[Congressional Record Volume 150, Number 138 (Tuesday, December 7, 2004)]
[Senate]
[Pages S11898-S11905]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. SMITH (for himself and Mr. Conrad):
  S. 3029. A bill to amend the Internal Revenue Code of 1986 to 
encourage guaranteed lifetime income payments from annuities and 
similar payments of life insurance proceeds at dates later than death 
by excluding from income a portion of such payments; to the Committee 
on Finance.
  Mr. SMITH. Mr. President, with over 77 million baby boomers beginning 
to retire in 2008, a serious retirement challenge is looming in our 
country. Moreover, with Americans living longer and a growing numbers 
of retirees facing the challenge of managing their own retirement 
savings, we need to provide them with better retirement options. In 
response, I rise today to offer legislation aimed at assisting people 
to maintain their financial independence and their standard of living 
throughout their retirement by making it easier for them to secure a 
steady income for life.
  In recent years, the focus of the ``retirement security'' debate in 
Congress has almost entirely been on the need to accumulate a nest egg 
to fund retirement. Congress is doing much to encourage personal saving 
and employer-provided retirement plans. I am proud of both our 
successes and our continuing efforts in these areas. Encouraging 
greater savings is an important step; however, it is not enough.
  Unfortunately, there has been little attention paid to the retirement 
income or ``payout'' phase of the retirement security equation. The 
risk of outliving one's savings is one of the biggest problems facing 
retirees. I have heard it said that Americans perceive the retirement 
savings ``finish line'' to be the point of retirement. But retirement 
is just the beginning of a very different kind of race, one of unknown 
duration. If Americans are going to fully enjoy their retirement years, 
we need to ensure that as many Americans as possible will have a stream 
of income they cannot outlive. We have some control over when we 
retire. However, we have very little control over how long we will 
live.
  For most Americans, a ``secure retirement'' means maintaining their 
standard of living through retirement and the means to deal with life's 
challenges from the first day of retirement to the very last. For the 
majority of Americans, that requires a steady stream of income that, 
combined with Social Security or other retirement income, covers basic 
living expenses--from housing expenses to medical bills, taxes to 
transportation, food to clothing. Yet, Americans today are facing a 
serious and growing challenge to retirement security.
  At the same time Americans are living longer, the future of private 
and public retirement programs, as well as financial markets, is 
increasingly uncertain. Fewer Americans are covered by traditional 
pension plans, and Social Security currently replaces on average only 
about 42 percent of earnings. This means it's increasingly up to each 
individual to manage their retirement savings to last their lifetime. 
And exactly how long will that period in retirement be? It depends. Of 
course none of us know how long we will live; research shows most 
Americans vastly underestimate their longevity.
  According to the Society of Actuaries, a male age 65 has a 50 percent 
chance of living beyond age 85 and a 25 percent chance of living beyond 
age 92. Indeed, the biggest risk we face in retirement is the longevity 
risk--that is, living longer than our retirement savings lasts. In 
order to meet this challenge, Senator Conrad and I are introducing 
legislation to encourage the use of retirement vehicles that pay a 
guaranteed lifetime income.
  Under the Retirement Security for Life Act that Senator Conrad and I 
are introducing today, a tax incentive would be enacted that encourages 
retirees to provide themselves with a guaranteed lifetime income that 
they can't outlive. Specifically, the proposal would exclude from 
Federal taxes one-half of the income payments from an annuity purchased 
with after tax dollars (a so-called non-qualified annuity). 
Importantly, we have proposed a cap on the exclusion so that no more 
that $20,000 could be excluded in a year. For a typical American in the 
25 percent tax bracket, this would provide an annual maximum tax 
savings of up to $5,000. I believed that this modest tax incentive will 
enable some retirees to consider annuitizing a portion of their nest 
egg so that they have a guaranteed lifetime of income.
  This legislation has a wide range of support from organizations 
representing women, minorities, farmers and small businesses. Many in 
these groups do not have access to traditional employer provided 
pension. As we tackle the challenges of retirement policy, we need to 
ensure that all Americans have adequate financial security to meet 
their basic needs during retirement. Personal savings and 
responsibility are the keys to a balanced national retirement security 
policy. Please join me in supporting our proposal as a crucial step in 
providing a secure retirement for all Americans. 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. 3029

       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 ``Retirement Security for Life 
     Act of 2004''.

     SEC. 2. EXCLUSION FOR LIFETIME ANNUITY PAYMENTS.

       (a) Lifetime Annuity Payments Under Annuity Contracts.--
     Section 72(b) of the Internal Revenue Code of 1986 (relating 
     to exclusion ratio) is amended by adding at the end the 
     following new paragraph:
       ``(5) Exclusion for lifetime annuity payments.--
       ``(A) In general.--In the case of lifetime annuity payments 
     received under one or more annuity contracts in any taxable 
     year, gross income shall not include 50 percent of the 
     portion of lifetime annuity payments otherwise includible 
     (without regard to this paragraph) in gross income under this 
     section. For purposes of the preceding sentence, the amount 
     excludible from gross income in any taxable year shall not 
     exceed $20,000.
       ``(B) Cost-of-living adjustment.--In the case of taxable 
     years beginning after December 31, 2005, the $20,000 amount 
     in subparagraph (A) shall be increased by an amount equal 
     to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2004' 
     for `calendar year 1992' in subparagraph (B) thereof.

     If any amount as increased under the preceding sentence is 
     not a multiple of $500, such amount shall be rounded to the 
     next lower multiple of $500.
       ``(C) Application of paragraph.--Subparagraph (A) shall not 
     apply to--
       ``(i) any amount received under an eligible deferred 
     compensation plan (as defined in section 457(b)) or under a 
     qualified retirement plan (as defined in section 4974(c)),
       ``(ii) any amount paid under an annuity contract that is 
     received by the beneficiary under the contract--

       ``(I) after the death of the annuitant in the case of 
     payments described in subsection (c)(5)(A)(ii)(III), unless 
     the beneficiary is the surviving spouse of the annuitant, or
       ``(II) after the death of the annuitant and joint annuitant 
     in the case of payments described in subsection 
     (c)(5)(A)(ii)(IV), unless the beneficiary is the surviving 
     spouse of the last to die of the annuitant and the joint 
     annuitant, or

       ``(iii) any annuity contract that is a qualified funding 
     asset (as defined in section

[[Page S11899]]

     130(d)), but without regard to whether there is a qualified 
     assignment.
       ``(D) Investment in the contract.--For purposes of this 
     section, the investment in the contract shall be determined 
     without regard to this paragraph.''.
       (b) Definitions.--Subsection (c) of section 72 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new paragraph:
       ``(5) Lifetime annuity payment.--
       ``(A) In general.--For purposes of subsection (b)(5), the 
     term `lifetime annuity payment' means any amount received as 
     an annuity under any portion of an annuity contract, but only 
     if--
       ``(i) the only person (or persons in the case of payments 
     described in subclause (II) or (IV) of clause (ii)) legally 
     entitled (by operation of the contract, a trust, or other 
     legally enforceable means) to receive such amount during the 
     life of the annuitant or joint annuitant is such annuitant or 
     joint annuitant, and
       ``(ii) such amount is part of a series of substantially 
     equal periodic payments made not less frequently than 
     annually over--

       ``(I) the life of the annuitant,
       ``(II) the lives of the annuitant and a joint annuitant, 
     but only if the annuitant is the spouse of the joint 
     annuitant as of the annuity starting date or the difference 
     in age between the annuitant and joint annuitant is 15 years 
     or less,
       ``(III) the life of the annuitant with a minimum period of 
     payments or with a minimum amount that must be paid in any 
     event, or
       ``(IV) the lives of the annuitant and a joint annuitant 
     with a minimum period of payments or with a minimum amount 
     that must be paid in any event, but only if the annuitant is 
     the spouse of the joint annuitant as of the annuity starting 
     date or the difference in age between the annuitant and joint 
     annuitant is 15 years or less.

       ``(iii) Exceptions.--For purposes of clause (ii), annuity 
     payments shall not fail to be treated as part of a series of 
     substantially equal periodic payments--

       ``(I) because the amount of the periodic payments may vary 
     in accordance with investment experience, reallocations among 
     investment options, actuarial gains or losses, cost of living 
     indices, a constant percentage applied not less frequently 
     than annually, or similar fluctuating criteria,
       ``(II) due to the existence of, or modification of the 
     duration of, a provision in the contract permitting a lump 
     sum withdrawal after the annuity starting date, or
       ``(III) because the period between each such payment is 
     lengthened or shortened, but only if at all times such period 
     is no longer than one calendar year.

       ``(B) Annuity contract.--For purposes of subparagraph (A) 
     and subsections (b)(5) and (w), the term `annuity contract' 
     means a commercial annuity (as defined by section 
     3405(e)(6)), other than an endowment or life insurance 
     contract.
       ``(C) Minimum period of payments.--For purposes of 
     subparagraph (A), the term `minimum period of payments' means 
     a guaranteed term of payments that does not exceed the 
     greater of 10 years or--
       ``(i) the life expectancy of the annuitant as of the 
     annuity starting date, in the case of lifetime annuity 
     payments described in subparagraph (A)(ii)(III), or
       ``(ii) the life expectancy of the annuitant and joint 
     annuitant as of the annuity starting date, in the case of 
     lifetime annuity payments described in subparagraph 
     (A)(ii)(IV).

     For purposes of this subparagraph, life expectancy shall be 
     computed with reference to the tables prescribed by the 
     Secretary under paragraph (3). For purposes of subsection 
     (w)(1)(C)(ii), the permissible minimum period of payments 
     shall be determined as of the annuity starting date and 
     reduced by one for each subsequent year.
       ``(D) Minimum amount that must be paid in any event.--For 
     purposes of subparagraph (A), the term `minimum amount that 
     must be paid in any event' means an amount payable to the 
     designated beneficiary under an annuity contract that is in 
     the nature of a refund and does not exceed the greater of the 
     amount applied to produce the lifetime annuity payments under 
     the contract or the amount, if any, available for withdrawal 
     under the contract on the date of death.''.
       (c) Recapture Tax for Lifetime Annuity Payments.--Section 
     72 of the Internal Revenue Code of 1986 is amended by 
     redesignating subsection (w) as subsection (x) and by 
     inserting after subsection (v) the following new subsection:
       ``(w) Recapture Tax for Modifications to or Reductions in 
     Lifetime Annuity Payments.--
       ``(1) In general.--If any amount received under an annuity 
     contract is excluded from income by reason of subsection 
     (b)(5) (relating to lifetime annuity payments), and--
       ``(A) the series of payments under such contract is 
     subsequently modified so any future payments are not lifetime 
     annuity payments,
       ``(B) after the date of receipt of the first lifetime 
     annuity payment under the contract an annuitant receives a 
     lump sum and thereafter is to receive annuity payments in a 
     reduced amount under the contract, or
       ``(C) after the date of receipt of the first lifetime 
     annuity payment under the contract the dollar amount of any 
     subsequent annuity payment is reduced and a lump sum is not 
     paid in connection with the reduction, unless such reduction 
     is--
       ``(i) due to an event described in subsection 
     (c)(5)(A)(iii), or
       ``(ii) due to the addition of, or increase in, a minimum 
     period of payments within the meaning of subsection (c)(5)(C) 
     or a minimum amount that must be paid in any event (within 
     the meaning of subsection (c)(5)(D)),

     then gross income for the first taxable year in which such 
     modification or reduction occurs shall be increased by the 
     recapture amount.
       ``(2) Recapture amount.--
       ``(A) In general.--For purposes of this subsection, the 
     recapture amount shall be the amount, determined under rules 
     prescribed by the Secretary, equal to the amount that (but 
     for subsection (b)(5)) would have been includible in the 
     taxpayer's gross income if the modification or reduction 
     described in paragraph (1) had been in effect at all times, 
     plus interest for the deferral period at the underpayment 
     rate established by section 6621.
       ``(B) Deferral period.--For purposes of this subsection, 
     the term `deferral period' means the period beginning with 
     the taxable year in which (without regard to subsection 
     (b)(5)) the payment would have been includible in gross 
     income and ending with the taxable year in which the 
     modification described in paragraph (1) occurs.
       ``(3) Exceptions to recapture tax.--Paragraph (1) shall not 
     apply in the case of any modification or reduction that 
     occurs because an annuitant--
       ``(A) dies or becomes disabled (within the meaning of 
     subsection (m)(7)),
       ``(B) becomes a chronically ill individual within the 
     meaning of section 7702B(c)(2), or
       ``(C) encounters hardship.''.
       (d) Lifetime Distributions of Life Insurance Death 
     Benefits.--
       (1) In general.--Section 101(d) of the Internal Revenue 
     Code of 1986 (relating to payment of life insurance proceeds 
     at a date later than death) is amended by adding at the end 
     the following new paragraph:
       ``(4) Exclusion for lifetime annuity payments.--
       ``(A) In general.--In the case of amounts to which this 
     subsection applies, gross income shall not include the lesser 
     of--
       ``(i) 50 percent of the portion of lifetime annuity 
     payments otherwise includible in gross income under this 
     section (determined without regard to this paragraph), or
       ``(ii) the amount in effect under section 72(b)(5).
       ``(B) Rules of section 72(b)(5) to apply.--For purposes of 
     this paragraph, rules similar to the rules of section 
     72(b)(5) and section 72(w) shall apply, substituting the term 
     `beneficiary of the life insurance contract' for the term 
     `annuitant' wherever it appears, and substituting the term 
     `life insurance contract' for the term `annuity contract' 
     wherever it appears.''.
       (2) Conforming amendment.--Section 101(d)(1) of such Code 
     is amended by inserting ``or paragraph (4)'' after ``to the 
     extent not excluded by the preceding sentence''.
       (e) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to amounts received in calendar years beginning after 
     the date of the enactment of this Act.
       (2) Special rule for existing contracts.--In the case of a 
     contract in force on the date of the enactment of this Act 
     that does not satisfy the requirements of section 72(c)(5)(A) 
     of the Internal Revenue Code of 1986 (as added by this 
     section), or requirements similar to such section 72(c)(5)(A) 
     in the case of a life insurance contract), any modification 
     to such contract (including a change in ownership) or to the 
     payments thereunder that is made to satisfy the requirements 
     of such section (or similar requirements) shall not result in 
     the recognition of any gain or loss, any amount being 
     included in gross income, or any addition to tax that 
     otherwise might result from such modification, but only if 
     the modification is completed prior to the date that is 2 
     years after the date of the enactment of this Act.

  Mr. CONRAD. Mr. President, I am pleased to join my friend and 
colleague, Senator Gordon Smith from Oregon, in introducing legislation 
that can help seniors enjoy a more secure retirement. The good news is 
that Americans are living longer but it also means that people have to 
plan for a longer period of retirement. A successful retirement income 
plan is a challenge even for the savvy investor. How much more 
difficult is this task for the millions of Americans with limited 
investment experience?
  For years Congress has encouraged people to save for their 
retirement. Through the tax code, we encourage asset building through 
home ownership. We provide significant tax incentives for employer-
based pension plans and for dedicated retirement savings programs by 
individuals, such as IRAs and 401(k) plans.
  One of the biggest threats to retirement income security for baby 
boomers is their own longevity. It will not be easy to manage their 
accumulated assets so that they will last a lifetime. Unprecedented 
numbers of Americans are now living into their 90s and even past 100. 
Today, actuaries tell us that

[[Page S11900]]

about one in six 65-year-old men and one out of three 65-year-old women 
can expect to live into their 90s.
  Consequently, people are going to spend more time in retirement than 
previous generations. Over the course of the 20th century, the 
percentage of men in the workforce aged 65 years or older dropped from 
about 66 percent to less than 20 percent. Now our society confronts the 
impending retirement of 77 million baby boomers. Many of them will not 
have the guaranteed monthly retirement checks that many of their 
parents enjoyed as a result of employer-based pension plans. 
Traditional defined-benefit pension plans have given way to defined 
contribution plans, which have shifted the retirement income security 
risk from the employer to the individual.
  Of course, there are still many Americans who have no access at all 
to employer-provided pension plans. Some have never been in the 
traditional workforce; others work in seasonal jobs or part time. In my 
state of North Dakota, as well as in rural and farming communities 
across America, there is an acute need for retirement vehicles that 
will provide a secure lifetime payout. Others who could face difficulty 
in securing retirement income are widowed individuals--both men and 
women--who suddenly find themselves having to make a life insurance 
benefit or proceeds from the sale of a business or family home last a 
lifetime.
  The proposal we are introducing today will provide a valuable tool 
for helping people avoid the risk of outliving their assets. 
Specifically, we are proposing a tax incentive to encourage Americans 
to available a portion of their assets annuitize for retirement. If 
they annuitize--in other words, elect to receive their money from an 
annuity in a series of payments for the rest of their lives, no matter 
how long that may be--they would be able to exclude from income a 
portion of the annuity benefit that represents the accumulation in the 
annuity above and beyond the original investment. The tax benefit is 
capped to ensure that tax sheltering activity is not encouraged and 
that the incentive will be effective for people who would benefit most 
from securing a lifetime income stream.
  This proposal we offer today would apply only to life-contingent, 
nonqualified annuities. A life-contingent annuity that is subsequently 
modified to a fixed-term payout would be subject to a recapture tax.
  Baby boomers represent an unprecedented challenge to our retirement 
security policies. They should have a wide range of options available 
for responsible retirement planning. Our proposal focuses on non-
qualified annuities because it is important to have this option 
considered as part of the larger retirement income security debate that 
Congress should have before baby boomers begin retiring in large 
numbers. Options for making qualified plans more secure should be part 
of that debate as well.
  I hope that the 109th Congress will tackle this matter promptly 
because time is short. That first wave of baby boomer retirees begins 
in 2008--just over 36 months from today.
                                 ______
                                 
      By Mr. NELSON of Florida:
  S. 3030. A bill to establish an Office of Consumer Advocacy and 
Outreach within the Federal Trade Commission to protect consumers from 
certain unfair or deceptive acts or practices, and for other purposes; 
to the Committee on Commerce, Science, and Transportation.
  Mr. NELSON of Florida. Mr. President, today I rise to introduce a 
bill to create a new government reward hotline designed to solicit tips 
from Spanish-speaking immigrants and other groups that are more likely 
to be the silent victims of consumer fraud.
  The hotline will allow anyone with knowledge of a fraud scheme 
involving deceptive advertising to get a reward for reporting it 
directly to the experts who work at the Federal Trade Commission.
  This legislation addresses the unscrupulous businesses that target 
certain communities because they know the victims are less likely to 
report crimes. It will further the efforts of the Federal Trade 
Commission to combat this problem by creating an Office of Consumer 
Advocacy and Outreach within the Federal Trade Commission which will 
administer programs and services that make it easier for victims in 
these communities to hold wrong-doers accountable.
  A Federal Trade Commission survey from earlier this year revealed 
that nearly 25 million adults in the United States, or 11.2 percent of 
the adult population, were victims of fraud, and that certain 
communities were more likely to fall prey to fraudulent schemes. For 
example, the survey found that Hispanics are twice as likely to be 
victims of fraud as non-Hispanic whites. A study conducted by the 
National Institute of Justice concluded that immigrant victims report 
crimes less frequently than other victims. The factors cited as 
contributing to this underreporting included language barriers, 
cultural differences, and a limited understanding of the United States 
Justice system.
  During this past year the Federal Trade Commission has levied an 
increasing number of complaints against deceptive Spanish-language 
advertisements, including fraudulent driving permits and junk 
computers. Two of these complaints were filed against businesses in 
South Florida that targeted Spanish speakers with advertisements for 
``scientifically unfeasible'' weight-loss pills.
  The Office of Consumer Advocacy and Outreach created by this bill 
will provide information to targeted consumers in these communities on 
how to protect themselves against fraudulent schemes and where to seek 
redress if they become a victim. The Office will work with law 
enforcement to track and investigate fraud schemes that target 
immigrants, the elderly, minorities and other communities.
  One of the ways the Office will work to increase reporting of fraud 
by Spanish-speakers, for example, will be to publicize the reward 
program through a Spanish-language public service advertising campaign 
produced by the Federal Trade Commission that warns against consumer 
fraud and provides the number for this newly created anonymous hotline.
  Additionally, the Office will work with law enforcement to increase 
their level of participation in the Consumer Sentinel database system. 
This database, currently in existence, collects information from local, 
State and Federal agencies on consumer complaints to assist in the 
tracking and investigating of consumer fraud issues.
                                 ______
                                 
      By Mr. NICKLES (for himself, Ms. Landrieu, Mr. Craig, and Mr. 
        Inhofe): S. 3031. A bill to provide for the reform of 
        intercountry adoption, and for other purposes; to the Committee 
        on the Judiciary.
  Mr. NICKLES. Mr. President, last month we celebrated National 
Adoption Month. In 2003, Americans opened their hearts and homes to 
over 20,000 orphaned children born overseas. In order to adopt these 
children the families had to submit extensive paperwork and work with 
three federal agencies in order to be approved to adopt a foreign born 
child and to be able to bring that child home to America. The 
Intercountry Adoption Reform Act that I am introducing today along with 
Senators Landrieu, Craig, and Inhofe streamlines the process families 
go through to adopt a child from overseas by eliminating unnecessary 
paperwork and consolidating the federal functions into one office.
  Last November, I introduced the first version of the Intercountry 
Adoption Reform Act, known simply as the ICARE Act, along with Senators 
Landrieu, Craig, Inhofe, Bingaman, and Smith. Over the last year we 
have received many comments about the bill from groups representing 
adoption professionals as well as comments from the administration. In 
response to these comments, we have revised our original bill to 
incorporate many of the suggestions provided to us and to address some 
of the concerns expressed.
  Two major changes have been made. First, we have added enforcement 
provisions. We revised the bill to make clear that the new Office of 
Intercountry Adoption (OIA) will have the ability to protect children, 
birth families and adoptive families from fraud and abuse through 
enforcement provisions. It also clarifies that the OIA can work with 
the Department of Homeland Security and the Department of Justice to 
enforce the provisions of the Act. Second, we added provisions to 
provide a smooth transition from the

[[Page S11901]]

current adoption process to the new and improved process. These 
provisions ensure that all adoption cases filed prior to the opening of 
the OIA would be processed under the current rules. Any cases filed 
after the opening of the OIA would be processed under the provisions of 
ICARE.
  There were many other technical and minor changes made to clarify and 
perfect the original language. I believe that these changes have 
significantly improved the bill and address many, if not all of the 
concerns that were raised.
  Since 1998, I have been working to improve the foreign adoption 
process. It was in that year that I introduced the first version of the 
Child Citizenship Act which became law in 2000. This Act provides for 
automatic U.S. citizenship for foreign born children adopted by 
American citizens. When that bill took effect on February 27, 2001, 
over 150,000 foreign adopted children became U.S. citizens 
automatically.
  In the fall of 2001, and the first half of 2002, I helped work on the 
crisis that ensued when the INS suspended American adoptions from 
Cambodia. Four hundred and fifty families who were in the process of 
adopting from Cambodia were left stranded, unable to bring their 
adopted children home to America. Although there was evidence that 
fraudulent players were involved in adoptions in Cambodia and that 
there is a need for a fraud free, transparent adoption process, the 
suspension impacted many American families and the Cambodian orphans 
they hoped to adopt. The children and families stuck in the process 
when the suspension was announced needed to be able to complete the 
adoption process they had started prior to the suspension. I worked 
with the Administration to develop a plan to process those adoptions 
where it was determined that no fraud was involved. I worked closely 
with Senator Landrieu and other members of Congress on both the House 
and Senate side to ensure that these Cambodian orphans could come home 
to their American families.
  I have also been working since 2002, to develop the ICARE Act. ICARE 
has two main goals. First, and most importantly, this bill acknowledges 
and affirms that foreign adopted children of American citizens are to 
be treated in all respects the same as children born abroad to an 
American citizen. Under existing law, foreign adopted children are 
treated as immigrants to the United States. They have to apply for, and 
be granted immigrant visas to enter the United States. Once they enter 
the United States, citizenship is acquired automatically. Had these 
children been born abroad to American citizens, they would have 
traveled back to the United States with a U.S. passport and entered as 
citizens. This bill provides for equal treatment for foreign adopted 
children.
  The second goal is to consolidate the existing functions of the 
federal government relating to foreign adoption into one centralized 
office. The office would be located within the Department of State. 
Currently, these functions are performed by offices within the 
Department of Homeland Security and the Department of State. 
Consolidation of these functions into one office will result in focused 
attention on the needs of families seeking to adopt overseas and on the 
children they are hoping to make part of their families.
  Although I have not been able to see this bill through to completion 
during my tenure in the Senate, it is my hope and desire that my 
colleagues who have cosponsored this bill with me will continue to 
press forward until the goals of this bill are accomplished.
  I introduce this revised version of the ICARE Act and hope that it 
will be reintroduced and acted upon in the next Congress. Passage of 
this bill will significantly improve the foreign adoption process so 
that more children worldwide can find loving, permanent homes. It is my 
prayer that someday, adoption will not be needed. That all children 
will be born into stable, loving homes to parents who want them and are 
able to care for them. However, until that day comes, the foreign 
adoption process can be improved and should be improved. Foreign 
adopted children of American citizens should be treated as children of 
U.S. citizens, not as immigrants, and should be accorded all the same 
rights as biological children of U.S. citizens. To that end, I 
introduce this 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. 3031

       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 ``Intercountry Adoption Reform 
     Act of 2004'' or the ``ICARE Act''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) That a child, for the full and harmonious development 
     of his or her personality, should grow up in a family 
     environment, in an atmosphere of happiness, love, and 
     understanding.
       (2) That intercountry adoption may offer the advantage of a 
     permanent family to a child for whom a suitable family cannot 
     be found in his or her country of origin.
       (3) There has been a significant growth in intercountry 
     adoptions. In 1990, Americans adopted 7,093 children from 
     abroad. In 2001, they adopted 19,237 children from abroad.
       (4) Americans increasingly seek to create or enlarge their 
     families through intercountry adoptions.
       (5) There are many children worldwide that are without 
     permanent homes.
       (6) In the interest of children without a permanent family 
     and the United States citizens who are waiting to bring them 
     into their families, reforms are needed in the intercountry 
     adoption process used by United States citizens.
       (7) Before adoption, each child should have the benefit of 
     measures taken to ensure that intercountry adoption is in his 
     or her best interests and prevents the abduction, selling, or 
     trafficking of children.
       (8) In addition, Congress recognizes that foreign born 
     adopted children do not make the decision whether to 
     immigrate to the United States. They are being chosen by 
     Americans to become part of their immediate families.
       (9) As such these children should not be classified as 
     immigrants in the traditional sense. Once fully and finally 
     adopted, they should be treated as children of United States 
     citizens.
       (10) Since a child who is fully and finally adopted is 
     entitled to the same rights, duties, and responsibilities as 
     a biological child, the law should reflect such equality.
       (11) Therefore, foreign born adopted children of United 
     States citizens should be accorded the same procedural 
     treatment as biological children born abroad to a United 
     States citizen.
       (12) If a United States citizen can confer citizenship to a 
     biological child born abroad, then the same citizen is 
     entitled to confer such citizenship to their legally and 
     fully adopted foreign born child immediately upon final 
     adoption.
       (13) If a United States citizen cannot confer citizenship 
     to a biological child born abroad, then such citizen cannot 
     confer citizenship to their legally and fully adopted foreign 
     born child, except through the naturalization process.
       (b) Purposes.--The purposes of this Act are--
       (1) to ensure that intercountry adoptions take place in the 
     best interests of the child;
       (2) to ensure that foreign born children adopted by United 
     States citizens will be treated identically to a biological 
     child born abroad to the same citizen parent; and
       (3) to improve the intercountry adoption process by making 
     it more citizen friendly and focused on the protection of the 
     child.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Adoptable child.--The term ``adoptable child'' has the 
     same meaning given such term in section 101(c)(3) of the 
     Immigration and Nationality Act (8 U.S.C. 1101(c)(3)), as 
     added by section 204(a) of this Act.
       (2) Ambassador at large.--The term ``Ambassador at Large'' 
     means the Ambassador at Large for Intercountry Adoptions 
     appointed to head the Office pursuant to section 101(b).
       (3) Competent authority.--The term ``competent authority'' 
     means the entity or entities authorized by the law of the 
     child's country of residence to engage in permanent placement 
     of children who are no longer in the legal or physical 
     custody of their biological parents.
       (4) Convention.--The term ``Convention'' means the 
     Convention on Protection of Children and Co-operation in 
     Respect of Intercountry Adoption, done at The Hague on May 
     29, 1993.
       (5) Full and final adoption.--The term ``full and final 
     adoption'' means an adoption--
       (A) that is completed according to the laws of the child's 
     country of residence or the State law of the parent's 
     residence;
       (B) under which a person is granted full and legal custody 
     of the adopted child;
       (C) that has the force and effect of severing the child's 
     legal ties to the child's biological parents;
       (D) under which the adoptive parents meet the requirements 
     of section 205; and
       (E) under which the child has been adjudicated to be an 
     adoptable child in accordance with section 206.

[[Page S11902]]

       (6) Office.--The term ``Office'' means the Office of 
     Intercountry Adoptions established under section 101(a).
       (7) Readily approvable.--A petition or certification is 
     considered ``readily approvable'' if the documentary support 
     provided demonstrates that the petitioner satisfies the 
     eligibility requirements and no additional information or 
     investigation is necessary.

           TITLE I--ADMINISTRATION OF INTERCOUNTRY ADOPTIONS

                         Subtitle A--In General

     SEC. 101. OFFICE OF INTERCOUNTRY ADOPTIONS.

       (a) Establishment.--Not later than 180 days after the date 
     of enactment of this Act, there is to be established within 
     the Department of State, an Office of Intercountry Adoptions 
     which shall be headed by the Ambassador at Large for 
     Intercountry Adoptions who shall be appointed pursuant to 
     subsection (b).
       (b) Ambassador at Large.--
       (1) Appointment.--The Ambassador at Large shall be 
     appointed by the President, by and with the advice and 
     consent of the Senate, from among individuals who have 
     background, experience, and training in intercountry 
     adoptions, taking care to ensure that the individual who 
     serves as Ambassador is free from any conflicts of interest 
     that might inhibit such individual's ability to serve as 
     Ambassador.
       (2) Authority.--The Ambassador at Large shall report 
     directly to the Secretary of State, in consultation with the 
     Assistant Secretary for Consular Affairs. The Ambassador at 
     Large has no independent regulatory authority.
       (3) Duties of the ambassador at large.--In carrying out the 
     functions of the Office, the Ambassador at Large shall have 
     the following responsibilities:
       (A) In general.--The primary responsibilities of the 
     Ambassador at Large shall be--
       (i) to ensure that intercountry adoptions take place in the 
     best interests of the child; and
       (ii) to assist the Secretary of State in fulfilling the 
     responsibilities designated to the central authority under 
     title I of the Intercountry Adoption Act of 2000 (42 U.S.C. 
     14911 et seq.).
       (B) Advisory role.--The Ambassador at Large shall be a 
     principal advisor to the President and the Secretary of State 
     regarding matters affecting intercountry adoption and the 
     general welfare of children abroad and shall make 
     recommendations regarding--
       (i) the policies of the United States with respect to the 
     establishment of a system of cooperation among the parties to 
     the Convention;
       (ii) the policies to prevent abandonment, strengthen 
     families, and to advance the placement of children in 
     permanent families; and
       (iii) policies that promote the protection and well-being 
     of children.
       (C) Diplomatic representation.--Subject to the direction of 
     the President and the Secretary of State, the Ambassador at 
     Large may represent the United States in matters and cases 
     relevant to international adoption in--
       (i) fulfillment of the responsibilities designated to the 
     central authority under title I of the Intercountry Adoption 
     Act of 2000 (42 U.S.C. 14911 et seq.);
       (ii) contacts with foreign governments, intergovernmental 
     organizations, and specialized agencies of the United Nations 
     and other international organizations of which the United 
     States is a member; and
       (iii) multilateral conferences and meetings relevant to 
     international adoption.
       (D) International policy development.--The Ambassador at 
     Large shall advise and support the Secretary of State and 
     other relevant Bureaus of the Department of State in the 
     development of sound policy regarding child protection and 
     intercountry adoption.
       (E) Reporting responsibilities.--The Ambassador at Large 
     shall have the following reporting responsibilities:
       (i) In general.--The Ambassador at Large shall assist the 
     Secretary of State and other relevant Bureaus in preparing 
     those portions of the Human Rights Reports that relate to the 
     abduction, sale, and trafficking of children.
       (ii) Annual report on intercountry adoption.--On September 
     1 of each year, the Secretary of State, with the assistance 
     of the Ambassador at Large, shall prepare and transmit to 
     Congress an annual report on intercountry adoption. Each 
     annual report shall include--

       (I) a description of the status of child protection and 
     adoption in each foreign country, including--

       (aa) trends toward improvement in the welfare and 
     protection of children and families;
       (bb) trends in family reunification, domestic adoption, and 
     intercountry adoption;
       (cc) movement toward ratification and implementation of the 
     Convention; and
       (dd) census information on the number of children in 
     orphanages, foster homes, and other types of nonpermanent 
     residential care as reported by the foreign country;

       (II) the number of intercountry adoptions by United States 
     citizens, including the country from which each child 
     emigrated, the State in which each child resides, and the 
     country in which the adoption was finalized;
       (III) the number of intercountry adoptions involving 
     emigration from the United States, including the country 
     where each child now resides and the State from which each 
     child emigrated;
       (IV) the number of placements for adoption in the United 
     States that were disrupted, including the country from which 
     the child emigrated, the age of the child, the date of the 
     placement for adoption, the reasons for the disruption, the 
     resolution of the disruption, the agencies that handled the 
     placement for adoption, and the plans for the child, and in 
     addition, any information regarding disruption or dissolution 
     of adoptions of children from other countries received 
     pursuant to section 422(b)(14) of the Social Security Act (42 
     U.S.C. 622(b)(14));
       (V) the average time required for completion of an 
     adoption, set forth by the country from which the child 
     emigrated;
       (VI) the current list of agencies accredited and persons 
     approved under the Intercountry Adoption Act of 2000 (42 
     U.S.C. 14901 et seq.) to provide adoption services;
       (VII) the names of the agencies and persons temporarily or 
     permanently debarred under the Intercountry Adoption Act of 
     2000 (42 U.S.C. 14901 et seq.), and the reasons for the 
     debarment;
       (VIII) the range of adoption fees involving adoptions by 
     United States citizens and the median of such fees set forth 
     by the country of origin;
       (IX) the range of fees charged for accreditation of 
     agencies and the approval of persons in the United States 
     engaged in providing adoption services under the Convention; 
     and
       (X) recommendations of ways the United States might act to 
     improve the welfare and protection of children and families 
     in each foreign country.

       (c) Functions of Office.--The Office shall have the 
     following 7 functions:
       (1) Approval of a family to adopt.--To approve or 
     disapprove the eligibility of United States citizens to adopt 
     foreign born children.
       (2) Child adjudication.--To investigate and adjudicate the 
     status of a child born abroad to determine their eligibility 
     as an adoptable child.
       (3) Family services.--To provide assistance to United 
     States citizens engaged in the intercountry adoption process 
     in resolving problems with respect to that process and to 
     track intercountry adoption cases so as to ensure that all 
     such adoptions are processed in a timely manner.
       (4) International policy development.--To advise and 
     support the Ambassador at Large and other relevant Bureaus in 
     the development of sound policy regarding child protection 
     and intercountry adoption.
       (5) Central authority.--To assist the Secretary of State in 
     carrying out duties of the central authority as defined in 
     section 3 of the Intercountry Adoption Act of 2000 (42 U.S.C. 
     14902).
       (6) Enforcement.--To investigate, either directly or in 
     cooperation with other appropriate international, Federal, 
     State, or local entities, improprieties relating to adoption, 
     including issues of child protection, birth family 
     protection, and consumer fraud.
       (7) Administration.--To perform administrative functions 
     related to the functions performed under paragraphs (1) 
     through (6), including legal functions and congressional 
     liaison and public affairs functions.
       (d) Organization.--
       (1) In general.--All functions of the Office shall be 
     performed by officers housed in a centralized office located 
     in Washington, D.C. Within the Washington, D.C. office, there 
     shall be 7 divisions corresponding to the 7 functions of the 
     Office. All 7 divisions and their respective directors shall 
     report directly to the Ambassador at Large.
       (2) Approval to adopt.--The division responsible for 
     approving parents to adopt shall be divided into regions of 
     the United States as follows:
       (A) Northwest.
       (B) Northeast.
       (C) Southwest.
       (D) Southeast.
       (E) Midwest.
       (F) West.
       (3) Child adjudication.--To the extent practicable, the 
     division responsible for the adjudication of foreign born 
     children as adoptable shall be divided by world regions which 
     correspond to those currently used by other divisions within 
     the Department of State.
       (4) Use of international field officers.--Nothing in this 
     section shall be construed to prohibit the use of 
     international field officers posted abroad, as necessary, to 
     fulfill the requirements of this Act.
       (5) Use of existing systems.--Whenever possible, the Office 
     shall utilize systems currently in place that ensure 
     protections against child trafficking.
       (e) Qualifications and Training.--In addition to meeting 
     the employment requirements of the Department of State, 
     officers employed in any of the 7 divisions of the Office 
     shall undergo extensive and specialized training in the laws 
     and processes of intercountry adoption as well as 
     understanding the cultural, medical, emotional, and social 
     issues surrounding intercountry adoption and adoptive 
     families. The Ambassador at Large shall, whenever possible, 
     recruit and hire individuals with background and experience 
     in intercountry adoptions, taking care to ensure that such 
     individuals do not have any conflicts of interest that might 
     inhibit their ability to serve.

[[Page S11903]]

       (f) Use of Electronic Databases and Filing.--To the extent 
     possible, the Office shall make use of centralized, 
     electronic databases and electronic form filing.

     SEC. 102. RECOGNITION OF CONVENTION ADOPTIONS IN THE UNITED 
                   STATES.

       Section 505(a)(1) of the Intercountry Adoption Act of 2000 
     (42 U.S.C. 14901 note) is amended by inserting ``301, 302,'' 
     after ``205,''.

     SEC. 103. TECHNICAL AND CONFORMING AMENDMENT.

       Section 104 of the Intercountry Adoption Act of 2000 (42 
     U.S.C. 14914) is repealed.

                   Subtitle B--Transition Provisions

     SEC. 111. TRANSFER OF FUNCTIONS.

       (a) In General.--Subject to subsection (c), all functions 
     under the immigration laws of the United States with respect 
     to the adoption of foreign born children by United States 
     citizens and their admission to the United States that have 
     been vested by statute in, or exercised by, the Commissioner 
     of Immigration and Naturalization, the Immigration and 
     Naturalization Service (or any officer, employee, or 
     component thereof), of the Department of Homeland Security 
     (or any officer, employee, or component thereof) immediately 
     prior to the effective date of this title, are transferred to 
     the Office on the effective date of this title for exercise 
     by the Ambassador at Large in accordance with applicable laws 
     and title II of this Act.
       (b) Exercise of Authorities.--Except as otherwise provided 
     by law, the Ambassador at Large may, for purposes of 
     performing any function transferred to the Ambassador at 
     Large under subsection (a), exercise all authorities under 
     any other provision of law that were available with respect 
     to the performance of that function to the official 
     responsible for the performance of the function immediately 
     before the effective date of the transfer of the function 
     pursuant to this title.
       (c) Limitation on Transfer of Pending Adoptions.--If an 
     individual has filed a petition with the Immigration and 
     Naturalization Service or the Department of Homeland Security 
     with respect to the adoption of a foreign born child prior to 
     the date of enactment of this title, the Secretary of 
     Homeland Security shall have the authority to make the final 
     determination on such petition and such petition shall not be 
     transferred to the Office.

     SEC. 112. TRANSFER OF RESOURCES.

       Subject to section 1531 of title 31, United States Code, 
     upon the effective date of this title, there are transferred 
     to the Ambassador at Large for appropriate allocation in 
     accordance with section 115, the assets, liabilities, 
     contracts, property, records, and unexpended balance of 
     appropriations, authorizations, allocations, and other funds 
     employed, held, used, arising from, available to, or to be 
     made available to the Immigration and Naturalization Service 
     or the Department of Homeland Security in connection with the 
     functions transferred pursuant to this title.

     SEC. 113. INCIDENTAL TRANSFERS.

       The Ambassador at Large may make such additional incidental 
     dispositions of personnel, assets, liabilities, grants, 
     contracts, property, records, and unexpended balances of 
     appropriations, authorizations, allocations, and other funds 
     held, used, arising from, available to, or to be made 
     available in connection with such functions, as may be 
     necessary to carry out this title. The Ambassador at Large 
     shall provide for such further measures and dispositions as 
     may be necessary to effectuate the purposes of this title.

     SEC. 114. SAVINGS PROVISIONS.

       (a) Legal Documents.--All orders, determinations, rules, 
     regulations, permits, grants, loans, contracts, agreements, 
     including collective bargaining agreements, certificates, 
     licenses, and privileges--
       (1) that have been issued, made, granted, or allowed to 
     become effective by the President, the Ambassador at Large, 
     the former Commissioner of the Immigration and Naturalization 
     Service, their delegates, or any other Government official, 
     or by a court of competent jurisdiction, in the performance 
     of any function that is transferred pursuant to this title; 
     and
       (2) that are in effect on the effective date of such 
     transfer (or become effective after such date pursuant to 
     their terms as in effect on such effective date);

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, any other authorized 
     official, a court of competent jurisdiction, or operation of 
     law, except that any collective bargaining agreement shall 
     remain in effect until the date of termination specified in 
     the agreement.
       (b) Proceedings.--
       (1) Pending.--The transfer of functions under section 111 
     shall not affect any proceeding or any application for any 
     benefit, service, license, permit, certificate, or financial 
     assistance pending on the effective date of this title before 
     an office whose functions are transferred pursuant to this 
     title, but such proceedings and applications shall be 
     continued.
       (2) Orders.--Orders shall be issued in such proceedings, 
     appeals shall be taken therefrom, and payments shall be made 
     pursuant to such orders, as if this Act had not been enacted, 
     and orders issued in any such proceeding shall continue in 
     effect until modified, terminated, superseded, or revoked by 
     a duly authorized official, by a court of competent 
     jurisdiction, or by operation of law.
       (3) Discontinuance or modification.--Nothing in this 
     section shall be considered to prohibit the discontinuance or 
     modification of any such proceeding under the same terms and 
     conditions and to the same extent that such proceeding could 
     have been discontinued or modified if this section had not 
     been enacted.
       (c) Suits.--This title shall not affect suits commenced 
     before the effective date of this title, and in all such 
     suits, proceeding shall be had, appeals taken, and judgments 
     rendered in the same manner and with the same effect as if 
     this title had not been enacted.
       (d) Nonabatement of Actions.--No suit, action, or other 
     proceeding commenced by or against the Department of State, 
     the Immigration and Naturalization Service, or the Department 
     of Homeland Security, or by or against any individual in the 
     official capacity of such individual as an officer or 
     employee in connection with a function transferred pursuant 
     to this section, shall abate by reason of the enactment of 
     this Act.
       (e) Continuance of Suit With Substitution of Parties.--If 
     any Government officer in the official capacity of such 
     officer is party to a suit with respect to a function of the 
     officer, and pursuant to this title such function is 
     transferred to any other officer or office, then such suit 
     shall be continued with the other officer or the head of such 
     other office, as applicable, substituted or added as a party.
       (f) Administrative Procedure and Judicial Review.--Except 
     as otherwise provided by this title, any statutory 
     requirements relating to notice, hearings, action upon the 
     record, or administrative or judicial review that apply to 
     any function transferred pursuant to any provision of this 
     title shall apply to the exercise of such function by the 
     head of the office, and other officers of the office, to 
     which such function is transferred pursuant to such 
     provision.

                       Subtitle C--Effective Date

     SEC. 121. EFFECTIVE DATE.

       This title shall take effect 180 days after the date of 
     enactment of this Act.

TITLE II--REFORM OF UNITED STATES LAWS GOVERNING INTERCOUNTRY ADOPTIONS

     SEC. 201. AUTOMATIC ACQUISITION OF CITIZENSHIP FOR ADOPTED 
                   CHILDREN BORN OUTSIDE THE UNITED STATES.

       (a) Amendments of Automatic Citizenship Provisions.--
     Section 320 of the Immigration and Nationality Act (8 U.S.C. 
     1431) is amended--
       (1) by amending the section heading to read as follows: 
     ``Children Born Outside the United States; Conditions Under 
     Which Citizenship Automatically Acquired''; and
       (2) in subsection (a), by striking paragraphs (1) through 
     (3) and inserting the following:
       ``(1) Upon the date the adoption becomes full and final, at 
     least 1 parent of the child is a citizen of the United 
     States, whether by birth or naturalization, who has been 
     physically present in the United States or its outlying 
     possessions for a period or periods totaling not less than 5 
     years, at least 2 of which were after attaining the age of 14 
     years. Any periods of honorable service in the Armed Forces 
     of the United States, or periods of employment with the 
     United States Government or with an international 
     organization as that term is defined in section 1 of the 
     International Organizations Immunities Act (22 U.S.C. 288) by 
     such citizen parent, or any periods during which such citizen 
     parent is physically present abroad as the dependent 
     unmarried son or daughter and a member of the household of a 
     person--
       ``(A) honorably serving with the Armed Forces of the United 
     States; or
       ``(B) employed by the United States Government or an 
     international organization as defined in section 1 of the 
     International Organizations Immunities Act (22 U.S.C. 288);
     may be included in order to satisfy the physical presence 
     requirement of this paragraph.
       ``(2) The child is an adoptable child described in section 
     101(c)(3).
       ``(3) The child is the beneficiary of a full and final 
     adoption decree entered by a foreign government or a court in 
     the United States.
       ``(4) For purposes of this subsection, the term `full and 
     final adoption' means an adoption--
       ``(A) that is completed under the laws of the child's 
     country of residence or the State law of the parent's 
     residence;
       ``(B) under which a person is granted full and legal 
     custody of the adopted child;
       ``(C) that has the force and effect of severing the child's 
     legal ties to the child's biological parents;
       ``(D) under which the adoptive parents meet the 
     requirements of section 205 of the Intercountry Adoption 
     Reform Act of 2004; and
       ``(E) under which the child has been adjudicated to be an 
     adoptable child in accordance with section 206 of the 
     Intercountry Adoption Reform Act of 2004.''.
       (b) Effective Date.--This section shall take effect as if 
     enacted on January 1, 1950.

     SEC. 202. REVISED PROCEDURES.

       Notwithstanding any other provision of law, the following 
     requirements shall apply with respect to the adoption of 
     foreign born children by United States citizens:
       (1) Upon completion of a full and final adoption, the 
     Secretary of State shall issue a

[[Page S11904]]

     United States passport and a Consular Report of Birth for a 
     child who satisfies the requirements of section 320 of the 
     Immigration and Nationality Act (8 U.S.C. 1431), as amended 
     by section 201 of this Act, upon application by a United 
     States citizen parent.
       (2) An adopted child described in paragraph (1) shall not 
     require the issuance of a visa for travel and admission to 
     the United States but shall be admitted to the United States 
     upon presentation of a valid, unexpired United States 
     passport.
       (3) No affidavit of support under section 213A of the 
     Immigration and Nationality Act (8 U.S.C. 1183a) shall be 
     required in the case of any adoptable child.
       (4)(A) The Secretary of State shall require that agencies 
     provide prospective adoptive parents an opportunity to 
     conduct an independent medical exam and a copy of any medical 
     records of the child known to exist (to the greatest extent 
     practicable, these documents shall include an English 
     translation) on a date that is not later than the earlier of 
     the date that is 2 weeks before the adoption, or the date on 
     which prospective adoptive parents travel to such a foreign 
     country to complete all procedures in such country relating 
     to adoption.
       (B) The Secretary of State shall not require an adopted 
     child described in paragraph (1) to undergo a medical exam 
     for the purpose of excluding the child's immigration to the 
     United States.
       (5) The Secretary of State shall take necessary measures to 
     ensure that all prospective adoptive parents adopting 
     internationally are provided with training that includes 
     counseling and guidance for the purpose of promoting a 
     successful intercountry adoption before such parents travel 
     to adopt the child or the child is placed with such parents 
     for adoption.
       (6) The Secretary of State shall take necessary measures to 
     ensure that--
       (A) prospective adoptive parents are given full disclosure 
     of all direct and indirect costs of intercountry adoption 
     before they are matched with child for adoption;
       (B) fees charged in relation to the intercountry adoption 
     be on a fee for service basis not on a contingent fee basis; 
     and
       (C) that the transmission of fees between the adoption 
     agency, the country of origin, and the prospective adoptive 
     parents is carried out in a transparent and efficient manner.
       (7) The Secretary of State shall take all measures 
     necessary to ensure that all documents provided to a country 
     of origin on behalf of a prospective adoptive parent are 
     truthful and accurate.

     SEC. 203. NONIMMIGRANT VISAS FOR CHILDREN TRAVELING TO THE 
                   UNITED STATES TO BE ADOPTED BY A UNITED STATES 
                   CITIZEN.

       (a) In General.--Section 101(a)(15) of the Immigration and 
     Nationality Act (8 U.S.C. 1101(a)(15)) is amended--
       (1) by striking ``or'' at the end of subparagraph (U);
       (2) by striking the period at the end of subparagraph (V) 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(W) an adoptable child who is coming into the United 
     States for adoption by a United States citizen and a spouse 
     jointly or by an unmarried United States citizen at least 25 
     years of age, who has been approved to adopt.''.
       (b) Termination of Period of Authorized Admission.--Section 
     214 of the Immigration and Nationality Act (8 U.S.C. 1184) is 
     amended by adding at the end the following:
       ``(s) In the case of a nonimmigrant described in section 
     101(a)(15)(W), the period of authorized admission shall 
     terminate on the earlier of--
       ``(1) the date on which the adoption of the nonimmigrant is 
     completed by the courts of the State where the parents 
     reside; or
       ``(2) the date that is 4 years after the date of admission 
     of the nonimmigrant into the United States, unless a 
     petitioner is able to show cause as to why the adoption could 
     not be completed prior to such date and the Secretary extends 
     such period for the period necessary to complete the 
     adoption.''.
       (c) Temporary Treatment as Legal Permanent Resident.--
     Notwithstanding any other law, all benefits and protections 
     that apply to a legal permanent resident shall apply to a 
     nonimmigrant described in section 101(a)(15)(W) of the 
     Immigration and Nationality Act, as added by subsection (a), 
     pending a full and final adoption.
       (d) Exception From Immunization Requirement for Certain 
     Adopted Children.--Section 212(a)(1)(C) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(1)(C)) is amended--
       (1) in the heading by striking ``10 years'' and inserting 
     ``18 years''; and
       (2) in clause (i), by striking ``10 years'' and inserting 
     ``18 years''.
       (e) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary of State shall prescribe 
     such regulations as may be necessary to carry out this 
     section.

     SEC. 204. DEFINITION OF ADOPTABLE CHILD.

       (a) In General.--Section 101(c) of the Immigration and 
     Nationality Act (8 U.S.C. 1101(c)) is amended by adding at 
     the end the following:
       ``(3) The term `adoptable child' means an unmarried person 
     under the age of 18--
       ``(A)(i) whose biological parents (or parent, in the case 
     of a child who has one sole or surviving parent) or other 
     persons or institutions that retain legal custody of the 
     child--
       ``(I) have freely given their written irrevocable consent 
     to the termination of their legal relationship with the 
     child, and to the child's emigration and adoption and that 
     such consent has not been induced by payment or compensation 
     of any kind and has not been given prior to the birth of the 
     child;
       ``(II) are unable to provide proper care for the child, as 
     determined by the competent authority of the child's 
     residence; or
       ``(III) have voluntarily relinquished the child to the 
     competent authorities pursuant to the law of the child's 
     residence; or
       ``(ii) who, as determined by the competent authority of the 
     child's residence--
       ``(I) has been abandoned or deserted by their biological 
     parent, parents, or legal guardians; or
       ``(II) has been orphaned due to the death or disappearance 
     of their biological parent, parents, or legal guardians;
       ``(B) with respect to whom the Secretary of State is 
     satisfied that the proper care will be furnished the child if 
     admitted to the United States;
       ``(C) with respect to whom the Secretary of State is 
     satisfied that the purpose of the adoption is to form a bona 
     fide parent-child relationship and that the parent-child 
     relationship of the child and the biological parents has been 
     terminated (and in carrying out both obligations under this 
     subparagraph the Secretary of State, in consultation with the 
     Secretary of Homeland Security, may consider whether there is 
     a petition pending to confer immigrant status on one or both 
     of the biological parents);
       ``(D) with respect to whom the Secretary of State, is 
     satisfied that there has been no inducement, financial or 
     otherwise, offered to obtain the consent nor was it given 
     before the birth of the child;
       ``(E) with respect to whom the Secretary of State, in 
     consultation with the Secretary of Homeland Security, is 
     satisfied that the person is not a security risk; and
       ``(F) whose eligibility for adoption and emigration to the 
     United States has been certified by the competent authority 
     of the country of the child's place of birth or residence.''.
       (b) Conforming Amendment.--Section 204(d) of the 
     Immigration and Nationality Act (8 U.S.C. 1154(d)) is amended 
     by inserting ``and an adoptable child as defined in section 
     101(c)(3)'' before ``unless a valid home-study''.

     SEC. 205. APPROVAL TO ADOPT.

       (a) In General.--Prior to the issuance of a visa under 
     section 101(a)(15)(W) of the Immigration and Nationality Act, 
     as added by section 203(a) of this Act, or the issuance of a 
     full and final adoption decree, the United States citizen 
     adoptive parent shall have approved by the Office a petition 
     to adopt. Such petition shall be subject to the same terms 
     and conditions as are applicable to petitions for 
     classification under section 204.3 of title 8 of the Code of 
     Federal Regulations, as in effect on the day before the date 
     of enactment of this Act.
       (b) Expiration of Approval.--Approval to adopt under this 
     Act is valid for 24 months from the date of approval. Nothing 
     in this section may prevent the Secretary of Homeland 
     Security from periodically updating the fingerprints of an 
     individual who has filed a petition for adoption.
       (c) Expedited Reapproval Process of Families Previously 
     Approved To Adopt.--The Secretary of State shall prescribe 
     such regulations as may be necessary to provide for an 
     expedited and streamlined process for families who have been 
     previously approved to adopt and whose approval has expired, 
     so long as not more than 3 years have lapsed since the 
     original application.
       (d) Denial of Petition.--
       (1) Notice of intent.--If the officer adjudicating the 
     petition to adopt finds that it is not readily approvable, 
     the officer shall notify the petitioner, in writing, of the 
     officer's intent to deny the petition. Such notice shall 
     include the specific reasons why the petition is not readily 
     approvable.
       (2) Petitioners right to respond.--Upon receiving a notice 
     of intent to deny, the petitioner has 30 days to respond to 
     such notice.
       (3) Decision.--Within 30 days of receipt of the 
     petitioner's response the Office must reach a final decision 
     regarding the eligibility of the petitioner to adopt. Notice 
     of a formal decision must be delivered in writing.
       (4) Right to an appeal.--Unfavorable decisions may be 
     appealed to the Department of State and, after the exhaustion 
     of the appropriate appeals process of the Department, to a 
     United States district court.
       (5) Regulations regarding appeals.--Not later than 6 months 
     after the date of enactment of this Act, the Secretary of 
     State shall promulgate formal regulations regarding the 
     process for appealing the denial of a petition.

     SEC. 206. ADJUDICATION OF CHILD STATUS.

       (a) In General.--Prior to the issuance of a full and final 
     adoption decree or a visa under section 101(a)(15)(W) of the 
     Immigration and Nationality Act, as added by section 203(a) 
     of this Act--
       (1) the Office shall obtain from the competent authority of 
     the country of the child's residence a certification, 
     together with documentary support, that the child sought to 
     be adopted meets the description of an adoptable child; and
       (2) not later than 15 days after the date of the receipt of 
     the certification referred to in paragraph (1), the Office 
     shall make a final determination on whether the certification 
     and the documentary support are sufficient

[[Page S11905]]

     to meet the requirements of this section or whether 
     additional investigation or information is required.
       (b) Process for Determination.--
       (1) In general.--The Ambassador at Large shall work with 
     the competent authorities of the child's country of residence 
     to establish a uniform, transparent, and efficient process 
     for the exchange and approval of the certification and 
     documentary support required under subsection (a).
       (2) Notice of intent.--If the Office finds that the 
     certification submitted by the competent authority of the 
     child's country of origin is not readily approvable, the 
     Office shall--
       (A) notify the competent authority and the prospective 
     adoptive parents, in writing, of the specific reasons why the 
     certification is not sufficient; and
       (B) provide the competent authority and the prospective 
     adoptive parents the opportunity to address the stated 
     insufficiencies.
       (3) Petitioners right to respond.--Upon receiving a notice 
     of intent to find that a certification is not readily 
     approvable, the prospective adoptive parents shall have 30 
     days to respond to such notice.
       (4) Decision.--Not later than 30 days after the date of 
     receipt of a response submitted under paragraph (3), the 
     Office must reach a final decision regarding the child's 
     eligibility as an adoptable child. Notice of such decision 
     must be in writing.
       (5) Right to an appeal.--Unfavorable decisions on a 
     certification may be appealed to the Department of State and, 
     after the exhaustion of the appropriate appeals process of 
     the Department, to a United States district court.

                           TITLE III--FUNDING

     SEC. 301. FUNDS.

       The Secretary of State shall provide the Ambassador at 
     Large with such funds as may be necessary for--
       (1) the hiring of staff for the Office;
       (2) investigations conducted by the Office; and
       (3) travel and other expenses necessary to carry out this 
     Act.

                         TITLE IV--ENFORCEMENT

     SEC. 401. ENFORCEMENT.

       (a) Civil Penalties.--A person shall be subject, in 
     addition to any other penalty that may be prescribed by law, 
     to a civil money penalty of not more than $50,000 for a first 
     violation, and not more than $100,000 for each succeeding 
     violation if such person--
       (1) violates a provision of this Act or an amendment made 
     by this Act;
       (2) makes a false or fraudulent statement, or 
     misrepresentation, with respect to a material fact, or 
     offers, gives, solicits, or accepts inducement by way of 
     compensation, intended to influence or affect in the United 
     States or a foreign country--
       (A) a decision for an approval under title II;
       (B) the relinquishment of parental rights or the giving of 
     parental consent relating to the adoption of a child; or
       (C) a decision or action of any entity performing a central 
     authority function; or
       (3) engages another person as an agent, whether in the 
     United States or in a foreign country, who in the course of 
     that agency takes any of the actions described in paragraph 
     (1) or (2).
       (b) Civil Enforcement.--
       (1) Authority of attorney general.--The Attorney General 
     may bring a civil action to enforce subsection (a) against 
     any person in any United States district court.
       (2) Factors to be considered in imposing penalties.--In 
     imposing penalties the court shall consider the gravity of 
     the violation, the degree of culpability of the defendant, 
     and any history of prior violations by the defendant.
       (c) Criminal Penalties.--Whoever knowingly and willfully 
     commits a violation described in paragraph (1) or (2) of 
     subsection (a) shall be subject to a fine of not more than 
     $250,000, imprisonment for not more than 5 years, or both.

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