Congressional Record, Volume 149 Issue 1 (Tuesday, January 7, 2003)

[Congressional Record Volume 149, Number 1 (Tuesday, January 7, 2003)]
[Senate]
[Pages S38-S64]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

DEMOCRATIC LEADERSHIP PRIORITIES FOR THE 108TH CONGRESS

Mr. DASCHLE. Mr. President, officially, the Congress that ended in
December was the 107th Congress. But history will almost surely record
it as the September 11th Congress. From the moment the first plane hit
the first tower until the last moments of the lameduck session, helping
America recover from that horrific day, bringing its plotters to
justice and making changes to protect America from future terrorist
attacks dominated the Senate's agenda.
We continued that work--even as we confronted unprecedented
challenges in the Senate: anthrax, the rise of new threats to our
Nation, and the loss of our friend and colleague, Paul Wellstone.
Through tragic and historic events, the 107th Senate under Democratic
control produced a number of important legislative accomplishments:
aviation security and counterterrorism legislation; the toughest
corporate accountability law since the SEC was created in 1934; the
most far-reaching campaign finance reforms since Watergate; the most
significant overhaul of Federal education policies since 1965; and a
new farm bill to replace the failed Freedom to Farm Act.
However, other important legislation fell victim to special-interest
arm-twisting, and the other party's unwillingness to compromise on
their proposals, or even consider ours. We saw that on proposals to
dedicate greater resources to homeland security, a Medicare
prescription drug benefit, and a real, enforceable patients' bill of
rights.
The proposals we are introducing today recognize that the American
people have real concerns about their security, and that Republicans
and the Bush administration have not done enough to address those
concerns.
But they also recognize that security means more than national
security, and homeland security. It means economic security, retirement
security, and the security of knowing that our children are getting a
good education, and that, if you get sick, health care is available and
affordable. It means giving people who work fulltime the security of
knowing they can earn a decent wage--whether they work on a farm, in a
factory, or at a fast-food restaurant. It is the security of knowing
that our air is safe to breathe and our water is safe to drink, that
America is living up to its commitment to civil rights, and that we are
keeping our promises to our veterans.
Democrats are committed to tackling terrorism abroad, and making our
country more secure.
One of our first priorities will be to make Americans safer by
enhancing protections for our ports, borders, food and water supplies,
and chemical and nuclear plants.
We are introducing a bill to commit real resources to doing all of
those things, and to hiring more police and first responders and
providing them the tools and training to do the difficult jobs we are
now asking them to do.
We also recognize that national strength also depends on economic
strength, and in the last 2 years, America's economy has weakened. In
the coming weeks, we will put forward our ideas for how best to
stimulate the economy in the short term.
But, in the long term, one of the most important things we can do is
give people greater confidence that their private pensions will be
there for them. That is why another of our leadership bills is one to
strengthen pension protections, expand pension coverage, and crack down
on rogue corporations.
It has been said that almost every problem any society faces can be
solved with two things: good health, and a good education--and we have
bills in each of those areas.
The Right Start for Children Act makes Head Start fully available for
4- and 5-year-olds, and increases availability for infants and
toddlers. It will help improve childcare quality, make childcare more
affordable for 1 million additional children, and strengthen child
nutrition programs to reduce child hunger.
The Educational Excellence for All Learners Act builds on that
foundation by improving education every step of the way--from
kindergarten, to college, to lifelong learning. It makes sure that we
match the real reforms we passed last year with the real resources they
demand. It will help us recruit, hire, and train qualified teachers,
build new schools, and make college and job training more affordable
and more available.
President Bush pledged to leave no child behind, and then proposed
more than a billion dollars of education cuts. We are proposing to put
our money where the Republicans' mouths are--and help secure a good
start, a good education, and good prospects for all Americans.
When it comes to health care, it was an outrage that 40 million
Americans were uninsured 2 years ago. In the past year, over 1 million
more Americans have lost health insurance. And those who are lucky
enough to have health insurance are seeing their premiums skyrocket.
With the Health Care Coverage Expansion and Quality Improvement Act,
we hope to reduce the number of uninsured by making health care
coverage more available to small businesses, parents of children
eligible for

[[Page S39]]

CHIP and Medicaid, pregnant women, and others.

We also want to improve the quality of care people receive by
overcoming Republican resistance to a real, enforceable, patients' bill
of rights.
We will also insist that mental illness be treated like any other
illness--something that will not only honor Paul Wellstone's legacy,
but also help millions of families.
We are also committed to passing a prescription drug benefit under
Medicare, and lowering the price of prescription drugs for all
Americans. Last year, we passed a bill to lower the price of generic
drugs, but the House refused to take it up. And we had 52 Senators
support our Medicare prescription drug benefit--but it was blocked on a
procedural motion.
The high cost of prescription drugs--combined with the increasing
need for such drugs--is destroying the life savings--and threatening
the dignity--of millions of older Americans. And that is simply
unacceptable.
A couple of months ago in elections all across the country, and in
words spoken here in the Senate, we have seen that when it comes to
protecting equal rights, we still have a lot of work to do in changing
hearts, minds, and laws.
That is why we are introducing The Equal Rights and Equal Dignity for
Americans Act. This bill will enforce employment nondiscrimination,
fund the election-reform measures we passed last year, outlaw hate
crimes, and take other steps to see that as a nation, we live up to the
promise of equal rights.
I hope those Republicans who have recently expressed their support
for civil rights will join us in expressing their support for this
legislation. I also hope they will join us in supporting our bill to
combat drug and gun violence, to crack down on new crimes like identity
theft, and to protect against and prevent crimes against children and
seniors.
We also need to ensure greater dignity for our minimum wage workers,
our farmers, and our veterans. The purchasing power of the minimum wage
is now the lowest it has been in more than 30 years. And a full-time
minimum wage income won't get you over the poverty line. If we can
afford over a trillion dollars in tax cuts for those at the top of the
income scale, we can afford a dollar fifty more an hour for those at
the bottom.
We need to help our rural economy, and help those impacted by a
drought and other natural disasters that are being called among the
costliest for agricultural producers in our Nation's history.
And we need to maintain our commitment to those currently serving,
and keep our promises to our veterans. One way we do that is by
allowing our wounded veterans to receive both their full disability and
retirement benefits. Another way is by addressing the current crisis in
veterans' health care. With each of these proposals--we stand with the
leading veterans organizations, and for those who served our country.
Finally, we are committed to stopping what is adding up to an all-out
assault on our environment. By unilaterally abandoning the Kyoto
process, the Bush administration took us out of position to lead the
world on the issue of climate change. The Global Climate Security Act
will help America reassert our position of world leadership on this
vital issue of world health.
Each of these things is relevant, not revolutionary. If they seem
familiar, it is because most of what is in them has been introduced
before.
But they are not law, despite the support of the American people and,
in some cases, a bipartisan majority of Senators.
They have been opposed by an extreme few, and their special interest
supporters. And while those bills have languished, we have seen the
rise of more threats to our country; more people have lost their jobs
and their health care; and more of our national challenges have gone
unmet.
These are our priorities. In the last couple of days, the President
has made clear his priorities--more tax cuts for those who need them
least.
The President's plan won't help middle income families. It won't
contribute to economic growth; it won't make our homeland more secure;
it won't expand educational opportunity for the young, or strengthen
health care for the elderly.
Instead--by putting us deeper into deficit and debt--it makes all of
these things, and all of our other goals, harder to achieve.
Our bills will help us create an America that is stronger, safer, and
better for all Americans--and I hope my colleagues will join me in
supporting them.
______

By Mrs. HUTCHISON:
S. 24. A bill to amend the Internal Revenue Code of 1986 to exclude
from gross income dividends received by individuals; to the Committee
on Finance
______

By Mrs. HUTCHISON:
S. 25. A bill to amend the Internal Revenue Code of 1986 to provide
that dividend income of individuals not be taxed at rates in excess of
the maximum capital gains rate; to the Committee on Finance.
______

By Mrs. HUTCHISON:
S. 26. A bill to amend the Internal Revenue Code of 1986 to provide
that dividend and interest income of individuals not be taxed at rates
in excess of the maximum capital gains rate; to the Committee on
Finance.
Mrs. HUTCHISON. Mr. President, I am pleased to introduce a package of
three bills I hope will be the starting point for a long overdue
discussion on reducing taxes on investment income, particularly
dividends. The first bill would completely eliminate taxes on
dividends. The second bill would reduce the tax on dividends to the
capital gains rate. The third bill would lower the tax to the capital
gains rate on dividends and interest income. These bills would not only
stimulate the economy, but also correct long-term problems with the tax
code.
The economy is currently on the way to recovery but faces
significant bottlenecks along the way. Following a mild recession, we
are experiencing moderate growth. Many believe we will continue on a
slow yet steady pace, but we are not yet in the clear. We must take
aggressive steps to create jobs and ensure the economy gets moving
again.
The most effective tool government has for promoting growth is the
tax code. By lowering taxes we allow people to keep more of their money
and spend it more effectively than the government ever could.
Lowering the taxes on investment income would stimulate the economy
on several levels. First, we would leave more money in the pockets of
families to spend. Second, lowering taxes on dividends would encourage
investors to re-enter the stock market and realize higher returns since
the government would be taking less. The increased demand for stocks
would stabilize the market and encourage economic growth. Third, these
tax cuts would ultimately help to reduce the deficit as tax revenues
increase from higher economic growth and increased capital gains
revenue.

A tax cut on investment income would particularly help the elderly
and others who rely on fixed incomes. A third of seniors received
dividend income and more than half of dividends go to seniors. With
such pressures as the rising cost of healthcare, it is critical that we
let them keep as much of their money as possible. Also, these tax cuts
would help a broad cross-section of Americans. For example, almost half
of those who receive dividends have income of less than $50,000.
One of the problems with our tax code is the double taxation of
dividends. People have already paid taxes on the money they use to
invest. Then they must pay taxes on their investment income. This is
not fair and discourages savings.
Also, companies must use after-tax dollars to pay dividends.
Investors then have to pay taxes on their dividend income at the
ordinary income tax rates. This leads to two unintended consequences.
First, it encourages investors to focus on returns through stock
price appreciation, which are taxed at the lower capital gains rate.
People are encouraged to invest in higher growth, but often in riskier
companies, rather than more stable, dividend-paying companies. As
anyone can see from the collapse of stock prices in high-growth sectors
over the past two years, the current incentives in the tax code may

[[Page S40]]

not lead to the best decisions for investors.
Second, the double taxation of dividends encourages companies to
raise capital by loading up on debt rather than issuing stock, because
interest expense on debt can lower a company's taxes while dividend
payments do not. This leads to an increase in highly leveraged
companies that are at greater financial risk when the economy slows.

Whether investors should invest in growth stocks is a decision that
must be left to individuals. Likewise, the issuance of debt is best
decided by the company in question. By lowering the tax rates on
dividends and interest income, we would reduce the influence of taxes
on these decisions.
Increasingly, America is a Nation of investors. Today, half of U.S.
households own stock. The number of shareholders has increased more
than 60 percent since 1989. Thus, it is critical to ensure our tax laws
lead to rational decisionmaking; decisions based on the best investment
choices, not guided by tax inequities. Let's take tax rates out of the
capital allocation decision process. People should make investment
decisions based on what is the best investment.
I call on the Senate to bolster the economy, help senior citizens
meet their financial needs, and level the way we tax investment gains
by lowering taxes on investment income. Today, I offer three
alternatives I hope will lead to a constructive discussion and action
to achieve these goals.
I ask unanimous consent the text of the bills be printed in the
Record.
There being no objection, the bills were ordered to be printed in the
Record, as follows:

S. 24

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

SECTION 1. EXCLUSION OF DIVIDEND INCOME FROM TAX.

(a) In General.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to amounts
specifically excluded from gross income) is amended by
inserting after section 115 the following new section:

``SEC. 116. EXCLUSION OF DIVIDENDS RECEIVED BY INDIVIDUALS.

``(a) Exclusion From Gross Income.--Gross income does not
include dividends otherwise includible in gross income which
are received during the taxable year by an individual.
``(b) Certain Dividends Excluded.--Subsection (a) shall not
apply to any dividend from a corporation which, for the
taxable year of the corporation in which the distribution is
made, or for the next preceding taxable year of the
corporation, is a corporation exempt from tax under section
501 (relating to certain charitable, etc., organization) or
section 521 (relating to farmers' cooperative associations).
``(c) Special Rules.--For purposes of this section--
``(1) Exclusion not to apply to capital gain dividends from
regulated investment companies and real estate investment
trusts.--

``For treatment of capital gain dividends, see sections 854(a) and
857(c).
``(2) Certain nonresident aliens ineligible for
exclusion.--In the case of a nonresident alien individual,
subsection (a) shall apply only--
``(A) in determining the tax imposed for the taxable year
pursuant to section 871(b)(1) and only in respect of
dividends which are effectively connected with the conduct of
a trade or business within the United States, or
``(B) in determining the tax imposed for the taxable year
pursuant to section 877(b).
``(3) Dividends from employee stock ownership plans.--
Subsection (a) shall not apply to any dividend described in
section 404(k).''
(b) Conforming Amendments.--
(1)(A) Subparagraph (A) of section 135(c)(4) of such Code
is amended by inserting ``116,'' before ``137''.
(B) Subsection (d) of section 135 of such Code is amended
by redesignating paragraph (4) as paragraph (5) and by
inserting after paragraph (3) the following new paragraph:
``(4) Coordination with section 116.--This section shall be
applied before section 116.''
(2) Subsection (c) of section 584 of such Code is amended
by adding at the end thereof the following new flush
sentence:

``The proportionate share of each participant in the amount
of dividends received by the common trust fund and to which
section 116 applies shall be considered for purposes of such
section as having been received by such participant.''
(3) Subsection (a) of section 643 of such Code is amended
by redesignating paragraph (7) as paragraph (8) and by
inserting after paragraph (6) the following new paragraph:
``(7) Dividends.--There shall be included the amount of any
dividends excluded from gross income pursuant to section
116.''
(4) Section 854(a) of such Code is amended by inserting
``section 116 (relating to exclusion of dividends received by
individuals) and'' after ``For purposes of''.
(5) Section 857(c) of such Code is amended to read as
follows:
``(c) Restrictions Applicable to Dividends Received From
Real Estate Investment Trusts.--
``(1) Treatment for section 116.--For purposes of section
116 (relating to exclusion of dividends received by
individuals), a capital gain dividend (as defined in
subsection (b)(3)(C)) received from a real estate investment
trust which meets the requirements of this part shall not be
considered as a dividend.
``(2) Treatment for section 243.--For purposes of section
243 (relating to deductions for dividends received by
corporations), a dividend received from a real estate
investment trust which meets the requirements of this part
shall not be considered as a dividend.''
(6) The table of sections for part III of subchapter B of
chapter 1 of such Code is amended by inserting after the item
relating to section 115 the following new item:

``Sec. 116. Exclusion of dividends received by individuals.''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2002.
____

S. 25

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

SECTION 1. DIVIDENDS OF INDIVIDUALS TAXED AT CAPITAL GAIN
RATES.

(a) In General.--Section 1(h) of the Internal Revenue Code
of 1986 (relating to maximum capital gains rate) is amended
by adding at the end the following new paragraph:
``(13) Dividends taxed as net capital gain.--
``(A) In general.--For purposes of this subsection, the
term `net capital gain' means net capital gain (determined
without regard to this paragraph), increased by qualified
dividend income.
``(B) Qualified dividend income.--For purposes of this
paragraph--
``(i) In general.--The term `qualified dividend income'
means dividends received from domestic corporations during
the taxable year.
``(ii) Certain dividends excluded.--Such term shall not
include--

``(I) any dividend from a corporation which for the taxable
year of the corporation in which the distribution is made, or
the preceding taxable year, is a corporation exempt from tax
under section 501 or 521,
``(II) any amount allowed as a deduction under section 591
(relating to deduction for dividends paid by mutual savings
banks, etc.), and
``(III) any dividend described in section 404(k).

``(iii) Minimum holding period.--Such term shall not
include any dividend on any share of stock with respect to
which the holding period requirements of section 246(c) are
not met.
``(C) Special rules.--
``(i) Amounts taken into account as investment income.--
Qualified dividend income shall not include any amount which
the taxpayer takes into account as investment income under
section 163(d)(4)(B).
``(ii) Nonresident aliens.--In the case of a nonresident
alien individual, subparagraph (A) shall apply only--

``(I) in determining the tax imposed for the taxable year
pursuant to section 871(b) and only in respect of amounts
which are effectively connected with the conduct of a trade
or business within the United States, and
``(II) in determining the tax imposed for the taxable year
pursuant to section 877.

``(iii) Treatment of dividends from regulated investment
companies and real estate investment trusts.--

``For treatment of dividends from regulated investment companies and
real estate investment trusts, see sections 854 and 857.''
(b) Exclusion of Dividends From Investment Income.--
Subparagraph (B) of section 163(d)(4) of the Internal Revenue
Code of 1986 (defining net investment income) is amended by
adding at the end the following flush sentence:

``Such term shall include qualified dividend income (as
defined in section 1(h)(13)(B)) only to the extent the
taxpayer elects to treat such income as investment income for
purposes of this subsection.''
(c) Treatment of Dividends From Regulated Investment
Companies.--
(1) Subsection (a) of section 854 of the Internal Revenue
Code of 1986 (relating to dividends received from regulated
investment companies) is amended by inserting ``section
1(h)(13) (relating to maximum rate of tax on dividends and
interest) and'' after ``For purposes of''.
(2) Paragraph (1) of section 854(b) of such Code (relating
to other dividends) is amended by redesignating subparagraph
(B) as subparagraph (C) and by inserting after subparagraph
(A) the following new subparagraph:
``(B) Maximum rate under section 1(h).--
``(i) In general.--If the aggregate dividends received by a
regulated investment company during any taxable year is less
than 95 percent of its gross income, then, in computing the
maximum rate under section 1(h)(13), rules similar to the
rules of subparagraph (A) shall apply.

[[Page S41]]

``(ii) Gross income.--For purposes of clause (i), in the
case of 1 or more sales or other dispositions of stock or
securities, the term `gross income' includes only the excess
of--

``(I) the net short-term capital gain from such sales or
dispositions, over
``(II) the net long-term capital loss from such sales or
dispositions.''

S. 26

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

SECTION 1. DIVIDENDS AND INTEREST OF INDIVIDUALS TAXED AT
CAPITAL GAIN RATES.

(a) In General.--Section 1(h) of the Internal Revenue Code
of 1986 (relating to maximum capital gains rate) is amended
by adding at the end the following new paragraph:
``(13) Dividends and interest taxed as net capital gain.--
``(A) In general.--For purposes of this subsection, the
term `net capital gain' means net capital gain (determined
without regard to this paragraph), increased by qualified
dividend income and qualified interest income.
``(B) Qualified dividend income.--For purposes of this
paragraph--
``(i) In general.--The term `qualified dividend income'
means dividends received from domestic corporations during
the taxable year.
``(ii) Certain dividends excluded.--Such term shall not
include--

``(iii) Minimum holding period.--Such term shall not
include any dividend on any share of stock with respect to
which the holding period requirements of section 246(c) are
not met.
``(C) Qualified interest income.--For purposes of this
paragraph, the term `qualified interest income' means--
``(i) interest on deposits with a bank (as defined in
section 581),
``(ii) amounts (whether or not designated as interest)
paid, in respect of deposits, investment certificates, or
withdrawable or repurchasable shares, by--

``(I) a mutual savings bank, cooperative bank, domestic
building and loan association, industrial loan association or
bank, or credit union, or
``(II) any other savings or thrift institution which is
chartered and supervised under Federal or State law,

the deposits or accounts in which are insured under Federal
or State law or which are protected and guaranteed under
State law,
``(iii) interest on--

``(I) evidences of indebtedness (including bonds,
debentures, notes, and certificates) issued by a domestic
corporation in registered form, and
``(II) to the extent provided in regulations prescribed by
the Secretary, other evidences of indebtedness issued by a
domestic corporation of a type offered by corporations to the
public,

``(iv) interest on obligations of the United States, a
State, or a political subdivision of a State (not excluded
from gross income of the taxpayer under any other provision
of law), and
``(v) interest attributable to participation shares in a
trust established and maintained by a corporation established
pursuant to Federal law.
``(D) Special rules.--
``(i) Amounts taken into account as investment income.--
Qualified dividend income and qualified interest income shall
not include any amount which the taxpayer takes into account
as investment income under section 163(d)(4)(B).
``(ii) Nonresident aliens.--In the case of a nonresident
alien individual, subparagraph (A) shall apply only--

``(iii) Treatment of dividends from regulated investment
companies and real estate investment trusts.--

``For treatment of dividends from regulated investment companies and
real estate investment trusts, see sections 854 and 857.''
(b) Exclusion of Dividends and Interest From Investment
Income.--Subparagraph (B) of section 163(d)(4) of the
Internal Revenue Code of 1986 (defining net investment
income) is amended by adding at the end the following flush
sentence:

``Such term shall include qualified dividend income (as
defined in section 1(h)(13)(B)) or qualified interest income
(as defined in section 1(h)(13)(C)) only to the extent the
taxpayer elects to treat such income as investment income for
purposes of this subsection.''
(c) Treatment of Dividends From Regulated Investment
Companies.--
(1) Subsection (a) of section 854 of the Internal Revenue
Code of 1986 (relating to dividends received from regulated
investment companies) is amended by inserting ``section
1(h)(13) (relating to maximum rate of tax on dividends and
interest) and'' after ``For purposes of''.
(2) Paragraph (1) of section 854(b) of such Code (relating
to other dividends) is amended by redesignating subparagraph
(B) as subparagraph (C) and by inserting after subparagraph
(A) the following new subparagraph:
``(B) Maximum rate under section 1(h).--
``(i) In general.--If the sum of the aggregate dividends
received, and the aggregate interest described in section
1(h)(13)(C) received, by a regulated investment company
during any taxable year is less than 95 percent of its gross
income, then, in computing the maximum rate under section
1(h)(13), rules similar to the rules of subparagraph (A)
shall apply.
``(ii) Gross income.--For purposes of clause (i), in the
case of 1 or more sales or other dispositions of stock or
securities, the term `gross income' includes only the excess
of--

``(I) the net short-term capital gain from such sales or
dispositions, over
``(II) the net long-term capital loss from such sales or
dispositions.''

(3) Subparagraph (C) of section 854(b)(1) of such Code, as
redesignated by paragraph (2), is amended by striking
``subparagraph (A)'' and inserting ``subparagraph (A) or
(B)''.
(4) Paragraph (2) of section 854(b) of such Code is amended
by inserting ``the maximum rate under section 1(h)(13) and''
after ``for purposes of''.
(d) Treatment of Dividends Received From Real Estate
Investment Trusts.--Section 857(c) of the Internal Revenue
Code of 1986 (relating to restrictions applicable to
dividends received from real estate investment trusts) is
amended to read as follows:
``(c) Restrictions Applicable To Dividends Received From
Real Estate Investment Trusts.--
``(1) In general.--For purposes of section 1(h)(13)
(relating to maximum rate of tax on dividends and interest)
and section 243 (relating to deductions received by
corporations), a dividend received from a real estate
investment trust which meets the requirements of this part
shall not be considered a dividend.
``(2) Treatment as interest.--
``(A) In general.--For purposes of section 1(h)(13), in the
case of a dividend (other than a capital gain dividend, as
defined in subsection (b)(3)(C)) received from a real estate
investment trust which meets the requirements of this part
for the taxable year in which it paid--
``(i) such dividend shall be treated as interest if the
aggregate interest received by the real estate investment
trust for the taxable year equals or exceeds 75 percent of
its gross income, or
``(ii) if clause (i) does not apply, the portion of such
dividend which bears the same ratio to the amount of such
dividend as the aggregate interest received bears to gross
income shall be treated as interest.
``(B) Adjustments to gross income and aggregate interest
received.--For purposes of subparagraph (B)--
``(i) gross income does not include the net capital gain,
``(ii) gross income and aggregate interest received shall
each be reduced by so much of the deduction allowable by
section 163 for the taxable year (other than for interest on
mortgages on real property owned by the real estate
investment trust) as does not exceed aggregate interest
received by the taxable year, and
``(iii) gross income shall be reduced by the sum of the
taxes imposed by paragraphs (4), (5), and (6) of section
857(b).
``(C) Aggregate interest received.--For purposes of this
subsection, aggregate interest received shall be computed by
taking into account only interest which is described in
section 1(13)(C).
``(D) Notice to shareholders.--The amount of any
distribution by a real estate investment trust which may be
taken into account as interest for purposes of section
1(h)(13) shall not exceed the amount so designated by the
trust in a written notice to its shareholders mailed not
later than 45 days after the close of its taxable year.''
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2002.
______

By Mr. GRASSLEY (for himself, Mr. Johnson, Mr. Enzi, and Mr.
Harkin):

[[Page S42]]

S. 27 A bill to amend the Packers and Stockyards Act, 1921, to make
it unlawful for packet to own, feed, or control livestock intended for
slaughter; to the Committee on Agriculture, Nutrition, and Forestry.
Mr. GRASSLEY. Mr. President, the goal of the farm bill was to improve
the economic condition of America's farmers over the next few years.
However one of the many shortcomings of the new law is that it fails to
protect family farmers and independent livestock producers from
vertical integration in the livestock industry.
In recent years, family farmers from across Iowa have contacted me to
express their fears about the threat they fell from concentration in
the livestock industry. They fear that if the trend toward increased
concentration continues, they may be unable to compete effectively and
will not be able to get a fair price for their livestock in the
marketplace.
The bill I am introducing would prevent meat packers from assuming
complete control of the meat supply by preventing packers from owning
livestock.
This bill would make it unlawful for a packer to own or feed
livestock intended for slaughter. Single pack entities and packs too
small to participate in the Mandatory Price Reporting program would be
excluded from the limitation. In addition, farmer cooperatives in which
the members own, feed, or control the livestock themselves would be
exempt under this new bill.
We have tightened down the limitations in this new version of the
packer ban. The last version provided an exemption to plants that
killed less than 2 percent of the Nation's livestock, per commodity.
That meant plants that killed less than 1.9 million pigs or
approximately 725,000 cattle were excluded under the old version. We
have changed the standard to be consistent with the Mandatory Price
Reporting law and other legislation I've introduced. That means the new
limit will be 125,000 for cattle and 100,000 for swine.
It's also important to realize that this is not the original version
I co-sponsored with Senator Johnson. Instead, this is the version I
successfully offered on the floor during the debate on the farm bill
that removed the word ``control'' so that the packers couldn't attack
us with a red-herring argument.
It's important for our colleagues to remember that family farmers
ultimately derive their income from the agricultural marketplace, not
the farm bill. Family farmers have unfortunately been in a position of
weakness in selling their product to large processors and in buying
their inputs from large suppliers.
Today, the position of the family has become weaker as consolidation
in agribusiness has reached all time highs. Farmers have fewer buyers
and suppliers than ever before. The result is an increasing loss of
family farms and the smallest farm share of the consumer dollar in
history.
One hundred years ago, this Nation reacted appropriately to citizen
concerns about large, powerful companies by establishing rules
constraining such businesses when they achieved a level of market power
that harmed, or risked harming, the public interest, trade and
commerce. The United State Congress enacted the first competition laws
in the world to make commerce more free and fair. These competition
laws include the Sherman Act, Clayton Act, Federal Trade Commission Act
and Packers & Stockyards Act.
Since that time, many countries in the world have followed this U.S.
example to constrain undue market power in their domestic economies.
Unfortunately, competition policy has been severely weakened in this
country, especially in agriculture, due to Federal case law,
underfunded enforcement, and unfounded reliance on efficiency claims.
The result has been a significant degradation of the domestic
agricultural market infrastructure. The current situation reflects a
tremendous mis-allocation of resources across the food chain. Congress
must strengthen competition policy within the farm sector to reclaim a
properly operating marketplace.
While this legislation does not accomplish all that we need to do in
this area, it's an important first step toward remedying the biggest
problem facing farmers today, the problem of concentration.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no object, the bill was ordered to be printed in the
Record, as follows:

S. 27

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

SECTION 1. PROHIBITION ON PACKERS OWNING, FEEDING, OR
CONTROLLING LIVESTOCK.

(a) In General.--Section 202 of the Packers and Stockyards
Act, 1921 (7 U.S.C. 192), is amended--
(1) by redesignating subsections (f) and (g) as subsections
(g) and (h), respectively; and
(2) by inserting after subsection (e) the following:
``(f) Own or feed livestock directly, through a subsidiary,
or through an arrangement that gives the packer operational,
managerial, or supervisory control over the livestock, or
over the farming operation that produces the livestock, to
such an extent that the producer is no longer materially
participating in the management of the operation with respect
to the production of the livestock, except that this
subsection shall not apply to--
``(1) an arrangement entered into within 7 days (excluding
any Saturday or Sunday) before slaughter of the livestock by
a packer, a person acting through the packer, or a person
that directly or indirectly controls, or is controlled by or
under common control with, the packer;
``(2) a cooperative or entity owned by a cooperative, if a
majority of the ownership interest in the cooperative is held
by active cooperative members that--
``(A) own, feed, or control livestock; and
``(B) provide the livestock to the cooperative for
slaughter;
``(3) a packer that is not required to report to the
Secretary on each reporting day (as defined in section 212 of
the Agricultural Marketing Act of 1946 (7 U.S.C. 1635a))
information on the price and quantity of livestock purchased
by the packer; or
``(4) a packer that owns 1 livestock processing plant;
or''.
(b) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendments
made by subsection (a) take effect on the date of enactment
of this Act.
(2) Transition rules.--In the case of a packer that on the
date of enactment of this Act owns, feeds, or controls
livestock intended for slaughter in violation of section
202(f) of the Packers and Stockyards Act, 1921 (as amended by
subsection (a)), the amendments made by subsection (a) apply
to the packer--
(A) in the case of a packer of swine, beginning on the date
that is 18 months after the date of enactment of this Act;
and
(B) in the case of a packer of any other type of livestock,
beginning as soon as practicable, but not later than 180
days, after the date of enactment of this Act, as determined
by the Secretary of Agriculture.
______

By Mr. CAMPBELL (for himself and Mr. Allard):
S. 30. A bill to redesignate the Colonnade Center in Denver,
Colorado, as the ``Cesar E. Chavez Memorial Building''; to the
Committee on Environment and Public Works.
Mr. CAMPBELL. Mr. President, today I am introducing legislation to
name the Federal building located at 1244 Speer Boulevard, Denver CO,
as the ``Cesar E. Chavez Memorial Building.''
Cesar E. Chavez was an ordinary American who left behind an
extraordinary legacy of commitment and accomplishment.
Born on March 31, 1927 in Yuma, AZ on a farm his grandfather
homesteaded in the 1880's, he began his life as a migrant farm worker
at the age of 10 when the family lost the farm during the Great
Depression. Those were desperate years for the Chavez family as they
joined the thousands of displaced people who were forced to migrate
throughout the country to labor in the fields and vineyards.
Motivated by the poverty and harsh working conditions, he began to
follow his dream of establishing an organization dedicated to helping
these farm workers. In 1962 he founded the National Farm Workers
Association which would eventually evolve into the United Farm Workers
of America.
Over the next three decades with an unwavering commitment to
democratic principals and a philosophy of non-violence he struggled to
secure a living wage, health benefits and safe working conditions for
arguably the most exploited work force in our country, that they might
enjoy the basic protections and worker's right to which all Americans
aspire.
In 1945, at the age of 18 Cesar Chavez joined the U.S. Navy and
served his country for two years. He was the recipient of the Martin
Luther King Jr.

[[Page S43]]

Peace Prize as well as the Presidential Medal of Freedom, the highest
award this country can bestow upon a civilian.
Chavez's efforts brought dignity and respect to this country's farm
workers and in doing so became a hero, role model and inspiration to
people engaged in human rights struggles throughout the world.
The naming of this building will keep alive the memory of his
sacrifice and commitment for the millions of people whose lives he
touched.
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. 30

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

SECTION 1. DESIGNATION OF CESAR E. CHAVEZ MEMORIAL BUILDING.

The building known as the ``Colonnade Center'', located at
1244 Speer Boulevard in Denver, Colorado, shall be known and
designated as the ``Cesar E. Chavez Memorial Building''.

SEC. 2. REFERENCES.

Any reference in a law, map, regulation, document, paper,
or other record of the United States to the building referred
to in section 1 shall be deemed to be a reference to the
Cesar E. Chavez Memorial Building.
______

By Mr. FEINGOLD (for himself, Ms. Collins, and Mr. Kohl):
S. 36. A bill to amend title XVIII of the Social Security Act to
eliminate the geographic physician work adjustment factor from the
geographic indices used to adjust payments under the physician fee
schedule, to provide incentives necessary to attract educators and
clinical practitioners to underserved areas, and to revise the area
wage adjustment applicable under the prospective payment system for
skilled nursing facilities; to the Committee on Finance.
Mr. FEINGOLD. Mr. President, I rise today to join with my colleagues
from Maine to introduce legislation to restore fairness to the Medicare
program. This package of legislation will reduce regional inequalities
in Medicare spending and support providers of high-quality, low-cost
Medicare services.
The high cost of health care in Wisconsin is skyrocketing: A survey
issued a few days ago found that the cost of health care benefits for
employees in this State rose 14.8 percent this year, to an average of
$6,940 per employee. That's 20 percent high than the national average
of $5,758 for workers in businesses with 500 or more employees.
These costs are hitting our State hard, they are burdening businesses
and employees, hurting health care providers, and preventing seniors
from getting full access to the care that they deserve.
One of the major contributing factors to the high cost in our state
is the inherent unfairness of the Medicare Program.
With the guidance and support of people across our State who are
fighting for Medicare fairness. I have proposed this legislation to
address Medicare's discrimination against Wisconsin's seniors,
employers and health care providers. The Medicare program should
encourage the kind of high-quality, cost-effective Medicare services
that we have in Wisconsin. But as many in Wisconsin know, that's not
the case.
To give an idea of how inequitable the distribution of Medicare
dollars is, imagine identical twins over the age of 65. Both twins
worked at the same company all their lives, at the same salary, and
paid the same amount to the Federal Government in payroll taxes, the
tax that goes into the Medicare Trust Fund.
But if one twin retired to New Orleans, Louisiana, and the other
retired to Eau Claire, Wisconsin, they would have vastly different
health options under the Medicare system. The twin in Louisiana would
get much more.
For example, in most parts of Louisiana, the first twin would have
more options under Medicare. The high Medicare payments in those areas
allow Medicare beneficiaries to choose between an HMO or traditional
fee-for-service plan, and, because area health care providers are
reimbursed at such a high rate, those providers can afford to offer
seniors a broad range of health care services. The twin in Eau Claire
does not have the same access to care, there are no options to choose
from in terms of Medicare HMOs, and sometimes fewer health care
agencies that can afford to provide care under the traditional fee-for-
service plan.
How can two people with identical backgrounds, who paid the same
amount in payroll taxes, have such different options under Medicare?
They can because the distribution of Medicare dollars among the 50
States is grossly unfair to Wisconsin, and much of the Upper Midwest.
Wisconsinites pay payroll taxes just like every American taxpayer, but
the Medicare funds we get in return are lower than those received in
many other states.
My legislation will take us a step in the right direction by reducing
the inequities in Medicare payments to Wisconsin's hospitals,
physicians, and skilled nursing facilities.
Last year, with the introduction my Medicare fairness legislation
along with the efforts of many other Senators, we put Medicare fairness
issues front and center in Congress. The Senate Budget Committee
approved my amendment to promote Medicare fairness in any Medicare
reform package. A wide range of Senators from both parties endorsed my
proposal to create a Medicare fairness coalition. The House passed a
number of Medicare fairness provisions that were a result of these
successes, and both House and Senate leadership endorsed Medicare
fairness issues. Now that we have finally brought these issues the
attention that they deserve, we need to build on that momentum to pass
Medicare fairness provisions into law.
My legislation demands Medicare fairness for Wisconsin and other
affected States, plain and simple. Medicare shouldn't penalize high-
quality providers of Medicare services, most of all. Medicare should
stop penalizing seniors who depend on the program for their health
care. They have worked had and paid into the program all their lives,
and in return they deserve full access to the wide range of benefits
that Medicare has to offer.
I look forward to working with my colleagues to move this legislation
forward. I believe that we can re-balance the budget, while at the same
time encouraging efficient, quality enhancing services, and that's what
my legislation sets out to do.
______

By Mr. McCONNELL (for himself and Mr. Bunning):
S. 37. A bill to amend title II of the Social Security Act to permit
Kentucky to operate a separate retirement system for certain public
employees; to the Committee on Finance.
Mr. McCONNELL. Mr. President, I rise today to introduce legislation
to add Kentucky to the list of States that are permitted to offer
``divided retirement'' plans under the Social Security Act.
Last year, I was contacted by Brian James, President of the
Louisville Fraternal Order of Police, FOP, and Tony Cobaugh, President
of the Jefferson County FOP. These two law enforcement leaders called
my attention to a problem that could jeopardize the retirement security
of many of our community's police, fire, and emergency personnel.
In November of 2000, the citizens of Jefferson County and the City of
Louisville, Kentucky voted to merge their communities and respective
governments into a single entity, which will be known as Greater
Louisville. As one might expect, combining two large metropolitan
governments in such a short time frame cannot be done without
encountering a few difficulties along the way. Jefferson County and the
City of Louisville currently operate two very different retirement
programs for their police officers. When these two governments merge
today, current federal law will require the new government to offer a
single retirement plan that could dramatically increase the cost of
retirement for both our dedicated public safety officers and the new
Greater Louisville government.
Thankfully, when the FOP's leaders called this problem to my
attention, they also suggested a simple solution, let the police
officers and firefighters choose for themselves the retirement system
which best meets their needs.
I rise today to offer legislation that will provide retirement
stability to our public safety officers by allowing Kentucky to operate
what is known as a ``divided retirement system.''

[[Page S44]]

With passage of my legislation and legislation already passed by the
Kentucky General Assembly, Louisville's and Jefferson County's police
officers would decide whether or not they want to participate in Social
Security or remain in their traditional retirement plan. While future
employees will be automatically enrolled in Social Security, no current
officers would be forced into a new retirement system as a result of
the merger without their approval.
Current Federal law allows twenty-one States the option of offering
divided retirement systems. Unfortunately, Kentucky is not one of these
twenty-one states. The legislation I am offering today would change
that by adding Kentucky to list of states designated in the Social
Security Act.
The language I introduce today was included in legislation, H.R.
4070, that passed both the House and the Senate in the 107th Congress.
Unfortunately, there were differences in the House and Senate versions
of H.R. 4070, unrelated to the Louisville language, that were resolved
only shortly prior to the adjournment of the 107th Congress.
Unfortunately, the 107th Congress adjourned sine die before this
compromise version of H.R. 4070 could be considered by both bodies of
Congress.
It is critical that the Senate provide this retirement stability to
the brave men and women who protect the citizens of Louisville and
Jefferson County everyday. There is extensive precedent for granting
Kentucky this authority, and my legislation enjoys the broad,
bipartisan support of policemen, firefighters, local and state
officials, and the Social Security Administration.
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. 37

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

SECTION 1. COVERAGE UNDER DIVIDED RETIREMENT SYSTEM FOR
PUBLIC EMPLOYEES IN KENTUCKY.

(a) In General.--Section 218(d)(6)(C) of the Social
Security Act (42 U.S.C. 418(d)(6)(C)) is amended by inserting
``Kentucky,'' after ``Illinois,''.
(b) Effective Date.--The amendment made by subsection (a)
takes effect on January 1, 2003.
______

By Mr. FEINGOLD (for himself and Ms. Collins):
S. 39. A bill to promote the development of health care cooperatives
that will help businesses to pool the health care purchasing power of
employers, and for other purposes; to the Committee on Health,
Education, Labor, and Pensions.
Mr. FEINGOLD. Mr. President, I rise today with my colleague from
Maine to introduce legislation to help businesses form group-purchasing
cooperatives to obtain enhanced benefits, to reduce health care rates,
and to improve quality for their employees' health care.
High health care costs are burdening businesses and employees across
the Nation. These costs are digging into profits and preventing access
to affordable health care. Too many patients feel trapped by the
system, with decisions about their health dictated by costs rather than
by what they need.
The cost of health care in Wisconsin is skyrocketing: A recent survey
found that the cost of health benefits for employees in Wisconsin rose
14.8 percent this year, to an average of $6,940 per employee. That's 20
percent higher than the national average of $5,758 for workers in
businesses with 500 or more employees.
We must curb these rapidly-increasing health care premiums. I
strongly support initiatives to ensure that everyone has access to
health care. It is crucial that we support successful local initiatives
to reduce health care premiums and to improve the quality of employees'
health care.
By using group purchasing to obtain rate discounts, some employers
have been able to reduce the cost of health care premiums for their
employees. According to the National Business Coalition on Health,
there are more than 90 employer-led coalitions across the United States
that collectively purchase health care. Through these pools, businesses
are able to proactively challenge high costs and inefficient delivery
of health care and share information on quality. These coalitions
represent over 7,000 employers and approximately 34 million employees
Nationwide.
Improving the quality of health care will also lower the cost of
care. By investing in the delivery of quality health care, we will be
able to lower long term health care costs. Effective care, such as
quality preventive services, can reduce overall health care
expenditures. Health purchasing coalitions help promote these services
and act as an employer forum for networking and education on health
care cost containment strategies. They can help foster a dialogue with
health care providers, insurers, and local HMOs.
Health care markets are local. Problems with cost, quality, and
access to health care are felt most intensely in the local markets.
Health care coalitions can function best when they are formed and
implemented locally. Local employers of large and small businesses have
formed health care coalitions to track health care trends, create a
demand for quality and safety, and encourage group purchasing.
In Wisconsin, there have been various successful initiatives that
have formed health care purchasing cooperatives to improve quality of
care and to reduce cost. For example, the Employer Health Care Alliance
Cooperative, an employer-owned and employer-directed not-for-profit
cooperative, has developed a network of health care providers in Dane
County and 12 surrounding counties on behalf of its 170 member
employers. Through this pooling effort, employers are able to obtain
affordable, high-quality health care for their 110,000 employees and
dependents.
This legislation seeks to build on successful local initiatives, such
as the Alliance, that help businesses to join together to increase
access to affordable and high-quality health care.
The Promoting Health Care Purchasing Cooperatives Act would authorize
grants to a group of businesses so that they could form group-
purchasing cooperatives to obtain enhanced benefits, reduce health care
rates, and improve quality.
This legislation offers two separate grant programs to help different
types of businesses pool their resources and bargaining power. Both
programs would aid businesses to form cooperatives. The first program
would help large businesses that sponsor their own health plans, while
the second program would help small businesses that purchase their
health insurance.
My bill would enable larger businesses to form cost-effective
cooperatives that could offer quality health care through several ways.
First, they could obtain health services through pooled purchasing from
physicians, hospitals, home health agencies, and others. By pooling
their experience and interests, employers involved in a coalition could
better attack the essential issues, such as rising health insurance
rates and the lack of comparable health care quality data. They would
be able to share information regarding the quality of these services
and to partner with these health care providers to meet the needs of
their employees.
For smaller businesses that purchase their health insurance, the
formation of cooperatives would allow them to buy health insurance at
lower prices through pooled purchasing.
Also, the communication within these cooperatives would provide
employees of small businesses with better information about the health
care options that are available to them. Finally, coalitions would
serve to promote quality improvements by facilitating partnerships
between their group and the health care providers.
By working together, the group could develop better quality insurance
plans and negotiate better rates.
Past health purchasing pool initiatives have focused only on cost and
have tried to be all things for all people. My legislation creates an
incentive to join the pools by giving grants to a group of similar
businesses to form group-purchasing cooperatives. The pool are also
given flexibility to find innovative ways to lower costs, such as
enhancing benefits, for example, more preventive care, and improving
quality. Finally, the cooperative structure is a proven model, which
creates an incentive for businesses to remain in the pool because they
will be invested in the organization.

[[Page S45]]

We must reform health care in America and give employers and
employees more options. This legislation, by providing for the
formation of cost-effective coalitions that will also improve the
quality of care, contributes to this essential reform process. I urge
my colleagues to join me in cosponsoring this proposal to improve the
quality and costs of health care.
______

By Mr. FEINGOLD (for himself and Mr. Jeffords):
S. 40. A bill to prohibit products that contain dry ultra-filtered
milk products or casein from being labeled as domestic natural cheese,
and for other purposes; to the Committee on Agriculture, Nutrition, and
Forestry.
Mr. FEINGOLD. Mr. President, I am pleased to re-introduce the Quality
Cheese Act of 2003. This legislation will protect the consumer, save
taxpayer dollars and provide support to America's dairy farmers, who
have taken a beating in the marketplace in recent years.
When Wisconsin consumers have the choice, they will choose natural
Wisconsin cheese. But the Food and Drug Administration, FDA, and the
U.S. Department of Agriculture, USDA, may change current law, and
consumers won't know whether cheese is really all natural or not.
If the Federal Government creates a loophole for imitation cheese
ingredients to be used in U.S. cheese vats, some cheese labels saying
``domestic'' and ``natural'' will no longer be truly accurate.
If USDA and FDA allow a change in Federal rules, imitation milk
proteins known as milk protein concentrate, casein, or dry ultra
filtered milk could be used to make cheese in place of the wholesome
natural milk produced by cows in Wisconsin or other part of the U.S.
I am deeply concerned by recent efforts to change America's natural
cheese standard. This effort to allow milk protein concentrate and
casein into natural cheese products flies in the face of logic and
could create a loophole that could allow unlimited amounts of
substandard imported milk proteins to enter U.S. cheese vats.
My legislation would close this loophole and ensure that consumers
could be confident that they were buying natural cheese when they saw
the natural label.
Over the past decade, cheese consumption has risen at a strong pace
due in part to promotional and marketing efforts and investments by
dairy farmers across the country. Year after year, per capita cheese
consumption has risen at a steady rate.
Recent proposals to change to our natural cheese standards, however,
could decrease consumption of natural cheese. These declines could
result from concerns about the origin of casein and milk protein
concentrate.
The addition of this kind of milk could significantly tarnish the
wholesome reputation of natural cheese in the eyes of the consumer.
This change could seriously compromise decades of work by America's
dairy farmers to build up domestic cheese consumption levels. It is
simply not fair to America's farmers!
Consumers have a right to know if the cheese that they buy is
unnatural. And by allowing milk protein concentrate milk into cheese,
we are denying consumers the entire picture.
This legislation will require that labels paint the entire picture
for the consumer, and allow them enough information to select cheese
made from truly natural ingredients.
Allowing MPCs or dry ultra-filtered milk into natural cheeses would
also harm dairy producers throughout the United States. Some estimate
that the annual effect of the change on the dairy farm sector of the
economy could be more than $100 million.
The proposed change to our natural cheese standard would also harm
the American taxpayer. If we allow MPCs to be used in cheese, we will
effectively permit unrestricted importation of these ingredients into
the United States. Because there are no tariffs and quotas on these
ingredients, these heavily-subsidized products would displace natural
domestic dairy ingredients.
These unnatural domestic dairy products would enter our domestic
cheese market and might further depress dairy prices paid to American
dairy producers. Low dairy prices result in increased costs to the
dairy price support program. So, at the same time that U.S. dairy
farmers would receive lower prices, the U.S. taxpayer would pay more
for the dairy price support program.
This change does not benefit the dairy farmer, consumer or taxpayer.
Who then is it good for?
It would benefit only unscrupulous foreign MPC producers out to make
a fast buck at the expense of Americans.
This legislation addresses the concerns of farmers, consumers and
taxpayers by prohibiting dry ultra-filtered milk from being included in
America's natural cheese standard.
Congress must shut the door on any backdoor efforts to stack the deck
against America's dairy farmers. And we must pass my legislation that
prevents a loophole that would allow changes that hurt the consumer,
taxpayer, and dairy farmer.
______

By Mr. LIEBERMAN (for himself and Mr. Daschle)
S. 41. A bill to strike certain provisions of the Homeland Security
Act of 2002 (Public Law 107-296), and for other purposes; to the
Committee on Governmental Affairs.
Mr. LIEBERMAN. Mr. President, I rise today to introduce a bill on
behalf of myself and Senator Daschle to remedy some problems in
landmark legislation passed at the end of the last Congress, and signed
into law by President Bush, to establish a Department of Homeland
Security. The legislation we are offering today would strike seven
extraneous special interest provisions inserted into the Homeland
Security Act by Republican leadership in the bill's waning hours,
provisions that are contrary to the bipartisan spirit in which the
Homeland Security Act was conceived.
Since the days following September 11, 2001, when terrorists
viciously took the lives of 3,000 of our friends, family and fellow
Americans, I have advocated establishing a Department of Homeland
Security to beat the terrorist threat. Senator Arlen Specter, and I
initially proposed creating a new department in October 2001. Our
measure was not just bipartisan. It was in fact intended to be
nonpartisan.
Unfortunately, some partisan battles did ensue, primarily regarding
longstanding civil service protections for homeland security workers,
and I remain very concerned about the potential impact of these
provisions. Nevertheless, the final bill was, for the most part, a
critical, well-constructed piece of legislation that incorporated the
majority of the provisions approved by the Governmental Affairs
Committee, and which an overwhelming majority of the Senate embraced.
In some very specific ways, however, the bill was flawed. In the
final stages of passing the bill, the Republican leadership hastily
inserted several special interest provisions that had no place in this
measure. Most of these provisions had never been in any version of the
legislation before the Senate before they were presented in a take-it-
or-leave-it package by Republicans, and several had not been considered
by either chamber. The method and spirit in which these provisions
found their way into what should have been a consensus piece of
legislation was utterly objectionable and Senator Daschle and I made an
effort to remove them at the time. That effort narrowly failed, but not
before news of these special interest provisions had created great
consternation for Democrats and the public, and even for some
Republicans. Indeed, according to numerous published reports, the
Republican leadership was able to muster the votes to preserve the
provisions only after promising to revisit at least some of the most
egregious additions during this session of Congress.
I believe that the seven extraneous provisions my legislation targets
hurt the Homeland Security Act as it was finally passed by the Congress
and signed by the President. And I believe that, by attaching these
measures to what could have and should have been a common cause, the
Republican leadership all but admitted that the provisions cannot
withstand independent scrutiny. Following are the provisions my bill
would strike.

First, perhaps the most egregious add-on to the Homeland Security Act

[[Page S46]]

was a provision that dramatically alters the way certain vaccine
preservatives are treated for liability purposes under the law. To
quickly summarize this very complicated issue, children who are hurt by
childhood vaccines generally may not go directly to court to hold
vaccine manufacturers liable. Instead, they have to go first to what's
called the Federal Vaccine Injury Compensation Program, which offers
compensation for some of these claims. Parents argued, however, that
the bar on lawsuits didn't use to apply to claims regarding faulty
vaccine additives.
These seemingly arcane legal distinctions were particularly important
to a large number of parents of autistic children who have attributed
their children's autism to thimerosal, a mercury-based preservative
that used to be in some childhood vaccines. These parents sued the
manufacturers of both vaccines and thimerosal, and they had many
lawsuits pending in the courts as of last Fall.
If you are wondering what any of this has to do with Homeland
Security, you are doing exactly what we all did last November when in
the waning days of debate on the Homeland Security bill, a provision
addressing this issue appeared for the very first time in any version
of the bill. That provision fundamentally altered the way vaccine
additive claims would be treated from then on. With the swoop of a pen,
the pending additive lawsuits against both vaccine and additive
manufacturers were thrown out of court and, the provision's supporters
alleged, sent into the compensation fund.
As I said last Fall, I don't know whether there is any relationship
between thimerosal and autism. I also don't know whether these cases
really should be resolved in court or through the compensation fund.
But I do know that figuring out where and how to resolve these claims
is a very contentious, complex and challenging task, and is just one
part of addressing broader problems with the vaccine compensation
system. For example, the vaccine compensation fund's viability may be
affected by the addition of claims regarding these additives. I also
know that it is an issue that the committees of jurisdiction had been
struggling with for a long time and that they should have been left to
resolve. And I certainly know that a last second addition to the
Homeland Security Act was absolutely the wrong way to deal with this
issue and the wrong bill to use to take so many injured parents' and
children's legal rights away. Indeed, we know that even more now, as it
has become clear that while the provision closed the courthouse door to
autistic children, it apparently didn't open the compensation fund
window as its supporters said it would--because it didn't make the
changes to either the fund's statute of limitations or to governing tax
code provisions that would be necessary to obtain access to the fund
for these cases.
The bottom line is that this was a wrong and poorly conceived
provision to put in the Homeland Security bill--something I thought
even the Republican leadership acknowledged when they were forced to
make promises to get rid of this provision in order to save their bill.
We should scrap it now, and let the committee of jurisdiction undertake
a careful review and, I hope, get it right this time.
My legislation would also strike from the Act a measure that requires
the Transportation Security Oversight Board to ratify within 90 days
emergency security regulations issued by the Transportation Security
Agency. If the oversight board does not ratify the regulations, they
would automatically lapse. Despite the TSA having decided that they are
necessary, 90 days later, lacking the board's approval, they'd
disappear.
This doesn't make any sense. In the current climate, shouldn't we be
trying to find new ways to expedite and implement TSA rules, not always
to disrupt and derail them? This provision is contrary to new
procedures that the Senate passed in 2001 in the aviation security
bill. Under that law, regulations go into effect and remain in effect
unless they are affirmatively disapproved by the Board. I think that's
a better system.
Another provision would extend liability protection to companies that
provided passenger and baggage screening in airports on September 11.
But we in the Senate decided against extending such liability
protection in at least two different contexts. First, the airline
bailout bill limited the liability of the airlines, but not of the
security screeners, due to ongoing concerns about their role leading up
to September 11. Then, the conference report on the Transportation
Security bill extended the liability limitations to others who might
have been the target of lawsuits, such as aircraft manufacturers and
airport operators, but again not to the baggage and passenger
screeners.
Like that little mole you hit with the mallet in a whack-a-mole game,
somehow this provision reappeared in the Homeland Security Act. We must
strike it.
Another unnecessary and overreaching provision I seek to strike gives
the Secretary of the new department broad authority to designate
certain technologies as so-called ``qualified antiterrorism
technologies.'' His granting of this designation, which appears to be
unilateral, and probably not subject to review by anyone, would entitle
companies selling that technology to broad liability protection from
any claim arising out of, relating to, or resulting from an act of
terrorism, no matter how negligently, or even wantonly and willfully,
the company acted.
This provision seems to say that in many cases, the plaintiff can't
recover anything from the seller unless an injured plaintiff can prove
that the seller of the product that injured him or her acted
fraudulently or with willful misconduct in submitting information to
the Secretary when the Secretary was deciding whether to certify the
product.
Even in cases where a seller isn't entitled to the benefit of that
protection, the company still isn't fully, or in many cases even
partially, responsible for its actions, even if it knew there was
something terribly wrong with its product. Perhaps worst of all, this
measure caps the seller's liability at the limits of its insurance
policy. In other words, if injured people were lucky enough to get
through the first hurdle and even hold a faulty seller liable, they
still could go completely uncompensated even if a liable seller has
more than enough money to compensate them.
The Homeland Security Act unwisely and unnecessarily allows the
Secretary to exempt the new department's advisory committees from the
open meetings requirements and other requirements of the Federal
Advisory Committee Act, FACA.
Agencies throughout government make use of advisory committees that
function under these open meetings requirements. Existing law is
careful to protect discussions and documents that involve sensitive
information, in fact, the FACA law currently applies successfully to
the Department of Defense, the Department of Justice, the State
Department, even the secretive National Security Agency.
So why should the Department of Homeland Security be allowed to
exempt its advisory committees from its requirements? Why should its
advisory committees be allowed to meet in total secret with no public
knowledge?
We all say that we're for ``good government,'' for openness,
integrity, and accountability. But as it now stands, few of us will be
able to say with confidence that the new department's advisory
committees are designed to be as independent, balanced, and transparent
as possible. I know full well that the Homeland Security Department
will deal with sensitive information involving life and death, but so
does the National Security Agency. So does the FBI. So does the
Department of Defense. Their advisory committees aren't allowed to hide
themselves away from the public.
Finally, our legislation would alter a provision in the Act creating
a university-based homeland security research center. Now, I have
nothing against creating a university research center focused on
homeland security.
But there's a problem with this particular provision as it is
written. The research center that it would create is described so
narrowly, through 15 specific criteria, that it appears Texas A&M
University has the inside track, to say the least, to get the funding
and house the center.
Science in this country has thrived over the years because, by and
large,

[[Page S47]]

Congress has refused to intervene in science decisions. Science has
thrived through peer review and competition over the best proposals--
which are fundamentals of federal science policy. We are violating them
here. This is nothing short of ``science pork.''
When it comes to making these research funding decisions, we need a
playing field that's truly level, not one that only looks level when
you tilt your head.
Our legislation keeps the university-based science center program.
However, it removes the highly-specific criteria that appear to direct
it to a particular university. That's the way we'll get the best
science, not by making Congressional allocations to particular
institutions.
I'm extremely pleased we have created a Department of Homeland
Security and plan to do everything I can to help ensure its success.
But these flaws are real. They are serious. And they are utterly
unnecessary. I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 41

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

SECTION 1. AMENDMENTS TO THE HOMELAND SECURITY ACT OF 2002.

(a) Stricken Provisions.--
(1) In general.--The Homeland Security Act of 2002 (Public
Law 107-296) is amended--
(A) in section 308(b)(2) by striking subparagraph (B) and
inserting the following:
``(B) Criteria for selection.--In selecting colleges or
universities as centers for homeland security, the Secretary
shall consider demonstrated expertise in interdisciplinary
public policy research and communication outreach regarding
science, technology, and public policy.'';
(B) in section 311--
(i) by striking subsection (i); and
(ii) redesignating subsection (j) as subsection (i);
(C) in title VIII, by striking subtitle G;
(D) by striking section 871;
(E) by striking section 890;
(F) by striking section 1707; and
(G) by striking sections 1714, 1715, 1716, and 1717.
(2) Technical and conforming amendments.--The table of
contents for the Homeland Security Act of 2002 (Public Law
107-296) is amended by striking the items relating to
subtitle G of title VIII, and sections 871, 890, 1707, 1714,
1715, 1716, and 1717.
(b) Advisory Groups.--Section 232(b) of the Homeland
Security Act of 2002 (Public Law 107-296) is amended by
striking paragraph (2) and inserting the following:
``(2) To establish and maintain advisory groups to assess
the law enforcement technology needs of Federal, State, and
local law enforcement agencies.''.
(c) Waivers Relating to Contracts With Corporate
Expatriates.--Section 835 of the Homeland Security Act of
2002 (Public Law 107-296) is amended by striking subsection
(d) and inserting the following:
``(d) Waivers.--The Secretary shall waive subsection (a)
with respect to any specific contract if the Secretary
determines that the waiver is required in the interest of
homeland security.''.
(d) Effective Date.--The amendments made by this Act shall
take effect as though enacted as part of the Homeland
Security Act of 2002 (Public Law 107-296).
______

By Mr. FEINGOLD:
S. 42. A bill to amend the Agricultural Adjustment Act to prohibit
the Secretary of Agriculture from basing minimum prices for Class I
milk on the distance or transportation costs from any location that is
not within a marketing area, except under certain circumstances, and
for other purposes; to the Committee on Agriculture, Nutrition, and
Forestry.
Mr. FEINGOLD. Mr. President, I rise today to offer a measure which
could serve as a first step towards eliminating the inequities borne by
the dairy farmers of Wisconsin and the upper Midwest under the Federal
Milk Marketing Order system.
The Federal Milk Marketing Order system, created nearly 60 years ago,
establishes minimum prices for milk paid to producers throughout
various marketing areas in the U.S. For sixty years, this system has
discriminated against producers in the Upper Midwest by awarding a
higher price to dairy farmers in proportion to the distance of their
farms from Eau Claire, Wisconsin.
My legislation is very simple. It identifies the single most harmful
and unjust feature of the current system, and corrects it. Under the
current archaic law, the price for fluid milk increases depending on
the distance from Eau Claire, Wisconsin, even though most local milk
markets do not receive any milk from Wisconsin.
The bill I introduce today would prohibit the Secretary of
Agriculture from using distance or transportation costs from any
location as the basis for pricing milk, unless significant quantities
of milk are actually transported from that location into the recipient
market. The Secretary will have to comply with the statutory
requirement that supply and demand factors be considered as specified
in the Agricultural Marketing Agreement Act when setting milk prices in
marketing orders. The fact remains that single-basing-point pricing
simply cannot be justified based on supply and demand for milk both in
local and national markets.
This bill also requires the Secretary to report to Congress on
specifically which criteria are used to set milk prices. Finally, the
Secretary will have to certify to Congress that the criteria used by
the Department do not in any way attempt to circumvent the prohibition
on using distance or transportation cost as basis for pricing milk.
This one change is so crucial to Upper Midwest producers, because the
current system has penalized them for many years. The current system
provides disparate profits for producers in other parts of the country
and creating artificial economic incentives for milk production. As a
result, Wisconsin producers have seen national surpluses rise, and milk
prices fall. Rather than providing adequate supplies of fluid milk, the
prices have led to excess production.
The prices have provided production incentives beyond those needed to
ensure a local supply of fluid milk in some regions, leading to an
increase in manufactured products in those marketing orders. Those
manufactured products directly compete with Wisconsin's processed
products, eroding our markets and driving national prices down.
The perverse nature of this system is further illustrated by the fact
that since 1995 some regions of the U.S., notably the Central states
and the Southwest, are producing so much milk that they are actually
shipping fluid milk north to the Upper Midwest. The high fluid milk
prices have generated so much excess production, that these markets
distant from Eau Claire are now encroaching upon not only our
manufactured markets, but also our markets for fluid milk, further
eroding prices in Wisconsin.
The market-distorting effects of the fluid price differentials in
Federal orders are manifest in the Congressional Budget Office estimate
that eliminating the orders would save $669 million over five years.
Government outlays would fall, CBO concludes, because production would
fall in response to lower milk prices and there would be fewer
government purchases of surplus milk. The regions that would gain and
lose in this scenario illustrate the discrimination inherent to the
current system. Economic analyses show that farm revenues in a market
undisturbed by Federal orders would actually increase in the Upper
Midwest and fall in most other milk-producing regions.
While this system has been around since 1937, the practice of basing
fluid milk price differentials on the distance from Eau Claire was
formalized in the 1960's, when the Upper Midwest arguably was the
primary reserve for additional supplies of milk. The idea was to
encourage local supplies of fluid milk in areas of the country that did
not traditionally produce enough fluid milk to meet their own needs.
That is no longer the case. The Upper Midwest is not the primary
source of reserve supplies of milk. Unfortunately, the prices didn't
adjust with changing economic conditions, most notably the shift of the
dairy industry away from the Upper Midwest and towards the Southwest,
and specifically California, which now leads the Nation in milk
production.
The result of this antiquated system has been a decline in the Upper
Midwest dairy industry, not because it can't produce a product that can
compete in the market place, but because the system discriminates
against it. Today, Wisconsin loses dairy farmers at a rate of more than
5 per day. The Upper Midwest, with the lowest fluid milk prices, is
shrinking as a dairy region despite the dairy-friendly climate

[[Page S48]]

of the region. Other regions with higher fluid milk prices are growing
rapidly.
In an free market with a level playing field, these shifts in
production might be fair. But in a market where the government is
setting the prices and providing that artificial advantage to regions
outside the Upper Midwest, the current system is unconscionable.
I urge my colleagues to do the right thing and bring reform to this
out dated system and work to eliminate the inequities in the current
milk marketing order pricing system.
______

By Mr. FEINGOLD:
S. 43. A bill to allow modified bloc voting by cooperative
associations of milk producers in connection with a referendum on
Federal Milk Marketing Order reform; to the Committee on Agriculture,
Nutrition and Forestry.
Mr. FEINGOLD. Mr. President, I rise to re-introduce a measure that
will begin to restore democracy for dairy farmers throughout the
Nation.
When dairy farmers across the country voted on a referendum four
years ago, perhaps the most significant change in dairy policy in sixty
years, they didn't actually get to vote. Instead, their dairy marketing
cooperatives cast their votes for them.
This procedure is called ``bloc voting'' and it is used all the time.
Basically, a Cooperative's Board of Directors decides that, in the
interest of time, bloc voting will be implemented for that particular
vote. It may serve the interest of time, but not always in the interest
of their producer owner-members.
I do think that bloc voting can be a useful tool in some
circumstances, but I have serious concerns about its use in every
circumstance. Farmers in Wisconsin and in other states tell me that
they do not agree with their Cooperative's view on every vote. Yet,
they have no way to preserve their right to make their single vote
count.
After speaking to farmers and officials at USDA, I have learned that
if a Cooperative bloc votes, individual members simply have no
opportunity to voice opinions separately. That seems unfair when you
consider what significant issues may be at stake. Coops and their
members do not always have identical interests. We shouldn't ask
farmers to ignore that fact.
The Democracy for Dairy Producers Act of 2003 is simple and fair. It
provides that a cooperative cannot deny any of its members a ballot if
one or two or ten or all of the members chose to vote on their own.
This will in no way slow down the process at USDA; implementation of
any rule or regulation would proceed on schedule. Also, I do not expect
that this would often change the final outcome of any given vote. Coops
could still cast votes for their members who do not exercise their
right to vote individually. And to the extent that coops represent
farmers interest, farmers are likely to vote along with the coops, but
whether they join the coops or not, farmers deserve the right to vote
according to their own views.
I urge my colleagues to return the democratic process to America's
farmers, by supporting the Democracy for Dairy Producers Act.
______

By Mr. FEINGOLD (for himself and Ms. Cantwell):
S. 44. A bill to amend the Internal Revenue Code of 1986 to repeal
the percentage depletion allowance for certain hardrock mines, and for
other purposes; to the Committee on Finance.
Mr. FEINGOLD. Mr. President, today I am reintroducing legislation to
eliminate from the Federal Tax Code percentage depletion allowances for
hardrock minerals mined on Federal public lands. I am pleased that the
Senator from Washington, Ms. Cantwell, is joining me as an original
cosponsor.
President Clinton proposed the elimination of the percentage
depletion allowance on public lands in his FY 2001 budget. President
Clinton's FY 2001 budget estimated that, under this legislation, income
to the Federal treasury from the elimination of percentage depletion
allowances for hardrock mining on public lands would total $487 million
over 5 years and $1.20 billion over 10 years. The Joint Committee on
Taxation estimated that it would save $410 million over 5 years and
$823 million over 10 years. These savings are calculated as the excess
amount of Federal revenues above what would be collected if depletion
allowances were limited to sunk costs in capital investments.
Percentage depletion allowances are contained in the tax code for
extracted fuel, minerals, metal and other mined commodities. These
allowances have a combined value, according to estimates by the Joint
Committee on Taxation, of $4.8 billion.
These percentage depletion allowances were initiated by the
Corporation Excise Act of 1909. That's right, these allowances were
initiated nearly one hundred years ago. Provisions for a depletion
allowance based on the value of the mine were made under a 1912
Treasury Department regulation, but difficulty in applying this
accounting principle to mineral production led to the initial
codification of the mineral depletion allowance in the Tariff Act of
1913. The Revenue Act of 1926 established percentage depletion much in
its present form for oil and gas. The percentage depletion allowance
was then extended to metal mines, coal, and other hardrock minerals by
the Revenue Act of 1932, and has been adjusted several times since.
Percentage depletion allowances were historically placed in the Tax
Code to reduce the effective tax rates in the mineral and extraction
industries far below tax rates on other industries, providing
incentives to increase investment, exploration and output. Percentage
depletion also makes it possible, however, to recover many times the
amount of the original investment.
There are two methods of calculating a deduction to allow a firm to
recover the costs of its capital investment: cost depletion, and
percentage depletion. Cost depletion allows for the recovery of the
actual capital investment, the costs of discovering, purchasing, and
developing a mineral reserve, over the period during which the reserve
produces income. Using cost depletion, a company would deduct a portion
of its original capital investment minus any previous deductions, in an
amount that is equal to the fraction of the remaining recoverable
reserves. Under this method, the total deductions cannot exceed the
original capital investment.
Under percentage depletion, however, the deduction for recovery of a
company's investment is a fixed percentage of ``gross income,'' namely,
sales revenue--from the sale of the mineral. Under this method, total
deductions typically exceed, let me be clear on that point, exceed the
capital that the company invested.
The rates for percentage depletion are quite significant. Section 613
of the U.S. Code contains depletion allowances for more than 70 metals
and minerals, at rates ranging from 10 to 22 percent.
In addition to repealing the percentage depletion allowances for
minerals mined on public lands, my bill would also create a new fund,
called the Abandoned Mine Reclamation Fund. One fourth of the revenue
raised by the bill, or approximately $120 million dollars, would be
deposited into an interest bearing fund in the Treasury to be used to
clean up abandoned hardrock mines in states that are subject to the
1872 Mining Law. The Mineral Policy Center estimates that there are
557,650 abandoned hardrock mine sites nationwide and the cost of
clearing them up will range from $32.7 billion to $71.5 billion.
There are currently no comprehensive Federal or State programs to
address the need to clean up old mine sites. Reclaiming these sites
requires the enactment of a program with explicit authority to clean up
abandoned mine sites and the resources to do it. My legislation is a
first step toward providing the needed authority and resources.
In today's budget climate we are faced with the question of who
should bear the costs of exploration, development, and production of
natural resources: all taxpayers, or the users and producers of the
resource? For more than a century, the mining industry has been paying
next to nothing for the privilege of extracting minerals from public
lands and then abandoning its mines. Now those mines are adding to the
nation's environmental and financial burdens. We face serious budget
choices this fiscal year, yet these subsidies remain persistent tax
expenditures that raise the deficit for all citizens or shift a greater
tax burden to

[[Page S49]]

other taxpayers to compensate for the special tax breaks provided to
the mining industry.
The measure I am introducing is fairly straightforward. It eliminates
the percentage depletion allowance for hardrock minerals mined on
public lands while continuing to allow companies to recover reasonable
cost depletion.
Though at one time, there may have been an appropriate role for a
government-driven incentive for enhanced mineral production, there is
now sufficient reason to adopt a more reasonable depletion allowance
that is consistent with depreciation rates given to other businesses.
The time has come for the Federal Government to get out of the
business of subsidizing one business over another. We can no longer
afford its costs in dollars or its cost to the health of our citizens.
This legislation is one step toward the goal of ending these corporate
welfare subsidies.
I ask unanimous consent the text of the legislation be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 44

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Elimination of Double
Subsidies for the Hardrock Mining Industry Act of 2003''.

SEC. 2. REPEAL OF PERCENTAGE DEPLETION ALLOWANCE FOR CERTAIN
HARDROCK MINES.

(a) In General.--Section 613(a) of the Internal Revenue
Code of 1986 (relating to percentage depletion) is amended by
inserting ``(other than hardrock mines located on lands
subject to the general mining laws or on land patented under
the general mining laws)'' after ``In the case of the
mines''.
(b) General Mining Laws Defined.--Section 613 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``(f) General Mining Laws.--For purposes of subsection (a),
the term ``general mining laws'' means those Acts which
generally comprise chapters 2, 12A, and 16, and sections 161
and 162 of title 30 of the United States Code.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2002.

SEC. 3. ABANDONED MINE RECLAMATION FUND.

(a) In General.--Subchapter A of chapter 98 of the Internal
Revenue Code of 1986 (relating to establishment of trust
funds) is amended by adding at the end the following:

``SEC. 9511. ABANDONED MINE RECLAMATION FUND.

``(a) Creation of Trust Fund.--There is established in the
Treasury of the United States a trust fund to be known as the
`Abandoned Mine Reclamation Trust Fund' (in this section
referred to as `Trust Fund'), consisting of such amounts as
may be appropriated or credited to the Trust Fund as provided
in this section or section 9602(b).
``(b) Transfers to Trust Fund.--There are hereby
appropriated to the Trust Fund amounts equivalent to 25
percent of the additional revenues received in the Treasury
by reason of the amendments made by section 2 of the
Elimination of Double Subsidies for the Hardrock Mining
Industry Act of 2003.
``(c) Expenditures From Trust Fund.--
``(1) In general.--Amounts in the Trust Fund shall be
available, as provided in appropriation Acts, to the
Secretary of the Interior for--
``(ii) for which the Secretary of the Interior makes a
determination that there is no continuing reclamation
responsibility under State or Federal law, and
``(iii) for which it can be established to the satisfaction
of the Secretary of the Interior that such lands or resources
do not contain minerals which could economically be extracted
through remining of such lands or resources.
``(B) Certain sites and areas excluded.--The lands and
water resources described in this paragraph shall not include
sites and areas which are designated for remedial action
under the Uranium Mill Tailings Radiation Control Act of 1978
(42 U.S.C. 7901 et seq.) or which are listed for remedial
action under the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. 9601 et
seq.).
``(3) General mining laws.--For purposes of paragraph (2),
the term `general mining laws' means those Acts which
generally comprise chapters 2, 12A, and 16, and sections 161
and 162 of title 30 of the United States Code.''.
(b) Conforming Amendment.--The table of sections for
subchapter A of chapter 98 of the Internal Revenue Code of
1986 is amended by adding at the end the following:

``Sec. 9511. Abandoned Mine Reclamation Trust Fund.''.
______

By Mr. FEINGOLD (for himself and Ms. Collins):
S. 45. A bill to make changes to the Office for State and Local
Government Coordination, Department of Homeland Security; to the
Committee on Governmental Affairs.
Mr. FEINGOLD. Mr. President I rise today with my colleague from Maine
to introduce legislation to help first responders do what they do so
well, protect our communities in an emergency.
The Department of Homeland Security will create a massive shift in
the Federal Government. Nobody will feel the impact of this shift more
than the brave men and women who work in law enforcement, as
firefighters, as rescue workers, as emergency medical service
providers, and in capacities as first responders.
We must make sure that these first responders have the resources that
they need.
While I commend the Administration for raising the funding dedicated
to first responders in the President's budget, I am concerned that new
layers of bureaucracy and reorganization could reduce these funding
levels, or just as harmful, put up barriers to first responders
actually receiving these funds.
The Federal agencies in the proposed Department of Homeland Security
must listen to the priorities of our communities. After all, the needs
of first responders vary between regions, as well as between rural and
urban communities. In Wisconsin, I have heard needs ranging from
training to equipment to more emergency personnel in the field, just to
name a few.
My legislation would promote effective coordination among Federal
agencies under the Department of Homeland Security and ensure that our
first responders, our firefighters, law enforcement, rescue, and EMS
providers, can help Federal agencies and the new Department of Homeland
Security to improve existing programs and future initiatives.
It would first establish a Federal Liaison on Homeland Security in
each state and coordinate between the Department of Homeland Security
and state and local first responders.
This office would serve not only as an avenue to exchange ideas, but
also as a resource to ensure that the funding and programs are
effective.
For example, my hope is that the Homeland Security Department will
make programs such as the Fire Act a high priority. The Fire Act
provides grants directly to fire departments across our nation for
training and equipment needs. I recently visited one excellent example
of this program in West Allis, Wisconsin, where the Department received
a grant in 2001 to implement a wellness and fitness program for their
firefighters. I am told that it is one of the first departments in the
State to meet the goals of this program, and I commend the department
for its efforts.
My legislation would also direct the agencies within the Department
of Homeland Security to coordinate and prioritize their activities that
support first responders, and at the same time, ensure effective use of
taxpayer dollars.
As part of this coordination, the First Responders Support Act
establishes a new advisory committee of those in the first responder
community to identify and streamline effective programs.
Last year, both the original Senate and House homeland security bills
lacked the provisions needed to ensure that the new Department of
Homeland Security communicates and coordinates effectively with first
responders.
During the Senate Governmental Affairs Committee mark-up of the
Homeland Security bill, the Committee added our First Responders
Support Act to the legislation. They did so knowing that we would have
to reconcile the overlap between our legislation and the language in
the Chairman's mark creating an office for state and local government
coordination. Our amendment, which was approved by the full Senate, did
just that. Unfortunately, our proposal was dropped from the final bill
during backroom negotiations.
Because of this omission, I promised to make enacting this
legislation one of our top priorities this Congress. That's why we are
re-introducing this legislation today.
We must be aggressive in seeking the advice of our first responders,
and helping them get the resources that they need to provide effective
services. They are on the front lines, and deserve our strong support.

[[Page S50]]

In almost any disaster, the local first responders and health care
providers play an indispensable role. If the Department of Homeland
Security is to be effective, we need to ensure that the resources are
delivered to the front line personnel in an effective and coordinated
manner. I urge my colleagues to join me in cosponsoring this proposal
and support our first responders.
______

By Mr. FEINGOLD (for himself, Mr. Kohl, and Mr. Wyden):
S. 47. A bill to terminate operation of the Extremely Low Frequency
Communication System of the Navy; to the Committee on Armed Services.
Mr. FEINGOLD. Mr. President, today I am reintroducing legislation
that would terminate the operation of the Navy's Extremely Low
Frequency communications system, Project ELF, which is located in Clam
Lake, WI, and Republic, MI.
I would like to thank the senior Senator from Wisconsin, Mr. Kohl,
and the Senator from Oregon, Mr. Wyden, for cosponsoring this bill.
Project ELF is a Cold War relic that was designed to send short one-
way messages to ballistic and attack submarines that are submerged in
deep waters. The bill that I am introducing today would terminate
operations at Project ELF, while maintaining the infrastructure in
Wisconsin and Michigan in the event that a resumption in operations
becomes necessary.
Project ELF is ineffective and unnecessary in the post-Cold War era.
This antiquated system does not facilitate the rapid mobilization that
our military says it needs to respond to current threats from weapons
of mass destruction. The horrific attacks of September 11, 2001,
emphasized the need for rapid, reliable two-way communications. Since
ELF cannot transmit detailed messages, it serves as an expensive
``beeper'' system to tell submarines to come to the surface to receive
messages from other sources, and the subs cannot send a return message
to ELF in the event of an emergency. It takes ELF four minutes to send
a three-letter message to a deeply submerged submarine.
With the end of the Cold War, Project ELF becomes harder and harder
to justify. Our submarines no longer need to take that extra precaution
against Soviet nuclear forces. They can now surface on a regular basis
with less danger of detection or attack. They can also receive more
complicated messages through very low frequency, VLF, radio waves or
lengthier messages through satellite systems. Taxpayers should not be
asked to continue to pay for what amounts to a beeper system that tells
our submarines to come to the surface to receive orders from another,
more sophisticated source.
Further, continued operation of this facility is opposed by most
residents in my state. The members of the Wisconsin delegation have
fought hard for years to close down Project ELF. I have introduced
legislation during each Congress since taking office in 1993 to
terminate it, and I have recommended it for closure to the Base
Realignment and Closure Commission.
Project ELF has had a turbulent history. Since the idea for ELF was
first proposed in 1958, the project has been changed or canceled
several times. Residents of Wisconsin have opposed ELF since its
inception, but for years we were told that the national security
considerations of the Cold War outweighed our concerns about this
installation in our State. Ironically, this system became fully
operational in 1989, the same year the tide of democracy began to sweep
across Eastern Europe and the Soviet Union. Now, fourteen years later,
the hammer and sickle has fallen and the Russian submarine fleet is in
disarray. But Project ELF still remains as a constant, expensive
reminder to the people of my State that many at the Department of
Defense remain focused on the past.
There also continue to be a number of public health and environmental
concerns associated with Project ELF. For almost two decades, we have
received inconclusive data on this project's effects on Wisconsin and
Michigan residents. In 1984, a U.S. District Court ordered that ELF be
shut down because the Navy paid inadequate attention to the system's
possible health effects and violated the National Environmental Policy
Act. Interestingly, that decision was overturned because U.S. national
security, at the time, prevailed over public health and environmental
concerns.
Numerous medical studies point to a possible link between exposure to
extremely low frequency electromagnetic fields and a variety of human
health effects and abnormalities in both animal and plant species.
In 1999, after six years of research, the National Institute of
Environmental Health Sciences released a report that did not prove
conclusively a link between electromagnetic fields and cancer, but the
report did not disprove it, either. Serious questions remain, and many
of my constituents are rightly concerned about this issue.
In addition, I have heard from a number of dairy farmers who are
convinced that the stray voltage associated with ELF transmitters has
demonstrably reduced milk production. As we continue our efforts to
return to a sustainable balanced federal budget, and as the Department
of Defense continues to struggle to address readiness and other
concerns, it is clear that outdated programs such as Project ELF should
be closed down.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 47

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

SECTION 1. TERMINATION OF OPERATION OF EXTREMELY LOW
FREQUENCY COMMUNICATION SYSTEM.

(a) Termination Required.--The Secretary of the Navy shall
terminate the operation of the Extremely Low Frequency
Communication System of the Navy.
(b) Maintenance of Infrastructure.--The Secretary shall
maintain the infrastructure necessary for resuming operation
of the Extremely Low Frequency Communication System.
______

By Mr. FEINGOLD:
S. 48. A bill to repeal the provisions of law that provides automatic
pay adjustments for Members of Congress; to the Committee on
Governmental Affairs
Mr. FEINGOLD. Mr. President, I am pleased to reintroduce legislation
that would put an end to automatic cost-of-living adjustments for
Congressional pay.
As my Colleagues are aware, it is an unusual thing to have the power
to raise our own pay. Few people have that ability. Most of our
constituents do not have that power. And that this power is so unusual
is good reason for the Congress to exercise that power openly, and to
exercise it subject to regular procedures that include debate,
amendment, and a vote on the record.
Regrettably, current law permits Members to avoid such an open
procedure. All that is necessary for Congress to get a pay raise is
that nothing be done to stop it. Unless Congress affirmatively acts,
the annual pay raise takes effect.
This stealth pay raise technique began with a change Congress enacted
in the Ethics Reform Act of 1989. In section 704 of that Act, Members
of Congress voted to make themselves entitled to an annual raise equal
to half a percentage point less than the employment cost index, one
measure of inflation.
On occasion, Congress has voted to deny itself the raise.
Traditionally, this has been done on the Treasury-Postal appropriations
bill. But that vehicle is not always made available to those who want a
public debate and vote on the matter. In one instance, the Treasury-
Postal bill was slipped into the conference report on the Legislative
Branch appropriations bill, and thus completely shielded from
amendment. And during 2002, the Senate did not consider the Treasury-
Postal bill at all.
This makes getting a vote on the annual congressional pay raise a
haphazard affair at best. And it should not be that way. No one should
have to force a debate and public vote on the pay raise. On the
contrary, Congress should have to act if it decides to award itself a
hike in pay. This process of pay raises without accountability must
end.
The question of how and whether Members of Congress can raise their
own pay was one that our Founders considered from the beginning of our
Nation. In August of 1789, as part of the package of 12 amendments
advocated

[[Page S51]]

by James Madison that included what has become our Bill of Rights, the
House of Representatives passed an amendment to the Constitution
providing that Congress could not raise its pay without an intervening
election. Almost 214 years ago, on September 9, 1789, the Senate passed
that amendment. In late September of 1789, Congress submitted the
amendments to the States.
Although the amendment on pay raises languished for two centuries, in
the 1980s, a campaign began to ratify it. While I was a member of the
Wisconsin State Senate, I was proud to help ratify the amendment. Its
approval by the Michigan legislature on May 7, 1992, gave it the needed
approval by three-fourths of the States.
The 27th Amendment to the Constitution now states: `No law, varying
the compensation for the services of the senators and representatives,
shall take effect, until an election of representatives shall have
intervened.''
I try to honor that limitation in my own practices. In my own case,
throughout my 6-year term, I accept only the rate of pay that Senators
receive on the date on which I was sworn in as a Senator. And I return
to the Treasury any additional income Senators get, whether from a
cost-of-living adjustment or a pay raise we vote for ourselves. I don't
take a raise until my bosses, the people of Wisconsin, give me one at
the ballot box. That is the spirit of the 27th Amendment. The stealth
pay raises like the one that Congress allowed last year, at a minimum,
certainly violate the spirit of that amendment.
This practice must end. To address it, I am reintroducing this bill
to end the automatic cost-of-living adjustment for Congressional pay.
Senators and Congressmen should have to vote up-or-down to raise
Congressional pay. My bill would simply require us to vote in the open.
We owe our constituents no less.
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. 48

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

SECTION 1. ELIMINATION OF AUTOMATIC PAY ADJUSTMENTS FOR
MEMBERS OF CONGRESS.

(a) In General.--Paragraph (2) of section 601(a) of the
Legislative Reorganization Act of 1946 (2 U.S.C. 31) is
repealed.
(b) Technical and Conforming Amendments.--Section 601(a)(1)
of such Act is amended--
(1) by striking ``(a)(1)'' and inserting ``(a)'';
(2) by redesignating subparagraphs (A), (B), and (C) as
paragraphs (1), (2), and (3), respectively; and
(3) by striking ``as adjusted by paragraph (2) of this
subsection'' and inserting ``adjusted as provided by law''.
(c) Effective Date.--This section shall take effect on
February 1, 2005.
______

By Mr. FEINGOLD:
S. 49. A bill to reduce the deficit of the United States; to the
Committee on Energy and Natural Resources.
Mr. FEINGOLD. Mr. President, today I am introducing a measure aimed
at curbing wasteful spending. In the face of our return to Federal
deficits, we must prioritize and eliminate programs that can no longer
be sustained with limited Federal dollars, or where a more cost-
effective means of fulfilling those functions can be substituted. The
measure that I introduce today eliminates or modifies three Federal
programs: it establishes a means test for large agribusinesses
receiving subsidized water from the Bureau of Reclamation, it
terminates the Uniformed Services University of the Health Sciences,
USUHS, a medical school run by the Department of Defense, and it ends
the future production of submarine launched D5 missiles, commonly known
as the Trident II missiles. Eliminating or reforming these three
programs would save the taxpayers in excess of $8 billion over ten
years.
The irrigation means test provision is drawn from legislation that I
that have sponsored in previous Congresses to reduce the amount of
Federal irrigation subsidies received by large agribusiness interests.
I believe that reforming Federal water pricing policy by reducing
subsidies is important as a means to achieve our broader objectives of
achieving a truly balanced budget. This legislation is also needed to
curb fundamental abuses of reclamation law that cost the taxpayer
millions of dollars every year.
In 1901, President Theodore Roosevelt proposed legislation, which
came to be known as the Reclamation Act of 1902, to encourage
development of family farms throughout the western United States. The
idea was to provide needed water for areas that were otherwise dry and
give small farms, those no larger than 160 acres, a chance, with a
helping hand from the Federal Government, to establish themselves.
According to a 1996 General Accounting Office report, since the passage
of the Reclamation Act, the Federal Government has spent $21.8 billion
to construct 133 water projects in the west which provide water for
irrigation. Agribusinesses, and other project beneficiaries, are
required under the law to repay to the Federal Government their
allocated share of the costs of constructing these projects.
As a result of the subsidized financing provided by the Federal
Government, however, some of the beneficiaries of Federal water
projects repay considerably less than their full share of these costs.
According to the 1996 GAO report, agribusinesses generally receive the
largest amount of Federal financial assistance. Since the initiation of
the irrigation program in 1902, construction costs associated with
irrigation have been repaid without interest. The GAO further found, in
reviewing the Bureau of Reclamation's financial reports, that $16.9
billion, or 78 percent, of the $21.8 billion of Federal investment in
water projects is considered to be reimbursable. Of the reimbursable
costs, the largest share, $7.1 billion, is allocated to irrigation
interests. GAO also found that the Bureau of Reclamation will likely
shift $3.4 billion of the debt owed by agribusinesses to other users of
the water projects for repayment.
There are several reasons why large agribusinesses continue to
receive such significant subsidies. Under the Reclamation Reform Act of
1982, Congress acted to expand the size of the farms that could receive
subsidized water from 160 acres to 960 acres. The RRA of 1982 expressly
prohibits farms that exceed 960 acres in size from receiving federally-
subsidized water. These restrictions were added to the Reclamation law
to close loopholes through which Federal subsidies were flowing to
large agribusinesses rather than the small family farmers that
Reclamation projects were designed to serve. Agribusinesses were
expected to pay full cost for all water received on land in excess of
their 960 acre entitlement.
Despite the express mandate of Congress, regulations promulgated
under the Reclamation Reform Act of 1982 have failed to keep big
agricultural water users from receiving Federal subsidies. The General
Accounting Office and the Inspector General of the Department of the
Interior continue to find that the acreage limits established in law
are circumvented through the creation of arrangements such as farming
trusts. These trusts, which in total acreage well exceed the 960 acre
limit, are comprised of smaller units that are not subject to the
reclamation acreage cap. These smaller units are farmed under a single
management agreement often through a combination of leasing and
ownership.
The Department of the Interior has acknowledged that these trusts do
exist. Interior published a final rulemaking in 1998 to require farm
operators who provide services to more than 960 nonexempt acres
westwide, held by a single trust or legal entity or any combination of
trusts and legal entities to submit RRA forms to the district(s) where
such land is located. Water districts are now required to provide
specific information about farm operators to Interior annually. This
information is an important step toward enforcing the legislation that
I am reintroducing today.
My legislation combines various elements of proposals introduced by
other members of Congress to close loopholes in the 1982 legislation
and to impose a $500,000 means-test. This new approach limits the
amount of subsidized irrigation water delivered to any operation in
excess of the 960 acre limit which claimed $500,000 or more in gross
income, as reported on its most recent IRS tax form. If the $500,000
threshold were exceeded, an income ratio would

[[Page S52]]

be used to determine how much of the water should be delivered to the
user at the full-cost rate, and how much at the below-cost rate. For
example, if a 961 acre operation earned $1 million dollars, a ratio of
$500,000, the means-test value, divided by its gross income would
determine the full cost rate. Thus the water user would pay the full
cost rate on half of their acreage and the below-cost rate on the
remaining half.
This means-testing proposal was featured in the 2000 Green Scissors
report. This report is compiled annually by Friends of the Earth and
Taxpayers for Common Sense and supported by a number of environmental,
consumer and taxpayer groups. The premise of the report is that there
are a number of subsidies and projects that could be cut to both reduce
the deficit and benefit the environment. The Green Scissors
recommendation on means-testing water subsidies indicates that if a
test is successful in reducing subsidy payments to the highest grossing
10 percent of farms, then the Federal Government would recover between
$440 million and $1.1 billion per year, or at least $2.2 billion over
five years.
When countless Federal programs are subjected to various types of
means-tests to limit benefits to those who truly need assistance, it
makes little sense to continue to allow large business interests to dip
into a program intended to help small entities struggling to survive.
Taxpayers have legitimate concerns when they learn that their hard-
earned tax dollars are being expended to assist large corporate
interests in select regions of the country, particularly in tight
budgetary times.
The second element of my bill will help our Armed Services obtain
physician services at a more reasonable cost by terminating the
Uniformed Services University of the Health Sciences, USUHS. The
measure is one I proposed when I ran for the U.S. Senate, and was part
of a larger, 82-point plan to reduce the Federal budget deficit. The
most recent estimates of the Congressional Budget Office, CBO, project
that terminating the school would save $273 million over the next five
years, and when completely phased-out, would generate $450 million in
savings over five years.
USUHS was created in 1972 to meet an expected shortage of military
medical personnel. Today, however, USUHS accounts for only a small
fraction of the military's new physicians, less than 12 percent in
1994, according to CBO. This contrasts dramatically with the military's
scholarship program, which provided over 80 percent of the military's
new physicians in that year.
What is even more troubling is that USUHS is also the single most
costly source of new physicians for the military. CBO reports that
based on figures from 1995, each USUHS trained physician costs the
military $615,000. By comparison, the scholarship program cost about
$125,000 per doctor, with other sources providing new physicians at a
cost of $60,000. As CBO has noted, even adjusting for the lengthier
service commitment required of USUHS trained physicians, the cost of
training them is still higher than that of training physicians from
other sources, an assessment shared by the Pentagon itself. Indeed,
CBO's estimate of the savings generated by this measure also includes
the cost of obtaining physicians from other sources.
The House of Representatives has voted to terminate this program on
several occasions, joining others, ranging from the Grace Commission to
the CBO, in raising the question of whether this medical school, which
graduated its first class in 1980, should be closed because it is so
much more costly than alternative sources of physicians for the
military.
The real issue we must address is whether USUHS is essential to the
needs of today's military structure, or if we can do without this
costly program. The proponents of USUHS frequently cite the higher
retention rates of USUHS graduates over physicians obtained from other
sources as a justification for continuation of this program, but while
a greater percentage of USUHS trained physicians may remain in the
military longer than those from other sources, the Pentagon indicates
that the alternative sources already provide an appropriate mix of
retention rates. Testimony by the Department of Defense before the
Subcommittee on Force Requirements and Personnel noted that the
military's scholarship program meets the retention needs of the
services.
And while USUHS provides only a small fraction of the military's new
physicians, relying primarily on these other sources has not
compromised the ability of military physicians to meet the needs of the
Pentagon. According to the Office of Management and Budget, of the
approximately 2,000 physicians serving in Desert Storm, only 103, about
5 percent, were USUHS trained.
USUHS has some dedicated supporters in the U.S. Senate, and I realize
that there are legitimate arguments that those supporters have made in
defense of this institution. The problem, however, is that the Federal
Government cannot afford to continue every program that provides some
useful function, especially when such services can be procured
elsewhere.
The final provision of my legislation terminates another wasteful
defense program, the continued production of new Trident II submarine-
launched ballistic missiles. Trident submarines, and the deadly
submarine-launched ballistic missiles they carry, were designed
specifically to attack targets inside the Soviet Union from waters off
the continental United States.
Let me say at the outset that this provision would in no way prevent
the Navy from maintaining the current arsenal of Trident II missiles.
Nor would it affect those Trident II missiles that are currently in
production.
The Navy currently has ten Trident II submarines, each of which
carries 24 Trident II, D5, missiles. Each of these missiles contains
eight independently targetable nuclear warheads, for a total of 192
warheads per submarine. Each warhead packs between 300 to 450 kilotons
of explosive power.
By way of comparison, the first atomic bomb that the United States
dropped on Hiroshima generated 15 kilotons of force. Let's do the math
for just one fully-equipped Trident II submarine. Each warhead can
generate up to 450 kilotons of force. Each missile has eight warheads,
and each submarine has 24 missiles. That equals 86.4 megatons of force
per submarine. That means that each Trident II submarine carries the
power to deliver devastation which is the equivalent of 5,760
Hiroshimas.
And that is just one fully equipped submarine. As I noted earlier,
the Navy currently has ten such submarines.
Through fiscal year 2003, the Navy will have been authorized to
purchase 408 Trident II missiles for these submarines. Even taking into
account the 86 Trident II missiles that have been expended in testing
through calendar year 2002, the Navy will still have 322 missiles in
stock once those authorized to be purchased during FY2003 are
completed.
The Navy needs 240 missiles to fully equip ten Trident II submarines
with 24 missiles each. That leaves 82 ``extra'' missiles in the Navy's
inventory. And the Navy still plans to buy at least 132 more missiles
over the next two years, for a total purchase of 540 missiles. My bill
would terminate production of these missiles after the currently
authorized 408, saving taxpayers $6.6 billion over the next ten years.
The tragic events of September 11, 2001, and the recent resumption of
nuclear activities by North Korea, serve as chilling reminders that
there is still a potential threat from rogue states, and from
independent operators such as al-Qaeda, who seek to acquire ballistic
missiles and other weapons of mass destruction. I also recognize that
our submarine fleet and our arsenal of strategic nuclear weapons still
have an important role to play in warding off these threats. Their
role, however, has diminished dramatically from what it was at the
height of the Cold War. Our missile procurement decisions should
reflect that change and should reflect the realities of the post-Cold
War world.
Our current ballistic missile capability is far superior to that of
any other county on the globe. And the capability of the Russian
military, the very force which these missiles were designed to counter,
is seriously degraded.
We should not be buying more Trident II missiles at a time when the
governments of the United States and Russia have signed the Moscow
Treaty, which calls for deep reductions in our nuclear forces. To spend
scarce resources on building more missiles now

[[Page S53]]

is short-sighted and could seriously undermine our efforts to negotiate
further arms reductions with Russia.
In conclusion, the time has come to rethink our Federal budget
priorities, and to redirect needed funds appropriately. Eliminating or
reforming these three programs will go a long way to doing just that,
and I urge Congress to act swiftly to save money for the taxpayers. I
ask unanimous consent that the text of this legislation be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 49

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 `Deficit Reduction Act of
2003'.

TITLE I--REFORMED BUREAU OF RECLAMATION WATER PRICING

SECTION 101. SHORT TITLE.

This Act may be cited as the `Irrigation Subsidy Reduction
Act of 2001'.

SEC. 102. FINDINGS.

Congress finds that--
(1) the Federal reclamation program has been in existence
for over 90 years, with an estimated taxpayer investment of
over $70,000,000,000;
(2) the program has had and continues to have an enormous
effect on the water resources and aquatic environments of the
western States;
(3) irrigation water made available from Federal water
projects in the West is a very valuable resource for which
there are increasing and competing demands;
(4) the justification for providing water at less than full
cost was to benefit and promote the development of small
family farms and exclude large corporate farms, but this
purpose has been frustrated over the years due to inadequate
implementation of subsidy and acreage limits;
(5) below-cost water prices tend to encourage excessive use
of scarce water supplies in the arid regions of the West, and
reasonable price increases to the wealthiest western farmers
would provide an economic incentive for greater water
conservation;
(6) the Federal Government has increasingly applied
eligibility tests based on income for Federal entitlement and
subsidy programs, measures that are consistent with the
historic approach of the reclamation program's acreage
limitations that seek to limit water subsidies to small
farms; and
(7) including a means test based on gross income in the
reclamation program will increase the effectiveness of
carrying out the family farm goals of the Federal reclamation
laws.

SEC. 103. AMENDMENTS.

(a) Definitions--Section 202 of the Reclamation Reform Act
of 1982 (43 U.S.C. 390bb) is amended--
(1) by redesignating paragraphs (7), (8), (9), (10), and
(11) as paragraphs (9), (10), (11), (12), and (13),
respectively;
(2) in paragraph (6), by striking `owned or operated under
a lease which' and inserting `that is owned, leased, or
operated by an individual or legal entity and that';
(3) by inserting after paragraph (6) the following:
`(7) Legal entity--The term `legal entity' includes a
corporation, association, partnership, trust, joint tenancy,
or tenancy in common, or any other entity that owns, leases,
or operates a farm operation for the benefit of more than 1
individual under any form of agreement or arrangement.
``(8) Operator--
``(A) In general--The term `operator'--
``(i) means an individual or legal entity that operates a
single farm operation on a parcel (or parcel) of land that is
owned or leased by another person (or persons) under any form
of agreement or arrangement (or agreements or arrangements);
and
``(ii) if the individual or legal entity--
``(I) is an employee of an individual or legal entity,
includes the individual or legal entity; or
``(II) is a legal entity that controls, is controlled by,
or is under common control with another legal entity,
includes each such other legal entity.
``(B) Operation of a farm operation--For the purposes of
subparagraph (A), an individual or legal entity shall be
considered to operate a farm operation if the individual or
legal entity is the person that performs the greatest
proportion of the decisionmaking for and supervision of the
agricultural enterprise on land served with irrigation
water.'; and
(4) by adding at the end the following:
``(14) Single farm operation--
``(A) In general--The term `single farm operation' means
the total acreage of land served with irrigation water for
which an individual or legal entity is the operator.
``(B) Rules for determining whether separate parcels are
operated as a single farm operation--
``(i) Equipment--and labor-sharing activities--The conduct
of equipment- and labor-sharing activities on separate
parcels of land by separate individuals or legal entities
shall not by itself serve as a basis for concluding that the
farming operations of the individuals or legal entities
constitute a single farm operation.
``(ii) Performance of certain services--The performance by
an individual or legal entity of an agricultural chemical
application, pruning, or harvesting for a farm operation on a
parcel of land shall not by itself serve as a basis for
concluding that the farm operation on that parcel of land is
part of a single farm operation operated by the individual or
entity on other parcels of land.'.
(b) Identification of Owners, Lessees, and Operators and of
Single Farm Operations--The Reclamation Reform Act of 1982
(43 U.S.C. 390aa et seq.) is amended by inserting after
section 201 the following:

``SEC. 201A. IDENTIFICATION OF OWNERS, LESSEES, AND OPERATORS
AND OF SINGLE FARM OPERATIONS.

``(a) In General--Subject to subsection (b), for each
parcel of land to which irrigation water is delivered or
proposed to be delivered, the Secretary shall identify a
single individual or legal entity as the owner, lessee, or
operator.
``(b) Shared Decisionmaking and Supervision--If the
Secretary determines that no single individual or legal
entity is the owner, lessee, or other individual that
performs the greatest proportion of decisionmaking for and
supervision of the agricultural enterprise on a parcel of
land--
``(1) all individuals and legal entities that own, lease,
or perform a proportion of decisionmaking and supervision
that is equal as among themselves but greater than the
proportion performed by any other individual or legal entity
shall be considered jointly to be the owner, lessee, or
operator; and
``(2) all parcels of land of which any such individual or
legal entity is the owner, lessee, or operator shall be
considered to be part of the single farm operation of the
owner, lessee, or operator identified under subsection (1);
(c) Pricing--Section 205 of the Reclamation Reform Act of
1982 (43 U.S.C. 390ee) is amended by adding at the end the
following:
``(d) Single Farm Operations Generating More Than $500,000
in Gross Farm Income.--
``(1) In general.--Notwithstanding subsections (a), (b),
and (c), in the case of--
``(A) a qualified recipient that reports gross farm income
from a single farm operation in excess of $500,000 for a
taxable year; or
``(B) a limited recipient that received irrigation water on
or before October 1, 1981, and that reports gross farm income
from a single farm operation in excess of $500,000 for a
taxable year;

irrigation water may be delivered to the single farm
operation of the qualified recipient or limited recipient at
less than full cost to a number of acres that does not exceed
the number of acres determined under paragraph (2).
``(2) Maximum number of acres to which irrigation water may
be delivered at less than full cost.--The number of acres
determined under this subparagraph is the number equal to the
number of acres of the single farm operation multiplied by a
fraction, the numerator of which is $500,000 and the
denominator of which is the amount of gross farm income
reported by the qualified recipient or limited recipient in
the most recent taxable year.
``(3) Inflation adjustment.--
``(A) In general.--The $500,000 amount under paragraphs (1)
and (2) for any taxable year beginning in a calendar year
after 2002 shall be equal to the product of--
``(i) $500,000, multiplied by
``(ii) the inflation adjustment factor for the taxable
year.
``(B) Inflation adjustment factor.--The term `inflation
adjustment factor' means, with respect to any calendar year,
a fraction the numerator of which is the GDP implicit price
deflator for the preceding calendar year and the denominator
of which is the GDP implicit price deflator for 2002. Not
later than April 1 of any calendar year, the Secretary shall
publish the inflation adjustment factor for the preceding
calendar year.
``(C) GDP implicit price deflator.--For purposes of
subparagraph (B), the term `GDP implicit price deflator'
means the first revision of the implicit price deflator for
the gross domestic product as computed and published by the
Secretary of Commerce.
``(D) Rounding.--If any increase determined under
subparagraph (A) is not a multiple of $100, the increase
shall be rounded to the next lowest multiple of $100.''.
(d) Certification of Compliance.--Section 206 of the
Reclamation Reform Act of 1982 (43 U.S.C. 390ff) is amended
to read as follows:

``SEC. 206. CERTIFICATION OF COMPLIANCE.

``(a) In General.--As a condition to the receipt of
irrigation water for land in a district that has a contract
described in section 203, each owner, lessee, or operator in
the district shall furnish the district, in a form prescribed
by the Secretary, a certificate that the owner, lessee, or
operator is in compliance with this title, including a
statement of the number of acres owned, leased, or operated,
the terms of any lease or agreement pertaining to the
operation of a farm operation, and, in the case of a lessee
or operator, a certification that the rent or other fees paid
reflect the reasonable value of the irrigation water to the
productivity of the land.
``(b) Documentation.--The Secretary may require a lessee or
operator to submit for the Secretary's examination--
``(1) a complete copy of any lease or other agreement
executed by each of the parties to the lease or other
agreement; and

[[Page S54]]

``(2) a copy of the return of income tax imposed by chapter
1 of the Internal Revenue Code of 1986 for any taxable year
in which the single farm operation of the lessee or operator
received irrigation water at less than full cost.''.
(e) Trusts.--Section 214 of the Reclamation Reform Act of
1982 (43 U.S.C. 390nn) is repealed.
(f) Administrative Provisions.--
(1) Penalties.--Section 224(c) of the Reclamation Reform
Act of 1982 (43 U.S.C. 390ww(c)) is amended--
(A) by striking ``(c) The Secretary'' and inserting the
following:
``(c) Regulations; Data Collection; Penalties.--
``(1) Regulations; data collection.--The Secretary''; and
(B) by adding at the end the following:
``(2) Penalties.--Notwithstanding any other provision of
law, the Secretary shall establish appropriate and effective
penalties for failure to comply with any provision of this
Act or any regulations issued under this Act.''.
(2) Interest.--Section 224(i) of the Reclamation Reform Act
of 1982 (43 U.S.C. 390ww(i)) is amended by striking the last
sentence and inserting the following: ``The interest rate
applicable to underpayments shall be equal to the rate
applicable to expenditures under section 202(3)(C).''.
(g) Reporting.--Section 228 of the Reclamation Reform Act
of 1982 (43 U.S.C. 390zz) is amended by inserting ``operator
or'' before ``contracting entity'' each place it appears.
(h) Memorandum of Understanding.--The Reclamation Reform
Act of 1982 (43 U.S.C. 390aa et seq.) is amended--
(1) by redesignating sections 229 and 220 as sections 230 and 231;
and
(2) by inserting after section 228 the following:

``SEC. 229. MEMORANDUM OF UNDERSTANDING.

``The Secretary, the Secretary of the Treasury, and the
Secretary of Agriculture shall enter into a memorandum of
understanding or other appropriate instrument to permit the
Secretary, notwithstanding section 6103 of the Internal
Revenue Code of 1996, to have access to and use of available
information collected or maintained by the Department of the
Treasury and the Department of Agriculture that would aid
enforcement of the ownership and pricing limitations of
Federal reclamation law.''.

TITLE II--TERMINATION OF THE UNIFORMED SERVICES UNIVERSITY OF
THE HEALTH SCIENCES. SECTION 201. TERMINATION.

(a) In General.--The Uniformed Services University of the
Health Sciences is terminated.
(b) Conforming Amendments.--
(1) Chapter 104 of title 10, United States Code, is
repealed.
(2) The table of chapters at the beginning of subtitle A of
such title, and at the beginning of part III of such
subtitle, are each amended by striking out the item relating
to chapter 104.
(C) Effective Dates.--
(1) Termination.--The termination of the Uniformed Services
University of the Health Sciences under subsection (a)(1)
shall take effect on the day after the date of the graduation
from the university of the last class of students that
enrolled in such university on or before the date of the
enactment of the Act.
(2) Amendments.--The amendments made by subsection (a)(2)
shall take effect on that date of the enactment of this Act,
except that the provisions of chapter 104 of title 10, United
States Code, as in effect on the day before such date, shall
continue to apply with respect to the Uniformed Services
University of the Health Sciences until the termination of
the university under this section.

TITLE III--TERMINATION OF PRODUCTION UNDER THE D5 SUBMARINE
LAUNCHED MISSILE PROGRAM.

SECTION 301. PRODUCTION TERMINATION.

(a) Termination of Program.--The Secretary of Defense shall
terminate production of D5 submarine-launched ballistic
missile program.
(b) Payment of Termination Costs.--Funds available on or
after the date of the enactment of this Act for obligation
for the D5 submarine-launched ballistic missile program may
be obligated for production under that program only for
payment of the costs associated with the termination of
production under this Act.

SEC. 302. CURRENT PROGRAM ACTIVITIES.

Nothing in this legislation shall be construed to prohibit
or otherwise affect the availability of funds for the
following:
(1) Production of D5 submarine-launched ballistic missiles
in production on the date of the enactment of this Act.
(2) Maintenance after the date of the enactment of this act
of the arsenal of D5 submarine-launched ballistic missiles in
existence on such date, including the missiles described in
paragraph (1).
______

By Mr. WYDEN:
S. 52. A bill to permanently extend the moratorium enacted by the
Internet Tax Freedom Act, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
Mr. WYDEN. Mr. President, predictions that the Internet Tax Freedom
Act would topple Western Civilization have not come to pass. Since the
moratorium on taxation of out-of-State, online sales was first enacted
in October 1998, not a single community, county or state has come
forward to prove it is being injured by its inability to impose
discriminatory taxes on electronic commerce. There is simply no
evidence that States have lost revenue by technology-driven commerce.
On the contrary, the technology sector itself has been pounded as hard
as any sector by the economic downturn.
Across the country States are facing tremendous budget pressures. My
own State of Oregon is facing a nearly 20 percent budget shortfall, and
Oregon has the highest unemployment rate in the Nation. The shift from
black ink to red is the result of this Administration's failed economic
policies, not the inability of States to impose discriminatory taxes on
Internet sales.
Adding new taxes on the backs of consumers is not the way to salvage
weakened State and local economies. Sales taxes are among the most
regressive revenue measures, and imposing new sales taxes at this time
could actually make a bad economic situation worse. A number of States
seem to be arguing that their economic future is tied to taxing
technology entrepreneurs located thousands of miles away with no
physical presence in their jurisdiction. I don't share this view. The
reason States don't tax remote sellers, as former Massachusetts
Governor Celluci has testified before the Senate, is they don't want
the political heat. Few of the 45 States that could collect a use tax
on all items their residents have purchased out-of-State actually do
so. Most States simply chose not to enforce their own laws, preferring
to export their tax burden to out of state businesses who get no
benefit from the taxing state.
Congress will soon be asked again by the Streamlined Sales Tax
Project States to take the political heat for new sales taxes. The U.S.
Senate has voted three times in recent years on whether to overturn
Quill to require remote sellers with no nexus to serve the States as
their tax collectors. Every time the Senate has rejected the notion. On
January 19, 1995, the Senate voted 73-25 to table the amendment; on
October 2, 1998, the Senate voted 66-29 to table the amendment; and
most recently, on November 15, 2001, the Senate voted 57-43 to table
the amendment.
As Congress revisits this issue again this year, we should remember
what the Supreme Court said in Quill: ``Congress is . . . free to
decide whether, when and to what extent the States may burden mail-
order concerns with a duty to collect use taxes.'' The authority the
Constitution vests in Congress to regulate interstate commerce--online
or otherwise--is an enormous power that must be exercised with great
care and caution. I believe the moratorium should be extended
indefinitely, and that is what the legislation I introduce today would
do. I am pleased to be joined once again in this effort by
Representative Chris Cox, and 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. 52

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 ``Internet Tax
Nondiscrimination Act''.

SEC. 2. PERMANENT EXTENSION OF INTERNET TAX FREEDOM ACT
MORATORIUM.

(a) Permanent Extension; Internet Access Taxes.--Section
1101 of the Internet Tax Freedom Act (47 U.S.C. 151 note) is
amended--
(1) by striking ``taxes during the period beginning on
October 1, 1998, and ending on November 1, 2003--'' and
inserting ``taxes after September 30, 1998:'';
(2) by striking paragraph (1) of subsection (a) and
inserting the following:
``(1) Taxes on Internet access.'';
(3) by striking ``multiple'' in paragraph (2) of subsection
(a) and inserting ``Multiple'';
(4) by striking subsection (d); and
(5) by redesignating subsections (e) and (f) as subsections
(d) and (e), respectively.
(b) Conforming Amendment.--Section 1104(10) of the Internet
Tax Freedom Act (47 U.S.C. 151 note) is amended by striking
``unless'' and all that follows through ``1998''.
______

By Mr. SCHUMER (for himself, Mr. McCain, Mr. Edwards, Ms.
Collins, Mr. Kennedy, Mr. Miller, Mr. Johnson, Mrs.

[[Page S55]]

Clinton, Mr. Kohl, Mr. Feingold, Ms. Stabenow, Mr. Daschle, Mr.
Nelson of Florida, Mr. Rockefeller, Mr. Leahy, Mr. Reed, Mr.
Pryor, Mr. Durbin, and Mr. Dorgan):
S. 54. A bill to amend the Federal Food, Drug, and Cosmetic Act to
provide greater access to affordable pharmaceuticals; to the Committee
on Health, Education, Labor, and Pensions.
Mr. SCHUMER. Mr. President, I ask unanimous consent that the test 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. 54

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 ``Greater Access to Affordable
Pharmaceuticals Act of 2003''.

SEC. 2. FINDINGS; PURPOSES.

(a) Findings.--Congress finds that--
(1) prescription drug costs are increasing at an alarming
rate and are a major worry of American families and senior
citizens;
(2) enhancing competition between generic drug
manufacturers and brand-name manufacturers can significantly
reduce prescription drug costs for American families;
(3) the pharmaceutical market has become increasingly
competitive during the last decade because of the increasing
availability and accessibility of generic pharmaceuticals,
but competition must be further stimulated and strengthened;
(4) the Federal Trade Commission has discovered that there
are increasing opportunities for drug companies owning
patents on brand-name drugs and generic drug companies to
enter into private financial deals in a manner that could
restrain trade and greatly reduce competition and increase
prescription drug costs for consumers;
(5) generic pharmaceuticals are approved by the Food and
Drug Administration on the basis of scientific testing and
other information establishing that pharmaceuticals are
therapeutically equivalent to brand-name pharmaceuticals,
ensuring consumers a safe, efficacious, and cost-effective
alternative to brand-name innovator pharmaceuticals;
(6) the Congressional Budget Office estimates that--
(A) the use of generic pharmaceuticals for brand-name
pharmaceuticals could save purchasers of pharmaceuticals
between $8,000,000,000 and $10,000,000,000 each year; and
(B) generic pharmaceuticals cost between 25 percent and 60
percent less than brand-name pharmaceuticals, resulting in an
estimated average savings of $15 to $30 on each prescription;
(7) generic pharmaceuticals are widely accepted by
consumers and the medical profession, as the market share
held by generic pharmaceuticals compared to brand-name
pharmaceuticals has more than doubled during the last decade,
from approximately 19 percent to 43 percent, according to the
Congressional Budget Office;
(8) expanding access to generic pharmaceuticals can help
consumers, especially senior citizens and the uninsured, have
access to more affordable prescription drugs;
(9) Congress should ensure that measures are taken to
effectuate the amendments made by the Drug Price Competition
and Patent Term Restoration Act of 1984 (98 Stat. 1585)
(referred to in this section as the ``Hatch-Waxman Act'') to
make generic drugs more accessible, and thus reduce health
care costs; and
(10) it would be in the public interest if patents on drugs
for which applications are approved under section 505(c) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(c))
were extended only through the patent extension procedure
provided under the Hatch-Waxman Act rather than through the
attachment of riders to bills in Congress.
(b) Purposes.--The purposes of this Act are--
(1) to increase competition, thereby helping all Americans,
especially seniors and the uninsured, to have access to more
affordable medication; and
(2) to ensure fair marketplace practices and deter
pharmaceutical companies (including generic companies) from
engaging in anticompetitive action or actions that tend to
unfairly restrain trade.

SEC. 3. FILING OF PATENT INFORMATION WITH THE FOOD AND DRUG
ADMINISTRATION.

(a) Filing After Approval of an Application.--
(1) In General.--Section 505 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355) (as amended by section
9(a)(2)(B)(ii)) is amended in subsection (c) by striking
paragraph (2) and inserting the following:
``(2) Patent information.--
``(A) In general.--Not later than the date that is 30 days
after the date of an order approving an application under
subsection (b) (unless the Secretary extends the date because
of extraordinary or unusual circumstances), the holder of the
application shall file with the Secretary the patent
information described in subparagraph (C) with respect to any
patent--
``(i)(I) that claims the drug for which the application was
approved; or
``(II) that claims an approved method of using the drug;
and
``(ii) with respect to which a claim of patent infringement
could reasonably be asserted if a person not licensed by the
owner engaged in the manufacture, use, or sale of the drug.
``(B) Subsequently issued patents.--In a case in which a
patent described in subparagraph (A) is issued after the date
of an order approving an application under subsection (b),
the holder of the application shall file with the Secretary
the patent information described in subparagraph (C) not
later than the date that is 30 days after the date on which
the patent is issued (unless the Secretary extends the date
because of extraordinary or unusual circumstances).
``(C) Patent information.--The patent information required
to be filed under subparagraph (A) or (B) includes--
``(i) the patent number;
``(ii) the expiration date of the patent;
``(iii) with respect to each claim of the patent--

``(I) whether the patent claims the drug or claims a method
of using the drug; and
``(II) whether the claim covers--

``(aa) a drug substance;
``(bb) a drug formulation;
``(cc) a drug composition; or
``(dd) a method of use;
``(iv) if the patent claims a method of use, the approved
use covered by the claim;
``(v) the identity of the owner of the patent (including
the identity of any agent of the patent owner); and
``(vi) a declaration that the applicant, as of the date of
the filing, has provided complete and accurate patent
information for all patents described in subparagraph (A).
``(D) Publication.--On filing of patent information
required under subparagraph (A) or (B), the Secretary shall--
``(i) immediately publish the information described in
clauses (i) through (iv) of subparagraph (C); and
``(ii) make the information described in clauses (v) and
(vi) of subparagraph (C) available to the public on request.
``(E) Civil action for correction or deletion of patent
information.--
``(i) In general.--A person that has filed an application
under subsection (b)(2) or (j) for a drug may bring a civil
action against the holder of the approved application for the
drug seeking an order requiring that the holder of the
application amend the application--

``(I) to correct patent information filed under
subparagraph (A); or
``(II) to delete the patent information in its entirety for
the reason that--

``(aa) the patent does not claim the drug for which the
application was approved; or
``(bb) the patent does not claim an approved method of
using the drug.
``(ii) Limitations.--Clause (i) does not authorize--

``(I) a civil action to correct patent information filed
under subparagraph (B); or
``(II) an award of damages in a civil action under clause
(i).

``(F) No claim for patent infringement.--An owner of a
patent with respect to which a holder of an application fails
to file information on or before the date required under
subparagraph (A) or (B) shall be barred from bringing a civil
action for infringement of the patent against a person that--
``(i) has filed an application under subsection (b)(2) or
(j); or
``(ii) manufactures, uses, offers to sell, or sells a drug
approved under an application under subsection (b)(2) or
(j).''.
(2) Transition provision.--
(A) Filing of patent information.--Each holder of an
application for approval of a new drug under section 505(b)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355(b)) that has been approved before the date of enactment
of this Act shall amend the application to include the patent
information required under the amendment made by paragraph
(1) not later than the date that is 30 days after the date of
enactment of this Act (unless the Secretary of Health and
Human Services extends the date because of extraordinary or
unusual circumstances).
(B) No claim for patent infringement.--An owner of a patent
with respect to which a holder of an application under
subsection (b) of section 505 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355) fails to file information on or
before the date required under subparagraph (A) shall be
barred from bringing a civil action for infringement of the
patent against a person that--
(i) has filed an application under subsection (b)(2) or (j)
of that section; or
(ii) manufactures, uses, offers to sell, or sells a drug
approved under an application under subsection (b)(2) or (j)
of that section.
(b) Filing With an Application.--Section 505 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355) is amended--
(1) in subsection (b)(2)--
(A) in subparagraph (A), by striking ``and'' at the end;
(B) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following:
``(C) with respect to a patent that claims both the drug
and a method of using the drug or claims more than 1 method
of using the drug for which the application is filed--
``(i) a certification under subparagraph (A)(iv) on a
claim-by-claim basis; and

[[Page S56]]

``(ii) a statement under subparagraph (B) regarding the
method of use claim.''; and
(2) in subsection (j)(2)(A), by inserting after clause
(viii) the following:

``With respect to a patent that claims both the drug and a
method of using the drug or claims more than 1 method of
using the drug for which the application is filed, the
application shall contain a certification under clause
(vii)(IV) on a claim-by-claim basis and a statement under
clause (viii) regarding the method of use claim.''.

SEC. 4. LIMITATION OF 30-MONTH STAY TO CERTAIN PATENTS.

(a) Abbreviated New Drug Applications.--Section 505(j)(5)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355(j)(5)) is amended--
(1) in subparagraph (B)--
(A) in clause (iii)--
(i) by striking ``(iii) If the applicant made a
certification described in subclause (IV) of paragraph
(2)(A)(vii),'' and inserting the following:
``(iii) Subclause (iv) certification with respect to
certain patents.--If the applicant made a certification
described in paragraph (2)(A)(vii)(IV) with respect to a
patent (other than a patent that claims a process for
manufacturing the listed drug) for which patent information
was filed with the Secretary under subsection (c)(2)(A),'';
and
(ii) by adding at the end the following: ``The 30-month
period provided under the second sentence of this clause
shall not apply to a certification under paragraph
(2)(A)(vii)(IV) made with respect to a patent for which
patent information was filed with the Secretary under
subsection (c)(2)(B).'';
(B) by redesignating clause (iv) as clause (v); and
(C) by inserting after clause (iii) the following:
``(iv) Subclause (iv) certification with respect to other
patents.--

``(I) In general.--If the applicant made a certification
described in paragraph (2)(A)(vii)(IV) with respect to a
patent not described in clause (iii) for which patent
information was published by the Secretary under subsection
(c)(2)(D), the approval shall be made effective on the date
that is 45 days after the date on which the notice provided
under paragraph (2)(B) was received, unless a civil action
for infringement of the patent, accompanied by a motion for
preliminary injunction to enjoin the applicant from engaging
in the commercial manufacture or sale of the drug, was filed
on or before the date that is 45 days after the date on which
the notice was received, in which case the approval shall be
made effective--

``(aa) on the date of a court action declining to grant a
preliminary injunction; or
``(bb) if the court has granted a preliminary injunction
prohibiting the applicant from engaging in the commercial
manufacture or sale of the drug--
``(AA) on issuance by a court of a determination that the
patent is invalid or is not infringed;
``(BB) on issuance by a court of an order revoking the
preliminary injunction or permitting the applicant to engage
in the commercial manufacture or sale of the drug; or
``(CC) on the date specified in a court order under
section 271(e)(4)(A) of title 35, United States Code, if the
court determines that the patent is infringed.

``(II) Cooperation.--Each of the parties shall reasonably
cooperate in expediting a civil action under subclause (I).
``(III) Expedited notification.--If the notice under
paragraph (2)(B) contains an address for the receipt of
expedited notification of a civil action under subclause (I),
the plaintiff shall, on the date on which the complaint is
filed, simultaneously cause a notification of the civil
action to be delivered to that address by the next business
day.''; and

(2) by inserting after subparagraph (B) the following:
``(C) Failure to bring infringement action.--If, in
connection with an application under this subsection, the
applicant provides an owner of a patent notice under
paragraph (2)(B) with respect to the patent, and the owner of
the patent fails to bring a civil action against the
applicant for infringement of the patent on or before the
date that is 45 days after the date on which the notice is
received, the owner of the patent shall be barred from
bringing a civil action for infringement of the patent in
connection with the development, manufacture, use, offer to
sell, or sale of the drug for which the application was filed
or approved under this subsection.''.
(b) Other Applications.--Section 505(c)) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)) (as amended
by section 9(a)(3)(A)(iii)) is amended--
(1) in paragraph (3)--
(A) in subparagraph (C)--
(i) by striking ``(C) If the applicant made a certification
described in clause (iv) of subsection (b)(2)(A),'' and
inserting the following:
``(C) Clause (iv) certification with respect to certain
patents.--If the applicant made a certification described in
subsection (b)(2)(A)(iv) with respect to a patent (other than
a patent that claims a process for manufacturing the listed
drug) for which patent information was filed with the
Secretary under paragraph (2)(A),''; and
(ii) by adding at the end the following: ``The 30-month
period provided under the second sentence of this
subparagraph shall not apply to a certification under
subsection (b)(2)(A)(iv) made with respect to a patent for
which patent information was filed with the Secretary under
paragraph (2)(B).''; and
(B) by inserting after subparagraph (C) the following:
``(D) Clause (iv) certification with respect to other
patents.--
``(i) In general.--If the applicant made a certification
described in subsection (b)(2)(A)(iv) with respect to a
patent not described in subparagraph (C) for which patent
information was published by the Secretary under paragraph
(2)(D), the approval shall be made effective on the date that
is 45 days after the date on which the notice provided under
subsection (b)(3) was received, unless a civil action for
infringement of the patent, accompanied by a motion for
preliminary injunction to enjoin the applicant from engaging
in the commercial manufacture or sale of the drug, was filed
on or before the date that is 45 days after the date on which
the notice was received, in which case the approval shall be
made effective--

``(I) on the date of a court action declining to grant a
preliminary injunction; or
``(II) if the court has granted a preliminary injunction
prohibiting the applicant from engaging in the commercial
manufacture or sale of the drug--

``(aa) on issuance by a court of a determination that the
patent is invalid or is not infringed;
``(bb) on issuance by a court of an order revoking the
preliminary injunction or permitting the applicant to engage
in the commercial manufacture or sale of the drug; or
``(cc) on the date specified in a court order under section
271(e)(4)(A) of title 35, United States Code, if the court
determines that the patent is infringed.
``(ii) Cooperation.--Each of the parties shall reasonably
cooperate in expediting a civil action under clause (i).
``(iii) Expedited notification.--If the notice under
subsection (b)(3) contains an address for the receipt of
expedited notification of a civil action under clause (i),
the plaintiff shall, on the date on which the complaint is
filed, simultaneously cause a notification of the civil
action to be delivered to that address by the next business
day.''; and
(2) by inserting after paragraph (3) the following:
``(4) Failure to bring infringement action.--If, in
connection with an application under subsection (b)(2), the
applicant provides an owner of a patent notice under
subsection (b)(3) with respect to the patent, and the owner
of the patent fails to bring a civil action against the
applicant for infringement of the patent on or before the
date that is 45 days after the date on which the notice is
received, the owner of the patent shall be barred from
bringing a civil action for infringement of the patent in
connection with the development, manufacture, use, offer to
sell, or sale of the drug for which the application was filed
or approved under subsection (b)(2).''.
(c) Effective Date.--
(1) In general.--The amendments made by subsections (a) and
(b) shall be effective with respect to any certification
under subsection (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of
section 505 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355) made after the date of enactment of this Act in
an application filed under subsection (b)(2) or (j) of that
section.
(2) Transition provision.--In the case of applications
under section 505(b) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(b)) filed before the date of enactment of
this Act--
(A) a patent (other than a patent that claims a process for
manufacturing a listed drug) for which information was
submitted to the Secretary of Health and Human Services under
section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act
(as in effect on the day before the date of enactment of this
Act) shall be subject to subsections (c)(3)(C) and
(j)(5)(B)(iii) of section 505 of the Federal Food, Drug, and
Cosmetic Act (as amended by this section); and
(B) any other patent (including a patent for which
information was submitted to the Secretary under section
505(c)(2) of that Act (as in effect on the day before the
date of enactment of this Act)) shall be subject to
subsections (c)(3)(D) and (j)(5)(B)(iv) of section 505 of the
Federal Food, Drug, and Cosmetic Act (as amended by this
section).

SEC. 5. EXCLUSIVITY FOR ACCELERATED GENERIC DRUG APPLICANTS.

(a) In General.--Section 505(j)(5) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)) (as amended by
section 4(a)) is amended--
(1) in subparagraph (B)(v), by striking subclause (II) and
inserting the following:

``(II) the earlier of--

``(aa) the date of a final decision of a court (from which
no appeal has been or can be taken, other than a petition to
the Supreme Court for a writ of certiorari) holding that the
patent that is the subject of the certification is invalid or
not infringed; or
``(bb) the date of a settlement order or consent decree
signed by a Federal judge that enters a final judgment and
includes a finding that the patent that is the subject of the
certification is invalid or not infringed;''; and
(2) by inserting after subparagraph (C) the following:
``(D) Forfeiture of 180-day period.--
``(i) Definitions.--In this subparagraph:

``(I) Application.--The term `application' means an
application for approval of a drug

[[Page S57]]

under this subsection containing a certification under
paragraph (2)(A)(vii)(IV) with respect to a patent.
``(II) First application.--The term `first application'
means the first application to be filed for approval of the
drug.
``(III) Forfeiture event.--The term `forfeiture event',
with respect to an application under this subsection, means
the occurrence of any of the following:

``(aa) Failure to market.--The applicant fails to market
the drug by the later of--
``(AA) the date that is 60 days after the date on which
the approval of the application for the drug is made
effective under clause (iii) or (iv) of subparagraph (B)
(unless the Secretary extends the date because of
extraordinary or unusual circumstances); or
``(BB) if 1 or more civil actions have been brought
against the applicant for infringement of a patent subject to
a certification under paragraph (2)(A)(vii)(IV) or 1 or more
civil actions have been brought by the applicant for a
declaratory judgment that such a patent is invalid or not
infringed, the date that is 60 days after the date of a final
decision (from which no appeal has been or can be taken,
other than a petition to the Supreme Court for a writ of
certiorari) in the last of those civil actions to be decided
(unless the Secretary extends the date because of
extraordinary or unusual circumstances).
``(bb) Withdrawal of application.--The applicant withdraws
the application.
``(cc) Amendment of certification.--The applicant,
voluntarily or as a result of a settlement or defeat in
patent litigation, amends the certification from a
certification under paragraph (2)(A)(vii)(IV) to a
certification under paragraph (2)(A)(vii)(III).
``(dd) Failure to obtain approval.--The applicant fails to
obtain tentative approval of an application within 30 months
after the date on which the application is filed, unless the
failure is caused by--
``(AA) a change in the requirements for approval of the
application imposed after the date on which the application
is filed; or
``(BB) other extraordinary circumstances warranting an
exception, as determined by the Secretary.
``(ee) Failure to challenge patent.--In a case in which,
after the date on which the applicant submitted the
application, new patent information is submitted under
subsection (c)(2) for the listed drug for a patent for which
certification is required under paragraph (2)(A), the
applicant fails to submit, not later than the date that is 60
days after the date on which the Secretary publishes the new
patent information under paragraph (7)(A)(iii) (unless the
Secretary extends the date because of extraordinary or
unusual circumstances)--
``(AA) a certification described in paragraph
(2)(A)(vii)(IV) with respect to the patent to which the new
patent information relates; or
``(BB) a statement that any method of use claim of that
patent does not claim a use for which the applicant is
seeking approval under this subsection in accordance with
paragraph (2)(A)(viii).
``(ff) Unlawful conduct.--The Federal Trade Commission
determines that the applicant engaged in unlawful conduct
with respect to the application in violation of section 1 of
the Sherman Act (15 U.S.C. 1).

``(IV) Subsequent application.--The term `subsequent
application' means an application for approval of a drug that
is filed subsequent to the filing of a first application for
approval of that drug.

``(ii) Forfeiture of 180-day period.--

``(I) In general.--Except as provided in subclause (II), if
a forfeiture event occurs with respect to a first
application--

``(aa) the 180-day period under subparagraph (B)(v) shall
be forfeited by the first applicant; and
``(bb) any subsequent application shall become effective as
provided under clause (i), (ii), (iii), or (iv) of
subparagraph (B), and clause (v) of subparagraph (B) shall
not apply to the subsequent application.

``(II) Forfeiture to first subsequent applicant.--If the
subsequent application that is the first to be made effective
under subclause (I) was the first among a number of
subsequent applications to be filed--

``(aa) that first subsequent application shall be treated
as the first application under this subparagraph (including
subclause (I)) and as the previous application under
subparagraph (B)(v); and
``(bb) any other subsequent applications shall become
effective as provided under clause (i), (ii), (iii), or (iv)
of subparagraph (B), but clause (v) of subparagraph (B) shall
apply to any such subsequent application.
``(iii) Availability.--The 180-day period under
subparagraph (B)(v) shall be available to a first applicant
submitting an application for a drug with respect to any
patent without regard to whether an application has been
submitted for the drug under this subsection containing such
a certification with respect to a different patent.
``(iv) Applicability.--The 180-day period described in
subparagraph (B)(v) shall apply to an application only if a
civil action is brought against the applicant for
infringement of a patent that is the subject of the
certification.''.
(b) Applicability.--The amendment made by subsection (a)
shall be effective only with respect to an application filed
under section 505(j) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(j)) after the date of enactment of this
Act for a listed drug for which no certification under
section 505(j)(2)(A)(vii)(IV) of that Act was made before the
date of enactment of this Act, except that if a forfeiture
event described in section 505(j)(5)(D)(i)(III)(ff) of that
Act occurs in the case of an applicant, the applicant shall
forfeit the 180-day period under section 505(j)(5)(B)(v) of
that Act without regard to when the applicant made a
certification under section 505(j)(2)(A)(vii)(IV) of that
Act.

SEC. 6. FAIR TREATMENT FOR INNOVATORS.

(a) Basis for Application.--Section 505 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355) is amended--
(1) in subsection (b)(3)(B), by striking the second
sentence and inserting ``The notice shall include a detailed
statement of the factual and legal basis of the applicant's
opinion that, as of the date of the notice, the patent is not
valid or is not infringed, and shall include, as appropriate
for the relevant patent, a description of the applicant's
proposed drug substance, drug formulation, drug composition,
or method of use. All information disclosed under this
subparagraph shall be treated as confidential and may be used
only for purposes relating to patent adjudication. Nothing in
this subparagraph precludes the applicant from amending the
factual or legal basis on which the applicant relies in
patent litigation.''; and
(2) in subsection (j)(2)(B)(ii), by striking the second
sentence and inserting ``The notice shall include a detailed
statement of the factual and legal basis of the opinion of
the applicant that, as of the date of the notice, the patent
is not valid or is not infringed, and shall include, as
appropriate for the relevant patent, a description of the
applicant's proposed drug substance, drug formulation, drug
composition, or method of use. All information disclosed
under this subparagraph shall be treated as confidential and
may be used only for purposes relating to patent
adjudication. Nothing in this subparagraph precludes the
applicant from amending the factual or legal basis on which
the applicant relies in patent litigation.''.
(b) Injunctive Relief.--Section 505(j)(5)(B) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)) (as
amended by section 4(a)(1)) is amended--
(1) in clause (iii), by adding at the end the following:
``A court shall not regard the extent of the ability of an
applicant to pay monetary damages as a whole or partial basis
on which to deny a preliminary or permanent injunction under
this clause.''; and
(2) in clause (iv), by adding at the end the following:
``(IV) Injunctive relief.--A court shall not regard the
extent of the ability of an applicant to pay monetary damages
as a whole or partial basis on which to deny a preliminary or
permanent injunction under this clause.''.

SEC. 7. BIOEQUIVALENCE.

(a) In General.--The amendments to part 320 of title 21,
Code of Federal Regulations, promulgated by the Commissioner
of Food and Drugs on July 17, 1991 (57 Fed. Reg. 17997 (April
28, 1992)), shall continue in effect as an exercise of
authorities under sections 501, 502, 505, and 701 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351, 352,
355, 371).
(b) Effect.--Subsection (a) does not affect the authority
of the Commissioner of Food and Drugs to amend part 320 of
title 21, Code of Federal Regulations.
(c) Effect of Section.--This section shall not be construed
to alter the authority of the Secretary of Health and Human
Services to regulate biological products under the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.). Any
such authority shall be exercised under that Act as in effect
on the day before the date of enactment of this Act.

SEC. 8. REPORT.

(a) In General.--Not later than the date that is 5 years
after the date of enactment of this Act, the Federal Trade
Commission shall submit to Congress a report describing the
extent to which implementation of the amendments made by this
Act--
(1) has enabled products to come to market in a fair and
expeditious manner, consistent with the rights of patent
owners under intellectual property law; and
(2) has promoted lower prices of drugs and greater access
to drugs through price competition.
(b) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $5,000,000.

SEC. 9. CONFORMING AND TECHNICAL AMENDMENTS.

(a) Section 505.--Section 505 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355) is amended--
(1) in subsection (a), by striking ``(a) No person'' and
inserting ``(a) In General.--No person'';
(2) in subsection (b)--
(A) by striking ``(b)(1) Any person'' and inserting the
following:
``(b) Applications.--
``(1) Requirements.--
``(A) In general.--Any person'';
(B) in paragraph (1)--
(i) in the second sentence--

(I) by redesignating subparagraphs (A) through (F) as
clauses (i) through (vi), respectively, and adjusting the
margins appropriately;
(II) by striking ``Such persons'' and inserting the
following:

``(B) Information to be submitted with application.--A
person that submits an application under subparagraph (A)'';
and

[[Page S58]]

(III) by striking ``application'' and inserting
``application--'';

(ii) by striking the third through fifth sentences; and
(iii) in the sixth sentence--

(I) by striking ``The Secretary'' and inserting the
following:

``(C) Guidance.--The Secretary''; and

(II) by striking ``clause (A)'' and inserting
``subparagraph (B)(i)''; and

(C) in paragraph (2)--
(i) by striking ``clause (A) of such paragraph'' and
inserting ``paragraph (1)(B)(i)'';
(ii) in subparagraphs (A) and (B), by striking ``paragraph
(1) or''; and
(iii) in subparagraph (B)--

(I) by striking ``paragraph (1)(A)'' and inserting
``paragraph (1)(B)(i)''; and
(II) by striking ``patent'' each place it appears and
inserting ``claim''; and

(3) in subsection (c)--
(A) in paragraph (3)--
(i) in subparagraph (A)--

(I) by striking ``(A) If the applicant'' and inserting the
following:

``(A) Clause (i) or (ii) certification.--If the
applicant''; and

(II) by striking ``may'' and inserting ``shall'';

(ii) in subparagraph (B)--

(I) by striking ``(B) If the applicant'' and inserting the
following:

``(B) Clause (iii) certification.--If the applicant''; and

(II) by striking ``may'' and inserting ``shall'';

(iii) by redesignating subparagraph (D) as subparagraph
(E); and
(iv) in subparagraph (E) (as redesignated by clause (iii)),
by striking ``clause (A) of subsection (b)(1)'' each place it
appears and inserting ``subsection (b)(1)(B)(i)''; and
(B) by redesignating paragraph (4) as paragraph (5); and
(4) in subsection (j)--
(A) in paragraph (2)(A)--
(i) in clause (vi), by striking ``clauses (B) through
((F)'' and inserting ``subclauses (ii) through (vi) of
subsection (b)(1)'';
(ii) in clause (vii), by striking ``(b) or''; and
(iii) in clause (viii)--

(I) by striking ``(b) or''; and
(II) by striking ``patent'' each place it appears and
inserting ``claim''; and

(B) in paragraph (5)--
(i) in subparagraph (B)--

(I) in clause (i)--

(aa) by striking ``(i) If the applicant'' and inserting the
following:
``(i) Subclause (i) or (ii) certification.--If the
applicant''; and
(bb) by striking ``may'' and inserting ``shall'';

(II) in clause (ii)--

(aa) by striking ``(ii) If the applicant'' and inserting
the following:
``(i) Subclause (iii) certification.--If the applicant'';
and
(bb) by striking ``may'' and inserting ``shall'';

(III) in clause (iii), by striking ``(2)(B)(i)'' each place
it appears and inserting ``(2)(B)''; and
(IV) in clause (v) (as redesignated by section 4(a)(1)(B)),
by striking ``continuing'' and inserting ``containing''; and

(ii) by redesignating subparagraphs (C) and (D) as
subparagraphs (E) and (F), respectively.
(b) Section 505A.--Section 505A of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355a) is amended--
(1) in subsections (b)(1)(A)(i) and (c)(1)(A)(i)--
(A) by striking ``(c)(3)(D)(ii)'' each place it appears and
inserting ``(c)(3)(E)(ii)''; and
(B) by striking ``(j)(5)(D)(ii)'' each place it appears and
inserting ``(j)(5)(F)(ii)'';
(2) in subsections (b)(1)(A)(ii) and (c)(1)(A)(ii)--
(A) by striking ``(c)(3)(D)'' each place it appears and
inserting ``(c)(3)(E)''; and
(B) by striking ``(j)(5)(D)'' each place it appears and
inserting ``(j)(5)(F)'';
(3) in subsections (e) and (l)--
(A) by striking ``505(c)(3)(D)'' each place it appears and
inserting ``505(c)(3)(E)''; and
(B) by striking ``505(j)(5)(D)'' each place it appears and
inserting ``505(j)(5)(F)''; and
(4) in subsection (k), by striking ``505(j)(5)(B)(iv)'' and
inserting ``505(j)(5)(B)(v)''.
(c) Section 527.--Section 527(a) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 360cc(a)) is amended in the
second sentence by striking ``505(c)(2)'' and inserting
``505(c)(1)(B)''.

Ms. COLLINS. Mr. President, I am pleased to join my colleagues from
New York and Arizona in introducing the Greater Access to Affordable
Pharmaceuticals Act, which will make prescription drugs more affordable
by promoting completion in the pharmaceutical industry and increasing
access to lower-priced generic drugs. The bipartisan bill that we are
introducing today is identical to the compromise legislation that
overwhelmingly passed the Senate last July by a vote of 78 to 21. That
compromise was based on an amendment I Offered in the Health,
Education, Labor and Pensions Committee with my colleague form North
Carolina, Senator Edwards.
Prescription drug spending in the United States has increased by 92
percent over the past 5 years to almost $120 million. These soaring
costs are a particular burden for the millions of uninsured Americans,
as well as those seniors on Medicare who lack prescription drug
coverage. Many of these individuals are simply priced out of the
market, or forced to choose between paying the bills or buying the
pills that keep them healthy.
Skyrocketing prescription drug costs are also putting the squeeze on
our Nation's employers who are struggling in the face of double-digit
annual premium increases to provide health care coverage for their
workers. And they are exacerbating the Medicaid funding crisis that all
of us are hearing about from our Governors back home as they struggle
to bridge growing shortfalls in their State budgets.
The legislation that we are introducing today will make prescription
drugs more affordable for all Americans. The nonpartisan Congressional
Budget Office estimates that are bill will cut our Nation's drug costs
by $60 billion over the next 10 years. That is why the legislation is
supported by coalitions representing the Governors, insurers,
businesses, organized labor, senior groups, and individual consumers
who are footing the bill for these expensive drugs and whose costs for
popular drugs like Cardizem CD, Cipro, Prilosec, and Zantac could be
cut in half if generic alternatives were available.
The 1984 Hatch-Waxman Act made significant changes in our patent laws
that were intended to encourage pharmaceutical companies to make the
investments necessary to develop new drug products, while
simultaneously enabling their competitors to bring lower-cost, generic
alternatives to the market. To that end, the legislation has succeeded
to a large degree. Prior to Hatch-Waxman, it took 3 to 5 years for
generics to enter the market after a brand-name patent had expired.
Today, lower-cost generics often enter the market immediately upon the
expiration of the patent. As a consequence, consumers are saving
anywhere from $8 to 10 billion a year by purchasing generic drugs.
Moreover, there are even greater potential savings on the horizon.
Within the next 4 years, the patents on brand name drugs with combined
sales of $20 billion are set to expire. If Hatch-Waxman were to work as
it was intended, consumers could expect to save between 50 and 60
percent on these drugs as lower cost generic alternatives become
available as these patents expire.
Despite its past success, however,it is becoming increasingly
apparent that the Hatch-Waxman Act has been subject to abuse. While
many pharmaceutical companies have acted in good faith, there is
mounting evidence that some brand name generic drug manufacturers have
attempted to ``game'' the system by exploiting legal loopholes in the
current law.
Too many pharmaceutical companies have maximized their profits at the
expense of consumers by filing frivolous patents that have delayed
access to lower priced generic drugs. Currently, brand-name companies
can delay a generic drug from going to market for years. A ``new''
patent for an existing drug can be awarded for merely changing the
color of a pill or its packaging. For example, Bristol Myers-Squibb
delayed generic competition on Platinol, a cancer treatment, by filing
a patent on the brown bottle that it came in.

Another example cited by the Chairman of the Federal Trade
Commission, Timothy Muris, in testimony before the Senate Commerce
Commission, involved the producer of the heart medication Cardizem CD,
which brought a lawsuit for patent and trademark infringement against
the generic manufacturer in early 1996. Instead of asking the generic
company to pay damages, however, the brand name manufacturer offered a
settlement to pay the generic company more than $80 million in return
for keeping the generic drug off the market. Meanwhile, users of
Cardizem--which treats high blood pressure, chest pains and heart
disease--were paying about $73 a month when the generic would have cost
about $32 a month.
Last July, the Federal Trade Commission released a long-awaited
report that found that brand-name drug manufacturers have misused legal
loopholes to delay the entry of lower-cost generics into the market.
The FTC found that these tactics have led to delays of between four and
40 months--

[[Page S59]]

over and above the first 30-month stay provided under Hatch-Waxman--for
generic competitors of at least eight drugs since 1992. Moreover, six
of the eight delays have occurred since 1998.
The FTC report points to two specific provisions of the Hatch-Waxman
Act--the automatic 30-month stay and the 180-day market exclusivity for
the first generic to file a patent challenge--as being susceptible to
strategies that could delay the entry of lower-cost generics into the
market. According to the report, these loopholes ``continue to have the
potential for abuse,'' and, if left unchanged, ``may have more
significance in the future.'' These are the very loopholes that the
legislation we are introducing today would close.
The original Hatch-Waxman Act was a carefully constructed compromise
that balanced an expedited FDA approval process to speed the entry of
lower-cost generic drugs into the market with additional patent
protections to ensure continuing innovation. The bipartisan bill that
we are introducing today restores that balance by closing the loopholes
that have reduced the original law's effectiveness in bringing lower-
cost generic drugs to market more quickly, and I urge all of my
colleagues to join us as cosponsors.
______

By Mr. INOUYE:
S. 57. A bill for the relief of Donald C. Pence; to the Committee on
Veterans' Affairs.
Mr. INOUYE. Mr. President, today I am introducing a private relief
bill on behalf of Donald C. Pence of Stanford, NC, for compensation for
the failure of the Department of Veterans Affairs to pay dependency and
indemnity compensation to Kathryn E. Box, the now-deceased mother of
Donald C. Pence. It is rare that a Federal agency admits a mistake. In
this case, the Department of Veterans Affairs has admitted that a
mistake was made and explored ways to permit payment under the law,
including equitable relief, but has found no provisions authorizing the
Department to release the remaining benefits that were unpaid to Mrs.
Box at the time of her death. My bill would correct this injustice, and
I urge my colleagues to support this measure.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 57

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

SECTION 1. RELIEF OF DONALD C. PENCE.

(a) Relief.--The Secretary of the Treasury shall pay, out
of any moneys in the Treasury not otherwise appropriated, to
Donald C. Pence, of Sanford, North Carolina, the sum of
$31,128 in compensation for the failure of the Department of
Veterans Affairs to pay dependency and indemnity compensation
to Kathryn E. Box, the now-deceased mother of Donald C.
Pence, for the period beginning on July 1, 1990, and ending
on March 31, 1993.
(b) Limitation on Fees.--Not more than a total of 10
percent of the payment authorized by subsection (a) shall be
paid to or received by agents or attorneys for services
rendered in connection with obtaining such payment, any
contract to the contrary notwithstanding. Any person who
violates this subsection shall be fined not more than $1,000.
______

By Mr. INOUYE:
S. 58. A bill to amend the Internal Revenue Code of 1986 to provide
tax relief for the conversion of cooperative housing corporations into
condominiums; to the Committee on Finance.
Mr. INOUYE. Mr. President, today I rise to introduce legislation
which would amend the Internal Revenue Code of 1986 to allow
Cooperative Housing Corporations, co-ops, to convert to condominium
forms of ownership.
Under current law, a conversion from a cooperative shareholding to
condominium ownership is taxable at a corporate level as well as an
individual level. The conversion is treated as a corporate liquidation,
and therefore taxed accordingly. In addition, a capital gains tax is
levied on any increase between the owner's basis in the co-op share
pre-conversion and the market value of the condominium interest post-
conversion. This double taxation dissuades condominium conversion
because the owner is being taxed on the transaction which is nothing
more than a change in the form of ownership. While the Internal Revenue
Service concedes that there are no discernable advantages to society of
the cooperative form of ownership, they do not view Federal tax
statutes as providing sufficient flexibility with which to address the
obstacles of conversion.
Cooperative housing organizes the ownership structure into a
corporation, with shares of stock for each apartment unit, which are
sold to buyers. The corporation then issues a proprietary lease
entitling the owner of the stock to the use of the unit in perpetuity.
Because the investment is in the form of a share of stock, investors
sometimes lose their entire investment as a result of debt incurred by
the corporation in construction and development. In addition, due to
the structure of a cooperative housing corporation, a prospective
purchaser of shares in the corporation from an existing tenant-
stockholders has difficulty obtaining mortgage financing for the
purchase. Furthermore, tenant-stockholders of cooperative housing also
encounter difficulties in securing bank loans for the full value of
their investment.
As a result, owners of cooperative housing are increasingly looking
toward conversion to the condominium structure of ownership.
Condominium ownership permits the owner of a unit to own the unit
itself, eliminating the cooperative housing dilemma of corporate debt
that supersedes the investment of cooperative housing share owners, and
other financial concerns.
The legislation I introduce today will remove the penalty of double
taxation from the conversion of cooperative housing to condominium
ownership, and will greatly benefit co-op owners across the nation. The
bill does not apply to cooperatives which have been or are now being
financed by any Federal, State, or local programs for the purpose of
assisting in the construction of affordable housing cooperatives or the
conversion of rental units to affordable housing cooperatives. I urge
my colleagues' consideration of and support for this measure.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 58

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

SECTION 1. NONRECOGNITION OF GAIN OR LOSS ON DISTRIBUTIONS BY
COOPERATIVE HOUSING CORPORATIONS.

(a) In General.--Section 216(e) of the Internal Revenue
Code of 1986 (relating to distributions by cooperative
housing corporations) is amended to read as follows:
``(e) Distributions by Cooperative Housing Corporations.--
``(1) In general.--Except as provided in regulations--
``(A) no gain or loss shall be recognized to a cooperative
housing corporation on the distribution by such corporation
of a dwelling unit to a stockholder in such corporation if
such distribution is in exchange for the stockholder's stock
in such corporation, and
``(B) no gain or loss shall be recognized to a stockholder
of such corporation on the transfer of such stockholder's
stock in an exchange described in subparagraph (A).
``(2) Basis.--The basis of a dwelling unit acquired in a
distribution to which paragraph (1) applies shall be the same
as the basis of the stock in the cooperative housing
corporation for which it is exchanged, decreased in the
amount of any money received by the taxpayer in such
exchange.
(3) Applicability.--This subsection shall not apply with
respect to any dwelling unit the basis of which includes
financing under any Federal, State, or local program for the
purpose of assisting the construction of affordable housing
cooperatives or the conversion of rental units to affordable
housing cooperatives.''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions after the date of the enactment
of this Act.
______

By Mr. INOUYE:
S. 59. A bill to amend title 10, United States Code, to permit former
members of the Armed Forces who have a service-connected disability
rated as total to travel on military aircraft in the same manner and to
the same extent as retired members of the Armed Forces are entitled to
travel on such aircraft; to the Committee on Armed Services.
Mr. INOUYE. Mr. President, today I am reintroducing a bill which is
of great importance to a group of patriotic Americans. This legislation
is designed to extend space-available travel privileges on military
aircraft to those who have been totally disabled in the service of our
country.
Currently, retired members of the Armed Forces are permitted to
travel

[[Page S60]]

on a space-available basis on non-scheduled military flights within the
continental United States, and on scheduled overseas flights operated
by the Military Airlift Command. My bill would provide the same
benefits for veterans with 100 percent service-connected disabilities.
We owe these heroic men and women who have given so much to our
country a debt of gratitude. Of course, we can never repay them for the
sacrifices they have made on behalf of our Nation, but we can surely
try to make their lives more pleasant and fulfilling. One way in which
we can help is to extend military travel privileges to these
distinguished American veterans. I have received numerous letters from
all over the country attesting to the importance attached to this issue
by veterans. Therefore, I ask that my colleagues show their concern and
join me in saying ``thank you'' by supporting this legislation.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 59

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

SECTION 1. TRAVEL ON MILITARY AIRCRAFT OF CERTAIN DISABLED
FORMER MEMBERS OF THE ARMED FORCES.

(a) In General.--Chapter 53 of title 10, United States
Code, is amended by adding after section 1060a the following
new section:

``Sec. 1060b. Travel on military aircraft: certain disabled
former members of the armed forces

``The Secretary of Defense shall permit any former member
of the armed forces who is entitled to compensation under the
laws administered by the Secretary of Veterans Affairs for a
service-connected disability rated as total to travel, in the
same manner and to the same extent as retired members of the
armed forces, on unscheduled military flights within the
continental United States and on scheduled overseas flights
operated by the Military Airlift Command. The Secretary of
Defense shall permit such travel on a space-available
basis.''.
(b) Clerical Amendment.--The table of sections at the
beginning of such chapter is amended by adding after the item
relating to section 1060a the following new item:

``1060b. Travel on military aircraft: certain disabled former members
of the armed forces.''.
______

By Mr. INOUYE:
S. 60. A bill to amend title 10, United States Code, to authorize
certain disabled former prisoners of war to use Department of Defense
commissary and exchange stores; to the Committee on Armed Services.
Mr. INOUYE. Mr. President, today I am reintroducing legislation to
enable those former prisoners of war who have been separated honorably
from their respective services and who have been rated as having a 30
percent service-connected disability to have the use of both the
military commissary and post exchange privileges. While I realize it is
impossible to adequately compensate one who has endured long periods of
incarceration at the hands of our Nation's enemies, I do feel this
gesture is both meaningful and important to those concerned because it
serves as a reminder that our Nation has not forgotten their
sacrifices.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 60

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

SECTION 1. USE OF COMMISSARY AND EXCHANGE STORES BY CERTAIN
DISABLED FORMER PRISONERS OF WAR.

(a) In General.--Chapter 54 of title 10, United States
Code, is amended by inserting after section 1064 the
following new section:

``Sec. 1064a. Use of commissary and exchange stores by
certain disabled former prisoners of war

``(a) In General.--Under regulations prescribed by the
Secretary of Defense, former prisoners of war described in
subsection (b) may use commissary and exchange stores.
``(b) Covered Individuals.--Subsection (a) applies to any
former prisoner of war who--
``(1) separated from active duty in the armed forces under
honorable conditions; and
``(2) has a service-connected disability rated by the
Secretary of Veterans Affairs at 30 percent or more.
``(c) Definitions.--In this section:
``(1) The term `former prisoner of war' has the meaning
given that term in section 101(32) of title 38.
``(2) The term `service-connected' has the meaning given
that term in section 101(16) of title 38.''.
(b) Clerical Amendment.--The table of sections at the
beginning of such chapter is amended by inserting after the
item relating to section 1064 the following new item:

``1064a. Use of commissary and exchange stores by certain disabled
former prisoners of war.''.
______

By Mr. INOUYE:
S. 61. A bill to amend title VII of the Public Health Service Act to
revise and extend certain programs relating to the education of
individuals as health professionals, and for other purposes; to the
Committee on Health, Education, Labor, and Pensions.
Mr. INOUYE. Mr. President, today I rise to introduce the Physical and
Occupational Therapy Education Act of 2003. This legislation will
increase educational opportunities for physical therapy and
occupational therapy practitioners in order to meet the growing demand
for the valuable services they provide in our communities.
Several factors contribute to the present need for federal support in
this area. The rapid aging of our Nation's population, the demands of
the AIDS crisis, increasing emphasis on health promotion and disease
prevention, and the growth of home health care has increased the demand
for physical and occupational therapy services. This demand has
exceeded our ability to educate an adequate number of physical
therapists and occupational therapists. In addition, technological
advances are allowing injured and disabled individuals to survive
conditions that would have proven fatal in past years.
An inadequate number of physical therapists has led to an increased
reliance on foreign-educated, non-immigrant temporary workers who enter
the U.S. as H-1B visa holders. The U.S. Commission on Immigration
Reform has identified physical therapy and occupational therapy as
having the highest number of H-1B visa holders in the United States,
second only to computer specialists.
In addition to the shortage of practitioners, a shortage of faculty
impedes the expansion of established education programs. The critical
shortage of doctoral-prepared occupational therapists and physical
therapists has resulted in a depleted pool of potential faculty. This
bill would assist in the development of qualified faculty by giving
preference to grant applicants seeking to develop and expand post-
professional programs for the advanced training of physical and
occupational therapists.
The legislation I introduce today would provide necessary assistance
to physical and occupational therapy programs throughout the country.
The investment we make will help reduce America's dependence on foreign
labor and create highly-skilled, high-wage employment opportunities for
American citizens.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 61

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Physical Therapy and
Occupational Therapy Education Act of 2003''.

SEC. 2. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

Subpart 2 of part E of title VII of the Public Health
Service Act (42 U.S.C. 295 et seq.) is amended by inserting
after section 769, the following:

``SEC. 769A. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

``(a) In General.--The Secretary may make grants to, and
enter into contracts with, programs of physical therapy and
occupational therapy for the purpose of planning and
implementing projects to recruit and retain faculty and
students, develop curriculum, support the distribution of
physical therapy and occupational therapy practitioners in
underserved areas, or support the continuing development of
these professions.
``(b) Preference in Making Grants.--In making grants under
subsection (a), the Secretary shall give preference to
qualified applicants that seek to educate physical therapists
or occupational therapists in rural or urban medically
underserved communities, or to expand post-professional
programs for the advanced education of physical therapy or
occupational therapy practitioners.

[[Page S61]]

``(c) Peer Review.--Each peer review group under section
799(f) that is reviewing proposals for grants or contracts
under subsection (a) shall include not fewer than 2 physical
therapists or occupational therapists.
``(d) Report to Congress.--
``(1) In general.--The Secretary shall prepare a report
that--
``(A) summarizes the applications submitted to the
Secretary for grants or contracts under subsection (a);
``(B) specifies the identity of entities receiving the
grants or contracts; and
``(C) evaluates the effectiveness of the program based upon
the objectives established by the entities receiving the
grants or contracts.
``(2) Date certain for submission.--Not later than February
1, 2004, the Secretary shall submit the report prepared under
paragraph (1) to the Committee on Commerce and the Committee
on Appropriations of the House of Representatives, the
Committee on Health, Education, Labor, and Pensions and the
Committee on Appropriations of the Senate.
``(e) Authorization of Appropriations.--For the purpose of
carrying out this section, there is authorized to be
appropriated $3,000,000 for each of the fiscal years 2004
through 2006.''.
______

By Mr. INOUYE:
S. 62. A bill to amend title XVIII of the Social Security Act to
remove the restriction that a clinical psychologist or clinical social
worker provide services in a comprehensive outpatient rehabilitation
facility to a patient only under the care of a physician; to the
Committee on Finance.
Mr. INOUYE. Mr. President, today I introduce legislation to authorize
the autonomous functioning of clinical psychologists and clinical
social workers within the Medicare comprehensive outpatient
rehabilitation facility program.
In my judgment, it is unfortunate that Medicare requires clinical
supervision of the services provided by certain health professionals
and does not allow them to function to the full extent of their State
practice licenses. Those who need the services of outpatient
rehabilitation facilities should have access to a wide range of social
and behavioral science expertise. Clinical psychologists and clinical
social workers are recognized as independent providers of mental health
care services under the Federal Employee Health Benefits Program, the
Civilian Health and Medical Program of the Uniformed Services, the
Medicare, Part B, Program, and numerous private insurance plans. This
legislation will ensure that these qualified professionals achieve the
same recognition under the Medicare comprehensive outpatient
rehabilitation facility program.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 62

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 ``Autonomy for Psychologists
and Social Workers Act of 2003''.

SEC. 2. REMOVAL OF RESTRICTION THAT A CLINICAL PSYCHOLOGIST
OR CLINICAL SOCIAL WORKER PROVIDE SERVICES IN A
COMPREHENSIVE OUTPATIENT REHABILITATION
FACILITY TO A PATIENT ONLY UNDER THE CARE OF A
PHYSICIAN.

(a) In General.--Section 1861(cc)(2)(E) of the Social
Security Act (42 U.S.C. 1395x(cc)(2)(E)) is amended by
striking ``physician'' and inserting ``physician, except that
a patient receiving qualified psychologist services (as
defined in subsection (ii)) may be under the care of a
clinical psychologist with respect to such services to the
extent permitted under State law and except that a patient
receiving clinical social worker services (as defined in
subsection (hh)(2)) may be under the care of a clinical
social worker with respect to such services to the extent
permitted under State law''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to services provided on or after January 1, 2004.
______

By Mr. INOUYE:
S. 63. A bill to amend title XIX of the Social Security Act to
provide for coverage of services provided by nursing school clinics
under State Medicaid programs; to the Committee on Finance.
Mr. INOUYE. Mr. President, today I introduce the Nursing School
Clinics Act of 2003. This measure builds on our concerted efforts to
provide access to quality health care for all Americans by offering
grants and incentives for nursing schools to establish primary care
clinics in underserved areas where additional medical services are most
needed. In addition, this measure provides the opportunity for nursing
schools to enhance the scope of student training and education by
providing firsthand clinical experience in primary care facilities.
Primary care clinics administered by nursing schools are university
or nonprofit primary care centers developed mainly in collaboration
with university schools of nursing and the communities they serve.
These centers are staffed by faculty and staff who are nurse
practitioners and public health nurses. Students supplement patient
care while receiving preceptorships provided by college of nursing
faculty and primary care physicians, often associated with academic
institutions, who serve as collaborators with nurse practitioners. To
date, the comprehensive models of care provided by nursing clinics have
yielded excellent results, including significantly fewer emergency room
visits, fewer hospital inpatient days, and less use of specialists, as
compared to conventional primary health care.
This bill reinforces the principle of combining health care delivery
in underserved areas with the education of advanced practices nurses.
To accomplish these objectives, Title XIX of the Social Security Act
would be amended to designate that the services provided in these
nursing school clinics are reimbursable under Medicaid. The combination
of grants and the provision of Medicaid reimbursement furnishes the
financial incentives for clinic operators to establish the clinics.
In order to meet the increasing challenges of bringing cost-effective
and quality health care to all Americans, we must consider a wide range
of proposals, both large and small. Most importantly, we must approach
the issue of health care with creativity and determination, ensuring
that all reasonable avenues are pursued. Nurses have always been an
integral part of health care delivery. The Nursing School Clinics Act
of 2003 recognizes the central role nurses can perform as care givers
to the medically underserved.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 63

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 ``Nursing School Clinics Act
of 2003''.

SEC. 2. MEDICAID COVERAGE OF SERVICES PROVIDED BY NURSING
SCHOOL CLINICS.

(a) In General.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d(a)) is amended--
(1) in paragraph (26), by striking ``and'' at the end;
(2) by redesignating paragraph (27) as paragraph (28); and
(3) by inserting after paragraph (26), the following new
paragraph:
``(27) nursing school clinic services (as defined in
subsection (x)) furnished by or under the supervision of a
nurse practitioner or a clinical nurse specialist (as defined
in section 1861(aa)(5)), whether or not the nurse
practitioner or clinical nurse specialist is under the
supervision of, or associated with, a physician or other
health care provider; and''.
(b) Nursing School Clinic Services Defined.--Section 1905
of the Social Security Act (42 U.S.C. 1396d) is amended by
adding at the end the following new subsection:
``(x) The term `nursing school clinic services' means
services provided by a health care facility operated by an
accredited school of nursing which provides primary care,
long-term care, mental health counseling, home health
counseling, home health care, or other health care services
which are within the scope of practice of a registered
nurse.''.
(c) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of
the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is
amended by inserting ``and (27)'' after ``(24)''.
(d) Effective Date.--The amendments made by this section
shall be effective with respect to payments made under a
State plan under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) for calendar quarters commencing with
the first calendar quarter beginning after the date of
enactment of this Act.
______

By Mr. INOUYE:
S. 64. A bill to amend title XVIII of the Social Security Act to
provide improved reimbursement for clinical social worker services
under the medicare program; to the Committee on Finance.

[[Page S62]]

Mr. INOUYE. Mr. President, today I am introducing legislation to
amend Title XVIII of the Social Security Act to correct discrepancies
in the reimbursement of clinical social workers covered through
Medicare, Part B. The three proposed changes contained in this
legislation clarify the current payment process for clinical social
workers and establish a reimbursement methodology for the profession
that is similar to other health care professionals reimbursed through
the Medicare program.
First, this legislation sets payment for clinical social worker
services according to a fee schedule established by the Secretary.
Second, it explicitly states that services and supplies furnished by a
clinical social worker are a covered Medicare expense, just as these
services are covered for other mental health professionals in Medicare.
Third, the bill allows clinical social workers to be reimbursed for
services provided to a client who is hospitalized.
Clinical social workers are valued members of our health care
provider network. They are legally regulated in every state of the
nation and are recognized as independent providers of mental health
care throughout the health care system. It is time to correct the
disparate reimbursement treatment of this profession under Medicare.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 64

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 ``Equity for Clinical Social
Workers Act of 2003''.

SEC. 2. IMPROVED REIMBURSEMENT FOR CLINICAL SOCIAL WORKER
SERVICES UNDER MEDICARE.

(a) In General.--Section 1833(a)(1)(F)(ii) of the Social
Security Act (42 U.S.C. 1395l(a)(1)(F)(ii)) is amended to
read as follows: ``(ii) the amount determined by a fee
schedule established by the Secretary,''.
(b) Definition of Clinical Social Worker Services
Expanded.--Section 1861(hh)(2) of the Social Security Act (42
U.S.C. 1395x(hh)(2)) is amended by striking ``services
performed by a clinical social worker (as defined in
paragraph (1))'' and inserting ``such services and such
services and supplies furnished as an incident to such
services performed by a clinical social worker (as defined in
paragraph (1))''.
(c) Clinical Social Worker Services Not To Be Included in
Inpatient Hospital Services.--Section 1861(b)(4) of the
Social Security Act (42 U.S.C. 1395x(b)(4)) is amended by
striking ``and services'' and inserting ``clinical social
worker services, and services''.
(d) Treatment of Services Furnished in Inpatient Setting.--
Section 1832(a)(2)(B)(iii) of the Social Security Act (42
U.S.C. 1395k(a)(2)(B)(iii)) is amended by striking ``and
services'' and inserting ``clinical social worker services,
and services''.
(e) Effective Date.--The amendments made by this section
shall apply to payments made for clinical social worker
services furnished on or after January 1, 2004.
______

By Mr. INOUYE:
S. 65. A bill to amend title VII of the Public Health Service Act to
establish a psychology post-doctoral fellowship program, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.
Mr. INOUYE. Mr. President, I am introducing legislation today to
amend Title VII of the Public Health Service Act to establish a
psychology post-doctoral program.
Psychologists have made a unique contribution in reaching out to the
Nation's medically underserved populations. Expertise in behavioral
science is useful in addressing grave concerns such as violence,
addiction, mental illness, adolescent and child behavioral disorders,
and family disruption. Establishment of a psychology post-doctoral
program could be an effective way to find solutions to these issues.
Similar programs supporting additional, specialized training in
traditionally underserved settings have been successful in retaining
participants to serve the same populations. For example, mental health
professionals who have participated in these specialized federally
funded programs have tended not only to meet their repayment
obligations, but have continued to work in the public sector or with
the underserved.
While a doctorate in psychology provides broad-based knowledge and
mastery in a wide variety of clinical skills, specialized post-doctoral
fellowship programs help to develop particular diagnostic and treatment
skills required to respond effectively to underserved populations. For
example, what appears to be poor academic motivation in a child
recently relocated from Southeast Asia might actually reflect a
cultural value of reserve rather than a disinterest in academic
learning. Specialized assessment skills enable the clinician to
initiate effective treatment.
Domestic violence poses a significant public health problem and is
not just a problem for the criminal justice system. Violence against
women results in thousands of hospitalizations a year. Rates of child
and spouse abuse in rural areas are particularly high, as are the rates
of alcohol abuse and depression in adolescents. A post-doctoral
fellowship program in the psychology of the rural populations could be
of special benefit in addressing these problems.
Given the demonstrated success and effectiveness of specialized
training programs, it is incumbent upon us to encourage participation
in post-doctoral fellowships that respond to the needs of the nation's
underserved.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 65

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Psychologists in the Service
of the Public Act of 2003''.

SEC. 2. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

Part C of title VII of the Public Health Service Act (42
U.S.C. 293k et seq.) is amended by adding at the end the
following:

``SEC. 749. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

``(a) In General.--The Secretary shall establish a
psychology post-doctoral fellowship program to make grants to
and enter into contracts with eligible entities to encourage
the provision of psychological training and services in
underserved treatment areas.
``(b) Eligible Entities.--
``(1) Individuals.--In order to receive a grant under this
section an individual shall submit an application to the
Secretary at such time, in such form, and containing such
information as the Secretary shall require, including a
certification that such individual--
``(A) has received a doctoral degree through a graduate
program in psychology provided by an accredited institution
at the time such grant is awarded;
``(B) will provide services in a medically underserved
population during the period of such grant;
``(C) will comply with the provisions of subsection (c);
and
``(D) will provide any other information or assurances as
the Secretary determines appropriate.
``(2) Institutions.--In order to receive a grant or
contract under this section, an institution shall submit an
application to the Secretary at such time, in such form, and
containing such information as the Secretary shall require,
including a certification that such institution--
``(A) is an entity, approved by the State, that provides
psychological services in medically underserved areas or to
medically underserved populations (including entities that
care for the mentally retarded, mental health institutions,
and prisons);
``(B) will use amounts provided to such institution under
this section to provide financial assistance in the form of
fellowships to qualified individuals who meet the
requirements of subparagraphs (A) through (C) of paragraph
(1);
``(C) will not use in excess of 10 percent of amounts
provided under this section to pay for the administrative
costs of any fellowship programs established with such funds;
and
``(D) will provide any other information or assurance as
the Secretary determines appropriate.
``(c) Continued Provision of Services.--Any individual who
receives a grant or fellowship under this section shall
certify to the Secretary that such individual will continue
to provide the type of services for which such grant or
fellowship is awarded for at least 1 year after the term of
the grant or fellowship has expired.
``(d) Regulations.--Not later than 180 days after the date
of enactment of this section, the Secretary shall promulgate
regulations necessary to carry out this section, including
regulations that define the terms `medically underserved
areas' or `medically unserved populations'.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section,
$5,000,000 for each of the fiscal years 2004 through 2006.''.

[[Page S63]]

______

By Mr. INOUYE:
S. 66. A bill to amend title 5, United States Code, to require the
issuance of prisoner-of-war medal to civilian employees of the Federal
Government who are forcibly detained or interned by an enemy government
or a hostile force under wartime conditions; to the Committee on
Governmental Affairs.
Mr. INOUYE. Mr. President, all too often we find that our Nation's
civilian employees of the Federal Government who have been forcibly
detained or interred by a hostile government do not receive the
recognition they deserve. My bill would correct this inequity and
provide a prisoner of war medal for such citizens.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 66

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

SECTION 1. PRISONER-OF-WAR MEDAL FOR CIVILIAN EMPLOYEES OF
THE FEDERAL GOVERNMENT.

(a) Authority To Issue Prisoner-of-War Medal.--(1) Subpart
A of part III of title 5, United States Code, is amended by
inserting after chapter 23 the following new chapter:

``CHAPTER 25--MISCELLANEOUS AWARDS

``Sec.
``2501. Prisoner-of-war medal: issue.

``Sec. 2501. Prisoner-of-war medal: issue

``(a) The President shall issue a prisoner-of-war medal to
any person who, while serving in any capacity as an officer
or employee of the Federal Government, was forcibly detained
or interned, not as a result of such person's own willful
misconduct--
``(1) by an enemy government or its agents, or a hostile
force, during a period of war; or
``(2) by a foreign government or its agents, or a hostile
force, during a period other than a period of war in which
such person was held under circumstances which the President
finds to have been comparable to the circumstances under
which members of the armed forces have generally been
forcibly detained or interned by enemy governments during
periods of war.
``(b) The prisoner-of-war medal shall be of appropriate
design, with ribbons and appurtenances.
``(c) Not more than one prisoner-of-war medal may be issued
to a person under this section or section 1128 of title 10.
However, for each succeeding service that would otherwise
justify the issuance of such a medal, the President (in the
case of service referred to in subsection (a) of this
section) or the Secretary concerned (in the case of service
referred to in section 1128(a) of title 10) may issue a
suitable device to be worn as determined by the President or
the Secretary, as the case may be.
``(d) For a person to be eligible for issuance of a
prisoner-of-war medal, the person's conduct must have been
honorable for the period of captivity which serves as the
basis for the issuance.
``(e) If a person dies before the issuance of a prisoner-
of-war medal to which he is entitled, the medal may be issued
to the person's representative, as designated by the
President.
``(f) Under regulations to be prescribed by the President,
a prisoner-of-war medal that is lost, destroyed, or rendered
unfit for use without fault or neglect on the part of the
person to whom it was issued may be replaced without charge.
``(g) In this section, the term `period of war' has the
meaning given such term in section 101(11) of title 38.''.
(2) The table of chapters at the beginning of part III of
such title is amended by inserting after the item relating to
chapter 23 the following new item:

``25. Miscellaneous Awards..................................2501''.....

(b) Applicability.--Section 2501 of title 5, United States
Code, as added by subsection (a), applies with respect to any
person who, after April 5, 1917, is forcibly detained or
interned as described in subsection (a) of such section.
______

By Mr. INOUYE:
S. 67. A bill for the relief of Jim K. Yoshida; to the Committee on
Veterans' Affairs.
Mr. INOUYE. Mr. President, today I am introducing a private relief
bill on behalf of Jim K. Yoshida, to obtain recognition of his service
with the U.S. military in Korea so that he may obtain veteran's status.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 67

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

SECTION 1. VETERAN STATUS.

(a) Entitlement to Status.--Notwithstanding any other
provision of law, Jim K. Yoshida of Honolulu, Hawaii, is
deemed to be a veteran for the purposes of all laws
administered by the Secretary of Veterans Affairs.
(b) Treatment of Service.--Notwithstanding any other
provision of law, the service of Jim K. Yoshida of Honolulu,
Hawaii, as a volunteer member of the United States Army
during the period beginning on July 2, 1950, and ending on
January 17, 1951, shall be deemed to be active military
service from which Jim K. Yoshida was discharged under
honorable conditions for the purposes of all laws
administered by the Secretary of Veterans Affairs.
(c) Prospective Applicability.--No benefits may be paid or
otherwise provided to Jim K. Yoshida of Honolulu, Hawaii, by
reason of the enactment of this Act with respect to any
period before the date of the enactment of this Act.
______

By Mr. INOUYE:
S. 68. A bill to amend title 36, United States Code, to improve
benefits for Filipino veterans of World War II, and for other purposes;
to the Committee on Veterans' Affairs.
Mr. INOUYE. Mr. President, I rise to introduce the Filipino Veterans'
Benefits Improvement Act of 2003 to give our country the opportunity to
right a wrong committed decades ago by providing Philippine-born
veterans of World War II, who served in the United States Armed Forces,
their hard-earned, due compensation.
The Philippines became a United States possession in 1898, when it
was ceded from Spain following the Spanish-American War. In 1934, the
Congress enacted the Philippine Independence Act, Public Law 73-127,
which provided a 10-year time frame for the independence of the
Philippines. Between 1934 and final independence in 1946, the United
States retained certain powers over the Philippines, including the
right to call all military forces organized by the newly-formed
Commonwealth government into the service of the United States Armed
Forces.
On July 26, 1941, President Roosevelt issued an Executive Order
calling members of the Philippine Commonwealth Army into the service of
the United States Armed Forces of the Far East. Under this order,
Filipinos were entitled to full veterans' benefits. More than 100,000
Filipinos volunteered for the Philippine Commonwealth Army and fought
alongside the United States Armed Forces.
Shortly after Japan's surrender, Congress enacted the Armed Forces
Voluntary Recruitment Act of 1945 for the purpose of sending American
troops to occupy enemy lands, and to oversee military installations at
various overseas locations.
A provision included in the Recruitment Act called for the enlistment
of Philippine citizens to constitute a new body of scouts. The New
Philippine Scouts were authorized to receive pay and allowances for
services performed throughout the Western Pacific. Although hostilities
had ceased, wartime service of the New Philippine Scouts continued as a
matter of law until the end of 1946.
Despite their sacrifices, on February 18, 1946, Congress betrayed
these veterans by enacting the Rescission Act of 1946 and declaring the
service performed by the Philippine Commonwealth Army veterans as not
``active service,'' thus denying many benefits to which these veterans
were entitled.
On May 27, 1946, the Congress enacted the Second Supplemental Surplus
Appropriations Rescission Act, which included a provision to limit
veterans' benefits provided to Filipinos. This provision duplicated the
language that had eliminated veterans' benefits under the First
Rescission Act, and placed similar restrictions on veterans of the New
Philippine Scouts. Thus, the Filipino veterans who fought in the
service of the United States during World War II were precluded from
receiving most veterans' benefits that had been available to them
before 1946, and that are available to all other veterans of our armed
forces regardless of race, national origin, or citizenship status.
The Congress tried to rectify the wrong committed against the
Filipino veterans of World War II by amending the Nationality Act of
1940, to grant the veterans the privilege of becoming United States
citizens for having served in the United States Armed Forces of the Far
East. The law expired at the end of 1946, but not before the United
States had withdrawn its sole naturalization examiner from the
Philippines for a nine-month period. This

[[Page S64]]

effectively denied Filipino veterans the opportunity to become citizens
during this nine-month window. Forty-five years later, under the
Immigration Act of 1990, certain Filipino veterans who had served
during World War II became eligible for United States citizenship.
Between November, 1990, and February, 1995, approximately 24,000
veterans took advantage of this opportunity and became United States
citizens.
Although progress has been made, we must, as a nation, correct fully
the injustice caused by the Rescission Acts by providing equal
treatment for the service and sacrifice by these brave men. The
Filipino Veterans' Benefits Improvement Act of 2003 will compensate
eligible veterans by providing a number of needed benefits: Dependency
and Indeminity Compensation to surviving widows of service-connected
veterans living in the United States; a payment increase to New
Philippine Scouts and survivors residing in the United States from 50
percent to the full dollar amount for service-connected disability
compensation; authorization of non-service connected disability
pensions for veterans residing in the Philippines, but at a rate of
$100 per month, which matches the amount of the veterans' pension
received by them from the Philippine government; access to veterans
hospitals for non-service connected disabled veterans in the same
manner as United States veterans; and $500,000 per year to the
Outpatient Clinic in Manila.
Heroes should never be forgotten or ignored, so let us not turn our
backs on those who sacrificed so much. Many of the Filipinos who fought
so hard for our nation have been honored with American citizenship, but
let us now work to repay all of these brave men for their sacrifices by
providing them the veterans' benefits they have earned.
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. 68

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 ``Filipino Veterans' Benefits
Improvements Act of 2003''.

SEC. 2. RATE OF PAYMENT OF CERTAIN BENEFITS FOR NEW
PHILIPPINE SCOUTS RESIDING IN THE UNITED
STATES.

(a) Rate of Payment.--Section 107 of title 38, United
States Code, is amended--
(1) in the second sentence of subsection (b), by striking
``Payments'' and inserting ``Except as provided in subsection
(c), payments''; and
(2) in subsection (c)--
(A) by inserting ``or (b)'' after ``subsection (a)'' the
first place it appears; and
(B) by striking ``subsection (a)'' the second place it
appears and inserting ``the applicable subsection''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on the date of the enactment of this Act,
and shall apply to benefits paid for months beginning on or
after that date.

SEC. 3. RATE OF PAYMENT OF DEPENDENCY AND INDEMNITY
COMPENSATION FOR SURVIVING SPOUSES OF CERTAIN
FILIPINO VETERANS.

(a) Rate of Payment.--Subsection (c) of section 107 of
title 38, United States Code, as amended by section 2 of this
Act, is further amended by inserting ``, and under chapter 13
of this title,'' after ``chapter 11 of this title''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act,
and shall apply to benefits paid for months beginning on or
after that date.

SEC. 4. ELIGIBILITY OF CERTAIN FILIPINO VETERANS FOR
DISABILITY PENSION.

(a) Eligibility.--Section 107 of title 38, United States
Code, as amended by this Act, is further amended--
(1) in subsection (a)--
(A) in paragraph (3) of the first sentence, by inserting
``15,'' before ``23,''; and
(B) in the second sentence, by striking ``subsections (c)
and (d)'' and inserting ``subsections (c), (d), and (e)'';
and
(2) in subsection (b)--
(A) by striking paragraph (2) of the first sentence and
inserting the following new paragraph (2):
``(2) chapters 11, 13 (except section 1312(a)), and 15 of
this title.''; and
(B) in the second sentence, by striking ``subsection (c)''
and inserting ``subsections (c) and (e)''.
(b) Rate of Payment.--That section is further amended by
adding at the end the following new subsection:
``(e) In the case of benefits under chapter 15 of this
title paid by reason of service described in subsection (a)
or (b), if--
``(1) the benefits are paid to an individual residing in
the United States who is a citizen of, or an alien lawfully
admitted for permanent residence in, the United States, the
second sentence of the applicable subsection shall not apply;
and
``(2) the benefits are paid to an individual residing in
the Republic of the Philippines, the benefits shall be paid
(notwithstanding any other provision of law) at the rate of
$100 per month.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act,
and shall apply to benefits for months beginning on or after
that date.

SEC. 5. ELIGIBILITY OF FILIPINO VETERANS FOR HEALTH CARE IN
THE UNITED STATES.

The text of section 1734 of title 38, United States Code,
is amended to read as follows:
``The Secretary, within the limits of Department
facilities, shall furnish hospital and nursing home care and
medical services to Commonwealth Army veterans and new
Philippine Scouts in the same manner as provided for under
section 1710 of this title.''.

SEC. 6. OUTPATIENT HEALTH CARE FOR VETERANS RESIDING IN THE
PHILIPPINES.

(a) In General.--Subchapter IV of chapter 17 of title 38,
United States Code, is amended--
(1) by redesignating section 1735 as section 1736; and
(2) by inserting after section 1734 the following new
section 1735:

``Sec. 1735. Outpatient care and services for World War II
veterans residing in the Philippines

``(a) Outpatient Health Care.--The Secretary shall furnish
care and services to veterans of World War II, Commonwealth
Army veterans, and new Philippine Scouts for the treatment of
the service-connected disabilities and nonservice-connected
disabilities of such veterans and scouts residing in the
Republic of the Philippines on an outpatient basis at the
Manila VA Outpatient Clinic.
``(b) Limitations.--(1) The amount expended by the
Secretary for the purpose of subsection (a) in any fiscal
year may not exceed $500,000.
``(2) The authority of the Secretary to furnish care and
services under subsection (a) is effective in any fiscal year
only to the extent that appropriations are available for that
purpose.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 17 of such title is amended by striking
the item relating to section 1735 and inserting after the
item relating to section 1734 the following new items:

``1735. Outpatient care and services for World War II veterans residing
in the Philippines.
``1736. Definitions.''.

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