[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

[[Page S4394]]

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.

                          ____________________