[Congressional Record Volume 149, Number 64 (Thursday, May 1, 2003)]
[Senate]
[Pages S5652-S5678]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KENNEDY (for himself, Mr. Specter, Mr. Daschle, Mr. Smith, 
        Mr. Leahy, Ms. Collins, Mr. Lieberman, Ms. Snowe, Mr. Wyden, 
        Mr. Jeffords, Mr. Schumer, Mr. Chafee, Mr. Akaka, Mr. Ensign, 
        Mr. Bayh, Mr. Biden, Mr. Bingaman, Mrs. Boxer, Mr. Breaux, Ms. 
        Cantwell, Mr. Carper, Mrs. Clinton, Mr. Corzine, Mr. Dayton, 
        Mr. Dodd, Mr. Dorgan, Mr. Durbin, Mr. Edwards, Mrs. Feinstein, 
        Mr. Graham of Florida, Mr. Harkin, Mr. Inouye, Mr. Johnson, Mr. 
        Kerry, Ms. Landrieu, Mr. Levin, Mrs. Lincoln, Ms. Mikulski, Mr. 
        Miller, Mrs. Murray, Mr. Nelson of Nebraska, Mr. Nelson of 
        Florida, Mr. Reed, Mr. Reid, Mr. Rockefeller, Mr. Sarbanes, Ms. 
        Stabenow, Mr. Lautenberg, and Mr. Pryor):
  S. 966. A bill to provide Federal assistance to States and local 
jurisdictions to prosecute hate crimes; to the Committee on the 
Judiciary.
  Mr. KENNEDY. Mr. President, it's a privilege to join my colleagues in 
introducing this legislation to combat hate crimes. Hate crimes are a 
violation of all our country stands for. They send the poisonous 
message that some Americans deserve to be victimized solely because of 
who they are. Like acts of terrorism, hate crimes have an impact far 
greater than the impact on the individual victims. They are crimes 
against entire communities, against the whole Nation, and against the 
fundamental ideals on which America was founded. As Attorney General 
Ashcroft has said, ``Criminal acts of hate run counter to what is best 
in America--our belief in equality and freedom.''
  Although there was a significant overall reduction in violent crimes 
during the 1990s, the number of hate crimes continued to grow. 
According to the Federal Bureau of Investigation, 9,730 hate crimes 
were reported in the United States in 2001. That is over 26 hate crimes 
a day, every day. More than 83,000 hate crimes have been reported since 
1991.
  The need for an effective national response is as compelling as it 
has ever been. Hate crimes against Arabs and Muslims rose dramatically 
in the weeks following the September 11 terrorist attacks. These hate 
crimes included murder, beatings, arson, attacks on mosques, shootings, 
and other assaults. In 2001, anti-Islamic incidents were the second 
highest-reported type of hate crimes based on religion--second only to 
anti-Jewish hate crimes.

[[Page S5653]]

Los Angeles and Chicago reported a massive increase in the number of 
anti-Arab and anti-Muslim crimes after 9/11.
  Hate crimes based on sexual orientation continue to be a serious 
danger, constituting 14 percent of all hate crimes reported.
  Each person's life is valuable, and even one life lost is too many. 
It is not the frequency of hate crimes alone that makes these acts of 
violence so serious. It is the terror and intimidation they inflict on 
the victims, their families, their communities, and, in some cases, the 
entire Nation.
  Congress cannot sit silent while this hatred spreads. It is long past 
time for us to do more to end hate-motivated violence. The Local Law 
Enforcement Enhancement Act will strengthen the ability of Federal, 
State and local governments to investigate and prosecute these vicious 
and senseless crimes. Our legislation is supported by over 175 law 
enforcement, civil rights, civic, and religious organizations.
  The current Federal law on hate crimes was passed soon after the 
assassination of Dr. Martin Luther King Jr. Today, however, it is a 
generation out of date. It has two significant deficiencies. It does 
not cover hate crimes based on sexual orientation, gender, or 
disability. And even in cases of hate crimes based on race, religion, 
or ethnic background, it contains excessive restrictions requiring 
proof that the victims were attacked because they were engaged in 
certain ``federally protected activities.''
  Our bill is designed to close these substantial loopholes. It has six 
principal provisions: 1. It removes the ``federally protected 
activity'' barrier. 2. It adds sexual orientation, gender and 
disability to the existing categories of race, color, religion, and 
national origin. 3. It protects State interests with a strict 
certification procedure that requires the Federal Government to consult 
with local officials before bringing a Federal case. 4. It offers 
federal assistance to State and local law enforcement officials to 
investigate and prosecute heated crimes in any of the federal 
categories. 5. It offers training grants for local law enforcement. 6. 
It amends the Federal Hate Crime Statistics Act to add gender to the 
existing categories of race, religion, ethnic background, sexual 
orientation, and disability.
  These much needed changes in current law will help ensure that the 
Department of Justice has what it needs to combat the growing problem 
of hate-motivated violence more effectively.
  Nothing in the bill prohibits or punishes speech, expression, or 
association in any way--even ``hate speech.'' It addresses only violent 
actions that result in death or injury. The Supreme Court has ruled 
repeatedly--and as recently as this year, in the cross-burning decision 
Virginia v. Black--that a hate crimes statute that considers bias 
motivation directly connected to a defendant's criminal conduct does 
not violate the First Amendment. No one has a First Amendment right to 
commit a crime.
  A strong Federal role in prosecuting hate crimes is essential, 
because crimes have an impact far greater than their impact on 
individual victims. Nevertheless, our bill fully respects the primary 
role of state and local law enforcement in responding to violent crime. 
The vast majority of hate crimes will continue to be prosecuted at the 
state and local level. The bill authorizes the Justice Department to 
assist State and local authorities in hate crimes cases, but it 
authorizes Federal prosecutions only when a state does not have 
jurisdiction, or when it asks the Federal Government to take 
jurisdiction, or when it fails to act against hate-motivated violence. 
In other words, the bill establishes an appropriate back-up for State 
and local law enforcement, to deal with hate crimes in cases where 
states request assistance, or cases that would not otherwise be 
effectively investigated and prosecuted.
  Working cooperatively, State, local and Federal law enforcement 
officials have the best chance to bring the perpetrators of hate crimes 
to justice. Federal resources and expertise in the identification and 
proof of hate crimes can provide invaluable assistance to state and 
local authorities without undermining the traditional role of states in 
prosecuting crimes. As Attorney General Ashcroft has said of current 
law, ``Cooperation between federal agents and local law enforcement 
officers and between Justice Department prosecutors and local 
prosecutors has been outstanding.'' And it will continue to be so, and 
be even more effective, when this legislation is enacted into law.
  Now is the time for Congress to speak with one voice and insist that 
all Americans will be guaranteed the equal protection of the laws. Now 
is the time to make combating hate crimes a high national priority. The 
Local Law Enforcement Enhancement Act is a needed response to a serious 
problem that continues to plague the nation, and I urge the Senate to 
support it.
  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. 966

       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 ``Local Law Enforcement 
     Enhancement Act of 2003''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The incidence of violence motivated by the actual or 
     perceived race, color, religion, national origin, gender, 
     sexual orientation, or disability of the victim poses a 
     serious national problem.
       (2) Such violence disrupts the tranquility and safety of 
     communities and is deeply divisive.
       (3) State and local authorities are now and will continue 
     to be responsible for prosecuting the overwhelming majority 
     of violent crimes in the United States, including violent 
     crimes motivated by bias. These authorities can carry out 
     their responsibilities more effectively with greater Federal 
     assistance.
       (4) Existing Federal law is inadequate to address this 
     problem.
       (5) The prominent characteristic of a violent crime 
     motivated by bias is that it devastates not just the actual 
     victim and the family and friends of the victim, but 
     frequently savages the community sharing the traits that 
     caused the victim to be selected.
       (6) Such violence substantially affects interstate commerce 
     in many ways, including--
       (A) by impeding the movement of members of targeted groups 
     and forcing such members to move across State lines to escape 
     the incidence or risk of such violence; and
       (B) by preventing members of targeted groups from 
     purchasing goods and services, obtaining or sustaining 
     employment, or participating in other commercial activity.
       (7) Perpetrators cross State lines to commit such violence.
       (8) Channels, facilities, and instrumentalities of 
     interstate commerce are used to facilitate the commission of 
     such violence.
       (9) Such violence is committed using articles that have 
     traveled in interstate commerce.
       (10) For generations, the institutions of slavery and 
     involuntary servitude were defined by the race, color, and 
     ancestry of those held in bondage. Slavery and involuntary 
     servitude were enforced, both prior to and after the adoption 
     of the 13th amendment to the Constitution of the United 
     States, through widespread public and private violence 
     directed at persons because of their race, color, or 
     ancestry, or perceived race, color, or ancestry. Accordingly, 
     eliminating racially motivated violence is an important means 
     of eliminating, to the extent possible, the badges, 
     incidents, and relics of slavery and involuntary servitude.
       (11) Both at the time when the 13th, 14th, and 15th 
     amendments to the Constitution of the United States were 
     adopted, and continuing to date, members of certain religious 
     and national origin groups were and are perceived to be 
     distinct ``races''. Thus, in order to eliminate, to the 
     extent possible, the badges, incidents, and relics of 
     slavery, it is necessary to prohibit assaults on the basis of 
     real or perceived religions or national origins, at least to 
     the extent such religions or national origins were regarded 
     as races at the time of the adoption of the 13th, 14th, and 
     15th amendments to the Constitution of the United States.
       (12) Federal jurisdiction over certain violent crimes 
     motivated by bias enables Federal, State, and local 
     authorities to work together as partners in the investigation 
     and prosecution of such crimes.
       (13) The problem of crimes motivated by bias is 
     sufficiently serious, widespread, and interstate in nature as 
     to warrant Federal assistance to States and local 
     jurisdictions.

     SEC. 3. DEFINITION OF HATE CRIME.

       In this Act, the term ``hate crime'' has the same meaning 
     as in section 280003(a) of the Violent Crime Control and Law 
     Enforcement Act of 1994 (28 U.S.C. 994 note).

     SEC. 4. SUPPORT FOR CRIMINAL INVESTIGATIONS AND PROSECUTIONS 
                   BY STATE AND LOCAL LAW ENFORCEMENT OFFICIALS.

       (a) Assistance Other Than Financial Assistance.--

[[Page S5654]]

       (1) In general.--At the request of a law enforcement 
     official of a State or Indian tribe, the Attorney General may 
     provide technical, forensic, prosecutorial, or any other form 
     of assistance in the criminal investigation or prosecution of 
     any crime that--
       (A) constitutes a crime of violence (as defined in section 
     16 of title 18, United States Code);
       (B) constitutes a felony under the laws of the State or 
     Indian tribe; and
       (C) is motivated by prejudice based on the race, color, 
     religion, national origin, gender, sexual orientation, or 
     disability of the victim, or is a violation of the hate crime 
     laws of the State or Indian tribe.
       (2) Priority.--In providing assistance under paragraph (1), 
     the Attorney General shall give priority to crimes committed 
     by offenders who have committed crimes in more than 1 State 
     and to rural jurisdictions that have difficulty covering the 
     extraordinary expenses relating to the investigation or 
     prosecution of the crime.
       (b) Grants.--
       (1) In general.--The Attorney General may award grants to 
     assist State, local, and Indian law enforcement officials 
     with the extraordinary expenses associated with the 
     investigation and prosecution of hate crimes.
       (2) Office of justice programs.--In implementing the grant 
     program, the Office of Justice Programs shall work closely 
     with the funded jurisdictions to ensure that the concerns and 
     needs of all affected parties, including community groups and 
     schools, colleges, and universities, are addressed through 
     the local infrastructure developed under the grants.
       (3)  Application.--
       (A) In general.--Each State that desires a grant under this 
     subsection shall submit an application to the Attorney 
     General at such time, in such manner, and accompanied by or 
     containing such information as the Attorney General shall 
     reasonably require.
       (B) Date for submission.--Applications submitted pursuant 
     to subparagraph (A) shall be submitted during the 60-day 
     period beginning on a date that the Attorney General shall 
     prescribe.
       (C) Requirements.--A State or political subdivision of a 
     State or tribal official applying for assistance under this 
     subsection shall--
       (i) describe the extraordinary purposes for which the grant 
     is needed;
       (ii) certify that the State, political subdivision, or 
     Indian tribe lacks the resources necessary to investigate or 
     prosecute the hate crime;
       (iii) demonstrate that, in developing a plan to implement 
     the grant, the State, political subdivision, or tribal 
     official has consulted and coordinated with nonprofit, 
     nongovernmental victim services programs that have experience 
     in providing services to victims of hate crimes; and
       (iv) certify that any Federal funds received under this 
     subsection will be used to supplement, not supplant, non-
     Federal funds that would otherwise be available for 
     activities funded under this subsection.
       (4) Deadline.--An application for a grant under this 
     subsection shall be approved or disapproved by the Attorney 
     General not later than 30 business days after the date on 
     which the Attorney General receives the application.
       (5) Grant amount.--A grant under this subsection shall not 
     exceed $100,000 for any single jurisdiction within a 1 year 
     period.
       (6) Report.--Not later than December 31, 2004, the Attorney 
     General shall submit to Congress a report describing the 
     applications submitted for grants under this subsection, the 
     award of such grants, and the purposes for which the grant 
     amounts were expended.
       (7) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $5,000,000 
     for each of fiscal years 2004 and 2005.

     SEC. 5. GRANT PROGRAM.

       (a) Authority To Make Grants.--The Office of Justice 
     Programs of the Department of Justice shall award grants, in 
     accordance with such regulations as the Attorney General may 
     prescribe, to State and local programs designed to combat 
     hate crimes committed by juveniles, including programs to 
     train local law enforcement officers in identifying, 
     investigating, prosecuting, and preventing hate crimes.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 6. AUTHORIZATION FOR ADDITIONAL PERSONNEL TO ASSIST 
                   STATE AND LOCAL LAW ENFORCEMENT.

       There are authorized to be appropriated to the Department 
     of the Treasury and the Department of Justice, including the 
     Community Relations Service, for fiscal years 2004, 2005, and 
     2006 such sums as are necessary to increase the number of 
     personnel to prevent and respond to alleged violations of 
     section 249 of title 18, United States Code, as added by 
     section 7.

     SEC. 7. PROHIBITION OF CERTAIN HATE CRIME ACTS.

       (a) In General.--Chapter 13 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 249. Hate crime acts

       ``(a) In General.--
       ``(1) Offenses involving actual or perceived race, color, 
     religion, or national origin.--Whoever, whether or not acting 
     under color of law, willfully causes bodily injury to any 
     person or, through the use of fire, a firearm, or an 
     explosive or incendiary device, attempts to cause bodily 
     injury to any person, because of the actual or perceived 
     race, color, religion, or national origin of any person--
       ``(A) shall be imprisoned not more than 10 years, fined in 
     accordance with this title, or both; and
       ``(B) shall be imprisoned for any term of years or for 
     life, fined in accordance with this title, or both, if--
       ``(i) death results from the offense; or
       ``(ii) the offense includes kidnaping or an attempt to 
     kidnap, aggravated sexual abuse or an attempt to commit 
     aggravated sexual abuse, or an attempt to kill.
       ``(2) Offenses involving actual or perceived religion, 
     national origin, gender, sexual orientation, or disability.--
       ``(A) In general.--Whoever, whether or not acting under 
     color of law, in any circumstance described in subparagraph 
     (B), willfully causes bodily injury to any person or, through 
     the use of fire, a firearm, or an explosive or incendiary 
     device, attempts to cause bodily injury to any person, 
     because of the actual or perceived religion, national origin, 
     gender, sexual orientation, or disability of any person--
       ``(i) shall be imprisoned not more than 10 years, fined in 
     accordance with this title, or both; and
       ``(ii) shall be imprisoned for any term of years or for 
     life, fined in accordance with this title, or both, if--

       ``(I) death results from the offense; or
       ``(II) the offense includes kidnaping or an attempt to 
     kidnap, aggravated sexual abuse or an attempt to commit 
     aggravated sexual abuse, or an attempt to kill.

       ``(B) Circumstances described.--For purposes of 
     subparagraph (A), the circumstances described in this 
     subparagraph are that--
       ``(i) the conduct described in subparagraph (A) occurs 
     during the course of, or as the result of, the travel of the 
     defendant or the victim--

       ``(I) across a State line or national border; or

       ``(II) using a channel, facility, or instrumentality of 
     interstate or foreign commerce;

       ``(ii) the defendant uses a channel, facility, or 
     instrumentality of interstate or foreign commerce in 
     connection with the conduct described in subparagraph (A);
       ``(iii) in connection with the conduct described in 
     subparagraph (A), the defendant employs a firearm, explosive 
     or incendiary device, or other weapon that has traveled in 
     interstate or foreign commerce; or
       ``(iv) the conduct described in subparagraph (A)--

       ``(I) interferes with commercial or other economic activity 
     in which the victim is engaged at the time of the conduct; or
       ``(II) otherwise affects interstate or foreign commerce.

       ``(b) Certification Requirement.--No prosecution of any 
     offense described in this subsection may be undertaken by the 
     United States, except under the certification in writing 
     of the Attorney General, the Deputy Attorney General, the 
     Associate Attorney General, or any Assistant Attorney 
     General specially designated by the Attorney General 
     that--
       ``(1) he or she has reasonable cause to believe that the 
     actual or perceived race, color, religion, national origin, 
     gender, sexual orientation, or disability of any person was a 
     motivating factor underlying the alleged conduct of the 
     defendant; and
       ``(2) he or his designee or she or her designee has 
     consulted with State or local law enforcement officials 
     regarding the prosecution and determined that--
       ``(A) the State does not have jurisdiction or does not 
     intend to exercise jurisdiction;
       ``(B) the State has requested that the Federal Government 
     assume jurisdiction;
       ``(C) the State does not object to the Federal Government 
     assuming jurisdiction; or
       ``(D) the verdict or sentence obtained pursuant to State 
     charges left demonstratively unvindicated the Federal 
     interest in eradicating bias-motivated violence.
       ``(c) Definitions.--In this section--
       ``(1) the term `explosive or incendiary device' has the 
     meaning given the term in section 232 of this title; and
       ``(2) the term `firearm' has the meaning given the term in 
     section 921(a) of this title.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 13 of title 18, United States Code, is amended by 
     adding at the end the following:

``249. Hate crime acts.''.

     SEC. 8. DUTIES OF FEDERAL SENTENCING COMMISSION.

       (a) Amendment of Federal Sentencing Guidelines.--Pursuant 
     to the authority provided under section 994 of title 28, 
     United States Code, the United States Sentencing Commission 
     shall study the issue of adult recruitment of juveniles to 
     commit hate crimes and shall, if appropriate, amend the 
     Federal sentencing guidelines to provide sentencing 
     enhancements (in addition to the sentencing enhancement 
     provided for the use of a minor during the commission of an 
     offense) for adult defendants who recruit juveniles to assist 
     in the commission of hate crimes.
       (b) Consistency With Other Guidelines.--In carrying out 
     this section, the United States Sentencing Commission shall--
       (1) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (2) avoid duplicative punishments for substantially the 
     same offense.

[[Page S5655]]

     SEC. 9. STATISTICS.

       Subsection (b)(1) of the first section of the Hate Crimes 
     Statistics Act (28 U.S.C. 534 note) is amended by inserting 
     ``gender,'' after ``race,''.

     SEC. 10. SEVERABILITY.

       If any provision of this Act, an amendment made by this 
     Act, or the application of such provision or amendment to any 
     person or circumstance is held to be unconstitutional, the 
     remainder of this Act, the amendments made by this Act, and 
     the application of the provisions of such to any person or 
     circumstance shall not be affected thereby.
                                 ______
                                 
      By Mr. SESSIONS:
  S. 968. A bill to amend the Internal Revenue Code of 1986 to provide 
capital gain treatment under section 631(b) of such Code for outright 
sales of timber by landowners; to the Committee on Finance.
  Mr. SESSIONS. Mr. President, I rise today to introduce legislation 
which will simplify and update a provision of the tax code that affects 
the sale of timber. It is both a simplification measure and a fairness 
measure. I call it the Timber Tax Simplification Act.
  Under current law, landowners that are occasional sellers of timer 
are often classified by the Internal Revenue Service as ``dealers.'' As 
a result, the small landowner is forced to choose, because of the tax 
code, between two different methods of selling their timber. The first 
method, ``lump sum sales provides for good business practice but is 
subjected to a high income tax. The second method ``pay-as-cut'' sales, 
allows for lower capital gains tax treatment, but often results in an 
underrealization of the fair value of the contract. Why, one might ask, 
do these conflicting incentives exist for our Nation's timber growers?
  Ealier in this century, outright, or ``lump sum,'' sales on a cash in 
advance, sealed basis, were associated with a ``cut and run'' mentality 
that did not promote good forest management. ``Pay-as-cut sales,'' 
however, in which a timber owner is only paid for timber that is 
harvested, were associated with ``enlighted'' resource management. 
Consequently, in 1943, Congress, in an effect to provide an incentive 
for improved forest management, passed legislation that allowed capital 
gains treatment under 631(b) of the IRS Code for pay-as-cut sales, 
leaving lump-sum sales to pay the much higher rate of income tax. It is 
said that President Roosevelt opposed the bill and almost vetoed it.
  Today, however, Section 631(b) like so many provisions in the IRS 
Code, is outdated. Forest management practices are much different from 
what they were in 1943 and lump-sum sales are no longer associated with 
poor forest management. And while there are occasional special 
situations where other methods may be more appropriate, most timber 
owners prefer this method over the ``pay-as-cut'' method. The reasons 
are simple: title to the timber is transferred upon the closing of the 
sale and the buyer assumes the risk of any physical loss of timber to 
fire, insects, disease, storms, etc. Furthermore, the price to be paid 
for the timber is determined and received at the time of the sale.

  Unfortunately, in order for timber owners to qualify for the 
favorable capital gains treatment, they must market their timber on a 
``pay-as-cut'' basis under Section 631(b) which requires timber owners 
to sell their timber with a ``retained economic interest.'' This means 
that the timber owner, not the buyer, must bear the risk of any 
physical loss during the timber sale contract period and must be paid 
only for the timber that is actually harvested. As a result, this type 
of sale can be subject to fraud and abuse by the timber buyer. Since 
the buyer pays only for the timber that is removed and scaled, there is 
an incentive to waste poor quality timber by breaking the tree during 
the logging process, underscaling the timber, or removing the timber 
without scaling. But because 631(b) provides for the favorable tax 
treatment, many timber owners are forced into exposing themselves to 
unnecessary risk of loss by having to market their timber in this 
disadvantageous way instead of the more preferable lump-sum method.
  Like many of the provisions in the tax code, Section 631(b) is 
outdated and prevents good forestry business management. Timber 
farmers, who have usually spent decades producing their timber 
``crop,'' should be able to receive equal tax treatment regardless of 
the method used for marketing their timber.
  In the past, the Joint Committee on Taxation has studied this 
legislation to consider what impact it might have on the Treasury and 
found that it would have no real cost--only a ``negligible change'' 
according to their analysis.
  The IRS has no business stepping in and dictating the kind of sales 
contract a landowner must choose. My legislation will provide greater 
consistency by removing the exclusive ``retained economic interest'' 
requirement in the IRC Section 631(b). Reform of 631(b) is important to 
our Nation's non-industrial, private landowners because it will improve 
the economic viability of their forestry investments and protect the 
taxpayer from unnecessary exposure to risk of loss. This in turn will 
benefit the entire forest products industry, the U.S. economy and 
especially small landowners.
                                 ______
                                 
      By Mr. LAUTENBERG (for himself, Mr. Kennedy, Mr. Corzine, and Mr. 
        Reed):
  S. 969. A bill to enhance the security and safety of the Nation by 
increasing the time allowed to track terrorists during periods of 
elevated alert, closing loopholes that have allowed terrorists to 
acquire firearms, maintaining records of certain handgun transfers 
during periods of heightened terrorist risk, and for other purposes; to 
the Committee on the Judiciary.
  Mr. LAUTENBERG. Mr. President, I rise to introduce a critical piece 
of legislation, the Homeland Security Gun Safety Act.
  In the aftermath of the tragic events of 9-11, the Federal Government 
has reassessed the Nation's vulnerabilities to acts and threats of 
terrorism.
  And in response, the United States Congress gave the Department of 
Justice expanded powers to detain suspected terrorists, conduct 
surveillance and obtain confidential information on American citizens. 
In addition, we have created the new Department of Homeland Security--
the largest reorganization of the Federal Government since the 1940s.
  In short, the events of 9-11 required us to reevaluate our safety 
concerns and the security of the Nation.
  Echoing this need, President Bush said before the United Nations on 
November 10, 2001, that ``we have the responsibility to deny weapons to 
terrorists and to actively prevent private citizens from providing 
them.''
  I wholeheartedly agree with this statement. And I believe the 
American people want the U.S. Senate to follow through with concrete 
legislative action.
  However, we have failed to address a significant remaining threat: 
the accessibility to firearms and explosives within our own borders.
  How can we truly protect this Nation, if we do not enact legislation 
which prevents terrorists and potential terrorists from acquiring guns 
in the United States?
  Terrorists have identified the lax gun laws of the United States as a 
means to advance their evil goal to terrorize and harm the American 
people.
  In December 2001, during the war on terror, we attacked a terrorist 
training facility south of Kabul. Found among the rubble at that 
facility was a manual called: ``How I Can Train Myself for Jihad.''
  This manual, contains an entire section on ``Firearms Training'' and 
singles out the United States for its easy availability of firearms. It 
stipulates that terrorists living in the U.S. should ``obtain an 
assault weapon legally, preferably AK-47 or variations.'' It also 
advises would-be terrorsts on how they should conduct themselves in 
order to avoid arousing suspicion as they amass and transport firearms.
  There are other examples where terrorists have sought to take 
advantage of this nation's lax gun laws.
  On the eve of the September 11 terrorist attack, on September 10, 
2001, a Federal jury convicted Ali Boumelhem, a known member of the 
terrorist group Hezbollah on seven counts of weapons charges and 
conspiracy to ship weapons and ammunition to Lebanon.
  And we have seen how firearms can be used to terrorize an entire 
community.
  We are all familiar with the case of John Muhammad and John Malvo, 
who terrorized the Washington, DC area for more than three weeks as 
they embarked on a shooting spree with a sniper rifle, shooting 13 
innocent people before being caught.

[[Page S5656]]

  Homeland Security Secretary Tom Ridge agrees that there is a 
dangerous link between guns and terror. During his confirmation hearing 
before Governmental Affairs Committee on January 17, 2003, in response 
to a question I asked him about guns and terror, Secretary Ridge said:

       [W]hen anyone uses a firearm, whether it's the kind of 
     terrorism that we are trying to combat with al Qaeda and 
     these non-state terrorists, or as a former district attorney 
     involved in the conviction of an individual who used firearms 
     against innocent citizens--regardless of how we define 
     terrorism, that individual and that family felt that they 
     were victims of a terrorist act. Brandishing a firearm in 
     front of anybody under any set of circumstances is a 
     terrorist act and needs to be dealt with.

  Well, the Homeland Security Gun Safety Act deals with it. The Act 
deals with this threat that leaves America especially vulnerable to 
future terrorist attacks.
  The Homeland Security Gun Safety Act would enact specific measures 
that would help prevent terrorists from acquiring firearms within our 
own borders.
  Under current law, there are cases when law enforcement is blocked 
from conducting an adequate investigation when a terrorist or criminal 
tries to buy a gun.
  Current law says if law enforcement takes over three days to conduct 
a background check on someone who wants a weapon--just hand over the 
gun.
  That is ludicrous--especially when we are in an elevated state of 
terrorist threat.
  When we are at Code Yellow, the Department of Homeland Security has 
determined that we are at a significant risk of terrorist attack.
  The bill I am introducing today would suspend these loopholes in our 
gun safety laws when we are at Code Yellow or above in the interest of 
homeland security.
  The three-day limit on law enforcement is nothing more than a 
loophole in our laws put there by the gun lobby.
  And it's a dangerous loophole--a recent study showed that, from 
December 1998 to June 2001, nearly 10,000 people who should not have 
been permitted to buy guns, did receive guns because the three-day 
period passed before law enforcement could finish a background check.
  Our bill will also require that the Federal Government retain records 
of weapons transactions while we are in an elevated state of alert. 
There is no reason we should handicap law enforcement during such a 
dangerous time.
  This bill will also close a number of loopholes that have allowed 
rogue gun dealers to skirt the law. These are the same few gun dealers 
that are now the subject of lawsuits across the country.
  These dangerous loopholes that the gun lobby built into our gun laws 
now pose a major threat to homeland security.
  This bill will help shut down those loopholes. The bill would require 
gun dealers to: immediately report ``missing'' guns or face suspension 
of their license; and put appropriate security measures in place to 
prevent theft of their weapons; and check with the FBI's Stolen Gun 
Registry to make sure that secondhand weapons they purchase are not 
stolen.
  This bill will also step up enforcement of gun dealers: law 
enforcement would not be restricted in its ability to inspect dealers. 
Currently, law enforcement is only allowed one unannounced inspection 
per year.
  The bill will also increase the penalties for violations of gun 
dealer laws to a felony. Right now, the maximum penalty is only a 
misdemeanor. It has no teeth.
  I know the NRA will cry wolf to gun owners about this bill. But this 
bill will not affect the vast majority of honest, law abiding Americans 
who want to purchase guns. This bill focuses on preventing weapons from 
getting into the hands of terrorists and criminals.
  Over 75 percent of background checks are performed in mere minutes. 
However, there are those purchasers who raise red flags that require 
further investigation.
  Those are red flags we can no longer afford to ignore.
  When we are at Code Yellow, everyday Americans are prevented from 
taking a tour of the White House--but a terrorist can buy weapons.
  It makes no sense.
  This bill offers Congress a clear choice: protect our homeland or 
protect the gun lobby.
  I ask unanimous consent that a summary of my bill, the Homeland 
Security Gun Safety Act, be printed in the Record.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:

              The Homeland Security Gun Safety Act of 2003

       In the aftermath of the tragic events of September 11, 
     2001, the Federal Government has reassessed the Nation's 
     vulnerabilities to acts and threats of terrorism. However, 
     actions taken thus far have failed to address a major 
     remaining threat: accessibility to firearms and explosives 
     within our own borders. The Homeland Security Gun Safety Act 
     of 2003 addresses this threat that leaves America especially 
     vulnerable to future terrorist attacks.
       The Act would enact specific measures that would help 
     prevent terrorists from acquiring firearms and explosives in 
     the United States. Specifically, the Act: 1. enacts increased 
     homeland security measures regarding firearm sales when the 
     terrorist risk level of the Homeland Security Advisory System 
     is raised to ``Elevated''; 2. closes loopholes that have 
     allowed rogue gun dealers to abuse existing law and supply 
     weapons to terrorists and criminals; and 3. strengthens the 
     enforcement of laws federally licensed gun dealers are 
     required to follow.
       ``We have the responsibility to deny weapons to terrorists 
     and to actively prevent private citizens from providing 
     them.''--President George W. Bush, Address to the United 
     Nations, November 10, 2001.


                    The Problem: Terrorism and Guns

       There are a number of cases in which terrorists, both 
     domestic and international, have been acquiring firearms in 
     our country and are using them here and abroad for despicable 
     acts of violence. Firearms are being acquired by prohibited 
     persons due to the weakness and lack of enforceability of 
     existing gun laws.
       Examples of the link between terrorism and firearms in the 
     U.S. include:
       In December, 2001, a manual titled ``How I Can Train Myself 
     for Jihad'' was found among the rubble at a training facility 
     for a radical Pakistan-based Islamic terrorist organization 
     in Afghanistan. This manual contains an entire section on 
     ``Firearms Training'' and singles out the United States for 
     its easy availability of firearms. It stipulates that 
     terrorists living in the U.S. ``obtain an assault weapon 
     legally, preferably AK-47 or variations.'' It also advises 
     would-be terrorists on how they should conduct themselves in 
     order to avoid arousing suspicion as they amass and transport 
     firearms.
       In November 2000, Ali Bourmelhem, was arrested for shipping 
     guns and ammunition to Hezbollah militants in Lebanon by 
     hiding the arms in cargo crates. Boumelhem, who was a 
     resident of Detroit and Beirut, was observed by authorities 
     traveling to gun shows to buy gun parts and ammunition for 
     shipment overseas. He was arrested just before he was 
     scheduled to travel to Lebanon.
       In September 2000, Conor Claxton, an admitted member of the 
     IRA, bought dozens of handguns, rifles and rounds of high-
     powered ammunition through illegal multiple sales and at gun 
     shows. Police in Northern Ireland intercepted 23 of the 
     packages which contained 122 guns and other weapons 
     originating from the group. Claxton's team enlisted the 
     assistance of a licensed firearms dealer in Florida who sold 
     at least 43 handguns to associates of Claxton. The dealer 
     agreed not to report all of the sales on required Federal 
     forms in exchange for an extra $50 per gun. The dealer 
     admitted that he suspected the guns could wind up in the 
     hands of assassins. The dealer later cooperated with 
     prosecutors and pleaded guilty to conspiring to export guns 
     illegally. According to the FBI Agent interviewing Claxton: 
     ``Claxton stated that it is common knowledge that obtaining 
     weapons in the United States is easy,'' and that ``Claxton 
     blamed the United States government for not having tougher 
     gun laws.''
       In 1993, the owners of the Al Fajr Trading Company in 
     Atlanta were convicted of illegally shipping hundreds of guns 
     to Muslim street gangs and drug dealers in New York, Detroit 
     and Philadelphia. Among the customers was a gang associated 
     with Sheik Omar Abdel-Rahman, the Egyptian cleric who was 
     involved in the 1993 terrorist bombing of the World Trade 
     Center. Al Fajr was a licensed dealer but intentionally 
     failed to maintain firearms transaction records of nearly 
     1,000 guns that were trafficked to the Northeast.
       In 1992, an Iranian immigrant in the United States was shot 
     and killed execution style outside her home in Northern New 
     Jersey by a suspected Iranian terrorist. The gun was bought 
     at a Virginia gun shop that was preferred by straw 
     purchasers, high-volume buyers, gun traffickers and convicted 
     felons. The Virginia gun shop owners were arrested 2 months 
     prior to the murder and pleaded guilty to charges stemming 
     from straw purchases.
       Cases of the use of firearms for terrorist acts include:
       In 2002, John Muhammad and John Malvo terrorized the 
     Washington, DC area for more than 3 weeks by embarking on a 
     shooting spree with a sniper rifle. The weapon used to shoot 
     13 innocent victims was a Bushmaster XM-15 rifle purchased at 
     the Bull's Eye Shooter Supply in Tacoma, WA. Muhammad

[[Page S5657]]

     could not have legally purchased it because he is under a 
     domestic violence restraining order and Malvo at age 17 is 
     disqualified as a minor and an illegal immigrant. Two 
     employees of the store admitted that they noticed that the 
     .223 caliber Bushmaster was ``missing'' from a display case 
     but the store's owner did not report the loss as required by 
     Federal law. Following the sniper killings, the shop revealed 
     that over 200 guns went ``missing'' in the last several 
     years. Bull's Eye Shooter Supply remains in operation today.
       In February 1997, Ali Abu Kamal opened fire on a crowd of 
     tourists at the Empire State Building, killing one person and 
     wounding six others. Kamal arrived in New York from Cairo on 
     a tourist visa. After a short stay in New York, he traveled 
     to Melbourne, FL where he checked into a motel. He showed the 
     motel receipt as proof of residency to obtain a Florida ID 
     card which he used to buy a 14-shot, semi-automatic Beretta 
     handgun. Total time from arrival in this country to purchase 
     of the gun was 37 days. The same gun store in Melbourne sold 
     a Ruger Mini 14 rifle to mass-murderer William Cruse a month 
     before he went on a shooting spree in Palm Bay, FL. Cruse 
     killed six people and wounded two dozen others.
       ``[W]hen anyone uses a firearm, whether it's the kind of 
     terrorism that we are trying to combat with al Qaeda and 
     these non-state terrorists, or as a former district attorney 
     involved in the conviction of an individual who used firearms 
     against innocent citizens--regardless of how we define 
     terrorism, that individual and that family felt that they 
     were victims of a terrorist act. Brandishing a firearm in 
     front of anybody under any set of circumstances is a 
     terrorist act and needs to be dealt with.''--Tom Ridge, 
     January 17, 2003, at his confirmation hearing for Secretary 
     of Homeland Security, before the Senate Government Affairs 
     Committee.


  confronting the threat: the homeland security gun safety act of 2003

       The Homeland Security Gun Safety Act of 2003 integrates gun 
     safety into our national homeland security strategy. The bill 
     will suspend the current restrictions on law enforcement's 
     investigative powers during periods of ``Elevated'' terror 
     threat.
       Currently, law enforcement is severely limited in its 
     ability to conduct background checks on suspicious gun 
     purchasers. While over 70 percent of background checks are 
     completed within seconds, and approximately 95 percent are 
     completed within 2 hours, red flags raised on some people's 
     records require further investigation. Under current law, law 
     enforcement only has 3 days to conduct a background check. 
     Given the complexity of tracing court records, the 3-day 
     period often does not give law enforcement enough time to 
     complete a check in some important cases. However, under 
     current law, after the 3-day period has expired, the firearm 
     is handed over to the purchaser--even if the person is a 
     convicted felon or part of a terrorist organization.
       Under the Homeland Security Gun Safety Act, when the 
     Department of Homeland Security determines that the nation is 
     in an ``Elevated'' (yellow) risk of attack or above, the 3-
     day rule would be suspended and law enforcement would have as 
     much time as needed to complete a background check on an 
     individual seeking a weapon or explosive. Upon reverting to a 
     ``Low,'' green, risk for a period of 180 consecutive days, 
     the 3-day rule would resume.
       The Homeland Security Gun Safety Act would suspend this 
     record destruction rule, and require that all records of 
     firearms transfers subject to background checks and records 
     of the National Instant Criminal Background Check system be 
     maintained indefinitely when the Department of Homeland 
     Security determines that the nation is at an ``elevated,'' 
     yellow, risk of terrorist attack or above. Upon reverting to 
     a ``Low,'' green, risk for a period of 180 consecutive days, 
     the standard destruction of records rule resumes. This 
     information will be critical to investigators who are 
     tracking potential terrorists within our borders while we are 
     in a heightened state of alert.

                Federal Firearms Dealer Responsibilities

       The Homeland Security Gun Safety Act requires more 
     responsibility on the part of Federal Firearms Licensees; 
     FFLs; to prevent the flow of illegal firearms. Under the 
     current regime, rules gun dealers are ``required'' to follow 
     are routinely ignored, as the gun laws provide for little 
     enforcement, and even restrict the ability of law enforcement 
     to check gun dealer compliance. In addition, the current 
     system allows terrorists and criminals to travel from dealer 
     to dealer to attempt to purchase a gun until they ``score''--
     without worrying about detection of their failed purchases. 
     The Homeland Security Gun Safety Act would close these 
     loopholes that allow rogue gun dealers to evade the law and 
     sell guns to criminals and terrorists. Specifically, the Act 
     would:
       Require FFLs to report missing weapons immediately and 
     satisfy record keeping requirements, for multiple handgun 
     sales, theft or loss of firearm registration documents, trace 
     requests, out of business and demand records, or face 
     suspension of their licenses. As the ATF's ability to trace 
     crime guns depends on the records kept by FFLs, it is 
     imperative that FFLs fulfill their responsibility to timely 
     report missing weapons and relevant records.
       Requires FFLs not to sell a firearm to an individual when 
     they have reasonable cause to believe that a gun will be used 
     in the commission of a crime.
       If a FFL has reasonable cause to believe that a purchaser 
     is not buying a firearm for his or her own use, but intends 
     to transfer it to another individual who would not qualify 
     for a legal gun purchase, he or she will be prohibited from 
     making the transfer. This is commonly known as a ``straw 
     purchase'' and is a major problem in firearm trafficking in 
     the United States.
       Require FFLs to abide by security standards for the storage 
     and display of firearms. According to the ATF, in 1998 and 
     1999, FFLs filed reports on over 27,287 missing or stolen 
     firearms. The Act would authorize suspensions and fines of 
     FFLs who fail to abide by security standards for the display 
     and storage of firearms.
       Require FFLs to check all secondhand firearm purchases 
     through the FBI's Stolen Gun Registry to confirm that the 
     firearm was not stolen prior to the purchase.
       Require that FFLs notify NICS immediately upon receiving a 
     request from a prospective transferee, of any check conducted 
     within the previous 30 days that did not result in the 
     transfer of a handgun.
       Increase the number of permissible inspections of gun 
     dealers from one unannounced inspection per year, current 
     law, to an unlimited amount of inspections for any violation. 
     If a licensee has a poor compliance record, such as one of 
     the 1.2 percent of firearms dealers who account for 57 
     percent of crime guns, multiple compliance inspections within 
     the 1-year period are necessary for adequate supervision.
       Increase penalties for FFLs who fail to account for missing 
     weapons, fail to timely record or maintain records, record 
     keeping violations or knowingly make false statements in 
     connection with firearms from 1 year to 5 years and assess 
     fines up to $10,000 per violation. The current penalty for 
     this violation is a misdemeanor.
       Prohibit any licensed firearms dealer from selling two or 
     more handguns to an unlicensed individual during any 30-day 
     period. This prohibition will be inapplicable to an exchange 
     of one handgun for one handgun.
       Increase the penalties for persons who unlawfully transfer 
     handguns to juveniles from a misdemeanor to a felony.
       Suspend a FFL's license if the licensee is charged with a 
     crime. Currently, a gun dealer can remain in operation if 
     charged with a crime.
       Require the termination of a FFLs license upon a conviction 
     of a felony. Under current law, a licensee convicted of a 
     felony may continue to conduct business until appeal rights 
     are exhausted. This is a serious loophole which jeopardizes 
     public safety by allowing convicted felons to continue buying 
     and selling large quantities of firearms in interstate 
     commerce pending the resolution of their appeals.
       Require criminal background checks of gun industry 
     employees who deal with firearms, including gun shops, 
     manufacturers and distributors.
       Increase the penalty for persons who unlawfully transfer 
     firearms to a juvenile, from a misdemeanor to a felony.
       Decrease the amount of black powder explosive one is able 
     to acquire without a permit from 50 pounds to 5 pounds.
       According to the ATF report on Commerce in Firearms in the 
     United States, only 1.2 percent of Federal firearms 
     licensees--1,020 of the approximately 83,200 FFL retail 
     dealers--account for over half, 57 percent, of the crime guns 
     traced to current FFLs. This is a staggering number that 
     depicts the disregard of existing laws by these rogue gun 
     dealers. The Homeland and Security Gun Safety Act will 
     strengthen current regulatory control and enforcement in 
     order to protect the safety of the public, while allowing 
     law-abiding Americans to purchase firearms for their own use.
       ``It's our position at the Justice Department and the 
     position of this Administration that we need to unleash every 
     possible tool in the fight against terrorism and do so 
     promptly.''--Attorney General John Ash- croft, Testimony 
     before Congress, September 24, 2001.
       It is time we take a common sense approach to the terrorist 
     threats that face our country today. Terrorists are well 
     aware of our lax gun laws, and we must act preemptively to 
     prevent future tragedies. It is time for action to prevent 
     terrorism by strengthening our country's current gun laws. 
     Our citizens demand it and our homeland security depends on 
     it.

  It is time we take a common sense approach to the terrorist threats 
that face our country today. Terrorists are well aware of our lax gun 
laws, and we must act preemptively to prevent future tragedies. It is 
time for action to prevent future tragedies by strengthening our 
country's current gun laws. Our homeland security depends on it.
                                 ______
                                 
      By Mr. HOLLINGS:
  S. 970. A bill to amend the Internal Revenue Code of 1986 to preserve 
jobs and production activities in the United States; to the Committee 
on Finance.
  Mr. HOLLINGS. Mr. President, March marked the 32nd consecutive month, 
since July 2000), that manufacturing employment has declined in the 
United States. This is the longest consecutive monthly decline in the 
post

[[Page S5658]]

World War II era. Already, more than 2 million manufacturing jobs are 
gone.
  In South Carolina, we have seen a steady erosion of our manufacturing 
job base, and if we don't come up with new concepts to create and 
maintain domestic manufacturing jobs, America will go out of business.
  For all of 2002, industrial production fell 0.6 percent following a 
3.5 percent decline in 2001. That represented the first back-to-back 
annual declines in industrial output since 1974-1975.
  Quite frankly, this is unacceptable.
  We must act to save our manufacturing jobs. Earlier this Congress, I 
introduced S. 592, the ``Save American Manufacturing Act of 2003,'' 
that seeks to eliminate the tax incentives for off-shore production. 
Today, I introduce complementary legislation to provide tax incentives 
to produce in the United States.
  The legislation I'm introducing today would provide tax benefits to 
domestic producers. These tax incentives would become increasingly 
beneficial as the percentage of manufacturing done in the United States 
increases. Conversely, as the percentage of domestic production 
decreases the incentives would also decrease.
  This mechanism will provide a strong incentive for manufacturers to 
maintain U.S. production and to return runaway production to the United 
States.
  Our communities, our industries and our workers are being harmed by 
the erosion of our manufacturing base. Today's legislation is one 
additional way that we can provide assistance to these vital groups.
  This legislation is the companion to H.R. 1769 introduced earlier 
this session in the House by Representatives Rangel and Crane.
  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. 970

       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 ``Job Protection Act of 
     2003''.

     SEC. 2. REPEAL OF EXCLUSION FOR EXTRATERRITORIAL INCOME.

       (a) In General.--Section 114 of the Internal Revenue Code 
     of 1986 is hereby repealed.
       (b) Conforming Amendments.--
       (1) Subpart E of part III of subchapter N of chapter 1 of 
     such Code (relating to qualifying foreign trade income) is 
     hereby repealed.
       (2) The table of subparts for such part III is amended by 
     striking the item relating to subpart E.
       (3) The table of sections for part III of subchapter B of 
     chapter 1 of such Code is amended by striking the item 
     relating to section 114.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to transactions occurring after the date of the 
     enactment of this Act.
       (2) Binding contracts.--The amendments made by this section 
     shall not apply to any transaction in the ordinary course of 
     a trade or business which occurs pursuant to a binding 
     contract--
       (A) which is between the taxpayer and a person who is not a 
     related person (as defined in section 943(b)(3) of such Code, 
     as in effect on the day before the date of the enactment of 
     this Act), and
       (B) which is in effect on April 11, 2003, and at all times 
     thereafter.

     For purposes of this paragraph, a binding contract shall 
     include a purchase option, renewal option, or replacement 
     option which is included in such contract.
       (d) Revocation of Section 943(e) Elections.--
       (1) In general.--In the case of a corporation that elected 
     to be treated as a domestic corporation under section 943(e) 
     of the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of this Act)--
       (A) the corporation may revoke such election, effective as 
     of the date of the enactment of this Act, and
       (B) if the corporation does revoke such election--
       (i) such corporation shall be treated as a domestic 
     corporation transferring (as of the date of the enactment of 
     this Act) all of its property to a foreign corporation in 
     connection with an exchange described in section 354 of the 
     Internal Revenue Code of 1986, and
       (ii) no gain or loss shall be recognized on such transfer.
       (2) Exception.--Subparagraph (B)(ii) of paragraph (1) shall 
     not apply to gain on any asset held by the revoking 
     corporation if--
       (A) the basis of such asset is determined in whole or in 
     part by reference to the basis of such asset in the hands of 
     the person from whom the revoking corporation acquired such 
     asset,
       (B) the asset was acquired by transfer (not as a result of 
     the election under section 943(e) of such Code) occurring on 
     or after the 1st day on which its election under section 
     943(e) of such Code was effective, and
       (C) a principal purpose of the acquisition was the 
     reduction or avoidance of tax.
       (e) General Transition.--
       (1) In general.--In the case of a taxable year ending after 
     the date of the enactment of this Act and beginning before 
     January 1, 2009, for purposes of chapter 1 of such Code, each 
     current FSC/ETI beneficiary shall be allowed a deduction 
     equal to the transition amount determined under this 
     subsection with respect to such beneficiary for such year.
       (2) Current fsc/eti beneficiary.--The term ``current FSC/
     ETI beneficiary'' means any corporation which entered into 
     one or more transactions during its taxable year beginning in 
     calendar year 2001 with respect to which FSC/ETI benefits 
     were allowable.
       (3) Transition amount.--For purposes of this subsection--
       (A) In general.--The transition amount applicable to any 
     current FSC/ETI beneficiary for any taxable year is the 
     phaseout percentage of the adjusted base period amount.
       (B) Phaseout percentage.--
       (i) In general.--In the case of a taxpayer using the 
     calendar year as its taxable year, the phaseout percentage 
     shall be determined under the following table:

``Years:                                    The phaseout percentage is:
2004 and 2005.......................................................100
2006.................................................................75
2007.................................................................75
2008.................................................................50
2009 and thereafter...................................................0

       (ii) Special rule for 2003.--The phaseout percentage for 
     2003 shall be the amount that bears the same ratio to 
     100 percent as the number of days after the date of the 
     enactment of this Act bears to 365.
       (iii) Special rule for fiscal year taxpayers.--In the case 
     of a taxpayer not using the calendar year as its taxable 
     year, the phaseout percentage is the weighted average of the 
     phaseout percentages determined under the preceding 
     provisions of this paragraph with respect to calendar years 
     any portion of which is included in the taxpayer's taxable 
     year. The weighted average shall be determined on the basis 
     of the respective portions of the taxable year in each 
     calendar year.
       (4) Adjusted base period amount.--For purposes of this 
     subsection--
       (A) In general.--In the case of a taxpayer using the 
     calendar year as its taxable year, the adjusted base period 
     amount for any taxable year is the base period amount 
     multiplied by the applicable percentage, as determined in the 
     following table:

``Years:                                  The applicable percentage is:
2003................................................................100
2004................................................................100
2005................................................................105
2006................................................................110
2007................................................................115
2008................................................................120
2009 and thereafter...................................................0

       (B) Base period amount.--The base period amount is the 
     aggregate FSC/ETI benefits for the taxpayer's taxable year 
     beginning in calendar year 2001.
       (C) Special rules for fiscal year taxpayers, etc.--Rules 
     similar to rules of clauses (ii) and (iii) of paragraph 
     (3)(B) shall apply for purposes of this paragraph.
       (5) FSC/ETI benefit.--For purposes of this subsection, the 
     term `FSC/ETI benefit' means--
       (A) amounts excludable from gross income under section 114 
     of such Code, and
       (B) the exempt foreign trade income of related foreign 
     sales corporations from property acquired from the taxpayer 
     (determined without regard to section 923(a)(5) of such Code 
     (relating to special rule for military property), as in 
     effect on the day before the date of the enactment of the FSC 
     Repeal and Extraterritorial Income Exclusion Act of 2000).

     In determining the FSC/ETI benefit there shall be excluded 
     any amount attributable to a transaction with respect to 
     which the taxpayer is the lessor unless the leased property 
     was manufactured or produced in whole or in part by the 
     taxpayer.
       (6) Special rule for farm cooperatives.--Under regulations 
     prescribed by the Secretary, determinations under this 
     subsection with respect to an organization described in 
     section 943(g)(1) of such Code, as in effect on the day 
     before the date of the enactment of this Act, shall be made 
     at the cooperative level and the purposes of this subsection 
     shall be carried out by excluding amounts from the gross 
     income of its patrons.
       (7) Certain rules to apply.--Rules similar to the rules of 
     section 41(f) of such Code shall apply for purposes of this 
     subsection.
       (8) Coordination with binding contract rule.--The deduction 
     determined under paragraph (1) for any taxable year shall be 
     reduced by the phaseout percentage of any FSC/ETI benefit 
     realized for the taxable year by reason of subsection (c)(2). 
     The preceding sentence shall not apply to any FSC/ETI benefit 
     attributable to a transaction described in the last sentence 
     of paragraph (5).
       (9) Special rule for taxable year which includes date of 
     enactment.--In the case of a taxable year which includes the 
     date of the enactment of this Act, the deduction allowed 
     under this subsection to any current FSC/ETI beneficiary 
     shall in no event exceed--

[[Page S5659]]

       (A) 100 percent of such beneficiary's adjusted base period 
     amount for calendar year 2003, reduced by
       (B) the aggregate FSC/ETI benefits of such beneficiary with 
     respect to transactions occurring during the portion of the 
     taxable year ending on the date of the enactment of this Act.

     SEC. 3. DEDUCTION RELATING TO INCOME ATTRIBUTABLE TO UNITED 
                   STATES PRODUCTION ACTIVITIES.

       (a) In General.--Part VIII of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to special 
     deductions for corporations) is amended by adding at the end 
     the following new section:

     ``SEC. 250. INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION 
                   ACTIVITIES.

       ``(a) In General.--In the case of a corporation, there 
     shall be allowed as a deduction an amount equal to 10 percent 
     of the qualified production activities income of the 
     corporation for the taxable year.
       ``(b) Phasein.--In the case of taxable years beginning in 
     2006, 2007, 2008 or 2009, subsection (a) shall be applied by 
     substituting for the percentage contained therein the 
     transition percentage determined under the following table:

``Taxable years beginning in:             The transition percentage is:
2006..................................................................1
2007..................................................................2
2008..................................................................4
2009..................................................................9

       ``(c) Qualified Production Activities Income.--For purposes 
     of this section, the term `qualified production activities 
     income' means the product of--
       ``(1) the portion of the modified taxable income of the 
     taxpayer which is attributable to domestic production 
     activities, and
       ``(2) the domestic/foreign fraction.
       ``(d) Determination of Income Attributable to Domestic 
     Production Activities.--For purposes of this section--
       ``(1) In general.--The portion of the modified taxable 
     income which is attributable to domestic production 
     activities is so much of the modified taxable income for the 
     taxable year as does not exceed--
       ``(A) the taxpayer's domestic production gross receipts for 
     such taxable year, reduced by
       ``(B) the sum of--
       ``(i) the costs of goods sold that are allocable to such 
     receipts,
       ``(ii) other deductions, expenses, or losses directly 
     allocable to such receipts, and
       ``(iii) a ratable portion of other deductions, expenses, 
     and losses that are not directly allocable to such receipts 
     or another class of income.
       ``(2) Allocation method.--Except as provided in 
     regulations, allocations under clauses (ii) and (iii) of 
     paragraph (1)(B) shall be made under the principles used in 
     determining the portion of taxable income from sources within 
     and without the United States.
       ``(3) Special rule.--
       ``(A) For purposes of determining costs under clause (i) of 
     paragraph (1)(B), any item or service brought into the United 
     States without a transfer price meeting the requirements of 
     section 482 shall be treated as acquired by purchase, and its 
     cost shall be treated as not less than its value when it 
     entered the United States. A similar rule shall apply in 
     determining the adjusted basis of leased or rented property 
     where the lease or rental gives rise to domestic production 
     gross receipts.
       ``(B) In the case of any property described in subparagraph 
     (A) that had been exported by the taxpayer for further 
     manufacture, the increase in cost (or adjusted basis) under 
     subparagraph (A) shall not exceed the difference between the 
     value of the property when exported and the value of the 
     property when brought back into the United States after the 
     further manufacture.
       ``(4) Modified taxable income.--The term `modified taxable 
     income' means taxable income computed without regard to the 
     deduction allowable under this section.
       ``(e) Domestic Production Gross Receipts.--For purposes of 
     this section--
       ``(1) In general.--The term `domestic production gross 
     receipts' means the gross receipts of the taxpayer which are 
     derived from--
       ``(A) any sale, exchange, or other disposition of, or
       ``(B) any lease, rental or license of,
     qualifying production property which was manufactured, 
     produced, grown, or extracted in whole or in significant part 
     by the taxpayer within the United States.
       ``(2) Special rule.--The term `domestic production gross 
     receipts' includes gross receipts of the taxpayer from the 
     sale, exchange, or other disposition of replacement parts 
     if--
       ``(A) such parts are sold by the taxpayer as replacement 
     parts for qualified production property produced or 
     manufactured in whole or significant part by the taxpayer in 
     the United States, and
       ``(B) the taxpayer (or a related party) owns the designs 
     for such parts.
       ``(3) Related party.--The term `related party' means any 
     corporation which is a member of the taxpayer's expanded 
     afiliated group.
       ``(f) Qualifying Production Property.--For purposes of this 
     section--
       ``(1) In general.--Except as otherwise provided in this 
     paragraph, the term `qualifying production property' means--
       ``(A) any tangible personal property,
       ``(B) any computer software, and
       ``(C) any films, tapes, records, or similar reproductions.
       ``(2) Exclusions from qualifying production property.--The 
     term `qualifying production property' shall not include--
       ``(A) consumable property that is sold, leased, or licensed 
     by the taxpayer as an integral part of the provision of 
     services,
       ``(B) oil or gas (or any primary product thereof),
       ``(C) electricity,
       ``(D) water supplied by pipeline to the consumer,
       ``(E) any unprocessed timber which is softwood,
       ``(F) utility services, or
       ``(G) any property (not described in paragraph (1)(B)) 
     which is a film, tape, recording, book, magazine, newspaper, 
     or similar property the market for which is primarily topical 
     or otherwise essentially transitory in nature.

     For purposes of subparagraph (E), the term `unprocessed 
     timber' means any log, cant, or similar form of timber.
       ``(g) Domestic/Foreign Fraction.--For purposes of this 
     section--
       ``(1) In general.--The term `domestic/foreign fraction' 
     means a fraction--
       ``(A) the numerator of which is the value of the domestic 
     production of the taxpayer, and
       ``(B) the denominator of which is the value of the 
     worldwide production of the taxpayer.
       ``(2) Value of domestic production.--The value of domestic 
     production is the excess of--
       ``(A) the domestic production gross receipts, over
       ``(B) the cost of purchased inputs allocable to such 
     receipts that are deductible under this chapter for the 
     taxable year.
       ``(3) Purchased inputs.--
       ``(A) In general.--Purchased inputs are any of the 
     following items acquired by purchase:
       ``(i) Services (other than services of employees) used in 
     manufacture, production, growth, or extraction activities.
       ``(ii) Items consumed in connection with such activities.
       ``(iii) Items incorporated as part of the property being 
     manufactured, produced, grown, or extracted.
       ``(B) Special rule.--Rules similar to the rules of 
     subsection (d)(3) shall apply for purposes of this 
     subsection.
       ``(4) Value of worldwide production.--
       ``(A) In general.--The value of worldwide production shall 
     be determined under the principles of paragraph (2), except 
     that--
       ``(i) worldwide production gross receipts shall be taken 
     into account, and
       ``(ii) paragraph (3)(B) shall not apply.
       ``(B) Worldwide production gross receipts.--The worldwide 
     production gross receipts is the amount that would be 
     determined under subsection (e) if such subsection were 
     applied without any reference to the United States.
       ``(5) Special rule for affiliated groups.--
       ``(A) In general.--In the case of a taxpayer that is a 
     member of an expanded affiliated group, the domestic/foreign 
     fraction shall be the amount determined under the preceding 
     provisions of this subsection by treating all members of such 
     group as a single corporation.
       ``(B) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group as defined in 
     section 1504(a), determined--
       ``(i) by substituting `50 percent' for `80 percent' each 
     place it appears, and
       ``(ii) without regard to paragraphs (2), (3), and (4) of 
     section 1504(b).
       ``(h) Definitions and Special Rules.--
       ``(1) United states.--For purposes of this section, the 
     term `United States' includes the Commonwealth of Puerto Rico 
     and any other possession of the United States.
       ``(2) Special rule for partnerships.--For purposes of this 
     section, a corporation's distributive share of any 
     partnership item shall be taken into account as if directly 
     realized by the corporation.
       ``(3) Coordination with minimum tax.--The deduction under 
     this section shall be allowed for purposes of the tax imposed 
     by section 55; except that for purposes of section 55, 
     alternative minimum taxable income shall be taken into 
     account in determining the deduction under this section.
       ``(4) Ordering rule.--The amount of any other deduction 
     allowable under this chapter shall be determined as if this 
     section had not been enacted.
       ``(5) Coordination with transition rules.--For purposes of 
     this section--
       ``(A) domestic production gross receipts shall not include 
     gross receipts from any transaction if the binding contract 
     transition relief of section 2(c)(2) of the Job Protection 
     Act of 2003 applies to such transaction, and
       ``(B) any deduction allowed under section 2(e) of such Act 
     shall be disregarded in determining the portion of the 
     taxable income which is attributable to domestic production 
     gross receipts.''.
       (b) Clerical Amendment.--The table of sections for part 
     VIII of subchapter B of chapter 1 of such Code is amended by 
     adding at the end the following new item:

``Sec. 250. Income attributable to domestic production activities.''.

       (c) Effective Date.--

[[Page S5660]]

       ``(1) In general.--The amendments made by this section 
     shall apply to taxable years beginning after 2005.
       ``(2) Application of section 15.--Section 15 of the 
     Internal Revenue Code of 1986 shall apply to the amendments 
     made by this section as if they were changes in a rate of 
     tax.
                                 ______
                                 
      By Mr. HARKIN (for himself, Mr. Specter, Mr. Kennedy, Mr. 
        Cochran, Mr. Biden, Ms. Landrieu, Mr. Kerry, Mr. Corzine, Mr. 
        Schumer, Mrs. Clinton, and Mr. Dayton):
  S. 971. A bill to amend title XIX of the Social Security Act to 
provide individuals with disabilities and older Americans with equal 
access to community-based attendant services and supports, and for 
other purposes; to the Committee on Finance.
  Mr. HARKIN. Mr. President, today Senator Specter and I and others 
introduce the Medicaid Community-Based Attendant Services and Supports 
Act of 2003, MICASSA. This legislation is needed to truly bring people 
with disabilities into the mainstream of society and provide equal 
opportunity for employment and community activities.
  In order to work or live in their own homes, Americans with 
disabilities and older Americans need access to community-based 
services and supports. Unfortunately, under current Federal Medicaid 
policy, the deck is stacked in favor of living in an institution. The 
purpose of our bill is to level the playing field and give eligible 
individuals equal access to community-based services and supports.
  The Medicaid Community Attendant Services and Supports Act 
accomplishes four goals.
  First, the bill amends Title XIX of the Social Security Act to 
provide a new Medicaid plan benefit that would give individuals who are 
currently eligible for nursing home services or an intermediate care 
facility for the mentally retarded equal access to community-based 
attendant services and supports.
  Second, for a limited time, States would have the opportunity to 
receive additional funds to support community attendant services and 
supports and for certain administrative activities. Each State 
currently gets Federal money for their Medicaid program based on a set 
percentage. This percentage is the Medicaid match rate. This bill would 
increase that percentage to provide some additional funding to States 
to help them reform their long term care systems.
  Third, the bill provides States with financial assistance to support 
``real choice systems change initiatives'' that include specific action 
steps to increase the provision of home and community based services.
  Finally, the bill establishes a demonstration project to evaluate 
service coordination and cost sharing approaches with respect to the 
provision of services and supports for individuals with disabilities 
under the age of 65 who are dually eligible for Medicaid and Medicare.
  Some States have already recognized the benefits of home and 
community based services. Every State offers certain services under 
home and community based waiver programs, which serve a capped number 
of individuals with an array of home and community based services to 
meet their needs and avoid institutionalization. Some States also are 
now providing the personal care optional benefit through their Medicaid 
program.

  However, despite this market progress, home and community based 
services are unevenly distributed within and across states and only 
reach a small percentage of eligible individuals.
  Those left behind are often needlessly institutionalize because they 
cannot access community alternatives. A person with a disability's 
civil right to be integrated into his or her community should not 
depend on his or her address. In Olmstead v. LC, the Supreme Court 
recognized that needless institutionalization is a form of 
discrimination under the Americans With Disabilities Act. We in 
Congress have a responsibility to help States meet their obligations 
under Olmstead.
  This MICASSA legislation is designed to do just that and make the 
promise of the ADA a reality. It will help rebalance the current 
Medicaid long term care system, which spends a disproportionate amount 
on institutional services. For example, in 2000, 49.5 billion dollars 
were spent on institutional care, compared to 18.2 billion on community 
based care. In the same year, only 3 States spent 50 percent or more of 
their long term care funds under the Medicaid program on home and 
community based care.
  And that means that individuals do not have equal access to community 
based care throughout this country. An individual should not be asked 
to move to another state in order to avoid needless segregation. They 
also should not be moved away from family and friends because their 
only choice is an institution.
  For example, I know a young man in Iowa, Ken Kendall, who is 
currently living in a nursing home because he cannot access home and 
community based care. Ken was injured in a serious accident at the age 
of 17 and sustained a spinal chord injury. With the help of community 
based services covered by his insurance company, Ken could live in his 
home in Iowa City. Remaining independent made a tremendous difference 
in his life.
  However, several years ago, Ken lost his health insurance and after a 
time, he went onto Medicaid. As a Medicaid recipient, Ken was only 
given the option to live in a nursing home in Waterloo, almost two 
hours from his friends and family in Iowa City. In the nursing home, 
Ken has become isolated. He is very far from his family and friends and 
does not have access to transportation. He has not been to a restaurant 
or a movie since he moved to the nursing home over two years ago. His 
life has dramatically changed from when he lived in his own apartment 
and hired his own attendants to care for him. MICASSA would give him 
that choice again--the choice to control his own life and live a full 
and meaningful life in his home community surrounded by his friends and 
family.
  Federal Medicaid policy should reflect the consensus reached in the 
ADA that Americans with Disabilities should have equal opportunity to 
contribute to our communities and participate in our society as full 
citizens. That means no one has to sacrifice their full participation 
in society because they need help getting out of the house in the 
morning or assistance with personal care or some other basic service.
  I am very pleased that the administration has included the Real 
Choice Systems Change grants in its budget this year at $40 million 
dollars. Senator Specter and I have supported these grants for several 
years now. I also applaud the administration's commitment to The 
President's New Freedom Initiative for People with Disabilities and 
believe that this legislation helps promote the goals of that 
initiative.
  Community based attendant services and supports allow people with 
disabilities to lead independent lives, have jobs, and participate in 
the community. Some will become taxpayers, some will get an education, 
and some will participate in recreational and civic activities. But all 
will experience a chance to make their own choices and govern their own 
lives.
  This bill will open the door to full participation by people with 
disabilities in our workplaces, our economy, and our American Dream, 
and I urge all my colleagues to support us on this issue. I want to 
thank Senator Specter for his leadership on this issue and his 
commitment to improving access to home and community based services for 
people with disabilities. I would also like to thank Senators Kennedy, 
Cochran, Biden, Landrieu, Kerry, Corzine, Schumer, and Clinton for 
joining me in this important initiative.
  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. 971

       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 ``Medicaid 
     Community-Based Attendant Services and Supports Act of 
     2003''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.

            TITLE I--ESTABLISHMENT OF MEDICAID PLAN BENEFIT

Sec. 101. Coverage of community-based attendant services and supports 
              under the medicaid program.

[[Page S5661]]

Sec. 102. Enhanced FMAP for ongoing activities of early coverage States 
              that enhance and promote the use of community-based 
              attendant services and supports.
Sec. 103. Increased Federal financial participation for certain 
              expenditures.

      TITLE II--PROMOTION OF SYSTEMS CHANGE AND CAPACITY BUILDING

Sec. 201. Grants to promote systems change and capacity building.
Sec. 202. Demonstration project to enhance coordination of care under 
              the medicare and medicaid programs for non-elderly dual 
              eligible individuals.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) Long-term services and supports provided under the 
     medicaid program established under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) must meet the ability 
     and life choices of individuals with disabilities and older 
     Americans, including the choice to live in one's own home or 
     with one's own family and to become a productive member of 
     the community.
       (2) Research on the provision of long-term services and 
     supports under the medicaid program (conducted by and on 
     behalf of the Department of Health and Human Services) has 
     revealed a significant funding bias toward institutional 
     care. Only about 27 percent of long term care funds expended 
     under the medicaid program, and only about 9 percent of all 
     funds expended under that program, pay for services and 
     supports in home and community-based settings.
       (3) In the case of medicaid beneficiaries who need long 
     term care, the only long-term care service currently 
     guaranteed by Federal law in every State is nursing home 
     care. Only 27 States have adopted the benefit option of 
     providing personal care services under the medicaid program. 
     Although every State has chosen to provide certain services 
     under home and community-based waivers, these services are 
     unevenly available within and across States, and reach a 
     small percentage of eligible individuals. In fiscal year 
     2000, only 3 States spent 50 percent or more of their 
     medicaid long term care funds under the medicaid program on 
     home and community-based care.
       (4) Despite the funding bias and the uneven distribution of 
     home and community-based services, 2\1/2\ times more people 
     are served in home and community-based settings than in 
     institutional settings.
       (5) The goals of the Nation properly include providing 
     families of children with disabilities, working-age adults 
     with disabilities, and older Americans with--
       (A) a meaningful choice of receiving long-term services and 
     supports in the most integrated setting appropriate to their 
     needs;
       (B) the greatest possible control over the services 
     received and, therefore, their own lives and futures; and
       (C) quality services that maximize independence in the home 
     and community, including in the workplace.
       (b) Purposes.--The purposes of this Act are the following:
       (1) To reform the medicaid program established under title 
     XIX of the Social Security Act (42 U.S.C. 1396 et seq.) to 
     provide equal access to community-based attendant services 
     and supports.
       (2) To provide financial assistance to States as they 
     reform their long-term care systems to provide comprehensive 
     statewide long-term services and supports, including 
     community-based attendant services and supports that provide 
     consumer choice and direction, in the most integrated setting 
     appropriate.

            TITLE I--ESTABLISHMENT OF MEDICAID PLAN BENEFIT

     SEC. 101. COVERAGE OF COMMUNITY-BASED ATTENDANT SERVICES AND 
                   SUPPORTS UNDER THE MEDICAID PROGRAM.

       (a) Mandatory Coverage.--Section 1902(a)(10)(D) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(D)) is amended--
       (1) by inserting ``(i)'' after ``(D)'';
       (2) by adding ``and'' after the semicolon; and
       (3) by adding at the end the following new clause:
       ``(ii) subject to section 1935, for the inclusion of 
     community-based attendant services and supports for any 
     individual who--
       ``(I) is eligible for medical assistance under the State 
     plan;
       ``(II) with respect to whom there has been a determination 
     that the individual requires the level of care provided in a 
     nursing facility or an intermediate care facility for the 
     mentally retarded (whether or not coverage of such 
     intermediate care facility is provided under the State plan); 
     and
       ``(III) who chooses to receive such services and 
     supports;''.
       (b) Community-Based Attendant Services and Supports.--
       (1) In general.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended--
       (A) by redesignating section 1935 as section 1936; and
       (B) by inserting after section 1934 the following:


           ``community-based attendant services and supports

       ``Sec. 1935. (a) Required Coverage.--
       ``(1) In general.--Not later than October 1, 2007, a State 
     shall provide through a plan amendment for the inclusion of 
     community-based attendant services and supports (as defined 
     in subsection (g)(1)) for individuals described in section 
     1902(a)(10)(D)(ii) in accordance with this section.
       ``(2) Enhanced fmap and additional federal financial 
     support for earlier coverage.--Notwithstanding section 
     1905(b), during the period that begins on or after October 1, 
     2003, and ends on September 30, 2007, in the case of a State 
     with an approved plan amendment under this section during 
     that period that also satisfies the requirements of 
     subsection (c) the Federal medical assistance percentage 
     shall be equal to the enhanced FMAP described in section 
     2105(b) with respect to medical assistance in the form of 
     community-based attendant services and supports provided to 
     individuals described in section 1902(a)(10)(D)(ii) in 
     accordance with this section.
       ``(b) Development and Implementation of Benefit.--In order 
     for a State plan amendment to be approved under this section, 
     a State shall provide the Secretary with the following 
     assurances:
       ``(1) Assurance of development and implementation 
     collaboration.--That the State has developed and shall 
     implement the provision of community-based attendant services 
     and supports under the State plan through active 
     collaboration with--
       ``(A) individuals with disabilities;
       ``(B) elderly individuals;
       ``(C) representatives of such individuals; and
       ``(D) providers of, and advocates for, services and 
     supports for such individuals.
       ``(2) Assurance of provision on a statewide basis and in 
     most integrated setting.--That community-based attendant 
     services and supports will be provided under the State plan 
     to individuals described in section 1902(a)(10)(D)(ii) on a 
     statewide basis and in a manner that provides such services 
     and supports in the most integrated setting appropriate for 
     each individual eligible for such services and supports.
       ``(3) Assurance of nondiscrimination.--That the State will 
     provide community-based attendant services and supports to an 
     individual described in section 1902(a)(10)(D)(ii) without 
     regard to the individual's age, type of disability, or the 
     form of community-based attendant services and supports that 
     the individual requires in order to lead an independent life.
       ``(4) Assurance of maintenance of effort.--That the level 
     of State expenditures for optional medical assistance that--
       ``(A) is described in a paragraph other than paragraphs (1) 
     through (5), (17) and (21) of section 1905(a) or that is 
     provided under a waiver under section 1915, section 1115, or 
     otherwise; and
       ``(B) is provided to individuals with disabilities or 
     elderly individuals for a fiscal year,
     shall not be less than the level of such expenditures for the 
     fiscal year preceding the fiscal year in which the State plan 
     amendment to provide community-based attendant services and 
     supports in accordance with this section is approved.
       ``(c) Requirements for Enhanced FMAP for Early Coverage.--
     In addition to satisfying the other requirements for an 
     approved plan amendment under this section, in order for a 
     State to be eligible under subsection (a)(2) during the 
     period described in that subsection for the enhanced FMAP for 
     early coverage under subsection (a)(2), the State shall 
     satisfy the following requirements:
       ``(1) Specifications.--With respect to a fiscal year, the 
     State shall provide the Secretary with the following 
     specifications regarding the provision of community-based 
     attendant services and supports under the plan for that 
     fiscal year:
       ``(A)(i) The number of individuals who are estimated to 
     receive community-based attendant services and supports under 
     the plan during the fiscal year.
       ``(ii) The number of individuals that received such 
     services and supports during the preceding fiscal year.
       ``(B) The maximum number of individuals who will receive 
     such services and supports under the plan during that fiscal 
     year.
       ``(C) The procedures the State will implement to ensure 
     that the models for delivery of such services and supports 
     are consumer controlled (as defined in subsection (g)(2)(B)).
       ``(D) The procedures the State will implement to inform all 
     potentially eligible individuals and relevant other 
     individuals of the availability of such services and supports 
     under the this title, and of other items and services that 
     may be provided to the individual under this title or title 
     XVIII.
       ``(E) The procedures the State will implement to ensure 
     that such services and supports are provided in accordance 
     with the requirements of subsection (b)(1).
       ``(F) The procedures the State will implement to actively 
     involve individuals with disabilities, elderly individuals, 
     and representatives of such individuals in the design, 
     delivery, administration, and evaluation of the provision of 
     such services and supports under this title.
       ``(2) Participation in evaluations.--The State shall 
     provide the Secretary with such substantive input into, and 
     participation in, the design and conduct of data collection, 
     analyses, and other qualitative or quantitative evaluations 
     of the provision of community-based attendant services and 
     supports under this section as the Secretary deems necessary 
     in order to determine the effectiveness of the provision of 
     such services and supports in allowing the individuals 
     receiving such services and supports to lead

[[Page S5662]]

     an independent life to the maximum extent possible.
       ``(d) Quality Assurance Program.--
       ``(1) State responsibilities.--In order for a State plan 
     amendment to be approved under this section, a State shall 
     establish and maintain a quality assurance program with 
     respect to community-based attendant services and supports 
     that provides for the following:
       ``(A) The State shall establish requirements, as 
     appropriate, for agency-based and other delivery models that 
     include--
       ``(i) minimum qualifications and training requirements for 
     agency-based and other models;
       ``(ii) financial operating standards; and
       ``(iii) an appeals procedure for eligibility denials and a 
     procedure for resolving disagreements over the terms of an 
     individualized plan.
       ``(B) The State shall modify the quality assurance program, 
     as appropriate, to maximize consumer independence and 
     consumer control in both agency-provided and other delivery 
     models.
       ``(C) The State shall provide a system that allows for the 
     external monitoring of the quality of services and supports 
     by entities consisting of consumers and their 
     representatives, disability organizations, providers, 
     families of disabled or elderly individuals, members of the 
     community, and others.
       ``(D) The State shall provide for ongoing monitoring of the 
     health and well-being of each individual who receives 
     community-based attendant services and supports.
       ``(E) The State shall require that quality assurance 
     mechanisms appropriate for the individual be included in the 
     individual's written plan.
       ``(F) The State shall establish a process for the mandatory 
     reporting, investigation, and resolution of allegations of 
     neglect, abuse, or exploitation in connection with the 
     provision of such services and supports.
       ``(G) The State shall obtain meaningful consumer input, 
     including consumer surveys, that measure the extent to which 
     an individual receives the services and supports described in 
     the individual's plan and the individual's satisfaction with 
     such services and supports.
       ``(H) The State shall make available to the public the 
     findings of the quality assurance program.
       ``(I) The State shall establish an ongoing public process 
     for the development, implementation, and review of the 
     State's quality assurance program.
       ``(J) The State shall develop and implement a program of 
     sanctions for providers of community-based services and 
     supports that violate the terms or conditions for the 
     provision of such services and supports.
       ``(2) Federal responsibilities.--
       ``(A) Periodic evaluations.--The Secretary shall conduct a 
     periodic sample review of outcomes for individuals who 
     receive community-based attendant services and supports under 
     this title.
       ``(B) Investigations.--The Secretary may conduct targeted 
     reviews and investigations upon receipt of an allegation of 
     neglect, abuse, or exploitation of an individual receiving 
     community-based attendant services and supports under this 
     section.
       ``(C) Development of provider sanction guidelines.--The 
     Secretary shall develop guidelines for States to use in 
     developing the sanctions required under paragraph (1)(J).
       ``(e) Reports.--The Secretary shall submit to Congress 
     periodic reports on the provision of community-based 
     attendant services and supports under this section, 
     particularly with respect to the impact of the provision of 
     such services and supports on--
       ``(1) individuals eligible for medical assistance under 
     this title;
       ``(2) States; and
       ``(3) the Federal Government.
       ``(f) No Effect On Ability To Provide Coverage Under a 
     Waiver.--
       ``(1) In general.--Nothing in this section shall be 
     construed as affecting the ability of a State to provide 
     coverage under the State plan for community-based attendant 
     services and supports (or similar coverage) under a waiver 
     approved under section 1915, section 1115, or otherwise.
       ``(2) Eligibility for enhanced match.--In the case of a 
     State that provides coverage for such services and supports 
     under a waiver, the State shall not be eligible under 
     subsection (a)(2) for the enhanced FMAP for the early 
     provision of such coverage unless the State submits a plan 
     amendment to the Secretary that meets the requirements of 
     this section.
       ``(g) Definitions.--In this title:
       ``(1) Community-based attendant services and supports.--
       ``(A) In general.--The term `community-based attendant 
     services and supports' means attendant services and supports 
     furnished to an individual, as needed, to assist in 
     accomplishing activities of daily living, instrumental 
     activities of daily living, and health-related functions 
     through hands-on assistance, supervision, or cueing--
       ``(i) under a plan of services and supports that is based 
     on an assessment of functional need and that is agreed to by 
     the individual or, as appropriate, the individual's 
     representative;
       ``(ii) in a home or community setting, which may include a 
     school, workplace, or recreation or religious facility, but 
     does not include a nursing facility or an intermediate care 
     facility for the mentally retarded;
       ``(iii) under an agency-provider model or other model (as 
     defined in paragraph (2)(C)); and
       ``(iv) the furnishing of which is selected, managed, and 
     dismissed by the individual, or, as appropriate, with 
     assistance from the individual's representative.
       ``(B) Included services and supports.--Such term includes--
       ``(i) tasks necessary to assist an individual in 
     accomplishing activities of daily living, instrumental 
     activities of daily living, and health-related functions;
       ``(ii) the acquisition, maintenance, and enhancement of 
     skills necessary for the individual to accomplish activities 
     of daily living, instrumental activities of daily living, and 
     health-related functions;
       ``(iii) backup systems or mechanisms (such as the use of 
     beepers) to ensure continuity of services and supports; and
       ``(iv) voluntary training on how to select, manage, and 
     dismiss attendants.
       ``(C) Excluded services and supports.--Subject to 
     subparagraph (D), such term does not include--
       ``(i) the provision of room and board for the individual;
       ``(ii) special education and related services provided 
     under the Individuals with Disabilities Education Act and 
     vocational rehabilitation services provided under the 
     Rehabilitation Act of 1973;
       ``(iii) assistive technology devices and assistive 
     technology services;
       ``(iv) durable medical equipment; or
       ``(v) home modifications.
       ``(D) Flexibility in transition to community-based home 
     setting.--Such term may include expenditures for transitional 
     costs, such as rent and utility deposits, first month's rent 
     and utilities, bedding, basic kitchen supplies, and other 
     necessities required for an individual to make the transition 
     from a nursing facility or intermediate care facility for the 
     mentally retarded to a community-based home setting where the 
     individual resides.
       ``(2) Additional definitions.--
       ``(A) Activities of daily living.--The term `activities of 
     daily living' includes eating, toileting, grooming, dressing, 
     bathing, and transferring.
       ``(B) Consumer controlled.--The term `consumer controlled' 
     means a method of providing services and supports that allow 
     the individual, or where appropriate, the individual's 
     representative, maximum control of the community-based 
     attendant services and supports, regardless of who acts as 
     the employer of record.
       ``(C) Delivery models.--
       ``(i) Agency-provider model.--The term `agency-provider 
     model' means, with respect to the provision of community-
     based attendant services and supports for an individual, a 
     method of providing consumer controlled services and supports 
     under which entities contract for the provision of such 
     services and supports.
       ``(ii) Other models.--The term `other models' means 
     methods, other than an agency-provider model, for the 
     provision of consumer controlled services and supports. Such 
     models may include the provision of vouchers, direct cash 
     payments, or use of a fiscal agent to assist in obtaining 
     services.
       ``(D) Health-related functions.--The term `health-related 
     functions' means functions that can be delegated or assigned 
     by licensed health-care professionals under State law to be 
     performed by an attendant.
       ``(E) Instrumental activities of daily living.--The term 
     `instrumental activities of daily living' includes meal 
     planning and preparation, managing finances, shopping for 
     food, clothing, and other essential items, performing 
     essential household chores, communicating by phone and other 
     media, and traveling around and participating in the 
     community.
       ``(F) Individual's representative.--The term `individual's 
     representative' means a parent, a family member, a guardian, 
     an advocate, or an authorized representative of an 
     individual.''.
       (c) Conforming Amendments.--
       (1) Mandatory benefit.--Section 1902(a)(10)(A) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(A)) is amended, 
     in the matter preceding clause (i), by striking ``(17) and 
     (21)'' and inserting ``(17), (21), and (27)''.
       (2) Definition of medical assistance.--Section 1905(a) of 
     the Social Security Act (42 U.S.C. 1396d) is amended--
       (A) by striking ``and'' at the end of paragraph (26);
       (B) by redesignating paragraph (27) as paragraph (28); and
       (C) by inserting after paragraph (26) the following:
       ``(27) community-based attendant services and supports (to 
     the extent allowed and as defined in section 1935); and''.
       (3) IMD/ICFMR requirements.--Section 1902(a)(10)(C)(iv) of 
     the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is 
     amended by inserting ``and (27)'' after ``(24)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section (other than the amendment 
     made by subsection (c)(1)) take effect on October 1, 2003, 
     and apply to medical assistance provided for community-based 
     attendant services and supports described in section 1935 of 
     the Social Security Act furnished on or after that date.
       (2) Mandatory benefit.--The amendment made by subsection 
     (c)(1) takes effect on October 1, 2007.

[[Page S5663]]

     SEC. 102. ENHANCED FMAP FOR ONGOING ACTIVITIES OF EARLY 
                   COVERAGE STATES THAT ENHANCE AND PROMOTE THE 
                   USE OF COMMUNITY-BASED ATTENDANT SERVICES AND 
                   SUPPORTS.

       (a) In General.--Section 1935 of the Social Security Act, 
     as added by section 101(b), is amended--
       (1) by redesignating subsections (d) through (g) as 
     subsections (f) through (i), respectively;
       (2) in subsection (a)(1), by striking ``subsection (g)(1)'' 
     and inserting ``subsection (i)(1)'';
       (3) in subsection (a)(2), by inserting ``, and with respect 
     to expenditures described in subsection (d), the Secretary 
     shall pay the State the amount described in subsection 
     (d)(1)'' before the period;
       (4) in subsection (c)(1)(C), by striking ``subsection 
     (g)(2)(B)'' and inserting ``subsection (i)(2)(B)''; and
       (5) by inserting after subsection (c), the following:
       ``(d) Increased Federal Financial Participation for Early 
     Coverage States That Meet Certain Benchmarks.--
       ``(1) In general.--Subject to paragraph (2), for purposes 
     of subsection (a)(2), the amount and expenditures described 
     in this subsection are an amount equal to the Federal medical 
     assistance percentage, increased by 10 percentage points, of 
     the expenditures incurred by the State for the provision or 
     conduct of the services or activities described in paragraph 
     (3).
       ``(2) Expenditure criteria.--A State shall--
       ``(A) develop criteria for determining the expenditures 
     described in paragraph (1) in collaboration with the 
     individuals and representatives described in subsection 
     (b)(1); and
       ``(B) submit such criteria for approval by the Secretary.
       ``(3) Services and activities described.--For purposes of 
     paragraph (1), the services and activities described in this 
     subparagraph are the following:
       ``(A) One-stop intake, referral, and institutional 
     diversion services.
       ``(B) Identifying and remedying gaps and inequities in the 
     State's current provision of long-term services, particularly 
     those services that are provided based on such factors as 
     age, disability type, ethnicity, income, institutional bias, 
     or other similar factors.
       ``(C) Establishment of consumer participation and consumer 
     governance mechanisms, such as cooperatives and regional 
     service authorities, that are managed and controlled by 
     individuals with significant disabilities who use community-
     based services and supports or their representatives.
       ``(D) Activities designed to enhance the skills, earnings, 
     benefits, supply, career, and future prospects of workers who 
     provide community-based attendant services and supports.
       ``(E) Continuous improvement activities that are designed 
     to ensure and enhance the health and well-being of 
     individuals who rely on community-based attendant services 
     and supports, particularly activities involving or initiated 
     by consumers of such services and supports or their 
     representatives.
       ``(F) Family support services to augment the efforts of 
     families and friends to enable individuals with disabilities 
     of all ages to live in their own homes and communities.
       ``(G) Health promotion and wellness services and 
     activities.
       ``(H) Provider recruitment and enhancement activities, 
     particularly such activities that encourage the development 
     and maintenance of consumer controlled cooperatives or other 
     small businesses or microenterprises that provide community-
     based attendant services and supports or related services.
       ``(I) Activities designed to ensure service and systems 
     coordination.
       ``(J) Any other services or activities that the Secretary 
     deems appropriate.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect on October 1, 2003.

     SEC. 103. INCREASED FEDERAL FINANCIAL PARTICIPATION FOR 
                   CERTAIN EXPENDITURES.

       (a) In General.--Section 1935 of the Social Security Act, 
     as added by section 101(b) and amended by section 102, is 
     amended by inserting after subsection (d) the following:
       ``(e) Increased Federal Financial Participation for Certain 
     Expenditures.--
       ``(1) Eligibility for payment.--
       ``(A) In general.--In the case of a State that the 
     Secretary determines satisfies the requirements of 
     subparagraph (B), the Secretary shall pay the State the 
     amounts described in paragraph (2) in addition to any other 
     payments provided for under section 1903 or this section for 
     the provision of community-based attendant services and 
     supports.
       ``(B) Requirements.--The requirements of this subparagraph 
     are the following:
       ``(i) The State has an approved plan amendment under this 
     section.
       ``(ii) The State has incurred expenditures described in 
     paragraph (2).
       ``(iii) The State develops and submits to the Secretary 
     criteria to identify and select such expenditures in 
     accordance with the requirements of paragraph (3).
       ``(iv) The Secretary determines that payment of the 
     applicable percentage of such expenditures (as determined 
     under paragraph (2)(B)) would enable the State to provide a 
     meaningful choice of receiving community-based services and 
     supports to individuals with disabilities and elderly 
     individuals who would otherwise only have the option of 
     receiving institutional care.
       ``(2) Amounts and expenditures described.--
       ``(A) Expenditures in excess of 150 percent of baseline 
     amount.--The amounts and expenditures described in this 
     paragraph are an amount equal to the applicable percentage, 
     as determined by the Secretary in accordance with 
     subparagraph (B), of the expenditures incurred by the State 
     for the provision of community-based attendant services and 
     supports to an individual that exceed 150 percent of the 
     average cost of providing nursing facility services to an 
     individual who resides in the State and is eligible for such 
     services under this title, as determined in accordance with 
     criteria established by the Secretary.
       ``(B) Applicable percentage.--The Secretary shall establish 
     a payment scale for the expenditures described in 
     subparagraph (A) so that the Federal financial participation 
     for such expenditures gradually increases from 70 percent to 
     90 percent as such expenditures increase.
       ``(3) Specification of order of selection for 
     expenditures.--In order to receive the amounts described in 
     paragraph (2), a State shall--
       ``(A) develop, in collaboration with the individuals and 
     representatives described in subsection (b)(1) and pursuant 
     to guidelines established by the Secretary, criteria to 
     identify and select the expenditures submitted under that 
     paragraph; and
       ``(B) submit such criteria to the Secretary.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2003.

      TITLE II--PROMOTION OF SYSTEMS CHANGE AND CAPACITY BUILDING

     SEC. 201. GRANTS TO PROMOTE SYSTEMS CHANGE AND CAPACITY 
                   BUILDING.

       (a) Authority To Award Grants.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     award grants to eligible States to carry out the activities 
     described in subsection (b).
       (2) Application.--In order to be eligible for a grant under 
     this section, a State shall submit to the Secretary an 
     application in such form and manner, and that contains such 
     information, as the Secretary may require.
       (b) Permissible Activities.--A State that receives a grant 
     under this section may use funds provided under the grant for 
     any of the following activities, focusing on areas of need 
     identified by the State and the Consumer Task Force 
     established under subsection (c):
       (1) The development and implementation of the provision of 
     community-based attendant services and supports under section 
     1935 of the Social Security Act (as added by section 101(b) 
     and amended by sections 102 and 103) through active 
     collaboration with--
       (A) individuals with disabilities;
       (B) elderly individuals;
       (C) representatives of such individuals; and
       (D) providers of, and advocates for, services and supports 
     for such individuals.
       (2) Substantially involving individuals with significant 
     disabilities and representatives of such individuals in 
     jointly developing, implementing, and continually improving a 
     mutually acceptable comprehensive, effectively working 
     statewide plan for preventing and alleviating unnecessary 
     institutionalization of such individuals.
       (3) Engaging in system change and other activities deemed 
     necessary to achieve any or all of the goals of such 
     statewide plan.
       (4) Identifying and remedying disparities and gaps in 
     services to classes of individuals with disabilities and 
     elderly individuals who are currently experiencing or who 
     face substantial risk of unnecessary institutionalization.
       (5) Building and expanding system capacity to offer quality 
     consumer controlled community-based services and supports to 
     individuals with disabilities and elderly individuals, 
     including by--
       (A) seeding the development and effective use of community-
     based attendant services and supports cooperatives, 
     independent living centers, small businesses, 
     microenterprises and similar joint ventures owned and 
     controlled by individuals with disabilities or 
     representatives of such individuals and community-based 
     attendant services and supports workers;
       (B) enhancing the choice and control individuals with 
     disabilities and elderly individuals exercise, including 
     through their representatives, with respect to the personal 
     assistance and supports they rely upon to lead independent, 
     self-directed lives;
       (C) enhancing the skills, earnings, benefits, supply, 
     career, and future prospects of workers who provide 
     community-based attendant services and supports;
       (D) engaging in a variety of needs assessment and data 
     gathering;
       (E) developing strategies for modifying policies, 
     practices, and procedures that result in unnecessary 
     institutional bias or the overmedicalization of long-term 
     services and supports;
       (F) engaging in interagency coordination and single point 
     of entry activities;
       (G) providing training and technical assistance with 
     respect to the provision of community-based attendant 
     services and supports;
       (H) engaging in--

[[Page S5664]]

       (i) public awareness campaigns;
       (ii) facility-to-community transitional activities; and
       (iii) demonstrations of new approaches; and
       (I) engaging in other systems change activities necessary 
     for developing, implementing, or evaluating a comprehensive 
     statewide system of community-based attendant services and 
     supports.
       (6) Ensuring that the activities funded by the grant are 
     coordinated with other efforts to increase personal attendant 
     services and supports, including--
       (A) programs funded under or amended by the Ticket to Work 
     and Work Incentives Improvement Act of 1999 (Public Law 106-
     170; 113 Stat. 1860);
       (B) grants funded under the Families of Children With 
     Disabilities Support Act of 2000 (42 U.S.C. 15091 et seq.); 
     and
       (C) other initiatives designed to enhance the delivery of 
     community-based services and supports to individuals with 
     disabilities and elderly individuals.
       (7) Engaging in transition partnership activities with 
     nursing facilities and intermediate care facilities for the 
     mentally retarded that utilize and build upon items and 
     services provided to individuals with disabilities or elderly 
     individuals under the medicaid program under title XIX of the 
     Social Security Act, or by Federal, State, or local housing 
     agencies, independent living centers, and other organizations 
     controlled by consumers or their representatives.
       (c) Consumer Task Force.--
       (1) Establishment and duties.--To be eligible to receive a 
     grant under this section, each State shall establish a 
     Consumer Task Force (referred to in this subsection as the 
     ``Task Force'') to assist the State in the development, 
     implementation, and evaluation of real choice systems change 
     initiatives.
       (2) Appointment.--Members of the Task Force shall be 
     appointed by the Chief Executive Officer of the State in 
     accordance with the requirements of paragraph (3), after the 
     solicitation of recommendations from representatives of 
     organizations representing a broad range of individuals with 
     disabilities, elderly individuals, representatives of such 
     individuals, and organizations interested in individuals with 
     disabilities and elderly individuals.
       (3) Composition.--
       (A) In general.--The Task Force shall represent a broad 
     range of individuals with disabilities from diverse 
     backgrounds and shall include representatives from 
     Developmental Disabilities Councils, Mental Health Councils, 
     State Independent Living Centers and Councils, Commissions on 
     Aging, organizations that provide services to individuals 
     with disabilities and consumers of long-term services and 
     supports.
       (B) Individuals with disabilities.--A majority of the 
     members of the Task Force shall be individuals with 
     disabilities or representatives of such individuals.
       (C) Limitation.--The Task Force shall not include employees 
     of any State agency providing services to individuals with 
     disabilities other than employees of entities described in 
     the Developmental Disabilities Assistance and Bill of Rights 
     Act of 2000 (42 U.S.C. 15001 et seq.).
       (d) Annual Report.--
       (1) States.--A State that receives a grant under this 
     section shall submit an annual report to the Secretary on the 
     use of funds provided under the grant in such form and manner 
     as the Secretary may require.
       (2) Secretary.--The Secretary shall submit to Congress an 
     annual report on the grants made under this section.
       (e) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated to 
     carry out this section, $50,000,000 for each of fiscal years 
     2004 through 2006.
       (2) Availability.--Amounts appropriated to carry out this 
     section shall remain available without fiscal year 
     limitation.

     SEC. 202. DEMONSTRATION PROJECT TO ENHANCE COORDINATION OF 
                   CARE UNDER THE MEDICARE AND MEDICAID PROGRAMS 
                   FOR NON-ELDERLY DUAL ELIGIBLE INDIVIDUALS.

       (a) Definitions.--In this section:
       (1) Non-elderly dually eligible individual.--The term 
     ``non-elderly dually eligible individual'' means an 
     individual who--
       (A) has not attained age 65; and
       (B) is enrolled in the medicare and medicaid programs 
     established under titles XVIII and XIX, respectively, of the 
     Social Security Act (42 U.S.C. 1395 et seq., 1396 et seq.).
       (2) Project.--The term ``project'' means the demonstration 
     project authorized to be conducted under this section.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (b) Authority To Conduct Project.--The Secretary shall 
     conduct a project under this section for the purpose of 
     evaluating service coordination and cost-sharing approaches 
     with respect to the provision of community-based services and 
     supports to non-elderly dually eligible individuals.
       (c) Requirements.--
       (1) Number of participants.--Not more than 5 States may 
     participate in the project.
       (2) Application.--A State that desires to participate in 
     the project shall submit an application to the Secretary, at 
     such time and in such form and manner as the Secretary shall 
     specify.
       (3) Duration.--The project shall be conducted for at least 
     5, but not more than 10 years.
       (d) Evaluation and Report.--
       (1) Evaluation.--Not later than 1 year prior to the 
     termination date of the project, the Secretary, in 
     consultation with States participating in the project, 
     representatives of non-elderly dually eligible individuals, 
     and others, shall evaluate the impact and effectiveness of 
     the project.
       (2) Report.--The Secretary shall submit a report to 
     Congress that contains the findings of the evaluation 
     conducted under paragraph (1) along with recommendations 
     regarding whether the project should be extended or expanded, 
     and any other legislative or administrative actions that the 
     Secretary considers appropriate as a result of the project.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
  Mr. SPECTER. Mr. President, I have sought recognition to join Senator 
Tom Harkin, my colleague and distinguished ranking member of the 
Appropriations Subcommittee on Labor, Health and Human Services and 
Education, which I chair, in introducing the ``Medicaid Attendant Care 
Services and Supports Act of 2003.'' This creative proposal addresses a 
glaring gap in Federal health coverage, and assists one of our Nation's 
most vulnerable populations, persons with disabilities.
  In an effort to improve the delivery of care and the comfort of those 
with long-term disabilities, this vital legislation would allow for 
reimbursement for community-based attendant care services, in lieu of 
institutionalization, for eligible individuals who require such 
services based on functional need, without regard to the individual's 
age or the nature of the disability. The most recent data available 
tell us that 58.5 million individuals receive care for disabilities 
under the Medicaid program. The number of disabled who are not 
currently enrolled in the program who would apply for this improved 
benefit is not easily counted, but would likely be substantial given 
the preference of home and community-based care over institutional 
care.
  Under this proposal, States may apply for grants for assistance in 
implementing ``systems change'' initiatives, in order to eliminate the 
institutional bias in their current policies and for needs assessment 
activities. Further, if a state can show that the aggregate amounts of 
Federal expenditures on people living in the community exceeds what 
would have been spent on the same people had they been in nursing 
homes, the state can limit the program. No limiting mechanism is 
mandated under this bill, And finally, States would be required to 
maintain expenditures for attendant care services under other Medicaid 
community-based programs, thereby preventing the states from shifting 
patients into the new benefit proposed under this bill.

  Let me speak briefly about why such a change in Medicaid law is so 
desperately needed. In 1999 the Supreme Court held in Olmstead v. L.C., 
119 S. Ct. 2176 (1999), that the Americans with Disabilities Act, ADA, 
requires States, under some circumstances, to provide community-based 
treatment to persons with mental disabilities rather than placing them 
in institutions. This decision and several lower court decisions have 
pointed to the need for a structured Medicaid attendant-care services 
benefit in order to meet obligations under the ADA. Disability 
advocates strongly support this legislation, arguing that the lack of 
Medicaid community-based services options is discriminatory and 
unhealthful for disabled individuals. Virtually every major disability 
advocacy group supports this bill, including ADAPT, the Arc, the 
National Council on Independent Living, Paralyzed Veterans of America, 
and the National Spinal Cord Injury Association.
  Senator Harkin and I recognize that such a shift in the Medicaid 
program is a huge undertaking--but feel that it is a vitally important 
one. We are introducing this legislation today in an attempt to move 
ahead with the consideration of crucial disability legislation and to 
provide a starting point for debate. The time has come for concerted 
action in this arena.
  I urge the Congressional leadership, including the appropriate 
committee chairmen, to move forward in considering this legislation, 
and take the significant next step forward in achieving the objective 
of providing individuals with disabilities the freedom to live in their 
own communities.

[[Page S5665]]

                                 ______
                                 
      By Mr. COLEMAN:
  S. 972. A bill to clarify the authority of States to establish 
conditions for insurers to conduct the business of insurance within a 
State based on the provision of information regarding Holocaust era 
insurance policies of the insurer, to establish a Federal cause of 
action for claims for payment of such insurance policies, and for other 
purposes; to the Committee on the Judiciary.
  Mr. COLEMAN. Mr. President, I ask unanimous consent that the bill I 
introduce today to clarify the authority of States to establish 
conditions for insurers to conduct the business of insurance within a 
State based on the provision of information regarding Holocaust era 
insurance policies of the insurer, to establish a Federal cause of 
action for claims of payment of such insurance policies, and for other 
purposes be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 972

       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 ``Comprehensive Holocaust 
     Accountability in Insurance Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Between 1933 and 1945, the Nazi regime and its 
     collaborators conducted systematic, bureaucratic, and State-
     sponsored persecution and murder of approximately 6,000,000 
     Jews--the genocidal act known as the Holocaust.
       (2) Before and during World War II, millions of European 
     Jews purchased, in good faith, life insurance policies with 
     certain European insurance companies because these policies 
     were a popular form of savings and investment that provided a 
     means of safeguarding family assets, assisting in retirement 
     planning, providing for a dowry, or saving for the education 
     of children.
       (3) After the Nazis came to power in Germany, they 
     systematically confiscated the insurance assets, including 
     the cash value of life insurance policies, of Jews and other 
     designated enemies of the Nazi regime.
       (4) After the conclusion of World War II, European insurers 
     often rejected insurance claims of Holocaust victims and 
     heirs who lacked required documentation, such as death 
     certificates.
       (5) During the 50 years since the end of the war, only a 
     small percentage of Holocaust victims and their families have 
     been successful in collecting on their policies.
       (6) In 1998, the International Commission on Holocaust Era 
     Insurance Claims (ICHEIC) was established by State insurance 
     regulators in the United States, European insurers, and 
     certain nongovernmental organizations to act as a facilitator 
     between insurers and beneficiaries to help expedite payouts 
     on contested insurance policies.
       (7) To date ICHEIC has received more than 90,000 claims and 
     has only made 2,281 settlement offers, which amounts to a 
     resolution rate of less than a 3 percent.
       (8) These insurance payments should to be expedited to the 
     victims of the most heinous crime of the 20th Century to 
     ensure that they do not become victims a second time.
       (9) States should be allowed to collect Holocaust-era 
     insurance information from foreign-based insurance companies 
     that want to do business in such States.
       (10) Holocaust victims and their families should be able to 
     recover claims on Holocaust era insurance policies in Federal 
     court when they consider it necessary to seek redress through 
     the judicial system.

     SEC. 3. STATE AUTHORITY TO ESTABLISH REQUIREMENTS FOR 
                   CONDUCTING INSURANCE BUSINESS.

       (a) In General.--A State may establish requirements on 
     insurers as a condition of doing insurance business in that 
     State, to the extent such requirements are consistent with 
     the due process guarantees of the Constitution of the United 
     States, as follows:
       (1) Information requirements.--The State may require that 
     an insurer provide to the State the following information 
     regarding Holocaust era insurance policies:
       (A) Whether the insurer, or any affiliate or predecessor 
     company, sold any such policies.
       (B) The number of such policies sold by the insurer, and 
     any affiliates and predecessor companies, and the number the 
     insurer and its affiliates currently have in their 
     possession.
       (C) The identity of the holder and beneficiary of each such 
     policy sold or held and the current status of each such 
     policy.
       (D) The city of origin, domicile, and address for each 
     policyholder listed.
       (E) If an insurer has no such policies to report because 
     records are no longer in the possession of the insurer or its 
     affiliates, a statement explaining the reasons for the lack 
     of possession of such records.
       (F) Any other information regarding such policies as the 
     State considers appropriate.
       (2) Requirements regarding payment of policies.--A State 
     may require that an insurer certify that, with respect to any 
     Holocaust era insurance policies sold or at any time held by 
     the insurer--
       (A) the proceeds of the policy were paid;
       (B) the beneficiaries of the policy or heirs or such 
     beneficiaries could not, after diligent search, be located, 
     and the proceeds were distributed to Holocaust survivors or 
     charities;
       (C) a court of law has certified a plan for the 
     distribution of the proceeds; or
       (D) the proceeds have not been distributed.
       (b) Holocaust Era Insurance Policies.--In this section, the 
     term ``Holocaust era insurance policy'' means a policy for 
     insurance coverage that--
       (1) was in force at any time during the period beginning 
     with 1920 and ending with 1945; and
       (2) has a policy beneficiary, policyholder, or insured life 
     that is a listed Holocaust victim.

     SEC. 4. FEDERAL CAUSE OF ACTION FOR COVERED CLAIMS.

       (a) Federal Cause of Action.--
       (1) In general.--There shall exist a Federal cause of 
     action for any covered claim.
       (2) Statute of limitations.--Any action brought under 
     paragraph (1) shall be filed not later than 10 years after 
     the date of the enactment of this Act.
       (b) Subject Matter Jurisdiction.--The district courts shall 
     have original jurisdiction of any civil action on a covered 
     claim (whether brought under subsection (a) or otherwise).
       (c) Personal Jurisdiction.--Notwithstanding any provision 
     of Rule 4 of the Federal Rules of Civil Procedure to the 
     contrary, in a civil action on a covered claim (whether 
     brought under subsection (a) or otherwise) commenced in a 
     district where the defendant is not a resident--
       (1) the court may exercise jurisdiction over such defendant 
     on any basis not inconsistent with the Constitution of the 
     United States; and
       (2) service of process, summons, and subpoena may be made 
     on such defendant in any manner not inconsistent with the 
     Constitution of the United States.
       (d) Definitions.--In this section:
       (1) Covered claim.--The term ``covered claim'' means a 
     claim against a covered foreign insurance company that arises 
     out of the insurance coverage involved in an original 
     request.
       (2) Original request.--The term ``original request'' means 
     a request that--
       (A) seeks payment of any claim on insurance coverage that--
       (i) was provided by a covered foreign insurance company;
       (ii) had as the policyholder, insured, or beneficiary a 
     listed Holocaust victim; and
       (iii) was in effect during any portion of the 13-year 
     period beginning with 1933 and ending with 1945; and
       (B) was made by a listed Holocaust victim, or the heirs of 
     beneficiaries of such victim, to the covered foreign 
     insurance company or the International Commission on 
     Holocaust Era Insurance Claims.
       (3) Covered foreign insurance company.--The term ``covered 
     foreign insurance company'' means each of the following 
     companies, and its affiliates and predecessor companies:
       (A) Assicurazioni Generali S.p.A.
       (B) Union Des Assurances de Paris.
       (C) Victoria Lebenversicherungs AG.
       (D) Winterthur Lebensversicherungs Gesellschaft.
       (E) Allianz Lebensversicherungs AG.
       (F) Wiener Allianz Versicherungs AG.
       (G) Riunione Adriatica di Sicurta.
       (H) Vereinte Lebensversicherungs AG.
       (I) Basler Lebens-Versicherungs Gesellschaft.
       (J) Deutscher Ring Lebensversicherungs AG.
       (K) Nordstern Lebensversicherungs AG.
       (L) Gerling Konzern Lebensversicherungs AG.
       (M) Manheimer Lebensversicherung AG.
       (N) Der Anker.
       (O) Allgemeine Versicherungs AG.
       (P) Zuerich Lebensversicherungs Gesellschaft.
       (Q) Any other foreign insurance company that a State or the 
     Attorney General determines was in a position to have 
     financial dealings with any individual who was a victim of 
     the Holocaust.

     SEC. 5. LISTED HOLOCAUST VICTIMS.

       In this Act, the term ``listed Holocaust victim'' means the 
     following individuals:
       (1) List of survivors.--Any individual whose name is on the 
     list of Jewish Holocaust Survivors maintained by the United 
     States Holocaust Memorial Museum in Washington, D.C.
       (2) List of deceased.--Any individual whose name is on the 
     list of individuals who died in the Holocaust maintained by 
     the Yad Veshem of Jerusalem in its Hall of Names.
       (3) Other lists.--Any individual whose name is on any list 
     of Holocaust victims that is designated as appropriate for 
     use under this Act by the chief executive officer of a State 
     or a State insurance commissioner or other principal 
     insurance regulatory authority of a State.
                                 ______
                                 
      By Mr. NICKLES (for himself and Mr. Breaux):
  S. 973. A bill to amend the Internal Revenue Code of 1986 to provide 
a shorter recovery period for the depreciation of certain restaurant 
buildings; to the Committee on Finance.
  Mr. NICKLES. Mr. President, I rise today to introduce legislation to 
provide that restaurant buildings are depreciated over 15 years instead 
of the

[[Page S5666]]

current-law 39 years. My legislation will ensure that the tax laws more 
accurately reflect the true economic life of restaurant buildings.
  Under current law, real estate property and any improvements thereto 
generally must be depreciated over 39 years. However, restaurant 
buildings undergo excessive wear and tear, and are renovated on average 
every 6 to 8 years. Requiring restaurant owners to depreciate these 
renovations over 39 years leads to a mismatch of income and expenses, 
thereby increasing the tax consequence of making such improvements. The 
long depreciation period simply makes no economic sense.
  In recent years, Congress has changed the depreciation schedules for 
competitors of owner-occupied restaurants. For example, convenience 
stores are depreciated over 15 years. In addition, leased properties, 
including leased restaurant space, can take advantage of the temporary 
bonus depreciation incentives contained in the 2001 economic stimulus 
bill.
  I believe that our tax laws should be updated to treat restaurant 
property in a more rational manner. That is why I am introducing 
legislation to reduce the depreciable life of restaurant property from 
39 years to 15 years. My legislation would ensure that all restaurants, 
either leased or owner-occupied, are treated equally. It would also 
ensure a level playing field between restaurants and their competitors. 
By reducing the time period over which all restaurants are depreciated, 
my bill will more accurately align a restaurant's income and expenses. 
According to the National Restaurant Association, enacting this 
legislation would generate an additional $3.7 billion in cash flow for 
restaurants over the next 10 years. This is money that could be 
reinvested and, in turn, generate new jobs.
  I look forward to working with my colleagues to enact my legislation 
that will provide more rational tax-treatment of restaurants on a 
permanent basis. by doing so, we will take an incremental step toward 
modernizing the tax code's outdated depreciation rules.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Santorum):
  S. 974. A bill to amend the Fair Labor Standards Act of 1938 to 
permit certain youth to perform certain work with wood products; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation designed to permit certain youths, those exempt 
from attending school, between the ages of 14 and 18 to work in 
sawmills under special safety conditions and close adult supervision. I 
introduced identical measures in the past three Congresses. Similar 
legislation introduced by my distinguished colleague, Representative 
Joseph R. Pitts, has already passed in the House in the 105th and 106th 
Congresses. I am hopeful the Senate will also enact this important 
issue.
  As Chairman of the Labor, Health and Human Services and Education 
Appropriations Subcommittee, I have strongly supported increased 
funding for the enforcement of the important child safety protections 
contained in the Fair Labor Standards Act. I also believe, however, 
that accommodation must be made for youths who are exempt from 
compulsory school-attendance laws after the eighth grade. It is 
extremely important that youths who are exempt from attending school be 
provided with access to jobs and apprenticeships in areas that offer 
employment where they live.
  The need for access to popular trades is demonstrated by the Amish 
community. In 1998, I toured an Amish sawmill in Lancaster County, PA, 
and had the opportunity to meet with some of my Amish constituency. In 
December 2000, Representative Pitts and I held a meeting in Gap, PA 
with over 20 members of the Amish community to hear their concerns on 
this issue. On May 3, 2001, I chaired a hearing of the Labor, Health 
and Human Services and Education Appropriations Subcommittee to examine 
these issues.
  At the hearing the Amish explained that while they once made their 
living almost entirely by farming, they have increasingly had to expand 
into other occupations as farmland has disappeared in many areas due to 
pressure from development. As a result, many of the Amish have come to 
rely more and more on work in sawmills to make their living. The Amish 
culture expects youth, upon the completion of their education at the 
age of 14, to begin to learn a trade that will enable them to become 
productive members of society. In many areas, work in sawmills is one 
of the major occupations available for the Amish, whose belief system 
limits the types of jobs they may hold. Unfortunately, these youths are 
currently prohibited by law from employment in this industry until they 
reach the age of 18. This prohibition threatens both the religion and 
lifestyle of the Amish.
  Under my legislation, youths would not be allowed to operate power 
machinery, but would be restricted to performing activities such as 
sweeping, stacking wood, and writing orders. My legislation requires 
that the youths must be protected from wood particles or flying debris 
and wear protective equipment, all while under strict adult 
supervision. The Department of Labor must monitor these safeguards to 
insure that they are enforced.
  The Department of Justice has raised serious concerns under the 
Establishment Clause with the House legislation. The House measure 
conferred benefits only to a youth who is a ``member of a religious 
sect or division thereof whose established teachings do not permit 
formal education beyond the eighth grade.'' By conferring the 
``benefit'' of working in a sawmill only to the adherents of certain 
religions, the Department argues that the bill appears to impermissibly 
favor religion to ``irreligion.'' In drafting my legislation, I 
attempted to overcome such an objection by conferring permission to 
work in sawmills to all youths who ``are exempted from compulsory 
education laws after the eighth grade.'' Indeed, I think a broader 
focus is necessary to create a sufficient range of vocational 
opportunities for all youth who are legally out of school and in need 
of vocational opportunities.
  I also believe that the logic of the Supreme Court's 1972 decision in 
Wisconsin v. Yoder supports my bill. In Yoder, the Court held that 
Wisconsin's compulsory school attendance law requiring children to 
attend school until the age of 16 violated the Free Exercise Clause. 
The Court found that the Wisconsin law imposed a substantial burden on 
the free exercise of religion by the Amish since attending school 
beyond the eighth grade ``contravenes the basic religious tenets and 
practices of the Amish faith.'' I believe a similar argument can be 
made with respect to Amish youth working in sawmills. As their 
population grows and their subsistence through an agricultural way of 
life decreases, trades such as sawmills become more and more crucial to 
the continuation of their lifestyle. Barring youths from the sawmills 
denies these youths the very vocational training and path to self-
reliance that was central to the Yoder Court's holding that the Amish 
do not need the final two years of public education.
  I offer my legislation with the hope that my colleagues will work 
with me to provide relief for the Amish community.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Santorum):
  S. 975. A bill to revise eligibility requirements applicable to 
essential air service subsidies; to the Committee on Commerce, Science, 
and Transportation.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation designed to improve the Department of 
Transportation's Essential Air Services program and reinstate 
Lancaster, PA's eligibility to receive subsidized air service.
  The Essential Air Services program provides operating subsidies to 
airlines, enabling them to serve smaller markets which would otherwise 
be unable to attract or retain commercial flights. To be eligible to 
receive such a subsidy, the community where the airport is located must 
be greater than 70 miles from the nearest large or medium hub airport. 
If the airport is located within 70 miles of a hub airport, the 
Secretary of Transportation may use his or her discretion to award a 
subsidy if the most commonly used highway route between both places is 
greater than 70 miles. It is up to the Department of Transportation to 
determine what route is used in making this mileage determination.

[[Page S5667]]

  Residents and businesses in many rural and smaller communities 
throughout the United States rely heavily upon air service to provide a 
necessary link to larger cities. Lancaster, PA is one such community 
which had been designated as an Essential Air Services city since the 
Airline Deregulation Act of 1978. Up until the events of September 11, 
when the Airport faced a sharp decline in passenger revenue, Lancaster 
had never required a subsidy under this program.
  When Lancaster ultimately found it necessary to seek a subsidy for 
its three daily flights to Pittsburgh, the Department of Transportation 
issued an Order to Show Cause on March 8, 2002, stating that Lancaster 
was not eligible for an Essential Air Services subsidy because it was 
located within 70 miles of Philadelphia International Airport. The 
Secretary of Transportation declined to use his discretion to award the 
subsidy because the Department identified a driving route of less than 
70 miles between Lancaster City and Philadelphia Airport. While there 
is no question that such a route exists, it is by no means the most 
commonly used highway route as required by law.
  The route selected by the Department of Transportation is one which 
the average person would never travel, via back roads and seldom used 
streets. In making its distance determination, the Department used a 66 
mile route along Route 30 which would take over three hours to drive. 
The more commonly used highway route to the Philadelphia International 
Airport would be along US 222 to the Pennsylvania Turnpike, and then on 
to I-76, which is over 70 miles.
  The legislation I am introducing today addresses this issue by 
designating an area's local metropolitan planning organization, rather 
than the Department of Transportation, as the organization responsible 
for determining the most commonly used highway route. If no such 
organization exists, the Governor of the State in which the airport is 
located, or the Governor's designee will make the determination. I 
believe that a local entity, not the Department of Transportation, is 
better suited to identify the route most travelers would drive. In such 
cases where that route exceeds 70 miles, the Department should be 
required to designate a community as eligible to receive subsidized air 
service.
  My legislation will not place too great a burden upon the Essential 
Air Services program by allowing additional airports to participate. I 
am advised that there are only eight other communities, including 
Lancaster, which could become newly eligible to receive subsidized air 
service as a result of the changes I am proposing. Further, I would 
note that of the $113 million the program received in Fiscal Year 2002, 
there was an excess of $10.9 million which remained unspent and which 
carried over into Fiscal Year 2003.
  Lancaster Airport's only commercial air carrier, Colgan Air, ceased 
operations on March 23, 2003, because it could not sustain service 
without a subsidy. The loss of commercial air service has already had a 
serious impact upon the Lancaster community. I am confident that my 
legislation will not only reinstate Lancaster's eligibility for 
subsidized air service and allow for the return of commercial air 
service, but it will also provide for a greater level of fairness for 
other communities which rely so heavily upon this important program.
                                 ______
                                 
      By Mr. WARNER (for himself and Mr. Allen):
  S. 976. A bill to provide for the issuance of a coin to commemorate 
the 400th anniversary of the Jamestown settlement; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. WARNER. Mr. President, I rise today to introduce legislation, 
along with my colleague, Senator Allen, to mint a commemorative coin 
celebrating the 400th anniversary of the founding of Jamestown, VA in 
2007.
  The lasting significance of Jamestown stretches far beyond its 
contributions to the Commonwealth of Virginia. Our Nation is indebted 
to the 104 original inhabitants of Jamestown who, after completing a 
harrowing journey across the Atlantic in May of 1607, established the 
first permanent English settlement in America.
  The legacies of Jamestown extend from the founding of our 
representative democracy in which we serve today, to the free market 
enterprise system on which our economy has flourished. Our unshakeable 
traditions of common law, agricultural production, manufacturing, and 
our free market economy received their humble beginnings from the 
entrepreneurial spirit of the Jamestown colonists.
  The colonists established and implemented the principles of a 
representative government to build our American democracy that has 
withstood the test of time and internal conflict. The Jamestown 
settlers elected America's first democratic assembly, the Virginia 
House of Burgesses. The structure and procedures of this first 
legislative body still resonates in the chamber we serve in today. Our 
political philosophies and traditions took hold in the untamed 
landscape of Jamestown Island and remain the cornerstone of our 
republic today.
  Jamestown also marked the beginning of the American cultural 
identity, hosting a combination of diverse cultural traditions. The 
settlement united English, Native American, and African cultures 
compelling each one to learn valuable lessons from the others. The 
colonists at Jamestown were the first immigrants to travel to America, 
making us a nation of immigrants of which we are so proud today.
  The colony at Jamestown showcased the triumph of American ingenuity 
and hard work. Colonists at Jamestown were forced to battle starvation, 
disease, and the weather of their new home. Life in Jamestown was a 
struggle, and the determination shown by the colonists set the 
foundation for the revolutionary ideas that guided Americans through 
the colonial era.
  Now 395 years later, the history of our Nation continues to come 
alive in Jamestown. Since 1994, archaeologists have found the remains 
of the original Jamestown fort constructed in 1607 and over 350,000 
artifacts from the colonial period. These fascinating discoveries have 
given scholars, visitors, and most importantly, America's young people, 
a realistic view of 17th century American life. The continuing 
restoration and discovery of the original Jamestown colony provides all 
Americans with a window on their roots, and to the foundation on which 
this great Nation was built.
  The proceeds from this commemorative coin will help both the National 
Park Service and the Association for the Preservation of Virginia 
Antiquities continue their research at the Jamestown site, complete 
necessary construction projects at the Jamestown National Park, and 
provide funds for events surrounding the 400th anniversary celebration. 
In addition, this legislation would help ensure that the Jamestown 
Rediscovery project will have adequate funds to continue educating the 
American public on our colonial history. In the 106th Congress, the 
House and Senate created the Jamestown 400th Commemoration Commission 
to ensure that the anniversary in 2007 is a truly national event. This 
legislation that I introduce today continues along this same line.
  Recent events have brought about a renewed reverence and interest in 
our nation's history among the American people. This legislation would 
help bring national attention to this important anniversary and would 
serve as a fitting tribute to America's first permanent settlers. This 
event celebrates America's colonial history and gives every American a 
chance to help support America's Hometown, Jamestown, VA.
  I ask my colleagues in the Senate to join me in supporting our 
Nation's and Virginia's colonial traditions with this important 
legislation. 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. 976

       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 ``Jamestown 400th Anniversary 
     Commemorative Coin Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the founding of the colony at Jamestown, Virginia in 
     1607, the first permanent English colony in America, and the 
     capital of Virginia for 92 years, has major significance in 
     the history of the United States;

[[Page S5668]]

       (2) the Jamestown settlement brought people from throughout 
     the Atlantic Basin together to form a multicultural society, 
     including English, other Europeans, Native Americans, and 
     Africans;
       (3) the economic, political, religious, and social 
     institutions that developed during the first 9 decades of the 
     existence of Jamestown continue to have profound effects on 
     the United States, particularly in English common law and 
     language, cross cultural relationships, manufacturing, and 
     economic structure and status;
       (4) the National Park Service, the Association for the 
     Preservation of Virginia Antiquities, and the Jamestown-
     Yorktown Foundation of the Commonwealth of Virginia 
     collectively own and operate significant resources related to 
     the early history of Jamestown;
       (5) in 2000, Congress established the Jamestown 400th 
     Commemoration Commission to ensure a suitable national 
     observance of the Jamestown 2007 anniversary and to support 
     and facilitate marketing efforts for a commemorative coin, 
     stamp, and related activities for the Jamestown 2007 
     observances;
       (6) a commemorative coin will bring national and 
     international attention to the lasting legacy of Jamestown, 
     Virginia; and
       (7) the proceeds from a surcharge on the sale of such 
     commemorative coin will assist the financing of a suitable 
     national observance in 2007 of the 400th anniversary of the 
     founding of Jamestown, Virginia.

     SEC. 3. COIN SPECIFICATIONS.

       (a) $5 Gold Coins.--The Secretary of the Treasury (in this 
     Act referred to as the ``Secretary'') shall issue not more 
     than 100,000 $5 coins, which shall--
       (1) weigh 8.359 grams;
       (2) have a diameter of 0.850 inches; and
       (3) contain 90 percent gold and 10 percent alloy.
       (b) $1 Silver Coins--The Secretary shall issue not more 
     than 500,000 $1 coins, which shall--
       (1) weigh 26.73 grams;
       (2) have a diameter of 1,500 inches; and
       (3) contain 90 percent silver and 10 percent copper.
       (c) Legal Tender.--The coins minted under this Act shall be 
     legal tender, as provided in section 5103 of title 31, United 
     States Code.
       (d) Numismatic Items.--For purposes of section 5132(a)(1) 
     of title 31, United States Code, all coins minted under this 
     Act shall be considered to be numismatic items.
       (e) Sources of Bullion.--
       (1) Gold.--The Secretary shall obtain gold for minting 
     coins under this Act pursuant to the authority of the 
     Secretary under section 5116 of title 31, United States Code.
       (2) Silver.--The Secretary shall obtain silver for the 
     coins minted under this Act only from stockpiles established 
     under the Strategic and Critical Minerals Stock Piling Act 
     (50 U.S.C. 98 et seq.).

     SEC. 4. DESIGN OF COINS.

       (a) Design Requirements.--
       (1) In general.--The design of the coins minted under this 
     Act shall be emblematic of the settlement of Jamestown, 
     Virginia, the first permanent English settlement in America.
       (2) Designation and inscriptions.--On each coin minted 
     under this Act, there shall be--
       (A) a designation of the value of the coin;
       (B) an inscription of the year ``2007''; and
       (C) inscriptions of the words ``Liberty'', ``In God We 
     Trust'', ``United States of America'', and ``E Pluribus 
     Unum''.
       (b) Design Selection.--Subject to subsection (a), the 
     design for the coins minted under this Act shall be--
       (1) selected by the Secretary after consultation with--
       (A) the Jamestown 2007 Steering Committee, created by the 
     Jamestown-Yorktown Foundation of the Commonwealth of 
     Virginia;
       (B) the National Park Service; and
       (C) the Commission of Fine Arts; and
       (2) reviewed by the Citizens Commemorative Coin Advisory 
     Committee.

     SEC. 5. ISSUANCE OF COINS.

       (a) Quality of Coins.--Coins minted under this Act shall be 
     issued in uncirculated and proof qualities.
       (b) Mint Facility.--Only 1 facility of the United States 
     Mint may be used to strike any particular quality of the 
     coins minted under this Act.
       (c) Period for Issuance.--The Secretary may issue coins 
     minted under this Act only during the period beginning on 
     January 1, 2007, and ending on December 31, 2007.

     SEC. 6. SALE OF COINS.

       (a) Sale Price.--The coins minted under this Act shall be 
     sold by the Secretary at a price equal to the sum of--
       (1) the face value of the coins;
       (2) the surcharge provided in subsection (c) with respect 
     to such coins; and
       (3) the cost of designing and issuing the coins (including 
     labor, materials, dies, use of machinery, overhead expenses, 
     marketing, and shipping).
       (b) Prepaid Orders.--
       (1) In general.--The Secretary shall accept prepaid orders 
     for the coins minted under this Act before the issuance of 
     such coins.
       (2) Discount.--Sale prices with respect to prepaid orders 
     under paragraph (1) shall be at a reasonable discount.
       (c) Bulk Sales.--The Secretary shall make bulk sales of the 
     coins minted under this Act at a reasonable discount.
       (d) Surcharge.--All sales of coins minted under this Act 
     shall include a surcharge of--
       (1) $35 per coin for the $5 coin; and
       (2) $10 per coin for the $1 coin.

     SEC. 7. GENERAL WAIVER OF PROCUREMENT REGULATIONS.

       (a) In General.--Except as provided in subsection (b), no 
     provision of law governing procurement or public contracts 
     shall be applicable to the procurement of goods and services 
     necessary for carrying out the provisions of this Act.
       (b) Equal Employment Opportunity.--Subsection (a) shall not 
     relieve any person entering into a contract under the 
     authority of this Act from complying with any law relating to 
     equal employment opportunity.

     SEC. 8. DISTRIBUTION OF SURCHARGES.

       (a) Recipients.--
       (1) In general.--All surcharges received by the Secretary 
     from the sale of coins minted under this Act shall be 
     promptly paid by the Secretary to the recipients listed under 
     paragraphs (2) and (3).
       (2) Jamestown-yorktown foundation.--The Secretary shall 
     distribute 50 percent of the surcharges described under 
     paragraph (1) to the Jamestown-Yorktown Foundation of the 
     Commonwealth of Virginia, to support programs to promote the 
     understanding of the legacies of Jamestown.
       (3) Other recipients.--
       (A) In general.--The Secretary shall distribute 50 percent 
     of the surcharges described under paragraph (1) to the 
     entities specified under subparagraph (B), in equal shares, 
     for the purposes of--
       (i) sustaining the ongoing mission of preserving Jamestown;
       (ii) enhancing the national and international educational 
     programs;
       (iii) improving infrastructure and archaeological research 
     activities; and
       (iv) conducting other programs to support the commemoration 
     of the 400th anniversary of Jamestown.
       (B) Entities specified.--Entities specified under this 
     subparagraph are--
       (i) the Secretary of the Department of the Interior;
       (ii) the President of the Association for the Preservation 
     of Virginia Antiquities; and
       (iii) the Chairman of the Jamestown Yorktown Foundation.
       (b) Audits.--The Comptroller General of the United States 
     shall have the right to examine such books, records, 
     documents, and other data of the entities specified in 
     subsection (a), as may be related to the expenditure of 
     amounts distributed under subsection (a).

     SEC. 9. FINANCIAL ASSURANCES.

       (a) No Net Cost to the Government.--The Secretary shall 
     take such actions as may be necessary to ensure that minting 
     and issuing coins under this Act will not result in any net 
     cost to the United States Government.
       (b) Payment for Coins.--A coin shall not be issued under 
     this Act unless the Secretary has received--
       (1) full payment for the coin;
       (2) security satisfactory to the Secretary to indemnify the 
     United States for full payment; or
       (3) a guarantee of full payment satisfactory to the 
     Secretary from a depository institution, the deposits of 
     which are insured by the Federal Deposit Insurance 
     Corporation or the National Credit Union Administration.
                                 ______
                                 
      By Mr. FITZGERALD (for himself, Mr. Kennedy, and Ms. Snowe):
  S. 977. A bill to amend the Public Health Service Act, the Employee 
Retirement Income Security Act of 1974, and the Internal Revenue Code 
of 1986 to require that group and individual health insurance coverage 
and group health plans provide coverage from treatment of a minor 
child's congenital or developmental deformity or disorder due to 
trauma, infection, tumor, or disease; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. FITZGERALD. Mr. President, I rise today to introduce the 
Children's Deformities Act of 2003, which will require insurance 
companies to cover corrective surgeries for children with congenital or 
developmental deformities.
  According to the March of Dimes, 3.8 percent of babies born 
annually--about 150,000 babies per year suffer from birth defects. 
Approximately 50,000 of these babies require reconstructive surgery. 
Examples of these deformities include cleft lip, cleft palate, skin 
lesions, vascular anomalies, malformations of the ear, hand, or foot, 
and other more profound craniofacial deformities.
  Plastic surgeons are able to correct many of these problems, and 
doing so is critical to both the physical and mental health and 
development of the child. On average, children with congenital 
deformities or developmental anomalies will need three to five surgical 
procedures before normalcy is achieved. An increasing number of 
insurance companies are denying access

[[Page S5669]]

to care by labeling the surgical procedures cosmetic or nonfunctional 
in nature. In some cases, carriers may provide coverage for initial 
procedures, but resist covering later, necessary procedures, claiming 
that they are cosmetic and not medically necessary.
  Although insurance companies ultimately have decided to cover some of 
these procedures, families have had to battle through the appeals 
process of insurance companies for extended periods of time, thereby 
forcing children to wait unnecessarily for needed surgeries. The 
treatment plan for children with congenital defects usually requires 
staged surgical care in accordance with the child's growth pattern. 
Onerous and time-consuming appeals procedures can jeopardize the 
physical and psychological health of children with deformities.
  The American Medical Association defines cosmetic surgery as being 
performed to reshape normal structures of the body in order to improve 
the patient's appearance and self-esteem. In contrast, reconstructive 
surgery is defined as being performed on abnormal structures of the 
body, caused by congenital defects, developmental abnormalities, 
trauma, infection, tumors, or disease. According to the American 
Society of Plastic Surgeons, reconstructive surgery is performed in 
order to improve function and approximate a normal appearance.
  The Treatment of Children's Deformities Act of 2003 will prohibit 
insurers from denying coverage for reconstructive surgery for children. 
This bill identifies the difference between cosmetic and reconstructive 
surgery and incorporates the American Medical Association's definition 
of reconstructive surgery. The measure requires group and individual 
health insurers and group health plans to provide coverage for 
treatment of a minor child's congenital or developmental deformity, 
disease, or injury. The legislation defines ``treatment'' to include 
reconstructive surgical procedures. These are procedures that are 
performed on abnormal structures of the body caused by congenital 
defects, developmental abnormalities, trauma, infection, tumors, or 
disease.
  The Treatment of Children's Deformities Act of 2003 has been endorsed 
by the American Society of Plastic Surgeons, the American Medical 
Association, the American Academy of Pediatrics, and several other 
medical organizations. Fifteen States have already enacted legislation 
that to different degrees require insurance companies to cover 
treatment of craniofacial and congenital anomalies. While governor of 
Texas, George W. Bush signed into law legislation that is similar to 
the legislation I introduce today.
  I would like to thank Senator Kennedy and Senator Snowe for 
cosponsoring this important legislation. I urge all of my colleagues to 
join me in supporting this bill so that children who suffer from 
congenital deformities or developmental anomalies do not have to wait 
unnecessarily for needed treatment.
  I ask unanimous consent that the bill be printed in the Record 
following the conclusion of my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 977

       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 ``Treatment of Children's 
     Deformities Act of 2003''.

     SEC. 2. COVERAGE OF MINOR CHILD'S CONGENITAL OR DEVELOPMENTAL 
                   DEFORMITY OR DISORDER.

       (a) Group Health Plans.--
       (1) Public health service act amendments.--
       (A) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 2707. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.
       ``(b) Notice.--A group health plan under this part shall 
     comply with the notice requirement under section 714(b) of 
     the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this section as if such 
     section applied to such plan.''.
       (B) Conforming amendment.--Section 2723(c) of the Public 
     Health Service Act (42 U.S.C. 300gg-23(c)) is amended by 
     striking ``section 2704'' and inserting ``sections 2704 and 
     2707''.
       (2) ERISA amendments.--
       (A) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.
       ``(b) Notice Under Group Health Plan.--The imposition of 
     the requirements of this section shall be treated as a 
     material modification in the terms of the plan described in 
     section 102(a)(1), for purposes of assuring notice of such 
     requirements under the plan; except that the summary 
     description required to be provided under the last sentence 
     of section 104(b)(1) with respect to such modification shall 
     be provided by not later than 60 days after the first day of 
     the first plan year in which such requirements apply.''.
       (B) Conforming amendments.--
       (i) Section 731(c) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191(c)) is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (ii) Section 732(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (iii) The table of contents in section 1 of the Employee 
     Retirement Income Security Act of 1974 is amended by 
     inserting after the item relating to section 713 the 
     following:

``Sec. 714. Standards relating to benefits for minor child's congenital 
              or developmental deformity or disorder.''.

       (3) Internal revenue code amendments.--Subchapter B of 
     chapter 100 of the Internal Revenue Code of 1986 is amended--
       (A) in the table of sections, by inserting after the item 
     relating to section 9812 the following:

``Sec. 9813. Standards relating to benefits for minor child's 
              congenital or developmental deformity or disorder.''; and

       (B) by inserting after section 9812 the following:

[[Page S5670]]

     ``SEC. 9813. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.''.
       (b) Individual Health Insurance.--
       (1) In general.--Part B of title XXVII of the Public Health 
     Service Act is amended by inserting after section 2752 the 
     following:

     ``SEC. 2753. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 714(b) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements referred to in subsection (a) as 
     if such section applied to such issuer and such issuer were a 
     group health plan.''.
       (2) Conforming amendment.--Section 2762(b)(2) of the Public 
     Health Service Act (42 U.S.C. 300gg-62(b)(2)) is amended by 
     striking ``section 2751'' and inserting ``sections 2751 and 
     2753''.
       (c) Effective Dates.--
       (1) Group health coverage.--The amendments made by 
     subsection (a) shall apply with respect to group health plans 
     for plan years beginning on or after January 1, 2004.
       (2) Individual health coverage.--The amendment made by 
     subsection (b) shall apply with respect to health insurance 
     coverage offered, sold, issued, renewed, in effect, or 
     operated in the individual market on or after such date.
       (d) Coordinated Regulations.--Section 104(1) of Health 
     Insurance Portability and Accountability Act of 1996 (42 
     U.S.C. 300gg-92 note) is amended by striking ``this subtitle 
     (and the amendments made by this subtitle and section 401)'' 
     and inserting ``the provisions of part 7 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974, the provisions of parts A and C of title XXVII of the 
     Public Health Service Act, and chapter 100 of the Internal 
     Revenue Code of 1986''.

  Mr. KENNEDY. Mr. President, it is a privilege to join Senator 
Fitizgerald and Senator Snowe in introducing the Treatment of 
Children's Deformities Act. The purpose of our bill is to see that 
health insurers and health plans cover the treatment of children's 
congenital and developmental deformities and disorders.
  About 7 percent of all children are born with significant problems, 
including cleft lips or cleft palates, serious skin lesions such as 
port wine stains, malformations of the ear, or facial deformities. 
Plastic surgery can correct many of these conditions, but too often 
parents face significant barriers in obtaining care for their children. 
More than half of all plastic surgeons report that these patients are 
denied insurance coverage or had the struggle to receive it. Too often, 
insurers deny coverage by calling the treatment cosmetic or not 
medically necessary.
  The medical, developmental, and psychological problems associated 
with denied or delayed treatment of these deformities are enormous. 
Treatment often requires a series of treatments as the child grow. No 
child should be forced to live with an untreated cleft lip or a facial 
deformity while parents appeal an insurer's unfair denial. Delayed or 
denied treatment puts a child's physical and mental health at risk.
  Our bill requires health insurers and health plans to provide 
coverage to treat a child's congenial or developmental deformity, or 
disorders caused by disease, trauma, infection, or tumor. It is 
supported by many medical organizations, including the American Academy 
of Pediatrics, the American Medical Association, and the American 
Society of Plastic Surgeons. I urge the Senate to support this 
important bill, and give children and families the support they 
deserve.
                                 ______
                                 
      By Mr. ENSIGN (for himself, Mrs. Boxer, Ms. Cantwell, Mr. Crapo, 
        Mr. Craig, Mr. Allen, Mrs. Murray, Mrs. Feinstein, Mr. Reid, 
        Mr. Allard, Mr. Burns, Mr. Warner, Mr. Bennett, Mr. Smith, Ms. 
        Stabenow, and Mr. Coleman):
  S. 979. A bill to direct the Securities and Exchange Commission to 
require enhanced disclosures of employee stock options, to require a 
study on the economic impact of broad-based employee stock options 
plans, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.
  Mr. ENSIGN. Mr. President, I rise today, along with my good friend, 
the junior Senator from California, to introduce legislation on an 
issue that could have a significant impact on the economy.
  The financial scandals which occurred last year at Enron, WorldCom, 
and other corporations rocked our financial markets and greatly 
diminished investor confidence in this country. In response to abuses 
by a few high-profile corporate executives, Congress passed the 
Sarbanes-Oxley Corporate Responsibility Act, which closed loopholes 
that led to those scandals and sought to restore investor confidence in 
our markets.
  However, in the wake of those scandals, I believe that stock options 
have been incorrectly equated with abuse.
  Stock option plans reflect America's best business values--the 
willingness to take risks, the vision to develop new entrepreneurial 
companies and technologies, and a way to broaden ownership and 
participation among all employees.
  Last week, the Financial Accounting Standards Board made a tentative 
decision to mandate the expensing of stock options. This would 
effectively kill broad-based stock option plans which are used by many 
high-growth, entrepreneurial companies. Such board-based plans 
distribute options to rank-and-file employees, not just to senior 
executives. This is a very different approach than that used by 
companies associated with the scandals of last year.
  This issue was brought to my attention by a couple hundred chief 
executive officers and leaders in the high-tech world. This is their 
No. 1 issue because, when they are properly structured, stock options 
are valuable incentives for productivity and growth. They also help 
startup companies recruit and retain workers--an essential tool in a 
struggling economy.
  I think it is absolutely ludicrous that we would risk destroying 
growth when there isn't even a workable model available to accurately 
expense stock options. Not only is the plan wrong, it is not doable.
  The legislation that we are introducing today would provide 
shareholders with accurate information

[[Page S5671]]

about a company's use of stock options, while also preserving this 
critical tool for all company employees. It would enhance the 
availability of financial reporting by requiring the SEC to take very 
specific steps to give shareholders and investors the important 
financial information they need.
  Additionally, this bill places a 3-year moratorium on the mandatory 
expensing of stock options. This will allow the Department of Commerce 
to take a very detailed look at the negative impact that mandating 
expensing of stock options could have on our economy.
  It is important that we do not react to the corporate scandals of 
last year by stifling this vital tool for economic growth. It would be 
bad for the economy, bad for workers in this country, and bad for 
potential investors.
  Mr. President, before I yield the floor, I would like to thank the 
Senator from California, Mrs. Boxer, for her hard work on this issue. I 
would also like to recognize and thank my colleagues who have signed on 
in support of this bill, Senators George Allen, Mike Crapo, Larry 
Craig, Maria Cantwell, Patty Murray, Dianne Feinstein, Harry Reid, 
Wayne Allard, Conrad Burns, Gordon Smith, Robert Bennett and John 
Warner.
  I yield the floor.
  I ask unanimous consent that the text of the bill be printed in the 
Record in the appropriate place.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 979

       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 ``Broad-Based Stock Option 
     Plan Transparency Act of 2003''.

     SEC. 2. CONGRESSIONAL FINDINGS.

        Congress finds that--
       (1) innovation and entrepreneurship, particularly in the 
     high technology industry, helped propel the economic growth 
     of the 1990s, and will continue to be the essential building 
     blocks of economic growth in the 21st century;
       (2) broad-based employee stock option plans enable 
     entrepreneurs and corporations to attract quality workers, to 
     incentivize worker innovation, and to stimulate productivity, 
     which in turn increase shareholder value;
       (3) broad-based employee stock options plans that expand 
     corporate ownership to rank-and-file employees spur capital 
     formation, benefit workers, and improve corporate performance 
     to the benefit of investors and the economy;
       (4) concerns raised about the impact of employee stock 
     option plans on shareholder value raise legitimate issues 
     relevant to the current level of disclosure and transparency 
     of those plans to current and potential investors; and
       (5) investors deserve to have accurate, reliable, and 
     meaningful information about the existence of outstanding 
     employee stock options and their impact on the share value of 
     a going concern.

     SEC. 3. IMPROVED EMPLOYEE STOCK OPTION TRANSPARENCY AND 
                   REPORTING DISCLOSURES.

       (a) Enhanced Disclosures Required.--Not later than 180 days 
     after the date of enactment of this Act, the Securities and 
     Exchange Commission (in this Act referred to as the 
     ``Commission'') shall, by rule, require, for each company 
     required to file periodic reports under section 13(a) or 
     15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 
     78o(d)), that such reports include detailed information 
     regarding stock option plans, stock purchase plans, and other 
     arrangements involving an employee acquisition of an equity 
     interest in the company, particularly with respect to the 
     dilutive effect of such plans, including--
       (1) a discussion, written in ``plain English'' (in 
     accordance with the Plain English Handbook published by the 
     Office of Investor Education and Assistance of the 
     Commission), of the dilutive effect of stock option plans, 
     including tables or graphic illustrations of such dilutive 
     effects;
       (2) expanded disclosure of the dilutive effect of employee 
     stock options on the earnings per share number of the 
     company;
       (3) prominent placement and increased comparability of all 
     stock option related information; and
       (4) a summary of the stock options granted to the 5 most 
     highly compensated executive officers of the company, 
     including any outstanding stock options of those officers.
       (b) Equity Interest.--As used in this section, the term 
     ``equity interest'' includes common stock, preferred stock, 
     stock appreciation rights, phantom stock, and any other 
     security that replicates the investment characteristics of 
     such securities, and any right or option to acquire any such 
     security.

     SEC. 4. EVALUATION OF EMPLOYEE STOCK OPTION PLANS 
                   TRANSPARENCY AND REPORTING DISCLOSURES AND 
                   REPORT TO CONGRESS.

       (a) Study and Report.--
       (1) Study.--During the 3-year period following the date of 
     issuance of a final rule under section 3(a), the Commission 
     shall conduct a study of the effectiveness of the enhanced 
     disclosures required by section 3 in increasing transparency 
     to current and potential investors.
       (2) Report.--Not later than 180 days after the end of the 
     3-year period referred to in paragraph (1), the Commission 
     shall transmit a report of the results of the study conducted 
     under paragraph (1) to the Committee on Financial Services of 
     the House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate.
       (b) Moratorium on New Accounting Standards Related to Stock 
     Options.--During the period beginning on the date of 
     enactment of this Act and ending 60 days after the date of 
     transmission of the report required under subsection (a)(2), 
     the Commission shall not recognize as generally accepted 
     accounting principles for purposes of enforcing the 
     securities laws any accounting standards related to the 
     treatment of stock options that the Commission did not 
     recognize for that purpose before April 1, 2003.

     SEC. 5. STUDY ON THE ECONOMIC IMPACT OF BROAD-BASED EMPLOYEE 
                   STOCK OPTION PLANS AND REPORT TO CONGRESS.

       (a) Study.--
       (1) In general.--The Secretary of Commerce shall conduct a 
     study and analysis of broad-based employee stock option 
     plans, particularly in the high technology and any other high 
     growth industries.
       (2) Content.--The study and analysis required by paragraph 
     (1) shall include an examination of--
       (A) the impact of such plans on expanding employee 
     corporate ownership to workers at a wide-range of income 
     levels, with a particular focus on rank-and-file employees;
       (B) the role of such plans in the recruitment and retention 
     of skilled workers; and
       (C) the role of such plans in stimulating research and 
     innovation;
       (D) the impact of such plans on the economic growth of the 
     United States; and
       (E) the role of such plans in strengthening the 
     international competitiveness of companies organized under 
     the laws of the United States.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Commerce shall submit 
     a report on the study and analysis required by subsection (a) 
     to--
       (1) the Committee on Energy and Commerce and the Committee 
     on Financial Services of the House of Representatives; and
       (2) the Committee on Commerce, Science, and Transportation 
     and the Committee on Banking, Housing, and Urban Affairs of 
     the Senate.
  Mrs. FEINSTEIN. Mr. President, I rise in support of legislation 
introduced by Senators Boxer and Ensign to improve disclosure of stock 
option grants in company financial statements while, at the same time, 
delaying the adoption of new accounting standards that could 
fundamentally distort reported earnings.
  I believe that at this time of continued economic weakness it is 
critical that we take action to both increase transparency and improve 
corporate governance, without which we cannot hope to restore investor 
confidence.
  The Broad-Based Stock Option Plan Transparency Act would increase the 
transparency of stock option grants at all levels of public companies, 
particularly executive compensation, and would provide investors with 
additional tools to make investment decisions.
  Increased disclosure provisions in the bill include: expanded 
disclosure of the dilutive effect of employee stock options on reported 
earnings per share; a ``plain English'' discussion of share value 
dilution, which would allow individual investors to understand the 
impact of options grants on their investment; more prominent placement 
and increased comparability of stock option-related footnotes; and a 
summary of stock options granted to the 5 most highly compensated 
executives of the company.
  These provisions help us fulfill the goal of greater transparency in 
our markets and improved corporate governance. With passage of the 
Sarbanes-Oxley accounting reform legislation last summer, we took a 
major step in that direction, and I believe this bill adds to those 
achievements.
  If individual investors do not feel comfortable with the information 
reported by public companies or the advice given by banks and other 
major players in our financial markets, they will not feel comfortable 
making new investments and our markets are unlikely to recover.
  In addition to requiring new disclosure of the impact of employee 
stock options on a company's earnings per share, this bill also 
requires the SEC to

[[Page S5672]]

monitor the effectiveness of increased disclosure requirements for 3 
years.
  The bill also specifies that the SEC must examine the impact of 
broad-based stock option plans on worker productivity and the 
performance of the firms which use such plans.
  As anyone who has spent time in Silicon Valley can attest, the 
phenomenal achievements of high tech companies in California and across 
the country would not have been possible without employee stock 
options.
  Stock options give employees a stake in the success of their company 
and create a degree of employee loyalty, productivity, and achievement 
that simply would not be possible if cash were the only form of 
compensation available. Moreover, it has allowed start-ups that are 
cash-poor to hire and retain talent that might otherwise have been 
available only to established firms.
  A mandatory expensing standard will sharply limit the use of stock 
options, particularly for rank and file workers, and will slow our 
economic recovery.
  Without a strong high tech sector developing new technologies and 
bringing new products to market, we cannot hope to return to the robust 
economic growth of the last decade.
  Moreover, mandatory expensing could actually decrease transparency 
for the average investor. The Financial Accounting Standards Board 
(FASB) has indicated it will implement such a rule within the next 
year, but has not come up with an adequate means of valuing those 
options for expensing purposes.
  The binomial pricing model currently used to value short-term 
derivatives, also known as Black/Scholes, does not work with the types 
of long-term, restricted options packages granted to employees. Without 
an accurate valuation methodology, we risk giving investors a much less 
accurate picture of a company's financial health than they would have 
otherwise.
  I have spoken with the chief executive officers of a number of 
companies in my state, including John Chambers, CEO of Cisco Systems, 
Craig Barrett, CEO of Intel, and Richard Kovacevich, CEO of Wells 
Fargo. Each one of those corporate leaders has told me that a mandatory 
expensing standard would lead them to sharply limit the number of 
options he grants to his employees.
  They also told me that it would lead them cut back on hiring and 
possibly send more jobs abroad. I found those comments disturbing, and 
they should give us pause and compel us to act prudently. That is why 
we should support further study of the accounting treatment of stock 
options, during which period no new accounting rules pertaining tot 
stock options could be adopted.
  I would like to describe briefly the impact of employee stock options 
on the value of an investor's holdings in the company that granted the 
option.
  In order for employee stock options not to be counted as an expense, 
they must be set at or above the average closing price of the company's 
stock during a fixed period. They are also generally restricted, and 
usually cannot be exercised for several years after their grant date.
  Should the value of the underlying shares fall during the life of the 
option, the options are underwater and are effectively worthless. 
Should the share price increase, however, the exercise of those options 
creates no cash charge to the company whatsoever. Instead, it increases 
the total number of shares outstanding.
  To take one concrete example, Cisco Systems recently reported 
approximately 7.3 billion shares outstanding in their latest annual 
report. They also reported approximately 600 million options to 
purchase shares that were ``in the money,'' or had an exercise price 
below the current share price.
  If all those options were exercised, and no shares were repurchased, 
each share would be entitled to approximately 8 percent less in 
dividends than before. In fact, the actual dilution would likely be 
somewhat less.
  If options are expensed, however, the impact on Cisco's bottom line 
would be dramatic, despite the fact that their only tangible impact is 
on the number of shares outstanding. Had Cisco expensed their stock 
options for the 2001 fiscal year, their reported profits would have 
been 171 percent lower. A roughly $1 billion profit would instead have 
been a nearly $1 billion loss.
  Yet the actual value of those options now is almost nil. They were 
all granted at exercise prices well above the current share price, and 
may never be exercised.
  Options are not a cash expense and represent no tangible exchange of 
assets. They are a form of incentive pay that may ultimately be 
worthless. In short, they are nothing like a cash salary.
  The legislation introduced by Senators Boxer and Ensign recognizes 
the need for further study, but does not place an indefinite moratorium 
on FASB action. It is a balanced bill that will help the average 
investor and ultimately strengthen our financial markets.
  I urge my colleagues to support the Broad-Based Stock Option 
Transparency Act.
                                 ______
                                 
      By Mr. GRAHAM of South Carolina (for himself and Mr. Miller):
  S. 980. A bill to conduct a study on the effectiveness of ballistic 
imaging technology and evaluate its effectiveness as a law enforcement 
tool; to the Committee on the Judiciary.
  Mr. GRAHAM of South Carolina. Mr. President, 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. 980

       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 ``Ballistic Imaging Evaluation 
     and Study Act of 2003''.

     SEC. 2. PURPOSES.

       The purposes of this Act are the following:
       (1) To conduct a comprehensive study of ballistic imaging 
     technology and evaluate design parameters for packing and 
     shipping of fired cartridge cases and projectiles.
       (2) To determine the effectiveness of the National 
     Integrated Ballistic Information Network (NIBIN) as a tool in 
     investigating crimes committed with handguns and rifles.
       (3) To establish the cost and overall effectiveness of 
     State-mandated ballistic imaging systems and the sharing and 
     retention of the data collected by the systems.

     SEC. 3. STUDY.

       (a) In General.--Not later than six (6) months after the 
     date of the enactment of this Act, the Attorney General shall 
     enter into an arrangement with the National Research Council 
     of the National Academy of Sciences, which shall have sole 
     responsibility for conducting under the arrangement a study 
     to determine the following:
       (1) The design parameters for an effective and uniform 
     system for packing fired cartridge cases and projectiles, and 
     for collecting information that will accompany a fired 
     cartridge case and projectile and be entered into a ballistic 
     imaging system.
       (2) The most effective method for projectile recovery that 
     can be used to collect fired projectiles for entry into a 
     ballistic imaging system and the cost of such recovery 
     equipment.
       (3) Which countries are employing ballistic imaging systems 
     and the results of the systems as a tool in investigating 
     crimes committed with handguns and rifles.
       (4) The comprehensive cost, to date, for Federal, State, 
     and local jurisdictions that have implemented a ballistic 
     imaging system to include startup, operating costs, and 
     outlays for personnel and administration.
       (5) The estimated yearly cost for administering a ballistic 
     imaging system, the storage of cartridge cases and 
     projectiles on a nationwide basis, and the costs to industry 
     and consumers of doing so.
       (6) How many revolvers, manually operated handguns, 
     semiautomatic handguns, manually operated rifles, and 
     semiautomatic rifles are sold in the United States each year, 
     the percentage of crimes committed with revolvers, other 
     manually operated handguns, and manually operated rifles as 
     compared with semiautomatic handguns and semiautomatic 
     rifles, and the percentage of each currently on record in the 
     NIBIN system.
       (7) Whether in countries where ballistic identification has 
     been implemented, a shift has occurred in the number of 
     semiautomatic handguns and semiautomatic rifles, compared 
     with revolvers, other manually operated handguns, and 
     manually operated rifles that are used to commit a crime.
       (8) A comprehensive list of environmental and 
     nonenvironmental factors, including modifications to a 
     firearm, that can substantially alter or change the 
     identifying marks on a cartridge case and projectile so as to 
     preclude a scientifically reliable comparison between 
     specimens and the stored image from the same firearm being 
     admissible as evidence in a court of law.
       (9) The technical improvements in database management that 
     will be necessary to keep pace with system growth and the 
     estimated cost of the improvements.
       (10) What redundant or duplicate systems exist, or have 
     existed, the ability of the various systems to share 
     information, and the

[[Page S5673]]

     cost and time it will take to integrate operating systems.
       (11) Legal issues that need to be addressed at the Federal 
     and State levels to codify the type of information that would 
     be captured and stored as part of a national ballistic 
     identification program and the sharing of the information 
     between State systems and NIBIN.
       (12) What storage and retrieval procedures guarantee the 
     integrity of cartridge cases and projectiles for indefinite 
     periods of time and insure proper chain of custody and 
     admissibility of ballistic evidence or images in a court of 
     law.
       (13) The time, cost, and resources necessary to enter 
     images of fired cartridge cases and fired projectiles into a 
     ballistic imaging identification system of all new handguns 
     and rifles sold in the United States and those possessed 
     lawfully by firearms owners.
       (14) Whether an effective procedure is available to collect 
     fired cartridge cases and projectiles from privately owned 
     handguns and rifles.
       (15) Whether the cost of ballistic imaging technology is 
     worth the investigative benefit to law enforcement officers.
       (16) Whether State-based ballistic imaging systems, or a 
     combination of State and Federal ballistic imaging systems 
     that record and store cartridge cases and projectiles can be 
     used to create a centralized list of firearms owners.
       (17) The cost-effectiveness of using a Federal, NIBIN-based 
     approach to using ballistic imaging technology as opposed to 
     State-based initiatives.

     SEC. 4. CONSULTATION.

       In carrying out this Act, the National Research Council of 
     the National Academy of Sciences shall consult with--
       (1) Federal, State, and local officials with expertise in 
     budgeting, administering, and using a ballistic imaging 
     system, including the Bureau of Alcohol, Tobacco and 
     Firearms, and the Federal Bureau of Investigation, and the 
     Bureau of Forensic Services at the California Department of 
     Justice, and the National Institute for Forensic Sciences in 
     Brussels, Belgium;
       (2) law enforcement officials who use ballistic imaging 
     systems;
       (3) entities affected by the actual and proposed uses of 
     ballistic imaging technology, including manufacturers, 
     distributors, importers, and retailers of firearms and 
     ammunition, firearms purchasers and owners and their 
     organized representatives, the Sporting Arms and Ammunition 
     Manufacturers' Institute, Inc., and the National Shooting 
     Sports Foundation, Inc.;
       (4) experts in ballistics imaging and related fields, such 
     as the Association of Firearm and Tool Mark Examiners, 
     projectile recovery system manufacturers, and ballistic 
     imaging device manufacturers;
       (5) foreign officials administering ballistic imaging 
     systems;
       (6) individuals or organizations with significant expertise 
     in the field of ballistic imaging technology, as the Attorney 
     General deems necessary.

     SEC. 5. REPORT.

       Not later than 30 days after the National Research Council 
     of the National Academy of Sciences completes the study 
     conducted under section 3, the National Research Council 
     shall submit to the Attorney General a report on the results 
     of the study, and the Attorney General shall submit to the 
     Congress a report, which shall be made public, that 
     contains--
       (1) the results of the study; and
       (2) recommendations for legislation, if applicable.

     SEC. 6. SUSPENSION OF USE OF FEDERAL FUNDS FOR BALLISTIC 
                   IMAGING TECHNOLOGY.

       (a) In General.--Notwithstanding any other provision of 
     law, a State shall not use Federal funds for ballistic 
     imaging technology until the report referred to in section 5 
     is completed and transmitted to the Congress.
       (b) Waiver Authority.--On request of a State, the Secretary 
     of the Treasury may waive the application of subsection (a) 
     to a use of Federal funds upon a showing that the use would 
     be in the national interest.

     SEC. 7. DEFINITIONS.

       In this Act:
       (1) The term ``ballistic imaging technology'' means 
     software and hardware that records electronically, stores, 
     retrieves, and compares the marks or impressions on the 
     cartridge case and projectile of a round of ammunition fired 
     from a handgun or rifle.
       (2) The term ``handgun'' has the meaning given the term in 
     section 921(a)(29) of title 18, United States Code.
       (3) The term ``rifle'' has the meaning given the term in 
     section 921(a)(7) of title 18, United States Code.
       (4) The term ``cartridge case'' means the part of a fully 
     assembled ammunition cartridge that contains the propellant 
     and primer for firing.
       (5) The terms ``manually operated handgun'' and ``manually 
     operated rifle'' mean any handgun or rifle, as the case may 
     be, in which all loading, unloading, and reloading of the 
     firing chamber is accomplished through manipulation by the 
     user.
       (6) The term ``semiautomatic handgun'' means any repeating 
     handgun which utilizes a portion of the energy of a firing 
     cartridge to extract the fired cartridge case and chamber the 
     next round, which requires a pull of the trigger to fire each 
     cartridge.
       (7) The term ``semiautomatic rifle'' has the meaning given 
     the term in section 921(a)(28) of title 18, United States 
     Code.
       (8) The term ``projectile'' means that part of ammunition 
     that is, by means of an explosive, expelled through the 
     barrel of a handgun or rifle.
                                 ______
                                 
      By Mrs. BOXER:
  S. 981. A bill to limit the period for which the Federal Government 
may procure property or services using noncompetitive procedures during 
emergency and urgent situations; to the Committee on Governmental 
Affairs.
  Mrs. BOXER. Mr. President, today I am introducing legislation is to 
ensure that American taxpayers and American businesses are protected 
when the Federal Government procures property or services.
  The purpose of this legislation is to close certain loopholes that 
allow Federal agencies to enter into contracts through a process that 
does not ensure full and open competition. Current law provides several 
exceptions that allow Federal agencies to limit competition or provide 
a sole-source contract. My legislation does not eliminate any of these 
exceptions, but it does place a 90-day limitation on the broadest 
exceptions to ensure that a full and fair bidding process takes place 
as soon as possible.
  This bill does not extend the 90-day limitation on sole-source or 
limited-source contracts when full and open competition is not 
practicable. For example, the legislation will continue to allow sole-
source or limited-source contracts when there is a threat to the 
national security of the United States or when the property or service 
is only available from one party.
  But we must take a common-sense approach to shield taxpayers from 
waste and abuse. This bill does just that. I have heard from people 
throughout my state who believe that the administration is abusing its 
authority in providing sole-source and limited-source contacts in Iraq.
  One example is the sole-source contract worth up to $7 billion that 
was awarded earlier this year to Kellogg, Brown and Root--a subsidiary 
of Halliburton--to extinguish oil fires in Iraq. The exception under 
Federal law used to provide KBR with the sole-source contract was that 
a full and open bid process would cause unacceptable delays. While it 
is understandable that oil fires cannot be allowed to burn while an 
open bid process takes place, it is not acceptable that the term of 
this contract was 2 years.
  Recently, the administration announced that this contract would be 
terminated and an open bid process take place. While I applaud this 
move, I fear it would not have happened without the outcry of the 
American people. My legislation will ensure that certain sole-source 
contracts will be limited to 90 days. During the 90-day period, a full 
and open competition would take place so that the long-term contract is 
awarded to the qualified low-bidder.
  It is the responsibility of Congress to ensure that these contracts 
are awarded in a competitive manner whenever possible. This legislation 
is a step in the right direction.
  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. 981

       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 ``Business and Taxpayer 
     Procurement Protection Act.''

     SECTION 2. LIMITATION ON CONTRACTS AWARDED ON A 
                   NONCOMPETITIVE BASIS.

       (a) In General.--Notwithstanding any other provision of law 
     or regulation, including the Federal Property and 
     Administrative Services Act of 1949, section 2304 of title 
     10, United States Code, and the Federal Acquisition 
     Regulation--
       (1) any procurement for property or services that is not 
     subject to competitive procedures under a provision of law or 
     regulation set forth in subsection (b) may not exceed 90 
     days; and
       (2) if any property or services procured under the 
     limitations of paragraph (1) are required beyond the 90 days 
     referred to in paragraph (1), such property or services 
     shall--
       (A) during the 90-day period, be the subject of a full and 
     open competition in accordance with the appropriate law or 
     regulation; and
       (B) shall not be procured using procedures other than 
     competitive procedures under a provision of law or regulation 
     set forth in subsection (b).

[[Page S5674]]

       (b) Applicability.--The provisions of law and regulations 
     referred to in subsection (a) are the following:
       (1) Subsections (c)(2), (c)(3)(A), (c)(7), and 
     (d)(1)(B)(ii) of section 303 of the Federal Property and 
     Administrative Services Act of 1949 (41 U.S.C. 253).
       (2) Subsections (c)(2), (c)(3)(A), (c)(7), and 
     (d)(1)(B)(ii) of section 2304 of title 10, United States 
     Code.
       (3) Any other provision of law or regulation that provides 
     for the use of noncompetitive procedures for the same or a 
     similar reason as those referred to in clauses (1) and (2).

     SECTION 3. EFFECTIVE DATE.

       This Act shall apply with respect to contracts entered into 
     after the date of the enactment of this Act.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mr. Santorum):
  S. 982. A bill to halt Syrian support for terrorism, end its 
occupation of Lebanon, stop its development of weapons of mass 
destruction, cease its illegal importation of Iraqi oil, and hold Syria 
accountable for its role in the Middle East, and for other purposes; to 
the Committee on Foreign Relations.
  Mrs. BOXER. Mr. President, today I am reintroducing the Syria 
Accountability Act, a bill that aims to end Syrian support for 
terrorism by diplomatic and economic means.
  It is well known that terrorist organizations like Hizballah, Hamas, 
and the Popular Front for the Liberation of Palestine maintain offices, 
training camps, and other facilities on Syrian territory and in areas 
of Lebanon occupied by the Syrian armed forces. We must address this 
issue not with saber rattling but by confronting the Government of 
Syria in a diplomatic way that shows the seriousness of our concerns.
  The Syria Accountability Act works to achieve our foreign policy 
goals by expanding economic and diplomatic sanctions against Syria 
until the President certifies that Syria has ended its support of 
terrorism, withdrawn from Lebanon, ceased its chemical and biological 
weapons program, and no longer illegally imports Iraqi oil. The bill 
provides flexibility to the President by allowing him to choose from a 
variety of sanctions, as well as the authority to waive sanctions if it 
is in the interest of United States national security.
  I hope this legislation will receive the support of the 
Administration and Congress because it provides the President with the 
flexibility to target specific sanctions against Syria, but in no way 
threatens or condones the use of military force against Syria.
                                 ______
                                 
      By Mr. CHAFEE (for himself, Mr. Reid, Mr. Hatch, Ms. Mikulski, 
        Ms. Collins, Mr. Leahy, Mr. Warner, Mr. Kennedy, Mr. Voinovich, 
        Mr. Biden, Mr. Allen, Mrs. Clinton, Mr. Fitzgerald, Mrs. 
        Murray, Ms. Snowe, Mr. Johnson, Mr. Feingold, Mrs. Feinstein, 
        Mr. Reed, and Mr. Corzine):
  S. 983. A bill to amend the Public Health Service Act to authorize 
the Director of the National Institute of Environmental Health Sciences 
to make grants for the development and operation of research centers 
regarding environmental factors that may be related to the etiology of 
breast cancer; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. CHAFEE. Mr. President, I am pleased to be joined today by Senator 
Harry Reid and others in introducing the Breast Cancer and 
Environmental Research Act of 2003. This bill would establish research 
centers that would be the first in the Nation to specifically study the 
environmental factors that may be related to the development of breast 
cancer. The lack of agreement within the scientific community and among 
breast cancer advocates on this question highlights the need for 
further study.
  It is generally believed that the environment plays some role in the 
development of breast cancer, but the extent of that role is not 
understood. The Breast Cancer and Environmental Research Act of 2003 
will enable us to conduct more conclusive and comprehensive research to 
determine the impact of the environment on breast cancer. Before we can 
find the answers, we must determine the right questions we should be 
asking.
  While more research is being conducted into the relationship between 
breast cancer and the environment, there are still several issues that 
must be resolved to make this research more effective. They are as 
follows:
  There is no known cause of breast cancer. There is little agreement 
in the scientific community on how the environment affects breast 
cancer. While studies have been conducted on the links between 
environmental factors like pesticides, diet, and electromagnetic 
fields, no consensus has been reached. There are other factors that 
have not yet been studied that could provide valuable information. 
While there is much speculation, it is clear that the relationship 
between environmental exposures and breast cancer is poorly understood.
  There are challenges in conducting environmental research. 
Identifying linkages is difficult. Laboratory experiments and cluster 
analyses, such as those in Long Island, New York, cannot reveal whether 
an environmental exposure increases a woman's risk of breast cancer. 
Epidemiological studies must be designed carefully, because 
environmental exposures are difficult to measure.
  Coordination between the National Institutes of Health, NIH, the 
National Cancer Institute, NCI, and the National Institute of 
Environmental Health Sciences, NIEHS, needs to occur. NCI and NIEHS are 
the two institutes in the NIH that fund most of the research related to 
breast cancer and the environment; however, comprehensive information 
is not currently available.
  This legislation would establish eight Centers of Excellence to study 
these potential links. These ``Breast Cancer Environmental Research 
Centers'' would provide for multi-disciplinary research among basic, 
clinical, epidemiological and behavioral scientists interested in 
establishing outstanding, state-of-the-art research programs addressing 
potential links between the environment and breast cancer. The NIEHS 
would award grants based on a competitive peer-review process. This 
legislation would require each Center to collaborate with community 
organizations in the area, including those that represent women with 
breast cancer. The bill would authorize $30 million for the next five 
years for these grants.
  ``Genetics loads the gun, the environment pulls the trigger,'' as Ken 
Olden, the Director of NIEHS, frequently says. Many scientists believe 
that certain groups of women have genetic variations that may make them 
more susceptible to adverse environmental exposures. We need to step 
back and gather evidence before we come to conclusions--that is the 
purpose of this bill. People are hungry for information, and there is a 
lot of inconclusive data out there, some of which has no scientific 
merit whatsoever. We have the opportunity through this legislation to 
gather legitimate and comprehensive data from premier research 
institutions across the nation.
  According to the American Cancer Society, each year 800 women in 
Rhode Island are diagnosed with breast cancer, and 200 women in my 
state will die of this terrible disease this year. We owe it to these 
women who are diagnosed with this life-threatening disease to provide 
them with answers for the first time.
  I urge my colleagues to join me in supporting and cosponsoring this 
important legislation, and ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 983

       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 ``Breast Cancer and 
     Environmental Research Act of 2003''.

     SEC. 2. FINDINGS.

       The Congress finds as follows:
       (1) Breast cancer is the second leading cause of cancer 
     deaths among American women.
       (2) More women in the United States are living with breast 
     cancer than any other cancer (excluding skin cancer). 
     Approximately 3,000,000 women in the United States are living 
     with breast cancer, 2,000,000 of which have been diagnosed 
     and an estimated 1,000,000 who do not yet know that they have 
     the disease.
       (3) Breast cancer is the most commonly diagnosed cancer 
     among women in the United States and worldwide (excluding 
     skin cancer). In 2003, it is estimated that 258,600 new cases 
     of breast cancer will be diagnosed among women in the United 
     States, 211,300

[[Page S5675]]

     cases of which will involve invasive breast cancer and 47,300 
     cases of which will involve ductal carcinoma in situ (DCIS).
       (4) Breast cancer is the second leading cause of cancer 
     death for women in the United States. Approximately 40,000 
     women in the United States die from the disease each year. 
     Breast cancer is the leading cause of cancer death for women 
     in the United States between the ages of 20 and 59, and the 
     leading cause of cancer death for women worldwide.
       (5) A woman in the United States has a 1 in 8 chance of 
     developing invasive breast cancer in her lifetime. This risk 
     was 1 in 11 in 1975. In 2001, a new case of breast cancer 
     will be diagnosed every 2 minutes and a woman will die from 
     breast cancer every 13 minutes.
       (6) All women are at risk for breast cancer. About 90 
     percent of women who develop breast cancer do not have a 
     family history of the disease.
       (7) The National Action Plan on Breast Cancer, a public 
     private partnership, has recognized the importance of 
     expanding the scope and breadth of biomedical, 
     epidemiological, and behavioral research activities related 
     to the etiology of breast cancer and the role of the 
     environment.
       (8) To date, there has been only a limited research 
     investment to expand the scope or coordinate efforts across 
     disciplines or work with the community to study the role of 
     the environment in the development of breast cancer.
       (9) In order to take full advantage of the tremendous 
     potential for avenues of prevention, the Federal investment 
     in the role of the environment and the development of breast 
     cancer should be expanded.
       (10) In order to understand the effect of chemicals and 
     radiation on the development of cancer, multi-generational, 
     prospective studies are probably required.

     SEC. 3. NATIONAL INSTITUTE OF ENVIRONMENTAL HEALTH SCIENCES; 
                   AWARDS FOR DEVELOPMENT AND OPERATION OF 
                   RESEARCH CENTERS REGARDING ENVIRONMENTAL 
                   FACTORS RELATED TO BREAST CANCER.

       Subpart 12 of part C of title IV of the Public Health 
     Service Act (42 U.S.C. 285l et seq.) is amended by adding at 
     the end the following section:

     ``SEC. 463B. RESEARCH CENTERS REGARDING ENVIRONMENTAL FACTORS 
                   RELATED TO BREAST CANCER.

       ``(a) In General.--The Director of the Institute, based on 
     recommendations from the Breast Cancer and Environmental 
     Research Panel established under subsection (b) (referred to 
     in this section as the `Panel') shall make grants, after a 
     process of peer review and programmatic review, to public or 
     nonprofit private entities for the development and operation 
     of not more than 8 centers for the purpose of conducting 
     multidisciplinary and multi-institutional research on 
     environmental factors that may be related to the etiology of 
     breast cancer. Each such center shall be known as a Breast 
     Cancer and Environmental Research Center of Excellence.
       ``(b) Breast Cancer and Environmental Research Panel.--
       ``(1) Establishment.--The Secretary shall establish in the 
     Institute of Environmental Health Sciences a Breast Cancer 
     and Environmental Research Panel.
       ``(2) Composition.--The Panel shall be composed of--
       ``(A) 9 members to be appointed by the Secretary, of 
     which--
       ``(i) six members shall be appointed from among physicians, 
     and other health professionals, who--

       ``(I) are not officers or employees of the United States;
       ``(II) represent multiple disciplines, including clinical, 
     basic, and public health sciences;
       ``(III) represent different geographical regions of the 
     United States;
       ``(IV) are from practice settings or academia or other 
     research settings; and
       ``(V) are experienced in biomedical review; and

       ``(ii) three members shall be appointed from the general 
     public who are representatives of individuals who have had 
     breast cancer and who represent a constituency; and
       ``(B) such nonvoting, ex officio members as the Secretary 
     determines to be appropriate.
       ``(3) Chairperson.--The members of the Panel appointed 
     under paragraph (2)(A) shall select a chairperson from among 
     such members.
       ``(4) Meetings.--The Panel shall meet at the call of the 
     chairperson or upon the request of the Director, but in no 
     case less often than once each year.
       ``(5) Duties.--The Panel shall--
       ``(A) oversee the peer review process for the awarding of 
     grants under subsection (a) and conduct the programmatic 
     review under such subsection;
       ``(B) make recommendations with respect to the funding 
     criteria and mechanisms under which amounts will be allocated 
     under this section; and
       ``(C) make final programmatic recommendations with respect 
     to grants under this section.
       ``(c) Collaboration With Community.--Each center under 
     subsection (a) shall establish and maintain ongoing 
     collaborations with community organizations in the geographic 
     area served by the center, including those that represent 
     women with breast cancer.
       ``(d) Coordination of Centers; Reports.--The Director of 
     the Institute shall, as appropriate, provide for the 
     coordination of information among centers under subsection 
     (a) and ensure regular communication between such centers, 
     and may require the periodic preparation of reports on the 
     activities of the centers and the submission of the reports 
     to the Director.
       ``(e) Required Consortium.--Each center under subsection 
     (a) shall be formed from a consortium of cooperating 
     institutions, meeting such requirements as may be prescribed 
     by the Director of the Institute. Each center shall require 
     collaboration among highly accomplished scientists, other 
     health professionals and advocates of diverse backgrounds 
     from various areas of expertise.
       ``(f) Duration of Support.--Support of a center under 
     subsection (a) may be for a period not exceeding 5 years. 
     Such period may be extended for one or more additional 
     periods not exceeding 5 years if the operations of such 
     center have been reviewed by an appropriate technical and 
     scientific peer review group established by the Director of 
     the Institute and if such group has recommended to the 
     Director that such period should be extended.
       ``(g) Geographic Distribution of Centers.--The Director of 
     the Institute shall, to the extent practicable, provide for 
     an equitable geographical distribution of centers under this 
     section.
       ``(h) Innovative Approaches.--Each center under subsection 
     (a) shall use innovative approaches to study unexplored or 
     under-explored areas of the environment and breast cancer.
       ``(i) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated $30,000,000 for each of the fiscal years 2004 
     through 2009. Such authorization is in addition to any other 
     authorization of appropriations that is available for such 
     purpose.''.

  Mr. REID. Mr. President, I am pleased to join Senator Chafee in 
reintroducing the Breast Cancer and Environmental Research Act. Senator 
Chafee and I serve together on the Environment and Public Works 
Committee where we have had the opportunity to take a closer look at 
different environment-related health concerns. After a number of 
children in the small town of Fallon, NV, were diagnosed with leukemia, 
the committee traveled to Nevada to investigate what environmental 
factors may have contributed to the cancer cluster.
  The Fallon hearing reminded me how little we know about what causes 
cancer and what, if any, connection exists between the environment and 
cancer. Three decades have passed since President Nixon declared the 
``War on Cancer'' and scientists are still struggling with these and 
other crucial unanswered questions about cancer. This is particularly 
true in the case of breast cancer. We still don't know what causes 
breast cancer. We don't know if the environment plays a role in the 
development of breast cancer, and if it does, we don't know how 
significant that role is. In our search for answers about breast 
cancer, we need to make sure we are asking the right questions.
  To date, there has been only a limited research investment to study 
the role of the environment in the development of breast cancer. More 
research needs to be done to determine the impact of the environment on 
breast cancer. The Breast Cancer and Environmental Research Act would 
give scientists the tools they need to pursue a better understanding 
about what links between the environment and breast cancer may exist. 
Specifically, our bill would authorize $30 million to the National 
Institute of Environmental Health Sciences to establish eight Centers 
of Excellence that would focus on breast cancer and the environment.
  In the year 2003 alone, it is estimated that 258,600 new cases of 
breast cancer will be diagnosed among women in the United States. In 
Nevada, an estimated 1400 new cases will be diagnosed in 2003, and 
tragically, approximately 300 women in Nevada will die of breast cancer 
this year. If we miss promising research opportunities because of 
Congress' failure to act, millions of women and their families will 
face critical unanswered questions about breast cancer. During the 
107th Congress, almost half of the Senate cosponsored this important 
legislation. There is no reason we should not be able to work together 
during this session to pass this bill so we can find answers for the 
millions of Americans affected by breast cancer. I urge my colleagues 
to join in our quest for answers about this deadly disease and to 
support the Breast Cancer and Environmental Research Act.
                                 ______
                                 
      By Mr. BAUCUS:
  S. 984. A bill to direct the Secretary of the Interior to evaluate 
opportunities to enhance domestic oil and gas

[[Page S5676]]

production through the exchange of nonproducing Federal oil and gas 
leases located in the Lewis and Clark National Forest, in the Flathead 
National Forest, and on Bureau of Land Management land in the State of 
Montana, and for other purposes; to the Committee on Energy and Natural 
Resources.
  Mr. BAUCUS. Mr. President, I am introducing a bill today that I hope 
will take us one step closer to achieving permanent protections for 
Montana's magnificent Rocky Mountain Front.
  The Front, as we call it back home, is part of one of the largest and 
most intact wild places left in the lower 48. To the North, the Front 
includes a 200 square mile area known as the Badger-Two Medicine in the 
Lewis and Clark National Forest. This area sits just south-east of 
Glacier National Park, one of our greatest national treasures. The 
Badger-Two Medicine area is sacred ground to the Blackfeet Tribe. In 
January of 2002, portions of the Badger-Two, known as the Badger-Two 
Medicine Blackfoot Traditional Cultural District, were declared 
eligible for listing in the National Register of Historic Places.
  South of the Badger-Two, the Front includes a 400 square mile strip 
of national forest land and about 20 square miles of BLM lands, 
including three BLM Outstanding Natural Areas.
  Not only does the Front still retain almost all its native species, 
but it also harbors the country's largest bighorn sheep herd and second 
largest elk herd. The Rocky Mountain Front supports one of the largest 
populations of grizzly bears south of Canada and is the only place in 
the lower 48 states where grizzly bears still roam from the mountains 
to their historic range on the plains.
  Because of this exceptional habitat, the Front offers world renowned 
hunting, fishing and recreational opportunities. Sportsmen, local land 
owners, hikers, local communities and many other Montanans have worked 
for decades to protect and preserve the Front for future generations.
  In short, a majority of Montanans feel very strongly that oil and gas 
development, and Montana's Rocky Mountain Front, just don't mix. The 
habitat is too rich, the landscape too important, to subject it to the 
roads, drills, pipelines, industrial equipment, chemicals, noise and 
human activity that come with oil and gas development.
  Building upon a significant public and private conservation 
investment and following an extensive public comment process, the Lewis 
and Clark National Forest decided in 1997 to withdraw for 15 years 
356,000 acres in the Front from any new oil and gas leasing. This was a 
significant first step in protecting the Front from development that I 
wholeheartedly supported.
  However, in many parts of the Rocky Mountain Front, oil and gas 
leases exist that pre-date the 1997 decision or are located in the 
Badger-Two Medicine area, where the lease suspension could be lifted 
soon. These leaseholders have invested time and resources in acquiring 
their leases. Several leaseholders have applied to the federal 
government for permits to drill. These leases are the subject of my 
proposed bill.
  History has shown that energy exploration and development in the 
Front is likely to result in expensive and time-consuming environmental 
studies and litigation. This process rarely ends with a solution that 
is satisfactory to the oil and gas lessee. For example, in the late 
1980's both Chevron and Fina applied for permits to drill in the Badger 
Two Medicine portion of the Front.
  After millions of dollars spent on studies and years of public 
debate, Chevron abandoned or assigned all of its lease rights, and Fina 
sold its lease rights back to the original owner.
  Therefore, I think we should be fair to those leaseholders. We want 
them to continue to provide for our domestic oil and gas needs, but 
they are going to have a long, difficult and expensive road if they 
wish to develop oil and gas in the Rocky Mountain Front.
  My legislation would direct the Interior Department to evaluate non-
producing leases in the Rocky Mountain Front and look at opportunities 
to cancel those leases, in exchange for allowing leaseholders to 
explore for oil and gas somewhere else, namely in the Gulf of Mexico or 
in the State of Montana. In conducting this evaluation, the Secretary 
would have to consult with leaseholders, with the State of Montana, the 
public and other interested parties.
  When Interior concludes this study in two years, the bill calls for 
the agency to make recommendations to Congress and the Energy and 
Natural Resources Committee on the advisability of pursuing lease 
exchanges in the Front and any changes in law and regulation needed to 
enable the Secretary to undertake such an exchange.
  Finally, in order to allow the Secretary to conduct this study, my 
bill would continue the current lease suspension in the Badger-Two 
Medicine Area for three more years. This lease suspension would only 
apply to the Badger-Two Medicine Area, not the entire Front.
  That's it, that's all my bill does. It doesn't predetermine any 
outcome, it doesn't impact any existing exploration activities or 
environmental processes. It just creates a process through which the 
federal government, the people of Montana and leaseholders can finally 
have a real, open and honest discussion about the fate of the Rocky 
Mountain Front.
  I would also point out that the Administration recently completed an 
inventory of the onshore oil and gas reserves on federal lands in five 
basins in the Interior West, including the Rocky Mountain Front, also 
known as the Montana Thrust Belt. The Administration's study found that 
this area contains the smallest volumes of oil and gas resources of all 
five of the Western inventory areas. For example, the mean estimate of 
all natural gas reserves in the Uinta/Pinceance Basin in Colorado and 
Utah is 22 trillion cubic feet. In the Front, the mean estimate is only 
8.6 trillion cubic feet.
  Additionally, the study concluded that in reality, the vast majority 
of Federal lands in the interior West are available for leasing with 
few if any restrictions. Although a large percentage of federal lands 
in the Front are currently unavailable for leasing, many of those lands 
are unavailable because they lie under Glacier National Park, Indian 
lands, and already established wilderness areas, which comprise much of 
the Federal land in the Front. So, not only is the Front relatively 
poor in terms of oil and gas reserves, many of those reserves--by 
Congressional mandate, executive order or treaty--will never be 
available for leasing.
  We should look for ways to fairly compensate leaseholders for 
investments they've made in their leases if they decide to leave the 
Front rather than waste years and millions fighting to explore for 
uncertain--and small--oil and gas reserves. A lot of Montanans just 
don't want to see the Front developed, and they will fight to protect 
it. Including me.

  So, developers can wait years, or decades, or most likely never, for 
oil and gas to flow from the Front. Or we can look at ways to encourage 
domestic production much sooner, in much more cost effective, 
appropriate and efficient ways somewhere else.
  That is what I hope this legislation will accomplish Mr. President, 
and I hope my colleagues in the Senate will support it.
                                 ______
                                 
      By Mr. DODD (for himself, Ms. Collins, Mrs. Clinton, Mr. Corzine, 
        Ms. Cantwell, Mr. Durbin, Mr. Grassley, Mr. Leahy, Ms. Snowe, 
        Mr. Reed, Mr. Biden, Mrs. Feinstein, Mr. Schumer, Mr. 
        Lieberman, Mr. Warner, Mr. Johnson, Mrs. Murray, Mr. Carper, 
        Mr. Kerry, Mr. Baucus, Mr. Reid, Mr. Sarbanes, and Mr. 
        Jeffords):
  S. 985. A bill to amend the Federal Law Enforcement Pay Reform Act of 
1990 to adjust the percentage differentials payable to Federal law 
enforcement officers in certain high-cost areas, and for other 
purposes; to the Committee on Governmental Affairs.
  Mr. DODD. Mr. President, I rise today to introduce legislation that 
is important to America's Federal law enforcement officers and the 
people they protect across the country. I am joined today by Senator 
Collins, Senator Clinton, Senator Corzine, Senator Cantwell, Senator 
Durbin, Senator Grassley, Senator Leahy, Senator Snowe, Senator Reed, 
Senator Biden, Senator Feinstein, Senator Schumer,

[[Page S5677]]

Senator Lieberman, Senator Warner, Senator Johnson, Senator Murray, 
Senator Carper, Senator Kerry, Senator Baucus, Senator Reid, Senator 
Sarbanes, and Senator Jeffords.
  The legislation that we are offering will amend the Federal Law 
Enforcement Pay Reform Act of 1990 to ensure that the government treats 
Federal law enforcement officers fairly. This bill will partially 
increase the locality pay adjustments paid to Federal agents in certain 
high cost areas. These areas have pay disparities so high they are 
negatively affecting our Federal law enforcement officers, since 
locality pay adjustments have either not been increased since 1990, or 
have been increased negligibly.
  All over America, Federal law enforcement personnel are enduring 
tremendous stress associated with our Nation's effort to protect 
citizens from the threat of terrorism. Unfortunately, that stress has 
been compounded by ongoing pressing concerns among many such personnel 
about their pay. I have heard from officers who have described long 
commutes, high personal debts, and in some cases, almost all-consuming 
concerns about financial insecurity. Many of these problems occur when 
agents or officers are transferred from low-cost parts of the country 
to high-cost areas. I have been told that some Federal officers are 
forced to separate from their families and rent rooms in the cities to 
which they have been transferred because they cannot afford to rent or 
buy homes large enough for a family.
  Unfortunately, the raise in the cost of living in many cities across 
America has outstripped our Federal pay system. I recognize that this 
is a problem for other Federal employees and I am prepared to work with 
my colleagues to address this larger issue. The cost of living has also 
had a very negative impact on non-federal employees as well and I have 
consistently worked to ensure that all working Americans enjoy a truly 
livable wage. The legislation that we are introducing today in no way 
suggests that the needs of other workers should be ignored, but it 
acknowledges that as we continue to ask Federal law enforcement 
personnel to put in long hours and remain on heightened alert, we must 
provide them with a salary sufficient to allow them to focus on their 
vital work without nagging worries about how to provide their families 
with the essentials of food, clothing, and shelter.
  The Federal Law Enforcement Officers Association, representing more 
than 19,000 Federal agents, along with the Fraternal Order of Police, 
National Association of Police Organizations, National Troopers 
Coalition, National Organization of Black Law Enforcement Executives, 
International Brotherhood of Police, and the Police Executive Research 
Forum have endorsed this legislative proposal.
  In these difficult times, we must remain committed to recruiting, 
hiring, and retaining law enforcement officers of the highest caliber. 
However, we must also recognize that the Federal government is in 
competition with State and Local police departments that often pay more 
and provide better standards of living.
  I urge all of my colleagues to join us in this effort. I hope that we 
can quickly pass this important legislation because it will improve the 
lives of the men and women who are dedicated to protecting us. In so 
doing, it will improve the Nation's domestic security.
  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. 985

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

     SECTION 1. ADJUSTED DIFFERENTIALS.

       (a) In General.--Paragraph (1) of section 404(b) of the 
     Federal Law Enforcement Pay Reform Act of 1990 (5 U.S.C. 5305 
     note) is amended by striking the matter after ``follows:'' 
     and inserting the following:

    ``Area                                                 Differential
  Atlanta Consolidated Metropolitan Statistical Area............16.82% 
  Boston-Worcester-Lawrence, MA-NH-ME-CT-RI Consolidated 
    Metropolitan Statistical Area...............................24.42% 
  Chicago-Gary-Kenosha, IL-IN-WI Consolidated Metropolitan 
    Statistical Area............................................25.68% 
  Cincinnati-Hamilton, OH-KY-IN Consolidated Metropolitan 
    Statistical Area............................................21.47% 
  Cleveland Consolidated Metropolitan Statistical Area..........17.83% 
  Columbus Consolidated Metropolitan Statistical Area...........16.90% 
  Dallas Consolidated Metropolitan Statistical Area.............18.51% 
  Dayton Consolidated Metropolitan Statistical Area.............15.97% 
  Denver-Boulder-Greeley, CO Consolidated Metropolitan Statistical 
    Area........................................................22.78% 
  Detroit-Ann Arbor-Flint, MI Consolidated Metropolitan Statistical 
    Area........................................................25.61% 
  Hartford, CT Consolidated Metropolitan Statistical Area.......24.47% 
  Houston-Galveston-Brazoria, TX Consolidated Metropolitan 
    Statistical Area............................................30.39% 
  Huntsville Consolidated Metropolitan Statistical Area.........13.29% 
  Indianapolis Consolidated Metropolitan Statistical Area.......13.38% 
  Kansas City Consolidated Metropolitan Statistical Area........14.11% 
  Los Angeles-Riverside-Orange County, CA Consolidated Metropolitan 
    Statistical Area............................................27.25% 
  Miami-Fort Lauderdale, FL Consolidated Metropolitan Statistical 
    Area........................................................21.75% 
  Milwaukee Consolidated Metropolitan Statistical Area..........17.45% 
  Minneapolis-St. Paul, MN-WI Consolidated Metropolitan Statistical 
    Area........................................................20.27% 
  New York-Northern New Jersey-Long Island, NY-NJ-CT-PA Consolidated 
    Metropolitan Statistical Area...............................27.11% 
  Orlando, FL Consolidated Metropolitan Statistical Area........14.22% 
  Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD Consolidated 
    Metropolitan Statistical Area...............................21.03% 
  Pittsburgh Consolidated Metropolitan Statistical Area.........14.89% 
  Portland-Salem, OR-WA Consolidated Metropolitan Statistical Ar20.96% 
  Richmond Consolidated Metropolitan Statistical Area...........16.46% 
  Sacramento-Yolo, CA Consolidated Metropolitan Statistical Area20.77% 
  San Diego, CA Consolidated Metropolitan Statistical Area......22.13% 
  San Francisco-Oakland-San Jose, CA Consolidated Metropolitan 
    Statistical Area............................................32.98% 
  Seattle-Tacoma-Bremerton, WA Consolidated Metropolitan Statistical 
    Area........................................................21.18% 
  St. Louis Consolidated Metropolitan Statistical Area..........14.69% 
  Washington-Baltimore, DC-MD-VA-WV Consolidated Metropolitan 
    Statistical Area............................................19.48% 
  Rest of United States Consolidated Metropolitan Statistical 14.19%''.

       (b) Special Rules.--For purposes of the provision of law 
     amended by subsection (a)--
       (1) the counties of Providence, Kent, Washington, Bristol, 
     and Newport, RI, the counties of York and Cumberland, ME, and 
     the city of Concord, NH, shall be treated as if located in 
     the Boston-Worcester-Lawrence, MA-NH-ME-CT-RI Consolidated 
     Metropolitan Statistical Area; and
       (2) members of the Capitol Police shall be considered to be 
     law enforcement officers within the meaning of section 402 of 
     the Federal Law Enforcement Pay Reform Act of 1990.
       (c) Effective Date.--The amendment made by subsection (a)--
       (1) shall take effect as if included in the Federal Law 
     Enforcement Pay Reform Act of 1990 on the date of the 
     enactment of such Act; and
       (2) shall be effective only with respect to pay for service 
     performed in pay periods beginning on or after the date of 
     the enactment of this Act.
     Subsection (b) shall be applied in a manner consistent with 
     the preceding sentence.

     SEC. 2. SEPARATE PAY, EVALUATION, AND PROMOTION SYSTEM FOR 
                   FEDERAL LAW ENFORCEMENT OFFICERS.

       (a) Study.--Not later than 6 months after the date of the 
     enactment of this Act, the Office of Personnel Management 
     shall study and submit to Congress a report which shall 
     contain its findings and recommendations regarding the need 
     for, and the potential benefits to be derived from, the 
     establishment of a separate pay, evaluation, and promotion 
     system for Federal law enforcement officers. In carrying out 
     this subsection, the Office of Personnel Management shall 
     take into account the findings and recommendations contained 
     in the September 1993 report of the Office entitled ``A Plan 
     to Establish a New Pay and Job Evaluation System for Federal 
     Law Enforcement Officers''.
       (b) Demonstration Project.--
       (1) In general.--If, after completing its report under 
     subsection (a), the Office of Personnel Management considers 
     it to be appropriate, the Office shall implement, within 12 
     months after the date of the enactment of this Act, a 
     demonstration project to determine whether a separate system 
     for Federal law enforcement officers (as described in 
     subsection (a)) would result in improved Federal personnel 
     management.

[[Page S5678]]

       (2) Applicable provisions.--Any demonstration project under 
     this subsection shall be conducted in accordance with the 
     provisions of chapter 47 of title 5, United States Code, 
     except that a project under this subsection shall not be 
     taken into account for purposes of the numerical limitation 
     under section 4703(d)(2) of such title.
       (3) Permanent changes.--Not later than 6 months before the 
     demonstration project's scheduled termination date, the 
     Office of Personnel Management shall submit to Congress--
       (A) its evaluation of the system tested under the 
     demonstration project; and
       (B) recommendations as to whether or not that system (or 
     any aspects of that system) should be continued or extended 
     to other Federal law enforcement officers.
       (c) Federal Law Enforcement Officer Defined.--In this 
     section, the term ``Federal law enforcement officer'' means a 
     law enforcement officer as defined under section 8331(20) or 
     8401(17) of title 5, United States Code.

     SEC. 3. LIMITATION ON PREMIUM PAY.

       (a) In General.--Section 5547 of title 5, United States 
     Code, is amended--
       (1) in subsection (a), by striking ``5545a,'';
       (2) in subsection (c), by striking ``or 5545a''; and
       (3) in subsection (d), by striking the period and inserting 
     ``or a criminal investigator who is paid availability pay 
     under section 5545a.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     1114 of the National Defense Authorization Act for Fiscal 
     Year 2002 (Public Law 107-107; 115 Stat. 1239).

                          ____________________