counties. Under
the bill, the Authority can provide funding to increase the Federal
share of a Federal grant program to up to 90 percent of the total cost.
This is particularly helpful to the many communities that are often
unable to utilize Federal funding because they can't afford the
required local match.
For far too long the needs of the Southwest border have been ignored,
overlooked, or underfunded. I am confident that the creation of a
Southwest Regional Border Authority not only will call attention to the
great needs that exist along the border, but also provide resources to
local communities where the dollars will do the most good. I urge the
Senate to move swiftly on this legislation, and I ask my colleagues for
their support.
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. 2522

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 ``Southwest
Regional Border Authority Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.

TITLE I--SOUTHWEST REGIONAL BORDER AUTHORITY

Sec. 101. Membership and voting.
Sec. 102. Duties and powers.
Sec. 103. Authority personnel matters.

TITLE II--GRANTS AND DEVELOPMENT PLANNING

Sec. 201. Infrastructure development and improvement.
Sec. 202. Technology development.
Sec. 203. Community development and entrepreneurship.
Sec. 204. Education and workforce development.
Sec. 205. Funding.
Sec. 206. Supplements to Federal grant programs.
Sec. 207. Demonstration projects.
Sec. 208. Local development districts; certification and administrative
expenses.
Sec. 209. Distressed counties and areas and economically strong
counties.
Sec. 210. Development planning process.

TITLE III--ADMINISTRATION

Sec. 301. Program development criteria.
Sec. 302. Approval of development plans and projects.
Sec. 303. Consent of States.
Sec. 304. Records.
Sec. 305. Annual report.
Sec. 306. Authorization of appropriations.
Sec. 307. Termination of authority.

SEC. 2. FINDINGS AND PURPOSES.

(a) Findings.--Congress finds that--
(1) a rapid increase in population in the Southwest border
region is placing a significant strain on the infrastructure
of the region, including transportation, water and
wastewater, public health, and telecommunications;
(2) 20 percent of the residents of the region have incomes
below the poverty level;
(3) unemployment rates in counties in the region are up to
5 times the national unemployment rate;
(4) per capita personal income in the region is
significantly below the national average and much of the
income in the region is distributed through welfare programs,
retirement programs, and unemployment payments;
(5) a lack of adequate access to capital in the region--
(A) has created economic disparities in the region; and
(B) has made it difficult for businesses to start up in the
region;
(6) many residents of the region live in communities
referred to as ``colonias'' that lack basic necessities,
including running water, sewers, storm drainage, and
electricity;
(7) many of the problems that exist in the region could be
solved or ameliorated by technology that would contribute to
economic development in the region;
(8) while numerous Federal, State, and local programs
target financial resources to the region, those programs are
often uncoordinated, duplicative, and, in some cases,
unavailable to eligible border communities because those
communities cannot afford the required funding match;
(9) Congress has established several regional economic
development commissions, including the Appalachian Regional
Commission, the Delta Regional Authority, and the Denali
Commission, to improve the economies of those areas of the
United States that experience the greatest economic distress;
and
(10) many of the counties in the region are among the most
economically distressed in the United States and would
benefit from a regional economic development commission.
(b) Purposes.--The purposes of this Act are--
(1) to establish a regional economic development authority
for the Southwest Border region to address critical issues
relating to the economic health and well-being of the
residents of the region;
(2) to provide funding to communities in the region to
stimulate and foster infrastructure development, technology
development, community development and entrepreneurship, and
education and workforce development in the region;
(3) to increase the total amount of Federal funding
available for border economic development projects by
coordinating with and reducing duplication of other Federal,
State, and local programs; and
(4) to empower the people of the region through the use of
local development districts and State and regional
development plans that reflect State and local priorities.

SEC. 3. DEFINITIONS.

In this Act:
(1) Attainment county.--The term ``attainment county''
means an economically strong county that is not a distressed
county or a competitive county.
(2) Authority.--The term ``Authority'' means the Southwest
Regional Border Authority established by section 101(a)(1).
(3) Binational region.--The term ``binational region''
means the 150 miles on either side of the United States-
Mexico border.
(4) Business incubator service.--The term ``business
incubator service'' means--
(A) a legal service, including aid in preparing a corporate
charter, partnership agreement, or contract;
(B) a service in support of the protection of intellectual
property through a patent, a trademark, or any other means;
(C) a service in support of the acquisition or use of
advanced technology, including the use of Internet services
and Web-based services; and
(D) consultation on strategic planning, marketing, or
advertising.
(5) Competitive county.--The term ``competitive county''
means an economically strong county that meets at least 1,
but not all, of the criteria for a distressed county
specified in paragraph (5).
(6) Distressed county.--The term ``distressed county''
means a county in the region that--
(A)(i) has a poverty rate that is at least 150 percent of
the poverty rate of the United States;
(ii) has a per capita market income that is not more than
67 percent of the per capita market income of the United
States; and
(iii) has a 3-year unemployment rate that is at least 150
percent of the unemployment rate of the United States; or
(B)(i) has a poverty rate that is at least 200 percent of
the poverty rate of the United States; and
(ii)(I) has a per capita market income that is not more
than 67 percent of the per capita market income of the United
States; or
(II) has a 3-year unemployment rate that is at least 150
percent of the unemployment rate of the United States.
(7) Economically strong county.--The term ``economically
strong county'' means a county in the region that is not a
distressed county.
(8) Federal grant program.--The term ``Federal grant
program'' means a Federal grant program to provide assistance
in--
(A) acquiring or developing land;
(B) constructing or equipping a highway, road, bridge, or
facility; or
(C) carrying out other economic development activities.

[[Page S4399]]

(9) Isolated area of distress.--The term ``isolated area of
distress'' means an area located in an economically strong
county that has a high rate of poverty, unemployment, or
outmigration, as determined by the Authority.
(10) Local development district.--The term ``local
development district'' means an entity that--
(A)(i) is a planning district in existence on the date of
enactment of this Act that is recognized by the Economic
Development Administration of the Department of Commerce; or
(ii) in the case of an area for which an entity described
in clause (i) does not exist, is--
(I) organized and operated in a manner that ensures broad-
based community participation and an effective opportunity
for other nonprofit groups to contribute to the development
and implementation of programs in the region;
(II) governed by a policy board with at least a simple
majority of members consisting of elected officials or
employees of a general purpose unit of local government who
have been appointed to represent the government;
(III) certified to the Authority as having a charter or
authority that includes the economic development of counties
or parts of counties or other political subdivisions within
the region--

(aa) by the Governor of each State in which the entity is
located; or
(bb) by the State officer designated by the appropriate
State law to make the certification; and

(IV)(aa) a nonprofit incorporated body organized or
chartered under the law of the State in which the entity is
located;
(bb) a nonprofit agency or instrumentality of a State or
local government;
(cc) a public organization established before the date of
enactment of this Act under State law for creation of
multijurisdictional, area-wide planning organizations;
(dd) a nonprofit association or combination of bodies,
agencies, and instrumentalities described in subclauses (I)
through (III); or
(ee) a nonprofit, binational organization; and
(B) has not, as certified by the Federal cochairperson--
(i) inappropriately used Federal grant funds from any
Federal source; or
(ii) appointed an officer who, during the period in which
another entity inappropriately used Federal grant funds from
any Federal source, was an officer of the other entity.
(11) Region.--The term ``region'' means--
(A) the counties of Cochise, Gila, Graham, Greenlee, La
Paz, Maricopa, Pima, Pinal, Santa Cruz, and Yuma in the State
of Arizona;
(B) the counties of Imperial, Los Angeles, Orange,
Riverside, San Bernardino, San Diego, and Ventura in the
State of California;
(C) the counties of Catron, Chaves, Dona Ana, Eddy, Grant,
Hidalgo, Lincoln, Luna, Otero, Sierra, and Socorro in the
State of New Mexico; and
(D) the counties of Atascosa, Bandera, Bee, Bexar,
Brewster, Brooks, Cameron, Coke, Concho, Crane, Crockett,
Culberson, Dimmit, Duval, Ector, Edwards, El Paso, Frio,
Gillespie, Glasscock, Hidalgo, Hudspeth, Irion, Jeff Davis,
Jim Hogg, Jim Wells, Karnes, Kendall, Kenedy, Kerr, Kimble,
Kinney, Kleberg, La Salle, Live Oak, Loving, Mason, Maverick,
McMullen, Medina, Menard, Midland, Nueces, Pecos, Presidio,
Reagan, Real, Reeves, San Patricio, Shleicher, Sutton, Starr,
Sterling, Terrell, Tom Green, Upton, Uvlade, Val Verde, Ward,
Webb, Willacy, Wilson, Winkler, Zapata, and Zavala in the
State of Texas.
(12) Small business.--The term ``small business'' has the
meaning given the term ``small business concern'' in section
3(a) of the Small Business Act (15 U.S.C. 632(a)).

TITLE I--SOUTHWEST REGIONAL BORDER AUTHORITY

SEC. 101. MEMBERSHIP AND VOTING.

(a) Establishment.--
(1) In general.--There is established the Southwest
Regional Border Authority.
(2) Composition.--The Authority shall be composed of--
(A) a Federal member, to be appointed by the President, by
and with the advice and consent of the Senate; and
(B) State members who shall consist of the Governor (or a
designee of the Governor) of each State in the region that
elects to participate in the Authority.
(3) Cochairpersons.--The Authority shall be headed by--
(A) the Federal member, who shall serve--
(i) as the Federal cochairperson; and
(ii) as a liaison between the Federal Government and the
Authority; and
(B) a State cochairperson, who shall--
(i) be a Governor of a State described in paragraph (2)(B);
(ii) be elected by the State members for a term of not more
than 2 years; and
(iii) serve only 1 term during any 4 year period.
(b) Alternate Members.--
(1) State alternates.--The State member of a State
described in paragraph (2)(B) may have a single alternate,
who shall be--
(A) a resident of that State; and
(B) appointed by the Governor of the State, from among the
members of the cabinet or personal staff of the Governor.
(2) Alternate federal cochairperson.--The President shall
appoint an alternate Federal cochairperson.
(3) Quorum.--Subject to subsection (d)(4), a State
alternate member shall not be counted toward the
establishment of a quorum of the members of the Authority in
any case in which a quorum of the State members is required
to be present.
(4) Delegation of power.--No power or responsibility of the
Authority specified in paragraph (2) or (3) of subsection
(d), and no voting right of any member of the Authority,
shall be delegated to any person who is not--
(A) a member of the Authority; or
(B) entitled to vote at meetings of the Authority.
(c) Meetings.--
(1) Initial meeting.--The initial meeting of the Authority
shall be conducted not later than the date that is the
earlier of--
(A) 180 days after the date of enactment of this Act; or
(B) 60 days after the date on which the Federal
cochairperson is appointed.
(2) Other meetings.--The Authority shall hold meetings at
such times as the Authority determines, but not less often
than semiannually.
(3) Location.--Meetings of the Authority shall be
conducted, on a rotating basis, at a site in the region in
each of the States of Arizona, California, New Mexico, and
Texas.
(d) Voting.--
(1) In general.--To be effective, a decision by the
Authority shall require the approval of the Federal
cochairperson and not less than 60 percent of the State
members of the Authority (not including any member
representing a State that is delinquent under section
102(d)(2)(D)).
(2) Quorum.--
(A) In general.--A majority of the State members shall
constitute a quorum.
(B) Required for policy decision.--A quorum of State
members shall be required to be present for the Authority to
make any policy decision, including--
(i) a modification or revision of a policy decision of the
Authority;
(ii) approval of a State or regional development plan; and
(iii) any allocation of funds among the States.
(3) Project and grant proposals.--The approval of project
and grant proposals shall be--
(A) a responsibility of the Authority; and
(B) conducted in accordance with section 302.
(4) Voting by alternate members.--An alternate member shall
vote in the case of the absence, death, disability, removal,
or resignation of the Federal or State member for which the
alternate member is an alternate.

SEC. 102. DUTIES AND POWERS.

(a) Duties.--The Authority shall--
(1) develop comprehensive and coordinated plans and
programs to establish priorities and approve grants for the
economic development of the region, giving due consideration
to other Federal, State, and local planning and development
activities in the region;
(2) conduct and sponsor investigations, research, and
studies, including an inventory and analysis of the resources
of the region, using, in part, the materials compiled by the
Interagency Task Force on the Economic Development of the
Southwest Border established by Executive Order No. 13122 (64
Fed. Reg. 29201);
(3) sponsor demonstration projects under section 207;
(4) review and study Federal, State, and local public and
private programs and, as appropriate, recommend modifications
or additions to increase the effectiveness of the programs;
(5) formulate and recommend, as appropriate, interstate and
international compacts and other forms of interstate and
international cooperation;
(6) encourage private investment in industrial, commercial,
and recreational projects in the region;
(7) provide a forum for consideration of the problems of
the region and any proposed solutions to those problems;
(8) establish and use, as appropriate, citizens, special
advisory counsels, and public conferences; and
(9) provide a coordinating mechanism to avoid duplication
of efforts among the border programs of the Federal agencies
and the programs established under the North American Free
Trade Agreement entered into by the United States, Mexico,
and Canada on December 17, 1992.
(b) Powers.--In carrying out subsection (a), the Authority
may--
(1) hold such hearings, sit and act at such times and
places, take such testimony, receive such evidence, and print
or otherwise reproduce and distribute a description of the
proceedings of, and reports on actions by, the Authority as
the Authority considers appropriate;
(2) request from any Federal, State, or local agency such
information as may be available to or procurable by the
agency that may be of use to the Authority in carrying out
the duties of the Authority;
(3) maintain an accurate and complete record of all
transactions and activities of the Authority, to be available
for audit and examination by the Comptroller General of the
United States;
(4) adopt, amend, and repeal bylaws and rules governing the
conduct of business and the performance of duties of the
Authority;
(5) request the head of any Federal agency to detail to the
Authority, for a specified period of time, such personnel as
the Authority

[[Page S4400]]

requires to carry out duties of the Authority, each such
detail to be without loss of seniority, pay, or other
employee status;
(6) request the head of any State department or agency or
local government to detail to the Authority, for a specified
period of time, such personnel as the Authority requires to
carry out the duties of the Authority, each such detail to be
without loss of seniority, pay, or other employee status;
(7) make recommendations to the President regarding--
(A) the expenditure of funds at the Federal, State, and
local levels under this Act; and
(B) additional Federal, State, and local legislation that
may be necessary to further the purposes of this Act;
(8) provide for coverage of Authority employees in a
suitable retirement and employee benefit system by--
(A) making arrangements or entering into contracts with any
participating State government; or
(B) otherwise providing retirement and other employee
benefit coverage;
(9) accept, use, and dispose of gifts or donations of
services or real, personal, tangible, or intangible property;
(10) enter into and perform such contracts, leases,
cooperative agreements, or other transactions as are
necessary to carry out the duties of the Authority; and
(11) establish and maintain--
(A) a central office, to be located at a site that is not
more than 100 miles from the United States-Mexico border; and
(B) at least 1 field office in each of the States of
Arizona, California, New Mexico, and Texas, to be located at
sites in the region that the Authority determines to be
appropriate.
(c) Federal Agency Cooperation.--A Federal agency shall--
(1) cooperate with the Authority; and
(2) provide, on request of the Federal cochairperson,
appropriate assistance in carrying out this Act, in
accordance with applicable Federal laws (including
regulations).
(d) Administrative Expenses.--
(1) In general.--
(A) Administrative expenses.--Subject to paragraph (2),
administrative expenses of the Authority shall be paid--
(i) by the Federal Government, in an amount equal to 60
percent of the administrative expenses; and
(ii) by the States in the region that elect to participate
in the Authority, in an amount equal to 40 percent of the
administrative expenses.
(B) Expenses of federal chairperson.--All expenses of the
Federal cochairperson, including expenses of the alternate
and staff of the Federal cochairperson, shall be paid by the
Federal Government.
(2) State share.--
(A) In general.--Subject to subparagraph (C), the share of
administrative expenses of the Authority to be paid by each
State shall be determined by a unanimous vote of the State
members of the Authority.
(B) No federal participation.--The Federal cochairperson
shall not participate or vote in any decision under
subparagraph (A).
(C) Limitation.--A State shall not pay less than 10 nor
more than 40 percent of the share of administrative expenses
of the Authority determined under paragraph (1)(A)(ii).
(D) Delinquent states.--During any period in which a State
is more than 1 year delinquent in payment of the State's
share of administrative expenses of the Authority under this
subsection (as determined by the Secretary)--
(i) no assistance under this Act shall be provided to the
State (including assistance to a political subdivision or a
resident of the State) for any project not approved as of the
date of the commencement of the delinquency; and
(ii) no member of the Authority from the State shall
participate or vote in any action by the Authority.
(E) Effect on assistance.--A State's share of
administrative expenses of the Authority under this
subsection shall not be taken into consideration in
determining the amount of assistance provided to the State
under title II.

SEC. 103. AUTHORITY PERSONNEL MATTERS.

(a) Compensation of Members.--
(1) Federal cochairperson.--The Federal cochairperson shall
be compensated by the Federal Government at the annual rate
of basic pay prescribed for level III of the Executive
Schedule in subchapter II of chapter 53 of title 5, United
States Code.
(2) Alternate federal cochairperson.--The alternate Federal
cochairperson--
(A) shall be compensated by the Federal Government at the
annual rate of basic pay prescribed for level V of the
Executive Schedule described in paragraph (1); and
(B) when not actively serving as an alternate for the
Federal cochairperson, shall perform such functions and
duties as are delegated by the Federal cochairperson.
(3) State members and alternates.--
(A) In general.--A State shall compensate each member and
alternate member representing the State on the Authority at
the rate established by State law.
(B) No additional compensation.--No State member or
alternate member shall receive any salary, or any
contribution to or supplementation of salary, from any source
other than the State for services provided by the member or
alternate member to the Authority.
(b) Detailed Employees.--
(1) In general.--No person detailed to serve the Authority
under section 102(b)(6) shall receive any salary, or any
contribution to or supplementation of salary, for services
provided to the Authority from--
(A) any source other than the State, local, or
intergovernmental department or agency from which the person
was detailed; or
(B) the Authority.
(2) Violation.--Any person that violates this subsection
shall be fined not more than $5,000, imprisoned not more than
1 year, or both.
(c) Additional Personnel.--
(1) Compensation.--
(A) In general.--The Authority may appoint and fix the
compensation of an executive director and such other
personnel as are necessary to enable the Authority to carry
out the duties of the Authority.
(B) Exception.--Compensation under subparagraph (A) shall
not exceed the maximum rate of basic pay established for the
Senior Executive Service under section 5382 of title 5,
United States Code, including any applicable locality-based
comparability payment that may be authorized under section
5304(h)(2)(C) of that title.
(2) Executive director.--The executive director--
(A) shall be a Federal employee; and
(B) shall be responsible for--
(i) carrying out the administrative duties of the
Authority;
(ii) directing the Authority staff; and
(iii) such other duties as the Authority may assign.
(d) Conflicts of Interest.--
(1) In general.--Except as provided under paragraph (2), no
State member, State alternate, officer, employee, or detailee
of the Authority shall participate personally and
substantially as a member, alternate, officer, employee, or
detailee of the Authority, through decision, approval,
disapproval, recommendation, the rendering of advice,
investigation, or otherwise, in any proceeding, application,
request for a ruling or other determination, contract, claim,
controversy, or other matter in which the member, alternate,
officer, employee, or detailee has a financial interest.
(2) Disclosure.--Paragraph (1) shall not apply if the State
member, State alternate, officer, employee, or detailee--
(A) immediately advises the Authority of the nature and
circumstances of the proceeding, application, request for a
ruling or other determination, contract, claim, controversy,
or other particular matter presenting a potential conflict of
interest;
(B) makes full disclosure of the financial interest; and
(C) before the proceeding concerning the matter presenting
the conflict of interest, receives a written determination by
the Authority that the interest is not so substantial as to
be likely to affect the integrity of the services that the
Authority may expect from the State member, State alternate,
officer, employee, or detailee.
(3) Violation.--Any person that violates this subsection
shall be fined not more than $10,000, imprisoned not more
than 2 years, or both.
(e) Validity of Contracts, Loans, and Grants.--The
Authority may declare void any contract, loan, or grant of or
by the Authority in relation to which the Authority
determines that there has been a violation of subsection (b),
subsection (d), or any of sections 202 through 209 of title
18, United States Code.
(f) Applicable Labor Standards.--
(1) In general.--All laborers and mechanics employed by
contractors or subcontractors in the construction,
alteration, or repair, including painting and decorating, of
projects, buildings, and works funded by the United States
under this Act, shall be paid wages at not less than the
prevailing wages on similar construction in the locality as
determined by the Secretary of Labor in accordance with the
Act of March 3, 1931 (40 U.S.C. 276a et seq.).
(2) Authority.--With respect to the determination of wages
under paragraph (1), the Secretary of Labor shall have the
authority and functions set forth in Reorganization Plan No.
14 of 1950 (64 Stat. 1267) and section 2 of the Act of June
13, 1934 (40 U.S.C. 276c).

TITLE II--GRANTS AND DEVELOPMENT PLANNING

SEC. 201. INFRASTRUCTURE DEVELOPMENT AND IMPROVEMENT.

The Authority may approve grants to States, local
governments, and public and nonprofit organizations in the
region for projects, approved in accordance with section 302,
to develop and improve the transportation, water and
wastewater, public health, and telecommunications
infrastructure of the region.

SEC. 202. TECHNOLOGY DEVELOPMENT.

The Authority may approve grants to small businesses,
universities, national laboratories, and nonprofit
organizations in the region to research, develop, and
demonstrate technology that addresses--
(1) water quality;
(2) water quantity;
(3) pollution;
(4) transportation;
(5) energy consumption;
(6) public health;
(7) border and port security; and
(8) any other related matter that stimulates job creation
or enhances economic development, as determined by the
Authority.

SEC. 203. COMMUNITY DEVELOPMENT AND ENTREPRENEURSHIP.

The Authority may approve grants to States, local
governments, and public or

[[Page S4401]]

nonprofit entities for projects, approved in accordance with
section 302--
(1) to create dynamic local economies by--
(A) recruiting businesses to the region; and
(B) increasing and expanding international trade to other
countries;
(2) to foster entrepreneurship by--
(A) supporting the advancement of, and providing
entrepreneurial training and education for, youths, students,
and businesspersons;
(B) improving access to debt and equity capital by
facilitating the establishment of development venture capital
funds and other appropriate means;
(C) providing aid to communities in identifying,
developing, and implementing development strategies for
various sectors of the economy; and
(D)(i) developing a working network of business incubators;
and
(ii) supporting entities that provide business incubator
services.
(3) to promote civic responsibility and leadership through
activities that include--
(A) the identification and training of emerging leaders;
(B) the encouragement of citizen participation; and
(C) the provision of assistance for strategic planning and
organization development.

SEC. 204. EDUCATION AND WORKFORCE DEVELOPMENT.

The Authority, in coordination with State and local
workforce development boards, may approve grants to States,
local governments, and public or nonprofit entities for
projects, approved in accordance with section 302--
(1) to assist the region in obtaining the job training,
employment-related education, and business development (with
an emphasis on entrepreneurship) that are needed to build and
maintain strong local economies; and
(2) to supplement in-plant training programs offered by
State and local governments to attract new businesses to the
region.

SEC. 205. FUNDING.

(a) In General.--Funds for grants under sections 201
through 204 may be provided--
(1) entirely from appropriations to carry out this Act;
(2) in combination with funds available under another
Federal grant program or other Federal program; or
(3) in combination with funds from any other source,
including--
(A) State and local governments, nonprofit organizations,
and the private sector in the United States;
(B) the federal and local government of, and private sector
in, Mexico; and
(C) the North American Development Bank.
(b) Priority of Funding.--The Authority shall award funding
to each State in the region for activities in accordance with
an order of priority to be determined by the State.
(c) Binational Projects.--
(1) Prohibition on provision of funding to non-united
states entities.--The Authority shall not award funding to
any entity that is not incorporated in the United States.
(2) Funding of binational projects.--The Authority may
award funding to a project in which an entity that is
incorporated outside the United States participates if, for
any fiscal year, the entity matches with an equal amount, in
cash or in-kind, the assistance received under this Act for
the fiscal year.

SEC. 206. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

(a) Finding.--Congress finds that certain States and local
communities of the region, including local development
districts, may be unable to take maximum advantage of Federal
grant programs for which the States and communities are
eligible because--
(1) they lack the economic resources to provide the
required matching share; or
(2) there are insufficient funds available under the
Federal law authorizing the Federal grant program to meet
pressing needs of the region.
(b) Federal Grant Program Funding.--Notwithstanding any
provision of law limiting the Federal share, the areas
eligible for assistance, or the authorizations of
appropriations, under any Federal grant program, and in
accordance with subsection (c), the Authority, with the
approval of the Federal cochairperson and with respect to a
project to be carried out in the region, may--
(1) increase the Federal share of the costs of a project
under any Federal grant program to not more than 90 percent
(except as provided in section 209(b)); and
(2) use amounts made available to carry out this Act to pay
all or a portion of the increased Federal share.
(c) Certifications.--
(1) In general.--In the case of any project for which all
or any portion of the basic Federal share of the costs of the
project is proposed to be paid under this section, no Federal
contribution shall be made until the Federal official
administering the Federal law that authorizes the Federal
grant program certifies that the project--
(A) meets (except as provided in subsection (b)) the
applicable requirements of the applicable Federal grant
program; and
(B) could be approved for Federal contribution under the
Federal grant program if funds were available under the law
for the project.
(2) Certification by authority.--
(A) In general.--The certifications and determinations
required to be made by the Authority for approval of projects
under this Act in accordance with section 302--
(i) shall be controlling; and
(ii) shall be accepted by the Federal agencies.
(B) Acceptance by federal cochairperson.--In the case of
any project described in paragraph (1), any finding, report,
certification, or documentation required to be submitted with
respect to the project to the head of the department, agency,
or instrumentality of the Federal Government responsible for
the administration of the Federal grant program under which
the project is carried out shall be accepted by the Federal
cochairperson.

SEC. 207. DEMONSTRATION PROJECTS.

(a) In General.--For each fiscal year, the Authority may
approve not more than 10 demonstration projects to carry out
activities described in sections 201 through 204, of which
not more than 3 shall be carried out in any 1 State.
(b) Requirements.--A demonstration project carried out
under this section shall--
(1) be carried out on a multistate or multicounty basis;
and
(2) be developed in accordance with the regional
development plan prepared under section 210(d).

SEC. 208. LOCAL DEVELOPMENT DISTRICTS; CERTIFICATION AND
ADMINISTRATIVE EXPENSES.

(a) Grants to Local Development Districts.--
(1) In general.--The Authority may make grants to local
development districts to pay the administrative expenses of
the local development districts.
(2) Conditions for grants.--
(A) Maximum amount.--The amount of any grant awarded under
paragraph (1) shall not exceed 80 percent of the
administrative expenses of the local development district
receiving the grant.
(B) Maximum period.--No grant described in paragraph (1)
shall be awarded for a period greater than 3 years to a State
agency certified as a local development district.
(C) Local share.--The contributions of a local development
district for administrative expenses may be in cash or in
kind, fairly evaluated, including space, equipment, and
services.
(b) Duties of Local Development Districts.--A local
development district shall--
(1) operate as a lead organization serving multicounty
areas in the region at the local level; and
(2) serve as a liaison between State and local governments,
nonprofit organizations (including community-based groups and
educational institutions), the business community, and
citizens that--
(A) are involved in multijurisdictional planning;
(B) provide technical assistance to local jurisdictions and
potential grantees; and
(C) provide leadership and civic development assistance.

SEC. 209. DISTRESSED COUNTIES AND AREAS AND ECONOMICALLY
STRONG COUNTIES.

(a) Designations.--At the initial meeting of the Authority
and annually thereafter, the Authority, in accordance with
such criteria as the Authority may establish, shall
designate--
(1) distressed counties;
(2) economically strong counties;
(3) attainment counties;
(4) competitive counties; and
(5) isolated areas of distress.
(b) Distressed Counties.--
(1) In general.--For each fiscal year, the Authority shall
allocate at least 40 percent of the amounts made available
under section 306 for programs and projects designed to serve
the needs of distressed counties and isolated areas of
distress in the region.
(2) Funding limitations.--The funding limitations under
section 206(b) shall not apply to a project to provide
transportation or basic public services to residents of 1 or
more distressed counties or isolated areas of distress in the
region.
(c) Economically Strong Counties.--
(1) Attainment counties.--Except as provided in paragraph
(3), the Authority shall not provide funds for a project
located in a county designated as an attainment county under
subsection (a)(2)(A).
(2) Competitive counties.--Except as provided in paragraph
(3), the Authority shall not provide more than 30 percent of
the total cost of any project carried out in a county
designated as a competitive county under subsection
(a)(2)(B).
(3) Exceptions.--
(A) In general.--The funding prohibition under paragraph
(1) and the funding limitation under paragraph (2) shall not
apply to grants to fund the administrative expenses of local
development districts under section 208(a).
(B) Multicounty projects.--If the Authority determines that
a project could bring significant benefits to areas of the
region outside an attainment or competitive county, the
Authority may waive the application of the funding
prohibition under paragraph (1) and the funding limitation
under paragraph (2) to--
(i) a multicounty project that includes participation by an
attainment or competitive county; or
(ii) any other type of project.
(4) Isolated areas of distress.--For a designation of an
isolated area of distress for assistance to be effective, the
designation shall be supported--

[[Page S4402]]

(A) by the most recent Federal data available; or
(B) if no recent Federal data are available, by the most
recent data available through the government of the State in
which the isolated area of distress is located.

SEC. 210. DEVELOPMENT PLANNING PROCESS.

(a) State Development Plan.--In accordance with policies
established by the Authority, each State member shall submit
an annual development plan for the area of the region
represented by the State member to assist the Authority in
determining funding priorities under section 205(b).
(b) Consultation With Interested Parties.--In carrying out
the development planning process (including the selection of
programs and projects for assistance), a State shall--
(1) consult with--
(A) local development districts; and
(B) local units of government;
(2) take into consideration the goals, objectives,
priorities, and recommendations of the entities described in
paragraph (1); and
(3) solicit input on and take into consideration the
potential impact of the State development plan on the
binational region.
(c) Public Participation.--
(1) In general.--The Authority and applicable State and
local development districts shall encourage and assist, to
the maximum extent practicable, public participation in the
development, revision, and implementation of all plans and
programs under this Act.
(2) Regulations.--The Authority shall develop guidelines
for providing public participation described in paragraph
(1), including public hearings.
(d) Regional Development Plan.--The Authority shall prepare
an annual regional development plan that--
(1) is based on State development plans submitted under
subsection (a);
(2) takes into account--
(A) the input of the private sector, academia, and
nongovernmental organizations; and
(B) the potential impact of the regional development plan
on the binational region;
(3) establishes 5-year goals for the development of the
region;
(4) identifies and recommends to the States--
(A) potential multistate or multicounty projects that
further the goals for the region; and
(B) potential development projects for the binational
region; and
(5) identifies and recommends to the Authority for funding
demonstration projects under section 207.

TITLE III--ADMINISTRATION

SEC. 301. PROGRAM DEVELOPMENT CRITERIA.

(a) In General.--In considering programs and projects to be
provided assistance under this Act, and in establishing a
priority ranking of the requests for assistance provided to
the Authority, the Authority shall follow procedures that
ensure, to the maximum extent practicable, consideration of--
(1) the relationship of the project or class of projects to
overall regional development;
(2) the per capita income and poverty and unemployment
rates in an area;
(3) the financial resources available to the applicants for
assistance seeking to carry out the project, with emphasis on
ensuring that projects are adequately financed to maximize
the probability of successful economic development;
(4) the socioeconomic importance of the project or class of
projects in relation to other projects or classes of projects
that may be in competition for the same funds;
(5) the prospects that the project for which assistance is
sought will improve, on a continuing rather than a temporary
basis, the opportunities for employment, the average level of
income, or the economic development of the area to be served
by the project; and
(6) the extent to which the project design provides for
detailed outcome measurements by which grant expenditures and
the results of the expenditures may be evaluated.
(b) No Relocation Assistance.--No financial assistance
authorized by this Act shall be used to assist a person or
entity in relocating from 1 area to another, except that
financial assistance may be used as otherwise authorized by
this Act to attract businesses from outside the region to the
region.
(c) Maintenance of Effort.--Funds may be provided for a
program or project in a State under this Act only if the
Authority determines that the level of Federal or State
financial assistance provided under a law other than this
Act, for the same type of program or project in the same area
of the State within the region, will not be reduced as a
result of funds made available by this Act.

SEC. 302. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.

(a) In General.--A State or regional development plan or
any multistate subregional plan that is proposed for
development under this Act shall be reviewed by the
Authority.
(b) Evaluation by State Member.--An application for a grant
or any other assistance for a project under this Act shall be
made through and evaluated for approval by the State member
of the Authority representing the applicant.
(c) Certification.--An application for a grant or other
assistance for a project shall be approved only on
certification by the State member that the application for
the project--
(1) describes ways in which the project complies with any
applicable State development plan;
(2) meets applicable criteria under section 301;
(3) provides adequate assurance that the proposed project
will be properly administered, operated, and maintained; and
(4) otherwise meets the requirements of this Act.
(d) Votes for Decisions.--On certification by a State
member of the Authority of an application for a grant or
other assistance for a specific project under this section,
an affirmative vote of the Authority under section 101(d)
shall be required for approval of the application.

SEC. 303. CONSENT OF STATES.

Nothing in this Act requires any State to engage in or
accept any program under this Act without the consent of the
State.

SEC. 304. RECORDS.

(a) Records of the Authority.--
(1) In general.--The Authority shall maintain accurate and
complete records of all transactions and activities of the
Authority.
(2) Availability.--All records of the Authority shall be
available for audit and examination by the Comptroller
General of the United States (including authorized
representatives of the Comptroller General).
(b) Records of Recipients of Federal Assistance.--
(1) In general.--A recipient of Federal funds under this
Act shall, as required by the Authority, maintain accurate
and complete records of transactions and activities financed
with Federal funds and report to the Authority on the
transactions and activities.
(2) Availability.--All records required under paragraph (1)
shall be available for audit by the Comptroller General of
the United States and the Authority (including authorized
representatives of the Comptroller General and the
Authority).
(c) Annual Audit.--The Comptroller General of the United
States shall audit the activities, transactions, and records
of the Authority on an annual basis.

SEC. 305. ANNUAL REPORT.

(a) In General.--Not later than 180 days after the end of
each fiscal year, the Authority shall submit to the President
and to Congress a report describing the activities carried
out under this Act.
(b) Contents.--
(1) In general.--The report shall include--
(A) an evaluation of the progress of the Authority--
(i) in meeting the goals set forth in the regional
development plan and the State development plans; and
(ii) in working with other Federal agencies and the border
programs administered by the Federal agencies;
(B) examples of notable projects in each State;
(C) a description of all demonstration projects funded
under section 306(b) during the fiscal year preceding
submission of the report; and
(D) any policy recommendations approved by the Authority.
(2) Initial report.--In addition to the contents specified
in paragraph (1), the initial report submitted under this
section shall include--
(A) a determination as to whether the creation of a loan
fund to be administered by the Authority is necessary; and
(B) if the Authority determines that a loan fund is
necessary--
(i) a request for the authority to establish a loan fund;
and
(i) a description of the eligibility criteria and
performance requirements for the loans.

SEC. 306. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated to
the Authority to carry out this Act, to remain available
until expended--
(1) $50,000,000 for fiscal year 2003;
(2) $75,000,000 for fiscal year 2004;
(3) $90,000,000 for fiscal year 2005; and
(4) $92,000,000 for fiscal year 2006.
(b) Demonstration Projects.--Of the funds made available
under subsection (a), $5,000,000 for each fiscal year shall
be available to the Authority to carry out section 207.

SEC. 307. TERMINATION OF AUTHORITY.

The authority provided by this Act terminates effective
October 1, 2006.
______

By Mr. KERRY (for himself, Mr. Frist, Mr. Biden, Mr. Helms, Mr.
Daschle, Mr. Leahy, Mr. Feingold, Mr. Dodd, Mr. Hagel, Mrs.
Boxer, Mr. Sarbanes, Mr. Smith of Oregon, Mr. DeWine, and Mr.
Wellstone):
S. 2525. A bill to amend the Foreign Assistance Act of 1961 to
increase assistance for foreign countries seriously affected by HIV/
AIDS, tuberculosis, and malaria, and for other purposes; to the
Committee on Foreign Relations.
Mr. KERRY. Mr. President, today I am introducing legislation along
with Senators Frist, Biden, Helms, Daschle and others that offers our
Nation's most comprehensive response to date to the global HIV/AIDS
crisis. It authorizes $4.7 billion over the next two years for U.S.
contributions to the Global Fund to Fight AIDS, Tuberculosis and
Malaria and for a dramatic expansion of bilateral U.S. programs

[[Page S4403]]

administered by the US Agency for International Development, USAID.
There can be no question that the AIDS pandemic has truly reached a
crisis point, not only for the 40 million people infected worldwide,
but also for the communities in which they live. The pandemic strikes
at the foundations of societies, devastating families, undermining
economies, and weakening a broad range of institutions by taking the
lives of educators, health care providers, police, military personnel,
and civil servants. These forces cripple the potential for long-term
economic development and jeopardize political and social stability in
Sub-Saharan Africa, the most-severely affected region, and increasingly
in all corners of the world.
Although 95 percent of people infected with HIV live in developing
countries, this crisis ultimately affects us all. Here in the United
States, we cannot afford to ignore the fact that instability anywhere
threatens security everywhere. While this is certainly not a new
reality, it became painfully evident on September 11 of last year that
the fate of our people is inextricably bound to the lives of those
living thousands of miles across the globe. We are called by moral duty
and by our national interest to forcefully combat the further spread of
HIV/AIDS. Only the United States has the capacity to lead and enhance
the effectiveness of the international community's response. Clearly we
have not done enough to address this crisis. The need for strong action
has never been so urgent or so great.
AIDS has become the fourth-highest cause of death globally, already
claiming the lives of 22 million people. More than three-quarters of
these deaths, more than 17 million, have been in Sub-Saharan Africa,
where AIDS is now the leading cause of death. Last year alone, AIDS
killed 2.3 million African people, and experts project that the disease
will eventually take the lives of one in four adults throughout that
region. Because of AIDS, Botswana, Zimbabwe, and South Africa are
already experiencing negative population growth, and life expectancy
for children born in some parts of the continent has dropped as low as
35 years. Of the estimated 40 million people now living with HIV
globally, 28.1 million are in Sub-Saharan Africa. This number includes
3.4 million people who were infected last year alone.
Other parts of the world are going down the same path as Africa. The
Caribbean is now the second most affected region, with 2.3 percent of
adults infected with HIV. Eastern Europe, especially the Russian
Federation, is experiencing the world's fastest-growing epidemic,
mainly from injection drug use. In Asia and the Pacific region, 7.1
million people are infected with HIV or living with AIDS. Although
national prevalence rates in most countries throughout that region are
relatively low, localized epidemics have broken out in many areas, and
there is a serious threat of major outbreaks of the virus in China,
India, and a number of other countries.
More than 20 years after the first cases were reported, basic
knowledge about HIV/AIDS remains disturbingly low. Half of all teenage
girls in Sub-Saharan Africa still do not know that healthy-looking
people can have HIV. In Mozambique, 74 percent of young women and 62
percent of young men aged 15 to 19 cannot name a single method of
protecting themselves against HIV/AIDS. Worldwide, nine out of ten HIV
infected individuals are unaware they are infected.
The AIDS crisis is affecting females at an increasing rate. In 1997,
41 percent of adults living with HIV/AIDS were women. By 2000, that
proportion had increased to 47 percent. Biologically, the risk of
becoming infected with HIV during unprotected intercourse is greater
for women than for men, and gender inequalities in social and economic
status and access to medical care increase women's vulnerability. This
gender imbalance is even stronger for younger females, in some
countries, the rate of new infections among girls is as much as 5 to 6
times higher than among boys.
Although girls are hardest-hit, the HIV/AIDS crisis takes a
disproportionate toll on young people in general. Nearly one-third of
the 40 million people currently living with HIV are between the ages of
15 and 24, and half of all new infections occur in this age group.
Mother-to-child transmission is responsible for the vast majority of
infections among children under the age of 15. Without preventive
measures, 35 percent of infants born to HIV-positive mothers contract
the virus. Even those who are not infected in this manner can confront
tremendous difficulties, more than 13 million children under age 15
have already lost their mothers or both parents to AIDS, and this
number is expected to more than double by the end of the decade.
Children orphaned by AIDS are susceptible to extreme poverty,
malnutrition, psychological distress, and a long list of other
hardships. Many of these orphans turn to crime in order to survive.
HIV/AIDS can undermine the economic security of individual families,
communities, and even entire nations. The disease weakens the
productivity and longevity of the labor force across a broad array of
economic sectors, reducing the potential for immediate and long-term
economic growth. In some countries, AIDS is reversing progress brought
by decades of economic development efforts. But the ripple effects of
this pandemic go far beyond the economic realm, touching virtually all
aspects of life in the countries that are hardest-hit. HIV/AIDS strikes
at the most mobile and educated members of society, many of whom are
responsible for governance, health care, education, and security.
Earlier this month, the World Bank reported that AIDS is spreading so
rapidly in parts of Africa that it is killing teachers faster than
countries can train them. At the same time, HIV-infected children and
those orphaned by AIDS must often leave school. These trends have
combined to create an education crisis. Africa is also confronting a
mounting security crisis with ramifications for the broader
international community. According to UNAIDS, many military forces in
Sub-Saharan Africa face infection rates as high as five times that of
the civilian population. These military forces are losing their
capacity to preserve stability within their own borders and to engage
in regional peacekeeping and conflict prevention efforts. This pattern
is likely to compound the problem of failing states throughout Africa.

My words have barely begun to chronicle the extent to which this
pandemic has spread, the devastation it has wrought, and the myriad
threats it poses to distant countries and to our own. We are facing the
world's worst health crisis since the bubonic plague and it is not
``someone else's problem.'' It is humanity's problem.
It is up to us to respond. American leadership is needed as never
before. The United States can not afford to sit on the sidelines or
tinker at the edges of a global pandemic. Only the United States is in
a position to lead the effort with other governments and private sector
partners to beat this pandemic and only the United States has the
resources to make a difference. History is going to judge how we react
to this crisis and we want history to judge us well.
There is so much we can do--if we commit ourselves to the effort. We
have learned that we can change behavior through prevention and
education programs, especially if those programs make treatment
available for those already sick. We can stop the transmission of the
HIV virus from mother-to-child through the use of the drug nevirapine.
And we can reduce the growing number of ``AIDS orphans'' if we start
adding voluntary counseling, testing and treatment of parents and care-
givers to children--in other words adding a Plus to the MTCT, mother-
to-child transmission, programs.
That is the goal of this legislation. It will provide clear American
leadership, helping to harness resources here at home and around the
globe for research and development to eradicate these deadly diseases.
It will inject unprecedented amounts of capital in effective prevention
and treatment programs and direct resources to the people on the ground
fighting these diseases.
The legislation that we are introducing today represents the first
effort ever to create a comprehensive long term strategy for American
leadership in responding to this global pandemic. If passed into law,
this bill would represent the largest single monetary commitment ever
made by the United States to deal with AIDS pandemic. It would double
U.S. spending on global

[[Page S4404]]

AIDS from roughly $1 billion this year to more than $2 billion per year
over the next two years. But equally important, it would require the
U.S. government to develop a comprehensive, detailed five-year plan to
significantly reduce the spread of HIV/AIDS around the world and meet
the targets set by the international community at the June 2001 United
Nations Special Session on HIV/AIDS.
This legislation authorizes $1 billion in this fiscal year and $1.2
billion in the next for US contributions to the Global Fund to Fight
AIDS, Tuberculosis and Malaria--the international community's new
combined effort to increase resources against this pandemic. It
authorizes more than $800 million this year and $900 million next year
for an expansion of existing USAID programs and creation of new
programs to increase our efforts not only in the areas of prevention
and education but also in the equally important areas of care and
prevention. It provides significant new funding levels for programs to
combat tuberculosis and malaria--serious infectious diseases which,
together with HIV/AIDS, killed 5.7 million people last year.
The fight against HIV/AIDS has started to produce results in some
countries. Cambodia and Thailand, driven by strong political leadership
and public commitment, have developed successful prevention programs.
HIV prevalence among pregnant women in Cambodia dropped by almost a
third between 1997 and 2000. In Uganda, rates of HIV infection among
adults continue to fall, largely because President Yoweri Museveni has
pursued an aggressive education campaign to make people in his country
aware of ways they can protect themselves from this disease. President
Museveni has displayed courage in his willingness to break through
cultural boundaries to discuss the AIDS crisis openly and
realistically.
Leadership within the countries that are most severely-affected by
HIV/AIDS is absolutely indispensable. Our legislation seeks to
encourage that leadership by offering the possibility of obtaining
greater resources to be used for health programs through a new round of
international negotiations to further reduce the debt of many of these
countries. Ultimately the fight against AIDS requires a broad
partnership between the governments of those countries severely
affected, governments like ours in a position to provide assistance,
and the private sector which can bring not only resources but
scientific and medical knowledge and expertise to bear.
Various organizations in the private sector have already contributed
a great deal to the struggle against HIV/AIDS. Philanthropies like the
Bill & Melinda Gates Foundation have donated hundreds of millions of
dollars to purchase drugs, improve health delivery systems, and bolster
prevention campaigns, among other means of support. Pharmaceutical
companies such as Merck and Pfizer have also offered a number of life-
extending therapies to the developing world at no cost or at a very
discounted rate.
These contributions and these public/private sector partnerships are
critical to the success or our effort. The bill that we are introducing
makes it clear that these kinds of partnerships should be strengthened
and expanded. And for the first time, it also sets out a voluntary code
of conduct for American businesses who have operations in countries
affected by the AIDS pandemic to follow, not unlike the Sullivan Code
of Conduct that many American firms followed during the days of
apartheid in South Africa.
The global HIV/AIDS crisis is a matter of money, for words alone will
not beat back the greatest challenge the world has ever witnessed to
the very survival a continent, Africa, and an ever growing number of
other areas. But it is more than that, this is a question of
leadership, not fate; of willpower, not capacity. The question before
us is not whether we can win this fight, but whether we will choose to,
whether `here on earth,' as President Kennedy said, we are going to
make ``God's work truly our own.''
I believe we will. That is why there is such a broad coalition
supporting this effort. That is why my friend and colleague Senator
Kennedy, chairman of the HELP Committee, is working in concert with us
to produce a bill that will authorize another $500 million for the CDC
and other HHS agencies to help fight this epidemic. And that is why
Democrats and Republicans together are going to demonstrate the full
measure of America's ability to respond to enormous tragedy with
enormous strength.

____________________