[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.''

       (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.--For purposes of section 
     1(h)(13) (relating to maximum rate of tax on dividends) 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.''
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.
                                  ____


                                 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--

       ``(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) 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--

       ``(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 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.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     

                          ____________________