[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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