[Congressional Record Volume 149, Number 139 (Friday, October 3, 2003)]
[Senate]
[Pages S12449-S12470]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CORZINE:
  S. 1711. A bill to increase the expertise and capacity of community-
based organizations involved in economic development activities and key 
development programs; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mr. CORZINE. Mr. President, I rise today to introduce the Community 
Economic Development Expertise Enhancement Act of 2003.
  This regulation would provide funding for nonprofit, community-based 
economic development organizations and for the establishment of 
partnerships between these organizations. Most importantly, the 
legislation would authorize grants to promote the use of mentors to 
improve the operational capabilities of community-based organizations 
in the areas of project development, personnel management, legal 
services, and financial management. These and other eligible uses of 
the funding would increase the capacity of these organizations to 
expand community development activities throughout the country.
  Over the past several decades, our Nation has seen the emergence of 
community-based organizations that have helped break the cycle of 
poverty for millions of families. Today, according to the National 
Congress of Community Economic Development, there are more than 3,600 
of these organizations, many of which serve some of our Nation's most 
economically challenged communities. These include both urban and rural 
areas, as well as suburban regions.
  Typically, community development corporations have annual budgets 
ranging from $200,000 to $500,000 and staffs averaging about six 
members. Their lack of personnel, expertise and financing often creates 
real constraints on their ability to make even greater contributions to 
their community.
  This legislation would expand our investment in these organizations, 
and expand their capacity to build homes, create jobs, improve public 
safety, provide critical social services, increase access to capital, 
and turn around communities now filled with despair. The bill would 
serve a wide range of communities with different economic, geographic, 
and social characteristics.
  I hope my colleagues will support the bill, and I ask unanimous 
consent that the text of the legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1711

       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 ``Community Economic 
     Development Expertise Enhancement Act of 2003''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) there are a multitude of community economic development 
     programs administered by the Federal Government that assist 
     many of the most economically distressed areas in the United 
     States in--
       (A) revitalizing physical and economic structures; and
       (B) providing support to small- and medium-sized businesses 
     to encourage and assist the businesses in generating long-
     term jobs and economic opportunity;
       (2) there are many nonprofit, nongovernmental, community-
     based economic development organizations, including faith-
     based organizations, that have successfully operated 
     community economic development programs that create jobs, 
     build homes, and revitalize local markets;

[[Page S12450]]

       (3) Federal community economic development programs in 
     effect as of the date of enactment of this Act are intended 
     to leverage private sector investment as part of an overall 
     community development effort;
       (4) Federal community economic development programs connect 
     residents of distressed neighborhoods to jobs and 
     opportunities of the regional marketplace, replacing economic 
     distress with opportunity;
       (5) Federal community economic development programs--
       (A) provide financial assistance, including tax credits and 
     loan guarantees;
       (B) involve private investment institutions and 
     universities; and
       (C) provide technical expertise for small businesses;
       (6) Federal community economic development programs in 
     effect as of the date of enactment of this Act build on 
     ongoing efforts to encourage economic growth in distressed 
     communities by--
       (A) helping to create new affordable housing opportunities;
       (B) allowing communities to address important public 
     safety, access to capital, infrastructure, and environmental 
     concerns; and
       (C) providing social services, including affordable health 
     care, transportation, child care, and youth development;
       (7) the continuing success of Federal community economic 
     development programs will depend in great measure on the 
     ability of community-based organizations and private sector 
     institutions to form partnerships that connect residents of 
     distressed neighborhoods to jobs and other opportunities;
       (8) the Federal Government administers various programs 
     that employ the services and capabilities of community-based 
     organizations to deliver a wide range of services to 
     residents of distressed communities;
       (9) Federal community economic development programs help 
     achieve lasting improvement and enhance domestic prosperity 
     by the establishment of stable and diversified local 
     economies, sustainable development, and improved local 
     conditions;
       (10) there is a need for greater cooperation between the 
     Federal Government, States, and other entities to ensure 
     that, consistent with national community economic development 
     objectives, Federal programs are compatible with, and further 
     the objectives of, State, regional, and local economic 
     development plans and comprehensive economic development 
     strategies;
       (11) while economic development is an inherently local 
     process, the Federal Government should work in closer 
     partnership with community-based economic development 
     organizations to ensure that--
       (A) resources are fully utilized; and
       (B) all people in the United States have an opportunity to 
     participate in the economic growth of the United States; and
       (12) extending technical assistance to community-based 
     economic development organizations may be necessary or 
     desirable--
       (A) to alleviate economic distress;
       (B) to encourage and support public-private partnerships 
     for the formation and improvement of economic development 
     strategies that promote the growth of the national economy;
       (C) to stimulate modernization and technological advances 
     in the generation and commercialization of goods and 
     services; and
       (D) to enhance the effectiveness of United States companies 
     in the global economy.
       (b) Purposes.--The purposes of this Act are--
       (1) to provide a new source of Federal funding to enhance 
     the capabilities of nonprofit, nongovernmental, community-
     based economic development organizations, or collaborations 
     of those organizations, to leverage private sector investment 
     as part of an overall community development strategy;
       (2) to establish educational programs for nonprofit, 
     nongovernmental, community-based organizations to expand the 
     project development capabilities of those organizations;
       (3) to increase the use of tax incentives to leverage 
     private sector investment in community economic development 
     projects;
       (4) to promote and facilitate investments in community-
     based economic development projects from traditional and 
     nontraditional capital sources;
       (5) to encourage partnerships between community-based 
     organizations that will expand and enhance the expertise of 
     emerging nonprofit, nongovernmental organizations in using 
     private sector investment as part of the comprehensive 
     community development strategies of the organizations; and
       (6) to ensure that viable community economic development 
     projects are successfully pursued throughout the United 
     States in communities having a wide range of economic, 
     geographic, and social characteristics.

     SEC. 3. DEFINITIONS.

        In this Act:
       (1) Community-based economic development organization.--
       (A) In general.--The term ``community-based economic 
     development organization'' means a nonprofit, nongovernmental 
     organization that--
       (i) has the primary mission to serve, or provide investment 
     capital for, low-income communities and low-income 
     individuals; and
       (ii) either--

       (I) maintains accountability to residents of low-income 
     communities through representation of those residents on any 
     governing board of the organization or on any advisory board 
     to the organization; or
       (II) maintains accountability to low-income communities by 
     having a governing board that primarily consists of leaders 
     of community-based development organizations from the region 
     or State of the organization.

       (B) Inclusion.--The term ``community-based economic 
     development organization'' includes any faith-based 
     organization that complies with the requirements under 
     clauses (i) and (ii) of subparagraph (A).
       (C) Treatment of community development financial 
     institutions.--The requirements of subparagraph (A) shall be 
     deemed to be met by any community development financial 
     institution (as defined in section 103 of the Community 
     Development Banking and Financial Institutions Act of 1994 
     (12 U.S.C. 4702)).
       (2) Community economic development project.--The term 
     ``community economic development project'' means a project 
     that involves--
       (A) investment in business enterprises, including 
     investments in the form of loan origination, equity 
     investment, and monetary assistance to home buyers or to 
     business owners for business development projects; or
       (B) the construction or rehabilitation of facilities, 
     including commercial or industrial facilities, homes, 
     apartment buildings, and community parks.
       (3) Low-income community.--The term ``low-income 
     community'' has the meaning given the term in section 45D of 
     the Internal Revenue Code of 1986.
       (4) Low-income individual.--The term ``low-income 
     individual'' means any individual who--
       (A) lives in an area other than a metropolitan area and 
     whose median family income does not exceed 80 percent of the 
     statewide median family income; or
       (B) lives in a metropolitan area and whose median family 
     income does not exceed 80 percent of the greater of the 
     statewide median family income or the metropolitan area 
     median family income, as those terms are used in section 45D 
     of the Internal Revenue Code of 1986.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.

     SEC. 4. GRANTS TO INCREASE CAPACITY AND EXPERTISE OF 
                   NONPROFIT, NONGOVERNMENTAL COMMUNITY-BASED 
                   ORGANIZATIONS INVOLVED IN COMMUNITY ECONOMIC 
                   DEVELOPMENT ACTIVITIES.

       (a) Grant Authority.--The Secretary may provide grants 
     under this section only--
       (1) to eligible community-based economic development 
     organizations; and
       (2) for the purposes described in subsection (c).
       (b) Eligible Community-Based Economic Development 
     Organization.--
       (1) Definition.--In this section, the term ``eligible 
     community-based economic development organization'' means a 
     community-based economic development organization, or a 
     collaboration of organizations (including city or State 
     community economic development associations), that 
     demonstrates management capacity by meeting, as determined by 
     the Secretary, 2 or more of the requirements in paragraph 
     (2).
       (2) Requirements.--The requirements referred to in 
     paragraph (1), with respect to an eligible community-based 
     economic development organization, are--
       (A) completion of construction of 10 or more dwelling units 
     of affordable housing;
       (B) completion of construction of a commercial, industrial, 
     retail, or community facility project;
       (C) the past or present provision, in partnership with 
     community-based economic development organizations, of 
     training, education, capacity, technical assistance, or other 
     mentoring services;
       (D) the exhibition of willingness to form operational 
     partnerships and execute contractual agreements with emerging 
     community-based economic development organizations; and
       (E) the possession of tangible assets the value of which is 
     not less than the value of the grant requested under this 
     section.
       (c) Use of Funds.--
       (1) Purposes.--Amounts from a grant provided under this 
     section may be used only--
       (A) to pay salaries or administrative expenses of the 
     grantee or an emerging community-based economic development 
     organization that is undertaking a community economic 
     development project;
       (B) to provide technical assistance to an emerging 
     community-based economic development organization that is 
     undertaking a community economic development project; or
       (C) to conduct training or research, and to carry out 
     technical assistance, relating to community economic 
     development through subgrants under paragraph (2), including 
     subgrants for program evaluation and economic impact 
     analyses.
       (2) Expenditure.--Amounts from a grant provided under this 
     section may be--
       (A) used directly by the eligible community-based economic 
     development organization receiving the grant; or
       (B) redistributed by the recipient to a nonprofit, 
     nongovernmental entity in the form of--
       (i) a grant;
       (ii) a loan;
       (iii) a loan guarantee;

[[Page S12451]]

       (iv) a payment to reduce interest on a loan guarantee; or
       (v) other appropriate assistance.
       (d) Selection Criteria.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     shall promulgate rules, including guidelines and procedures, 
     to provide for the selection of eligible community-based 
     economic development organizations for grants under this 
     section.
       (2) Criteria.--The rules promulgated under paragraph (1) 
     shall--
       (A) be based on a determination of the relative 
     effectiveness of the organizations in carrying out the 
     purposes of this Act; and
       (B) provide for consideration of--
       (i) the number of eligible community-based economic 
     development organizations eligible to receive assistance 
     under programs other than this section;
       (ii) the extent to which grant amounts provided under this 
     section will enhance the capabilities of community-based 
     economic development organizations in underserved States and 
     localities;
       (iii) the extent to which an eligible community-based 
     economic development organization applying for a grant does 
     not have access to other traditional local financial sources;
       (iv) the extent to which an eligible community-based 
     economic development organization represents nonprofit, 
     nongovernmental organizations that serve low-income 
     communities and individuals; and
       (v) the extent to which an eligible community-based 
     economic development organization will implement a plan to 
     become financially sustainable.
       (e) Amount.--A grant provided under this section to a 
     single grantee shall be in an amount that is not less than 
     $250,000 and not greater than $1,000,000.
       (f) Prohibition of Matching Funds Requirement.--The 
     Secretary may not require a grantee under this section to 
     provide amounts from sources other than this section to fund 
     the specific activities to be carried out with grant amounts 
     provided under this section.
       (g) Eligibility for Community Reinvestment Act Credits.--In 
     determining whether an eligible community-based economic 
     development organization is meeting the credit needs of the 
     community of that organization for the purpose of section 
     804(a) of the Community Reinvestment Act of 1977 (12 U.S.C. 
     2903(a)), the appropriate Federal financial supervisory 
     agency (as defined in section 803 of that Act (12 U.S.C. 
     2902)), in assessing and taking into account the record of 
     any regulated financial institution, may consider as a factor 
     investments in community economic development projects of 
     eligible community-based economic development organizations.
       (h) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     provide grants under this section $75,000,000 for each of 
     fiscal years 2004 through 2006.
       (2) Set-aside for technical assistance and training.--
       (A) In general.--Of the amount made available under this 
     Act for each fiscal year, subject to subparagraph (C), 
     $10,000,000 shall be available only for technical assistance 
     and training activities, to be conducted by organizations 
     described in subparagraph (B).
       (B) Organizations.--The organizations referred to in 
     subparagraph (A) are national community development 
     organizations, State community development associations, and 
     city community development associations, that have extensive 
     nationwide partnerships and experience in working with 
     community-based economic development organizations in 
     accordance with section 4 of the HUD Demonstration Act of 
     1993 (42 U.S.C. 9816 note), as in effect on April 30, 2000.
       (C) Reservation.--Of the amount reserved for use under this 
     paragraph, not less than $4,000,000 shall be used for the 
     support of development organizations in rural areas.

     SEC. 5. ASSESSMENT OF COMMUNITY-BASED ECONOMIC DEVELOPMENT 
                   EXPERTISE.

       (a) Capability Study.--
       (1) In general.--The Secretary shall conduct a study to 
     assess the capability needs of community-based economic 
     development organizations that--
       (A) analyzes, evaluates, and recommends processes to 
     improve the administrative and operational capabilities of 
     the organizations to acceptable levels of success in support 
     of the role of the Federal Government in community economic 
     development; and
       (B) assesses the extent to which Federal agencies may--
       (i) incorporate the organizations into the formulation of 
     the strategic plans of funding agencies; and
       (ii) if the extent or quality of that type of involvement 
     is satisfactory, support the role of the Federal Government 
     in community economic development.
       (2) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the results of the study under this 
     subsection.
       (b) Annual Reports to Congress.--Not later than the first 
     March 1 occurring after the end of each fiscal year for which 
     amounts are made available for grants under section 4, the 
     Secretary shall submit to Congress a report that includes--
       (1) an evaluation of the progress made during the fiscal 
     year covered by the report, to enhance the administrative and 
     operational capabilities of community-based economic 
     development organizations in support of the role of the 
     Federal Government in community economic development;
       (2) an assessment of the extent to which Federal agencies 
     have, during that fiscal year, involved community-based 
     economic development organizations in--
       (A) carrying out community economic development programs 
     administered by the agencies; and
       (B) delivering services under those programs that enhance 
     the operational capabilities of the organizations; and
       (3) a plan for making recommendations for actions or 
     measures to further involve community-based economic 
     development organizations in the strategic operations of 
     Federal agencies in support of community economic 
     development.
       (c) Final Evaluation.--
       (1) In general.--On termination of the grant program under 
     section 4, the Secretary shall select an independent entity 
     that has experience in national community economic 
     development activities, nonprofit community-based developers, 
     and impact evaluation and analysis to conduct an evaluation 
     of the impact of the grant program.
       (2) Report.--Not later than 180 days after the conclusion 
     of the last fiscal year for which amounts are made available 
     for grants under section 4, the entity conducting the 
     evaluation under this subsection shall submit to the 
     Secretary and Congress a final report regarding the 
     evaluation.

     SEC. 6. ADVISORY COUNCIL.

       (a) Establishment.--The Secretary shall establish an 
     advisory council to be known as the ``Secretary's Advisory 
     Council on Community Economic Development'' (referred to in 
     this section as the ``Advisory Council'').
       (b) Duties.--The Advisory Council shall make 
     recommendations to the Secretary, for use in carrying out 
     this Act, including recommendations on--
       (1) developing plans under section 5(b)(3); and
       (2) reviewing and making recommendations on plans that have 
     been developed.
       (c) Membership.--
       (1) In general.--The Advisory Council shall consist of not 
     less than 19 members, to be appointed by the Secretary, as 
     described in paragraphs (2) and (3).
       (2) Nonvoting members.--The nonvoting members of the 
     Advisory Council shall be--
       (A) the Secretary of Housing and Urban Development;
       (B) the Secretary of Health and Human Services;
       (C) the Assistant Secretary for Economic Development of the 
     Department of Commerce;
       (D) the Administrator of the Community Development 
     Financial Institutions Fund; and
       (E) the Under Secretary of Agriculture for Rural 
     Development.
       (3) Voting members.--
       (A) In general.--The Advisory Council shall have not less 
     than 14 voting members, to include--
       (i) at least 2 individuals who conduct research on 
     community economic development activities;
       (ii) at least 2 individuals who are experts in community 
     economic development financing;
       (iii) at least 3 individuals who are publicly elected 
     officials; and
       (iv) at least 7 individuals who are representatives of 
     community-based economic development organizations that carry 
     out community economic development activities.
       (B) Limitation.--No voting member of the Advisory Council 
     may be an officer or employee of the Federal Government.
       (d) Travel Expenses.--Members of the Advisory Council shall 
     not receive any compensation for service on the Advisory 
     Council, other than travel expenses (including per diem in 
     lieu of subsistence), in accordance with sections 5702 and 
     5703 of title 5, United States Code.

     SEC. 7. COORDINATION WITH THE ANNUAL BUDGET REQUEST OF THE 
                   PRESIDENT.

        The President of the United States shall include with each 
     annual budget of the Federal Government required to be 
     submitted under section 1105(a) of title 31, United States 
     Code, a report regarding Federal financial support for 
     community economic development that includes--
       (1) a detailed summary of the total level of funding 
     committed to community-based economic development 
     organizations by all Federal agencies;
       (2) a statement of--
       (A) projected funding levels for the grant program under 
     section 4 for the upcoming fiscal year and each fiscal year 
     thereafter until fiscal year 2010; and
       (B) projected funding levels for financial assistance for 
     economic development activities for each Federal agency that 
     provides that assistance;
       (3) an identification and analysis of the method (including 
     grant agreements, procurement contracts, and cooperative 
     agreements (as those terms are used in chapter 63 of title 
     31, United States Code)) by which financial assistance is 
     provided for each economic development activity; and
       (4) recommendations for specific activities and measures--
       (A) to enhance community-based economic development 
     capacity building in States having less concentrated economic 
     and infrastructure resources; and
       (B) to strengthen nationwide community-based economic 
     development.

[[Page S12452]]

                                 ______
                                 
      By Mr. LIEBERMAN (for himself and Mr. Levin):
  S. 1712. A bill to re-establish and reform the independent counsel 
statute; to the Committee on Governmental Affairs.
  Mr. LIEBERMAN. Mr. President, I am very pleased to be joining today 
with Senator Levin in introducing the Independent Counsel Reform Act of 
2003. With this bill, we hope to convince our colleagues that an 
improved independent counsel statute can serve an essential purpose. We 
want to convince our colleagues that our legislation will preserve the 
ideals that motivated the enactment of this statute in the years after 
Watergate, that no person is above the law, and that our highest 
government officials must be subject to our laws in the same way as any 
other person. If they are guilty, they must be held accountable. If 
they are not, they must be cleared. In these cases the American people 
are more likely to trust the findings of an independent counsel's 
investigation and conclusions. Officials who are wrongly accused will 
receive vindication that is far more credible to the public than when 
it comes from the Department of Justice. As a result, the public's 
confidence in its government is enhanced by the independent counsel 
statute.
  In 1999, as the independent counsel law was expiring, I joined with 
Senators Levin, Specter, and Collins in introducing the Independent 
Counsel Reform Act of 1999. That year, we drafted new provisions to 
curb the excesses we had seen in some of the investigations conducted 
under the prior incarnation of the law. The revisions ensure that there 
will be fewer Independent Counsel appointed, and that their actions 
will in many respects be constrained by the same sorts of guidelines 
and practical restraints that govern regular federal prosecutors. The 
bill we are introducing today retains these suggested reforms. In fact, 
it is virtually identical to the Independent Counsel Reform Act of 
1999, with a single exception I will describe in a moment.
  We made those substantial changes after the Committee on Governmental 
Affairs had held five hearings on the Independent Counsel statute. 
During the hearings we heard from numerous witnesses who had served as 
Independent Counsel, and as Attorney General, from former prosecutors 
and from defense attorneys. Many witnesses supported the statute, even 
defense attorneys who had represented targets in Independent Counsel 
investigations. Both witnesses who opposed the statute outright, and 
those who advocated keeping it in some form, suggested a number of 
improvements to the statute. We carefully considered those 
recommendations before we sat down to draft a bill that retained the 
essential features of the old law while reducing its scope, limiting 
the powers of the Independent Counsel, and bringing greater 
transparency into the process.

  For example, the threshold for seeking the appointment of an 
Independent Counsel will be raised, so that a greater amount of 
evidence to back up allegations of criminal conduct will be required. 
The attorney General will also be entitled for the first time to issue 
subpoenas for evidence and convene grand juries during the preliminary 
investigation, and would be given more time to conduct preliminary 
investigations. This change responds to concerns that, in the past, the 
Attorney General's hands have been tied during the preliminary 
investigation stage. With our bill, the Department of Justice will be 
able to conduct a more substantial preliminary investigation.
  In another change that will reduce the number of Independent Counsel 
appointed, officials covered by the statute will be limited to the 
President, the Vice President, the President's Chief of Staff, and 
Cabinet members. This is a major reduction compared to the number of 
officials covered by the Independent Counsel statute when it expired. 
The Attorney General will retain the discretionary authority to appoint 
an Independent Counsel to investigate non-covered individuals when the 
Attorney General determines that investigation or prosecution by the 
Department of Justice would result in a personal, financial or 
political conflict of interest. This discretionary authority was part 
of the Independent Counsel law from 1983 to 1999; although the 
provision was not included in the bill we introduced that year, it has 
been included in this bill because of the promulgation, after our bill 
was introduced, of new regulations by the Department of Justice.
  In many administrations, high level political advisers can have 
enormous influence, much more even than some Cabinet members. When we 
first introduced the Independent Counsel Reform Act of 1999, I hoped 
that criminal allegations against officials not covered by the statute 
could be handled either by the Department of Justice, or, in cases 
involving high-level officials or other conflicts of interest, through 
the appointment by the Attorney General of a Special Counsel. After our 
bill was introduced, however, then Attorney General Reno issued revised 
regulations for the appointment of Special Counsel, which provide that 
the Attorney General may block any investigative or prosecutorial 
action being pursued by the Special Counsel. The regulations also allow 
the Attorney General to shut down the investigation entirely, or starve 
it of funds. These revisions, and others, constituted a major reduction 
in a Special Counsel's autonomy. As Robert Fiske had testified during 
our committee hearings in 1999, he accepted his 1994 appointment to be 
the Whitewater Special Counsel only after satisfying himself that the 
regulations then in effect granted him the same powers as would have 
been available to an Independent Counsel. Now, with the variety of 
control mechanisms in place under the Department's 1999 regulations, it 
is far too easy for an Attorney General to stifle an investigation in 
ways less dramatic and less public than actually removing the Special 
Counsel.

  Under the legislation we are introducing today, each Independent 
Counsel will have to devote his full time to the position for the 
duration of his tenure. This will prevent the appearance of conflicts 
that may arise when an Independent Counsel continues with his private 
legal practice, and it will expedite investigations as well. The 
Independent Counsel will also be expected to conform his conduct to the 
written guidelines and established policies of the Department of 
Justice. The prior version of that requirement contained a loophole, 
which has been eliminated.
  There have been many complaints about runaway prosecutors, who 
continued their investigations longer than was necessary or 
appropriate. Our bill will impose a time limit of two years on 
investigations by Independent Counsel. The Special Division of the 
Court of Appeals will be able to grant extensions of time, however, for 
good cause and to compensate for dilatory tactics by opposing counsel. 
Imposing a time limit with flexibility allows Independent Counsel the 
time they genuinely need to complete their investigations, and deters 
defense counsel from using the time limit strategically to escape 
justice. But the time limit will also encourage future Independent 
Counsel to bring their investigations to an expeditious conclusion, and 
not chase down every imaginable lead.
  Our bill makes another important change that will prevent expansion 
of investigations into unrelated areas. Until now the statute has 
allowed the Attorney General to request an expansion of an Independent 
Counsel's prosecutorial jurisdiction into unrelated areas. This 
happened several times with Judge Starr's investigation, and I believe 
those expansions contributed to a perception that the prosecutor was 
pursuing the person and not the crime. An Independent Counsel must not 
exist to pursue every possible lead against his target until he finds 
some taint of criminality. His function, our bill makes clear, is to 
investigate that subject matter given him in his original grant of 
prosecutorial jurisdiction.
  We are bringing greater budgetary transparency to the process by 
directing the Independent Counsel to produce an estimated budget for 
each year, and by allowing the General Accounting Office to comment on 
that budget. This greater transparency will provide more incentive for 
Counsel to budget responsibly.
  Another correction we are making is to eliminate entirely the 
requirement that an Independent Counsel refer evidence of impeachable 
offenses to the House of Representatives. The impeachment power is one 
of Congress's essential Constitutional functions, and

[[Page S12453]]

no part of that role should be delegated by statute to a prosecutor.

  Our bill was unsuccessful in the 106th Congress. Perhaps one of the 
reasons was that we were still too close to one or two controversial 
investigations that turned some against the statute; perhaps the wounds 
were still too raw. Now with a fresh perspective gained through the 
passage of time, Congress should reconsider what it has given up by 
allowing the Independent Counsel law to lapse for the past four years. 
Hopefully, occasions will be few and far between when serious and 
credible criminal allegations emerge against high-level officials. When 
this happens, however, the public will question how we can be certain 
that the incident is being appropriately investigated. Indeed, in the 
absence of an Independent Counsel law, some may even question whether 
allegations are as likely to surface in the first place. If people with 
knowledge of criminal wrongdoing suspect that their information may be 
covered up rather than acted upon, they would be less likely to take 
the risk of coming forward.
  The controversy that has enveloped the White House in the past week 
illustrates the need for an Independent Counsel law. According to news 
reports, two high-level Administration figures, which some reports have 
placed in the White House, willfully disclosed the name of a covert CIA 
operative. If true, this disclosure would be a serious criminal law 
violation, one that may well have endangered not just the covert 
operative, but the people abroad who worked with her in service to the 
United States. The disclosures were reportedly made to punish the 
agent's husband, Ambassador Joseph Wilson, for questioning the accuracy 
of comments made by the President about Iraq's nuclear weapons program. 
The Department of Justice recently initiated an investigation, but 
according to a recent poll the public overwhelmingly prefers that the 
investigation not be handled by the Department. Although we do not yet 
know which individuals may be implicated as a result of a thorough 
investigation, many Americans question whether Attorney General 
Ashcroft can preside impartially over a probe that could prove very 
damaging to his close associates in the White House, and to the 
President. An Independent Counsel statute is absolutely essential so 
that we have an institutionalized means for addressing allegations such 
as these. We should not, as we are now, forced into an ad hoc and 
situationally driven discussion of whether the Department of Justice 
can investigate a particular case.
  I have always believed that the Independent Counsel statute embodies 
certain principles fundamental to our democracy. The alternative to an 
Independent Counsel statute is a system in which the Attorney General 
must decide how to handle substantive allegations against colleagues in 
the Cabinet, or against the President. Often the President and the 
Attorney General are long-time friends and political allies. The 
Attorney General will not be trusted by some to ensure that an unbiased 
investigation will be conducted. In other cases, many will question the 
thoroughness of an investigation directed from inside the Department. 
In a time of great public cynicism about government, the Independent 
Counsel statute guarantees that even the President and his highest 
officials will have to answer for their criminal malfeasance. In that 
sense, this statute upholds the rule of law and will help stem the 
distrust toward government. The Independent Counsel statute embodies 
the bedrock American principle that no person is above the law.
  I ask unanimous consent that the text of the Independent Counsel 
Reform 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. 1712

       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 ``Independent Counsel Reform 
     Act of 2003''.

     SEC. 2. INDEPENDENT COUNSEL STATUTE.

       Chapter 40 of title 28, United States Code, is amended to 
     read as follows:

                   ``CHAPTER 40--INDEPENDENT COUNSEL

``Sec.
``591. Applicability of provisions of this chapter.
``592. Preliminary investigation and application for appointment of an 
              independent counsel.
``593. Duties of the division of the court.
``594. Authority and duties of an independent counsel.
``595. Congressional oversight.
``596. Removal of an independent counsel; termination of office.
``597. Relationship with Department of Justice.
``598. Severability.
``599. Termination of effect of chapter.

     ``Sec. 591. Applicability of provisions of this chapter

       ``(a) Preliminary Investigation With Respect to Certain 
     Covered Persons.--The Attorney General shall conduct a 
     preliminary investigation in accordance with section 592 
     whenever the Attorney General receives information sufficient 
     to constitute grounds to investigate whether any person 
     described in subsection (b) may have violated any Federal 
     criminal law other than a violation classified as a Class B 
     or C misdemeanor or an infraction.
       ``(b) Persons to Whom Subsection (a) Applies.--The persons 
     referred to in subsection (a) are--
       ``(1) the President and Vice President;
       ``(2) any individual serving in a position listed in 
     section 5312 of title 5; and
       ``(3) the Chief of Staff to the President.
       ``(c) Preliminary Investigation With Respect to Other 
     Persons.--When the Attorney General determines that an 
     investigation or prosecution of a person by the Department of 
     Justice may result in a personal, financial, or political 
     conflict of interest, the Attorney General may conduct a 
     preliminary investigation of such person in accordance with 
     section 592 if the Attorney General receives information 
     sufficient to constitute grounds to investigate whether that 
     person may have violated Federal criminal law other than a 
     violation classified as a Class B or C misdemeanor or an 
     infraction.
       ``(d) Examination of Information To Determine Need for 
     Preliminary Investigation.--
       ``(1) Factors to be considered.--In determining under 
     subsection (a) or section 592(c)(2) whether grounds to 
     investigate exist, the Attorney General shall consider only--
       ``(A) the specificity of the information received; and
       ``(B) the credibility of the source of the information.
       ``(2) Time period for making determination.--The Attorney 
     General shall determine whether grounds to investigate exist 
     not later than 30 days after the information is first 
     received. If within that 30-day period the Attorney General 
     determines that the information is not specific or is not 
     from a credible source, then the Attorney General shall close 
     the matter. If within that 30-day period the Attorney General 
     determines that the information is specific and from a 
     credible source, the Attorney General shall, upon making that 
     determination, commence a preliminary investigation with 
     respect to that information. If the Attorney General is 
     unable to determine, within that 30-day period, whether the 
     information is specific and from a credible source, the 
     Attorney General shall, at the end of that 30-day period, 
     commence a preliminary investigation with respect to that 
     information.
       ``(e) Recusal of Attorney General.--
       ``(1) When recusal is required.--
       ``(A) Involving the attorney general.--If information 
     received under this chapter involves the Attorney General, 
     the next most senior official in the Department of Justice 
     who is not also recused shall perform the duties assigned 
     under this chapter to the Attorney General.
       ``(B) Personal or financial relationship.--If information 
     received under this chapter involves a person with whom the 
     Attorney General has a personal or financial relationship, 
     the Attorney General shall recuse himself or herself by 
     designating the next most senior official in the Department 
     of Justice who is not also recused to perform the duties 
     assigned under this chapter to the Attorney General.
       ``(2) Requirements for recusal determination.--Before 
     personally making any other determination under this chapter 
     with respect to information received under this chapter, the 
     Attorney General shall determine under paragraph (1)(B) 
     whether recusal is necessary. The Attorney General shall set 
     forth this determination in writing, identify the facts 
     considered by the Attorney General, and set forth the reasons 
     for the recusal. The Attorney General shall file this 
     determination with any notification or application 
     submitted to the division of the court under this chapter 
     with respect to that information.

     ``Sec. 592. Preliminary investigation and application for 
       appointment of an independent counsel

       ``(a) Conduct of Preliminary Investigation.--
       ``(1) In general.--A preliminary investigation conducted 
     under this chapter shall be of those matters as the Attorney 
     General considers appropriate in order to make a 
     determination, under subsection (b) or (c), with respect to 
     each potential violation, or allegation of a violation, of 
     criminal law. The Attorney General shall make that 
     determination not later than 120 days after the

[[Page S12454]]

     preliminary investigation is commenced, except that, in the 
     case of a preliminary investigation commenced after a 
     congressional request under subsection (g), the Attorney 
     General shall make that determination not later than 120 days 
     after the request is received. The Attorney General shall 
     promptly notify the division of the court specified in 
     section 593(a) of the commencement of that preliminary 
     investigation and the date of commencement.
       ``(2) Limited authority of attorney general.--
       ``(A) In general.--In conducting preliminary investigations 
     under this chapter, the Attorney General shall have no 
     authority to plea bargain or grant immunity. The Attorney 
     General shall have the authority to convene grand juries and 
     issue subpoenas.
       ``(B) Not to be basis of determinations.--The Attorney 
     General shall not base a determination under this chapter--
       ``(i) that information with respect to a violation of 
     criminal law by a person is not specific and from a credible 
     source upon a determination that that person lacked the state 
     of mind required for the violation of criminal law; or
       ``(ii) that there are no substantial grounds to believe 
     that further investigation is warranted, upon a determination 
     that that person lacked the state of mind required for the 
     criminal violation involved, unless there is a preponderance 
     of the evidence that the person lacked that state of mind.
       ``(3) Extension of time for preliminary investigation.--The 
     Attorney General may apply to the division of the court for a 
     single extension, for a period of not more than 90 days, of 
     the 120-day period referred to in paragraph (1). The division 
     of the court may, upon a showing of good cause, grant that 
     extension.
       ``(b) Determination That Further Investigation Not 
     Warranted.--
       ``(1) Notification of division of the court.--If the 
     Attorney General, upon completion of a preliminary 
     investigation under this chapter, determines that there are 
     no substantial grounds to believe that further investigation 
     is warranted, the Attorney General shall promptly so notify 
     the division of the court, and the division of the court 
     shall have no power to appoint an independent counsel with 
     respect to the matters involved.
       ``(2) Form of notification.--Notification under paragraph 
     (1) shall contain a summary of the information received and a 
     summary of the results of the preliminary investigation.
       ``(c) Determination That Further Investigation is 
     Warranted.--
       ``(1) Application for appointment of independent counsel.--
     The Attorney General shall apply to the division of the court 
     for the appointment of an independent counsel if--
       ``(A) the Attorney General, upon completion of a 
     preliminary investigation under this chapter, determines that 
     there are substantial grounds to believe that further 
     investigation is warranted; or
       ``(B) the 120-day period referred to in subsection (a)(1), 
     and any extension granted under subsection (a)(3), have 
     elapsed and the Attorney General has not filed a notification 
     with the division of the court under subsection (b)(1).

     In determining under this chapter whether there are 
     substantial grounds to believe that further investigation is 
     warranted, the Attorney General shall comply with the written 
     or other established policies of the Department of Justice 
     with respect to the conduct of criminal investigations.
       ``(2) Receipt of additional information.--If, after 
     submitting a notification under subsection (b)(1), the 
     Attorney General receives additional information sufficient 
     to constitute grounds to investigate the matters to which 
     that notification related, the Attorney General shall--
       ``(A) conduct such additional preliminary investigation as 
     the Attorney General considers appropriate for a period of 
     not more than 120 days after the date on which that 
     additional information is received; and
       ``(B) otherwise comply with the provisions of this section 
     with respect to that additional preliminary investigation to 
     the same extent as any other preliminary investigation under 
     this section.
       ``(d) Contents of Application.--Any application for the 
     appointment of an independent counsel under this chapter 
     shall contain sufficient information to assist the division 
     of the court in selecting an independent counsel and in 
     defining that independent counsel's prosecutorial 
     jurisdiction so that the independent counsel has adequate 
     authority to fully investigate and prosecute the subject 
     matter and all matters directly related to that subject 
     matter.
       ``(e) Disclosure of Information.--Except as otherwise 
     provided in this chapter or as is deemed necessary for law 
     enforcement purposes, no officer or employee of the 
     Department of Justice or an office of independent counsel 
     may, without leave of the division of the court, disclose to 
     any individual outside the Department of Justice or that 
     office any notification, application, or any other document, 
     materials, or memorandum supplied to the division of the 
     court under this chapter. Nothing in this chapter shall be 
     construed as authorizing the withholding of information from 
     the Congress.
       ``(f) Limitation on Judicial Review.--The Attorney 
     General's determination under this chapter to apply to the 
     division of the court for the appointment of an independent 
     counsel shall not be reviewable in any court.
       ``(g) Congressional Request.--
       ``(1) By judiciary committee or members thereof.--The 
     Committee on the Judiciary of either House of the Congress, 
     or a majority of majority party members or a majority of all 
     nonmajority party members of either such committee, may 
     request in writing that the Attorney General apply for the 
     appointment of an independent counsel.

       ``(2) Report by attorney general pursuant to request.--Not 
     later than 30 days after the receipt of a request under 
     paragraph (1), the Attorney General shall submit, to the 
     committee making the request, or to the committee on which 
     the persons making the request serve, a report on whether the 
     Attorney General has begun or will begin a preliminary 
     investigation under this chapter of the matters with respect 
     to which the request is made, in accordance with section 
     591(a). The report shall set forth the reasons for the 
     Attorney General's decision regarding the preliminary 
     investigation as it relates to each of the matters with 
     respect to which the congressional request is made. If there 
     is such a preliminary investigation, the report shall include 
     the date on which the preliminary investigation began or will 
     begin.
       ``(3) Submission of information in response to 
     congressional request.--At the same time as any notification, 
     application, or any other document, material, or memorandum 
     is supplied to the division of the court pursuant to this 
     section with respect to a preliminary investigation of any 
     matter with respect to which a request is made under 
     paragraph (1), that notification, application, or other 
     document, material, or memorandum shall be supplied to the 
     committee making the request, or to the committee on which 
     the persons making the request serve. If no application for 
     the appointment of an independent counsel is made to the 
     division of the court under this section pursuant to such a 
     preliminary investigation, the Attorney General shall submit 
     a report to that committee stating the reasons why the 
     application was not made, addressing each matter with respect 
     to which the congressional request was made.
       ``(4) Disclosure of information.--Any report, notification, 
     application, or other document, material, or memorandum 
     supplied to a committee under this subsection shall not be 
     revealed to any third party, except that the committee may, 
     either on its own initiative or upon the request of the 
     Attorney General, make public such portion or portions of 
     that report, notification, application, document, material, 
     or memorandum as will not in the committee's judgment 
     prejudice the rights of any individual.

     ``Sec. 593. Duties of the division of the court

       ``(a) Reference to Division of the Court.--The division of 
     the court to which this chapter refers is the division 
     established under section 49 of this title.
       ``(b) Appointment and Jurisdiction of Independent 
     Counsel.--
       ``(1) Authority.--Upon receipt of an application under 
     section 592(c), the division of the court shall appoint an 
     appropriate independent counsel and define the independent 
     counsel's prosecutorial jurisdiction. The appointment shall 
     be made from a list of candidates comprised of 5 
     individuals recommended by the chief judge of each Federal 
     circuit and forwarded by January 15 of each year to the 
     division of the court.
       ``(2) Qualifications of independent counsel.--The division 
     of the court shall appoint as independent counsel an 
     individual who--
       ``(A) has appropriate experience, including, to the extent 
     practicable, prosecutorial experience and who has no actual 
     or apparent personal, financial, or political conflict of 
     interest;
       ``(B) will conduct the investigation on a full-time basis 
     and in a prompt, responsible, and cost-effective manner; and
       ``(C) does not hold any office of profit or trust under the 
     United States.
       ``(3) Scope of prosecutorial jurisdiction.--
       ``(A) In general.--In defining the independent counsel's 
     prosecutorial jurisdiction under this chapter, the division 
     of the court shall assure that the independent counsel has 
     adequate authority to fully investigate and prosecute--
       ``(i) the subject matter with respect to which the Attorney 
     General has requested the appointment of the independent 
     counsel; and
       ``(ii) all matters that are directly related to the 
     independent counsel's prosecutorial jurisdiction and the 
     proper investigation and prosecution of the subject matter of 
     such jurisdiction.
       ``(B) Directly related.--In this paragraph, the term 
     `directly related matters' includes Federal crimes, other 
     than those classified as Class B or C misdemeanors or 
     infractions, that impede the investigation and prosecution, 
     such as perjury, obstruction of justice, destruction of 
     evidence, and intimidation of witnesses.
       ``(4) Disclosure of identity and prosecutorial 
     jurisdiction.--An independent counsel's identity and 
     prosecutorial jurisdiction may not be made public except upon 
     the request of the Attorney General or upon a determination 
     of the division of the court that disclosure of the identity 
     and prosecutorial jurisdiction of that independent counsel 
     would be in the best interests of justice. In any event, the 
     identity and prosecutorial jurisdiction of the independent 
     counsel shall be

[[Page S12455]]

     made public when any indictment is returned, or any criminal 
     information is filed, pursuant to the independent counsel's 
     investigation.
       ``(c) Return for Further Explanation.--Upon receipt of a 
     notification under section 592 from the Attorney General that 
     there are no substantial grounds to believe that further 
     investigation is warranted with respect to information 
     received under this chapter, the division of the court shall 
     have no authority to overrule this determination but may 
     return the matter to the Attorney General for further 
     explanation of the reasons for that determination.
       ``(d) Vacancies.--If a vacancy in office arises by reason 
     of the resignation, death, or removal of an independent 
     counsel, the division of the court shall appoint an 
     independent counsel to complete the work of the independent 
     counsel whose resignation, death, or removal caused the 
     vacancy, except that in the case of a vacancy arising by 
     reason of the removal of an independent counsel, the division 
     of the court may appoint an acting independent counsel to 
     serve until any judicial review of the removal is completed.
       ``(e) Attorneys' Fees.--
       ``(1) Award of fees.--Upon the request of an individual who 
     is the subject of an investigation conducted by an 
     independent counsel pursuant to this chapter, the division of 
     the court may, if no indictment is brought against that 
     individual pursuant to the investigation, award reimbursement 
     for those reasonable attorneys' fees incurred by the 
     individual during the investigation which would not have been 
     incurred but for the requirements of this chapter. The 
     division of the court shall notify the independent counsel 
     who conducted the investigation and the Attorney General of 
     any request for attorneys' fees under this subsection.
       ``(2) Evaluation of fees.--The division of the court shall 
     direct the independent counsel and the Attorney General to 
     file a written evaluation of any request for attorneys' fees 
     under this subsection, addressing--
       ``(A) the sufficiency of the documentation;
       ``(B) the need or justification for the underlying item;
       ``(C) whether the underlying item would have been incurred 
     but for the requirements of this chapter; and
       ``(D) the reasonableness of the amount of money requested.
       ``(f) Disclosure of Information.--The division of the court 
     may, subject to section 594(h)(2), allow the disclosure of 
     any notification, application, or any other document, 
     material, or memorandum supplied to the division of the court 
     under this chapter.
       ``(g) Amicus Curiae Briefs.--When presented with 
     significant legal issues, the division of the court may 
     disclose sufficient information about the issues to permit 
     the filing of timely amicus curiae briefs.

     ``Sec. 594. Authority and duties of an independent counsel

       ``(a) Authorities.--Notwithstanding any other provision of 
     law, an independent counsel appointed under this chapter 
     shall have, with respect to all matters in that independent 
     counsel's prosecutorial jurisdiction established under this 
     chapter, full power and independent authority to exercise all 
     investigative and prosecutorial functions and powers of the 
     Department of Justice, the Attorney General, and any other 
     officer or employee of the Department of Justice, except that 
     the Attorney General shall exercise direction or control as 
     to those matters that specifically require the Attorney 
     General's personal action under section 2516 of title 18. 
     Such investigative and prosecutorial functions and powers 
     shall include--
       ``(1) conducting proceedings before grand juries and other 
     investigations;
       ``(2) participating in court proceedings and engaging in 
     any litigation, including civil and criminal matters, that 
     the independent counsel considers necessary;
       ``(3) appealing any decision of a court in any case or 
     proceeding in which the independent counsel participates in 
     an official capacity;
       ``(4) reviewing all documentary evidence available from any 
     source;
       ``(5) determining whether to contest the assertion of any 
     testimonial privilege;
       ``(6) receiving appropriate national security clearances 
     and, if necessary, contesting in court (including, where 
     appropriate, participating in in camera proceedings) any 
     claim of privilege or attempt to withhold evidence on grounds 
     of national security;
       ``(7) making applications to any Federal court for a grant 
     of immunity to any witness, consistent with applicable 
     statutory requirements, or for warrants, subpoenas, or other 
     court orders, and, for purposes of sections 6003, 6004, and 
     6005 of title 18, exercising the authority vested in a United 
     States attorney or the Attorney General;
       ``(8) inspecting, obtaining, or using the original or a 
     copy of any tax return, in accordance with the applicable 
     statutes and regulations, and, for purposes of section 6103 
     of the Internal Revenue Code of 1986 and the regulations 
     issued thereunder, exercising the powers vested in a United 
     States attorney or the Attorney General;
       ``(9) initiating and conducting prosecutions in any court 
     of competent jurisdiction, framing and signing indictments, 
     filing informations, and handling all aspects of any case, in 
     the name of the United States; and
       ``(10) consulting with the United States attorney for the 
     district in which any violation of law with respect to which 
     the independent counsel is appointed was alleged to have 
     occurred.
       ``(b) Compensation.--
       ``(1) In general.--An independent counsel appointed under 
     this chapter shall receive compensation at the annual rate of 
     basic pay payable for level IV of the Executive Schedule 
     under section 5315 of title 5.
       ``(2) Travel expenses.--Except as provided in paragraph 
     (3), an independent counsel and persons appointed under 
     subsection (c) shall be entitled to the payment of travel 
     expenses as provided by subchapter I of chapter 57 of title 
     5, United States Code, including travel, per diem, and 
     subsistence expenses in accordance with section 5703 of title 
     5.
       ``(3) Travel to primary office.--
       ``(A) In general.--After 1 year of service under this 
     chapter, an independent counsel and persons appointed under 
     subsection (c) shall not be entitled to the payment of 
     travel, per diem, or subsistence expenses under subchapter I 
     of chapter 57 of title 5, United States Code, for the purpose 
     of commuting to or from the city in which the primary office 
     of the independent counsel or person is located. The 1-year 
     period may be extended for successive 6-month periods if the 
     independent counsel and the division of the court certify 
     that the payment is in the public interest to carry out the 
     purposes of this chapter.
       ``(B) Relevant factors.--In making any certification under 
     this paragraph with respect to travel and subsistence 
     expenses of an independent counsel or person appointed under 
     subsection (c), that employee shall consider, among other 
     relevant factors--
       ``(i) the cost to the Government of reimbursing those 
     travel and subsistence expenses;
       ``(ii) the period of time for which the independent counsel 
     anticipates that the activities of the independent counsel or 
     person, as the case may be, will continue;
       ``(iii) the personal and financial burdens on the 
     independent counsel or person, as the case may be, of 
     relocating so that the travel and subsistence expenses would 
     not be incurred; and
       ``(iv) the burdens associated with appointing a new 
     independent counsel, or appointing another person under 
     subsection (c), to replace the individual involved who is 
     unable or unwilling to so relocate.
       ``(c) Additional Personnel.--For the purposes of carrying 
     out the duties of an office of independent counsel, an 
     independent counsel may appoint, fix the compensation, and 
     assign the duties of such employees as such independent 
     counsel considers necessary (including investigators, 
     attorneys, and part-time consultants). The positions of all 
     such employees are exempted from the competitive service. 
     Such employees shall be compensated at levels not to exceed 
     those payable for comparable positions in the Office of 
     United States Attorney for the District of Columbia under 
     sections 548 and 550, but in no event shall any such employee 
     be compensated at a rate greater than the rate of basic pay 
     payable for level ES-4 of the Senior Executive Service 
     Schedule under section 5382 of title 5, as adjusted for the 
     District of Columbia under section 5304 of that title 
     regardless of the locality in which an employee is employed.
       ``(d) Assistance of Department of Justice.--
       ``(1) In carrying out functions.--An independent counsel 
     may request assistance from the Department of Justice in 
     carrying out the functions of the independent counsel, and 
     the Department of Justice shall provide that assistance, 
     which may include access to any records, files, or other 
     materials relevant to matters within that independent 
     counsel's prosecutorial jurisdiction, and the use of the 
     resources and personnel necessary to perform that independent 
     counsel's duties. At the request of an independent counsel, 
     prosecutors, administrative personnel, and other employees of 
     the Department of Justice may be detailed to the staff of the 
     independent counsel to the extent the number of staff so 
     detailed is reasonably related to the number of staff 
     ordinarily assigned by the Department to conduct an 
     investigation of similar size and complexity.
       ``(2) Payment of and reports on expenditures of independent 
     counsel.--The Department of Justice shall pay all costs 
     relating to the establishment and operation of any office of 
     independent counsel. The Attorney General shall submit to the 
     Congress, not later than 30 days after the end of each fiscal 
     year, a report on amounts paid during that fiscal year for 
     expenses of investigations and prosecutions by independent 
     counsel. Each such report shall include a statement of all 
     payments made for activities of independent counsel but may 
     not reveal the identity or prosecutorial jurisdiction of any 
     independent counsel which has not been disclosed under 
     section 593(b)(4).
       ``(e) Referral of Directly Related Matters to an 
     Independent Counsel.--An independent counsel may ask the 
     Attorney General or the division of the court to refer to the 
     independent counsel only such matters that are directly 
     related to the independent counsel's prosecutorial 
     jurisdiction, and the Attorney General or the division of the 
     court, as the case may be, may refer such matters. If the 
     Attorney General refers a matter to an independent counsel on 
     the Attorney General's own initiative, the independent 
     counsel may accept that referral only if the matter directly 
     relates to the independent counsel's prosecutorial 
     jurisdiction. If the Attorney General refers any matter to 
     the independent counsel pursuant to

[[Page S12456]]

     the independent counsel's request, or if the independent 
     counsel accepts a referral made by the Attorney General on 
     the Attorney General's own initiative, the independent 
     counsel shall so notify the division of the court.
       ``(f) Compliance With Policies of the Department of 
     Justice.--
       ``(1) In general.--An independent counsel shall comply with 
     the written or other established policies of the Department 
     of Justice respecting enforcement of the criminal laws except 
     when that policy requires the specific approval of the 
     Attorney General or another Department of Justice official. 
     If a policy requires the approval of the Attorney General or 
     other Department of Justice official, an independent counsel 
     is encouraged to consult with the Attorney General or other 
     official. To identify and understand these policies and 
     policies under subsection (l)(1)(B), the independent counsel 
     shall consult with the Department of Justice.
       ``(2) National security.--An independent counsel shall 
     comply with guidelines and procedures used by the Department 
     in the handling and use of classified material.
       ``(3) Relief from a violation of policies.--
       ``(A) In general.--A person who is a target, witness, or 
     defendant in, or otherwise directly affected by, an 
     investigation by an independent counsel and who has reason to 
     believe that the independent counsel is violating a written 
     policy of the Department of Justice material to the 
     independent counsel's investigation, may ask the Attorney 
     General to determine whether the independent counsel has 
     violated that policy. The Attorney General shall respond in 
     writing within 30 days.
       ``(B) Relief.--If the Attorney General determines that the 
     independent counsel has violated a written policy of the 
     Department of Justice material to the investigation by the 
     independent counsel pursuant to subparagraph (A), the 
     Attorney General may ask the division of the court to order 
     the independent counsel to comply with that policy, and the 
     division of the court may order appropriate relief.
       ``(g) Dismissal of Matters.--The independent counsel shall 
     have full authority to dismiss matters within the independent 
     counsel's prosecutorial jurisdiction without conducting an 
     investigation or at any subsequent time before prosecution, 
     if to do so would be consistent with the written or other 
     established policies of the Department of Justice with 
     respect to the enforcement of criminal laws.
       ``(h) Reports by Independent Counsel.--
       ``(1) Required reports.--An independent counsel shall--
       ``(A) file with the division of the court, with respect to 
     the 6-month period beginning on the date of his or her 
     appointment, and with respect to each 6-month period 
     thereafter until the office of that independent counsel 
     terminates, a report which identifies and explains major 
     expenses, and summarizes all other expenses, incurred by that 
     office during the 6-month period with respect to which the 
     report is filed, and estimates future expenses of that 
     office; and
       ``(B) before the termination of the independent counsel's 
     office under section 596(b), file a final report with the 
     division of the court, setting forth only the following:
       ``(i) the jurisdiction of the independent counsel's 
     investigation;
       ``(ii) a list of indictments brought by the independent 
     counsel and the disposition of each indictment, including any 
     verdicts, pleas, convictions, pardons, and sentences; and
       ``(iii) a summary of the expenses of the independent 
     counsel's office.
       ``(2) Disclosure of information in reports.--The division 
     of the court may release to the Congress, the public, or any 
     appropriate person, those portions of a report made under 
     this subsection as the division of the court considers 
     appropriate. The division of the court shall make those 
     orders as are appropriate to protect the rights of any 
     individual named in that report and to prevent undue 
     interference with any pending prosecution. The division of 
     the court may make any portion of a final report filed under 
     paragraph (1)(B) available to any individual named in that 
     report for the purposes of receiving within a time limit set 
     by the division of the court any comments or factual 
     information that the individual may submit. Such comments and 
     factual information, in whole or in part, may, in the 
     discretion of the division of the court, be included as an 
     appendix to the final report.
       ``(3) Publication of reports.--At the request of an 
     independent counsel, the Public Printer shall cause to be 
     printed any report previously released to the public under 
     paragraph (2). The independent counsel shall certify the 
     number of copies necessary for the public, and the Public 
     Printer shall place the cost of the required number to the 
     debit of the independent counsel. Additional copies shall be 
     made available to the public through the depository library 
     program and Superintendent of Documents sales program 
     pursuant to sections 1702 and 1903 of title 44.
       ``(i) Independence From Department of Justice.--Each 
     independent counsel appointed under this chapter, and the 
     persons appointed by that independent counsel under 
     subsection (c), are employees of the Department of Justice 
     for purposes of sections 202 through 209 of title 18.
       ``(j) Standards of Conduct Applicable to Independent 
     Counsel, Persons Serving in the Office of an Independent 
     Counsel, and Their Law Firms.--
       ``(1) Restrictions on employment while independent counsel 
     and appointees are serving.--
       ``(A) Independent counsel.--During the period in which an 
     independent counsel is serving under this chapter--
       ``(i) that independent counsel shall have no other paid 
     employment; and
       ``(ii) any person associated with a firm with which that 
     independent counsel is associated may not represent in any 
     matter any person involved in any investigation or 
     prosecution under this chapter.
       ``(B) Other persons.--During the period in which any person 
     appointed by an independent counsel under subsection (c) is 
     serving in the office of independent counsel, that person may 
     not represent in any matter any person involved in any 
     investigation or prosecution under this chapter.
       ``(2) Post employment restrictions on independent counsel 
     and appointees.--Each independent counsel and each person 
     appointed by that independent counsel under subsection (c) 
     may not--
       ``(A) for 3 years following the termination of the service 
     under this chapter of that independent counsel or appointed 
     person, as the case may be, represent any person in any 
     matter if that individual was the subject of an investigation 
     or prosecution under this chapter that was conducted by that 
     independent counsel; or
       ``(B) for 1 year following the termination of the service 
     under this chapter of that independent counsel or appointed 
     person, as the case may be, represent any person in any 
     matter involving any investigation or prosecution under this 
     chapter.
       ``(3) One-year ban on representation by members of firms of 
     independent counsel.--Any person who is associated with a 
     firm with which an independent counsel is associated or 
     becomes associated after termination of the service of that 
     independent counsel under this chapter may not, for 1 year 
     following that termination, represent any person in any 
     matter involving any investigation or prosecution under this 
     chapter.
       ``(4) Definitions.--For purposes of this subsection--
       ``(A) the term `firm' means a law firm whether organized as 
     a partnership or corporation; and
       ``(B) a person is `associated' with a firm if that person 
     is an officer, director, partner, or other member or employee 
     of that firm.
       ``(5) Enforcement.--The Attorney General and the Director 
     of the Office of Government Ethics have authority to enforce 
     compliance with this subsection. The designated agency ethics 
     official for the Department of Justice shall be the ethics 
     adviser for the independent counsel and employees of the 
     independent counsel.
       ``(k) Custody of Records of an Independent Counsel.--
       ``(1) Transfer of records.--Upon termination of the office 
     of an independent counsel, that independent counsel shall 
     transfer to the Archivist of the United States all records 
     which have been created or received by that office. Before 
     this transfer, the independent counsel shall clearly identify 
     which of these records are subject to rule 6(e) of the 
     Federal Rules of Criminal Procedure as grand jury materials 
     and which of these records have been classified as national 
     security information. Any records which were compiled by an 
     independent counsel and, upon termination of the independent 
     counsel's office, were stored with the division of the court 
     or elsewhere before the enactment of the Independent Counsel 
     Reauthorization Act of 1987, shall also be transferred to the 
     Archivist of the United States by the division of the court 
     or the person in possession of those records.
       ``(2) Maintenance, use, and disposal of records.--Records 
     transferred to the Archivist under this chapter shall be 
     maintained, used, and disposed of in accordance with chapters 
     21, 29, and 33 of title 44.
       ``(3) Access to records.--
       ``(A) In general.--Subject to paragraph (4), access to the 
     records transferred to the Archivist under this chapter shall 
     be governed by section 552 of title 5.
       ``(B) Access by department of justice.--The Archivist 
     shall, upon written application by the Attorney General, 
     disclose any such records to the Department of Justice for 
     purposes of an ongoing law enforcement investigation or 
     court proceeding, except that, in the case of grand jury 
     materials, those records shall be so disclosed only by 
     order of the court of jurisdiction under rule 6(e) of the 
     Federal Rules of Criminal Procedure.
       ``(C) Exception.--Notwithstanding any restriction on access 
     imposed by law, the Archivist and persons employed by the 
     National Archives and Records Administration who are engaged 
     in the performance of normal archival work shall be permitted 
     access to the records transferred to the Archivist under this 
     chapter.
       ``(4) Records provided by congress.--Records of an 
     investigation conducted by a committee of the House of 
     Representatives or the Senate which are provided to an 
     independent counsel to assist in an investigation or 
     prosecution conducted by that independent counsel--
       ``(A) shall be maintained as a separate body of records 
     within the records of the independent counsel; and
       ``(B) shall, after the records have been transferred to the 
     Archivist under this chapter, be made available, except as 
     provided in

[[Page S12457]]

     paragraph (3) (B) and (C), in accordance with the rules 
     governing release of the records of the House of Congress 
     that provided the records to the independent counsel.
     Subparagraph (B) shall not apply to those records which have 
     been surrendered pursuant to grand jury or court proceedings.
       ``(l) Cost and Administrative Support.--
       ``(1) Cost controls.--
       ``(A) In general.--An independent counsel shall--
       ``(i) conduct all activities with due regard for expense;
       ``(ii) authorize only reasonable and lawful expenditures; 
     and
       ``(iii) promptly, upon taking office, assign to a specific 
     employee the duty of certifying that expenditures of the 
     independent counsel are reasonable and made in accordance 
     with law.
       ``(B) Liability for invalid certification.--An employee 
     making a certification under subparagraph (A)(iii) shall be 
     liable for an invalid certification to the same extent as a 
     certifying official certifying a voucher is liable under 
     section 3528 of title 31.
       ``(C) Department of justice policies.--An independent 
     counsel shall comply with the established policies of the 
     Department of Justice respecting expenditures of funds.
       ``(2) Budget.--The independent counsel, after consulting 
     with the Attorney General, shall, within 90 days of 
     appointment, submit a budget for the first year of the 
     investigation and, on the anniversary of the appointment, for 
     each year thereafter to the Attorney General and the General 
     Accounting Office. The General Accounting Office shall review 
     the budget and submit a written appraisal of the budget to 
     the independent counsel and the Committees on Governmental 
     Affairs and Appropriations of the Senate and the Committees 
     on the Judiciary and Appropriations of the House of 
     Representatives.
       ``(3) Administrative support.--The Director of the 
     Administrative Office of the United States Courts shall 
     provide administrative support and guidance to each 
     independent counsel. No officer or employee of the 
     Administrative Office of the United States Courts shall 
     disclose information related to an independent counsel's 
     expenditures, personnel, or administrative acts or 
     arrangements without the authorization of the independent 
     counsel.
       ``(4) Office space.--The Administrator of General Services, 
     in consultation with the Director of the Administrative 
     Office of the United States Courts, shall promptly provide 
     appropriate office space for each independent counsel. The 
     office space shall be within a Federal building unless the 
     Administrator of General Services determines that other 
     arrangements would cost less. Until the office space is 
     provided, the Administrative Office of the United States 
     Courts shall provide newly appointed independent counsels 
     immediately upon appointment with appropriate, temporary 
     office space, equipment, and supplies.
       ``(m) Expedited Judicial Consideration and Review.--It 
     shall be the duty of the courts of the United States to 
     advance on the docket and to expedite to the greatest extent 
     possible the disposition of matters relating to an 
     investigation and prosecution by an independent counsel under 
     this chapter consistent with the purposes of this chapter.

     ``Sec. 595. Congressional oversight

       ``(a) Oversight of Conduct of Independent Counsel.--
       ``(1) Congressional oversight.--The appropriate committees 
     of the Congress shall have oversight jurisdiction with 
     respect to the official conduct of any independent counsel 
     appointed under this chapter, and the independent counsel 
     shall have the duty to cooperate with the exercise of that 
     oversight jurisdiction.
       ``(2) Reports to congress.--An independent counsel 
     appointed under this chapter shall submit to the Congress 
     annually a report on the activities of the independent 
     counsel, including a description of the progress of any 
     investigation or prosecution conducted by the independent 
     counsel. The report may omit any matter that in the judgment 
     of the independent counsel should be kept confidential, but 
     shall provide information adequate to justify the 
     expenditures that the office of the independent counsel has 
     made.
       ``(b) Oversight of Conduct of Attorney General.--Within 15 
     days after receiving an inquiry about a particular case under 
     this chapter, which is a matter of public knowledge, from a 
     committee of the Congress with jurisdiction over this 
     chapter, the Attorney General shall provide the following 
     information to that committee with respect to the case:
       ``(1) When the information about the case was received.
       ``(2) Whether a preliminary investigation is being 
     conducted, and if so, the date it began.
       ``(3) Whether an application for the appointment of an 
     independent counsel or a notification that further 
     investigation is not warranted has been filed with the 
     division of the court, and if so, the date of that filing.

     ``Sec. 596. Removal of an independent counsel; termination of 
       office

       ``(a) Removal; Report on Removal.--
       ``(1) Grounds for removal.--
       ``(A) In general.--An independent counsel appointed under 
     this chapter may be removed from office, other than by 
     impeachment and conviction, only by the personal action of 
     the Attorney General and only for good cause, physical or 
     mental disability (if not prohibited by law protecting 
     persons from discrimination on the basis of such a 
     disability), or any other condition that impairs the 
     performance of that independent counsel's duties.
       ``(B) Good cause.--In this paragraph, the term `good cause' 
     includes--
       ``(i) a knowing and material failure to comply with written 
     Department of Justice policies relevant to the conduct of a 
     criminal investigation; and
       ``(ii) an actual personal, financial, or political conflict 
     of interest.
       ``(2) Report to division of the court and congress.--If an 
     independent counsel is removed from office, the Attorney 
     General shall promptly submit to the division of the court 
     and the Committees on the Judiciary of the Senate and the 
     House of Representatives a report specifying the facts found 
     and the ultimate grounds for the removal. The committees 
     shall make available to the public that report, except that 
     each committee may, if necessary to protect the rights of any 
     individual named in the report or to prevent undue 
     interference with any pending prosecution, postpone or 
     refrain from publishing any or all of the report. The 
     division of the court may release any or all of the report in 
     accordance with section 594(h)(2).
       ``(3) Judicial review of removal.--An independent counsel 
     removed from office may obtain judicial review of the removal 
     in a civil action commenced in the United States District 
     Court for the District of Columbia. A member of the division 
     of the court may not hear or determine any such civil action 
     or any appeal of a decision in any such civil action. The 
     independent counsel may be reinstated or granted other 
     appropriate relief by order of the court.
       ``(b) Termination of Office.--
       ``(1) Termination by action of independent counsel.--An 
     office of independent counsel shall terminate when--
       ``(A) the independent counsel notifies the Attorney General 
     that the investigation of all matters within the 
     prosecutorial jurisdiction of the independent counsel or 
     accepted by the independent counsel under section 594(e), and 
     any resulting prosecutions, have been completed or so 
     substantially completed that it would be appropriate for the 
     Department of Justice to complete those investigations and 
     prosecutions; and
       ``(B) the independent counsel files a final report in 
     compliance with section 594(h)(1)(B).
       ``(2) Termination by division of the court.--The division 
     of the court, either on its own motion or upon the request of 
     the Attorney General, may terminate an office of independent 
     counsel at any time, on the ground that the investigation of 
     all matters within the prosecutorial jurisdiction of the 
     independent counsel or accepted by the independent counsel 
     under section 594(e), and any resulting prosecutions, have 
     been completed or so substantially completed that it would be 
     appropriate for the Department of Justice to complete those 
     investigations and prosecutions. At the time of that 
     termination, the independent counsel shall file the final 
     report required by section 594(h)(1)(B). If the Attorney 
     General has not made a request under this paragraph, the 
     division of the court shall determine on its own motion 
     whether termination is appropriate under this paragraph no 
     later than 2 years after the appointment of an independent 
     counsel.
       ``(3) Termination after 2 years.--
       ``(A) General rule.--Except as provided in subparagraph 
     (B), the term of an independent counsel shall terminate at 
     the expiration of 2 years after the date of appointment of 
     the independent counsel and any matters under investigation 
     by the independent counsel shall be transferred to the 
     Attorney General.
       ``(B) Exceptions.--
       ``(i) Good cause.--An independent counsel may petition the 
     division of the court to extend the investigation of the 
     independent counsel for up to 1 year for good cause. The 
     division of the court shall determine whether the grant of 
     such an extension is warranted and determine the length of 
     each extension.
       ``(ii) Dilatory tactics.--If the investigation of an 
     independent counsel was delayed by dilatory tactics by 
     persons that could provide evidence that would significantly 
     assist the investigation, an independent counsel may petition 
     the division of the court to extend the investigation of the 
     independent counsel for an additional period of time equal to 
     the amount of time lost by the dilatory tactics. If the 
     division of the court finds that dilatory tactics did delay 
     the investigation, the division of the court shall extend the 
     investigation for a period equal to the delay.
       ``(c) Audits.--
       ``(1) In general.--On or before June 30 of each year, an 
     independent counsel shall prepare a statement of expenditures 
     for the 6 months that ended on the immediately preceding 
     March 31. On or before December 31 of each year, an 
     independent counsel shall prepare a statement of expenditures 
     for the fiscal year that ended on the immediately preceding 
     September 30. An independent counsel whose office is 
     terminated prior to the end of the fiscal year shall prepare 
     a statement of expenditures on or before the date that is 90 
     days after the date on which the office is terminated.
       ``(2) Comptroller general review.--The Comptroller General 
     shall--
       ``(A) conduct a financial review of a mid-year statement 
     and a financial audit of a

[[Page S12458]]

     year-end statement and statement on termination; and
       ``(B) report the results to the Committee on the Judiciary, 
     Committee on Governmental Affairs, and Committee on 
     Appropriations of the Senate and the Committee on the 
     Judiciary, Committee on Government Reform, and Committee on 
     Appropriations of the House of Representatives not later than 
     90 days following the submission of each statement.

     ``Sec. 597. Relationship with Department of Justice

       ``(a) Suspension of Other Investigations and Proceedings.--
     Whenever a matter is in the prosecutorial jurisdiction of an 
     independent counsel or has been accepted by an independent 
     counsel under section 594(e), the Department of Justice, the 
     Attorney General, and all other officers and employees of the 
     Department of Justice shall suspend all investigations and 
     proceedings regarding that matter, except to the extent 
     required by section 594(d)(1), and except insofar as the 
     independent counsel agrees in writing that the investigation 
     or proceedings may be continued by the Department of Justice.
       ``(b) Presentation as Amicus Curiae Permitted.--Nothing in 
     this chapter shall prevent the Attorney General or the 
     Solicitor General from making a presentation as amicus curiae 
     to any court as to issues of law raised by any case or 
     proceeding in which an independent counsel participates in an 
     official capacity or any appeal of such a case or proceeding.

     ``Sec. 598. Severability

       ``If any provision of this chapter or the application 
     thereof to any person or circumstance is held invalid, the 
     remainder of this chapter and the application of 
     that provision to other persons not similarly situated or 
     to other circumstances shall not be affected by that 
     invalidation.

     ``Sec. 599. Termination of effect of chapter

       ``This chapter shall cease to be effective 5 years after 
     the date of enactment of the Independent Counsel Reform Act 
     of 2003, except that this chapter shall continue in effect 
     with respect to then pending matters before an independent 
     counsel that in the judgment of that counsel require the 
     continuation until that independent counsel determines those 
     matters have been completed.''.

     SEC. 3. ASSIGNMENT OF JUDGES TO DIVISION TO APPOINT 
                   INDEPENDENT COUNSELS.

       Section 49 of title 28, United States Code, is amended to 
     reads as follows:

     ``Sec. 49. Assignment of judges to division to appoint 
       independent counsels

       ``(a) In General.--Beginning with the 3-year period 
     commencing on the date of the enactment of the Independent 
     Counsel Reform Act of 2003, 3 judges shall be assigned for 
     each successive 3-year period to a division of the United 
     States Court of Appeals for the District of Columbia to be 
     the division of the court for the purpose of appointing 
     independent counsels. The Clerk of the United States Court of 
     Appeals for the District of Columbia Circuit shall serve as 
     the clerk of the division of the court and shall provide such 
     services as are needed by the division of the court.
       ``(b) Other Judicial Assignments.--Except as provided in 
     subsection (e), assignment to the division of the court shall 
     not be a bar to other judicial assignments during the term of 
     the division of the court.
       ``(c) Designation and Assignment.--The Chief Justice of the 
     United States shall designate and assign by a lottery of all 
     circuit court judges, 3 circuit court judges 1 of whom shall 
     be a judge of the United States Court of Appeals for the 
     District of Columbia, to the division of the court. Not more 
     than 1 judge may be named to the division of the court from a 
     particular court.
       ``(d) Vacancy.--Any vacancy in the division of the court 
     shall be filled only for the remainder of the 3-year period 
     in which that vacancy occurs and in the same manner as 
     initial assignments to the division of the court were made.
       ``(e) Recusal.--Except as otherwise provided in chapter 40 
     of this title, no member of the division of the court who 
     participated in a function conferred on the division of the 
     court under chapter 40 of this title involving an independent 
     counsel shall be eligible to participate in any judicial 
     proceeding concerning a matter that--
       ``(1) involves that independent counsel while the 
     independent counsel is serving in that office; or
       ``(2) involves the exercise of the independent counsel's 
     official duties, regardless of whether the independent 
     counsel is still serving in that office.''.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Pryor, and Mr. Bond):
  S. 1713. A bill to amemd title IV of the Small Business Investment 
Act of 1958, relating to pilot program for credit enhancement 
guarantees on pools of non-SBA loans; to the Committee on Small 
Business and Entrepreneurship.
  Ms. SNOWE. Mr. President, I rise today to introduce the Small 
Business Credit Liquidity Act of 2003, and I am pleased to be joined by 
my colleagues, Senator Pryor and Senator Bond, as sponsors of this 
bill.
  The genesis of this legislation was a proposal made by the Small 
Business Administration. When the President's Fiscal Year 2004 budget 
request was transmitted to the Congress this past February, it stated 
that the SBA was exploring a possible new approach to expand the 
opportunities of small businesses to access capital markets by 
facilitating the securitization of non-SBA small business loans, i.e., 
loans that were not already guaranteed by the SBA. Increasing access to 
capital is a high priority of small businesses, and has been one of the 
Committee's priorities throughout its history. We are always seeking 
innovative ways to increase access to capital for small businesses, 
while at the same time measuring the cost and risk of loss that the 
Federal government must incur to facilitate such financing. 
Accordingly, we recognized the potential benefits of this proposal for 
small businesses across the Nation.
  At our roundtable on April 30, 2003, the Committee discussed the idea 
of the securitization of non-SBA small business loans. The SBA reported 
that it had been exploring this type of program for some time and 
thought the idea had considerable merit. The agency was uncertain, 
however, whether it had the statutory authority to develop and 
implement such a program, absent legislative authorization. After the 
roundtable, we consulted with the SBA and with participants in the 
small business financing industry to determine the program's 
appropriate elements.
  In addition to the support the SBA expressed for the proposal in its 
budget request, at the Committee's roundtable, and in subsequent 
discussions with Committee staff, the SBA took other steps to help make 
the proposal a success. For example, the agency entered into a contract 
with Dun & Bradstreet and with Fair, Isaacs, Co., to create a credit 
scoring model for small businesses, similar to individual consumer 
credit scores, to help small businesses gauge their credit quality. The 
scoring model will be an important asset to the pooling proposal by 
providing uniformity of pricing, thus reducing one obstacle to the 
securitization of non-SBA small business loans. The Office of Advocacy 
of the SBA has also helped build support for the proposal by 
publicizing the need to take the foundational steps to build a 
secondary market for small business loans, rather than later trying to 
create such a market in one step when economic pressures called for an 
immediate response.
  Support for a program to securitize small business loans has also 
been advocated by the Board of Governors of the Federal Reserve System. 
In its September 2002 Report to the Congress on the Availability of 
Credit to Small Businesses, the Federal Reserve stated that the 
securitization of small business loans could ``substantially influence 
the availability of credit'' to small businesses. The Federal Reserve 
noted that one primary benefit of a secondary market would be that 
small business borrowers could enjoy lower financing costs.
  In addition to the Federal Reserve report, other studies have shown 
that small businesses could benefit from an efficient secondary market 
for small business loans. Several, including the Federal Reserve 
report, have noted that a primary obstacle to a wide-spread secondary 
market for small business loans has been the lack of standardized 
information to evaluate and price small business loans efficiently for 
resale. As noted, the SBA has exercised foresight by securing the 
contract with Dun & Bradstreet and Fair, Isaacs to address this 
problem. With the information provided by this new credit-scoring 
model, the securitization of non-SBA small business loans will be far 
more feasible.
  With input from the SBA, small businesses, and financial firms in 
hand, and having considered many studies regarding small business 
credit and the effectiveness of secondary markets, we included a 
provision similar to this Act in S. 1375, the Small Business 
Administration 50th Anniversary Reauthorization Act of 2003, which was 
approved unanimously by the Committee on July 10, 2003.
  Working with Senator Pryor and with other colleagues, we endeavored 
to provide sufficient specificity in the instructions the legislation 
gives the SBA regarding the pilot program, so as to ensure that the 
pooling proposal provides the greatest benefit to small businesses in 
need of capital while limiting risk to the Federal government.

[[Page S12459]]

  Unfortunately, despite all the hard work and input from the SBA and 
from other participants in the small business financing industry, some 
apparently either failed to recognize or understand the benefits for 
small businesses that exist in this idea that originated with the SBA. 
In the interest of expediting the passage of S. 1375 before the SBA's 
authorizing legislation expired, I reluctantly removed that provision 
from S. 1375 to focus on those elements of the bill that had to be 
enacted before the legislation expired. I continue to appreciate the 
benefits of this proposal, and I am now introducing this provision as a 
separate bill. With the support this proposal already has, I am 
confident we can implement this innovative program, and I look forward 
to the benefits it can provide as we try to assist small businesses to 
prosper, create more jobs, and pull the economy out of its current 
doldrums.
  The Small Business Credit Liquidity Act of 2003 authorizes the Small 
Business Administration (SBA) to develop and implement an innovative 
three-year pilot program to facilitate the securitization of small 
business loans in order to increase the liquidity of capital available 
to small businesses. Under the pilot program, the SBA could provide 
partial guarantees on pools of securitized small business loans that 
are not otherwise guaranteed by the SBA. The legislation seeks to 
increase capital available to small businesses, without creating 
additional risk for the government since the SBA's guarantees would be 
paid for by fees charged to the financial firms administering the 
pooling of loans, and thus no appropriations will be necessary.
  I believe this pilot program has a great potential to provide 
increased access to capital on terms that are beneficial to small 
businesses. The pilot program will also allow lenders, including small 
lenders such as community banks, to utilize their capital better, and 
make more loans available to small businesses on better terms, by 
increasing the liquidity of existing loans.
  The pooling structure is based on similar arrangements for home 
mortgages, credit card loans, and car loans, which have active 
secondary markets based upon their pooling and securitization. The 
increased liquidity of loans provided by a secondary market allows 
lenders to be confident that the loans they make can be sold to 
investors, so that the lenders can utilize again capital that is 
otherwise locked into existing loans. In addition, because lenders 
receive a quick ``turnaround'' on the loans that they make and then 
sell to investors, the profit that the lenders receive from the 
interest rates charged to borrowers becomes less important for the 
lenders, who can receive a smaller per-loan profit, but increase the 
number of loans they make, and thereby receive a greater profit. 
Lenders are thus able to make more loans and to provide better terms to 
borrowers on those loans.
  As Chair of the Committee on Small Business, I realize that access to 
credit for small businesses is often a challenge. The Committee has 
consistently found that encouraging more lending to small businesses 
that have a likelihood to succeed, grow, and create new jobs is a sound 
national policy. The pilot program takes advantage of the successful 
example of the prior securitizations of SBA small business loans, and 
of changes in the investment community, to facilitate lending in the 
small business community for years to come.
  This pilot program is not a departure from the SBA's current practice 
of guaranteeing loans and regulating the securitization of those loans. 
The SBA already regulates the securitization of both guaranteed 
portions of 7(a) and 504 loans to small businesses and non-guaranteed 
portions of the same loans. These loans are made both by Federally-
regulated lenders and by lenders that are not federally regulated. In 
Fiscal Year 2002, the SBA regulated the securitization of $3.4 billion 
in government-guaranteed 7(a) loans to small businesses. When the 
guaranteed portions of the 7(a) loans are securitized separately from 
the non-guaranteed portions, the SBA is guaranteeing 100 percent of the 
loan pools.
  This bill authorizes a pilot program with a much more modest SBA 
involvement than is represented by the SBA's current financing 
programs. Under the pilot program, financial firms approved by the SBA 
would pool loans not individually guaranteed by the SBA. These pooling 
entities would then issue securities offering returns based upon the 
returns from the loans in the pool. The securities would be rated by a 
rating agency and sold to investors.
  The pooling entities, also known as ``loan poolers,'' would also 
offer a partial ``first-loss'' guarantee to investors on the 
securities' returns. If the loans had insufficient returns to pay the 
expected returns on the securities, the pooling entities' guarantees 
would be the first guarantees called into performance to pay investors. 
The SBA would issue partial, not complete, ``second-loss'' guarantees 
on the return from the securities, but not on individual loans within 
the pool. The agency's guarantees would thus be available only after 
the first-loss guarantees offered by the loan poolers are exhausted.
  Significantly, the cost of the SBA guarantees will be fully funded by 
fees paid by the loan poolers, so no Federal appropriations will be 
necessary. The bill provides that the SBA will adjust the fees required 
from the poolers under the pilot program annually, as necessary.
  The legislation also includes other provisions to ensure that the 
pilot program will not lead to increased risk or liability for the 
government. In particular, it caps the SBA's guarantees on any loan 
pool at a maximum of 25 percent of the value of the securities issued 
for that loan pool. In contrast, the SBA's guarantees for the 7(a) and 
504 loan programs are as high as 90 percent and 40 percent, 
respectively, of each loan in those programs. Moreover, in the 504 loan 
program the SBA is in a first-loss position, sustaining the loss of its 
full guaranteed amount on a defaulted loan before the private lender 
incurs any loss, whereas in the pilot program the SBA will be in a 
second-loss position.
  In addition, the bill requires that firms licensed as loan poolers 
adhere to certain standards, such as being well-capitalized and 
maintaining sufficient reserves. The bill also provides that the SBA 
will set standards for the licensed poolers and will review these 
entities annually to verify that they are conforming with SBA 
requirements. Among the requirements the SBA would establish for such 
loan poolers would be standards relating to loan delinquency, default, 
liquidation, and loss rates. If any licensed loan pooler fails to meet 
the SBA's standards, the SBA may terminate the pooler's participation 
in the pilot program.
  To ensure that the pilot program is initially implemented on a 
manageable scale, the legislation specifies that no individual loan 
pool created by a licensed pooler will exceed $350 million in loans in 
fiscal year 2004, $400 million in loans in fiscal year 2005, or $450 
million in loans in fiscal year 2006. The bill also specifies that the 
SBA's total guarantees under the pilot program will not exceed $2.1 
billion for fiscal year 2004, $3.25 billion for fiscal year 2005, or 
$4.5 billion for fiscal year 2006.
  Finally, this legislation requires three separate types of reports to 
ensure that the pilot program is properly monitored and evaluated. 
First, the SBA must provide to the Senate and House Committees on Small 
Business a report detailing the pooling program before it is 
implemented, and wait 50 days after submitting the report before 
implementing the program. In addition, the SBA must file with the 
Congress, in the SBA's Budget Request and Performance Plan, an annual 
report about the program's performance. To strengthen the on-going 
oversight of the pilot program, the bill also specifies that the SBA's 
annual report to Congress will include information about the pooled 
loans, including delinquency, default, loss, and recovery rates. Third, 
the GAO is required to study the program once implemented, and report 
on the program's performance, including any effects the program may 
have on the 504 or 7(a) programs, before calendar year 2006.
  My Small Business Committee has received expressions of support for 
the pilot program from representatives of thousands of small businesses 
that believe the program could improve access to capital, and could 
improve the terms of loans received, for many small businesses, 
particularly those without significant real estate property to use as

[[Page S12460]]

collateral. In particular, support for the program has been expressed 
by minority-owned small businesses and by women-owned small businesses. 
For these small businesses, which often have less real estate 
collateral than other small businesses, this pilot program holds great 
potential for creating capital resources to meet their financing needs.
  For instance, a recent study by the SBA's Office of Advocacy, issued 
in September 2003, reveals that small businesses owned by women are 
more likely than other small businesses to rely on expensive personal 
credit cards to finance the business, rather than more traditional 
types of loans. For these small businesses, an increase in the 
availability of traditional business loans, with lower financing costs 
and on terms beneficial to the borrowers, would be a welcome 
development.
  In addition, the same study showed that minority-owned small 
businesses, in addition to being less likely than other small 
businesses to obtain credit, were far less likely to obtain their 
credit from traditional Federally regulated depository institutions, 
and were more likely to resort to financing their businesses through 
sources such as family, friends, and acquaintances of the business 
owners. While this bill does not address subjective lender behavior, it 
does address the objective cost/profit opportunity presented to a 
lender by a loan to a small business, including a minority-owned or 
women-owned small business. If a lender is able to sell a conventional 
small business loan in an efficient secondary market, the potential 
downside cost of the loan to the lender, e.g., its default risk, is 
decreased, and the lender is assured that its capital will still be 
available for other loans.
  Financial firms currently involved in the pooling and securitization 
of loans issued in the SBA's two primary loan guaranty programs, under 
Section 7(a) of the Small Business Act (``7(a) loans'') and under 
Section 504 of the Small Business Investment Act of 1958 (``504 
loans''), have also expressed their support for the program, and have 
stated their belief that it will increase small businesses' access to 
effective capital.
  In closing, the Small Business Credit Liquidity Act of 2003 is an 
innovative approach to a persistent problem for small businesses in 
this country--access to capital. I believe it has the potential to 
address this problem for small businesses with effectively no risk to 
the Federal Government. At a time when our small enterprises are 
helping to lead the country back onto the road to economic recovery, we 
should be doing all we can to eliminate obstacles facing small 
businesses, which hold the greatest potential for job creation in 
America today. This bill is an important step in that direction, and I 
urge my colleagues to join me in supporting its enactment.
  I ask unanimous consent that the text of the bill and a summary of 
its provision be printed in the Record.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:

              Small Business Credit Liquidity Act of 2003


                         Summary of Provisions

       The Small Business Credit Liquidity Act of 2003 authorizes 
     the Small Business Administration (SBA) to develop a three-
     year pilot program to facilitate the securitization of small 
     business loans, and thereby improve the opportunities for 
     small businesses to obtain capital by increasing the 
     liquidity of small business loans.
       Under the pilot program:
       Financial firms, after being licensed by the SBA, would 
     create ``pools'' of conventional small business loans, i.e., 
     small business loans not individually guaranteed by the SBA.
       These financial firms, also known as ``loan poolers,'' 
     would then issue securities, rated by rating agencies, which 
     would offer returns based upon the returns from the loans in 
     the pools. The securities would be sold to private investors.
       The loan poolers would offer partial ``first-loss'' 
     guarantees to investors on the securities' returns (i.e., on 
     the pools themselves, rather than on individual loans). If 
     the loans had insufficient returns to pay the expected 
     returns on the securities, the pooling entities' guarantees 
     would be the first guarantees called into performance to pay 
     investors.
       The SBA would issue additional guarantees, on the pools 
     rather than on individual loans, that would be in a ``second 
     loss'' position, meaning that the private investors would 
     receive the full first-loss guarantees from the loan poolers 
     before any SBA guarantee was applied. The SBA's second-loss 
     guarantees for each pool would be limited to 25 percent of 
     the size of that pool.
       The SBA's second-loss guarantees would be funded 
     exclusively through fees paid by loan poolers, and would 
     therefore require no appropriated funds.
       The SBA would be required to report its plan for the 
     program to the Senate and House Committees on Small Business 
     before implementing the program. The SBA would also be 
     required to file with the Congress, in the agency's Budget 
     Request and Performance Plan, an annual report about the 
     program's performance. In addition, the General Accounting 
     Office (GAO) would be required to study the pilot program 
     after it began and analyze its results.
       To ensure that the pilot program is initially implemented 
     on a manageable scale, loan pools under the pilot program 
     would have maximum individual sizes beginning at $350 million 
     for fiscal year 2004 and increasing to $450 million for 
     fiscal year 2006. In addition, the SBA's guarantees would be 
     limited to maximum amounts of $2.1 billion for fiscal year 
     2004, $3.25 billion for fiscal year 2005, and $4.5 billion 
     for fiscal year 2006.
       The program will sunset at the end of fiscal year 2006 
     unless it is reauthorized by Congress.

                                S. 1713

       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 ``Small Business Credit 
     Liquidity Act of 2003''.

     SEC. 2. PILOT PROGRAM FOR GUARANTEES ON POOLS OF NON-SBA 
                   LOANS.

       Title IV of the Small Business Investment Act of 1958 (15 
     U.S.C. 692 et seq.) is amended by adding at the end the 
     following:

                ``Part C--Credit Enhancement Guarantees

       ``Sec. 420. (a)(1) The Administration is authorized, upon 
     such terms and conditions as it may prescribe, in order to 
     encourage lenders to increase the availability of small 
     business financing by improving such lenders' access to 
     reasonable sources of funding, to provide a credit 
     enhancement guarantee, or commitment to guarantee, of the 
     timely payment of a portion of the principal and interest on 
     securities issued and managed by not less than 2 qualified 
     entities authorized and approved by the Administration.
       ``(2) The entities authorized under this subsection to act 
     as issuers and managers of pools or trusts of loans shall be 
     well-capitalized, as defined by the Administration, and shall 
     maintain sufficient reserves to allow securities to be issued 
     representing interests in each pool or trust that are rated 
     as investment grade by a nationally-recognized rating agency.
       ``(3) The authority of the entities authorized under this 
     subsection shall be reviewed annually by the Administration 
     and may be renewed upon the satisfactory completion of such 
     review.
       ``(4) The Administration shall set and maintain standards 
     for entities authorized under this subsection, including 
     standards relating to delinquency, default, liquidation, and 
     loss rates.
       ``(5) If an entity authorized under this subsection fails 
     to meet the standards set pursuant to paragraph (4), the 
     Administration may terminate the entity's participation in 
     the pilot program under this subsection.
       ``(b)(1)(A) The Administration may provide its credit 
     enhancement guarantees in respect of securities that 
     represent interests in, or other obligations issued by, a 
     trust, pool, or other entity whose assets (other than the 
     Administration's credit enhancement guarantee and credit 
     enhancements provided by other parties) consist of loans made 
     to small business concerns.
       ``(B) As used in this paragraph, the term `small business 
     concern' has the meaning given that term in either the Small 
     Business Act (15 U.S.C. 631 et seq.) or this Act (15 U.S.C. 
     661 et seq.).
       ``(2) The credit enhancement guarantees provided by the 
     Administration under paragraph (1) shall be second-loss 
     guarantees that are only available after the full payment of 
     credit enhancement guarantees offered by the entities 
     authorized to act as issuers and managers of pools or trusts 
     of loans under this section.
       ``(3) A pool or trust of loans shall not be eligible for 
     guarantees under this section--
       ``(A) if the value of such loans exceeds $350,000,000 in 
     fiscal year 2004;
       ``(B) if the value of such loans exceeds $400,000,000 in 
     fiscal year 2005; or
       ``(C) if the value of such loans exceeds $450,000,000 in 
     fiscal year 2006.
       ``(4) All loans under paragraph (1) shall be originated, 
     purchased, or assembled and managed consistent with 
     requirements prescribed by the Administration in connection 
     with this credit enhancement guarantee program.
       ``(5) The Administration shall prescribe requirements to be 
     observed by the issuers and managers of the securities 
     covered by credit enhancement guarantees to ensure the safety 
     and soundness of the credit enhancement guarantee program.
       ``(c) The full faith and credit of the United States is 
     pledged to the payment of all amounts the Administration may 
     be required to pay as a result of credit enhancement 
     guarantees under this section.
       ``(d)(1) The Administration may issue credit enhancement 
     guarantees in an amount--
       ``(A) not to exceed $2,100,000,000 in fiscal year 2004;

[[Page S12461]]

       ``(B) not to exceed $3,250,000,000 in fiscal year 2005; and
       ``(C) not to exceed $4,500,000,000 in fiscal year 2006.
       ``(2) The Administration shall set the percentage and 
     priority of each credit enhancement guarantee on issued 
     securities at a level not to exceed 25 percent of the value 
     of the securities so that the amount of the Administration's 
     anticipated net loss (if any) as a result of such guarantee 
     is fully reserved in a credit subsidy account funded wholly 
     by fees collected by the Administration from the issuers or 
     managers of the pool or trust.
       ``(3) The Administration shall charge and collect a fee 
     from the issuer based on the Administration's guaranteed 
     amount of issued securities, and the amount of such fee shall 
     equal the estimated credit subsidy cost of the 
     Administration's credit enhancement guarantee.
       ``(4) The fees provided for under this subsection shall be 
     adjusted annually, as necessary, by the Administration.
       ``(5) The Federal government shall not appropriate any 
     funds to finance credit enhancement guarantees under this 
     section.
       ``(e) Report and Analysis.--
       ``(1) Report.--
       ``(A) In general.--During the development and 
     implementation of the pilot program, the Administrator shall 
     submit a report on the status of the pilot program under this 
     section to Congress in each annual budget request and 
     performance plan.
       ``(B) Contents.--The report submitted under subparagraph 
     (A) shall include, among other items, information about the 
     loans in the pools or trusts, including delinquency, default, 
     loss, and recovery rates.
       ``(2) Analysis and report.--Not later than December 30, 
     2005, the Comptroller General shall--
       ``(A) conduct an analysis of the pilot program under this 
     section; and
       ``(B) submit a report to Congress that contains a summary 
     of the analysis conducted under subparagraph (A) and a 
     description of any effects, not attributable to other causes, 
     of the pilot program on the lending programs under section 
     7(a) of the Small Business Act (15 U.S.C. 636(a)) and title V 
     of this Act.
       ``(3) Implementation.--
       ``(A) Report.--After completing operational guidelines to 
     carry out the pilot program under this section, the 
     Administration shall submit a report, which describes the 
     method in which the pilot program will be implemented, to--
       ``(i) the Committee on Small Business and Entrepreneurship 
     of the Senate; and
       ``(ii) the Committee on Small Business of the House of 
     Representatives.
       ``(B) Timing.--The Administration shall not implement the 
     pilot program under this section until the date that is 50 
     days after the report has been submitted under subparagraph 
     (A).
       ``(f) Sunset Provision.--This section shall remain in 
     effect until September 30, 2006.''.
                                 ______
                                 
      By Mr. CORZINE:
  S. 1714. A bill to amend the National Housing Act to increase the 
maximum mortgage amount limit for FHA-insured mortgages for multifamily 
housing located in high-cost areas; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. CORZINE. Mr. President, today I am introducing legislation, the 
FHA Multifamily Housing Loan Limit Adjustment Act of 2003, that will 
improve access to affordable housing for families living in high cost 
areas where there is a shortage of such housing. This bill was 
introduced earlier this year by Congressmen Gary Miller (R-CA) and 
Barney Frank (D-MA) and was recently approved by the House Financial 
Services Committee.
  The Multifamily Housing Loan Limit Adjustment Act of 2003 is 
supported by housing and community advocates and has also been endorsed 
by the National Association of Home Builders, the National Association 
of Realtors, the Mortgage Bankers Association, the Manufactured Housing 
Institute, and the National Affordable Housing Management Association.
  The Federal Housing Administration's Multifamily Housing programs are 
among HUD's most successful. The Federal Government has tried a number 
of different approaches to providing housing over the last 50 years. 
The most successful of these rely heavily on a public/private 
partnership that encourages the private sector to produce housing with 
support from the Federal Government. The FHA mortgage insurance 
programs have been extremely successful in producing new and 
rehabilitated housing with little or no cost to the Federal Government.
  As you know, rising construction costs have resulted in a shortage of 
moderately priced affordable rental units. Rent increases now exceed 
inflation in all regions of the country, and new affordable rental 
units have become increasingly harder to find. Because of the current 
dollar limits on loans, FHA insurance cannot be used to help finance 
construction in high-cost urban areas such as the New York/New Jersey 
metropolitan area, Philadelphia and San Francisco.
  HUD statistics demonstrate this--in 2002 and 2003, no multifamily 
loans have been FHA insured in New York City, Philadelphia, Los 
Angeles, Seattle, Massachusetts, or New Jersey.
  Increasing the limits on loans for rental housing would create more 
incentives for public/private investment in communities through America 
and spur the new production of cooperative housing projects, rental 
housing for the elderly and new construction or substantial 
rehabilitation of apartments by for- and non-profit entities.
  The National Association of Home Builders estimates that increasing 
the limits in high cost areas will allow for an additional 6,000 units 
of rental housing to be built each year in the cities limited by the 
current law. These 6,000 units will generate $318 million in new income 
to the residents and businesses in these cities, $38 million in added 
revenues to the local governments, and 6,720 new jobs. Over a ten year 
period, the cumulative effects of the additional building will 
contribute $9 billion in new income to the cities where the limits 
currently constrain new rental production.

  While Congress approved legislation I introduced in 2001 to increase 
the statutory limits for FHA-insured multifamily project loans to 
account for inflation, we failed to act on a key provision in my bill 
to raise the loan limits for high cost areas. I am reintroducing that 
portion of my bill gain, with the hope that two years later, we can 
finally achieve the increases we need to make the FHA multifamily 
programs succeed in all our communities, particularly in those high 
costs areas that so desperately need additional affordable rental 
housing.
  There is currently no HUD program designed to provide rental housing 
for working families from 60 percent to 100 percent of median income 
who are unable to find decent, affordable housing near where they work. 
Yet, the most recent Census data reveals that these working families, 
including vital municipal workers like teachers and police officers, 
are increasingly vulnerable and the lack of decent, affordable housing 
is increasingly being seen as a significant impediment to local 
economic growth. This is one reason why the FHA multifamily programs 
are so important.
  Without this much-needed adjustment to the FHA multifamily loan 
limits, access to affordable housing for our working-citizens will 
continue to lag, thousands of more families will join the 14 million 
people who currently face severe housing needs and our nation's economy 
will suffer.
  I hope my Senate colleagues will support the legislation and help 
ensure that America's working families have access to affordable 
housing.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1714

       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 ``FHA Multifamily Loan Limit 
     Adjustment Act of 2003''.

     SEC. 2. MAXIMUM MORTGAGE AMOUNT LIMIT FOR MULTIFAMILY HOUSING 
                   IN HIGH-COST AREAS.

       Sections 207(c)(3)(B), 213(b)(2)(B)(i), 
     220(d)(3)(B)(iii)(II), 221(d)(3)(ii)(II), 221(d)(4)(ii)(II), 
     231(c)(2)(B), and 234(e)(3)(B) of the National Housing Act 
     (12 U.S.C. 1713(c)(3)(B), 1715e(b)(2)(B)(i), 
     1715k(d)(3)(B)(iii)(II), 1715l(d)(3)(ii)(II), 
     1715l(d)(4)(ii)(II), 1715v(c)(2)(B)), and 1715y(e)(3)(B)) are 
     each amended--
       (1) by striking ``110 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``140 percent'' and inserting ``170 
     percent''.

     SEC. 3. CATCH-UP ADJUSTMENTS TO CERTAIN MAXIMUM MORTGAGE 
                   AMOUNT LIMITS.

       (a) Section 207 Limits.--Section 207(c)(3)(A) of the 
     National Housing Act (12 U.S.C. 1713(c)(3)(A)) is amended by 
     striking ``$11,250'' and inserting ``$17,460''.
       (b) Section 213 Limits.--Section 213(b)(2)(A) of the 
     National Housing Act (12 U.S.C. 1715e(b)(2)(A)) is amended--
       (1) by striking ``$38,025'' and inserting ``$41,207'';
       (2) by striking ``$42,120'' and inserting ``$47,511'';
       (3) by striking ``$50,310'' and inserting ``$57,300'';

[[Page S12462]]

       (4) by striking ``$62,010'' and inserting ``$73,343'';
       (5) by striking ``$70,200'' and inserting ``$81,708'';
       (6) by striking ``$49,140'' and inserting ``$49,710'';
       (7) by striking ``$60,255'' and inserting ``$60,446'';
       (8) by striking ``$75,465'' and inserting ``$78,197''; and
       (9) by striking ``$85,328'' and inserting ``$85,836''.
                                        NAHMA, National Affordable


                               Housing Management Association,

                                  Alexandria, VA, October 2, 2003.
     Hon. Jon S. Corzine.
     U.S. Senate, 502 Senate Hart Building, Washington, DC.
       Dear Senator Corzine: I am writing to convey the National 
     Affordable Housing Management Association's (NAHMA) strong 
     support for the FHA Multifamily Housing Loan Limit Adjustment 
     Act.
       NAHMA represents owners and individuals involved with the 
     management of affordable multifamily housing developments. 
     Affordable properties owned and managed by NAHMA members are 
     subject to the regulations of federal agencies including the 
     U.S. Department of Housing and Urban Development, the U.S. 
     Rural Housing Service, and the Internal Revenue Service. 
     NAHMA members provide quality affordable housing to more than 
     two million Americans with very low and moderate incomes. 
     Executives of property management companies, owners of 
     affordable rental housing, public agencies and vendors that 
     serve the affordable housing industry constitute NAHMA's 
     membership.
       The FHA multifamily insurance programs are an important 
     component of any affordable housing strategy. Your 
     legislation, which increases the maximum Federal Housing 
     Administration (FHA) multifamily mortgage loan limits in high 
     cost areas from 110 to 170 percent above the base loan 
     limits, will help increase the availability of affordable 
     housing for low-to-moderate income families. This bill will 
     encourage production of multifamily developments in some of 
     the most expensive areas in the nation--where affordable 
     housing is often desperately needed.
       NAHMA is pleased to offer its strong support for the FHA 
     Multifamily Housing Loan Limit Adjustment Act. I look forward 
     to working with you to advance this important legislation.
           Sincerely,
                                                   Kris Cook, CAE,
     Executive Director.
                                  ____

         National Association of Realtors, National Association of 
           Home Builders, Mortgage Bankers Association,
                                                  October 2, 2003.
     Hon. Jon S. Corzine,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Corzine: On behalf of the membership of our 
     associations who represent the home buying, home building, 
     and home financing industries, we are writing in support of 
     legislation you intend to introduce to increase the Federal 
     Housing Administration (FHA) multifamily loan limits in high-
     cost areas. Over the past 2 years, Congress and the 
     Administration have taken steps to update the FHA multifamily 
     loan limits. However, one final hurdle remains since the 
     current maximum FHA multifamily mortgage limits are 
     inadequate and continue to constrain new construction and 
     rehabilitation in many urban and suburban areas, where 
     construction costs are significantly higher than in the rest 
     of the country.
       The FHA's multifamily mortgage insurance programs enable 
     qualified borrowers to obtain long-term, fixed-rate, 
     nonrecourse, financing for a variety of multifamily 
     properties that are affordable to low- and moderate-income 
     families. This public/private partnership has resulted in a 
     successful program providing housing for a portion of the 
     population not usually served by private industry alone. In 
     addition to serving a valuable purpose, according to recent 
     calculations by HUD and OMB indicate that virtually all of 
     the FHA multifamily insurance programs operate on a break-
     even basis or raise revenue for the government.
       Without higher FHA multifamily loan limits in high-cost 
     markets, critical housing needs will go unmet. Those who will 
     be most affected will include low- and moderate-income 
     families, including important community service providers 
     such as teachers, firefighters, and police officers. By 
     increasing the maximum loan limit for FHA's multifamily 
     programs, these programs can help provide the housing 
     opportunities necessary for the economic and social well 
     being of our Nation. We applaud your efforts to increase the 
     availability of affordable housing in our Nation's high-cost 
     areas.
                                 ______
                                 
      By Mr. CAMPBELL (for himself and Mr. Inouye):
  S. 1715. A bill to amend the Indian Self-Determination and Education 
Assistance Act to provide further self-governance by Indian tribes; to 
the Committee on Indian Affairs.
  Mr. CAMPBELL. Mr. President, today I am pleased to be joined by 
Senator Inouye in introducing the Department of Interior Tribal Self 
Governance Amendments of 2003, a bill that is a companion to the bill 
we introduced yesterday, the Department of Health and Human Services 
Tribal Self Governance Amendments of 2003.
  Taken together, these bills will strengthen the government-to-
government relationship between the United States and Indian tribes by 
shepherding in the next phase of Indian Self Governance.
  Due to the Federal reservation status of Indian lands, the Department 
of the Interior, among all Federal agencies, has historically had the 
most significant impact on the lives of Indians.
  This longstanding relationship with Indian tribes has often been 
stormy, with Federal bureaucrats providing all or nearly all services 
to Indian tribes and their members, including police, fire, education 
and health care services.
  The Federal-tribal relationship took a decided turn for the better in 
1975 with the enactment of the Indian Self Determination and Education 
Assistance Act of 1975, Pub. L. 93-638. Since passage of Pub. L. 93-
638, Congress has systematically devolved to Indian tribes the 
authority and responsibility to manage Federal programs within the 
Bureau of Indian Affairs and the Indian Health Service.
  The bill I am introducing today will expand the provisions of Self 
Governance within the Department of the Interior by creating a 
Demonstration Project within the Department of the Interior for non-BIA 
programs.
  This Demonstration Project is integral to the continued success of 
Self Governance for Indians, as there remain many non-BIA programs with 
the Department that affect the ability of Indian tribes to better serve 
their members.
  I urge my colleagues to join me in supporting this important bill.
  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. 1715

       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 ``Department of the Interior 
     Tribal Self-Governance Act of 2003''.

     SEC. 2. AMENDMENT.

       The Indian Self-Determination and Education Assistance Act 
     is amended by striking title IV (25 U.S.C. 458aa et seq.) and 
     inserting the following:

                   ``TITLE IV--TRIBAL SELF-GOVERNANCE

     ``SEC. 401. DEFINITIONS.

       ``In this title:
       ``(1) Compact.--The term `compact' means a compact under 
     section 404.
       ``(2) Construction program.--The term `construction 
     program' means a tribal undertaking to complete any or all 
     included programs relating to the administration, planning, 
     environmental determination, design, construction, repair, 
     improvement, or expansion of roads, bridges, buildings, 
     structures, systems, or other facilities for purposes of 
     housing, law enforcement, detention, sanitation, water 
     supply, education, administration, community health, 
     irrigation, agriculture, conservation, flood control, 
     transportation, or port facilities or for other tribal 
     purposes.
       ``(3) Construction project.--The term `construction 
     project' means a tribal undertaking that constructs 1 or more 
     roads, bridges, buildings, structures, systems, or other 
     facilities for purposes of housing, law enforcement, 
     detention, sanitation, water supply, education, 
     administration, community health, irrigation, agriculture, 
     conservation, flood control, transportation, or port 
     facilities or for other tribal purposes.
       ``(4) Department.--The term `Department' means the 
     Department of the Interior.
       ``(5) Funding agreement.--The term `funding agreement' 
     means a funding agreement under section 405(b).
       ``(6) Gross mismanagement.--The term `gross mismanagement' 
     means a significant violation, shown by clear and convincing 
     evidence, of a compact, funding agreement, or statutory or 
     regulatory requirement applicable to Federal funds 
     transferred to an Indian tribe by a compact or funding 
     agreement that results in a significant reduction of funds 
     being made available for the included programs assumed by an 
     Indian tribe.
       ``(7) Included program.--The term `included program' means 
     a program that is eligible for inclusion under a funding 
     agreement (including any portion of such a program and any 
     function, service, or activity performed under such a 
     program).
       ``(8) Indian tribe.--The term `Indian tribe', in a case in 
     which an Indian tribe authorizes another Indian tribe, an 
     inter-tribal consortium, or a tribal organization to plan for 
     or carry out an included program on its behalf in accordance 
     with section 403(a)(3), includes

[[Page S12463]]

     the other authorized Indian tribe, inter-tribal consortium, 
     or tribal organization.
       ``(9) Inherent federal function.--The term `inherent 
     Federal function' means a Federal function that cannot 
     legally be delegated to an Indian tribe.
       ``(10) Inter-tribal consortium.--
       ``(A) In general.--The term `inter-tribal consortium' means 
     a coalition of 2 more separate Indian tribes that join 
     together for the purpose of participating in self-governance.
       ``(B) Inclusion.--The term `inter-tribal organization' 
     includes a tribal organization.
       ``(11) Secretary.--The term `Secretary' means the Secretary 
     of the Interior.
       ``(12) Self-governance.--The term `self-governance' means 
     the program of self-governance established under section 402.
       ``(13) Tribal share.--The term `tribal share' means an 
     Indian tribe's portion of all funds and resources that 
     support secretarial included programs that are not required 
     by the Secretary for the performance of inherent Federal 
     functions.

     ``SEC. 402. ESTABLISHMENT.

       ``The Secretary shall carry out a program within the 
     Department to be known as the `Tribal Self-Governance 
     Program'.

     ``SEC. 403. SELECTION OF PARTICIPATING INDIAN TRIBES.

       ``(a) In General.--
       ``(1) Continuing participation.--An Indian tribe that was 
     participating in the Tribal Self-Governance Demonstration 
     Project at the Department under title III on October 25, 
     1994, may elect to participate in self-governance under this 
     title.
       ``(2) Additional participants.--
       ``(A) In general.--In addition to Indian tribes 
     participating in self-governance under paragraph (1), an 
     Indian tribe that meets the eligibility criteria specified in 
     subsection (b) shall be entitled to participate in self-
     governance.
       ``(B) No limitation.--The Secretary shall not limit the 
     number of additional Indian tribes to be selected each year 
     from among Indian tribes that are eligible under subsection 
     (b).
       ``(3) Other authorized indian tribe, inter-tribal 
     consortium, or tribal government.--If an Indian tribe 
     authorizes another Indian tribe, an inter-tribal consortium, 
     or a tribal organization to plan for or carry out an included 
     program on its behalf under this title, the authorized Indian 
     tribe, inter-tribal consortium, or tribal organization shall 
     have the rights and responsibilities of the authorizing 
     Indian tribe (except as otherwise provided in the authorizing 
     resolution).
       ``(4) Joint participation.--Two or more Indian tribes that 
     are not otherwise eligible under subsection (b) may be 
     treated as a single Indian tribe for the purpose of 
     participating in self-governance as a consortium if--
       ``(A) if each Indian tribe so requests; and
       ``(B) the consortium itself is eligible under subsection 
     (b).
       ``(5) Tribal withdrawal from a consortium.--
       ``(A) In general.--An Indian tribe that withdraws from 
     participation in an inter-tribal consortium or tribal 
     organization, in whole or in part, shall be entitled to 
     participate in self-governance if the Indian tribe is 
     eligible under subsection (b).
       ``(B) Effect of withdrawal.--If an Indian tribe withdraws 
     from participation in an inter-tribal consortium or tribal 
     organization, the Indian tribe shall be entitled to its 
     tribal share of funds and resources supporting the included 
     programs that the Indian tribe will be carrying out under the 
     compact and funding agreement of the Indian tribe.
       ``(C) Participation in self-governance.--The withdrawal of 
     an Indian tribe from an inter-tribal consortium or tribal 
     organization shall not affect the eligibility of the inter-
     tribal consortium or tribal organization to participate in 
     self-governance on behalf of 1 or more other Indian tribes.
       ``(D) Withdrawal process.--
       ``(i) In general.--An Indian tribe may fully or partially 
     withdraw from a participating inter-tribal consortium or 
     tribal organization its tribal share of any included program 
     that is included in a compact or funding agreement.
       ``(ii) Effective date.--

       ``(I) In general.--A withdrawal under clause (i) shall 
     become effective on the date specified in the resolution that 
     authorizes transfer to the participating tribal organization 
     or inter-tribal consortium.
       ``(II) No specified date.--In the absence of a date 
     specified in the resolution, the withdrawal shall become 
     effective on--

       ``(aa) the earlier of--
       ``(AA) 1 year after the date of submission of the request; 
     or
       ``(BB) the date on which the funding agreement expires; or
       ``(bb) such date as may be agreed on by the Secretary, the 
     withdrawing Indian tribe, and the tribal organization or 
     inter-tribal consortium that signed the compact or funding 
     agreement on behalf of the withdrawing Indian tribe, inter-
     tribal consortium, or tribal organization.
       ``(E) Distribution of funds.--If an Indian tribe or tribal 
     organization eligible to enter into a self-determination 
     contract under title I or a compact or funding agreement 
     under this title fully or partially withdraws from a 
     participating inter-tribal consortium or tribal organization, 
     the withdrawing Indian tribe--
       ``(i) may elect to enter into a self-determination contract 
     or compact, in which case--

       ``(I) the withdrawing Indian tribe or tribal organization 
     shall be entitled to its tribal share of funds and resources 
     supporting the included programs that the Indian tribe will 
     be carrying out under its own self-determination contract or 
     compact and funding agreement (calculated on the same basis 
     as the funds were initially allocated to the funding 
     agreement of the inter-tribal consortium or tribal 
     organization); and
       ``(II) the funds referred to in subclause (I) shall be 
     withdrawn by the Secretary from the funding agreement of the 
     inter-tribal consortium or tribal organization and 
     transferred to the withdrawing Indian tribe, on the condition 
     that sections 102 and 105(i), as appropriate, shall apply to 
     the withdrawing Indian tribe; or

       ``(ii) may elect not to enter into a self-determination 
     contract or compact, in which case all funds not obligated by 
     the inter-tribal consortium associated with the withdrawing 
     Indian tribe's returned included programs, less closeout 
     costs, shall be returned by the inter-tribal consortium to 
     the Secretary for operation of the included programs included 
     in the withdrawal.
       ``(F) Return to mature contract status.--If an Indian tribe 
     elects to operate all or some included programs carried out 
     under a compact or funding agreement under this title through 
     a self-determination contract under title I, at the option of 
     the Indian tribe, the resulting self-determination contract 
     shall be a mature self-determination contract.
       ``(b) Eligibility.--To be eligible to participate in self-
     governance, an Indian tribe shall--
       ``(1) complete the planning phase described in subsection 
     (c);
       ``(2) request participation in self-governance by 
     resolution or other official action by the tribal governing 
     body; and
       ``(3) demonstrate, for the 3 fiscal years preceding the 
     date on which the Indian tribe requests participation, 
     financial stability and financial management capability as 
     evidenced by the Indian tribe's having no uncorrected 
     significant and material audit exceptions in the required 
     annual audit of its self-determination or self-governance 
     agreements with any Federal agency.
       ``(c) Planning Phase.--
       ``(1) In general.--An Indian tribe seeking to participate 
     in self-governance shall complete a planning phase in 
     accordance with this subsection.
       ``(2) Activities.--The planning phase--
       ``(A) shall be conducted to the satisfaction of the Indian 
     tribe; and
       ``(B) shall include--
       ``(i) legal and budgetary research; and
       ``(ii) internal tribal government planning and 
     organizational preparation.
       ``(d) Grants.--
       ``(1) In general.--Subject to the availability of 
     appropriations, an Indian tribe that meets the requirements 
     of paragraphs (2) and (3) of subsection (b) shall be eligible 
     for grants--
       ``(A) to plan for participation in self-governance; and
       ``(B) to negotiate the terms of participation by the Indian 
     tribe or tribal organization in self-governance, as set forth 
     in a compact and a funding agreement.
       ``(2) Receipt of grant not required.--Receipt of a grant 
     under paragraph (1) shall not be a requirement of 
     participation in self-governance.

     ``SEC. 404. COMPACTS.

       ``(a) In General.--The Secretary shall negotiate and enter 
     into a written compact with as Indian tribe participating in 
     self-governance in a manner that is consistent with the trust 
     responsibility of the Federal Government, treaty obligations, 
     and the government-to-government relationship between Indian 
     tribes and the United States.
       ``(b) Contents.--A compact under subsection (a) shall--
       ``(1) specify the general terms of the government-to-
     government relationship between the Indian tribe and the 
     Secretary; and
       ``(2) include such terms as the parties intend shall 
     control year after year.
       ``(c) Amendment.--A compact under subsection (a) may be 
     amended only by agreement of the parties.
       ``(d) Effective Date.--The effective date of a compact 
     under subsection (a) shall be--
       ``(1) the date of the execution of the compact by the 
     Indian tribe; or
       ``(2) another date agreed to by the parties.
       ``(e) Duration.--A compact under subsection (a) shall 
     remain in effect for so long as permitted by Federal law or 
     until terminated by written agreement, retrocession, or 
     reassumption.
       ``(f) Existing Compacts.--An Indian tribe participating in 
     self-governance under this title, as in effect on the date of 
     enactment of the Department of the Interior Tribal Self-
     Governance Act of 2003, shall have the option at any time 
     after that date--
       ``(1) to retain its negotiated compact (in whole or in 
     part) to the extent that the provisions of the compact are 
     not directly contrary to any express provision of this title; 
     or
       ``(2) to negotiate a new compact in a manner consistent 
     with this title.

     ``SEC. 405. FUNDING AGREEMENTS.

       ``(a) In General.--The Secretary shall negotiate and enter 
     into a written funding agreement with the governing body of 
     an Indian tribe in a manner that is consistent with the trust 
     responsibility of the Federal Government, treaty obligations, 
     and the government-to-government relationship between Indian 
     tribes and the United States.

[[Page S12464]]

       ``(b) Included Programs.--
       ``(1) Bureau of indian affairs and office of special 
     trustee.--
       ``(A) In general.--A funding agreement shall, as determined 
     by the Indian tribe, authorize the Indian tribe to plan, 
     conduct, consolidate, administer, and receive full tribal 
     share funding for all programs carried out by the Bureau of 
     Indian Affairs and the Office of Special Trustee, without 
     regard to the agency or office within which the program is 
     performed (including funding for agency, area, and central 
     office functions in accordance with section 409(c)), that--
       ``(i) are provided for in the Act of April 16, 1934 (25 
     U.S.C. 452 et seq.);
       ``(ii) the Secretary administers for the benefit of Indians 
     under the Act of November 2, 1921 (25 U.S.C. 13), or any 
     subsequent Act;
       ``(iii) the Secretary administers for the benefit of 
     Indians with appropriations made to agencies other than the 
     Department of the Interior; or
       ``(iv) are provided for the benefit of Indians because of 
     their status as Indians.
       ``(B) Inclusions.--Programs described in subparagraph (A) 
     shall include all programs with respect to which Indian 
     tribes or Indians are primary or significant beneficiaries.
       ``(2) Other agencies.--A funding agreement under subsection 
     (a) shall, as determined by the Indian tribe, authorize the 
     Indian tribe to plan, conduct, consolidate, administer, and 
     receive full tribal share funding for all programs carried 
     out by the Secretary outside the Bureau of Indian Affairs, 
     without regard to the agency or office within which the 
     program is performed, including funding for agency, area, and 
     central office functions in accordance with subsection 
     409(c), to the extent that the included programs are within 
     the scope of paragraph (1).
       ``(3) Discretionary programs.--A funding agreement under 
     subsection (a) may, in accordance with such additional terms 
     as the parties consider to be appropriate, include programs 
     administered by the Secretary, in addition to programs 
     described in paragraphs (1) and (2), that are of special 
     geographical, historical, or cultural significance to the 
     Indian tribe.
       ``(4) Competitive bidding.--Nothing in this section--
       ``(A) supersedes any express statutory requirement for 
     competitive bidding; or
       ``(B) prohibits the inclusion in a funding agreement of a 
     program in which non-Indians have an incidental or legally 
     identifiable interest.
       ``(5) Excluded funding.--A funding agreement shall not 
     authorize an Indian tribe to plan, conduct, administer, or 
     receive tribal share funding under any program that--
       ``(A) is provided under the Tribally Controlled Community 
     College Assistance Act of 1978 (25 U.S.C. 1801 et seq.);
       ``(B) is provided for elementary and secondary schools 
     under the formula developed under section 1128 of the 
     Education Amendments of 1978 (25 U.S.C. 2008); and
       ``(C) is provided for the Flathead Agency Irrigation 
     Division or the Flathead Agency Power Division (except that 
     nothing in this section affects the contract authority of the 
     Flathead Agency Irrigation Division or the Flathead Agency 
     Power Division under section 102).
       ``(6) Services, functions, and responsibilities.--A funding 
     agreement shall specify--
       ``(A) the services to be provided under the funding 
     agreement;
       ``(B) the functions to be performed under the funding 
     agreement; and
       ``(C) the responsibilities of the Indian tribe and the 
     Secretary under the funding agreement.
       ``(7) Base budget.--A funding agreement shall, at the 
     option of the Indian tribe, provide for a stable base budget 
     specifying the recurring funds (including funds available 
     under section 106(a)) to be transferred to the Indian tribe, 
     for such period as the Indian tribe specifies in the funding 
     agreement, subject to annual adjustment only to reflect 
     changes in congressional appropriations.
       ``(8) No waiver of trust responsibility.--A funding 
     agreement shall prohibit the Secretary from waiving, 
     modifying, or diminishing in any way the trust responsibility 
     of the United States with respect to Indian tribes and 
     individual Indians that exists under treaties, Executive 
     orders, court decisions, and other laws.
       ``(c) Amendment.--The Secretary shall not revise, amend, or 
     require additional terms in a new or subsequent funding 
     agreement without the consent of the Indian tribe.
       ``(d) Effective Date.--A funding agreement shall become 
     effective on the date specified in the funding agreement.
       ``(e) Existing and Subsequent Funding Agreements.--
       ``(1) Subsequent funding agreements.--Absent notification 
     from an Indian tribe that is withdrawing or retroceding the 
     operation of 1 or more included programs identified in a 
     funding agreement, or unless otherwise agreed to by the 
     parties to the funding agreement--
       ``(A) a funding agreement shall remain in effect until a 
     subsequent funding agreement is executed; and
       ``(B) the term of the subsequent funding agreement shall be 
     retroactive to the end of the term of the preceding funding 
     agreement.
       ``(2) Existing funding agreements.--An Indian tribe that 
     was participating in self-governance under this title on the 
     date of enactment of the Department of the Interior Tribal 
     Self-Governance Act of 2003 shall have the option at any time 
     after that date--
       ``(A) to retain its existing funding agreement (in whole or 
     in part) to the extent that the provisions of that funding 
     agreement are not directly contrary to any express provision 
     of this title; or
       ``(B) to negotiate a new funding agreement in a manner 
     consistent with this title.
       ``(3) Multiyear funding agreements.--An Indian tribe may, 
     at the discretion of the Indian tribe, negotiate with the 
     Secretary for a funding agreement with a term that exceeds 1 
     year.

     ``SEC. 406. GENERAL PROVISIONS.

       ``(a) Applicability.--An Indian tribe may include in any 
     compact or funding agreement provisions that reflect the 
     requirements of this title.
       ``(b) Conflicts of Interest.--An Indian tribe participating 
     in self-governance shall ensure that internal measures are in 
     place to address, pursuant to tribal law and procedures, 
     conflicts of interest in the administration of included 
     programs.
       ``(c) Audits.--
       ``(1) Single agency audit act.--Chapter 75 of title 31, 
     United States Code, shall apply to a funding agreement under 
     this title.
       ``(2) Cost principles.--An Indian tribe shall apply cost 
     principles under the applicable Office of Management and 
     Budget circular, except as modified by--
       ``(A) section 106 of this Act or any other provision of 
     law; or
       ``(B) any exemptions to applicable Office of Management and 
     Budget circulars granted by the Office of Management and 
     Budget.
       ``(3) Federal claims.--Any claim by the Federal Government 
     against an Indian tribe relating to funds received under a 
     funding agreement based on an audit under this subsection 
     shall be subject to section 106(f).
       ``(d) Redesign and Consolidation.--An Indian tribe may 
     redesign or consolidate included programs or reallocate funds 
     for included programs in any manner that the Indian tribe 
     determines to be in the best interest of the Indian community 
     being served, so long as the redesign or consolidation does 
     not have the effect of denying eligibility for services to 
     population groups otherwise eligible to be served under 
     applicable Federal law.
       ``(e) Retrocession.--
       ``(1) In general.--An Indian tribe may fully or partially 
     retrocede to the Secretary any included program under a 
     compact or funding agreement.
       ``(2) Effective date.--
       ``(A) Agreement.--Unless the Indian tribe rescinds a 
     request for retrocession, the retrocession shall become 
     effective on the date specified by the parties in the compact 
     or funding agreement.
       ``(B) No agreement.--In the absence of such a 
     specification, the retrocession shall become effective on--
       ``(i) the earlier of--

       ``(I) the date that is 1 year after the date of submission 
     of the request; or
       ``(II) the date on which the funding agreement expires; or

       ``(ii) such date as may be agreed on by the Secretary and 
     the Indian tribe.
       ``(f) Nonduplication.--A funding agreement shall provide 
     that, for the period for which, and to the extent to which, 
     funding is provided to an Indian tribe under this title, the 
     Indian tribe--
       ``(1) shall not be entitled to enter into a contract with 
     the Secretary for funds under section 102, except that the 
     Indian tribe shall be eligible for new included programs on 
     the same basis as other Indian tribes; and
       ``(2) shall be responsible for the administration of 
     included programs in accordance with the compact or funding 
     agreement.
       ``(g) Records.--
       ``(1) In general.--Unless an Indian tribe specifies 
     otherwise in the compact or funding agreement, records of an 
     Indian tribe shall not be treated as agency records for 
     purposes of chapter 5 of title 5, United States Code.
       ``(2) Recordkeeping system.--An Indian tribe shall--
       ``(A) maintain a recordkeeping system; and
       ``(B) on 30 days' notice, provide the Secretary with 
     reasonable access to the records to enable the Department to 
     meet the requirements of sections 3101 through 3106 of title 
     44, United States Code.

     ``SEC. 407. PROVISIONS RELATING TO THE SECRETARY.

       ``(a) Trust Evaluations.--A funding agreement shall include 
     a provision to monitor the performance of trust functions by 
     the Indian tribe through the annual trust evaluation.
       ``(b) Reassumption.--
       ``(1) In general.--A compact or funding agreement shall 
     include provisions for the Secretary to reassume an included 
     program and associated funding if there is a specific finding 
     relating to that included program of--
       ``(A) imminent jeopardy to a physical trust asset, natural 
     resource, or public health and safety that--
       ``(i) is caused by an act or omission of the Indian tribe; 
     and
       ``(ii) arises out of a failure to carry out the compact or 
     funding agreement; or
       ``(B) gross mismanagement with respect to funds transferred 
     to an Indian tribe by a compact or funding agreement, as 
     determined by the Secretary in consultation with the 
     Inspector General, as appropriate.
       ``(2) Prohibition.--The Secretary shall not reassume 
     operation of an included program unless--

[[Page S12465]]

       ``(A) the Secretary first provides written notice and a 
     hearing on the record to the Indian tribe; and
       ``(B) the Indian tribe does not take corrective action to 
     remedy gross mismanagement or the imminent jeopardy to a 
     physical trust asset, natural resource, or public health and 
     safety.
       ``(3) Exception.--
       ``(A) In general.-- Notwithstanding subparagraph (2), the 
     Secretary may, on written notice to the Indian tribe, 
     immediately reassume operation of an included program if--
       ``(i) the Secretary makes a finding of both imminent and 
     substantial jeopardy and irreparable harm to a physical trust 
     asset, a natural resource, or the public health and safety 
     caused by an act or omission of the Indian tribe; and
       ``(ii) the imminent and substantial jeopardy and 
     irreparable harm to the physical trust asset, natural 
     resource, or public health and safety arises out of a failure 
     by the Indian tribe to carry out its compact or funding 
     agreement.
       ``(B) Reassumption.--If the Secretary reassumes operation 
     of an included program under subparagraph (A), the Secretary 
     shall provide the Indian tribe with a hearing on the record 
     not later than 10 days after the date of reassumption.
       ``(c) Inability To Agree on Compact or Funding Agreement.--
       ``(1) Final offer.--If the Secretary and a participating 
     Indian tribe are unable to agree, in whole or in part, on the 
     terms of a compact or funding agreement (including funding 
     levels), the Indian tribe may submit a final offer to the 
     Secretary.
       ``(2) Determination.--Not more than 45 days after the date 
     of submission of a final offer, or as otherwise agreed to by 
     the Indian tribe, the Secretary shall review and make a 
     determination with respect to the final offer.
       ``(3) No timely determination.--If the Secretary fails to 
     make a determination with respect to a final offer within the 
     time specified in paragraph (2), the Secretary shall be 
     deemed to have agreed to the offer.
       ``(4) Rejection of final offer.--
       ``(A) In general.--If the Secretary rejects a final offer 
     (or 1 or more provisions or funding levels in a final offer), 
     the Secretary shall--
       ``(i) provide timely written notification to the Indian 
     tribe that contains a specific finding that clearly 
     demonstrates, or that is supported by a controlling legal 
     authority, that--

       ``(I) the amount of funds proposed in the final offer 
     exceeds the applicable funding level to which the Indian 
     tribe is entitled under this title;
       ``(II) the included program that is the subject of the 
     final offer is an inherent Federal function;
       ``(III) the Indian tribe cannot carry out the included 
     program in a manner that would not result in significant 
     danger or risk to the public health; or
       ``(IV) the Indian tribe is not eligible to participate in 
     self-governance under section 403(b);

       ``(ii) provide technical assistance to overcome the 
     objections stated in the notification required by clause (i);
       ``(iii) provide the Indian tribe a hearing on the record 
     with the right to engage in full discovery relevant to any 
     issue raised in the matter and the opportunity for appeal on 
     the objections raised (except that the Indian tribe may, in 
     lieu of filing an appeal, directly proceed to bring a civil 
     action in United States district court under section 110(a)); 
     and
       ``(iv) provide the Indian tribe the option of entering into 
     the severable portions of a final proposed compact or funding 
     agreement (including a lesser funding amount, if any), that 
     the Secretary did not reject, subject to any additional 
     alterations necessary to conform the compact or funding 
     agreement to the severed provisions.
       ``(B) Effect of exercising certain option.--If an Indian 
     tribe exercises the option specified in subparagraph 
     (A)(iv)--
       ``(i) the Indian tribe shall retain the right to appeal the 
     rejection by the Secretary under this section; and
       ``(ii) clauses (i), (ii), and (iii) of that subparagraph 
     shall apply only to the portion of the proposed final compact 
     or funding agreement that was rejected by the Secretary.
       ``(d) Burden of Proof.--In any administrative hearing or 
     appeal or civil action brought under this section, the 
     Secretary shall have the burden of demonstrating by clear and 
     convincing evidence the validity of the grounds for rejecting 
     a final offer made under subsection (c) or the grounds for a 
     reassumption under subsection (b).
       ``(e) Good Faith.--
       ``(1) In general.--In the negotiation of compacts and 
     funding agreements, the Secretary shall at all times 
     negotiate in good faith to maximize implementation of the 
     self-governance policy.
       ``(2) Policy.--The Secretary shall carry out this Act in a 
     manner that maximizes the policy of tribal self-governance.
       ``(f) Savings.--To the extent that included programs 
     carried out by Indian tribes under this title reduce the 
     administrative or other responsibilities of the Secretary 
     with respect to the operation of Indian programs and result 
     in savings that have not otherwise been included in the 
     amount of tribal shares and other funds determined under 
     section 409(c), the Secretary shall make such savings 
     available to the Indian tribes, inter-tribal consortia, or 
     tribal organizations for the provision of additional services 
     to program beneficiaries in a manner equitable to directly 
     served, contracted, and included programs.
       ``(g) Trust Responsibility.--The Secretary may not waive, 
     modify, or diminish in any way the trust responsibility of 
     the United States with respect to Indian tribes and 
     individual Indians that exists under treaties, Executive 
     orders, other laws, or court decisions.
       ``(h) Decisionmaker.--A decision that constitutes final 
     agency action and relates to an appeal within the Department 
     brought under subsection (c)(4) may be made--
       ``(1) by an official of the Department who holds a position 
     at a higher organizational level within the Department than 
     the level of the departmental agency in which the decision 
     that is the subject of the appeal was made; or
       ``(2) by an administrative law judge.
       ``(i) Rule of Construction.--Each provision of this title 
     and each provision of a compact or funding agreement shall be 
     liberally construed for the benefit of the Indian tribe 
     participating in self-governance, and any ambiguity shall be 
     resolved in favor of the Indian tribe.

     ``SEC. 408. CONSTRUCTION PROGRAMS AND CONSTRUCTION PROJECTS.

       ``(a) In General.--An Indian tribe participating in self-
     governance may carry out a construction program or 
     construction project under this title in the same manner as 
     the Indian tribe carries out other included programs under 
     this title, consistent with the provisions of all applicable 
     Federal laws.
       ``(b) Federal Functions.--An Indian tribe participating in 
     self-governance may, in carrying out construction projects 
     under this title, elect to assume all Federal 
     responsibilities under the National Environmental Policy Act 
     of 1969 (42 U.S.C. 4321 et seq.), the National Historic 
     Preservation Act (16 U.S.C. 470 et seq.), and related 
     provisions of law that would apply if the Secretary were to 
     carry out a construction project, by adopting a resolution--
       ``(1) designating a certifying officer to represent the 
     Indian tribe and to assume the status of a responsible 
     Federal official under those laws; and
       ``(2) accepting the jurisdiction of the Federal courts for 
     the purpose of enforcement of the responsibilities of the 
     responsible Federal official under applicable environmental 
     law.
       ``(c) Negotiations.--
       ``(1) In general.--In accordance with all applicable 
     Federal laws, a construction program or construction project 
     shall be treated in the same manner and be subject to all 
     provisions of this Act as are all other tribal assumptions of 
     included programs under this Act.
       ``(2) Construction projects.--A provision shall be included 
     in the funding agreement that, for each construction 
     project--
       ``(A) states the approximate start and completion dates of 
     the construction project, which may extend for 1 or more 
     years;
       ``(B) provides a general description of the construction 
     project;
       ``(C) states the responsibilities of the Indian tribe and 
     the Secretary with respect to the construction project;
       ``(D) describes--
       ``(i) the ways in which the Indian tribe will address 
     project-related environmental considerations; and
       ``(ii) the standards by which the Indian tribe will 
     accomplish the construction project; and
       ``(E) the amount of funds provided for the construction 
     project.
       ``(d) Codes and Standards; Tribal Assurances.--A funding 
     agreement shall contain a certification by the Indian tribe 
     that the Indian tribe will establish and enforce procedures 
     designed to ensure that all construction-related included 
     programs carried out through the funding agreement adhere to 
     building codes and other codes and architectural and 
     engineering standards (including public health and safety 
     standards) identified by the Indian tribe in the funding 
     agreement, which codes and standards shall be in conformity 
     with nationally recognized standards for comparable projects 
     in comparable locations.
       ``(e) Responsibility for Completion.--The Indian tribe 
     shall assume responsibility for the successful completion of 
     a construction project in accordance with the funding 
     agreement.
       ``(f) Funding.--
       ``(1) In general.--At the option of an Indian tribe, full 
     funding for a construction program or construction project 
     carried out under this title shall be included in a funding 
     agreement as an annual advance payment.
       ``(2) Entitlement.--Notwithstanding the annual advance 
     payment provisions or any other provision of law, an Indian 
     tribe shall be entitled to receive in its initial funding 
     agreement all funds made available to the Secretary for 
     multiyear construction programs and projects carried out 
     under this title.
       ``(3) Contingency funds.--The Secretary shall include 
     associated project contingency funds in an advance payment 
     described in paragraph (1), and the Indian tribe shall be 
     responsible for the management of the contingency funds 
     included in the funding agreement.
       ``(4) Reallocation of savings.--
       ``(A) In general.--Notwithstanding any other provision of 
     an annual Act of appropriation or other Federal law, an 
     Indian tribe may reallocate any financial savings realized by 
     the Indian tribe arising from efficiencies in the design, 
     construction, or any

[[Page S12466]]

     other aspect of a construction program or construction 
     project.
       ``(B) Purposes.--A reallocation under subparagraph (A) 
     shall be for construction-related activity purposes generally 
     similar to those for which the funds were appropriated and 
     distributed to the Indian tribe under the funding agreement.
       ``(g) Approval.--
       ``(1) In general.--If the planning and design documents for 
     a construction project are prepared by an Indian tribe in a 
     manner that is consistent with the certification given by the 
     Indian tribe as required under subsection (d), approval by 
     the Secretary of a funding agreement providing for the 
     assumption of the construction project shall be deemed to be 
     an approval by the Secretary of the construction project 
     planning and design documents.
       ``(2) Reports.--The Indian tribe shall provide the 
     Secretary with construction project progress and financial 
     reports not less than semiannually.
       ``(3) Inspections.--The Secretary may conduct onsite 
     project inspections at a construction project semiannually or 
     on an alternate schedule agreed to by the Secretary and the 
     Indian tribe.
       ``(h) Wages.--
       ``(1) In general.--All laborers and mechanics employed by a 
     contractor or subcontractor in the construction, alteration, 
     or repair (including painting and decorating) of a building 
     or other facility in connection with a construction project 
     funded by the United States under this title shall be paid 
     wages at not less than the amounts of wages prevailing on 
     similar construction in the locality as determined by the 
     Secretary of Labor in accordance with subchapter IV of 
     chapter 31 of title 40, United States Code.
       ``(2) Authority.--With respect to construction, alteration, 
     or repair work to which that subchapter is applicable under 
     this subsection, the Secretary of Labor shall have the 
     authority and functions specified in the Reorganization Plan 
     numbered 14, of 1950.
       ``(3) Applicability of subsection.--Notwithstanding any 
     other provision of law, this subsection does not apply to any 
     portion of a construction project carried out under this 
     Act--
       ``(A) that is funded from a non-Federal source, regardless 
     of whether the non-Federal funds are included with Federal 
     funds for administrative convenience; or
       ``(B) that is performed by a laborer or mechanic employed 
     directly by an Indian tribe or tribal organization.
       ``(4) Applicability of tribal law.--This subsection does 
     not apply to a compact or funding agreement if the compact, 
     self-determination contract, or funding agreement is 
     otherwise covered by a law (including a regulation) adopted 
     by an Indian tribe that requires the payment of not less than 
     prevailing wages, as determined by the Indian tribe.
       ``(i) Applicability of Other Law.--Unless otherwise agreed 
     to by the Indian tribe, no provision of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 401 et seq.), the Federal 
     Acquisition Regulation, or any other law or regulation 
     pertaining to Federal procurement (including Executive 
     orders) shall apply to any construction program or project 
     conducted under this title.

     ``SEC. 409. PAYMENT.

       ``(a) In General.--At the request of the governing body of 
     the Indian tribe and under the terms of a funding agreement, 
     the Secretary shall provide funding to the Indian tribe to 
     carry out the funding agreement.
       ``(b) Advance Annual Payment.--At the option of the Indian 
     tribe, a funding agreement shall provide for an advance 
     annual payment to an Indian tribe.
       ``(c) Amount.--Subject to subsection (e) and sections 405 
     and 406 of this title, the Secretary shall provide funds to 
     the Indian tribe under a funding agreement for included 
     programs in the amount that is equal to the amount that the 
     Indian tribe would have been entitled to receive under 
     contracts and grants under this Act (including amounts for 
     direct program and contract support costs and, in addition, 
     any funds that are specifically or functionally related to 
     the provision by the Secretary of services and benefits to 
     the Indian tribe or its members) without regard to the 
     organization level within the Federal agency in which the 
     included programs are carried out.
       ``(d) Timing.--Unless the funding agreement provides 
     otherwise, the transfer of funds shall be made not later than 
     10 days after the apportionment of funds by the Office of 
     Management and Budget to the Department.
       ``(e) Availability.--Funds for trust services to individual 
     Indians shall be available under a funding agreement only to 
     the extent that the same services that would have been 
     provided by the Secretary are provided to individual Indians 
     by the Indian tribe.
       ``(f) Multiyear Funding.--A funding agreement may provide 
     for multiyear funding.
       ``(g) Limitation on Authority of the Secretary.--The 
     Secretary shall not--
       ``(1) fail to transfer to an Indian tribe its full share of 
     any central, headquarters, regional, area, or service unit 
     office or other funds due under this Act, except as required 
     by Federal law;
       ``(2) withhold any portion of such funds for transfer over 
     a period of years; or
       ``(3) reduce the amount of funds required under this Act--
       ``(A) to make funding available for self-governance 
     monitoring or administration by the Secretary;
       ``(B) in subsequent years, except as necessary as a result 
     of--
       ``(i) a reduction in appropriations from the previous 
     fiscal year for the program to be included in a compact or 
     funding agreement;
       ``(ii) a congressional directive in legislation or an 
     accompanying report;
       ``(iii) a tribal authorization;
       ``(iv) a change in the amount of pass-through funds subject 
     to the terms of the funding agreement; or
       ``(v) completion of an activity under an included program 
     for which the funds were provided;
       ``(C) to pay for Federal functions, including--
       ``(i) Federal pay costs;
       ``(ii) Federal employee retirement benefits;
       ``(iii) automated data processing;
       ``(iv) technical assistance; and
       ``(v) monitoring of activities under this Act; or
       ``(D) to pay for costs of Federal personnel displaced by 
     self-determination contracts under this Act or self-
     governance.
       ``(h) Federal Resources.--If an Indian tribe elects to 
     carry out a compact or funding agreement with the use of 
     Federal personnel, Federal supplies (including supplies 
     available from Federal warehouse facilities), Federal supply 
     sources (including lodging, airline transportation, and other 
     means of transportation including the use of interagency 
     motor pool vehicles), or other Federal resources (including 
     supplies, services, and resources available to the Secretary 
     under any procurement contracts in which the Department is 
     eligible to participate), the Secretary shall acquire and 
     transfer such personnel, supplies, or resources to the Indian 
     tribe.
       ``(i) Prompt Payment Act.--Chapter 39 of title 31, United 
     States Code, shall apply to the transfer of funds due under a 
     compact or funding agreement authorized under this Act.
       ``(j) Interest or Other Income.--
       ``(1) In general.--An Indian tribe may retain interest or 
     income earned on any funds paid under a compact or funding 
     agreement to carry out governmental purposes.
       ``(2) No effect on other amounts.--The retention of 
     interest or income under paragraph (1) shall not diminish the 
     amount of funds that an Indian tribe is entitled to receive 
     under a funding agreement in the year in which the interest 
     or income is earned or in any subsequent fiscal year.
       ``(3) Investment standard.--Funds transferred under this 
     title shall be managed using the prudent investment standard.
       ``(k) Carryover of Funds.--
       ``(1) In general.--Notwithstanding any provision of an Act 
     of appropriation, all funds paid to an Indian tribe in 
     accordance with a compact or funding agreement shall remain 
     available until expended.
       ``(2) Effect of carryover.--If an Indian tribe elects to 
     carry over funding from 1 year to the next, the carryover 
     shall not diminish the amount of funds that the Indian tribe 
     is entitled to receive under a funding agreement in that 
     fiscal year or any subsequent fiscal year.
       ``(l) Limitation of Costs.--
       ``(1) In general.--An Indian tribe shall not be obligated 
     to continue performance that requires an expenditure of funds 
     in excess of the amount of funds transferred under a compact 
     or funding agreement.
       ``(2) Notice of insufficiency.--If at any time an Indian 
     tribe has reason to believe that the total amount provided 
     for a specific activity under a compact or funding agreement 
     is insufficient, the Indian tribe shall provide reasonable 
     notice of the insufficiency to the Secretary.
       ``(3) Suspension of performance.--If the Secretary does not 
     increase the amount of funds transferred under the funding 
     agreement, the Indian tribe may suspend performance of the 
     activity until such time as additional funds are transferred.

     ``SEC. 410. CIVIL ACTIONS.

       ``(a) Inclusion as Contract.--Except as provided in 
     subsection (b), for the purposes of section 110, the term 
     `contract' shall include a funding agreement.
       ``(b) Contracts With Professionals.--For the period during 
     which a funding agreement is in effect, section 2103 of the 
     Revised Statutes (25 U.S.C. 81), and section 16 of the Act of 
     June 18, 1934 (25 U.S.C. 476) shall not apply to a contract 
     between an attorney or other professional and an Indian 
     tribe.

     ``SEC. 411. FACILITATION.

       ``(a) In General.--Except as otherwise provided by law, the 
     Secretary shall interpret each Federal law (including a 
     regulation) in a manner that facilitates--
       ``(1) the inclusion of included programs in funding 
     agreements; and
       ``(2) the implementation of funding agreements.
       ``(b) Regulation Waiver.--
       ``(1) Request.--An Indian tribe may submit a written 
     request for a waiver to the Secretary identifying the 
     specific text in regulation sought to be waived and the basis 
     for the request.
       ``(2) Determination by the secretary.--Not later than 60 
     days after the date of receipt by the Secretary of a request 
     under paragraph (1), the Secretary shall approve or deny the 
     requested waiver in writing to the Indian tribe.
       ``(3) Ground for denial.--The Secretary may deny a request 
     for a waiver only on a specific finding by the Secretary that 
     the identified text in the regulation may not be waived 
     because such a waiver is prohibited by Federal law.

[[Page S12467]]

       ``(4) Failure to make determination.--If the Secretary 
     fails to approve or deny a waiver request within the time 
     required under paragraph (2), the Secretary shall be deemed 
     to have approved the request.
       ``(5) Finality.--The Secretary's decision shall be final 
     for the Department.

     ``SEC. 412. DISCLAIMERS.

       ``Nothing in this title expands or alters any statutory 
     authority of the Secretary so as to authorize the Secretary 
     to enter into any funding agreement under section 405(b)(2) 
     or 415(c)(1)--
       ``(1) with respect to an inherent Federal function;
       ``(2) in a case in which the statute establishing a program 
     does not authorize the type of participation sought by the 
     Indian tribe (without regard to whether 1 or more Indian 
     tribes are identified in the authorizing statute); or
       ``(3) limits or reduces in any way the services, contracts, 
     or funds that any other Indian tribe or tribal organization 
     is eligible to receive under section 102 or any other 
     applicable Federal law.

     ``SEC. 413. APPLICABILITY OF OTHER PROVISIONS.

       ``(a) Mandatory Application.--Sections 5(d), 6, 102(c), 
     104, 105(f), 110, and 111 apply to compacts and funding 
     agreements under this title.
       ``(b) Discretionary Application.--
       ``(1) In general.--At the option of a participating Indian 
     tribe, any or all of the provisions of title I or title V 
     shall be incorporated in a compact or funding agreement.
       ``(2) Effect.--Each incorporated provision--
       ``(A) shall have the same effect as if the provision were 
     set out in full in this title; and
       ``(B) shall be deemed to supplement or replace any related 
     provision in this title and to apply to any agency otherwise 
     governed by this title.
       ``(3) Effective date.--If an Indian tribe requests 
     incorporation at the negotiation stage of a compact or 
     funding agreement, the incorporation--
       ``(A) shall be effective immediately; and
       ``(B) shall control the negotiation and resulting compact 
     and funding agreement.

     ``SEC. 414. BUDGET REQUEST.

       ``(a) Requirement of Annual Budget Request.--
       ``(1) In general.--The President shall identify in the 
     annual budget request submitted to Congress under section 
     1105 of title 31, United States Code, all funds necessary to 
     fully fund all funding agreements authorized under this 
     title.
       ``(2) Duty of secretary.-- The Secretary shall ensure that 
     there are included, in each budget request, requests for 
     funds in amounts that are sufficient for planning and 
     negotiation grants and sufficient to cover any shortfall in 
     funding identified under subsection (b).
       ``(3) Timing.--All funds included within funding agreements 
     shall be provided to the Office of Self-Governance not later 
     than 15 days after the date on which funds are apportioned to 
     the Department.
       ``(4) Distribution of funds.--The Office of Self-Governance 
     shall be responsible for distribution of all funds provided 
     under this title.
       ``(5) Rule of construction.--Nothing in this subsection 
     authorizes the Secretary to reduce the amount of funds that 
     an Indian tribe is otherwise entitled to receive under a 
     funding agreement or other applicable law.
       ``(b) Present Funding; Shortfalls.--In all budget requests, 
     the President shall identify the level of need presently 
     funded and any shortfall in funding (including direct program 
     costs, tribal shares and contract support costs) for each 
     Indian tribe, either directly by the Secretary of Interior, 
     under self-determination contracts, or under compacts and 
     funding agreements.

     ``SEC. 415. REPORTS.

       ``(a) In General.--
       ``(1) Requirement.--On January 1 of each year, the 
     Secretary shall submit to Congress a report regarding the 
     administration of this title.
       ``(2) Analysis.--A report under paragraph (1) shall include 
     a detailed analysis of tribal unmet need for each Indian 
     tribe, either directly by the Secretary, under self-
     determination contracts under title I, or under compacts and 
     funding agreements authorized under this subchapter.
       ``(3) No additional reporting requirements.--In preparing 
     reports under paragraph (1), the Secretary may not impose any 
     reporting requirement on participating Indian tribes not 
     otherwise provided for by this Act.
       ``(b) Contents.--A report under subsection (a) shall--
       ``(1) be compiled from information contained in funding 
     agreements, annual audit reports, and data of the Secretary 
     regarding the disposition of Federal funds;
       ``(2) identify--
       ``(A) the relative costs and benefits of self-governance;
       ``(B) with particularity, all funds that are specifically 
     or functionally related to the provision by the Secretary of 
     services and benefits to self-governance Indian tribes and 
     members of Indian tribes;
       ``(C) the funds transferred to each Indian tribe and the 
     corresponding reduction in the Federal bureaucracy;
       ``(D) the funding formula for individual tribal shares of 
     all Central Office funds, with the comments of affected 
     Indian tribes, developed under subsection (d); and
       ``(E) amounts expended in the preceding fiscal year to 
     carry out inherent Federal functions, including an 
     identification of inherent Federal functions by type and 
     location;
       ``(3) contain a description of the methods used to 
     determine the individual tribal share of funds controlled by 
     all components of the Department (including funds assessed by 
     any other Federal agency) for inclusion in compacts or 
     funding agreements;
       ``(4) before being submitted to Congress, be distributed to 
     the Indian tribes for comment (with a comment period of not 
     less than 30 days); and
       ``(5) include the separate views and comments of each 
     Indian tribe or tribal organization.
       ``(c) Report on Non-BIA Programs.--
       ``(1) In general.--In order to optimize opportunities for 
     including non-Bureau of Indian Affairs included programs in 
     agreements with Indian tribes participating in self-
     governance under this title, the Secretary shall--
       ``(A) review all included programs administered by the 
     Department, other than through the Bureau of Indian Affairs, 
     without regard to the agency or office concerned;
       ``(B) not later than January 1, 2004, submit to Congress--
       ``(i) a list of all such included programs that the 
     Secretary determines, with the concurrence of Indian tribes 
     participating in self-governance, are eligible to be included 
     in a funding agreement at the request of a participating 
     Indian tribe; and
       ``(ii) a list of all such included programs for which 
     Indian tribes have requested to include in a funding 
     agreement under section 405(b)(3) due to the special 
     geographic, historical, or cultural significance to the 
     Indian tribe, indicating whether each request was granted or 
     denied and stating the grounds for any denial.
       ``(2) Programmatic targets.--The Secretary shall establish 
     programmatic targets, after consultation with Indian tribes 
     participating in self-governance, to encourage bureaus of the 
     Department to ensure that a significant portion of those 
     included programs are included in funding agreements.
       ``(3) Publication.--The lists and targets under paragraphs 
     (1) and (2) shall be published in the Federal Register and be 
     made available to any Indian tribe participating in self-
     governance.
       ``(4) Annual review.--
       ``(A) In general.--The Secretary shall annually review and 
     publish in the Federal Register, after consultation with 
     Indian tribes participating in self-governance, revised lists 
     and programmatic targets.
       ``(B) Contents.--The revised lists and programmatic targets 
     shall include all included programs that were eligible for 
     contracting in the original list published in the Federal 
     Register in 1995, except for included programs specifically 
     determined not to be contractible as a matter of law.
       ``(d) Report on Central Office Funds.--Not later than 
     January 1, 2004, the Secretary shall, in consultation with 
     Indian tribes, develop a funding formula to determine the 
     individual tribal share of funds controlled by the Central 
     Office of the Bureau of Indian Affairs for inclusion in the 
     self-governance compacts.

     ``SEC. 416. REGULATIONS.

       ``(a) In General.--
       ``(1) Promulgation.--Not later than 90 days after the date 
     of the enactment of the Department of the Interior Tribal 
     Self-Governance Act of 2003, the Secretary shall initiate 
     procedures under subchapter III of chapter 5, of title 5, 
     United States Code, to negotiate and promulgate such 
     regulations as are necessary to carry out the amendments made 
     by that Act.
       ``(2) Publication of proposed regulations.--Proposed 
     regulations to implement the amendments shall be published in 
     the Federal Register not later than 1 year after the date of 
     enactment of that Act.
       ``(3) Expiration of authority.--The authority to promulgate 
     regulations under paragraph (1) shall expire on the date that 
     is 18 months after the date of enactment of that Act.
       ``(b) Committee.--
       ``(1) Memebership.--A negotiated rulemaking committee 
     established under section 565 of title 5, United States Code, 
     to carry out this section shall have as its members only 
     Federal and tribal government representatives.
       ``(2) Lead agency.-- Among the Federal representatives, the 
     Office of Self-Governance shall be the lead agency for the 
     Department of the Interior.
       ``(c) Adaptation of Procedures.--The Secretary shall adapt 
     the negotiated rulemaking procedures to the unique context of 
     self-governance and the government-to-government relationship 
     between the United States and Indian tribes.
       ``(d) Effect.--
       ``(1) Repeal.--All regulatory provisions under part 1000 of 
     title 25, Code of Federal Regulations, are repealed on the 
     date of enactment of the Department of the Interior Tribal 
     Self-Governance Act of 2003.
       ``(2) Effectiveness without regard to regulations.--The 
     lack of promulgated regulations shall not limit the effect of 
     this Act.
       ``(3) Interim provision.--Notwithstanding this subsection, 
     any regulation under part 1000 of title 25, Code of Federal 
     Regulations,

[[Page S12468]]

     shall remain in effect, at an Indian tribe's option, in 
     implementing compacts until regulations are promulgated.

     ``SEC. 417. EFFECT OF CIRCULARS, POLICIES, MANUALS, 
                   GUIDANCES, AND RULES.

       ``Unless expressly agreed to by a participating Indian 
     tribe in a compact or funding agreement, the participating 
     Indian tribe shall not be subject to any agency circular, 
     policy, manual, guidance, or rule adopted by the Department, 
     except for--
       ``(1) the eligibility provisions of section 105(g); and
       ``(2) regulations promulgated under section 416.

     ``SEC. 418. APPEALS.

       ``In any administrative appeal or civil action for judicial 
     review of any decision made by the Secretary under this 
     title, the Secretary shall have the burden of proof of 
     demonstrating by clear and convincing evidence--
       ``(1) the validity of the grounds for the decision; and
       ``(2) the consistency of the decision with the provisions 
     and policies of this title.

     ``SEC. 419. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as are 
     necessary to carry out this title.''.

                                S. 1716

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

     SECTION 1. PHASE II STORM WATER PROGRAM IMPLEMENTATION AND 
                   MANAGEMENT.

       Section 319(h) of the Federal Water Pollution Control Act 
     (33 U.S.C. 1329(h)) is amended by adding at the end the 
     following:
       ``(13) Phase ii storm water implementation.--A State may 
     use funds from a grant provided under this subsection--
       ``(A) to carry out a project or activity relating to the 
     development or implementation of phase II of the storm water 
     program of the Environmental Protection Agency established by 
     the final rule entitled `National Pollutant Discharge 
     Elimination System--Regulations for Revision of the Water 
     Pollution Control Program Addressing Storm Water 
     Discharges'', promulgated by the Administrator on December 8, 
     1999 (64 Fed. Reg. 68722); and
       ``(B) to implement a management program in a geographic 
     jurisdiction for phase II of the program described in 
     subparagraph (A).''.
                                 ______
                                 
      By Mr. CHAFEE (for himself, Mr. Bond, and Mr. Jeffords):
  S. 1716. A bill to amend the Federal Water Pollution Control Act to 
authorize the use of funds made available for nonpoint source 
management programs for projects and activities relating to the 
development and implementation of phase II of the storm water program 
of the Environmental Protection Agency; to the Committee on Environment 
and Public Works.
  Mr. CHAFEE. Mr. President, I am pleased to be joined by my colleagues 
Senator Bond of Missouri and Senator Jeffords of Vermont in introducing 
legislation today that addresses an issue of great concern for our 
States and regions--the availability of Clean Water Act Section 319 
funding for development and implementation of the Phase II Storm Water 
Program.
  Stormwater runoff carries with it a host of contaminants as it runs 
over rooftops and lawns, parking lots and new construction sites, 
depositing nutrients, toxic metals, and sediments into downstream 
waterbodies. In many areas of the country, and particularly strongly 
urbanized areas, stormwater ranks high on the list of priority 
pollution sources impacting the water quality of our lakes, rivers, 
streams, and bays. As States proceed with development of the federally-
mandated Phase II Storm Water Program to address critical stormwater 
runoff, the costs of implementing the requirements of the program are 
becoming a major concern for States and the municipalities.
  At issue is whether funds provided to States through Section 319 of 
the Clean Water Act may be used for the purposes of developing and 
implementing the Environmental Protection Agency (EPA) Phase II Storm 
Water Rule that went into effect in March 2003. This issue is 
significant because the Phase II Program requires States to regulate 
stormwater discharges, which have historically been treated as nonpoint 
sources, as if they are point sources under the National Pollutant 
Discharge Elimination System (NPDES) Program. As a result, it is 
possible that federally-mandated State nonpoint source control 
programs, which have been funded by 319 monies in the past, may have to 
find new funding sources even as stormwater requirements are increased.
  In recent years, the Environmental Protection Agency's Nonpoint 
Source Program has increasingly focused on impaired waters and 
stormwater-related concerns as the agency has moved toward a watershed-
based approach. Although the Clean Water Act appears silent on the 
eligibility of Section 319 funding to address stormwater issues 
currently falling under the NPDES Program, EPA has thus far interpreted 
the Act to prohibit 319 funds from being used for implementation of the 
Phase II Storm Water Program. In recent months, a lack of clarity also 
exists on the use of Section 319 funding in geographic areas covered by 
the Phase II Program. Phase II applies to all populated areas of 1000 
people or greater per square mile. In Rhode Island, nearly all of the 
state's impaired waters are included in Phase II areas. Given a strict 
EPA interpretation of the law, Section 319 funds could not be used in 
any of these areas.
  Last year, the Senate approved and the President signed into law the 
Great Lakes and Lake Champlain Act of 2002 which contains a provision 
providing a one-year extension, during fiscal year 2003, for states to 
retain flexibility in using 319 funding for addressing their stormwater 
concerns. We are introducing legislation today that builds upon the 
fiscal year 2003 fix by providing permanent authority for states to use 
Section 319 monies for development and implementation of the Phase II 
Storm Water Program. Further, the legislation clarifies that 319 monies 
may be used in Phase II geographic jurisdictions.
  The Phase II Storm Water Program is an important step toward 
protecting our Nation's waters from stormwater discharges, and striving 
for an integrated strategy in preventing, controlling, and reducing 
pollution entering our waterbodies. The legislation introduced today 
provides critical flexibility to States and municipalities as they 
continue to struggle financially with coming into compliance with the 
Phase II Program. I encourage my colleagues on the Environment and 
Public Works Committee, and in the Senate, to join us in expeditiously 
approving this important legislation. Thank you.
  Mr. JEFFORDS. Mr. President, I rise before the Senate today to join 
my colleagues Senator Chafee and Senator Bond to introduce legislation 
to provide funding for storm water control and management. This 
legislation will ensure that smaller communities required to comply 
with the storm water phase II regulations will continue to have access 
to section 319 grant funds under the Clean Water Act.
  The storm water phase II regulations went into effect on March 10, 
2003. These regulations require that smaller communities required to 
obtain a National Pollutant Discharge Elimination System (NPDES) permit 
and implement best management practices to control storm water 
discharges and prevent water pollution. Existing EPA policy requires 
that once a community obtains an NPDES permit, it can no longer use 
section 319, non-point source funding. However, there are no dedicated, 
alternative funding sources available for storm water management. As 
smaller communities, like many of those in Vermont, are working hard to 
implement strong programs to control storm water runoff, it seems 
counterintuitive to remove one of the main funding sources these 
communities use for this purpose.
  During the 107th Congress, as Chairman of the Environment and Public 
Works Committee, I supported Senator Chafee's efforts to put in place a 
one-year fix to this problem, allowing section 319 funds to be used for 
storm water controls during fiscal year 2003. This one-year fix passed 
the EPW Committee, the full Senate, and the full House unanimously. I 
hope that we have the same level of support during the 108th Congress.
  In our efforts to make our nation's water cleaner, non-point sources 
of pollution remain our next major hurdle. Storm water runoff is one 
area where we can make an immediate difference in the amount of 
pollution reaching our waters with an investment in best management 
practices and control techniques. We need to make more resources 
available to communities working hard to reduce the impact of storm 
water runoff on water quality. This legislation is step one of a long 
list of actions that I believe this Congress should take to make more 
resources available for storm water management.

[[Page S12469]]

                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Brownback, Mr. Specter, and Mr. 
        Dodd):
  S. 1717. A bill to amend the Public Health Service Act to establish a 
National Cord Blood Stem Cell Bank Network to prepare, store, and 
distribute human umbilical cord blood stem cells for the treatment of 
patients and to support peer-reviewed research using such cells; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. HATCH. Mr. President, today, I am pleased to introduce the ``Cord 
Blood Stem Cell Act'' of 2003. I am particularly gratified that 
Senators Brownback, Specter, and Dodd have joined me as cosponsors of 
this bipartisan bill. The purpose of the Cord Blood Stem Cell Act is to 
create a network of qualified cord blood banking centers to prepare, 
store, and distribute human umbilical cord blood stem cells for the 
treatment of patients and to support research using such cells.
  As my colleagues are aware, thousands of Americans receive and are 
saved by bone marrow transplants each year. But, thousands more die for 
lack of an appropriate donor. The good news is that for several years, 
experts from a few centers have collected and preserved the blood and 
stem cells from human placenta and umbilical cords. These cells can 
provide an alternative to bone marrow transplantation. For some 
patients, particularly those for whom a bone marrow match cannot be 
found, transplantation of these cells can be a life-saving therapy.
  In some cases cord blood stem cell transplants provide an advantage 
relative to bone marrow transplants because they reduce risk to the 
donor, they are readily available, and they lower the risk of 
transplant complications. Cord blood stem cells also increase the 
success of transplantation from donors to recipients who are not fully 
matched, thus decreasing the difficulty of finding a fully matched 
donor.
  Cord blood transplantation has been used successfully to treat 
leukemia, lymphoma, immunodeficiency diseases, sickle cell anemia, and 
several metabolic diseases. However, despite initial successes, not 
enough cord blood exists currently to meet the need. Currently, the 
number of cord blood stem cell units in the United States is 
insufficient to meet the need.
  The bipartisan Cord Blood Stem Cell Act of 2003 proposes to establish 
an inventory of 150,000 cord blood stem cell units that reflects the 
diversity of the United States and will enable at least 90 percent of 
Americans to receive an appropriately matched cord blood stem cell 
transplant. The inventory would provide a critical resource for those 
in need of transplants and allocate a certain proportion of units to 
sustain further research on cord blood stem cells.
  The National Cord Blood Stem Cell Network, administered by the 
Secretary of Health and Human services and a Board of Directors 
appointed by the Secretary, would be a system of qualified donor banks 
which will acquire, test, and preserve cord blood stem cells, educate 
and recruit donors, and make such cells available to transplant centers 
for stem cell transplantation. The Network would establish a National 
Cord Blood Stem Cell Registry, which would acquire and distribute 
donated units of cord blood, provide health care professionals with the 
ability to search the entire registry for a suitable donor match for 
patients and maintain a database to document the activities of the 
Network.
  I ask unanimous consent that a brief section-by-section analysis of 
the National Cord Blood Stem Cell Act be printed in the Record.
  There being no objection, the analysis was ordered to be printed in 
the Record, as follows:

                    Cord Blood Stem Cell Act of 2003

       Section 1--Short Title: Cord Blood Stem Cell Act of 2003
       Section 2--National Cord Blood Stem Cell Bank Network:
       Subsection (a): Sets fourth the definitions to be used for 
     the purposes of this document.
       Subsection (b): (1) In general--A national cord blood stem 
     cell bank containing of 150,000 units will be established and 
     provided for by qualified cord blood stem cell banks. (2) 
     Purpose of donor banks--The banks will acquire tissue type, 
     test, cryopreserve, and store donated cord blood stem cell 
     units and make cord blood units available. Ten percent of 
     this cord blood inventory will be allocated for research. (3) 
     Eligibility of donor banks--In order to create an effective 
     donor bank it must obtain all licenses, certifications, and 
     registrations needed to operate. It must preform adequate 
     screenings of the cord blood in order to eliminate 
     transmission of disease and other harmful infections. Donor 
     banks must uphold the utmost confidentiality to protect the 
     patients and the donors under HIPAA. A donor bank must 
     encourage an ethnically diverse population of cord blood stem 
     cells. A donor bank must also develop an adequate system of 
     communication for nationwide usage of cord blood stem cells, 
     and educate the public on the advantages of donating and 
     utilizing cord blood stem cells.
       Subsection (c): Administration of the Network--Cord blood 
     stem cell banks shall be run by a board of directors, 
     including a chairman. Each member of the board of directors 
     shall serve a 3-year term, and the board will be represented 
     by various experienced people. Each year \1/3\ of the board 
     of directors' terms will expire.
       There shall also be a National Cord Blood Stem Cell 
     registry. The registry shall find appropriate cord blood for 
     matched candidates; allow searches in the registry for a 
     suitable donor for patients; and maintain a healthy, updated 
     database.
       The Database shall be confidential under HIPAA, and will be 
     carefully monitored by the Secretary.
       Subsection (d): Authorization of Appropriation--Authorizes 
     $15 million for FY2004.
       This is a therapy that can be life-saving for many 
     Americans with diseases that can be treated by stem cell 
     transplantation; particularly for many minorities and other 
     Americans who are unable to find a matching bone marrow 
     donor. I am pleased to introduce this bill that will save 
     lives by providing Americans with the opportunity to receive 
     a promising therapy.

  Mr. DODD. Mr. President, I am pleased to join Senator Hatch, Senator 
Brownback, and Senator Specter in introducing legislation to advance 
the use of umbilical cord blood for clinical applications and research. 
I first became aware of the potential therapeutic benefits of cord 
blood when my daughter was born 2 years ago. At that time, our doctor 
informed me and my wife that preserving a small amount of blood from 
the umbilical cord could prove enormously beneficial later in her life. 
Should she become ill with a disease requiring bone marrow 
reconstitution, he told us, her own cord blood stem cells could be 
used. This would eliminate the need to find a suitable bone marrow 
donor.
  The bill that we are introducing today will begin a new national 
commitment to the development of this technology--which has the 
potential to reduce pain and suffering and save the lives of so many 
Americans afflicted with some of the most debilitating illnesses. Cord 
blood has already been used successfully in treating a number of 
diseases, including sickle cell anemia and certain childhood cancers. 
However, the use of cord blood is still fledgling. Recent developments 
have suggested that the stem cells derived from cord blood may be 
useful in treating a much wider range of diseases, such as Parkinson's 
disease, diabetes, and heart disease.
  Like many Americans, I had never heard of cord blood before the birth 
of my daughter. It is not widely used--at least in this country. In the 
first 8 months of this year, 95 percent of all bone marrow 
reconstitutions were done using a bone marrow transplant. Only 5 
percent used cord blood. This figure is surprising when we consider the 
potential benefits of cord blood relative to bone marrow.
  First, it can be very difficult to find a suitable bone marrow donor. 
According to a General Accounting Office, GAO, report, of the 15,231 
individuals needing bone marrow transplants between 1997 and 2000 who 
conducted a preliminary search of the National Bone Marrow Donor 
Registry, NBMDR, only 4,056 received a transplant--a 27-percent success 
rate. This number is even lower for minorities. Cord blood would not 
only produce an additional source of donation, it also does not require 
as exact a match as bone marrow.
  In addition, cord blood is readily available. While it can take 
months between finding a bone marrow match and actually receiving a 
transplant, a unit of cord blood can be utilized in a matter of days or 
weeks. Cord blood also lowers the risk of complications of both the 
donor and the recipient. The need to extract bone marrow from the donor 
is eliminated, and the risk of infection or rejection by the recipient 
is significantly reduced. Finally, research has suggested that cord 
blood might produce better outcomes than bone marrow in children.
  Why then, given all of these benefits, has the use of cord blood not 
become

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much more prevalent in the United States? In Japan, where the use of 
cord blood in clinical settings is more advanced, nearly half of all 
transplants now use cord blood rather than bone marrow.
  The relatively infrequent use of cord blood in our country is at 
least partly attributable to the lack of a national infrastructure for 
the matching and distribution of cord blood units. There are a handful 
of cord blood banks around the country doing excellent work, but there 
is a much more developed infrastructure for bone marrow. This is thanks 
to legislation passed by Congress in 1986 that established a National 
Registry for bone marrow. By the way, that legislation is due to be 
reauthorized next year--and I would like to voice my strong support for 
that reauthorization.
  Our bill would create a similar infrastructure for cord blood. 
Specifically, it would direct the Secretary of Health and Human 
Services, HHS, acting through the Administrator of the Health Resources 
and Services Administration, HRSA, to establish a National Cord Blood 
Stem Cell Bank Network, as well as a registry of available cord blood 
units. The network and registry would be required to collect a minimum 
of 150,000 units, which should be sufficient to provide a suitable 
match for 90 percent of the U.S. population.
  Donor banks would also be required to educate the general public 
about the potential benefits of cord blood, and encourage an ethnically 
diverse population of cord blood donors. Given the untapped potential 
of cord blood, at least 10 percent of the available units must also be 
made available for research. Finally, the legislation authorizes an 
appropriation of $15 million for fiscal year 2004, and such sums as may 
be necessary for fiscal years 2005 through 2008.
  Mr. President, before finishing today I would like to make it clear 
that I strongly support the continuation of the excellent work done by 
the National Marrow Donor Program (NMDP). Cord blood should act as a 
complement to--not a replacement for--bone marrow. In many cases, a 
bone marrow transplant is still the preferred therapy. Physicians 
should have the ability to decide on a case-by-case basis which is best 
for their patients. That is why I am hopeful that the NMDP will have a 
very active role in designing and supporting the National Cord Blood 
Stem Cell Network and Registry. Ideally, the two will work together to 
provide a single resource where doctors can search both cord blood 
stockpiles and a list of marrow donors for a suitable match for their 
patients.
  I firmly believe that the creation of a national infrastructure for 
cord blood will, in time, save the lives of thousands of gravely ill 
Americans. We have a responsibility to encourage use of cord blood 
where appropriate today, and invest in research to fully tap the 
potential of this technology. I urge my colleagues to support this 
legislation.

                          ____________________