[Congressional Record Volume 149, Number 15 (Tuesday, January 28, 2003)]
[Senate]
[Pages S1669-S1685]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CRAIG (for himself, Mr. Baucus, Mr. Lott, Mr. Crapo, Mr. 
        Sessions, Ms. Snowe, Ms. Collins, Mr. Cochran, Mrs. Lincoln, 
        Mr. Burns, and Mr. Miller):
  S. 219. A bill to amend the Tariff Act of 1930 to clarify the 
adjustments to be made in determining export price and constructed 
export price; to the Committee on Finance.
  Mr. CRAIG. Mr. President, I come to the Chamber this morning, with a 
number of my colleagues, to discuss what is a critical issue in timber 
country across the United States, where men and women go to work every 
day in our sawmills only to find the mill has been shut down and the 
lights have been turned out.
  As a result, that has been a problem which has grown for some time 
because of the Canadians, their style of production at this moment, and 
the huge volume of timber they are pouring into this country. It is a 
market condition that will continue to shut down many of our mills, 
some that will never turn on their lights again, some that will never 
again employ men and women in the small towns where most of those mills 
are across the country.
  Today, some of my colleagues and I are introducing legislation to 
work cooperatively with the administration in trying to resolve this 
through negotiation. This legislation is being offered on behalf of 
myself, Senator Baucus, Senator Crapo, my colleague from Idaho, who is 
in the Chamber, Senator Sessions, Senator Snowe, Senator Collins, 
Senator Cochran, Senator Burns, and Senator Lincoln.
  In introducing this legislation today, we are amending the Tariff Act 
of 1930 to clarify what is an appropriate deduction from the price of 
merchandise. We believe the deduction of the countervailing duty should 
be included in the calculation in determining whether or not and to 
what extent there have been sales dumped at less than fair market value 
in the United States.
  Some time ago, we established a countervailing duty against Canadian 
products coming into this market. This is in response to that and the 
way it is calculated.
  While the Department of Commerce has worked diligently on the 
softwood lumber case, the Canadian industry and Government continue to 
effectively avoid the countervailing duty and antidumping orders. The 
most recent move by the Canadian Government to avoid the countervailing 
duty is to declare a significant region of interior British Columbia 
bug kill timber. This particular green lumber--or timber in this case--
is being sold at salvage prices and has flooded the amount of available 
timber already in the market.
  The price for this timber is now as low as a dollar per thousand 
board feet, while the competitive market value is over $100 per 
thousand board feet--in other words, on the stump at the time of the 
sale.
  I remind my colleagues a majority of this determined bug kill has not 
yet been affected by bugs. It is simply a decision made by the Canadian 
Government in this instance. Yet they are selling it at prices that are 
as if it had been affected by disease.
  Next, British Columbia has revised their forest practice code to 
reduce costs to the lumber manufacturers by decreasing forestry 
standards and placing logging corporations in charge of

[[Page S1670]]

enforcement actions. That is like the U.S. Forest Service turning to 
the logging companies and saying the logging companies can enforce all 
of the environmental laws, as well as the laws under which we govern 
and manage our forests. We will turn that authority over to the logging 
companies.
  What does this do to Canadian timber companies? It literally saves 
them millions of dollars in operating expenses.
  These recent and blatant moves by the Canadians reveal their true 
desires to continue to flood the U.S. markets and their unwillingness 
to find a resolution that provides both security for U.S. and Canadian 
jobs.

  Our proposal specifies that countervailing duties are to be treated 
as a cost of production, a clarification of the Trade Act that all 
duties should be considered a cost of production incurred on shipments 
to the United States. The deduction of countervailing duty would assist 
in determining whether or not and to what extent there have been sales 
dumped at less than fair market value in the United States.
  Dumping is when a company sells a product into the United States for 
less than its cost of production. The Department of Commerce currently 
does not consider countervailing duties, which offset subsidies, as a 
cost of production when calculating the amount of dumping and requisite 
antidumping duties. The Department's policy of ignoring countervailing 
duties when calculating antidumping duties undervalues the actual 
amount of the dumping.
  Fair value typically is the sales price of the merchandise in the 
country-of-origin market. The antidumping analysis compares fair value 
of a good from another country to the fair value of a good from the 
United States to determine if the good from another country was dumped 
at an unfair price in the U.S. market.
  For example, in the U.S.-Canadian softwood lumber dispute, the 
Department of Commerce determined that the Canadian provinces subsidize 
their industry by providing lumber mills timber at prices that are 33 
to 50 percent below market value. It also found that Canadian companies 
were selling lumber in the United States at below their subsidized cost 
of production, requiring an antidumping duty of 8.79 percent.
  The antidumping duty currently undervalues the Canadian dumping 
practices by comparing a subsidized cost of production to the price of 
lumber rather than comparing the cost of production plus the 
countervailing duty to the price of lumber. It is all in the math, and 
in this kind of math it is quite obvious that Canadians are taking 
tremendous advantage of the marketplace. As I said earlier, the lights 
in the sawmills across America are going out.
  Such a change in the Department's policy, we believe--those of us who 
have authored this legislation--is consistent with the practices of the 
European community and of Canada. It is time the Department of Commerce 
correct this accounting error, and it is time for the Canadian 
Government and their industry leaders to come to the table to negotiate 
a free and fair market price for both U.S. and Canadian lumber 
products.
  I believe this Congress will not tolerate the kind of dumping 
activity that is going on in the market today, which appears to be at 
this moment not only blatant but an attempt to grab even a larger 
market share in this country.
  For years, I have worked on this issue, and I clearly recognize the 
importance in the overall market of Canadian lumber in our market to 
meet our housing demands, but to do so and to expand that market base 
at a cost to U.S. jobs and U.S. producers is not fair, nor is it 
balanced. That is why we have introduced this legislation today.
  Several other colleagues who are cosponsors in the legislation plan 
to come to the floor during this period of morning business to speak to 
this issue. I am extremely pleased to be joined by Senator Baucus, 
Senator Lott, and Senator Snowe. I mention those three specifically 
because they are on the Finance Committee. This is legislation that 
will be referred to the Finance Committee.
  As my colleague from Idaho so clearly said, this is a simple 
correction in the law. It is a practice followed by other countries in 
Europe and Canada itself. Clearly, it would change the dynamics of how 
we deal with Canada, but it would also show the Canadians that we are 
not going to stand idly by and allow what is so blatant and so 
intentional in both the pricing of their stumpage and, therefore, the 
cost of entry into our market. Blatant dumping in the market for the 
purpose of gaining market share and putting some of our businesses out 
of business should not be tolerated.
  We have all heard over the years the phrase ``mill town.'' It is so 
true today, still, in those areas of our country that are adjacent to 
private and public forests, that it is the sawmill that often is the 
larger employer in the community, providing excellent jobs at high pay 
to the men and women who live within that community. When that mill 
goes down and those citizens are out of work, there is no alternative, 
there are no other jobs, or there are limited jobs in the community. 
That community oftentimes is anywhere from 20 to 100 to 150 miles from 
the next community.
  So that wage earner oftentimes is faced with a very tough choice he 
or she may have to make. That is not just to go search for another job 
but oftentimes to pick up their family and move from that small 
community they had chosen to live in and to raise their families. Why? 
Because a singular employee in this instance was either shut down or 
put out of business. Why? Because of predatory practices on the part of 
our friends to the north. And I say ``friends'' because I believe that. 
But certainly in this segment of their economy, they are choosing to 
enter the most lucrative timber market in the world--ours--with a 
thriving, aggressive homebuilding industry and an economy in the 
homebuilding industry that is very strong today, to supply that 
product.

  I recognize the sheer demand for dimensional lumber in this market is 
much greater than both United States producers from private and public 
lands can supply, and Canadians can and have had and will have a 
substantial portion of our market. But now, to do so intentionally so 
the big boys can get bigger in Canada, putting oftentimes out of 
business the smaller producer here in the United States, is something 
we should not stand idly by and tolerate.
  Mr. President, I see I am being joined in the Chamber by my colleague 
from Mississippi. Senator Lott is a cosponsor of the legislation we 
have just introduced dealing with the Tariff Act of 1930. Mississippi 
has a thriving timber industry that is a major contributor to their 
State's economy, and especially to rural Mississippi's workforce. So I 
will be happy to yield to Senator Lott for him to discuss this issue, 
of course, or any other issue he might wish to discuss.
  Mr. BAUCUS. Mr. President, I rise today to discuss a much-needed 
clarification of current trade law. Misinterpretation of the current 
law hurts hundreds of American companies and thousands of American 
workers.
  It is a misinterpretation that results in the understatement both of 
the degree of foreign unfair trade and the amount of duties necessary 
to offset it.
  The legislation Senator Craig and I are proposing would clarify that, 
in an antidumping proceeding, countervailing duties paid by a foreign 
seller should be deducted from the U.S. price.
  This legislation would rectify the current understatement of unfair 
trade and ensure that the true expenses of selling in the United States 
are recognized in the calculation of duties.
  Now, I am here today because this issue is of particular importance 
to Montana's softwood lumber industry. For more than 20 years, I have 
stood beside our lumber industry as they have fought massive illegal 
subsidies by the Canadian government.
  All they are asking for is a level playing field.
  Unfortunately for everyone, this process has been stuck in an endless 
cycle of litigation. I hope we can end that, and get to a place where 
there is real market-based competition. But until we do, we must ensure 
that our fair trade laws are as strong as possible.
  We have countervailing duty laws that offset unfair foreign 
subsidies. We also have antidumping laws that help ensure that foreign 
products are sold for a ``fair price'' in the United States,

[[Page S1671]]

a price that is comparable to the foreign price, and that reasonably 
reflects the cost of production.
  But we can't make a fair comparison unless we factor in the cost of 
countervailing duties. It's that simple. We are letting unfair traders 
off the hook.
  And we're doing so simply because of a misinterpretation of current 
law by the Department of Commerce. There is no sensible policy or legal 
rationale for this practice.
  And I would note here that adopting this legislation would make our 
practice consistent with the practices of Canada and the European 
Union. For the life of me, I can't understand we wouldn't give our 
companies and workers trade laws that are as strong as those in the 
countries we compete against. That is just common sense.
  I would also emphasize that Commerce itself could fix this problem if 
it were so inclined. Commerce could, for example, announce in an 
ongoing administrative review its intention to reconsider treatment of 
countervailing duties as a cost. The Department has often used such 
cases as a means to review policy.
  The current policy makes no sense. It violates the statute. It fails 
to redress continued dumping. And it effectively discourages 
negotiations to end unfair trade.
  Most importantly, correcting the current policy would force Canadian 
mills to make a clear choice, negotiate a long-term resolution or face 
higher duties.
  In the absence of a voluntary change in policy by Commerce, I offer 
this legislation to clarify the statute.
  This will ensure a fair comparison of prices and a more accurate 
measurement of the amount of dumping. It is just the right thing to do.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. Mr. President, I thank Senator Craig for his leadership on 
this issue, and also Senator Baucus and Senator Crapo, and a number of 
others whose States are being severely impacted by very unfair Canadian 
softwood lumber practices.
  Forestry is the second largest crop in my State of Mississippi and 
represents $1.25 billion annually. But what we are dealing with is the 
dumping of this Canadian softwood into our region of the country.
  ``Dumping'' is when a company sells a product for less than the cost 
of production. But the Department of Commerce currently does not 
consider countervailing duties, which offset subsidies, as a cost of 
production when evaluating and calculating the amount of dumping and 
the requisite antidumping duties. The Department's policy of ignoring 
these countervailing duties when calculating antidumping duties 
undervalues the amount of the dumping of the products.
  Let me just say, I have been working on this issue actually for years 
now. I have worked with the previous administration and have been 
working with this administration. Our Customs officials have tried to 
be helpful. And certainly the current Secretary of Commerce has been 
paying close attention to this issue, and I really appreciate it. But 
there are limits to what they can do without additional legislation 
that will make it clear how we will deal with these countervailing 
duties. So that is why this legislation has been introduced.
  I think we must have had 8 or 10 Senators who met with the Secretary 
of Commerce and other officials of Commerce and discussed this problem 
and its continuing impact on this major industry in my State and in our 
country, and talked about the need to take some further actions to make 
sure we are properly evaluating the product that is being dumped in the 
United States.
  The United States-Canada softwood lumber dispute is one that has been 
going on a long time. And it is clear from information we have that the 
Canadian provinces are subsidizing their industry by providing lumber 
mills timber at prices that are 33 to 50 percent below market value. 
Our Commerce Department has found that Canadian companies have been 
selling lumber in the United States but below their subsidized cost of 
production, requiring an antidumping duty of 8.79 percent. The fair 
market value calculation currently undervalues the Canadian dumping 
practices by comparing a subsidized cost of production to the cost of 
United States lumber rather than comparing the subsidized cost of 
production plus the countervailing duty to the cost of United States 
lumber.
  That is what this legislation would do. It would correct this by 
specifying that the CVD duties are to be treated as a cost of 
production, a clarification of U.S. statute section 19, U.S.C. 1677, 
which states that all duties should be considered a cost of production 
incurred on shipments to the United States. Such a change of Department 
policy is consistent with practices in the European Union and, as a 
matter of fact, of Canada.
  The legislation, in my opinion, will have an immediate impact because 
with the correction of this problem, then, the Canadian mills will face 
the prospect of paying considerably higher antidumping rates if the 
lumber market remains at the current low level. So I think this is 
something we need to do.
  I have met with Canadian officials, including the Prime Minister, the 
Ambassador, and Members of their Parliament. I had the impression that 
while they recognized this is an economic problem in the United States 
and unfair, they do not believe we are going to take the necessary 
action to really get a result. And they have been dragging it out now 
for years.

  I am going to meet with some Canadian Government officials even 
tomorrow. I am sure this issue will come up. But once they realize we 
are serious--I believe this administration, this Commerce Department is 
serious--we are not going to allow them to sell this product at below 
production of cost, and that we are also going to include in that 
figure the cost figure, the countervailing duty orders, I think maybe 
they will understand that we have to deal with this problem.
  Even today, bug kill timber is being sold at salvage prices in the 
interior of British Columbia, which has increased the amount of 
available timber already on the market. The price for this timber is as 
low as $1 per 1,000 board feet, when the competitive market value is 
over $100 per thousand board feet. That gives you some concept of the 
disadvantage with which our American softwood lumber producers are 
dealing. Our lumber industry is in a crisis. Make no mistake about it. 
We have been losing mills. The product value is down. Production is 
down. If the current market conditions continue, many of our remaining 
lumber manufacturers will not survive the next 6 months. This is a 
critical situation, and it is one that is going to get much worse if we 
don't get some action quickly.
  The U.S. lumber industry supports the Department's changed 
circumstances process. Therefore, I think this is a solution we can all 
work on. As a member of the Finance Committee, along with Senator 
Baucus, who also serves on the Finance Committee, we will make sure 
this legislation receives the consideration it deserves.
  We urge our colleagues in the country that is one of our two or three 
best friends in the world, Canada, to work with us on this. This is an 
unfair situation, one that has been going on too long, one that is 
destroying an important part of our economy. I hope our Government will 
vigorously pursue the litigation that is now being considered. The WTO 
has already found that Canada has an actionable subsidy, meaning these 
duties will be imposed until provinces allow the market to determine 
the price of timber. Our Government should continue to pursue it.
  Our Canadian friends and allies should work with us because this is a 
very unfair situation, one we are trying to remedy by making sure all 
of the costs of production, including the countervailing duties, are 
included in their calculations.
  I congratulate Senator Craig for his leadership in this area, and I 
look forward to working with him in the future as we come forward with 
a proper solution to this critical issue.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, I appreciate Senator Lott coming to the 
Chamber this morning to speak on the role the timber industry plays in 
the

[[Page S1672]]

economy of Mississippi and how important it is. It is important to 
rural Mississippi, to rural Idaho, to rural America, where we struggle 
mightily to keep a viable productive job base.
  Clearly over the last decade, the economy of this country flourished. 
And while all of that was going on, it was rural Idaho that felt much 
of the pain and shared not in that new growth economy, in part because 
of the very problem both Senator Lott and I and Senator Baucus and 
others are addressing. My colleague Senator Crapo spoke to the matter 
as well.
  This is a relatively simple adjustment in trade law, but it could 
have a substantial impact on the Canadians and the current practices in 
which they are involved, practices we believe are not in the best 
interest of both governments and both countries.
  To have a nearly ``cut at will'' policy, both in provincial and crown 
timber in Canada, is at best frustrating to some of us who believe not 
only is that bad policy but, from an environmental point of view, it is 
not an effectively balanced policy. Are the practices being adhered to 
that should be adhered to for the purposes of sustaining yields and 
ongoing production of timber? Or is it simply an effort to keep people 
at work, in this instance, and, more importantly now, because of the 
declaration of green timber unaffected by disease or bug, now being 
called bug kill timber, is it simply a policy to grab an increasingly 
larger portion of the market? When many of these medium- and small-size 
mills go down, oftentimes they don't come back. If they are down for a 
longer period of time, the workforce disperses in search of another job 
and, as a result of that, many of these mills that go down will stay 
down permanently.
  That is exactly what larger producers in Canada are hoping for, as it 
will allow them an ever-increasing larger portion of the market here in 
the lower 48 States.
  I hope the Finance Committee will hold hearings and move quickly on 
this issue. It is important for our economy and, more importantly, it 
is a small town, mill town issue that in many States, such as Idaho, 
Mississippi, Montana, and throughout the South where there are large 
timber reserves, becomes a critical way of sustaining the rural 
economy.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. Mr. President, I appreciate the opportunity to join with 
my colleague from Idaho, Senator Craig, and with the other Senators he 
has listed who are cosponsoring this critical legislation.
  Senator Craig has already laid out this circumstance. Some time ago, 
when we could not reach an agreement with Canada on this critical issue 
through trade negotiations, WTO and other trade sanctions were sought 
by American companies seeking to correct the problem that has been 
faced by subsidized timber flooding into the United States from Canada. 
As a result of that effort, the U.S. Department of Commerce found the 
Canadian provinces subsidize their industry by providing lumber mills 
timber at prices that are 33 to 50 percent below market value.
  As Senator Craig has indicated, as a result of that, a countervailing 
duty was applied and the Canadian timber producers, who are trying to 
bring their timber into the United States, are now required to pay this 
countervailing duty as a cost for their subsidized timber.
  The response of the Canadian Government to that has not been simply 
to comply and try to negotiate a new, workable softwood lumber 
agreement. Instead, the Canadian Government has continued to increase 
the available subsidies and to try to flood the United States markets 
with this timber. The outcome has been that from August 2000 to March 
2001, the United States lumber manufacturers closed 27 mills 
permanently while only two Canadian mills were closed during that time. 
The reason, of course, was this continued support provided from the 
Canadian Government.
  How was it provided? As has already been indicated, allegedly bug 
kill timber. But timber wood that has not faced the impact yet was 
provided for prices which were as low as $1 per 1,000 board feet when 
the market price for that timber would have been somewhere in the 
neighborhood of $100 per 1,000 board feet. This significantly 
subsidized timber has been brought into the United States, exacerbating 
the problem.
  Second, as Senator Craig already indicated, the British Columbian 
government has already revised their forest practice code to reduce the 
cost of lumber manufacturers under their code, saving them millions of 
dollars annually. What we see is, in response to this anticompetitive 
situation of unfair trade practices that have been identified and which 
are now being dealt with in litigation, the Canadians have increased 
their subsidies and are continuing to flood timber into the United 
States markets.
  A number of changes need to occur. But one of them needs to occur in 
U.S. law because as a part of the entire process, it is important to 
determine the amount of subsidy. The subsidy is determined by 
evaluating whether the price that is being charged to the Canadian 
producers is above or below their cost of production. One of the 
critical elements is determining that value.
  Currently, we have found Canadian companies are selling their lumber 
into the United States at below their subsidized cost of production, 
requiring antidumping duty of 8.79 percent. The point I make is that 
their current subsidies are even below and make it so that they are 
able to provide their timber to U.S. markets below subsidized cost of 
production.
  The legislation we are introducing today will require them to include 
the countervailing duty which they pay as a part of their cost of 
production in determining what their true subsidy is. As long as the 
United States does not require the Canadians to include their 
countervailing duties as a cost of their production, then the amount of 
the subsidy which we determine will be even less than it truly is. It 
will not be accurately reflected.
  This is a simple change to clarify what is already on the books in 
the United States. This practice is pursued in Europe and in Canada 
already under their approach to these issues. It is only proper that 
the U.S. Government stand firmly behind this principle. Again, the 
principle is, when a nation is subsidizing its products and shipping 
them into U.S. markets to the detriment of our producers, that subsidy 
must be included as a cost of doing business when we calculate in our 
litigation with them the amount of subsidy and the resultant 
countervailing duties we can apply.

  I don't believe there is a legitimate argument against this 
legislation. I realize nations across the world are trying to figure 
out how to continue to do the best they can for their producers to help 
them get their products into our markets. However, we have now very 
aggressive negotiations underway in bilateral trade arrangements as 
well as in multilateral trade arrangements such as the world trade 
negotiations seeking to bring down the level of subsidies across the 
world to a level of zero. That is our objective in our international 
trade negotiations. We cannot tolerate the continued defiance of these 
types of laws in our negotiations. That is the simple purpose behind 
this legislation.
  The United States and the Department of Commerce and our United 
States trade negotiators in particular have been doing a tremendous job 
in helping deal with a very difficult situation resulting from the 
Canadian unfair trade practices in softwood lumber. They are to be 
commended for this. One of the things we need to provide to them as a 
tool in this ongoing process is a congressional and, indeed, American 
statutory declaration that countervailing duties must be included in 
the cost of production as we negotiate on these critical issues with 
our neighbors to the north.
  I thank the Senate for this time. I thank my colleague Senator Craig 
for his leadership on this issue and the other Senators supporting this 
effort.
  Ms. SNOWE. Mr. President, I am here today to cosponsor legislation 
that should help resolve the current crisis being faced by the U.S. 
softwood lumber industry, which continues to be devastated by the 
continuation of a ``wall of subsidized wood'' coming from four Canadian 
provinces that are effectively avoiding countervailing duty and 
antidumping orders of the U.S. Department of Commerce. This is causing

[[Page S1673]]

a crisis in current market conditions not only in Maine but across the 
Nation.
  The purpose of the U.S. countervailing duty, or CVD, law, is to 
offset unfair foreign subsidies which cause injury to our U.S. 
producers. In the Canadian softwood lumber case, Commerce has 
determined that some Canadian provinces subsidize their lumber mills at 
prices that are 33 to 55 percent below market value. Currently, 
Canadian prices for salvage timber, for instance, are as low as $1 per 
thousand board feet at the same time the competitive market value is 
over $100 thousand board feet.
  Our antidumping law is supposed to ensure that foreign products are 
not sold for less than its cost of production. Currently, the 
Department of Commerce does not consider countervailing duties as a 
cost of production, thereby undervaluing the Canadian dumping practices 
by comparing a subsidized cost of production to the price of lumber 
rather than comparing the cost of production plus the countervailing 
duty to the price of lumber. Ignoring countervailing duties when then 
calculating antidumping duties undervalues the actual amount of 
dumping, and is devastating to our U.S. softwood lumber industry.
  The Craig/Baucus legislation that I am supporting today amends the 
Tariff Act of 1930 to clarify that countervailing duties should be 
added into the cost of production as it reflects the true cost of 
production by offsetting subsidies. This provision will rectify the 
problem of undervalued dumping duties and make U.S. trade policies 
consistent with those of our trading partners, such as Canada and the 
European Union.
  Adopting this clarification should have an immediate market impact. 
With the correction of the current problem, Canadian mills would face 
the prospect of paying considerably higher antidumping rates if the 
lumber market remains at the current low level. This legislation should 
demonstrate the resolve of the U.S. government to reach a fair and 
permanent solution to the softwood lumber trade case by increasing the 
risk to Canadian companies if a negotiated settlement is not reached. 
The Canadian lumber industry and its governments must realize that the 
U.S. will continue to impose the required duty offsets until the 
subsidies and dumping stop.
  I commend the Department of Commerce for their diligent work on the 
softwood lumber case with Canada and cannot urge our U.S. trade 
negotiators strongly enough to reach a settlement with Canada just as 
soon as possible before we have yet another U.S. mill close its doors 
for good. The subsidized and dumped lumber from Canada has been 
devastating to my State of Maine, where sawmills continue to close 
their doors for good, affecting entire rural communities where these 
businesses are located, and where the mills are often the major source 
of good paying jobs in these areas.
  Moreover, if a negotiated settlement is not reached, I believe that 
the U.S. should vigorously pursue the litigation with the World Trade 
Organization, WTO, especially since the WTO has already found that 
Canada has an actionable subsidy, meaning duties will be imposed until 
provinces allow the market to determine the price of timber rather than 
provincial governments.
  Again, this legislation being offered today by Senators from all 
regions of the country provides a much needed clarification of U.S. 
trade law, in keeping with those of Canada and the European Union, that 
will greatly help the U.S. softwood lumber industry out of its current 
economic crisis that has been caused by subsidized, underpriced 
imports, and I urge the support of my colleagues.
  Mr. COCHRAN. Mr. President, I support the efforts of the Department 
of Commerce and United States Trade Representative to negotiate a fair 
trade agreement with Canada. We have a very important trading 
relationship with Canada. They are America's strongest trading partner, 
and I hope we can continue strengthening that relationship. However, 
Canada subsidizes its lumber mills, and those mills are dumping lumber 
in our domestic market. This has a devastating effect on the lumber 
industry in America, particularly in Mississippi where mills are 
closing each month.
  Currently, the Department of Commerce has imposed a countervailing 
duty to offset the injury to our market. Canadian mills must pay a 29 
percent duty on top of the cost of producing their lumber. To arrive at 
that duty rate, the Department of Commerce calculates what it costs 
Canadian lumber producers to process their lumber. In fact, a U.S. 
statute, Sec. 19 U.S.C. 1677, states that duties should be considered a 
cost of production incurred on shipments to the United States.
  Today, Senators Craig, Baucus, Burns, Miller, Crapo, Lott, Sessions, 
Snowe, Collins, Lincoln, and I introduced a bill to clarify the law so 
that there is no misunderstanding of the rules under which the 
Department of Commerce calculates the duties imposed on illegally 
subsidized Canadian lumber. This recalculation would raise the price it 
costs Canadians to produce their lumber and would allow the Department 
of Commerce to raise the current 29 percent duty. The practice of 
subsidizing and dumping must be taken seriously.
  I am hopeful that the recent trips by the U.S. Government to Canada 
can result in honest and fruitful negotiations leading to a fair lumber 
trading agreement. It is in the best interest of both of our countries 
that we reach an agreement. In my State, lumber is one of our most 
valuable agricultural products.
  For years the mills in my state have endured unfair trading 
practices. Now that the U.S. is finally imposing duties to offset the 
injury to these mills, the Canadians are simply incorporating the 
duties into their cost of doing business. On behalf of the few 
remaining lumber mills in Mississippi I urge the Department of Commerce 
to uphold existing trade laws by counting duties as a cost.
                                 ______
                                 
      By Mr. FITZGERALD:
  S. 220. A bill to reinstate and extend the deadline for commencement 
of construction of a hydroelectric project in the State of Illinois; to 
the Committee on Energy and Natural Resources.
  Mr. FITZGERALD. Mr. President, I rise today to introduce a bill to 
reinstate a license surrendered to the Federal Energy Regulatory 
Commission, FERC, that authorized the construction of a hydroelectric 
power plant in Carlyle, IL. In order to facilitate the construction of 
the hydroelectric power plant, the bill also contains a provision that 
extends the deadline for beginning construction of the plant.
  Carlyle, IL, is a small community of 3,406 people in Southwestern 
Illinois, fifty miles east of St. Louis. Carlyle is situated on the 
Kaskaskia River at the southern tip of Carlyle Lake, which was formed 
in 1967 when the U.S. Army Corps of Engineers completed construction of 
a dam on the river. Carlyle Lake is 15 miles long and 3.5 miles wide, 
the largest man-made lake in Illinois.
  When the Army Corps of Engineers constructed the dam, it failed to 
build a hydroelectric power plant to capitalize on the energy available 
from water flowing through the dam. A hydroelectric power facility in 
Carlyle would produce 4,000 kilowatts of power and provide a renewable 
energy source for surrounding communities. Furthermore, the 
environmental impact of adding a hydroelectric facility would be 
minimal, and such a facility, located at a site near the existing dam, 
would not produce harmful emissions.
  In 1997, Southwestern Electric Cooperative obtained a license from 
the FERC to begin work on a hydroelectric project in Carlyle. In 2000, 
Southwestern Electric Cooperative surrendered their license because 
they were unable to begin the project in the required time period. The 
City of Carlyle is interested in constructing the hydroelectric power 
plant and is seeking to obtain Southwestern Electric Cooperative's 
license.
  The bill I am introducing today is required for the construction of 
the facility. Legislation is necessary to authorize FERC to reinstate 
Southwestern Electric Cooperative's surrendered license. Because there 
is not enough time remaining on the license to conduct studies, produce 
a design for the facility, and begin construction of the project, the 
bill includes a provision that allows FERC to extend the applicable 
deadline.
  The full Senate passed this bill, during the 107th Congress, on 
November 20, 2002 without opposition, but, the House

[[Page S1674]]

of Representatives was unable to act on this legislation before the 
107th Congress adjourned.
  This legislation is an easy and environmentally safe approach to 
meeting the energy needs of Southwestern Illinois. Please join me in 
supporting this measure to provide a clean alternative energy source 
for this part of the Midwest.
  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. 220

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

     SECTION 1. EXTENSION OF TIME FOR FEDERAL ENERGY REGULATORY 
                   COMMISSION PROJECT.

       Notwithstanding the time period specified in section 13 of 
     the Federal Power Act (16 U.S.C. 806) that would otherwise 
     apply to the Federal Energy Regulatory Commission project 
     numbered 11214, the Commission may, at the request of the 
     licensee for the project, and after reasonable notice, in 
     accordance with the good faith, due diligence, and public 
     interest requirements of that section and the Commission's 
     procedures under that section--
       (1) reinstate the license for the construction of the 
     project as of the effective date of the surrender of the 
     license; and
       (2) extend the time period during which the licensee is 
     required to commence the construction of the project for 3 
     consecutive 2-year periods beyond the date that is 4 years 
     after the date of issuance of the license.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Miller):
  S. 221. A bill to amend the Communications Act of 1934 to facilitate 
an increase in programming and content on radio that is locally and 
independently produced, to facilitate competition in radio programming, 
radio advertising, and concerts, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.
  Mr. FEINGOLD. Mr. President, I rise today to re-introduce legislation 
that will promote competition in the radio and concert industries.
  This legislation will begin to address many of the concerns that I 
have heard from my constituents regarding the concentration of 
ownership in the radio and concert industry and its effect on 
consumers, artists, local businesses, and ticket prices.
  Last year, I introduced this same legislation, and with the help of a 
wide range of organizations and other Senators, we put this issue on 
the front and center in Congress. I am pleased that a number of 
Committees are looking at this issue and considering holding hearings 
in the coming weeks.
  With these hearings coming up, I want once again to bring this 
proposal to my colleagues attention. And as the Committee process works 
itself forward, I expect that we will discover additional issues to 
address that will strengthen the provisions in my legislation.
  But this legislation is where Congress should begin its efforts to 
promote competition, diversity, and localism in radio.
  I love radio. But, over the last year, I have learned that 
concentration of ownership in the radio and concert industry has made 
it difficult for individuals, artists, and organizations to find 
outlets to express their creativity and promote diversity.
  Music and local news carried over the radio can help society to 
consider some of the most serious issues affecting our Nation: issues 
like war and peace, issues like social justice.
  If the already diminishing number of gatekeepers of radio content 
chooses not to air controversial music because it may turn off 
advertisers, one of the most universal mediums to engage in dialogue 
will be lost. Regardless of our point of view, we must retain the 
ability of radio to show the diverse range of voices that form our 
culture.
  I have heard many stories about the effects of this concentration. 
But perhaps the most compelling was at the annual Congressional Black 
Caucus event last year, when two people who have been involved in radio 
for decades told me about the real life importance of diversity in 
radio.
  They spoke about the importance of the locally-owned media that 
helped raise public awareness of the campaign of the late Harold 
Washington to become the first black mayor of Chicago. They said that 
the main avenue for many in the central city to hear about the campaign 
was through locally-owned radio stations.
  If an out-of-State corporation controlled the programming of these 
radio stations, would this political pioneer have received the same 
coverage?
  I have also heard a great deal from religious organizations about how 
consolidation harms their ability to reach out in their communities. 
They have said that we must get to the root of the problem by curbing 
anti-competitive practices that make it difficult for locally-owned, 
independent radio stations to prosper.
  I also learned about the story of Everett Parker, who during the 
civil rights movement of the 1960s was a pioneering defender of public 
interest in broadcasting.
  In Dr. Parker's most famous crusade, he and the United Church of 
Christ went to Jackson, MS, to challenge the license renewals of 
stations that were blocking coverage of the civil rights movement, even 
though African-Americans constituted almost half of the audience.
  By failing to cover the civil rights movement, the station failed all 
of the citizens of Jackson by limiting access to information on issues 
of public importance.
  So, joining with the local NAACP, the group went to the Federal 
Communications Commission and challenged the licenses of the Jackson 
stations. The case went all the way to the Court of Appeals for the 
District of Columbia Circuit, which took away the station's license.
  What makes this case so significant is that it established the right 
of any American to petition the Commission, instead of limiting such 
petitions to commercial interests.
  The radio airwaves continued to be owned by the public. Radio is a 
public medium. It must serve the public good.
  We must promote localism and diversity on our airwaves and crack down 
on anti-competitive practices that are a result of concentration in the 
radio and concert industry.
  We must address negative consequences of the 1996 Telecommunications 
Act, which opened the floodgates for consolidation and led to anti-
consumer and anti-competitive practices.
  Just consider how the rise in ticket prices coincided with the 
passage of the Telecommunications Act. Following the passage of the 
Act, and the resulting consolidation of the radio and concert industry, 
ticket prices went through the roof!
  Before the passage of the 1996 Act, ticket prices were increasing at 
a rate slightly higher than the Consumer Price Index. Following the 
Telecommunications Act of 1996, however, ticket prices have increased 
at a rate almost 50 percentage points higher than the Consumer Price 
Index. From 1996 to 2001, concert ticket prices rose by more than 61 
percent, while the Consumer Price Index increased by just 13 percent.
  During the debate of the 1996 Act, I joined a number of my colleagues 
in opposing the deregulation of radio ownership rules because of 
concerns about its effect on consumers, artists, independent radio 
stations, and local communities.
  Passage of this Act was an unfortunate example of the influence of 
soft money in the political process. I have consistently said that this 
Act was bought and paid for by soft money, by unlimited contributions 
by corporations, unions and wealthy individuals to the political 
parties. Everyone was at the table, except for the consumers.
  That's why I am pleased to re-introduce this legislation, the 
Competition in Radio and Concert Industries Act, which would reduce the 
levels of concentration and curb some of these anti-competitive 
practices.
  My legislation prohibits those who own radio stations and concert 
promotion services or venues from leveraging their cross-ownership to 
hinder competition in the industry. For example, if an owner of a radio 
station and a promotion service hinders access to the airwaves of a 
rival promoter or artist, then the owner would be subject to penalties.
  My legislation will also help to curb the concentration that leads to 
these anti-competitive practices.
  It would strengthen the FCC merger review process by requiring the 
FCC to

[[Page S1675]]

scrutinize the mergers of any radio station ownership group that 
reaches more than 60% of the nation.
  My legislation would also curb consolidation on the local level by 
preventing any upward revision of the limitation on multiple ownership 
of radio stations in local markets.
  The bill would also prohibit the current shakedown system, where the 
big radio corporations are said to leverage their market power to 
require payments from artists in exchange for playing their songs. And 
it would also close a loophole that allows large radio ownership 
companies to exceed the cap by ``warehousing stations'' through a third 
party. In these cases, they control the station through a third party, 
but the stations are not counted against their local ownership cap.
  Songs and ideas should not be broadcast on the radio based on how 
much money has changed hands. Airplay should be based on good songs and 
good ideas what the local audience wants to hear.
  My legislation would slow the levels of concentration and address a 
number of concerns that I have heard from artists and others, although 
it does not address all the issues facing our communities.
  Over the coming months, I hope that my colleagues will give this 
issue their attention, both on the floor and in committee.
  I urge my colleagues to cosponsor this legislation so that we can 
work together to restore competition to the radio and concert industry 
by putting independent radio stations, local concert promoters, and 
artists on a level playing field.
  People should have choices, listeners should have a diversity of 
options, and Americans should be able to hear new and different voices. 
Radio allows us to connect to our communities, to our culture, and to 
our democracy. It is one of the most vibrant mediums we have for the 
exchange of ideas, and for artistic expression. We must fight to 
preserve it, and together I believe we can do just that.
  Radio is a public medium, and we must ensure that it serves the 
public good. That's a democratic vision of American radio well worth 
fighting for.
                                 ______
                                 
      By Mr. KYL (for himself and Mr. McCain):
  S. 222. A bill to approve the settlement of the water rights claims 
of the Zuni Indian Tribe in Apache County, Arizona, and for other 
purposes; to the Committee on Indian Affairs.
  Mr. KYL. Mr. President, on behalf of Senator McCain and myself I am 
introducing legislation today that would codify the settlement of the 
Zuni Indian Tribe's water rights for its religious lands in 
northeastern Arizona. Congress first recognized the importance of these 
lands in 1984 when it created the Zuni Heaven Reservation, Pub. L. 98-
498, as amended by Pub. Law No. 101-486, 1990. For nearly a century, 
the small communities upstream from this Reservation have fully-
appropriated the water from Little Colorado River for use in their 
homes and on their fields. Yet the Zuni Tribe asserted that it would 
need water to restore and use its Reservation lands. The prospect of 
dividing the limited water of the Little Colorado River with still 
another user created great uncertainly. To resolve that uncertainty and 
to avoid expensive and protracted litigation, the Zuni Tribe, the 
United States on behalf of the Zuni Tribe, the State of Arizona, 
including the Arizona Game and Fish Commission, the Arizona State Land 
Department, and the Arizona State Parks Board, and the major water 
users in this area of Arizona negotiated for many years to produce a 
water settlement that is acceptable to all parties.
  This bill would provide the Zuni Tribe with the resources and 
protections necessary to acquire water rights from willing sellers and 
to restore and protect the wetland environment that the Zuni Tribe 
previously used. In return, the Zuni Tribe would waive its claim in the 
Little Colorado River Adjudication. In addition, the Zuni Tribe would, 
among other things, grandfather existing water uses and waive claims 
against many future water uses in the Little Colorado River basin. In 
summary, with this bill, the Zuni Tribe can achieve its needs for the 
Zuni Heaven Reservation while avoiding a disruption to local water 
users and industry. Furthermore, the United States can avoid litigating 
water rights and damage claims and satisfy its trust responsibilities 
to the Tribe regarding water for the Reservation. The parties have 
worked many years to reach consensus and I believe this bill would 
produce a fair result to all.
  This legislation unanimously passed the Senate in the 107th Congress. 
Unfortunately, the House of Representatives adjourned and was unable to 
take action on the bill. We hope for its swift passage in the 108th 
Congress.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Grassley, Mr. Corzine, and 
        Mr. Gregg):
  S. 223. A bill to prevent identity theft, and for other purposes; to 
the Committee on Banking, Housing, and Urban Affairs.
  Mrs. FEINSTEIN. Mr. President, I rise, along with Senator Grassley, 
Senator Corzine, and Senator Gregg to introduce the Identity Theft 
Prevention Act.
  This bill addresses the growing tide of identity theft cases by 
requiring banks, credit bureaus, and other financial institutions to 
take some practical steps to protect sensitive personal information.
  What is identity theft? Identity theft occurs when one person uses 
another person's Social Security number, birth date, driver's license 
number, or other identifying information to obtain credit cards, car 
loans, phone plans or other services in the victim's name.
  The criminal literally assumes the identity of the victim for illicit 
gain.
  Identity theft has become the number one white collar crime of the 
new millennium, and Congress needs to make a major effort to protect 
Americans' personal information.
  Hundreds of thousands of Americans are victimized by identity theft 
each year.
  The personal losses as a result of these crimes are major. The 
average financial loss from an identity theft case is $17,000 and it 
takes a typical victim 18 months to restore his or her good credit.
  In some cases, victims are falsely saddled with criminal records or 
are denied loans and other valuable financial services.
  Identity theft is frighteningly easy to commit. One of my 
constituents, Kim Bradbury of Castro Valley, knows this too well. Kim 
reported that an identity thief obtained a credit card in her name 
through the Internet in less than 60 seconds. The false application 
only had her Social Security number and birth date correct.
  Kim only found out she was an identity theft victim when a 
representative of a telemarketing company called her at home while she 
was feeding her one-year child. The representative told her that 
someone with a different address had applied for a credit card in Kim's 
name.
  In Kim's case, it appears that her Social Security number was stolen 
by a fellow employee who also had stolen the identities of several 
dozen company employees. The thief ultimately stole over $100,000 in 
merchandise, including 20 cell phone accounts, via identity fraud.
  All indicators suggest that the crime continues to grow at an 
alarming rate.
  Just two months ago, Federal prosecutors announced the largest single 
identity theft case in U.S. history. Three individuals allegedly sold 
the credit and personal information of 30,000 people.
  At one national credit reporting agency, consumers requested 53 
percent more fraud alerts in fiscal year 2001 than fiscal year 2000.
  As of December 2001, the Federal Trade Commission, FTC, Identity 
Theft Clearinghouse averaged more than 3,000 call-ins per week, a 
seven-fold increase since the clearinghouse began operation in November 
1999.
  The Identity Theft Prevention Act offers a series of practical steps 
to cut-off criminal access to sensitive consumer data.
  No. 1, Credit card number truncation on receipts: first, the Identity 
Theft Prevention Act would require all new credit-card machines to 
truncate any credit card number printed on a customer receipt.
  Thus, when a store gives a customer a receipt from a credit card 
purchase, only the last five digits of the credit card number will 
show.
  This prevents identity thieves from stealing credit card numbers by 
retrieving discarded receipts.

[[Page S1676]]

  Existing machines would have to be reprogrammed to truncate credit 
card numbers on receipts within four years after enactment of the 
legislation.
  No. 2, Fraud alerts: the bill would give the Federal Trade Commission 
the authority to impose a fine on credit issuers who issue new credit 
to identity thieves despite the presence of a fraud alert on the 
consumer's credit file.
  Too many credit card issuers are granting new cards without 
adequately verifying the identity of the applicant. Putting some teeth 
into fraud alerts will curb irresponsible granting of credit.
  No. 3, Free credit reports: third, the legislation would entitle each 
consumer to one free credit report per year. Currently six States, 
Colorado, Georgia, Maryland, Massachusetts, New Jersey, and Vermont, 
have laws entitling consumers to one free credit report per year from 
the national credit bureaus.
  According to identity theft victim advocates, identity theft is 
detected much earlier if consumers actively monitor their credit files. 
The cost of credit reports is a major obstacle to their use by 
consumers.
  No. 4, Change of address: finally, the bill requires a credit card 
company to notify consumers when an additional credit card is requested 
on an existing credit account within 30 days of an address change 
request.
  This provision addresses a common method of identity fraud where a 
criminal steals an individual's credit card number, and then obtains a 
duplicate card by informing the issuer of a change of address.
  The Identity Theft Prevention Act requires financial institutions to 
implement needed precautions to prevent identity fraud and protect a 
person's good name.
  Verifying a credit applicant's address, complying with ``fraud 
alerts'', and truncating credit numbers on receipts are all measures 
that will make it harder for criminals to engage in identity fraud.
  It is appropriate and necessary for financial institutions to take 
these steps. These companies have a responsibility to prevent 
fraudsters from using their services to harm the good name of other 
citizens.
  Morever, in this complex, information-driven society, consumers 
simply can't protect their good name on their own.
  I strongly believe this legislation will provide desperately needed 
tools to combat identity theft, and I look forward to working with my 
colleagues to secure its passage.
  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. 223

       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 ``Identity Theft Prevention 
     Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the crime of identity theft has become one of the major 
     law enforcement challenges of the new economy, as vast 
     quantities of sensitive, personal information are now 
     vulnerable to criminal interception and misuse;
       (2) in November 2002, Americans were alerted to the dangers 
     of identity theft when Federal prosecutors announced that 3 
     individuals had allegedly sold the credit and personal 
     information of 30,000 people, the largest single identity 
     theft case in United States history;
       (3) hundreds of thousands of Americans are victims of 
     identity theft each year, resulting in an annual cost to 
     industry of more than $3,500,000,000.
       (4) several indicators reveal that despite increased public 
     awareness of the crime, the number of incidents of identity 
     theft continues to rise;
       (5) in December 2001, the Federal Trade Commission received 
     an average of more than 3,000 identity theft calls per week, 
     a 700 percent increase since the Identity Theft Data 
     Clearinghouse began operation in November 1999;
       (6) allegations of social security number fraud increased 
     by 500 percent between 1998 and 2001, from 11,000 to 65,000;
       (7) a national credit reporting agency reported that 
     consumer requests for fraud alerts increased by 53 percent 
     during fiscal year 2001;
       (8) identity theft violates the privacy of American 
     citizens and ruins their good names;
       (9) victims of identity theft may suffer restricted access 
     to credit and diminished employment opportunities, and may 
     spend years repairing the damage to credit histories caused 
     by identity theft;
       (10) businesses and government agencies that handle 
     sensitive personal information of consumers have a 
     responsibility to protect this information from identity 
     thieves; and
       (11) the private sector can better protect consumers by 
     implementing effective fraud alerts, affording greater 
     consumer access to credit reports, truncating of credit card 
     numbers, and establishing other prevention measures.

     SEC. 3. IDENTITY THEFT PREVENTION.

       (a) Changes of Address.--
       (1) Duty of issuers of credit.--Section 132 of the Truth in 
     Lending Act (15 U.S.C. 1642) is amended--
       (A) by inserting ``(a) In General.--'' before ``No 
     credit''; and
       (B) by adding at the end the following:
       ``(b) Confirmation of Changes of Address.--If a card issuer 
     receives a request for an additional credit card with respect 
     to an existing credit account not later than 30 days after 
     receiving notification of a change of address for that 
     account, the card issuer shall--
       ``(1) not later than 5 days after sending the additional 
     card to the new address, notify the cardholder of the request 
     at both the new address and the former address; and
       ``(2) provide to the cardholder a means of promptly 
     reporting incorrect changes.''.
       (2) Enforcement.--
       (A) Federal trade commission.--Except as provided in 
     subparagraph (B), compliance with section 132(b) of the Truth 
     in Lending Act (as added by this subsection) shall be 
     enforced by the Federal Trade Commission in the same manner 
     and with the same power and authority as the Commission has 
     under the Fair Debt Collection Practices Act to enforce 
     compliance with that Act.
       (B) Other agencies in certain cases.--
       (i) In general.--Compliance with section 132(b) of the 
     Truth in Lending Act shall be enforced under--

       (I) section 8 of the Federal Deposit Insurance Act, in the 
     case of a card issuer that is--

       (aa) a national bank or a Federal branch or Federal agency 
     of a foreign bank, by the Office of the Comptroller of the 
     Currency;
       (bb) a member bank of the Federal Reserve System (other 
     than a national bank), a branch or agency of a foreign bank 
     (other than a Federal branch, Federal agency, or insured 
     State branch of a foreign bank), a commercial lending company 
     owned or controlled by a foreign bank, or an organization 
     operating under section 25 or 25A of the Federal Reserve Act, 
     by the Board of Governors of the Federal Reserve System;
       (cc) a bank insured by the Federal Deposit Insurance 
     Corporation (other than a member of the Federal Reserve 
     System or a national nonmember bank) or an insured State 
     branch of a foreign bank, by the Board of Directors of the 
     Federal Deposit Insurance Corporation; and
       (dd) a savings association, the deposits of which are 
     insured by the Federal Deposit Insurance Corporation, by the 
     Director of the Office of Thrift Supervision; and

       (II) the Federal Credit Union Act, by the Administrator of 
     the National Credit Union Administration in the case of a 
     card issuer that is a Federal credit union, as defined in 
     that Act.

       (C) Violations treated as violations of other laws.--
       (i) In general.--For the purpose of the exercise by any 
     agency referred to in this paragraph of its powers under any 
     Act referred to in this paragraph, a violation of section 
     132(b) of the Truth in Lending Act (as added by this 
     subsection) shall be deemed to be a violation of a 
     requirement imposed under that Act.
       (ii) Agency authority.--In addition to its powers under any 
     provision of law specifically referred to in subparagraph (A) 
     or (B), each of the agencies referred to in those 
     subparagraphs may exercise, for the purpose of enforcing 
     compliance with section 132(b) of the Truth in Lending Act, 
     any other authority conferred on such agency by law.
       (b) Fraud Alerts.--Section 605 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681c) is amended by adding at the end the 
     following:
       ``(g) Fraud Alerts.--
       ``(1) Defined term.--In this subsection, the term `fraud 
     alert' means a statement in the file of a consumer that 
     notifies all prospective users of a consumer report made with 
     respect to that consumer that--
       ``(A) the consumer's identity may have been used, without 
     the consumer's consent, to fraudulently obtain goods or 
     services in the consumer's name; and
       ``(B) the consumer does not authorize the issuance or 
     extension of credit in the name of the consumer unless the 
     issuer of such credit--
       ``(i) obtains express preauthorization from the consumer at 
     a telephone number designated by the consumer; or
       ``(ii) utilizes another reasonable means of communications 
     to obtain the express preauthorization of the consumer.
       ``(2) Inclusion of fraud alert in consumer file.--Upon the 
     request of a consumer and upon receiving proper 
     identification, a consumer reporting agency shall include a 
     fraud alert in the file of that consumer.
       ``(3) Notice sent by consumer reporting agencies.--A 
     consumer reporting agency shall notify each person procuring 
     consumer credit information with respect to a consumer of the 
     existence of a fraud alert in the file of that consumer, 
     regardless of whether

[[Page S1677]]

     a full credit report, credit score, or summary report is 
     requested.
       ``(4) Procedures to receive fraud alerts.--Any person who 
     uses a consumer credit report in connection with a credit 
     transaction shall establish reasonable procedures to receive 
     fraud alerts transmitted by consumer reporting agencies.
       ``(5) Violations.--
       ``(A) Consumer reporting agency.--Any consumer reporting 
     agency that fails to notify any user of a consumer credit 
     report of the existence of a fraud alert in that report shall 
     be in violation of this section.
       ``(B) User of a consumer report.--Any user of a consumer 
     report that fails to comply with preauthorization procedures 
     contained in a fraud alert and issues or extends credit in 
     the name of the consumer to a person other than the consumer 
     shall be in violation of this section.
       ``(6) Exceptions.--
       ``(A) Resellers.--
       ``(i) In general.--The provisions of this subsection do not 
     apply to a consumer reporting agency that acts as a reseller 
     of information by assembling and merging information 
     contained in the database of another consumer reporting 
     agency or multiple consumer reporting agencies, and does not 
     maintain a permanent database of the assembled or merged 
     information from which new consumer reports are produced.
       ``(ii) Limitation.--A reseller of assembled or merged 
     information shall preserve any fraud alert placed on a 
     consumer report by another consumer reporting agency.
       ``(B) Exempt institutions.--The requirement under this 
     subsection to place a fraud alert in a consumer file shall 
     not apply to--
       ``(i) a check services company, which issues authorizations 
     for the purpose of approving or processing negotiable 
     instruments, electronic funds transfers, or similar methods 
     of payments; or
       ``(ii) a demand deposit account information service 
     company, which issues reports regarding account closures due 
     to fraud, substantial overdrafts, ATM abuse, or similar 
     negative information regarding a consumer, to inquiring banks 
     or other financial institutions for use only in reviewing a 
     consumer request for a demand deposit account at the 
     inquiring bank or financial institution.''.

     SEC. 4. TRUNCATION OF CREDIT CARD ACCOUNT NUMBERS.

       (a) In General.--Except as provided in this section, no 
     person, firm, partnership, association, corporation, or 
     limited liability company that accepts credit cards for the 
     transaction of business shall print more than the last 5 
     digits of the credit card account number or the expiration 
     date upon any receipt provided to the cardholder.
       (b) Limitation.--This section--
       (1) applies only to receipts that are electronically 
     printed; and
       (2) does not apply to transactions in which the sole means 
     of recording the cardholder's credit card account number is 
     by handwriting or by an imprint or copy of the credit card.
       (c) Effective Date.--This section shall take effect--
       (1) on the date that is 4 years after the date of enactment 
     of this Act, with respect to any cash register or other 
     machine or device that electronically prints receipts for 
     credit card transactions that is in use prior to the date of 
     enactment of this Act; and
       (2) on the date that is 18 months after the date of 
     enactment of this Act, with respect to any cash register or 
     other machine or device that electronically prints receipts 
     for credit card transactions that is first put into use on or 
     after the date of enactment of this Act.
       (d) Effect on State Law.--Nothing in this section prevents 
     a State from imposing requirements that are the same or 
     substantially similar to the requirements of this section at 
     any time before the effective date of this section.

     SEC. 5. FREE ANNUAL CREDIT REPORT.

       Section 612(c) of the Fair Credit Reporting Act (15 U.S.C. 
     1681j(c)) is amended to read as follows:
       ``(c) Free Annual Disclosure.--Upon the request of the 
     consumer and without charge to the consumer, a consumer 
     reporting agency shall make all the disclosures listed under 
     section 609 once during any 12-month period.''.
                                 ______
                                 
      By Mr. BIDEN (for himself, Mr. Grassley, Mr. Lieberman, and Mrs. 
        Feinstein):
  S. 226. A bill to prohibit an individual from knowingly opening, 
maintaining, managing controlling, renting, leasing, making available 
for use, or profiting from any place for the purpose of manufacturing, 
distributing, or using any controlled substance, and for other 
purposes; to the Committee on the Judiciary.
  Mr. BIDEN. Mr. President, I rise today, along with my good friend, 
the senior Senator from Iowa, Senator Grassley, to introduce the 
Illicit Drug Anti-Proliferation Act. This legislation arises out of a 
hearing Senator Grassley and I held in the Senate Caucus on 
International Narcotics Control in December 2001 on the proliferation 
of Ecstasy and other club drugs generally, and the role of some 
promoters of all-night dance parties, known as ``raves'', in 
distributing Ecstasy to young people. Our bill provides Federal 
prosecutors the tools needed to combat the manufacture, distribution or 
use of any controlled substance at any venue whose purpose is to engage 
in illegal narcotics activity. Rather than create a new law, our bill 
merely amends a well-established statute to make clear that anyone who 
knowingly and intentionally uses their property, or allows another 
person to use their property, for the purpose of distributing or 
manufacturing or using illegal drugs can be held accountable, 
regardless of whether the drug use is ongoing or occurs at a single 
event.
  While my legislation is aimed at the defendant's predatory behavior, 
regardless of the type of drug or the particular place in which it is 
being used or distributed, one problem that we are facing currently 
involves so-called ``club drugs'' and raves. According to a report 
which the Partnership for a Drug Free America will release in the near 
future, teens who report attending a rave are seven times more likely 
to have tried Ecstasy than teens who report not attending a rave. I 
find this statistic quite troubling.
  Despite the conventional wisdom that Ecstasy and other club drugs are 
``no big deal,'' a view that even the New York Times Magazine espoused 
in a cover story, these drugs can have serious consequences, and can 
even be fatal. Just last month we got some encouraging news: after 
years of steady increase, Ecstasy use is finally beginning to decrease 
among teens. That said, the rate of use remains unacceptably high and 
we still have quite a bit of work to do to counter the widespread 
misconception that Ecstacy is harmless, fashionable and hip.
  At the Drug Caucus hearing, witnesses testified that rogue rave 
organizers commonly go to great lengths to portray their events as safe 
so that parents will allow their kids to attend. They advertise their 
parties as alcohol-free events and some even hire off-duty police 
officers to patrol outside the venue. But the truth is that some of 
these raves are drug dens where use of Ecstasy and other ``club 
drugs'', such as the date rape drugs Rohypnol, GHB and Ketamine, is 
widespread.
  But even as these promoters work to make parents think that their 
events are safe, they send a different message to kids. Their 
promotional flyers make clear that drugs are an integral part of the 
party by prominently featuring terms associated with drug use, such as 
the letters ``E'' or ``X''--street terms for Ecstasy, or the term 
``rollin''', which refers to an Ecstasy high. They are, in effect, 
promoting Ecstasy along with the rave.
  By doing so, unscrupulous promoters get rich as they exploit and 
endanger kids. Some supplement their profits from the $10 to $50 cover 
charge to enter the club by selling popular Ecstasy paraphernalia such 
as baby pacifiers, glow sticks, or mentholated inhalers. And predatory 
party organizers know that Ecstasy raises the core body temperature and 
makes the user extremely thirsty, so they sell bottles of water for $5 
or $10 apiece. Some even shut off the water faucets so club goers will 
be forced to buy water or pay admission to enter an air-conditioned 
``cool down room.''
  After the death of a 17-year-old girl at a rave party in New Orleans 
in 1998, the Drug Enforcement Administration conducted an assessment of 
rave activity in that city which showed the close relationship between 
these parties and club drug overdoses. In a two year period, 52 raves 
were held at the New Orleans State Palace Theater, during which time 
approximately 400 teenagers overdosed and were treated at local 
emergency rooms. Following ``Operation Rave Review'' which resulted in 
the arrest of several rave promoters and closing the city's largest 
rave, overdoses and emergency room visits dropped by 90 percent and 
Ecstasy overdoses were eliminated.
  State and local governments have begun to take important steps to 
crack down on rave promoters who allow their events to be used as 
havens for illicit drug activity. In Chicago, where Mayor Daley has 
shown great leadership on this issue, it is a criminal offense to 
knowingly maintain a place, such as a rave, where controlled substances 
are used or distributed. Not only the promoter, but also the building 
owner and building manager can be

[[Page S1678]]

charged under Mayor Daley's law. The State of Florida has a similar 
statute making such activity a felony.

  And in Modesto, California, police officers are offering ``rave 
training classes'' to parents to educate them about the dangers 
associated with some raves and the club drugs often associated with 
them.
  At the Federal level, there have been four cases in which Federal 
prosecutors have used the so called ``crack house statute'' or other 
Federal charges to go after rogue rave promoters. These cases, in 
Little Rock, AR, Boise, ID, Panama City, FL, and New Orleans, LA, have 
had mixed results, culminating in two wins, a loss and a draw, 
suggesting that there may be a need to tailor this Federal statute more 
precisely to the problem at hand. As a result, last session I proposed 
legislation which would do just that. I am reintroducing it today and I 
am pleased to have Senator Grassley once again as the lead cosponsor. I 
might note that the legislation is also included in the Democratic 
leadership crime bill.
  After I introduced this legislation last year, a great deal of 
misinformation began circulating about it. I want to make the record 
clear. Simply stated, my bill provides technical corrections to an 
existing statute, one which has been on the books for 16 years and is 
well established.
  Critics of my bill have asserted that if the legislation were to 
become law ``there would be no way that someone could hold a concert 
and not be liable'' and that the bill ``holds the owners and the 
promoters responsible for the actions of the patrons.'' That is simply 
untrue. We know that there will always be certain people who will bring 
drugs into musical or other events and use them without the knowledge 
or permission of the promoter or club owner. This is not the type of 
activity that my bill would address. The purpose of my legislation is 
not to prosecute legitimate law-abiding managers of stadiums, arenas, 
performing arts centers, licensed beverage facilities and other venues 
because of incidental drug use at their events. In fact, when crafting 
this legislation, I took steps to ensure that it did not capture such 
cases. My bill would help in the prosecution of rogue promoters who not 
only know that there is drug use at their event but also hold the event 
for the purpose of illegal drug use or distribution. That is quite a 
high bar.
  I ask unanimous consent that a letter from the Coalition of Licensed 
Beverage Associations, COLBA, be printed at the end of my statement. 
COLBA, who initially expressed concerns that my bill would make their 
members liable for the actions of their patrons, has endorsed my 
legislation because they realized that my bill was not aimed at 
responsible party promoters.
  I am confident that the overwhelming majority of promoters are 
decent, law abiding people who are going to discourage drug use, or any 
other illegal activity, at their venues. But there are a few promoters 
out there who are taking steps to profit from drug activity at their 
events. Some of these folks actually distribute drugs themselves or 
have their staff distribute drugs, get kickbacks from drug sales at 
their events, have thinly veiled drug messages on their promotional 
flyers, tell their security to ignore drug use or sales, or send 
patients who need medical attention because of a drug overdose to a 
hospital across town so that people won't link emergency room visits 
with their club. What they are doing is illegal under current law. My 
bill would not change that fact. Let me be clear. Neither current law 
nor my bill seeks to punish a promoter for the behavior of their 
patrons. As I mentioned, the underlying crack house statute has been on 
the books since 1986, and I am unaware of this statute ever being used 
to prosecute a legitimate business.
  The legislation simply amends the current ``crack house statute'' in 
two minor ways. First, it clarifies that Congress intended for the law 
to apply not just to ongoing drug distribution operations, but to 
``single-event'' activities, such as a party where the promoter 
sponsors the event with the purpose of distributing Ecstasy or other 
illegal drugs. After all, a drug dealer can be arrested and prosecuted 
for selling one bag of drugs, and the government need not show that the 
dealer is selling day after day, or to multiple sellers. Likewise, the 
bill clarifies that a ``one-time'' event where the promoter knowingly 
distributes Ecstasy over the course of an evening, for example, 
violates the statute the same as a crack house which is in operation 
over a period of time. Second, the bill makes the law apply to outdoor 
as well as indoor venues, such as where a rogue rave promoter uses a 
field to hold a rave for the purpose of distributing a controlled 
substance. Those are the only changes the bill makes to the crack house 
statute. It does not give the Federal Government sweeping new powers as 
the detractors have asserted.
  Critics of the bill have also claimed that it would provide a 
disincentive for promoters to take steps to protect the public health 
of their patrons including providing water or air conditioned rooms, 
making sure that there is an ambulance on the premises, etc. That is 
not my intention. And to underscore that fact, I plan to remove the 
findings, which is the only place in the bill where these items are 
mentioned, from the bill. Certainly there are legitimate reasons for 
selling water, having a room where people can cool down after dancing, 
or having an ambulance on hand. Clearly, the presence of any of these 
things is not enough to signify that an event is ``for the purpose of'' 
drug use.
  The reason that I introduced this bill was not to ban dancing, kill 
the ``rave scene'' or silence electronic music, all things of which I 
have been accused. Although this legislation grew out of testimony I 
heard at a number of hearings about the problems identified at raves, 
the criminal and civil penalties in the bill would also apply to people 
who promoted any type of event for the purpose of drug use or 
distribution. If rave promoters and sponsors operate such events as 
they are so often advertised as places for people to come dance in a 
safe, drug-free environment then they have nothing to fear from this 
law. In no way is this bill aimed at stifling any type of music or 
expression it is only trying to deter illicit drug use and protect 
kids.
  Last year people criticized the bill's title, the ``RAVE Act'', 
because they thought it was unfairly targeting raves. Although I do not 
believe that I was unfairly targeting anybody, I have changed the title 
to the ``Illicit Drug Anti-Proliferation Act of 2003.''
  In addition to amending the crack house statute, the legislation also 
addresses the low penalties for trafficking gamma hydroxybutyric acid, 
GHB, by directing the United States Sentencing Commission to examine 
the current penalties and consider increasing them to reflect the 
seriousness of offenses involving GHB. Currently, GHB penalties are 
simply too low. In order to get five years for a GHB offense, you have 
to have more than 13 gallons of the drug, equivalent to 100,000 doses 
and a street value of about $1 million. According to the DEA, big-time 
GHB dealers distribute approximately one gallon quantities of the drug, 
the penalty for which is currently only between 15 and 21 months. These 
cases simply aren't being prosecuted at the Federal level because the 
penalties are so low. The Sentencing Commission needs to take a look at 
this problem and consider raising the penalties for this dangerous 
drug.
  But the answer to the problem of drug use at raves is not simply to 
prosecute irresponsible rave promoters and those who distribute drugs. 
There is also a responsibility to raise awareness among parents, 
teachers, students, coaches, religious leaders, etc. about the dangers 
of the drugs used and sold at raves. The DEA is already doing some of 
this through its club drug awareness campaign, where DEA agents are 
holding conferences with local women legislators to get information out 
about the dangers of these substances. The legislation provides funds 
to the DEA to continue this important work. Further, the bill 
authorizes nearly $6 million for the DEA to hire a Demand Reduction 
Coordinator in each state who can work with communities following the 
arrest of a significant local trafficker to reduce the demand for drugs 
through prevention and treatment programs.
  It is the unfortunate truth that some raves are havens for illicit 
drugs. Enacting the Illicit Drug Anti-Proliferation Act will help to 
prosecute the promoters who seek to profit from exploiting and 
endangering young lives and

[[Page S1679]]

will take steps to educate youth, parents and other interested adults 
about the dangers of Ecstasy and other club drugs associated with 
raves.
  I hope that my colleagues will join me and support this legislation.

  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    Coalition of Licensed Beverage


                                                  Association,

                                 Alexandria, VA, October 15, 2002.
     Senator Joe Biden,
     Chairman, Senate Judiciary Committee, Hart Senate Office 
         Building,
     Washington, DC.
       Dear Mr. Chairman: The Coalition of Licensed Beverage 
     Associations (COLBA) is a national association representing 
     the interests of private-sector licensed beverage retailers 
     who sell and serve alcohol beverages. COLBA represents both 
     on-premise and off-premise alcohol beverage licensees. It is 
     dedicated to preserving States' rights to ensure legal sales 
     of alcohol to persons of legal-consumption age to maintaining 
     high standards for the retail sale of alcohol.
       Like you, Mr. Chairman, COLBA members have become 
     increasingly concerned with the trafficking and use of the 
     drug Ecstasy. As you know, much of the abuse of Ecstasy and 
     other club drugs happens at all-night dance parties known as 
     ``raves.'' Rave organizers often go to great lengths to 
     portray their events as safe, alcohol-free parties in order 
     to persuade parents to allow their children to attend. Such 
     events tend to reflect negatively on the legitimate licensed 
     beverage industry and its many small businesses.
       COLBA supports state and local government's efforts to 
     crack down on rave promoters who allow their events to be 
     used as havens for illicit drug activity. COLBA also supports 
     your effort to strengthen the current statues to provide law 
     enforcement and prosecutors with the tools necessary to bring 
     a halt to this activity.
       Initially COLBA had concerns about your legislation effort 
     and felt that if it were to become law any concert or special 
     event holder would be held liable for incidental drug use. 
     There was a misconception in the industry that the bill would 
     hold the owners and the promoters of non-rave events 
     responsible for the actions of the patrons.
       However, it is the understanding of COLBA that the purpose 
     of the Rave Act legislation is not to prosecute legitimate 
     law-abiding managers of stadiums, arenas, performing arts 
     centers, licensed beverage facilities and other venues due to 
     incidental drug use at their events. The purpose of the Rave 
     Act is the prosecution of rogue promoters who not only know 
     that there is illegal drug use at their event, but also hold 
     the event for the purpose of illegal drug use or 
     distribution.
       In light of this clarification by your gracious and 
     dedicate staff, the Coalition now understand the intent of 
     your legislative effort and fully supports the passage of the 
     Rave Act. Please feel free to contact me if you need any 
     additional information or if I can be of any further 
     assistance.
           Respectfully,
                                                David S. Germroth.
                                        Washington Representative.

  Mr. GRASSLEY. Mr. President, I am pleased to join my colleague 
Senator Biden today in introducing the Illicit Drug Anti-Proliferation 
Act. This is a continuation of an effort he and I spearheaded last year 
to update our laws so they can continue to be used effectively against 
drug dealers who are pushing drugs on our kids.
  As drug dealers discover new drugs and new methods of pushing their 
poison, we must make sure our legal system is adequately structured to 
react appropriately. I believe this legislation does that.
  Our proposal will modify the existing crack house statute so that its 
jurisdiction over temporary events, such as raves, would be more clear. 
And although this legislation grew out of the problems identified at 
raves, the criminal and civil penalties in the bill would also apply to 
people who promoted any type of event for the purpose of drug use or 
distribution. Illegal drug use in any location should not be tolerated, 
regardless of what cover activity is created to hide the transaction.
  This said, I want to emphasize that our legislation should in no way 
hamper the activities of legitimate event promoters. I realize that 
drugs are not widely available at all raves or other events open to the 
public. And I know that my colleagues Senator Biden is just as aware as 
I am that drug use occurs at events without the knowledge or 
endorsement of the event promoters. This legislation should not affect 
the activities of legitimate event promoters. In no way is our bill 
aimed at stifling any type of music or public expression, it is only 
trying to deter illicit drug use and protect kids.
  The sale of illicit narcotics, whether on a street corner here in 
Washington, D.C., or a warehouse in Des Moines, IA, must be confronted 
and halted wherever possible. One of the new, ``trendy'' illicit 
narcotics is Ecstasy--an especially popular club drug that is all too 
often being sold at all-night dance parties, or raves. Ecstasy is an 
illegal drug that has extremely dangerous side effects.
  In general, Ecstasy raises the heart rate to dangerous levels, and in 
some cases the heart will stop. It also causes severe dehydration, a 
condition that is exacerbated by the high levels of physical exertion 
that happens at raves. Users must constantly drink water in an attempt 
to cool off--a fact that some unscrupulous event promoters take 
advantage of by charging exorbitant fees for bottles of water, after 
cutting off water to drinking fountains and rest room sinks.
  Too often, Ecstasy users collapse and die because their bodies 
overheat. And even those who survive the short-term effects of Ecstasy 
use can look forward to long-term problems such as depression, 
paranoia, and confusion, as scientists have learned that Ecstasy causes 
irreversible changes to the brain.
  Many young people perceive Ecstasy as harmless and it is wrongly 
termed a recreational or ``kid-friendly'' drug. This illegal substance 
does real damage to real lives. Although targeted at teenagers and 
young adults, its use has spread to the middle-aged population and 
rural areas, including my own State of Iowa. Ninety percent of all drug 
treatment and law enforcement experts say that Ecstasy is readily 
accessible in this country. We cannot continue to allow easy access to 
this drug or ignore the consequences of its use.
  That is why I believe it is important that we update the laws that 
have been effectively used to shut down crack houses so they can go 
after temporary events used as a cover to sell drugs. It is important 
to remember that this legislation builds upon an existing statute, with 
existing case law, and therefore existing standards of how it is to be 
implemented. The existing statute has been used to go after landlords 
who ``knowingly and intentionally'' let their property be used for 
illegal narcotics activities. It has not, nor should it be used, to 
take action against every landlord of every property where drug 
activity takes place.
  Similarly, the expansion of authorities created by this legislation 
is designed to target promoters who ``knowingly and intentionally'' 
allow drug use at their events. This is a high standard that should 
protect event promoters from casual application of this statute. 
Clearly, taking steps to reduce or eliminate drug use at an event, such 
as the posting of signs or through zero-tolerance instructions to 
security personnel, are not actions that would be taken by someone who 
would intentionally allow drug use to occur at an event.
  I believe an event promoter does have some responsibility for what 
goes on at an event that they create. Particularly if they knowingly 
create an event for the purpose of buying, using, keeping, or selling 
drugs. While not common, there have been court cases which have been 
able to reach this high standard of proof. Using 21 U.S.C. 856, more 
popularly known as the ``crack house'' statute, law enforcement has 
arrested drug dealers who hosted raves and other dance events as a 
cover to push their product. Four cases have been brought to Federal 
court, with mixed results--mostly because the applicability of current 
law is unclear.
  This legislation is an important step, but a careful one. Our future 
rests with the young people of this great nation and America is at 
risk. Ecstasy has shown itself to be a formidable threat and we must 
confront it on all fronts, not only through law enforcement but 
education and treatment as well. I hope my colleagues will join us in 
supporting this legislation, and help us work towards its quick 
passage.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Reid):
  S. 227. A bill to amend the Higher Education Act of 1965 to extend 
loan forgiveness for certain loans to certified or licensed teachers, 
to provide for grants that promote teacher certification and licensing, 
and for other purposes; to the Committee on Health, Education, Labor, 
and Pensions.

[[Page S1680]]

  Mrs. FEINSTEIN. Mr. President, I rise today to introduce this bill 
with Senator Harry Reid to increase the maximum loan cancellation 
amount available to credentialed teachers from $5,000 to $10,000.
  Educational research is clear: the single most important contributor 
to raising student achievement is having well-trained, high-caliber 
teachers in the classroom. And yet, far too many of our Nations' 
students are being taught by teachers who are not fully credentialed.
  This is especially true in low-income communities, where 22 percent 
of the teachers do not have credentials, more than 10 times the rate in 
wealthy communities.
  Because good teachers can make such a positive difference in the 
classroom, the ``No Child Left Behind Act,'' signed by President Bush 
last year, requires States to ensure that all teachers in our public 
schools are ``highly qualified'' by the 2005-2006 school year. This 
benchmark, which I believe was long overdue, is one that I applaud and 
was pleased to support last Congress.
  And while we have taken a bold first step by committing that our 
children will receive quality education from a licensed teacher, our 
work is far from over.
  We must now strengthen our commitment by helping States look for new 
ways to reach prospective teachers and build quality into their teacher 
preparation and development programs.
  Nationwide, it is estimated that approximately 2 million new teachers 
will need to be hired by 2009.
  This statistic, combined with the reality that roughly 200,000 
veteran teachers will need to get their teaching certificate by the 
2005 school year or lose their ability to teach, makes it clear that 
States have an ambitious requirement to fulfill in a short amount of 
time.
  But many States and school districts argue that they lack the 
resources necessary to fulfill these mandates on their own.
  The gravity of this problem is vividly depicted in California, where 
at least 300,000 new teachers will need to be hired and credentialed by 
2008 to replace retirees and to accommodate the projected population 
growth at a time when the State is experiencing a drastic budget 
shortfall. All of this must happen during a time when the State is 
experiencing drastic budget shortfalls. The California State Board of 
Education projects that all of these changes will cost $6 billion.
  The $6 billion price tag does not include the costs associated with 
credentialing 32,000 emergency credentialed teachers, which is 11 
percent of California's entire workforce, by the 2005 school year. This 
task alone would cost California $365 million.
  And none of these cost-estimates take into account the cost of 
credentialing teachers in other States with high percentages of the 
teaching work force not fully credentialed.
  While I strongly believe that States need to be held accountable for 
ensuring that all teachers are fully credentialed. But I also recognize 
that in order for States to meet this Federal mandate on time, many may 
need guidance and support from the Federal Government.
  This is not just a matter of holding those in the local school 
district or the local schoolhouse accountable; it is also a question of 
holding those in positions of public trust from the schoolhouse up to 
the statehouse, and to the U.S. Capitol, too, accountable for making 
sure that the job gets done.
  I believe that this bill takes a good first step in doing just that 
by creating a balance between State and Federal accountability and 
addressing two obstacles confronting school districts as they prepare 
for the 2005 academic year: lack of incentives to lure teachers into 
teacher credentialing programs early and lack of resources available to 
teaching institutions to improve and build upon their credentialing 
curriculum.
  I believe that the Federal Government should recognize the value of 
having a qualified teacher in a low income classroom by enhancing the 
loan cancellation benefits of credentialed teachers.
  Current law allows teachers to receive up to $5,000 of their student 
loans to be forgiven in exchange for 5 years of teaching in a low-
income school. Unfortunately, few teachers have taken advantage of this 
program because of the low loan cancellation amount available to them 
in comparison to the length of service required for eligibility.
  To encourage recent graduates of teacher licensure programs to enter 
and remain in the teaching field, this bill doubles the maximum loan 
cancellation amount to $10,000 for credentialed teachers teaching for 
five years in a low income school.
  And while uncredentialed teachers would continue to be eligible for 
loan forgiveness available to all teachers under the current law, the 
enhanced benefits for uncredentialed teachers will expire on December 
31, 2005, just in time for the mandated deadline set for all teachers 
to be fully licensed.
  The second element of my bill authorizes grants to institutions of 
higher education to create and expand credentialing programs. Funds 
would be made available to colleges and universities to develop and 
implement teacher preparation programs including curriculum development 
that focuses on credentialing teachers.
  I strongly believe that teachers desiring to become credentialed 
should have every resource available to them to do so. These components 
are meant to complement State programs already available to 
credentialed teachers, which aim to improve teacher quality and tenure.
  To California's credit, since the 1999-2000 school year, 5,000 
emergency credentialed teachers have been successfully placed in State-
backed teacher preparation programs. And the State is working to create 
and improve teacher preparation programs that include relevant course 
work, classroom training, and mentoring by a veteran teacher, with a 
goal of full credentialing.
  But this is not happening in every school district nationwide and it 
must, States and local school districts should work together to 
prioritize available funds to set up programs to ensure that every 
teacher within their district is adequately trained.
  States must continue to look for innovative ways to keep qualified 
teachers in the classroom, especially in low performing school 
districts, and funnel available Federal funds to local initiatives to 
get emergency certified teachers into credentialing programs.
  We as a Nation must continue to make providing quality education to 
our children a top priority. Passing legislation is just the first 
step. With the expected population growth and the need to replace 
teachers approaching retirement, States must act swiftly and 
aggressively to ensure that neither children nor teachers are left 
behind.
  I urge my colleagues to join me in cosponsoring this important piece 
of legislation that would give States and teachers the necessary 
resources to ensure that every teacher is a ``highly qualified'' 
teacher. Our Nation's students deserve nothing less.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Gregg, and Mr. Leahy):
  S. 228. A bill to amend title 18, United States Code, to limit the 
misuse of social security numbers, to establish criminal penalties for 
such misuse, and for other purposes; read the first time.
  Mrs. FEINSTEIN. Mr. President. I rise to reintroduce, along with 
Senator Judd Gregg, the Social Security Number Misuse Prevention Act. 
This is critical legislation, especially in light of the increasing 
number of cases of identity theft.
  In fact, the Federal Trade Commission, FTC, this week announced that 
identity theft is the Nation's top consumer fraud complaint for the 
third consecutive year.
  Last year, this legislation was approved by the Senate Judiciary 
Committee, and the Finance Committee was set to vote on it as well, but 
it got entangled in an unrelated, amendment.
  It is my hope that Congress will approve this legislation this year, 
so that we can begin to protect one of the most fundamental rights of 
all Americans.
  I believe all Americans should have the right to: control how their 
personal identifying information is used. Keep their Social Security 
number out of the public domain. Limit disclosure by public agencies of 
personal information; and I also believe that Americans have the right 
to expect that businesses and government agencies will

[[Page S1681]]

protect your personal information held within their databases.
  Lately, however, these rights have been seriously compromised by 
thieves who are stealing American's identity's in record numbers.
  Just in the last year, identity theft cases have doubled nationwide. 
American consumers filed approximately 163,000 identity theft 
complaints with the FTC in 2002. Fully 43 percent of all the complaints 
the FTC receives are about identity theft.
  My own State, California, has more victims than any other State. The 
FTC recorded 30,738 identity theft cases last year from California 
consumers alone.
  Senator Gregg and I are reintroducing our Social Security number 
protection bill because Social Security numbers are the keys thieves 
use to unlock and take over a person's identity.
  Identity thieves use Social Security numbers to: fraudulently obtain 
credit cards, access existing financial accounts, commit bank fraud, 
falsely obtain employment and government benefits; and create 
additional false identification documents, such as drivers' licenses.
  Sally Twentyman, for instance, had her identity stolen when a thief 
rifled through her mail and stole credit card renewal forms.
  The thief used her name and Social Security number to make $13,000 in 
cash advances and to open two additional credit card accounts in her 
name.
  Not surprisingly, reports of Social Security number misuse have risen 
lockstep with the growth in identity theft.
  Allegations of Social Security number fraud have increased by 600 
percent over the past several years from 11,000 in 1998 to 73,000 in 
2003.
  Social Security Number Prevention Act:
  The goal of this legislation is straightforward, to get Social 
Security numbers out of the public domain so that identity thieves 
can't access the number.
  First, this bill prohibits anyone from selling or displaying an 
individual's Social Security number to the general public without the 
individual's consent, but does permit legitimate business-to-business 
and business-to-government uses of the number.
  This practice occurs today. A stranger or stalker can buy your Social 
Security number off the Internet for a few dollars.
  In one troubling case, Christopher Jones, a twenty-five-year old 
employee at the University of North Carolina-Pembroke, stole 
approximately 3,000 Social Security numbers through his job handing out 
towels and other equipment at the university gym.
  In order to get equipment from Mr. Jones, students had to give him 
their Social Security numbers. Jones mined these numbers over several 
months and advertised the Social Security numbers for sale on eBay with 
an opening bid of $1.00 per number for a block of 1,000 numbers.
  One advertisement, for example, read ``100 (one hundred social 
Security # Numbers Obtain False Credit Cards Idenity Theft I Don't Care 
Bid Starts at a Dollar a Piece USPS Money Orders only all Different.''
  Second, this legislation gives consumers the right to refuse to give 
out their Social Security numbers to companies that don't really need 
it.
  Companies, however, can still require Social Security numbers for 
purposes under the Fair Credit Reporting Act, for background checks, if 
required by law, or if the number is necessary to verify identity or 
prevent fraud.
  Third, this legislation curbs the public display of Social Security 
numbers on government documents. Specifically, the bill removes Social 
Security numbers from government checks and driver's licenses.
  In addition, the bill prohibits governments entities from displaying 
Social Security numbers on public records that are posted on the 
Internet or in electronic media after the effective date of the act.
  I don't believe a complete stranger should not be able to get access 
to my Social Security number from my birth certificate or marriage 
license, especially just by logging onto the Internet!
  Finally, this legislation creates new penalties targeting the misuse 
of Social Security numbers. Specifically, the bill gives the Social 
Security Administration the authority to issue civil penalties of up to 
$5,000 for people who misuse Social Security numbers.
  The bill also creates a maximum five year prison sentence for anyone 
who obtains another person's Social Security number for purpose of 
locating or identifying that individual with the intent to physically 
harm that person.
  This legislation is fundamental to protecting the identities of 
American citizens.
  I look forward to working with Senator Gregg to secure its passage 
this year, and 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. 228

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Social 
     Security Number Misuse Prevention Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Prohibition of the display, sale, or purchase of social 
              security numbers.
Sec. 4. Application of prohibition of the display, sale, or purchase of 
              social security numbers to public records.
Sec. 5. Rulemaking authority of the Attorney General.
Sec. 6. Treatment of social security numbers on government documents.
Sec. 7. Limits on personal disclosure of a social security number for 
              consumer transactions.
Sec. 8. Extension of civil monetary penalties for misuse of a social 
              security number.
Sec. 9. Criminal penalties for the misuse of a social security number.
Sec. 10. Civil actions and civil penalties.
Sec. 11. Federal injunctive authority.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The inappropriate display, sale, or purchase of social 
     security numbers has contributed to a growing range of 
     illegal activities, including fraud, identity theft, and, in 
     some cases, stalking and other violent crimes.
       (2) While financial institutions, health care providers, 
     and other entities have often used social security numbers to 
     confirm the identity of an individual, the general display to 
     the public, sale, or purchase of these numbers has been used 
     to commit crimes, and also can result in serious invasions of 
     individual privacy.
       (3) The Federal Government requires virtually every 
     individual in the United States to obtain and maintain a 
     social security number in order to pay taxes, to qualify for 
     social security benefits, or to seek employment. An 
     unintended consequence of these requirements is that social 
     security numbers have become one of the tools that can be 
     used to facilitate crime, fraud, and invasions of the privacy 
     of the individuals to whom the numbers are assigned. Because 
     the Federal Government created and maintains this system, and 
     because the Federal Government does not permit individuals to 
     exempt themselves from those requirements, it is appropriate 
     for the Federal Government to take steps to stem the abuse of 
     social security numbers.
       (4) The display, sale, or purchase of social security 
     numbers in no way facilitates uninhibited, robust, and wide-
     open public debate, and restrictions on such display, sale, 
     or purchase would not affect public debate.
       (5) No one should seek to profit from the display, sale, or 
     purchase of social security numbers in circumstances that 
     create a substantial risk of physical, emotional, or 
     financial harm to the individuals to whom those numbers are 
     assigned.
       (6) Consequently, this Act provides each individual that 
     has been assigned a social security number some degree of 
     protection from the display, sale, and purchase of that 
     number in any circumstance that might facilitate unlawful 
     conduct.

     SEC. 3. PROHIBITION OF THE DISPLAY, SALE, OR PURCHASE OF 
                   SOCIAL SECURITY NUMBERS.

       (a) Prohibition.--
       (1) In general.--Chapter 47 of title 18, United States 
     Code, is amended by inserting after section 1028 the 
     following:

     ``Sec. 1028A. Prohibition of the display, sale, or purchase 
       of social security numbers

       ``(a) Definitions.--In this section:
       ``(1) Display.--The term `display' means to intentionally 
     communicate or otherwise make available (on the Internet or 
     in any other manner) to the general public an individual's 
     social security number.
       ``(2) Person.--The term `person' means any individual, 
     partnership, corporation, trust, estate, cooperative, 
     association, or any other entity.
       ``(3) Purchase.--The term `purchase' means providing 
     directly or indirectly, anything of value in exchange for a 
     social security number.

[[Page S1682]]

       ``(4) Sale.--The term `sale' means obtaining, directly or 
     indirectly, anything of value in exchange for a social 
     security number.
       ``(5) State.--The term `State' means any State of the 
     United States, the District of Columbia, Puerto Rico, the 
     Northern Mariana Islands, the United States Virgin Islands, 
     Guam, American Samoa, and any territory or possession of the 
     United States.
       ``(b) Limitation on Display.--Except as provided in section 
     1028B, no person may display any individual's social security 
     number to the general public without the affirmatively 
     expressed consent of the individual.
       ``(c) Limitation on Sale or Purchase.--Except as otherwise 
     provided in this section, no person may sell or purchase any 
     individual's social security number without the affirmatively 
     expressed consent of the individual.
       ``(d) Prerequisites for Consent.--In order for consent to 
     exist under subsection (b) or (c), the person displaying or 
     seeking to display, selling or attempting to sell, or 
     purchasing or attempting to purchase, an individual's social 
     security number shall--
       ``(1) inform the individual of the general purpose for 
     which the number will be used, the types of persons to whom 
     the number may be available, and the scope of transactions 
     permitted by the consent; and
       ``(2) obtain the affirmatively expressed consent 
     (electronically or in writing) of the individual.
       ``(e) Exceptions.--Nothing in this section shall be 
     construed to prohibit or limit the display, sale, or purchase 
     of a social security number--
       ``(1) required, authorized, or excepted under any Federal 
     law;
       ``(2) for a public health purpose, including the protection 
     of the health or safety of an individual in an emergency 
     situation;
       ``(3) for a national security purpose;
       ``(4) for a law enforcement purpose, including the 
     investigation of fraud and the enforcement of a child support 
     obligation;
       ``(5) if the display, sale, or purchase of the number is 
     for a use occurring as a result of an interaction between 
     businesses, governments, or business and government 
     (regardless of which entity initiates the interaction), 
     including, but not limited to--
       ``(A) the prevention of fraud (including fraud in 
     protecting an employee's right to employment benefits);
       ``(B) the facilitation of credit checks or the facilitation 
     of background checks of employees, prospective employees, or 
     volunteers;
       ``(C) the retrieval of other information from other 
     businesses, commercial enterprises, government entities, or 
     private nonprofit organizations; or
       ``(D) when the transmission of the number is incidental to, 
     and in the course of, the sale, lease, franchising, or merger 
     of all, or a portion of, a business;
       ``(6) if the transfer of such a number is part of a data 
     matching program involving a Federal, State, or local agency; 
     or
       ``(7) if such number is required to be submitted as part of 
     the process for applying for any type of Federal, State, or 
     local government benefit or program;

     except that, nothing in this subsection shall be construed as 
     permitting a professional or commercial user to display or 
     sell a social security number to the general public.
       ``(f) Limitation.--Nothing in this section shall prohibit 
     or limit the display, sale, or purchase of social security 
     numbers as permitted under title V of the Gramm-Leach-Bliley 
     Act, or for the purpose of affiliate sharing as permitted 
     under the Fair Credit Reporting Act, except that no entity 
     regulated under such Acts may make social security numbers 
     available to the general public, as may be determined by the 
     appropriate regulators under such Acts. For purposes of this 
     subsection, the general public shall not include affiliates 
     or unaffiliated third-party business entities as may be 
     defined by the appropriate regulators.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code, is amended by inserting 
     after the item relating to section 1028 the following:

``1028A. Prohibition of the display, sale, or purchase of social 
              security numbers.''.

       (b) Study; Report.--
       (1) In general.--The Attorney General shall conduct a study 
     and prepare a report on all of the uses of social security 
     numbers permitted, required, authorized, or excepted under 
     any Federal law. The report shall include a detailed 
     description of the uses allowed as of the date of enactment 
     of this Act and shall evaluate whether such uses should be 
     continued or discontinued by appropriate legislative action.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General shall report to 
     Congress findings under this subsection. The report shall 
     include such recommendations for legislation based on 
     criteria the Attorney General determines to be appropriate.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 30 days after the date 
     on which the final regulations promulgated under section 5 
     are published in the Federal Register.

     SEC. 4. APPLICATION OF PROHIBITION OF THE DISPLAY, SALE, OR 
                   PURCHASE OF SOCIAL SECURITY NUMBERS TO PUBLIC 
                   RECORDS.

       (a) Public Records Exception.--
       (1) In general.--Chapter 47 of title 18, United States Code 
     (as amended by section 3(a)(1)), is amended by inserting 
     after section 1028A the following:

     ``Sec. 1028B. Display, sale, or purchase of public records 
       containing social security numbers

       ``(a) Definition.--In this section, the term `public 
     record' means any governmental record that is made available 
     to the general public.
       ``(b) In General.--Except as provided in subsections (c), 
     (d), and (e), section 1028A shall not apply to a public 
     record.
       ``(c) Public Records on the Internet or in an Electronic 
     Medium.--
       ``(1) In general.--Section 1028A shall apply to any public 
     record first posted onto the Internet or provided in an 
     electronic medium by, or on behalf of a government entity 
     after the date of enactment of this section, except as 
     limited by the Attorney General in accordance with paragraph 
     (2).
       ``(2) Exception for government entities already placing 
     public records on the internet or in electronic form.--Not 
     later than 60 days after the date of enactment of this 
     section, the Attorney General shall issue regulations 
     regarding the applicability of section 1028A to any record of 
     a category of public records first posted onto the Internet 
     or provided in an electronic medium by, or on behalf of a 
     government entity prior to the date of enactment of this 
     section. The regulations will determine which individual 
     records within categories of records of these government 
     entities, if any, may continue to be posted on the Internet 
     or in electronic form after the effective date of this 
     section. In promulgating these regulations, the Attorney 
     General may include in the regulations a set of procedures 
     for implementing the regulations and shall consider the 
     following:
       ``(A) The cost and availability of technology available to 
     a governmental entity to redact social security numbers from 
     public records first provided in electronic form after the 
     effective date of this section.
       ``(B) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A with respect to such records.
       ``(C) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.

     Nothing in the regulation shall permit a public entity to 
     post a category of public records on the Internet or in 
     electronic form after the effective date of this section if 
     such category had not been placed on the Internet or in 
     electronic form prior to such effective date.
       ``(d) Harvested Social Security Numbers.--Section 1028A 
     shall apply to any public record of a government entity which 
     contains social security numbers extracted from other public 
     records for the purpose of displaying or selling such numbers 
     to the general public.
       ``(e) Attorney General Rulemaking on Paper Records.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Attorney General shall 
     determine the feasibility and advisability of applying 
     section 1028A to the records listed in paragraph (2) when 
     they appear on paper or on another nonelectronic medium. If 
     the Attorney General deems it appropriate, the Attorney 
     General may issue regulations applying section 1028A to such 
     records.
       ``(2) List of paper and other nonelectronic records.--The 
     records listed in this paragraph are as follows:
       ``(A) Professional or occupational licenses.
       ``(B) Marriage licenses.
       ``(C) Birth certificates.
       ``(D) Death certificates.
       ``(E) Other short public documents that display a social 
     security number in a routine and consistent manner on the 
     face of the document.
       ``(3) Criteria for attorney general review.--In determining 
     whether section 1028A should apply to the records listed in 
     paragraph (2), the Attorney General shall consider the 
     following:
       ``(A) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A.
       ``(B) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.''.
       (2) Conforming Amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code (as amended by section 
     3(a)(2)), is amended by inserting after the item relating to 
     section 1028A the following:

``1028B. Display, sale, or purchase of public records containing social 
              security numbers.''.

       (b) Study and Report on Social Security Numbers in Public 
     Records.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study and prepare a report on social security 
     numbers in public records. In developing the report, the 
     Comptroller General shall consult with the Administrative 
     Office of the United States Courts, State and local 
     governments that store, maintain, or disseminate public 
     records, and other stakeholders, including members of the 
     private sector who routinely

[[Page S1683]]

     use public records that contain social security numbers.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under paragraph (1). The report shall include a 
     detailed description of the activities and results of the 
     study and recommendations for such legislative action as the 
     Comptroller General considers appropriate. The report, at a 
     minimum, shall include--
       (A) a review of the uses of social security numbers in non-
     federal public records;
       (B) a review of the manner in which public records are 
     stored (with separate reviews for both paper records and 
     electronic records);
       (C) a review of the advantages or utility of public records 
     that contain social security numbers, including the utility 
     for law enforcement, and for the promotion of homeland 
     security;
       (D) a review of the disadvantages or drawbacks of public 
     records that contain social security numbers, including 
     criminal activity, compromised personal privacy, or threats 
     to homeland security;
       (E) the costs and benefits for State and local governments 
     of removing social security numbers from public records, 
     including a review of current technologies and procedures for 
     removing social security numbers from public records; and
       (F) an assessment of the benefits and costs to businesses, 
     their customers, and the general public of prohibiting the 
     display of social security numbers on public records (with 
     separate assessments for both paper records and electronic 
     records).
       (c) Effective Date.--The prohibition with respect to 
     electronic versions of new classes of public records under 
     section 1028B(b) of title 18, United States Code (as added by 
     subsection (a)(1)) shall not take effect until the date that 
     is 60 days after the date of enactment of this Act.

     SEC. 5. RULEMAKING AUTHORITY OF THE ATTORNEY GENERAL.

       (a) In General.--Except as provided in subsection (b), the 
     Attorney General may prescribe such rules and regulations as 
     the Attorney General deems necessary to carry out the 
     provisions of section 1028A(e)(5) of title 18, United 
     States Code (as added by section 3(a)(1)).
       (b) Display, Sale, or Purchase Rulemaking With Respect to 
     Interactions Between Businesses, Governments, or Business and 
     Government.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General, in consultation 
     with the Commissioner of Social Security, the Chairman of the 
     Federal Trade Commission, and such other heads of Federal 
     agencies as the Attorney General determines appropriate, 
     shall conduct such rulemaking procedures in accordance with 
     subchapter II of chapter 5 of title 5, United States Code, as 
     are necessary to promulgate regulations to implement and 
     clarify the uses occurring as a result of an interaction 
     between businesses, governments, or business and government 
     (regardless of which entity initiates the interaction) 
     permitted under section 1028A(e)(5) of title 18, United 
     States Code (as added by section 3(a)(1)).
       (2) Factors to be considered.--In promulgating the 
     regulations required under paragraph (1), the Attorney 
     General shall, at a minimum, consider the following:
       (A) The benefit to a particular business, to customers of 
     the business, and to the general public of the display, sale, 
     or purchase of an individual's social security number.
       (B) The costs that businesses, customers of businesses, and 
     the general public may incur as a result of prohibitions on 
     the display, sale, or purchase of social security numbers.
       (C) The risk that a particular business practice will 
     promote the use of a social security number to commit fraud, 
     deception, or crime.
       (D) The presence of adequate safeguards and procedures to 
     prevent--
       (i) misuse of social security numbers by employees within a 
     business; and
       (ii) misappropriation of social security numbers by the 
     general public, while permitting internal business uses of 
     such numbers.
       (E) The presence of procedures to prevent identity thieves, 
     stalkers, and other individuals with ill intent from posing 
     as legitimate businesses to obtain social security numbers.

     SEC. 6. TREATMENT OF SOCIAL SECURITY NUMBERS ON GOVERNMENT 
                   DOCUMENTS.

       (a) Prohibition of Use of Social Security Account Numbers 
     on Checks Issued for Payment by Governmental Agencies.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) is amended by adding at 
     the end the following:
       ``(x) No Federal, State, or local agency may display the 
     social security account number of any individual, or any 
     derivative of such number, on any check issued for any 
     payment by the Federal, State, or local agency.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to violations of section 
     205(c)(2)(C)(x) of the Social Security Act (42 U.S.C. 
     405(c)(2)(C)(x)), as added by paragraph (1), occurring after 
     the date that is 3 years after the date of enactment of this 
     Act.
       (b) Prohibition of Appearance of Social Security Account 
     Numbers on Driver's Licenses or Motor Vehicle Registration.--
       (1) In general.--Section 205(c)(2)(C)(vi) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)(vi)) is amended--
       (A) by inserting ``(I)'' after ``(vi)''; and
       (B) by adding at the end the following:
       ``(II)(aa) An agency of a State (or political subdivision 
     thereof), in the administration of any driver's license or 
     motor vehicle registration law within its jurisdiction, may 
     not display the social security account numbers issued by the 
     Commissioner of Social Security, or any derivative of such 
     numbers, on the face of any driver's license or motor vehicle 
     registration or any other document issued by such State (or 
     political subdivision thereof) to an individual for purposes 
     of identification of such individual.
       ``(bb) Nothing in this subclause shall be construed as 
     precluding an agency of a State (or political subdivision 
     thereof), in the administration of any driver's license or 
     motor vehicle registration law within its jurisdiction, from 
     using a social security account number for an internal use or 
     to link with the database of an agency of another State that 
     is responsible for the administration of any driver's license 
     or motor vehicle registration law.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply with respect to licenses, registrations, and 
     other documents issued or reissued after the date that is 1 
     year after the date of enactment of this Act.
       (c) Prohibition of Inmate Access to Social Security Account 
     Numbers.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) (as amended by 
     subsection (b)) is amended by adding at the end the 
     following:
       ``(xi) No Federal, State, or local agency may employ, or 
     enter into a contract for the use or employment of, prisoners 
     in any capacity that would allow such prisoners access to the 
     social security account numbers of other individuals. For 
     purposes of this clause, the term `prisoner' means an 
     individual confined in a jail, prison, or other penal 
     institution or correctional facility pursuant to such 
     individual's conviction of a criminal offense.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to employment of prisoners, or entry 
     into contract with prisoners, after the date that is 1 year 
     after the date of enactment of this Act.

     SEC. 7. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL SECURITY 
                   NUMBER FOR CONSUMER TRANSACTIONS.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 1150A. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL 
                   SECURITY NUMBER FOR CONSUMER TRANSACTIONS.

       ``(a) In General.--A commercial entity may not require an 
     individual to provide the individual's social security number 
     when purchasing a commercial good or service or deny an 
     individual the good or service for refusing to provide that 
     number except--
       ``(1) for any purpose relating to--
       ``(A) obtaining a consumer report for any purpose permitted 
     under the Fair Credit Reporting Act;
       ``(B) a background check of the individual conducted by a 
     landlord, lessor, employer, voluntary service agency, or 
     other entity as determined by the Attorney General;
       ``(C) law enforcement; or
       ``(D) a Federal, State, or local law requirement; or
       ``(2) if the social security number is necessary to verify 
     the identity of the consumer to effect, administer, or 
     enforce the specific transaction requested or authorized by 
     the consumer, or to prevent fraud.
       ``(b) Application of Civil Money Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     1129(a)(3)(F).
       ``(c) Application of Criminal Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     208(a)(8).
       ``(d) Limitation on Class Actions.--No class action 
     alleging a violation of this section shall be maintained 
     under this section by an individual or any private party in 
     Federal or State court.
       ``(e) State Attorney General Enforcement.--
       ``(1) In general.--
       ``(A) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any person in a 
     practice that is prohibited under this section, the State, as 
     parens patriae, may bring a civil action on behalf of the 
     residents of the State in a district court of the United 
     States of appropriate jurisdiction to--
       ``(i) enjoin that practice;
       ``(ii) enforce compliance with such section;
       ``(iii) obtain damages, restitution, or other compensation 
     on behalf of residents of the State; or
       ``(iv) obtain such other relief as the court may consider 
     appropriate.
       ``(B) Notice.--
       ``(i) In general.--Before filing an action under 
     subparagraph (A), the attorney general of the State involved 
     shall provide to the Attorney General--

       ``(I) written notice of the action; and
       ``(II) a copy of the complaint for the action.

       ``(ii) Exemption.--

       ``(I) In general.--Clause (i) shall not apply with respect 
     to the filing of an action by an attorney general of a State 
     under this subsection, if the State attorney general 
     determines that it is not feasible to provide the

[[Page S1684]]

     notice described in such subparagraph before the filing of 
     the action.
       ``(II) Notification.--With respect to an action described 
     in subclause (I), the attorney general of a State shall 
     provide notice and a copy of the complaint to the Attorney 
     General at the same time as the State attorney general files 
     the action.

       ``(2) Intervention.--
       ``(A) In general.--On receiving notice under paragraph 
     (1)(B), the Attorney General shall have the right to 
     intervene in the action that is the subject of the notice.
       ``(B) Effect of intervention.--If the Attorney General 
     intervenes in the action under paragraph (1), the Attorney 
     General shall have the right to be heard with respect to any 
     matter that arises in that action.
       ``(3) Construction.--For purposes of bringing any civil 
     action under paragraph (1), nothing in this section shall be 
     construed to prevent an attorney general of a State from 
     exercising the powers conferred on such attorney general by 
     the laws of that State to--
       ``(A) conduct investigations;
       ``(B) administer oaths or affirmations; or
       ``(C) compel the attendance of witnesses or the production 
     of documentary and other evidence.
       ``(4) Actions by the attorney general of the united 
     states.--In any case in which an action is instituted by or 
     on behalf of the Attorney General for violation of a practice 
     that is prohibited under this section, no State may, during 
     the pendency of that action, institute an action under 
     paragraph (1) against any defendant named in the complaint in 
     that action for violation of that practice.
       ``(5) Venue; service of process.--
       ``(A) Venue.--Any action brought under paragraph (1) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 1391 
     of title 28, United States Code.
       ``(B) Service of process.--In an action brought under 
     paragraph (1), process may be served in any district in which 
     the defendant--
       ``(i) is an inhabitant; or
       ``(ii) may be found.
       ``(f) Sunset.--This section shall not apply on or after the 
     date that is 6 years after the effective date of this 
     section.''.
       (b) Evaluation and Report.--Not later than the date that is 
     6 years and 6 months after the date of enactment of this Act, 
     the Attorney General, in consultation with the chairman of 
     the Federal Trade Commission, shall issue a report evaluating 
     the effectiveness and efficiency of section 1150A of the 
     Social Security Act (as added by subsection (a)) and shall 
     make recommendations to Congress as to any legislative action 
     determined to be necessary or advisable with respect to such 
     section, including a recommendation regarding whether to 
     reauthorize such section.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to requests to provide a social security number 
     occurring after the date that is 1 year after the date of 
     enactment of this Act.

     SEC. 8. EXTENSION OF CIVIL MONETARY PENALTIES FOR MISUSE OF A 
                   SOCIAL SECURITY NUMBER.

       (a) Treatment of Withholding of Material Facts.--
       (1) Civil penalties.--The first sentence of section 
     1129(a)(1) of the Social Security Act (42 U.S.C. 1320a-
     8(a)(1)) is amended--
       (A) by striking ``who'' and inserting ``who--'';
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(A) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;

       ``(B) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(C) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading,
     shall be subject to'';
       (C) by inserting ``or each receipt of such benefits while 
     withholding disclosure of such fact'' after ``each such 
     statement or representation'';
       (D) by inserting ``or because of such withholding of 
     disclosure of a material fact'' after ``because of such 
     statement or representation''; and
       (E) by inserting ``or such a withholding of disclosure'' 
     after ``such a statement or representation''.
       (2) Administrative procedure for imposing penalties.--The 
     first sentence of section 1129A(a) of the Social Security Act 
     (42 U.S.C. 1320a-8a(a)) is amended--
       (A) by striking ``who'' and inserting ``who--''; and
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(1) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;
       ``(2) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(3) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading,

     shall be subject to''.
       (b) Application of Civil Money Penalties to Elements of 
     Criminal Violations.--Section 1129(a) of the Social Security 
     Act (42 U.S.C. 1320a-8(a)), as amended by subsection (a)(1), 
     is amended--
       (1) by redesignating paragraph (2) as paragraph (4);
       (2) by redesignating the last sentence of paragraph (1) as 
     paragraph (2) and inserting such paragraph after paragraph 
     (1); and
       (3) by inserting after paragraph (2) (as so redesignated) 
     the following:
       ``(3) Any person (including an organization, agency, or 
     other entity) who--
       ``(A) uses a social security account number that such 
     person knows or should know has been assigned by the 
     Commissioner of Social Security (in an exercise of authority 
     under section 205(c)(2) to establish and maintain records) on 
     the basis of false information furnished to the Commissioner 
     by any person;
       ``(B) falsely represents a number to be the social security 
     account number assigned by the Commissioner of Social 
     Security to any individual, when such person knows or should 
     know that such number is not the social security account 
     number assigned by the Commissioner to such individual;
       ``(C) knowingly alters a social security card issued by the 
     Commissioner of Social Security, or possesses such a card 
     with intent to alter it;
       ``(D) knowingly displays, sells, or purchases a card that 
     is, or purports to be, a card issued by the Commissioner of 
     Social Security, or possesses such a card with intent to 
     display, purchase, or sell it;
       ``(E) counterfeits a social security card, or possesses a 
     counterfeit social security card with intent to display, 
     sell, or purchase it;
       ``(F) discloses, uses, compels the disclosure of, or 
     knowingly displays, sells, or purchases the social security 
     account number of any person in violation of the laws of the 
     United States;
       ``(G) with intent to deceive the Commissioner of Social 
     Security as to such person's true identity (or the true 
     identity of any other person) furnishes or causes to be 
     furnished false information to the Commissioner with respect 
     to any information required by the Commissioner in connection 
     with the establishment and maintenance of the records 
     provided for in section 205(c)(2);
       ``(H) offers, for a fee, to acquire for any individual, or 
     to assist in acquiring for any individual, an additional 
     social security account number or a number which purports to 
     be a social security account number; or
       ``(I) being an officer or employee of a Federal, State, or 
     local agency in possession of any individual's social 
     security account number, willfully acts or fails to act so as 
     to cause a violation by such agency of clause (vi)(II) or (x) 
     of section 205(c)(2)(C),

     shall be subject to, in addition to any other penalties that 
     may be prescribed by law, a civil money penalty of not more 
     than $5,000 for each violation. Such person shall also be 
     subject to an assessment, in lieu of damages sustained by the 
     United States resulting from such violation, of not more than 
     twice the amount of any benefits or payments paid as a result 
     of such violation.''.
       (c) Clarification of Treatment of Recovered Amounts.--
     Section 1129(e)(2)(B) of the Social Security Act (42 U.S.C. 
     1320a-8(e)(2)(B)) is amended by striking ``In the case of 
     amounts recovered arising out of a determination relating to 
     title VIII or XVI,'' and inserting ``In the case of any other 
     amounts recovered under this section,''.
       (d) Conforming Amendments.--
       (1) Section 1129(b)(3)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(b)(3)(A)) is amended by striking ``charging 
     fraud or false statements''.
       (2) Section 1129(c)(1) of the Social Security Act (42 
     U.S.C. 1320a-8(c)(1)) is amended by striking ``and 
     representations'' and inserting ``, representations, or 
     actions''.
       (3) Section 1129(e)(1)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(e)(1)(A)) is amended by striking ``statement 
     or representation referred to in subsection (a) was made'' 
     and inserting ``violation occurred''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply with respect to 
     violations of sections 1129 and 1129A of the Social Security 
     Act (42 U.S.C. 1320-8 and 1320a-8a), as amended by this 
     section, committed after the date of enactment of this Act.
       (2) Violations by government agents in possession of social 
     security numbers.--Section 1129(a)(3)(I) of the Social 
     Security Act (42 U.S.C. 1320a-8(a)(3)(I)), as added by

[[Page S1685]]

     subsection (b), shall apply with respect to violations of 
     that section occurring on or after the effective date 
     described in section 3(c).

     SEC. 9. CRIMINAL PENALTIES FOR THE MISUSE OF A SOCIAL 
                   SECURITY NUMBER.

       (a) Prohibition of Wrongful Use as Personal Identification 
     Number.--No person may obtain any individual's social 
     security number for purposes of locating or identifying an 
     individual with the intent to physically injure, harm, or use 
     the identity of the individual for any illegal purpose.
       (b) Criminal Sanctions.--Section 208(a) of the Social 
     Security Act (42 U.S.C. 408(a)) is amended--
       (1) in paragraph (8), by inserting ``or'' after the 
     semicolon; and
       (2) by inserting after paragraph (8) the following:
       ``(9) except as provided in subsections (e) and (f) of 
     section 1028A of title 18, United States Code, knowingly and 
     willfully displays, sells, or purchases (as those terms are 
     defined in section 1028A(a) of title 18, United States Code) 
     any individual's social security account number without 
     having met the prerequisites for consent under section 
     1028A(d) of title 18, United States Code; or
       ``(10) obtains any individual's social security number for 
     the purpose of locating or identifying the individual with 
     the intent to injure or to harm that individual, or to use 
     the identity of that individual for an illegal purpose;''.

     SEC. 10. CIVIL ACTIONS AND CIVIL PENALTIES.

       (a) Civil Action in State Courts.--
       (1) In general.--Any individual aggrieved by an act of any 
     person in violation of this Act or any amendments made by 
     this Act may, if otherwise permitted by the laws or rules of 
     the court of a State, bring in an appropriate court of that 
     State--
       (A) an action to enjoin such violation;
       (B) an action to recover for actual monetary loss from such 
     a violation, or to receive up to $500 in damages for each 
     such violation, whichever is greater; or
       (C) both such actions.

     It shall be an affirmative defense in any action brought 
     under this paragraph that the defendant has established and 
     implemented, with due care, reasonable practices and 
     procedures to effectively prevent violations of the 
     regulations prescribed under this Act. If the court finds 
     that the defendant willfully or knowingly violated the 
     regulations prescribed under this subsection, the court may, 
     in its discretion, increase the amount of the award to an 
     amount equal to not more than 3 times the amount available 
     under subparagraph (B).
       (2) Statute of limitations.--An action may be commenced 
     under this subsection not later than the earlier of--
       (A) 5 years after the date on which the alleged violation 
     occurred; or
       (B) 3 years after the date on which the alleged violation 
     was or should have been reasonably discovered by the 
     aggrieved individual.
       (3) Nonexclusive remedy.--The remedy provided under this 
     subsection shall be in addition to any other remedies 
     available to the individual.
       (b) Civil Penalties.--
       (1) In general.--Any person who the Attorney General 
     determines has violated any section of this Act or of any 
     amendments made by this Act shall be subject, in addition to 
     any other penalties that may be prescribed by law--
       (A) to a civil penalty of not more than $5,000 for each 
     such violation; and
       (B) to a civil penalty of not more than $50,000, if the 
     violations have occurred with such frequency as to constitute 
     a general business practice.
       (2) Determination of violations.--Any willful violation 
     committed contemporaneously with respect to the social 
     security numbers of 2 or more individuals by means of mail, 
     telecommunication, or otherwise, shall be treated as a 
     separate violation with respect to each such individual.
       (3) Enforcement procedures.--The provisions of section 
     1128A of the Social Security Act (42 U.S.C. 1320a-7a), other 
     than subsections (a), (b), (f), (h), (i), (j), (m), and (n) 
     and the first sentence of subsection (c) of such section, and 
     the provisions of subsections (d) and (e) of section 205 of 
     such Act (42 U.S.C. 405) shall apply to a civil penalty 
     action under this subsection in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), except that, 
     for purposes of this paragraph, any reference in section 
     1128A of such Act (42 U.S.C. 1320a-7a) to the Secretary shall 
     be deemed to be a reference to the Attorney General.

     SEC. 11. FEDERAL INJUNCTIVE AUTHORITY.

       In addition to any other enforcement authority conferred 
     under this Act or the amendments made by this Act, the 
     Federal Government shall have injunctive authority with 
     respect to any violation by a public entity of any provision 
     of this Act or of any amendments made by this Act.

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