Congressional Record, Volume 149 Issue 77 (Thursday, May 22, 2003)

[Congressional Record Volume 149, Number 77 (Thursday, May 22, 2003)]
[Senate]
[Pages S6981-S7054]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. HARKIN (for himself, Mr. Specter, Mr. Kohl, Mr. Durbin,
Mr. Feingold, Mrs. Clinton, and Mr. Schumer):
S. 1103. A bill to clarify the authority of the Secretary of
Agriculture to prescribe performance standards for the reduction of
pathogens in meat, meat products, poultry, and poultry products
processed by establishments receiving inspection services and to
enforce the Hazard Analysis and Critical Control Point (HACCP) System
requirements, sanitation requirements, and the performance standards;
to the Committee on Agriculture, Nutrition, and Forestry.
Mr. HARKIN. Mr. President, today I am introducing the Meat and
Poultry Pathogen Reduction Act of 2003. This legislation, commonly
known as Kevin's Law, is dedicated to the memory of 2-year-old Kevin
Kowalcyk, who died in 2001 after eating a hamburger contaminated with
E.coli H7:0157 bacteria. Passage of this bill is vital because on
December 6, 2001, the 5th Circuit Court of Appeals upheld and expanded
an earlier District Court decision that removes the U.S. Department of
Agriculture's, USDA, authority to enforce its Pathogen Performance
Standard for Salmonella. The 5th Circuit's decision in Supreme Beef v.
USDA, Supreme, seriously undermines the sweeping food safety changes
adopted by USDA in its 1996 Hazard Analysis Critical Control Point and
Pathogen Reduction, HACCP, rule.
More recently, there was another court case that calls into question
USDA's authority to enforce its microbiological performance standards.
A company called Nebraska Beef sued USDA after the Department tried to
shut down the plant for numerous alleged food safety violations. The
judge in the case granted a temporary restraining order, preventing
USDA to take enforcement action.
According the 5th Circuit's opinion in Supreme and the Nebraska Beef
decision, today, there is nothing USDA could do to shut down a meat
grinding plant that insists on using low-quality, potentially
contaminated trimmings. These decisions seriously undermine the new
meat and poultry inspection system.
The Pathogen Reduction Rule recognized that bacterial and viral
pathogens were the foremost food safety threat in America, responsible
for 5,000 deaths, 325,000 hospitalizations and 76 million illnesses
each year. To address the threat of foodborne illness, USDA developed a
modern inspection system based on two fundamental principles.
The first was that industry has the primary responsibility to
determine how to produce the safest products possible. Industry had to
examine their plants and determine how to control contamination at
every step of the food production process, from the moment a product
arrives at their door until the moment it leaves their plant.
The second, even more crucial principle was that plants nationwide
must reduce levels of dangerous pathogens in meat and poultry products.
To ensure the new inspection system accomplished this, USDA developed
Pathogen Performance Standards. These standards provide targets for
reducing pathogens and require all USDA-inspected facilities to meet
them. Facilities failing to meet a standard are shut down until they
create a corrective action plan to meet the standard.
So far, USDA has only issued one Pathogen Performance Standard, for
Salmonella. The vast majority of plants in the U.S. have been able to
meet the new standard, so it is clearly workable. In addition, USDA
reports that Salmonella levels for meat and poultry products have
fallen substantially. Therefore the Salmonella standard has been
successful. The 5th Circuit Court's and the Nebraska Beef decisions
threaten to destroy this success and set our food safety system back
years.
The other major problem is we have an industry dead set on striking
down USDA's authority to enforce meat and poultry pathogen standards.
Ever since the original Supreme decision, I have spent untold hours
trying to find a compromise that will allow us to ensure we have
enforceable, science-based standards for pathogens in meat and poultry
products. I have introduced bills to address this issue and I have even
worked with industry leaders to reach a reasonable compromise.

However, despite repeated attempts to address industry concerns,
industry has continually backtracked and moved the finish line. Many
times, I have made changes in my legislation to address their
``pressing'' concern of the moment only to have them come back and say
we hadn't gone far enough. We cannot let a few bullies in the meat and
poultry industry place our children, our families at a increased risk
of getting ill or dying, because some of the industry want to backtrack
on food safety.
In addition, the recent announcement that a cow in Alberta, Canada
tested positive for bovine spongiform encephalopathy, BSE, otherwise
known as ``mad cow disease'', provoked the U.S. government to
immediately close the U.S.-Canadian border for the trade at beer and
beef products. I applaud the current Administration for taking this
action to ensure the safety of our Nation's food supply until more
information is made available about the true extent of the problem.
And without downplaying the seriousness of that horrible disease, I
think its necessary to look at the impact of BSE in light of other food
borne illnesses. Researchers believe that BSE is linked to variable
Creutzfeldt-Jakob,

[[Page S6982]]

vCJD, disease. Since its onset in Britain in 1995, 129 people have died
worldwide from vCJD. Foodborne pathogens, on the other hand, have cause
5000 deaths, 125,000 hospitalizations, and 76 million illnesses each
year. The numbers speak for themselves.
The swift and comprehensive response provoked by a single diseased
cow in a neighboring country stands in stark contrast to the way our
government currently responds to outbreaks of foodbornes illness in our
country today. USDA has the ability to shut down the trade from the
biggest importer of beef into out country on suspicions of possible
food safety problems, but cannot even temporarily shut down one plant
that USDA knows has problems.
I plan to seek every opportunity to get this language enacted. I
think it is essential, both to ensuring the modernization of our food
safety system, and ensuring consumers that we are making progress in
reducing dangerous pathogens.
I hope that both parties, and both houses of Congress will be able to
act to pass this legislation without delay. The public's confidence in
our meat and poultry inspection system is at stake.
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. 1103

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 ``Meat and Poultry Pathogen
Reduction and Enforcement Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the primary purpose of the Federal meat and poultry
inspection program is to protect public health;
(2) the Centers for Disease Control and Prevention report
that human pathogens found in raw and cooked meat, meat
products, poultry, and poultry products are a significant
source of foodborne illness;
(3) to reduce the public health burden of foodborne
illness, the Federal meat and poultry inspection system
should focus on reducing the risk of foodborne illness
associated with the presence of foodborne pathogens through--
(A) establishment and enforcement of performance standards
for the reduction of pathogens in meat, meat products,
poultry, and poultry products processed by establishments
receiving inspection services; and
(B) enforcement of the Hazard Analysis and Critical Control
Point (HACCP) System requirements and sanitation
requirements;
(4) good public health practice requires controlling
pathogens as close as practicable to the initial source of
contamination to reduce pathogens and prevent foodborne
illness;
(5) there is a need for strong safeguards at slaughter
establishments during the slaughter and processing of meat
and poultry products because those establishments are where
pathogen contamination often originates;
(6) while proper handling and cooking of meat and poultry
products can virtually eliminate the risk of foodborne
illness from the consumption of meat and poultry, the
presence of pathogens in raw meat and poultry products leads
to cross-contamination of other foods and surrounding
surfaces;
(7) to reduce the risk of foodborne illness and protect
public health, regulatory authorities and all parties
involved in the production and handling of meat, meat
products, poultry, or poultry products should make a
concerted effort to reduce, to the maximum extent
practicable, contamination by pathogens using the best
available scientific information and appropriate technology;
(8) the distribution of meat, meat products, poultry, or
poultry products that contain human pathogens--
(A) impairs the effective regulation of wholesome meat,
meat products, poultry, or poultry products in interstate and
foreign commerce; and
(B) destroys markets for wholesome products;
(9) all articles and other animals that are subject to this
Act and the amendments made by this Act are either in or
substantially affect interstate or foreign commerce; and
(10) regulation by the Secretary of Agriculture and
cooperation by the States are necessary to prevent or
eliminate burdens on interstate or foreign commerce and to
protect the health and welfare of consumers.

SEC. 3. PATHOGEN PERFORMANCE STANDARDS.

(a) Meat and Meat Products.--The Federal Meat Inspection
Act (21 U.S.C. 601 et seq.) is amended by inserting after
section 8 (21 U.S.C. 608) the following:

``SEC. 8A. PATHOGEN PERFORMANCE STANDARDS.

``(a) In General.--In order to protect the public health
and promote food safety, the Secretary shall prescribe
performance standards for the reduction of pathogens in raw
meat and meat products processed by each establishment
receiving inspection services under this Act.
``(b) List of Pathogens.--
``(1) In general.--In consultation with the Secretary of
Health and Human Services, and taking into account data
available from the Centers for Disease Control and
Prevention, the Secretary shall identify the pathogens that
make a significant contribution to the total burden of
foodborne disease associated with meat and meat products.
``(2) Publication; updates.--The Secretary shall--
``(A) publish a list of the pathogens described in
paragraph (1) not later than 60 days after the date of
enactment of this section; and
``(B) update and publish the list annually thereafter.
``(c) Pathogen Surveys.--
``(1) In general.--Not later than 180 days after the date
of enactment of this section, the Secretary shall initiate
comprehensive, statistically representative surveys to
determine the current levels and incidence of contamination
of raw meat and meat products with the pathogens listed under
subsection (b), including the variation in levels and
incidence of contamination among establishments.
``(2) Publication.--Not later than 2 years after the date
of enactment of this section, the Secretary shall compile,
and publish in the Federal Register, the results of the
surveys.
``(3) Updates.--At least once every 3 years after the
preceding surveys are conducted, the Secretary shall--
``(A) conduct surveys described in paragraph (1); and
``(B) compile and publish the results of the surveys in
accordance with paragraph (2).
``(d) Pathogen Reduction Performance Standards.--
``(1) In general.--The pathogen reduction performance
standards required under subsection (a) shall ensure the
lowest level or incidence of contamination that is reasonably
achievable using the best available processing technology and
practices.
``(2) Current contamination.--In determining what is
reasonably achievable, the Secretary shall consider data on
current levels or incidence of contamination, including what
is being achieved by establishments in the upper quartile of
performance in controlling the level or incidence of
contamination.
``(3) Initial pathogens.--Not later than 3 years after the
date of enactment of this section, the Secretary shall
propose pathogen reduction performance standards for at least
2 pathogens from the list published under subsection (b).
``(4) Subsequent pathogens.--Not later than 1 year after
proposing pathogen reduction standards for the initial
pathogens under paragraph (3), and each year thereafter, the
Secretary shall propose a pathogen reduction performance
standard for at least 1 pathogen each year from the list
published under subsection (b) until standards have been
proposed for all pathogens on the list.
``(5) Final standards.--Not later than 1 year after
proposing a pathogen reduction standard for a pathogen under
this subsection, the Secretary shall promulgate a final
pathogen reduction standard for the pathogen.
``(6) Zero-tolerance standards.--Nothing in this section
affects the authority of the Secretary to establish a zero-
tolerance pathogen reduction performance standard.
``(e) Review of Standards.--
``(1) In general.--Not later than 3 years after
promulgation of a final pathogen reduction performance
standard for a pathogen under subsection (d)(5), the
Secretary shall review the standard to determine whether the
standard continues to ensure the lowest level or incidence of
contamination that is reasonably achievable using the best
available processing technology and practices, taking into
account the most recent survey conducted under subsection
(c).
``(2) Revisions.--The Secretary shall revise the standard,
as necessary, to comply with subsection (d).
``(f) Enforcement.--
``(1) In general.--The Secretary shall conduct regular
microbial testing in establishments producing raw meat and
meat products to determine compliance with the pathogen
reduction performance standards promulgated under this
section.
``(2) Inspections.--If the Secretary determines that an
establishment fails to meet a standard promulgated under
subsection (d) and that the establishment fails to take
appropriate corrective action, as determined by the
Secretary, the Secretary shall refuse to allow any meat or
meat product subject to the standard and processed by the
establishment to be labeled, marked, stamped or tagged as
`inspected and passed'.
``(g) Report on Health-Based Pathogen Performance
Standards.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Secretary, in consultation
with the Secretary of Health and Human Services, shall submit
to Congress a report on the scientific feasibility of
establishing health-based performance standards for pathogens
in raw meat and meat products.
``(2) Factors.--In preparing the report, the Secretary
shall consider--
``(A) the scientific feasibility of determining safe levels
for pathogens in raw meat and meat products;

[[Page S6983]]

``(B) the scientific and public health criteria that are
relevant to determining the safe levels; and
``(C) other factors determined by the Secretary.
``(h) Relationship to Adulteration Provisions.--Nothing in
this section affects the applicability to pathogens of the
provisions of this Act relating to adulteration.''.
(b) Poultry and Poultry Products.--The Poultry Products
Inspection Act (21 U.S.C. 451 et seq.) is amended by
inserting after section 7 (21 U.S.C. 456) the following:

``SEC. 7A. PATHOGEN PERFORMANCE STANDARDS.

``(a) In General.--In order to protect the public health
and promote food safety, the Secretary shall prescribe
pathogen performance standards for the reduction of pathogens
in raw poultry and poultry products processed by each
establishment receiving inspection services under this Act.
``(b) List of Pathogens.--
``(1) In general.--In consultation with the Secretary of
Health and Human Services, and taking into account data
available from the Centers for Disease Control and
Prevention, the Secretary shall identify the pathogens that
make a significant contribution to the total burden of
foodborne disease associated with poultry and poultry
products.
``(2) Publication; updates.--The Secretary shall--
``(A) publish a list of the pathogens described in
paragraph (1) not later than 60 days after the date of
enactment of this section; and
``(B) update and publish the list annually thereafter.
``(c) Pathogen Surveys.--
``(1) In general.--Not later than 180 days after the date
of enactment of this section, the Secretary shall initiate
comprehensive, statistically representative surveys to
determine the current levels and incidence of contamination
of raw poultry and poultry products with the pathogens listed
under subsection (b), including the variation in levels and
incidence of contamination among establishments.
``(2) Publication.--Not later than 2 years after the date
of enactment of this section, the Secretary shall compile,
and publish in the Federal Register, the results of the
surveys.
``(3) Updates.--At least once every 3 years after the
preceding surveys are conducted, the Secretary shall--
``(A) conduct surveys described in paragraph (1); and
``(B) compile and publish the results of the surveys in
accordance with paragraph (2).
``(d) Pathogen Reduction Performance Standards.--
``(1) In general.--The pathogen reduction performance
standards required under subsection (a) shall ensure the
lowest level or incidence of contamination that is reasonably
achievable using the best available processing technology and
practices.
``(2) Current contamination.--In determining what is
reasonably achievable, the Secretary shall consider data on
current levels or incidence of contamination, including what
is being achieved by establishments in the upper quartile of
performance in controlling the level or incidence of
contamination.
``(3) Initial pathogens.--Not later than 3 years after the
date of enactment of this section, the Secretary shall
propose pathogen reduction performance standards for at least
2 pathogens from the list published under subsection (b).
``(4) Subsequent pathogens.--Not later than 1 year after
proposing pathogen reduction standards for the initial
pathogens under paragraph (3), and each year thereafter, the
Secretary shall propose a pathogen reduction performance
standard for at least 1 pathogen each year from the list
published under subsection (b) until standards have been
proposed for all pathogens on the list.
``(5) Final standards.--Not later than 1 year after
proposing a pathogen reduction standard for a pathogen under
this subsection, the Secretary shall promulgate a final
pathogen reduction standard for the pathogen.
``(6) Zero-tolerance standards.--Nothing in this section
affects the authority of the Secretary to establish a zero-
tolerance pathogen reduction performance standard.
``(e) Review of Standards.--
``(1) In general.--Not later than 3 years after
promulgation of a final pathogen reduction performance
standard for a pathogen under subsection (d)(5), the
Secretary shall review the standard to determine whether the
standard continues to ensure the lowest level or incidence of
contamination that is reasonably achievable using the best
available processing technology and practices, taking into
account the most recent survey conducted under subsection
(c).
``(2) Revisions.--The Secretary shall revise the standard,
as necessary, to comply with subsection (d).
``(f) Enforcement.--
``(1) In general.--The Secretary shall conduct regular
microbial testing in establishments producing raw poultry and
poultry products to determine compliance with the pathogen
reduction performance standards promulgated under this
section.
``(2) Inspections.--If the Secretary determines that an
establishment fails to meet a standard promulgated under
subsection (d) and that the establishment fails to take
appropriate corrective action, as determined by the
Secretary, the Secretary shall refuse to allow any poultry or
poultry product subject to the standard and processed by the
establishment to be labeled, marked, stamped or tagged as
`inspected and passed'.
``(g) Report on Health-Based Pathogen Performance
Standards.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Secretary, in consultation
with the Secretary of Health and Human Services, shall submit
to Congress a report on the scientific feasibility of
establishing health-based performance standards for pathogens
in raw poultry and poultry products.
``(2) Factors.--In preparing the report, the Secretary
shall consider--
``(A) the scientific feasibility of determining safe levels
for pathogens in raw poultry and poultry products;
``(B) the scientific and public health criteria that are
relevant to determining the safe levels; and
``(C) other factors determined by the Secretary.
``(h) Relationship to Adulteration Provisions.--Nothing in
this section affects the applicability to pathogens of the
provisions of this Act relating to adulteration.''.

SEC. 4. NATIONAL ADVISORY COMMITTEE FOR MICROBIOLOGY CRITERIA
FOR FOODS.

(a) Establishment.--
(1) In general.--In consultation with the Secretary of
Health and Human Services, the Secretary of Agriculture
(referred to in this section as the ``Secretary'') shall
establish a National Advisory Committee for Microbiology
Criteria for Foods (referred to in this section as the
``Committee'').
(2) Administration.--The Committee shall report to--
(A) the Secretary of Agriculture, acting through the Under
Secretary for Food Safety; and
(B) the Secretary of Health and Human Services, acting
through the Assistant Secretary for Health.
(b) Membership.--
(1) Composition.--The Committee shall be composed of not
fewer than 9 nor more than 15 members appointed by the
Secretary, including a Chairperson designated by the
Secretary.
(2) Qualifications.--In appointing members of the
Committee, the Secretary shall appoint individuals who--
(A) are qualified by education, training, and experience to
evaluate scientific and technical information on matters
referred to the Committee; and
(B) to the maximum extent practicable, represent the fields
of microbiology, risk assessment, epidemiology, public
health, food science, veterinary medicine, and other relevant
disciplines.
(3) Prohibition on federal government employment.--A member
of the Committee appointed under paragraph (1) shall not be
an employee of the Federal Government.
(4) Date of appointments.--The appointment of an initial
member of the Committee shall be made not later than 90 days
after the date of enactment of this Act.
(5) Term.--A member of the Committee shall be appointed for
a term established by the Secretary.
(c) Meetings.--
(1) Initial meeting.--Not later than 30 days after the date
on which all members of the Committee have been appointed,
the Committee shall hold the initial meeting of the
Committee.
(2) Meetings.--The Committee shall meet at the call of the
Chairperson, in consultation with the Secretary.
(3) Quorum.--A majority of the members of the Committee
shall constitute a quorum, but a lesser number of members may
hold hearings.
(4) Conflicts of interest.--
(A) In general.--Notwithstanding sections 201 through 209
of title 18, United States Code, a conflict of interest
involving the appointment of a member of the Committee shall
be waived under section 208(b)(3) of that title only if the
member with the conflict of interest is essential to the
completion of the work of the Committee.
(B) Voting.--Notwithstanding subparagraph (A), a member of
the Committee with a conflict of interest on a matter before
the Committee shall not be allowed to vote on the matter.
(d) Duties.--
(1) In general.--The Committee shall provide such
independent, impartial, scientific advice to Federal food
safety agencies as may be requested by the Secretary for use
in the development of an integrated national food safety
systems approach from farm-to-final consumption to ensure the
safety of domestic, imported, and exported foods and reduce
the public health burden of foodborne illness.
(2) Food safety standards and regulations.--
(A) In general.--At the time at which the Secretary submits
to any Federal agency for formal review and comment any
standard or regulation proposed under the Federal Meat
Inspection Act (21 U.S.C. 601 et seq.), the Poultry Products
Inspection Act (21 U.S.C. 451 et seq.), or any program
administered by the Under Secretary for Food Safety, the
Secretary shall make available to the Committee--
(i) the standard or regulation; and
(ii) relevant scientific and technical information
possessed by the Secretary on which the proposed standard or
regulation is based.
(B) Advice and comments.--Not later than a date specified
by the Secretary that is not

[[Page S6984]]

later than 90 days after receipt of the standard or
regulation, the Committee may make available to the Secretary
the advice and comments of the Committee on the adequacy of
the scientific and technical basis for the proposed standard
or regulation, together with any additional information the
Committee considers appropriate.
(C) Contemporaneous review.--To the maximum extent
practicable, the review by the Committee under subparagraph
(A) shall be conducted contemporaneously with review by other
Federal agencies.
(e) Powers.--
(1) Hearings.--The Committee may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Committee considers advisable to
carry out this section.
(2) Information from federal agencies.--
(A) In general.--The Committee may secure directly from a
Federal agency such information as the Committee considers
necessary to carry out this section.
(B) Provision of information.--On request of the
Chairperson of the Committee, the head of the agency shall
provide the information to the Committee.
(3) Subcommittees and investigative panels.--
(A) In general.--The Committee may establish such
subcommittees and investigative panels as the Secretary and
the Committee determine necessary to carry out this section.
(B) Chairperson.--Each subcommittee and investigative panel
shall be chaired by a member of the Committee.
(4) Postal services.--The Committee may use the United
States mails in the same manner and under the same conditions
as other agencies of the Federal Government.
(5) Gifts.--The Committee may accept, use, and dispose of
gifts or donations of services or property.
(f) Committee Personnel Matters.--
(1) Compensation of members.--A member of the Committee
shall be compensated at a rate equal to the daily equivalent
of the annual rate of basic pay prescribed for level IV of
the Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during
which the member is engaged in the performance of the duties
of the Committee.
(2) Travel expenses.--A member of the Committee shall be
allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for an employee of an agency
under subchapter I of chapter 57 of title 5, United States
Code, while away from the home or regular place of business
of the member in the performance of the duties of the
Committee.
(3) Staff.--
(A) In general.--The Chairperson of the Committee may,
without regard to the civil service laws (including
regulations), appoint and terminate an executive director and
such other additional personnel as are necessary to enable
the Committee to perform the duties of the Committee.
(B) Confirmation of executive director.--The employment of
an executive director shall be subject to confirmation by the
Committee.
(C) Compensation.--
(i) In general.--Except as provided in clause (ii), the
Chairperson of the Committee may fix the compensation of the
executive director and other personnel without regard to the
provisions of chapter 51 and subchapter III of chapter 53 of
title 5, United States Code, relating to classification of
positions and General Schedule pay rates.
(ii) Maximum rate of pay.--The rate of pay for the
executive director and other personnel shall not exceed the
rate payable for level V of the Executive Schedule under
section 5316 of title 5, United States Code.
(4) Procurement of temporary and intermittent services.--
The Chairperson of the Committee may procure temporary and
intermittent services in accordance with section 3109(b) of
title 5, United States Code, at rates for individuals that do
not exceed the daily equivalent of the annual rate of basic
pay prescribed for level V of the Executive Schedule under
section 5316 of that title.
(g) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated
such sums as are necessary to carry out this section, to
remain available until expended.
(2) Existing funds.--Any funds that are available to the
National Advisory Committee on Microbiological Criteria in
existence on the date of enactment of this Act shall be made
available to the Committee.

SEC. 5. ENFORCEMENT OF HACCP AND SANITATION REQUIREMENTS.

(a) In General.--The Secretary of Agriculture shall enforce
the Hazard Analysis and Critical Control Point (HACCP) System
requirements established under part 417 of title 9, Code of
Federal Regulations (or successor regulations), and the
sanitation requirements established under part 416 of title
9, Code of Federal Regulations (or successor regulations), in
any official establishment.
(b) Enforcement.--
(1) In general.--If the Secretary determines that an
establishment fails to meet a requirement described in
subsection (a) and that the establishment fails to take
appropriate corrective action, as determined by the
Secretary, the Secretary may refuse to allow any meat or meat
product, or poultry or poultry product, subject to the
standard and processed by the establishment to be labeled,
marked, stamped or tagged as ``inspected and passed''.
(2) Additional authority.--The authority provided under
paragraph (1) is in addition to any other authority the
Secretary may have to enforce the requirements of this
section.

SEC. 6. REGULATIONS.

(a) In General.--Consistent with section 553 of title 5,
United States Code, the Secretary of Agriculture shall have
the authority to enforce the pathogen performance standards
of the Secretary in accordance with the Federal Meat
Inspection Act (21 U.S.C. 601 et seq.) and the Poultry
Products Inspection Act (21 U.S.C. 451 et seq.).
(b) Challenges.--Subsection (a) does not prevent a
challenge to the standards described in subsection (a) on any
basis other than the basis that the Secretary lacks the
authority to issue and enforce pathogen performance standards
promulgated in accordance with section 553 of title 5, United
States Code.
(c) Effective Date.--This section takes effect on January
1, 2000.

Mr. DURBIN. Mr. President, I am pleased to join Senator Harkin today
in introducing Kevin's Law, which is an essential piece of legislation
that will clarify the U.S. Department of Agriculture's authority to
enforce pathogen reduction standards in meat and poultry products.
Our country has been blessed with one of the safest and most abundant
food supplies in the world. However, we can do better. While food may
never be completely free of risk, we must strive to make our food as
safe as possible. Foodborne illnesses and hazards are still a
significant problem that cannot be passively dismissed.
The Centers for Disease Control and Prevention estimate as many as 76
million people suffer from foodborne illnesses each year. Of those
individuals, approximately 325,000 will be hospitalized and more than
5,000 will die. With emerging pathogens, broader distribution patterns,
an increasing volume of food imports, and changing consumption
patterns, this situation is not likely to improve without decisive
action.
Foodborne illnesses can have devastating effects on certain
populations in our society. Children are especially vulnerable. Because
their immune systems are not fully developed, they are at greater risk
for developing life-threatening or fatal complications associated with
foodborne illnesses. Quite simply, a child's lower weight means that it
takes a smaller quantity of pathogens to make a child sick than it
would a healthy adult. The elderly and those with compromised immune
systems are also at high risk for developing life-threatening
conditions associated with foodborne illnesses.
A key tool for addressing foodborne illness in this country has been
the USDA's pathogen reduction/hazard analysis and critical control
point, PR/HACCP, regulations that were phased in beginning in January
1998. Under these regulations, USDA developed a scientific approach
aimed at protecting consumers from foodborne pathogens. Instead of a
system based on sight, smell, and touch, USDA moved to a system that
would successfully detect harmful pathogens whether visible or not.
A major part of this system includes testing for harmful pathogens,
such as salmonella. USDA uses the data from this testing to determine
if meat and poultry plants are producing products that are safe to
consume.
USDA's pathogen testing regulations have provided consumers with
increased confidence in the safety of meat and poultry products.
However, in December of 2001, the Fifth Circuit Court of Appeals upheld
an earlier district court decision that removes the USDA's authority to
enforce its pathogen standards for salmonella. The result of this court
case is that USDA can no longer ensure that meat and poultry plants
comply with pathogen standards. This creates a significant risk that
meat and poultry products contaminated with common but potentially
deadly pathogens will be sold to unsuspecting consumers.
The legislation we are introducing today will clarify USDA's
authority to enforce strong safety standards for contamination in meat
and poultry products. Specifically, this legislation will provide the
Secretary of Agriculture with the clear authority to control for
pathogens and enforce pathogen performance standards for meat and
poultry products. Only with this authority will the Secretary of
Agriculture be able to ensure the safety of the meat and poultry
products sold in this country.
We must work together to ensure that USDA has the necessary authority

[[Page S6985]]

to enforce pathogen performance standards that will protect public
health. Let's not turn our back on food safety and consumer protection
at such a critical time for food safety and security. I encourage my
colleagues to join this effort to protect our food supply and public
health.
______

By Mr. BOND:
S. 1105. A bill to authorize the Secretary of the Interior to study
the suitability and feasibility of designating the French Colonial
Heritage Area in the State of Missouri as a unit of the National Park
System, and for other purposes; to the Committee on Energy and Natural
Resources.
Mr. BOND. Mr. President, I rise today to introduce legislation
recognizing the historical significance of downtown Sainte Genevieve,
MO. Sainte Genevieve was the first European settlement west of the
Mississippi River, and still contains many structures and artifacts
that have survived from its rich early history. Establishing this area
as a unit of the National Park System will provide an unparalleled
opportunity for Americans to be educated about our Nation's colonial
past.
Sainte Genevieve was founded by French settlers in 1735. These early
pioneers traveled south from French Canada, and built the rare French
Colonial style structures that remain in place to this day. Today, the
city contains an invaluable wealth of Native American and French
Colonial sites, artifacts, and architecture. Perhaps most impressively,
downtown Sainte Genevieve contains three of only five poteaux-en-Terre,
post in the ground, vertical log French homes remaining in North
America, dating from approximately 1800.
In addition to the historic downtown district, the area adjacent to
Sainte Genevieve is rich in historic sites. The ``Grand Champ'' common
field of the French colonists still retains its original field land
pattern. The area's saline salt springs were an important industry
source for Native American and European settlers. And nearby ceremonial
mounds are evidence of a prehistoric Native American village.
This area is a truly valuable asset to the State of Missouri, and I
feel that it is only fair to share it with the entire Nation by
establishing the French Colonial Heritage Area as a unit of the
National Park System. My legislation would take the first step toward
such an establishment by directing the National Park Service to conduct
a study of the historic features of Sainte Genevieve. After a thorough
study, I am confident that the National Park Service will determine
that Sainte Genevieve is the best tool with which to tell the important
and fascinating story of the French in the New World.
______

By Ms. SNOWE (for herself and Mr. Kerry):
S. 1106. A bill to establish National Standards for Fishing Quota
Systems; to the Committee on Commerce, Science, and Transportation.
Ms. SNOWE. Mr. President, I rise today, along with Senator Kerry, to
introduce the Fishing Quota Act of 2003 which will address one of the
most complex policy questions in fisheries management--fishing quotas.
This bill will amend the Magnuson-Stevens Fishery Conservation and
Management Act to authorize the establishment of new fishing quota
systems. This legislation will in no way whatsoever force Fishing Quota
programs upon any regional fishery management council and this is not a
mandate to use Fishing Quota programs. Rather, it is intended to
provide the councils with an additional conservation and management
tool.
Fishing Quota programs can drastically change the face of fishing
communities and the fundamental principles of conservation and
management. Therefore, this legislation was developed in a careful and
meaningful manner over the span of many years with significant input
and participation from all of the many affected and interested parties.
In 1996, Congress reauthorized the Magnuson-Stevens Fishery
Conservation and Management Act through enactment of the Sustainable
Fisheries Act, SFA. The SFA contained the most substantial improvements
to fisheries conservation since the original passage of the Magnuson-
Stevens Act in 1976. More specifically, the SFA included a five year
moratorium on new fishing quota programs and required the National
Academy of Sciences, NAS, to study and report on the issue.
In 1999, the NAS issued its report, Sharing the Fish, which contained
a number of critically important recommendations addressing the social,
economic, and biological aspects of Fishing Quota programs. The Fishing
Quota Act of 2003 incorporates many of the recommendations in this
report and provides the regional councils with the flexibility to adopt
additional NAS recommendations.
During the 106th Congress, the Subcommittee on Oceans and Fisheries
traveled across the country and held six hearings on reauthorizing the
Magnuson-Stevens Act. We began the process in Washington, DC, and then
visited fishing communities in Maine, Louisiana, Alaska, Washington,
and Massachusetts. During the course of those hearings, we heard
official testimony from over 70 witnesses and received statements from
many more fishermen during open microphone sessions at each field
hearing. The Subcommittee heard the comments, views, and
recommendations of Federal and State officials, regional council
chairmen and members, other fisheries managers, commercial and
recreational fishermen, members of the conservation community, and many
other interested in these important issues. After these hearings, I
introduced the Individual Fishing Quota Act of 2001, S. 637, at the
beginning of the 107th Congress beginning the legislative dialogue.
Since then, we have heard from many stakeholders who assisted the
Subcommittee in shaping and re-shaping this bill.
The Fishing Quota Act of 2003 creates a framework under which fishery
management plans, FMPs, or plan amendments may establish a new fishing
quota system. As with other components of fisheries conservation and
management, there is no ``one-size-fits-all'' solution to Fishing Quota
programs. Therefore, this bill sets certain conditions under which
Fishing Quota programs may be developed, if such a program is desired.
In doing so, it clearly provides the regional fishery management
councils and the affected fishermen with the flexibility to shape any
new Fishing Quota program to fit the needs of the fishery.
The bill ensures that any regional council which establishes a new
fishing quota program will promote sustainable management of the
fishery; require fair and equitable allocation of fishing quotas;
minimize negative social and economic impacts on local coastal
communities; ensure adequate enforcement of the system; and take into
account present participation and historical fishing practices of the
relevant fishery. Additionally, the bill requires the Secretary of
Commerce to conduct referenda to ensure that those most affected by
fishing quotas will have the opportunity to formally approve the
adoption of any new fishing quota program by a two-thirds vote.
This bill authorizes the potential allocation of fishing quotas to
fishing vessel owners, fishermen, and crew members who are citizens of
the United States. In addition, participation in the fishery is
required for a person to obtain quota. Moreover, this bill permits
councils to allocate quota shares to entry-level fishermen, small
vessel owners, or crew members who may not otherwise be eligible for
individual quotas. While this bill authorizes the transfer of fishing
quotas, it requires the regional councils to define and prohibit an
excess accumulation of quota shares.
This is a good bill which allows Fishing Quota programs to be created
where they are needed and desired. The Fishing Quota Act of 2003
incorporates many of the suggestions we heard from those men and women
who fish for a living and those who are most affected by the law and
its regulations. I appreciate the participation of Senator Kerry and
all the impacted stakeholders who assisted in drafting this
legislation. I look forward to moving this bill through the legislative
process toward final passage.
I ask unanimous consent that the text of the bill be printed in the
Record.

S. 1106

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 ``Fishing Quota Act of 2003''.

[[Page S6986]]

SEC. 2. FISHING QUOTA SYSTEMS.

(a) In General.--Section 303 of the Magnuson-Stevens
Fishery Conservation and Management Act (16 U.S.C. 1853) is
amended--
(1) by striking subsection (f)(6) and inserting the
following:
``(6) establish a limited access system for the fishery in
order to achieve optimum yield if, in developing such system,
the Council and the Secretary take into account--
``(A) the conservation requirements of this Act with
respect to the fishery;
``(B) present participation in the fishery;
``(C) historical fishing practices in, and dependence on,
the fishery;
``(D) the economics of the fishery;
``(E) the capability of fishing vessels used in the fishery
to engage in other fisheries;
``(F) the cultural and social framework relevant to the
fishery and any affected fishing communities;
``(G) the fair and equitable distribution of a public
resource; and
``(H) any other relevant considerations.'';
(2) by striking subsection (d) and inserting the following:
``(d) Fishing Quota Systems.--
``(1) Establishment.--Any fishery management plan or
amendment that is prepared by any Council, or by the
Secretary, with respect to any fishery, may establish a
fishing quota system consistent with the provision of
subsection (b)(6).
``(2) In general.--The Councils and Secretary shall ensure
that any such fishing quota system submitted and approved
after September 30, 2002, complies with the requirements of
this Act, and;
``(A) shall prevent any person from acquiring an excessive
share of the fishing quotas issued, as appropriate for the
fishery, and establish any other limits or measures necessary
to prevent inequitable concentration of quota share;
``(B) shall provide for the fair and equitable initial
allocation of quota share and in such allocation--
``(i) shall take into account present and historic
participation in the fishery;
``(ii) shall consider allocating a portion of the annual
harvest to entry-level fishermen, small vessel owners,
skippers, crew members, and fishing communities; and
``(iii) may allocate shares among categories of vessels or
gear types.
``(C) shall contain provisions for the regular review and
evaluation of the system, including timetables and criteria
for evaluating performance, and actions to be taken for
failure to meet the criteria;
``(D) shall contain criteria that would govern limitation,
revocation, renewal, reallocation, or reissuance of fishing
quota, including:
``(i) reallocation or reissuance of quota revoked pursuant
to section 308 of this Act;
``(ii) revocation and reissuance of fishing quota if the
owner of the quota cease to substantially participate in the
fishery; and
``(iii) exceptions to revocation or limitation in cases of
death, disablement, undue hardship, or in any case in which
fishing is prohibited by the Secretary;
``(E) shall provide a process for appeals of decisions on--
``(i) eligibility of a person to receive or bid for an
allocation of quota shares; and
``(ii) limitations, restrictions and revocations of quota
held by a person.
``(F) shall promote management measures top improve the
conservation and management of the fishery, including
reduction by bycatch;
``(G) shall provide for effective enforcement, monitoring,
a management of such system, including adequate data
collection and use of observers at least at a level of
coverage that should yield statistically significant results;
``(H) may provide for the sale, lease or transfer of quota
shares and limitations thereto;
``(I) shall provide a mechanism, such as fees as authorized
by section 304(d)(2), including fees payable on quota
transfers to recover costs related to administering and
implementing the program, including enforcement, management
and data collection (including adequate observer coverage),
if the assessment of such fees is proportional to the amount
of quota held and fished by each quota holder and if such
fees are used only for that fishing quota system;
``(J) shall consider the use of community or area-based
approaches and strategies in developing fishing quota systems
and consider other management measures, including measures to
facilitate formation of fishery cooperative arrangements,
taking into account proximity to and dependence on the
resource, contribution of fishing to the social and economic
status of the community, and historic participation in the
fishery; and
``(K) shall include procedures and requirements necessary
to carry out subparagraphs (A) through (J).
``(3) No creation of right, title, or interest.--A fishing
quota or other limited access system authorization--
``(A) shall be considered a permit for the purposes of
sections 307, 308, and 309;
``(B) may be revoked or limited at any time in accordance
with this Act, including for failure to comply with the terms
of the plan or if the system is found to have jeopardized the
sustainability of the stock or the safety of fishermen;
``(C) shall not confer any right of compensation to the
holder of such fishing quota or other such limited access
system authorization if it is revoked or limited;
``(D) shall not create, or be construed to create, any
right, title, or interest in or to any fish before the fish
is harvested; and
``(E) shall be considered a grant of permission to the
holder of the fishing quota to engage in activities permitted
by the fishing quota system.
``(4) Eligibility.--Persons eligible to hold fishing quota
shares are persons who are United States citizens, or who are
United States nationals or permanent resident aliens
qualified by Federal law to participate in the fishery.
``(5) Duration.--Any fishing quota system established under
this section after the date of enactment of the Fishing Quota
Act of 2003 shall expire at the end of a 10-year period
beginning on the date the system is established, or at the
end of successive 10 year periods thereafter, unless extended
by a fishery management plan amendment is accordance with
this Act, for successive periods not to exceed 10 years.
``(6) Referendum Procedures.--
``(A) Except as provided in subparagraph (C) for the Gulf
of Mexico commercial red snapper fishery, a Council may not
submit, and the Secretary not approve or implement a fishery
management plan or amendment that creates a fishing quota
system, including a secretarial plan, unless such a system,
as ultimately developed, has been approved by more than two-
thirds of those voting in a referendum among eligible permit
holders. If a fishing quota system fails to be approved by
the requisite number of those voting, it may be revised and
submitted for approval in a subsequent referendum.
``(B) The Secretary shall conduct the referendum referred
to in this paragraph, including notifying all persons
eligible to participate in the referendum and making
available to them information concerning the schedule,
procedures and eligibility requirements for the referendum
process and the proposed fishing quota system. The Secretary
shall within one year of enactment of the Fishing Quota Act
of 2003 publish guidelines and procedures to determine
procedures and voting eligibility requirements for
referenda and to conduct such referenda in a fair and
equitable manner.
``(C) The provisions of section 407(e) shall apply in lieu
of this paragraph for any fishing quota system for the Gulf
of Mexico commercial red snapper fishery.
``(D) Chapter 35 of title 44, United States Code, (commonly
known as the ``Paperwork Reduction Act'') does not apply to
the referenda conducted under this paragraph.
``(7)(A) No provision of law shall be construed to limit
the authority of a Council to submit, or the Secretary to
approve, the termination or limitation, without compensation
to holders of any limited access system permits, of a fishery
management plan, plan amendment, or regulation that provides
for a limited access system, including a fishing quota
system.
``(B) This subsection shall not apply to, or be construed
to prohibit a Council from submitting, or the Secretary from
approving and implementing, amendments to the North Pacific
halibut and sablefish, Southern Atlantic wreckfish, or Mid-
Atlantic surf clam and ocean (including mahogany) quahog
individual fishing quota programs.
``(8)(A) A Council may submit, and the Secretary may
approve and implement, a program which reserves up to 25
percent of any fees collected from a fishery under section
304(d)(2) to be used, pursuant to section 1104A(a)(7) of the
Merchant Marine Act, 1936 (46 U.S.C. App. 1274(a)(7)), to
issue obligations that aid in financing the----
``(i) purchase of fishing quotas in that fishery by
fishermen who fish from small vessels; and
``(ii) first-time purchase of fishing quotas in that
fishery by entry level fishermen.
``(B) A Council making a submission under subparagraph (A)
shall recommend criteria, consistent with the provisions of
this Act, that a fisherman must meet to qualify for
guarantees under clauses (i) and (ii) of subparagraph (A) and
the portion of funds to be allocated for guarantees under
each clause.''.
(b) Independent Review.--Section 303 of the Magnuson-
Stevens Fishery Conservation and Management Act (16 U.S.C.
1853) is further amended by adding at the end the following:
``(e)(1) Within 5 years after the date of enactment of the
Fishing Quota Act of 2003, and every 5 years thereafter, the
National Research Council shall provide an independent review
of the effectiveness of fishing quota systems conducted in
Federal fisheries.
``(2) The review shall be conducted by an independent panel
of individuals who have knowledge and experience in fisheries
conservation and management, in the implementation of fishing
quota systems, or in the social or economic characteristics
of fisheries. The National Research Council shall ensure that
members of the panel are qualified for appointment, are not
active quota share holders, and provide fair representation
to interests affected by such programs.
``(3) The independent review of fishing quota systems shall
include--
``(A) a determination of how fishing quota systems affect
fisheries management and contribute to improved management,
conservation (including bycatch reduction) and safety in the
fishery;
``(B) formal input in the form of testimony from quota
holders relative to the effectiveness of the fishing quota
system;
``(C) an evaluation of the social, economic and biological
consequences of the quota system, including the economic
effects of the system on fishing communities;

[[Page S6987]]

``(D) an evaluation of the costs of implementing,
monitoring and enforcing the systems and the methods used to
establish or allocate individual quota shares; and
``(E) recommendations to the Councils and the Secretary to
ensure that quota systems meet the requirements of this Act
and the goals of the plans, and recommendations to the
Secretary for any changes to regulations issued under section
304(i).
``(4) The Secretary shall submit the report to the Congress
and any appropriate Councils within 60 days after the review
is completed.''.
(c) Action on Limited Access Systems.--Section 304 of the
Magnuson-Stevens Fishery Conservation and Management Act (16
U.S.C. 1854) is amended by adding at the end the following:
``(i) Action on limited access systems.--Within 1 year
after the date of enactment of the Fishing Quota Act of 2003,
the Secretary shall issue regulations which establish
requirements for establishing a fishing quota system. Nothing
in this paragraph prohibits a Council or the Secretary
from initiating development of a fishing quota system
consistent with the provisions of this Act pending
publication of the final regulations.''.
(d) Definitions.--Section 3 of the Magnuson-Stevens Fishery
Management and Conservation Act (16 U.S.C. 1802) is amended
by--
(1) adding at the end the following:
``(46) The term `United States Citizen' means an individual
who is a citizen of the United States or a corporation,
partnership, association or other entity that qualifies to
document a fishing vessel as a vessel of the United States
under chapter 121 of title 46, United States Code.''; and
(2) striking `` `individual fishing quota' '' in paragraph
(21) and inserting `` `fishing quota system' ''.
(e) Conforming Amendments.--
(1) The following provisions of that Act are amended by
striking ``individual fishing quota'' and inserting ``fishing
quota'';
(A) Section 304(c)(3) (16 U.S.C. 1854(c)(3)).
(B) Section 304(d)(2)(A)(i) (16 U.S.C. 1854(D)(2)(A)(i)).
(C) Section 402(b)(1)(D) (16 U.S.C. 1881a(b)(1)(D)).
(D) Section 407(a)(1)(D), (c)(1), and (c)(2)(B) (16 U.S.C.
1883(a)(1)(D), (c)(1), and (c)(2)(B)).
(2) section 305(h)(1) (16 U.S.C. 1855(h)(1) is amended by
striking ``individual''.

SEC. 3. GULF OF MEXICO FISHING QUOTA SYSTEMS.

Section 407(c) of the Magnuson-Stevens Fishery Conservation
and Management Act (16 U.S.C. 1883) is amended by adding at
the end the following:
``(3) The initial referendum described in paragraph (1)
shall be used to determine support for whether the sale,
transfer, or lease of quota shares shall be allowed.''.

Mr. KERRY. Mr. President, I rise today with my colleague, Ms. Snowe,
to introduce the Fishing Quota Act of 2003, legislation to establish
national criteria governing the use of individual fishing quota IFQ
systems. Work began in earnest on this bipartisan bill in the Commerce
Committee last spring, as the expiration of the national moratorium on
the use of IFQs approached, and small boat fishermen voiced concerns
that existing legislative criteria governing the use of IFQs would not
offer sufficient protection to communities. I would like to thank
Subcommittee Chair Snowe for her efforts to work with me and with other
members of the Commerce Committee on this legislation, which draws from
separate IFQ legislation that both Senator Snowe and I introduced
beginning in the 106th Congress.
The IFQ moratorium established under the 1996 Sustainable Fisheries
Act was set to expire September 30, 2000. Senator Snowe and I supported
a 2-year extension of that moratorium to allow for hearings and full
consultation with affected groups on the issues surrounding IFQs. Our
discussions focused on the need to provide regional flexibility to use
IFQs as a management tool, while providing national ``rules of the
road.'' Such rules of the road would ensure IFQ systems developed after
expiration of the moratorium are adopted with the support of the
fishery, allocate quota fairly and equitably, address region-specific
needs, further the conservation and management goals of the Magnuson-
Stevens Act, prevent consolidation of quota, address the needs of small
fishing communities, and recognize both the public nature of the
resource and that issuance of an IFQ does not give rise to a
compensable property right.
To develop such rules, we worked with fellow Commerce Committee
members, including Senators Breaux, Lott, Boxer, Stevens, and Cantwell,
consulted with interested groups, and obtained technical advice from
the National Marine Fisheries Service. While New England has
historically been opposed to IFQs, other regions are interested in
utilizing IFQ programs in certain fisheries. I believe the resulting
bill provides a balance between the need to provide national policy
guidance that considers the concerns of communities and harvesters, but
allows for development of IFQ systems, where appropriate, on a fishery-
by-fishery basis. This preserves the balanced regional approach to
fishery management that Congress intended in the Magnuson-Stevens Act.
I also want to clarify that this bill does not authorize the
establishment of ``processor quota,'' and relates only to issuance of
harvester quota.
The bill Senator Snowe and I are introducing today sets forth a set
of national criteria that councils wishing to adopt IFQs would follow.
Importantly, this bill contains a provision that directs councils to
consider the use of community or area-based approaches and strategies
that would preserve the vitality of small fishing communities,
including the allocation of quota to a fishing community. It also
directs councils to consider use of other management measures,
including those that would facilitate formation of fishery cooperative
arrangements, taking account of the dependence of coastal communities
on these fisheries.
This bill addresses many of the concerns raised by fishermen, and I
understand the many concerns of small fisherman in New England
regarding the use of IFQs. I believe this bill gives fishermen the
power to decide whether to implement an IFQ program and ensures that
those who do will operate under a fair system. First, no region could
implement an IFQ system without approval of a two-thirds majority of
eligible permit holders through a referendum process run by the
Secretary of Commerce. In addition, any IFQ system developed under the
legislation would have to meet a set of national criteria. These
national criteria would include: (1) ensuring a fair and equitable
initial allocation of quota, including the establishment of an appeals
process for qualification and allocation decisions, taking into account
present and historic participation in the fishery; (2) establishing
limits necessary to prevent inequitable concentration of quota share;
(3) preventing any person from acquiring an ``excessive share''; (4)
considering allocation of a portion of the annual harvest specifically
to small fishermen, skippers, crew members, fishing communities, or
categories of vessels or gear types; and (5) providing for revocation
of quota if the owner is no longer an active fisherman.

I also believe this bill responds to concerns that IFQ systems would
undermine the national interest in conserving fishery resources held in
the public trust. In order to respond to those concerns, the bill
would: (1) specify that an IFQ is a permit under the Magnuson-Stevens
Act and does not confer any right of compensation or any right, title
or interest to any fish before it is harvested; (2) established that
the quota expires after 10 years, unless extended by a fishery
management plan; (3) require that the systems promote management
measures to improve the conservation and management of the fishery,
including reduction of bycatch; (4) provide for regular review and
evaluation of the system, including specifying actions to be taken for
any failure to meet the criteria; (5) require that the systems provide
for effective enforcement, monitoring, and management, including use of
observers; and (6) require that quota be revoked from individuals found
to be subject to civil penalties under section 308 of the Magnuson-
Stevens Act.

The bill also would require a 5-year recurring independent review of
IFQ systems by the National Research Council, to: (1) evaluate the
effectiveness of such systems and determine who the systems contribute
to improved management, conservation and safety; (2) evaluate the
social, economic and biological consequences of the systems, including
economic impacts on fishing communities; (3) evaluate the costs of
implementation; and (4) provide recommendations to ensure the systems
meet Magnuson-Stevens Act requirements and the goals of the plans.
I believe this legislation provides guidelines for the use of IFQs
that will help ensure the health of our marine fisheries. During the
last reauthorization of the Magnuson-Stevens Act, our

[[Page S6988]]

Nation's fisheries were at a crossroads, and action was required to
remedy our marine resource management problems, to preserve the way of
life in our coastal communities, and to promote the sustainable use and
conservation of our marine resources for future generations and for the
economic good of the Nation. We must stay the course, and this bill
will help us do just that. I remain committed to the goal of
establishing biologically and economically sustainable fisheries so
that fishing will continue to be an important part of the culture and
economy of coastal communities throughout Massachusetts, as well as the
economy of the Nation.
______

By Mr. THOMAS:
S. 1107. A bill to enhance the Recreation Fee Demonstration Program
for the National Park Service, and for other purposes; to the Committee
on Energy and Natural Resources.
Mr. THOMAS. Mr. President, I rise today to introduce the Recreation
Fee Authority Act of 2003. This legislation modifies the
congressionally created Recreation Fee Demonstration Program.
The issue of user fees on public lands is a difficult one. As you
know, our Nation's parks and recreation areas are in serious trouble
and have significant maintenance and infrastructure needs. The National
Park Service alone has roughly a $5 billion backlog in maintenance and
infrastructure repair. There are a number of reasons for this funding
shortage, including poor park management, congressional inaction and
apathy from the American public.
Currently, the Recreation Fee Demonstration Program allows the
National Park Service, Bureau of Land Management, Fish and Wildlife
Service and the U.S. Forest Service to collect and expend funds for
areas in need of additional financial support. Agencies collect fees
for admission to a unit or site for special uses such as boating and
back country camping fees and are able to use 80 percent of the
receipts for protection and enhancement in that area. Fees are
typically used for visitor services, maintenance and repair of
facilities as well as cultural and natural resource management. The
remaining 20 percent is used on an agency-wide basis for parts of the
system, which are precluded from participating in the Recreation Fee
Demonstration program.
The legislation I am introducing today allows permanent authorization
of the Recreation Fee Demonstration Program for national parks, and
provides some new flexibility. For example, many visitors frequent
national and State parks, but are not allowed to use State and national
passes interchangeably. In cooperation with State agencies, the
Secretary of the Interior will be authorized to enter into revenue
sharing agreements to accept state and national park passes at sites
within that state--providing a cost savings and convenience for the
visitor.
In the past, concerns have been expressed about ``nickel and dime''
efforts where there appears to be a lack of planning and coordination
by agency officials. Fee programs under this legislation would be
established at fair and equitable rates. Each unit would perform an
analysis to consider benefits and services provided to the visitor,
cumulative effect of fees, public policy and management objectives and
feasibility of fee collection. This review would serve as a business
plan for each site so that managers could utilize scarce resources in
the most efficient manner.
The Recreation Fee Demonstration program was an effort by Congress to
allow public land agencies to obtain funding in addition to their
annual appropriations. This legislation will help provide resources for
badly needed improvement projects and ensure an enhanced experience for
all visitors.
We need to guarantee our national treasures are available for
generations to come. I believe that Congress, the National Park Service
and those interested in helping our parks should cooperate on
initiatives to protect resources, increase visitor services and improve
management throughout the system. Working together, we can ensure that
these areas will remain affordable and accessible for everyone.
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. 1107

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 ``Recreational Fee Authority
Act of 2003''.

SEC. 2. RECREATION FEE AUTHORITY.

(a) In General.--Beginning in Fiscal Year 2004 and
thereafter, the Secretary of the Interior (``Secretary'') may
establish, modify, charge, and collect fees for admission to
a unit of the National Park System and the use of National
Park Service (``Service'') administered areas, lands, sites,
facilities, and services (including reservations) by
individuals and/or groups. Fees shall be based on an analysis
by the Secretary of--
(A) the benefits and services provided to the visitor;
(B) the cumulative effect of fees;
(C) the comparable fees charged elsewhere and by other
public agencies and by nearby private sector operators;
(D) the direct and indirect cost and benefit to the
government;
(E) public policy or management objectives served;
(F) economic and administrative feasibility of fee
collection, and
(G) other factors or criteria determined by the Secretary.
(b) Number of Fees.--The Secretary shall establish the
minimum number of fees and shall avoid the collection of
multiple or layered fees for a wide variety of uses,
activities or programs.
(c) Analysis.--The results of the analysis together with
the Secretary's determination of appropriate fee levels shall
be transmitted to the Congress at least three months prior to
publication of such fees in the Federal Register. New fees
and any increases or decreases in established fees shall be
published in the Federal Register and no new fee or change in
the amount of fees shall take place until at least 12 months
after the date the notice is published in the Federal
Register.
(d) Additional Authorities.--Beginning on October 1, 2003
the Secretary may enter into agreements, including contracts
to provide reasonable commissions or reimbursements with any
public or private entity for visitor reservation services,
fee collection and/or processing services.
(e) Administration.--The Secretary may provide discounted
or free admission days or use, may modify the National Park
Passport, established pursuant to Public Law 105-391, and
shall provide information to the public about the various fee
programs and the costs and benefits of each program.
(f) State Agency Admission and Special Use Passes.--
Effective October 1, 2003 and notwithstanding the Federal
Grants Cooperative Agreements Act, the Secretary may enter
into revenue sharing agreements with State agencies to accept
their annual passes and convey the same privileges, terms and
conditions as offered under the auspices of the National Park
Passport, to State agency annual passes and shall only be
accepted for all of the units of the National Park System
within the boundaries of the State in which the
specific revenue sharing agreement is entered into except
where the Secretary has established a fee that includes a
unit or units located in more than one State.

SEC. 3. DISTRIBUTION OF RECEIPTS.

(a) Without further appropriation, all receipts collected
pursuant to the Act or from sales of the National Park
Passport shall be retained by the Secretary and may be
expended as follows--
(1) 80 percent of amounts collected at a specific area,
site, or project as determined by the Secretary, shall remain
available for use at the specific area, site or project,
except for those units of the National Park System that
participate in an active revenue sharing agreement with a
State under Section 2(f) of this Act, not less than 90
percent of amounts collected at a specific area, site, or
project shall remain available for use.
(2) The balance of the amounts collected shall remain
available for use by the Service on a Service-wide basis as
determined by the Secretary.
(3) Monies generated as a result of revenue sharing
agreements established pursuant to Section 2(f) may provide
for a fee-sharing arrangement. The Service shares of fees
shall be distributed equally to all units of the National
Park System in the specific States that are parties to the
revenue sharing agreement.
(4) Not less than 50 percent of the amounts collected from
the sale of the National Park Passport shall remain available
for use at the specific area, site, or project at which the
fees were collected and the balance of the receipts shall be
distributed in accordance with paragraph 2 of this Section.

SEC. 4. EXPENDITURES

(a) Use of Fees at Specific Area, Site, or Project.--
Amounts available for expenditure at a specific area, site or
project shall be accounted for separately and may be used
for--
(1) repair, maintenance, facility enhancement, media
services and infrastructure including projects and expenses
relating to visitor enjoyment, visitor access, environmental
compliance, and health and safety;
(2) interpretation, visitor information, visitor service,
visitor needs assessments, monitoring, and signs;
(3) habitat enhancement, resource assessment, preservation,
protection, and restoration related to recreation use, and

[[Page S6989]]

(4) law enforcement relating to public use and recreation.
(b) The Secretary may use not more than fifteen percent of
total revenues to administer the recreation fee program
including direct operating or capital costs, cost of fee
collection, notification of fee requirements, direct
infrastructure, fee program management costs, bonding of
volunteers, start-up costs, and analysis and reporting on
program accomplishments and effects.

SEC. 5. REPORTS.

(a) On January 1, 2006 and every three years thereafter the
Secretary shall submit to the Congress a report detailing the
status of the Recreation Fee Program conducted in units of
the National Park System including an evaluation of the
Recreation Fee Program conducted at each unit of the National
Park System; a description of projects that were funded, work
accomplished, and future projects and programs for funding
with fees, and any recommendations for changes in the overall
fee system.
______

By Mr. TALENT (for himself and Mr. Wyden):
S. 1109. A bill to provide $50,000,000,000 in new transportation
infrastructure funding through Federal bonding to empower States and
local governments to complete significant infrastructure projects
across all modes of transportation, including roads, rail, transit,
aviation, and water, and for other purposes; to the Committee on
Finance.
Mr. TALENT. 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. 1109

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

SECTION 1. SHORT TITLE; ETC.

(a) Short Title.--This Act may be cited as the ``Build
America Bonds Act of 2003''.
(b) References to Internal Revenue Code of 1986.--Except as
otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to,
or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.

SEC. 2. FINDINGS.

Congress finds the following:
(1) Our Nation's highways, transit systems, railroads,
airports, ports, and inland waterways drive our economy,
enabling all industries to achieve growth and productivity
that makes America strong and prosperous.
(2) The establishment, maintenance, and improvement of the
national transportation network is a national priority, for
economic, environmental, energy, security, and other reasons.
(3) The ability to move people and goods is critical to
maintaining State, metropolitan, rural, and local economies.
(4) The construction of infrastructure requires the skills
of numerous occupations, including those in the contracting,
engineering, planning and design, materials supply,
manufacturing, distribution, and safety industries.
(5) Investing in transportation infrastructure creates
long-term capital assets for the Nation that will help the
United States address its enormous infrastructure needs and
improve its economic productivity.
(6) Investment in transportation infrastructure creates
jobs and spurs economic activity to put people back to work
and stimulate the economy.
(7) Every billion dollars in transportation investment has
the potential to create up to 47,500 jobs.
(8) Every dollar invested in the Nation's transportation
infrastructure yields at least $5.70 in economic benefits
because of reduced delays, improved safety, and reduced
vehicle operating costs.

SEC. 3. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

(a) In General.--Part IV of subchapter A of chapter 1
(relating to credits against tax) is amended by adding at the
end the following new subpart:

``Subpart H--Nonrefundable Credit for Holders of Build America Bonds

``Sec. 54. Credit to holders of Build America bonds.

``SEC. 54. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

``(a) Allowance of Credit.--In the case of a taxpayer who
holds a Build America bond on a credit allowance date of such
bond which occurs during the taxable year, there shall be
allowed as a credit against the tax imposed by this chapter
for such taxable year an amount equal to the sum of the
credits determined under subsection (b) with respect to
credit allowance dates during such year on which the taxpayer
holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance
date for a Build America bond is 25 percent of the annual
credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any Build America bond is the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(2), the applicable credit rate with respect to an issue is
the rate equal to an average market yield (as of the day
before the date of sale of the issue) on outstanding long-
term corporate debt obligations (determined in such manner as
the Secretary prescribes).
``(4) Credit allowance date.--For purposes of this section,
the term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.

Such term includes the last day on which the bond is
outstanding.
``(5) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period
ending on a credit allowance date, the amount of the credit
determined under this subsection with respect to such credit
allowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-month
period during which the bond is outstanding. A similar rule
shall apply when the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this part
(other than this subpart and subpart C).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such taxable year.
``(d) Credit Included in Gross Income.--Gross income
includes the amount of the credit allowed to the taxpayer
under this section (determined without regard to subsection
(c)) and the amount so included shall be treated as interest
income.
``(e) Build America Bond.--For purposes of this part, the
term `Build America bond' means any bond issued as part of an
issue if--
``(1) 95 percent or more of the proceeds from the sale of
such issue are to be used--
``(A) for expenditures incurred after the date of the
enactment of this section for any qualified project, or
``(B) for deposit in the Build America Trust Account for
repayment of Build America bonds at maturity,
``(2) the bond is issued by the Build America Corporation,
is in registered form, and meets the Build America bond
limitation requirements under subsection (f),
``(3) the Build America Corporation certifies that it meets
the State contribution requirement of subsection (k) with
respect to such project, as in effect on the date of
issuance,
``(4) the Build America Corporation certifies that the
State in which an approved qualified project is located meets
the requirement described in subsection (l),
``(5) except for bonds issued in accordance with subsection
(f)(4), the term of each bond which is part of such issue
does not exceed 30 years,
``(6) the payment of principal with respect to such bond is
the obligation of the Build America Corporation, and
``(7) the issue meets the requirements of subsection (g)
(relating to arbitrage).
``(f) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a Build America bond
limitation for each calendar year. Such limitation is--
``(A) for 2004--
``(i) with respect to bonds described in subsection
(e)(1)(A), $50,000,000,000, plus
``(ii) with respect to bonds described in subsection
(e)(1)(B), such amount (not to exceed $15,000,000,000) as
determined necessary by the Build America Corporation to
provide funds in the Build America Trust Account for the
repayment of Build America bonds at maturity, and
``(B) except as provided in paragraph (3), zero thereafter.
``(2) Limitation allocated to qualified projects among
states.--
``(A) In general.--Subject to subparagraph (B), the
limitation applicable under paragraph (1)(A)(i) for any
calendar year shall be allocated by the Build America
Corporation for qualified projects among the States under an
allocation plan established by the Corporation and submitted
to Congress for consideration.
``(B) Minimum allocations to states.--In establishing the
allocation plan under subparagraph (A), the Build America
Corporation shall ensure that the aggregate amount allocated
for qualified projects located in each State under such plan
is not less than $500,000,000.
``(3) Carryover of unused limitation.--If for any calendar
year--
``(A) the Build America bond limitation amount, exceeds
``(B) the amount of bonds issued during such year by the
Build America Corporation,

[[Page S6990]]

the Build America bond limitation amount for the following
calendar year shall be increased by the amount of such
excess. Any carryforward of a Build America bond limitation
amount may be carried only to calendar year 2005 or 2006.
``(4) Issuance of small denomination bonds.--From the Build
America bond limitation for each year, the Build America
Corporation shall issue a limited quantity of Build America
bonds in small denominations suitable for purchase as gifts
by individual investors wishing to show their support for
investing in America's infrastructure.
``(g) Special Rules Relating to Arbitrage.--
``(1) In general.--Subject to paragraph (2), an issue shall
be treated as meeting the requirements of this subsection if
as of the date of issuance, the Build America Corporation
reasonably expects--
``(A) to spend at least 95 percent of the proceeds from the
sale of the issue for 1 or more qualified projects within the
3-year period beginning on such date,
``(B) to incur a binding commitment with a third party to
spend at least 10 percent of the proceeds from the sale of
the issue, or to commence construction, with respect to such
projects within the 6-month period beginning on such date,
and
``(C) to proceed with due diligence to complete such
projects and to spend the proceeds from the sale of the
issue.
``(2) Rules regarding continuing compliance after 3-year
determination.--If at least 95 percent of the proceeds from
the sale of the issue is not expended for 1 or more qualified
projects within the 3-year period beginning on the date of
issuance, but the requirements of paragraph (1) are otherwise
met, an issue shall be treated as continuing to meet the
requirements of this subsection if either--
``(A) the Build America Corporation uses all unspent
proceeds from the sale of the issue to redeem bonds of the
issue within 90 days after the end of such 3-year period, or
``(B) the following requirements are met:
``(i) The Build America Corporation spends at least 75
percent of the proceeds from the sale of the issue for 1 or
more qualified projects within the 3-year period beginning on
the date of issuance.
``(ii) The Build America Corporation spends at least 95
percent of the proceeds from the sale of the issue for 1 or
more qualified projects within the 4-year period beginning on
the date of issuance, and uses all unspent proceeds from the
sale of the issue to redeem bonds of the issue within 90 days
after the end of the 4-year period beginning on the date of
issuance.
``(h) Recapture of Portion of Credit Where Cessation of
Compliance.--
``(1) In general.--If any bond which when issued purported
to be a Build America bond ceases to be such a qualified
bond, the Build America Corporation shall pay to the United
States (at the time required by the Secretary) an amount
equal to the sum of--
``(A) the aggregate of the credits allowable under this
section with respect to such bond (determined without regard
to subsection (c)) for taxable years ending during the
calendar year in which such cessation occurs and the 2
preceding calendar years, and
``(B) interest at the underpayment rate under section 6621
on the amount determined under subparagraph (A) for each
calendar year for the period beginning on the first day of
such calendar year.
``(2) Failure to pay.--If the Build America Corporation
fails to timely pay the amount required by paragraph (1) with
respect to such bond, the tax imposed by this chapter on each
holder of any such bond which is part of such issue shall be
increased (for the taxable year of the holder in which such
cessation occurs) by the aggregate decrease in the credits
allowed under this section to such holder for taxable years
beginning in such 3 calendar years which would have resulted
solely from denying any credit under this section with
respect to such issue for such taxable years.
``(3) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable year shall
be increased under paragraph (2) only with respect to credits
allowed by reason of this section which were used to reduce
tax liability. In the case of credits not so used to reduce
tax liability, the carryforwards and carrybacks under section
39 shall be appropriately adjusted.
``(B) No credits against tax.--Any increase in tax under
paragraph (2) shall not be treated as a tax imposed by this
chapter for purposes of determining--
``(i) the amount of any credit allowable under this part,
or
``(ii) the amount of the tax imposed by section 55.
``(i) Build America Trust Account.--
``(1) In general.--The following amounts shall be held in a
Build America Trust Account by the Build America Corporation:
``(A) The proceeds from the sale of all bonds issued under
this section.
``(B) The amount of any matching contributions with respect
to such bonds.
``(C) The investment earnings on proceeds from the sale of
such bonds.
``(D) Any earnings on any amounts described in subparagraph
(A), (B), or (C).
``(2) Use of funds.--Amounts in the Build America Trust
Account may be used only to pay costs of qualified projects,
redeem Build America bonds, and fund the operations of the
Build America Corporation, except that amounts withdrawn from
the Build America Trust Account to pay costs of qualified
projects may not exceed the aggregate proceeds from the sale
of Build America bonds described in subsection (e)(1)(A).
``(3) Use of remaining funds in build america trust
account.--Upon the redemption of all Build America bonds
issued under this section, any remaining amounts in the Build
America Trust Account shall be available to the Build America
Corporation for any qualified project.
``(j) Qualified Project.--For purposes of this section--
``(1) In general.--The term `qualified project' means the
financing of capital improvements for any transportation
infrastructure project of any governmental unit or other
person, including highways, transit systems, railroads,
airports, ports, and inland waterways, proposed by a State
and approved by the Build America Corporation.
``(2) Approval guidelines and criteria.--Not later than 60
days after the date of the enactment of this section, the
Build America Corporation shall consult with the appropriate
committees of Congress regarding the development of
guidelines and criteria for the approval by the Corporation
of projects as qualified projects for inclusion in the
allocation plan established under subsection (f)(2)(A) and
shall submit such guidelines and criteria to such committees.
The guidelines and criteria shall--
``(A) to the maximum extent, be consistent with statutory
provisions governing the approval of transportation projects,
as in effect on such date, and
``(B) require the Build America Corporation--
``(i) to base such approval on--

``(I) the results of alternatives analysis and preliminary
engineering, and
``(II) a comprehensive review of mobility improvements,
environmental benefits, cost effectiveness, and operating
efficiencies, and

``(ii) to give preference to--

``(I) projects supported by evidence of stable and
dependable financing sources to construct, maintain, and
operate the infrastructure,
``(II) projects expected to have a significant impact on
traffic congestion, and
``(III) projects which promote regional balance in
infrastructure investment.

``(k) State Contribution Requirements.--
``(1) In general.--For purposes of subsection (e)(3), the
State contribution requirement of this subsection is met with
respect to any qualified project if the Build America
Corporation has received from 1 or more States, not later
than the date of issuance of the bond, written commitments
for matching contributions of not less than 20 percent of the
cost of the qualified project.
``(2) State matching contributions may not include federal
funds.--For purposes of this subsection, State matching
contributions shall not be derived, directly or indirectly,
from Federal funds, including any transfers from the Highway
Trust Fund under section 9503.
``(l) Utilization of Updated Construction Technology for
Qualified Projects.--For purposes of subsection (e)(4), the
requirement of this subsection is met if the appropriate
State agency relating to the qualified project has updated
its accepted construction technologies to match a list
prescribed by the Secretary of Transportation and in effect
on the date of the approval of the project as a qualified
project.
``(m) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Treatment of changes in use.--For purposes of
subsection (e)(1)(A), the proceeds from the sale of an issue
shall not be treated as used for a qualified project to the
extent that the Build America Corporation takes any action
within its control which causes such proceeds not to be used
for a qualified project. The Secretary shall specify remedial
actions that may be taken (including conditions to taking
such remedial actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a Build
America bond.
``(3) Partnership; s corporation; and other pass-thru
entities.--In the case of a partnership, trust, S
corporation, or other pass-thru entity, rules similar to the
rules of section 41(g) shall apply with respect to the credit
allowable under subsection (a).
``(4) Bonds held by regulated investment companies.--If any
Build America bond is held by a regulated investment company,
the credit determined under subsection (a) shall be allowed
to shareholders of such company under procedures prescribed
by the Secretary.
``(5) Credits may be stripped.--Under regulations
prescribed by the Secretary--
``(A) In general.--There may be a separation (including at
issuance) of the ownership of a Build America bond and the
entitlement to the credit under this section with respect to
such bond. In case of any such separation, the credit under
this section shall be allowed to the person who on the credit
allowance date holds the instrument evidencing the
entitlement to the credit and not to the holder of the bond.
``(B) Certain rules to apply.--In the case of a separation
described in subparagraph (A), the rules of section 1286
shall apply to the Build America bond as if it were a
stripped bond and to the credit under this section as if it
were a stripped coupon.
``(6) Reporting.--The Build America Corporation shall
submit reports similar to the reports required under section
149(e).''.

[[Page S6991]]

(b) Amendments to Other Code Sections.--
(1) Reporting.--Subsection (d) of section 6049 (relating to
returns regarding payments of interest) is amended by adding
at the end the following new paragraph:
``(8) Reporting of credit on build america bonds.--
``(A) In general.--For purposes of subsection (a), the term
`interest' includes amounts includible in gross income under
section 54(d) and such amounts shall be treated as paid on
the credit allowance date (as defined in section 54(b)(4)).
``(B) Reporting to corporations, etc.--Except as otherwise
provided in regulations, in the case of any interest
described in subparagraph (A), subsection (b)(4) shall be
applied without regard to subparagraphs (A), (H), (I), (J),
(K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may prescribe
such regulations as are necessary or appropriate to carry out
the purposes of this paragraph, including regulations which
require more frequent or more detailed reporting.''.
(2) Treatment for estimated tax purposes.--
(A) Individual.--Section 6654 (relating to failure by
individual to pay estimated income tax) is amended by
redesignating subsection (m) as subsection (n) and by
inserting after subsection (l) the following new subsection:
``(m) Special Rule for Holders of Build America Bonds.--For
purposes of this section, the credit allowed by section 54 to
a taxpayer by reason of holding a Build America bond on a
credit allowance date shall be treated as if it were a
payment of estimated tax made by the taxpayer on such
date.''.
(B) Corporate.--Subsection (g) of section 6655 (relating to
failure by corporation to pay estimated income tax) is
amended by adding at the end the following new paragraph:
``(5) Special rule for holders of build america bonds.--For
purposes of this section, the credit allowed by section 54 to
a taxpayer by reason of holding a Build America bond on a
credit allowance date shall be treated as if it were a
payment of estimated tax made by the taxpayer on such
date.''.
(c) Clerical Amendments.--
(1) The table of subparts for part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
item:

``Subpart H. Nonrefundable Credit for Holders of Build America
Bonds.''.

(2) Section 6401(b)(1) is amended by striking ``and G'' and
inserting ``G, and H''.
(d) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.

SEC. 4. BUILD AMERICA CORPORATION.

(a) Establishment and Status.--There is established a body
corporate to be known as the ``Build America Corporation''
(hereafter in this section referred to as the
``Corporation''). The Corporation is not a department,
agency, or instrumentality of the United States Government,
and shall not be subject to title 31, United States Code.
(b) Principal Office; Application of Laws.--The principal
office and place of business of the Corporation shall be in
the District of Columbia, and, to the extent consistent with
this section, the District of Columbia Business Corporation
Act (D.C. Code 29-301 et seq.) shall apply.
(c) Functions of Corporation.--The Corporation shall--
(1) issue Build America bonds for the financing of
qualified projects as required under section 54 of the
Internal Revenue Code of 1986,
(2) establish an allocation plan as required under section
54(f)(2)(A) of such Code,
(3) establish and operate the Build America Trust Account
as required under section 54(i) of such Code,
(4) perform any other function the sole purpose of which is
to carry out the financing of qualified projects through
Build America bonds, and
(5) not later than February 15 of each year submit a report
to Congress--
(A) describing the activities of the Corporation for the
preceding year, and
(B) specifying whether the amounts deposited and expected
to be deposited in the Build America Trust Account are
sufficient to fully repay at maturity the principal of any
outstanding Build America bonds issued pursuant to such
section 54.
(d) Powers of Corporation.--The Corporation--
(1) may sue and be sued, complain and defend, in its
corporate name, in any court of competent jurisdiction,
(2) may adopt, alter, and use a seal, which shall be
judicially noticed,
(3) may prescribe, amend, and repeal such rules and
regulations as may be necessary for carrying out the
functions of the Corporation,
(4) may make and perform such contracts and other
agreements with any individual, corporation, or other private
or public entity however designated and wherever situated, as
may be necessary for carrying out the functions of the
Corporation,
(5) may determine and prescribe the manner in which its
obligations shall be incurred and its expenses allowed and
paid,
(6) may, as necessary for carrying out the functions of the
Corporation, employ and fix the compensation of employees and
officers,
(7) may lease, purchase, or otherwise acquire, own, hold,
improve, use, or otherwise deal in and with such property
(real, personal, or mixed) or any interest therein, wherever
situated, as may be necessary for carrying out the functions
of the Corporation,
(8) may accept gifts or donations of services or of
property (real, personal, or mixed), tangible or intangible,
in furtherance of the purposes of this Act, and
(9) shall have such other powers as maybe necessary and
incident to carrying out this Act.
(e) Nonprofit Entity; Restriction on Use of Moneys;
Conflict of Interests; Independent Audits.--
(1) Nonprofit entity.--The Corporation shall be a nonprofit
corporation and shall have no capital stock.
(2) Restriction.--No part of the Corporation's revenue,
earnings, or other income or property shall inure to the
benefit of any of its directors, officers, or employees, and
such revenue, earnings, or other income or property shall
only be used for carrying out the purposes of this Act.
(3) Conflict of interests.--No director, officer, or
employee of the Corporation shall in any manner, directly or
indirectly participate in the deliberation upon or the
determination of any question affecting his or her personal
interests or the interests of any corporation, partnership,
or organization in which he or she is directly or indirectly
interested.
(4) Independent audits.--An independent certified public
accountant shall audit the financial statements of the
Corporation each year. The audit shall be carried out at the
place at which the financial statements normally are kept and
under generally accepted auditing standards. A report of the
audit shall be available to the public and shall be included
in the report required under subsection (c)(5).
(f) Tax Exemption.--The Corporation, including its
franchise and income, is exempt from taxation imposed by the
United States, by any territory or possession of the United
States, or by any State, county, municipality, or local
taxing authority.
(g) Management of Corporation.--
(1) Board of directors; membership; designation of
chairperson and vice chairperson; appointment considerations;
term; vacancies.--
(A) Board of directors.--The management of the Corporation
shall be vested in a board of directors composed of 7 members
appointed by the President, by and with the advice and
consent of the Senate.
(B) Chairperson and vice chairperson.--The President shall
designate 1 member of the Board to serve as Chairperson of
the Board and 1 member to serve as Vice Chairperson of the
Board.
(C) Individuals from private life.--Five members of the
Board shall be appointed from private life.
(D) Federal officers and employees.--Two members of the
Board shall be appointed from among officers and employees of
agencies of the United States concerned with infrastructure
development.
(E) Appointment considerations.--All members of the Board
shall be appointed on the basis of their understanding of and
sensitivity to infrastructure development processes. Members
of the Board shall be appointed so that not more than 4
members of the Board are members of any 1 political party.
(F) Terms.--Members of the Board shall be appointed for
terms of 3 years, except that of the members first appointed,
as designated by the President at the time of their
appointment, 2 shall be appointed for terms of 1 year and 2
shall be appointed for terms of 2 years.
(G) Vacancies.--A member of the Board appointed to fill a
vacancy occurring before the expiration of the term for which
that member's predecessor was appointed shall be appointed
only for the remainder of that term. Upon the expiration of a
member's term, the member shall continue to serve until a
successor is appointed and is qualified.
(2) Compensation, actual, necessary, and transportation
expenses.--Members of the Board shall serve without
additional compensation, but may be reimbursed for actual and
necessary expenses not exceeding $100 per day, and for
transportation expenses, while engaged in their duties on
behalf of the Corporation.
(3) Quorum.--A majority of the Board shall constitute a
quorum.
(4) President of corporation.--The Board of Directors shall
appoint a president of the Corporation on such terms as the
Board may determine.
______

By Mr. BINGAMAN (for himself, Mr. Baucus, Mr. Rockefeller, Mr.
Daschle, Mrs. Murray, Ms. Cantwell, Mr. Dayton, Mr. Lieberman,
Mrs. Lincoln, and Mrs. Feinstein):
S. 1110. A bill to amend the Trade Act of 1974 to provide trade
adjustment assistance for communities, and for other purposes; to the
Committee on Finance.
Mr. BINGAMAN. Mr. President, I rise today to introduce the Trade
Adjustment Assistance for Communities Act of 2003. This legislation is
co-sponsored by Senators Baucus, Rockefeller, Daschle, Murray,
Cantwell, Dayton, Lieberman, Lincoln, and Feinstein.

[[Page S6992]]

Companion legislation will be introduced in the House by Congressman
Sander Levin tomorrow.
I first introduced Trade Adjustment Assistance legislation in the
last Congress, and I was very pleased when that legislation--the
provisions relating to both individuals and communities--passed the
Senate as part of the Trade Act of 2002. I would like to take this
opportunity to thank all of my colleagues for their efforts in making
this happen. But I would like to thank Senator Baucus in particular for
making Trade Adjustment Assistance one of his priorities last session
and pushing on it to the very end. And I would also like to thank
Senator Grassley for understanding the importance of Trade Adjustment
Assistance to the ongoing trade debate, and his decision to make it
part of the trade package that went through Congress.
But I also have to express my disappointment with the way the process
ended. In spite of the bi-partisan consensus that formed around Trade
Adjustment Assistance during the negotiations last year and the efforts
of my colleagues, I regret to say that the provisions related to
communities did not make it out of conference. I can not tell you why
this happened. However, I can tell you that it is incredibly naive to
ignore the problems that are occurring right now across the country and
not understand what it means for our country's long-term economic
interests. Look at the newspaper and you will see that in many
communities, people are pretty much out of work for good, at least when
you look at the jobs they had and the wages they were making. And as
the lay-offs have expanded, the impact the lay-offs have had on entire
communities have become more pronounced. Now it is not just the
individuals who are struggling, but the communities in which hundreds
or thousands of people live, all because a company or a group of
companies have closed their doors for good.
From what I can tell from statements some of my colleagues have made
in committee or on the floor of the Senate, this is really nothing more
than tough luck. This is the way markets work and you simply make do
with what you have. I disagree completely. From where I sit you can't
just let individuals who have worked their whole life at a company, who
have played by the rules for their entire life, who have committed
their entire life to keeping their communities intact, be reduced to
little more than hope that something will change for the better. They
deserve more than that. You also can't let the communities where these
people live just die, because they form the foundation of what we are
as a society. These are the networks that have lasted generations, that
connect us, and define who we are. I firmly believe we need to do
everything we can for these folks and the communities where they live,
simply because we owe them something for what they have given us and
our country. I believe we have a responsibility to give these
communities a shot at a new future. The legislation I am introducing
today does just that.
Let me make it clear that writing this legislation is not an abstract
exercise. For me, this is about my friends and neighbors that I have
known for years. Right now, in my hometown of Silver City, NM, I have
folks that I grew up with, wondering what they are going to do next.
Over the last few years the copper mines closed, and then the
businesses that supported the copper mines closed, and then the tax
base began to disappear, and then services started to be cut, and it
seems to everyone like the whole community has been caught in a
downward spiral. In spite of what some of my colleagues might claim,
this is not because of lack of effort on the part of the people of
Silver City. These people are not content with the way things are. On
the contrary, they are trying desperately to change direction. They
have ideas about where they want to go and what they need to do to make
things better. They have acted on these ideas to the best of their
ability. And I want to commend them for that. But right now they are
stuck because there is no money available to get things started, to
take the first step so other steps can be taken afterward.
And this is the way it is across the country in a good many
communities just like Silver City. I strongly believe this has to
change. We have let things stand just the way they are for far too
long. The status quo is not acceptable, and it is time for Congress to
make a serious effort to change how we manage these kinds of problems.
My interest in Trade Adjustment Assistance actually began in
November, 1997 when Levi-Strauss announced its decision to close most
of its plants in the United States and transfer production to other
countries. Levi-Strauss decided to close two plants in New Mexico one
in Albuquerque and one in Roswell--with the Roswell facility alone
losing close to 600 workers. This number didn't even include the
contract workers and other folks that relied on Levi Strauss for their
living. They lost their jobs as well. 600 plus individuals would be a
significant blow in any town, but in a town of 50,000 people--which is
what Roswell--is with a workforce of only 25,000 people, this lay-off
was truly devastating. What exactly were these people going to do?
Where could they go to get work so they could pay their mortgage, pay
for health care, pay for their kids' education? Sure, some of them
could be re-trained through Trade Adjustment Assistance, but the
question that was on everyone's mind was: retrained for what? What do
you re-train 600 people for when there are no other jobs available in
town, and no new companies coming into town?
The questions surrounding what happened in Roswell--actually, what
should have happened in Roswell if we had more effective Trade
Adjustment Assistance policies in place--combined with other plant
closures across the country in towns just like Roswell, made me ask
what actually could be done to help individuals and communities adapt
to this kind of collective crisis. In cooperation with Senators Roth
and Moynihan, who were the Chair and Ranking Member of the Finance
Committee at the time, I requested studies from the General Accounting
Office on the over-all efficacy of Trade Adjustment Assistance program.
I also asked them to study how communities across the country had
responded to the changes that derive from international trade
agreements and globalization.
I have to say that the answers we got back from the General
Accounting Office were not very encouraging. To begin with, the Trade
Adjustment Assistance for individuals program suffered from
inconsistencies, incoherence, and a general lack of accountability.
Some states managed their programs well, but others--my home State of
New Mexico being one--did not. There was no Trade Adjustment Assistance
for Communities program at the time, but in analyzing how particular
communities responded to economic crises, the General Accounting Office
report clearly stated that government funds available for economic
recovery efforts were limited and the road to real recovery was
difficult even when funds were available. There were no ``best
practices'', no obvious answers, to refer to because success had been
so limited. In most cases, there was no way out of the downward spiral
at all.

But over time some individual lessons appeared, and interestingly
enough, those lessons were very similar to the ones we learned in
Roswell. Among other things, technical assistance is needed early on in
the process to ensure that a community-wide recovery strategy can be
developed. Funding needs to be made available to assist in strategic
planning. Individual and institutional differences need to be bridged
in the community so there is a tangible collective interest in the
strategic plan. Short-term, medium-term, and long-term funding needs to
be available for communities to use as they pursue their economic
strategy. U.S. government agencies need to cooperate to ensure that
their efforts are not duplicative or contradictory. State governments
need to be involved in the recovery process to encourage cooperation
where there has been none before.
I admit that it is very difficult to make sure all these things
happen, especially in communities that are struggling to stay on an
even keel. Clearly much of the burden for the activities fall on
communities, because they are the ones that have to decide what is best
for them. And that is the way it should be. But Congress can play a
role in helping communities attain the

[[Page S6993]]

goals they have set for themselves, and I believe the bill I am
introducing today offers a very good start. The key components of the
legislation are as follows: First, the legislation establishes a Trade
Adjustment Assistance for Communities Program at the Department of
Commerce, signaling that communities that are negatively impacted by
trade are deserving of a separate stream of funds to help them through
their economic crisis. Ideally this program will be located at the
Economic Development Administration, which has the expertise and
experience to manage a program of this type.
Second, the legislation establishes a U.S. government inter-agency
Trade Adjustment Assistance for Communities working group, the goal
being to ensure that agencies work in cooperation to assist communities
negatively impacted by trade, integrating personnel, activities, and
resources as they respond to existing or anticipated problems.
Third, the legislation provides funding for strategic planning and
development grants for communities negatively impacted by trade. As
written, there is no limit on the funds that a community can receive.
Instead, the level of funding is determined by the individual needs of
each community, the coherence of their strategic plan, and the
cooperation that exists among the stakeholders applying for the grant.
Fourth, the legislation allows funding from programs at other
agencies to be used in concurrence with Trade Adjustment Assistance for
Communities funding, and, furthermore, allows Federal funding to be
used to fulfill most non-Federal matching requirements that exist. In
the past, some economic development efforts have been stopped in their
tracks because communities don't have the matching funds necessary to
get grants. This legislation would give communities that are now
suffering under serious financial constraints some initial flexibility
in their effort to get funding.
Fifth, the legislation gives preference to rural communities in
funding guidelines, since these are the communities that have the
fewest options available to them as they attempt to respond to trade
related problems.
Sixth, the legislation authorizes $350 million per year for the Trade
Adjustment Assistance for Communities program, essentially doubling the
funds that are currently available for economic adjustment in the
United States. I believe this amount is consistent with the needs that
we see of communities across the United States.
Seventh, the legislation establishes a lookback to January 1998,
allowing communities that were negatively impacted by trade and have
yet to overcome their problems an opportunity to obtain funds and begin
their recovery.
Finally, the legislation establishes a set of new triggers for
eligibility that are designed to help not only communities that have
been negatively impacted by trade, but also communities that have
experienced some negative impacts but want to set a new course so any
future impacts will be limited. This approach is far different than
anything that has been done before in Trade Adjustment Assistance
legislation--far different even than the legislation that my colleagues
and I introduced last year--and is designed specifically to avoid the
criticism that Trade Adjustment Assistance is really nothing but
``death insurance''.
The inclusion of the category of ``affected domestic producers'' as a
trigger, for example, would allow certain companies to work with their
communities to create a coherent strategic plan to renovate or
construct basic or advanced infrastructure, diversify the local
economy, attract new investment, and encourage long-term economic
stability and global competitiveness--all this before a company is
closed and the entire community is affected. The inclusion of TAA for
firms as a trigger would allow restructuring at a firm to occur in
tandem with restructuring in a community. The inclusion of TAA for
workers as a trigger would allow funds to be directed into a community
at the initial onset of problems at a company--at the moment when lay-
offs are first occurring--not when the problems are so far down the
line that there is very little that can be done about it.
Let me say straight out that this legislation cannot be considered a
substitute for a strong trade or manufacturing policy. But I do believe
this legislation is complementary to those policies. From where I sit,
there will always be individuals and communities negatively impacted by
trade, and it is incumbent upon Congress to ensure that these
individuals and communities are treated with the respect they deserve
and with the strategic economic interests of our country in mind. The
economic ideology that suggests we just let things take their course
and things will work out the way they are supposed to is, from my
perspective, wrongheaded and misguided. The fact is we must look very
carefully at the changes that are occurring to our national economy as
a result of globalization and position ourselves to do better than we
are now.
This legislation carves out an area of real need and addresses it in
a coherent, comprehensive, and innovative fashion. If enacted, it will
have an immediate, concrete, and important impact on communities across
the country. Every State in the country would benefit from the
legislation. It will allow communities to take charge of the future and
contribute to the economic welfare of the Nation. It is a practical
approach that is designed to keep our communities intact and our
country competitive and strong. I urge my colleagues to support it.
Mr. BAUCUS. Mr. President, I rise today in support of the Trade
Adjustment Assistance for Communities Act of 2003.
I want to commend Senator Bingaman for introducing this bill today.
He has been a strong advocate of Trade Adjustment Assistance and a
strong voice for communities that need a helping hand facing the
challenges of the global economy.
Trade and trade-opening policies create benefits for our country. But
that fact should not keep us from acknowledging that the benefits of
trade are seldom evenly distributed. In fact, there can be losers from
trade, even when the economy as a whole is better off.
In 1962, President Kennedy said that ``those injured by . . . trade
competition should not be required to bear the full brunt of the
impact.'' ``There is an obligation,'' he said, for the Federal
Government ``to render assistance to those who suffer as a result of
national trade policy.''
That year, President Kennedy and a bipartisan majority of Congress
created Trade Adjustment Assistance--a program designed to help those
who are displaced by trade policy to retrain and get back on their
feet.
Last year, with help of another bipartisan majority of Congress, we
passed the Trade Adjustment Assistance Reform Act of 2002--a historic
expansion of the TAA program.
The Trade Adjustment Assistance for Communities Act continues to
build on this important tradition by creating a new TAA program for
communities.
In a recent study, the General Accounting Office found that, even
with TAA benefits available to displaced workers, the loss of a major
employer can have ripple effects on the local economy.
In addition to the direct job losses, local economies can experience
reduced tax revenues, reduced sales by the closed plant's supplier
firms and by local retailers, and rising social services costs. Until
they can attract well-paying new jobs, these communities can face
extended periods of economic distress.
This is especially true in smaller and rural communities, such as we
have in Montana. These communities may not have a lot of job
opportunities for displaced workers, even with TAA retraining. Indeed,
one of the main criticisms of the current TAS program has been that it
does nothing to make sure there are jobs for workers at the end of the
retraining process.
There are a number of Federal programs out there that might offer
some help. They are all over the map--in Commerce, Treasury, Labor,
Agriculture, HUD and the SBA, just to name a few. But these communities
have no way to start, no go-to person or resource to guide them through
this maze of potential help. And the Federal Government doesn't make it
any easier. There is very little coordination of response among the
various agencies. Finally, even if communities can find

[[Page S6994]]

these Federal resources, most existing programs are not tailored to the
special needs of trade-impacted communities.
This bill tries to make Federal economic assistance work better for
trade-impacted distressed communities in a few simple ways.
It creates a single office responsible for coordinating the Federal
response.
It creates a simple trigger process to identify potentially eligible
communities and bring appropriate resources to their attention.
It gives communities the technical assistance they need to develop a
strategic plan--basically a roadmap for economic recovery. That helps
ensure that Federal resources are being used in the most coordinated
and cost-effective way possible.
Finally, it makes sure that there are expertise and resources
tailored to the special needs of trade-impacted communities.
I am pleased to be a cosponsor of this bill. I hope we will be able
to consider it in the Finance Committee this year.
______

By Mrs. FEINSTEIN:
S. 1111. A bill to provide suitable grazing arrangements on National
Forest System land to persons that hold a grazing permit adversely
affected by the standards and guidelines contained in the Record of
Decision of the Sierra Nevada Forest Plan Amendment and pertaining to
the Willow Flycatcher and the Yosemite Toad; to the Committee on Energy
and Natural Resources.
Mrs. FEINSTEIN. Mr. President, I rise today to introduce a bill to
prevent unnecessary hardship for ranching families in the Sierra Nevada
Mountains.
This summer, restrictions imposed for the Yosemite Toad and willow
flycatcher will force about fifteen to thirty ranchers off the land
that they have long used for grazing.
This bill requires the Forest Service to explore all the options
available to avoid this outcome. For example, the bill makes it easier
for the Forest Service to offer ranchers suitable alternative grazing
land.
Besides alternative grazing arrangements, the Forest Service should
look at fencing, active management of the cattle, and other options. If
none of these alternatives are feasible, the bill provides relief for
the most seriously affected ranchers.
The bill would allow ranchers to keep using 15 parcels of land during
this calendar year where Yosemite Toad and willow flycatcher
restrictions would otherwise make grazing unworkable. For many other
ranches, where grazing and the species could coexist with some
adjustments, environmental protections would fully remain in place.
I urge the Forest Service to quickly devise a long-term strategy to
promote the coexistence of ranchers and the species. The Forest Service
should work proactively with the Fish and Wildlife Service to establish
a conservation plan for the species--with the goal of avoiding the need
for any listing of it.
I believe that if the regulatory agencies collect better information
on the Yosemite Toad and the willow flycatcher, we can find ways to
protect the species without completely shutting down long-term ranching
operations. I am committed to expediting these long-term solutions.
______

By Mr. KERRY (for himself and Mr. Harkin):
S. 1112. A bill to amend title 38, United States Code, to permit
Department of Veterans Affairs pharmacies to dispense medications on
prescriptions written by private practitioners to veterans who are
currently awaiting their first appointment with the Department for
medical care, and for other purposes; to the Committee on Veterans'
Affairs.
Mr. KERRY. Mr. President, there are now nearly 200,000 American
veterans today who are forced to wait at least 6 months for their first
visit with a Department of Veterans Affairs physician. Despite having
served their country and been promised health benefits, these veterans
are receiving deferred and rationed health care because of chronic
underfunding and bureaucratic red tape. It amounts to a broken promise
with men and women who have served in our armed forces. To help ensure
that our veterans receive the care they need and have been guaranteed,
today I am pleased to introduce the Veterans' Prescription Drug Reform
Act of 2003.
Veterans enrolled in the VA health care program are entitled to a
prescription drug benefit. This is an essential benefit given the
importance of pharmaceuticals in health care today. However, there's a
bureaucratic catch: the benefit only applies to prescriptions written
by a VA physician, and there are nearly 200,000 veterans who now wait 6
months or longer for their first visit with a VA physician. For those
veterans in need of medicine and waiting months on end to see a VA
physician, the benefit has little value.
The VA has reported to Congress that, while it has no exact figure,
it estimates that tens of thousands of the veterans now on the waiting
list are there primarily to access their prescription drug benefit. In
many of these cases, veterans have already seen a private physician and
have a prescription. But in order to use the VA pharmacy and receive
their prescription benefit, these individuals must duplicate their
health care visits and see a VA physician. This delays health care
benefits for far too many veterans.
The Veterans' Prescription Drug Reform Act of 2003 would permit
veterans already on the waiting list to fill a prescription written by
a private physician at the VA pharmacy.
Specifically, the Veterans' Prescription Drug Reform Act of 2003
would give the Secretary of Veterans Affairs the authority to permit
veterans on the waiting list for their first appointment with a VA
physician at the date of enactment to use the VA pharmacy to fill
prescriptions written by a private physician. It would also preserve
the core healthcare mission of the VA by limiting this initiative only
to those currently waiting for their first appointment. The proposal
calls for a report to Congress in 1 year so that its potential
expansion can be evaluated.
The Secretary of Veterans Affairs has told Congress that he would
support such a proposal, and I look forward to working with Senator
Harkin, who joins me in sponsoring this legislation, and my other
colleagues in the Senate on this common-sense approach to reducing the
lengthy wait-lines for veterans' healthcare.
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. 1112

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 ``Veterans' Prescription Drug
Reform Act of 2003''.

SEC. 2. AUTHORITY OF DEPARTMENT OF VETERANS AFFAIRS
PHARMACIES TO DISPENSE MEDICATIONS TO CERTAIN
VETERANS FOR PRESCRIPTIONS WRITTEN BY PRIVATE
PRACTITIONERS.

(a) Authority to Dispense Medications to Certain
Veterans.--Section 1712 of title 38, United States Code, is
amended--
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following new
subsection (e):
``(e)(1) The Secretary may authorize the pharmacies of the
Department to dispense medications to a veteran described in
paragraph (2) pursuant to a valid prescription of the veteran
written by a private practitioner.
``(2) A veteran described in this paragraph is any veteran
who is on a waiting list for such veteran's first appointment
with the Department for medical services as of the date of
the enactment of this section.
``(3) A veteran dispensed a medication under this
subsection shall pay the Secretary an amount for such
medication determined in accordance with the provisions of
section 1722A(a) of this title.
``(4) Any amounts paid under paragraph (3) shall be
deposited in the Department of Veterans Affairs Medical Care
Collections Fund.''.
(b) Deposit of Collections.--Section 1729A(b) of such title
is amended--
(1) by redesignating paragraphs (4) through (8) as
paragraphs (5) through (9), respectively; and
(2) by inserting after paragraph (3) the following new
paragraph (4):
``(4) Section 1712(e) of this title.''.
(c) Report.--(1) Not later than one year after the date of
the enactment of this Act, the Secretary of Veterans Affairs
shall submit to the Committees on Veterans' Affairs of the
Senate and the House of Representatives a report on the
exercise by the Secretary of the authority provided in
subsection (e) of section 1712 of title 38, United

[[Page S6995]]

States Code (as amended by subsection (a) of this section).
(2) The report shall include--
(A) a description of the exercise of the authority by the
Secretary; and
(B) such recommendations for additional legislative or
administrative action with respect to the authority as the
Secretary considers appropriate in light of the exercise of
the authority.
______

By Mrs. MURRAY (for herself, Mr. Dayton, Ms. Cantwell, Mr.
Baucus, Mr. Leahy, Mrs. Boxer, and Mr. Jeffords):
S. 1115. A bill to amend the Toxic Substances Control Act to reduce
the health risks posed by asbestos-containing products; to the
Committee on Environment and Public Works.
Mrs. MURRAY. Mr. President, today I rise to introduce legislation to
do what should have been done decades ago: fully ban asbestos in the
United States. I am introducing the Ban Asbestos in America Act of 2003
to prohibit this known carcinogen from being used to manufacture
products in this country. The bill also bans imports of asbestos
products from other countries where asbestos is still legal. I am
pleased that Senators Baucus, Boxer, Cantwell, Dayton, Jeffords and
Leahy are original cosponsors of this important legislation.
The primary purpose of the Ban Asbestos in America Act of 2003 is to
require the Environmental Protection Agency, EPA, to ban the substance
within two years. Most people think that asbestos has already been
banned. In fact, in 1989 EPA finalized regulations to phase out and ban
the substance by 1997. But in 1991, the 5th Circuit Court of Appeals
overturned EPA's ban, arguing that EPA did not ``first evaluate and
then reject the less burdensome alternatives'' under the Toxic
Substances Control Act. Unfortunately, the first Bush Administration
did not appeal the decision to the Supreme Court. While new uses of
asbestos were banned, existing ones were not.
As a result, it is still legal in 2003 to construct buildings in the
United States with asbestos cement shingles and to treat them with
asbestos roof coatings. It is still legal to construct new water
systems using asbestos cement pipes imported from other countries. It
is still legal for cars and trucks to be made and serviced with
asbestos brake pads and clutch facings.
Asbestos is still not banned, and as a result, we're still using it.
According to the U.S. Geological Survey, in 2001, businesses in this
country consumed 26 million pounds of chrysotile asbestos to make
roofing products, gaskets, friction materials and other products. Last
month, my staff walked into a local home improvement store and bought
off the shelf roofing sealants made with asbestos. In addition, we are
still importing asbestos products from other countries, many of which
have less stringent environmental and public health standards.
Everyone knows that asbestos is harmful. The term asbestos, like
arsenic, lead, mercury or DDT, is synonymous with poison. Asbestos may
well be the most regulated toxic substance that federal and state
agencies have ever dealt with. At least eleven different Federal
statutes address asbestos. The EPA, Occupational Safety and Health
Administration, OSHA, Mine Safety and Health Administration and
Consumer Product Safety Commission are only some of the Federal
agencies tasked with implementing rules to protect workers and
consumers from the dangers of this substance.
But the sheer volume of rules and regulations in place does not
guarantee that public health and the environment are being adequately
protected. We have significant evidence suggesting that because
asbestos is still not banned, we're still not safe from its dangers.
I'd like to highlight some of this evidence for my colleagues.
First, workers in this country are still being exposed to dangerous
levels of asbestos. According to OSHA, ``An estimated 1.3 million
employees in construction and general industry face significant
asbestos exposure on the job. Heaviest exposures occur in the
construction industry, particularly during the removal of asbestos
during renovation or demolition. Employees are also likely to be
exposed during the manufacture of asbestos products, such as textiles,
friction products, insulation, and other building materials, and during
automotive brake and clutch repair work.''
It is important to remember that there is no known safe threshold
level of asbestos exposure. OSHA's permissible exposure limit of 0.1
fibers per cubic centimeter is based on technical measurement
limitations. OSHA's limit assumes that workers exposed to this
concentration have a lifetime exposure risk of 3 to 5 in 1,000 for
cancer and 2 in 1,000 for asbestosis. This is a very high risk compared
to the cancer risk levels that are considered acceptable for some
environmental cleanups.
The extent to which workers are exposed to dangerous levels of
asbestos is especially troublesome when one considers the frequency
with which OSHA's standards are violated. On July 31, 2001, I chaired a
Senate Health, Education, Labor and Pensions hearing on asbestos and
workplace safety. At the hearing I learned from OSHA that since 1995,
the agency had cited employers for violations of its asbestos standards
15,691 times. This is astounding given the known dangers of asbestos
and the high risks of disease even when OSHA's exposure limit is being
met.
As follow-up to the hearing, I asked OSHA to provide more information
about asbestos-related violations. In an October 17, 2001 letter to me,
Mr. John Henshaw, Assistant Secretary for Occupational Safety and
Health, wrote that between fiscal year 1996 and fiscal year 2001, OSHA
conducted a total of 190,971 inspections generating a total of 427,786
violations. Of these, 3,000 inspections and 15,691 violations involved
asbestos. According to Mr. Henshaw, about 2 percent of inspections and
4 percent of violations were asbestos-related. In his letter to me, Mr.
Henshaw wrote, ``OSHA does not consider any level to be an acceptable
noncompliance level. We strive for 100 percent compliance.'' Despite
OSHA's best intentions, workers are still being exposed to dangerous
levels of asbestos.
It is also important to consider that the vast majority of workplaces
where asbestos exposure occurs, such as construction jobs and auto
repair shops, are not regularly inspected by OSHA. The Administration
conducts inspections only in response to complaints or as a result of
referrals from law enforcement or the media. Many more violations of
the standard occur in the real world than are actually recorded by
regulators. Many employees likely do not contact OSHA about potential
asbestos exposure on the job because they think asbestos has been
banned long ago and is no longer a problem.
But asbestos in the workplace is clearly still a problem. Recent news
investigations provide more evidence that workers are being exposed to
dangerous levels of this mineral. According to an article in the
Seattle Post-Intelligencer on November 16, 2000, ``During the past
three months, the P-I collected samples of dust from floors, work areas
and tool bins in 31 brake-repair garages in Baltimore, Boston, Chicago,
Denver, Richmond, Seattle, and Washington, D.C. Asbestos, almost
exclusively chrysotile, which has been used for decades in brakes, was
detected in 21 of the locations. The amount of asbestos in the dust
ranged from 2.26 percent to 63.8 percent.''

When dust with these concentrations of asbestos in them is disturbed,
airborne concentrations of asbestos occur that are well above OSHA's
permissible exposure limit of 0.1 fiber per cubic centimeter. Under
current OSHA regulations, if airborne asbestos concentrations exceed
this level, employers must conduct air monitoring, take measures to
reduce asbestos emissions, post warning signs and record concentrations
of airborne asbestos. Workers are supposed to wear respirators and
protective clothing and are required to undergo long term medical
monitoring.
Now I recognize that much of the exposure to asbestos in the
workplace comes from asbestos products installed years, and in many
cases, decades ago. By one estimate, about 30 million tons of asbestos
was used in this country between 1900 and 1980. Asbestos in place, in
our buildings, schools and homes, will be with us for decades to come.
But given the known dangers of this mineral, why are we still using
it? Why are we still adding it to products on purpose when there are
perfectly acceptable substitutes? In retrospect, it is tragic that
asbestos was so widely used during the 20th century, for the

[[Page S6996]]

economic and public health impacts have been disastrous. One very
important step in overcoming the problems caused by asbestos is to stop
adding to the problem--however incrementally--by continuing to use this
dangerous mineral in products on purpose.
I'd like to point out some additional evidence supporting the need to
ban asbestos in the United States and to raise awareness about this
issue. Most of my colleagues are familiar with the tragedy in Libby,
MT, where hundreds of workers and their families suffer from asbestos-
related diseases caused by exposure to asbestos-tainted vermiculite.
For decades, the W.R. Grace mine in Libby supplied about 80 percent
of the vermiculite used in this country. W.R. Grace very successfully
marketed its product, without any warning labels, even though the
company was well aware its product was contaminated with this known
carcinogen. Asbestos-contaminated ore was shipped to more than 300
sites around the country for processing and use in industrial and
consumer products. According to the EPA, 14 of these sites are so
contaminated with asbestos that they still need to be cleaned up, even
though the Libby mine closed in 1990. While this is a problem that came
from a small mining town in Montana, the ramifications and consequences
are clearly national in scope.
In addition, vermiculite from Libby is still around and is still a
threat to public health. It is estimated that tens of millions of
homes, schools and businesses contain insulation made with Libby
vermiculite, known as Zonolite. A recent study conducted for EPA,
entitled Asbestos Exposure Assessment for Vermiculite Attic Insulation,
found that Zonolite in homes today contains up to 2 percent asbestos.
This study included tests on Zonolite insulation from Seattle Public
Utilities and from a home in Washington State. It found that when this
insulation was disturbed, airborne concentrations of 3.3 asbestos
fibers per cubic centimeters were measured. In other words, handling
Zonolite asbestos can cause levels of asbestos in the air that
significantly exceed OSHA's exposure limit for workers. Even more
troubling, perhaps, the study found ``vermiculite that tests non-detect
for asbestos by bulk analysis can still generate airborne asbestos
concentrations when disturbed.'' When vermiculite without significant
amounts of asbestos in bulk was disturbed, concentrations of asbestos
in the air up to 0.5 fibers per cubic centimeters were detected. This
means that even vermiculite with only trace amounts of asbestos in bulk
can generate unhealthy concentrations of asbestos in the air.
Yesterday EPA launched a national consumer education campaign warning
people not to disturb Zonolite attic insulation if they have it in
their homes. The agency also warned people not to let their children
play in attics with vermiculite for fear of asbestos exposure. EPA has
developed a consumer education brochure and has created an asbestos
hotline for people to call for more information. The Agency for Toxic
Substances and Disease Registry and National Institute for Occupational
Safety and Health have joined EPA in this education effort by creating
materials to educate consumers and workers about the dangers of
asbestos-contaminated vermiculite.
While we need to ensure that we are no longer adding asbestos to our
products on purpose, we also need to ensure that asbestos in harmful
concentrations isn't ending up in our consumer products by accident. I
am glad EPA, ATSDR and NIOSH are now proactively reaching out to
consumers and workers to warn them to stay away from vermiculite attic
insulation. This is an important first step in dealing with just one
aspect of the legacy created by W.R. Grace in Libby.
There is another important reason to ban asbestos that I would like
to share with my colleagues. As I mentioned previously, the United
States is still importing products that contain asbestos.
Unfortunately, we do not have precise statistics on which products
coming into this country contain the deadly mineral. The Department of
Commerce's import database does not distinguish between asbestos-
containing products and products containing asbestos substitutes.
According to the U.S. International Trade Commission, in 2002 this
country imported more than 44,000 tons of asbestos-cement products,
some of which may have contained cellulose instead of asbestos.
With increased globalization and international trade, U.S. imports of
asbestos containing consumer and industrial products will continue to
rise--unless we prohibit these products from crossing our borders in
the first place.
Although we do not have accurate numbers for the extent to which
asbestos products are flowing across our borders, we do know that
asbestos is being heavily marketed to developing countries. According
to an August 2, 1999 USA Today article, ``As asbestos demand has
plummeted in the industrialized world the past 25 years, it has soared
in many developing nations and formerly communist countries. Its use in
these countries is largely unregulated, haphazard and deadly.''
A more recent editorial in the Canadian Medical Association Journal
compares the asbestos industry to the tobacco industry. The February
20, 2001 article by Doctors Joseph LaDou, Philip Landrigan, John C.
Bailar III, Vito Foa and Arthur Frank reads:
``The commercial tactics of the asbestos industry are very similar to
those of the tobacco industry. In the absence of international
sanctions, losses resulting from reduced cigarette consumption in the
developed countries are offset by heavy selling to developing nations.
In a similar fashion, the developed world has responded to the asbestos
health catastrophe with a progressive ban on the use of asbestos. In
response, the asbestos industry is progressively transferring its
commercial activities and the health hazards to the developing
countries.''
Banning asbestos in the United States sends an important message to
the rest of the world. The asbestos industry will no longer be able to
justify its marketing to developing countries by pointing out that
asbestos is still legal in the U.S., and therefore, it must be safe.
More than 30 countries have already banned asbestos, and it is time for
this country to follow suit. It is our moral responsibility as the
world's strongest economy, the most powerful Nation and a leader in
environmental protection and public health to ban this harmful
substance.
That is why today I am introducing the Ban Asbestos in America Act.
The legislation has five main parts. First, this bill protects public
health by doing what the EPA tried to do 14 years ago: ban asbestos in
the United States. The legislation requires EPA to ban it within two
years of passage of the Act. As under the regulations EPA finalized in
1989, companies may file for an exemption to the ban if there is no
substitute material available.
Second, the bill requires EPA to convene a Blue Ribbon Panel on
asbestos policy and to have the National Academy of Sciences conduct an
asbestos study. In response to the 2001 EPA Inspector General's report
on Libby, Montana, the EPA promised to convene a Blue Ribbon Panel on
asbestos and non-regulated fibers. But instead of convening a high
level panel, EPA hired a non-profit organization, the Global
Environment and Technology Foundation, to develop an asbestos policies
focus group. Just yesterday EPA released GETF's Asbestos Strategies
Report. I am very pleased that the Report recommends several aspects of
the Ban Asbestos in America Act, including that Congress pass
legislation to ban asbestos.
While the recommendations are certainly helpful in providing guidance
to EPA, Congress and other federal agencies on the next steps to
address asbestos, the GETF report does not replace a full fledged Blue
Ribbon Panel. The Ban Asbestos in America Act codifies creation of a
Blue Ribbon Panel as EPA first committed to in 2001. The panel will
include participation from the Department of Labor and the Consumer
Product Safety Commission. It will review the current laws and rules in
place to protect workers and consumers, and make recommendations for
improving protections within 2 years of passage of the Act.
In addition, the bill calls for EPA to have the NAS conduct a study
on the current state of the science relating to the human health
effects of exposure to asbestos and other durable fibers. The NAS study
shall also include recommendations for a uniform system of asbestos
exposure standards and for a uniform system to create protocols to

[[Page S6997]]

detect and measure asbestos. As I mentioned previously, asbestos is
regulated under multiple statutes. There are different standards within
EPA and across Federal agencies, and agencies rely on different
protocols to identify the substance. The NAS shall be required to
submit the study to EPA, other federal agencies and Congress within 18
months of passage of the Act.
Third, the legislation requires a survey to determine which products
contain asbestos, either on purpose or as a contaminant. EPA will be
required to conduct this review with input from the Department of
Labor, the Consumer Product Safety Commission and the International
Trade Commission.
The bill directs the EPA to conduct a survey on the status of
asbestos-containing products, such as roofing materials, brake pads and
gaskets, which contain asbestos on purpose. EPA must also study
contaminant-asbestos products, such as some insulation and
horticultural products, which contain asbestos as a contaminant of
another substance. The study will examine how people use these products
and the extent to which people are exposed to harmful levels of
asbestos. The study must be finalized within 18 months to inform the
Blue Ribbon Panel and the education campaign.
Fourth, based on the results of the study, EPA shall conduct a public
education campaign to increase awareness of the dangers posed by
asbestos-containing products and contaminant-asbestos products,
including those in homes and workplaces. The agency shall give priority
to those products posing the greatest risk, as determined by the study
required by the bill. The education campaign must be conducted within 2
years of passage of the bill.
EPA and the Consumer Product Safety Commission shall still be
required to conduct a national education campaign about vermiculite
insulation within 6 months of passage of the Act. As many as 35 million
homes and businesses may contain asbestos-contaminated insulation made
with vermiculite from Libby. This requirement is still in the bill
despite EPA's recent announcement of an education campaign about
vermiculite attic insulation. This will ensure EPA's long-term
commitment to educating the public.
Finally, the Ban Asbestos in America Act increases the federal
commitment to finding new treatments for the terrible diseases caused
by asbestos. At least 2,000 people per year die from mesothelioma, a
deadly cancer of the lining of the lungs and internal organs caused by
exposure to asbestos. The legislation would direct the head of NIH to
``expand, intensify and coordinate programs for the conduct and support
of research on diseases caused by exposure to asbestos.'' The Centers
for Disease Control would be required to create a National Mesothelioma
Registry to improve tracking of the disease, which in many cases goes
undiagnosed and thus unrecorded. In addition, the bill creates 10
mesothelioma treatment centers around the country to improve treatments
for and awareness of this fatal cancer.
Our hope is that by continuing to work together, we will build
support for the Ban Asbestos in America Act. If we can get this
legislation passed, fewer people will be exposed to asbestos, fewer
people will contract asbestos diseases in the first place, and those
who already have asbestos diseases will receive treatments to prolong
and improve quality of life. I urge my colleagues to support this
important legislation.
In the meantime, we should do all we can to ensure that the rules in
place to protect workers, consumers and schoolchildren from asbestos
are followed and are strengthened if necessary. We also need to make
sure that Federal agencies are given adequate resources to fully
implement Congress' many mandates.
I ask unanimous consent that the text of the Ban Asbestos in America
Act of 2003 be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1115

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 ``Ban Asbestos in America Act
of 2003''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the Administrator of the Environmental Protection
Agency has classified asbestos as a category A human
carcinogen, the highest cancer hazard classification for a
substance;
(2) there is no known safe level of exposure to asbestos;
(3)(A) in hearings before Congress in the early 1970s, the
example of asbestos was used to justify the need for
comprehensive legislation on toxic substances; and
(B) in 1976, Congress passed the Toxic Substances Control
Act (15 U.S.C. 2601 et seq.);
(4) in 1989, the Administrator promulgated final
regulations under title II of the Toxic Substances Control
Act (15 U.S.C. 2641 et seq.) to phase out asbestos in
consumer products by 1997;
(5) in 1991, the United States Court of Appeals for the 5th
Circuit overturned portions of the regulations, and the
Government did not appeal the decision to the Supreme Court;
(6) as a result, while new applications for asbestos were
banned, asbestos is still being used in some consumer and
industrial products in the United States;
(7) the United States Geological Survey has determined that
in 2000, companies in the United States consumed 15,000
metric tons of chrysotile asbestos, of which approximately 62
percent was consumed in roofing products, 22 percent in
gaskets, 12 percent in friction products, and 4 percent in
other products;
(8) available evidence suggests that--
(A) imports of some types of asbestos-containing products
may be increasing; and
(B) some of those products are imported from foreign
countries in which asbestos is poorly regulated;
(9) many people in the United States incorrectly believe
that--
(A) asbestos has been banned in the United States; and
(B) there is no risk of exposure to asbestos through the
use of new commercial products;
(10) the Department of Commerce estimates that in 2000, the
United States imported 51,483 metric tons of asbestos-cement
products;
(11) banning asbestos from being used in or imported into
the United States will provide certainty to manufacturers,
builders, environmental remediation firms, workers, and
consumers that after a specific date, asbestos will not be
added to new construction and manufacturing materials used in
this country;
(12) asbestos has been banned in Argentina, Australia,
Austria, Belgium, Chile, Croatia, the Czech Republic,
Denmark, Finland, France, Germany, Iceland, Ireland, Italy,
Latvia, Luxembourg, the Netherlands, Norway, Poland, Saudi
Arabia, the Slovak Republic, Spain, Sweden, Switzerland, and
the United Kingdom;
(13) asbestos will be banned throughout the European Union
in 2005;
(14) in 2000, the World Trade Organization upheld the right
of France to ban asbestos, with the United States Trade
Representative filing a brief in support of the right of
France to ban asbestos;
(15) the 1999 brief by the United States Trade
Representative stated, ``In the view of the United States,
chrysotile asbestos is a toxic material that presents a
serious risk to human health.'';
(16) people in the United States have been exposed to
harmful levels of asbestos as a contaminant of other
minerals;
(17) in the town of Libby, Montana, workers and residents
have been exposed to dangerous levels of asbestos for
generations because of mining operations at the W.R. Grace
vermiculite mine located in that town;
(18) the Agency for Toxic Substances and Disease Registry
found that over a 20-year period, ``mortality in Libby
resulting from asbestosis was approximately 40 to 80 times
higher than expected. Mesothelioma mortality was also
elevated.'';
(19)(A) in response to this crisis, in January 2002, the
Governor of Montana requested that the Administrator of the
Environmental Protection Agency designate Libby as a
Superfund site; and
(B) on October 23, 2002, the Administrator placed Libby on
the National Priorities List;
(20)(A) vermiculite from Libby was shipped for processing
to 42 States; and
(B) Federal agencies are investigating potential harmful
exposures to asbestos-contaminated vermiculite at sites
throughout the United States;
(21) the Administrator has identified 14 sites that have
dangerous levels of asbestos-tainted vermiculite and require
cleanup efforts; and
(22) although it is impracticable to eliminate exposure to
asbestos entirely because asbestos is a naturally occurring
mineral in the environment and occurs in several deposits
throughout the United States, Congress needs to do more to
protect the public from exposure to asbestos and Congress has
the power to prohibit the continued, intentional use of
asbestos in consumer products.

SEC. 3. ASBESTOS-CONTAINING PRODUCTS.

(a) In General.--Title II of the Toxic Substances Control
Act (15 U.S.C. 2641 et seq.) is amended--
(1) by inserting before section 201 (15 U.S.C. 2641) the
following:

``Subtitle A--General Provisions'';

and
(2) by adding at the end the following:

[[Page S6998]]

``Subtitle B--Asbestos-Containing Products

``SEC. 221. DEFINITIONS.

``In this subtitle:
``(1) Asbestos-containing product.--The term `asbestos-
containing product' means any product (including any part) to
which asbestos is deliberately or knowingly added or in which
asbestos is deliberately or knowingly used in any
concentration.
``(2) Contaminant-asbestos product.--The term `contaminant-
asbestos product' means any product that contains asbestos as
a contaminant of any mineral or other substance, in any
concentration.
``(3) Distribute in commerce.--
``(A) In general.--The term `distribute in commerce' has
the meaning given the term in section 3.
``(B) Exclusions.--The term `distribute in commerce' does
not include--
``(i) an action taken with respect to an asbestos-
containing product in connection with the end use of the
asbestos-containing product by a person that is an end user;
or
``(ii) distribution of an asbestos-containing product by a
person solely for the purpose of disposal of the asbestos-
containing product in compliance with applicable Federal,
State, and local requirements.
``(4) Durable fiber.--
``(A) In general.--The term `durable fiber' means a
silicate fiber that--
``(i) occurs naturally in the environment; and
``(ii) is similar to asbestos in--

``(I) resistance to dissolution;
``(II) leaching; and
``(III) other physical, chemical, or biological processes
expected from contact with lung cells and other cells and
fluids in the human body.

``(B) Inclusions.--The term `durable fiber' includes--
``(i) richterite;
``(ii) winchite;
``(iii) erionite; and
``(iv) nonasbestiform varieties of crocidolite, amosite,
anthophyllite, tremolite, and actinolite.
``(5) Fiber.--The term `fiber' means an acicular single
crystal or similarly elongated polycrystalline aggregate
particle with a length to width ratio of 3 to 1 or greater.
``(6) Person.--The term `person' means--
``(A) any individual;
``(B) any corporation, company, association, firm,
partnership, joint venture, sole proprietorship, or other
for-profit or nonprofit business entity (including any
manufacturer, importer, distributor, or processor);
``(C) any Federal, State, or local department, agency, or
instrumentality; and
``(D) any interstate body.

``SEC. 222. NATIONAL ACADEMY OF SCIENCES STUDY.

``The Administrator shall enter into a contract with the
National Academy of Sciences to study and, not later than 18
months after the date of enactment of this subtitle, provide
the Administrator, and other Federal agencies, as
appropriate--
``(1) a description of the current state of the science
relating to the human health effects of exposure to asbestos
and other durable fibers; and
``(2) recommendations for the establishment of--
``(A) a uniform system for the establishment of asbestos
exposure standards for workers, school children, and other
populations; and
``(B) a uniform system for the establishment of protocols
for detecting and measuring asbestos.

``SEC. 223. ASBESTOS POLICIES PANEL.

``(a) Panel.--
``(1) In general.--The Administrator shall establish an
Asbestos Policies Panel (referred to in this section as the
`panel') to study asbestos and other durable fibers.
``(2) Membership.--The panel shall be comprised of
representatives of--
``(A) the Secretary of Labor;
``(B) the Secretary of Health and Human Services; and
``(C) the Chairman of the Consumer Product Safety
Commission;
``(D) nongovernmental environmental, public health, and
consumer organizations;
``(E) industry;
``(F) school officials;
``(G) public health officials;
``(H) labor organizations; and
``(I) the public.
``(b) Duties.--The panel shall--
``(1) provide independent advice and counsel to the
Administrator and other Federal agencies on policy issues
associated with the use and management of asbestos and other
durable fibers; and
``(2) study and, not later than 2 years after the date of
enactment of this subtitle, provide the Administrator, other
Federal agencies, and Congress recommendations concerning--
``(A) implementation of subtitle A;
``(B) grant programs under subtitle A;
``(C) revisions to the national emissions standards for
hazardous air pollutants promulgated under the Clean Air Act
(42 U.S.C. 7401 et seq.);
``(D) legislative and regulatory options for improving
consumer and worker protections against harmful health
effects of exposure to asbestos and durable fibers;
``(E) whether the definition of asbestos-containing
material, meaning any material that contains more than 1
percent asbestos by weight, should be modified throughout the
Code of Federal Regulations;
``(F) the feasibility of establishing a durable fibers
testing program;
``(G) options to improve protections against exposure to
asbestos from asbestos-containing products and contaminant-
asbestos products in buildings;
``(H) current research on and technologies for disposal of
asbestos-containing products and contaminant-asbestos
products; and
``(I) at the option of the panel, the effects on human
health that may result from exposure to ceramic, carbon, and
other manmade fibers.

``SEC. 224. STUDY OF ASBESTOS-CONTAINING PRODUCTS AND
CONTAMINANT-ASBESTOS PRODUCTS.

``(a) In General.--In consultation with the Secretary of
Labor, the Chairman of the International Trade Commission,
the Chairman of the Consumer Product Safety Commission, and
the Assistant Secretary for Occupational Safety and Health,
the Administrator shall conduct a study on the status of the
manufacture, processing, distribution in commerce, ownership,
importation, and disposal of asbestos-containing products and
contaminant-asbestos products in the United States.
``(b) Issues.--In conducting the study, the Administrator
shall examine--
``(1) how consumers, workers, and businesses use asbestos-
containing products and contaminant-asbestos products that
are entering commerce as of the date of enactment of this
subtitle; and
``(2) the extent to which consumers and workers are being
exposed to unhealthful levels of asbestos through exposure to
products described in paragraph (1).
``(c) Report.--Not later than 18 months after the date of
enactment of this subtitle, the Administrator shall submit to
the Committee on Energy and Commerce of the House of
Representatives and the Committee on Environment and Public
Works of the Senate a report on the results of the study.

``SEC. 225. PROHIBITION ON ASBESTOS-CONTAINING PRODUCTS.

``(a) In General.--Subject to subsection (b), the
Administrator shall promulgate--
``(1) not later than 1 year after the date of enactment of
this subtitle, proposed regulations that--
``(A) prohibit persons from manufacturing, processing, or
distributing in commerce asbestos-containing products; and
``(B) provide for implementation of subsections (b) and
(c); and
``(2) not later than 2 years after the date of enactment of
this subtitle, final regulations that, effective 60 days
after the date of promulgation, prohibit persons from
manufacturing, processing, or distributing in commerce
asbestos-containing products.
``(b) Exemptions.--
``(1) In general.--Any person may petition the
Administrator for, and the Administrator may grant an
exemption from the requirements of subsection (a) if the
Administrator determines that--
``(A) the exemption would not result in an unreasonable
risk of injury to public health or the environment; and
``(B) the person has made good faith efforts to develop,
but has been unable to develop, a substance, or identify a
mineral, that--
``(i) does not present an unreasonable risk of injury to
public health or the environment; and
``(ii) may be substituted for an asbestos-containing
product.
``(2) Terms and conditions.--An exemption granted under
this subsection shall be in effect for such period (not to
exceed 1 year) and subject to such terms and conditions as
the Administrator may prescribe.
``(c) Disposal.--
``(1) In general.--Except as provided in paragraph (2), not
later than 3 years after the date of enactment of this
subtitle, each person that possesses an asbestos-containing
product that is subject to the prohibition established under
this section shall dispose of the asbestos-containing
product, by a means that is in compliance with applicable
Federal, State, and local requirements.
``(2) Exemption.--Nothing in paragraph (1)--
``(A) applies to an asbestos-containing product that--
``(i) is no longer in the stream of commerce; or
``(ii) is in the possession of an end user; or
``(B) requires that an asbestos-containing product
described in subparagraph (A) be removed or replaced.

``SEC. 226. PUBLIC EDUCATION PROGRAM.

``(a) In General.--Not later than 2 years after the date of
enactment of this subtitle, and subject to subsection (c), in
consultation with the Chairman of the Consumer Product Safety
Commission and the Secretary of Labor, the Administrator
shall establish a program to increase awareness of the
dangers posed by asbestos-containing products and
contaminant-asbestos products in homes and workplaces.
``(b) Greatest Risks.--In establishing the program, the
Administrator shall--
``(1) base the program on the results of the study
conducted under section 224;
``(2) give priority to asbestos-containing products and
contaminant-asbestos products used by consumers and workers
that pose the greatest risk of injury to human health; and
``(3) at the option of the Administrator on receipt of a
recommendation from the Asbestos Policies Panel, include in
the program the conduct of projects and activities to
increase public awareness of the effects on human health that
may result from exposure to--
``(A) durable fibers; and

[[Page S6999]]

``(B) ceramic, carbon, and other manmade fibers.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated such sums as are necessary to
carry out this section.''.
(b) Vermiculite Insulation.--Not later than 180 days after
the date of enactment of this Act, the Administrator of the
Environmental Protection Agency and the Consumer Product
Safety Commission shall begin a national campaign to educate
consumers concerning--
(1) the dangers of vermiculite insulation that may be
contaminated with asbestos; and
(2) measures that homeowners and business owners can take
to protect against those dangers.

SEC. 4. ASBESTOS-CAUSED DISEASES.

Subpart 1 of part C of title IV of the Public Health
Service Act (42 U.S.C. 285 et seq.) is amended by adding at
the end the following:

``SEC. 417D. RESEARCH ON ASBESTOS-CAUSED DISEASES.

``(a) In General.--The Secretary, acting through the
Director of NIH and the Director of the Centers for Disease
Control and Prevention, shall expand, intensify, and
coordinate programs for the conduct and support of research
on diseases caused by exposure to asbestos, particularly
mesothelioma, asbestosis, and pleural injuries.
``(b) Administration.--The Secretary shall carry out this
section--
``(1) through the Director of NIH and the Director of the
CDC (Centers for Disease Control and Prevention); and
``(2) in collaboration with the Administrator of the Agency
for Toxic Substances and Disease Registry and the head of any
other agency that the Secretary determines to be appropriate.
``(c) Mesothelioma Registry.--Not later than 1 year after
the date of enactment of this section, the Director of the
Centers for Disease Control and Prevention, in cooperation
with the Director of the National Institute for Occupational
Safety and Health and the Administrator of the Agency for
Toxic Substances and Disease Registry, shall establish a
mechanism by which to obtain data from State cancer
registries and other cancer registries, which shall form the
basis for establishing a Mesothelioma Registry.
``(d) Authorization of Appropriations.--In addition to
amounts made available for the purposes described in
subsection (a) under other law, there are authorized to be
appropriated to carry out this section such sums as are
necessary for fiscal year 2004 and each fiscal year
thereafter.

``SEC. 417E. MESOTHELIOMA RESEARCH AND TREATMENT CENTERS.

``(a) In General.--The Director of NIH shall provide
$1,000,000 for each of fiscal years 2004 through 2008 for
each of up to 10 mesothelioma disease research and treatment
centers.
``(b) Requirements.--The Centers shall--
``(1) be chosen through competitive peer review;
``(2) be geographically distributed throughout the United
States with special consideration given to areas of high
incidence of mesothelioma disease;
``(3) be closely associated with Department of Veterans
Affairs medical centers to provide research benefits and care
to veterans, who have suffered excessively from mesothelioma;
``(4) be engaged in research to provide mechanisms for
detection and prevention of mesothelioma, particularly in the
areas of pain management and cures;
``(5) be engaged in public education about mesothelioma and
prevention, screening, and treatment;
``(6) be participants in the National Mesothelioma
Registry;
``(7) be coordinated in their research and treatment
efforts with other Centers and institutions involved in
exemplary mesothelioma research; and
``(8) be focused on research and treatments for
mesothelioma that have historically been underfunded.
``(c) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $10,000,000 for
each of fiscal years 2004 through 2008.''.

SEC. 5. CONFORMING AMENDMENTS.

The table of contents in section 1 of the Toxic Substances
Control Act (15 U.S.C. prec. 2601) is amended--
(1) by inserting before the item relating to section 201
the following:

``Subtitle A--General Provisions'';

and
(2) by adding at the end of the items relating to title II
the following:

``Subtitle B--Asbestos-Containing Products

``Sec. 221. Definitions.
``Sec. 222. National Academy of Sciences Study.
``Sec. 223. Asbestos Policies Panel.
``Sec. 224. Study of asbestos-containing products and contaminant-
asbestos products.
``Sec. 225. Prohibition on asbestos-containing products.
``Sec. 226. Public education program.''.
______

By Mr. LEVIN (for himself, Mr. DeWine, Ms. Stabenow, and Mr.
Voinovich):
S. 1116. A bill to amend the Federal Water Pollution Control Act to
direct the Great Lakes National Program Office of the Environmental
Protection Agency to develop, implement, monitor, and report on a
series of indicators of water quality and related environmental factors
in the Great Lakes; to the Committee on Environmental and Public Works.
Mr. LEVIN. Mr. President, my colleagues Senators DeWine and Voinovich
of Ohio, Senator Stabenow of Michigan, and I are pleased to introduce
the Great Lakes Water Quality Indicators and Monitoring Act. This bill
will provide science-based assessments of the health of the Great Lakes
and whether restoration projects are working. The bill directs the
Environmental Protection Agency to develop indicators of Great Lakes
water quality and related environmental factors and a comprehensive
network to monitor those indicators.
The Great Lakes contain almost 20 percent of the world's fresh water.
Millions of people rely on the lakes for drinking water, for economic
livelihoods such as fishing and shipping, and for recreational
opportunities, including swimming and boating. But the Great Lakes have
suffered from decades of toxic discharges, urban and agricultural
runoff, and other environmental challenges. We've made some progress in
improving water quality, but we know we have a long way to go.
The stewards of the lakes at the Federal, State, and local levels use
a variety of methods to determine the health of the Great Lakes and
whether they are improving. For example, EPA and the Fish and Wildlife
Service monitor the accumulation of chemicals in Great Lakes fish. The
National Oceanic and Atmospheric Administration detects changes in the
ecosystem from space-based satellites and waterborne buoys. The
Geological Survey samples stream flow and quality, and the states
inspect for compliance with water quality standards.
But these efforts to collect scientific data are largely voluntary
and suffer from a lack of funding and coordination. They use
inconsistent methods that often produce incompatible results.
This week, members of the Great Lakes Task Force released a General
Accounting Office report on Great Lakes environmental programs. GAO
looked at almost 200 Federal and State programs and found that a lack
of coordination, poorly defined goals, and insufficient data make it
difficult to evaluate the success of these programs. GAO found that
there are no data collected regularly throughout the Great Lakes, and
that the existing data are inadequate to determine whether water
quality and other environmental conditions are improving.
In 1990, I authored the Great Lakes Critical Programs Act, which
strengthened the water quality standards in the Great Lakes region.
This year, Congress passed the Great Lakes Legacy Act, to speed the
cleanup of contaminated bottom sediment. But we haven't established a
way to evaluate the impact of these measures.
A restoration program is only as good as its ability to demonstrate
results. To show results, we need science-based indicators of water
quality and related environmental factors, and we need to monitor those
indicators regularly throughout the ecosystem.
GAO recommends that EPA's Great Lakes National Program Office lead an
effort to develop indicators and a monitoring network. Our bill gives
that office the mandate to work with other federal agencies and Canada
to identify and measure water quality and other environmental factors
on a regular basis. The initial set of data collected through this
network will serve as a benchmark against which to measure future
improvements. Those measurements will help us make decisions on how to
steer future restoration efforts. With a clear picture of how the Great
Lakes are changing, we can change course when needed and spend public
funds on the most pressing demands.
This bill serves a second purpose--it provides EPA with dedicated
funding to make sure that data collection can begin in a timely manner
and be carried out consistently and comprehensively as long as the
Great Lakes are in need.
I encourage my colleagues to support this bill and help speed its
passage.
I ask unanimous consent that the text of the bill be printed in the
Record.

[[Page S7000]]

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

S. 1116

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 ``Great Lakes Water Quality
Indicators and Monitoring Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) there are no comprehensive, regularly-collected data
that reveal whether the water quality or related
environmental factors of the Great Lakes have improved as a
result of efforts to remediate and protect the Great Lakes;
(2) that lack of data was confirmed in May 2003 in a report
by the General Accounting Office that concluded that existing
data were inadequate to assess the overall progress of
restoration efforts in the Great Lakes; and
(3) without those data, it is impossible to determine
whether--
(A) progress is being made toward achieving the goals
contained in the Great Lakes Water Quality Agreement between
the United States and Canada; or
(B) Federal and State water quality standards and
remediation programs are effective.

SEC. 3. GREAT LAKES WATER QUALITY INDICATORS AND MONITORING.

(a) In General.--Section 118(c)(1) of the Federal Water
Pollution Control Act (33 U.S.C. 1268(c)(1)) is amended by
striking subparagraph (B) and inserting the following:
``(B)(i) not later than 2 years after the date of enactment
of this clause, in cooperation with Canada and appropriate
Federal agencies (including the United States Geological
Survey, the National Oceanic and Atmospheric Administration,
and the United States Fish and Wildlife Service), develop and
implement a set of science-based indicators of water quality
and related environmental factors in the Great Lakes,
including, at a minimum, measures of toxic pollutants that
have accumulated in the Great Lakes for a substantial period
of time, as determined by the Program Office;
``(ii) not later than 4 years after the date of enactment
of this clause--
``(I) establish a Federal network for the regular
monitoring of, and collection of data throughout, the Great
Lakes basin with respect to the indicators described in
clause (i); and
``(II) collect an initial set of benchmark data from the
network; and
``(iii) not later than 2 years after the date of collection
of the data described in clause (ii)(II), and biennially
thereafter, in addition to the report required under
paragraph (10), submit to Congress, and make available to the
public, a report that--
``(I) describes the water quality and related environmental
factors of the Great Lakes (including any changes in those
factors), as determined through the regular monitoring of
indicators under clause (ii)(I) for the period covered by the
report; and
``(II) identifies any emerging problems in the water
quality or related environmental factors of the Great
Lakes.''.
(b) Authorization of Appropriations.--Section 118 of the
Federal Water Pollution Control Act (33 U.S.C. 1268) is
amended by striking subsection (h) and inserting the
following:
``(h) Authorization of Appropriations.--
``(1) In general.--There is authorized to be appropriated
to carry out this section (other than subsection (c)(1)(B))
$25,000,000 for each of fiscal years 2004 through 2008.
``(2) Great lakes water quality indicators and
monitoring.--There are authorized to be appropriated to carry
out subsection (c)(1)(B)--
``(A) $4,000,000 for fiscal year 2004;
``(B) $6,000,000 for fiscal year 2005;
``(C) $8,000,000 for fiscal year 2006; and
``(D) $10,000,000 for fiscal year 2007.''.
______

By Mr. FEINGOLD (for himself, Mr. Kennedy, and Mr. Jeffords):
S. 1117. A bill to provide a definition of a prevailing party for
Federal fee-shifting statutes; to the Committee on the Judiciary.
Mr. FEINGOLD. Mr. President, I am pleased today to introduce the
Settlement Encouragement and Fairness Act of 2003. This bill provides
that when plaintiffs bring a lawsuit that acts as a catalyst for a
change in position by the opposing party, they will be considered the
``prevailing party'' for purposes of recovering attorneys' fees under
Federal law. The bill will help ensure that people who are the victims
of civil rights, environmental and worker rights' abuses can obtain
legal representation to enforce their rights.
Over the course of our history, Congress has often enacted laws
encouraging private litigants to implement public policy through our
court system. An integral part of many such laws are provisions that
help individuals obtain adequate legal representation by providing that
the defendants will pay the plaintiffs' attorneys fees in cases were
the plaintiff prevails. In laws involving public accommodations,
housing, labor, disabilities, age discrimination, violence against
women, voting rights, pollution and others, Congress has acted over and
over again to empower private litigants in their pursuit of justice.
Presently, there are over two hundred statutory fee-shifting provisions
that allow for some sort of payment of attorneys' fees to a prevailing
plaintiff.
Until 2001, in interpreting these fee-shifting statutes in cases
where a settlement was reached before trial, nine circuit courts of
appeals embraced the ``catalyst theory'' to determine whether
attorneys' fees could be obtained. The catalyst theory required the
payment of fees where the lawsuit caused a change in the position or
conduct of the defendant. Only one circuit court, the Fourth Circuit,
applied a more narrow definition of prevailing party, requiring a
judgment or a court approved settlement in order for a plaintiff to
obtain attorneys' fees.
In Buckhannon Board of Care & Home Inc. v. West Virginia Department
of Health and Human Services (2001), a case arising out of the Fourth
Circuit, the U.S. Supreme Court ruled, in a 5-4 decision, that
plaintiffs may recover attorneys' fees from defendants only if they
have been awarded relief by a court, not if they prevailed through a
voluntary change in the defendant's behavior or a private settlement.
The Buckhannon ruling eliminated the catalyst theory for all fee
shifting statutes in federal law.
The bill I introduce today restores the catalyst theory that the vast
majority of courts had approved prior to the Buckhannon decision as a
basis for seeking attorneys fees under Federal fee shifting statutes.
It provides a new definition of ``prevailing party'' for all such
statutes to encompass the common situation where defendants alter their
conduct after a lawsuit has commenced but without waiting for a court
order requiring them to do so. This critical change in the definition
of ``prevailing party'' will allow attorneys representing clients who
cannot otherwise afford to hire a lawyer to recover their costs and to
be paid a reasonable rate for their work.

The Buckhannon case itself illustrates the need for this legislation.
Buckhannon Board and Care Home in West Virginia, an operator of
assisted living residences, failed a state inspection because some
residents were incapable of ``self-preservation'' as defined by state
law. After receiving orders to close its facilities, Buckhannon sued
the state seeking declaratory and injunctive relief that the ``self-
preservation'' requirement violated the Fair Housing Amendments Act and
the Americans with Disabilities Act. While the lawsuit was pending but
before the court ruled, the state legislature eliminated the ``self-
preservation'' requirement.
Imagine how the plaintiffs felt when they learned that their lawsuit
had forced a change in the law not only for their own case but also for
all of the other individuals who had been subject to the improper self-
preservation doctrine. If ever there was a complete and total victory
caused by litigation, this was it. But, as Casey Stengall once said,
``It ain't over 'til it's over.'' Once the state legislature changed
the law, the District Court granted defendant's motion to dismiss the
case as moot and denied Buckhannon's request for attorneys' fees. The
court ruled that the legislative action did not amount to a judicially
required change in position that would permit Buckhannon to be
considered a ``prevailing party'' in the case. On appeal, the Court of
Appeals for the Fourth Circuit and then the U.S. Supreme Court denied
attorneys' fees for the plaintiffs, ruling that because the change in
the defendants' conduct was voluntary rather than ordered by the court,
Buckhannon was not a prevailing party.
I believe the narrow definition of ``prevailing party'' endorsed by
the Buckhannon decision will result in many injustices going
unchallenged. Indeed, in calculating whether to take a case, an
attorney for a plaintiff will have to consider not only the chances of
losing, but the chances of winning too easily. If businesses or
individuals are able to engage in egregious conduct, refuse to change
their behavior without a lawsuit being filed against them, and then
avoid paying attorneys' fees by changing their conduct on the eve of
trial, the effect will be that

[[Page S7001]]

some lawyers will decide they cannot afford to take a case even if the
claims are very strong.
Imagine a case involving a legitimate claim of housing discrimination
where, after many months, perhaps even years of work, as the attorney
who labored for the plaintiff prepares into the evening for opening
statements, the attorney learns that the defendant has admitted its
wrongful conduct and offered substantial compensation and a promise to
change its practices. This offer came about only because of the
spotlight the lawsuit put on the defendant and the possibility of a
large jury verdict. This would be a complete victory for the plaintiff,
but under Buckhannon, the attorney who labored for years to bring about
this result may not be paid. Later, if the same defendant returns to
discriminatory practices, the next plaintiff might very well not be
able to find competent counsel who will take the case.
Ironically, the failure to correct the Buckhannon decision could lead
to plaintiffs' attorneys dragging out law suits far beyond a point in
time where the parties could reach a fair settlement, in order to
insure that they meet the Buckhannon definition of ``prevailing
party.'' This will increase the costs of litigation and discourage
settlement. Simply put, Buckhannon creates unnatural tensions between
attorneys and clients and may even push attorneys to not act in the
best interest of their clients.
Certainly we can do better. Congress has passed important laws to
protect the public in the work place and in our communities; we must
ensure that these laws can be enforced, when necessary, in court. The
Settlement Encouragement and Fairness Act of 2003 will help insure that
all our citizens have the ability to meaningfully challenge injustice.
______

By Mr. JEFFORDS (for himself, Mr. Leahy, Mr. Schumer, and Mrs.
Clinton):
S. 1118. A bill to establish the Champlain Valley National Heritage
Partnership in the States of Vermont and New York, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. JEFFORDS. Mr. President, I am very pleased to introduce the
Champlain Valley National Heritage Act of 2003. I am joined by Senator
Leahy and Senators Schumer and Clinton of New York. This bill will
establish a National Heritage Partnership within the Champlain Valley.
Passage of this bill will culminate a process to enhance the incredible
cultural resources of the Champlain Valley.
The Champlain Valley of Vermont and New York has one of the richest
and most intact collections of historic resources in the United States.
Fort Ticonderoga still stands where it has for centuries, at the scene
of numerous battles critical to the birth of our Nation. Revolutionary
gunboats have recently been found fully intact on the bottom of Lake
Champlain. Our cemeteries are the permanent resting place for great
explorers, soldiers and sailors. The United States and Canada would not
exist today but for events that occurred in this region.
We in Vermont and New York take great pride in our history. We
preserve it, honor it and show it off to visitors from around the
world. These visitors are also very important to our economy. Tourism
is among the most important industries in this region and has much
potential for growth.
The Champlain Valley Heritage Partnership will bring together more
than one hundred local groups working to preserve and promote our
heritage. Up to $2 million a year will be made available from the
National Park Service through the Lake Champlain Basin Program to
support local efforts to preserve and interpret our heritage and
present it to the world. Most of the funding will be given to small
communities to help preserve their heritage and develop economic
opportunities.
This project has taken many years for me to bring to the point of
introducing legislation. This has been time well spent working at the
grass-roots level to develop a framework to direct federal resources to
where it will do the most good. I am confident that we have found the
best model. This will be a true partnership that supports each member
but does not impose any new federal requirements.
The Champlain Valley National Heritage Partnership will preserve our
historic resources, interpret and teach about the events that shaped
our nation and will be an engine for economic growth. I am hopeful that
this bill, which was considered by the Senate last year, will become
law during this Congress.
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. 1118

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 ``Champlain Valley National
Heritage Partnership Act of 2003''.

SEC. 2. FINDINGS AND PURPOSES.

(a) Findings.--Congress finds that--
(1) the Champlain Valley and its extensive cultural and
natural resources have played a significant role in the
history of the United States and the individual States of
Vermont and New York;
(2) archaeological evidence indicates that the Champlain
Valley has been inhabited by humans since the last retreat of
the glaciers, with the Native Americans living in the area at
the time of European discovery being primarily of Iroquois
and Algonquin descent;
(3) the linked waterways of the Champlain Valley, including
the Richelieu River in Canada, played a unique and
significant role in the establishment and development of the
United States and Canada through several distinct eras,
including--
(A) the era of European exploration, during which Samuel de
Champlain and other explorers used the waterways as a means
of access through the wilderness;
(B) the era of military campaigns, including highly
significant military campaigns of the French and Indian War,
the American Revolution, and the War of 1812; and
(C) the era of maritime commerce, during which canals
boats, schooners, and steamships formed the backbone of
commercial transportation for the region;
(4) those unique and significant eras are best described by
the theme ``The Making of Nations and Corridors of
Commerce'';
(5) the artifacts and structures associated with those eras
are unusually well-preserved;
(6) the Champlain Valley is recognized as having one of the
richest collections of historical resources in North America;
(7) the history and cultural heritage of the Champlain
Valley are shared with Canada and the Province of Quebec;
(8) there are benefits in celebrating and promoting this
mutual heritage;
(9) tourism is among the most important industries in the
Champlain Valley, and heritage tourism in particular plays a
significant role in the economy of the Champlain Valley;
(10) it is important to enhance heritage tourism in the
Champlain Valley while ensuring that increased visitation
will not impair the historical and cultural resources of the
region;
(11) according to the 1999 report of the National Park
Service entitled ``Champlain Valley Heritage Corridor
Project'', ``the Champlain Valley contains resources and
represents a theme `The Making of Nations and Corridors of
Commerce', that is of outstanding importance in U.S.
history''; and
(12) it is in the interest of the United States to preserve
and interpret the historical and cultural resources of the
Champlain Valley for the education and benefit of present and
future generations.
(b) Purposes.--The purposes of this Act are--
(1) to establish the Champlain Valley National Heritage
Partnership in the States of Vermont and New York to
recognize the importance of the historical, cultural, and
recreational resources of the Champlain Valley region to the
United States;
(2) to assist the State of Vermont and New York, including
units of local government and nongovernmental organizations
in the States, in preserving, protecting, and interpreting
those resources for the benefit of the people of the United
States;
(3) to use those resources and the theme ``The Making of
Nations and Corridors of Commerce'' to--
(A) revitalize the economy of communities in the Champlain
Valley; and
(B) generate and sustain increased levels of tourism in the
Champlain Valley;
(4) to encourage--
(A) partnerships among State and local governments and
nongovernmental organizations in the United States; and
(B) collaboration with Canada and the Province of Quebec
to--
(i) interpret and promote the history of the waterways of
the Champlain Valley region;
(ii) form stronger bonds between the United States and
Canada; and
(iii) promote the international aspects of the Champlain
Valley region; and
(5) to provide financial and technical assistance for the
purposes described in paragraphs (1) through (4).

SEC. 3. DEFINITIONS.

In this Act:

[[Page S7002]]

(1) Heritage partnership.--The term ``Heritage
Partnership'' means the Champlain Valley National Heritage
Partnership established by section 4(a).
(2) Management entity.--The term ``management entity''
means the Lake Champlain Basin Program.
(3) Management plan.--The term ``management plan'' means
the management plan developed under section 4(b)(B)(i).
(4) Region.--
(A) In general.--The term ``region'' means any area or
community in 1 of the States in which a physical, cultural,
or historical resource that represents the theme is located.
(B) Inclusions.--The term ``region'' includes
(i) the linked navigable waterways of--

(I) Lake Champlain;
(II) Lake George;
(III) the Champlain Canal; and
(IV) the portion of the Upper Hudson River extending south
to Saratoga;

(ii) portions of Grand Isle, Franklin, Chittenden, Addison,
Rutland, and Bennington Counties in the State of Vermont; and
(iii) portions of Clinton, Essex, Warren, Saratoga and
Washington Counties in the State of New York.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(6) State.--the term ``State'' means--
(A) the State of Vermont; and
(B) the State of New York.
(7) Theme.--The term ``theme'' means the theme ``The Making
of Nations and Corridors of Commerce'', as the term is used
in the 1999 report of the National Park Service entitled
``Champlain Valley Heritage Corridor Project'', that
describes the periods of international conflict and maritime
commerce during which the region played a unique and
significant role in the development of the United States and
Canada.

SEC. 4. HERITAGE PARTNERSHIP.

(a) Establishment.--There is established in the regional
the Champlain Valley National Heritage Partnership.
(b) Management Entity.--
(1) Duties.--
(A) In general.--The management entity shall implement the
Act.
(B) Management plan.--
(i) In general.--Not later than 3 years after the date of
enactment of this Act, the management entity shall develop a
management plan for the Heritage Partnership.
(ii) Existing plan.--Pending the completion and approval of
the management plan, the management entity may implement the
provisions of this Act based on its federally authorized plan
``Opportunities for Action, an Evolving Plan For Lake
Champlain''.
(iii) Contents.--The management plan shall include--

(I) recommendations for funding, managing, and developing
the Heritage Partnership;
(II) a description of activities to be carried out by
public and private organizations to protect the resources of
the Heritage Partnership;
(III) a list of specific, potential sources of funding for
the protection, management, and development of the Heritage
Partnership;
(IV) an assessment of the organizational capacity of the
management entity to achieve the goals for implementation;
and
(V) recommendations of ways in which to encourage
collaboration with Canada and the Province of Quebec in
implementing this Act.

(iv) Considerations.--In developing the management plan
under clause (i), the management entity shall take into
consideration existing Federal, State, and local plans
relating to the region.
(v) Submission to secretary for approval.--

(I) In general.--Not later than 3 years after the date of
enactment of this Act, the management entity shall submit the
management plan to the Secretary for approval.
(II) Effect of failure to submit.--If a management plan is
not submitted to the Secretary by the date specified in
paragraph (I), the Secretary shall not provide any additional
funding under this Act until a management plan for the
Heritage Partnership is submitted to the Secretary.

(vi) Approval.--Not later than 90 days after receiving the
management plan submitted under subparagraph (V)(I), the
Secretary, in consultation with the States, shall approve or
disapprove the management plan.
(vii) Action following disapproval.--

(I) General.--If the Secretary disapproves a management
plan under subparagraph (vi), the Secretary shall--

(aa) advise the management entity in writing of the reasons
for the disapproval;
(bb) make recommendations for revisions to the management
plan; and
(cc) allow the management entity to submit to the Secretary
revisions to the management plan.

(II) Deadline for approval of revision.--Not later than 90
days after the date on which a revision is submitted under
subparagraph (vii)(I)(cc), the Secretary shall approve or
disapprove the revision.

(viii) Amendment.--

(I) In general.--After approval by the Secretary of the
management plan, the management entity shall periodically--

(aa) review the management plan; and
(bb) submit to the Secretary, for review and approval by
the Secretary, the recommendations of the management entity
for any amendments to the management plan that the management
entity considers to be appropriate.

(II) Expenditure of funds.--No funds made available under
this Act shall be used to implement any amendment proposed by
the management entity under subparagraph (viii)(1) until the
Secretary approves the amendments.

(2) Partnerships.--
(A) In general.--In carrying out this Act, the management
entity may enter into partnerships with--
(i) the States, including units of local governments in the
States;
(ii) nongovernmental organizations;
(iii) Indian Tribes; and
(iv) other persons in the Heritage Partnership.
(B) Grants.--Subject to the availability of funds, the
management entity may provide grants to partners under
subparagraph (A) to assist in implementing this Act.
(3) Prohibition on the acquisition of real property.--The
management entity shall not use Federal funds made available
under this Act to acquire real property or any interest in
real property.
(c) Assistance From Secretary.--To carry out the purposes
of this Act, the Secretary may provide technical and
financial assistance to the management entity.

SEC. 5. EFFECT.

Nothing in this Act--
(1) grants powers of zoning or land use to the management
entity;
(2) modifies, enlarges, or diminishes the authority of the
Federal Government or a State or local government to manage
or regulate any use of land under any law (including
regulations); or
(3) obstructs or limits private business development
activities or resource development activities.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There is authorized to be appropriated to
carry out this Act not more than a total of $10,000,000, of
which not more than $1,000,000 may be made available for any
fiscal year.
(b) Non-Federal Share.--The non-Federal share of the cost
of any activities carried out using Federal funds made
available under subsection (a) not be less than 50 percent.

SEC. 7. TERMINATION OF AUTHORITY.

The authority of the Secretary to provide assistance under
this Act terminates on the date that is 15 years after the
date of enactment of this Act.

Mr. LEAHY. Mr. President, I am very pleased to join with my Senate
colleagues from Vermont and New York as we reintroduce the Lake
Champlain Heritage Act of 2003. Last year, we took a significant step
in helping all Americans better appreciate Lake Champlain with the
passage of Daniel Patrick Moynihan Lake Champlain Basin Program Act.
Today, we reaffirm our commitment to the continuing preservation of
Lake Champlain's important historic sites and artifacts.
The role of Lake Champlain cannot be overlooked. From the earliest
human habitation 10,000 years ago, to the Revolutionary War and the
conduct of trade in the 19th and 20th centuries, this 120-mile-long
basin has played a pivotal role in the Course of American history.
It was on Lake Champlain that Benedict Arnold's motley group of 15
American ships engaged a much larger and far superior British fleet in
the Battle at Valcour Island. While the battle ended in a loss for the
Americans, it successfully delayed the British fleet and became known
as one of the most crucial engagements of the American Revolution.
This act is intended to promote and preserve these centuries of
struggle in the Lake Champlain Valley. It will advance the cultural
heritage goals of ``Opportunities for Action,'' a comprehensive
pollution prevention, control, and restoration plan developed by the
Lake Champlain Basin Program. And it will also promote such things as
locally planned and managed heritage networks and a management strategy
for the lake's underwater cultural resources. With the 400th
anniversary of Samuel De Champlain's arrival in the valley coming up in
2009, this bill could not be more needed.
Vermonters and New Yorkers have a serious responsibility to preserve
the historical and cultural heritage of the Lake Champlain Valley for
future generations. Local communities on both sides of the lake have
helped us develop a bold vision to enhance the conservation,
interpretation, and enjoyment of our shared history. We can help
revitalize local economies, promote heritage tourism, and improve the
valley's cultural legacy by making additional resources available to
communities and organizations through the Lake Champlain Basin Program.
It is with great pride that I stand here today with my colleagues
from

[[Page S7003]]

Vermont and New York to reassert our partnership for Champlain Valley
National Heritage Act and continue our cooperative effort to conserve,
interpret, and honor our common heritage.
______

By Mr. GRAHAM of Florida (for himself, Mr. Hatch, and Mr.
Jeffords):
S. 1119. A bill to amend the Internal Revenue Code of 1986 to clarify
the eligibility of certain expenses for the low-income housing credit;
to the Committee on Finance.
Mr. GRAHAM of Florida. Mr. President, today I am re-introducing
legislation that will improve the effectiveness of one of the most
successful programs we have to help Americans get affordable housing,
the Low-Income Housing Tax Credit. I am proud to be joined in this
effort by my esteemed colleagues, Senators Hatch and Jeffords.
The need for affordable housing is as great today as ever. The
generally accepted definition of affordability is for a household to
pay no more than 30 percent of annual income on housing. Today, twelve
million renter and homeowner households pay more than 50 percent toward
housing costs. In fact, nowhere in the country can a family with one
minimum wage worker afford the rent on a two-bedroom apartment.
The Low-Income Housing Tax Credit was created in 1986 to attract
private sector capital to the affordable housing market. It has been
the major engine for financing the production of low-income multi-
family housing. The program offers developers and investors in
affordable housing credit against their federal income tax in return
for their investment. Since its inception, the Low-Income Housing Tax
Credit has assisted in the development and availability of roughly
850,000 new and rehabilitated units of affordable housing.
In the fall of 2000, the Internal Revenue Service isssued its first
guidance in the program's 16-year history. That guidance was issued in
the form of several technical advice memoranda, or TAMs, and specified
which development costs will be eligible and ineligible for the credit,
known as eligible basis.
TAMs are not official guidance, reviewed by the Treasury Department,
but instead, are IRS legal opinions providing direction to IRS agents
conducting audits. They are not citable in court proceedings because
they are not official guidance. In the absence of official guidance,
TAMs could be taken as the official government position. In fact, that
is exactly what is happening.
The problem is that the IRS's position is contrary to common industry
practice, and eliminates many reasonable, legitimate and necessary
costs from the tax credit. This has caused uncertainty among investors
as to whether the credits for which they have paid, will be realized.
Moreover, these guidelines could adversely affect the ability of States
to target affordable housing to those who need it the most.
It is important to understand, this legislation will not increase the
pool of low-income housing tax credits. The Internal Revenue Code sets
the maximum amount of credits that States may allocate to developers of
affordable housing properties. Thanks to legislation that we enacted in
2000, the amount available to each State has increased from $1.50 to
$1.75 times the State's population. That 40 percent increase is
expected to produce about 30,000 more units a year. Since the unmet
demand for affordable housing is many times greater than what can be
built with the help of the credit, our legislation should not affect
revenues. In fact, the only way for this legislation to have a revenue
impact is if the legislation makes it easier for the states to use the
credits we intend for them to have under present law.

What this legislation does do, however, is very important. To
understand its importance, it may be useful to have a little background
on how the low-income housing tax credit works.
In economic terms, the credit is equity financing which replaces a
portion of debt that would otherwise be necessary to finance a
property. By replacing debt, credits work to reduce interest costs.
This allows a property owner to offer lower rents than otherwise would
be the case.
The most unique feature of the program is that state housing finance
agencies award Federal tax credits to developers of rental housing.
Since these agencies have considerable flexibility in how they
distribute the credits, developers compete for the limited number of
tax credits by submitting project proposals. The agencies rate the
proposals, and allocate credits to individual properties based on
criteria provided in the Internal Revenue Code, and on the state's
particular housing needs and priorities.
The Internal Revenue Code also limits the amount of credits a state
may allocate to a particular property. The limit is determined as
percentage of the basis of a property. The basis is, generally
speaking, the cost of constructing a building that is part of an
affordable housing project. Non-federally subsidized new construction
may receive a 9 percent credit. Existing buildings and new buildings
receiving other federal subsidies may get a 4 percent credit.
The IRS takes the position that certain construction costs should not
be included in basis. This position makes a large number of affordable
housing properties financially unfeasible, and weakens the economics of
those that still pass minimum underwriting requirements. The loss of
equity would surely affect the properties that serve the lowest income
tenants, provide higher levels of service, or operate in high cost
areas. The reason that this is problematic is simple. Reducing the
amount of credits does not reduce the development costs. It merely
alters the source of financing from equity to debt, forcing either
higher rents or lower quality construction.
Apparently, the Treasury Department and Internal Revenue Service
agree that this is an issue worthy of review, as both agencies have
included it in their business plan. Last year, the IRS issued new
guidance on one of the items addressed by the TAMs, but there does not
appear to be a full review of the effect of the positions set forth in
the TAMs anytime soon.
This legislation would amend the Internal Revenue Code to specify
that certain associated development costs are to be included in
eligible basis. In many cases, the largest item excluded from eligible
basis under the TAMs is ``impact fees.'' Impact fees are fees required
by the government ``as a condition to the development'' and considered
ineligible because they are one- time costs, unlike building permits
that need to be renewed each time a building is built. These fees cover
a wide range of infrastructure improvements including sewer lines,
schools, and roads. Certainly, whether or not they are includable in
basis for the purpose of calculating the amount of tax credit, these
costs will be incurred and will impact the economics of the property.
As I mentioned previously, the IRS has recently addressed the inclusion
of impact fees in eligible basis, but not other costs directly related
to building construction.

Other items that would be severely restricted or excluded from
eligible basis under the interpretations expressed in the TAMs are site
preparation costs, development fees, professional fees related to
developing the property, and construction financing costs. The
legislation we are introducing today will clarify that any cost
incurred in preparing a site which is reasonably related to the
development of a qualified low-income housing property, any reasonable
fee paid to the developer, any professional fee relating to an item
includable in basis, and any cost of financing attributable to
construction of the building is includable in basis for the purpose of
calculating the maximum amount of credit a state may allocate to a low-
income housing property.
The intent of these clarifications is simply to codify common
industry practice before the issuance of the TAMs. Not only will the
legislation allow the low-income tax credit program to provide better
quality hosing at lower rental rates than would be possible if the
positions taken in the TAMs are followed, but clarification will help
simplify administration of the credit by giving both taxpayers and the
Internal Revenue Service a clearer statement of the standards that
apply in calculating credit amounts.
Our economy is not doing as well as we would like, and there is a
significant likelihood that we are going to need even more affordable
housing in

[[Page S7004]]

the not too distant future. We should be proud that we increased the
amount of low-income housing tax credits that will be available to help
finance this housing. What we need to do now is to make sure that these
credits are used as efficiently as possible to provide housing for
those who need it the most. The legislation we are introducing today
will help achieve that goal.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1119

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

SECTION 1. ELIGIBILITY OF CERTAIN EXPENSES FOR LOW-INCOME
HOUSING CREDIT.

(a) In General.--Subsection (d) of section 42 of the
Internal Revenue Code of 1986 (relating to low-income housing
credit) is amended by adding at the end the following new
paragraph:
``(8) Associated development costs included in basis.--
``(A) In general.--Solely for purposes of this section,
associated development costs shall be taken into account in
determining the basis of any building which is part of a low-
income housing project to the extent not otherwise so taken
into account.
``(B) Associated development costs.--For purposes of
subparagraph (A), the term `associated development costs'
means, with respect to any building, such building's
allocable share of--
``(i) any cost incurred in preparing the site which is
reasonably related to the development of the qualified low-
income housing project of which the building is a part,
``(ii) any fee imposed by a State or local government as a
condition to development of such project,
``(iii) any reasonable fee paid to any developer of such
project,
``(iv) any professional fee relating to any item includible
in the basis of the building pursuant to this paragraph, and
``(v) any cost of financing attributable to construction of
the building (without regard to the source of such financing)
which is required to be capitalized.''
(b) Effective Date.--The amendments made by this section
shall apply to--
(1) housing credit dollar amounts allocated after December
31, 2002, and
(2) buildings placed in service after such date to the
extent paragraph (1) of section 42(h) of the Internal Revenue
Code of 1986 does not apply to any building by reason of
paragraph (4) thereof, but only with respect to bonds issued
after such date.
______

By Mr. BAUCUS (for himself, Mr. Rockefeller, Mr. Bingaman, Mr.
Dayton, and Mrs. Murray):
S. 1120. A bill to establish an Office of Trade Adjustment
Assistance, and for other purposes; to the Committee on Finance.
Mr. BAUCUS. Mr. President, I rise today to introduce the Trade
Adjustment Assistance for Firms Reorganization Act.
The Trade Adjustment Assistance for Firms program assists hundreds of
mostly small and medium-sized manufacturing and agricultural companies
in Montana and nationwide when they face layoffs and lost sales due to
import competition. Qualifying companies develop adjustment plans and
receive technical assistance to become more competitive, so they can
retain and expand employment.
The program is very cost effective. It requires the firms being
helped to match the Federal assistance with their own funds, and it
pays the government back in Federal and State tax revenues when the
firms succeed.
Currently, TAA for Firms clients receive assistance preparing
petitions and adjustment plans from twelve Trade Adjustment Assistance
Centers, which are Commerce Department contractors. Program and policy
decisions are made by a small Headquarters staff in Commerce's Economic
Development Administration. This organizational structure is efficient
and has served the program well for many years.
For example, TAA for Firms is helping Montola Growers from
Culbertson, Montana, to develop cosmetic applications for its rapeseed
oil. The program is helping Pyramid Mountain Lumber of Seeley Lake, MT
to upgrade its production process and train employees to use new
process controls. And it is helping Porterbilt Company of Hamilton to
expand its product line.
Last year, in the Trade Act of 2002, a bipartisan majority of
Congress voted to reauthorize this important program for seven years
and to increase its authorized funding level. The program seemed headed
toward some years of smooth sailing. But it turns out that is not the
case.
For reasons unrelated to TAA for Firms, EDA is about to move all its
Headquarters program operations to its six regional offices, with a
policy office in Washington. For TAA for Firms, that means clients will
get the same local services from the TAACs, but decisions will be made
in six regional offices and the national policy office--a net increase
in layers of government. The likely result is more personnel needed to
run the program, less centralized and consistent decision making, and
less accountability--all without any likely improvement in customer
service.
The organizational structure of TAA for Firms is not broken and it
doesn't need to be fixed. This bill preserves the existing efficient
management structure of the TAA for Firms program. Instead of moving
the program out of Commerce Headquarters entirely, it simply moves the
program to a different part of the Commerce Department. That way it can
continue to be centrally managed with a minimal staff.

Under this bill, administration of TAA for Firms will move from the
Economic Development Administration at the Department of Commerce to
DOC's International Trade Administration.
Relocating the program to ITA makes a lot more sense that dividing it
up among seven different EDA offices, for several reasons. First, ITA
has experience running this program, which was located there prior to
1990. Second, relocating TAA for Firms to ITA will result in fewer
layers of government and more centralized and accountable program
management. It also creates synergies by allowing better coordination
of the TAA for Firms program with other trade and trade remedy programs
administered by ITA. And it enhances the ability of the Finance
Committee to carry out its oversight responsibilities for this program
and for trade policy in general.
I want to thank Senators Rockefeller, Bingaman, Dayton, and Murray
who have joined me in co-sponsoring this bill. This is a simple matter
of good, sensible government and I encourage more of my colleagues to
lend it their support. I urge Chairman Grassley to take up this bill in
the Finance Committee as soon as possible.
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. 1120

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 ``Trade Adjustment Assistance
for Firms Reorganization Act''.

SEC. 2. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

(a) In General.--Chapter 3 of title II of the Trade Act of
1974 (19 U.S.C. 2341 et seq.) is amended by inserting after
section 255 the following new section:

``SEC. 255A. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

``(a) Establishment.--Not later than 90 days after the date
of enactment of the Trade Adjustment Assistance for Firms
Reorganization Act, there shall be established in the
International Trade Administration of the Department of
Commerce an Office of Trade Adjustment Assistance.
``(b) Personnel.--The Office shall be headed by a Director,
and shall have such staff as may be necessary to carry out
the responsibilities of the Secretary of Commerce described
in this chapter.
``(c) Functions.--The Office shall assist the Secretary of
Commerce in carrying out the Secretary's responsibilities
under this chapter.''.
(b) Conforming Amendment.--The table of contents for the
Trade Act of 1974 is amended by inserting after the item
relating to section 255, the following new item:

``Sec. 255A. Office of Trade Adjustment Assistance.''.
______

By Mr. BAUCUS (for himself and Mr. McCain):
S. 1121. A bill to extend certain trade benefits to countries of the
greater Middle East; to the Committee on Finance.
Mr. BAUCUS. Mr. President, I rise today to introduce, on behalf of my
self and Senator McCain, the Middle East Trade and Engagement Act of
2003.
For more than a thousand years, the most important trade route in the
world ran through the heart of the

[[Page S7005]]

Middle East. The Silk Road that linked the Western world with China
wound its way through what is today Egypt, Iraq, Jordan, Turkey, and a
host of other countries in the Middle East.
Merchants who traveled either direction along the Silk Road brought
with them not only their goods for sale, but also their ideas and
culture. In this way, all peoples from the West through the East were
enriched with both money and knowledge.
But in modern times, the countries of the Middle East have retreated
from their historically critical role in world trade. Today, few
countries in the Middle East engage fully in the global trading system.
Many are not members of the World Trade Organization. Many have high
barriers to international trade and investment. Their economies have
suffered as a result. A declining share of world trade and investment
has led to decades of deepening poverty and slow job creation in the
countries of the Middle East.
At the same time, they have been experiencing population growth rates
among the highest in the world. That means that a growing number of
young people will be entering the workforce to look for jobs that don't
now exist.
The United States cannot stand idly by as a generation of young
people in the Middle East grows up to discover that there is no
meaningful work for them, and that they have no way to provide for a
family of their own.
The problem will only get worse if we don't act now. As the rest of
the world continues to liberalize its trade, the countries of the
Middle East will only be left further behind.
That is why we're today introducing the Middle East Trade and
Engagement ACt of 2003. Under this Act, countries in the Middle East
will be given preferential access to the U.S. market.
This is not a one-way street. Countries must meet certain conditions.
They must support our war on terrorism, and they must pursue economic
reforms. Only then will they reap the benefits of this legislation.
Our proposal can have an immediate impact. Opening our markets to the
countries of the Middle East will encourage higher levels of trade and
direct investment in those countries. And we know it can be a success
because if has worked before in other regions. Our bill is modeled on
successful programs that increased economic development in sub-Saharan
Africa and the Andean countries.
This legislation will do the same for the countries of the Middle
East. Increased economic development in that region means jobs for the
young and the unemployed, some of whom may otherwise be recruited by
our enemies in the war on terrorism.
By helping to strengthen these economies, we also increase the number
of people who can afford to purchase American products and services.
That means increased export opportunities for American businesses and
more jobs for American farmers and workers.
President Bush recently announced an initiative to create a free
trade area for the United States and the countries of the Middle East
by the year 2013. This is a good long-term goal. But the people in the
Middle East need our help now. They need jobs now, not ten years from
now.
The Middle East Trade and Engagement Act would bring the benefits of
trade to the people of the countries in the Middle East in a much
shorter time. It would also help those countries make the economic
reforms they'll need to make before a free trade area can become a
realistic option.
And just as trade in the time of the Silk Road allowed the exchange
of ideas and culture as well as goods, increased trade now can
strengthen ties between the United States and the countries in the
Middle East.
Now, in the Aftermath of the war in Iraq, the whole world's attention
is focused on the Middle East. It is the ideal time for the United
States to engage these countries in a comprehensive way and help bring
them more fully into the global trading system.
I hope that my colleagues will join Senator McCain and me in
cosponsoring this important legislation, and I hope we will have a
change to consider this in the Finance Committee this year.
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. 1121

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 ``Middle East Trade and
Engagement Act of 2003''.

SEC. 2. FINDINGS.

Congress finds that--
(1) it is in the mutual interest of the United States and
the countries of the greater Middle East to promote stable
and sustainable growth and development throughout the greater
Middle East;
(2) Congress views democratization and economic progress in
the countries of the greater Middle East as important
elements of a policy to address terrorism and endemic
instability;
(3) free trade relationships are not a substitute for, but
a complement to, necessary political and economic reforms
that lead to political liberalization and economic freedom;
(4) the countries of the greater Middle East have enormous
economic potential and are of enduring political significance
to the United States;
(5) despite their economic potential, the countries of the
greater Middle East are experiencing deepening poverty, slow
job creation, and a declining share of world trade and
investment, while at the same time experiencing population
growth rates among the highest in the world;
(6) these economic conditions are in part the result of
barriers to trade and investment, a failure to engage fully
in the global trading system, lack of participation in the
World Trade Organization, and, often, a lack of economic
diversification and over-reliance on the energy sector;
(7) offering the countries of the greater Middle East
enhanced trade preferences will encourage higher levels of
trade and direct investment and help bring those countries
more fully into the global trading system;
(8) higher levels of trade and investment and greater
involvement in the global trading system can lead to
increased economic development, which can in turn lead to
more jobs for people in the countries of the greater Middle
East; and
(9) encouraging the reciprocal reduction of trade and
investment barriers in the greater Middle East will enhance
the benefits of trade and investment for all the countries in
the greater Middle East as well as enhance commercial and
political ties between the United States and the greater
Middle East.

SEC. 3. STATEMENT OF POLICY.

Congress supports--
(1) encouraging increased trade and investment between the
United States and the countries of the greater Middle East
and among the countries of the greater Middle East;
(2) reducing tariff and nontariff barriers and other
obstacles to trade between the United States and the
countries of the greater Middle East and among the countries
of the greater Middle East;
(3) strengthening and expanding the private sector and
accelerating the rate of job creation in the countries of the
greater Middle East;
(4) focusing on countries committed to the rule of law,
economic reform, political liberalization, respect for human
rights, and the eradication of poverty;
(5) facilitating the development of civil societies and
political freedom in the countries of the greater Middle
East;
(6) promoting sustainable development, and protecting and
preserving the environment in a manner consistent with
economic development; and
(7) encouraging the countries of the greater Middle East to
diversify their economies, implement domestic economic
reforms, open to trade, and adopt anticorruption measures,
including through accession to the Organization for Economic
Cooperation and Development (OECD) Convention on Combating
Bribery of Foreign Public Officials in International Business
Transactions.

SEC. 4. DESIGNATION OF ELIGIBLE COUNTRIES.

(a) In General.--The President is authorized to designate
any country listed in subsection (c) as a beneficiary country
if the President determines that the country--
(1) has established, or is making continual progress toward
establishing--
(A) a market-based economy that protects private property
rights, incorporates an open rules-based trading system, and
minimizes government interference in the economy through
measures such as price controls, subsidies, and government
ownership of economic assets;
(B) the rule of law and the right to due process, a fair
trial, and equal protection under the law;
(C) political pluralism, a climate free of political
intimidation and restrictions on peaceful political activity,
and democratic elections that meet international standards of
fairness, transparency, and participation;
(D) the elimination of barriers to United States trade and
investment, including by--
(i) providing national treatment and measures to create an
environment conducive to domestic and foreign investment;
(ii) protecting intellectual property; and

[[Page S7006]]

(iii) resolving bilateral trade and investment disputes;
(E) economic policies that reduce poverty, increase the
availability of health care and educational opportunities,
expand physical infrastructure, promote the development of
private enterprise, and encourage the formation of capital
markets through micro-credit or other programs;
(F) a system to combat corruption and bribery, such as
signing and implementing the OECD Convention on Combating
Bribery of Foreign Public Officials in International Business
Transactions;
(G) protection of internationally recognized worker rights,
including the right of association, the right to organize and
bargain collectively, a prohibition on the use of any form of
forced or compulsory labor, a minimum age for the employment
of children, and acceptable conditions of work; and
(H) policies that provide a high level of environmental
protection;
(2) does not engage in activities that undermine United
States national security or foreign policy interests, and
supports a peaceful resolution of the Israeli-Palestinian
conflict;
(3) is a signatory of the United Nations Declaration of
Human Rights, does not engage in gross violations of
internationally recognized human rights, and is making
continuing and verifiable progress on the protection of
internationally recognized human rights, including freedom of
speech and press, freedom of peaceful assembly and
association, and freedom of religion;
(4) is not listed by the United States Department of State
as a state sponsor of terrorism and cooperates fully in
international efforts to combat terrorism;
(5) does not participate in the primary, secondary, or
tertiary economic boycott of Israel; and
(6) otherwise meets the eligibility criteria set forth in
section 502(b)(2) of the Trade Act of 1974 (19 U.S.C.
2462(b)(2)), other than section 502(b)(2)(B).
(b) Continuing Compliance.--If the President determines
that a designated beneficiary country no longer meets the
requirements described in subsection (a), the President shall
terminate the designation of the country made pursuant to
subsection (a) and inform Congress of the President's
determination and the reasons therefor.
(c) Countries Eligible for Designation.--In designating
countries as beneficiary countries under this Act, the
President shall consider only the following countries of the
greater Middle East or their successor political entities:
(1) Afghanistan.
(2) Algeria.
(3) Azerbaijan.
(4) Bahrain.
(5) Bangladesh.
(6) Egypt.
(7) Iraq.
(8) Kuwait.
(9) Lebanon.
(10) Morocco.
(11) Oman.
(12) Pakistan.
(13) Qatar.
(14) Saudi Arabia.
(15) Tunisia.
(16) Turkey.
(17) United Arab Emirates.
(18) Yemen.
(d) The Palestinian Authority.--The President is also
authorized to designate the Palestinian Authority or its
successor political entity as a beneficiary political entity
which, if so designated, shall be accorded benefits under
this Act as if it were a beneficiary country, if the
President determines that the Palestinian Authority--
(1) satisfies the conditions of subsection (a) (1) and (2);
(2) does not participate in acts of terrorism, and takes
active measures to combat terrorism;
(3) cooperates fully in international efforts to combat
terrorism;
(4) does not engage in gross violations of internationally
recognized human rights, and is making continuing and
verifiable progress on the protection of internationally
recognized human rights, including freedom of speech and the
press, freedom of peaceful assembly and association, and
freedom of religion; and
(5) accepts Israel's right to exist in peace within secure
borders.

SEC. 5. DESIGNATION OF ELIGIBLE ARTICLES.

(a) Eligible Articles.--Except as provided in sections
503(b)(2) and (3) of the Trade Act of 1974 (19 U.S.C.
2463(b)(2) and (3)), the President is authorized to designate
articles as eligible for duty-free treatment from all
beneficiary countries for purposes of this Act by Executive
order or Presidential proclamation after receiving the advice
of the International Trade Commission in accordance with
subsection (c).
(b) Rules of Origin.--
(1) General rule.--The duty-free treatment provided under
this Act shall apply to any eligible article which is the
growth, product, or manufacture of 1 or more beneficiary
countries if--
(A) that article is imported directly from a beneficiary
country into the customs territory of the United States; and
(B) the sum of--
(i) the cost or value of the materials produced in 1 or
more beneficiary countries, plus
(ii) the direct cost of processing operations performed in
such beneficiary country or countries,

is not less than 35 percent of the appraised value of such
article at the time it is entered.
(2) Additional countries.--For purposes of the rules of
origin in paragraph (1) and the regulations prescribed
pursuant to paragraph (4), the term ``beneficiary country''
includes Israel and Jordan.
(3) Exclusions.--An article shall not be treated as the
growth, product, or manufacture of a beneficiary country by
virtue of having merely undergone--
(A) simple combining or packaging operations; or
(B) mere dilution with water or mere dilution with another
substance that does not materially alter the characteristics
of the article.
(4) Regulations.--The Secretary of the Treasury, after
consulting with the United States Trade Representative, shall
prescribe such regulations as may be necessary to carry out
this subsection, including, but not limited to, regulations
providing that, in order to be eligible for duty-free
treatment under this Act, an article--
(A) must be wholly the growth, product, or manufacture of 1
or more beneficiary countries, including Israel and Jordan;
or
(B) must be a new or different article of commerce which
has been grown, produced, or manufactured in 1 or more
beneficiary countries, including Israel and Jordan.
(c) International Trade Commission Advice.--Before
designating an article as an eligible article under
subsection (a), the President shall publish in the Federal
Register and furnish the International Trade Commission with
a list of articles that may be considered for designation as
eligible articles for purposes of this Act. The President
shall comply with the provisions of sections 131, 132, 133,
and 134 of the Trade Act of 1974 as if an action under this
Act were an action taken under section 123 of the Trade Act
of 1974 to carry out a trade agreement entered into under
section 123.

SEC. 6. UNITED STATES-MIDDLE EAST TRADE AND ECONOMIC
COOPERATION FORUM.

(a) Declaration of Policy.--The President shall convene
annual high-level meetings among appropriate officials of the
United States Government, officials of the governments of
eligible beneficiary countries, and officials of the
Governments of Israel and Jordan in order to foster close
economic ties between the United States and the countries of
the greater Middle East.
(b) Establishment.--Not later than 12 months after the date
of enactment of this Act, the President, after consulting
with Congress and the governments concerned, shall establish
a United States-Middle East Trade and Economic Cooperation
Forum (in this section referred to as the ``Forum'').
(c) Requirements.--In creating the Forum, the President
shall meet the following requirements:
(1) The President shall direct the Secretary of Commerce,
the Secretary of the Treasury, the Secretary of State, and
the United States Trade Representative to host the first
annual meeting with their counterparts from the governments
of designated beneficiary countries, and those countries and
political entities listed in section 4 (c) and (d) that the
President determines are taking substantial positive steps
toward meeting the eligibility requirements in section 4. The
purpose of the meeting shall be to discuss expanding trade
and investment relations between the United States and the
countries of the greater Middle East and the implementation
of this Act including encouraging joint ventures between
small and large businesses. The President shall also direct
the Secretaries and the United States Trade Representative to
invite to the meeting representatives from appropriate
organizations and government officials from countries and
political entities in the greater Middle East.
(2)(A) The President, in consultation with Congress, shall
encourage United States nongovernmental organizations to host
annual meetings with nongovernmental organizations from the
countries and political entities of the greater Middle East
in conjunction with the annual meetings of the Forum for the
purpose of discussing the issues described in paragraph (1).
(B) The President, in consultation with Congress, shall
encourage United States representatives of the private sector
to host annual meetings with representatives of the private
sector from the countries and political entities of the
greater Middle East in conjunction with the annual meetings
of the Forum for the purpose of discussing the issues
described in paragraph (1).
(3) The President shall, to the extent practicable, meet
with the heads of governments of designated beneficiary
countries, and those countries and political entities listed
in section 4 (c) and (d) that the President determines are
taking substantial positive steps toward meeting the
eligibility requirements in section 4, not less than once
every 2 years for the purpose of discussing the issues
described in paragraph (1). The first such meeting should
take place not later than 12 months after the date of
enactment of this Act.
(d) Dissemination of Information by USIS.--In order to
assist in carrying out the purposes of the Forum, the United
States Information Service shall disseminate regularly,
through multiple media, economic information in support of
the free market economic reforms described in this Act.

[[Page S7007]]

SEC. 7. FREE TRADE AGREEMENTS WITH COUNTRIES OR POLITICAL
ENTITIES IN THE GREATER MIDDLE EAST.

(a) Declaration of Policy.--Congress declares that
bilateral free trade agreements should be negotiated, where
feasible, with interested countries or political entities in
the greater Middle East, in order to serve as the catalyst
for increasing trade between the United States and the
greater Middle East and increasing private sector investment
in the greater Middle East.
(b) Eligibility.--Any country or political entity that
desires to negotiate a bilateral free trade agreement with
the United States shall be a member of the World Trade
Organization or be working diligently toward membership and
shall satisfy the criteria in section 4(a) of this Act.
(c) Plan Requirement.--
(1) In general.--The President, taking into account the
willingness of the governments of the beneficiary countries
to engage in negotiations to enter into free trade
agreements, shall develop a plan for the purpose of
negotiating and entering into 1 or more trade agreements with
interested beneficiary countries.
(2) Elements of plan.--The plan shall include the
following:
(A) The specific objectives of the United States with
respect to negotiations described in paragraph (1) and a
suggested timetable for achieving those objectives.
(B) The benefits to both the United States and the relevant
beneficiary countries with respect to the applicable free
trade agreement or agreements.
(C) A mutually agreed-upon timetable for the negotiations.
(D) Subject matter anticipated to be covered by the
negotiations and United States laws, programs, and policies,
as well as the laws of participating eligible countries of
the greater Middle East and existing bilateral and
multilateral and economic cooperation and trade agreements,
that may be affected by the agreement or agreements.
(E) Procedures to ensure the following:
(i) Adequate consultation with Congress and the private
sector during the negotiations.
(ii) Consultation with Congress regarding all matters
relating to implementation of the agreement or agreements.
(iii) Approval by Congress of the agreement or agreements.
(iv) Adequate consultations with the relevant governments
of the greater Middle East during the negotiation of the
agreement or agreements.
(d) Reporting Requirement.--Not later than 12 months after
the date of enactment of this Act, the President shall
prepare and transmit to Congress a report containing the plan
developed pursuant to subsection (c).

SEC. 8. REPORTING REQUIREMENT.

(a) In General.--The President shall monitor, review, and
prepare a report annually on the progress of each country and
political entity listed in section 4 (c) and (d) in meeting
the requirements described in section 4(a) in order to
determine the current or potential eligibility of each
country or political entity to be designated as a beneficiary
country under this Act. The report shall also include a
comprehensive discussion of the implementation of this Act
and an analysis of the trade and investment policy of the
United States with respect to the countries and political
entities listed in section 4 (c) and (d). To the extent that
any subject matter required by the report is included in
another report submitted by the President, the report
required by this section may reference the other report.
(b) Time For Submitting Report.--The President shall submit
the report described in subsection (a) to Congress not later
than 1 year after the date of enactment of this Act, and
annually thereafter through 2011.

SEC. 9. PRESERVATION OF BENEFITS OF UNITED STATES-ISRAEL AND
UNITED STATES-JORDAN FREE TRADE AGREEMENTS.

Nothing in this Act shall be deemed to nullify or impair
any right or benefit accorded either to Israel or to Jordan
under the existing trade agreements with the United States.

SEC. 10. TERMINATION OF PREFERENTIAL TREATMENT.

No duty-free treatment or other preferential treatment
extended to beneficiary countries under this Act shall remain
in effect after December 31, 2011.

Mr. McCAIN. Mr. President, today I join Senator Baucus in introducing
the Middle East Trade and Engagement Act of 2003. Our legislation would
permit eligible countries in the greater Middle East to gain greater
access to American markets through the duty-free treatment of certain
exports, and ultimately to negotiate free trade agreements with the
United States. It would condition broader trade relations on
fundamental political and economic reforms, cooperation in the fight
against terrorism, and support for the Israeli-Palestinian peace
process, among other issues, in order to promote liberalization and
reform across the Arab and Muslim worlds.
Free trade is a powerful tool for opening up closed societies, if
leaders in the greater Middle East are willing to make necessary and
overdue political and economic reforms. It is past time for nations in
the region to join the global economy, and for rulers to lead
increasingly restive populations in the direction of democracy and free
markets.
Today, the countries of the Middle East account for a small
percentage of non-energy sector trade for the United States. With the
exception of oil, most Arab nations barely trade with each other, much
less with the rest of the world, and many still maintain a hostile
economic boycott on Israel--policies that isolate the Middle East from
the global economy and perpetuate conflict instead of building
prosperity. The wave of free-market reform and democratization that
swept Europe, Latin America, Asia, and parts of Africa in the 1980s and
1990s has left most of the Middle East untouched and unchanged.
America's interest in economic opening and political liberalization
in the region requires a new level of engagement with the countries of
the greater Middle East, premised on the acceleration and active
implementation of a host of reforms without which prosperity and
democracy are not possible. Our legislation would tie preferential
trade access to American markets to progress towards adoption of these
reforms, as well as meaningful progress on human rights protections,
decisive movement towards democracy, full cooperation in the war on
terrorism, and an end to the primary, secondary, and tertiary economic
boycott of Israel.
Our bill is modeled on the success of the Andean Trade Preferences
Act and the African Growth and Opportunity Act. Ideally, enactment of
the bill we are introducing today would create a regime of duty-free
trade in a number of goods from the greater Middle East. Such a trade
preference program would encourage and often require eligible nations
to undertake the kind of significant economic reforms that ultimately
lead to free trade agreements, as President Bush has called for and
which we support.
The Andean Trade Preferences Act was created to expand the economies
of Bolivia, Colombia, Ecuador, and Peru. By granting duty-free and
reduced rate treatment to various products from these nations, we took
action to strengthen the fragile economies of the region, expand their
export bases, and provide Andean farmers and workers with legitimate
employment outside of the drug trade. It has worked. The trade
agreement created new industries in the region outside of the drug
trade and expanded the economies of the region which helped to create
legitimate jobs. We foresee similar effects from this legislation on
parts of the Middle East, if leaders have the courage and vision to
complement progress on trade with internal political and economic
reforms.
Reform in the Arab and Muslim worlds requires not just greater trade
but accelerated political and economic liberalization, including
respect for fundamental human freedom. It is my hope that the spirit
and effect of our legislation will help move countries of the greater
Middle East in that direction.
______

By Mrs. BOXER (for herself and Mr. Biden):
S. 1123. A bill to provide enhanced Federal enforcement and
assistance in preventing and prosecuting crimes of violence against
children; to the Committee on the Judiciary.
Mrs. BOXER. Mr. President, today I am introducing the Violence
Against Children Act of 2003. The legislation, modeled on the
successful Violence Against Women Act, will both toughen Federal
penalties for crimes against children and assist local communities in
their efforts to fight violence against children. It has been endorsed
by over 100 prominent individuals and organizations.
We were all horrified by the tragic murders of Samantha Runion and
Danielle van Dam. We were horrified by the kidnaping of Elizabeth
Smart, Erica Pratt, and Nichole Taylor Timmons who were snatched right
from their homes. We were horrified by the kidnaping and rape of
Jacqueline Marris and Tamara Brooks.
But there are thousands more stories we do not hear--thousands of
children who each year are victims of sexual molestation, kidnaping,
murder--thousands of children whose stories do not make the nightly
news--thousands of children and thousands of families who suffer in
silence and often without help.

[[Page S7008]]

In fact, 71 percent of all sex crime victims are under the age of
18--and 38 percent of all kidnaping victims are under age 18. Those
between the ages of 12 and 17 are over two times more likely to be
victims of a violent crime than adults. And as alarming as those
statistics are, according to a study published in 1999, only 28 percent
of all crimes against children are actually reported.
While we are horrified by these and other stories, we must not let
them paralyze us. We must do for children what we have done on behalf
of women, by changing attitudes and changing the culture. The Violence
Against Children Act would create a new Federal criminal statute for
willfully injuring or attempting to injure any person under the age of
18. Those who injure a child or try to will be imprisoned for up to 10
years and fined. And if the crime is kidnaping, aggravated sexual
abuse, or murder, the maximum penalty will be life in prison.
In addition to enhanced penalties for crimes against children, the
Violence Against Children Act provides Federal assistance--including
technical, forensic, and prosecutorial assistance--to any State, Indian
tribe, or local government that requests assistance with a violent
felony against a child. The bill also establishes a grant program to
help local police and prosecutors to strengthen effective law
enforcement and prosecution for these crimes.
This Act builds upon the Protect Act, recently signed into law, by
requiring that States have an Amber Alert system to help locate missing
children in order to qualify for the local law enforcement grants. In
addition, to cut down on the number of abused and neglected children,
states are required to have a Safe Haven program that would allow
parents to leave newborn babies in hospital emergency rooms,
anonymously and with no fear of penalty. These requirements will ensure
that states take action to improve systems that can protect our
Nation's children.
I am pleased to be joined in this effort by Senator Biden, who I
teamed up with over a decade ago in introducing the Violence Against
Women Act. And Representative Millender-McDonald is the sponsor of the
House bill.
This is a critical issue to safeguard our children and youth
nationwide. I urge my colleagues to cosponsor this bill.
I ask unanimous consent to print in the Record a section-by-section
summary of the bill and a list of those who have endorsed it.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Violence Against Children Act--Section-by-Section Summary

Section 1. Short title
Names the Act the ``Violence Against Children Act of
2003.''
Section 2. Findings
Includes findings on the extent of crimes against children
and the effect of those crimes against children. Also finds
that failure to pay child support is a form of neglect.

title I--enHANCED FedERAL ROle In CRIMES against CHILDREN

Section 101. Enhanced penalties
(1) New Criminal Statute
Creates a new federal criminal statute for willfully
injuring or attempting to injure any person under the age of
18. Establishes a maximum penalty of 10 years in prison and a
fine. If death of the child results from the crime or if the
crime is kidnapping, an attempt to kidnap, aggravated sexual
abuse, an attempt to commit aggravated sexual abuse, or an
attempt to kill, the maximum penalty is a fine and life in
prison.
For constitutional purposes, the criminal statute applies
only under certain circumstances: (1) if the defendant or the
victim engages in interstate or foreign commerce, including
crossing a state line, during the course of or as the result
of committing the crime; or (2) the defendant uses a firearm
or other weapon that has traveled in interstate or foreign
commerce.
(2) Enhanced Penalties of Existing Crimes
Directs the United States Sentencing Commission to provide
enhanced penalties for existing federal crimes when the
victim is under the age of 18.
(3) Review of State Laws
Directs the General Accounting Office, within 6 months, to
review state criminal penalties for crimes against children
and state laws regarding enhanced penalties when the victim
of a crime is under the age of 18.
Section 102. Enhanced assistance for criminal investigations
and prosecutions by state and local law enforcement
officials
Requires the Attorney General to provide federal
assistance--including technical, forensic, and prosecutorial
assistance--to any state, Indian tribe, or local government
that requests assistance with a violent felony against a
child.
If the Attorney General determines that there are
insufficient resources to fulfill all such requests, priority
is given to (a) requests that involve offenders who have
committed crimes in more than one state; and (b) rural areas
that do not have sufficient resources to investigate and
prosecute the crime.

TITLE II--GRANT PROGRAMS

Section 201. State and local law enforcement assistance
grants
Creates a new grant program to assist states, Indian
tribes, and local governments to strengthen law enforcement
and prosecution of crimes against children. Grants could be
used for a variety of purposes, including: (a) training law
enforcement officers, prosecutors, and judges; (b) developing
or expanding law enforcement units or courts that
specifically target crimes against children; (c) developing
policies to prevent, identify, and respond to crimes against
children; (d) establishing data collection and communication
systems to link police, prosecutors, and courts in helping to
track arrests, prosecutions, and convictions of crimes
against children; and (e) establishing and strengthening
collaboration and communication between law enforcement and
child services agencies.
To be eligible for funds, a state must have in place an
AMBER Alert system (see section 301) and must use, or be in
the process of using, the National Incident-Based Reporting
System (see section 302).
Authorizes $25 million for each of the next five years.
Federal funds must supplement, not supplant, non-federal
funds.
Section 202. Education, prevention, and victims' assistance
grants
Creates a new grant program to assist states, Indian
tribes, local governments, and nongovernmental organizations
to provide education, prevention, intervention, and victims'
assistance services regarding crimes against children. Grants
could be used for a variety of purposes, including: (a)
hotlines; (b) training of professionals; (c) informational
and educational services and materials; (d) intervention
services; (e) emergency medical treatment; (f) counseling to
child victims and their families; and (g) increasing the
number of mental health professionals that specialize in
child victims.
To be eligible for funds, a state must have a Safe Haven
program (see section 303).
Authorizes $25 million for each of the next five years.
Federal funds must supplement, not supplant, non-federal
funds.

TITLE III--NATIONWIDE PROGRAMS

Section 301. Nationwide AMBER Alert
Requires each state receiving a law enforcement assistance
grant (see section 201) to have in place a state-wide AMBER
Alert communications network for child abduction cases.
This system must be in place within 3 years after the date
of enactment of the Violence Against Children Act.
Section 302. Improved statistical gathering
Requires each state receiving a law enforcement assistance
grant (see section 201) to use, or to be in the process of
testing or developing protocols to use, the National
Incident-Based Reporting System. (This program provides the
most detailed statistical profile of crimes in the United
States, including by the age of the victims. However, it is a
voluntary program, and less than half the states currently
participate.)
Section 303. National safe haven
Requires each state receiving a victims' assistance grant
(see section 202) to have a Safe Haven program, which permits
a parent to leave a newborn baby with a medically-trained
employee of a hospital emergency room anonymously without
penalty. The state program must have a mechanism to
voluntarily collect information about the medical history of
the family, must require a search of the child in the state
and federal missing person databases, and must include a plan
to publicize the state program.
To ensure that an abused or intentionally harmed newborn is
not left at a hospital so a parent can escape responsibility,
a state may have a limited exception to the Safe Haven
program in those circumstances.
Section 304. Improved child protection services programs
Directs each state, within 6 months, to report to the
Department of Health and Human Services on its child
protective services program, including how the state
maintains records, keeps track of the children under its
care, and verifies the well-being of the children.
Directs the General Accounting Office, within 6 months, to
review state child protective services practices, including
how states keep track of the children under their care, and
to report to Congress on any legislative changes needed to
improve the program.

TITLE IV--CHILD SUPPORT ENFORCEMENT

Section 401. Child support bad debt deduction
Expresses the sense of the Senate that Congress should
extend the existing federal tax law on bad debt to nonpayment
of child support. That is, those who do not receive the child
support they are owed should be able to deduct that from
their federal income taxes; those who fail to pay ordered

[[Page S7009]]

child support should be required to add the unpaid amount to
their income and pay federal taxes on it.
____

Violence Against Children Act Letters of Support

national organizations/individuals

KlaasKids Foundation (Marc Klaas).
Children's Defense Fund.
National Children's Alliance.
American Academy of Child and Adolescent Psychiatry.
American Humane Association.
Crimes Against Children Research Center.
Dr. Laura Schlessinger.

California Law Enforcement

California Police Activities Leagues.
Auburn Chief of Police.
Butte County Sheriff-Coroner.
Chico Chief of Police.
Colusa County Sheriff-Coroner.
Fairfield Chief of Police.
Glenn County Sheriff-Coroner.
Kern County Sheriff-Coroner.
Lassen County Sheriff-Coroner.
Long Beach Chief of Police.
Los Angeles Chief of Police.
Manteca Chief of Police.
Marin County Sheriff.
Marysville Chief of Police.
Napa Chief of Police.
Oxnard Chief of Police.
Redding Chief of Police.
Roseville Chief of Police.
Sacramento Chief of Police.
Sacramento County Sheriff.
San Diego Chief of Police.
San Mateo Chief of Police.
San Mateo County Sheriff.
Santa Ana Chief of Police.
Santa Clara Chief of Police.
Shasta County Sheriff.
Stanislaus County Sheriff-Coroner.
Stockton Chief of Police.
Woodland Chief of Police.
Yolo County Sheriff.
Yuba City Chief of Police.

other law enforcement

Pierce County (WA) Sheriff.

california public officials

Bill Lockyer, California Attorney General.
Jack O'Connell, California State Superintendent of Public
Instruction.
Steve Westly, California State Controller.
John L. Burton, President Pro Tempore, California State
Senate.
James Hahn, Mayor, Los Angeles.
Jan Scully, Sacramento County District Attorney.
Chula Vista City Council (Stephen C. Padilla, Mayor).
Santa Rosa City Council (Sharon Wright Mayor).
Ed Henderson, Mayor, Napa.
Steve Cooley, Los Angeles County District Attorney.
Pete Knoll, Siskiyou County District Attorney.
Claire Mack, Mayor, San Mateo.
Karin MacMillan, Mayor, Fairfield.
John A. Russo, Oakland City Attorney.
Alan D. Bersin, San Diego Superintendent of Public
Instruction.
City of Santa Clara (Patricia M. Mahan, Mayor).

california organizations

Family Violence Law Center (Oakland).
Children's Interview Center (San Pablo).
Child Abuse Prevention Council of Sacramento.
Latino Coalition for a Healthy California.
Healthy Children's Collaborative (Stockton).
Sacramento Pediatric Society.
Sacramento County Children's Coalition.
Didi Hirsch Community Mental Health Center (Culver City).
Prevent Child Abuse--California.
Fresno Council on Child Abuse Prevention.
Rancho Cordova Neighborhood Center.
The Mutual Assistance Network of Del Paso Heights.
FamiliesFirst (Davis).
La Familia Counseling Center (Sacramento).
Orange County Child Advocacy Center.
Shasta County Child Abuse Prevention Coordinating Council.
Bienvenidos Family Services (Los Angeles).
Break the Cycle (Los Angeles).
SHEILDS For Families (Los Angeles).
South Central Prevention Coalition (Los Angeles).
Violence Prevention Coalition of Greater Los Angeles.
Prototypes (Culver City).
Five Acres Boys' and Girls' Aid Society of Los Angeles.
Heart of Los Angeles Youth.
Jewish Family Service of Los Angeles.
Marjaree Mason Center (Fresno).
Phoenix Houses of California.
Boys & Girls Club of San Fernando Valley.
Community Violence Solutions.
California Coalition for Youth.
The Jeffrey Foundation (Los Angeles).
The Center for the Advancement of Nonviolence (Los
Angeles).
The Community Clinic Association of Los Angeles County.
A Place Called Home (Los Angeles).
LA's Best.
Prevent Child Abuse, Tuolumne County.
Child Advocacy Center, San Joaquin County.
Multi-Disciplinary Interview Center, Placer County District
Attorney's Office.
YMCA Youth and Family Services, San Diego.
Advokids (Core Madera).
Northridge Hospital Medical Center.
Holmes & Holmes Attorneys at Law (Glendale).
San Fernando Valley Interfaith Council.
Chicano Youth Center (Fresno).
LA Family Housing.
Child Abuse Listening & Mediation (Santa Barbara).
Department of Children and Family Services, Alameda County.

other organizations

Children's Advocacy Center of Delaware.
Friends of the Children's Justice Center of West Hawaii.
Friends of the Children's Justice Center of East Hawaii.
Caring House (Iron Mountain, MI).
Garrett County Family Violence Coalition (Oakland, MD).
Dove Center (Oakland, MD).
Logan County Children's Services (Bellefontaine, OH).
CornerHouse (Minneapolis, MN).
Children's Advocacy Center (Pittsburgh, KS).
Prevent Child Abuse Illinois.
Children's Advocacy Center (Chicago).
____

Mr. BIDEN. Mr. President, I rise today to help introduce a bill with
my good friend from California that will bring new and needed tools to
the battle to end violence against children in America, whether it
takes place inside the home or out on the street. Today, Senator Boxer
and I are introducing the Violence Against Children Act, VACA, which
provides a comprehensive approach to prevent crimes against children,
treat child victims, and prosecute those who harm our Nation's
children.
In 1994, this body passed a piece of legislation that I authored, the
Violence Against Women Act. When we passed this landmark legislation,
we said as a Congress, and as a Nation as a whole, that domestic
violence is not a family problem to be dealt with quietly behind the
scenes, but a national crisis in need of a coordinated response from
law enforcement, the courts and the medical community. Backed by almost
one and half billion dollars of Federal funds, the Violence Against
Women Act spurred a sea change on the Federal, State and local levels
in how police, prosecutors, judges, medical personnel and others,
process and handle cases of domestic abuse, sexual assault and
stalking. Most importantly, the Violence Against Women Act also made it
clear that victims of domestic violence and sexual assault were, in
fact, victims: Victims who deserved the full extend of this Nation's
medical and legal resources. The Violence Against Children Act, offered
by Senator Boxer and myself today, is designed to bring this same type
of concentered focus and coordinated response to end all child abuse,
the most heinous and incomprehensible form of violence against the most
vulnerable people in our lives.
Last year in my state of Delaware there were 1,073 substantiated
cases of child abuse and neglect--46 percent were cases of neglect, 31
percent were cases of abuse and 12 percent were cases of sexual abuse.
Nationally, 3.9 million of the nation's 22.3 million children between
the ages of 12 and 17 have been seriously physically assaulted. One in
three girls and one in five boys are sexually abused before the age of
18. One study recently reported that in 2000, the homicide rate for
U.S. infants is almost equal to the murder rate of teens. As stunning
as these numbers are, we should be aware that these numbers are not the
totals. Like incidents of domestic violence, we know that violence
against children is under-reported. We also know that violence against
kids cuts across all lines--it happens to children of doctors and
lawyers, not just to poor children. We must do more to protect our
children, and with the Violence Against Children Act we can.
Designed to be a comprehensive measure, the Violence Against Children
Act will fight the battle against child abuse on a number of fronts: by
providing states with new resources, law enforcement with additional
tools and families with more places to turn to for help. What
specifically the legislation do? The Violence Against Children Act has
three major provisions; 1. it deters crime by toughening Federal
criminal penalties for crimes against children; 2. it requires the
Federal Government to provide investigative, forensic and prosecutorial
assistance to states working on cases of violent crimes against
children; and 3. it authorizes two new grant programs--one

[[Page S7010]]

aimed at providing more resources to state and local law enforcement
for training, creating new courts and enforcement units focused solely
on child crimes, and a second grant program for local governments and
nonprofit organizations to provide emergency medical treatment and
counseling for child victims, to increase the number of mental health
professionals who specialize in child victims, and to establish child
abuse and crime prevention programs.

The Violence Against Children Act also encourages State and
localities to take affirmative steps to fight crimes against children
by conditioning receipt of grant monies on three points: 1. creating a
statewide Amber Alert system to alert the public immediately after a
child abduction has been discovered; 2. creating Safe Haven programs
which allow parents to leave newborn babies for whom they cannot care
in hospital emergency room anonymously and without fear of penalty; and
3. improving data gathering so that police, treatment providers and
policy makers get a clearer view of the circumstances surrounding child
crimes. We need to stop nibbling around the edges with piecemeal
legislation that tackles just one aspect of child abuse or child
exploitation. The Violence Against Children Act takes into account the
larger landscape and provides wide-reaching tools and resources. I feel
certain that once my colleagues become aware of this effort, this bill
will gather broad and bipartisan support.
Recently the Nation was stunned and relieved at the return of
Elizabeth Smart to her parents Ed and Lois. As a father and grandfather
my heart went out to them. I don't want to read about these types of
cases anymore. My State of Delaware has an Amber Alert system in place.
Delaware has a Safe Haven law. Not every State has these critical tools
at their disposal. Senator Boxer and I are introducing the Violence
Against Children Act for a reason. We must do everything that we can to
prevent crimes against children and, if God forbid they do occur, we
must do everything we can to treat the victims and their families and
prosecute their perpetrators to the fullest extent of the law. As one
child advocates succinctly said, ``a civilized society says children
matter.'' The Violence Against Children Act says loud and clear, kids
matter.
______

By Ms. MIKULSKI:
S. 1124. A bill to amend title 38, United States Code, to increase
burial benefits for veterans, and for other purposes; to the Committee
on Veterans' Affairs.
Ms. MIKULSKI. Mr. President, I rise to introduce the Veterans Burial
Benefits Improvement Act.
During the upcoming Memorial Day holiday, we will honor our U.S.
soldiers who died in the name of their country. These service men and
women are America's true heroes and on this day we pay tribute to their
courage and sacrifice. Some have given their lives for our country. All
have given their time and dedication to ensure our country remains the
land of the free and the home of the brave. We owe a special debt of
gratitude to each and every one of them.
This holiday serves as an important reminder that our nation has a
sacred commitment to honor the promises made to soldiers when they
signed up to serve our country. As the Ranking Member of the Senate
Appropriations Subcommittee that funds veterans programs, I fight hard
to make sure promises made to our service men and women are promises
kept. These promises include access to quality, affordable health care
and a proper burial for our veterans.
I am deeply concerned that burial benefits for the families of our
wounded or disabled veterans have not kept up with inflation and rising
funeral costs. We are losing over 1,000 World War II veterans each day,
but Congress has failed to increase veterans' burial benefits to keep
up with rising costs and inflation. While these benefits were never
intended to cover the full costs of burial, they now pay for only a
fraction of what they covered in 1973, when the Federal Government
first started paying burial benefits for our veterans.
I want to thank my colleagues on the Veterans' Affairs Committee for
working with me in the 107th Congress. Together, we were able to
increase modestly the service-connected benefit from $1,500 to $2,000,
and the plot allowance from $150 to $300. While I believe these
increases are a step in the right direction, they are not a substitute
for the amounts included in my bill.
That's why I am again introducing the Veterans Burial Benefits
Improvement Act. This bill will increase burial benefits to cover the
same percentage of funeral costs as they did in 1973. It will also
provide for these benefits to be increased annually to keep up with
inflation.
In 1973, the service-connected benefit paid for 72 percent of
veterans' funeral costs. Today, this benefit covers just 39 percent of
funeral costs. My bill will increase the service-connected benefit from
$2,000 to $3,713, bringing it back up to the original 72 percent level.
In 1973, the non-service connected benefit paid for 22 percent of
funeral costs. It has not been increased since 1978, and today it
covers just 6 percent of funeral costs. My bill will increase the non-
service connected benefit from $300 to $1,135, bringing it back up to
the original 22 percent level.
In 1973, the plot allowance paid for 13 percent of veterans' funeral
costs. Yet it now covers just 3 percent of funeral costs. My bill will
increase the plot allowance from $300 to $670, bringing it back up to
the original 13 percent level.
Finally, the Veterans Burial Benefits Improvement Act will also
ensure that these burial benefits are adjusted for inflation annually,
so veterans won't have to fight this fight again.
This legislation is just one way to honor our Nation's service men
and women. I want to thank the millions of veterans, Marylanders, and
people across the nation for their patriotism, devotion, and commitment
to honoring the true meaning of Memorial Day. U.S. soldiers from every
generation have shared in the duty of defending America and protecting
our freedom. For these sacrifices, America is eternally grateful.
I ask unanimous consent that the text of this legislation, and
letters from several veterans' advocacy groups supporting it, be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1124

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 ``Veterans Burial Benefits
Improvement Act of 2003''.

SEC. 2. INCREASE IN BURIAL BENEFITS FOR VETERANS.

(a) Burial and Funeral Expenses.--(1) Section 2302(a) of
title 38, United States Code, is amended by striking ``$300''
and inserting ``$1,135 (as increased from time to time under
section 2309 of this title)''.
(2) Section 2303(a)(1)(A) of that title is amended by
striking ``$300'' and inserting ``$1,135 (as increased from
time to time under section 2309 of this title)''.
(3) Section 2307 of that title is amended by striking
``$2,000,'' and inserting ``$3,712 (as increased from time to
time under section 2309 of this title),''.
(b) Plot Allowance.--Section 2303(b) of that title is
amended--
(1) by striking ``$300'' the first place it and inserting
``$670 (as increased from time to time under section 2309 of
this title)''; and
(2) by striking ``$300'' the second place it appears and
inserting ``$670 (as so increased)''.
(c) Annual Adjustment.--(1) Chapter 23 of that title is
amended by adding at the end the following new section:

``Sec. 2309. Annual adjustment of amounts of burial benefits

``With respect to any fiscal year, the Secretary shall
provide a percentage increase (rounded to the nearest dollar)
in the burial and funeral expenses under sections 2302(a),
2303(a), and 2307 of this title, and in the plot allowance
under section 2303(b) of this title, equal to the percentage
by which--
``(1) the Consumer Price Index (all items, United States
city average) for the 12-month period ending on the June 30
preceding the beginning of the fiscal year for which the
increase is made, exceeds
``(2) the Consumer Price Index for the 12-month period
preceding the 12-month period described in paragraph (1).''.
(2) The table of sections at the beginning of that chapter
is amended by adding at the end the following new item:

``2309. Annual adjustment of amounts of burial benefits.''.

(d) Effective Date.--(1) Except as provided in paragraph
(2), the amendments made by this section shall apply to
deaths occurring on or after the date of the enactment of
this Act.
(2) No adjustments shall be made under section 2309 of
title 38, United States Code,

[[Page S7011]]

as added by subsection (c), for fiscal year 2004.
____

May 15, 2003.
Hon. Barbara Mikulski,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Senator Mikulski: As Memorial Day 2003 approaches, the
co-authors of The Independent Budget would like to express
our strong support for your legislation which would
revitalize veterans' burial benefits and honor those who have
sacrificed for this country. This legislation would provide a
meaningful increase in burial benefits that is long overdue.
Veterans' burial benefits have seriously eroded in value
over the years. The proposed increase would cover the same
percentage of veterans' burial costs that they covered in
1973 when they were initiated. The annual adjustment to cover
the costs of inflation is also something that The Independent
Budget has argued in favor of in the past.
The Independent Budget produced by AMVETS, Disabled
American Veterans, Paralyzed Veterans of America, and the
Veterans of Foreign Wars fully supports the proposed
adjustment of burial allowances to reflect the increases in
burial costs. Clearly, it is time these benefits were raised
to provide a more meaningful contribution to the costs of
burial for veterans. We applaud your efforts to responsibly
address this matter, and we appreciate your continued
commitment to the men and women who have served this country
and are continuing to do so even today.
Sincerely,
Rick Jones,
National Legislative Director, AMVETS.
Richard B. Fuller,
National Legislative Director, Paralyzed Veterans of
America.
Joseph A. Violante,
National Legislative Director, Disabled American Veterans.
Dennnis Cullinan,
National Legislative Director, Veterans of Foreign Wars of
the United States.
____

Fleet Reserve Association,

Alexandria, VA, May 21, 2003.
Hon. Barbara A. Mikulski,
U.S. Senate, Hart Building, Washington, DC.
Dear Senator Mikulski: The Fleet Reserve Association (FRA)
and its 135,000 members extend its strong support for the
reintroduction of the Veterans Burial Benefits Improvement
Act. FRA applauds your leadership on working on this
important issue.
As it has for more than 79 years, FRA effectively
represents the interests of Sea Services enlisted
communities, and is committed to ensuring equitable
compensation and benefits for active duty, reserve and
retired personnel.
The FRA stands ready to assist you and your staff on the
introduction of this important legislation.
Sincerely,
Joseph L. Barnes,
National Executive Secretary.
____

The National Association of State Directors of Veterans
Affairs, Inc.,
May 20, 2003.
Senator Barbara Mikulski,
Hart Senate Office Building,
Wasington, DC.
Dear Senator Mikulski: The National Association of State
Directors of Veterans Affairs (NASDVA) is in strong support
of the legislation you are proposing with regards to burial
benefits for our Nation's deceased veterans, namely, ``The
Veterans Burial Benefits Improvement Act of 2003.''
We recognize and thank you for your outstanding earlier
work with regards to veterans' burial benefits, including
authoring, introducing, and shepherding the Veterans Burial
Benefits Improvement Act of 2001 through the legislative
process. While it is regrettable that Congress declined to
enact all of the much needed measures you proposed, your work
did lead to important increases in the authorized allowance
for burial and funeral expenses for deceased veterans. We
appreciate and thank you for your introduction of this new
legislation.
As you are aware, the 95th Congress enacted the State
Cemeteries Grant as part of Public Law 95-476 in order to
provide Federal assistance to the States to construct,
expand, and improve State veterans' cemeteries. State
veterans' cemeteries must be State-owned, and operated solely
for the interment of eligible veterans and their dependents
and/or spouses. Operational costs are paid by the States.
State veterans' cemeteries continue to provide a cost-
effective supplement to the VA's National Cemetery System.
However, Federal veterans' burial plot allowances currently
offset the costs of operation of State veterans' cemeteries
by only one-third of the total cost. Furthermore, the actual
allowances have been increased only incrementally since the
programs were first instituted in 1973, and the rate of
reimbursement has fallen far short of increases in the actual
costs of burial expenses and cemetery plots.
Your bill proposes an increase to $3,713 for the burial
plot allowance for veterans who die as a direct result of a
service-connected illness or injury. When first enacted in
1973, the amount of the benefit at that time covered 72
percent of the average burial expense at that time. Today,
the current benefit of $2,000 covers just 39 percent of those
costs. Your earlier work helped to provide a much-needed
increase to the current level, and we fully endorse your
current efforts to ensure that the allowance is raised to
at least the 1973 rate.
Your proposed legislation would also increase the amount of
the burial benefit to $1,135 for the non-service-connected
death of veterans in receipt of or otherwise found entitled
to VA compensation, VA pension, and veterans who die while
hospitalized or domiciled in a VA facility. The original 1973
benefit aided grieving families of deceased veterans by
offsetting the cost of burial and funeral expenses by 22
percent. Today, the $300 that is provided covers just 6
percent of those costs.
Finally, your bill addresses the amount of funding provided
for veterans' burial plot allowances. Your earlier work
helped to provide a much-needed increase in that amount from
$150 to $300. However, as you know, the current amount
provides only 5.85 of the average cost of a burial plot,
while the 1973 rate provided 13 percent. We are in strong
support of your efforts to raise the allowance to its 1973
rate, at $670.
We are hopeful that Congress will see fit to fully enact
the provisions of the Veterans Burial Benefits Improvement
Act of 2003. We also that Congress will enact legislation to
expand eligibility for the burial plot allowance for burial
in State Veterans Cemeteries to include all honorably
discharged veterans.
Thank you again for your efforts on behalf of our Nation's
veterans. Your work is greatly appreciated.
Sincerely,
Raymond G. Boland,
President, NASDVA.
____

National Funeral

Directors Association,

Washington, DC, May 15, 2003.
Hon. Barbara A. Mikulski,
U.S. Senate, Senate Hart Office Building, Washington, DC.
Dear Senator Mikulski: The National Funeral Directors
Association (NFDA) represents more than 13,000 funeral homes
in all 50 states. It is the leading funeral service
organization in the United States, providing a national voice
for the profession. The NPDA has been the premier
organization chosen by top funeral directors for more than
120 years. NFDA members stand for credibility, ethics,
excellence and trust.
The NFDA would like to thank you for your support of
legislation to increase the amount paid for veteran funeral
and burial expenses by the Department of Veterans Affairs
(DVA), as well as to increase the amount for veteran plot
allowances.
As you are well aware, the amount payable for veterans'
memorial benefits has remained constant for many years in
spite of inflation. Today, the average cost of a funeral,
including casket, vault and cemetery charges is about $7,500.
While funerals are still a modest expense when compared to
the cost of other items an individual must purchase during
the course of their lifetime, it is still a significant
expense, particularly for those least able to afford it.
At a time of unimaginable grief, funeral directors deal
with the families of service members who must plan for the
funeral of their loved one. This process is never easy, but
it is even more difficult when a family must plan a funeral
within the current DVA funeral and burial expense limits.
The NFDA strongly supports legislation that recognizes the
reality of the cost of a funeral and burial in 2003, and that
seeks to help the families of veterans manage this expense.
Again, thank you for your interest and action on this
important issue.
Sincercly,
William A. Isokait
NFDA Director of Advocacy.
______

By Mr. JOHNSON (for himself, Mr. Kerry, and Mr. Smith):
S. 1126. A bill to establish the Office of Native American Affairs
within the Small Business Administration, to create the Native American
Small Business Development Program, and for other purposes; to the
Committee on Small Business and Entrepreneurship.
Mr. JOHNSON. Mr. President, today, I proudly join with Senator Kerry
and Senator Smith to reintroduce the Native American Small Business
Development Act. This important legislation is designed to help
American Indians, Alaska Natives, and Native Hawaiians to overcome
barriers which inhibit business development and job creation. We
greatly appreciate the support of the distinguished Senators who join
us in sponsoring the legislation including Senators: Akaka, Baucus,
Bingaman, Daschle, Cantwell, Murray, Stabenow.
The communities served this initiative represent some of the most
traditionally isolated, disadvantaged, and underserved populations in
our country. Despite the unique and persistent challenges to business
development in these areas, many of the supportive services the federal
government provides to entrepreneurs are not available in these
distressed regions. The

[[Page S7012]]

Native American Small Business Development Act endeavors to develop and
disseminate culturally tailored business assistance to assure Native
American businesses may secure and sustain long-term success.
Native American communities continue to struggle with the social,
economic, and cultural repercussions derived from persistent and
pervasive poverty and unemployment. A recent report released by the
U.S. Census Bureau, entitled Poverty in the United States: 2000,
indicates that the ``three year average poverty rate for American
Indians and Alaska Natives [from 1998-2000] was 25.9 percent. Higher
than for any other race groups.''
The Native American Small Business Development Act is a deliberate
effort to enhance the availability of technical assistance to support
entrepreneurship in Indian Country. The communities served by this
initiative represent some of the most traditionally isolated,
disadvantaged, and underserved populations in our country.
Too many Native American communities are plagued by feelings of
hopelessness and helplessness. We must work to transform this
disappointment and discouragement into a sensible, workable, strategy
for economic opportunity.
According to U.S. Department of Commerce census data, unemployment
rates on Indian Lands in the continental United States range up to 80
percent compared to 5.6 percent for the U.S. as a whole. Census data
also show that the poverty rate for Native Americans during the late
1990s was 26 percent, compared to the national average of 12 percent.
In fact, overall, Native American household income is only three-
quarters of the national average.
This disparity is particularly evident in my home state of South
Dakota where Native Americans represent over 8 percent of the State's
population. While the overall State economy is relatively strong with a
low 3.1 percent unemployment rate, the Native American population
continues to suffer. South Dakota counties with Indian Reservations are
ranked by the U.S. Census Bureau as among the most impoverished in the
United States.
Among the achievements included in the bill is the establishment of a
statutory office within the U.S. Small Business Administration to focus
on concerns specific to Native American populations. The Office of
Native American Affairs will serve as an advocate in the SBA for the
interests of Native Americans. In addition to administering the Native
American Development Program, the Assistant Administrator will consult
with Tribal Colleges, Tribal Governments, Alaska Native Corporations
and Native Hawaiian Organizations to enhance the development and
implementation of culturally specific approaches to support the growth
and prosperity of Native American small businesses.
Furthermore, the Act creates the Native American Development Program
to provide necessary business development assistance. These services
are vital to establish and support small businesses. The Federal
Government currently invests to provide these services in communities
throughout the country. It is past time for these services to be
integrated into our efforts to promote self-sufficiency and economic
development in Indian Country.

In addition, we recognize that in order to remain competitive,
businesses and entrepreneurs must be innovative and flexible to change.
This legislation reflects the needs of businesses, tribes, and regional
interests to pursue unique approaches that will complement local needs
and improve the overall quality of services. Two pilot programs are
integrated in this approach to promote new and creative solutions to
assist American Indians to awaken economic opportunities in their
communities.
We must strive to eliminate the impediments that stifle Native
American entrepreneurs. By providing business planning services and
technical assistance to potential and existing small businesses, we can
unlock the capacity for individuals and families to pursue their dreams
of business ownership. Not only will these efforts combat poverty and
unemployment, but they will bring new services and opportunities to
communities that enhance the quality of life for local families.
We must also work to improve access to investment capital to support
economic and community development for Native Americans. As the
Chairman of the Senate Banking Financial Institutions Subcommittee, I
am conducting hearings last year to identify opportunities and
techniques which may foster greater access to capital markets for
Tribal and Native American entities.
Together, these initiatives will help to turn an important corner as
we endeavor to enhance the livelihood of the First Americans.
I would like to thank Congressman Udall for his leadership in the
U.S. House of Representatives in bringing these issues to the forefront
and for his cooperation on this historic legislation. I would like to
thank Senator John Kerry, the Ranking Member of the Senate Small
Business and Entrepreneurship Committee, for his hard work on this
legislation and his serious commitment to these critical issues. In
addition, I would like to express my sincere appreciation to Senator
Smith for his strong support of this effort. We are grateful to the
many cosponsors who join us in introducing the bill today.
I encourage the Senate to fully consider this historic legislation
and to work expeditiously to enact it into law. The Native American
Small Business Development Act will forge a more hopeful and prosperous
future for Native American families and communities. By investing in
adequate infrastructure and by making the appropriate tools available,
we can empower individuals to pursue, achieve, and sustain economic
opportunities that enrich their lives and their communities. The
American dream will never be fully realized until it becomes a reality
for all Americans. This legislation is critical to ensuring that
economic growth and economic opportunity permeate the lives of Native
American families.
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. 1126

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 ``Native American Small
Business Development Act''.

SEC. 2. NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT PROGRAM.

The Small Business Act (15 U.S.C. 631 et seq.) is amended--
(1) by redesignating section 36 as section 37; and
(2) by inserting after section 35 the following:

``SEC. 36. NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT
PROGRAM.

``(a) Definitions.--In this section--
``(1) the term `Alaska Native' has the same meaning as the
term `Native' in section 3(b) of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602(b));
``(2) the term `Alaska Native corporation' has the same
meaning as the term `Native Corporation' in section 3(m) of
the Alaska Native Claims Settlement Act (43 U.S.C. 1602(m));
``(3) the term `Assistant Administrator' means the
Assistant Administrator of the Office of Native American
Affairs established under subsection (b);
``(4) the terms `center' and `Native American business
center' mean a center established under subsection (c);
``(5) the term `Native American business development
center' means an entity providing business development
assistance to federally recognized tribes and Native
Americans under a grant from the Minority Business
Development Agency of the Department of Commerce;
``(6) the term `Native American small business concern'
means a small business concern that is owned and controlled
by--
``(A) a member of an Indian tribe or tribal government;
``(B) an Alaska Native or Alaska Native corporation; or
``(C) a Native Hawaiian or Native Hawaiian organization;
``(7) the term `Native Hawaiian' has the same meaning as in
section 625 of the Older Americans Act of 1965 (42 U.S.C.
3057k);
``(8) the term `Native Hawaiian organization' has the same
meaning as in section 8(a)(15) of this Act;
``(9) the term `tribal college' has the same meaning as the
term `tribally controlled college or university' has in
section 2(a)(4) of the Tribally Controlled Community College
Assistance Act of 1978 (25 U.S.C. 1801(a)(4));
``(10) the term `tribal government' has the same meaning as
the term `Indian tribe' has in section 7501(a)(9) of title
31, United States Code; and
``(11) the term `tribal lands' means all lands within the
exterior boundaries of any Indian reservation.

[[Page S7013]]

``(b) Office of Native American Affairs.--
``(1) Establishment.--There is established within the
Administration the Office of Native American Affairs, which,
under the direction of the Assistant Administrator, shall
implement the Administration's programs for the development
of business enterprises by Native Americans.
``(2) Purpose.--The purpose of the Office of Native
American Affairs is to assist Native American entrepreneurs
to--
``(A) start, operate, and grow small business concerns;
``(B) develop management and technical skills;
``(C) seek Federal procurement opportunities;
``(D) increase employment opportunities for Native
Americans through the start and expansion of small business
concerns; and
``(E) increase the access of Native Americans to capital
markets.
``(3) Assistant administrator.--
``(A) Appointment.--The Administrator shall appoint a
qualified individual to serve as Assistant Administrator of
the Office of Native American Affairs in accordance with this
paragraph.
``(B) Qualifications.--The Assistant Administrator
appointed under subparagraph (A) shall have--
``(i) knowledge of the Native American culture; and
``(ii) experience providing culturally tailored small
business development assistance to Native Americans.
``(C) Employment status.--The Assistant Administrator shall
be a Senior Executive Service position under section
3132(a)(2) of title 5, United States Code, and shall serve as
a noncareer appointee, as defined in section 3132(a)(7) of
title 5, United States Code.
``(D) Responsibilities and duties.--The Assistant
Administrator shall--
``(i) administer and manage the Native American Small
Business Development program established under this section;
``(ii) recommend the annual administrative and program
budgets for the Office of Native American Affairs;
``(iii) consult with Native American business centers in
carrying out the program established under this section;
``(iv) recommend appropriate funding levels;
``(v) review the annual budgets submitted by each applicant
for the Native American Small Business Development program;
``(vi) select applicants to participate in the program
under this section;
``(vii) implement this section; and
``(viii) maintain a clearinghouse to provide for the
dissemination and exchange of information between Native
American business centers.
``(E) Consultation requirements.--In carrying out the
responsibilities and duties described in this paragraph, the
Assistant Administrator shall confer with and seek the advice
of--
``(i) Administration officials working in areas served by
Native American business centers and Native American business
development centers;
``(ii) the Bureau of Indian Affairs of the Department of
the Interior;
``(iii) tribal governments;
``(iv) tribal colleges;
``(v) Alaska Native corporations; and
``(vi) Native Hawaiian organizations.
``(c) Native American Small Business Development Program.--
``(1) Authorization.--
``(A) In general.--The Administration, through the Office
of Native American Affairs, shall provide financial
assistance to tribal governments, tribal colleges, Native
Hawaiian organizations, and Alaska Native corporations to
create Native American business centers in accordance with
this section.
``(B) Use of funds.--The financial and resource assistance
provided under this subsection shall be used to overcome
obstacles impeding the creation, development, and expansion
of small business concerns, in accordance with this section,
by--
``(i) reservation-based American Indians;
``(ii) Alaska Natives; and
``(iii) Native Hawaiians.
``(2) 5-year projects.--
``(A) In general.--Each Native American business center
that receives assistance under paragraph (1)(A) shall conduct
5-year projects that offer culturally tailored business
development assistance in the form of--
``(i) financial education, including training and
counseling in--

``(I) applying for and securing business credit and
investment capital;
``(II) preparing and presenting financial statements; and
``(III) managing cash flow and other financial operations
of a business concern;

``(ii) management education, including training and
counseling in planning, organizing, staffing, directing, and
controlling each major activity and function of a small
business concern; and
``(iii) marketing education, including training and
counseling in--

``(I) identifying and segmenting domestic and international
market opportunities;
``(II) preparing and executing marketing plans;
``(III) developing pricing strategies;
``(IV) locating contract opportunities;
``(V) negotiating contracts; and
``(VI) utilizing varying public relations and advertising
techniques.

``(B) Business development assistance recipients.--The
business development assistance under subparagraph (A) shall
be offered to prospective and current owners of small
business concerns that are owned by--
``(i) American Indians or tribal governments, and located
on or near tribal lands;
``(ii) Alaska Natives or Alaska Native corporations; or
``(iii) Native Hawaiians or Native Hawaiian organizations.
``(3) Form of federal financial assistance.--
``(A) Documentation.--
``(i) In general.--The financial assistance to Native
American business centers authorized under this subsection
may be made by grant, contract, or cooperative agreement.
``(ii) Exception.--Financial assistance under this
subsection to Alaska Native corporations or Native Hawaiian
organizations may only be made by grant.
``(B) Payments.--
``(i) Timing.--Payments made under this subsection may be
disbursed in an annual lump sum or in periodic installments,
at the request of the recipient.
``(ii) Advance.--The Administration may disburse not more
than 25 percent of the annual amount of Federal financial
assistance awarded to a Native American small business center
after notice of the award has been issued.
``(iii) No matching requirement.--The Administration shall
not require a grant recipient to match grant funding received
under this subsection with non-Federal resources as a
condition of receiving the grant.
``(4) Contract and cooperative agreement authority.--A
Native American business center may enter into a contract or
cooperative agreement with a Federal department or agency to
provide specific assistance to Native American and other
under-served small business concerns located on or near
tribal lands, to the extent that such contract or cooperative
agreement is consistent with the terms of any assistance
received by the Native American business center from the
Administration.
``(5) Application process.--
``(A) Submission of a 5-year plan.--Each applicant for
assistance under paragraph (1) shall submit a 5-year plan to
the Administration on proposed assistance and training
activities.
``(B) Criteria.--
``(i) In general.--The Administration shall evaluate and
rank applicants in accordance with predetermined selection
criteria that shall be stated in terms of relative
importance.
``(ii) Public notice.--The criteria required by this
paragraph and their relative importance shall be made
publicly available, within a reasonable time, and stated in
each solicitation for applications made by the
Administration.
``(iii) Considerations.--The criteria required by this
paragraph shall include--

``(I) the experience of the applicant in conducting
programs or ongoing efforts designed to impart or upgrade the
business skills of current or potential owners of Native
American small business concerns;
``(II) the ability of the applicant to commence a project
within a minimum amount of time;
``(III) the ability of the applicant to provide quality
training and services to a significant number of Native
Americans;
``(IV) previous assistance from the Small Business
Administration to provide services in Native American
communities; and
``(V) the proposed location for the Native American
business center site, with priority given based on the
proximity of the center to the population being served and to
achieve a broad geographic dispersion of the centers.

``(6) Program examination.--
``(A) In general.--Each Native American business center
established pursuant to this subsection shall annually
provide the Administration with an itemized cost breakdown of
actual expenditures incurred during the preceding year.
``(B) Administration action.--Based on information received
under subparagraph (A), the Administration shall--
``(i) develop and implement an annual programmatic and
financial examination of each Native American business center
assisted pursuant to this subsection; and
``(ii) analyze the results of each examination conducted
under clause (i) to determine the programmatic and financial
viability of each Native American business center.
``(C) Conditions for continued funding.--In determining
whether to renew a grant, contract, or cooperative agreement
with a Native American business center, the Administration--
``(i) shall consider the results of the most recent
examination of the center under subparagraph (B), and, to a
lesser extent, previous examinations; and
``(ii) may withhold such renewal, if the Administration
determines that--

``(I) the center has failed to provide adequate information
required to be provided under subparagraph (A), or the
information provided by the center is inadequate; or
``(II) the center has failed to provide adequate
information required to be provided by the center for
purposes of the report of the Administration under
subparagraph (E).

``(D) Continuing contract and cooperative agreement
authority.--
``(i) In general.--The authority of the Administrator to
enter into contracts or cooperative agreements in accordance
with this subsection shall be in effect for each fiscal year
only to the extent and in the amounts

[[Page S7014]]

as are provided in advance in appropriations Acts.
``(ii) Renewal.--After the Administrator has entered into a
contract or cooperative agreement with any Native American
business center under this subsection, it shall not suspend,
terminate, or fail to renew or extend any such contract or
cooperative agreement unless the Administrator provides the
center with written notification setting forth the reasons
therefore and affords the center an opportunity for a
hearing, appeal, or other administrative proceeding under
chapter 5 of title 5, United States Code.
``(E) Management report.--
``(i) In general.--The Administration shall prepare and
submit to the Committee on Small Business of the House of
Representatives and the Committee on Small Business and
Entrepreneurship of the Senate an annual report on the
effectiveness of all projects conducted by Native American
business centers under this subsection and any pilot programs
administered by the Office of Native American Affairs.
``(ii) Contents.--Each report submitted under clause (i)
shall include, with respect to each Native American business
center receiving financial assistance under this subsection--

``(I) the number of individuals receiving assistance from
the Native American business center;
``(II) the number of startup business concerns created;
``(III) the number of existing businesses seeking to expand
employment;
``(IV) jobs created or maintained, on an annual basis, by
Native American small business concerns assisted by the
center since receiving funding under this Act;
``(V) to the maximum extent practicable, the capital
investment and loan financing utilized by emerging and
expanding businesses that were assisted by a Native American
business center; and
``(VI) the most recent examination, as required under
subparagraph (B), and the subsequent determination made by
the Administration under that subparagraph.

``(7) Annual report.--Each entity receiving financial
assistance under this subsection shall annually report to the
Administration on the services provided with such financial
assistance, including--
``(A) the number of individuals assisted, categorized by
ethnicity;
``(B) the number of hours spent providing counseling and
training for those individuals;
``(C) the number of startup small business concerns created
or maintained;
``(D) the gross receipts of assisted small business
concerns;
``(E) the number of jobs created or maintained at assisted
small business concerns; and
``(F) the number of Native American jobs created or
maintained at assisted small business concerns.
``(8) Record retention.--
``(A) Applications.--The Administration shall maintain a
copy of each application submitted under this subsection for
not less than 7 years.
``(B) Annual reports.--The Administration shall maintain
copies of the information collected under paragraph (6)(A)
indefinitely.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated $5,000,000 for each of the
fiscal years 2004 through 2008, to carry out the Native
American Small Business Development Program, authorized under
subsection (c).''.

SEC. 3. PILOT PROGRAMS.

(a) Definitions.--In this section:
(1) Incorporation by reference.--The terms defined in
section 36(a) of the Small Business Act (as added by this
Act) have the same meanings as in that section 36(a) when
used in this section.
(2) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(3) Joint project.--The term `joint project' means the
combined resources and expertise of 2 or more distinct
entities at a physical location dedicated to assisting the
Native American community;
(b) Native American Development Grant Pilot Program.--
(1) Authorization.--
(A) In general.--There is established a 4-year pilot
program under which the Administration is authorized to award
Native American development grants to provide culturally-
tailored business development training and related services
to Native Americans and Native American small business
concerns.
(B) Eligible organizations.--The grants authorized under
subparagraph (A) may be awarded to--
(i) any small business development center; or
(ii) any private, nonprofit organization that--

(I) has members of an Indian tribe comprising a majority of
its board of directors;
(II) is a Native Hawaiian organization; or
(III) is an Alaska Native corporation.

(C) Amounts.--The Administration shall not award a grant
under this subsection in an amount which exceeds $100,000 for
each year of the project.
(D) Grant duration.--Each grant under this subsection shall
be awarded for not less than a 2-year period and not more
than a 4-year period.
(2) Conditions for participation.--Each entity desiring a
grant under this subsection shall submit an application to
the Administration that contains--
(A) a certification that the applicant--
(i) is a small business development center or a private,
nonprofit organization under paragraph (1)(B)(i);
(ii) employs an executive director or program manager to
manage the facility; and
(iii) agrees--

(I) to a site visit as part of the final selection process;
(II) to an annual programmatic and financial examination;
and
(III) to the maximum extent practicable, to remedy any
problems identified pursuant to that site visit or
examination;

(B) information demonstrating that the applicant has the
ability and resources to meet the needs, including cultural
needs, of the Native Americans to be served by the grant;
(C) information relating to proposed assistance that the
grant will provide, including--
(i) the number of individuals to be assisted; and
(ii) the number of hours of counseling, training, and
workshops to be provided;
(D) information demonstrating the effective experience of
the applicant in--
(i) conducting financial, management, and marketing
assistance programs designed to impart or upgrade the
business skills of current or prospective Native American
business owners;
(ii) providing training and services to a representative
number of Native Americans;
(iii) using resource partners of the Administration and
other entities, including universities, tribal governments,
or tribal colleges; and
(iv) the prudent management of finances and staffing;
(E) the location where the applicant will provide training
and services to Native Americans; and
(F) a multiyear plan, corresponding to the length of the
grant, that describes--
(i) the number of Native Americans and Native American
small business concerns to be served by the grant;
(ii) in the continental United States, the number of Native
Americans to be served by the grant; and
(iii) the training and services to be provided to a
representative number of Native Americans.
(3) Review of applications.--The Administration shall--
(A) evaluate and rank applicants under paragraph (2) in
accordance with predetermined selection criteria that is
stated in terms of relative importance;
(B) include such criteria in each solicitation under this
subsection and make such information available to the public;
and
(C) approve or disapprove each completed application
submitted under this subsection not more than 60 days after
submission.
(4) Annual report.--Each recipient of a Native American
development grant under this subsection shall annually report
to the Administration on the impact of the grant funding,
including--
(A) the number of individuals assisted, categorized by
ethnicity;
(B) the number of hours spent providing counseling and
training for those individuals;
(C) the number of startup small business concerns created
or maintained with assistance from a Native American business
center;
(D) the gross receipts of assisted small business concerns;
(E) the number of jobs created or maintained at assisted
small business concerns; and
(F) the number of Native American jobs created or
maintained at assisted small business concerns.
(5) Record retention.--
(A) Applications.--The Administration shall maintain a copy
of each application submitted under this subsection for not
less than 7 years.
(B) Annual reports.--The Administration shall maintain
copies of the information collected under paragraph (4)
indefinitely.
(c) American Indian Tribal Assistance Center Grant Pilot
Program.--
(1) Authorization.--
(A) In general.--There is established a 4-year pilot
program, under which the Administration shall award not less
than 3 American Indian Tribal Assistance Center grants to
establish joint projects to provide culturally tailored
business development assistance to prospective and current
owners of small business concerns located on or near tribal
lands.
(B) Eligible organizations.--
(i) Class 1.--Not fewer than 1 grant shall be awarded to a
joint project performed by a Native American business center,
a Native American business development center, and a small
business development center.
(ii) Class 2.--Not fewer than 2 grants shall be awarded to
joint projects performed by a Native American business center
and a Native American business development center.
(C) Amounts.--The Administration shall not award a grant
under this subsection in an amount which exceeds $200,000 for
each year of the project.
(D) Grant duration.--Each grant under this subsection shall
be awarded for a 3-year period.
(2) Conditions for participation.--Each entity desiring a
grant under this subsection shall submit to the
Administration a joint application that contains--
(A) a certification that each participant of the joint
application--

[[Page S7015]]

(i) is either a Native American Business Center, a Native
American Business Development Center, or a Small Business
Development Center;
(ii) employs an executive director or program manager to
manage the center; and
(iii) as a condition of receiving the American Indian
Tribal Assistance Center grant, agrees--

(I) to an annual programmatic and financial examination;
and
(II) to the maximum extent practicable, to remedy any
problems identified pursuant to that examination;

(B) information demonstrating an historic commitment to
providing assistance to Native Americans--
(i) residing on or near tribal lands; or
(ii) operating a small business concern on or near tribal
lands;
(C) information demonstrating that each participant of the
joint application has the ability and resources to meet the
needs, including the cultural needs of the Native Americans
to be served by the grant;
(D) information relating to proposed assistance that the
grant will provide, including--
(i) the number of individuals to be assisted; and
(ii) the number of hours of counseling, training, and
workshops to be provided;
(E) information demonstrating the effective experience of
each participant of the joint application in--
(i) conducting financial, management, and marketing
assistance programs, as described above, designed to impart
or upgrade the business skills of current or prospective
Native American business owners; and
(ii) the prudent management of finances and staffing; and
(F) a plan for the length of the grant, that describes--
(i) the number of Native Americans and Native American
small business concerns to be served by the grant; and
(ii) the training and services to be provided.
(3) Review of applications.--The Administration shall--
(A) evaluate and rank applicants under paragraph (2) in
accordance with predetermined selection criteria that is
stated in terms of relative importance;
(B) include such criteria in each solicitation under this
subsection and make such information available to the public;
and
(C) approve or disapprove each application submitted under
this subsection not more than 60 days after submission.
(4) Annual report.--Each recipient of an American Indian
tribal assistance center grant under this subsection shall
annually report to the Administration on the impact of the
grant funding received during the reporting year, and the
cumulative impact of the grant funding received since the
initiation of the grant, including--
(A) the number of individuals assisted, categorized by
ethnicity;
(B) the number of hours of counseling and training provided
and workshops conducted;
(C) the number of startup business concerns created or
maintained with assistance from a Native American business
center;
(D) the gross receipts of assisted small business concerns;
(E) the number of jobs created or maintained at assisted
small business concerns; and
(F) the number of Native American jobs created or
maintained at assisted small business concerns.
(5) Record retention.--
(A) Applications.--The Administration shall maintain a copy
of each application submitted under this subsection for not
less than 7 years.
(B) Annual reports.--The Administration shall maintain
copies of the information collected under paragraph (4)
indefinitely.
(d) Authorization of Appropriations.--There are authorized
to be appropriated--
(1) $1,000,000 for each of the fiscal years 2004 through
2007, to carry out the Native American Development Grant
Pilot Program, authorized under subsection (b); and
(2) $1,000,000 for each of the fiscal years 2004 through
2007, to carry out the American Indian Tribal Assistance
Center Grant Pilot Program, authorized under subsection (c).

Mr. KERRY. Mr. President, I am pleased today to join with my
colleagues, Senators Johnson and Smith, as well as the cosponsors of
our legislation, Senators Akaka, Baucus, Bingaman, Cantwell, Daschle,
Murray, and Stabenow in introducing the Native American Small Business
Development Act.
As many of my colleagues are aware, last Congress the Committee on
Small Business and Entrepreneurship unanimously passed nearly identical
legislation, S. 2335, yet the bill was not taken up by the full Senate.
Today, Senator Johnson, Senator Smith and I are reintroducing this bill
because we recognize that there is an even a greater need for this
legislation on tribal lands across the Nation. The economy continues to
slump, access to capital is even more limited, and state funding for
small business initiatives is being pulled back.
According to a report released by the U.S. Census Bureau, the ``three
year average poverty rate for American Indians and Alaska Natives [from
1998-2000] was 25.9 percent. Higher than for any other race groups.''
With an unemployment rate well above the national average and household
income at just three-quarters of the national average, Native American
communities need a commitment from the Federal government that we will
help them, particularly during these difficult economic times. To
reaffirm this commitment, the Johnson-Kerry-Smith bill provides Native
Americans the resources they need to take advantage of the
opportunities of entrepreneurship.
Mr. President, this legislation bears the same name as legislation
that recently passed the House, H.R. 1166, which was reintroduced by
Congressman Tom Udall, a recognized leader in promoting the interests
of American Indians. I would like to thank Congressman Udall for his
work in stewarding the Native American Small Business Development Act
through the House, this Congress and last, and for his assistance in
working with Senators Johnson and Smith and me in drafting the Senate
version of our legislation. And I would specifically like to thank
Senator Smith for his continued support on this issue.
I would again like to thank the National Indian Business Association,
the National Center for American Indian Enterprise Development, the
Association of Small Business Development Centers, the Oregon Native
American Business Entrepreneurial Network (ONABEN), Native American
Management Services, Inc., and all of the tribes that met with us or
provided information to help in the drafting of this legislation.
The Senate version of the Native American Small Business Development
Act, while incorporating the heart of the Udall legislation, is more
comprehensive and provides greater assistance to Native American
communities. Senator Johnson, who serves on the Indian Affairs
Committee, and I, as the lead Democrat on the Senate Committee on Small
Business and Entrepreneurship, were able to combine the resources and
experiences of our committees in developing this legislation.
Mr. President, our need to fashion a more comprehensive business
assistance package for Native American small businesses stems in part
from a growing lack of commitment from the Small Business
Administration (SBA) to our Native American communities under
this Administration.

While I applaud the Bush Administration for responding to
congressional requests by including $1 million in the Administration's
FY 2003 budget request for Native American outreach, I was disappointed
that it did not seek the full level of $2.5 million requested in a
letter I sent with my colleagues Senators Daschle, Wellstone, Johnson,
Bingaman and Baucus. Our request specifically sought funding for the
SBA's Tribal Business Information Center (TBIC) program, an initiative
started and successfully operated under the Clinton Administration. The
TBIC program was designed to address the unique conditions faced by
American Indians when they seek to start or expand small businesses.
Mr. President, I am disappointed that the Administration has
eliminated all funding for Native American outreach in FY2004. With an
average unemployment rate on reservations as high as 43 percent, it is
inconceivable that two years of outreach is sufficient to have met our
shared goal of building sustainable economic opportunities in those
communities.
Mr. President, I do not believe that anyone in this Congress would
dispute that economic development in Indian Country has often been
difficult to achieve and that one important way to help American
Indians who live on reservations is to provide them with assistance to
open and run their own small businesses. Helping Native Americans open
and run small businesses not only instills a sense of pride in the
owner and his or her community, it also provides much-needed job
opportunities, as well as other economic benefits.
Although underfunded, the TBIC program has provided assistance to a
number of small businesses on Indian reservations. TBICs have the
support of the American Indian communities they serve because they
provide desperately

[[Page S7016]]

needed, culturally tailored business development assistance in those
communities. The Administration should be seeking to strengthen its
commitment to programs that assist Native American communities.
Unfortunately, the SBA cut off TBIC funding on March 31, 2002, and now
14 months later, has not met a request by a bipartisan group of
Senators to begin the reprogramming process in order to keep the TBICs
open.
The Native American Small Business Development Act will ensure that
the SBA's programs to assist Native American communities cannot be
dissolved by making the SBA's Office of Native American Affairs (ONAA)
and its Assistant Administrator permanent. Our legislation would also
create a statutory grant program, known as the Native American
Development grant program, to assist Native Americans. It would also
establish two pilot programs to try new means of assisting Native
American communities and require Native American communities to be
consulted regarding the future of SBA programs designed to assist them.
In short, this legislation will ensure that our Native American
communities receive the adequate assistance they need to help start and
grow small businesses.
The ONAA will be responsible for helping Native Americans and Native
American communities start, operate, and grow small businesses; develop
management and technical skills; seek out Federal procurement
opportunities; increase employment opportunities through the start and
expansion of small business concerns; and increase their access to
capital markets.
To be selected to serve as the Assistant Administrator for ONAA, a
candidate must have knowledge of Native American cultures and
experience providing culturally tailored small business development
assistance to Native Americans. Under our legislation, the Assistant
Administrator would be statutorily required to consult with Tribal
Colleges and Tribal Governments, Alaska Native Corporations (ANC) and
Native Hawaiian Organizations (NHO) when carrying out responsibilities
under this legislation, which would give Native American communities a
true voice within the SBA. The Assistant Administrator for ONAA would
be responsible for administering the Native American Development
program and the pilot programs created by the Native American Small
Business Development Act.

The Native American Development program is designed to be the SBA's
primary program for providing business development assistance to Native
American communities. To offer this support, to the SBA will provide
financial assistance in establish and keep Native American Business
Centers (NABC) in operation. Financial assistance under the Native
American Development program would be available to Tribal Governments
and Tribal Colleges. Unlike the SBA's TBIC program, however, ANCs and
NHOs would also be eligible for the grants.
NABCs would address the unique conditions faced by reservation-based
American Indians, as well as Native Hawaiians and Native Alaskans, in
their efforts to create, develop and expand small business concerns.
Grant funding would be used by the NABCs to provide culturally tailored
financial education assistance, management education assistance, and
marketing education assistance.
The first pilot program under the legislation establishes a Native
American development grant. This grant is modeled after the Udall
legislation and is designed to bring the expertise of SBA's Small
Business Development Centers (SBDC) to Native American Communities.
Additionally, any private nonprofit organization, which has members of
an Indian tribe comprising a majority of its board of governors or is
an NHO or an ANC, may also apply for the grant. Nonprofits were
included in the Senate version thanks to the thoughtful input of
Senator Cantwell. Many American Indian communities in Washington state
are served by an organization called ONABEN, which provides SBDC-like
services to Native American communities in Washington, Oregon, Idaho,
and California. Organizations like ONABEN, which also has the strong
support of Senator Smith, should be encouraged to continue their good
work assisting Native American communities, and including them in the
grant program available to SBDCs was an important addition to the
legislation.
Finally, our legislation establishes a second pilot program to try a
unique experiment in Indian Country. Grant funding would be made
available to establish American Indian Tribal Assistance Centers. These
centers will consist of joint entitles, such as a partnership between
an NABC, a Native American development center (which receive grants
from the Department of Commerce) and possibly an SBDC. The purpose of
this grant is to coordinate experts from various entities to provide
culturally tailored business development assistance to prospective and
current owners of small business concerns on or near Tribal Lands.
Mr. President, I would again like to thank Senators Johnson and Smith
and all of the cosponsors of this important legislation to assist our
Native American communities. I would also, again like to thank
Congressman Udall for taking the lead in the House on providing
critical assistance for small businesses in Native American
communities. I would urge all of my colleagues to cosponsor this
legislation to help us fulfill our commitment to Native American
communities.
______

By Ms. STABENOW (for herself, Mr. Kennedy, Mr. Leahy, Mr. Dodd,
Mr. Corzine, Mr. Lautenberg, Mr. Harkin, Mr. Bingaman, Mr.
Durbin, and Mr. Rockefeller):
S. 1127. A bill to establish administrative law judges involved in
the appeals process provided for under the medicare program under title
XVIII of the Social Security Act within the Department of Health and
Human Services, to ensure the independence of, and preserve the role
of, such administrative law judges, and for other purposes; to the
Committee on Finance.
Ms. STABENOW. Mr. President, today I rise to introduce the Fair and
Impartial Rights, FAIR, for Medicare Act and bring attention to growing
concerns I have heard about the possible politicization of the Medicare
appeals process.
The Administrator of the Centers for Medicare and Medicaid Services,
CMS, has indicated that the Administration would like to alter the
current practice of requiring that Medicare beneficiaries or Medicare
providers be granted a hearing before an independent Administrative Law
Judge, ALJ, when their initial claim is denied.
Instead of taking the side of beneficiaries and providers, this
proposed action would seek to inject political interference in the
Medicare appeals process to try to deny benefits to claimants. When
Medicare beneficiaries and Medicare providers are denied payment for
services, the 2000 BIPA law allows them a five-step process for them to
appeal this decision.
Unfortunately, the first two steps of this appeals process has been
working against beneficiaries and providers. In the last five years,
ALJs have reversed 53 percent of these preliminary rulings. This means
that 53 percent of all cases were decided incorrectly by the
preliminary steps in the Medicare appeals process. It was only when
beneficiaries or providers appealed to an independent ALJ that they
received the proper ruling.
ALJs serve an essential role in the claims review process because
there is often conflicting and confusing information to guide
beneficiaries and providers. In its 2001 report as part of its ongoing
review of CMS communications, the General Accounting office described
the information CMS's carriers gives to providers as ``often
incomplete, confusing, out of date, or even incorrect.'' GAO found that
``the norm'' for many carriers were documents over 50 pages that
``often contained long articles, written in dense language and printed
in small type.'' Documents ``were also poorly organized, making it
difficult for a physician to identify relevant or new information.''
ALJs base their decisions on administrative rules, which have the
benefit of being open to public comment and review, as well as case law
and statutes.
Unfortunately, the Administration is seeking to undermine the
independent role of ALJs who hear Medicare cases and replace ALJs with
Federal employees, perhaps even political appointees,

[[Page S7017]]

with closer ties to the Administration's policy goals. The
Administration's plan is not just an abstract proposal. It would hurt
Medicare beneficiaries and Medicare providers.
The FAIR for Medicare Act would stop this political attempt to weaken
the role of independent ALJs. Specifically, it would: Prohibit non-
ALJs, like political appointees, from performing the duties of ALJs.
Transfer Medicare ALJs from the Social Security Administration to the
Department of HHS, just like a bipartisan bill introduced in the House
by Congresswoman Nancy Johnson. Ensure ALJs are organizationally and
functionally separated from CMS and all other political appointees
other than the Secretary of HHS.
Similar legislation has been introduced in the House by
Representative Nancy Johnson, and it received bipartisan support. I
hope that my proposal will achieve the same result.
I ask unanimous consent that the text of the bill and several
articles be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1127

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 ``Fair And Impartial Rights
(FAIR) for Medicare Act of 2003''.

SEC. 2. ADMINISTRATIVE LAW JUDGES WITHIN HHS; ENSURING
INDEPENDENCE OF ADMINISTRATIVE LAW JUDGES;
PRESERVATION OF THE ROLE OF ADMINISTRATIVE LAW
JUDGES.

(a) ALJs Within HHS.--Any administrative law judge
performing the administrative law judge functions described
in section 1869 of the Social Security Act (42 U.S.C. 1395ff)
shall be within the Department of Health and Human Services.
(b) Ensuring Independence of ALJs.--
(1) In general.--The Secretary of Health and Human Services
shall ensure the independence of administrative law judges
described in subsection (a).
(2) Independence described.--In order to ensure the
independence described in paragraph (1), each administrative
law judge described in subsection (a) shall--
(A) be an impartial decisionmaker;
(B) be bound only by applicable statutes, regulations, and
rulings issued in accordance with subchapter II of chapter 5,
and chapter 7, of title 5, United States Code (commonly known
as the ``Administrative Procedures Act'');
(C) be placed by the Secretary in an administrative office
that is organizationally and functionally separate from the
Centers for Medicare & Medicaid Services; and
(D) report to, and be under the general supervision of, the
Secretary, but shall not report to, or be subject to
supervision by, another officer of the Department of Health
and Human Services.
(c) Preservation of the Role of ALJs.--An individual who is
not an administrative law judge appointed pursuant to section
3105 of title 5, United States Code, may not perform the
functions of an administrative law judge specified in section
1869 of the Social Security Act (42 U.S.C. 1395ff).
(d) Conforming Amendment.--Section 1869(f)(2)(A)(i) of the
Social Security Act (42 U.S.C. 1395ff(f)(2)(A)(i)) is amended
by striking ``of the Social Security Administration''.
____

[From The New York Times, March 16, 2003]

Bush Pushes Plan To Curb Appeals in Medicare Cases

(By Robert Pear)

Washington, March 15--The Bush administration says it is
planning major changes in the Medicare program that would
make it more difficult for beneficiaries to appeal the denial
of benefits like home health care and skilled nursing home
care.
In thousands of recent cases, federal judges have ruled
that frail elderly people with severe illnesses were
improperly denied coverage for such services.
In the last year, Medicare beneficiaries and the providers
who treated them won more than half the cases--39,796 of the
77,388 Medicare cases decided by administrative law judges.
In the last five years, claimants prevailed in 186,300 cases,
for a success rate of 53 percent.
Under federal law, the judges are independent, impartial
adjudicators who hold hearings and make decisions based on
the facts. They must follow the Medicare law and rules, but
are insulated from political pressures and sudden shifts in
policy made by presidential appointees.
President Bush is proposing both legislation and rules that
would limit the judges' independence and could replace them
in many cases.
The administration's draft legislation says, ``The
secretary of health and human services may use alternate
mechanisms in lieu of administrative law judge review'' to
resolve disputes over Medicare coverage.
Under the legislative proposal, cases could be decided by
arbitration or mediation or by lawyers or hearing officers at
the Department of Health and Human Services. The department
recently began testing the use of arbitration in Connecticut
under a law that permits demonstration projects.
Tommy G. Thompson, the secretary of health and human
services, said the proposed legislative changes would give
his agency ``flexibility to reform the appeals system'' so
the government could decide cases in a more ``efficient and
effective manner.''
The department said there was an ``urgent need for
improvements to the Medicare claim appeal system,'' in part
because the number of appeals was rising rapidly.
Consumer groups, administrative law judges and lawyers
denounced the proposals. Judith A. Stein, Director of the
Center for Medicare Advocacy in Willimantic, Conn., said,
``The president's proposals would compromise the independence
of administrative law judges, who have protected
beneficiaries in case after case, year after year.''
Beneficiaries have a personal stake in the issue. When
claims are denied, a beneficiary is often required to pay
tens of thousands of dollars for services already received.
In a typical case, an administrative law judge ordered
Medicare to pay for 230 home care visits to a 67-year-old
woman with breast cancer, heart disease and arthritis.
Medicare officials had said the woman should pay the cost.
But the judge ordered Medicare to pay because the woman was
homebound and the services were ``reasonable and necessary.''
When federal agencies issue rules or decide cases; they
generally must follow the Administrative Procedure Act, a
1946 law intended to guarantee the fairness of government
proceedings.
Ronald G. Bernoski, president of the Association of
Administrative Law Judges, said: ``We see President Bush's
proposals as a serious assault on the Administrative
Procedure Act, a stealth attack on the rights of citizens to
fair, impartial hearings. These hearings guarantee due
process of law, as required by the Constitution.''
The American Bar Association and the Federal Bar
Association, which represents lawyers who practice in federal
courts and before federal agencies, have expressed similar
concerns.
Health care providers, which are involved in many of the
appeals, share those concerns.
Robert L. Roth, a Washington lawyer who has represented
hospitals and suppliers of medical equipment, said: ``The
interests of providers and beneficiaries are aligned. Access
to an independent decision maker, an administrative law
judge, is quite valuable because it's often your first
opportunity to get a fair review of government action.''
Medicare officials could adopt the proposed rules,
regardless of whether Congress accepts Mr. Bush's
recommendation for changes in the law.
The proposed rules would require administrative law judges
to ``give deference'' to policies adopted by Medicare and its
contractors, which review and pay claims for the government.
Beneficiaries would have to show why such policies should be
disregarded,
That would be a significant change. Administrative law
judges are now required to follow Medicare statutes and
regulations, but not the agency's policies. As a result, the
judges often grant benefits previously denied by the Medicare
agency or its contractors.
In the Connecticut experiment, arbitration will be used to
resolve some claims disputes, and beneficiaries may opt out.
If this approach produces prompt, fair decisions with less
paperwork, it could be a model for Congress in changing the
appeals process.
But Matthew L. Spitzer, dean of the University of Southern
California Law School, said that consumers ``should think
long and hard before they agree to binding arbitration.'' It
is, he said, extremely difficult for an individual to
overturn an arbitrator's decision.
Ms. Stein, who has represented Medicare patients in
hundreds of cases, agreed. ``The president proposes replacing
administrative law judges with some form of dispute
resolution,'' Ms. Stein said. ``This puts beneficiaries at a
disadvantage, with unequal bargaining power and inadequate
expertise to do battle with the Medicare agency.''
The judges are full-time government employees who typically
receive salaries of $95,000 to $140,000 a year.
To ensure that federal agency hearings would be fair,
Congress in 1946 protected the decision makers, providing
that they could be dismissed or demoted ``only for good
cause.'' The judges who hear Medicare cases have extra
protection because they are employed by the Social Security
Administration, an independent agency.
Congress revamped the appeals process in 2000, to enhance
the rights of beneficiaries and to expedite decisions. The
changes were supposed to take effect in October 2002. But
Medicare officials said that without more money, they could
not meet the new deadlines, so they have postponed many of
the changes.
Medicare officials said they wanted to end the arrangement
under which Social Security judges decide Medicare cases.
They have announced plans to transfer responsibility for
hearing appeals to the Medicare agency from Social Security,
and they hope to do so by Oct. 1.
A bipartisan bill introduced by Representative Nancy L.
Johnson, Republican of Connecticut, would make the transfer
in 2005. The bill requires the secretary of health and human
services to preserve the judge's role as independent decision
makers.
The potential for conflict seems to be inherent in the
relationship between agency

[[Page S7018]]

officials and administrative law judges, with tensions
flaring periodically. In 1983, the Association of
Administrative Law Judges filed a lawsuit, saying that Social
Security officials appointed by President Ronald Reagan had
put improper pressure on them to deny benefits to people with
disabilities.
A Federal District Court found that Social Security had
engaged in practices ``of dubious legality,'' which tended to
encroach on the judges' independence. The agency halted the
practices after the lawsuit was filed.
____

[From the Philadelphia Inquirer, March 20, 2003]

Tilt!

medicare looks to rig appeals system in its favor

If the score's going against you, just change the rules of
the game.
That is, if you're president.
The Bush administration's plan to rework the appeals
process for Medicare recipients denied treatment appear to be
just that: a rules change that tilts the playing field.
In losing thousands of these appeal annually, the federal
government is being ordered to pay millions of dollars for
health-care services.
So administration officials start calling for ``flexibility
to reform the appeals system.'' Translation: We want to win
more cases and pay out less.
It's not as though the appeals process is a runaway train;
in the last year, only a little more than half the cases were
won by Medicare recipients. But nearly 40,000 appeals were
upheld; put another way, that means 40,000 elderly citizens
had been improperly denied care.
It wasn't for face lifts or tummy tucks, either. Rather, it
was for things that make all the difference to frail seniors,
things like home health assistance and skilled nursing care.
Independent administrative judges handle these appeals now.
Under proposed new rules, the Department of Health and Human
Services could steer the cases into arbitration or
mediation--both of which experts view as less likely to favor
the citizens.
The administration also wants to turn the independent
judges into Medicare employees--and to require them to ``give
deference'' to policies adopted under Medicare.
At this rate, why not drop all pretense and just ban
appeals? That way every Medicare recipient--including those
much-coveted Florida voters--would know exactly where they
stand with this White House.
Medicare's money troubles are real enough. But trimming
expenses by undercutting a fair appeals process is wrong. And
to pursue this policy while seeking huge tax cuts and
claiming to attend to seniors' health care needs is cynical.
____

[From The Seattle Times, May 7, 2003]

Medicare Appeal Process Should not be Weakened

(By Kathleen O'Connor)

With our focus riveted on Iraq and the state's dramatic
budget shortfalls, virtually no attention is being paid to
the proposed, ominous changes in Medicare. No, not the
Medicare prescription-drug benefit that hogs headlines. It's
something more dramatic, more important. The proposed changes
could essentially eliminate Medicare due process.
How? By removing the independence of the administrative law
judges who now hear Medicare appeals and by axing most of the
current terms and conditions under which those appeals can be
made. The Bush administration wants to let the secretary of
the Department of Health and Human Services (HHS) use
arbitration or mediation and--get this--lawyers or hearing
officers inside the HHS to make decisions on Medicare
appeals. This means appeals would no longer be heard by
independent judges in a separate agency. Instead, appeals
would be heard in-house by Medicare employees.
Nothing like letting the fox guard the hen house. Where is
due process or equal protection in this? How can inside
gatekeepers be fair? How do you hear an appeal when your job
is to guard the treasury? How long would these Medicare
employee-judges keep their jobs if they keep agreeing that
the beneficiaries are right, as they have been in over 50
percent of the appeals?
Even as far back as 1996, the Office of the Inspector
General--the internal audit arm of HHS that manages
Medicare--found that Medicare was dead wrong in 55 percent of
the claims it processed. Recent data cited in The New York
Times revealed that over half the appeals in the past five
years eventually were found to be in the beneficiaries'
favor. In 2002 alone, Medicare beneficiaries and their
providers prevailed in almost 40,000 of the 77,000 appeals
that were filed, or 52 percent of the time.
What's remarkable about this is that Medicare appeals had
to have been lost at two lower levels before the
beneficiaries even got to these judges. The 1946
Administrative Procedure Act was designed to assure we have
fair and just recourse when we have complaints against the
government.
Since the creation of Medicare, appeals have been heard
before these administrative law judges and have been based on
Medicare laws and regulations rather than internal Medicare
policies that frequently change with each administration. If
the appeals function is brought in-house, independent appeals
would vanish and coverage decisions could be made by the whim
of an internal policy, whether written or not. Worse yet, the
administration says these changes don't really need
congressional approval and can simply be made by procedural
rules that would have the administrative law judges ``give
deference'' to Medicare's policies and those of Medicare
contractors.
What this really means is the burden of proof would be
placed on the harmed beneficiaries and their providers, who
would have to show why these policies should be ignored. Why
does this matter? Follow the money. Let's take a look at what
Medicare covers. Part A pays for inpatient hospital care,
skilled nursing home care, home health care and hospice
stays. Part B basically covers all outpatient care (doctors)
and outpatient hospital services, cancer screening, lab tests
and medical equipment, such as wheel chairs.
Take the case of Mrs. H in Brooklyn, N.Y. She sought
coverage for a prescribed transcutaneous electronic nerve
stimulator (TENS) to treat her fibromyalgia, a chronic
disorder characterized by widespread musculoskeletal pain and
fatigue. Medicare initially denied coverage for this device,
noting that the information provided did not support the need
for the item. Mrs. H appealed and was denied at what's called
the fair hearing level, based on internal coverage
guidelines. After that denial, the appeal went to an
administrative law judge for an independent ruling. The judge
found in Mrs. H's favor, deeming the device to be ``medically
necessary.''
The finding provided on $646, but when you're poor and
living on Social Security, $600 is a lot of money. Other
findings are in the tens of thousands of dollars. How many
internal Medicare judge employees would be that independent?
Administrative law judges can be dismissed ``only for good
cause.'' If the appeals function is an in-house post, the
employee decision-maker can be transferred or reassigned. The
administration law judges can be dismissed ``only for good
cause.'' If the appeals function is an in-house post, the
employee decision-maker can be transferred or reassigned. The
administration will say it is only making ``procedural
changes''; that an appeals process still ``exists.'' Sure,
but it is one that harms rather than helps the beneficiary.
They may say there is still due process. But it will no
longer be an independent review. Not any real due process.
Which is the issue after all. As a friend is fond of saying:
``Token due process is not due process at all.''
______

By Mr. FEINGOLD (for himself, Mr. Leahy, and Mr. Kohl:
S. 1128. A bill to amend title 11 of the United States Code with
respect to the dismissal of certain involuntary cases; to the Committee
on the Judiciary.
Mr. FEINGOLD. Mr. President, today I introduce the ``Involuntary
Bankruptcy Improvement Act,'' along with Senator Leahy, the ranking
member of the Judiciary Committee, and my colleague Senator Kohl, the
senior Senator from Wisconsin. This bill addresses the growing problem
of the use of involuntary bankruptcy petitions as a means to harass
public officials. A similar bill has been introduced in the other body
by the Chairman of the House Judiciary Committee. I believe this bill
should be enacted on its own as soon as possible or, if necessary, be a
part of any bankruptcy-related legislation that goes through the
Congress this year.
Involuntary bankruptcy petitions are a rarely used, but legitimate,
creditor tool to prevent the wasting of an asset that would otherwise
be available to satisfy creditor claims. Unfortunately, tax protestors
and others with real or imagined grievances against the government have
filed fraudulent involuntary bankruptcy petitions against government
officials as a way to harass and harm them. This problem came to my
attention recently because of a case in my home State of Wisconsin.
In that case, a man named Steven Magritz undertook a vendetta against
thirty-six Ozaukee County officials after the County pursued a
foreclosure action against him for failing to pay taxes by filing
involuntary bankruptcy petitions against those officials. Although the
petitions were ultimately dismissed and Magritz was convicted of
criminal slander and sentenced to five years in prison, the petitions
had, and are still having, an impact on the credit ratings of the
officials.
Current law provides for punitive damages to be assessed against
someone who files an erroneous petition of this kind. But because
bankruptcy filings are public records and credit reporting agencies
include information in their reports for ten years, erroneous or
fraudulent filings can have a devastating impact on the credit ratings
of the individuals involved even if the perpetrator is punished. The
local government officials that were the subject of this vendetta have
had great difficulty in obtaining loans or refinancing their homes.

[[Page S7019]]

Although a comprehensive study of this problem has not been done, I
understand that fraudulent involuntary bankruptcy petitions have been
filed against federal district court judges in Ohio and Maine, a U.S.
Attorney in Maine, and IRS agents in Ohio. A district in California
reported that over 10 percent of the involuntary bankruptcy petitions
filed in recent years were likely filed in bad faith.
The bill I am introducing today will address this problem in two
ways. First, it requires the bankruptcy court on motion of the debtor
to expunge from the court's file all records relating to the filing of
an involuntary petition and any references to such petition, if 1. the
debtor is an individual; 2. the petition is dismissed; and 3. the
petition is false or contains a materially false, fictitious, or
fraudulent statement.
Second, the bill authorizes a bankruptcy court to prohibit credit
reporting agencies from issuing a consumer report that contains any
information relating to an involuntary bankruptcy petition or to the
case commenced by such petition where the debtor is an individual and
the court has dismissed the petition.
These steps will retain involuntary bankruptcy as a legitimate tool
to preserve debtor assets, but will allow the courts to address the
real harm that can befall an innocent victim of harassment. I urge my
colleagues to support this reasonable and necessary reform of the
bankruptcy laws. 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. 1128

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 ``Involuntary Bankruptcy
Improvement Act of 2003''.

SEC. 2. INVOLUNTARY CASES.

Section 303 of title 11, United States Code, is amended by
adding at the end the following:
``(l)(1) If--
``(A) the petition under this section is false or contains
any materially false, fictitious, or fraudulent statement;
``(B) the debtor is an individual; and
``(C) the court dismisses such petition;

the court, upon motion of the debtor, shall expunge from the
records of the court such petition, all the records relating
to such petition in particular, and all references to such
petition.
``(2) If the debtor is an individual and the court
dismisses a petition under this section, the court may enter
an order prohibiting all consumer reporting agencies (as
defined in section 603(f) of the Fair Credit Reporting Act
(15 U.S.C. 1681a(f))) from making any consumer report (as
defined in section 603(d) of that Act) that contains any
information relating to such petition or to the case
commenced by the filing of such petition.''.
Mr. KOHL. Mr. President, I rise today to join my colleagues, Senators
Leahy and Feingold in introducing the Involuntary Bankruptcy
Improvement Act of 2003.
This bill responds to an unfortunate abuse of the involuntary
bankruptcy laws which occurred in my home state of Wisconsin last year.
There, a tax protestor filed involuntary bankruptcy petitions against
36 public officials. Even though none of the filings had any merit, the
protestor succeeded in ruining the credit ratings of many of the public
officials by filing what the Milwaukee Journal-Sentinel described as
``an avalanche of legal documents against them.'' Some of the victims
did not even know they were the subject of an involuntary bankruptcy
case until they tried to use their lines of credit or obtain credit.
Involuntary bankruptcy plays an important role in our system, but
when it is abused by frivolous and fraudulent filings the victims
deserve the right to clear their good names.
Some background on involuntary bankruptcy is in order. Under current
law, one or more creditors can file an involuntary bankruptcy petition
against an individual or corporation. The credit problems were created
because the filing of an involuntary bankruptcy case is a matter of
public record pursuant to bankruptcy code section 107. In addition,
credit reporting agencies include the filing on a person's credit
report for up to ten years.
The abuse of the involuntary bankruptcy laws is not common, but the
Wisconsin case is not unique either. The National Conference of
Bankruptcy Clerks advises that after an initial review, they found that
federal district judges in Ohio and Maine have been the subject of
involuntary petitions, as well as a United States Attorney in Maine,
and two IRS agents in Ohio. Finally, the bankruptcy clerk in the
Central District of California reported that approximately 11 percent
of involuntary petitions were bad faith filings over a 27 month period
ending in March 2003.
This bill addresses the problem in two primary ways. First, it amends
the bankruptcy code to require that on the motion of the debtor that
the bankruptcy courts expunge from the courts file all records relating
to the filing of an involuntary petition under certain conditions.
Those conditions are: (1) the petition is false or contains a
materially false, fictitious, or fraudulent statement, (2) the debtor
is an individual; and (3) the petition is dismissed.
Second, the bill amends the bankruptcy code to authorize a bankruptcy
court to prohibit all credit reporting agencies from issuing a consumer
report that contains any information relating to the involuntary
bankruptcy petition or to the case commenced by such petition where the
debtor is an individual and the court has dismissed the petition.
So while this bill cannot prohibit someone from filing involuntary
bankruptcy petitions like the man in Wisconsin, it can make it
significantly easier for the victim to contain the impact on his or her
credit rating and to remove the unfortunate incident from the record.
Mr. President, I understand that Chairman Sensenbrenner is moving the
same bill on the House side. I look forward to working with him and my
Senate cosponsors to get this important change to the bankruptcy code
into law.
______

By Mrs. FEINSTEIN (for herself, Mr. Brownback, Mr. Voinovich, Ms.
Cantwell, Mr. DeWine, Mr. Lautenberg, Mr. Feingold, and Mr.
Kennedy):
S. 1129. A bill to provide for the protection of unaccompanied alien
children, and for other purposes; to the Committee on the Judiciary.
Mrs. FEINSTEIN. Mr. President, I rise to introduce the
``Unaccompanied Alien Child Protection Act of 2003,'' bipartisan
legislation to reform the way the Federal Government treats
unaccompanied alien children who are in Federal immigration custody. I
am pleased to be joined by my colleagues, Senators Brownback,
Voinovich, Kennedy, Cantwell, DeWine, Feingold, and Lautenberg in
introducing this important measure.
Approximately 5,000 foreign-born children under the age of 18 enter
the United States each year unaccompanied by parents or other legal
guardians. These children are among the most vulnerable of the
immigrant population.
Many have often entered the country under traumatic circumstances.
They are young and alone, subject to abuse and exploitation. They are
often unable to articulate their fears, their views, or testify to
their needs as accurately as adults can.
Despite these facts, U.S. Immigration laws and policies have been
developed and implemented without regard for their effect on children,
particularly on unaccompanied alien children.
Under current immigration law, these children are forced to struggle
through a system designed primarily for adults, even though they lack
the capacity to understand nuances legal principles and procedures.
Children who may very well be eligible for relief are often vulnerable
to being deported back to the very life-threatening situations from
which they fled--before they are even able to make their cases before
the Department of Homeland Security or an immigration judge.
Prior to March 1, 2003, the Immigration Naturalization Service, INS,
had responsibility for the care, custody, and treatment of
unaccompanied alien children. Too often, the INS, fell short in
fulfilling the protection side of these responsibilities.
The legislation that I am introducing today builds on Section 462 of
Public Law 107-296, the ``Homeland Security Act of 2002'', which
provided for the transfer of responsibility for the care

[[Page S7020]]

and placement of unaccompanied alien children from the now-abolished
INS to the Office of Refugee Resettlement, ORR, within the Department
of Health and Human Services. This provision was based on S. 121,
comprehensive legislation relating to unaccompanied alien children that
I introduced at the beginning of the 107th Congress.
With the enactment of the Homeland Security Act, we set into motion
the centralization of responsibility for the care and custody of
unaccompanied alien children in the Office of Refugee Resettlement. The
first phase of this transfer of responsibility occurred on March 1,
2003. Once the transition is completed, we have finally resolved the
conflict of interest inherent in the former system.
I am pleased that the provision transferring responsibility for the
care and custody of unaccompanied alien children was contained in the
Homeland Security Act. Its inclusion in the new law was an important
first step in reforming the way unaccompanied alien children are
treated. It was a key provision for two reasons: First, it will help
ensure that the Secretary of Homeland Security is not burdened with
policy issues unrelated to the threat of terrorism. The new Department
has a huge and important mission and its attention should be focused on
that mission. Second, it recognizes that the Federal Government has a
special responsibility to protect these children who are in federal
custody. The INS did not always live up that responsibility.
But, the transfer of authority to the ORR--by itself--is not enough
to ensure that these children are properly treated. Congress now has a
responsibilty to go beyond the simple transfer and set the priorities
for ORR and its new jurisdiction over unaccompanied foreign-born
minors.
A number of other important reforms that were contained in last
year's S. 121 were left out of the Homeland Security Act. Enactment of
these reforms will be crucial if we truly are to reform the manner in
which these children are treated. As I mentioned, the Unaccompanied
Alien Child Protection Act of 2003 builds on the Homeland Security Act
in two ways: First, it would make a number of technical and conforming
changes in law to bring about the smooth transfer of the INS's
unaccompanied alien child-related functions to ORR. Second, it would
make a number of more substantive reforms in law with respect the
respect to the treatment of these children--reforms that are designed
to ensure that such children are treated with fairness and compassion.
Other provisions include those that would keep children who are
criminals or who pose a threat to national security under the custody
of the Department of Homeland Security rather than transfer
responsibility of them to the ORR.

I first became involved in this issue when I heard about a young 15-
year old Chinese girl who stood before a U.S. immigration court facing
deportation proceedings. She had found her way to the United States as
a stowaway in a container ship captured off of Guam, hoping to escape
the repression she had experienced in her home country.
She had been placed on a boat bound for the United States by her very
own parents, fleeing China's rigid family planning laws, Under these
laws, she was denied citizenship, education, and medical care. She came
to this country alone and desperate.
And what did our immigration authorities do when they found her? The
INS detained her in a juvenile jail in Portland, OR, for 8 months
before her asylum hearing, and 4 months after she was granted asylum.
At her asylum hearing, the young girl stood before a judge,
unrepresented by counsel, confused, and unable to understand the
proceedings against her. She could not wipe away the tears from her
face because her hands were chained to her waist. According to a lawyer
who later came to represent her, ``her only crime was that her parents
had put her on a boat so she could get a better life over here.''
While the young girl eventually received asylum in our country, she
unnecessarily faced an ordeal no child should bear under our
immigration system. This young Chinese girl represents only one of
5,000 foreign-born children who, without parents or legal guardians to
protect them, are discovered in the United States each year in need of
protection. This, is unacceptable treatment. We have a responsibility
to do better than this.
Central throughout the Unaccompanied Alien Child Protection Act of
2003 are two concepts: 1. The United States Government has a
fundamental responsibility to protect unaccompanied children in its
custody; and 2. in all proceedings and actions, the government should
have as a high priority protecting the interests of these children,
most of whom are unable to understand the nature of the proceedings in
which they are involved.
This bill would ensure that children who are apprehended by
immigration authorities are treated humanely and appropriately
by: ensuring that eligible unaccompanied alien children are promptly
placed in the custody of Office of Refugee Resettlement after they are
encountered by immigration officials; ensuring that the children have
counsel to represent them in immigration proceedings and matters;
authorizing the Director of ORR to provide guardians ad litem for the
children to look after their interests; establishing clear guidelines
and uniformity for detention alternatives such as shelter care, foster
care, and other child custody arrangements; establishing minimum
standards for detention and alternative settings that take into account
the special needs of children; improving such children's access to
existing options for permanent protection when U.S. immigration and
child welfare authorities believe such protection is warranted; setting
forth procedures that immigration officers should follow when
apprehending unaccompanied alien children at the United states border
or at United States ports of entry; establishing procedures to ensure
that the true age of an alien who claims to be under the age of 18 is
determined; ensuring that the Department of Homeland Security, rather
than the Office of Refugee Resettlement, maintain custody over children
who are either criminals or threats to national security; and
establishing procedures to ensure that certain unaccompanied alien
children from Mexico or Canada, encountered along the United States
border, are returned to their homes, subject to formal agreements
between the United States and those countries providing for their safe
return without undue delay.

Without enactment of my legislation, none of these important
parameters would be placed on the Office of Refugee Resettlement or the
Department of Homeland Security.
This bill also includes provisions that provide for the safety of the
significant number of unaccompanied alien children who are victims of
smuggling or trafficking rings. For example, 2 years ago, Phanupong
Khaisri, a 2-year old Thai child, was brought to the United States by
two individuals falsely claiming to be his parents, but who were
actually part of a major alien trafficking ring.
The INS was prepared to deport the child back to Thailand. It was not
until Members of Congress and the local Thai community had intervened,
however, that the INS decided to allow the child to remain in the
United States until the agency could provide proper medical attention
and determine what course of action would be in his best interest.
The Unaccompanied Alien Child Protection Act aims to prevent
situations like this from recurring. Moreover, the legislation would
ensure that children are released into safe and humane environments
while awaiting a determination of their status when that is
appropriate, and it would ensure that the children are protected from
smugglers, traffickers, or others who might exploit them.
Further, it would require the ORR to take steps to ensure that
unaccompanied alien children are protected from smugglers or others who
may wish to do them harm, and authorizes reimbursement for State and
local expenses associated with caring for unaccompanied alien children.
Children, even more than adults, have incredible difficulty
understanding the complexities of the immigration system without the
assistance of counsel. Despite this reality, most children in
immigration custody are overlooked and unrepresented. Without legal
representation, children are at risk of being returned to their home

[[Page S7021]]

countries where they may face further human rights abuses.
The Unaccompanied Alien Child Protection Act of 20032 would require
that all unaccompanied alien children in Federal custody by reason of
their immigration status have counsel to represent them in any
immigration proceedings involving them. It would vest in the Director
of ORR responsibility for ensuring that the children have counsel, and
it would provide the Director power to establish an infrastructure for
developing a system to recruit and support pro bono counsel who can
represent these children without cost to them or to the government.
It provides, as a last resort, that counsel could be provided for the
children at government expense, capping the fees that such counsel
could charge in the event that the government pays for such counsel.
This bill would authorize, but not mandate, the Director of ORR to
put into place a system of guardians ad litem who would help the court
in determining the best interests of children in U.S. custody.
The vast majority of unaccompanied alien children have been forced to
maneuver the immigration system without any representation or without
any assistance. This is unacceptable. It results in many children
participating in a system without any understanding of the process they
are undergoing or the ramifications of their situation.

Under this section, the guardian ad litem would not be working ``for
the child.'' Nor would he or she be working for the Department of
Homeland Security. Instead, he or she would be an impartial observer
reporting to the court and to the Office of Refugee Resettlement on
what he or she thinks is in the best interest of the child.
The guardians ad litem system could be modeled after any of a number
of systems already existing in juvenile courts throughout the American
juvenile justice system. This system is not a novel legal concept, but
one that is trusted and already in place in every state in proceedings
involving juveniles.
Imagine the fear of a foreign-born child, in the United States alone
without a parent or guardian. Imagine that child being thrust into a
system she did not understand, given no legal aid, placed in jail that
housed juveniles with serious criminal convictions. Mr. President, I
find it hard to believe that our country would have allowed innocent
children to be treated in such a manner.
That is why my colleagues and I are introducing this legislation
today. The Unaccompanied Alien Child Protection Act of 2003 will help
our country fulfill the special obligation to these children.
I am proud to have the support of the United States Conference of
Catholic Bishops, the Women's Commission on Refugee Women and Children,
the Lutheran Immigration and Refugee Service, the American Bar
Association, the United National High Commissioner for Refugees, and
many other organizations with whom I have worked closely to develop
this legislation.
I urge my colleagues to join me by cosponsoring this important
measure and ensuring that these reforms are finally enacted.
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. 1129

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
``Unaccompanied Alien Child Protection 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. Definitions.

TITLE I--CUSTODY, RELEASE, FAMILY REUNIFICATION, AND DETENTION

Sec. 101. Procedures when encountering unaccompanied alien children.
Sec. 102. Family reunification for unaccompanied alien children with
relatives in the United States.
Sec. 103. Appropriate conditions for detention of unaccompanied alien
children.
Sec. 104. Repatriated unaccompanied alien children.
Sec. 105. Establishing the age of an unaccompanied alien child.
Sec. 106. Effective date.

TITLE II--ACCESS BY UNACCOMPANIED ALIEN CHILDREN TO GUARDIANS AD LITEM
AND COUNSEL

Sec. 201. Guardians ad litem.
Sec. 202. Counsel.
Sec. 203. Effective date; applicability.

TITLE III--STRENGTHENING POLICIES FOR PERMANENT PROTECTION OF ALIEN
CHILDREN

Sec. 301. Special immigrant juvenile visa.
Sec. 302. Training for officials and certain private parties who come
into contact with unaccompanied alien children.
Sec. 303. Report.
Sec. 304. Effective date.

TITLE IV--CHILDREN REFUGEE AND ASYLUM SEEKERS

Sec. 401. Guidelines for children's asylum claims.
Sec. 402. Unaccompanied refugee children.
Sec. 403. Exceptions for unaccompanied alien children in asylum and
refugee-like circumstances.

TITLE V--AUTHORIZATION OF APPROPRIATIONS

Sec. 501. Authorization of appropriations.

TITLE VI--AMENDMENTS TO THE HOMELAND SECURITY ACT OF 2002

Sec. 601. Additional responsibilities and powers of the Office of
Refugee Resettlement with respect to unaccompanied alien
children.
Sec. 602. Technical corrections.
Sec. 603. Effective date.

SEC. 2. DEFINITIONS.

(a) In General.--In this Act:
(1) Competent.--The term ``competent'', in reference to
counsel, means an attorney who complies with the duties set
forth in this Act and--
(A) is a member in good standing of the bar of the highest
court of any State, possession, territory, Commonwealth, or
the District of Columbia;
(B) is not under any order of any court suspending,
enjoining, restraining, disbarring, or otherwise restricting
the attorney in the practice of law; and
(C) is properly qualified to handle matters involving
unaccompanied immigrant children or is working under the
auspices of a qualified nonprofit organization that is
experienced in handling such matters.
(2) Director.--The term ``Director'' means the Director of
the Office.
(3) Directorate.--The term ``Directorate'' means the
Directorate of Border and Transportation Security established
by section 401 of the Homeland Security Act of 2002 (6 U.S.C.
201).
(4) Office.--The term ``Office'' means the Office of
Refugee Resettlement as established by section 411 of the
Immigration and Nationality Act (8 U.S.C. 1521).
(5) Secretary.--The term ``Secretary'' means the Secretary
of Homeland Security.
(6) Unaccompanied alien child.--The term ``unaccompanied
alien child'' has the same meaning as is given the term in
section 462(g)(2) of the Homeland Security Act of 2002 (6
U.S.C. 279(g)(2)).
(7) Voluntary agency.--The term ``voluntary agency'' means
a private, nonprofit voluntary agency with expertise in
meeting the cultural, developmental, or psychological needs
of unaccompanied alien children, as certified by the Director
of the Office of Refugee Resettlement.
(b) Amendments to the Immigration and Nationality Act.--
Section 101(a) of the Immigration and Nationality Act (8
U.S.C. 1101(a)) is amended by adding at the end the
following:
``(51) The term `unaccompanied alien child' means a child
who--
``(A) has no lawful immigration status in the United
States;
``(B) has not attained the age of 18; and
``(C) with respect to whom--
``(i) there is no parent or legal guardian in the United
States; or
``(ii) no parent or legal guardian in the United States is
able to provide care and physical custody.
``(52) The term `unaccompanied refugee children' means
persons described in paragraph (42) who--
``(A) have not attained the age of 18; and
``(B) with respect to whom there are no parents or legal
guardians available to provide care and physical custody.''.

TITLE I--CUSTODY, RELEASE, FAMILY REUNIFICATION, AND DETENTION

SEC. 101. PROCEDURES WHEN ENCOUNTERING UNACCOMPANIED ALIEN
CHILDREN.

(a) Unaccompanied Children Found Along the United States
Border or at United States Ports of Entry.--
(1) In general.--Subject to paragraph (2), if an
immigration officer finds an unaccompanied alien child who is
described in paragraph (2) at a land border or port of entry
of the United States and determines that such child is
inadmissible under the Immigration and Nationality Act (8
U.S.C. 1101 et seq.), the officer shall--
(A) permit such child to withdraw the child's application
for admission pursuant to section 235(a)(4) of the
Immigration and Nationality Act (8 U.S.C. 1225(a)(4)); and
(B) return such child to the child's country of nationality
or country of last habitual residence.
(2) Special rule for contiguous countries.--
(A) In general.--Any child who is a national or habitual
resident of a country that

[[Page S7022]]

is contiguous with the United States and that has an
agreement in writing with the United States providing for the
safe return and orderly repatriation of unaccompanied alien
children who are nationals or habitual residents of such
country shall be treated in accordance with paragraph (1),
unless a determination is made on a case-by-case basis that--
(i) such child is a national or habitual resident of a
country described in subparagraph (A);
(ii) such child has a fear of returning to the child's
country of nationality or country of last habitual residence
owing to a fear of persecution;
(iii) the return of such child to the child's country of
nationality or country of last habitual residence would
endanger the life or safety of such child; or
(iv) the child cannot make an independent decision to
withdraw the child's application for admission due to age or
other lack of capacity.
(B) Right of consultation.--Any child described in
subparagraph (A) shall have the right to consult with a
consular officer from the child's country of nationality or
country of last habitual residence prior to repatriation, as
well as consult with the Office, telephonically, and such
child shall be informed of that right in the child's native
language.
(3) Rule for apprehensions at the border.--The custody of
unaccompanied alien children not described in paragraph (2)
who are apprehended at the border of the United States or at
a United States port of entry shall be treated in accordance
with the provisions of subsection (b).
(b) Care and Custody of Unaccompanied Alien Children Found
in the Interior of the United States.--
(1) Establishment of jurisdiction.--
(A) In general.--Except as otherwise provided under
subparagraphs (B) and (C) and subsection (a), the care and
custody of all unaccompanied alien children, including
responsibility for their detention, where appropriate, shall
be under the jurisdiction of the Office.
(B) Exception for children who have committed crimes.--
Notwithstanding subparagraph (A), the Directorate shall
retain or assume the custody and care of any unaccompanied
alien child who--
(i) has been charged with any felony, excluding offenses
proscribed by the Immigration and Nationality Act (8 U.S.C.
1101 et seq.), while such charges are pending; or
(ii) has been convicted of any such felony.
(C) Exception for children who threaten national
security.--Notwithstanding subparagraph (A), the Directorate
shall retain or assume the custody and care of an
unaccompanied alien child if the Secretary has substantial
evidence, based on an individualized determination, that such
child could personally endanger the national security of the
United States.
(D) Trafficking victims.--For purposes of section 462 of
the Homeland Security Act of 2002 (6 U.S.C. 279) and this
Act, an unaccompanied alien child who is eligible for
services authorized under the Victims of Trafficking and
Violence Protection Act of 2000 (Public Law 106-386), shall
be considered to be in the custody of the Office.
(2) Notification.--
(A) In general.--The Secretary shall promptly notify the
Office upon--
(i) the apprehension of an unaccompanied alien child;
(ii) the discovery that an alien in the custody of the
Directorate is an unaccompanied alien child;
(iii) any claim by an alien in the custody of the
Directorate that such alien is under the age of 18; or
(iv) any suspicion that an alien in the custody of the
Directorate who has claimed to be over the age of 18 is
actually under the age of 18.
(B) Special rule.--In the case of an alien described in
clause (iii) or (iv) of subparagraph (A), the Director shall
make an age determination in accordance with section 105 and
take whatever other steps are necessary to determine whether
or not such alien is eligible for treatment under section 462
of the Homeland Security Act of 2002 (6 U.S.C. 279) or this
Act.
(3) Transfer of unaccompanied alien children.--
(A) Transfer to the office.--The care and custody of an
unaccompanied alien child shall be transferred to the
Office--
(i) in the case of a child not described in subparagraph
(B) or (C) of paragraph (1), not later than 72 hours after
the apprehension of such child; or
(ii) in the case of a child whose custody and care has been
retained or assumed by the Directorate pursuant to
subparagraph (B) or (C) of paragraph (1), immediately
following a determination that the child no longer meets the
description set forth in such subparagraphs.
(B) Transfer to the directorate.--Upon determining that a
child in the custody of the Office is described in
subparagraph (B) or (C) of paragraph (1), the Director shall
promptly make arrangements to transfer the care and custody
of such child to the Directorate.
(c) Age Determinations.--In any case in which the age of an
alien is in question and the resolution of questions about
the age of such alien would affect the alien's eligibility
for treatment under section 462 of the Homeland Security Act
of 2002 (6 U.S.C. 279) or this Act, a determination of
whether or not such alien meets the age requirements for
treatment under this Act shall be made by the Director in
accordance with section 105.

SEC. 102. FAMILY REUNIFICATION FOR UNACCOMPANIED ALIEN
CHILDREN WITH RELATIVES IN THE UNITED STATES.

(a) Placement Authority.--
(1) Order of preference.--Subject to the discretion of the
Director under paragraph (4) and section 103(a)(2), an
unaccompanied alien child in the custody of the Office shall
be promptly placed with 1 of the following individuals or
entities in the following order of preference:
(A) A parent who seeks to establish custody, as described
in paragraph (3)(A).
(B) A legal guardian who seeks to establish custody, as
described in paragraph (3)(A).
(C) An adult relative.
(D) An entity designated by the parent or legal guardian
that is capable and willing to care for the well-being of the
child.
(E) A State-licensed juvenile shelter, group home, or
foster care program willing to accept physical custody of the
child.
(F) A qualified adult or entity seeking custody of the
child when it appears that there is no other likely
alternative to long-term detention and family reunification
does not appear to be a reasonable alternative. For purposes
of this subparagraph, the qualification of the adult or
entity shall be decided by the Office.
(2) Suitability assessment.--Notwithstanding paragraph (1),
no unaccompanied alien child shall be placed with a person or
entity unless a valid suitability assessment conducted by an
agency of the State of the child's proposed residence, by an
agency authorized by that State to conduct such an
assessment, or by an appropriate voluntary agency contracted
with the Office to conduct such assessments has found that
the person or entity is capable of providing for the child's
physical and mental well-being.
(3) Right of parent or legal guardian to custody of
unaccompanied alien child.--
(A) Placement with parent or legal guardian.--If an
unaccompanied alien child is placed with any person or entity
other than a parent or legal guardian, but subsequent to that
placement a parent or legal guardian seeks to establish
custody, the Director shall assess the suitability of placing
the child with the parent or legal guardian and shall make a
written determination on the child's placement within 30
days.
(B) Rule of construction.--Nothing in this Act shall be
construed to--
(i) supersede obligations under any treaty or other
international agreement to which the United States is a
party, including The Hague Convention on the Civil Aspects of
International Child Abduction, the Vienna Declaration and
Program of Action, and the Declaration of the Rights of the
Child; or
(ii) limit any right or remedy under such international
agreement.
(4) Protection from smugglers and traffickers.--
(A) Policies and programs.--
(i) In general.--The Director shall establish policies and
programs to ensure that unaccompanied alien children are
protected from smugglers, traffickers, or other persons
seeking to victimize or otherwise engage such children in
criminal, harmful, or exploitative activity.
(ii) Witness protection programs included.--The programs
established pursuant to clause (i) may include witness
protection programs.
(B) Criminal investigations and prosecutions.--Any officer
or employee of the Office or the Department of Homeland
Security, and any grantee or contractor of the Office, who
suspects any individual of being involved in any activity
described in subparagraph (A) shall report such individual to
Federal or State prosecutors for criminal investigation and
prosecution.
(C) Disciplinary action.--Any officer or employee of the
Office or the Department of Homeland Security, and any
grantee or contractor of the Office, who suspects an attorney
of being involved in any activity described in subparagraph
(A) shall report the individual to the State bar association
of which the attorney is a member, or to other appropriate
disciplinary authorities, for appropriate disciplinary action
that may include private or public admonition or censure,
suspension, or disbarment of the attorney from the practice
of law.
(5) Grants and contracts.--Subject to the availability of
appropriations, the Director may make grants to, and enter
into contracts with, voluntary agencies to carry out section
462 of the Homeland Security Act of 2002 (6 U.S.C. 279) or to
carry out this section.
(6) Reimbursement of state expenses.--Subject to the
availability of appropriations, the Director may reimburse
States for any expenses they incur in providing assistance to
unaccompanied alien children who are served pursuant to
section 462 of the Homeland Security Act of 2002 (6 U.S.C.
279) or this Act.
(b) Confidentiality.--All information obtained by the
Office relating to the immigration status of a person
described in subsection (a) shall remain confidential and may
be used only for the purposes of determining such person's
qualifications under subsection (a)(1).

SEC. 103. APPROPRIATE CONDITIONS FOR DETENTION OF
UNACCOMPANIED ALIEN CHILDREN.

(a) Standards for Placement.--

[[Page S7023]]

(1) Prohibition of detention in certain facilities.--Except
as provided in paragraph (2), an unaccompanied alien child
shall not be placed in an adult detention facility or a
facility housing delinquent children.
(2) Detention in appropriate facilities.--An unaccompanied
alien child who has exhibited a violent or criminal behavior
that endangers others may be detained in conditions
appropriate to the behavior in a facility appropriate for
delinquent children.
(3) State licensure.--In the case of a placement of a child
with an entity described in section 102(a)(1)(E), the entity
must be licensed by an appropriate State agency to provide
residential, group, child welfare, or foster care services
for dependent children.
(4) Conditions of detention.--
(A) In general.--The Director shall promulgate regulations
incorporating standards for conditions of detention in such
placements that provide for--
(i) educational services appropriate to the child;
(ii) medical care;
(iii) mental health care, including treatment of trauma,
physical and sexual violence, or abuse;
(iv) access to telephones;
(v) access to legal services;
(vi) access to interpreters;
(vii) supervision by professionals trained in the care of
children, taking into account the special cultural,
linguistic, and experiential needs of children in immigration
proceedings;
(viii) recreational programs and activities;
(ix) spiritual and religious needs; and
(x) dietary needs.
(B) Notification of children.--Regulations promulgated in
accordance with subparagraph (A) shall provide that all
children are notified orally and in writing of such standards
in the child's native language.
(b) Prohibition of Certain Practices.--The Director and the
Secretary shall develop procedures prohibiting the
unreasonable use of--
(1) shackling, handcuffing, or other restraints on
children;
(2) solitary confinement; or
(3) pat or strip searches.
(c) Rule of Construction.--Nothing in this section shall be
construed to supersede procedures favoring release of
children to appropriate adults or entities or placement in
the least secure setting possible, as defined in the
Stipulated Settlement Agreement under Flores v. Reno.

SEC. 104. REPATRIATED UNACCOMPANIED ALIEN CHILDREN.

(a) Country Conditions.--
(1) Sense of congress.--It is the sense of Congress that,
to the extent consistent with the treaties and other
international agreements to which the United States is a
party, and to the extent practicable, the United States
Government should undertake efforts to ensure that it does
not repatriate children in its custody into settings that
would threaten the life and safety of such children.
(2) Assessment of conditions.--
(A) In general.--The Secretary of State shall include each
year in the State Department Country Report on Human Rights,
an assessment of the degree to which each country protects
children from smugglers and traffickers.
(B) Factors for assessment.--The Office shall consult the
State Department Country Report on Human Rights and the
Victims of Trafficking and Violence Protection Act of 2000:
Trafficking in Persons Report in assessing whether to
repatriate an unaccompanied alien child to a particular
country.
(b) Report on Repatriation of Unaccompanied Alien
Children.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, and annually thereafter, the Director
shall submit a report to the Committees on the Judiciary of
the House of Representatives and the Senate on efforts to
repatriate unaccompanied alien children.
(2) Contents.--The report submitted under paragraph (1)
shall include, at a minimum, the following information:
(A) The number of unaccompanied alien children ordered
removed and the number of such children actually removed from
the United States.
(B) A description of the type of immigration relief sought
and denied to such children.
(C) A statement of the nationalities, ages, and gender of
such children.
(D) A description of the procedures used to effect the
removal of such children from the United States.
(E) A description of steps taken to ensure that such
children were safely and humanely repatriated to their
country of origin.
(F) Any information gathered in assessments of country and
local conditions pursuant to subsection (a)(2).

SEC. 105. ESTABLISHING THE AGE OF AN UNACCOMPANIED ALIEN
CHILD.

(a) In General.--The Director shall develop procedures to
determine the age of an alien in the custody of the
Department of Homeland Security or the Office, when the age
of the alien is at issue. Such procedures shall permit the
presentation of multiple forms of evidence, including
testimony of the child, to determine the age of the
unaccompanied alien for purposes of placement, custody,
parole, and detention. Such procedures shall allow the appeal
of a determination to an immigration judge.
(b) Prohibition on Sole Means of Determining Age.--Neither
radiographs nor the attestation of an alien shall be used as
the sole means of determining age for the purposes of
determining an alien's eligibility for treatment under
section 462 of the Homeland Security Act of 2002 (6 U.S.C.
279) or this Act.
(c) Rule of Construction.--Nothing in this section shall be
construed to place the burden of proof in determining the age
of an alien on the government.

SEC. 106. EFFECTIVE DATE.

This title shall take effect 90 days after the date of
enactment of this Act.

TITLE II--ACCESS BY UNACCOMPANIED ALIEN CHILDREN TO GUARDIANS AD LITEM
AND COUNSEL

SEC. 201. GUARDIANS AD LITEM.

(a) Establishment of Guardian Ad Litem Program.--
(1) Appointment.--The Director may, in the Director's
discretion, appoint a guardian ad litem who meets the
qualifications described in paragraph (2) for such child. The
Director is encouraged, wherever practicable, to contract
with a voluntary agency for the selection of an individual to
be appointed as a guardian ad litem under this paragraph.
(2) Qualifications of guardian ad litem.--
(A) In general.--No person shall serve as a guardian ad
litem unless such person--
(i) is a child welfare professional or other individual who
has received training in child welfare matters; and
(ii) possesses special training on the nature of problems
encountered by unaccompanied alien children.
(B) Prohibition.--A guardian ad litem shall not be an
employee of the Directorate, the Office, or the Executive
Office for Immigration Review.
(3) Duties.--The guardian ad litem shall--
(A) conduct interviews with the child in a manner that is
appropriate, taking into account the child's age;
(B) investigate the facts and circumstances relevant to
such child's presence in the United States, including facts
and circumstances arising in the country of the child's
nationality or last habitual residence and facts and
circumstances arising subsequent to the child's departure
from such country;
(C) work with counsel to identify the child's eligibility
for relief from removal or voluntary departure by sharing
with counsel information collected under subparagraph (B);
(D) develop recommendations on issues relative to the
child's custody, detention, release, and repatriation;
(E) take reasonable steps to ensure that the best interests
of the child are promoted while the child participates in, or
is subject to, proceedings or matters under the Immigration
and Nationality Act (8 U.S.C. 1101 et seq.);
(F) take reasonable steps to ensure that the child
understands the nature of the legal proceedings or matters
and determinations made by the court, and ensure that all
information is conveyed in an age-appropriate manner; and
(G) report factual findings relating to--
(i) information gathered pursuant to subparagraph (B);
(ii) the care and placement of the child during the
pendency of the proceedings or matters; and
(iii) any other information gathered pursuant to
subparagraph (D).
(4) Termination of appointment.--The guardian ad litem
shall carry out the duties described in paragraph (3) until--
(A) those duties are completed;
(B) the child departs the United States;
(C) the child is granted permanent resident status in the
United States;
(D) the child attains the age of 18; or
(E) the child is placed in the custody of a parent or legal
guardian;
whichever occurs first.
(5) Powers.--The guardian ad litem--
(A) shall have reasonable access to the child, including
access while such child is being held in detention or in the
care of a foster family;
(B) shall be permitted to review all records and
information relating to such proceedings that are not deemed
privileged or classified;
(C) may seek independent evaluations of the child;
(D) shall be notified in advance of all hearings or
interviews involving the child that are held in connection
with proceedings or matters under the Immigration and
Nationality Act (8 U.S.C. 1101 et seq.), and shall be given a
reasonable opportunity to be present at such hearings or
interviews;
(E) shall be permitted to consult with the child during any
hearing or interview involving such child; and
(F) shall be provided at least 24 hours advance notice of a
transfer of that child to a different placement, absent
compelling and unusual circumstances warranting the transfer
of such child prior to notification.
(b) Training.--The Director shall provide professional
training for all persons serving as guardians ad litem under
this section in the--
(1) circumstances and conditions that unaccompanied alien
children face; and
(2) various immigration benefits for which such alien child
might be eligible.
(c) Pilot Program.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Director shall establish and begin
to carry

[[Page S7024]]

out a pilot program to test the implementation of subsection
(a).
(2) Purpose.--The purpose of the pilot program established
pursuant to paragraph (1) is to--
(A) study and assess the benefits of providing guardians ad
litem to assist unaccompanied alien children involved in
immigration proceedings or matters;
(B) assess the most efficient and cost-effective means of
implementing the guardian ad litem provisions in this
section; and
(C) assess the feasibility of implementing such provisions
on a nationwide basis for all unaccompanied alien children in
the care of the Office.
(3) Scope of program.--
(A) Selection of site.--The Director shall select 3 sites
in which to operate the pilot program established pursuant to
paragraph (1).
(B) Number of children.--To the greatest extent possible,
each site selected under subparagraph (A) should have at
least 25 children held in immigration custody at any given
time.
(4) Report to congress.--Not later than 1 year after the
date on which the first pilot program is established pursuant
to paragraph (1), the Director shall report to the Committees
on the Judiciary of the Senate and the House of
Representatives on subparagraphs (A) through (C) of paragraph
(2).

SEC. 202. COUNSEL.

(a) Access to Counsel.--
(1) In general.--The Director shall ensure that all
unaccompanied alien children in the custody of the Office, or
in the custody of the Directorate, who are not described in
section 101(a)(2) shall have competent counsel to represent
them in immigration proceedings or matters.
(2) Pro bono representation.--To the maximum extent
practicable, the Director shall utilize the services of
competent pro bono counsel who agree to provide
representation to such children without charge.
(3) Government-funded legal representation as a last
resort.--
(A) Appointment of competent counsel.--Notwithstanding
section 292 of the Immigration and Nationality Act (8 U.S.C.
1362) or any other provision of law, if no competent counsel
is available to represent an unaccompanied alien child
without charge, the Director shall appoint competent counsel
for such child at the expense of the Government.
(B) Limitation on attorney fees.--Counsel appointed under
subparagraph (A) shall not be compensated at a rate in excess
of the rate provided under section 3006A of title 18, United
States Code.
(C) Availability of funding.--In carrying out this
paragraph, the Director may make use of funds derived from
any source designated by the Secretary of Health and Human
Services from discretionary funds available to the Department
of Health and Human Services.
(D) Assumption of the cost of government-paid counsel.--In
the case of a child for whom counsel is appointed under
subparagraph (A) who is subsequently placed in the physical
custody of a parent or legal guardian, such parent or legal
guardian may elect to retain the same counsel to continue
representation of the child, at no expense to the Government,
beginning on the date that the parent or legal guardian
assumes physical custody of the child.
(4) Development of necessary infrastructures and systems.--
In ensuring that legal representation is provided to such
children, the Director shall develop the necessary mechanisms
to identify entities available to provide such legal
assistance and representation and to recruit such entities.
(5) Contracting and grant making authority.--
(A) In general.--Subject to the availability of
appropriations, the Director shall enter into contracts with
or make grants to national nonprofit agencies with relevant
expertise in the delivery of immigration-related legal
services to children in order to carry out this subsection.
National nonprofit agencies may enter into subcontracts with
or make grants to private voluntary agencies with relevant
expertise in the delivery of immigration-related legal
services to children in order to carry out this subsection.
(B) Ineligibility for grants and contracts.--In making
grants and entering into contracts with agencies in
accordance with subparagraph (A), the Director shall ensure
that no such agency receiving funds under this subsection is
a grantee or contractee for more than 1 of the following
services:
(i) Services provided under section 102.
(ii) Services provided under section 201.
(iii) Services provided under paragraph (2).
(iv) Services provided under paragraph (3).
(6) Model guidelines on legal representation of children.--
(A) Development of guidelines.--The Executive Office for
Immigration Review, in consultation with voluntary agencies
and national experts, shall develop model guidelines for the
legal representation of alien children in immigration
proceedings based on the children's asylum guidelines, the
American Bar Association Model Rules of Professional Conduct,
and other relevant domestic or international sources.
(B) Purpose of guidelines.--The guidelines developed in
accordance with subparagraph (A) shall be designed to help
protect a child from any individual suspected of involvement
in any criminal, harmful, or exploitative activity associated
with the smuggling or trafficking of children, while ensuring
the fairness of the removal proceeding in which the child is
involved.
(C) Implementation.--The Executive Office for Immigration
Review shall adopt the guidelines developed in accordance
with subparagraph (A) and submit them for adoption by
national, State, and local bar associations.
(b) Duties.--Counsel shall--
(1) represent the unaccompanied alien child in all
proceedings and matters relating to the immigration status of
the child or other actions involving the Directorate;
(2) appear in person for all individual merits hearings
before the Executive Office for Immigration Review and
interviews involving the Directorate; and
(3) owe the same duties of undivided loyalty,
confidentiality, and competent representation to the child as
is due an adult client.
(c) Access to Child.--
(1) In general.--Counsel shall have reasonable access to
the unaccompanied alien child, including access while the
child is being held in detention, in the care of a foster
family, or in any other setting that has been determined by
the Office.
(2) Restriction on transfers.--Absent compelling and
unusual circumstances, no child who is represented by counsel
shall be transferred from the child's placement to another
placement unless advance notice of at least 24 hours is made
to counsel of such transfer.
(d) Termination of Appointment.--Counsel appointed under
subsection (a)(3) shall carry out the duties described in
subsection (b) until--
(1) those duties are completed;
(2) the child departs the United States;
(3) the child is granted withholding of removal under
section 241(b)(3) of the Immigration and Nationality Act (8
U.S.C. 1231(b)(3));
(4) the child is granted protection under the Convention
Against Torture;
(5) the child is granted asylum in the United States under
section 208 of the Immigration and Nationality Act (8 U.S.C.
1158);
(6) the child is granted permanent resident status in the
United States; or
(7) the child attains 18 years of age;
whichever occurs first.
(e) Notice to Counsel During Immigration Proceedings.--
(1) In general.--Except when otherwise required in an
emergency situation involving the physical safety of the
child, counsel shall be given prompt and adequate notice of
all immigration matters affecting or involving an
unaccompanied alien child, including adjudications,
proceedings, and processing, before such actions are taken.
(2) Opportunity to consult with counsel.--An unaccompanied
alien child in the custody of the Office may not give consent
to any immigration action, including consenting to voluntary
departure, unless first afforded an opportunity to consult
with counsel.
(f) Access to Recommendations of Guardian Ad Litem.--
Counsel shall be afforded an opportunity to review the
recommendation by the guardian ad litem affecting or
involving a client who is an unaccompanied alien child.

SEC. 203. EFFECTIVE DATE; APPLICABILITY.

(a) Effective Date.--This title shall take effect 180 days
after the date of enactment of this Act.
(b) Applicability.--The provisions of this title shall
apply to all unaccompanied alien children in Federal custody
on, before, or after the effective date of this title.

TITLE III--STRENGTHENING POLICIES FOR PERMANENT PROTECTION OF ALIEN
CHILDREN

SEC. 301. SPECIAL IMMIGRANT JUVENILE VISA.

(a) J Visa.--Section 101(a)(27)(J) of the Immigration and
Nationality Act (8 U.S.C. 1101(a)(27)(J)) is amended to read
as follows:
``(J) an immigrant under the age of 21 on the date of
application who is present in the United States--
``(i) who by a court order, which shall be binding on the
Secretary of Homeland Security for purposes of adjudications
under this subparagraph, was declared dependent on a juvenile
court located in the United States or whom such a court has
legally committed to, or placed under the custody of, a
department or agency of a State, or an individual or entity
appointed by a State or juvenile court located in the United
States, due to abuse, neglect, or abandonment, or a similar
basis found under State law;
``(ii) for whom it has been determined in administrative or
judicial proceedings that it would not be in the alien's best
interest to be returned to the alien's or parent's previous
country of nationality or country of last habitual residence;
and
``(iii) with respect to a child in Federal custody, for
whom the Office of Refugee Resettlement of the Department of
Health and Human Services has certified to the Director of
the Bureau of Citizenship and Immigration Services that the
classification of an alien as a special immigrant under this
subparagraph has not been made solely to provide an
immigration benefit to that alien;

except that no natural parent or prior adoptive parent of any
alien provided special immigrant status under this
subparagraph shall thereafter, by virtue of such parentage,
be accorded any right, privilege, or status under this
Act;''.
(b) Adjustment of Status.--Section 245(h)(2) of the
Immigration and Nationality Act (8 U.S.C. 1255(h)(2)) is
amended--
(1) by amending subparagraph (A) to read as follows:

[[Page S7025]]

``(A) paragraphs (1), (4), (5), (6), and (7)(A) of section
212(a) shall not apply;'';
(2) in subparagraph (B), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following:
``(C) the Secretary of Homeland Security may waive
subparagraphs (A) and (B) of paragraph (2) of section 212(a)
in the case of an offense which arose as a consequence of the
child being unaccompanied.''.
(c) Eligibility for Assistance.--A child who has been
granted relief under section 101(a)(27)(J) of the Immigration
and Nationality Act (8 U.S.C. 1101(a)(27)(J)), as amended by
subsection (a), shall be eligible for all funds made
available under section 412(d) of that Act (8 U.S.C. 1522(d))
until such time as the child attains the age designated in
section 412(d)(2)(B) of that Act (8 U.S.C. 1522(d)(2)(B)), or
until the child is placed in a permanent adoptive home,
whichever occurs first.

SEC. 302. TRAINING FOR OFFICIALS AND CERTAIN PRIVATE PARTIES
WHO COME INTO CONTACT WITH UNACCOMPANIED ALIEN
CHILDREN.

(a) Training of State and Local Officials and Certain
Private Parties.--The Secretary of Health and Human Services,
acting jointly with the Secretary, shall provide appropriate
training to be available to State and county officials, child
welfare specialists, teachers, public counsel, and juvenile
judges who come into contact with unaccompanied alien
children. The training shall provide education on the
processes pertaining to unaccompanied alien children with
pending immigration status and on the forms of relief
potentially available. The Director shall be responsible for
establishing a core curriculum that can be incorporated into
education, training, or orientation modules or formats that
are currently used by these professionals.
(b) Training of Directorate Personnel.--The Secretary,
acting jointly with the Secretary of Health and Human
Services, shall provide specialized training to all personnel
of the Directorate who come into contact with unaccompanied
alien children. In the case of Border Patrol agents and
immigration inspectors, such training shall include specific
training on identifying children at the United States borders
or at United States ports of entry who have been victimized
by smugglers or traffickers, and children for whom asylum or
special immigrant relief may be appropriate, including
children described in section 101(a)(2).

SEC. 303. REPORT.

Not later than January 31, 2004, and annually thereafter,
the Secretary of Health and Human Services shall submit a
report for the previous fiscal year to the Committees on the
Judiciary of the House of Representatives and the Senate that
contains--
(1) data related to the implementation of section 462 of
the Homeland Security Act (6 U.S.C. 279);
(2) data regarding the care and placement of children in
accordance with this Act;
(3) data regarding the provision of guardian ad litem and
counsel services in accordance with this Act; and
(4) any other information that the Director or the
Secretary of Health and Human Services determines to be
appropriate.

SEC. 304. EFFECTIVE DATE.

The amendment made by section 301 shall apply to all aliens
who were in the United States before, on, or after the date
of enactment of this Act.

TITLE IV--CHILDREN REFUGEE AND ASYLUM SEEKERS

SEC. 401. GUIDELINES FOR CHILDREN'S ASYLUM CLAIMS.

(a) Sense of Congress.--Congress commends the Immigration
and Naturalization Service for its issuance of its
``Guidelines for Children's Asylum Claims'', dated December
1998, and encourages and supports the implementation of such
guidelines by the Immigration and Naturalization Service (and
its successor entities) in an effort to facilitate the
handling of children's asylum claims. Congress calls upon the
Executive Office for Immigration Review of the Department of
Justice to adopt the ``Guidelines for Children's Asylum
Claims'' in its handling of children's asylum claims before
immigration judges and the Board of Immigration Appeals.
(b) Training.--The Secretary shall provide periodic
comprehensive training under the ``Guidelines for Children's
Asylum Claims'' to asylum officers, immigration judges,
members of the Board of Immigration Appeals, and immigration
officers who have contact with children in order to
familiarize and sensitize such officers to the needs of
children asylum seekers. Voluntary agencies shall be allowed
to assist in such training.

SEC. 402. UNACCOMPANIED REFUGEE CHILDREN.

(a) Identifying Unaccompanied Refugee Children.--Section
207(e) of the Immigration and Nationality Act (8 U.S.C.
1157(e)) is amended--
(1) by redesignating paragraphs (3), (4), (5), (6), and (7)
as paragraphs (4), (5), (6), (7), and (8), respectively; and
(2) by inserting after paragraph (2) the following:
``(3) An analysis of the worldwide situation faced by
unaccompanied refugee children, by region, which shall
include an assessment of--
``(A) the number of unaccompanied refugee children, by
region;
``(B) the capacity of the Department of State to identify
such refugees;
``(C) the capacity of the international community to care
for and protect such refugees;
``(D) the capacity of the voluntary agency community to
resettle such refugees in the United States;
``(E) the degree to which the United States plans to
resettle such refugees in the United States in the coming
fiscal year; and
``(F) the fate that will befall such unaccompanied refugee
children for whom resettlement in the United States is not
possible.''.
(b) Training on the Needs of Unaccompanied Refugee
Children.--Section 207(f)(2) of the Immigration and
Nationality Act (8 U.S.C. 1157(f)(2)) is amended by--
(1) striking ``and'' after ``countries,''; and
(2) inserting before the period at the end the following:
``, and instruction on the needs of unaccompanied refugee
children''.

SEC. 403. EXCEPTIONS FOR UNACCOMPANIED ALIEN CHILDREN IN
ASYLUM AND REFUGEE-LIKE CIRCUMSTANCES.

(a) Placement in Removal Proceedings.--Any unaccompanied
alien child apprehended by the Directorate, except for an
unaccompanied alien child subject to exceptions under
paragraph (1)(A) or (2) of section (101)(a) of this Act,
shall be placed in removal proceedings under section 240 of
the Immigration and Nationality Act (8 U.S.C. 1229a).
(b) Exception from Time Limit for Filing Asylum
Application.--Section 208(a)(2) of the Immigration and
Nationality Act (8 U.S.C. 1158(a)(2)) is amended by adding at
the end the following:
``(E) Applicability.--Subparagraphs (A) and (B) shall not
apply to an unaccompanied child as defined in section
101(a)(51).''.

TITLE V--AUTHORIZATION OF APPROPRIATIONS

SEC. 501. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated
such sums as may be necessary to carry out--
(1) section 462 of the Homeland Security Act of 2002 (6
U.S.C. 279); and
(2) this Act.
(b) Availability of Funds.--Amounts appropriated pursuant
to subsection (a) are authorized to remain available until
expended.

TITLE VI--AMENDMENTS TO THE HOMELAND SECURITY ACT OF 2002

SEC. 601. ADDITIONAL RESPONSIBILITIES AND POWERS OF THE
OFFICE OF REFUGEE RESETTLEMENT WITH RESPECT TO
UNACCOMPANIED ALIEN CHILDREN.

(a) Additional Responsibilities of the Director.--Section
462(b)(1) of the Homeland Security Act of 2002 (6 U.S.C.
279(b)(1)) is amended--
(1) in subparagraph (K), by striking ``and'' at the end;
(2) in subparagraph (L), by striking the period at the end
and inserting ``, including regular follow-up visits to such
facilities, placements, and other entities, to assess the
continued suitability of such placements; and''; and
(3) by adding at the end the following:
``(M) ensuring minimum standards of care for all
unaccompanied alien children--
``(i) for whom detention is necessary; and
``(ii) who reside in settings that are alternative to
detention.''.
(b) Additional Powers of the Director.--Section 462(b) of
the Homeland Security Act of 2002 (6 U.S.C. 279(b)) is
amended by adding at the end the following:
``(4) Powers.--In carrying out the duties under paragraph
(3), the Director shall have the power to--
``(A) contract with service providers to perform the
services described in sections 102, 103, 201, and 202 of the
Unaccompanied Alien Child Protection Act of 2003; and
``(B) compel compliance with the terms and conditions set
forth in section 103 of the Unaccompanied Alien Child
Protection Act of 2003, including the power to--
``(i) declare providers to be in breach and seek damages
for noncompliance;
``(ii) terminate the contracts of providers that are not in
compliance with such conditions; and
``(iii) reassign any unaccompanied alien child to a similar
facility that is in compliance with such section.''.
(c) Clarification of Director's Authority To Hire
Personnel.--Section 462(f)(3) of the Homeland Security Act of
2002 (6 U.S.C. 279(f)(3)) is amended--
(1) by striking ``(3) Transfer and allocation of
appropriations and personnel.--The personnel'' and inserting
the following:
``(3) Transfer and allocation of appropriations and
personnel.--
``(A) In general.--Except as provided in subparagraph (B),
the personnel''; and
(2) by inserting at the end the following:
``(B) Exception.--The Director may hire and fix the level
of compensation of an adequate number of personnel to carry
out the duties of the Office. Notwithstanding the provisions
of subparagraph (A), the Director may elect not to receive
the transfer of any personnel of the Department of Justice
employed in connection with the functions transferred by this
section or, at the Director's discretion, to assign different
duties to such personnel.''.

SEC. 602. TECHNICAL CORRECTIONS.

Section 462(b) of the Homeland Security Act of 2002 (6
U.S.C. 279(b)), as amended by section 601, is amended--
(1) in paragraph (3), by striking ``paragraph (1)(G)'' and
inserting ``paragraph (1)''; and
(2) by adding at the end the following:
``(5) Statutory construction.--Nothing in paragraph (2)(B)
may be construed to require that a bond be posted for
unaccompanied

[[Page S7026]]

alien children who are released to a qualified sponsor.''.

SEC. 603. EFFECTIVE DATE.

The amendments made by this title shall take effect as if
enacted as part of the Homeland Security Act of 2002 (6
U.S.C. 101 et seq.).

Mr. BROWNBACK. Mr. President, I am honored to join my distinguished
colleagues, Senators Feinstein and Voinovich, to introduce this
important piece of legislation that will address an area of our
immigration law that is sorely neglected--unaccompanied alien children.
Currently, these children face a legal loophole that can leave them in
a confusing maze of technicalities, none of which actually help the
child or the nation. This bill will fix that problem through several
very straightforward remedies.
Last year, through the Homeland Security Act, the responsibility for
the care and custody of unaccompanied alien children was transferred
from the now-defunct Immigration and Naturalization Service to the
Department of Health and Human Services's Office of Refugee
Resettlement. This was an important step in the right direction, but it
did not accomplish everything we had hoped to do last year. That is why
I am pleased to join my colleagues in taking one more crack at
providing safeguards for these vulnerable children.
These safeguards are simple, but to the point. This legislation will
ensure that the transfer of responsibilities mandated last year
actually occurs in an orderly manner. It will remind Federal
authorities to keep in mind the special needs and circumstances of
unaccompanied children. It will ensure that these children have access
to competent counsel and guardians ad litem when appropriate. Minimum
standards for the care and custody of these unaccompanied alien
children will be established, and the procedures for access to
permanent protection for abused, abandoned or neglected children will
be reformed. Finally, the legislation will require an annual report to
Congress to ensure these provisions are being carried out faithfully.
But that is all simply the legalese surrounding this issue. What's
truly important are the children. That's the whole point of this
legislation, and why I--and all of my colleagues who are cosponsors--
got involved and are committed to seeing this legislation pass. It is
the children who suffer, through no fault of their own, if they're run
through the legal system in the United States without any accounting
for their unique situation as children.
Last year, the Senate Judiciary Committee held a hearing on this
topic, inviting Senator Feinstein to speak--her testimony and the
testimony of the children who came, moved me to cosponsor the bill that
very day. I still remember the story the Senator told of a young girl
from China, standing before a judge, unable to speak the language, her
arms shackled to her sides, crying. That sort of situation is shameful.
Or how about the case of Edwin Munoz, a Honduran youth who testified
last year during this hearing? His story was simple but appalling:
abandoned by his parents at age 7, he was left in the care of a cousin,
who beat him mercilessly. At 13, he finally escaped, and hitchhiked
alone to the United States. I can only imagine how frightening that
experience was--but unfortunately it was only the start: once he
arrived in the U.S., he was thrown into a San Diego juvenile facility
filled with violent offenders. Without a lawyer or court-appointed
guardian for weeks, this became a nightmare of taunts from the other
inmates and being shackled each time he had to appear in court.
These are children--not common criminals--and they should not be
treated as such. They should be treated as children.
The main purpose of our legislation is to ensure just that--that
children who come to the United States are still treated as children.
That does not mean that they will escape a proper and appropriate
accounting and ruling on whether they may stay or not--it simply means
that their age and circumstances will be considered at all times.
I therefore urge my colleagues to support this critically important
legislation. We are still the Nation described upon the Statue of
Liberty--let's ensure our legal system remembers this point as well.
____

Mr. KENNEDY. Mr. President, it is a privilege to join Senator
Feinstein in the introduction of the Unaccompanied Alien Child
Protection Act, and I commend her long-standing commitment to this
issue.
In recent years, increasing numbers of foreign-born children have
come to the United States, unaccompanied by their parents or their
guardians. Last year, more than 5,000 arrived, and the numbers have
continued to rise this year. Some are fleeing from armed conflict or
other dangerous conditions in their home countries. Others are fleeing
from human rights abuses, including forced recruitment as soldiers,
slavery, child labor, prostitution, or forced marriage. Still others
escape to the United States because they have been abused or abandoned
by their parents or care givers. Additional numbers are brought to the
United States by a family friend or relative, by paid smugglers, or by
traffickers involved in organized crime.
Regardless of how they arrive, these children often enter our country
after traumatic experiences, speaking little to no English, and unaware
of their rights under U.S. law. They may well be good candidates for
asylum, but they have no way to apply for it, and they are left to
represent themselves in an immigration court against experienced trial
lawyers for INS.
Their plight is exacerbated by the fact that when they arrive, they
are frequently detained. Many of them languish for long periods in
shelters designed for short-term use, without access to translators,
telephones, or medical care and other vital services. But these are the
``fortunate'' ones, compared to many others detained, with dangerous
criminals, put in handcuffs, shackles, strip-searched, and required to
wear prison uniforms.
Shamefully, this is happening every day in the United States of
America. It's no wonder other countries criticize us for hypocrisy on
human rights.
Last year, in the Homeland Security Act, we took the important first
step of transferring responsibility for the care and custody of these
children to the Office of Refugee Resettlement in the Department of
Health and Human Services. This office has decades of experience
working with foreign-born children and can easily include the care of
these unaccompanied children in its existing functions.
That Act, however, left out critical safeguards for these children.
The legislation we are introducing corrects these omissions. It
addresses many of the problems facing unaccompanied children and will
help bring our treatment of them in line with international standards.
Essential to these efforts is providing an appointed counsel and a
special guardian to assist them. Statistics demonstrate that
applications for asylum are four times more likely to be granted when
represented by counsel. Yet, less than half of the children in INS
custody are represented by an attorney.
Children are given appointed counsel in important non-immigration
cases, and they should be afforded the same right in immigration cases.
In addition, a special guardian can be indispensable in identifying the
needs of a child when language and cultural barriers prevent an
attorney from communicating effectively with the child.
Our bill will require that these vulnerable children receive the
representation they need to see that their rights are protected, and
the care they deserve to see their needs are properly considered as
they go through complicated immigration proceedings.
The vast majority of these children are not criminals, and they
should not be treated as criminals. We must prevent the use of
detention in these cases. Children who are not a danger to others or a
flight risk should be released to their families or appropriate care-
givers. Our bill requires the release of children whenever possible,
and supports the expanded use of shelters and foster care for children
who do not have such care givers. Other needed protections in the bill
will establish standards for detention, better training for immigration
personnel on these issues, and more effective opportunities for
permanent protection.
We look forward to working with our colleagues to enact these long
overdue

[[Page S7027]]

safeguards. It is time to end the gross abuses in our current
immigration system and to ensure that the best interests of these
children are fully protected and respected.
______

By Mrs. FEINSTEIN:
S. 1130. A bill for the relief of Esidronio Arreola-Saucedo, Maria
Elena Cobian Arreola, Nayely Bibiana Arreola, and Cindy Jael Arreola;
to the Committee on the Judiciary.
Mrs. FEINSTEIN. Mr. President, I rise today to offer legislation to
provide lawful permanent residence status to Esidronio Arreola-Saucedo,
Maria Elena Cobian Arreola, Nayely Bibiana Arreola, and Cindy Jael
Arreola, Mexican nationals who live in the Fresno area of California.
Mr. and Mrs. Arreola have lived in he United States for nearly 20
years. They are the parents of Nayely and Cindy, who also stand to
benefit from this legislation. The Arreolas also have three United
States citizens children: Roberto, who is 11 year old; Daniel, who is
8; and Saray, their youngest daughter, who is six-years old. Today, Mr.
and Mrs. Arreola, and her children face deportation.
The story of the Arreola family is quite compelling and I believe
they merit Congress' special consideration for humanitarian relief. The
Arreolas are in uncertain situation in part because of grievous errors
committed by their previous counsel, who has since been disbarred.
In fact, the attorney's conduct was so egregious that it compelled an
immigration judge to write the Executive Office of Immigration Review
seeking his disbarment for the legal detriment he caused his immigrant
clients.

Mr. Arreola has lived in the United States since 1986. He was an
agricultural migrant worker in the fields of California for several
years, and as such would have been eligible for permanent residence
through the Seasonal Agricultural Workers, SAW, program had he known
that he could apply for it. Mrs. Arreola was living in the United
States at the time she became pregnant with her daughter Cindy, but
returned to Mexico to give birth to Cindy to avoid any problems with
the Immigration and Naturalization Service. It is quite likely that the
family would have qualified for cancellation of removal but for the
conduct of their previous attorney.
Perhaps one of the most compelling reasons for permitting the family
to remain in the United States is the devastating impact their
deportation would have on their children: three of whom are U.S.
citizens; the other two have lived in the United States virtually all
of their lives. This country is the only the country they really know.
Nayely, the oldest child, is a junior in high school. She is an
outstanding student with a 3.91 Grade Point Average who ranks fourth in
her class of approximately 300 students. At her relatively young age,
Nayely has demonstrated a strong commitment to the ideals of
citizenship in her adopted country. She has worked hard to achieve her
full potential both in her academic endeavors and through the service
she provides her community.
Nayely is a member of Advancement Via Individual Determination, AVID,
a college preparatory program in which students commit to determining
their own futures through achieving a college degree. Nayely is also
President of the key Club, a community service organization. She helps
mentor freshmen and participates in several other student organizations
in her school. Perhaps the greatest hardship to this family if she is
forced to return to Mexico will be her lost opportunity to realize here
dreams and further contribute to her community and to this country.
As the principal of her high school wrote, ``[s]he epitomizes what we
seek to instill in all of our students. She has accepted the challenges
and has made a commitment to better her future, to better her life, and
to better herself through education.''
It is clear to me that Nayely feels a strong sense of responsibility
for her community and country. By all indication, this is the case as
well for all of the members of her fine family.
I understand that the Arreolas also have other family who are lawful
permanent residents here in the United States. Mrs. Arreola also has
three brothers who are U.S. citizens and Mr. Arreola has a sister who
is a U.S. citizen. It is my understanding that they do not have any
family to whom they might return in Mexico.
According to immigration authorities, this family has never had any
problems with law enforcement. I am told that they have filed their
taxes for every year from 1990 to the present. They have always worked
hard to support themselves. As I previously mentioned, Mr. Arreola was
previously employed as a farmworker, but now has his own business
repairing electronics. His business has been successful enough to
enable him to purchase a home for his family.
It seems so clear to me that this family has embraced the American
dream and their continued presence in our country would do so much to
enhance the values we hold dear. Enactment of the legislation I have
introduced today will enable the Arreolas to continue to make
significant contributions to their community and to the United States
as well.
I ask unanimous consent that the letter of Xavier De La Torre,
Principal of Granite Hills High School, as well as the numerous letters
of support our office has received from members of the Porterville
community be entered into the Record. I also ask unanimous consent that
Nayely's essay entitled ``If I Could Change the World,'' which she
wrote at age 15, be printed in the Record.
There being no objection, the additional material was ordered to be
printed in the Record, as follows:

Granite Hills High School,

Porterville, CA, May 7, 2003.
Dear Senator Feinstein: It is with a sense of urgency that
I write this letter in support of Nayely Arreola, a student
at Granite Hills High School. I have known Nayely for the
past three years and have found her to be an outstanding
student and a fine young lady with many of the personal
attributes I would want for my own daughters.
Nayely is a leader and a pioneer. She is among a very small
cadre of second language learners that have overcome
seemingly insurmountable conditions and adversities many of
us will never know and emerged as a respected scholar. She is
a classic success story. Nayely, with her spirit and drive,
has helped open and establish Granite Hills High School, the
newest high school in our community. She epitomizes what we
seek to instill in all of our students. She has accepted the
challenges and has made a commitment to better her future, to
better her life, and to better herself, through education.
Her leadership qualities were evident immediately, as she
became very involved in the Link Crew program, the American
Cancer Society's Relay for Life, the Porterville Celebrates
Reading program, and the Key Club.
As a first time principal of a new high school, I rely on
students like Nayely to establish a strong foundation for our
school. She and others like her have been instrumental in all
the success that we have had as a school in a relatively
short period of time. Much of this success has come on the
heels of adverse conditions. She is resilient and sees life
from an optimistic lens, something very difficult to teach.
As a student, Nayely is well liked by her peers, teachers,
and our learning community in general. A top student in her
class, Nayely is studious, polite, possesses a staunch work
ethic, and is determined to succeed in any endeavor she
pursues. I attribute this attitude to her parental
upbringing, her sense of moral obligation and a strong value
system. I have all the confidence in the world that Nayely
will be successful in life.
If there are any further questions, or if elaboration is
required, please contact me at your convenience.
Sincerely,
Xavier De La Torre,
Principal, Granite Hills High School.
____

Granite Hills High School,

Porterville, CA, May 7, 2003.
Dear Senator Feinstein: Nayely Arreola is one of the most
conscientious students I have even had in school. When I
first met her last year, she introduced herself and said she
would be the top student in my advanced Placement U.S.
History class. As it turned out, schedule conflicts forced
her into a college prep class, but her intentions and
performance remained the same. She has been one of the very
top academic students. She also has demonstrated a deep sense
of patriotism and commitment to our country. Often times in
discussion, she has been the first to voice her support of
government policies and has an understanding of the complex
reasoning behind difficult decisions legislators and other
elected government people must make. In all the process of
having to return to Mexico, she has never once been negative
or derogatory towards the laws and procedures. Of all the
people who should be given residency, Nayely and her family
should be at the top of the list. They have demonstrated
their dependability, loyalty, hard work and individual
responsibility in their lives in this country. There is the
``letter of the law'' and there is then the ``spirit of the
law.'' The Arreolas are a family that truly deserve the
``spirit of the law'' in allowing them to stay and become
officially

[[Page S7028]]

citizens. They have consistently demonstrated their
intentions to be such for the last decade or more.

Sally Howen,

Social Science
Chair, Granite Hills High School.
____

Granite Hills High School,

Porterville, CA, May 7, 2003.
Dear Senator Feinstein: Nayely Arreola is an outstanding
person. Having taught 30 years, I've met few students who are
as dedicated to working to improve themselves as Nayely. Not
only is she hard working, she is very intelligent. Nayely was
in my Geometry class two years ago and she not only worked
hard but she also has a wonderful understanding of the
connectedness of mathematics. She was always ready and
willing to help others who might not understand.
Nayely is more than just a shining example of a student,
she is also one of the nicest students I've ever had. She is
always courteous and respectful to everyone. I have never
seen her act unkindly to anyone around campus. She is the
type of person of intelligence, character and integrity that
this country desperately needs.
Nayely has the qualities that will make her a leader and a
peacekeeper in whatever situation she finds herself. If she
is deported to Mexico, she will do well there and enrich that
country. My hope and prayer is that she can stay and enrich
this country.
If there is anything I can do to help in her family's need,
please contact me.
Sincerely,
Carol Bentz,
Teacher, Granite Hills High School.
____

Granite Hills High School,

Porterville, CA.
Senator Diane Feinstein: My name is Filomena Lewis and I
serve as the chairperson for the World Language Department
here at Granite Hills High School. I am pleased to be writing
this letter on behalf of Nayely Arreola.
It has been a pleasure having Nayely as my student. She is
among the top students in my Advance Placement Spanish
Language class. Nayely functions effectively in both
leadership and group roles. Her properly developed social
skills are well received by her peers.
Nayely is a terrific young lady. I have no doubt in my mind
that she will be a contributing asset to our society. I
highly recommend, with utmost regard, that Nayely be extended
every possible consideration to allow her to complete this
portion of her education at Granite Hills High School.
Respectfully,
Filomena Rocha Lewis.
____

Granite Hills High School,

Porterville, CA, May 13, 2003.
To Whom It May Concern: It is a great pleasure to write
this letter for Nayely Arreola. One of Granite Hills High
School's most distinguished high academic students, Nayely is
a junior, the daughter of Esidronio and Maria Elena Arreola,
1384 E. Success Dr., Porterville, CA xxxxxxxxxxxxxx.
Nayely is currently earning a total grade point average of
3.9. She is enrolled in a college preparatory program called
AVID and is taking Advanced Placement Spanish Literature 3
and Advanced Placement English 3P. She also has nearly
perfect attendance.
Not only is Nayely excelling in academics, she also excels
and participates in various curricular and extracurricular
activities on and off campus. Including Grizzly basketball
and clubs. She also participates in her church youth group
activities at her church.
Nayely hopes to attend University of California upon
graduating from Granite Hills High School, where she will
major in medicine. Nayely also hopes to see how far she can
go with an honors program.
When asked what she liked about school, especially Granite
Hills, she said the instructors, classes and the academic
programs, especially AVID. She is our top AVID student in the
program.
Nayely across the years has also received many honors and
awards. Some of those being for leadership and the
Renaissance Academic Program here at Granite Hills. She has
also been on the Honor Roll for three years.
I know this student has all the tools to be successful in
life. She will definitely be a very successful individual.
I know Nayely on a personal basis. She has done so much to
be where she's at. She has achieved so many things because of
her efforts and motivation. She deserves so much in life. I
feel very proud of her.
Raul B. Bermudez,
Guidance Tech., Granite Hills High School.
____

Granite Hills High School,

Porterville, CA.
Dear Senator Feinstein: It is with a grateful heart I write
to thank you for your recent support of Nayely Arreola and
her family. It has been my extreme pleasure to work with
Nayely at Granite Hills High for the past three years. Nayely
is by far one of the hardest working students I have met in
my twenty years of teaching. She is currently ranked fourth
in a class of three hundred students and has received honors
here at Granite Hills High. Recently she was selected as the
runner-up to Girls State. She is the President of the Key
Club where she has assisted in food, coat and toy drives for
the needy of our community. She is a LINK leader, which works
with freshmen, and I have known her as one of my prized
speech students. Last year she won the Club and Zone levels
of the Optimist Speech Contest and this year she was a Club
winner in the Lions Club Speech Contest.
It has surprised many that I, a conservative Republican,
would try to assist Nayely and her family with their problem
of gaining residency her in the United States. I believe our
country was founded with people just like the Arreola family
who came here with a dream to improve their lives and the
lives of their family. The Arreola family has proved that
they are honest, hard working, tax paying people. It is
unfortunate that they received poor advice from their first
attorney that caused them to have their case sent to the
deportation court. I truly believe if they had received
proper representation they would have received residency long
ago.
Nayely Arreola is more than a remarkable student, she is a
remarkable person. Everything she has done has been to
prepare here to go to a University here in the United States.
I spent almost a year teaching in Mexico and I beg our
Congress not to send her there. She is America's dream--her
contribution to our country will be great. I have watched
with great pride as she has grown into a wonderful young
lady, ready to take on the world.
Once again, I thank you for all your help.
Christine L. Amann,
Reading Specialist/Speech Coordinator.
____

Granite Hills High School,

Porterville, CA, May 14, 2003.
To Whom It May Concern: It is with great pleasure that I
write this letter on behalf of Nayely Arreola, a student of
mine at Granite Hills High School.
Nayely is currently enrolled in my Chemistry class. She has
proven herself to be a conscientious, intelligent, hard-
working young lady. She consistently has the highest grade in
her class and often goes ``above and beyond'' on her
assignments.
I strongly support Nayely and her family in their quest for
legal residence in this country. I have no doubt Nayely will
one day be a successful, contributing member of our society.
She has the drive and determination to achieve any goal she
desires.
Sincerely,

Sara E. Silva,

Chemistry Teacher,
Granite Hills High School.
____

Granite Hills High School,

Porterville, CA.
Nayely Arreola is one of my top 5 Pre-calculus/Trig
students. This student is basically a model student. She is
the kind of student that teachers dream about. She is self-
motivated, intelligent, has a good heart, sincere, involved,
etc. etc. etc. Every teacher should get an opportunity to
have such a student.
It is truly sad that our government doesn't allow such
students to remain in the U.S. These kinds of students are
the ones that will help our country grow stronger. Students
like Nayely are the kind of resources this country needs. I
am in disbelief that other students that have no respect for
authority, do not care for education, and eventually, we will
have to pay for their existence in one way or another, are
allowed to stay. Yet great hard working people like the
Arreola family are obligated to leave this country.
The qualities that Nayely possesses are indeed rare. If our
students possessed half of her qualities we would be second
to no nation in terms of education. We can not afford to lose
these precious resources. If our country is to grow stronger
we must change our way of thinking. We must change our laws.
We must attract people like Nayely and abolish those that
harm our country. We are hurting ourselves by forcing Nayely
Arreola to leave this country. Howe can politics be so blind?
Truly,

Jose Velazquez,

Granite Hills High School
Trigonometry teacher.
____

If I Could Change the World . . .

(By Nayely B. Arreola)

The world has changed dramatically throughout the years.
Disrespect, abuse, and quick judgment are major factors that
have caused human suffering. They are my main concern because
we need to value individuality. In my speech today I am going
to talk about three ways I feel we could change the world.
If I could change our interactions with elderly people, the
world would be a better place. I disagree with the
pessimistic attitude that some young Americans take towards
the elderly. Our country should honor and respect our senior
citizens. For example, in other countries convalescent homes
do not exist, because family members take care of their older
family members. They demonstrate an appreciation, and respect
by giving their elderly person a special significance in
their own life. The children take care of the parents when
they grow older and cannot do it themselves. The sons or
daughters give their loved ones a special value and view age
as a wonderful experience because they can learn from the
elderly family members. If this were not possible, then I
would change the convalescent homes from a hospital
environment to more of a home environment. In order to ensure
better treatment of the elderly the main focus should be on
their dignity, comfort, and well-being.
By keeping the elderly at home, the children can receive
love and attention from

[[Page S7029]]

someone other than their parents. Some kids come home to
empty houses when their parents are working hard to maintain
their career. Instead of watching TV, they can actually learn
something about themselves and the origin of their family
history. In order to change the world, we should appreciate
our elderly people because they have a lot to offer us.
Elderly people have a lot to teach us about the world,
society, and culture because they have grown wise throughout
the years. They can help us learn from their mistakes so that
we won't have to go through it again and learn the hard way.
It is an honor to sit by them and hear so many things that
they have encountered during their lifetime. We have
degraded the value of age in America drastically by
placing so much emphasis on youth and looking youthful.
Second, we have degraded the beauty of other races. I would
make people colorblind, so that they would not care about a
person's color or race. Prejudice ignores a person's
character, causing one person to feel superior over another
person. Racism has caused conflicts and problems throughout
history. A person who is racist does not know the big mistake
that he or she is making. They fail to truly meet the
wonderful people who they neglect.
Furthermore, another thing that I would change in the world
is the suffering and abuse of an innocent child. Children are
gifts from heaven, but when they go through a life of torment
or anguish, they reflect that later in their lives. These
children have low self-esteem.
Most of them repeat the same type of abuse toward their
children, causing the chain to repeat itself, again and again
throughout generations. The life of an abused child is a sad
life. If child suffering were eliminated, we would have
happier children, thus healthier adults. They would be
prepared to succeed in the light of success and would not be
left in the darkness of despair. It would make them view the
world as a wonderful place.
In conclusion, I cannot change the world into a wonderful
place or impact it without changing myself. If I were able to
change the world, I would begin with myself and erase all
evil within my heart, in hopes of setting an example for
others to follow. I can only change one life at a time in
order to change the world into honoring the life of an
individual. We cannot disrespect the elderly, judge a person
by their color or abuse a child who in its innocence didn't
ask to be born. We should show respect and dignity without
caring the size, age or color. We should get past the
fashion, clothes, and looking good in order for us to truly
be compassionate to see what lies in the depths of a person's
heart. In order to change our world the answer is definitely
in changing the hearts of our people. We must all do our
part. Today I have accepted this challenge--I ask you can
you?
______

By Mr. SPECTER (for himself and Mr. Bunning):
S. 1131. A bill to increase, effective December 1, 2003, the rates of
compensation for veterans with service-connected disabilities and the
rates of dependency and indemnity compensation for the survivors of
certain disabled veterans; to the Committee on Veterans' Affairs.
Mr. SPECTER. Mr. President, I have sought recognition to comment on
legislation I am introducing today to provide a cost-of-living, COLA,
adjustment for certain veterans' benefits programs. This COLA
adjustment would affect payments made to nearly 3 million Department of
Veterans Affairs, VA, beneficiaries, and would be reflected in
beneficiary checks that are received in January 2004, and thereafter.
An annual cost-of-living adjustment in veterans benefits is an
important tool which protects veterans' cash-transfer benefits against
the corrosive effects of inflation. The principal programs affected by
the adjustment would be compensation paid to disabled veterans, and
dependency and indemnity compensation, DIC, payments made to the
surviving spouses, minor children and other dependents of persons who
died in service, or who died after service as a result of service-
connected injuries or diseases.
The President's budget anticipates inflation to be at a two percent
level at the close of this year as measured by the consumer price
index, CPI, published by the Department of Labor's Bureau of Labor
Statistics. If inflation is held to the 2 percent level, that will be
the level of COLA adjustment under this legislation since it ties the
increase directly to the CPI increase as measured by the Department of
Labor. Whatever the CPI increase eventually turns out to be, however,
veterans' and survivors' benefits payments must be protected by being
increased by a like amount. The Congress already concurred with that
judgment with the recent passage of the budget resolution; that
resolution sets aside the funds necessary to finance the COLA increase
envisioned by this legislation.
I ask my colleagues to support this vital legislation.
I yield the floor, and 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. 1131

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 ``Veterans' Compensation Cost-
of-Living Adjustment Act of 2003''.

SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND
DEPENDENCY AND INDEMNITY COMPENSATION.

(a) Rate Adjustment.--The Secretary of Veterans Affairs
shall, effective on December 1, 2003, increase the dollar
amounts in effect for the payment of disability compensation
and dependency and indemnity compensation by the Secretary,
as specified in subsection (b).
(b) Amounts To Be Increased.--The dollar amounts to be
increased pursuant to subsection (a) are the following:
(1) Compensation.--Each of the dollar amounts in effect
under section 1114 of title 38, United States Code.
(2) Additional compensation for dependents.--Each of the
dollar amounts in effect under sections 1115(1) of such
title.
(3) Clothing allowance.--The dollar amount in effect under
section 1162 of such title.
(4) New dic rates.--The dollar amounts in effect under
paragraphs (1) and (2) of section 1311(a) of such title.
(5) Old dic rates.--Each of the dollar amounts in effect
under section 1311(a)(3) of such title.
(6) Additional dic for surviving spouses with minor
children.--The dollar amount in effect under section 1311(b)
of such title.
(7) Additional dic for disability.--The dollar amounts in
effect under sections 1311(c) and 1311(d) of such title.
(8) DIC for dependent children.--The dollar amounts in
effect under sections 1313(a) and 1314 of such title.
(c) Determination of Increase.--(1) The increase under
subsection (a) shall be made in the dollar amounts specified
in subsection (b) as in effect on November 30, 2003.
(2) Except as provided in paragraph (3), each such amount
shall be increased by the same percentage as the percentage
by which benefit amounts payable under title II of the Social
Security Act (42 U.S.C. 401 et seq.) are increased effective
December 1, 2003, as a result of a determination under
section 215(i) of such Act (42 U.S.C. 415(i)).
(3) Each dollar amount increased pursuant to paragraph (2)
shall, if not a whole dollar amount, be rounded down to the
next lower whole dollar amount.
(d) Special Rule.--The Secretary may adjust
administratively, consistent with the increases made under
subsection (a), the rates of disability compensation payable
to persons within the purview of section 10 of Public Law 85-
857 (72 Stat. 1263) who are not in receipt of compensation
payable pursuant to chapter 11 of title 38, United States
Code.

SEC. 3. PUBLICATION OF ADJUSTED RATES.

At the same time as the matters specified in section
215(i)(2)(D) of the Social Security Act (42 U.S.C.
415(i)(2)(D)) are required to be published by reason of a
determination made under section 215(i) of such Act during
fiscal year 2004, the Secretary of Veterans Affairs shall
publish in the Federal Register the amounts specified in
subsection (b) of section 2, as increased pursuant to that
section.
______

By Mr. SPECTER (for himself, Mr. Bunning, and Mr. Graham of South
Carolina):
S. 1132. A bill to amend title 38, United States Code, to improve and
enhance certain benefits for survivors of veterans, and for other
purposes; to the Committee on Veterans' Affairs.

Mr. SPECTER. Mr. President, I have sought recognition to comment on
legislation I have introduced today to further honor the sacrifices
made by the family members of those who were killed or injured in
service to our country. As we celebrate the victory won on the
battlefield in Iraq, we must remember that the loss of American lives--
even a relative few--was a sobering price to pay.
The loss of life in service is most acutely felt by the spouses and
children left behind. For them, we must make every effort--however
inadequate that effort might be in comparison to the enormity of their
loss--to recognize their needs. This bill attempts to do so by
increasing educational assistance benefits for survivors, by providing
additional dependency and indemnity compensation payments for

[[Page S7030]]

bereaved families, by authorizing a remarried spouse to be buried in a
national cemetery with his or her deceased veteran-spouse, and by
providing health, training and compensation benefits to children of
certain veterans who served in or near the Korean demilitarized zone,
DMZ, in the late 1960s, and who were born with Agent Orange-induced
spina bifida.
The legislation I introduce today would increase the rate of monthly
Survivors' and Dependents' Education Assistance, DEA, benefits from
$680 to $985. DEA benefits are provided to the spouses and children of
veterans who were killed, or profoundly wounded, in service. The
increase I propose today would create parity between DEA benefits and
veterans' educational assistance, Montgomery GI Bill, benefits. Such
parity was recommended by a recent Department of Veterans Affairs, VA,
program evaluation and is dictated by the common sense observation that
college tuition is no less expensive for widows and orphans than it is
for veterans.
Under this legislation, DEA-eligible survivors, like Montgomery GI
Bill beneficiaries, would receive an aggregate of $35,460 worth of
education benefits--$985 monthly for a total of 36 months. Thus, both
veterans and survivors would have the resources necessary to meet the
average cost of tuition, fees, and room and board at four-year, public
institutions of higher learning. As was stated by VA's Deputy
Secretary, Dr. Leo Mackay, at a Committee on Veterans Affairs hearing
on June 28, 2001, VA ``believe[s] it is only fair that these benefits
should be at the same level as those provided to veterans.'' VA
estimates that a monthly benefit at that level will entice 90% of
eligible persons to use the benefit.
This legislation would also put into effect a key policy
recommendation made by a VA-contracted study examining the adequacy of
survivors' Dependency and Indemnification Compensation, DIC, benefit.
The 2001 study called for the DIC benefit--the basic rate of which is
now set at $948 per month--to be increased by $250 per month during the
5-year period following the death of a veteran to further ease the
transition of surviving spouses with dependent children. The contractor
study based its recommendations on the reported income needs and
expenses of DIC recipients; it found that spouses with children
reported higher levels of unmet need than spouses without children--
even though spouses with dependent children already receive an
additional $237 in monthly DIC benefits per child. In short, the
contractor found that while widows with children are already afforded
additional DIC benefits, they need more.
In July 2001, VA estimated that there were approximately 14,500
surviving spouses with dependent children. Reading the profiles of some
of the young men and women who lost their lives in Iraq, I know that
several spouses will, sadly, be added to that number. This provision of
my bill is a small way to further recognize the needs of families based
on an objective assessment of what those needs are.
Section four of this bill would codify a practice that VA routinely
allows through a waiver process. Under current practice, when the
remarried widow of a deceased veteran dies, her second husband must
grant VA permission before VA will allow, under a waiver process, the
widow to be buried in a national cemetery with her deceased veteran-
husband. A woman, for example, who was married for 50 years to a World
War II veteran and who remarries late in life after her first husband
dies should not have to depend on a waiver process to ensure burial
with her first husband. Remarried spouses whose second marriages end
due to death or divorce have a statutory right to burial with their
deceased veteran-spouse. The same statutory right should be afforded to
remarried spouses who, though married at death, never lost their desire
to be united with a prior spouse already at rest in a national
cemetery.
Finally, my legislation would provide benefits to spina bifida
children of veterans who served in or near the Korean DMZ between 1967
and 1969. Benefits would be provided on the same basis, and under the
same rationale, as they are to children of Vietnam veterans who are
born with spina bifida. In 1996, Congress authorized benefits for
Vietnam children born with spina bifida based on evidence reported by
the Institute of Medicine of an association between exposure to Agent
Orange and the appearance of the birth defect spina bifida in a
veteran's offspring. The same contaminant found in Agent Orange--
dioxin--was also used to clear brush in and near the Korean DMZ during
the late 1960s. Indeed, veterans who served near the Korean DMZ during
that time are already presumed by VA to have been exposed to
herbicides, unless military records demonstrate otherwise, and they
are, accordingly, already awarded compensation on a presumptive basis
if they fall ill from conditions presumed by law to be presumptively
service-connected for Vietnam veterans. VA, however, exercises no such
latitude in addressing the needs of the children of Korean DMZ veterans
born with spina bifida. It should--and this bill would direct VA to do
so.
I first learned of this inequity from Mr. John Ruzalski, a resident
of Hawley, PA. Mr. Ruzalski is a Korean DMZ veteran whose 27-year-old
son suffers from spina bifida. I am grateful to Mr. Ruzalski for his
service in Korea, and for bringing this matter to light, and am hopeful
that the Congress can reward his vigilance on behalf of his son.
Clearly, it makes no sense for VA to presume that Korean DMZ veterans
should be treated like Vietnam veterans for purposes of compensating
the veteran's service-related illnesses and yet treat their spina
bifida children differently.
In summary, the provisions of this legislation will make a difference
in the lives of those who fallen servicemembers loved even more than
country--their families. I ask my colleagues for their support.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1132

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 ``Veterans' Survivors Benefits
Enhancements Act of 2003''.

SEC. 2. INCREASE IN RATES OF SURVIVORS' AND DEPENDENTS'
EDUCATIONAL ASSISTANCE.

(a) Survivors' and Dependents' Educational Assistance.--
Section 3532 of title 38, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``at the monthly rate
of'' and all that follows and inserting ``at the monthly rate
of $985 for full-time, $740 for three-quarter-time, or $492
for half-time pursuit.''; and
(B) in paragraph (2), by striking ``at the rate of'' and
all that follows and inserting ``at the rate of the lesser
of--
``(A) the established charges for tuition and fees that the
educational institution involved requires similarly
circumstanced nonveterans enrolled in the same program to
pay; or
``(B) $985 per month for a full-time course.'';
(2) in subsection (b), by striking ``$670'' and inserting
``$985''; and
(3) in subsection (c)(2), by striking ``shall be'' and all
that follows and inserting ``shall be $795 for full-time,
$596 for three-quarter-time, or $398 for half-time
pursuit.''.
(b) Correspondence Courses.--Section 3534(b) of that title
is amended by striking ``$670'' and inserting ``$985''.
(c) Special Restorative Training.--Section 3542(a) of that
title is amended--
(1) by striking ``$670'' and inserting ``$985''; and
(2) by striking ``$210'' each place it appears and
inserting ``$307''.
(d) Apprenticeship Training.--Section 3687(b)(2) of that
title is amended by striking ``shall be $488 for the first
six months'' and all that follows and inserting ``shall be
$717 for the first six months, $536 for the second six
months, $356 for the third six months, and $179 for the
fourth and any succeeding six-month period of training.''.
(e) Effective Date.--(1) The amendments made by this
section shall take effect on October 1, 2003, and shall apply
with respect to educational assistance allowances payable
under chapter 35 and section 3687(b)(2) of title 38, United
States Code, for months beginning on or after that date.
(2) No adjustment in rates of monthly training allowances
shall be made under section 3687(d) of title 38, United
States Code, for fiscal year 2004.

SEC. 3. MODIFICATION OF DURATION OF EDUCATIONAL ASSISTANCE.

Section 3511(a)(1) of title 38, United States Code, is
amended by striking ``45 months'' and all that follows and
inserting ``45 months, or 36 months in the case of a person
who first files a claim for educational assistance under this
chapter after the date of the

[[Page S7031]]

enactment of the Veterans' Survivors Benefits Enhancements
Act of 2003, or the equivalent thereof in part-time
training.''.

SEC. 4. ADDITIONAL DEPENDENCY AND INDEMNITY COMPENSATION FOR
SURVIVING SPOUSES WITH DEPENDENT CHILDREN.

(a) Additional Dependency and Indemnity Compensation.--
Section 1311 of title 38, United States Code, is amended by
adding at the end the following new subsection:
``(e)(1) Subject to paragraphs (2) and (3), if there is a
surviving spouse with one or more children below the age of
eighteen, the dependency and indemnity compensation paid
monthly to the surviving spouse shall be increased by $250,
regardless of the number of such children.
``(2) Dependency and indemnity compensation shall be
increased for a month under this subsection only for months
occurring during the five-year period beginning on the date
of death of the veteran on which such dependency and
indemnity compensation is based.
``(3) The increase in dependency and indemnity compensation
of a surviving spouse under this subsection shall cease
beginning with the first month commencing after the month in
which all children of the surviving spouse have attained the
age of eighteen.
``(4) Dependency and indemnity compensation under this
subsection is in addition to any other dependency and
indemnity compensation payable by law.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act.

SEC. 5. ELIGIBILITY OF SURVIVING SPOUSES WHO REMARRY FOR
BURIAL IN NATIONAL CEMETERIES.

(a) In General.--Section 2402(5) of title 38, United States
Code, is amended by striking ``(which for purposes of this
chapter includes an unremarried surviving spouse who had a
subsequent remarriage which was terminated by death or
divorce)'' and inserting ``(which for purposes of this
chapter includes a surviving spouse who had a subsequent
remarriage)''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to deaths occurring on or after
January 1, 2000.

SEC. 6. BENEFIT FOR CHILDREN WITH SPINA BIFIDA OF VETERANS OF
CERTAIN SERVICE IN KOREA.

(a) In General.--Chapter 18 of title 38, United States
Code, is amended--
(1) by redesignating subchapter III, and sections 1821,
1822, 1823, and 1824, as subchapter IV, and sections 1831,
1832, 1833, and 1834, respectively; and
(2) by inserting after subchapter II the following new
subchapter III:

``SUBCHAPTER III--CHILDREN OF CERTAIN KOREA SERVICE VETERANS BORN WITH
SPINA BIFIDA

``Sec. 1821. Benefits for children of certain Korea service
veterans born with spina bifida

``(a) Benefits Authorized.--The Secretary may provide to
any child of a veteran of covered service in Korea who is
suffering from spina bifida the health care, vocational
training and rehabilitation, and monetary allowance required
to be paid to a child of a Vietnam veteran who is suffering
from spina bifida under subchapter I of this chapter as if
such child of a veteran of covered service in Korea were a
child of a Vietnam veteran who is suffering from spina bifida
under such subchapter I.
``(b) Spina Bifida Conditions Covered.--This section
applies with respect to all forms and manifestations of spina
bifida, except spina bifida occulta.
``(c) Veteran of Covered Service in Korea.--For purposes of
this section, a veteran of covered service in Korea is any
individual, without regard to the characterization of that
individual's service, who--
``(1) served in the active military, naval, or air service
in or near the Korean demilitarized zone (DMZ), as determined
by the Secretary in consultation with the Secretary of
Defense, during the period beginning on January 1, 1967, and
ending on December 31, 1969; and
``(2) is determined by the Secretary, in consultation with
the Secretary of Defense, to have been exposed to a herbicide
agent during such service in or near the Korean demilitarized
zone.
``(d) Herbicide Agent.--For purposes of this section, the
term `herbicide agent' means a chemical in a herbicide used
in support of United States and allied military operations in
or near the Korean demilitarized zone, as determined by the
Secretary in consultation with the Secretary of Defense,
during the period beginning on January 1, 1967, and ending on
December 31, 1969.''.
(b) Child Defined.--Section 1831 of that title, as
redesignated by subsection (a), is further amended by
striking paragraph (1) and inserting the following new
paragraph (1):
``(1) The term `child' means the following:
``(A) For purposes of subchapters I and II of this chapter,
an individual, regardless of age or marital status, who--
``(i) is the natural child of a Vietnam veteran; and
``(ii) was conceived after the date on which that veteran
first entered the Republic of Vietnam during the Vietnam era.
``(B) For purposes of subchapter III of this chapter, an
individual, regardless of age or marital status, who--
``(i) is the natural child of a veteran of covered service
in Korea (as determined for purposes of section 1821 of this
title); and
``(ii) was conceived after the date on which that veteran
first entered service described in subsection (c) of that
section.''.
(c) Nonduplication of Benefits.--Section 1834(a) of that
title, as redesignated by subsection (a), is further amended
by adding at the end the following new sentence: ``In the
case of a child eligible for benefits under subchapter I or
II of this chapter who is also eligible for benefits under
subchapter III of this chapter, a monetary allowance shall be
paid under the subchapter of this chapter elected by the
child.''.
(d) Conforming Amendment.--(1) Section 1811(1)(A) of that
title is amended by striking ``section 1821(1)'' and
inserting ``section 1831(1)''.
(2) The heading for chapter 18 of that title is amended to
read as follows:

``CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS AND CERTAIN
OTHER VETERANS''.

(e) Clerical Amendments.--(1) The table of sections at the
beginning of chapter 18 of that title is amended by striking
the items relating to subchapter III and inserting the
following new items:

``SUBCHAPTER III--CHILDREN OF CERTAIN KOREA SERVICE VETERANS BORN WITH
SPINA BIFIDA

``1821. Benefits for children of certain Korea service veterans born
with spina bifida.

``SUBCHAPTER IV--GENERAL PROVISIONS

``1831. Definitions.
``1832. Applicability of certain administrative provisions.
``1833. Treatment of receipt of monetary allowance and other benefits.
``1834. Nonduplication of benefits.''.
(2) The table of chapters at the beginning of title 38,
United States Code, and at the beginning of part II of such
title, are each amended by striking the item relating to
chapter 18 and inserting the following new item:

``18. Chapter 18--Benefits for Children of Vietnam Veterans and Certain
Other Veterans..........................................1802''.....

______

By Mr. SPECTER (by request):
S. 1133. A bill to amend title 38, United States Code, to improve the
authorities of the Department of Veterans Affairs relating to
compensation, dependency and indemnity compensation, pension, education
benefits, life insurance benefits, and memorial benefits, to improve
the administration of benefits for veterans, and for other purposes; to
the Committee on Veterans' Affairs.
Mr. SPECTER. Mr. President, as Chairman of the Committee on Veterans'
Affairs, I have today introduced, at the request of the Secretary of
Veterans Affairs, S.1133, the proposed ``Veterans Programs Improvement
Act of 2003.'' The Secretary of Veterans Affairs has submitted this
proposed legislation to the President of the Senate by letter dated
April 25, 2003.
My introduction of this measure is in keeping with the policy which I
have adopted of generally introducing--so that there will be specific
bills to which my colleagues and others may direct their attention and
comments--all Administration-proposed draft legislation referred to the
Committee on Veterans' Affairs. Thus, I reserve the right to support or
oppose the provisions of, as well as any amendment to, this
legislation.
I ask unanimous consent that the text of the bill be printed in the
Record, together with the transmittal letter and a section-by-section
analysis which accompanied it.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1133

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

SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES
CODE.

(a) Short Title.--This act may be cited as the ``Veterans
Programs Improvement Act of 2003''.
(b) References.--Except as otherwise expressly provided,
wherever in this Act an amendment is expressed in terms of an
amendment to a section or other provision, the reference
shall be considered to be made to a section or other
provision of title 38, United States Code.

SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND
DEPENDENCY AND INDEMNITY COMPENSATION.

[[Page S7032]]

(2) Additional compensation for dependents.--Each of the
dollar amounts in effect under section 1115(1);
(3) Clothing allowance.--The dollar amount in effect under
section 1162;
(4) New dic rates.--Each of the dollar amounts in effect
under paragraphs (1) and (2) of section 1311(a);
(5) Old dic rates.--Each of the dollar amounts in effect
under section 1311(a)(3);
(6) Additional dic for surviving spouses with minor
children.--The dollar amount in effect under section 1311(b);
(7) Additional dic for disability.--Each of the dollar
amounts in effect under subsections (c) and (d) of section
1311; and
(8) DIC for dependent children.--Each of the dollar amounts
in effect under sections 1313(a) and 1314.
(c) Determination of Increase.--(1) The increase under
subsection (a) shall be made in the dollar amounts specified
in subsection (b) as in effect on November 30, 2003.
(2) Except as provided in paragraph (3), each such amount
shall be increased by the same percentage as the percentage
by which benefit amounts payable under title II of the Social
Security Act (42 U.S.C. 401 et seq.) are increased effective
December 1, 2003, as a result of a determination under
section 215(i) of such Act (42 U.S.C. 415(i)).
(3) Each dollar amount increased pursuant to paragraph (2)
shall, if not a whole dollar amount, be rounded down to the
next lower whole dollar amount.
(d) Special Rule.--The Secretary may adjust
administratively, consistent with the increases made under
subsection (a), the rates of disability compensation payable
to persons within the purview of section 10 of Public Law No.
85-857 (72 Stat. 1263) who are not in receipt of compensation
payable pursuant to chapter 11 of title 38, United States
Code.
(e) Publication of Adjusted Rates.--At the same time as the
matters specified in section 215(i)(2)(D) of the Social
Security Act (42 U.S.C. 415(i)(2)(D)) are required to be
published by reason of a determination made under section
215(i) of such Act during fiscal year 2004, the Secretary of
Veterans Affairs shall publish in the Federal Register the
amounts specified in subsection (b) as increased pursuant to
subsection (a).

SEC. 3. REPEAL OF 45-DAY RULE FOR EFFECTIVE DATE OF AWARD OF
DEATH PENSION.

Subsection (d) of section 5110 is amended--
(1) by striking the designation ``(1)'';
(2) by striking ``death compensation or dependency and
indemnity compensation'' and inserting ``death compensation,
dependency and indemnity compensation, or death pension'';
and
(3) by striking paragraph (2).

SEC. 4. EXCLUSION OF LUMP-SUM LIFE INSURANCE PROCEEDS FROM
DETERMINATIONS OF ANNUAL INCOME FOR PENSION
PURPOSES.

Subsection (a) of section 1503 is amended--
(1) by striking ``and'' at the end of paragraph (9);
(2) by striking ``materials.'' at the end of paragraph
(10)(B) and inserting ``materials; and''; and
(3) by adding at the end the following new paragraph:
``(11) lump-sum proceeds of any life insurance policy or
policies on a veteran, for purposes of pension under
subchapter III of this chapter.''.

SEC. 5. CLARIFICATION OF PROHIBITION ON PAYMENT OF
COMPENSATION FOR ALCOHOL OR DRUG-RELATED
DISABILITY.

(a) Clarification.--Chapter 11 is amended--
(1) in section 1110, by striking ``drugs.'' and inserting
``drugs, even if the abuse is secondary to a service-
connected disability.''; and
(2) in section 1131, by striking ``drugs.'' and inserting
``drugs, even if the abuse is secondary to a service-
connected disability.''.
(b) Applicability.--The amendments made by subsection (a)
shall apply to any claim--
(1) filed on or after the date of enactment of this Act; or
(2) filed before the date of enactment of this Act and not
finally decided as of that date.

SEC. 6. ALTERNATIVE BENEFICIARIES FOR NATIONAL SERVICE LIFE
INSURANCE AND UNITED STATES GOVERNMENT LIFE
INSURANCE.

(a) National Service Life Insurance.--(1) Section 1917 is
amended by adding at the end the following new subsection:
``(f)(1) Following the death of the insured and in a case
not covered by subsection (d)--
``(A) if the first beneficiary otherwise entitled to
payment of the insurance does not make a claim for such
payment within two years after the death of the insured,
payment may be made to another beneficiary designated by the
insured, in the order of precedence as designated by the
insured, as if the first beneficiary had predeceased the
insured; and
``(B) if, within four years after the death of the insured,
no claim has been filed by a person designated by the insured
as a beneficiary and the Secretary has not received any
notice in writing that any such claim will be made, payment
may (notwithstanding any other provision of law) be made to
such person as may in the judgment of the secretary be
equitably entitled thereto.
``(2) Payment of insurance under paragraph (1) shall be a
bar to recovery by any other person.''.
(b) United States Government Life Insurance.--Section 1952
is amended by adding at the end the following new subsection:
``(c)(1) Following the death of the insured and in a case
not covered by section 1950 of this title--
``(A) if the first beneficiary otherwise entitled to
payment of the insurance does not make a claim for such
payment within two years after the death of the insured,
payment may be made to another beneficiary designated by the
insured, in the order of precedence as designated by the
insured, as if the first beneficiary had predeceased the
insured; and
``(B) if, within four years after the death of the insured,
no claim has been filed by a person designated by the insured
as a beneficiary and the Secretary has not received any
notice in writing that any such claim will be made, payment
may (notwithstanding any other provision of law) be made to
such person as may in the judgment of the Secretary be
equitably entitled thereto.
``(2) Payment of insurance under paragraph (1) shall be a
bar to recovery by any other person.''.
(c) Transition Provision.--In the case of a person insured
under subchapter I or II of chapter 19, title 38, United
States Code, who dies before the date of the enactment of
this Act, the two-year and four-year periods specified in
subsection (f)(1) of section 1917 of title 38, United States
Code, as added by subsection (a), and subsection (c)(1) of
section 1952 of such title, as added by subsection (b), as
applicable, shall for purposes of the applicable subsection
be treated as being the two-year and four-year periods,
respectively, beginning on the date of the enactment of this
Act.

SEC. 7. TIME LIMITATION ON RECEIPT OF CLAIM INFORMATION
PURSUANT TO REQUEST BY DEPARTMENT OF VETERANS
AFFAIRS.

(a) In General.--Section 5102 is amended by adding at the
end the following new subsection:
``(c) Time Limitation.--(1) If information that a claimant
and the claimant's representative, if any, are notified under
subsection (b) is necessary to complete an application is not
received by the Secretary within one year from the date of
such notification, no benefit may be paid or furnished by
reason of the claimant's application.
``(2) This subsection shall not apply to any application or
claim for Government life insurance benefits.''.
(b) Repeal of Superseded Provisions.--Section 5103 is
amended--
(1) by striking ``(a) Required information and evidence.--
''; and
(2) by striking subsection (b).
(c) Effective Date.--The amendments made by this section
shall take effect as if enacted on November 9, 2000,
immediately after the enactment of the Veterans Claims
Assistance Act of 2000 (Public Law 106-475; 114 Stat. 2096).

SEC. 8. BURIAL PLOT ALLOWANCE.

(a) Subsection (b) of section 2303 is amended--
(1) in the matter preceding paragraph (1), by striking ``a
burial allowance under such section 2302, or under such
subsection, who was discharged from the active military,
naval, or air service for a disability incurred or aggravated
in line of duty, or who is a veteran of any war'' and
inserting ``burial in a national cemetery under section 2402
of this title''; and
(2) in paragraph (2), by striking ``(other than a veteran
whose eligibility for benefits under this subsection is based
on being a veteran of any war)'' and inserting ``is eligible
for a burial allowance under section 2302 of title or under
subsection (a) of this section, or was discharged from the
active military, naval, or air service for a disability
incurred or aggravated in line of duty, and such veteran''.
(b) Section 2307 is amended in the last sentence by
striking ``and (b)'' and inserting ``and (b)(2)''.

SEC. 9. PROVISION OF MARKERS FOR PRIVATELY MARKED GRAVES.

(a) In General.--Subsection (d) of section 502 of the
Veterans Education and Benefits Expansion Act of 2001 (Public
Law 107-103; 115 Stat. 995), as amended by section 203 of the
Veterans Benefits Act of 2002 (Public Law 107-330; 116 Stat.
2824), is further amended by striking ``September 11, 2001''
and inserting ``November 1, 1990''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the enactment of section
502 of Public Law 107-103.

SEC. 10. EXPANSION OF BURIAL ELIGIBILITY FOR REMARRIED
SPOUSES.

(a) In General.--Paragraph (5) of section 2402 is amended
by striking ``(which for purposes of this chapter includes an
unremarried surviving spouse who had a subsequent remarriage
which was terminated by death or divorce)'' and inserting
``(which for purposes of this chapter includes a surviving
spouse who remarries following the veteran's death)''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to deaths occurring on or after the date of the
enactment of this Act.

SEC. 11. MAKE PERMANENT AUTHORITY FOR STATE CEMETERY GRANTS
PROGRAM.

(a) Permanent Authorization.--Paragraph (2) of section
2408(a) is amended--
(1) by striking ``for fiscal year 1999 and for each
succeeding fiscal year through fiscal year 2004''; and
(2) by adding at the end ``Funds appropriated under the
preceding sentence shall remain available until expended.''.

[[Page S7033]]

(b) Technical Amendment.--Subsection (e) of section 2408 is
amended by striking ``Sums appropriated under subsection (a)
of this section shall remain available until expended.''.

SEC. 12. FORFEITURE OF BENEFITS FOR SUBVERSIVE ACTIVITIES.

(a) Addition of Certain Offenses.--Paragraph (2) of section
6105(b) is amended by striking ``sections 792, 793, 794, 798,
2381, 2382, 2383, 2384, 2385, 2387, 2388, 2389, 2390, and
chapter 105 of title 18'' and inserting ``sections 175, 229,
792, 793, 794, 798, 831, 1091, 2332a, 2332b, 2381, 2382,
2383, 2384, 2385, 2387, 2388, 2389, 2390, and chapter 105 of
title 18''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to claims filed after the date of the enactment
of this Act.

SEC 13. VETERANS' ADVISORY COMMITTEE ON EDUCATION.

Section 3692 is amended--
91) in subsection (a), by inserting ``as far as
practicable'' after ``include'';
(2) in subsections (a) and (b), by striking ``chapter 106''
and inserting ``chapter 1606'' both places it appears; and
(3) in subsection (c), by striking ``2003'' and inserting
``2013''.

SEC. 14. REPEAL OF EDUCATION LOAN PROGRAM.

(a) Termination of Program.--No loans shall be made under
subchapter III of chapter 36 after the date of the enactment
of this Act, and such subchapter shall be repealed 90 days
after such date of enactment.
(b) Closing of Loan Fund.--All monies in the revolving fund
established in the Treasury of the United States of America
known as the ``Department of Veterans Affairs Education Loan
Fund'' (the ``Fund'') on the day before the date of repeal of
such subchapter III shall be transferred to the Department of
Veterans Affairs Readjustment Benefits Account, and the Fund
shall be closed.
(c) Discharge of Liability.--The liability on any education
loan debt outstanding under such subchapter III shall be
discharged, and any overpayments declared under section
3698(e)(1) of that subchapter shall be waived without further
process on the date funds are transferred as referred to in
subsection (b) of this section.
(d) Technical Amendment.--On the date of repeal of such
subchapter III, as provided herein, the table of sections at
the beginning of chapter 36 shall be amended by striking the
items relating to subchapter III.
(e) Conforming Amendment.--(1) Chapter 34 is amended--
(A) by repealing paragraph (2) of section 3462(a); and
(B) in paragraph (1) of section 3485(e), by striking
``(other than an education loan under subchapter III)''.
(2) Section 3512 is amended by repealing subsection (f).
(3) The amendments made by paragraphs (1)(B) and (2) shall
take effect 90 days after the date of the enactment of this
Act.

SEC. 15. RESTORATION OF CHAPTER 35 EDUCATION BENEFITS OF
CERTAIN INDIVIDUALS.

(a) Restoration.--Subsection (h) of section 3512 is amended
by inserting ``or is involuntarily ordered to full-time
National Guard duty under section 502(f) of title 32''
following ``title 10''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as of September 11, 2001.

SEC. 16. EXPANSION OF MONTGOMERY GI BILL EDUCATION BENEFITS
FOR CERTAIN SELF-EMPLOYMENT TRAINING.

(a) Self-employment Training.--Subparagraph (B) of section
3002(3) is amended--
(1) in clause (i) by striking ``and'';
(2) by adding at the end the following clause:
``(iii) a program of self-employment on-job training
approved as provided in section 3677(d) of this title; and''.
(b) Program Approval.--Section 3677 is amended--
(1) in subsections (a) and (c), by inserting ``self-
employment on-job training or'' after ``other than'';
(2) in subsection (b)(1), by inserting ``described in
subsection (a)'' after ``offering training''; and
(3) by adding at the end the following new subsection:
``(d)(1) Any State approving agency may approve a program
of self-employment on-job training for purposes of chapter 30
of this title only when it finds that the training is
generally recognized as needed or accepted for purposes of
obtaining licensure to engage in the self-employment
occupation or is required for ownership and operation of a
franchise that is the objective of the training.
``(2) The training entity offering the training for which
approval is sought under this chapter must submit to the
State approving agency a written application for approval, in
the form and with the content as prescribed by the Secretary,
which shall include such information as is required by the
State approving agency.
``(3) As a condition for approving a program of self-
employment on-job training, the State approving agency must
find upon investigation that the following criteria are met:
``(A) The training content is adequate to qualify the
eligible individual for the self-employment occupation that
is the objective of the training.
``(B) The training consists of full-time training for a
period of less than six months.
``(C) The length of the training period is not longer than
that customarily required to obtain the knowledge, skills,
and experience needed to successfully engage in the
particular self-employment occupation that is the objective
of the training.
``(D) The training entity has adequate instructional space,
equipment, materials, and personnel to provide satisfactory
training on the job.
``(E) The training entity keeps adequate records of each
trainee's progress toward the self-employment objective and,
at the end of the training period, issues a license,
certificate, or other document recording the individual's
successful completion of the training program.
``(F) The training entity and the self-employment on-job
training program meet such other criteria as the Secretary
may prescribe and as the State approving agency, with the
Secretary's approval, may establish.''.
(c) Conforming Amendment.--Paragraph (2) of section 3687(a)
is amended by inserting ``subsections (a), (b), and (c) of''
before ``section 3677''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date six months after the enactment
of this Act and shall apply to self-employment on-job
training approved and pursued on or after that date.
The Secretary of Veterans Affairs
Washington, DC, April 25, 2003.
Hon. Richard B. Cheney,
President of the Senate,
Washington, DC.
Dear Mr. President: I am transmitting a draft bill, the
``Veterans Programs Improvement Act of 2003'. I request that
this draft bill be referred to the appropriate committee for
prompt consideration and enactment.

Increase in Rates of Disability compensation and Dependency and
Indemnity Compensation

Section 2 of the draft bill would direct the Secretary of
Veterans Affairs to increase administratively the rates of
disability compensation for veterans with service-connected
disability and of dependency and indemnity compensation (DIC)
for the survivors of veterans whose deaths are service
related, effective December 1, 2003. As provided in the
Presidents fiscal year (FY) 2004 budget request, the rate of
increase would be the same as the cost-of-living adjustment
(COLA) that will be provided under current law to Social
Security recipients, which is currently estimated to be 2
percent. We believe this proposed COLA is necessary and
appropriate to protect the affected benefits from the eroding
effects of inflation.
We estimate that enactment of this section would cost $355
million during FY 2004 and $4.3 billion over the period FY
2004 through FY 2013. However, this cost is already assumed
in the Budget baseline and, therefore, would not have any
effect on direct spending.

REPEAL OF 45-DAY RULE FOR EFFECTIVE DATE OF AWARD OF DEATH PENSION AND
EXCLUSION OF LUMP-SUM INSURANCE PROCEEDS FROM DETERMINATIONS OF ANNUAL
INCOME FOR PENSION PURPOSES

Section 3 of the draft bill would amend 38 U.S.C.
Sec. 5110(d) to make an award of death pension effective the
first day of the month in which the death occurred if the
claim is received within one year from the date of death.
Section 4 of the draft bill would amend 38 U.S.C.
Sec. 1503(a) to add lump-sum proceeds of life insurance
policies to the list of payments that do not count as income
for purposes of determining eligibility for death pension
benefits administered by the Department of Veterans Affairs
(VA) under chapter 15 of title 38, United States Code.
Under 38 U.S.C. Sec. 5110(a), an award based on a death
pension claim received more than 45 days after the veterans
death can be effective no earlier than the date of the claim.
Pursuant to current 38 U.S.C. Sec. 5110(d)(2), however, if VA
receives an application for death pension within 45 days of
the veteran's death, then the effective date of a death
pension award is the first day of the month in which the
death occurred. Section 5110(d)(2)'s original one-year period
was reduced to the current 45 days by the Deficit Reduction
Act of 1984, Pub. L. No. 98-369, 98 Stat. 494, 854-901, as a
cost-saving measure. Unfortunately, the ``45-day rule''
created a situation that has led to unfair and unequal
treatment of applications for VA death pension.
The practical effect of the ``45-day rule'' in many cases
has been to exclude lump-sum life insurance proceeds received
within 45 days of the veteran's death from the countable
income for pension claimants who file their claims more than
45 days after the date of the veteran's death. In contrast,
claimants who both receive insurance proceeds and file
pension claims within 45 days of the veteran's death have
insurance proceeds counted as annual income, often reducing
or precluding pension benefits during their first year of
potential eligibility. In other words, claimants who receive
insurance proceeds within 45 days of death, but who wait 45
days or longer to file pension claims, can receive pension
effective from the date of claim without regard to recently-
received insurance proceeds. In essence, claimants receiving
lump-sum insurance proceeds under the current law are
encouraged to forego entitlement from the date of death in
exchange for the exclusion of the insurance payment in
determining countable income for the following 12 months.
While many veterans' advocates are aware of this situation
and advise claimants who receive life insurance proceeds
within 45 days of death to postpone filing their claims, the
current law unfairly penalizes claimants who are not well
versed in such technical details. Fairness dictates that VA
rules and

[[Page S7034]]

procedures be straightforward, particularly for claimants who
are coping with the losses of loved ones. Consequently, we
believe the ``45-day rule'' should be eliminated in favor of
a rule making death pension benefits effective from the first
day of the month of the veterans death if the claim is
received within one year of that date.
However, we believe that this change must go hand in hand
with an amendment, provided in section 4 of the draft bill,
excluding lump-sum life insurance proceeds from the
computation of income for death pension purposes. Lump-sum
life insurance proceeds of genuine consequence are more
appropriately address in terms of net worth, as provided in
38 U.S.C. Sec. 1543, than in terms of income. Pursuant of
section 1543, a claimant is ineligible to receive death
pension benefits if his or her net worth is such that it is
reasonable that some portion of it should be consumed for his
or her maintenance. In our view, a surviving spouse whose
income, excluding lump-sum life insurance proceeds, and net
worth do not constitute a bar to pension deserves help
from VA.
We believe these proposed amendments are necessary and
appropriate to eliminate unequal treatment of death pension
applicants and to uphold one of the fundamental principles of
the pension program, which is to ensure that those with the
greatest need receive the greatest benefit.
We estimate that the net effect of enactment of both
section 3 and section 4 would cost $649 thousand for FY 2004
and $12.8 million for the ten-year period FY 2004 through FY
2013.

clarification of prohibition on payment of compensation for alcohol or
drug-related disability

Section 5(a) of the draft bill would amend 38 U.S.C.
Sec. Sec. 1110 and 1131 to clarify that the prohibition on
payment of compensation for a disability that is a result of
the veteran's own abuse of alcohol or drugs applies even if
the abuse is secondary to a service-connected disability.
Section 5(b) would make that amendment applicable to claims
filed on or after the date of enactment and to claims filed
before then but not finally decided as of that date.
Section 1110 and 1131 of title 38, United States Code,
authorize the payment of compensation for disability
resulting from injury or disease incurred or aggravated in
line of duty in active service, during a period of war or
during other than a period of war, respectively. Sections
1110 also currently provide, ``but on compensation shall be
paid if the disability is a result of the veterans own
willful misconduct or abuse of alcohol or drugs.'' Before
their amendment in 1990, the provisions currently codified in
sections 1110 and 1131 prohibited compensation ``if the
disability is the result of the veteran's own willful
misconduct.'' In 1990, they were amended to also prohibit
compensation if the disability is a result of the veteran's
own alcohol or drug abuse.
VA has long interpreted those provisions to authorize
compensation not only for disability immediately resulting
from injury or disease incurred or aggravated in service, but
also for disability more remotely resulting from such injury
or disease. That interpretation is embodied in 38 C.F.R.
Sec. 3.310(a), which provides that, generally, disability
which is proximately due to or the result of a service-
connected disease or injury shall be service connected. Thus,
VA pays compensation for primary service-connected disability
and for secondary service-connected disability. However,
consistent with the plain meaning of sections 1110 and 1131,
if a disability, whether primary or secondary, is a result of
the veteran's own alcohol or drug abuse, VA did not pay
compensation.
This has changed. On February 2, 2001, a three-judge panel
of the United States Court of Appeals for the Federal Circuit
interpreted section 1110 as not precluding compensation for
an alcohol or drug-abuse-related disability arising
secondarily from a service-connected disability. Allen v.
Prncipi, 237 F.3d 1368, 1370 (Fed. Cir. 2001). More
specifically, the panel held that section 1110 ``does not
preclude compensation for an alcohol or drug abuse disability
secondary to a service-connected disability or use of an
alcohol or drug abuse disability as evidence of the increased
severity of a service-connected disability.'' Id. at 1381.
The Government filed a petition for rehearing and rehearing
en banc, which the panel and full court denied on October 16,
2001. Allen v. Pincipi, 268 F.3d 1340, 1341 (Fed. Cir. 2001).
However, five of the eleven judges who considered the
petition for rehearing en banc dissented from the order
denying rehearing, opening that that court's interpretation
is wrong. 268 F.3d at 1341-42.
We are concerned that payment of additional compensation
based on the abuse of alcohol or drugs is contrary to
congressional intent and is not in veterans' best interests
because it removes an incentive to refrain from debilitating
and self-destructive behavior.
The Federal Circuit's interpretation in Allen could also
greatly increase the amount of compensation VA pays for
service-connected disabilities. Under the court's
interpretation, any veteran with a service-connected
disability who abuses alcohol or drugs is potentially
eligible for an increased amount of compensation if he or she
can offer evidence that the substance abuse is a way of
coping with the pain or loss the disability causes. Under
this interpretation, alcohol or drug abuse disabilities that
are secondary to either physical or mental disorders are
compensable.
The potential for increased costs is illustrated by mental
disorders, which are frequently associated with alcohol and
drug abuse. Almost 421,000 veterans are currently receiving
compensation for a service-connected mental disability. All
but 97,000 of those disabilities are currently rated less
than 100 percent disabling and could potentially be rated
totally disabling on the basis of secondary alcohol or drug
abuse. Even if the service connection of disability from
alcohol or drug abuse does not result in an increased
schedular evaluation, temporary total evaluations could be
assigned whenever a veteran is hospitalized for more than
twenty-one days for treatment or observation related to the
abuse. Even the 97,000 cases of a service-connected mental
disability evaluated at 100 percent disabling have potential
for increased compensation for secondary alcohol or drug
abuse if the statutory criteria for special monthly
compensation are met.
The potential increase in compensation does not end there.
Under the Federal Circuit's interpretation, VA is required to
pay compensation for the secondary effects of the abuse of
alcohol or drugs. Once alcohol or drug abuse is service
connected as being secondary to another service-connected
disability, then service connection can be established for
any disability that is a result of the service-connected
abuse of alcohol or drugs. If alcohol or drug abuse results
in a disease, such as cirrhosis of the liver, then that
disease would also be service connected and provide a basis
for compensation under the court's interpretation.
Of course, an increase in the amount of compensation VA
pays for service-connected disabilities will increase the
benefit cost of the compensation program. Section 5 of this
draft would avoid those increased costs. Our estimate of
savings that would result from enactment of the draft bill is
based on the payment of only basic compensation for alcohol
or drug abuse disabilities secondary to service-connected
disabilities (i.e., it does not consider temporary total
evaluations, special monthly compensation, or compensation
for the secondary effects of alcohol or drug abuse). We
estimate that this provision would result in benefit cost
savings of $127 million and administrative cost savings of
$44 million in FY 2004 and benefit cost savings of $4.6
billion and administrative cost savings of $97 million for
the ten-month period FY 2004 through FY 2013.

alternative beneficiaries for national service life insurance and
united states government life insurance

Section 6 would authorize the payment of unclaimed National
Service Life Insurance (NSLI) and United States Government
Life Insurance (USGLI) proceeds to an alternative
beneficiary.
Under current law, there is no time limit under which a
named beneficiary of an NSLI or USGLI policy is required to
claim the proceeds. Consequently, when the insured dies and
the beneficiary does not file a claim for the proceeds, VA is
required to hold the unclaimed funds indefinitely in order to
honor any possible future claims by the beneficiary. VA holds
the proceeds as a liability. While extensive efforts are made
to locate and pay these individuals, there are cases where
the beneficiary simply cannot be found. Under current law, we
are not permitted to pay the proceeds to a contingent or
alternative beneficiary unless we can determine that the
principal beneficiary predeceased the insured. Consequently,
payment of the proceeds to other beneficiaries is withheld.
A majority of the existing liabilities of unclaimed
proceeds were established over ten years ago. As time passes,
the likelihood of locating and paying a principal beneficiary
becomes more remote. In fact, the older a liability becomes,
the more unlikely it is that it will ever be paid even though
other legitimate heirs of the insured have been located.
Section 6 would authorize the Secretary to pay NSLI and
USGLI proceeds to an alternative beneficiary when the
proceeds have not been claimed by the named beneficiary
within two years following the death of the insured or within
two years of this bill's enactment, whichever is later. The
principal beneficiary would have two years following the
insured's death to file a claim. Afterward, a contingent
beneficiary would have two additional years within which to
file a claim. Payment would be made as if the principal
beneficiary had predeceased the insured. If there is no
contingent beneficiary to receive the proceeds, payment would
be made to those equitably entitled, as determined by the
Secretary. As occurs under current law, no payment would be
made if payment would escheat to a State. Such payment would
bar recovery of the proceeds by any other individual.
Section 6 of the bill would apply retroactively as well as
prospectively, and is similar to the time-limitation
provisions of the Servicemember's and Veterans' Group Life
Insurance programs and the Federal Employees Group Life
Insurance program.
Insofar as payment to beneficiaries is made from the
insurance trust funds, there are no direct appropriated
benefit costs associated with this section of the bill. The
liabilities are already set aside and would eventually be
paid, either as payment to beneficiaries that eventually
claim the proceeds, or released from liability reserves and
paid as dividends.
There are approximately 4,000 existing policies in which
payment has not been made due to the fact that we cannot
locate the primary beneficiary, despite extensive efforts.

[[Page S7035]]

Over the years, the sum of moneys had as aggregated to
approximately $23 million. Each year, about 200 additional
policies (with an average face value of $9600, or
approximately $1.9 million annually) are placed into this
liability because the law prohibits payment to a contingent
beneficiary or to the veteran's heirs. It is estimated that
approximately two-thirds of the 4,000 policies would
eventually be paid as a result of this legislation.
Additionally, in anticipation of the fact that VA will not be
able to pay about one-third of these policies, nearly $7
million has already been released to surplus and made
available for dividend distribution.
VA estimates that the enactment of this section would
result in costs of $15 million during the five-year period FY
2004 through FY 2008 and a total of $17 million during the
ten-year period FY 2004 through FY 2013.

time limitation on receipt of claim information pursuant to request by
department of veterans affairs

Section 7(a) and (b) of the draft bill would make a
technical correction to the statutory provisions created by
the Veterans Claims Assistance Act of 2000 (VCAA), Pub. L.
No. 106-475, 114 Stat. 2096. Section 7(c) would make that
correction effective as if enacted immediately after the
VCAA.
Before the enactment of the VCAA, 38 U.S.C. Sec. 5103(a)
required VA, if a claimant's application for benefits was
incomplete, to notify the claimant of the evidence necessary
to complete the application. Section 5103(a) further
provided: ``If such evidence is not received within one year
from the date of such notification, no benefits may be paid
or furnished by reason of such application.''
In accordance with former section 5103(a), VA regulations
provide that, if evidence requested in connection with a
claim is not furnished within one year after the date of
request, the claim will be considered abandoned. After the
expiration of one year, VA will take no further action unless
it receives a new claim. Furthermore, should the right to
benefits be finally established, benefits based on such
evidence would commence no earlier than the date the new
claim was filed. 38 C.F.R. Sec. 3.158(a).
Before the enactment of the VCAA, title 38, United States
Code, contained no provision requiring VA to notify a
claimant of the evidence necessary to substantiate a claim.
Section 3(a) of the VCAA struck former 38 U.S.C.
Sec. Sec. 5102 and 5103 and added new sections 5102 and 5103.
114 Stat. at 2096-97. Now section 5102(b) requires VA, if a
claimant's application for a benefit is incomplete, to notify
the claimant (and his or her representative, if any) of the
information necessary to complete the application. Section
5102 contains no provision concerning a time limitation for
the submission of information necessary to complete an
application.
Now section 5103(a) requires VA, upon receipt of a complete
or substantially complete application for benefits, to notify
the claimant (and his or her representative, if any) of any
information and evidence not previously provided to VA that
is necessary to substantiate the claim. Furthermore, that
notice must indicate which portion of that information and
evidence, if any, is to be provided by the claimant and which
portion, if any, VA will attempt to obtain on the claimant's
behalf. Section 5103(b)(1) provides, in the case of
information or evidence that the claimant is notified is to
be provided by him or her, if VA does not receive such
information or evidence within one year from the date of such
notification, no benefit may be paid or furnished by reason
of the claimant's application.
As a result of the amendments made by the VCAA, the
statutory provision imposing a one-year limitation now
relates to the substantiation of claims rather than to the
completion of applications. We do not believe Congress
intended this change from prior law. This change raises
several potential problems.
Without a statutory limitation of one year to complete an
application, VA no longer has a statutory basis for closing
an application as abandoned. Thus, if a claimant were to
submit an incomplete application for benefits, but not
respond to VA's notice of the information necessary to
complete it until many years later, the award of any benefit
granted on the basis of that application would have to be
effective from the date of the application, even though the
claimant took no action to complete it for many years.
Further, it appears that VA would be authorized to close or
deny the claim based on the claimant's failure to respond. We
do not believe Congress intended this result. Rather, we
believe that the former one-year statutory limitation on the
time available to complete an application should be restored.
The statutory limitation of one year to substantiate a
claim also raises potential problems. One such problem is the
possibility that courts will interpret the provision to
preclude VA from deciding a claim until one year has expired
from the date VA gives notice of the information and evidence
necessary to substantiate the claim. Exactly that
interpretation was offered by several veterans service
organizations challenging VA's regulations implementing the
VCAA. Under those regulations, as part of VA's notice under
section 5103(a), VA will request the claimant to provide any
evidence in the claimant's possession that pertains to the
claim. We ask for the evidence within 30 days, but tell the
claimant that one year is available to respond. If the
claimant has not responded to the request within 30 days, VA
may decide the claim before expiration of the one year, based
on all the information and evidence contained in the file,
including information and evidence it has obtained on the
claimant's behalf. However, VA will have to readjudicate the
claim if the claimant subsequently provides the information
and evidence within one year of the date of the request. 38
C.F.R. Sec. 3.159(b)(1).
VA issued those rules ``to allow for the timely processing
of claims.'' 66 Fed. Reg. 17,834, 17,835 (2001). Once an
application had been substantially completed, VA does not
want to have to wait one year to decide the claim, given the
large backlog of claims awaiting adjudication by VA and the
Secretary's commitment to reducing the backlog and shortening
the time VA takes to adjudicate claims. What VA considers to
be Congress' inadvertent moving of the one-year limitation
from the provision relating to completion of applications to
the provision relating to the substantiation of claims could
impede VA's efforts to improve service to veterans. VA doubts
that Congress intended to require VA, after requesting
evidence from a claimant, to keep the claim open and pending
for a full year if the claimant has not responded.
Furthermore, section 5103(b)(1)'s clear and unambiguous
language appears to prohibit the payment of benefits even
though VA could allow a claim. For example, VA might be able
to allow a claim on the basis of evidence VA obtained on the
claimant's behalf, even though the claimant has not
provided the evidence requested of him or her. Or VA might
find clear and unmistakable error in a prior denial and
need to grant benefits on the claim that was erroneously
denied. Yet section 5103(b)(1) prohibits the payment or
furnishing of any benefit if VA does not receive within
one year the information or evidence the claimant is to
provide according to VA's notice. Surely, Congress did not
intend such a results.
Finally, some of VA's pro-veteran regulations will have to
be changed unless the one-year time limitation is removed
from section 5103. For example, 38 C.F.R. Sec. 20.1304(a)
permits an appellant to submit additional evidence during the
90 days following notice that an appeal has been certified to
the Board of Veterans' Appeals and the appellate record has
been transferred to the Board. That 90-day period may extend
beyond the one-year period following notice of the
information and evidence necessary to substantiate the claims
given under section 5103(a), in which case it would conflict
with the statutory mandate that ``no benefit may be paid or
furnished by reason of the claimant's application'' if VA
does not receive the evidence within one year from the date
of the section 5103(a) notice. Another potentially
conflicting regulation is 38 C.F.R. Sec. 3.156(b), which
deems new and material evidence received before expiration of
the one-year appeal period (beginning when notice of the
decision on a claim is sent) or before an appellate decision
is made if a timely appeal is filed to have been filed in
connection with the claim pending at the beginning of the
appeal period. Because the one-year appeal period necessarily
extends beyond the one-year substantiation period, the
regulation authorizes the grant of benefits based on evidence
not timely received under section 5103(b), contrary to the
statutory mandate.
Accordingly, we propose a technical amendment to sections
5102 and 5103 that would prevent these problems. Section 7
would restore the one-year limitation to section 5102 and
remove it from section 5103. It would make these technical
amendments effective as if enacted immediately after the
VCAA.
No costs are associated with this proposal. These
amendments would allow VA to close inactive or abandoned
claims and would prevent unjustified retroactive awards.

burial plot allowance

Section 8 of the draft bill would amend 38 U.S.C.
Sec. Sec. 2303(b) and 2307 to authorize payment of the burial
plot allowance to states for each veteran interred in a state
veterans cemetery at not cost to the veteran's estate or
survivors.
Current section 2302(b)(1) authorizes VA to pay to a state
a $300 plot or interment allowance for each eligible veteran
buried in qualifying state veterans' cemetery. Such allowance
authorized only if the veteran: (1) was a veteran of any war;
(2) was discharged from active service for a service-
connected disability; (3) was receiving VA compensation or
pension at the time of death; or (4) died in a VA facility.
Under current section 2307, survivors of veterans who die as
a result of service-connected disabilities may seek
reimbursement of burial and funeral expenses not exceeding
$2,000. If, however, a burial and funeral allowance is paid
to a veteran's survivors under section 2307, states cannot
also receive a plot allowance for burial of the veteran. The
proposed amendment would expand VA's authority to pay the
plot allowance to states for burial in State veterans'
cemeteries of all eligible peacetime veterans and all wartime
veterans who die of service-connected disabilities.
This amendment would encourage state participation in the
State Cemetery Grants Program. In 1978, Congress established
the State Cemetery Grants Program to complement VA's national
cemetery system by assisting states in providing burial plots
for veterans in areas where existing national cemeteries
cannot satisfy veterans' burial needs. State officials have
indicated to VA that they consider future maintenance costs

[[Page S7036]]

when deciding whether to pursue a state cemetery grant. To
the extent that the amendment would help defray those
maintenance costs and encourage states to establish veterans'
cemeteries, it would make the benefit of burial in such a
cemetery an accessible option for more veterans.
The proposed amendment would allow states to receive plot
allowance payments for approximately 1,200 additional
interments annually. We estimate the costs associated with
the enactment of this amendment would be $360,000 for FY 2004
and $3.6 million for the ten-year period from FY 2004 through
FY 2013.

PROVISION OF MARKERS FOR PRIVATELY MARKED GRAVES

Section 9 would change the applicability date of VA's
current authority to provide a marker for the private-
cemetery grave of a veteran, regardless of whether the grave
has been marked at private expense. Section 2306(a) of title
38, United States Code, has long authorized VA to provide a
Government headstone or marker for the unmarked grave of an
eligible individual. Section 502 of the Veterans Education
and Benefits Expansion Act of 3001, Pub. L. No. 107-103,
Sec. 502, 115 Stat. 976, 994, which was signed into law on
December 27, 2001, authorized VA to furnish appropriate
marker for the grave of an eligible veteran buried in a
private cemetery, regardless of whether the grave was already
marked with a non-Government marker. This authorization was
made applicable to veterans who died on or after that Act's
enactment date. Public Law 107-440 extended this authority to
include deaths.
Under current law, if a veteran died before September 11,
2001, provision of a Government headstone or market is
authorized only if the veterans' grave is unmarked. If a
veteran died after September 11, 2001, provision of a
Government headstone or market is authorized regardless of
whether the grave is already marked at private expense. While
recent changes in the law have allowed VA to begin to meet
the needs of families who view the government-furnished
market as a means of honoring and publicly recognizing a
veteran's military service, VA is now in the difficult
position of having to deny a benefit based solely on when a
veteran died.
Moreover, the law has never precluded the addition of a
privately purchased headstone to a grave after place of a
government-furnished marker, resulting in double marking.
However, when a private marker had been placed in the first
instance, a Government marker may not be provided if the
veteran died before September 11, 2001. We believe this
creates an arbitrary distinction disadvantaging families who
promptly obtained a private marker.
From October 18, 1979, until November 1, 1990, with the
enactment of the Omnibus Budget and Reconciliation Act of
1990, VA paid a headstone or marker allowance to those
families who purchased a private headstone or marker in lieu
of a Government headstone or marker. Those families all had
the opportunity to benefit from the VA-marker program. Our
proposal would benefit families of those veterans who died
between November 1, 1990, and September 11, 2001.
We estimate that the mandatory cost of this proposal would
be $4.9 million if FY 2004 and $12.4 million during the
period FY 2004 through FY 2013.

expansion of burial eligibility for remarried spouses

Section 10 would allow a veteran's surviving spouse who
marries a non-veteran after the veteran's death to be
eligible for burial in a VA national cemetery based on his or
her marriage to the veteran. Over the last several years, the
National Cemetery Administration has seen an increase in the
number of requests for burial of a veteran's widow or widower
who has married a non-veteran after the veteran has died.
These cases involve spouses of veterans who have been married
for many years and have raised a family with the veteran.
Typically, the veteran's children and grandchildren, and of
the current spouse, support the burial of the decedent with
the original veteran-spouse in a VA national cemetery.
However, current law does not permit it if the remarriage
remained in effect when the veteran's survivor predeceased
the new spouse.
Public Law 103-446 revised eligibility criteria for burial
in a national cemetery to reinstate burial eligibility for a
surviving spouse of an eligible veteran whose subsequent
remarriage to a non-veteran has been terminated by death or
dissolved by divorce. The current proposal would be
consistent with that amendment in further acknowledging the
importance of the first marriage to the veteran's family.
This proposal would allow the deceased veteran to be buried
with a spouse with whom he or she always expected to be
buried with a spouse with whom he or she always expected to
be buried. It would also allow the veteran's children to
visit a single gravesite to pay their respects to their
parents.
We estimate that the cost associated with this proposal
would be minimal. The average number of requests for burials
for individuals previously married to an eligible veteran who
subsequently married a non-veteran is estimated to be 200 per
year; the majority of these burials would be second
interments. The cost of a second interment (including a
headstone or marker) in a VA national cemetery ranges from
just over $400 to nearly $800, depending on the type of
burial and placement of the remains, with an average cost of
approximately $550. For FY 2004, we anticipate the cost of
the proposal would be $110,000. Our ten-year cost estimate
(FY 2004 through FY 2013) is $1.1 million.

make permanent authority for state cemetery grants program

Section 2408 of title 38, United States Code, authorizes VA
to make grants to states to assist them in establishing,
expanding, or improving state veterans' cemeteries. Section
2408(a)(2) currently authorizes appropriations for making
those grants through fiscal year 2004. Section 11 of our
proposed bill would permanently authorize such
appropriations.
VA's State Cemetery Grants Program is an important
component in meeting the burial needs of our Nation's
veterans. State veterans' cemeteries supplement VA's national
cemetery system in providing burial options to veterans
throughout the Nation. VA's State Cemetery Grants Program has
already helped to fund 49 operational state veterans'
cemeteries, and six more are under construction. VA has
received over 30 additional pre-applications from states
requesting grants. There is a tremendous, on-going demand for
grants to improve or expand existing state veterans'
cemeteries, and VA's proposal would assist long-term planning
for this important program.
Appropriations for VA's State Home Grants Program
(authorized by subchapter III of chapter 81, title 38, United
States Code) are permanently authorized under 38 U.S.C.
Sec. 7133(a). The amendment made by section 11 of this bill
would improve the consistency in the operation of the two
programs.
The costs associated with this proposal would be those
included in VA's annual budget request for use in providing
grants to states. The President's budget submission to
Congress for FY 2004 includes a request for $32 million for
the State Cemetery Grants Program.

forfeiture of benefits for subversive activities

Section 12 would amend 38 U.S.C. Sec. 6105 to supplement
the list of offenses conviction of which would result in a
bar to all gratuitous VA benefits. Section 6105 provides that
an individual convicted after September 1, 1959, of any of
several specified offenses involving subversive activities
shall have no right to gratuitous benefits, including
national cemetery burial, under laws administered by the
Secretary of Veterans Affairs and that no other person shall
be entitled to such benefits on account of such individual.
Congress' primary concern in enacting this provision was to
prevent VA benefits from being provided based on military
service of persons found guilty of offenses involving
national security. This proposal would amend section 6105 to
supplement the list of offenses conviction of which would
result in a bar to all gratuitous VA benefits to include
additional offenses that have come into being since enactment
of section 6105.
This proposal would extend the current prohibition on
payments of gratuitous benefits to persons convicted of
subversive activities to include six additional classes of
activities. The following offenses from title 18, United
States Code, would be added: sections 175 (Prohibitions with
respect to biological weapons); 229 (Prohibited activities
with respect to chemical weapons); 831 (Prohibited
transactions involving nuclear materials); 1091 (Genocide);
2332a (Use of certain weapons of mass destruction); and 2332b
(Acts of terrorism transcending national boundaries). All of
these offenses, which involve serious threats to national
security, were added to title 18, United States Code, after
the enactment of section 6105.
There is no cost associated with this proposal. Cost
savings would be insignificant.

veterans' advisory committee on education

Section 13 would extend to the year 2013 the expiration
date of the Veterans' Advisory Committee on Education. It
would also amend the language requiring that veterans from
specific wartime and post-wartime periods be members of the
Committee to state that Committee positions must be filled
with such individuals as far as practicable. Finally, this
section would make a technical amendment to reflect that,
under title 10, United States Code, as reorganized, chapter
106 is now designated chapter 1606.
Under current law, the authority for the Committee will
expire on December 31, 2003. VA favors extending the
existence of the Education Advisory Committee. The Committee
has been useful for the Secretary in keeping in touch with
the education community, as well as the veterans' service
organizations. Over the last several years, the Committee has
made a number of recommendations that have, in turn, become
legislative proposals. We believe the Committee's discussions
and recommendations are an invaluable aid to our efforts in
administering the education program.
The amendment that would require that veterans from certain
periods, e.g. World War II, the Korean conflict era, or post-
Korean conflict era, be included as members of the Committee
only as far as practicable allows for flexibility in filling
Committee positions if finding members of specific
populations who wish to serve on the Committee might be
problematic.
We estimate the costs associated with the extension of the
Committee would be $25,400 for FY 2004 and $200,000 for the
ten-year period from FY 2004 through FY 2013.

repeal of education loan program

Section 14 would repeal the VA education loan program and
waive any existing repayment obligations, to include
overpayments

[[Page S7037]]

due to default on such loans. The program, in effect since
January 1, 1975, currently is available to issue loans up to
a maximum of $2,500 per academic year to spouses and
surviving spouses who are past their delimiting dates with
remaining entitlement to chapter 35 benefits. The population
for this program is very limited, and with other options in
the public and private sectors, there is no longer a demand
for these loans. In fact, VA has not issued a loan under this
program in several years, but the government has paid an
estimated $70,000 a year to administer it. VA's October 2002
monthly loans statistics show 20 current education loans in
the amount of $14,987.08 and 116 defaulted education loans
totaling $105,908.10. As is apparent, it costs VA more to
administer the loan program than to forgive the debts
currently outstanding.

restoration of chapter 35 education benefits of certain individuals

Section 15 would amend the law to provide that individuals
who qualify for chapter 35 benefits and are involuntarily
ordered to full-time National Guard duty under 32 U.S.C.
Sec. 502(f) after September 11, 2001, would have their
individual delimiting dates (the ending date of the
individual's eligibility) extended by an amount of time equal
to that period of full-time duty plus 4 months.
Public Law 107-103 restored entitlement to National Guard
personnel who qualified for chapter 35 benefits who had to
discontinue course pursuit as a result of being called to
active duty under specific sections of title 10, United
States Code. Our proposal would provide the same delimiting
date extension to National Guard members who are activated
under title 32.
We estimate the costs associated with the enactment of
section 15 would be $150,000 for FY 2004 and approximately $5
million for the ten-year period from FY 2004 through FY 2013.

EXPANSION OF MONTGOMERY GI BILL EDUCATION BENEFITS FOR CERTAIN SELF-
EMPLOYMENT TRAINING

Section 16 would expand the Montgomery GI Bill chapter 30
program by authorizing education assistance benefits for
veterans under that program for on-job training in certain
self-employment training programs. Such training might, for
example, include that necessary for operation of a franchise
or to gain a commercial drivers' license to become an
independent trucker.
The Veterans Entrepreneurship and Small Business
Development Act of 1999 (Pub. L. 106-50) requires that all
Federal agencies aggressively support self-employment for
veterans and service-disabled veterans, directly and through
public-private partnerships. This amendment will provide
veterans considering self-employment with improved access to
capital for training. Thus, more veterans will be encouraged
to initiate steps towards self-employment and sustainable
self-sufficiency.
We estimate the costs associated with the enactment of
section 16 would be $357,000 for FY 2004 and approximately
$3.9 million for the ten-year period from FY 2004 through FY
2013.
The Budget Enforcement Act's pay-as-you-go (PAYGO)
requirements and discretionary spending caps expired on
September 30, 2002. The attached proposals affect revenues
and direct spending. This bill is currently estimated to
produce cost savings of $116.1 million for FY 2004 and $4.52
billion for FY 2004 through FY 2013. These proposals were
included in the President's FY 2004 Budget and should be
considered in conjunction with all other proposals in the
Budget. The Administration supports the extension of budget
enforcement mechanisms in a manner that ensures fiscal
discipline and is consistent with the President's Budget.
The Office of Management and Budget advises that there is
no objection to the transmission of this bill and that its
enactment would be in accord with the Administration's
program.
Sincerely yours,
Anthony J. Principi
Enclosure.

Section-by-Section Analysis of Draft Bill--Veterans Programs
Improvement Act of 2003

section 1. short title; references to title 38, united states code

Section 1(a) would provide a short title for the Act: the
``Veterans Programs Improvement Act of 2003.'' Section 1(b)
would provide that all amendments made by the Act, unless
otherwise specified, are to a section or other provision of
title 38, United States Code.

section 2. increase in rates of disability compensation and dependency
and indemnity compensation

Section 2 would direct the Secretary of Veterans Affairs to
administratively increase the rates of disability
compensation for veterans with service-connected disabilities
and of dependency and indemnity compensation (DIC) for the
survivors of veterans whose deaths are service related,
effective December 1, 2003. As provided in the President's
fiscal year 2004 budget request, the rate of increase would
be the same as the cost of living adjustment that will be
provided under current law to Social Security recipients,
which is currently estimated to be 2 percent.

section 3. repeal of 45-day rule for effective date of award of death
pension

Section 3 would amend 38 U.s.C. Sec. 5110(d) to make an
award of death pension effective the first day of the month
in which the death occurred if the claim is received within
one year from the date of death.

section 4. exclusion of lump-sum life insurance proceeds from
determinations of annual income for pension purposes

Section 4 would amend 38 U.S.C. Sec. 1503(a) to add lump-
sum proceeds of life insurance policies to the list of
payments that do not count as income for purposes of
determining eligibility for death pension benefits
administered by the Department of Veterans Affairs (VA) under
chapter 15 of title 38, United States Code.

section 5. clarification of prohibition on payment of compensation for
alcohol or drug-related disability

Section 5(a) would amend 38 U.S.C. Sec. Sec. 1110 and 1131
to clarify that the prohibition on payment of compensation
for a disability that is a result of the veteran's own abuse
of alcohol or drugs applies even if the abuse is secondary to
a service-connected disability. Section 5(b) would make that
amendment applicable to claims filed on or after the date of
enactment and to claims filed before then but not finally
decided as of that date.

section 6. alternative beneficiaries for national service life
insurance and united states government life insurance

Section 6 would authorize the payment of unclaimed National
Service Life Insurance and United States Government Life
Insurance proceeds to an alternative beneficiary.

section 7. time limitation on receipt of claim information pursuant to
request by department of veterans affairs

Section 7(a) and (b) would make a technical correction to
the statutory provisions created by the Veterans Claims
Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat.
2096. It would change the applicability of a one-year time
limit from the substantiation of a claim to the completion of
an application. Section 7(c) would make that correction
effective as if enacted immediately after the VCAA.

section 8. burial plot allowance

Section 8 would amend 38 U.S.C. Sec. Sec. 2302(b) and 2307
to authorize payment of the burial plot allowance to states
for each veteran interred in a state veterans' cemetery at no
cost to the veteran's estate or survivors.

section 9. provision of markers for privately marked graves

Section 9 would change the applicability date (to deaths
occurring on or after November 1, 1990) of VA's current
authority to provide a marker for the private-cemetery grave
of a veteran, regardless of whether the grave has been marked
at private expense.

Section 10. Expansion of Burial eligibility for Remarried Spouses

Section 11. Make Permanent authority for state cemetery grants program

Section 11 would permanently authorize appropriations for
the State Cemetery Grants Program under 38 U.S.C. Sec. 2408,
which authorizes VA to make grants to states to assist them
in establishing, expanding, or improving state veterans'
cemeteries.

Section 12. Forfeiture of benefits for subversive activities

Section 12 would amend 38 U.S.C. Sec. 6105 to supplement
the list of offenses conviction of which bars entitlement to
all gratuitous VA benefits.

section 13. veterans' advisory committee on education

Section 14. Repeal of Educational Loan Program

Section 14 would repeal the VA education loan program and
waive any existing repayment obligations, to include
overpayments due to default on such loans.

Section 15. Restoration of chapter 35 education benefits of certain
individuals

Section 15 would provide that individuals who qualify for
chapter 35 benefits and are involuntarily ordered to full-
time National Guard duty under 32 U.S.C. Sec. 502(f) after
September 11, 2001, would have their individual delimiting
dates (the ending date of the individual's eligibility)
extended by an amount of time equal to that period of full-
time duty plus 4 months.

Section 16. Expansion of Montgomery GI bill education benefits for
certain self-employment training

By Mr. BOND (for himself and Mr. Inhofe) (by request):

[[Page S7038]]

S. 1134. A bill to reauthorize and improve the programs authorized by
the Public Works and Economic Development Act of 1965; to the Committee
on Environment and Public Works.
Mr. BOND. Mr. President, in these times of economic distress and
hardship we must focus our efforts to assist the more impoverished
regions of our country. With this in mind, it is my pleasure to rise
today to introduce, on behalf of President Bush, the Economic
Development Administration Reauthorization Act of 2003.
This bill will allow the Economic Development Administration,
commonly known as the EDA, to assist communities in the development of
their local economy. Simply put, it will help to bring jobs to our
cities and towns by reauthorizing the mission of the EDA, while
focusing the Administration's efforts on localized economic growth.
EDA was established under the Public Works and Economic Development
Act of 1965. Throughout the near forty years of its existence, EDA has
helped to generate employment, retain existing jobs, and stimulate
industrial and commercial growth in rural and urban areas of the nation
that experience high unemployment, low income or other severe economic
distress.
EDA has consistently been guided by the basic principle that
`distressed communities must be empowered to develop and implement
their own economic development and revitalization strategies'. To
achieve these goals, EDA works in partnership with State and local
governments by providing Federal grants to public and private nonprofit
organizations, regional economic development agencies and Indian
tribes.
This bill seeks to improve the coordination, flexibility, and
performance of EDA. It focuses on methods to ensure that EDA can more
easily work in coordination with other agencies involved in economic
development, such as the Army Corps of Engineers or the Department of
Labor. It attempts to improve EDA's ability to respond to rapidly
changing economic conditions within regions and it highlights the need
to focus on the performance of grantees--whether grantees actually
increase jobs and economic growth.
During the last decade, in my home State of Missouri, EDA has
implemented over 300 projects and invested more than $115 million into
my state's economy. These projects have included improvements to the
Cornerstone Industrial Park in St. Louis, the renovation of a blighted
neighborhood outside Kansas City, and construction assistance for the
Center for Emerging Technologies in St. Louis. EDA assistance in
Missouri has truly been a boon to local investment and economic growth.
Reauthorization of EDA will enable future projects like these
throughout our country for years to come.
In this time of economic difficulty, strong partnership between
federal and local governments are crucial. My hope is that through a
sustained focus on spurring growth in our economy through continued
support of the EDA, we can surmount the economic challenges of today
and prepare the way for a more prosperous future.
I ask unanimous consent that the text of the bill be printed in the
Record.

S. 1134

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

SECTION 1. SHORT TITLE.

Short Title.--This Act may be cited as the ``Economic
Development Administration Reauthorization Act of 2003''.

SEC. 2. FINDINGS AND DECLARATIONS.

Section 2 of the Public Works and Economic Development Act
of 1965, as amended (``PWEDA'') (42 U.S.C. Sec. 3121), is
revised to read as follows:

``SEC. 2. FINDINGS AND DECLARATIONS.

``(a) Findings.--Congress finds that--
``(1) while the fundamentals for growth in the American
economy remain strong, there continue to be areas
experiencing chronic high unemployment, underemployment, low
per capita incomes, and outmigration as well as areas facing
sudden and severe economic dislocations due to structural
economic changes, changing trade patterns, certain Federal
actions (including environmental requirements that result in
the removal of economic activities from a locality), and
natural disasters;
``(2) sustained economic growth in our Nation, States,
cities and rural areas is produced by expanding free
enterprise through trade and enhanced competitiveness of
regions;
``(3) the goal of Federal economic development programs is
to raise the standard of living for all citizens and increase
the wealth and overall rate of growth of the economy by
encouraging local and regional communities to develop a more
competitive and diversified economic base by--
``(A) promoting job creation through increased innovation,
productivity, and entrepreneurship; and
``(B) empowering local and regional communities
experiencing chronic high unemployment and low per capita
income to attract substantially increased private-sector
capital investment;
``(4) while economic development is an inherently local
process, the Federal Government should work in partnership
with public and private local, regional, Tribal and State
organizations to maximize the impact of existing resources
and enable regions, communities, and citizens to participate
more fully in the American dream and national prosperity;
``(5) in order to avoid wasteful duplication of effort and
achieve meaningful, long-lasting results, Federal, State,
Tribal and local economic development activities should have
a clear focus, improved coordination, a comprehensive
approach, common measures of success, and simplified and
consistent requirements; and
``(6) Federal economic development efforts will be more
effective if they are coordinated with, and build upon, the
trade, workforce investment, and technology programs of the
United States.
``(b) Declarations.--Congress declares that, in order to
promote a strong and growing economy throughout the United
States:
``(1) assistance under this Act should be made available to
both rural and urban distressed communities;
``(2) local communities should work in partnership with
neighboring communities, Indian Tribes, the States, and the
Federal Government to increase their capacity to develop and
implement comprehensive economic development strategies to
enhance regional competitiveness in the global economy and
support long-term development of regional economies; and
``(3) whether suffering from long-term distress or a sudden
dislocation, distressed communities should be encouraged to
focus on strengthening entrepreneurship and competitiveness,
and to take advantage of the development opportunities
afforded by technological innovation and expanding and newly
opened global markets.''.

SEC. 3. DEFINITIONS.

Section 3 of PWEDA (42 U.S.C. Sec. 3122) is amended as
follows:
(1) Subparagraph (4)(A) of this section is amended by
striking subparagraph (i) and redesignating successive
subpararphs (ii) through (vii) as (i) through (vi) and
revising subparagraph (iv) as re-designated to read as
follows:
``(iv) a city or other political subdivision of a State,
including a special purpose unit of State or local
government, or a consortium of political subdivisions;''.
(2) Subparagraph 4(B) is amended by adding at the end
thereof a new sentence:

``The requirement under subparagraph (A)(vi) that the
nonprofit organization or association is `acting in
cooperation with officials of a political subdivision of a
State' does not apply in the case of research, training and
technical assistance grants under section 207 that are
national or regional in scope.''.
(3) Paragraph (8), (9) and (10) are amended by re-
designating them as paragraphs (9), (10) and (11) and a new
paragraph (8) is added as follows:
``(8) Regional commissions.--The term `Regional
Commissions' as used in section 403 of this Act refers to the
regional economic development authorities: the Delta Regional
Authority (Pub. L. No. 106-554, Sec. 1(a)(4) [Div. B, title
VI]. 114 Stat. 2763A-268) (7 U.S.C. Sec. 2009aa et seq.), the
Denali Commission (Pub. L. No. 105-277, Div. C, title III,
112 Stat. 2681-637)(42 U.S.C. Sec. 3121 note), and the
Northern Great Plains Regional Authority (Pub. L. 107-171,
116 Stat. 375) (7 U.S.,C. Sec. 2009bb et seq.).''.
(4) A new paragraph (12) is added at the end to read as
follows:
``(12) University center.--The term `university center'
refers to a University Center for Economic Development
established pursuant to the authority of section 207(a)(2)(D)
of this Act.''.

SEC. 4. WORKING WITH NONPROFIT ORGANIZATIONS IN ESTABLISHMENT
OF ECONOMIC DEVELOPMENT PARTNERSHIPS.

Section 101 of PWEDA (42 U.S.C. Sec. 3131) is amended as
follows:
(1) In subsection (b) strike '`and multi-State regional
organizations'' and insert in lieu thereof ``multi-State
regional organizations, and nonprofit organizations.''
(2) In subsection (d) strike ``adjoining'' each time it
occurs.

SEC. 5. SUB-GRANTS IN CONNECTION WITH PUBIC WORKS PROJECTS.

Section 201 of PWEDA (42 U.S.C. Sec. 3141) is amended by
adding a new subsection (d) as follows:
``(d) Sub-Grants.--(1) Subject to paragraph (2), a
recipient of a grant under this section may directly expend
the grant funds or may redistribute the funds in the form of
a sub-grant to other recipients eligible to receive
assistance under this section to fund required components of
the scope of work approved for the project.
``(2) Under paragraph (1), a receipt may not redistribute
grant funds to a for-profit entity.''.

[[Page S7039]]

SEC. 6 CLARIFICATION OF GRANTS FOR STATE PLANNING.

Section 203 of PWEDA (42 U.S.C. Sec. 3143) is amended as
follows:
(1) Revise paragraph (1) of subsection (d) to read as
follows:
``(1) Development.--Any State plan developed with
assistance under this section shall, to the maximum extent
practicable, take into consideration regional economic
development strategies.'';
(2) Strike paragraph (3) of subsection (d) in its entirety
and re-designate paragraphs (4) and (5) and (3) and (4);
(3) Revise re-designated paragraph (3) of subsection (d) by
striking ``and'' at the end of subparagraph (C) and re-
designating current subparagraph (D) as (E) and adding a new
subparagraph (D) to read as follows:
``(D) assist in carrying out state's workforce investment
strategy (as outlined in the State plan required under
section 112 of the Workforce Investment Act of 1998 (29
U.S.C. Sec. 2822)); and'';
(4) Add a new subsection (e) at the end thereof as follows:
``(e) Sub-Grants.--(1) Subject to paragraph (2), a
recipient of a grant under this section may directly expend
the grant funds or may redistribute the funds in the form of
a sub-grant to other recipients eligible to receive
assistance under this section to fund required components of
the scope of work approved for the project.
``(2) Under paragraph (1), a recipient may not redistribute
grant funds to a for-profit entity.''.

SEC. 7. SIMPLIFICATION OF DETERMINATION OF GRANT RATES.

Sections 204 and 205 of PWEDA (42 U.S.C. Sec. Sec. 3144,
3145) are amended to read as follows:

``SEC. 204. COST SHARING.

``(a) Federal Share.--The Secretary shall issue regulations
to establish the applicable grant rates for projects based on
the relative needs of the areas in which the projects are
located. Except as provided in subsection (c) below, the
amount of a grant for a project under this title may not
exceed 80 percent of the cost of the project.
``(b) Non-Federal Share.--In determining the amount of the
non-Federal share of the cost of a project, the Secretary may
provide credit toward the non-Federal share for all
contributions both in cash and in-kind, fairly evaluated,
including contributions of space, equipment, and services,
and assumptions of debt.
``(c) Increase in Federal Share.--
``(1) Indian tribes.--In the case of a grant to an Indian
tribe, the Secretary may increase the Federal share above the
percentage specified in subsection (a) up to 100 percent of
the cost of the project.
``(2) Certain states, political subdivisions, and nonprofit
organizations.--In the case of a grant to a State (or a
political subdivision of a State), that the Secretary
determines has exhausted its effective taxing and borrowing
capacity, or in the case of a grant to a nonprofit
organization that the Secretary determines has exhausted its
effective borrowing capacity, the Secretary may increase the
Federal share above the percentage specified in subsection
(a) up to 100 percent of the cost of the project.

``SEC. 205. GRANTS SUPPLEMENTING OTHER AGENCY GRANTS. (42
U.S.C. Sec. 3145)

``(a) Definition of Designated Federal Grant Program.--In
this section, the term `designated Federal grant program'
means any Federal grant program that--
``(1) provides assistance in the construction or equipping
of public works, public service, or development facilities;
``(2) is designated as eligible for an allocation of funds
under this section by the Secretary; and
``(3) assists projects that are--
``(A) eligible for assistance under this title; and
``(B) consistent with a comprehensive economic development
strategy.
``(b) Supplementary Grants.--Subject to subsection (c)
below, in order to assist eligible recipients to take
advantage of designated Federal grant programs, on
the application of an eligible recipient, the secretary
may make a supplementary grant for a project for which the
eligible recipient is eligible but, because of the
recipient's economic situation, for which the eligible
recipient cannot provide the required non-Federal share.
``(c) Requirements Applicable to Supplementary Grants.--
``(1) Amount of supplementary grants.--The share of the
project cost supported by a supplementary grant under this
section may not exceed the applicable grant rate under
section 204.
``(2) Form of supplementary grants.--The Secretray shall
make supplementary grants by
``(A) the payment of funds made available under this Act to
the heads of the Federal agencies responsible for carrying
out the applicable Federal programs, or
``(B) the award of funds under this Act which will be
combined with funds transferred from other Federal agencies
in projects administered by the secretary.''.
``(3) Federal share limitations specified in other laws.--
Notwithstanding any requirement as to the amount or source of
non-Federal funds that may be applicable to a Federal
program, funds provided under this section may be used to
increase the Federal share for specific projects under the
program that are carried out in areas described in section
301(a) above the Federal share of the cost of the project
authorized by the law governing the program.''.

SEC. 8. REGULATIONS ON ALLOCATIONS TO ENSURE JOB CREATION
POTENTIAL.

Subsection 206 of PWEDA (42 U.S.C. Sec. 3146) is amended by
striking ``and'' at the end of subparagraph (1)(C), inserting
``and'' at the end of paragraph (2), and adding a new
paragraph (3) at the end thereof to read as follows:
``(3) allocations of assistance under this title promote
job creation through increased innovation, productivity, and
entrepreneurship, and financial assistance extended pursuant
to such allocations will have a high probability of meeting
or exceeding applicable performance requirements established
in connection with extension of the assistance.''.

SEC. 9. INCREASED FLEXIBILITY IN GRANTS FOR TRAINING,
RESEARCH, AND TECHNICAL ASSISTANCE.

(a) Section 207 of PWEDA (42 U.S.C. Sec. 3147) is amended
by striking ``and'' at the end of subparagraph (2)(F) of
subsection (a), re-designating current subparagraph (G) as
(H), and adding a new subparagraph (G) to read as follows:
``(G) studies that evaluate the effectiveness of
collaborations between projects funded under this Act with
projects funded under the Workforce Investment Act of 1998
(29 U.S.C. Sec. 2801 et seq.); and ''.
(b) Section 207 is further amended by adding a new
subsection (c) to read as follows:
``(c) Sub-Grants.--A recipient of a grant under this
section may directly expend the grant funds or may
redistribute the funds in the form of a sub-grant to other
recipients eligible to receive assistance under this section
to fund required components of the scope of work approved for
the project.''.

SEC. 10. REMOVAL OF SECTION.

Section 208 of PWEDA (42 U.S.C. Sec. 3148) is stricken in
its entirety and insert in lieu thereof:

``SEC. 208. [REPEALED].''.

SEC. 11. IMPROVEMENTS IN ADMINISTRATION GRANTS FOR ECONOMIC
ADJUSTMENT INVOLVING REVOLVING LOAN FUND
PROJECTS.

(a) Subsection (d) of section 209 of PWEDA (42 U.S.C.
Sec. 3149) is amended by striking ``an eligible'' in each
case it occurs in paragraphs (1) and (2) inserting in lieu
thereof ``a recipient''.
(b) Section 209 of PWEDA (42 U.S.C. Sec. 3149) is amended
by adding a new subsection (e) at the end thereof as follows:
``(e) Special Provisions Relating to Revolving Loan Fund
Grants.--The Secretary shall promulgate regulations to ensure
the proper operation and financial integrity of revolving
loan funds established by recipients with assistance under
this section.
``(1) Efficient administration.--In order to improve the
ability to manage and administer the Federal interest in
revolving loan funds and in accordance with regulation issued
for such purposes, the Secretary may amend and consolidate
grant agreements governing revolving loan funds to provide
flexibility with respect to lending areas and borrower
criteria. In addition, the Secretary may assign or transfer
assets of a revolving loan fund to a third party for the
purpose of liquidation and a third party may retain assets of
the fund to defray costs related to liquidation. The
Secretary may also take such other actions with respect to
management and administration as the Secretary determines to
be appropriate to carry out the purposes of this Act,
including actions to enable revolving loan fund operators to
sell or securitize loans to the secondary market (except that
such actions may not include issuance of a Federal guaranty
by the Secretary).
``(2) Release of federal interests.--The Secretary may
release, in whole or in part, any property interest in
connection with a revolving loan fund grant after the date
that is 20 years after the date on which the grant was
awarded, provided that the recipient--
``(A) is in compliance with the terms of its grant and
operating the fund at an acceptable level of performance as
determined by the Secretary; and
``(B) reimburses the government prior to the release for
the amount of the Secretary's investment in the fund or the
pro-rata share of the fund at the time of the release,
whichever is less.

Any action taken by the Secretary pursuant to this subsection
with respect to a revolving loan fund shall not constitute a
new obligation provided that all grant funds associated with
the original grant award have been disbursed to the
recipient.''.

SEC. 12. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER PROJECTED
COST.

Section 211 of PWEDA (42 U.S.C. Sec. 3151) is amended to
read as follows:

``SEC. 211. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER
PROJECTED COST.

``In any case in which the Secretary has made a grant for a
construction project under sections 201 or 209 of this title,
and before closeout of the project, the Secretary determines
that the cost of the project based on the designs and
specifications that were the basis of the grant has decreased
because of decreases in costs--
``(1) without further appropriations action, the Secretary
may approve the use of the excess funds or a portion of the
funds to improve the project; and
``(2) any amount of excess funds remaining after
application of paragraph (1) may used for other investments
authorized for support under this Act.

In addition to paragraphs (1) and (2) of this section, in the
event of construction

[[Page S7040]]

underruns in projects utilizing funds transferred from other
Federal agencies pursuant to section 604 of this Act, the
Secretary may utilize thee funds in conjunction with
paragraphs (1) and (2) with the approval of the originating
agency or will return the funds to the originating agency.''.

SEC. 13. SPECIAL IMPACT AREAS.

Title II of PWEDA is further amended by adding a new
section 214 as follows:

``SEC. 214. SPECIAL IMPACT AREAS.

``Special Impact Areas.--The Secretary is authorized to
make grants, enter into contracts and provide technical
assistance for projects and programs that the Secretary finds
will fulfill a pressing need of the area and be useful in
alleviating or preventing conditions of excessive
unemployment or underemployment or assist in providing useful
employment opportunities for the unemployed or underemployed
residents in the areas. In extending assistance under this
section, the Secretary may waive, in whole or in part,
as appropriate, the provisions of section 302 of this Act
provided that the Secretary determines that such
assistance will carry out the purposes of the Act.''.

SEC. 14. PERFORMANCE INCENTIVES.

Title II of PWEDA is further amended by adding a new
section 215 as follows:

``SEC. 215. PERFORMANCE INCENTIVES.

``(a) In accordance with regulations issued for such
purposes, the Secretary may award transferable performance
credits in an amount that does not exceed 10 percent of the
grant amount awarded under sections 201 or 209 of this Act on
or after the effective date of this amendment. The Secretary
shall base such performance incentives on the extent to which
a recipient meets or exceeds performance requirements
established in connection with extension of the assistance.
``(b) A recipient awarded a transferable performance credit
under this section may redeem the credit to increase the
Federal share of a subsequent grant funded under sections 201
and 209 of this Act above the maximum Federal share allowable
under section 204 up to 80 percent of the project cost. A
performance credit must be redeemed within 5 years of its
issue date.
``(c) An original recipient may also sell or transfer the
credit in its entirety to another eligible recipient for use
in connection with a grant approved by the Secretary under
this Act without reimbursement to the Secretary for
redemption in accordance with subsection (b) above.
``(d) The Secretary shall attach such terms and conditions
or limitations as the Secretary deems appropriate in issuing
a performance credit. Performance credits shall be paid out
of appropriations for economic development assistance
programs made available in the year of redemption to the
extent of availability.
``(e) The Secretary shall include information regarding
issuance of performance credits in the annual report under
section 603 of this Act.''.

SEC. 15. COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGIES.

Sub-paragraph (a)(3)(A) of section 302 of PWEDA (42 U.S.C.
Sec. 3162) is amended by adding ``maximizes effective
development and use of the workforce (consistent with any
applicable state and local workforce investment strategy
under the Workforce Investment Act of 1998 (29 U.S.C.
Sec. 2801 et. seq.),'' between ``access,'' and ``enhances''.

SEC. 16. DESIGNATION OF ECONOMIC DEVELOPMENT DISTRICTS.

Sub-paragraph (a)(3)(B) of section 401 of PWEDA (42 U.S.C.
Sec. 3171) is amended by striking ``by each affected State
and''.

SEC. 17. DISTRICT INCENTIVES.

Section 403 of PWEDA (42 U.S.C. Sec. 3173) is amended by
striking it in its entirety and re-designating sections 404
and 405 as sections 403 and 404. Section 403 as re-designated
is amended by adding at the end the following new sentence:

``If any part of an economic development district is in a
region covered by one or more other Regional Commissions as
defined in section 3(8) of this Act, the economic development
district shall ensure that a copy of the comprehensive
economic development strategy of the district is provided to
the affected regional commission.''.

SEC. 18. ECONOMIC DEVELOPMENT INFORMATION CLEARINGHOUSE.

Section 502 of PWEDA (42 U.S.C. Sec. 3192) is amended to
read as follows:

``SEC. 502. ECONOMIC DEVELOPMENT INFORMATION CLEARINGHOUSE.

``In carrying out this Act, the Secretary shall--
``(1) maintain a central information clearinghouse on the
Internet with information on economic development, economic
adjustment, disaster recovery, defense conversion, and trade
adjustment programs and activities of the Federal government,
links to State economic development organizations, and links
to other appropriate economic development resources;
``(2) assist potential and actual applications for economic
development, economic adjustment, disaster recovery, defense
conversion, and trade adjustment assistance under Federal and
State laws in locating and applying for the assistance;
``(3) assist areas described in section 301(a) and other
areas by providing to interested persons, communities,
industries, and businesses in the areas any technical
information, market research, or other forms of assistance,
information, or advice that would be useful in alleviating or
preventing conditions of excessive unemployment or
underemployment in the areas; and
``(4) obtain appropriate information from other Federal
agencies needed to carry out the duties under this Act.''.

SEC. 19. REMOVAL OF UNUSED AUTHORITY.

Section 505 of PWEDA (42 U.S.C. Sec. 3195) is amended by
striking it in its entirety and sections 506 and 507 are re-
designated as sections 505 and 506.

SEC. 20. PERFORMANCE EVALUATIONS OF GRANT RECIPIENTS.

Section 505 of PWEDA (42 U.S.C. Sec. 3196) as re-designated
is amended as follows:
(1) In subsection (c), strike ``after the effective date of
the Economic Development Administration Reform Act of 1998''.
(2) In paragraph (d)(2), strike ``and'' before
``disseminating results'' and insert ``, and measuring the
outcome-based results of the university centers' activities''
before the period at the end thereof.
(3) In paragraph (d)(3) of section 506, insert before the
period at the end thereof ``as evidenced by outcome-based
results, including the number of jobs created or retained,
and amount of private-sector funds leveraged''.
(4) In subsection (e) of section 506, strike ``university
center or'' each occasion it occurs.

SEC. 21. CITATION CORRECTIONS.

Section 602 of PWEDA (42 U.S.C. Sec. 3212) is amended by
striking the citations to ``40 U.S.C. Sec. 276A-276A-5'' and
``section 276c'' and inserting in lieu thereof, ``40 U.S.C.
Sec. 3141 et seq.'' and ``section 3145'' respectively.

SEC. 22. DELETION OF UNNECESSARY PROVISION.

Section 609 of PWEDA (42 U.S.C. Sec. 3219) is amended by
striking subsection (a) in its entirety and striking the
subsection designation ``(b)''.

SEC. 23. GENERAL AUTHORIZATION OF APPROPRIATIONS.

Section 701 of PWEDA (42 U.S.C. Sec. 3231) is amended to
read as follows:

``SEC 701. GENERAL AUTHORIZATION OF APPROPRIATIONS.

``(a) Economic Development Assistance Programs.--There are
authorized to be appropriated for economic development
assistance programs to carry out this Act $331,027,000 for
fiscal year 2004, and such sums as may be necessary for
fiscal years 2005, 2006, 2007, and 2008, to remain available
until expended.
``(b) Salaries and Expenses.--There are authorized to be
appropriated for salaries and expenses of administering this
Act $33,377,000 for fiscal year 2004, and such sums as may be
necessary for each of the fiscal years from 2005 through
2008, to remain available until expended.''.
____

Mr. INHOFE. Mr. President, today I join my colleague from Missouri,
Senator Bond, in introducing by request a bill to reauthorize the
Economic Development Administration.
EDA works with partners in local communities to create wealth and
minimize poverty by promoting favorable business environments to
attract private investment. Studies show that EDA uses Federal dollars
efficiently and effectively. EDA's average cost of creating and
retaining long-term jobs is among the lowest in government.
In my home State of Oklahoma, we have some communities that struggle
with economic distress, and EDA has worked long and hard with those
communities to bring in private capital investment and jobs. In fact,
over the last ten years, EDA projects have resulted in more than 15,000
jobs being created or saved. With an investment of about $53 million,
we have leveraged another 50 million in State and local dollars and
more than 1.1 billion in private sector dollars. I would call that a
wonderful success story.
I am pleased that the President has chosen to send to Congress a
reauthorization bill for this agency. His bill promotes coordination,
flexibility and performance--all excellent goals. The EDA's
authorization is set to expire on September 30, 2003, and I look
forward to working with the Administration, as well as my colleagues
here in the Senate and in the House of Representatives, to try to
reauthorize it before then.
______

By Mr. HATCH (for himself, Mr. Jeffords, Mr. Grassley, Mrs.
Lincoln, and Mr. Bingaman):
S. 1135. A bill to amend title XVIII of the Social Security Act to
establish a uniform national medicare physician fee schedule; to the
Committee on Finance.
Mr. HATCH. Mr. President, today I am pleased to introduce the
``Medicare Physician Payment Equity Act of 2003,'' a bill that corrects
a long-standing inequity in Medicare reimbursement to rural physicians.
I am delighted that my colleagues, Senators Jeffords, Grassley,
Lincoln, and Bingaman have joined me in addressing this issue and
introducing this bill.
Although many Americans are not aware of it, Medicare currently
reimburses physicians practicing in many

[[Page S7041]]

rural areas at a lower rate than those practicing in more densely
populated areas. A complicated formula, the geographic physician cost
index, reimburses physicians according to presumed regional differences
in the costs of their work, practice expenses, and medical liability
insurance premiums. But in almost every case, this formula penalizes
physicians who practice in rural settings.
As a result, the unfortunate effect of the current formula is that it
may contribute to regional disparities in access to health care. Rural
areas tend to have fewer physicians, fewer hospitals and patients often
have less access to subspecialty care. Penalizing doctors who practice
in rural settings by paying them substantially less than their urban
colleagues may contribute to this inequity in access to care.
According to the Rural Policy Research Institute, the Medicare
payment for an intermediate office outpatient visit in 2003 is 30
percent higher in New York City, $59.33, than it is in St. George, UT,
$45.75, and the reimbursement for an emergency room visit is 22 percent
higher in New York City, $161.82, than it is in St. George, UT,
$131.96.
Proponents of this system that pays doctors differently for the same
work claim that the purchasing power of physician compensation should
be similar regardless of where the work is performed. But others, and I
am one of them, believe that doctors should be compensated equally and
appropriately for their work regardless of where that work is
performed. I believe that it is time that we provide physicians with
equal pay for equal work. Physicians deserve it and their patients do
also. After all, the citizen in Utah pays Federal taxes at the same
rate as the citizen in New York. Why should the citizen in Utah receive
cheaper service?
The practice expense component of the geographic physician cost index
also penalizes rural physicians and their patients. Proponents of the
current system claim that it is more expensive for doctors to practice
medicine in urban areas where the cost of living is higher and the cost
of paying employees is thought to be higher. The practice expense
geographic physician cost index rewards physicians in these ``high
practice expense'' areas by reimbursing physician services at a higher
rate.
While it might be tempting to think that practice expenses in urban
areas are higher than those in rural areas, this is not necessarily the
case. Rural physicians sometimes must offer higher wages to attract
nurses and technicians to work in their communities. Furthermore, the
formula that is used to calculate the geographic practice expense does
not take certain key elements into consideration. Volume discounts can
result in lower costs for capital goods and supplies in densely
populated areas. Furthermore, a physician in a rural area who purchases
an expensive, but necessary piece of equipment, such as an ultrasound
machine, may use that equipment less frequently than a physician from a
densely populated area. As a result, the rural doctor may not be able
to pay for the capital investment as quickly as the urban physician.
The practice expense for the rural physician in such a case is higher.
In fact, we have known for years that additional resources are
sometimes necessary to attract doctors to practice in rural settings.
Physicians, nurses and allied health professionals are less prevalent
and hospitals are fewer and farther between in rural settings. In some
cases, certain services and subspecialty care are not available at all.
For this reason, Federal and State programs have offered tuition
payment and loan forgiveness programs to student physicians who agree
to practice in underserved areas, many of which are rural.
Federal payment policy with respect to physician services delivered
in rural and underserved areas has been described as contradictory--
paying bonuses to physicians for practicing in rural and underserved
areas on the one hand while devaluing physician clinical decision-
making and patient services in rural areas less, on the other. The
bottom line is this: For many years we have found it difficult in this
country to increase access to health care and improve the quality of
health care in rural communities. Penalizing physicians for practicing
in rural settings just does not make sense.
All Medicare beneficiaries, whether they live in an urban or rural
area, deserve excellent health care and access to outstanding doctors.
The bill I am introducing today, the Medicare Physician Payment Act,
addresses current disparities by creating a system that reimburses
physicians equitably regardless of where they practice. The bill
addresses all three components of the geographic physician cost index,
work, practice expense, and medical liability costs, by increasing
reimbursement for physicians in disadvantaged areas over a three-year
period and by eliminating disparities in reimbursement altogether in
the year four. If we pass this bill, doctors will no longer be
discouraged from practicing in the rural communities that desperately
need their services. I look forward to working with my colleagues in
the 108th Congress to pass this legislation.
Mr. JEFFORDS. Mr. President, I am pleased to join with my colleagues
Senators Hatch, Grassley, Lincoln, and Bingaman in introducing the
Medicare Physician Payment Equity Act of 2003. This bill corrects a
longstanding inequity in the Medicare Part B reimbursement methodology
that pays rural physicians less than what is received by physicians for
more densely populated areas who provide the same exact service. I am
pleased that we are able to offer a legislative solution to this
payment inequity.
Establishing Medicare reimbursement for physician services is a
complex process and many factors go into setting rates. Without going
into all of the intricacies of how fees are set, let me note that, for
any specific service, the physician fee schedule has three components--
physician work, practice expenses, and the cost of malpractice
insurance. Each of these components is further subjected to a
geographic adjustment, which is lower for rural areas than for urban
areas.
In my own State of Vermont, we face a chronic shortage of doctors in
our rural areas. Yet, when we need to find a physician for a rural
clinic, we compete in a national market to find providers. The
inequities in payments these physicians receive, however, makes it all
the more difficult to recruit and retain physicians. Rural physicians
have the same training, spend the same time with patients, and manage
the same office pressures as their urban counterparts. Their work
should be valued equally, and that is what this bill accomplishes.
I've heard from many people in Vermont about this issue. Tim
Thompson, M.D., President of the Vermont Medical Society, expressed his
concern that while Vermonters pay the same premiums as other Americans
to support the Medicare program, our doctors are paid less. This occurs
without regard to the quality or efficiency of health care services
they provide. In fact, according to the Center for Medicare Services,
Vermont physicians provide the second highest quality care in the
country, but the State is ranked forty-fourth in payments per Medicare
beneficiary. We should do more to reward quality health care regardless
of whether it is provided in an urban or rural setting. The Vermont
Medical Society has told me that they strongly support the Medicare
Physician Payment Equity Act of 2003 as an important first step in
reducing the existing inequities in payment levels.
I look forward to working with my colleagues to pass the Medicare
Physician Payment Equity Act of 2003.
______

By Mr. SPECTER (for himself and Mr. Bunning):
S. 1136. A bill to restate, clarify, and revise the Soldiers' and
Sailors' Civil Relief Act of 1940; to the Committee on Veterans'
Affairs.
Mr. SPECTER. Mr. President, as Chairman of the Committee on Veterans'
Affairs, I have sought recognition today to introduce legislation that
would restate, revise and update the Soldiers' and Sailors' Civil
Relief Act of 1940, SSCRA.
The SSCRA, in summary, suspends some of the legal obligations
incurred by military personnel prior to entry into the service so that
they might give their full attention to military duty. As was stated by
the Supreme Court in LeMaistre v. Leffers, 333 U.S. 1, 6, 1948, SSCRA
is to be read ``with an eye friendly to those who dropped their

[[Page S7042]]

affairs to answer their country's call.'' With operations in Iraq now
wrapping up, it is an appropriate time for a review of this World War
II-vintage legislation to see how it might be modified to better
address the needs of 21st Century servicemen and women.
I should mention at this point that I am aware that a bill to revise
the SSCRA, H.R. 100, is currently pending in the House, and that my
colleague from Georgia, Senator Zell Miller, has introduced companion
legislation in the Senate as S. 792. My legislation is similar to H.R.
100 and S. 792, but it contains modifications and additions to those
bills as suggested by reservists and their families, the Department of
Defense, and by other groups. It is my intention to work with Senator
Miller to craft legislation that incorporates the best features of the
two bills.
This legislation would rename SSCRA the ``Servicemembers' Civil
Relief Act'' to reflect that the Armed Forces are made up now of more
than just soldiers and sailors, and keep in place the core protections
that have been features of SSCRA for decades: stays of civil
proceedings during a person's period of military service; an interest
rate cap of 6 percent on debts incurred before active duty; protection
from eviction and termination of pre-service residential leases; and
legal residency protection. But it would also add several new
provisions to this core.
Currently, the Higher Education Act of 1965 prohibits the SSCRA's 6
percent interest cap from applying to Federally-insured student loans.
This bill would remove that prohibition. It would also require
institutions of higher education to permit students who are called to
active duty to return and complete classes at no additional cost.
In addition, SSCRA now precludes evictions from premises occupied by
servicemembers having a monthly rent $1200 or less. This $1200 ceiling
was set in 1991; it has not been adjusted since. This legislation would
raise the rent ceiling to $1950 or the amount of a servicemember's
basic allowance for housing, whichever is higher. It would thereby take
post-1991 inflation into account, and avoid the need for frequent
amendments to the law since housing allowances are adjusted annually
based on housing costs in the area where the servicemember is assigned.
When the SSCRA was originally enacted in 1940, automobiles were not
commonly leased. That, of course, has changed; many people now choose
leasing as a way to finance their personal transportation needs. This
legislation would protect servicemembers who have leased cars--just as
it does those who had chosen the more traditional form of auto
financing--in two ways. First, it would prohibit lessors, like purchase
financers, from repossessing personal property for nonpayment or breach
without court action. Second, it would allow servicemembers called to
active duty to terminate automobile leases just as they can real
property leases.
This bill also takes steps to offer some protection to professionals
and small business owners who are called to active duty. It would
include the practice of law among the ``professional services'' for
which professional liability insurance obligations could be suspended
subject to mandatory reinstatement. It would also authorize the
Secretary of Defense to designate other professional callings that
would be subject to these protections. And it would protect the assets
of small business owners during military service if the servicemember
is personally liable for trade or business debts.
Since 1940, the Soldiers' and Sailors' Civil Relief Act has provided
important protections to the men and women who wear the uniform. But
60-plus years later, it is time for Congress to take a critical look at
this law and revise it to reflect changes in our society since it was
originally enacted. With the assistance of the Department of Defense,
the National Guard Bureau, the Enlisted Association of the National
Guard, and the Small Business Administration, the staff of the
Committee on Veterans' Affairs, most notably Mr. David Goetz, the
Committee's Associate Counsel, has undertaken the painstaking review
that has yielded this rather extensive bill. It is my intention to seek
further comment and then guide this important reform legislation to
enactment.
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. 1136

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

SECTION 1. RESTATEMENT OF ACT.

The Soldiers' and Sailors' Civil Relief Act of 1940 (50
U.S.C. App. 501 et seq.) is amended to read as follows:

``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

``(a) Short Title.--This Act may be cited as the
`Servicemembers Civil Relief Act'.
``(b) Table of Contents.--The table of contents of this Act
is as follows:

``Sec. 1. Short title; table of contents.
``Sec. 2. Purposes.

``TITLE I--GENERAL PROVISIONS

``Sec. 101. Definitions.
``Sec. 102. Jurisdiction and applicability of Act.
``Sec. 103. Protection of persons secondarily liable.
``Sec. 104. Extension of protections to citizens serving with allied
forces.
``Sec. 105. Notification of benefits.
``Sec. 106. Extension of rights and protections to Reserves ordered to
report for military service and to persons ordered to
report for induction.
``Sec. 107. Waiver of rights pursuant to written agreement.
``Sec. 108. Exercise of rights under Act not to affect certain future
financial transactions.
``Sec. 109. Legal representatives.

``TITLE II--GENERAL RELIEF

``Sec. 201. Protection of servicemembers against default judgments.
``Sec. 202. Stay of proceedings when servicemember defendant has
notice.
``Sec. 203. Fines and penalties under contracts.
``Sec. 204. Stay or vacation of execution of judgments, attachments,
and garnishments.
``Sec. 205. Duration and term of stays; codefendants not in service.
``Sec. 206. Statute of limitations.
``Sec. 207. Maximum rate of interest on debts incurred before military
service.

``TITLE III--RENT, INSTALLMENT CONTRACTS, MORTGAGES, LIENS, ASSIGNMENT,
LEASES.

``Sec. 301. Evictions and distress.
``Sec. 302. Protection under installment contracts for purchase or
lease.
``Sec. 303. Mortgages and trust deeds.
``Sec. 304. Settlement of stayed cases relating to personal property.
``Sec. 305. Termination of leases by lessees.
``Sec. 306. Protection of life insurance policy.
``Sec. 307. Enforcement of storage liens.
``Sec. 308. Extension of protections to dependents.

``TITLE IV--INSURANCE

``Sec. 401. Definitions.
``Sec. 402. Insurance rights and protections.
``Sec. 403. Application for insurance protection.
``Sec. 404. Policies entitled to protection and lapse of policies.
``Sec. 405. Policy restrictions.
``Sec. 406. Deduction of unpaid premiums.
``Sec. 407. Premiums and interest guaranteed by United States.
``Sec. 408. Regulations.
``Sec. 409. Review of findings of fact and conclusions of law.

``TITLE V--TAXES AND PUBLIC LANDS

``Sec. 501. Taxes respecting personal property, money, credits, and
real property.
``Sec. 502. Rights in public lands.
``Sec. 503. Desert-land entries.
``Sec. 504. Mining claims.
``Sec. 505. Mineral permits and leases.
``Sec. 506. Perfection or defense of rights.
``Sec. 507. Distribution of information concerning benefits of title.
``Sec. 508. Land rights of servicemembers.
``Sec. 509. Regulations.
``Sec. 510. Income taxes.
``Sec. 511. Residence for tax purposes.

``TITLE VI--ADMINISTRATIVE REMEDIES

``Sec. 601. Inappropriate use of Act.
``Sec. 602. Certificates of service; persons reported missing.
``Sec. 603. Interlocutory orders.

``TITLE VII--FURTHER RELIEF

``Sec. 701. Anticipatory relief.
``Sec. 702. Power of attorney.
``Sec. 703. Professional liability protection.
``Sec. 704. Health insurance reinstatement.
``Sec. 705. Guarantee of residency for military personnel.
``Sec. 706. Business or trade obligations.
``Sec. 707. Return to classes at no extra cost.

``SEC. 2. PURPOSES.

``The purposes of this Act are--
``(1) to provide for, strengthen, and expedite the national
defense through protection extended by this Act to
servicemembers of the United States to enable such persons to
devote their entire energy to the defense needs of the
Nation; and
``(2) to provide for the temporary suspension of judicial
and administrative proceedings and transactions that may
adversely affect the civil rights of servicemembers during
their military service.

[[Page S7043]]

``TITLE I--GENERAL PROVISIONS

``SEC. 101. DEFINITIONS.

``For the purposes of this Act:
``(1) Servicemember.--The term `servicemember' means a
member of the uniformed services, as that term is defined in
section 101(a)(5) of title 10, United States Code.
``(2) Military service.--
``(A) With respect to a member of the Army, Navy, Air
Force, Marine Corps, or Coast Guard, the term `military
service' means active duty, as that term is defined in
section 101(d)(1) of title 10, United States Code.
``(B) Active service of commissioned officers of the Public
Health Service or National Oceanic and Atmospheric
Administration shall be deemed to be `military service' for
the purposes of this Act.
``(C) Service of a member of the National Guard under a
call to active service authorized by the President or the
Secretary of Defense for a period of more than 30 consecutive
days under section 502(f) of title 32, United States Code,
for purposes of responding to a national emergency declared
by the President and supported by Federal funds shall be
deemed to be `military service' for the purposes of this Act.
``(3) Period of military service.--The term `period of
military service' means the period beginning on the date on
which a servicemember enters military service and ending on
the date on which the servicemember is released from military
service or dies while in military service.
``(4) Dependent.--The term `dependent', with respect to a
servicemember, means--
``(A) the servicemember's spouse;
``(B) the servicemember's child (as defined in section
101(4) of title 38, United States Code); or
``(C) an individual for whom the servicemember provided
more than one-half of the individual's support for 180 days
immediately preceding an application for relief under this
Act.
``(5) Court.--The term `court' means a court or an
administrative agency of the United States or of any State
(including any political subdivision of a State), whether or
not a court or administrative agency of record.
``(6) State.--The term `State' includes--
``(A) a commonwealth, territory, or possession of the
United States; and
``(B) the District of Columbia.
``(7) Secretary concerned.--The term `Secretary
concerned'--
``(A) with respect to a member of the armed forces, has the
meaning given that term in section 101(a)(9) of title 10,
United States Code;
``(B) with respect to a commissioned officer of the Public
Health Service, means the Secretary of Health and Human
Services; and
``(C) with respect to a commissioned officer of the
National Oceanic and Atmospheric Administration, means the
Secretary of Commerce.
``(8) Motor vehicle.--The term `motor vehicle' has the
meaning given that term in section 30102(a)(6) of title 49,
United States Code.

``SEC. 102. JURISDICTION AND APPLICABILITY OF ACT.

``(a) Jurisdiction.--This Act applies to--
``(1) the United States;
``(2) each of the States, including the political
subdivisions thereof; and
``(3) all territory subject to the jurisdiction of the
United States.
``(b) Applicability to Proceedings.--This Act applies to
any judicial or administrative proceeding commenced in any
court or agency in any jurisdiction subject to this Act. This
Act does not apply to criminal proceedings.
``(c) Court in Which Application May Be Made.--When under
this Act any application is required to be made to a court in
which no proceeding has already been commenced with respect
to the matter, such application may be made to any court
which would otherwise have jurisdiction over the matter.

``SEC. 103. PROTECTION OF PERSONS SECONDARILY LIABLE.

``(a) Extension of Protection When Actions Stayed,
Postponed, or Suspended.--Whenever pursuant to this Act a
court stays, postpones, or suspends (1) the enforcement of an
obligation or liability, (2) the prosecution of a suit or
proceeding, (3) the entry or enforcement of an order, writ,
judgment, or decree, or (4) the performance of any other act,
the court may likewise grant such a stay, postponement, or
suspension to a surety, guarantor, endorser, accommodation
maker, comaker, or other person who is or may be primarily or
secondarily subject to the obligation or liability the
performance or enforcement of which is stayed, postponed, or
suspended.
``(b) Vacation or Set-Aside of Judgments.--When a judgment
or decree is vacated or set aside, in whole or in part,
pursuant to this Act, the court may also set aside or vacate,
as the case may be, the judgment or decree as to a surety,
guarantor, endorser, accommodation maker, comaker, or other
person who is or may be primarily or secondarily liable on
the contract or liability for the enforcement of the judgment
or decree.
``(c) Bail Bond Not To Be Enforced During Period of
Military Service.--A court may not enforce a bail bond during
the period of military service of the principal on the bond
when military service prevents the surety from obtaining the
attendance of the principal. The court may discharge the
surety and exonerate the bail, in accordance with principles
of equity and justice, during or after the period of military
service of the principal.
``(d) Waiver of Rights.--
``(1) Waivers not precluded.--This Act does not prevent a
waiver in writing by a surety, guarantor, endorser,
accommodation maker, comaker, or other person (whether
primarily or secondarily liable on an obligation or
liability) of the protections provided under subsections (a)
and (b). Any such waiver is effective only if it is executed
as an instrument separate from the obligation or liability
with respect to which it applies.
``(2) Waiver invalidated upon entrance to military
service.--If a waiver under paragraph (1) is executed by an
individual who after the execution of the waiver enters
military service, or by a dependent of an individual who
after the execution of the waiver enters military service,
the waiver is not valid after the beginning of the period of
such military service unless the waiver was executed by such
individual or dependent during the period specified in
section 106.

``SEC. 104. EXTENSION OF PROTECTIONS TO CITIZENS SERVING WITH
ALLIED FORCES.

``A citizen of the United States who is serving with the
forces of a nation with which the United States is allied in
the prosecution of a war or military action is entitled to
the relief and protections provided under this Act if that
service with the allied force is similar to military service
as defined in this Act. The relief and protections provided
to such citizen shall terminate on the date of discharge or
release from such service.

``SEC. 105. NOTIFICATION OF BENEFITS.

``The Secretary concerned shall ensure that notice of the
benefits accorded by this Act is provided to persons in
military service and to persons entering military service.

``SEC. 106. EXTENSION OF RIGHTS AND PROTECTIONS TO RESERVES
ORDERED TO REPORT FOR MILITARY SERVICE AND TO
PERSONS ORDERED TO REPORT FOR INDUCTION.

``(a) Reserves Ordered To Report for Military Service.--A
member of a reserve component who is ordered to report for
military service is entitled to the rights and protections of
this title and titles II and III during the period beginning
on the date of the member's receipt of the order and ending
on the date on which the member reports for military service
(or, if the order is revoked before the member so reports, or
the date on which the order is revoked).
``(b) Persons Ordered To Report for Induction.--A person
who has been ordered to report for induction under the
Military Selective Service Act (50 U.S.C. App. 451 et seq.)
is entitled to the rights and protections provided a
servicemember under this title and titles II and III during
the period beginning on the date of receipt of the order for
induction and ending on the date on which the person reports
for induction (or, if the order to report for induction is
revoked before the date on which the person reports for
induction, on the date on which the order is revoked).

``SEC. 107. WAIVER OF RIGHTS PURSUANT TO WRITTEN AGREEMENT.

``(a) In General.--A servicemember may waive any of the
rights and protections provided by this Act. In the case of a
waiver that permits an action described in subsection (b),
the waiver is effective only if made pursuant to a written
agreement of the parties that is executed during or after the
servicemember's period of military service. The written
agreement shall specify the legal instrument to which the
waiver applies and, if the servicemember is not a party to
that instrument, the servicemember concerned.
``(b) Actions Requiring Waivers in Writing.--The
requirement in subsection (a) for a written waiver applies to
the following:
``(1) The modification, termination, or cancellation of--
``(A) a contract, lease, or bailment; or
``(B) an obligation secured by a mortgage, trust, deed,
lien, or other security in the nature of a mortgage.
``(2) The repossession, retention, foreclosure, sale,
forfeiture, or taking possession of property that--
``(A) is security for any obligation; or
``(B) was purchased or received under a contract, lease, or
bailment.
``(c) Coverage of Periods After Orders Received.--For the
purposes of this section--
``(1) a person to whom section 106 applies shall be
considered to be a servicemember; and
``(2) the period with respect to such a person specified in
subsection (a) or (b), as the case may be, of section 106
shall be considered to be a period of military service.

``SEC. 108. EXERCISE OF RIGHTS UNDER ACT NOT TO AFFECT
CERTAIN FUTURE FINANCIAL TRANSACTIONS.

``Application by a servicemember for, or receipt by a
servicemember of, a stay, postponement, or suspension
pursuant to this Act in the payment of a tax, fine, penalty,
insurance premium, or other civil obligation or liability of
that servicemember shall not itself (without regard to other
considerations) provide the basis for any of the following:
``(1) A determination by a lender or other person that the
servicemember is unable to pay the civil obligation or
liability in accordance with its terms.

[[Page S7044]]

``(2) With respect to a credit transaction between a
creditor and the servicemember--
``(A) a denial or revocation of credit by the creditor;
``(B) a change by the creditor in the terms of an existing
credit arrangement; or
``(C) a refusal by the creditor to grant credit to the
servicemember in substantially the amount or on substantially
the terms requested.
``(3) An adverse report relating to the creditworthiness of
the servicemember by or to a person engaged in the practice
of assembling or evaluating consumer credit information.
``(4) A refusal by an insurer to insure the servicemember.
``(5) An annotation in a servicemember's record by a
creditor or a person engaged in the practice of assembling or
evaluating consumer credit information, identifying the
servicemember as a member of the National Guard or a reserve
component.
``(6) A change in the terms offered or conditions required
for the issuance of insurance.

``SEC. 109. LEGAL REPRESENTATIVES.

``(a) Representative.--A legal representative of a
servicemember for purposes of this Act is either of the
following:
``(1) An attorney acting on the behalf of a servicemember.
``(2) An individual possessing a power of attorney.
``(b) Application.--Whenever the term `servicemember' is
used in this Act, such term shall be treated as including a
reference to a legal representative of the servicemember.

``TITLE II--GENERAL RELIEF

``SEC. 201. PROTECTION OF SERVICEMEMBERS AGAINST DEFAULT
JUDGMENTS.

``(a) Applicability of Section.--This section applies to
any civil action or proceeding in which the defendant does
not make an appearance.
``(b) Affidavit Requirement.--
``(1) Plaintiff to file affidavit.--In any action or
proceeding covered by this section, the court, before
entering judgment for the plaintiff, shall require the
plaintiff to file with the court an affidavit--
``(A) stating whether or not the defendant is in military
service and showing necessary facts to support the affidavit;
or
``(B) if the plaintiff is unable to determine whether or
not the defendant is in military service, stating that the
plaintiff is unable to determine whether or not the defendant
is in military service.
``(2) Appointment of attorney to represent defendant in
military service.--If in an action covered by this section it
appears that the defendant is in military service, the court
may not enter a judgment until after the court appoints an
attorney to represent the defendant. If an attorney appointed
under this section to represent a servicemember cannot locate
the servicemember, actions by the attorney in the case shall
not waive any defense of the servicemember or otherwise bind
the servicemember.
``(3) Defendant's military status not ascertained by
affidavit.--If based upon the affidavits filed in such an
action, the court is unable to determine whether the
defendant is in military service, the court, before entering
judgment, may require the plaintiff to file a bond in an
amount approved by the court. If the defendant is later found
to be in military service, the bond shall be available to
indemnify the defendant against any loss or damage the
defendant may suffer by reason of any judgment for the
plaintiff against the defendant, should the judgment be set
aside in whole or in part. The bond shall remain in effect
until expiration of the time for appeal and setting aside of
a judgment under applicable Federal or State law or
regulation or under any applicable ordinance of a political
subdivision of a State. The court may issue such orders or
enter such judgments as the court determines necessary to
protect the rights of the defendant under this Act.
``(4) Satisfaction of requirement for affidavit.--The
requirement for an affidavit under paragraph (1) may be
satisfied by a statement, declaration, verification, or
certificate, in writing, subscribed and certified or declared
to be true under penalty of perjury.
``(c) Penalty for Making or Using False Affidavit.--A
person who makes or uses an affidavit permitted under
subsection (b) (or a statement, declaration, verification, or
certificate as authorized under subsection (b)(4)) knowing it
to be false, shall be fined as provided in title 18, United
States Code, imprisoned for not more than one year, or both.
``(d) Stay of Proceedings.--In an action covered by this
section in which the defendant is in military service, the
court shall grant a stay of proceedings for a minimum period
of 90 days under this subsection upon application of counsel,
or on the court's own motion, if the court determines that--
``(1) there may be a defense to the action and a defense
cannot be presented without the presence of the defendant; or
``(2) after due diligence, counsel has been unable to
contact the defendant or otherwise determine if a meritorious
defense exists.
``(e) Inapplicability of Section 202 Procedures.--A stay of
proceedings under subsection (d) shall not be controlled by
procedures or requirements under section 202.
``(f) Section 202 Protection.--If a servicemember who is a
defendant in an action covered by this section receives
actual notice of the action, the servicemember may request a
stay of proceeding under section 202.
``(g) Vacation or Setting Aside of Default Judgments.--
``(1) Authority for court to vacate or set aside
judgment.--If a default judgment is entered in an action
covered by this section against a servicemember during the
servicemember's period of military service (or within 60 days
after termination of or release from such military service),
the court entering the judgment shall, upon application by or
on behalf of the servicemember, reopen the judgment for the
purpose of allowing the servicemember to defend the action if
it appears that--
``(A) the servicemember was materially affected by reason
of that military service in making a defense to the action;
and
``(B) the servicemember has a meritorious or legal defense
to the action or some part of it.
``(2) Time for filing application.--An application under
this subsection must be filed not later than 90 days after
the date of the termination of or release from military
service.
``(h) Protection of Bona Fide Purchaser.--If a court
vacates, sets aside, or reverses a default judgment against a
servicemember and the vacating, setting aside, or reversing
is because of a provision of this Act, that action shall not
impair a right or title acquired by a bona fide purchaser for
value under the default judgment.

``SEC. 202. STAY OF PROCEEDINGS WHEN SERVICEMEMBER DEFENDANT
HAS NOTICE.

``(a) Applicability of Section.--This section applies to
any civil action or proceeding in which the defendant at the
time of filing an application under this section--
``(1) is in military service or is within 90 days after
termination of or release from military service; and
``(2) has received notice of the action or proceeding.
``(b) Automatic Stay.--
``(1) Authority for stay.--At any stage before final
judgment in a civil action or proceeding in which a
servicemember described in subsection (a) is a party, the
court may on its own motion and shall, upon application by
the servicemember, stay the action for a period of not less
than 90 days, if the conditions in paragraph (2) are met.
``(2) Conditions for stay.--An application for a stay under
paragraph (1) shall include the following:
``(A) A letter or other communication setting forth facts
stating the manner in which current military duty
requirements materially affect the servicemember's ability to
appear and stating a date when the servicemember will be
available to appear.
``(B) A letter or other communication from the
servicemember's commanding officer stating that the
servicemember's current military duty prevents appearance and
that military leave is not authorized for the servicemember
at the time of the letter.
``(c) Application Not a Waiver of Defenses.--An application
for a stay by a servicemember or a servicemember's
representative under this section does not constitute an
appearance for jurisdictional purposes and does not
constitute a waiver of any substantive or procedural defense
(including a defense relating to lack of personal
jurisdiction).
``(d) Additional Stay.--
``(1) Application.--A servicemember who is granted a stay
of a civil action or proceeding under subsection (b) may
apply for an additional stay based on continuing material
affect of military duty on the servicemember's ability to
appear. Such an application may be made by the servicemember
at the time of the initial application under subsection (b)
or when it appears that the servicemember is unavailable to
prosecute or defend the action. The same information required
under subsection (b)(2) shall be included in an application
under this subsection.
``(2) Appointment of counsel when additional stay
refused.--If the court refuses to grant an additional stay of
proceedings under paragraph (1), the court shall appoint
counsel to represent the servicemember in the action or
proceeding.
``(e) Coordination With Section 201.--A servicemember who
applies for a stay under this section and is unsuccessful may
not seek the protections afforded by section 201.
``(f) Inapplicability to Section 301.--The protections of
this section do not apply to section 301.

``SEC. 203. FINES AND PENALTIES UNDER CONTRACTS.

``(a) Prohibition of Penalties.--When an action for
compliance with the terms of a contract is stayed pursuant to
this Act, a penalty shall not accrue for failure to comply
with the terms of the contract during the period of the stay.
``(b) Reduction or Waiver of Fines or Penalties.--If a
servicemember fails to perform an obligation arising under a
contract and a penalty is incurred arising from that
nonperformance, a court may reduce or waive the fine or
penalty if--
``(1) the servicemember was in military service at the time
the fine or penalty was incurred; and
``(2) the ability of the servicemember to perform the
obligation was materially affected by such military service.

``SEC. 204. STAY OR VACATION OF EXECUTION OF JUDGMENTS,
ATTACHMENTS, AND GARNISHMENTS.

``(a) Court Action Upon Material Affect Determination.--If
a servicemember, in the opinion of the court, is materially
affected

[[Page S7045]]

by reason of military service in complying with a court
judgment or order, the court may on its own motion and shall
on application by the servicemember--
``(1) stay the execution of such judgment or order entered
against the servicemember; and
``(2) vacate or stay an attachment or garnishment of
property, money, or debts in the possession of the
servicemember or a third party, whether before or after such
judgment.
``(b) Applicability.--This section applies to an action or
proceeding commenced in a court against a servicemember
before or during the period of the servicemember's military
service or within 60 days after such service terminates.

``SEC. 205. DURATION AND TERM OF STAYS; CODEFENDANTS NOT IN
SERVICE.

``(a) Period of Stay.--A stay of an action, proceeding,
attachment, or execution made pursuant to the provisions of
this Act by a court may be ordered for the period of military
service and 90 days thereafter, or for any part of that
period. The court may set the terms and amounts for such
installment payments as is considered reasonable by the
court.
``(b) Codefendants.--If the servicemember is a codefendant
with others who are not in military service and who are not
entitled to the relief and protections provided under this
Act, the plaintiff may proceed against those other defendants
with the approval of the court.
``(c) Inapplicability of Section.--This section does not
apply to sections 202 and 701.

``SEC. 206. STATUTE OF LIMITATIONS.

``(a) Tolling of Statutes of Limitation During Military
Service.--The period of a servicemember's military service
may not be included in computing any period limited by law,
regulation, or order for the bringing of any action or
proceeding in a court, or in any board, bureau, commission,
department, or other agency of a State (or political
subdivision of a State) or the United States by or against
the servicemember or the servicemember's heirs, executors,
administrators, or assigns.
``(b) Redemption of Real Property.--A period of military
service may not be included in computing any period provided
by law for the redemption of real property sold or forfeited
to enforce an obligation, tax, or assessment.
``(c) Inapplicability to Internal Revenue Laws.--This
section does not apply to any period of limitation prescribed
by or under the internal revenue laws of the United States.

``SEC. 207. MAXIMUM RATE OF INTEREST ON DEBTS INCURRED BEFORE
MILITARY SERVICE.

``(a) Interest Rate Limitation.--
``(1) 6-percent limit.--An obligation or liability bearing
interest at a rate in excess of 6 percent per year that is
incurred by a servicemember, or the servicemember and the
servicemember's spouse jointly, before the servicemember
enters military service shall not bear interest at a rate in
excess of 6 percent per year during the period of military
service.
``(2) Applicability to student loans.--Notwithstanding
section 428(d) of the Higher Education Act of 1965 (20 U.S.C.
1078(d)), paragraph (1) applies with respect to an obligation
or liability of a servicemember, or the servicemember and the
servicemember's spouse jointly, entered into under the Higher
Education Act of 1965 (20 U.S.C. 1001 et seq.)
``(3) Forgiveness of interest in excess of 6 percent.--
Interest at a rate in excess of 6 percent per year that would
otherwise be incurred but for the prohibition in paragraph
(1) is forgiven.
``(4) Prevention of acceleration of principal.--The amount
of any periodic payment due from a servicemember under the
terms of the instrument that created an obligation or
liability covered by this section shall be reduced by the
amount of the interest forgiven under paragraph (3) that is
allocable to the period for which such payment is made.
``(b) Implementation of Limitation.--
``(1) Written notice to creditor.--In order for an
obligation or liability of a servicemember to be subject to
the interest rate limitation in subsection (a), the
servicemember shall provide to the creditor written notice
and a copy of the military orders calling the servicemember
to military service and any orders further extending military
service, not later than 180 days after the date of the
servicemember's termination or release from military service.
``(2) Limitation effective as of date of order to active
duty.--Upon receipt of written notice and a copy of orders
calling a servicemember to military service, the creditor
shall treat the debt in accordance with subsection (a),
effective as of the date on which the servicemember is called
to military service.
``(c) Creditor Protection.--A court may grant a creditor
relief from the limitations of this section if, in the
opinion of the court, the ability of the servicemember to pay
interest upon the obligation or liability at a rate in excess
of 6 percent per year is not materially affected by reason of
the servicemember's military service.
``(d) Interest Defined.--As used in this section, the term
`interest' means simple interest plus service charges,
renewal charges, fees, or any other charges (except bona fide
insurance) with respect to an obligation or liability.

``TITLE III--RENT, INSTALLMENT CONTRACTS, MORTGAGES, LIENS, ASSIGNMENT,
LEASES

``SEC. 301. EVICTIONS AND DISTRESS.

``(a) Court-Ordered Eviction.--Except by court order, a
landlord (or another person with paramount title) may not--
``(1) evict a servicemember, or the dependents of a
servicemember, during a period of military service of the
servicemember, from premises--
``(A) that are occupied or intended to be occupied
primarily as a residence; and
``(B) for which the monthly rent does not exceed the
greater of--
``(i) $1,950; or
``(ii) the monthly basic allowance for housing to which the
servicemember is entitled under section 403 of title 37,
United States Code; or
``(2) subject such premises to a distress during the period
of military service.
``(b) Stay of Execution.--
``(1) Court authority.--Upon an application for eviction or
distress with respect to premises covered by this section,
the court may on its own motion and shall, if a request is
made by or on behalf of a servicemember whose ability to pay
the agreed rent is materially affected by military service--
``(A) stay the proceedings for a period of 90 days, unless
in the opinion of the court, justice and equity require a
longer or shorter period of time; or
``(B) adjust the obligation under the lease to preserve the
interests of all parties.
``(2) Relief to landlord.--If a stay is granted under
paragraph (1), the court may grant to the landlord (or other
person with paramount title) such relief as equity may
require.
``(c) Penalties.--
``(1) Misdemeanor.--Except as provided in subsection (a), a
person who knowingly takes part in an eviction or distress
described in subsection (a), or who knowingly attempts to do
so, shall be fined as provided in title 18, United States
Code, imprisoned for not more than one year, or both.
``(2) Preservation of other remedies and rights.--The
remedies and rights provided under this section are in
addition to and do not preclude any remedy for wrongful
conversion (or wrongful eviction) otherwise available under
the law to the person claiming relief under this section,
including any award for consequential and punitive damages.
``(d) Rent Allotment From Pay of Servicemember.--To the
extent required by a court order related to property which is
the subject of a court action under this section, the
Secretary concerned shall make an allotment from the pay of a
servicemember to satisfy the terms of such order, except that
any such allotment shall be subject to regulations prescribed
by the Secretary concerned establishing the maximum amount of
pay of servicemembers that may be allotted under this
subsection.
``(e) Limitation of Applicability.--Section 202 is not
applicable to this section.

``SEC. 302. PROTECTION UNDER INSTALLMENT CONTRACTS FOR
PURCHASE OR LEASE.

``(a) Protection Upon Breach of Contract.--
``(1) Protection after entering military service.--After a
servicemember enters military service, a contract by the
servicemember for--
``(A) the purchase of real or personal property (including
a motor vehicle); or
``(B) the lease or bailment of such property,

may not be rescinded or terminated for a breach of terms of
the contract occurring before or during that person's
military service, nor may the property be repossessed for
such breach without a court order.
``(2) Applicability.--This section applies only to a
contract for which a deposit or installment has been paid by
the servicemember before the servicemember enters military
service.
``(b) Penalties.--
``(1) Misdemeanor.--A person who knowingly resumes
possession of property in violation of subsection (a), or in
violation of section 108, or who knowingly attempts to do so,
shall be fined as provided in title 18, United States Code,
imprisoned for not more than one year, or both.
``(2) Preservation of other remedies and rights.--The
remedies and rights provided under this section are in
addition to and do not preclude any remedy for wrongful
conversion otherwise available under law to the person
claiming relief under this section, including any award for
consequential and punitive damages.
``(c) Authority of Court.--In a hearing based on this
section, the court--
``(1) may order repayment to the servicemember of all or
part of the prior installments or deposits as a condition of
terminating the contract and resuming possession of the
property;
``(2) may, on its own motion, and shall on application by a
servicemember when the servicemember's ability to comply with
the contract is materially affected by military service, stay
the proceedings for a period of time as, in the opinion of
the court, justice and equity require; or
``(3) may make other disposition as is equitable to
preserve the interests of all parties.

``SEC. 303. MORTGAGES AND TRUST DEEDS.

``(a) Mortgage as Security.--This section applies only to
an obligation on real or personal property owned by a
servicemember that--

[[Page S7046]]

``(1) originated before the period of the servicemember's
military service and for which the servicemember is still
obligated; and
``(2) is secured by a mortgage, trust deed, or other
security in the nature of a mortgage.
``(b) Stay of Proceedings and Adjustment of Obligation.--In
an action filed during, or within 90 days after, a
servicemember's period of military service to enforce an
obligation described in subsection (a), the court may after a
hearing and on its own motion and shall upon application by a
servicemember when the servicemember's ability to comply with
the obligation is materially affected by military service--
``(1) stay the proceedings for a period of time as justice
and equity require, or
``(2) adjust the obligation to preserve the interests of
all parties.
``(c) Sale or Foreclosure.--A sale, foreclosure, or seizure
of property for a breach of an obligation described in
subsection (a) shall not be valid if made during, or within
90 days after, the period of the servicemember's military
service except--
``(1) upon a court order granted before such sale,
foreclosure, or seizure with a return made and approved by
the court; or
``(2) if made pursuant to an agreement as provided in
section 108.
``(d) Penalties.--
``(1) Misdemeanor.--A person who knowingly makes or causes
to be made a sale, foreclosure, or seizure of property that
is prohibited by subsection (c), or who knowingly attempts to
do so, shall be fined as provided in title 18, United States
Code, imprisoned for not more than one year, or both.
``(2) Preservation of other remedies.--The remedies and
rights provided under this section are in addition to and do
not preclude any remedy for wrongful conversion otherwise
available under law to the person claiming relief under this
section, including consequential and punitive damages.

``SEC. 304. SETTLEMENT OF STAYED CASES RELATING TO PERSONAL
PROPERTY.

``(a) Appraisal of Property.--When a stay is granted
pursuant to this Act in a proceeding to foreclose a mortgage
on or to repossess personal property, or to rescind or
terminate a contract for the purchase of personal property,
the court may appoint three disinterested parties to appraise
the property.
``(b) Equity Payment.--Based on the appraisal, and if undue
hardship to the servicemember's dependents will not result,
the court may order that the amount of the servicemember's
equity in the property be paid to the servicemember, or the
servicemember's dependents, as a condition of foreclosing the
mortgage, repossessing the property, or rescinding or
terminating the contract.

``SEC. 305. TERMINATION OF LEASES BY LESSEES.

``(a) Covered Leases of Real Property.--This section
applies to the lease of premises occupied, or intended to be
occupied, by a servicemember or a servicemember's dependents
for a residential, professional, business, agricultural, or
similar purpose if--
``(1) the lease is executed by or on behalf of a person who
thereafter and during the term of the lease enters military
service; or
``(2) the servicemember, while in military service,
executes a lease and thereafter receives military orders for
a permanent change of station or to deploy with a military
unit for a period of not less than 90 days.
``(b) Covered Leases of Vehicles.--This section applies to
the lease of a motor vehicle used, or intended to be used, by
a servicemember or a servicemember's dependents if the lease
is executed by or on behalf of a person who thereafter and
during the term of the lease enters military service.
``(c) Notice to Lessor.--
``(1) Delivery of notice.--A lease described in subsection
(a) or (b) is terminated when written notice is delivered by
the lessee to the lessor (or the lessor's grantee) or to the
lessor's agent (or the agent's grantee).
``(2) Time for notice.--The written notice may be delivered
at any time after the lessee's entry into military service
or, in the case of a lease described in subsection (a), the
date of the military orders for a permanent change of station
or to deploy for a period of not less than 90 days.
``(3) Nature of notice.--Delivery may be accomplished--
``(A) by hand delivery;
``(B) by private business carrier; or
``(C) by placing the written notice in an envelope with
sufficient postage and addressed to the lessor (or the
lessor's grantee) or to the lessor's agent (or the agent's
grantee) and depositing the written notice in the United
States mails.
``(d) Effective Date of Termination.--
``(1) Lease with monthly rent.--Termination of a lease
providing for monthly payment of rent shall be effective 30
days after the first date on which the next rental payment is
due and payable after the date on which the notice is
delivered.
``(2) Other lease.--All other leases terminate on the last
day of the month following the month in which the notice is
delivered.
``(e) Arrearages.--Rents or lease amounts unpaid for the
period preceding termination shall be paid on a prorated
basis.
``(f) Amounts Paid in Advance.--Rents or lease amounts paid
in advance for a period succeeding termination shall be
refunded to the lessee by the lessor (or the lessor's
assignee or the assignee's agent).
``(g) Relief to Lessor.--Upon application by the lessor to
a court before the termination date provided in the written
notice, relief granted by this section to a servicemember may
be modified as justice and equity require.
``(h) Penalties.--
``(1) Misdemeanor.--Any person who knowingly seizes, holds,
or detains the personal effects, security deposit, or other
property of a servicemember or a servicemember's dependent
who lawfully terminates a lease covered by this section, or
who knowingly interferes with the removal of such property
from premises covered by such lease, for the purpose of
subjecting or attempting to subject any of such property to a
claim for rent or lease payments accruing after the date of
termination of such lease, or attempts to do so, shall be
fined as provided in title 18, United States Code, imprisoned
for not more than one year, or both.
``(2) Preservation of other remedies.--The remedy and
rights provided under this section are in addition to and do
not preclude any remedy for wrongful conversion otherwise
available under law to the person claiming relief under this
section, including any award for consequential or punitive
damages.

``SEC. 306. PROTECTION OF LIFE INSURANCE POLICY.

``(a) Assignment of Policy Protected.--If a life insurance
policy on the life of a servicemember is assigned before
military service to secure the payment of an obligation, the
assignee of the policy (except the insurer in connection with
a policy loan) may not exercise, during a period of military
service of the servicemember or within one year thereafter,
any right or option obtained under the assignment without a
court order.
``(b) Exception.--The prohibition in subsection (a) shall
not apply--
``(1) if the assignee has the written consent of the
insured made during the period described in subsection (a);
``(2) when the premiums on the policy are due and unpaid;
or
``(3) upon the death of the insured.
``(c) Order Refused Because of Material Affect.--A court
which receives an application for an order required under
subsection (a) may refuse to grant such order if the court
determines the ability of the servicemember to comply with
the terms of the obligation is materially affected by
military service.
``(d) Treatment of Guaranteed Premiums.--For purposes of
this subsection, premiums guaranteed under the provisions of
title IV shall not be considered due and unpaid.
``(e) Penalties.--
``(1) Misdemeanor.--A person who knowingly takes an action
contrary to this section, or attempts to do so, shall be
fined as provided in title 18, United States Code, imprisoned
for not more than one year, or both.
``(2) Preservation of other remedies.--The remedy and
rights provided under this section are in addition to and do
not preclude any remedy for wrongful conversion otherwise
available under law to the person claiming relief under this
section, including any consequential or punitive damages.

``SEC. 307. ENFORCEMENT OF STORAGE LIENS.

``(a) Liens.--
``(1) Limitation on foreclosure or enforcement.--A person
holding a lien on the property or effects of a servicemember
may not, during any period of military service of the
servicemember and for 90 days thereafter, foreclose or
enforce any lien on such property or effects without a court
order granted before foreclosure or enforcement.
``(2) Lien defined.--For the purposes of paragraph (1), the
term `lien' includes a lien for storage, repair, or cleaning
of the property or effects of a servicemember or a lien on
such property or effects for any other reason.
``(b) Stay of Proceedings.--In a proceeding to foreclose or
enforce a lien subject to this section, the court may on its
own motion, and shall if requested by a servicemember whose
ability to comply with the obligation resulting in the
proceeding is materially affected by military service--
``(1) stay the proceeding for a period of time as justice
and equity require; or
``(2) adjust the obligation to preserve the interests of
all parties.

The provisions of this subsection do not affect the scope of
section 303.
``(c) Penalties.--
``(1) Misdemeanor.--A person who knowingly takes an action
contrary to this section, or attempts to do so, shall be
fined as provided in title 18, United States Code, imprisoned
for not more than one year, or both.
``(2) Preservation of other remedies.--The remedy and
rights provided under this section are in addition to and do
not preclude any remedy for wrongful conversion otherwise
available under law to the person claiming relief under this
section, including any consequential or punitive damages.

``SEC. 308. EXTENSION OF PROTECTIONS TO DEPENDENTS.

``Upon application to a court, a dependent of a
servicemember is entitled to the protections of this title if
the dependent's ability to comply with a lease, contract,
bailment, or other obligation is materially affected by
reason of the servicemember's military service.

``TITLE IV--INSURANCE

``SEC. 401. DEFINITIONS.

``For the purposes of this title:

[[Page S7047]]

``(1) Policy.--The term `policy' means any contract for
whole, endowment, universal, or term life insurance,
including any benefit in the nature of such insurance arising
out of membership in any fraternal or beneficial association
which--
``(A) provides that the insurer may not--
``(i) decrease the amount of coverage or increase the
amount of premiums if the insured is in military service; or
``(ii) limit or restrict coverage for any activity required
by military service; and
``(B) is in force not less than 180 days before the date of
the insured's entry into military service and at the time of
application under this title.
``(2) Premium.--The term `premium' means the amount
specified in an insurance policy to be paid to keep the
policy in force.
``(3) Insured.--The term `insured' means a servicemember
whose life is insured under a policy.
``(4) Insurer.--The term `insurer' includes any firm,
corporation, partnership, association, or business that is
chartered or authorized to provide insurance and issue
contracts or policies by the laws of a State or the United
States.

``SEC. 402. INSURANCE RIGHTS AND PROTECTIONS.

``(a) Rights and Protections.--The rights and protections
under this title apply to the insured when the insured, the
insured's designee, or the insured's beneficiary applies in
writing for protection under this title, unless the Secretary
of Veterans Affairs determines that the insured's policy is
not entitled to protection under this title.
``(b) Notification and Application.--The Secretary of
Veterans Affairs shall notify the Secretary concerned of the
procedures to be used to apply for the protections provided
under this title. The applicant shall send the original
application to the insurer and a copy to the Secretary of
Veterans Affairs.
``(c) Limitation on Amount.--The total amount of life
insurance coverage protection provided by this title for a
servicemember may not exceed $250,000, or an amount equal to
the Servicemember's Group Life Insurance maximum limit,
whichever is greater, regardless of the number of policies
submitted.

``SEC. 403. APPLICATION FOR INSURANCE PROTECTION.

``(a) Application Procedure.--An application for protection
under this title shall--
``(1) be in writing and signed by the insured, the
insured's designee, or the insured's beneficiary, as the case
may be;
``(2) identify the policy and the insurer; and
``(3) include an acknowledgement that the insured's rights
under the policy are subject to and modified by the
provisions of this title.
``(b) Additional Requirements.--The Secretary of Veterans
Affairs may require additional information from the
applicant, the insured, and the insurer to determine if the
policy is entitled to protection under this title.
``(c) Notice to the Secretary by the Insured.--Upon receipt
of the application of the insured, the insurer shall furnish
a report concerning the policy to the Secretary of Veterans
Affairs as required by regulations prescribed by the
Secretary.
``(d) Policy Modification.--Upon application for protection
under this title, the insured and the insurer shall have
constructively agreed to any policy modification necessary to
give this title full force and effect.

``SEC. 404. POLICIES ENTITLED TO PROTECTION AND LAPSE OF
POLICIES.

``(a) Determination.--The Secretary of Veterans Affairs
shall determine whether a policy is entitled to protection
under this title and shall notify the insured and the insurer
of that determination.
``(b) Lapse Protection.--A policy that the Secretary
determines is entitled to protection under this title shall
not lapse or otherwise terminate or be forfeited for the
nonpayment of a premium, or interest or indebtedness on a
premium, after the date of the application for protection.
``(c) Time Application.--The protection provided by this
title applies during the insured's period of military service
and for a period of two years thereafter.

``SEC. 405. POLICY RESTRICTIONS.

``(a) Dividends.--While a policy is protected under this
title, a dividend or other monetary benefit under a policy
may not be paid to an insured or used to purchase dividend
additions without the approval of the Secretary of Veterans
Affairs. If such approval is not obtained, the dividends or
benefits shall be added to the value of the policy to be used
as a credit when final settlement is made with the insurer.
``(b) Specific Restrictions.--While a policy is protected
under this title, cash value, loan value, withdrawal of
dividend accumulation, unearned premiums, or other value of
similar character may not be available to the insured without
the approval of the Secretary. The right of the insured to
change a beneficiary designation or select an optional
settlement for a beneficiary shall not be affected by the
provisions of this title.

``SEC. 406. DEDUCTION OF UNPAID PREMIUMS.

``(a) Settlement of Proceeds.--If a policy matures as a
result of a servicemember's death or otherwise during the
period of protection of the policy under this title, the
insurer in making settlement shall deduct from the insurance
proceeds the amount of the unpaid premiums guaranteed under
this title, together with interest due at the rate fixed in
the policy for policy loans.
``(b) Interest Rate.--If the interest rate is not
specifically fixed in the policy, the rate shall be the same
as for policy loans in other policies issued by the insurer
at the time the insured's policy was issued.
``(c) Reporting Requirement.--The amount deducted under
this section, if any, shall be reported by the insurer to the
Secretary of Veterans Affairs.

``SEC. 407. PREMIUMS AND INTEREST GUARANTEED BY UNITED
STATES.

``(a) Guarantee of Premiums and Interest by the United
States.--
``(1) Guarantee.--Payment of premiums, and interest on
premiums at the rate specified in section 406, which become
due on a policy under the protection of this title is
guaranteed by the United States. If the amount guaranteed is
not paid to the insurer before the period of insurance
protection under this title expires, the amount due shall be
treated by the insurer as a policy loan on the policy.
``(2) Policy termination.--If, at the expiration of
insurance protection under this title, the cash surrender
value of a policy is less than the amount due to pay premiums
and interest on premiums on the policy, the policy shall
terminate. Upon such termination, the United States shall pay
the insurer the difference between the amount due and the
cash surrender value.
``(b) Recovery From Insured of Amounts Paid by the United
States.--
``(1) Debt payable to the united states.--The amount paid
by the United States to an insurer under this title shall be
a debt payable to the United States by the insured on whose
policy payment was made.
``(2) Collection.--Such amount may be collected by the
United States, either as an offset from any amount due the
insured by the United States or as otherwise authorized by
law.
``(3) Debt not dischargeable in bankruptcy.--Such debt
payable to the United States is not dischargeable in
bankruptcy proceedings.
``(c) Crediting of Amounts Recovered.--Any amounts received
by the United States as repayment of debts incurred by an
insured under this title shall be credited to the
appropriation for the payment of claims under this title.

``SEC. 408. REGULATIONS.

``The Secretary of Veterans Affairs shall prescribe
regulations for the implementation of this title.

``SEC. 409. REVIEW OF FINDINGS OF FACT AND CONCLUSIONS OF
LAW.

``The findings of fact and conclusions of law made by the
Secretary of Veterans Affairs in administering this title may
be reviewed by the Board of Veterans' Appeals and the United
States Court of Appeals for Veterans Claims.

``TITLE V--TAXES AND PUBLIC LANDS

``SEC. 501. TAXES RESPECTING PERSONAL PROPERTY, MONEY,
CREDITS, AND REAL PROPERTY.

``(a) Application.--This section applies in any case in
which a tax or assessment, whether general or special (other
than a tax on personal income), falls due and remains unpaid
before or during a period of military service with respect to
a servicemember's--
``(1) personal property; or
``(2) real property occupied for dwelling, professional,
business, or agricultural purposes by a servicemember or the
servicemember's dependents or employees--
``(A) before the servicemember's entry into military
service; and
``(B) during the time the tax or assessment remains unpaid.
``(b) Sale of Property.--
``(1) Limitation on sale of property to enforce tax
assessment.--Property described in subsection (a) may not be
sold to enforce the collection of such tax or assessment
except by court order and upon the determination by the court
that military service does not materially affect the
servicemember's ability to pay the unpaid tax or assessment.
``(2) Stay of court proceedings.--A court may stay a
proceeding to enforce the collection of such tax or
assessment, or sale of such property, during a period of
military service of the servicemember and for a period not
more than 180 days after the termination of, or release of
the servicemember from, military service.
``(c) Redemption.--When property described in subsection
(a) is sold or forfeited to enforce the collection of a tax
or assessment, a servicemember shall have the right to redeem
or commence an action to redeem the servicemember's property
during the period of military service or within 180 days
after termination of or release from military service. This
subsection may not be construed to shorten any period
provided by the law of a State (including any political
subdivision of a State) for redemption.
``(d) Interest on Tax or Assessment.--Whenever a
servicemember does not pay a tax or assessment on property
described in subsection (a) when due, the amount of the tax
or assessment due and unpaid shall bear interest until paid
at the rate of 6 percent per year. An additional penalty or
interest shall not be incurred by reason of nonpayment. A
lien for such unpaid tax or assessment may include interest
under this subsection.
``(e) Joint Ownership Application.--This section applies to
all forms of property described in subsection (a) owned
individually

[[Page S7048]]

by a servicemember or jointly by a servicemember and a
dependent or dependents.

``SEC. 502. RIGHTS IN PUBLIC LANDS.

``(a) Rights Not Forfeited.--The rights of a servicemember
to lands owned or controlled by the United States, and
initiated or acquired by the servicemember under the laws of
the United States (including the mining and mineral leasing
laws) before military service, shall not be forfeited or
prejudiced as a result of being absent from the land, or by
failing to begin or complete any work or improvements to the
land, during the period of military service.
``(b) Temporary Suspension of Permits or Licenses.--If a
permittee or licensee under the Act of June 28, 1934 (43
U.S.C. 315 et seq.), enters military service, the permittee
or licensee may suspend the permit or license for the period
of military service and for 180 days after termination of or
release from military service.
``(c) Regulations.--Regulations prescribed by the Secretary
of the Interior shall provide for such suspension of permits
and licenses and for the remission, reduction, or refund of
grazing fees during the period of such suspension.

``SEC. 503. DESERT-LAND ENTRIES.

``(a) Desert-Land Rights Not Forfeited.--A desert-land
entry made or held under the desert-land laws before the
entrance of the entryman or the entryman's successor in
interest into military service shall not be subject to
contest or cancellation--
``(1) for failure to expend any required amount per acre
per year in improvements upon the claim;
``(2) for failure to effect the reclamation of the claim
during the period the entryman or the entryman's successor in
interest is in the military service, or for 180 days after
termination of or release from military service; or
``(3) during any period of hospitalization or
rehabilitation due to an injury or disability incurred in the
line of duty.

The time within which the entryman or claimant is required to
make such expenditures and effect reclamation of the land
shall be exclusive of the time periods described in
paragraphs (2) and (3).
``(b) Service-Related Disability.--If an entryman or
claimant is honorably discharged and is unable to accomplish
reclamation of, and payment for, desert land due to a
disability incurred in the line of duty, the entryman or
claimant may make proof without further reclamation or
payments, under regulations prescribed by the Secretary of
the Interior, and receive a patent for the land entered or
claimed.
``(c) Filing Requirement.--In order to obtain the
protection of this section, the entryman or claimant shall,
within 180 days after entry into military service, cause to
be filed in the land office of the district where the claim
is situated a notice communicating the fact of military
service and the desire to hold the claim under this section.

``SEC. 504. MINING CLAIMS.

``(a) Requirements Suspended.--The provisions of section
2324 of the Revised Statutes of the United States (30 U.S.C.
28) specified in subsection (b) shall not apply to a
servicemember's claims or interests in claims, regularly
located and recorded, during a period of military service and
180 days thereafter, or during any period of hospitalization
or rehabilitation due to injuries or disabilities incurred in
the line of duty.
``(b) Requirements.--The provisions in section 2324 of the
Revised Statutes that shall not apply under subsection (a)
are those which require that on each mining claim located
after May 10, 1872, and until a patent has been issued for
such claim, not less than $100 worth of labor shall be
performed or improvements made during each year.
``(c) Period of Protection From Forfeiture.--A mining claim
or an interest in a claim owned by a servicemember that has
been regularly located and recorded shall not be subject to
forfeiture for nonperformance of annual assessments during
the period of military service and for 180 days thereafter,
or for any period of hospitalization or rehabilitation
described in subsection (a).
``(d) Filing Requirement.--In order to obtain the
protections of this section, the claimant of a mining
location shall, before the end of the assessment year in
which military service is begun or within 60 days after the
end of such assessment year, cause to be filed in the office
where the location notice or certificate is recorded a notice
communicating the fact of military service and the desire to
hold the mining claim under this section.

``SEC. 505. MINERAL PERMITS AND LEASES.

``(a) Suspension During Military Service.--A person holding
a permit or lease on the public domain under the Federal
mineral leasing laws who enters military service may suspend
all operations under the permit or lease for the duration of
military service and for 180 days thereafter. The term of the
permit or lease shall not run during the period of
suspension, nor shall any rental or royalties be charged
against the permit or lease during the period of suspension.
``(b) Notification.--In order to obtain the protection of
this section, the permittee or lessee shall, within 180 days
after entry into military service, notify the Secretary of
the Interior by registered mail of the fact that military
service has begun and of the desire to hold the claim under
this section.
``(c) Contract Modification.--This section shall not be
construed to supersede the terms of any contract for
operation of a permit or lease.

``SEC. 506. PERFECTION OR DEFENSE OF RIGHTS.

``(a) Right To Take Action Not Affected.--This title shall
not affect the right of a servicemember to take action during
a period of military service that is authorized by law or
regulations of the Department of the Interior, for the
perfection, defense, or further assertion of rights initiated
or acquired before entering military service.
``(b) Affidavits and Proofs.--
``(1) In general.--A servicemember during a period of
military service may make any affidavit or submit any proof
required by law, practice, or regulation of the Department of
the Interior in connection with the entry, perfection,
defense, or further assertion of rights initiated or acquired
before entering military service before an officer authorized
to provide notary services under section 1044a of title 10,
United States Code, or any superior commissioned officer.
``(2) Legal status of affidavits.--Such affidavits shall be
binding in law and subject to the same penalties as
prescribed by section 1001 of title 18, United State Code.

``SEC. 507. DISTRIBUTION OF INFORMATION CONCERNING BENEFITS
OF TITLE.

``(a) Distribution of Information by Secretary Concerned.--
The Secretary concerned shall issue to servicemembers
information explaining the provisions of this title.
``(b) Application Forms.--The Secretary concerned shall
provide application forms to servicemembers requesting relief
under this title.
``(c) Information From Secretary of the Interior.--The
Secretary of the Interior shall furnish to the Secretary
concerned information explaining the provisions of this title
(other than sections 501, 510, and 511) and related
application forms.

``SEC. 508. LAND RIGHTS OF SERVICEMEMBERS.

``(a) No Age Limitations.--Any servicemember under the age
of 21 in military service shall be entitled to the same
rights under the laws relating to lands owned or controlled
by the United States, including mining and mineral leasing
laws, as those servicemembers who are 21 years of age.
``(b) Residency Requirement.--Any requirement related to
the establishment of a residence within a limited time shall
be suspended as to entry by a servicemember in military
service until 180 days after termination of or release from
military service.
``(c) Entry Applications.--Applications for entry may be
verified before a person authorized to administer oaths under
section 1044a of title 10, United States Code, or under the
laws of the State where the land is situated.

``SEC. 509. REGULATIONS.

``The Secretary of the Interior may issue regulations
necessary to carry out this title (other than sections 501,
510, and 511).

``SEC. 510. INCOME TAXES.

``(a) Deferral of Tax.--Upon notice to the Internal Revenue
Service or the tax authority of a State or a political
subdivision of a State, the collection of income tax on the
income of a servicemember falling due before or during
military service shall be deferred for a period not more than
180 days after termination of or release from military
service, if a servicemember's ability to pay such income tax
is materially affected by military service.
``(b) Accrual of Interest or Penalty.--No interest or
penalty shall accrue for the period of deferment by reason of
nonpayment on any amount of tax deferred under this section.
``(c) Statute of Limitations.--The running of a statute of
limitations against the collection of tax deferred under this
section, by seizure or otherwise, shall be suspended for the
period of military service of the servicemember and for an
additional period of 270 days thereafter.
``(d) Application Limitation.--This section shall not apply
to the tax imposed on employees by section 3101 of the
Internal Revenue Code of 1986.

``SEC. 511. RESIDENCE FOR TAX PURPOSES.

``(a) Residence or Domicile.--A servicemember shall neither
lose nor acquire a residence or domicile for purposes of
taxation with respect to the person, personal property, or
income of the servicemember by reason of being absent or
present in any tax jurisdiction of the United States solely
in compliance with military orders.
``(b) Military Service Compensation.--Compensation of a
servicemember for military service shall not be deemed to be
income for services performed or from sources within a tax
jurisdiction of the United States if the servicemember is not
a resident or domiciliary of the jurisdiction in which the
servicemember is serving in compliance with military orders.
``(c) Personal Property.--
``(1) Relief from personal property taxes.--The personal
property of a servicemember shall not be deemed to be located
or present in, or to have a situs for taxation in, the tax
jurisdiction in which the servicemember is serving in
compliance with military orders.
``(2) Exception for property within member's domicile or
residence.--This subsection applies to personal property or
its use within any tax jurisdiction other than the
servicemember's domicile or residence.
``(3) Exception for property used in trade or business.--
This section does not prevent taxation by a tax jurisdiction
with

[[Page S7049]]

respect to personal property used in or arising from a trade
or business, if it has jurisdiction.
``(4) Relationship to law of state of domicile.--
Eligibility for relief from personal property taxes under
this subsection is not contingent on whether or not such
taxes are paid to the State of domicile.
``(d) Increase of Tax Liability.--A tax jurisdiction may
not use the military compensation of a nonresident
servicemember to increase the tax liability imposed on other
income earned by the nonresident servicemember or spouse
subject to tax by the jurisdiction.
``(e) Federal Indian Reservations.--An Indian servicemember
whose legal residence or domicile is a Federal Indian
reservation shall be taxed by the laws applicable to Federal
Indian reservations and not the State where the reservation
is located.
``(f) Definitions.--For purposes of this section:
``(1) Personal property.--The term `personal property'
means intangible and tangible property (including motor
vehicles).
``(2) Taxation.--The term `taxation' includes licenses,
fees, or excises imposed with respect to motor vehicles and
their use, if the license, fee, or excise is paid by the
servicemember in the servicemember's State of domicile or
residence.
``(3) Tax jurisdiction.--The term `tax jurisdiction' means
a State or a political subdivision of a State.

``TITLE VI--ADMINISTRATIVE REMEDIES

``SEC. 601. INAPPROPRIATE USE OF ACT.

``If a court determines, in any proceeding to enforce a
civil right, that any interest, property, or contract has
been transferred or acquired with the intent to delay the
just enforcement of such right by taking advantage of this
Act, the court shall enter such judgment or make such order
as might lawfully be entered or made concerning such transfer
or acquisition.

``SEC. 602. CERTIFICATES OF SERVICE; PERSONS REPORTED
MISSING.

``(a) Prima Facie Evidence.--In any proceeding under this
Act, a certificate signed by the Secretary concerned is prima
facie evidence as to any of the following facts stated in the
certificate:
``(1) That a person named is, is not, has been, or has not
been in military service.
``(2) The time and the place the person entered military
service.
``(3) The person's residence at the time the person entered
military service.
``(4) The rank, branch, and unit of military service of the
person upon entry.
``(5) The inclusive dates of the person's military service.
``(6) The monthly pay received by the person at the date of
the certificate's issuance.
``(7) The time and place of the person's termination of or
release from military service, or the person's death during
military service.
``(b) Certificates.--The Secretary concerned shall furnish
a certificate under subsection (a) upon receipt of an
application for such a certificate. A certificate appearing
to be signed by the Secretary concerned is prima facie
evidence of its contents and of the signer's authority to
issue it.
``(c) Treatment of Servicemembers in Missing Status.--A
servicemember who has been reported missing is presumed to
continue in service until accounted for. A requirement under
this Act that begins or ends with the death of a
servicemember does not begin or end until the servicemember's
death is reported to, or determined by, the Secretary
concerned or by a court of competent jurisdiction.

``SEC. 603. INTERLOCUTORY ORDERS.

``An interlocutory order issued by a court under this Act
may be revoked, modified, or extended by the court upon its
own motion or otherwise, upon notification to affected
parties as required by the court.

``TITLE VII--FURTHER RELIEF

``SEC. 701. ANTICIPATORY RELIEF.

``(a) Application for Relief.--A servicemember may, during
military service or within 180 days of termination of or
release from military service, apply to a court for relief--
``(1) from any obligation or liability incurred by the
servicemember before the servicemember's military service; or
``(2) from a tax or assessment falling due before or during
the servicemember's military service.
``(b) Tax Liability or Assessment.--In a case covered by
subsection (a), the court may, if the ability of the
servicemember to comply with the terms of such obligation or
liability or pay such tax or assessment has been materially
affected by reason of military service, after appropriate
notice and hearing, grant the following relief:
``(1) Stay of enforcement of real estate contracts.--
``(A) In the case of an obligation payable in installments
under a contract for the purchase of real estate, or secured
by a mortgage or other instrument in the nature of a mortgage
upon real estate, the court may grant a stay of the
enforcement of the obligation--
``(i) during the servicemember's period of military
service; and
``(ii) from the date of termination of or release from
military service, or from the date of application if made
after termination of or release from military service.
``(B) Any stay under this paragraph shall be--
``(i) for a period equal to the remaining life of the
installment contract or other instrument, plus a period of
time equal to the period of military service of the
servicemember, or any part of such combined period; and
``(ii) subject to payment of the balance of the principal
and accumulated interest due and unpaid at the date of
termination or release from the applicant's military service
or from the date of application in equal installments during
the combined period at the rate of interest on the unpaid
balance prescribed in the contract or other instrument
evidencing the obligation, and subject to other terms as may
be equitable.
``(2) Stay of enforcement of other contracts.--
``(A) In the case of any other obligation, liability, tax,
or assessment, the court may grant a stay of enforcement--
``(i) during the servicemember's military service; and
``(ii) from the date of termination of or release from
military service, or from the date of application if made
after termination or release from military service.
``(B) Any stay under this paragraph shall be--
``(i) for a period of time equal to the period of the
servicemember's military service or any part of such period;
and
``(ii) subject to payment of the balance of principal and
accumulated interest due and unpaid at the date of
termination or release from military service, or the date of
application, in equal periodic installments during this
extended period at the rate of interest as may be prescribed
for this obligation, liability, tax, or assessment, if paid
when due, and subject to other terms as may be equitable.
``(c) Affect of Stay on Fine or Penalty.--When a court
grants a stay under this section, a fine or penalty shall not
accrue on the obligation, liability, tax, or assessment for
the period of compliance with the terms and conditions of the
stay.

``SEC. 702. POWER OF ATTORNEY.

``(a) Automatic Extension.--A power of attorney of a
servicemember shall be automatically extended for the period
the servicemember is in a missing status (as defined in
section 551(2) of title 37, United States Code) if the power
of attorney--
``(1) was duly executed by the servicemember--
``(A) while in military service; or
``(B) before entry into military service but after the
servicemember--
``(i) received a call or order to report for military
service; or
``(ii) was notified by an official of the Department of
Defense that the person could receive a call or order to
report for military service;
``(2) designates the servicemember's spouse, parent, or
other named relative as the servicemember's attorney in fact
for certain, specified, or all purposes; and
``(3) expires by its terms after the servicemember entered
a missing status.
``(b) Limitation on Power of Attorney Extension.--A power
of attorney executed by a servicemember may not be extended
under subsection (a) if the document by its terms clearly
indicates that the power granted expires on the date
specified even though the servicemember, after the date of
execution of the document, enters a missing status.

``SEC. 703. PROFESSIONAL LIABILITY PROTECTION.

``(a) Applicability.--This section applies to a
servicemember who--
``(1) after July 31, 1990, is ordered to active duty (other
than for training) pursuant to sections 688, 12301(a),
12301(g), 12302, 12304, 12306, or 12307 of title 10, United
States Code, or who is ordered to active duty under section
12301(d) of such title during a period when members are on
active duty pursuant to any of the preceding sections; and
``(2) immediately before receiving the order to active
duty--
``(A) was engaged in the furnishing of health-care or legal
services or other services determined by the Secretary of
Defense to be professional services; and
``(B) had in effect a professional liability insurance
policy that does not continue to cover claims filed with
respect to the servicemember during the period of the
servicemember's active duty unless the premiums are paid for
such coverage for such period.
``(b) Suspension of Coverage.--
``(1) Suspension.--Coverage of a servicemember referred to
in subsection (a) by a professional liability insurance
policy shall be suspended by the insurance carrier in
accordance with this subsection upon receipt of a written
request from the servicemember, or the servicemember's legal
representative, by the insurance carrier.
``(2) Premiums for suspended contracts.--A professional
liability insurance carrier--
``(A) may not require that premiums be paid by or on behalf
of a servicemember for any professional liability insurance
coverage suspended pursuant to paragraph (1); and
``(B) shall refund any amount paid for coverage for the
period of such suspension or, upon the election of such
servicemember, apply such amount for the payment of any
premium becoming due upon the reinstatement of such coverage.
``(3) Nonliability of carrier during suspension.--A
professional liability insurance carrier shall not be liable
with respect to

[[Page S7050]]

any claim that is based on professional conduct (including
any failure to take any action in a professional capacity) of
a servicemember that occurs during a period of suspension of
that servicemember's professional liability insurance under
this subsection.
``(4) Certain claims considered to arise before
suspension.--For the purposes of paragraph (3), a claim based
upon the failure of a professional to make adequate provision
for a patient, client, or other person to receive
professional services or other assistance during the period
of the professional's active duty service shall be considered
to be based on an action or failure to take action before the
beginning of the period of the suspension of professional
liability insurance under this subsection, except in a case
in which professional services were provided after the date
of the beginning of such period.
``(c) Reinstatement of Coverage.--
``(1) Reinstatement required.--Professional liability
insurance coverage suspended in the case of any servicemember
pursuant to subsection (b) shall be reinstated by the
insurance carrier on the date on which that servicemember
transmits to the insurance carrier a written request for
reinstatement.
``(2) Time and premium for reinstatement.--The request of a
servicemember for reinstatement shall be effective only if
the servicemember transmits the request to the insurance
carrier within 30 days after the date on which the
servicemember is released from active duty. The insurance
carrier shall notify the servicemember of the due date for
payment of the premium of such insurance. Such premium shall
be paid by the servicemember within 30 days after receipt of
that notice.
``(3) Period of reinstated coverage.--The period for which
professional liability insurance coverage shall be reinstated
for a servicemember under this subsection may not be less
than the balance of the period for which coverage would have
continued under the insurance policy if the coverage had not
been suspended.
``(d) Increase in Premium.--
``(1) Limitation on premium increases.--An insurance
carrier may not increase the amount of the premium charged
for professional liability insurance coverage of any
servicemember for the minimum period of the reinstatement of
such coverage required under subsection (c)(3) to an amount
greater than the amount chargeable for such coverage for such
period before the suspension.
``(2) Exception.--Paragraph (1) does not prevent an
increase in premium to the extent of any general increase in
the premiums charged by that carrier for the same
professional liability coverage for persons similarly covered
by such insurance during the period of the suspension.
``(e) Continuation of Coverage of Unaffected Persons.--This
section does not--
``(1) require a suspension of professional liability
insurance protection for any person who is not a person
referred to in subsection (a) and who is covered by the same
professional liability insurance as a person referred to in
such subsection; or
``(2) relieve any person of the obligation to pay premiums
for the coverage not required to be suspended.
``(f) Stay of Civil or Administrative Actions.--
``(1) Stay of actions.--A civil or administrative action
for damages on the basis of the alleged professional
negligence or other professional liability of a servicemember
whose professional liability insurance coverage has been
suspended under subsection (b) shall be stayed until the end
of the period of the suspension if--
``(A) the action was commenced during the period of the
suspension;
``(B) the action is based on an act or omission that
occurred before the date on which the suspension became
effective; and
``(C) the suspended professional liability insurance would,
except for the suspension, on its face cover the alleged
professional negligence or other professional liability
negligence or other professional liability of the
servicemember.
``(2) Date of commencement of action.--Whenever a civil or
administrative action for damages is stayed under paragraph
(1) in the case of any servicemember, the action shall have
been deemed to have been filed on the date on which the
professional liability insurance coverage of the
servicemember is reinstated under subsection (c).
``(g) Effect of Suspension Upon Limitations Period.--In the
case of a civil or administrative action for which a stay
could have been granted under subsection (f) by reason of the
suspension of professional liability insurance coverage of
the defendant under this section, the period of the
suspension of the coverage shall be excluded from the
computation of any statutory period of limitation on the
commencement of such action.
``(h) Death During Period of Suspension.--If a
servicemember whose professional liability insurance coverage
is suspended under subsection (b) dies during the period of
the suspension--
``(1) the requirement for the grant or continuance of a
stay in any civil or administrative action against such
servicemember under subsection (f)(1) shall terminate on the
date of the death of such servicemember; and
``(2) the carrier of the professional liability insurance
so suspended shall be liable for any claim for damages for
professional negligence or other professional liability of
the deceased servicemember in the same manner and to the same
extent as such carrier would be liable if the servicemember
had died while covered by such insurance but before the claim
was filed.
``(i) Definitions.--For purposes of this section:
``(1) The term `active duty' has the meaning given that
term in section 101(d)(1) of title 10, United States Code.
``(2) The term `profession' includes occupation.
``(3) The term `professional' includes occupational.

``SEC. 704. HEALTH INSURANCE REINSTATEMENT.

``(a) Reinstatement of Health Insurance.--A servicemember
who, by reason of military service as defined in section
703(a)(1), is entitled to the rights and protections of this
Act shall also be entitled upon termination or release from
such service to reinstatement of any health insurance that--
``(1) was in effect on the day before such service
commenced; and
``(2) was terminated effective on a date during the period
of such service.
``(b) No Exclusion or Waiting Period.--The reinstatement of
health care insurance coverage for the health or physical
condition of a servicemember described in subsection (a), or
any other person who is covered by the insurance by reason of
the coverage of the servicemember, shall not be subject to an
exclusion or a waiting period, if--
``(1) the condition arose before or during the period of
such service;
``(2) an exclusion or a waiting period would not have been
imposed for the condition during the period of coverage; and
``(3) if the condition relates to the servicemember, the
condition has not been determined by the Secretary of
Veterans Affairs to be a disability incurred or aggravated in
the line of duty (within the meaning of section 105 of title
38, United States Code).
``(c) Exceptions.--Subsection (a) does not apply to a
servicemember entitled to participate in employer-offered
insurance benefits pursuant to the provisions of chapter 43
of title 38, United States Code.
``(d) Time for Applying for Reinstatement.--An application
under this section must be filed not later than 120 days
after the date of the termination of or release from military
service.

``SEC. 705. GUARANTEE OF RESIDENCY FOR MILITARY PERSONNEL.

``For the purposes of voting for any Federal office (as
defined in section 301 of the Federal Election Campaign Act
of 1971 (2 U.S.C. 431)) or a State or local office, a person
who is absent from a State in compliance with military or
naval orders shall not, solely by reason of that absence--
``(1) be deemed to have lost a residence or domicile in
that State, without regard to whether or not the person
intends to return to that State;
``(2) be deemed to have acquired a residence or domicile in
any other State; or
``(3) be deemed to have become a resident in or a resident
of any other State.

``SEC. 706. BUSINESS OR TRADE OBLIGATIONS.

``(a) Availability of Non-Business Assets to Satisfy
Obligations.--If the trade or business (without regard to the
form in which such trade or business is carried out) of a
servicemember has an obligation or liability for which the
servicemember is personally liable, the assets of the
servicemember not held in connection with the trade or
business may not be available for satisfaction of the
obligation or liability during the servicemember's military
service.
``(b) Relief to Obligors.--Upon application to a court by
the holder of an obligation or liability covered by this
section, relief granted by this section to a servicemember
may be modified as justice and equity require.

``SEC. 707. RETURN TO CLASSES AT NO ADDITIONAL COST.

``(a) In General.--Each institution of higher education
that receives Federal assistance or participates in a program
assisted under the Higher Education Act of 1965 (20 U.S.C.
1001 et seq.) shall permit each student who is enrolled in
the institution and enters into military service--
``(1) to return to the institution of higher education
after completion of the period of military service; and
``(2) complete, at no additional cost, each class the
student was unable to complete as a result of the period of
military service.
``(b) Institution of Higher Education Defined.--In this
section, the term `institution of higher education' has the
meaning given the term in section 101 of the Higher Education
Act of 1965 (20 U.S.C. 1001).''.

SEC. 2. CONFORMING AMENDMENTS.

(a) Military Selective Service Act.--Section 14 of the
Military Selective Service Act (50 U.S.C. App. 464) is
repealed.
(b) Title 5, United States Code.--(1) Section
5520a(k)(2)(A) of title 5, United States Code, is amended by
striking ``Soldiers' and Sailors' Civil Relief Act of 1940''
and inserting ``Servicemembers Civil Relief Act''; and
(2) Section 5569(e) of title 5, United States Code, is
amended--
(A) in paragraph (1), by striking ``provided by the
Soldiers' and Sailors' Civil Relief Act of 1940'' and all
that follows through ``of such Act'' and inserting ``provided
by the Servicemembers Civil Relief Act, including the
benefits provided by section 702 of such Act but excluding
the benefits provided by sections 104 and 106, title IV, and
title V (other than sections 501 and 510) of such Act''; and

[[Page S7051]]

(B) in paragraph (2), by striking ``person in the military
service'' and inserting ``servicemember''.
(c) Title 10, United States Code.--Section 1408(b)(1)(D) of
title 10, United States Code, is amended by striking
``Soldiers' and Sailors' Civil Relief Act of 1940'' and
inserting ``Servicemembers Civil Relief Act''.
(d) Internal Revenue Code.--Section 7654(d)(1) of the
Internal Revenue Code of 1986 is amended by striking
``Soldiers' and Sailors' Civil Relief Act'' and inserting
``Servicemembers Civil Relief Act''.
(e) Public Law 91-621.--Section 3(a)(3) of Public Law 91-
621 (33 U.S.C. 857-3(a)(3)) is amended by striking
``Soldiers' and Sailors' Civil Relief Act of 1940, as
amended'' and inserting ``Servicemembers Civil Relief Act''.
(f) Public Health Service Act.--Section 212(e) of the
Public Health Service Act (42 U.S.C. 213(e)) is amended by
striking ``Soldiers' and Sailors' Civil Relief Act of 1940''
and inserting ``Servicemembers Civil Relief Act''.
(g) Elementary and Secondary Education Act of 1965.--
Section 8001 of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 7701) is amended by striking ``section 514 of
the Soldiers' and Sailors' Civil Relief Act of 1940 (50
U.S.C. App. 574)'' in the matter preceding paragraph (1) and
inserting ``section 511 of the Servicemembers Civil Relief
Act''.

SEC. 3. EFFECTIVE DATE.

The amendment made by section 1 shall apply to any case
decided after the date of the enactment of this Act.
______

By Mr. COLEMAN:
S. 1138. A bill to amend the Employee Retirement Income Security Act
of 1974, Public Health Service Act, and the Internal Revenue Code of
1986 to provide parity with respect to substance abuse treatment
benefits under group health plans and health insurance coverage; to the
Committee on Health, Education, Labor, and Pensions.
Mr. COLEMAN. Mr. President, I ask unanimous consent that the bill I
introduce today to provide parity with respect to substance abuse
treatment benefits under group health plans and health insurance
coverage be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1138

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 ``Help Expand Access to
Recovery and Treatment Act of 2003'' or the ``HEART Act''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) Substance abuse, if left untreated, is a medical
emergency and a private and public heath crisis.
(2) Nothing in this Act should be construed as prohibiting
application of the concept of parity to substance abuse
treatment provided by faith-based treatment providers.

SEC. 3. PARITY IN SUBSTANCE ABUSE TREATMENT BENEFITS.

(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 is amended by adding at the end the
following new section:

``SEC. 2707. PARITY IN THE APPLICATION OF TREATMENT
LIMITATIONS AND FINANCIAL REQUIREMENTS TO
SUBSTANCE ABUSE TREATMENT BENEFITS.

``(a) In General.--In the case of a group health plan (or
health insurance coverage offered in connection with such a
plan) that provides both medical and surgical benefits and
substance abuse treatment benefits, the plan or coverage
shall not impose treatment limitations or financial
requirements on the substance abuse treatment benefits
unless similar limitations or requirements are imposed for
medical and surgical benefits.
``(b) Construction.--Nothing in this section shall be
construed--
``(1) as requiring a group health plan (or health insurance
coverage offered in connection with such a plan) to provide
any substance abuse treatment benefits; or
``(2) to prevent a group health plan or a health insurance
issuer offering group health insurance coverage from
negotiating the level and type of reimbursement with a
provider for care provided in accordance with this section.
``(c) Exemptions.--
``(1) Small employer exemption.--
``(A) In general.--This section shall not apply to any
group health plan (and group health insurance coverage
offered in connection with a group health plan) for any plan
year of a small employer.
``(B) Small employer.--For purposes of subparagraph (A),
the term `small employer' means, in connection with a group
health plan with respect to a calendar year and a plan year,
an employer who employed an average of at least 2 but not
more than 50 employees on business days during the preceding
calendar year and who employs at least 2 employees on the
first day of the plan year.
``(C) Application of certain rules in determination of
employer size.--For purposes of this paragraph--
``(i) Application of aggregation rule for employers.--Rules
similar to the rules under subsections (b), (c), (m), and (o)
of section 414 of the Internal Revenue Code of 1986 shall
apply for purposes of treating persons as a single employer.
``(ii) Employers not in existence in preceding year.--In
the case of an employer which was not in existence throughout
the preceding calendar year, the determination of whether
such employer is a small employer shall be based on the
average number of employees that it is reasonably expected
such employer will employ on business days in the current
calendar year.
``(iii) Predecessors.--Any reference in this paragraph to
an employer shall include a reference to any predecessor of
such employer.
``(2) Increased cost exemption.--This section shall not
apply with respect to a group health plan (or health
insurance coverage offered in connection with a group health
plan) if the application of this section to such plan (or to
such coverage) results in an increase in the cost under the
plan (or for such coverage) of at least 1 percent.
``(d) Separate Application to Each Option Offered.--In the
case of a group health plan that offers a participant or
beneficiary two or more benefit package options under the
plan, the requirements of this section shall be applied
separately with respect to each such option.
``(e) Definitions.--For purposes of this section:
``(1) Treatment limitation.--The term `treatment
limitation' means, with respect to benefits under a group
health plan or health insurance coverage, any day or visit
limits imposed on coverage of benefits under the plan or
coverage during a period of time.
``(2) Financial requirement.--The term `financial
requirement' means, with respect to benefits under a group
health plan or health insurance coverage, any deductible,
coinsurance, or cost-sharing or an annual or lifetime dollar
limit imposed with respect to the benefits under the plan or
coverage.
``(3) Medical or surgical benefits.--The term `medical or
surgical benefits' means benefits with respect to medical and
surgical services, as defined under the terms of the plan or
coverage (as the case may be), but does not include substance
abuse treatment benefits.
``(4) Substance abuse treatment benefits.--The term
`substance abuse treatment benefits' means benefits with
respect to substance abuse treatment services.
``(5) Substance abuse treatment services.--The term
`substance abuse treatment services' means any of the
following items and services provided for the treatment of
substance abuse:
``(A) Inpatient treatment, including detoxification.
``(B) Nonhospital residential treatment.
``(C) Outpatient treatment, including screening and
assessment, medication management, individual, group, and
family counseling, and relapse prevention.
``(D) Prevention services, including health education and
individual and group counseling to encourage the reduction of
risk factors for substance abuse.
``(6) Substance abuse.--the term `substance abuse' includes
chemical dependency.
``(f) Notice.--a group health plan under this part shall
comply with the notice requirement under section 714(f) 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 such 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 is
amended by adding at the end the following new section:

``SEC. 714. PARITY IN THE APPLICATION OF TREATMENT
LIMITATIONS AND FINANCIAL REQUIREMENTS TO
SUBSTANCE ABUSE TREATMENT BENEFITS.

[[Page S7052]]

means, in connection with a group health plan with respect to
a calendar year and a plan year, an employer who employed an
average of at least 2 but not more than 50 employees on
business days during the preceding calendar year and who
employs at least 2 employees on the first day of the plan
year.
``(C) Application of certain rules in determination of
employer size.--For purposes of this paragraph--
``(i) Application of aggregation rule for employers.--Rules
similar to the rules under subsections (b), (c), (m), and (o)
of section 414 of the Internal Revenue Code of 1986 shall
apply for purposes of treating persons as a single employer.
``(ii) Employers not in existence in preceding year.--In
the case of an employer which was not in existence throughout
the preceding calendar year, the determination of whether
such employer is a small employer shall be based on the
average number of employees that it is reasonably expected
such employer will employ on business days in the current
calendar year.
``(iii) Predecessors.--Any reference in this paragraph to
an employer shall include a reference to any predecessor of
such employer.
``(2) Increased cost exemption.--This section shall not
apply with respect to a group health plan (or health
insurance coverage offered in connection with a group health
plan) if the application of this section to such plan (or to
such coverage) results in an increase in the cost under the
plan (or for such coverage) of at least 1 percent.
``(d) Separate application to each option offered.--In the
case of a group health plan that offers a participant or
beneficiary two or more benefit package options under the
plan, the requirements of this section shall be applied
separately with respect to each such option.
``(e) Definitions.--For purposes of this section:
``(1) Treatment limitation.--The term `treatment
limitation' means, with respect to benefits under a group
health plan or health insurance coverage, any day or visit
limits imposed on coverage of benefits under the plan or
coverage during a period of time.
``(2) Financial requirement.--The term `financial
requirement' means, with respect to benefits under a group
health plan or health insurance coverage, any deductible,
coinsurance, or cost-sharing or an annual or lifetime dollar
limit imposed with respect to the benefits under the plan or
coverage.
``(3) Medical or surgical benefits.--The term `medical or
surgical benefits' means benefits with respect to medical or
surgical services, as defined under the terms of the plan or
coverage (as the case may be), but does not include substance
abuse treatment benefits.
``(4) Substance abuse treatment benefits.--The term
`substance abuse treatment benefits' means benefits with
respect to substance abuse treatment services.
``(5) Substance abuse treatment services.--The term
`substance abuse treatment services' means any of the
following items and services provided for the treatment of
substance abuse:
``(A) Inpatient treatment, including detoxification.
``(B) Nonhospital residential treatment.
``(C) Outpatient treatment, including screening and
assessment, medication management, individual, group, and
family counseling, and relapse prevention.
``(D) Prevention services, including health education and
individual and group counseling to encourage the reduction of
risk factors for substance abuse.
``(6) Substance abuse.--The term `substance abuse' includes
chemical dependency.
``(f) 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) Section 731(c) of such Act (29 U.S.C. 1191(c)) is
amended by striking ``section 711'' and inserting ``sections
711 and 714''.
(C) Section 732(a) of such Act (29 U.S.C. 1191a(a)) is
amended by striking ``section 711'' and inserting ``sections
711 and 714''.
(D) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 713
the following new item:

``714. Parity in the application of treatment limitations and financial
requirements to substance abuse treatment benefits.''.

(3) Internal revenue code amendments.--(A) Subchapter B of
chapter 100 of the Internal Revenue Code of 1986 (relating to
other requirements) is amended by adding at the end the
following new section:

``SEC. 9813. PARITY IN THE APPLICATION OF TREATMENT
LIMITATIONS AND FINANCIAL REQUIREMENTS TO
SUBSTANCE ABUSE TREATMENT BENEFITS.

``(a) In General.--In the case of a group health plan that
proves both medical and surgical benefits and substance abuse
treatment benefits, the plan shall not impose treatment
limitations or financial requirements on the substance abuse
treatment benefits unless similar limitations or requirements
are imposed for medical and surgical benefits.
``(b) Construction.--Nothing in this section shall be
construed--
``(1) as a requiring a group health plan to provide any
substance abuse treatment benefits; or
``(2) to prevent a group health plan from negotiating the
level and type of reimbursement with a provider for care
provided in accordance with this section.
``(c) Exemptions.--
``(1) Small employer exemption.--
``(A) In general.--This section shall not apply to any
group health plan for any plan year of a small employer.
``(B) Small employer.--For purposes of subparagraph (A),
the term `small employer' means, in connection with a group
health plan with respect to a calendar year and a plan year,
an employer who employed an average of at least 2 but not
more than 50 employees on business days during the preceding
calendar year and who employs at least 2 employees on the
first day of the plan year.
``(C) Application of certain rules in determination of
employer size.--For purposes of this paragraph--
``(i) Application of aggregation rule for employers.--Rule
similar to the rules under subsections (b), (c), (m), and (o)
of section 414 shall apply for purposes of treating persons
as a single employer.
``(ii) Employers not in existence in preceding year.--In
the case of an employer which was not in existence throughout
the preceding calendar year, the determination of whether
such employer is a small employer shall be based on the
average number of employees that it is reasonably expected
such employer will employ on business days in the current
calendar year.
``(iii) Predecessors.--Any reference in this paragraph to
an employer shall include a reference to any predecessor of
such employer.
``(2) Increased cost exemption.--This section shall not
apply with respect to a group health plan if the application
of this section to such plan results in an increase in the
cost under the plan of at least 1 percent.
``(d) Separate Application to Each Option Offered.--In the
case of a group health plan that offers a participant or
beneficiary two or more benefit package options under the
plan, the requirements of this section shall be applied
separately with respect to each such option.
``(e) Definitions.--For purposes of this section:
``(1) Treatment limitation.--The term `treatment
limitation' means, with respect to benefits under a group
health plan, any day or visit limits imposed on coverage of
benefits under the plan during a period of time.
``(2) Financial requirement.--The term `financial
requirement' means, with respect to benefits under a group
health plan, any deductible, coinsurance, or cost-sharing or
an annual or lifetime dollar limit imposed with respect to
the benefits under the plan.
``(3) Medical or surgical benefits.--The term `medical or
surgical benefits' means benefits with respect to medical or
surgical services, as defined under the terms of the plan,
but does not include substance abuse treatment benefits.
``(4) Substance abuse treatment benefits.--The term
`substance abuse treatment benefits' means benefits with
respect to substance abuse treatment services.
``(5) Substance abuse treatment services.--The term
`substance abuse treatment services' means any of the
following items and services provided for the treatment of
substance abuse:
``(A) Inpatient treatment, including detoxification.
``(B) Non-hospital residential treatment.
``(C) Outpatient treatment, including screening and
assessment, medication management, individual, group, and
family counseling, and relapse prevention.
``(D) Prevention services, including health education and
individual and group counseling to encourage the reduction of
risk factors for substance abuse.
``(6) Substance abuse.--The term `substance abuse' includes
chemical dependency.''.
``(B) Section 4980D(d)(1) of such Code is amended by
inserting ``(other than a failure attributable to section
9813)'' after ``on any failure''.
``(C) The table of sections of subchapter B of chapter 100
of such Code is amended by adding at the end the following
new item:

``9813. Parity in the application of treatment limitations and
financial requirements to substance abuse treatment
benefits.''.

[[Page S7053]]

(b) Individual Health Insurance.--(1) Part B of title XXVII
of the Public Health Service Act is amended by inserting
after section 2752 the following new section:

``SEC. 2753. PARITY IN THE APPLICATION OF TREATMENT
LIMITATIONS AND FINANCIAL REQUIREMENTS TO
SUBSTANCE ABUSE BENEFITS.

``(a) In General.--The provisions of section 2707 (other
than subsection (e)) shall apply to health insurance coverage
offered by a health insurance issuer in the individual market
in the same manner as it applies to health insurance coverage
offered by a health insurance issuer in connection with a
group health plan in the small or large group market.
``(b) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 714(f)
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) Section 2762(b)(2) of such 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) Subject to paragraph (3), the
amendments made by subsection (a) apply with respect to group
health plans for plan years beginning on or after January 1,
2004.
(2) The amendments made by subsection (b) apply with
respect to health insurance covered offered, sold, issued,
renewed, in effect, or operated in the individual market on
or after January 1, 2004.
(3) In the case of a group health plan maintained pursuant
to 1 or more collective bargaining agreements between
employee representatives and 1 or more employers ratified
before the date of enactment of this Act, the amendments made
by subsection (a) shall not apply to plan years beginning
before the later of--
(A) the date on which the last collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of enactment of this Act), or
(B) January 1, 2004.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by subsection (a) shall not be treated as a
termination of such collective bargaining agreement.
(d) Coordinated Regulations.--Section 104(1) of the Health
Insurance Portability and Accountability Act of 1996 is
amended by striking ``this subtitle (and the amendments made
this subtitle and section 401)'' and inserting ``the
provisions of part 7 of the subtitle B of title I of the
Employee Retirement Congressional Income Security Act of
1974, and 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''.
(e) Preemption.--Nothing in the amendments made by this
section shall be construed to preempt any provision of State
law that provides protections to individuals that are greater
than the protections provided under such amendments.
______

By Mr. DeWINE (for himself and Mr. Lautenberg):
S. 1139. A bill to direct the National Highway Traffic Safety
Administration to establish and carry out traffic safety law
enforcement and compliance campaigns, and for other purposes; to the
Committee on Commerce, Science, and Transportation.
Mr. DeWINE. Mr. President, I rise today, along with my colleague from
New Jersey, Senator Lautenberg, to introduce a bi-partisan bill aimed
at reducing the number of vehicle incidents associated with drinking
and driving.
Last year, the Nation experienced an increase in alcohol-related
traffic fatalities for the third year in a row. This increase resulted
in 17,970 deaths or 42 percent of the 42,850 people killed in traffic
incidents. Statistics from the National Highway Traffic Safety
Administration show that motor vehicle crashes are the leading cause of
death for Americans ages 1 to 35 years of age. In fact, on average, 117
people die each day from motor vehicle crashes in the United States.
Our bill--the Traffic Safety Law Enforcement Campaign Act--would
require States to conduct a combined media/law enforcement campaign
aimed at reducing these traffic fatalities. Specifically, the law
enforcement portion consists of sobriety checkpoints in the District of
Columbia and in the 39 States that allow them and saturation patrols in
those States that do not. The Centers for Disease Control estimate that
the sobriety checkpoints proposed in the underlying bill may reduce
alcohol related crashes by as much as 20 percent. More than 75 percent
of the public has indicated in NHTSA polls support for sobriety
checkpoints. In fact, NHTSA has concluded that 62 percent of Americans
want sobriety checkpoints to be used more often.
I urge each of my colleagues to join this bi-partisan effort to save
lives and promote highway safety.
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. 1139

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 ``Traffic Safety Law
Enforcement Campaign Act''.

SEC. 2. TRAFFIC SAFETY LAW ENFORCEMENT CAMPAIGNS.

(a) In General.--The Administration of the National Highway
Traffic Safety Administration shall establish a program to
conduct at least 3 high-visibility traffic safety law
enforcement campaigns each year.
(b) Focus.--The campaigns shall focus on--
(1) reducing alcohol-impaired driving;
(2) increasing seat belt use; and
(3) a combination of reducing alcohol-impaired driving and
increasing seat belt use.
(c) Advertising.--The Administrator may use, or authorize
the use of, funds available to carry out this section for the
development, production, and use of broadcast and print media
advertising in carrying out this section.
(d) Evaluation and Report.--The Administrator shall
evaluate the effectiveness of the campaigns at the end of
each year and submit a report to the Senate Committee on
Commerce, Science, and Transportation and the House of
Representatives Committee on Transportation and
Infrastructure within 90 days after the end of each year
setting forth the findings, conclusions, and recommendations
of the Administrator with respect to the program.

SEC. 3. FUNDING.

(a) In General.--There are authorized to be appropriated
out of the Highway Trust Fund (other than from the Mass
Transmit Account) to the Administrator to carry out this
Act $150,000,000 for each of fiscal years 2004 through
2009, of which--
(a) $48,000,000 shall be used for each fiscal year for
nationwide advertising by the Administration;
(2) $48,000,000 shall be made available each fiscal year by
the Administrator to States for advertising;
(3) $48,000,000 shall be made available each fiscal year by
the Administrator to States for traffic safety law
enforcement; and
(4) $6,000,000 shall be available to the Administrator for
evaluation of the program under section 2.
(b) Program Standards.--Within 120 days after the date of
enactment of this Act, the Administrator shall promulgate
program standards and criteria for the use of funds under
subsection (a)(2) and (3) that will ensure the effective and
appropriate use of such funds in accordance with this Act,
taking into account State efforts, needs, administrative
resources, and priorities.
(c) Apportionment.--The Administrator shall apportion funds
under subsection (a)(2) and (3) among the States on the same
basis as funds are apportioned among the States under section
402(c) of title 23, United States Code.
______

By Mr. LAUTENBERG (for himself, Mr. DeWine, and Mrs. Feinstein):
S. 1140. A bill to amend titles 23 and 49, United States Code,
concerning length and weight limitations for vehicles operating on
Federal-aid highways, and for other purposes; to the Committee on
Environment and Public Works.
Mr. LAUTENBERG. Mr. President, today, I am proud to introduce, along
with my colleagues Senator DeWine and Senator Feinstein, legislation
which will make our roads safer and last longer. Anyone who has ever
shared the road with a large tractor trailer truck has wondered whether
the truck driver is aware of the smaller vehicles around the truck.
Anyone who has seen the third trailer on a triple-trailer truck
swinging around like the tail end of a snake knows that these trucks
are to be avoided.
The State of New Jersey sees its share of the Nation's truck traffic,
but, incidentally, not its share of federal highway dollars. We are
concerned about these 53-foot, 80,000-pound vehicles on our highways
and the pressure from other states to increase weight and length
limitations to allow bigger trucks to come through our State. This

[[Page S7054]]

makes truck safety even more important to New Jersey drivers.
Twelve years ago, I got a provision into the highway reauthorization
bill we call ``ICE-TEA'' to ban triple-trailer trucks and other so-
called ``longer combination vehicles'', LCVs, from New Jersey and most
other States. At that time and ever since, the trucking industry has
fought to defeat and repeal this ban, under the guise of arguments for
``states' rights'' and ``unfair re-distribution of business to
railroads.'' But these are not rational arguments for allowing bigger
and heavier trucks as well as triple-trailer trucks on our roads.
Additionally, the trucking industry's proclaimed hardships have not
materialized. In fact, the trucking companies have survived the current
laws quite well, and trucks have refined their role in our national
freight transportation system.
Our bill, the ``Safe Highways and Infrastructure Preservation Act,
will extend the current limited ban which only applies to our 44,000-
mile Interstate Highway System to the entire 156,000-mile National
Highway System, NHS. This extension will make more roads safer and will
further reduce the wear and tear of our highways and bridges.
Bigger trucks are not safe. The U.S. Department of Transportation has
determined that multi-trailer trucks are likely to be involved in more
fatal crashes--11 percent more--than today's single-trailer trucks. By
expanding the limits on triples and other longer combination vehicles
to the entire NHS--including more than 2,000 miles of highway in New
Jersey--the Safe Highways and Infrastructure Protection Act will save
lives and prevent further deterioration of our roads and bridges.
Triple-trailers and other LCVs do more damage to our roads and
bridges but don't come close to paying associated maintenance and
repair costs. The fees, tolls and gasoline taxes paid by the operator
of a 100,000-pound truck only covers 40 percent of the cost of the
damage that truck does to our roads and bridges. The rest of the
taxpayers make up the difference. I believe that motorists should not
have to share the road with these dangerous behemoths and pay for the
extra damage they cause.
I thank my colleagues Senator DeWine and Senator Feinstein for
joining me in sponsoring this important legislation, and I look forward
to working with my colleagues in the Congress to improve the highway
safety and increase the remaining life of our country's roads and
bridges.
______

By Mr. LAUTENBERG (for himself and Mr. DeWine):
S. 1141. A bill to amend title 23, United States Code, to increase
penalties for individuals who operate motor vehicles while intoxicated
or under the influence of alcohol; to the Committee on Environment and
Public Works.
Mr. LAUTENBERG. Mr. President, today Senator Mike DeWine of Ohio and
I are helping to make a big stride in re-arming our country in the war
against drunk driving. Together, we have introduced two pieces of
legislation which will help reduce the number of civilian casualties in
this war by arming our government safety officials with the weapons
they need to keep drunk drivers off of our roads.
First, I am proud to be a cosponsor of Senator DeWine's legislation
on improving enforcement of drunk driving laws. There are some good
drunk driving laws on the books and they should not be ignored. Since
September 11, 2001, much of our country's law enforcement focus has
been on ensuring the security of citizens from terrorist attack. This
legislation will ensure that efforts to reduce drunk driving are not
given short shrift. Almost 18,000 people died last year in alcohol-
related motor vehicle traffic crashes, and we must not neglect the
safety of our highways. This bill provides needed resources for law
enforcement and will deter people from drinking and driving to begin
with.
Second, I am proud to introduce, along with Senator DeWine,
legislation targeting higher-risk drivers. This includes repeat
offenders and drivers with blood alcohol concentration levels of 0.15
percent or higher. Once these offenders are caught, we need to make
sure they don't fall through the cracks in the legal system. These
criminals should not be behind the wheel--I believe they are a menace
to our society, and we should not tolerate their existence.
I have long been interested in making our roads and highways safer.
During my previous tenure, I saw to it that the Federal government took
responsibility for reducing the number of fatalities due to drunk
driving. I authored laws to increase the minimum drinking age for
alcoholic beverages from 18 to 21, and to encourage States to establish
.08 percent as the blood alcohol concentration standard for drunk
driving nationwide. These laws have made our roads and highways safer
and my hope is that they have saved many precious lives.
I feel that the Federal Government needs to take a strong leadership
role to reduce alcohol-impaired driving. States cannot deal with these
problems in a comprehensive manner. We have passed legislation
encouraging states to establish tougher standards for highways safety
and drunk driving, but: 32 States still don't have a primary
enforcement safety belt law; 11 States still have not adopted the .08
percent Blood Alcohol Content (BAC) standard; 24 States still don't
have an open container law; and 27 States still don't have a repeat
offender law for drunk driving offenses.
I am particularly disappointed that my home State of New Jersey has
not yet adopted the .08 percent BAC standard. At risk are millions of
dollars in Federal highway funding that our State desperately needs to
repair and improve our roads and bridges. Here in Congress, I fight
desperately for this funding. But the State puts this funding at risk
rather than make a sensible safety choice and adopt a .08 percent BAC
standard. This is why I feel that the Federal Government needs to take
a leadership role in setting policies that will save lives by reducing
drunk driving.
I feel that States need stronger ``encouragement'' to address these
important highway safety issues. We have already tried threatening
withholding highway construction funds, but if we allow a loophole for
States to recover the funds within 4 years; maybe that still is not
enough encouragement.
Now it is time to take the next step in getting drunk drivers off our
roads. I look forward to working with Senator DeWine and the rest of my
colleagues in the Senate to reduce the 18,000 alcohol-related traffic
fatalities that occur each year. I urge my colleagues to join me and
Senator DeWine in supporting both of these important pieces of
legislation.

____________________