Congressional Record, Volume 151 Issue 49 (Thursday, April 21, 2005)

[Congressional Record Volume 151, Number 49 (Thursday, April 21, 2005)]
[Senate]
[Pages S4110-S4135]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mrs. HUTCHISON:
S. 866. A bill to amend title II of the Social Security Act to repeal
the windfall elimination provision and protect the retirement of public
servants; to the Committee on Finance.
Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the text
of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 866

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 ``Public Servant Retirement
Protection Act of 2005''.

SEC. 2. REPEAL OF CURRENT WINDFALL ELIMINATION PROVISION.

Paragraph (7) of section 215(a) of the Social Security Act
(42 U.S.C. 415(a)(7)) is repealed.

SEC. 3. REPLACEMENT OF THE WINDFALL ELIMINATION PROVISION
WITH A FORMULA EQUALIZING BENEFITS FOR CERTAIN
INDIVIDUALS WITH NON-COVERED EMPLOYMENT.

(a) Substitution of Proportional Formula for Formula Based
on Covered Portion of Periodic Benefit.--
(1) In general.--Section 215(a) of the Social Security Act
(as amended by section 2 of this Act) is amended further by
inserting after paragraph (6) the following new paragraph:
``(7)(A) In the case of an individual whose primary
insurance amount would be computed under paragraph (1) of
this subsection, who--
``(i) attains age 62 after 1985 (except where he or she
became entitled to a disability insurance benefit before 1986
and remained so entitled in any of the 12 months immediately
preceding his or her attainment of age 62), or
``(ii) would attain age 62 after 1985 and becomes eligible
for a disability insurance benefit after 1985,

and who first becomes eligible after 1985 for a monthly
periodic payment (including a

[[Page S4111]]

payment determined under subparagraph (E), but excluding (I)
a payment under the Railroad Retirement Act of 1974 or 1937,
(II) a payment by a social security system of a foreign
country based on an agreement concluded between the United
States and such foreign country pursuant to section 233, and
(III) a payment based wholly on service as a member of a
uniformed service (as defined in section 210(m)) which is
based in whole or in part upon his or her earnings for
service which did not constitute `employment' as defined in
section 210 for purposes of this title (hereafter in this
paragraph and in subsection (d)(3) referred to as `noncovered
service'), the primary insurance amount of that individual
during his or her concurrent entitlement to such monthly
periodic payment and to old-age or disability insurance
benefits shall be computed or recomputed under this
paragraph.
``(B) The primary insurance amount of an individual
described in subparagraph (A), as computed or recomputed
under this paragraph, shall be--
``(i) in the case of an individual who first performs
noncovered service after the 12th calendar month following
the date of the enactment of the Public Servant Retirement
Protection Act of 2005, the primary insurance amount
determined under subparagraph (C), or
``(ii) in the case of an individual who has performed
noncovered service during or before the 12th calendar month
following the date of the enactment of the Public Servant
Retirement Protection Act of 2005, the larger of--
``(I) the primary insurance amount determined under
subparagraph (C), or
``(II) the primary insurance amount determined under
subparagraph (E).
``(C) An individual's primary insurance amount determined
under this subparagraph shall be the product derived by
multiplying--
``(i) the individual's primary insurance amount, as
determined under paragraph (1) of this subsection and
subparagraph (D)(i) of this paragraph, by
``(ii) a fraction--
``(I) the numerator of which is the individual's average
indexed monthly earnings (determined without regard to
subparagraph (D)(i)), and
``(II) the denominator of which is an amount equal to the
individual's average indexed monthly earnings (as determined
under subparagraph (D)(i)),

rounded, if not a multiple of $0.10, to the next lower
multiple of $0.10.
``(D)(i) For purposes of determining an individual's
primary insurance amount pursuant to subparagraph (C)(i), the
individual's average indexed monthly earnings shall be
determined by treating all service performed after 1950 on
which the individual's monthly periodic payment referred to
in subparagraph (A) is based (other than noncovered service
as a member of a uniformed service (as defined in section
210(m))) as `employment' as defined in section 210 for
purposes of this title (together with all other service
performed by such individual consisting of `employment' as so
defined).
``(ii) For purposes of determining average indexed monthly
earnings as described in clause (i), the Commissioner of
Social Security shall provide by regulation for a method for
determining the amount of wages derived from service
performed after 1950 on which the individual's periodic
benefit is based and which is to be treated as `employment'
solely for purposes of clause (i). Such method shall provide
for reliance on employment records which are provided to the
Commissioner and which, as determined by the Commissioner,
constitute a reasonable basis for treatment of service as
`employment' for such purposes, together with such other
information received by the Commissioner (including such
documentary evidence of earnings derived from noncovered
service as may be provided to the Commissioner by the
individual) as the Commissioner may consider appropriate as a
reasonable basis for treatment of service as `employment' for
such purposes. The Commissioner shall enter into such
arrangements as are necessary and appropriate with the
Department of the Treasury, the Department of Labor, other
Federal agencies, and agencies of States and political
subdivisions thereof so as to secure satisfactory evidence of
earnings for noncovered service described in subparagraph (A)
for purposes of this clause and clauses (iii) and (iv). The
Secretary of the Treasury, the Secretary of Labor, and the
heads of all other Federal agencies are authorized and
directed to cooperate with the Commissioner and, to the
extent permitted by law, to provide such employment records
and other information as the Commissioner may request for
their assistance in the performance of the Commissioner's
functions under this clause and clauses (iii) and (iv).
``(iii) In any case in which satisfactory evidence of
earnings for noncovered service which was performed by an
individual during any year or portion of a year after 1977 is
not otherwise available, the Commissioner may, for purposes
of clause (ii), accept as satisfactory evidence of such
individual's earnings for such noncovered service during such
year or portion of a year reasonable extrapolations from
available information with respect to earnings for noncovered
service of such individual for periods immediately preceding
and following such year or portion of a year.
``(iv) In any case in which satisfactory evidence of
earnings for noncovered service which was performed by an
individual during any period before 1978 is not otherwise
available, the Commissioner may, for purposes of clause (ii),
accept as satisfactory evidence of such individual's earnings
for such noncovered service during such period --
``(I) the individual's written attestation of such
earnings, if such attestation is corroborated by at least 1
other individual who is knowledgeable of the relevant facts,
or
``(II) available information regarding the average earnings
for noncovered service for the same period for individuals in
similar positions in the same profession in the same State or
political subdivision thereof, or, in any case in which such
information is not available for such period, reasonable
extrapolations of average earnings for noncovered service for
such individuals from periods immediately preceding and
following such period.
``(v) In any case described in subparagraph (B)(i), if the
requirements of clause (ii) of this subparagraph are not met
(after applying clauses (iii) and (iv)), the primary
insurance amount of the individual shall be, notwithstanding
subparagraph (B)(i), the primary insurance amount computed
under subparagraph (E).
``(E)(i) For purposes of determining the primary insurance
amount under this subparagraph--
``(I) there shall first be computed an amount equal to the
individual's primary insurance amount under paragraph (1) of
this subsection, except that for purposes of such computation
the percentage of the individual's average indexed monthly
earnings established by subparagraph (A)(i) of paragraph (1)
shall be the percent specified in clause (ii), and
``(II) there shall then be computed (without regard to this
paragraph) a second amount, which shall be equal to the
individual's primary insurance amount under paragraph (1) of
this subsection, except that such second amount shall be
reduced by an amount equal to one-half of the portion of the
monthly periodic payment which is attributable to noncovered
service performed after 1956 (with such attribution being
based on the proportionate number of years of such noncovered
service) and to which the individual is entitled (or is
deemed to be entitled) for the initial month of his or her
concurrent entitlement to such monthly periodic payment and
old-age or disability insurance benefits.

An individual's primary insurance amount determined under
this subparagraph shall be the larger of the two amounts
computed under this clause (before the application of
subsection (i)).
``(ii) For purposes of clause (i), the percent specified in
this clause is--
``(I) 80.0 percent with respect to individuals who become
eligible (as defined in paragraph (3)(B)) for old-age
insurance benefits (or became eligible as so defined for
disability insurance benefits before attaining age 62) in
1986;
``(II) 70.0 percent with respect to individuals who so
become eligible in 1987;
``(III) 60.0 percent with respect to individuals who so
become eligible in 1988;
``(IV) 50.0 percent with respect to individuals who so
become eligible in 1989; and
``(V) 40.0 percent with respect to individuals who so
become eligible in 1990 or thereafter.
``(F)(i) Any periodic payment which otherwise meets the
requirements of subparagraph (A), but which is paid on other
than a monthly basis, shall be allocated on a basis
equivalent to a monthly payment (as determined by the
Commissioner of Social Security), and such equivalent monthly
payment shall constitute a monthly periodic payment for
purposes of this paragraph.
``(ii) In the case of an individual who has elected to
receive a periodic payment that has been reduced so as to
provide a survivor's benefit to any other individual, the
payment shall be deemed to be increased (for purposes of any
computation under this paragraph or subsection (d)(3)) by the
amount of such reduction.
``(iii) For purposes of this paragraph, the term `periodic
payment' includes a payment payable in a lump sum if it is a
commutation of, or a substitute for, periodic payments.
``(G)(i) This paragraph shall not apply in the case of an
individual who has 30 years or more of coverage. In the case
of an individual who has more than 20 years of coverage but
less than 30 years of coverage (as so defined), the percent
specified in the applicable subdivision of subparagraph
(E)(ii) shall (if such percent is smaller than the applicable
percent specified in the following table) be deemed to be the
applicable percent specified in the following table:

If the number of such individual's years of coverage (as so defined)
is: The applicable percent is:
29.................................................................85
28.................................................................80
27.................................................................75
26.................................................................70
25.................................................................65
24.................................................................60
23.................................................................55
22.................................................................50
21.................................................................45

``(ii) For purposes of clause (i), the term `year of
coverage' shall have the meaning provided in paragraph
(1)(C)(ii), except that the reference to `15 percent' therein
shall be deemed to be a reference to `25 percent'.
``(H) An individual's primary insurance amount determined
under this paragraph

[[Page S4112]]

shall be deemed to be computed under paragraph (1) of this
subsection for the purpose of applying other provisions of
this title.
``(I) This paragraph shall not apply in the case of an
individual whose eligibility for old-age or disability
insurance benefits is based on an agreement concluded
pursuant to section 233 or an individual who on January 1,
1984--
``(i) is an employee performing service to which social
security coverage is extended on that date solely by reason
of the amendments made by section 101 of the Social Security
Amendments of 1983; or
``(ii) is an employee of a nonprofit organization which (on
December 31, 1983) did not have in effect a waiver
certificate under section 3121(k) of the Internal Revenue
Code of 1954 and to the employees of which social security
coverage is extended on that date solely by reason of the
amendments made by section 102 of that Act, unless social
security coverage had previously extended to service
performed by such individual as an employee of that
organization under a waiver certificate which was
subsequently (prior to December 31, 1983) terminated.''.
(2) Conforming amendments.--
(A) Section 215(d)(3) of such Act (42 U.S.C. 415(d)(3)) is
amended--
(i) by striking ``subsection (a)(7)(C)'' each place it
appears and inserting ``subsection (a)(7)(F)'';
(ii) by striking ``subparagraph (E)'' and inserting
``subparagraph (I)''; and
(iii) by striking ``subparagraph (D)'' and inserting
``subparagraph (G)(i)''.
(B) Section 215(f)(9)(A) of such Act (42 U.S.C.
415(f)(9)(A)) is amended by striking ``(a)(7)(C)'' and
inserting ``(a)(7)(F)''.

SEC. 4. EFFECTIVE DATE.

The amendments made by this Act shall apply with respect to
monthly insurance benefits for months commencing with or
after the 12th calendar month following the date of the
enactment of this Act. Notwithstanding section 215(f) of the
Social Security Act, the Commissioner of Social Security
shall recompute primary insurance amounts to the extent
necessary to carry out the amendments made by this Act.
______

By Mr. SANTORUM (for himself, Mr. Corzine, Mr. Schumer, and Mr.
DeMint):
S. 868. A bill to encourage savings, promote financial literacy, and
expand opportunities for young adults by establishing KIDS Accounts; to
the Committee on Finance.
Mr. SANTORUM. Mr. President, today I am introducing ``The America
Saving for Personal Investment, Retirement, and Education (ASPIRE) Act
of 2005'' along with Senator Corzine, Senator Schumer and Senator
DeMint. A bipartisan group of members is introducing companion
legislation in the House of Representatives. The bill creates a Kids
Investment and Development Savings (KIDS) Account for every child at
birth and creates a new opportunity for the children of low-income
Americans to build assets and wealth.
This country has seen a growing number of Americans investing in the
stock market and has witnessed an historic boom in homeownership, which
has increased to record high levels. However, this growth in assets has
not reached every American. While many middle- and upper-income
families have increased their assets in the past decade, many low-
income families have not had the same financial success. A recent study
conducted by the Federal Reserve found that the median net worth of
families in the bottom 20 percent of the nation's income level was a
mere $7,900--an amount that is far too low to ensure a comfortable
economic future for their family. This challenge needs to be addressed
to ensure that lower income families have a significant opportunity to
accrue wealth and expand opportunities for their families.
Under this legislation, KIDS Accounts would be created after a child
is born and a Social Security number issued. A one-time $500 deposit
would automatically be placed into a KIDS account. Children from
households below the national median income would receive an additional
deposit of $500 at birth and would be eligible to receive dollar-for-
dollar matching funds up to $500 per year for voluntary contributions
to the account, which cannot exceed $1,000 per year. All funds grow
tax-free. Access to the account prior to age 18 would not be permitted,
but kids--in conjunction with their parents--would participate in
investment decisions and watch their money grow. When the young person
turns 18, he or she can use the accrued money for asset building
purposes such as education, homeownership, and retirement planning.
Accrued funds could also be rolled over into a Roth IRA or 529 post-
secondary education account to expand investment options.
I would like to highlight what I view as the two major benefits of
this legislation. The first, and most apparent, is that this bill will
help give younger individuals, especially low-income Americans, a sound
financial start to begin their adult life. For example, a typical low-
income family making modest but steady contributions can create a KIDS
Account worth over $20,000 in 18 years. Second, and perhaps more
important, is that KIDS Accounts create opportunities for all Americans
to become more financially literate. The account holders and their
guardians will choose from a list of possible investment funds and will
be able to watch their investment grow over time. All Americans will
have the opportunity to see firsthand that a smart investment now can
grow over time into considerable wealth.
I believe that this bill could be a significant and strategic step
forward in the effort to expand asset opportunities to all Americans,
and lower-income Americans in particular. I encourage my colleagues to
support this bipartisan effort.
Mr. CORZINE. Mr. President, I am pleased to join with Senators
Santorum, Schumer, and DeMint in introducing the ASPIRE Act of 2005,
which would expand opportunities for young adults, encourage savings,
and promote financial literacy, by establishing investment accounts,
known as KIDS Accounts, for every child in America.
ASPIRE is based largely on a similar initiative in the United Kingdom
developed by Prime Minister Tony Blair. Yet despite its British roots,
the proposal is based on the most basic of American values. By giving
every young person resources with which to get a start in life, ASPIRE
will help realize the American ideal of equal opportunity. And by
making every young person an investor, the proposal would encourage
self reliance, promote savings, and give every family a personal stake
in America's economy.
Under ASPIRE, an investment account would be established for every
American child upon receiving a Social Security number. Each account
would be funded initially with $500. Those with incomes less than the
national median would receive an additional contribution of up to $500,
and would receive a one-for-one government match for their first $500
of private contributions each year. Up to $1000 of after-tax private
contributions would be allowed annually from any source.
Funds would accumulate tax-free and could not be withdrawn for
purposes other than higher education until the child reaches the age of
18. At that point, funds could be withdrawn, according to Roth IRA
guidelines, either for higher education or for the purchase of a home.
Funds left unspent would be saved for retirement under rules similar to
those that apply to Roth IRAs or rolled over to a 529 plan for
educational expenses. Once the account holder reaches the age of 30,
the initial $500 government contribution would have to be repaid,
though exceptions could be made to avoid undue hardship.
Accounts initially would be held by a government entity that would be
based on the successful Thrift Savings Plan, or TSP, which now manages
retirement accounts for Federal employees with relatively low
administrative costs. As with the TSP, investors would have a range of
investment options, such as a Government securities fund, a fixed
income investment fund, and a common stock fund. However, once an
account holder reaches the age of 18, funds could be rolled over to a
KIDS Account held at a private institution.
It is difficult to understate the potential impact of giving every
American child a funded investment account of their own. For the first
time, every child will have a meaningful incentive to learn the basics
of investing, because they will have real resources to invest. For the
first time, even families with modest incomes will have a significant
incentive to save, to earn the government match. And, perhaps most
fundamentally, for the first time, every American child will grow up
knowing that when they reach adulthood, they will have the ability to
invest in themselves and in their own education. In short, every child
will have hope for a real future.
Considering its potentially significant social and individual
benefits, the ASPIRE Act requires an investment that is relatively
modest. It has been

[[Page S4113]]

estimated that, when it becomes effective, the bill's cost would
represent only about one tenth of one percent of the Federal budget.
Yet the proposal differs from other proposals for new spending or tax
cuts because, for the first 18 years, it would not reduce overall
national savings at all. In that period, virtually every dollar of
outlays would be saved, and would be available to expand long-term
economic growth. In fact, the proposal would lead to an increase in
national savings because of its incentives for families to save more.
This would help create the economic growth we need to handle the added
burdens associated with the impending retirement of the baby boomers.
Senator Santorum and I are excited to be joined this year by Senators
Schumer and DeMint as sponsors of ASPIRE, along with sponsors of
identical legislation in the House, Congressmen Harold Ford, Patrick
Kennedy, Thomas Petri and Phil English. In that process, we have been
assisted by a broad range of experts and other interested parties, for
which I am very grateful. However, I want to especially thank Ray
Boshara and Reid Cramer of the New America Foundation, who have been
extraordinarily helpful in the development of the legislation, and who
have taken the lead in efforts to promote this and other asset building
initiatives.
Mr. President, the ASPIRE Act is a big new idea based on simple, old
time American values. It already enjoys strong bipartisan support from
conservatives and progressives, alike, in both houses of Congress. I
look forward to working with colleagues on both sides of the aisle to
secure its prompt enactment.
______

By Mr. FEINGOLD:
S. 869. A bill to amend the Agricultural Adjustment Act to prohibit
the Secretary of Agriculture from basing minimum prices for class 1
milk on the distance or transportation costs from any location that is
not within a marketing area, except under certain circumstances, and
for other purposes; to the Committee on Agriculture, Nutrition, and
Forestry.
Mr. FEINGOLD. Mr. President, today I am offering a measure which
could serve as a first step towards eliminating the inequities borne by
the dairy farmers of Wisconsin and the upper Midwest under the Federal
Milk Marketing Order system.
The Federal Milk Marketing Order system, created nearly 60 years ago,
establishes minimum prices for milk paid to producers throughout
various marketing areas in the U.S. For sixty years, this system has
discriminated against producers in the Upper Midwest by awarding a
higher price to dairy farmers in proportion to the distance of their
farms from areas of high milk production, which historically have been
the region around Eau Claire, WI.
My legislation is very simple. It identifies the single most harmful
and unjust feature of the current system, and corrects it. Under the
current archaic law, the price farmers receive for fluid milk is higher
the further they are from the Eau Claire region of the Upper Midwest.
This provision originally was intended to guarantee the supply of fresh
milk from the high production areas to distant markets in an age of
difficult transportation and limited refrigeration. But the situation
has long since changed and the provision persists at the detriment of
the Wisconsin farmers even though most local milk markets do not
receive any milk from Wisconsin.
The bill I introduce today would prohibit the Secretary of
Agriculture from using distance or transportation costs from any
location as the basis for pricing milk, unless significant quantities
of milk are actually transported from that location into the recipient
market. The Secretary will have to comply with the statutory
requirement that supply and demand factors be considered as specified
in the Agricultural Marketing Agreement Act when setting milk prices in
marketing orders. The fact remains that single-basing-point pricing
simply cannot be justified based on supply and demand for milk both in
local and national markets and the changing pattern of U.S. milk
production.
This bill also requires the Secretary to report to Congress on
specifically which criteria are used to set milk prices. Finally, the
Secretary will have to certify to Congress that the criteria used by
the Department do not in any way attempt to circumvent the prohibition
on using distance or transportation cost as basis for pricing milk.
This one change is vitally important to Upper Midwest producers,
because the current system has penalized them for many years. The
current system is a double whammy to Upper Midwest dairy farmers--it
both provides disparate profits for producers in other parts of the
country and creates artificial economic incentives for milk production.
As a result, Wisconsin producers have seen national surpluses rise, and
milk prices fall. Rather than providing adequate supplies of fluid
milk, the prices often lead to excess production.
The prices have provided production incentives beyond those needed to
ensure a local supply of fluid milk in some regions, leading to an
increase in manufactured products in those marketing orders. Those
manufactured products directly compete with Wisconsin's processed
products, eroding our markets and driving national prices down.
The perverse nature of this system is further illustrated by the fact
that since 1995, some regions of the U.S., notably the central states
and the Southwest, are producing so much milk that they are actually
shipping fluid milk north to the Upper Midwest. The high fluid milk
prices have generated so much excess production, that these markets
distant from Eau Claire are now encroaching upon not only our
manufactured markets, but also our markets for fluid milk, further
eroding prices in Wisconsin.
The market-distorting effects of the fluid price differentials in
federal orders are shown by a previous Congressional Budget Office
analysis that estimated that the elimination of orders would save $669
million over five years. Government outlays would fall, CBO concluded,
because production would fall in response to lower milk prices and
there would be fewer government purchases of surplus milk. The regions
that would gain and lose in this scenario illustrate the discrimination
inherent to the current system. Economic analyses showed that farm
revenues in a market undisturbed by Federal orders would actually
increase in the Upper Midwest and fall in most other milk-producing
regions.
While this system has been around since 1937, the practice of basing
fluid milk price differentials on the distance from Eau Claire was
formalized in the 1960s, when the Upper Midwest arguably was the
primary reserve for additional supplies of milk. The idea was to
encourage local supplies of fluid milk in areas of the country that did
not traditionally produce enough fluid milk to meet their own needs.
That is no longer the case. The Upper Midwest is no longer the
primary source of reserve supplies of milk. Unfortunately, the prices
didn't adjust with changing economic conditions, most notably the shift
of the dairy industry away from the Upper Midwest and towards the
Southwest, and specifically California, which now leads the nation in
milk production.
The result of this antiquated system has been a decline in the Upper
Midwest dairy industry, not because it can't produce a product that can
compete in the marketplace, but because the system discriminates
against it. Over the past few years Wisconsin has lost dairy farmers at
a rate of more than 5 per day. The Upper Midwest, with the lowest fluid
milk prices, is shrinking as a dairy region despite the dairy-friendly
climate of the region. Some other regions with higher fluid milk prices
are growing rapidly.
In a free market with a level playing field, these shifts in
production might be fair. But in a market where the government is
setting the prices and providing that artificial advantage to regions
outside the Upper Midwest, the current system is unconscionable.
I urge my colleagues to do the right thing and bring reform to this
outdated system and work to eliminate the inequities in the current
milk marketing order pricing system.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

[[Page S4114]]

S. 869

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 ``Federal Milk Marketing
Reform Act of 2005''.

SEC. 2. LOCATION ADJUSTMENTS FOR MINIMUM PRICES FOR CLASS I
MILK.

Section 8c(5) of the Agricultural Adjustment Act (7 U.S.C.
608c(5)), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is amended--
(1) in paragraph (A)--
(A) in clause (3) of the second sentence, by inserting
after ``the locations'' the following: ``within a marketing
area subject to the order''; and
(B) by striking the last 2 sentences and inserting the
following: ``Notwithstanding subsection (18) or any other
provision of law, when fixing minimum prices for milk of the
highest use classification in a marketing area subject to an
order under this subsection, the Secretary may not, directly
or indirectly, base the prices on the distance from, or all
or part of the costs incurred to transport milk to or from,
any location that is not within the marketing area subject to
the order, unless milk from the location constitutes at least
50 percent of the total supply of milk of the highest use
classification in the marketing area. The Secretary shall
report to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate on the criteria that are used as
the basis for the minimum prices referred to in the preceding
sentence, including a certification that the minimum prices
are made in accordance with the preceding sentence.''; and
(2) in paragraph (B)(c), by inserting after ``the
locations'' the following: ``within a marketing area subject
to the order''.
______

By Mr. DURBIN:
S. 873. A bill to amend title XVIII of the Social Security Act to
deliver a meaningful benefit and lower prescription drug prices under
the medicare program; read the first time.
Mr. DORGAN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 873

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 ``Medicare Prescription Drug
Savings and Choice Act of 2005''.

SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRESCRIPTION DRUG
PLAN OPTION.

(a) In General.--Subpart 2 of part D of the Social Security
Act is amended by inserting after section 1860D-11 the
following new section:

``MEDICARE OPERATED PRESCRIPTION DRUG PLAN OPTION

``Sec. 1860D-11A. (a) In General.--Notwithstanding any
other provision of this part, for each year (beginning with
2006), in addition to any plans offered under section 1860D-
11, the Secretary shall offer one or more medicare operated
prescription drug plans (as defined in subsection (c)) with a
service area that consists of the entire United States and
shall enter into negotiations with pharmaceutical
manufacturers to reduce the purchase cost of covered part D
drugs for eligible part D individuals in accordance with
subsection (b).
``(b) Negotiations.--Notwithstanding section 1860D-11(i),
for purposes of offering a medicare operated prescription
drug plan under this section, the Secretary shall negotiate
with pharmaceutical manufacturers with respect to the
purchase price of covered part D drugs and shall encourage
the use of more affordable therapeutic equivalents to the
extent such practices do not override medical necessity as
determined by the prescribing physician. To the extent
practicable and consistent with the previous sentence, the
Secretary shall implement strategies similar to those used by
other Federal purchasers of prescription drugs, and other
strategies, to reduce the purchase cost of covered part D
drugs.
``(c) Medicare Operated Prescription Drug Plan Defined.--
For purposes of this part, the term `medicare operated
prescription drug plan' means a prescription drug plan that
offers qualified prescription drug coverage and access to
negotiated prices described in section 1860D-2(a)(1)(A). Such
a plan may offer supplemental prescription drug coverage in
the same manner as other qualified prescription drug coverage
offered by other prescription drug plans.
``(d) Monthly Beneficiary Premium.--
``(1) Qualified prescription drug coverage.--The monthly
beneficiary premium for qualified prescription drug coverage
and access to negotiated prices described in section 1860D-
2(a)(1)(A) to be charged under a medicare operated
prescription drug plan shall be uniform nationally. Such
premium for months in 2006 shall be $35 and for months in
succeeding years shall be based on the average monthly per
capita actuarial cost of offering the medicare operated
prescription drug plan for the year involved, including
administrative expenses.
``(2) Supplemental prescription drug coverage.--Insofar as
a medicare operated prescription drug plan offers
supplemental prescription drug coverage, the Secretary may
adjust the amount of the premium charged under paragraph (1).
``(3) Requirement for at least one plan with a $35 premium
in 2006.--The Secretary shall ensure that at least one
medicare operated prescription drug plan offered in 2006 has
a monthly premium of $35.''.
(b) Conforming Amendments.--
(1) Section 1860D-3(a) of the Social Security Act (42
U.S.C. 1395w-103(a)) is amended by adding at the end the
following new paragraph:
``(4) Availability of the medicare operated prescription
drug plan.--
``(A) In general.--A medicare operated prescription drug
plan (as defined in section 1860D-11A(c)) shall be offered
nationally in accordance with section 1860D-11A.
``(B) Relationship to other plans.--
``(i) In general.--Subject to clause (ii), a medicare
operated prescription drug plan shall be offered in addition
to any qualifying plan or fallback prescription drug plan
offered in a PDP region and shall not be considered to be
such a plan for purposes of meeting the requirements of this
subsection.
``(ii) Designation as a fallback plan.--Notwithstanding any
other provision of this part, the Secretary may designate the
medicare operated prescription drug plan as the fallback
prescription drug plan for any fallback service area (as
defined in section 1860D-11(g)(3)) determined to be
appropriate by the Secretary.''.
(2) Section 1860D-13(c)(3) of such Act (42 U.S.C. 1395w-
113(c)(3)) is amended--
(A) in the heading, by inserting ``and medicare operated
prescription drug plans'' after ``Fallback plans''; and
(B) by inserting ``or a medicare operated prescription drug
plan'' after ``a fallback prescription drug plan''.
(3) Section 1860D-16(b)(1) of such Act (42 U.S.C. 1395w-
116(b)(1)) is amended--
(A) in subparagraph (C), by striking ``and'' after the
semicolon at the end;
(B) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new subparagraph:
``(E) payments for expenses incurred with respect to the
operation of medicare operated prescription drug plans under
section 1860D-11A.''.
(4) Section 1860D-41(a) of such Act (42 U.S.C. 141(a)) is
amended by adding at the end the following new paragraph:
``(19) Medicare operated prescription drug plan.--The term
`medicare operated prescription drug plan' has the meaning
given such term in section 1860D-11A(c).''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of section
101 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173; 117 Stat.
2071).
______

By Mr. DURBIN (for himself and Mrs. Lincoln):
S. 874. A bill to establish a national health program administered by
the Office of Personnel Management to offer health benefits plans to
individuals who are not Federal employees, and for other purposes; read
the first time.
Mr. DURBIN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 874

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 Employers Health
Benefits Program Act of 2005''.

SEC. 2. DEFINITIONS.

(a) In General.--In this Act, the terms ``member of
family'', ``health benefits plan'', ``carrier'', ``employee
organizations'', and ``dependent'' have the meanings given
such terms in section 8901 of title 5, United States Code.
(b) Other Terms.--In this Act:
(1) Employee.--The term ``employee'' has the meaning given
such term under section 3(6) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(6)). Such term
shall not include an employee of the Federal Government.
(2) Employer.--The term ``employer'' has the meaning given
such term under section 3(5) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(5)), except that
such term shall include only employers who employed an
average of at least 1 but not more than 100 employees on
business days during the year preceding the date of
application. Such term shall not include the Federal
Government.
(3) Health status-related factor.--The term ``health
status-related factor'' has the meaning given such term in
section 2791(d)(9) of the Public Health Service Act (42
U.S.C. 300gg-91(d)(9)).
(4) Office.--The term ``Office'' means the Office of
Personnel Management.
(5) Participating employer.--The term ``participating
employer'' means an employer that--

[[Page S4115]]

(A) elects to provide health insurance coverage under this
Act to its employees; and
(B) is not offering other comprehensive health insurance
coverage to such employees.
(c) Application of Certain Rules in Determination of
Employer Size.--For purposes of subsection (b)(2):
(1) Application of aggregation rule for employers.--All
persons treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986 shall be treated as 1 employer.
(2) Employers not in existence in preceding year.--In the
case of an employer which was not in existence for the full
year prior to the date on which the employer applies to
participate, the determination of whether such employer meets
the requirements of subsection (b)(2) shall be based on the
average number of employees that it is reasonably expected
such employer will employ on business days in the employer's
first full year.
(3) Predecessors.--Any reference in this subsection to an
employer shall include a reference to any predecessor of such
employer.
(d) Waiver and Continuation of Participation.--
(1) Waiver.--The Office may waive the limitations relating
to the size of an employer which may participate in the
health insurance program established under this Act on a case
by case basis if the Office determines that such employer
makes a compelling case for such a waiver. In making
determinations under this paragraph, the Office may consider
the effects of the employment of temporary and seasonal
workers and other factors.
(2) Continuation of participation.--An employer
participating in the program under this Act that experiences
an increase in the number of employees so that such employer
has in excess of 100 employees, may not be excluded from
participation solely as a result of such increase in
employees.

SEC. 3. HEALTH INSURANCE COVERAGE FOR NON-FEDERAL EMPLOYEES.

(a) Administration.--The Office shall administer a health
insurance program for non-Federal employees and employers in
accordance with this Act.
(b) Regulations.--Except as provided under this Act, the
Office shall prescribe regulations to apply the provisions of
chapter 89 of title 5, United States Code, to the greatest
extent practicable to participating carriers, employers, and
employees covered under this Act.
(c) Limitations.--In no event shall the enactment of this
Act result in--
(1) any increase in the level of individual or Federal
Government contributions required under chapter 89 of title
5, United States Code, including copayments or deductibles;
(2) any decrease in the types of benefits offered under
such chapter 89; or
(3) any other change that would adversely affect the
coverage afforded under such chapter 89 to employees and
annuitants and members of family under that chapter.
(d) Enrollment.--The Office shall develop methods to
facilitate enrollment under this Act, including the use of
the Internet.
(e) Contracts for Administration.--The Office may enter
into contracts for the performance of appropriate
administrative functions under this Act.
(f) Separate Risk Pool.--In the administration of this Act,
the Office shall ensure that covered employees under this Act
are in a risk pool that is separate from the risk pool
maintained for covered individuals under chapter 89 of title
5, United States Code.
(g) Rule of Construction.--Nothing in this Act shall be
construed to require a carrier that is participating in the
program under chapter 89 of title 5, United States Code, to
provide health benefits plan coverage under this Act.

SEC. 4. CONTRACT REQUIREMENT.

(a) In General.--The Office may enter into contracts with
qualified carriers offering health benefits plans of the type
described in section 8903 or 8903a of title 5, United States
Code, without regard to section 5 of title 41, United States
Code, or other statutes requiring competitive bidding, to
provide health insurance coverage to employees of
participating employers under this Act. Each contract shall
be for a uniform term of at least 1 year, but may be made
automatically renewable from term to term in the absence of
notice of termination by either party. In entering into such
contracts, the Office shall ensure that health benefits
coverage is provided for individuals only, married
individuals without children, and families.
(b) Eligibility.--A carrier shall be eligible to enter into
a contract under subsection (a) if such carrier--
(1) is licensed to offer health benefits plan coverage in
each State in which the plan is offered; and
(2) meets such other requirements as determined appropriate
by the Office.
(c) Statement of Benefits.--
(1) In general.--Each contract under this Act shall contain
a detailed statement of benefits offered and shall include
information concerning such maximums, limitations,
exclusions, and other definitions of benefits as the Office
considers necessary or desirable.
(2) Nationwide plan.--The Office shall develop a benefit
package that shall be offered in the case of a contract for a
health benefit plan that is to be offered on a nationwide
basis.
(d) Standards.--The minimum standards prescribed for health
benefits plans under section 8902(e) of title 5, United
States Code, and for carriers offering plans, shall apply to
plans and carriers under this Act. Approval of a plan may be
withdrawn by the Office only after notice and opportunity for
hearing to the carrier concerned without regard to subchapter
II of chapter 5 and chapter 7 of title 5, United States Code.
(e) Conversion.--
(1) In general.--A contract may not be made or a plan
approved under this section if the carrier under such
contract or plan does not offer to each enrollee whose
enrollment in the plan is ended, except by a cancellation of
enrollment, a temporary extension of coverage during which
the individual may exercise the option to convert, without
evidence of good health, to a nongroup contract providing
health benefits. An enrollee who exercises this option shall
pay the full periodic charges of the nongroup contract.
(2) Noncancellable.--The benefits and coverage made
available under paragraph (1) may not be canceled by the
carrier except for fraud, over-insurance, or nonpayment of
periodic charges.
(f) Rates.--Rates charged under health benefits plans under
this Act shall reasonably and equitably reflect the cost of
the benefits provided. Such rates shall be determined on a
basis which, in the judgment of the Office, is consistent
with the lowest schedule of basic rates generally charged for
new group health benefits plans issued to large employers.
The rates determined for the first contract term shall be
continued for later contract terms, except that they may be
readjusted for any later term, based on past experience and
benefit adjustments under the later contract. Any
readjustment in rates shall be made in advance of the
contract term in which they will apply and on a basis which,
in the judgment of the Office, is consistent with the general
practice of carriers which issue group health benefits plans
to large employers. Rates charged for coverage under this Act
shall not vary based on health-status related factors.
(g) Requirement of Payment for or Provision of Health
Service.--Each contract entered into under this Act shall
require the carrier to agree to pay for or provide a health
service or supply in an individual case if the Office finds
that the employee, annuitant, family member, former spouse,
or person having continued coverage under section 8905a of
title 5, United States Code, is entitled thereto under the
terms of the contract.

SEC. 5. ELIGIBILITY.

An individual shall be eligible to enroll in a plan under
this Act if such individual--
(1) is an employee of an employer described in section
2(b)(2), or is a self employed individual as defined in
section 401(c)(1)(B) of the Internal Revenue Code of 1986;
and
(2) is not otherwise enrolled or eligible for enrollment in
a plan under chapter 89 of title 5, United States Code.

SEC. 6. ALTERNATIVE CONDITIONS TO FEDERAL EMPLOYEE PLANS.

(a) Treatment of Employee.--For purposes of enrollment in a
health benefits plan under this Act, an individual who had
coverage under a health insurance plan and is not a qualified
beneficiary as defined under section 4980B(g)(1) of the
Internal Revenue Code of 1986 shall be treated in a similar
manner as an individual who begins employment as an employee
under chapter 89 of title 5, United States Code.
(b) Preexisting Condition Exclusions.--
(1) In general.--Each contract under this Act may include a
preexisting condition exclusion as defined under section
9801(b)(1) of the Internal Revenue Code of 1986.
(2) Exclusion period.--
(A) In general.--A preexisting condition exclusion under
this subsection shall provide for coverage of a preexisting
condition to begin not later than 6 months after the date on
which the coverage of the individual under a health benefits
plan commences, reduced by 1 month for each month that the
individual was covered under a health insurance plan
immediately preceding the date the individual submitted an
application for coverage under this Act.
(B) Lapse in coverage.--For purposes of this paragraph, a
lapse in coverage of not more than 63 days immediately
preceding the date of the submission of an application for
coverage under this Act shall not be considered a lapse in
continuous coverage.
(c) Rates and Premiums.--
(1) In general.--Rates charged and premiums paid for a
health benefits plan under this Act--
(A) shall be determined in accordance with this subsection;
(B) may be annually adjusted and differ from such rates
charged and premiums paid for the same health benefits plan
offered under chapter 89 of title 5, United States Code;
(C) shall be negotiated in the same manner as rates and
premiums are negotiated under such chapter 89; and
(D) shall be adjusted to cover the administrative costs of
the Office under this Act.
(2) Determinations.--In determining rates and premiums
under this Act, the following provisions shall apply:
(A) In general.--A carrier that enters into a contract
under this Act shall determine that amount of premiums to
assess for coverage under a health benefits plan based on an
community rate that may be annually adjusted--

[[Page S4116]]

(i) for the geographic area involved if the adjustment is
based on geographical divisions that are not smaller than a
metropolitan statistical area;
(ii) based on whether such coverage is for an individual, a
married individual with no children, or a family; and
(iii) based on the age of covered individuals (subject to
subparagraph (B)).
(B) Age adjustments.--
(i) In general.--With respect to subparagraph (A)(iii), in
making adjustments based on age, a carrier may not use age
brackets in increments that are smaller than 5 years, which
begin not earlier than age 30 and end not later than age 65.
(ii) Age 65 and older.--With respect to subparagraph
(A)(iii), a carrier may develop separate rates for covered
individuals who are 65 years of age or older for whom
medicare is the primary payor for health benefits coverage
which is not covered under medicare.
(iii) Limitation.--In making an adjustment to premium rates
under subparagraph (A)(iii), a carrier shall ensure that such
adjustment does not result in an average premium rate
applicable to enrollees under the plan involved that is more
than 200 percent of the lowest rate for all age groups.
(d) Termination and Reenrollment.--If an individual who is
enrolled in a health benefits plan under this Act terminates
the enrollment, the individual shall not be eligible for
reenrollment until the first open enrollment period following
the expiration of 6 months after the date of such
termination.
(e) Preemption.--
(1) Health insurance or plans.--
(A) In general.--Except as provided in subparagraph (B),
the terms of any contract entered into under this Act that
relate to the nature, provision, or extent of coverage or
benefits shall supersede and preempt any State or local law,
or any regulation issued thereunder, which relates to the
nature, provision, or extent of coverage or benefits.
(B) Local plans.--With respect to a contract entered into
under this Act under which a carrier will offer health
benefits plan coverage in a limited geographic area,
subparagraph (A) shall not apply to the extent that a
mandated benefit law is in effect in the State in which the
plan is offered. Such mandated benefit law shall continue to
apply to such health benefits plan.
(C) Rating rules.--The rating requirements under subsection
(c)(2) shall supercede State rating rules for qualified plans
under this Act.
(2) Limitation.--Nothing in this subsection shall be
construed to preempt--
(A) any State or local law or regulation except those laws
and regulations described in subparagraphs (A) and (C) of
paragraph (1); and
(B) State network adequacy laws.
(f) Rule of Construction.--Nothing in this Act shall be
construed to limit the application of the service-charge
system used by the Office for determining profits for
participating carriers under chapter 89 of title 5, United
States Code.

SEC. 7. ENCOURAGING PARTICIPATION BY CARRIERS THROUGH
ADJUSTMENTS FOR RISK.

(a) Application of Risk Corridors.--
(1) In general.--This section shall only apply to carriers
with respect to health benefits plans offered under this Act
during any of calendar years 2006 through 2010.
(2) Notification of costs under the plan.--In the case of a
carrier that offers a health benefits plan under this Act in
any of calendar years 2006 through 2010, the carrier shall
notify the Office, before such date in the succeeding year as
the Office specifies, of the total amount of costs incurred
in providing benefits under the health benefits plan for the
year involved and the portion of such costs that is
attributable to administrative expenses.
(3) Allowable costs defined.--For purposes of this section,
the term ``allowable costs'' means, with respect to a health
benefits plan offered by a carrier under this Act, for a
year, the total amount of costs described in paragraph (2)
for the plan and year, reduced by the portion of such costs
attributable to administrative expenses incurred in providing
the benefits described in such paragraph.
(b) Adjustment of Payment.--
(1) No adjustment if allowable costs within 3 percent of
target amount.--If the allowable costs for the carrier with
respect to the health benefits plan involved for a calendar
year are at least 97 percent, but do not exceed 103 percent,
of the target amount for the plan and year involved, there
shall be no payment adjustment under this section for the
plan and year.
(2) Increase in payment if allowable costs above 103
percent of target amount.--
(A) Costs between 103 and 108 percent of target amount.--If
the allowable costs for the carrier with respect to the
health benefits plan involved for the year are greater than
103 percent, but not greater than 108 percent, of the target
amount for the plan and year, the Office shall reimburse the
carrier for such excess costs through payment to the carrier
of an amount equal to 75 percent of the difference between
such allowable costs and 103 percent of such target amount.
(B) Costs above 108 percent of target amount.--If the
allowable costs for the carrier with respect to the health
benefits plan involved for the year are greater than 108
percent of the target amount for the plan and year, the
Office shall reimburse the carrier for such excess costs
through payment to the carrier in an amount equal to the sum
of--
(i) 3.75 percent of such target amount; and
(ii) 90 percent of the difference between such allowable
costs and 108 percent of such target amount.
(3) Reduction in payment if allowable costs below 97
percent of target amount.--
(A) Costs between 92 and 97 percent of target amount.--If
the allowable costs for the carrier with respect to the
health benefits plan involved for the year are less than 97
percent, but greater than or equal to 92 percent, of the
target amount for the plan and year, the carrier shall be
required to pay into the contingency reserve fund maintained
under section 8909(b)(2) of title 5, United States Code, an
amount equal to 75 percent of the difference between 97
percent of the target amount and such allowable costs.
(B) Costs below 92 percent of target amount.--If the
allowable costs for the carrier with respect to the health
benefits plan involved for the year are less than 92 percent
of the target amount for the plan and year, the carrier shall
be required to pay into the stabilization fund under section
8909(b)(2) of title 5, United States Code, an amount equal to
the sum of--
(i) 3.75 percent of such target amount; and
(ii) 90 percent of the difference between 92 percent of
such target amount and such allowable costs.
(4) Target amount described.--
(A) In general.--For purposes of this subsection, the term
``target amount'' means, with respect to a health benefits
plan offered by a carrier under this Act in any of calendar
years 2006 through 2010, an amount equal to--
(i) the total of the monthly premiums estimated by the
carrier and approved by the Office to be paid for enrollees
in the plan under this Act for the calendar year involved;
reduced by
(ii) the amount of administrative expenses that the carrier
estimates, and the Office approves, will be incurred by the
carrier with respect to the plan for such calendar year.
(B) Submission of target amount.--Not later than December
31, 2005, and each December 31 thereafter through calendar
year 2009, a carrier shall submit to the Office a description
of the target amount for such carrier with respect to health
benefits plans provided by the carrier under this Act.
(c) Disclosure of Information.--
(1) In general.--Each contract under this Act shall
provide--
(A) that a carrier offering a health benefits plan under
this Act shall provide the Office with such information as
the Office determines is necessary to carry out this
subsection including the notification of costs under
subsection (a)(2) and the target amount under subsection
(b)(4)(B); and
(B) that the Office has the right to inspect and audit any
books and records of the organization that pertain to the
information regarding costs provided to the Office under such
subsections.
(2) Restriction on use of information.--Information
disclosed or obtained pursuant to the provisions of this
subsection may be used by officers, employees, and
contractors of the Office only for the purposes of, and to
the extent necessary in, carrying out this section.

SEC. 8. ENCOURAGING PARTICIPATION BY CARRIERS THROUGH
REINSURANCE.

(a) Establishment.--The Office shall establish a
reinsurance fund to provide payments to carriers that
experience one or more catastrophic claims during a year for
health benefits provided to individuals enrolled in a health
benefits plan under this Act.
(b) Eligibility for Payments.--To be eligible for a payment
from the reinsurance fund for a plan year, a carrier under
this Act shall submit to the Office an application that
contains--
(1) a certification by the carrier that the carrier paid
for at least one episode of care during the year for covered
health benefits for an individual in an amount that is in
excess of $50,000; and
(2) such other information determined appropriate by the
Office.
(c) Payment.--
(1) In general.--The amount of a payment from the
reinsurance fund to a carrier under this section for a
catastrophic episode of care shall be determined by the
Office but shall not exceed an amount equal to 80 percent of
the applicable catastrophic claim amount.
(2) Applicable catastrophic claim amount.--For purposes of
paragraph (1), the applicable catastrophic episode of care
amount shall be equal to the difference between--
(A) the amount of the catastrophic claim; and
(B) $50,000.
(3) Limitation.--In determining the amount of a payment
under paragraph (1), if the amount of the catastrophic claim
exceeds the amount that would be paid for the healthcare
items or services involved under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.), the Office shall use
the amount that would be paid under such title XVIII for
purposes of paragraph (2)(A).
(d) Definition.--In this section, the term ``catastrophic
claim'' means a claim submitted to a carrier, by or on behalf
of an enrollee in a health benefits plan under this Act, that
is in excess of $50,000.

[[Page S4117]]

SEC. 9. CONTINGENCY RESERVE FUND.

Beginning on October 1, 2010, the Office may use amounts
appropriated under section 14(a) that remain unobligated to
establish a contingency reserve fund to provide assistance to
carriers offering health benefits plans under this Act that
experience unanticipated financial hardships (as determined
by the Office).

SEC. 10. EMPLOYER PARTICIPATION.

(a) Regulations.--The Office shall prescribe regulations
providing for employer participation under this Act,
including the offering of health benefits plans under this
Act to employees.
(b) Enrollment and Offering of Other Coverage.--
(1) Enrollment.--A participating employer shall ensure that
each eligible employee has an opportunity to enroll in a plan
under this Act.
(2) Prohibition on offering other comprehensive health
benefit coverage.--A participating employer may not offer a
health insurance plan providing comprehensive health benefit
coverage to employees other than a health benefits plan
that--
(A) meets the requirements described in section 4(a); and
(B) is offered only through the enrollment process
established by the Office under section 3.
(3) Offer of supplemental coverage options.--
(A) In general.--A participating employer may offer
supplementary coverage options to employees.
(B) Definition.--In subparagraph (A), the term
``supplementary coverage'' means benefits described as
``excepted benefits'' under section 2791(c) of the Public
Health Service Act (42 U.S.C. 300gg-91(c)).
(c) Rule of Construction.--Except as provided in section
15, nothing in this Act shall be construed to require that an
employer make premium contributions on behalf of employees.

SEC. 11. ADMINISTRATION THROUGH REGIONAL ADMINISTRATIVE
ENTITIES.

(a) In General.--In order to provide for the administration
of the benefits under this Act with maximum efficiency and
convenience for participating employers and health care
providers and other individuals and entities providing
services to such employers, the Office is authorized to enter
into contracts with eligible entities to perform, on a
regional basis, one or more of the following:
(1) Collect and maintain all information relating to
individuals, families, and employers participating in the
program under this Act in the region served.
(2) Receive, disburse, and account for payments of premiums
to participating employers by individuals in the region
served, and for payments by participating employers to
carriers.
(3) Serve as a channel of communication between carriers,
participating employers, and individuals relating to the
administration of this Act.
(4) Otherwise carry out such activities for the
administration of this Act, in such manner, as may be
provided for in the contract entered into under this section.
(5) The processing of grievances and appeals.
(b) Application.--To be eligible to receive a contract
under subsection (a), an entity shall prepare and submit to
the Office an application at such time, in such manner, and
containing such information as the Office may require.
(c) Process.--
(1) Competitive bidding.--All contracts under this section
shall be awarded through a competitive bidding process on a
bi-annual basis.
(2) Requirement.--No contract shall be entered into with
any entity under this section unless the Office finds that
such entity will perform its obligations under the contract
efficiently and effectively and will meet such requirements
as to financial responsibility, legal authority, and other
matters as the Office finds pertinent.
(3) Publication of standards and criteria.--The Office
shall publish in the Federal Register standards and criteria
for the efficient and effective performance of contract
obligations under this section, and opportunity shall be
provided for public comment prior to implementation. In
establishing such standards and criteria, the Office shall
provide for a system to measure an entity's performance of
responsibilities.
(4) Term.--Each contract under this section shall be for a
term of at least 1 year, and may be made automatically
renewable from term to term in the absence of notice by
either party of intention to terminate at the end of the
current term, except that the Office may terminate any such
contract at any time (after such reasonable notice and
opportunity for hearing to the entity involved as the Office
may provide in regulations) if the Office finds that the
entity has failed substantially to carry out the contract or
is carrying out the contract in a manner inconsistent with
the efficient and effective administration of the program
established by this Act.
(d) Terms of Contract.--A contract entered into under this
section shall include--
(1) a description of the duties of the contracting entity;
(2) an assurance that the entity will furnish to the Office
such timely information and reports as the Office determines
appropriate;
(3) an assurance that the entity will maintain such records
and afford such access thereto as the Office finds necessary
to assure the correctness and verification of the information
and reports under paragraph (2) and otherwise to carry out
the purposes of this Act;
(4) an assurance that the entity shall comply with such
confidentiality and privacy protection guidelines and
procedures as the Office may require; and
(5) such other terms and conditions not inconsistent with
this section as the Office may find necessary or appropriate.

SEC. 12. COORDINATION WITH SOCIAL SECURITY BENEFITS.

Benefits under this Act shall, with respect to an
individual who is entitled to benefits under part A of title
XVIII of the Social Security Act, be offered (for use in
coordination with those medicare benefits) to the same extent
and in the same manner as if coverage were under chapter 89
of title 5, United States Code.

SEC. 13. PUBLIC EDUCATION CAMPAIGN.

(a) In General.--In carrying out this Act, the Office shall
develop and implement an educational campaign to provide
information to employers and the general public concerning
the health insurance program developed under this Act.
(b) Annual Progress Reports.--Not later than 1 year and 2
years after the implementation of the campaign under
subsection (a), the Office shall submit to the appropriate
committees of Congress a report that describes the activities
of the Office under subsection (a), including a determination
by the office of the percentage of employers with knowledge
of the health benefits programs provided for under this Act.
(c) Public Education Campaign.--There is authorized to be
appropriated to carry out this section, such sums as may be
necessary for each of fiscal years 2006 and 2007.

SEC. 14. APPROPRIATIONS.

(a) Mandatory Appropriations.--There are authorized to be
appropriated, and there are appropriated, to carry out
sections 7 and 8--
(1) $4,000,000,000 for fiscal year 2006;
(2) $4,000,000,000 for fiscal year 2007;
(3) $4,000,000,000 for fiscal year 2008;
(4) $3,000,000,000 for fiscal year 2009; and
(5) $3,000,000,000 for fiscal year 2010.
(b) Other Appropriations.--There are authorized to be
appropriated to the Office, such sums as may be necessary in
each fiscal year for the development and administration of
the program under this Act.

SEC. 15. REFUNDABLE CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH
INSURANCE EXPENSES.

(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 36 as
section 37 and inserting after section 35 the following new
section:

``SEC. 36. SMALL BUSINESS EMPLOYEE HEALTH INSURANCE EXPENSES.

``(a) Determination of Amount.--In the case of a qualified
small employer, there shall be allowed as a credit against
the tax imposed by this subtitle for the taxable year an
amount equal to the sum of--
``(1) the expense amount described in subsection (b), and
``(2) the expense amount described in subsection (c), paid
by the taxpayer during the taxable year.
``(b) Subsection (b) Expense Amount.--For purposes of this
section--
``(1) In general.--The expense amount described in this
subsection is the applicable percentage of the amount of
qualified employee health insurance expenses of each
qualified employee.
``(2) Applicable percentage.--For purposes of paragraph
(1)--
``(A) In general.--The applicable percentage is equal to--
``(i) 25 percent in the case of self-only coverage,
``(ii) 35 percent in the case of family coverage (as
defined in section 220(c)(5)), and
``(iii) 30 percent in the case of coverage for married
adults with no children.
``(B) Bonus for payment of greater percentage of
premiums.--The applicable percentage otherwise specified in
subparagraph (A) shall be increased by 5 percentage points
for each additional 10 percent of the qualified employee
health insurance expenses of each qualified employee
exceeding 60 percent which are paid by the qualified small
employer.
``(c) Subsection (c) Expense Amount.--For purposes of this
section--
``(1) In general.--The expense amount described in this
subsection is, with respect to the first credit year of a
qualified small employer which is an eligible employer, 10
percent of the qualified employee health insurance expenses
of each qualified employee.
``(2) First credit year.--For purposes of paragraph (1),
the term `first credit year' means the taxable year which
includes the date that the health insurance coverage to which
the qualified employee health insurance expenses relate
becomes effective.
``(3) Eligible employer.--For purposes of paragraph (1),
the term `eligible employer' shall not include a qualified
small employer if, during the 3-taxable year period
immediately preceding the first credit year, the employer or
any member of any controlled group including the employer (or
any predecessor of either) established or maintained health
insurance coverage for substantially the same employees as
are the qualified employees to which the qualified employee
health insurance expenses relate.

[[Page S4118]]

``(d) Limitation Based on Wages.--
``(1) In general.--The percentage which would (but for this
subsection) be taken into account as the percentage for
purposes of subsection (b)(2) or (c)(1) for the taxable year
shall be reduced (but not below zero) by the percentage
determined under paragraph (2).
``(2) Amount of reduction.--
``(A) In general.--The percentage determined under this
paragraph is the percentage which bears the same ratio to the
percentage which would be so taken into account as--
``(i) the excess of--

``(I) the qualified employee's wages at an annual rate
during such taxable year, over
``(II) $25,000, bears to

``(ii) $5,000.
``(B) Annual adjustment.--For each taxable year after 2006,
the dollar amounts specified for the preceding taxable year
(after the application of this subparagraph) shall be
increased by the same percentage as the average percentage
increase in premiums under the Federal Employees Health
Benefits Program under chapter 89 of title 5, United States
Code for the calendar year in which such taxable year begins
over the preceding calendar year.
``(e) Definitions.--For purposes of this section--
``(1) Qualified small employer.--The term `qualified small
employer' means any employer (as defined in section 2(b)(2)
of the Small Employers Health Benefits Program Act of 2005)
which--
``(A) is a participating employer (as defined in section
2(b)(5) of such Act), and
``(B) pays or incurs at least 60 percent of the qualified
employee health insurance expenses of each qualified
employee.
``(2) Qualified employee health insurance expenses.--
``(A) In general.--The term `qualified employee health
insurance expenses' means any amount paid by an employer for
health insurance coverage under such Act to the extent such
amount is attributable to coverage provided to any employee
while such employee is a qualified employee.
``(B) Exception for amounts paid under salary reduction
arrangements.--No amount paid or incurred for health
insurance coverage pursuant to a salary reduction arrangement
shall be taken into account under subparagraph (A).
``(3) Qualified employee.--
``(A) In general.--The term `qualified employee' means,
with respect to any period, an employee (as defined in
section 2(b)(1) of such Act) of an employer if the total
amount of wages paid or incurred by such employer to such
employee at an annual rate during the taxable year exceeds
$5,000.
``(B) Wages.--The term `wages' has the meaning given such
term by section 3121(a) (determined without regard to any
dollar limitation contained in such section).
``(f) Certain Rules Made Applicable.--For purposes of this
section, rules similar to the rules of section 52 shall
apply.
``(g) Credits for Nonprofit Organizations.--Any credit
which would be allowable under subsection (a) with respect to
a qualified small business if such qualified small business
were not exempt from tax under this chapter shall be treated
as a credit allowable under this subpart to such qualified
small business.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 36 of such Code''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by striking the last item and inserting the
following new items:

``Sec. 36 Small business employee health insurance expenses
``Sec. 37 Overpayments of tax''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2005.

SEC. 16. EFFECTIVE DATE.

Except as provided in section 10(e), this Act shall take
effect on the date of enactment of this Act and shall apply
to contracts that take effect with respect to calendar year
2006 and each calendar year thereafter.
______

By Mr. BINGAMAN (for himself, Ms. Snowe, Mr. Lieberman, and Mr.
Obama):
S. 875. A bill to amend the Internal Revenue Code of 1986 and the
Employee Retirement Income Security Act of 1974 to increase
participation in section 401(k) plans through automatic contribution
trusts, and for other purposes; to the Committee on Finance.
Mr. BINGAMAN. Mr. President, I rise today to introduce the Save More
for Retirement Act of 2005 with my colleagues Senator Snowe, Senator
Lieberman and Senator Obama. This legislation is designed to achieve
two important savings goals. First, it will encourage workers who are
not currently participating in their employer's retirement plan to do
so. Second, it will encourage workers who are currently investing in
40l(k) plans to save even more. At a time when national savings is at a
near all-time low, Congress needs to look at ways to expand retirement
savings, particularly savings garnered through an employer-provided
retirement plan. This legislation is a commonsense approach that is
based on research undertaken and compiled by a host of retirement
policy experts from both academia and business. It is imperative that
the Congress continues to look for new and innovative ways to help
workers save for their retirement through the existing employer-
provided plan system. This legislation accomplishes that goal by
creating incentives for employers to modify their existing plans to add
features that have been proven to increase savings.
The first step is to encourage employers to add a feature to its
40l(k) or similar plans to enroll its employees in the plan upon being
hired unless the employee notifies the employer that he or she does not
want to participate in the plan. The decision to participate still
rests entirely with the employees, as they can opt out before
participation begins or at any time afterward. Although some employers
do offer these types of plans now, most maintain a more traditional
structure under which the employee must opt into participating. Studies
have indicated that such a seemingly minor change in how employees are
enrolled can dramatically increase participation rates. It has been
reported that one large company experienced an increase in employee
participation in their retirement plan of 50 percent once the features
were changed to automatically enroll its employees. Clearly the first
step towards increasing our national savings rate is to get more people
saving.
Obviously the second step is to get those who are saving to set aside
even more for their retirement years. For this reason, the legislation
would encourage plans to add a feature that increases employees'
contributions annually until it reaches at least 10 percent of the
employees' compensation. Again, studies have repeatedly demonstrated
that people are more likely to agree to save more in the future than
they currently do. It has also been demonstrated that people are more
likely to agree to save more in the future if they make the decision
today and do not wait until future years to make that decision. In our
legislation, the employee can stop a future increase or change the
contribution rate. The employer has the discretion to tie these
automatic increases to either an annual increase or to increases in
salary or compensation. This is closely modeled on the Save More
Tomorrow, SMarT, plan advocated by Shlomo Benartzi from UCLA and
Richard Thaler from the University of Chicago. These behavioral finance
experts claim that although participants in this plan may start saving
at a lower rate--3.5 percent--than the average, within 4 years
increases averaged 13.6 percent--a greater than 10 percent increase.
Compared to the control group saving rate of slightly more than 8
percent of their compensation, the end result is quite extraordinary.
To encourage employers to make these two changes to the plan, the
legislation creates a new safe harbor that, if all the criteria are
met, treats the plan as being nondiscriminatory. In order to qualify
for the safe harbor, the employer must provide either a nonelective
match of 3 percent of the employee's compensation or an elective match
of 50 percent of the first 7 percent of the employee's compensation.
These criteria can be met also if the employer contributes a comparable
amount to another qualified plan for the same employees. The employer
must also allow its contributions to vest in either 2 years, if the
employer enrolls the employees in its pension plan before the
employees' first paycheck, or in 1 year if the employer enrolls the
employees within the first quarter of being hired. It is important to
note that both of these vesting periods are shorter than current law
allows and are comparable to what employers can do under the existing
safe harbor.
Finally, in an effort to help ensure employees are invested wisely,
the legislation directs the Department of Labor to provide guidance for
employers in selecting ``default'' investments so that employers have
options besides money market accounts and investment contracts. A
default investment is the investment that is made when

[[Page S4119]]

employees fail to indicate how they would like their retirement savings
invested. Due to liability concerns, retirement plans tend to invest
these funds in either investment contracts or money market accounts.
The benefit of compounding interest that would occur with even modest
returns in broad-based funds that have an equity component is lost.
This guidance will not allow employers to make default investment
decisions that are risky or put the employee's retirement at risk. It
is important to note that the employee always retains the ability to
invest the funds differently in other investment options offered by the
plan if they do not like the default investment offered by the
employer.
I thank all of those who have done considerable research into the
impact of human behavior on savings, which was quite instrumental to
the drafting of this legislation. I look forward to continuing to work
with them and others interested in this new approach to addressing our
Nation's savings problems.
I ask unanimous consent that the text of the bill be printed in the
Record.

S. 875

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 ``Save More for Retirement Act
of 2005''.

SEC. 2. INCREASING PARTICIPATION IN CASH OR DEFERRED PLANS
THROUGH AUTOMATIC CONTRIBUTION ARRANGEMENTS.

(a) In General.--Section 401(k) of the Internal Revenue
Code of 1986 (relating to cash or deferred arrangement) is
amended by adding at the end the following new paragraph:
``(13) Nondiscrimination requirements for automatic
contribution trusts.--
``(A) In general.--A cash or deferred arrangement shall be
treated as meeting the requirements of paragraph (3)(A)(ii)
if such arrangement constitutes an automatic contribution
trust.
``(B) Automatic contribution trust.--
``(i) In general.--For purposes of this paragraph, the term
`automatic contribution trust' means an arrangement--

``(I) except as provided in clauses (ii) and (iii), under
which each employee eligible to participate in the
arrangement is treated as having elected to have the employer
make elective contributions in an amount equal to the
applicable percentage of the employee's compensation, and
``(II) which meets the requirements of subparagraphs (C),
(D), (E), and (F).

``(ii) Exception for existing employees.--In the case of
any employee--

``(I) who was eligible to participate in the arrangement
(or a predecessor arrangement) immediately before the first
date on which the arrangement is an automatic contribution
trust, and
``(II) whose rate of contribution immediately before such
first date was less than the applicable percentage for the
employee,

clause (i)(I) shall not apply to such employee until the date
which is 1 year after such first date (or such earlier date
as the employee may elect).
``(iii) Election out.--Each employee eligible to
participate in the arrangement may specifically elect not to
have contributions made under clause (i), and such clause
shall cease to apply to compensation paid on or after the
effective date of the election.
``(iv) Applicable percentage.--For purposes of this
subparagraph--

``(I) In general.--The term `applicable percentage' means,
with respect to any employee, the percentage (not less than 3
percent) determined under the arrangement.
``(II) Increase in percentage.--In the case of the second
plan year beginning after the first date on which the
election under clause (i)(I) is in effect with respect to the
employee and any succeeding plan year, the applicable
percentage shall be a percentage (not greater than 10 percent
or such higher percentage specified by the plan) equal to the
sum of the applicable percentage for the employee as of the
close of the preceding plan year plus 1 percentage point (or
such higher percentage specified by the plan). A plan may
elect to provide that, in lieu of any increase under the
preceding sentence, the increase in the applicable percentage
required under this subclause shall occur after each increase
in compensation an employee receives on or after the first
day of such second plan year and that the applicable
percentage after each such increase in compensation shall be
equal to the applicable percentage for the employee
immediately before such increase in compensation plus 1
percentage point (or such higher percentage specified by the
plan).

``(C) Matching or nonelective contributions.--
``(i) In general.--The requirements of this subparagraph
are met if, under the arrangement, the employer--

``(I) makes matching contributions on behalf of each
employee who is not a highly compensated employee in an
amount equal to 50 percent of the elective contributions of
the employee to the extent such elective contributions do not
exceed 7 percent of compensation; or
``(II) is required, without regard to whether the employee
makes an elective contribution or employee contribution, to
make a contribution to a defined contribution plan on behalf
of each employee who is not a highly compensated employee and
who is eligible to participate in the arrangement in an
amount equal to at least 3 percent of the employee's
compensation,

The rules of clauses (ii) and (iii) of paragraph (12)(B)
shall apply for purposes of subclause (I). The rules of
paragraph (12)(E)(ii) shall apply for purposes of subclauses
(I) and (II).
``(ii) Other plans.--An arrangement shall be treated as
meeting the requirements under clause (i) if any other plan
maintained by the employer meets such requirements with
respect to employees eligible under the arrangement.
``(D) Notice requirements.--
``(i) In general.--The requirements of this subparagraph
are met if the requirements of clauses (ii) and (iii) are
met.
``(ii) Reasonable period to make election.--The
requirements of this clause are met if each employee to whom
subparagraph (B)(i) applies--

``(I) receives a notice explaining the employee's right
under the arrangement to elect not to have elective
contributions made on the employee's behalf, and how
contributions made under the arrangement will be invested in
the absence of any investment election by the employee, and
``(II) has a reasonable period of time after receipt of
such notice and before the first elective contribution is
made to make such election.

``(iii) Annual notice of rights and obligations.--The
requirements of this clause are met if each employee eligible
to participate in the arrangement is, within a reasonable
period before any year (or if the plan elects to change the
applicable percentage after any increase in compensation,
before the increase), given notice of the employee's rights
and obligations under the arrangement.
The requirements of clauses (i) and (ii) of paragraph (12)(D)
shall be met with respect to the notices described in clauses
(ii) and (iii) of this subparagraph.
``(E) Participation, withdrawal, and vesting
requirements.--The requirements of this subparagraph are met
if--
``(i) the arrangement requires that each employee eligible
to participate in the arrangement (determined without regard
to any minimum service requirement otherwise applicable under
section 410(a) or the plan) commences participation in the
arrangement no later than the 1st day of the 1st calendar
quarter following the date on which employee first becomes so
eligible,
``(ii) the withdrawal requirements of paragraph (2)(B) are
met with respect to all employer contributions (including
matching and elective contributions) taken into account in
determining whether the arrangement meets the requirements of
subparagraph (C), and
``(iii) the arrangement requires that an employee's right
to the accrued benefit derived from employer contributions
described in clause (ii) (other than elective contributions)
is nonforfeitable after the employee has completed--

``(I) at least 1 year of service, or
``(II) in the case of an employee who is eligible to
participate in the arrangement as of the first day on which
the employee begins employment with the employer maintaining
the arrangement, at least 2 years of service.

``(F) Certain withdrawals must be allowed.--
``(i) In general.--Notwithstanding any other provision of
this subsection, the requirements of this subparagraph are
met if the arrangement allows employees to elect to withdraw
elective contributions described in subparagraph (B)(i) (and
earnings attributable thereto) from the cash or deferred
arrangement in accordance with the provisions of this
subparagraph.
``(ii) Time for making election.--Clause (i) shall not
apply to an election by an employee unless the election is
made no later than the close of the latest of the following
payroll periods occurring after the first payroll period to
which the automatic enrollment system applies to the
employee:

``(I) The payroll period in which the aggregate elective
contributions made under subparagraph (B)(i) first exceed
$500.
``(II) The second payroll period following such first
payroll period.
``(III) The first payroll period which begins at least one
month after the close of the first payroll period to which
the automatic enrollment system applies.

``(iii) Amount of distribution.--Clause (i) shall not apply
to any election by an employee unless the amount of any
distribution by reason of the election is equal to the amount
of elective contributions made with respect to the first
payroll period to which the automatic enrollment system
applies to the employee and any succeeding payroll period
beginning before the effective date of the election (and
earnings attributable thereto).
``(iv) Treatment of distribution.--In the case of any
distribution to an employee pursuant to an election under
clause (i)--

``(I) the amount of such distribution shall be includible
in the gross income of the employee for the taxable year of
the employee in which the distribution is made, and
``(II) no tax shall be imposed under section 72(t) with
respect to the distribution.

[[Page S4120]]

``(v) Employer matching contributions.--In the case of any
distribution to an employee by reason of an election under
clause (i), employer matching contributions shall be
forfeited or subject to such other treatment as the Secretary
may prescribe.''
(b) Matching Contributions.--Section 401(m) of the Internal
Revenue Code of 1986 (relating to nondiscrimination test for
matching contributions and employee contributions) is amended
by redesignating paragraph (12) as paragraph (13) and by
inserting after paragraph (11) the following new paragraph:
``(12) Alternate method for automatic contribution
trusts.--A defined contribution plan shall be treated as
meeting the requirements of paragraph (2) with respect to
matching contributions if the plan--
``(A) meets the contribution requirements of subparagraphs
(B)(i) and (C) of subsection (k)(13);
``(B) meets the notice requirements of subparagraph (D) of
subsection (k)(13); and
``(C) meets the requirements of paragraph (11)(B) (ii) and
(iii).''.
(c) Exclusion From Definition of Top-Heavy Plans.--
(1) Elective contribution rule.--Clause (i) of section
416(g)(4)(H) of the Internal Revenue Code of 1986 is amended
by inserting ``or 401(k)(13)'' after ``section 401(k)(12)''.
(2) Matching contribution rule.--Clause (ii) of section
416(g)(4)(H) of such Code is amended by inserting ``or
401(m)(12)'' after ``section 401(m)(11)''.
(d) Definition of Compensation.--
(1) Base pay or rate of pay.--The Secretary of the Treasury
shall, no later than December 31, 2006, modify Treasury
Regulation section 1.414(s)-1(d)(3) to facilitate the use of
the safe harbors in sections 401(k)(12), 401(k)(13),
401(m)(11), and 401(m)(12) of the Internal Revenue Code of
1986, and in Treasury Regulation section 1.401(a)(4)-3(b), by
plans that use base pay or rate of pay in determining
contributions or benefits. Such modifications shall include
increased flexibility in satisfying section 414(s) of such
Code in any case where the amount of overtime compensation
payable in a year can vary significantly.
(2) Application of requirements to separate payroll
periods.--Not later than December 31, 2006, the Secretary of
the Treasury shall issue rules under subparagraphs (B)(i) and
(C)(i) of section 401(k)(13) of such Code and under clause
(i) of section 401(m)(12)(A) of such Code that, effective for
plan years beginning after December 31, 2006, permit such
requirements to be applied separately to separate payroll
periods based on rules similar to the rules described in
Treasury Regulation sections 1.401(k)-3(c)(5)(ii) and
1.401(m)-3(d)(4).
(e) Section 403(b) Contracts.--Paragraph (11) of section
401(m) of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``(C) Section 403(b) contracts.--An annuity contract under
section 403(b) shall be treated as meeting the requirements
of paragraph (2) with respect to matching contributions if
such contract meets requirements similar to the requirements
under subparagraph (A).''.
(f) Preemption of Conflicting State Regulation.--Section
514 of the Employee Retirement Income Security of 1974 (29
U.S.C. 1144) is amended by inserting at the end the following
new subsection:
``(e) Automatic Contribution Arrangements.--
``(1) In general.--Notwithstanding any other provision of
this section, any law of a State shall be superseded if it
would directly or indirectly prohibit or restrict the
inclusion in any plan of an eligible automatic contribution
arrangement.
``(2) Eligible automatic contribution arrangement.--For
purposes of this subsection, the term `eligible automatic
contribution arrangement' means an arrangement--
``(A) under which a participant may elect to have the
employer make payments as contributions under the plan on
behalf of the participant, or to the participant directly in
cash,
``(B) under which the participant is treated as having
elected to have the employer make such contributions in an
amount equal to a uniform percentage of compensation provided
under the plan until the participant specifically elects not
to have such contributions made (or specifically elects to
have such contributions made at a different percentage),
``(C) under which contributions described in subparagraph
(B) are invested in accordance with regulations prescribed by
the Secretary under section 404(c)(4), and
``(D) which meets the requirements of paragraph (3).
``(3) Notice requirements.--
``(A) In general.--The administrator of an individual
account plan shall, within a reasonable period before each
plan year, give to each employee to whom an arrangement
described in paragraph (2) applies for such plan year notice
of the employee's rights and obligations under the
arrangement which--
``(i) is sufficiently accurate and comprehensive to apprise
the employee of such rights and obligations, and
``(ii) is written in a manner calculated to be understood
by the average employee to whom the arrangement applies.
``(B) Time and form of notice.--A notice shall not be
treated as meeting the requirements of subparagraph (A) with
respect to an employee unless--
``(i) the notice includes a notice explaining the
employee's right under the arrangement to elect not to have
elective contributions made on the employee's behalf (or to
elect to have such contributions made at a different
percentage),
``(ii) the employee has a reasonable period of time after
receipt of the notice described in clause (i) and before the
first elective contribution is made to make such election,
and
``(iii) the notice explains how contributions made under
the arrangement will be invested in the absence of any
investment election by the employee.''.
(g) Effective Date.--
(1) In general.--Except as provided by paragraph (2), the
amendments made by this section shall apply to plan years
beginning after December 31, 2005.
(2) Section 403(b) contracts.--The amendments made by
subsection (e) shall apply to years ending after the date of
the enactment of this Act.

SEC. 3. TREATMENT OF INVESTMENT OF ASSETS BY PLAN WHERE
PARTICIPANT FAILS TO EXERCISE INVESTMENT
ELECTION.

(a) In General.--Section 404(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104(c)) is amended by
adding at the end the following new paragraph:
``(4) Default investment arrangements.--
``(A) In general.--For purposes of paragraph (1), a
participant in an individual account plan meeting the notice
requirements of subparagraph (B) shall be treated as
exercising control over the assets in the account with
respect to the amount of contributions and earnings which, in
the absence of an investment election by the participant, are
invested by the plan in accordance with regulations
prescribed by the Secretary. The regulations under this
subparagraph shall provide guidance on the appropriateness of
designating default investments that include a mix of asset
classes consistent with long-term capital appreciation.
``(B) Notice requirements.--
``(i) In general.--The requirements of this subparagraph
are met if each participant--

``(I) receives, within a reasonable period of time before
each plan year, a notice explaining the employee's right
under the plan to designate how contributions and earnings
will be invested and explaining how, in the absence of any
investment election by the participant, such contributions
and earnings will be invested, and
``(II) has a reasonable period of time after receipt of
such notice and before the beginning of the plan year to make
such designation.

``(ii) Form of notice.--The requirements of clauses (i) and
(ii) of section 401(k)(12)(D) of the Internal Revenue Code of
1986 shall be met with respect to the notices described in
this subparagraph.''
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to plan years beginning after December 31, 2005.
(2) Regulations.--Final regulations under section
404(c)(4)(A) of the Employee Retirement Income Security Act
of 1974 (as added by this section) shall be issued no later
than 6 months after the date of the enactment of this Act.
______

By Mr. HATCH (for himself, Mrs. Feinstein, Mr. Specter, Mr.
Kennedy, and Mr. Harkin):
S. 876. A bill to prohibit human cloning and protect stem cell
research; to the Committee on the Judiciary.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
Mr. HATCH. Mr. President, I am very pleased to join with Senators
Feinstein, Specter, Kennedy, and Harkin to introduce the Human Cloning
Ban and Stem Cell Research Protection Act of 2005. This bill could help
usher in the next great era of medical treatment. At the same time, it
will criminalize the offensive practice of reproductive cloning.
If you remember when Jonas Salk discovered the polio vaccine, you
will recall what a revolutionary step that was, to be able to stop
ravaging diseases before they hit their victims. It led to a whole new
way of practicing medicine and paved the way for the vaccines and
treatments that we take for granted today.
I believe we are on the verge of a similar step, a new generation in
medical research and treatment, thanks to the incredible potential of
stem cells. Stem cell research--particularly, embryonic stem cell
research--holds great promise. To quote Nobel Laureate Dr. Harold
Varmus, ``The development of cell lines that may produce almost every
tissue of the human body is an unprecedented scientific breakthrough.
It is not too unrealistic to say that this research has the potential
to revolutionize the practice of medicine and improve the quality and
length of life.''
As Dr. Varmus noted, embryonic stem cells appear to have the amazing
potential to transform themselves into any of the more than 200 types
of cells that form the human body. These cells

[[Page S4121]]

could be the key to understanding much about human health and disease
and may yield new diagnostic tests, treatments, and cures for diseases
such as diabetes, cancer, heart disease, Parkinson's, autoimmune
diseases, and many, many others.
Stem cell research could potentially be the scientific advance that
takes the practice of medicine not just to the next level, but to five
or ten levels above and beyond. Like my colleagues, I believe there is
an urgent need for uniformity in the rules governing stem cell research
in America. But let me just stress one aspect of that need: ethics.
Without the National Institutes of Health setting the ethical
guidelines for stem cell research, we invite a host of problems. Most
of us feel strongly that human reproductive cloning is wrong, for
example. But where should the lines be drawn with regard to embryonic
stem cell research--particularly, somatic cell nuclear transfer and the
use of cell lines derived from IVF embryos?
The NIH is the obvious and crucial choice to help set the ethical
boundaries. Our bill will ban outright any attempt at bringing to life
a cloned human being. It will also prohibit research on any embryo
created through somatic cell nuclear transfer beyond 14 days, require
informed consent of donors, prohibit profiteering from donated eggs,
and mandate separation of the egg collection site from the research
laboratory.
The NIH will help determine other suitable ethical guidelines in
allowing this critical research to go forward with Federal funding and
at federally-funded institutions. There is no question in my mind that,
when they do, the rest of the world will follow.
Now, the last time we introduced this bill, there was interest in the
fact that I, as a strongly pro-life senator, would be the lead sponsor.
I think we have put that issue behind us, as more pro-life lawmakers
have expressed their support for this research. The fact is, I have
never believed that life begins in a Petri dish. And as I travel across
my home State of Utah, more and more Utahns, whether they are pro-life
or not, come up to me and say, ``Orrin, we're with you on this. You're
doing the right thing.''
That support is building across the country, and we must act. If we
do not seize this opportunity, other countries could take the leading
role in medicine's next great advance. We will lose the chance to set
ethical guidelines, we will lose doctors to overseas research
institutions, and most importantly, we will lose the chance to offer
new hope to American and other patients who are waiting in desperation
for treatments and cures.
I urge the Senate to take up and pass this bill, and I look forward
to the work ahead.
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. 876

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 ``Human Cloning Ban and Stem
Cell Research Protection Act of 2005''.

SEC. 2. PURPOSES.

It is the purpose of this Act to prohibit human cloning and
to protect important areas of medical research, including
stem cell research.

TITLE I--PROHIBITION ON HUMAN CLONING

SEC. 101. PROHIBITION ON HUMAN CLONING.

(a) In General.--Title 18, United States Code, is amended
by inserting after chapter 15, the following:

``CHAPTER 16--PROHIBITION ON HUMAN CLONING

``301. Prohibition on human cloning

``Sec. 301. Prohibition on human cloning

``(a) Definitions.--In this section:
``(1) Human cloning.--The term `human cloning' means
implanting or attempting to implant the product of nuclear
transplantation into a uterus or the functional equivalent of
a uterus.
``(2) Human somatic cell.--The term `human somatic cell'
means any human cell other than a haploid germ cell.
``(3) Nuclear transplantation.--The term `nuclear
transplantation' means transferring the nucleus of a human
somatic cell into an oocyte from which the nucleus or all
chromosomes have been or will be removed or rendered inert.
``(4) Nucleus.--The term `nucleus' means the cell structure
that houses the chromosomes.
``(5) Oocyte.--The term `oocyte' means the female germ
cell, the egg.
``(6) Unfertilized blastocyst.--The term `unfertilized
blastocyst' means an intact cellular structure that is the
product of nuclear transplantation. Such term shall not
include stem cells, other cells, cellular structures, or
biological products derived from an intact cellular structure
that is the product of nuclear transplantation.
``(b) Prohibitions on Human Cloning.--It shall be unlawful
for any person or other legal entity, public or private--
``(1) to conduct or attempt to conduct human cloning;
``(2) to ship the product of nuclear transplantation in
interstate or foreign commerce for the purpose of human
cloning in the United States or elsewhere; or
``(3) to export to a foreign country an unfertilized
blastocyst if such country does not prohibit human cloning.
``(c) Protection of research.--Nothing in this section
shall be construed to restrict practices not expressly
prohibited in this section.
``(d) Penalties.--
``(1) Criminal penalties.--Whoever intentionally violates
paragraph (1), (2), or (3) of subsection (b) shall be fined
under this title and imprisoned not more than 10 years.
``(2) Civil penalties.--Whoever intentionally violates
paragraph (1), (2), or (3) of subsection (b) shall be subject
to a civil penalty of $1,000,000 or three times the gross
pecuniary gain resulting from the violation, whichever is
greater.
``(3) Forfeiture.--Any property, real or personal, derived
from or used to commit a violation or attempted violation of
the provisions of subsection (b), or any property traceable
to such property, shall be subject to forfeiture to the
United States in accordance with the procedures set forth in
chapter 46 of title 18, United States Code.
``(e) Right of Action.--Nothing in this section shall be
construed to give any individual or person a private right of
action.''.

SEC. 102. OVERSIGHT REPORTS ON ACTIONS TO ENFORCE CERTAIN
PROHIBITIONS.

(a) Report on Actions by Attorney General to Enforce
Chapter 16 of Title 18.--Not later than 1 year after the date
of enactment of this Act, the Comptroller General shall
prepare and submit to the Committee on the Judiciary of the
Senate and the Committee on the Judiciary of the House of
Representatives a report that--
(1) describes the actions taken by the Attorney General to
enforce the provisions of chapter 16 of title 18, United
States Code (as added by section 101);
(2) describes the personnel and resources the Attorney
General has utilized to enforce the provisions of such
chapter; and
(3) contain a list of any violations, if any, of the
provisions of such chapter 16.
(b) Report on Actions of State Attorneys General to Enforce
Similar State Laws.--
(1) Definition.--In this subsection and subsection (c), the
term ``similar State law relating to human cloning'' means a
State or local law that provides for the imposition of
criminal penalties on individuals who are determined to be
conducting or attempting to conduct human cloning (as defined
in section 301 of title 18, United States Code (as added by
section 101)).
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General shall prepare
and submit to the Committee on the Judiciary of the Senate
and the Committee on the Judiciary of the House of
Representatives a report that--
(A) describes any similar State law relating to human
cloning;
(B) describes the actions taken by the State attorneys
general to enforce the provisions of any similar State law
relating to human cloning;
(C) contains a list of violations, if any, of the
provisions of any similar State law relating to human
cloning; and
(D) contains a list of any individual who, or organization
that, has violated, or has been charged with violating, any
similar State law relating to human cloning.
(c) Report on Coordination of Enforcement Actions Among the
Federal and State and Local Governments With Respect to Human
Cloning.--Not later than 1 year after the date of enactment
of this Act, the Comptroller General shall prepare and submit
to the Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of Representatives a
report that
(1) describes how the Attorney General coordinates the
enforcement of violations of chapter 16 of title 18, United
States Code (as added by section 101), with enforcement
actions taken by State or local government law enforcement
officials with respect to similar State laws relating to
human cloning; and
(2) describes the status and disposition of--
(A) Federal appellate litigation with respect to such
chapter 16 and State appellate litigation with respect to
similar State laws relating to human cloning; and
(B) civil litigation, including actions to appoint
guardians, related to human cloning.
(d) Report on International Laws Relating to Human
Cloning.--Not later than 1 year after the date of enactment
of this Act, the Comptroller General shall prepare and submit
to the Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of Representatives a
report that--

[[Page S4122]]

(1) describes the laws adopted by foreign countries related
to human cloning;
(2) describes the actions taken by the chief law
enforcement officer in each foreign country that has enacted
a law described in paragraph (1) to enforce such law; and
(3) describes the multilateral efforts of the United
Nations and elsewhere to ban human cloning.

TITLE II--ETHICAL REQUIREMENTS FOR NUCLEAR TRANSPLANTATION RESEARCH

SEC. 201. ETHICAL REQUIREMENTS FOR NUCLEAR TRANSPLANTATION
RESEARCH.

Title IV of the Public Health Service Act (42 U.S.C. 281 et
seq.) is amended by adding at the end the following:

``part J--ethical REQUIREMENTS FOR NUCLEAR TRANSPLANTATION RESEARCH

``SEC. 499A. ETHICAL REQUIREMENTS FOR NUCLEAR TRANSPLANTATION
RESEARCH, INCLUDING INFORMED CONSENT,
INSTITUTIONAL REVIEW BOARD REVIEW, AND
PROTECTION FOR SAFETY AND PRIVACY.

``(a) Definitions.--
``(1) In general.--The definitions contained in section
301(a) of title 18, United States Code, shall apply for
purposes of this section.
``(2) Other definitions.--In this section:
``(A) Donating.--The term `donating' means giving without
receiving valuable consideration.
``(B) Fertilization.--The term `fertilization' means the
fusion of an oocyte containing a haploid nucleus with a male
gamete (sperm cell).
``(C) Valuable consideration.--The term `valuable
consideration' does not include reasonable payments--
``(i) associated with the transportation, processing,
preservation, or storage of a human oocyte or of the product
of nuclear transplantation research; or
``(ii) to compensate a donor of one or more human oocytes
for the time or inconvenience associated with such donation.
``(b) Applicability of Federal Ethical Standards to Nuclear
Transplantation Research.--Research involving nuclear
transplantation shall be conducted in accordance with subpart
A of part 46 of title 45, or parts 50 and 56 of title 21,
Code of Federal Regulations (as in effect on the date of
enactment of the Human Cloning Ban and Stem Cell Research
Protection Act of 2003), as applicable:
``(c) Prohibition on Conducting Nuclear Transplantation on
Fertilized Eggs.--A somatic cell nucleus shall not be
transplanted into a human oocyte that has undergone or will
undergo fertilization.
``(d) Fourteen-Day Rule.--An unfertilized blastocyst shall
not be maintained after more than 14 days from its first cell
division, not counting any time during which it is stored at
temperatures less than zero degrees centigrade.
``(e) Voluntary Donation of Oocytes.--
``(1) Informed consent.--In accordance with subsection (b),
an oocyte may not be used in nuclear transplantation research
unless such oocyte shall have been donated voluntarily by and
with the informed consent of the woman donating the oocyte.
``(2) Prohibition on purchase or sale.--No human oocyte or
unfertilized blastocyst may be acquired, received, or
otherwise transferred for valuable consideration if the
transfer affects interstate commerce.
``(f) Separation of In Vitro Fertilization Laboratories
From Locations at Which Nuclear Transplantation Is
Conducted.--Nuclear transplantation may not be conducted in a
laboratory in which human oocytes are subject to assisted
reproductive technology treatments or procedures.
``(g) Civil Penalties.--Whoever intentionally violates any
provision of subsections (b) through (f) shall be subject to
a civil penalty in an amount that is appropriate for the
violation involved, but not more than $250,000.''.
Mrs. FEINSTEIN. Mr. President, today Senators Hatch, Kennedy,
Specter, Harkin and I are introducing legislation to ban human
reproductive cloning, while ensuring that important medical research
goes forward under strict oversight by the federal government.
Simply put, this legislation will enable research to be conducted
that provides hope to millions of Americans suffering from paralysis
and debilitating diseases including Juvenile Diabetes, Parkinson's,
Alzheimer's, cancer and heart disease.
Every member of this body knows someone--whether it's a parent or
grandparent, a child or a friend--who suffers from one of these
diseases. That is why this legislation is so critical. We must act now
to protect promising research that will bring hope to those who suffer.
I now that every member of this body would agree that human
reproductive cloning is immoral and unethical. It should be outlawed by
Congress and the President. That is exactly what this bill does.
It prohibits any person from conducting or attempting to clone a
human being. It also prohibits shipping materials for the purpose of
human cloning in interstate or foreign commerce and prohibits the
export of an unfertilized blastocyst to a foreign country if such
country does not prohibit human cloning.
Any person that violates this prohibition is subject to harsh
criminal and civil penalties. They include: imprisonment of up to 10
years in federal prison.
Fines of up to $1 million or three times the gross profits resulting
from the violation, whichever is greater.
This legislation draws a bright line between human reproductive
cloning and promising medical research using somatic cell nuclear
transplantation for the sole purpose of deriving embryonic stem cells.
Somatic cell nuclear transplantation is the process by which
scientists derive embryonic stem cells that are an exact genetic match
as the patient. Those embryonic stem cells will one day be used to
correct defective cells such as non-insulin producing or cancerous
cells. Then those patients will not be forced to take immuno-
suppressive drugs and risk the chances of rejection since the new cells
will contain their own DNA.
It is truly astonishing that somatic cell nuclear transplantation
research may one day be used to regrow tissue or organs that could lead
to treatments and cures for diseases that afflict up to 100 million
Americans. What we are talking about here is research that does not
even involve sperm and an egg.
I believe it is essential that this research be conducted with
Federal Government oversight and under strict ethical requirements.
That is why the legislation: Mandates that eggs used in this research
be unfertilized.
Prohibits the purchase or sale of unfertilized eggs--to prevent
``embryo farms'' or the possible exploitation of women.
Imposes strong ethics rules on scientists, mandating informed consent
by egg donors, and include safety and privacy protections.
Prohibit any research on an unfertilized blastocyst after 14 days--
After 14 days, an unfertilized blastocyst begins differentiating into a
specific type of cell such as a heart or brain cell and is no longer
useful for the purposes of embryonic stem cell research.
Requires that all egg donations be voluntary, and that there is no
financial or other incentive for egg donations.
Requires that nuclear transportation occur in labs completely
separate from labs that engage in in vitro fertilization.
And for those who violate or attempt to violate the ethical
requirements of the legislation, they will be subject to civil
penalties of up to $250,000 per violation.
Embryonic stem cell research that is currently being done using
private funds, in animal models, and by scientists overseas continues
to show great promise and potential. This progress will not be
sustained in the U.S. without additional stem cell lines for federally-
funded research and without strict federal oversight of this research.
Senator Hatch and I have argued this point for years. What has
happened since the President limited federally-funded research to only
those embryonic stem cell lines derived prior to August 9, 2001?
Researchers have made a number of advancements confirming the promise
of embryonic stem cells using animal models and private research
dollars. In the absence of federal policy on embryonic stem cell
research and human reproductive cloning, States have taken action
creating a patchwork of state laws under varying ethical frameworks.
Fewer researchers are choosing to go into this field given the void
created by Federal inaction.
Last January, a study published by researchers from the University of
California San Diego and the Salk Institute for Biological Studies
confirmed that all 22 existing federally-approved stem cell lines are
tainted by mouse feeders cells and cannot be used in humans.
Researchers at the Whitehead Institute in Cambridge, MA, used
embryonic stem cells created by somatic cell nuclear transplantation to
cure a genetic defect in mice.
Researchers at Sloan-Kettering Cancer Center in New York found that
embryonic stem cells produce proteins

[[Page S4123]]

that can help ailing organs repair themselves.
Stanford scientists were able to relieve diabetes symptoms in mice by
using special chemicals to transform undifferentiated embryonic stem
cells of mice into cell masses that resemble islets found in the mouse
pancreas.
In the absence of federal legislation, we have seen a patchwork of
State laws under varying ethical frameworks and this is extremely
worrisome. In total, 30 States have passed laws pertaining to stem cell
research and there is tremendous variety in those laws.
California launched a $3 billion initiative to fund embryonic stem
cell research including somatic cell nuclear transplantation research
which bans human reproductive cloning.
At least 6 academic centers in California including UC San Francisco,
Stanford, UCLA, UC Berkeley, UC Irvine and UC Davis have already begun
developing facilities where this embryonic stem cell research will be
conducted and are all actively recruiting stem cell biologists from
across the country.

New Jersey has proposed a $380 million initiative to fund embryonic
stem cell research.
Wisconsin has proposed investing $750 million to support embryonic
stem cell research.
By contrast, Arkansas, Iowa, North Dakota, South Dakota and Michigan
have specifically prohibited nuclear transfer used to create stem
cells. And 22 other States have enacted laws on the matter.
What this means is researchers and research money are now moving to
States with pro-research laws and pro-research Governors.
There is clearly a void that needs to be filled--and it can only be
filled by the Federal Government.
To be clear, this is research that involves an unfertilized
blastocyst. No sperm are involved. It is conducted in a petri dish and
cannot occur beyond 14 days. It is also prohibited from ever being
implanted into a woman to create a child.
For those who believe that the clump of cells in a petri dish that we
are talking about is a human life, that is a moral decision each person
must make for himself, but to impose that view on the more than 100
million of our parents, children and friends who suffer from
Parkinson's, diabetes, Alzheimer's and cancer is immoral.
As former Senator and Episcopal minister John C. Danforth said
recently in an op-ed in the New York Times, ``Criminalizing the work of
scientists doing such research would give strong support to one
religious doctrine, and it would punish people who believe it is their
religious duty to use science to heal the sick.
This is exactly why the legislation I am introducing with my
colleagues Senators Hatch, Kennedy, Specter and Harkin is needed. I
urge the Senate to take up and pass this bill and help turn the hopes
of millions of Americans into reality.
I ask unanimous consent that the attached letter be printed in the
Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

Coalition for the Advancement

of Medical Research,

Washington, DC, April 21, 2005.
Senator Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building Washington, DC.
Dear Senator Feinstein, On behalf of the Coalition for the
Advancement of Medical Research (CAMR), I am writing to add
our strong support for the introduction of the Human Cloning
Ban and Stem Cell Research Protection Act of 2005. Along with
Senator Orrin Hatch (R-UT), Senator Arlen Specter (R-PA),
Senator Ted Kennedy (D-MA), and Senator Tom Harkin (D-IA),
your leadership in protecting research using somatic cell
nuclear transfer (SCNT), also known as therapeutic cloning,
is greatly appreciated.
This year, Congress will address the future of biomedical
research and the Nation's efforts to prevent, treat, and cure
such debilitating diseases as cancer, juvenile diabetes, ALS,
Parkinson's disease, spinal cord injuries and many more. Let
me be clear, CAMR supports a ban on reproductive cloning; it
is unsafe and unethical. Given the scientific potential of
SCNT and regenerative medicine, however, we strongly support
the bill's effort to allow for this research, which may
provide essential tools allowing scientists to develop the
promise of embryonic stern cell research. I am sure you will
agree, therapeutic cloning is about saving and improving
lives. It is fW1damemally different from human reproductive
cloning; it produces stem cells, not babies.
CAMR applauds your leadership in sponsoring legislation
that ensures cures for devastating diseases continue to be
developed. We look forward to working with you.
Thank you,
Daniel Perry,
President.
Mr. KENNEDY. It is a privilege to join Senator Hatch, Senator
Feinstein, Senator Specter and Senator Harkin in sponsoring the Human
Cloning Ban and Stem Cell Research Protection Act of 2005. This
bipartisan proposal will outlaw human cloning and open the way to
proper, ethical cures for our most feared diseases.
Using cloning to reproduce a child is improper and immoral--and our
legislation will make it illegal. Medicine must advance hand in hand
with ethics, and the legislation we introduce today will make certain
that American research sets the gold standard for ethical oversight.
But it is wrong to deny the great potential of medical research using
the remarkable new techniques of stem cell research, which can save
lives by preventing, treating, and curing a wide range of severe
diseases and disabilities.
We see the benefits of investment in biotechnology all around us.
Fifty years ago last week, Jonas Salk announced the first polio
vaccine. Imagine a world without that extraordinary discovery--where
peoples everywhere lived in fear of the polio virus and the devastation
it brings.
Thirty years ago, Congress was considering whether to ban research on
recombinant DNA--the very foundation of biotechnology.
Time after time, we heard of the medical advances that this new field
of research would bring. Then--as now--some dismissed this promise as a
pipe dream and urged Congress to forbid it. We chose instead to vote
for new hope and new cures. Today, countless Americans and persons
throughout the world are already benefiting from the new treatments
that biotechnology has brought. Why call a halt?
In the 1980s Congress made the right choice, again, by rejecting
attempts to outlaw in vitro fertilization, a technique that has
fulfilled the hopes and dreams of thousands of parents who would never
have been able to have a child.
Our debate today is no different and Congress should do all it can to
support lifesaving research, not prohibit it.
Other nations are more than willing to leave us behind. The potential
of this research is so immense that some of our best scientists are
already leaving America to pursue their dreams in research laboratories
in other countries. We need to stop that exodus before it becomes a
nightmare. Do we really want to wake up 10 years from now and hear that
a former American scientist in another land has won the Nobel Prize in
medicine for a landmark discovery in stem cell research?
The misguided fears of today can't be allowed to deny the cures of
tomorrow. I commend my colleagues for their leadership on this
important legislation, and I hope the Senate will act quickly to
approve this urgently needed bill.
______

By Mr. DOMENICI (for himself, Mr. Lieberman, Mr. Frist, Mr.
Lugar, Mr. Isakson, Mr. Enzi, Mr. Feingold, Mr. Crapo, Mr.
Alexander, Mr. Bunning, Mr. Sessions, Mr. Allard, and Mr.
Corzine):
S. 877. A bill to provide for a biennial budget process and a
biennial appropriations process and to enhance oversight and the
performance of the Federal Government; to the Committee on the Budget.
Mr. DOMENICI. Mr. President, on behalf of Senator Lieberman, the
distinguished Ranking Member of the Governmental Affairs Committee and
eleven other Senators, I rise to introduce the ``Biennial Budgeting and
Appropriations Act,'' a bill to convert the annual budget and
appropriations process to a two-year cycle and to enhance oversight of
federal programs.
Our most recent experience with the Omnibus Consolidated
Appropriations Act shows the need for a biennial appropriations and
budget process. That one bill clearly demonstrated Congress is
incapable of completing the budget, authorizing, and appropriations
process on an annual basis. That 1,000 plus paged bill contained nine
of the regular appropriations bills.
Congress should now act to streamline the system by moving to a two-

[[Page S4124]]

year, or biennial, budget process. This is the most important reform we
can enact to streamline the budget process, to make the Senate a more
deliberative and effective institution, and to make us more accountable
to the American people.
Moving to a biennial budget and appropriations process enjoys very
broad support. President Bush has supported a biennial budgeting
process. Presidents Clinton, Reagan and Bush also proposed a biennial
appropriations and budget cycle. Leon Panetta, who served as White
House Chief of Staff, OMB Director, and House Budget Committee
Chairman, has advocated a biennial budget since the late 1970s. Former
OMB and CBO Director Alice Rivlin has called for a biennial budget the
past two decades. The Majority Leader is a co-sponsor of this
legislation.
Vice President Gore's National Performance Review and the 1993 Joint
Committee on the Reorganization of Congress both recommended a biennial
appropriations and budget cycle.
A biennial budget will dramatically improve the current budget
process. The current annual budget process is redundant, inefficient,
and destined for failure each year. Look at what we struggle to
complete each year under the current annual process. The annual budget
process consumes three years: one year for the Administration to
prepare the President's budget, another year for the Congress to put
the budget into law, and the final year to actually execute the budget.
Today, I want to focus just on the Congressional budget process, the
process of annually passing a budget resolution, authorization
legislation, and multiple appropriation bills. The record clearly shows
that last year's experience was nothing new. Under the annual process,
we consistently fail to complete action on multiple appropriations
bills, to authorize programs, and to meet our deadlines.
While we have made a number of improvements in the budget process,
the current annual process is redundant and inefficient. The Senate has
the same debate, amendments and votes on the same issue three or four
times a year--once on the budget resolution, again on the authorization
bill, and finally on the appropriations bill.
A few years ago, I asked the Congressional Research Service (CRS) to
update and expand upon an analysis of the amount of time we spend on
the budget. CRS looked at all votes on appropriations, revenue,
reconciliation, and debt limit measures as well as budget resolutions.
CRS then examined any other vote dealing with budgetary levels, Budget
Act waivers, or votes pertaining to the budget process. Beginning with
1980, budget related votes started dominating the work of the Senate.
In 1996, 73 percent of the votes the Senate took were related to the
budget.
If we cannot adequately focus on our duties because we are constantly
debating the budget throughout the authorizing, budgeting, and
appropriations process, just imagine how confused the American public
is about what we are doing. The result is that the public does not
understand what we are doing and it breeds cynicism about our
government.
Under the legislation I am introducing today, the President would
submit a 2-year budget and Congress would consider a 2-year budget
resolution and 2-year appropriation bills during the first session of a
Congress. The second session of the Congress would be devoted to
consideration of authorization bills and for oversight of government
agencies.
Most of the arguments against a biennial budget process will come
from those who claim we cannot predict or plan on a two year basis. For
most of the budget, we do not actually budget on an annual basis. Our
entitlement and revenue laws are under permanent law and Congress does
not change these laws on an annual basis. The only component of the
budget that is set in law annually are the appropriated, or
discretionary, accounts.
The most predictable category of the budget are these appropriated,
or discretionary, accounts of the federal government. Much of this
spending is associated with international activities or emergencies.
Because most of this funding cannot be predicted on an annual basis, a
biennial budget is no less deficient than the current annual process.
My bill does not preclude supplemental appropriations necessary to meet
these emergency or unanticipated requirements.
In 1993 I had the honor to serve as co-Chairman on a Joint Committee
that studied the operations of the Congress. Senator Byrd testified
before that Committee that the increasing demands put on us as Senators
has led to our ``fractured attention.'' We simply are too busy to
adequately focus on the people's business. This legislation is designed
to free up time and focus our attention, particularly with respect to
the oversight of Federal programs and activities.
Frankly, the limited oversight we are now doing is not as good as it
should be. Our authorizing committees are increasingly crowded out of
the legislative process. Under a biennial budget, the second year of
the biennium will be exclusively devoted to examining federal programs
and developing authorization legislation. The calendar will be free of
the budget and appropriations process, giving these committees the time
and opportunity to provide oversight, review and legislate changes to
federal programs. Oversight and the authorization should be an ongoing
process, but a biennial appropriations process will provide greater
opportunity for legislators to concentrate on programs and policies in
the second year.
Mr. President, a biennial budget cannot make the difficult decisions
that must be made in budgeting, but it can provide the tools necessary
to make much better decisions. Under the current annual budget process
we are constantly spending the taxpayers' money instead of focusing on
how best and most efficiently we should spend the taxpayers' money. By
moving to a biennial budget cycle, we can plan, budget, and appropriate
more effectively, strengthen oversight and watchdog functions, and
improve the efficiency of government agencies.
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. 877

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 ``Biennial Budgeting and
Appropriations Act''.

SEC. 2. REVISION OF TIMETABLE.

Section 300 of the Congressional Budget Act of 1974 (2
U.S.C. 631) is amended to read as follows:

``timetable

``Sec. 300. (a) In General.--Except as provided by
subsection (b), the timetable with respect to the
congressional budget process for any Congress (beginning with
the One Hundred Tenth Congress) is as follows:

``First Session
``On or before: Action to be completed:

First Monday in February.................. President submits budget
recommendations.
February 15............................... Congressional Budget Office
submits report to Budget
Committees.
Not later than 6 weeks after budget Committees submit views and
submission. estimates to Budget
Committees.
April 1................................... Budget Committees report
concurrent resolution on
the biennial budget.
May 15.................................... Congress completes action on
concurrent resolution on
the biennial budget.
May 15.................................... Biennial appropriation bills
may be considered in the
House.
June 10................................... House Appropriations
Committee reports last
biennial appropriation
bill.
June 30................................... House completes action on
biennial appropriation
bills.
August 1.................................. Congress completes action on
reconciliation legislation.
October 1................................. Biennium begins.

``Second Session

``On or before: Action to be completed:

February 15............................... President submits budget
review.
Not later than 6 weeks after President Congressional Budget Office
submits budget review. submits report to Budget
Committees.
The last day of the session............... Congress completes action on
bills and resolutions
authorizing new budget
authority for the
succeeding biennium.

``(b) Special Rule.--In the case of any first session of
Congress that begins in any year immediately following a leap
year and during which the term of a President (except a
President who succeeds himself or herself) begins, the
following dates shall supersede those set forth in subsection
(a):

``First Session
``On or before: Action to be completed:

[[Page S4125]]

First Monday in April..................... President submits budget
recommendations.
April 20.................................. Committees submit views and
estimates to Budget
Committees.
May 15.................................... Budget Committees report
concurrent resolution on
the biennial budget.
June 1.................................... Congress completes action on
concurrent resolution on
the biennial budget.
July 1.................................... Biennial appropriation bills
may be considered in the
House.
July 20................................... House completes action on
biennial appropriation
bills.
August 1.................................. Congress completes action on
reconciliation legislation.
October 1................................. Biennium begins.''.

SEC. 3. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND
IMPOUNDMENT CONTROL ACT OF 1974.

(a) Declaration of Purpose.--Section 2(2) of the
Congressional Budget and Impoundment Control Act of 1974 (2
U.S.C. 621(2)) is amended by striking ``each year'' and
inserting ``biennially''.
(b) Definitions.--
(1) Budget resolution.--Section 3(4) of such Act (2 U.S.C.
622(4)) is amended by striking ``fiscal year'' each place it
appears and inserting ``biennium''.
(2) Biennium.--Section 3 of such Act (2 U.S.C. 622) is
further amended by adding at the end the following new
paragraph:
``(11) The term `biennium' means the period of 2
consecutive fiscal years beginning on October 1 of any odd-
numbered year.''.
(c) Biennial Concurrent Resolution on the Budget.--
(1) Section heading.--The section heading of section 301 of
such Act is amended by striking ``annual'' and inserting
``biennial''.
(2) Contents of resolution.--Section 301(a) of such Act (2
U.S.C. 632(a)) is amended--
(A) in the matter preceding paragraph (1) by--
(i) striking ``April 15 of each year'' and inserting ``May
15 of each odd-numbered year'';
(ii) striking ``the fiscal year beginning on October 1 of
such year'' the first place it appears and inserting ``the
biennium beginning on October 1 of such year''; and
(iii) striking ``the fiscal year beginning on October 1 of
such year'' the second place it appears and inserting ``each
fiscal year in such period'';
(B) in paragraph (6), by striking ``for the fiscal year''
and inserting ``for each fiscal year in the biennium''; and
(C) in paragraph (7), by striking ``for the fiscal year''
and inserting ``for each fiscal year in the biennium''.
(3) Additional matters.--Section 301(b)(3) of such Act (2
U.S.C. 632(b)) is amended by striking ``for such fiscal
year'' and inserting ``for either fiscal year in such
biennium''.
(4) Views of other committees.--Section 301(d) of such Act
(2 U.S.C. 632(d)) is amended by inserting ``(or, if
applicable, as provided by section 300(b))'' after ``United
States Code''.
(5) Hearings.--Section 301(e)(1) of such Act (2 U.S.C.
632(e)) is amended by--
(A) striking ``fiscal year'' and inserting ``biennium'';
and
(B) inserting after the second sentence the following: ``On
or before April 1 of each odd-numbered year (or, if
applicable, as provided by section 300(b)), the Committee on
the Budget of each House shall report to its House the
concurrent resolution on the budget referred to in subsection
(a) for the biennium beginning on October 1 of that year.''.
(6) Goals for reducing unemployment.--Section 301(f) of
such Act (2 U.S.C. 632(f)) is amended by striking ``fiscal
year'' each place it appears and inserting ``biennium''.
(7) Economic assumptions.--Section 301(g)(1) of such Act (2
U.S.C. 632(g)(1)) is amended by striking ``for a fiscal
year'' and inserting ``for a biennium''.
(8) Table of contents.--The item relating to section 301 in
the table of contents set forth in section 1(b) of such Act
is amended by striking ``Annual'' and inserting ``Biennial''.
(d) Committee Allocations.--Section 302 of such Act (2
U.S.C. 633) is amended--
(1) in subsection (a)
(A) in paragraph (1), by--
(i) striking ``for the first fiscal year of the
resolution,'' and inserting ``for each fiscal year in the
biennium,'';
(ii) striking ``for that period of fiscal years'' and
inserting ``for all fiscal years covered by the resolution'';
and
(iii) striking ``for the fiscal year of that resolution''
and inserting ``for each fiscal year in the biennium''; and
(B) in paragraph (5), by striking ``April 15'' and
inserting ``May 15 or June 1 (under section 300(b))'';
(2) in subsection (b), by striking ``budget year'' and
inserting ``biennium'';
(3) in subsection (c) by striking ``for a fiscal year''
each place it appears and inserting ``for each fiscal year in
the biennium'';
(4) in subsection (f)(1), by striking ``for a fiscal year''
and inserting ``for a biennium'';
(5) in subsection (f)(1), by striking ``the first fiscal
year'' and inserting ``each fiscal year of the biennium'';
(6) in subsection (f)(2)(A), by--
(A) striking ``the first fiscal year'' and inserting ``each
fiscal year of the biennium''; and
(B) striking ``the total of fiscal years'' and inserting
``the total of all fiscal years covered by the resolution'';
and
(7) in subsection (g)(1)(A), by striking ``April'' and
inserting ``May''.
(e) Section 303 Point of Order.--
(1) In general.--Section 303(a) of such Act (2 U.S.C.
634(a)) is amended by--
(A) striking ``the first fiscal year'' and inserting ``each
fiscal year of the biennium''; and
(B) striking ``that fiscal year'' each place it appears and
inserting ``that biennium''.
(2) Exceptions in the house.--Section 303(b)(1) of such Act
(2 U.S.C. 634(b)) is amended--
(A) in subparagraph (A), by striking ``the budget year''
and inserting ``the biennium''; and
(B) in subparagraph (B), by striking ``the fiscal year''
and inserting ``the biennium''.
(3) Application to the senate.--Section 303(c)(1) of such
Act (2 U.S.C. 634(c)) is amended by--
(A) striking ``fiscal year'' and inserting ``biennium'';
and
(B) striking ``that year'' and inserting ``each fiscal year
of that biennium''.
(f) Permissible Revisions of Concurrent Resolutions on the
Budget.--Section 304(a) of such Act (2 U.S.C. 635) is
amended--
(1) by striking ``fiscal year'' the first two places it
appears and inserting ``biennium''; and
(2) by striking ``for such fiscal year'' and inserting
``for such biennium''.
(g) Procedures for Consideration of Budget Resolutions.--
Section 305 of such Act (2 U.S.C. 636(3)) is amended--
(1) in subsection (a)(3), by striking ``fiscal year'' and
inserting ``biennium''; and
(2) in subsection (b)(3), by striking ``fiscal year'' and
inserting ``biennium''.
(h) Completion of House Action on Appropriation Bills.--
Section 307 of such Act (2 U.S.C. 638) is amended--
(1) by striking ``each year'' and inserting ``each odd-
numbered year'';
(2) by striking ``annual'' and inserting ``biennial'';
(3) by striking ``fiscal year'' and inserting ``biennium'';
and
(4) by striking ``that year'' and inserting ``each odd-
numbered year''.
(i) Completion of Action on Regular Appropriation Bills.--
Section 309 of such Act (2 U.S.C. 640) is amended--
(1) by inserting ``of any odd-numbered calendar year''
after ``July'';
(2) by striking ``annual'' and inserting ``biennial''; and
(3) by striking ``fiscal year'' and inserting ``biennium''.
(j) Reconciliation Process.--Section 310(a) of such Act (2
U.S.C. 641(a)) is amended--
(1) in the matter preceding paragraph (1), by striking
``any fiscal year'' and inserting ``any biennium''; and
(2) in paragraph (1) by striking ``such fiscal year'' each
place it appears and inserting ``any fiscal year covered by
such resolution''.
(k) Section 311 Point of Order.--
(1) In the house.--Section 311(a)(1) of such Act (2 U.S.C.
642(a)) is amended--
(A) by striking ``for a fiscal year'' and inserting ``for a
biennium'';
(B) by striking ``the first fiscal year'' each place it
appears and inserting ``either fiscal year of the biennium'';
and
(C) by striking ``that first fiscal year'' and inserting
``each fiscal year in the biennium''.
(2) In the senate.--Section 311(a)(2) of such Act is
amended--
(A) in subparagraph (A), by striking ``for the first fiscal
year'' and inserting ``for either fiscal year of the
biennium''; and
(B) in subparagraph (B)--
(i) by striking ``that first fiscal year'' the first place
it appears and inserting ``each fiscal year in the
biennium''; and
(ii) by striking ``that first fiscal year and the ensuing
fiscal years'' and inserting ``all fiscal years''.
(3) Social security levels.--Section 311(a)(3) of such Act
is amended by--
(A) striking ``for the first fiscal year'' and inserting
``each fiscal year in the biennium''; and
(B) striking ``that fiscal year and the ensuing fiscal
years'' and inserting ``all fiscal years''.
(l) MDA Point of Order.--Section 312(c) of the
Congressional Budget Act of 1974 (2 U.S.C. 643) is amended--
(1) by striking ``for a fiscal year'' and inserting ``for a
biennium'';
(2) in paragraph (1), by striking ``the first fiscal year''
and inserting ``either fiscal year in the biennium'';
(3) in paragraph (2), by striking ``that fiscal year'' and
inserting ``either fiscal year in the biennium''; and
(4) in the matter following paragraph (2), by striking
``that fiscal year'' and inserting ``the applicable fiscal
year''.

SEC. 4. AMENDMENTS TO TITLE 31, UNITED STATES CODE.

(a) Definition.--Section 1101 of title 31, United States
Code, is amended by adding at the end thereof the following
new paragraph:
``(3) `biennium' has the meaning given to such term in
paragraph (11) of section 3 of the Congressional Budget and
Impoundment Control Act of 1974 (2 U.S.C. 622(11)).''.
(b) Budget Contents and Submission to the Congress.--
(1) Schedule.--The matter preceding paragraph (1) in
section 1105(a) of title 31, United States Code, is amended
to read as follows:
``(a) On or before the first Monday in February of each
odd-numbered year (or, if applicable, as provided by section
300(b) of the Congressional Budget Act of 1974), beginning
with the One Hundred Ninth Congress, the President shall
transmit to the Congress, the

[[Page S4126]]

budget for the biennium beginning on October 1 of such
calendar year. The budget of the United States Government
transmitted under this subsection shall include a budget
message and summary and supporting information. The President
shall include in each budget the following:''.
(2) Expenditures.--Section 1105(a)(5) of title 31, United
States Code, is amended by striking ``the fiscal year for
which the budget is submitted and the 4 fiscal years after
that year'' and inserting ``each fiscal year in the biennium
for which the budget is submitted and in the succeeding 4
fiscal years''.
(3) Receipts.--Section 1105(a)(6) of title 31, United
States Code, is amended by striking ``the fiscal year for
which the budget is submitted and the 4 fiscal years after
that year'' and inserting ``each fiscal year in the biennium
for which the budget is submitted and in the succeeding 4
years''.
(4) Balance statements.--Section 1105(a)(9)(C) of title 31,
United States Code, is amended by striking ``the fiscal
year'' and inserting ``each fiscal year in the biennium''.
(5) Functions and activities.--Section 1105(a)(12) of title
31, United States Code, is amended in subparagraph (A), by
striking ``the fiscal year'' and inserting ``each fiscal year
in the biennium''.
(6) Allowances.--Section 1105(a)(13) of title 31, United
States Code, is amended by striking ``the fiscal year'' and
inserting ``each fiscal year in the biennium''.
(7) Allowances for uncontrolled expenditures.--Section
1105(a)(14) of title 31, United States Code, is amended by
striking ``that year'' and inserting ``each fiscal year in
the biennium for which the budget is submitted''.
(8) Tax expenditures.--Section 1105(a)(16) of title 31,
United States Code, is amended by striking ``the fiscal
year'' and inserting ``each fiscal year in the biennium''.
(9) Future years.--Section 1105(a)(17) of title 31, United
States Code, is amended--
(A) by striking ``the fiscal year following the fiscal
year'' and inserting ``each fiscal year in the biennium
following the biennium'';
(B) by striking ``that following fiscal year'' and
inserting ``each such fiscal year''; and
(C) by striking ``fiscal year before the fiscal year'' and
inserting ``biennium before the biennium''.
(10) Prior year outlays.--Section 1105(a)(18) of title 31,
United States Code, is amended--
(A) by striking ``the prior fiscal year'' and inserting
``each of the 2 most recently completed fiscal years,'';
(B) by striking ``for that year'' and inserting ``with
respect to those fiscal years''; and
(C) by striking ``in that year'' and inserting ``in those
fiscal years''.
(11) Prior year receipts.--Section 1105(a)(19) of title 31,
United States Code, is amended--
(A) by striking ``the prior fiscal year'' and inserting
``each of the 2 most recently completed fiscal years'';
(B) by striking ``for that year'' and inserting ``with
respect to those fiscal years''; and
(C) by striking ``in that year'' each place it appears and
inserting ``in those fiscal years''.
(c) Estimated Expenditures of Legislative and Judicial
Branches.--Section 1105(b) of title 31, United States Code,
is amended by striking ``each year'' and inserting ``each
even-numbered year''.
(d) Recommendations To Meet Estimated Deficiencies.--
Section 1105(c) of title 31, United States Code, is amended--
(1) by striking ``the fiscal year for'' the first place it
appears and inserting ``each fiscal year in the biennium
for'';
(2) by striking ``the fiscal year for'' the second place it
appears and inserting ``each fiscal year of the biennium, as
the case may be, for''; and
(3) by striking ``for that year'' and inserting ``for each
fiscal year of the biennium''.
(e) Capital Investment Analysis.--Section 1105(e)(1) of
title 31, United States Code, is amended by striking
``ensuing fiscal year'' and inserting ``biennium to which
such budget relates''.
(f) Supplemental Budget Estimates and Changes.--
(1) In general.--Section 1106(a) of title 31, United States
Code, is amended--
(A) in the matter preceding paragraph (1), by--
(i) inserting after ``Before July 16 of each year'' the
following: ``and February 15 of each even-numbered year'';
and
(ii) striking ``fiscal year'' and inserting ``biennium'';
(B) in paragraph (1), by striking ``that fiscal year'' and
inserting ``each fiscal year in such biennium'';
(C) in paragraph (2), by striking ``fiscal year'' and
inserting ``biennium''; and
(D) in paragraph (3), by striking ``fiscal year'' and
inserting ``biennium''.
(2) Changes.--Section 1106(b) of title 31, United States
Code, is amended by--
(A) striking ``the fiscal year'' and inserting ``each
fiscal year in the biennium'';
(B) inserting after ``Before July 16 of each year'' the
following: ``and February 15 of each even-numbered year'';
and
(C) striking ``submitted before July 16'' and inserting
``required by this subsection''.
(g) Current Programs and Activities Estimates.--
(1) In general.--Section 1109(a) of title 31, United States
Code, is amended--
(A) by striking ``On or before the first Monday after
January 3 of each year (on or before February 5 in 1986)''
and inserting ``At the same time the budget required by
section 1105 is submitted for a biennium''; and
(B) by striking ``the following fiscal year'' and inserting
``each fiscal year of such period''.
(2) Joint economic committee.--Section 1109(b) of title 31,
United States Code, is amended by striking ``March 1 of each
year'' and inserting ``within 6 weeks of the President's
budget submission for each odd-numbered year (or, if
applicable, as provided by section 300(b) of the
Congressional Budget Act of 1974)''.
(h) Year-Ahead Requests for Authorizing Legislation.--
Section 1110 of title 31, United States Code, is amended by--
(1) striking ``May 16'' and inserting ``March 31''; and
(2) striking ``year before the year in which the fiscal
year begins'' and inserting ``calendar year preceding the
calendar year in which the biennium begins''.

SEC. 5. TWO-YEAR APPROPRIATIONS; TITLE AND STYLE OF
APPROPRIATIONS ACTS.

Section 105 of title 1, United States Code, is amended to
read as follows:

``Sec. 105. Title and style of appropriations Acts

``(a) The style and title of all Acts making appropriations
for the support of the Government shall be as follows: `An
Act making appropriations (here insert the object) for each
fiscal year in the biennium of fiscal years (here insert the
fiscal years of the biennium).'.
``(b) All Acts making regular appropriations for the
support of the Government shall be enacted for a biennium and
shall specify the amount of appropriations provided for each
fiscal year in such period.
``(c) For purposes of this section, the term `biennium' has
the same meaning as in section 3(11) of the Congressional
Budget and Impoundment Control Act of 1974 (2 U.S.C.
622(11)).''.

SEC. 6. MULTIYEAR AUTHORIZATIONS.

(a) In General.--Title III of the Congressional Budget Act
of 1974 is amended by adding at the end the following new
section:

``authorizations of appropriations

``Sec. 316. (a) Point of Order.--It shall not be in order
in the House of Representatives or the Senate to consider--
``(1) any bill, joint resolution, amendment, motion, or
conference report that authorizes appropriations for a period
of less than 2 fiscal years, unless the program, project, or
activity for which the appropriations are authorized will
require no further appropriations and will be completed or
terminated after the appropriations have been expended; and
``(2) in any odd-numbered year, any authorization or
revenue bill or joint resolution until Congress completes
action on the biennial budget resolution, all regular
biennial appropriations bills, and all reconciliation bills.
``(b) Applicability.--In the Senate, subsection (a) shall
not apply to--
``(1) any measure that is privileged for consideration
pursuant to a rule or statute;
``(2) any matter considered in Executive Session; or
``(3) an appropriations measure or reconciliation bill.''.
(b) Amendment to Table of Contents.--The table of contents
set forth in section 1(b) of the Congressional Budget and
Impoundment Control Act of 1974 is amended by adding after
the item relating to section 315 the following new item:

``Sec. 316. Authorizations of appropriations.''.

SEC. 7. GOVERNMENT PLANS ON A BIENNIAL BASIS.

(a) Strategic Plans.--Section 306 of title 5, United States
Code, is amended--
(1) in subsection (a), by striking ``September 30, 1997''
and inserting ``September 30, 2005'';
(2) in subsection (b)--
(A) by striking ``five years forward'' and inserting ``6
years forward'';
(B) by striking ``at least every three years'' and
inserting ``at least every 4 years''; and
(C) by striking beginning with ``, except that'' through
``four years''; and
(3) in subsection (c), by inserting a comma after
``section'' the second place it appears and adding
``including a strategic plan submitted by September 30, 2005
meeting the requirements of subsection (a)''.
(b) Budget Contents and Submission to Congress.--Paragraph
(28) of section 1105(a) of title 31, United States Code, is
amended by striking ``beginning with fiscal year 1999, a''
and inserting ``beginning with fiscal year 2006, a
biennial''.
(c) Performance Plans.--Section 1115 of title 31, United
States Code, is amended--
(1) in subsection (a)--
(A) in the matter before paragraph (1)--
(i) by striking ``section 1105(a)(29)'' and inserting
``section 1105(a)(28)''; and
(ii) by striking ``an annual'' and inserting ``a
biennial'';
(B) in paragraph (1) by inserting after ``program
activity'' the following: ``for both years 1 and 2 of the
biennial plan'';
(C) in paragraph (5) by striking ``and'' after the
semicolon,
(D) in paragraph (6) by striking the period and inserting a
semicolon; and inserting ``and'' after the inserted
semicolon; and
(E) by adding after paragraph (6) the following:
``(7) cover a 2-year period beginning with the first fiscal
year of the next biennial budget cycle.'';
(2) in subsection (d) by striking ``annual'' and inserting
``biennial''; and

[[Page S4127]]

(3) in paragraph (6) of subsection (f) by striking
``annual'' and inserting ``biennial''.
(d) Managerial Accountability and Flexibility.--Section
9703 of title 31, United States Code, relating to managerial
accountability, is amended--
(1) in subsection (a)--
(A) in the first sentence by striking ``annual''; and
(B) by striking ``section 1105(a)(29)'' and inserting
``section 1105(a)(28)'';
(2) in subsection (e)--
(A) in the first sentence by striking ``one or'' before
``years'';
(B) in the second sentence by striking ``a subsequent
year'' and inserting ``a subsequent 2-year period''; and
(C) in the third sentence by striking ``three'' and
inserting ``4''.
(e) Pilot Projects for Performance Budgeting.--Section 1119
of title 31, United States Code, is amended--
(1) in paragraph (1) of subsection (d), by striking
``annual'' and inserting ``biennial''; and
(2) in subsection (e), by striking ``annual'' and inserting
``biennial''.
(f) Strategic Plans.--Section 2802 of title 39, United
States Code, is amended--
(1) is subsection (a), by striking ``September 30, 1997''
and inserting ``September 30, 2005'';
(2) by striking ``five years forward'' and inserting ``6
years forward'';
(3) in subsection (b), by striking ``at least every three
years'' and inserting ``at least every 4 years''; and
(4) in subsection (c), by inserting a comma after
``section'' the second place it appears and inserting
``including a strategic plan submitted by September 30, 2005
meeting the requirements of subsection (a)''.
(g) Performance Plans.--Section 2803(a) of title 39, United
States Code, is amended--
(1) in the matter before paragraph (1), by striking ``an
annual'' and inserting ``a biennial'';
(2) in paragraph (1), by inserting after ``program
activity'' the following: ``for both years 1 and 2 of the
biennial plan'';
(3) in paragraph (5), by striking ``and'' after the
semicolon;
(4) in paragraph (6), by striking the period and inserting
``; and''; and
(5) by adding after paragraph (6) the following:
``(7) cover a 2-year period beginning with the first fiscal
year of the next biennial budget cycle.''.
(h) Committee Views of Plans and Reports.--Section 301(d)
of the Congressional Budget Act (2 U.S.C. 632(d)) is amended
by adding at the end ``Each committee of the Senate or the
House of Representatives shall review the strategic plans,
performance plans, and performance reports, required under
section 306 of title 5, United States Code, and sections 1115
and 1116 of title 31, United States Code, of all agencies
under the jurisdiction of the committee. Each committee may
provide its views on such plans or reports to the Committee
on the Budget of the applicable House.''.
(i) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect on March 1, 2005.
(2) Agency actions.--Effective on and after the date of
enactment of this Act, each agency shall take such actions as
necessary to prepare and submit any plan or report in
accordance with the amendments made by this Act.

SEC. 8. BIENNIAL APPROPRIATIONS BILLS.

(a) In General.--Title III of the Congressional Budget Act
of 1974 (2 U.S.C. 631 et seq.) is amended by adding at the
end the following:

``consideration of biennial appropriations bills

``Sec. 317. It shall not be in order in the House of
Representatives or the Senate in any odd-numbered year to
consider any regular bill providing new budget authority or a
limitation on obligations under the jurisdiction of any of
the subcommittees of the Committees on Appropriations for
only the first fiscal year of a biennium, unless the program,
project, or activity for which the new budget authority or
obligation limitation is provided will require no additional
authority beyond 1 year and will be completed or terminated
after the amount provided has been expended.''.
(b) Amendment to Table of Contents.--The table of contents
set forth in section 1(b) of the Congressional Budget and
Impoundment Control Act of 1974 is amended by adding after
the item relating to section 316 the following new item:

``Sec. 317. Consideration of biennial appropriations bills.''.

SEC. 9. REPORT ON TWO-YEAR FISCAL PERIOD.

Not later than 180 days after the date of enactment of this
Act, the Director of OMB shall--
(1) determine the impact and feasibility of changing the
definition of a fiscal year and the budget process based on
that definition to a 2-year fiscal period with a biennial
budget process based on the 2-year period; and
(2) report the findings of the study to the Committees on
the Budget of the House of Representatives and the Senate.

SEC. 10. EFFECTIVE DATE.

(a) In General.--Except as provided in sections 8 and 10
and subsection (b), this Act and the amendments made by this
Act shall take effect on January 1, 2007, and shall apply to
budget resolutions and appropriations for the biennium
beginning with fiscal year 2008.
(b) Authorizations for the Biennium.--For purposes of
authorizations for the biennium beginning with fiscal year
2006, the provisions of this Act and the amendments made by
this Act relating to 2-year authorizations shall take effect
January 1, 2005.
______

By Mr. CORZINE (for himself and Mr. Lautenberg):
S. 878. A bill to amend the Outer Continental Shelf Lands Act to
permanently prohibit the conduct of offshore drilling on the Outer
Continental Shelf in the Mid-Atlantic and North Atlantic planning
areas; to the Committee on Energy and Natural Resources.
Mr. CORZINE. Mr. President, today, along with Senator Lautenberg, I
am introducing legislation, the Clean Ocean and Safe Tourism Anti-
Drilling Act, or COAST Anti-Drilling Act, to ban oil and gas drilling
off the Mid-Atlantic and Northern Atlantic coast.
The people of New Jersey, and other residents of States along the
Atlantic Coast, do not want oil or gas rigs anywhere near their
treasured beaches and fishing grounds. Such drilling poses serious
threats not only to our environment, but to our economy, which depends
heavily on tourism along our shore. Coastal tourism is New Jersey's
second-largest industry, and the New Jersey Shore is one of the fastest
growing regions in the country. According to the New Jersey Department
of Commerce, tourism in the Garden State generates more than $31
billion in spending, directly and indirectly supports more than 836,000
jobs, more than 20 percent of total State employment, generates more
than $16.6 billion in wages, and brings in more than $5.5 billion in
tax revenues to the State.
Until the Bush administration came into office, there was no reason
to suspect that drilling was even a remote possibility. Since 1982, a
statutory moratorium on leasing activities in most Outer Continental
Shelf, OCS, areas has been included annually in Interior appropriations
acts. In addition, President George H.W. Bush declared a leasing
moratorium on many OCS areas on June 26, 1990, under section 12 of the
OCS Lands Act. On June 12, 1998, President Clinton used the same
authority to issue a memorandum to the Secretary of the Interior that
extended the moratorium through 2012 and included additional OCS areas.
Given the longstanding consensus against drilling in these areas, I
was deeply disturbed to discover that on May 31, 2001, the Minerals
Management Service released a request for proposals, RFP, to conduct a
study of the environmental impacts of drilling in the Mid- and North-
Atlantic. The RFP noted that ``there are areas with some reservoir
potential, for example off the coast of New Jersey.'' In addition, the
RFP explained that the study would be conducted ``in anticipation of
managing the exploitation of potential and proven reserves.'' I
believed that the RFP was inappropriate and misguided, and I was
pleased when at my urging and the urging of other coastal Senators, the
administration rescinded it.
After our strong bipartisan coalition fought off the Department of
the Interior RFP, our coastal coalition came together again to fight
off the Outer Continental Shelf inventory provisions of last year's
energy bill. The bill directed the Department of the Interior to
inventory all potential oil and natural gas resources in the entire
Outer Continental Shelf, including areas off of the New Jersey coast.
The bill would have allowed the use of seismic surveys, dart core
sampling, and other exploration technologies, all of which would leave
these areas vulnerable to oil spills, drilling discharges and damage to
coastal wetlands.
These provisions run directly counter to language that Congress has
included annually in appropriations bills to prevent leasing,
preleasing, and related activities in most areas of the Outer
Continental Shelf, including areas off the New Jersey coast.
Fortunately, this provision was dropped last year, but it is likely
that it will resurface during debate on the Energy bill this year, and
it is clear that we need to once and for all ban drilling off the coast
of New Jersey and the rest of the Mid- and North-Atlantic.
So considering the minimal benefit and significant downside of
drilling off the coast of New Jersey, it is not worth threatening over
800,000 New Jersey jobs to recover what the MMS estimated in 2000 to be
196 million barrels

[[Page S4128]]

of oil, only enough to last the country barely 10 days.
I certainly don't think it is worth the risk, and it is time for
Congress to act to resolve this question once and for all. That is why
I am introducing the COAST Anti-Drilling Act. The Clean Ocean and Safe
Tourism Anti-Drilling Act would permanently ban drilling for oil, gas
and other minerals in the Mid- and North-Atlantic.
I look forward to working with my colleagues to enact this important
legislation. Doing so would ensure the people of New Jersey and
neighboring States that they need not fear the specter of oil rigs off
their beaches.
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. 878

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 ``Clean Ocean and Safe Tourism
Anti-Drilling Act'' or the ``COAST Anti-Drilling Act''.

SEC. 2. PROHIBITION OF OIL AND GAS LEASING IN CERTAIN AREAS
OF THE OUTER CONTINENTAL SHELF.

Section 8 of the Outer Continental Shelf Lands Act (43
U.S.C. 1337) is amended by adding at the end the following:
``(p) Prohibition of Oil and Gas Leasing in Certain Areas
of the Outer Continental Shelf.--Notwithstanding any other
provision of this section or any other law, the Secretary of
the Interior shall not issue a lease for the exploration,
development, or production of oil, natural gas, or any other
mineral in--
``(1) the Mid-Atlantic planning area; or
``(2) the North Atlantic planning area.''.
______

By Ms. MURKOWSKI:
S. 879. A bill to make improvements to the Arctic Research and Policy
Act of 1984; to the Committee on Homeland Security and Governmental
Affairs.
Ms. MURKOWSKI. Mr. President, it has been 20 years since the passage
of the Arctic Research and Policy Act of 1984, a bill sponsored by the
former Senator Murkowski. The time has come to make some modifications
to reflect the experience we've gained over that time.
I'm pleased to note that the amendments I introducing today are
really very modest, an indication that the act--and the presidential
commission it created--have functioned quite well. These minimal
changes will, I hope, make them function even more smoothly.
First, the chairman of the Arctic Research Commission will be
authorized compensation for an additional 30 days of work during the
course of a year. That is still far less than the actual number of days
demanded by the position, but will help. Second, the bill will allow
the Commission to stimulate additional interest in Arctic research by
establishing a professional award program for excellence in research.
Current and former members of the Commission will not be eligible.
Awards will be capped at a symbolic amount of $1,000, but the
recognition by each winner's scientific peers will be invaluable. Third
and finally, the bill will allow the Commission to reciprocate in the
expected manner when foreign delegations host a reception or other
event. This provision is limited to no more than two-tenths of a
percent of the Commission budget--as with the award program, the value
is primarily symbolic, but is nonetheless important.
Although these are small changes, they will help ensure a smoothly
functioning Arctic Research Act, and that is important. Although it is
not something you hear about on a daily basis, the United States is a
leader in the very small circle of Arctic nations, and the Congress
plays a major role in ensuring that we remain a leader in this
critically important sphere. And make no mistake about it, the Arctic
is critical to this country for social, strategic, economic and
scientific reasons that are simply too plentiful to enumerate at this
time.
The main purposes of the Arctic Research and Policy Act are: 1, to
establish national policy for basic and applied research on Arctic
resources and materials, physical, biological and health sciences, and
social and behavioral sciences; 2, to establish the U.S. Arctic
Research Commission to promote Arctic research and to recommend
research policies; 3, to designate the National Science Foundation as
the lead agency for implementing Arctic research; and, 4, to establish
the Interagency Arctic Research Policy Committee, IARPC, which is
responsible for coordinating a multiplicity of Arctic research efforts
throughout the government.
As we continue to see evidence of Arctic warming--whether or not we
consider it to be human-caused or natural, global or regional--it is of
tremendous importance to prepare as best we can. The future may hold
both positives--such as increased agricultural production and access to
natural resources--and negatives--such as widespread damage to existing
infrastructure, flooding, and sweeping social changes. The Arctic
Research Commission plays a vital role and deserves our full support.
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. 879

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 ``Arctic Research and Policy
Amendments Act of 2005''.

SEC. 2. CHAIRPERSON OF THE ARCTIC RESEARCH COMMISSION.

(a) Compensation.--Section 103(d)(1) of the Arctic Research
and Policy Act of 1984 (15 U.S.C. 4102(d)(1)) is amended in
the second sentence by striking ``90 days'' and inserting ``,
in the case of the chairperson, 120 days, and, in the case of
any other member, 90 days,''.
(b) Redesignation.--Section 103(d)(2) of the Arctic
Research and Policy Act of 1984 (15 U.S.C. 4102(d)(2)) is
amended by striking ``Chairman'' and inserting
``chairperson''.

SEC. 3. COMMISSION AWARDS FOR EXCELLENCE IN RESEARCH.

(a) Authority.--Section 104 of the Arctic Research and
Policy Act of 1984 (15 U.S.C. 4103) is amended--
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following new
subsection:
``(b) Commission Awards for Excellence in Research.--
``(1) In general.--Each year, the Commission may make a
cash award to any person in recognition of excellence in
Arctic research conducted by such person or outstanding
support of Arctic research provided by such person.
``(2) Amount.--The amount of a cash award made to a person
under paragraph (1) shall be fixed by the Commission and
shall not exceed $1,000.
``(3) Ineligibility of commission members.--An individual
who is or has been a member of the Commission shall be
ineligible to receive an award under paragraph (1).''.
(b) Technical Amendments.--Section 104 of such Act, as
amended by subsection (a), is further amended--
(1) by inserting ``Duties of Commission.--'' before ``The
Commission'' in subsection (a); and
(2) by inserting ``Report.--'' before ``Not later than'' in
subsection (c).

SEC. 4. REPRESENTATION AND RECEPTION ACTIVITIES.

Section 106 of the Arctic Research and Policy Act of 1984
(15 U.S.C. 4105) is amended--
(1) by striking ``and'' at the end of paragraph (4);
(2) by striking the period at the end of paragraph (5) and
inserting ``; and''; and
(3) by adding at the end the following:
``(6) expend for representation and reception expenses each
fiscal year not more than 0.2 percent of the amounts made
available to the Commission under section 111 for such fiscal
year.''.
______

By Mrs. BOXER (for herself and Mrs. Feinstein):
S. 880. A bill to expand the boundaries of the Gulf of the Farallones
National Marine Sanctuary and the Cordell Bank National Marine
Sanctuary; to the Committee on Environment and Public Works.
Mrs. BOXER. Mr. President, today I am introducing the Gulf of the
Farallones and Cordell Bank National Marine Sanctuaries Boundary
Modification and Protection Act. I am joined in this effort by Senator
Feinstein and Representative Lynn Woolsey who has introduced the
companion bill in the other body.
The Gulf of the Farallones and the adjacent Cordell Bank are rich
with wildlife and are visually spectacular. They are one of
California's--indeed America's--great natural treasures.
Thirty-three marine mammal species use this area. Over half of these
are threatened or endangered. The sanctuaries also contain one of the
largest

[[Page S4129]]

populations of blue and humpback whales in the world. Every summer,
many grey whales dwell in the boundaries and neighboring waters of the
sanctuaries. In addition, birds rely on the rich waters and surrounding
land for nesting, feeding, and rearing of their young.
As effective as the current boundaries are in protecting this
wildlife, new risks and a better understanding of the ecosystem
necessitate extending the existing boundaries.
My legislation would expand the boundaries of the two existing
national marine sanctuaries to protect the entire Sonoma Coast. By
expanding the boundaries of both the Gulf of the Farallones and Cordell
Bank National Marine Sanctuaries, the bill will protect the Russian and
Gualala River estuaries and the nutrient-rich Bodega Canyon from
offshore oil drilling and pollution.
Expanding these marine sanctuaries will help to ensure that they
remain the treasures they are. I urge my colleagues to support this
bill.
______

By Ms. CANTWELL (for herself, Mr. McCain, Mr. Dorgan, Mrs.
Murray, and Mr. Inouye):
S. 881. A bill to provide for equitable compensation to the Spokane
Tribe of Indians of the Spokane Reservation for the use of tribal land
for the production of hydropower by the Grand Coulee Dam, and for other
purposes; to the Committee on Indian Affairs.
Ms. CANTWELL. Mr. President, I rise today to introduce legislation
with my colleague from Washington State, Senator Murray, and former
Senate Indian Affairs Committee chairman, Senator Inouye of Hawaii. The
bill I submit today, which is identical to S. 1438 which passed the
Senate unanimously on November 19, 2004, provides an equitable
settlement of a longer standing injustice to the Spokane Tribe of
Indians.
For more than half a century, the Columbia Basin Project has made an
extraordinary contribution to this Nation. It helped pull the economy
out of the Great Depression. It provided the electricity that produced
aluminum required for airplanes and weapons that ensured our national
security. The project continues to produce enormous revenues for the
United States. It is a key component of the agricultural economy in
eastern Washington and plays a pivotal role in the electric systems
serving the entire western United States.
However, these benefits have come at a direct cost to tribal property
that became inundated when the U.S. Government built the Grand Coulee
Dam. Before dam construction, the free flowing Columbia River supported
robust and plentiful salmon runs and provided for virtually all of the
subsistence needs of the Spokane Tribe. After construction, the
Columbia and its Spokane River tributary flooded tribal communities,
schools, and roads, and the remaining stagnant water continues to erode
reservation lands today.
The legislation Senators Inouye, Murray and I are introducing today
is similar to P.L. 103-436, which was enacted in 1994 to provide just
compensation to the neighboring Confederated Colville Tribes. This bill
would provide the Spokane Tribe of Indians with compensation for the
use of its lands for the production of hydropower by the Grand Coulee
Dam under a formula based in part on that by which the Confederated
Tribes of the Colville Reservation were compensated in the Colville
Tribes' settlement legislation in 1994. The Spokane Tribe lost lands
equivalent in area to 39.4 percent of the lands lost to Colville Tribes
a settlement based solely on this factor would result in a proportional
payment of 39.4 percent to the Spokane Tribe. This was the formula
basis for similar Spokane settlement legislation introduced in the
Senate and House in the 107th, 108th, and 109th Congress. However,
based upon good faith, honorable and extensive negotiations by and
between the Spokane Tribe, the Bonneville Power Administration, the
Bureau of Reclamation the National Park Service during the past year,
this percentage has been reduced to 29 percent in recognition of the
fact that certain lands taken for the construction of the Grand Coulee
Dam would be restored to the Spokane Tribe under the terms of this
legislation. The legislation reserves a perpetual right, power, and
easement over the land transferred to carry out the Columbia Basin
Project under the Columbia Basin Project Act, 16 U.S.C. 835 et seq.
The United States has a trust responsibility to maintain and protect
the integrity of all tribal lands with its borders. When Federal
actions physically or economically impact or harm, our Nation has a
legal responsibility to address and compensate the damaged parties.
Unfortunately, despite countless effort, half a century has passed
without justice to the Spokane people.
In hearings before the Senate Committee on Indian Affairs on October
2, 2003, Robert A. Robinson, Managing Director, Natural Resources and
Environment, General Accounting Office testified:

A reasonable case can be made to settle the Spokane Tribe's
case along the lines of the Colville settlement--a one-time
payment from the U.S. Treasury for past lost payments for
water power values and annual payments primarily from
Bonneville [BPA]. Bonneville continues to earn revenues from
the Spokane reservation lands used to generate hydropower.
However, unlike the Colville Tribes, the Spokane Tribe does
not benefit from these revenues. The Spokane Tribe does not
benefit because it missed its filing opportunity before the
Indian Claims Commission. At that time it was pursuing other
avenues to win payments for the value of its land for
hydropower. These efforts would ultimately fail. Without
congressional action, it seems unlikely that a settlement for
the Spokane Tribe will occur.

The time has come for the Federal Government to finally meet its
fiduciary responsibility for converting the Spokane Tribe's resource to
its own benefit. Senators Inouye, Murray and I believe that the
legislation we are proposing today will finally bring a fair and
honorable closure to these matters. We are pleased that similar
bipartisan legislation was also introduced today in the U.S House of
Representatives.
I look forward to working with the Indian Affairs Committee and
Senate colleagues as this legislation proceeds through the Congress.
______

By Mr. DURBIN (for himself, Ms. Stabenow, Mr. Wyden, Mr.
Lautenberg, Mr. Bayh, Mr. Leahy, Mr. Lieberman, Mrs. Boxer, Mr.
Kennedy, Mr. Reed, Mrs. Clinton, Mr. Corzine, Mr. Kerry, Mr.
Feingold, and Mr. Schumer):
S. 882. A bill to designate certain Federal land in the State of Utah
as wilderness, and for other purposes; to the Committee on Energy and
Natural Resources.
Mr. DURBIN. Mr. President, I rise today to introduce America's Red
Rock Wilderness Act of 2005. This legislation continues our Nation's
commitment to preserve our natural heritage. Preservation of our
Nation's vital natural resources will be one of our most important
legacies.
Unfortunately, remaining wilderness areas are increasingly threatened
and degraded by oil and gas development, mining, claims of rights of
way, logging and off-road vehicles. America's Red Rock Wilderness Act
will designate 9.5 million acres of land managed by the Bureau of Land
Management, BLM, in Utah as wilderness under the Wilderness Act.
Wilderness designation will preserve the land's wilderness character,
along with the values associated with that wilderness; scenic beauty,
solitude, wildlife, geological features, archaeological sites, and
other features of scientific, educational and historical value.
America's Red Rock Wilderness Act will provide wilderness protection
for red rock cliffs offering spectacular vistas of rare rock
formations, canyons and desert lands, important archaeological sites,
and habitat for rare plant and animal species.
Volunteers have taken inventories of thousands of square miles of BLM
land in Utah to help determine which lands should be protected. These
volunteers provided extensive documentation to ensure that these areas
meet Federal wilderness criteria. The BLM also completed a reinventory
of approximately 6 million acres of Federal land in the same area. The
results provide a convincing confirmation that the areas designated for
protection under this bill meet Federal wilderness criteria.
For more than 20 years Utah conservationists have been working to add
the last great blocks of undeveloped BLM-administered land in Utah to
the National Wilderness Preservation System. The lands proposed for
protection

[[Page S4130]]

surround and connect eight of Utah's nine national park, monument and
recreation areas. These proposed BLM wilderness areas easily equal
their neighboring national parklands in scenic beauty, opportunities
for recreation, and ecological importance. Yet, unlike the parks, most
of these scenic treasures lack any form of long-term protection.
While my legislation would unambiguously protect Utah's red rock
wilderness, the question of preserving these lands for future
generations now also looms before the BLM. Not since the BLM conducted
its inventories of Utah public lands in the early 1980s has the agency
had such a promising opportunity to recognize and care for Utah's
wilderness. Whether the BLM realizes this opportunity has yet to be
seen.
Today, nearly 6 million acres of wildlands that my legislation would
protect are involved in the BLM's land use planning process. As I
understand, the BLM will be making lasting decisions about what places
should be preserved or developed, roaded or left unroaded, or
designated for off-road vehicle travel. These policies will stand for
as much as 15 to 20 years, a timespan long enough to leave a lasting
mark on this landscape.
We must be clear about the impact of these plans. Fundamentally, the
administration is choosing how it will act as stewards for our wild and
scenic places. These plans in Utah will profoundly influence many
fragile desert lands that would be protected under America's Red Rock
Wilderness Act. Places like the San Rafael Swell, the Book Cliffs, the
Canyonlands Basin, and Moab/La Sal Region now hang in the balance.
I believe Americans understand the need for wise and balanced
stewardship of these wild landscapes. Unfortunately, the administration
has proposed little or no serious protections for Utah's most majestic
places. Instead, the BLM appears to lack a solid conservation ethic and
routinely favors development and consumptive uses of our wild public
land.
The administration has a decidedly different approach on the fate of
some of our remaining wilderness. Under the Price plan, the BLM leaves
98 percent of the region's lands in America's Red Rock Wilderness Act,
outside of already protected areas, open to oil and gas drilling.
Sadly, the Green River, which cuts deep into the rugged Book Cliffs
forming the sandstone cliffs of Desolation Canyon, and other natural
wonders are being jeopardized by the BLM for a negligible amount of
oil.
The BLM has made important headway in protecting America's Red Rock
Wilderness from off-road vehicle abuse, but more can still be done to
safely and effectively plan for off-road vehicle recreation. Just 5
years ago, 94 percent of BLM public land in Utah lacked protection from
motorized vehicle abuse. As open BLM areas, many fragile lands in
America's Red Rock Wilderness Act and elsewhere were vulnerable to off-
road vehicle abuse. Since this free-for-all era, BLM trail designations
have helped to educate motorized users and direct use to appropriate
areas. Stewardship over the long-term is still needed to ensure that
our wilderness legacy remains intact.
America's Red Rock Wilderness Act is a lasting gift to the American
public. By protecting this serene yet wild land we are giving future
generations the opportunity to enjoy the same untrammeled landscape
that so many now cherish.
I'd like to thank all of my colleagues who are original cosponsors of
this measure this year, many of whom have supported the bill since it
was first introduced. The original cosponsors of the measure are
Senators Stabenow, Wyden, Feingold, Lautenberg, Bayh, Leahy, Lieberman,
Boxer, Kennedy, Reed, Clinton, Corzine and Kerry. Additionally, I would
like to thank The Utah Wilderness Coalition, which includes The
Wilderness Society and Sierra Club; The Southern Utah Wilderness
Alliance; and all of the other national, regional and local, hard-
working groups who, for years, have championed this legislation.
Theodore Roosevelt once stated:

The Nation behaves well if it treats the natural resources
as assets which it must turn over to the next generation
increased and not impaired in value.

Enactment of this legislation will help us realize Roosevelt's
vision. In order to protect these precious resources in Utah for future
generations, I urge my colleagues to support America's Red Rock
Wilderness Act.
Mr. FEINGOLD. Mr. President, I am very pleased to again join the
senior Senator from Illinois, Mr. Durbin, as an original co-sponsor of
legislation to designate more than one million acres of Bureau of Land
Management, BLM, lands in Utah as wilderness.
I had an opportunity to travel twice to Utah. I viewed firsthand some
of the lands that would be designated for wilderness under Senator
Durbin's bill. I was able to view most of the proposed wilderness areas
from the air, and was able to enhance my understanding through hikes
outside the Zion National Park on the Dry Creek Bench wilderness unit
contained in this proposal and inside the Grand Staircase-Escalante
National Monument to Upper Calf Creek Falls. I also viewed the lands
proposed for designation in this bill from a river trip down the
Colorado River, and in the San Rafael Swell with members of the Emery
County government.
I support this legislation for a number of reasons, but most of all
because I have personally seen what is at stake, and I know the
marvelous resources that Wisconsinites and all Americans own in the BLM
lands of Southern Utah.
Second, I support this legislation because I believe it sets the
broadest and boldest mark for the lands that should be protected in
Southern Utah. I believe that when the Senate considers wilderness
legislation it ought to know, as a benchmark, the full measure of those
lands which are deserving of wilderness protection. This bill
encompasses all the BLM lands of wilderness quality in Utah.
Unfortunately, the Senate has not always had the benefit of considering
wilderness designations for all of the deserving lands in Southern
Utah. During the 104th Congress, I joined with the former Senator from
New Jersey, Mr. Bradley, in opposing that Congress's Omnibus Parks
legislation. It contained provisions, which were eventually removed,
that many in my home state of Wisconsin believed not only designated as
wilderness too little of the Bureau of Land Management's holding in
Utah deserving of such protection, but also substantively changed the
protections afforded designated lands under the Wilderness Act of 1964.
The lands of Southern Utah are very special to the people of
Wisconsin. In writing to me over the last few years, my constituents
have described these lands as places of solitude, special family
moments, and incredible beauty. In December 1997, Ron Raunikar of
Madison, Wisconsin's Capital Times wrote:

Other remaining wilderness in the U.S. is at first
daunting, but then endearing and always a treasure for all
Americans. The sensually sculpted slickrock of the Colorado
Plateau and windswept crag lines of the Great Basin include
some of the last of our country's wilderness, which is not
fully protected.
We must ask our elected officials to redress this
circumstance, by enacting legislation which would protect
those national lands within the boundaries of Utah. This
wilderness is a treasure we can lose only once or a legacy we
can be forever proud to bestow to our children.

I believe that the measure being introduced today will accomplish
that goal. The measure protects wild lands that really are not done
justice by any description in words. In my trip I found widely varied
and distinct terrain, remarkable American resources of red rock cliff
walls, desert, canyons and gorges which encompass the canyon country of
the Colorado Plateau, the Mojave Desert and portions of the Great
Basin. The lands also include mountain ranges in western Utah, and
stark areas like the Grand Staircase-Escalante National Monument. These
regions appeal to all types of American outdoor interests from hikers
and sightseers to hunters.
Phil Haslanger of the Capital Times, answered an important question I
am often asked when people want to know why a Senator from Wisconsin
would co-sponsor legislation to protect lands in Utah. He wrote on
September 13, 1995 simply that:

``These are not scenes that you could see in Wisconsin.
That's part of what makes them special.''

He continues, and adds what I think is an even more important reason
to act to protect these lands than the landscape's uniqueness:

[[Page S4131]]

``the fight over wilderness lands in Utah is a test case of
sorts. The anti-environmental factions in Congress are trying
hard to remove restrictions on development in some of the
nation's most splendid areas.''

Ten years later, Wisconsinites are still watching this test case. I
believe that Wisconsinites view the outcome of this fight to save
Utah's lands as a sign of where the Nation is headed with respect to
its stewardship of natural resources. What Haslanger's comments make
clear is that while some in Congress may express concern about creating
new wilderness in Utah, wilderness, as Wisconsinites know, is not
created by legislation. Legislation to protect existing wilderness
simply ensures that future generations may have an experience on public
lands equal to that which is available today. The action of Congress to
preserve wild lands by extending the protections of the Wilderness Act
of 1964 will publicly codify that expectation and promise.
Finally, this legislation has earned my support, and deserves the
support of others in this body, because all of the acres that will be
protected under this bill are already public lands held in trust by the
Federal Government for the people of the United States. Thus, while
they are physically located in Utah, their preservation is important to
the citizens of Wisconsin, as it is for other Americans.
I am eager to work with my colleague from Illinois, Mr. Durbin, to
protect these lands. I commend him for introducing this measure.
______

By Mr. McCAIN (for himself, Mr. Alexander, Mr. Lieberman, Mr.
Salazar, and Mrs. Feinstein):
S. 886. A bill to eliminate the annual operating deficit and
maintenance backlog in the national parks, and for other purposes; to
the Committee on Finance.
Mr. McCAIN. Mr. President, I am pleased to be joined today by
Senators Alexander, Lieberman, Salazar, and Feinstein in introducing
legislation to restore and maintain our National Parks by the
centennial anniversary of the National Park System in 2016.
Heralding the establishment of the first National Parks, President
Theodore Roosevelt stated, ``We have fallen heirs to the most glorious
heritage a people ever received, and each one must do his part if we
wish to show that the nation is worthy of its good fortune.''
And what a priceless fortune Americans enjoy--Yellowstone, the Grand
Canyon, Yosemite, the Tetons, Mt. Rushmore, the Everglades, and
hundreds of other extraordinary national parks that grace our country.
Hundreds of millions of families and visitors from all over the world
have visited these parks for recreational, educational, and cultural
opportunities as well as the sheer pleasure of being surrounded by
their natural beauty or historical significance.
Unfortunately, all of this public enjoyment and use coupled with the
lack of adequate financial investment in our parks has left them in a
state of disrepair and neglect. A multi-billion dollar maintenance
backlog has cast a long shadow over the glory of our national park
heritage. An annual operating deficit estimated at $600 million has
further diminished the integrity of national park programs and
facilities.
The National Parks Centennial Act would allow all Americans to
contribute to the restoration of the parks through the creation of a
Centennial Fund with monies generated by a check-off box on federal tax
returns. The funds collected will be directed to the priority
maintenance and operation needs of the national parks to make them
fiscally sound by 2016. What better way or time to demonstrate that
``we are worthy of the good fortune of our parks''?
I commend the National Parks Conservation Association for promoting
this sound and innovative approach to remedying the significant
deterioration of our parks. A companion House bill has been introduced
by Representatives Souder and Baird with solid bipartisan support.
Surely this is legislation that we can all agree on and support. All
of our lives have been enriched by our National Parks. This bill
provides an opportunity to show our appreciation to restore and
maintain our country's cultural and natural heritage for generations to
come. The passage of this legislation will ensure that our national
parks will have a glorious 100th birthday to celebrate. Let's get on
with it!
Mr. ALEXANDER. Today I am joining with Senators McCain, Lieberman,
Salazar and Feinstein in introducing the National Park Centennial Act--
a bill to make the National Park System fiscally sound by its 100th
birthday in 2016. The park system currently suffers from a multi-
billion dollar backlog of maintenance projects and an operating deficit
that exceeds $600 million each year.
The Centennial Act aims to remedy this crisis by giving tax-payers
the opportunity to check off a box on their tax returns each year that
would send a small contribution to a National Park Centennial Fund.
Today, taxpayers can contribute $3 to Presidential elections. This Act
gives taxpayers an opportunity to contribute directly to our national
parks via their tax returns.
Our parks are national treasures, and they deserve to be preserved in
all their pristine glory. They are a part of our heritage.
It is a national travesty that they suffer from such a terrible lack
of funding. The overall backlog, according to the Congressional
Research Service, is about $7 billion, though estimates vary by about
$2 billion in either direction.
My own State, along with our neighbor North Carolina, is home to the
country's most visited national park, the Great Smoky Mountains
National Park. I live just a few miles from the park myself.
In Tennessee, we have tried to deal with the maintenance backlog in a
number of different ways. More than 2,100 volunteers have provided over
110,000 man-hours of service to the park, which is the equivalent of 50
staff and $1.9 million in extra funding. That's the third best
volunteer rate in the National Park System.
Our local communities in Tennessee and North Carolina have
established a non-profit organization to help support the park--
``Friends of the Smokies''--which has raised more than $8 million since
its founding in 1993 through individual, corporate and foundation
contributions, merchandise sales, special events, and sales of
specialty license plates in Tennessee and North Carolina. Friends now
has over 2,000 members. In addition to its fundraising activities,
Friends of the Smokies coordinates more than 80 volunteers who provide
direct and indirect assistance with projects that benefit Great Smoky
Mountains National Park.
Yet, despite all this extra support, the backlog in the Great Smoky
Mountains National Park remains significant. The Park's current
maintenance backlog is estimated at approximately $180 million dollars.
It is estimated that the Great Smokies will receive up to $36 million
over the next 5 years to address the maintenance backlog. There is over
a $140 million shortfall at the Great Smokies alone.
Examples of maintenance backlog projects at the Smokies are:
Rehabilitation of North Shore Cemetery access routes; rehabilitation
of three comfort stations at Balsam Mountain; rehabilitation of three
comfort stations at Chimney Tops picnic area; rehabilitation of
Newfound Gap Road, phase one; replace obsolete parkwide key system;
repave Clingmans Dome Trail.
We need to do better. It will be hard to do better in this budget
environment. So this is an innovative way to help the parks do better.
Sixty percent of this fund will go to maintenance backlogs. Forty
percent of this fund will supplement the annual operating deficits at
the parks. This program will terminate in 2016.
Parallel legislation has already been introduced in the House of
Representatives, including Congressman Jimmy Duncan. I hope Congress
will move quickly to address this critical need of our national parks.
Our national parks are national treasures. They are a part of our
heritage, a part of who we are as Americans. We need to take care of
these parks so that they are still there, in all their glory, and still
accessible for many generations to come.
______

By Mr. SALAZAR:
S. 888. A bill to direct the Department of Homeland Security to
provide guidance and training to State and local governments relating
to sensitive homeland security information, and for other purposes; to
the Committee on

[[Page S4132]]

Homeland Security and Governmental Affairs.
Mr. SALAZAR. Mr. President, I rise today to introduce an important
piece of legislation to help our local first responders and emergency
officials better prepare and respond to terrorist attacks.
State and local emergency officials represent more than 95 percent of
America's counterterrorism capability. They are on the front lines of
the war on terror. Despite this, there is still a fundamental
disconnect between what we do in Washington to help and what state and
local officials actually need. Too often this happens because people in
Washington are not listening to our folks back home.
One familiar example is homeland security grant funding. In the years
following 9/11, the Federal Government put more money into homeland
security than ever before. Office of Domestic Preparedness Grants
increased 2,900 percent from 2001 to 2003. The Federal Government acted
quickly to get money out the door, but in too many cases, the Feds did
not give States the guidance they needed to best use that money. As a
result, State officials were left scratching their heads. Money was
wasted and local officials did not get all the help they needed.
The same is true with antiterrorism intelligence. Police and fire
departments across the country are being bombarded with terrorism
intelligence from more than a dozen Federal sources. State officials
are getting expensive Federal security clearances so that they can
review spy reports. But State and local officials are not getting the
guidance they need to help them talk to each other.
Police, firemen, and EMTs are the first people on site during an
emergency, whether it is a terrorist attack or car accident. Our first
responders must be given the information they need to safely handle any
situation, the training they need to protect the public and the access
to grants to purchase the proper tools to do their jobs--this
legislation, if passed, will help do just that.
Right now, there are surprisingly few uniform standards for non-
Federal agencies to handle sensitive homeland security information.
While there are detailed procedures for handling classified documents
created by the FBI, CIA and other Federal agencies, there is little
real world guidance for how to make decisions about how to manage
information from non-Federal sources, including locally generated
homeland security plans, State-level grants and intelligence gathered
by local law enforcement agencies.
This lack of guidance has real implications for public safety. Over
the last few months, Colorado's State government has been fighting over
the Secretary of State homeland security information. Currently,
Colorado State law makes secret a wide swath of homeland security
information, including any document sent to, from, or on behalf of the
State Office of Preparedness, Security and Fire Safety. Local officials
have trouble acquiring State information to help them develop
antiterrorism plans, and even State legislators can't find out where
homeland security money is going.
State officials across the country have wasted precious resources
battling over what to make public and what to keep secret. They have
established a wide array of procedures for sharing sensitive
information among emergency management personnel. The current system of
distributing homeland security intelligence and grants funding is
inefficient and has failed to ensure an adequate balance between
protecting sensitive information and ensuring that first responders and
the public have the information they need to keep Coloradans and
Americans safe.
The legislation I am introducing would take three steps to clearing
up this confusion and giving States the tools they need to better
prepare and respond to terrorist attacks.
First, it establishes detailed best practices for State and local
governments to help them determine what homeland security information
should be made public, what should remain classified, and how different
government entities and emergency personnel can share and use sensitive
information.
Second, it establishes a training program to spread these best
practices among state and local officials.
Third, it directs the Department of Homeland Security to provide more
detailed instructions to State and local officials about how to manage
information about homeland security grants that are applied for and
awarded by DHS.
This bill will give emergency officials across the country the tools
they need so that they do not have to waste precious resources remaking
the wheel on homeland security information sharing.
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. 888

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 ``Homeland Security
Information Guidance and Training Act of 2005''.

SEC. 2. FINDINGS.

Congress finds that--
(1) there are few uniform standards for State and local
government agencies to handle sensitive homeland security
information;
(2) there are detailed procedures for handling classified
documents created by the Federal Government, but there is
little guidance for how to make decisions relating to the
management of information from non-Federal sources, including
locally generated homeland security plans, State-level
grants, and intelligence gathered by local law enforcement
agencies;
(3) State and local government officials have--
(A) a wide variety of approaches for handling such
information;
(B) wasted precious resources battling over what
information to make public and what information to keep
secret; and
(C) established a wide array of procedures for sharing
sensitive information among emergency management personnel;
and
(4) the current system is inefficient and has not ensured
the adequate balance between protecting sensitive information
and ensuring that public officials and the public have the
information needed to keep the Nation safe.

SEC. 3. GUIDANCE FOR BEST PRACTICES RELATING TO SENSITIVE
INFORMATION.

(a) In General.--Consistent with section 201(d) of the
Homeland Security Act of 2002 (6 U.S.C. 121(d)), the Under
Secretary of Homeland Security for Information Analysis and
Infrastructure Protection shall establish best practices for
State and local governments to assist State and local
governments in making determinations on--
(1) the types of sensitive non-Federal homeland security
information (including locally generated homeland security
plans, State-level grants, and intelligence gathered by local
law enforcement information agencies) that--
(A) should be made available to the public; or
(B) should be treated as information which should not be
made available to the public; and
(2) how to use and share sensitive homeland security
information among State and local emergency management
personnel.
(b) Effect on State and Local Governments.--Nothing under
subsection (a) shall be construed to--
(1) require any State or local government to comply with
any best practice established under that subsection; or
(2) preempt any State or local law.

SEC. 4. TRAINING.

The Director of the Office for Domestic Preparedness
shall--
(1) establish a training curriculum based on the best
practices established under section 3; and
(2) provide training to State and local governments using
that curriculum.

SEC. 5. GUIDANCE ON GRANT INFORMATION.

Not later than 180 days after the date of enactment of this
Act, the Secretary of Homeland Security shall publish in the
Federal Register detailed instructions for State and local
governments on the management of information relating to
homeland security grants administered by the Department of
Homeland Security.
______

By Mrs. FEINSTEIN (for herself, Ms. Snowe, Mr. Corzine, Mr.
Leahy, Mr. Jeffords, Mr. Schumer, Ms. Collins, Mr. Durbin, and
Ms. Cantwell):
S. 889. A bill to amend title 49, United States Code, to require
phased increases in the fuel efficiency standards applicable to light
trucks, to require fuel economy standards for automobiles up to 10,000
pounds gross vehicle weight, to increase the fuel economy of the
Federal fleet of vehicles, and for other purposes; to the Committee on
Commerce, Science, and Transportation.

[[Page S4133]]

Mrs. FEINSTEIN. Mr. President, I rise today to offer a bill with my
colleagues Senators Snowe, Corzine, Leahy, Cantwell, Collins, Durbin,
Schumer and Jeffords to close the SUV loophole.
This bill would increase Corporate Average Fuel Economy (CAFE)
standards for SUVs and other light duty trucks. It would close the
``SUV Loophole'' and require that SUVs meet the same fuel efficiency
standards as passenger cars by 2011.
Crude oil prices remain above $50/barrel. On April 1, 2005, crude oil
prices hit a record high of $57.70/barrel. Prices at the gas pump
continue to soar as well. Today, the average price for regular gasoline
was $2.24 per gallon. In California, the average price is almost $2.60.
This is not a problem we can drill our way out of. Global oil demand
is rising. China imports more than 40 percent of its record 6.4
million-barrel-per-day oil demand and its consumption is growing by 7.5
percent per year, seven times faster than the U.S.
India imports approximately 70 percent of its oil, which is projected
to rise to more than 90 percent by 2020. Their rapidly growing
economies are fueling their growing dependence on oil--which makes
continued higher prices inevitable.
The most effective step we can take to reduce gas prices is to reduce
demand. We must use our finite fuel supplies more wisely.
This legislation is an important first step to limit our nation's
dependence on oil and better protect our environment.
If implemented, closing the SUV Loophole would: save the U.S. 1
million barrels of oil a day and reduce our dependence on oil imports
by 10 percent.
Prevent about 240 million tons of carbon dioxide--the top greenhouse
gas and biggest single cause of global warming from entering the
atmosphere each year.
Save SUV and light duty truck owners hundreds of dollars each year in
gasoline costs.
CAFE Standards were first established in 1975. At that time, light
trucks made up only a small percentage of the vehicles on the road,
they were used mostly for agriculture and commerce, not as passenger
cars.
Today, our roads look much different, SUVs and light duty trucks
comprise more than half of the new car sales in the United States. As a
result, the overall fuel economy of our Nation's fleet is the lowest it
has been in two decades, because fuel economy standards for these
vehicles are so much lower than they are for other passenger vehicles.
The bill we are introducing today would change that. SUVs and other
light duty trucks would have to meet the same fuel economy requirements
by 2011 that passenger cars meet today.
The National Highway Traffic Safety Administration, NHTSA, has
proposed phasing in an increase in fuel economy standards for SUVs and
light trucks under the following schedule: by 2005, SUVs and light
trucks would have to average 21.0 miles per gallon; by 2006, SUVs and
light trucks would have to average 21.6 miles per gallon; and by 2007,
SUVs and light trucks would have to average 22.2 miles per gallon.
In 2002, the National Academy of Sciences, NAS, released a report
stating that adequate lead time can bring about substantive increases
in fuel economy standards. Automakers can meet higher CAFE standards if
existing technologies are utilized and included in new models of SUVs
and light trucks.
In 2003, the head of the National Highway Traffic Safety
Administration said he favored an increase in vehicle fuel economy
standards beyond the 1.5-mile-per-gallon hike slated to go into effect
by 2007. ``We can do better,'' said Jeffrey Runge in an interview with
Congressional Green Sheets. ``The overriding goal here is better fuel
economy to decrease our reliance on foreign oil without compromising
safety or American jobs,'' he said.
With this in mind, we have developed the following phase-in schedule
which would follow up on what NHTSA has proposed for the short term and
remain consistent with what the NAS report said is technologically
feasible over the next decade or so: by model year 2008, SUVs and light
duty vehicles would have to average 23.5 miles per gallon; by model
year 2009, SUVs and light duty vehicles would have to average 24.8
miles per gallon; by model year 2010, SUVs and light duty vehicles
would have to average 26.1 miles per gallon, by model year 2011, SUVs
and light duty vehicles would have to average 27.5 miles per gallon.
This legislation would do two other things: it would mandate that by
2008 the average fuel economy of the new vehicles comprising the
Federal fleet must be 3 miles per gallon higher than the baseline
average fuel economy for that class. And by 2011, the average fuel
economy of the new federal vehicles must be 6 miles per gallon higher
than the baseline average fuel economy for that class.
The bill also increases the weight limit within which vehicles are
bound by CAFE standards to make it harder for automotive manufacturers
to build SUVs large enough to become exempted from CAFE standards.
Because SUVs are becoming larger and larger, some may become so large
that they will no longer qualify as even SUVs anymore.
We are introducing this legislation because we believe that the
United States needs to take a leadership role in the fight against
global warming.
We have already seen the potential destruction that global warming
can cause in the United States.
Snowpacks in the Sierra Nevada are shrinking and will almost entirely
disappear by the end of the century, devastating the source of
California's water.
Eskimos are being forced inland in Alaska as their native homes on
the coastline are melting into the sea.
Glaciers are disappearing in Glacier National Park in Montana. In 100
years, the park has gone from having 150 glaciers to fewer than 30. And
the 30 that remain are two-thirds smaller than they once were.
Beyond our borders, scientists are predicting how the impact of
global warming will be felt around the globe.
It has been estimated that two-thirds of the glaciers in western
China will melt by 2050, seriously diminishing the water supply for the
region's 300 million inhabitants. Additionally, the disappearance of
glaciers in the Andes in Peru is projected to leave the population
without an adequate water supply during the summer.
The United States is the largest energy consumer in the world, with 4
percent of the world's population using 25 percent of the planet's
energy.
And much of this energy is used in cars and light trucks: 43 percent
of the oil we use goes into our vehicles and one-third of all carbon
dioxide emissions come from our transportation sector.
The U.S. is falling behind the rest of the world in the development
of more fuel efficient automobiles. Quarterly auto sales reflect that
consumers are buying smaller more fuel efficient cars and sales of the
big, luxury vehicles that are the preferred vehicle of the American
automakers have dropped significantly.
Even SUV sales have slowed. First quarter 2005 deliveries of these
vehicles are down compared to the same period last year--for example,
sales of the Ford Excursion is down by 29.5 percent, the Cadillac
Escalade by 19.9 percent, and the Toyota Sequoia by 12.6 percent.
On the other hand, the Toyota Prius hybrid had record sales in March
with a 160.9 percent increase over the previous year.
The struggling U.S. auto market cannot afford to fall behind in the
development of fuel efficient vehicles. Our bill sets out a reasonable
time frame for car manufacturers to design vehicles that are more fuel
efficient and that will meet the growing demand for more fuel efficient
vehicles.
We can do this, and we can do this today. I urge my colleagues to
support this legislation.
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. 889

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 ``Automobile Fuel Economy Act
of 2005''.

[[Page S4134]]

SEC. 2. INCREASED AVERAGE FUEL ECONOMY STANDARD FOR LIGHT
TRUCKS.

(a) Definition of Light Truck.--Section 32901(a) of title
49, United States Code, is amended--
(1) in each of paragraphs (1) through (14), by striking the
period at the end and inserting a semicolon;
(2) in paragraph (15), by striking the period at the end
and inserting ``; and'';
(3) by redesignating paragraphs (12) through (16) as
paragraphs (13) through (17), respectively; and
(4) by inserting after paragraph (11) the following:
``(12) `light truck' has the meaning given that term in
regulations prescribed by the Secretary of Transportation in
the administration of this chapter;''.
(b) Requirement for Increased Standard.--Section 32902(a)
of title 49, United States Code, is amended--
(1) by inserting ``(1)'' after ``AUTOMOBILES.--'';
(2) by striking ``The Secretary'' and inserting ``Subject
to paragraph (2), the Secretary''; and
(3) by adding at the end the following :
``(2) The average fuel economy standard for light trucks
manufactured by a manufacturer may not be less than 27.5
miles per gallon, except that the average fuel economy
standard for light trucks manufactured by a manufacturer in a
model year before model year 2011 and--
``(A) after model year 2008 may not be less than 23.5 miles
per gallon;
``(B) after model year 2009 may not be less than 24.8 miles
per gallon; and
``(C) after model year 2010 may not be less than 26.1 miles
per gallon.''.
(c) Applicability.--Section 32902(a)(2) of title 49, United
States Code, as added by subsection (b)(3), shall not apply
with respect to light trucks manufactured before model year
2009.

SEC. 3. FUEL ECONOMY STANDARDS FOR AUTOMOBILES UP TO 10,000
POUNDS GROSS VEHICLE WEIGHT.

(a) Vehicles Defined as Automobiles.--Section 32901(a)(3)
of title 49, United States Code, is amended by striking
``rated at--'' and all that follows and inserting ``rated at
not more than 10,000 pounds gross vehicle weight.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2011.

SEC. 4. FUEL ECONOMY OF THE FEDERAL FLEET OF VEHICLES.

(a) Definitions.--In this section--
(1) the term ``class of vehicles'' means a class of
vehicles for which an average fuel economy standard is in
effect under chapter 329 of title 49, United States Code;
(2) the term ``executive agency'' has the meaning given the
term in section 4(1) of the Office of Federal Procurement
Policy Act (41 U.S.C. 403(1)); and
(3) the term ``new vehicle'', with respect to the fleet of
vehicles of an executive agency, means a vehicle procured by
or for the agency after September 30, 2007.
(b) Baseline Average Fuel Economy.--The head of each
executive agency shall determine the average fuel economy for
all of the vehicles in each class of vehicles in the agency's
fleet of vehicles in fiscal year 2006.
(c) Increase of Average Fuel Economy.--The head of each
executive agency shall manage the procurement of vehicles in
each class of vehicles for that agency to ensure that--
(1) not later than September 30, 2008, the average fuel
economy of the new vehicles in the agency's fleet of vehicles
in each class of vehicles is not less than 3 miles per gallon
higher than the baseline average fuel economy determined for
that class; and
(2) not later than September 30, 2011, the average fuel
economy of the new vehicles in the agency's fleet of vehicles
in each class of vehicles is not less than 6 miles per gallon
higher than the baseline average fuel economy determined for
that class.
(d) Calculation of Average Fuel Economy.--For purposes of
this section--
(1) average fuel economy shall be calculated in accordance
with guidance prescribed by the Secretary of Transportation
for the implementation of this section; and
(2) average fuel economy calculated under subsection (b)
for an agency's vehicles in a class of vehicles shall be the
baseline average fuel economy for the agency's fleet of
vehicles in that class.

Ms. SNOWE. Mr. President, I rise today to join my esteemed colleague,
Senator Feinstein as the lead cosponsor for the Feinstein-Snowe
legislation that will rectify an unacceptable inequity when it comes to
obtaining greater fuel economy for the vehicles we choose to drive.
This bill allows us to take a road currently less traveled towards
decreasing our Nation's need to import greater and greater amounts of
foreign oil from the most volatile area of the globe, and at the same
time, decrease polluting vehicle emissions that affect both the
public's and the planet's health.
What is clear, on the eve of Earth Day, is that the Federal
Government must lead in ensuring consumers a choice of vehicles with
higher fuel economy, an appropriate degree of safety, and a minimal
impact on our environment. Closing what is called the SUV loophole that
allows popular SUVs and other light trucks to get only 20.7 miles per
gallon while other passenger cars need to meet a 27.5 mile per gallon
threshold, will help us meet these environmental, economic, and
national security goals, and I think it's an idea whose time has long
since arrived.
My colleague from California has been a passionate advocate of this
proposal, and I'm proud to work with her again in introducing our
practical, attainable bill that can garner the kind of broad support
necessary to address this national imperative this year. Now I know
when we first introduced our plan in 2001, some believed it was too
much too soon, while others felt it didn't go far enough. And around
here, that's usually a sign you're onto something. But can anyone
honestly say we're better off today without nothing? That we're in
better shape because we failed to pass what is possible four years ago?
This legislation is a critical first step to provide real relief from
skyrocketing gas prices that have reached over $2 a gallon all across
the county are estimated to stay high throughout the year. The increase
in Corporate Average Fuel Economy, or CAFE, standards for the light
trucks category--mostly SUVs and minivans--will ultimately decrease our
need for foreign oil. I would like to bring to my colleagues' attention
that every hour, $28 million leaves our country to pay for the Nation's
unquenched thirst for foreign oil. When it comes to the fuel economy of
America's sport utility vehicles, surely we can do better for our
pocketbooks, for our planet, and for our promise for the future.
It is unacceptable to me that a developing country like China has put
in place new regulations that are more stringent than U.S. CAFE
standards to promote better fuel. economy in their vehicles and rein in
that country's energy consumption. Like the U.S., China greatly depends
upon foreign oil. However, China's GDP per capita was only
approximately $860 in 2004 while the U.S. was at $35,000 per person.
The standards that go into force in China in July of 2005, require that
all new passenger cars get two miles per gallon more than U.S. CAFE
standards. And SUVs will have to achieve 1.7 to 2.7 miles per gallon
more depending on the make. By 2008, large cars in China will have to
get 30.4 miles per gallon. China, very aware of their rising oil
imports, skyrocketing oil prices, and their air pollution, are finding
a way to achieve greater fuel economy, but the U.S. cannot? This makes
absolutely no sense to me.

Right now, all our vehicles combined consume over 40 percent of our
oil, while coughing up over 20 percent of U.S. carbon monoxide
emissions--the greenhouse gas linked to global climate change. To put
this in perspective, the amount of carbon monoxide emission just from
U.S. vehicles alone is the equivalent of the fourth highest carbon
monoxide emitting country in the world. Given these stunning numbers,
how can we continue to allow SUVs to spew three times more pollution
into the air than passenger cars?
Just think for a moment how much the world has changed
technologically over the past 25 years. We've seen the advent of the
home computer and the information age. Computers are now running our
automobiles, and Global Positioning System devices are guiding drivers
to their destinations. Are we to believe that technology couldn't have
also helped those drivers burn less fuel in getting there? Are we going
to say that the whole world has transformed, but America doesn't have
the where-with-all to make SUVs that get better fuel economy?
Well, I don't believe it, and neither does the National Academy of
Sciences that issued a report in 2001 in response to Congress' request
the previous year that the NAS study the issue. They concluded that it
was possible to achieve a more than 40 percent improvement particularly
in light truck and SUV fuel economy over a 10-15 year period--and that
technologies exist now for improving fuel economy. That was 3\1/2\
years ago.
I don't want America's SUV manufacturers to be ``the industry that
time forgot?'' and history clearly shows that the Federal Government
must play a role in ensuring that consumers have a choice in vehicles
with high degrees of fuel economy, an appropriate degree of

[[Page S4135]]

safety and a minimal impact on our environment. As the 2001 NAS Report
also stated, ``Because of the concerns about greenhouse gas emissions
and the level of oil imports, it is appropriate for the Federal
Government to ensure fuel economy levels beyond those expected to
result from market forces alone.'' How can we do anything less?
So many questions that we already have the answers to but not the
initiative or will to do so. Closing the SUV loophole will help us
achieve so many goals, and it's an idea whose time has long since
arrived.
I ask for my colleagues' support for closing the SUV loophole, and I
thank the Chair.

____________________