[Congressional Record Volume 151, Number 95 (Thursday, July 14, 2005)]
[Senate]
[Pages S8304-S8326]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ALLEN (for himself and Mr. Santorum):
  S. 1396. A bill to amend the Investment Company Act of 1940 to 
provide incentives for small business investment, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. ALLEN. Mr. President, I am pleased to join with my distinguished 
colleague, Senator Santorum, in introducing the Increased Capital 
Access for Growing Businesses Act. The legislation would help many 
small businesses address the challenge of accessing capital as they 
look to grow, develop and create more jobs.
  I would like to share with colleagues in the Senate why this 
legislation is necessary and desirable to update our securities laws 
for entrepreneurial small business owners. In 1980, Congress passed 
legislation, the Small Business Investment Incentive Act, which 
authorized business development companies, or BDCs, to provide 
financing to small, developing or financially troubled companies. 
Congress recognized the importance of small businesses to the U.S. 
economy and that such businesses may have a more difficult time 
obtaining needed capital to grow and develop.
  BDCs are publicly traded companies that are required to have 70 
percent of their assets invested in eligible assets, or eligible 
portfolio companies, which are generally to be securities of small 
developing or financially troubled businesses. In 1980, the definition 
of a small company for the purposes of a BDC's 70 percent of asset 
category was tied to the Federal Reserve's rules defining marginable 
securities. At the time, about two-thirds or 8,000 publicly traded 
companies were not marginable and were therefore eligible investments 
for BDCs.
  However, there was an unintended consequence of tying the definition 
of small company to those issuers that do not have marginable 
securities--the margin rules have been changed several times, which 
significantly reduced the number of public companies in which BDCs 
could invest. This was obviously not the original intent of Congress, 
but the practical impact was that many small, public companies became 
ineligible to receive BDC financing, even if they could not receive 
more traditional sources of financing.
  Recently, the disqualification of any private company that had issued 
any debt security has significantly narrowed even further the number of 
companies that qualify as eligible portfolio companies. Thus, for the 
first time many companies with no access to the public equity markets 
cannot access capital through a BDC. These companies are either denied 
capital access altogether, or are forced to turn to various unregulated 
sources to meet capital needs. This situation is unfair to the 
shareholders of BDCs, and unfair to the shareholders of businesses that 
could grow if only offered capital access opportunities.
  That is why this legislation is so important. It will allow more 
small private and public companies to receive BDC financing and restore 
the original intent of Congress.
  Specifically, the legislation would use a market capitalization 
standard of $250 million or less to define what is an eligible 
portfolio company for BDCs. The $250 million market capitalization 
level approximates the number of public companies that Congress 
originally intended to qualify as eligible BDC assets. I would note 
that it is also much lower than the market capitalization levels of 
small cap indexes, such as the S&P SmallCap 600, which uses a market 
cap of $300 million to $1 billion for a definition of a small company.
  This legislation adds no costs or risks to the government or 
taxpayers. It will simply correct the unintended consequences of 
current rules and update the securities laws to allow more small 
businesses to access capital. This will in turn encourage small 
business growth, job creation and economic expansion.
  That is why, earlier this year the House of Representatives 
unanimously passed similar legislation to modernize U.S. securities 
laws and allow more small businesses to be eligible for such financing.
  I urge my colleagues in the Senate to join me in supporting this 
common-sense legislation for small businesses in America.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself, Mrs. Clinton, Mr. Nelson of 
        Florida, Mr. Reed, and Mr. Salazar):
  S. 1397. A bill to amend title 10, United States Code, to provide for 
an increase in the minimum end-strength level for active duty personnel 
for the United States Army, and for other purposes; to the Committee on 
Armed Services.
  Mr. LIEBERMAN. 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:

[[Page S8305]]

                                S. 1397

       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 ``United States Army Relief 
     Act of 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The 2004 National Military Strategy of the United 
     States assigns the Army the task of operating with the other 
     Armed Forces to provide for homeland defense, deter 
     aggression forward from and in four different regions around 
     the world, conduct military operations in two overlapping but 
     geographically disparate major campaigns, and win decisively 
     in one of those campaigns before shifting focus to the next 
     one.
       (2) The Chairman of the Joint Chiefs of Staff, General 
     Richard Myers, has directed that the Army must be able to 
     ``win decisively'' in one theater, even when it is committed 
     to a number of other contingencies.
       (3) While Congress lauds the current efforts by the 
     Administration to reduce demands upon ground forces by 
     continuing to pursue the transformation of the United States 
     military as a whole, the recent experiences of the Army in 
     Iraq serve to underscore the fact that there is, as of yet, 
     no substitute for having sufficient troops to conduct 
     personnel-intensive post-conflict missions.
       (4) The current force requirements posed by the ongoing 
     operations in Iraq, Afghanistan, and elsewhere as part of the 
     Global War on Terror are unsustainable for the long term and 
     undermine the ability of the United States military to 
     successfully execute the National Military Strategy.
       (5) Although the burden may be a heavy one, we as a nation 
     and as a people must not, will not, shy away from our 
     engagement in world affairs to defend our interests and to 
     defend those who are themselves defenseless.
       (6) Our engagement in Afghanistan, Iraq, and the greater 
     Middle East is, as Secretary of State Condoleezza Rice 
     stated, a ``generational'' one.
       (7) Although our commitments in this region--and around the 
     world--are vital, the Army has been ``overused'' according to 
     the Chief of the United States Army Reserve.
       (8) The Army currently has approximately 499,000 active 
     duty troops, and these are backed up by nearly 700,000 
     members of the Army National Guard and the Army Reserve.
       (9) This number is a third less than the force level on 
     hand when the first Persian Gulf War was fought in 1991.
       (10) Approximately 150,000 of these troops are in Iraq. 
     Nearly 10,000 troops are in Afghanistan. 1,700 serve in 
     Kosovo. 37,000 serve on the Korean peninsula.
       (11) As of 2005 the relationship between the total number 
     of troops and the number of operationally deployed troops has 
     resulted, as the commanding general of the 18th Corps of the 
     Army at Fort Bragg remarked in 2004, in an active-duty force 
     that is ``stretched extraordinarily thin.''
       (12) A former Army Deputy Chief of Staff has stated that in 
     light of the growing operational demands upon it in the 
     strategic environment after September 11, 2001, that the Army 
     ``is too small to do its current missions''.
       (13) That former Army Deputy Chief of Staff further stated 
     that the current size of the Army, coupled with the current 
     demands upon it, has resulted in a loss of ``the resiliency 
     to provide either strategic balance--what you need if some 
     other thing flares up--or to be able to give a respite as the 
     troops rotate back from overseas areas where they've been in 
     combat.''
       (14) In its attempts to fulfill its missions with too few 
     troops, the Army has risked ``damaging'' the force 
     significantly or ``even breaking it in the next five years'', 
     according to a division commander during Operation Desert 
     Storm.
       (15) In a December 2004 letter to the Chief of Staff, 
     United States Army, the Chief of the United States Army 
     Reserve wrote that ``the current demands'' of operations in 
     the Middle East were ``spreading the Reserve force too thin'' 
     and that his command ``was in grave danger'' of being unable 
     to meet other missions abroad or domestically, and that the 
     Army Reserve was ``rapidly degenerating into a `broken force' 
     ''.
       (16) The letter referred to in paragraph (15) was intended, 
     the Chief of the United States Army Reserve wrote, not ``to 
     sound alarmist . . . [but] . . . to send a clear, 
     distinctive, signal of deepening concern'' to his superiors.
       (17) In addition to hampering the ability of the Army to 
     successfully complete the missions assigned to it, this 
     ``overuse'' has significant consequences for domestic 
     homeland security operations.
       (18) A disproportionate number of Federal, State, and local 
     first responders are also members of the National Guard or 
     Reserve.
       (19) At a time of strain for large municipalities 
     struggling to secure their infrastructure against the threat 
     of terrorism, the drain on available personnel as well as 
     budgets is unacceptable.
       (20) An increase of the end-strength of the Army is in the 
     best interests of the people of the United States and their 
     interests abroad, and is consistent with the duties and 
     obligations of Congress as set forth in the Constitution.
       (21) An increase of 100,000 troops over the permanently 
     authorized level for the Army for fiscal year 2004 of 482,000 
     troops will provide a long-term, lasting solution to the 
     current operational constraints and future mission 
     requirements of the Army.
       (22) Progress was made toward that solution when Congress 
     authorized an increase of 20,000 troops in the end-strength 
     of the Army for fiscal year 2005 in the Ronald W. Reagan 
     National Defense Authorization Act for Fiscal Year 2005 
     (Public Law 108-375).
       (23) An increase in the permanent authorized end-strength 
     for the Army of 80,000 troops is required to meet the 
     100,000-troop increase level that will provide a lasting, 
     long-term solution to personnel problems currently being 
     experienced by the Army.
       (24) This number will equip the Army with sufficient 
     personnel so that it may not only engage in a stabilization 
     operation like Iraq, but so that it may do so while 
     maintaining optimal troop rotation schedules.
       (25) This conclusion is supported by the November 2003 
     testimony of the Director of the Congressional Budget Office, 
     Douglas Holtz-Eakin, before the Committee on Armed Services 
     of the House of Representatives.

     SEC. 3. INCREASE IN END-STRENGTH FOR THE ARMY.

       Section 691 of title 10, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(e) Notwithstanding subsection (b)(1), the authorization 
     for the number of members of the Army at the end of each 
     fiscal year as follows shall be not less than the number 
     specified for such fiscal year:
       ``(1) Fiscal year 2006, 522,400.
       ``(2) Fiscal year 2007, 542,400.
       ``(3) Fiscal year 2008, 562,400.
       ``(4) Fiscal year 2009, 582,400.
       ``(5) Any fiscal year after fiscal year 2009, 582,400.''.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 1398. A bill to provide more rigorous requirements with respect to 
ethics and lobbying; to the Committee on Homeland Security and 
Government Affairs.


                 Title I--Enhancing Lobbying Disclosure

       Section 101: Requires lobbying disclosure reports to be 
     filed quarterly rather than semiannually and adjusts monetary 
     thresholds accordingly.
       Section 102: Requires lobbying disclosure reports to be 
     filed in electronic form.
       Section 103: Directs the Secretary of the Senate and the 
     Clerk of the House of Representatives to create a searchable, 
     sortable, and downloadable public database that contains the 
     information disclosed in lobbying disclosure reports.
       Section 104: Requires registered lobbyists to provide, in 
     the section of their quarterly reports in which the issues or 
     bills on which they lobbied are listed, the names of all 
     senior executive branch officials and Members of Congress who 
     they communicated with orally and the dates on which such 
     communications occurred.
       Section 105: Mandates that registered lobbyists must 
     disclose all past executive and congressional employment, not 
     just such employment during the two years prior to making a 
     lobbying contact.
       Section 106: Requires lobbyists to disclose in their 
     quarterly reports how much they spent on grassroots lobbying 
     efforts.
       Section 107: Provides more transparency for lobbying 
     coalitions, by requiring such organizations to disclose those 
     individuals or entities whose total contribution to the 
     association in connection with lobbying activities exceeds 
     $10,000. Certain tax-exempt associations are not covered by 
     this new requirement.
       Section 108: Doubles the penalty for failing to comply with 
     lobbying disclosure requirements from $50,000 to $100,000.


                  Title II--Slowing the Revolving Door

       Section 201: Amends 18 U.S.C. Sec. 207, the section of the 
     criminal code that provides restrictions on lobbying by 
     former executive and legislative branch employees, to 
     establish the following restrictions:
       1. Senior executive employees, those paid at 86.5 percent 
     of level II of the Executive Schedule are prohibited from 
     making communications or appearances with the intent to 
     influence any employee of their former agencies for two 
     years. The current ``cooling off period'' is one year.
       2. Very senior executive employees, the Vice President and 
     those paid at level I of the Executive Schedule, such as 
     cabinet officers and heads of agencies, are prohibited from 
     engaging in ``lobbying activities,'' as defined in section 3, 
     subsection 7 of the Lobbying Disclosure Act of 1995, for a 
     two-year period; with respect to their former agency or to 
     any employee currently paid under the Executive Schedule. 
     Under the LDA, lobbying activities include not only direct 
     lobbying contacts, but activities such as providing advice, 
     strategy, or preparation in connection with such contacts.
       3. Members of Congress are prohibited from engaging in 
     lobbying activities relating to either House of Congress for 
     two years. This will prevent a former member from directing 
     or managing a lobbying campaign while avoiding personal 
     lobbying contacts.
       4. Senior congressional staff, those making 75 percent of a 
     Member's salary, are prohibited from making appearances or 
     communications with the intent to influence any employee of 
     the House of Congress that formerly employed them for two 
     years. Current law prohibits contacts with the former 
     employing office or committee for only one year.
       Section 202: Requires the establishment of uniform 
     regulations regarding the standards

[[Page S8306]]

     by which waivers on seeking employment by executive branch 
     officials are granted and requires the Executive branch to 
     publish waivers that have been granted within three business 
     days.
       Section 203: Requires Members to publicly disclose within 
     three days any negotiations with prospective employers in 
     which a conflict of interest or the appearance of a conflict 
     of interest exists.
       Section 204: Establishes stiffer penalties for an employee 
     of either House of Congress who uses his or her official 
     capacity to influence an employment decision or practice of 
     any private or public entity, except for the Congress itself.
       Section 205: Reaffirms that any employee of either House 
     may not take official action on the basis of a prospect for 
     personal gain.
       Section 206: Eliminates any benefits or privileges 
     generally granted by the House or Senate to former Members, 
     such as gym membership or floor privileges, for those former 
     Members who are registered lobbyists.


  Title III--Curbing Excesses in Privately Funded Travel and Lobbyist 
                                 Gifts

       Section 301: Amends the ethics rules to require all 
     congressional employees to obtain a certification from any 
     party that pays for transportation or lodging permitted by 
     the gift rules that the trip was not planned, organized, 
     arranged, or financed by a registered lobbyist and that no 
     registered lobbyists will participate in or attend the trip
       Section 302: Amends the gift rule to require Senators and 
     staff to publicly disclose information on any flight on a 
     corporate jet and requires Senators to reimburse the owner of 
     a corporate jet at the charter rate, instead of first class 
     airfare as is currently permitted. Also requires campaigns to 
     pay for the use of corporate jets at the charter rate. 
     Current FEC regulations allow campaigns to pay first class 
     airfare if the flight is between cities where commercial 
     service is available.
       Section 303: Establishes maximum civil fines of $100,000, 
     $300,000, and $500,000 for the first, second, and third false 
     travel certifications, respectively
       Section 304: Amends the ethics rules to require Members to 
     provide more detailed descriptions of all meetings, tours, 
     events, and outings during travel paid for by private 
     entities under the gift rules.
       Section 305: Directs House and Senate Ethics Committees to 
     develop and revise guidelines on what constitute ``reasonable 
     expenses'' or ``reasonable expenditures'' during privately 
     funded travel.
       Section 306: Prohibits registered lobbyists from giving 
     gifts to Members of Congress or congressional employees. 
     Exceptions are provided for gifts from relatives and personal 
     friends, campaign contributions, informational materials, and 
     items of nominal value.
       Section 307: Amends the House and Senate ethics rules to 
     prohibit Members from accepting gifts from registered 
     lobbyists not permitted by Section 306.


               Title IV--Oversight of Ethics and Lobbying

       Section 401: Requires the Comptroller General to review the 
     effectiveness of lobbying oversight and to issue semiannual 
     reports on the topic.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1398

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Lobbying 
     and Ethics Reform Act of 2005''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:
Sec. 1. Short title; table of contents.

                 TITLE I--ENHANCING LOBBYING DISCLOSURE

Sec. 101. Quarterly filing of lobbying disclosure reports.
Sec. 102. Electronic filing of lobbying disclosure reports.
Sec. 103. Public database of lobbying disclosure information.
Sec. 104. Identification of officials with whom lobbying contacts are 
              made.
Sec. 105. Disclosure by registered lobbyists of all past executive and 
              congressional employment.
Sec. 106. Disclosure of grassroots activities by paid lobbyists.
Sec. 107. Disclosure of lobbying activities by certain coalitions and 
              associations.
Sec. 108. Increased penalty for failure to comply with lobbying 
              disclosure requirements.

                  TITLE II--SLOWING THE REVOLVING DOOR

Sec. 201. Amendments to restrictions on former officers, employees, and 
              elected officials of the executive and legislative 
              branches.
Sec. 202. Reform of waiver process for acts affecting a personal 
              financial interest.
Sec. 203. Public disclosure by Members of Congress of employment 
              negotiations.
Sec. 204. Wrongfully influencing, on a partisan basis, an entity's 
              employment decisions or practices.
Sec. 205. Amendment to Code of Official Conduct to prohibit favoritism.
Sec. 206. Elimination of floor privileges and other perks for former 
              Member lobbyists.

  TITLE III--CURBING EXCESSES IN PRIVATELY FUNDED TRAVEL AND LOBBYIST 
                                 GIFTS

Sec. 301. Required certification that congressional travel meets 
              certain conditions.
Sec. 302. Requirement of full payment and disclosure of charter 
              flights.
Sec. 303. False certification in connection with congressional travel.
Sec. 304. Increased disclosure of travel by Members.
Sec. 305. Guidelines respecting travel expenses.
Sec. 306. Prohibition on gifts by registered lobbyists to Members of 
              Congress and to congressional employees.
Sec. 307. Prohibition on members accepting gifts from lobbyists.

               TITLE IV--OVERSIGHT OF ETHICS AND LOBBYING

Sec. 401. Comptroller General review and semiannual report on 
              activities carried out by Clerk of the House and 
              Secretary of the Senate under Lobbying Disclosure Act of 
              1995.

                 TITLE I--ENHANCING LOBBYING DISCLOSURE

     SEC. 101. QUARTERLY FILING OF LOBBYING DISCLOSURE REPORTS.

       (a) Quarterly Filing Required.--Section 5 of the Lobbying 
     Disclosure Act of 1995 (2 U.S.C. 1604) is amended--
       (1) in subsection (a)--
       (A) by striking ``Semiannual'' and inserting ``Quarterly'';
       (B) by striking ``the semiannual period'' and all that 
     follows through ``July of each year'' and insert ``the 
     quarterly period beginning on the first days of January, 
     April, July, and October of each year''; and
       (C) by striking ``such semiannual period'' and insert 
     ``such quarterly period''; and
       (2) in subsection (b)--
       (A) in the matter preceding paragraph (1), by striking 
     ``semiannual report'' and inserting ``quarterly report'';
       (B) in paragraph (2), by striking ``semiannual filing 
     period'' and inserting ``quarterly period'';
       (C) in paragraph (3), by striking ``semiannual period'' and 
     inserting ``quarterly period''; and
       (D) in paragraph (4), by striking ``semiannual filing 
     period'' and inserting ``quarterly period''.
       (b) Conforming Amendments.--
       (1) Definition.--Section 3 of such Act (2 U.S.C. 1602) is 
     amended in paragraph (10) by striking ``six month period'' 
     and inserting ``three-month period''.
       (2) Registration.--Section 4 of such Act (2 U.S.C. 1603) is 
     amended--
       (A) in subsection (a)(3)(A), by striking ``semiannual 
     period'' and inserting ``quarterly period''; and
       (B) in subsection (b)(3)(A), by striking ``semiannual 
     period'' and inserting ``quarterly period''.
       (3) Enforcement.--Section 6 of such Act (2 U.S.C. 1605) is 
     amended in paragraph (6) by striking ``semiannual period'' 
     and inserting ``quarterly period''.
       (4) Estimates.--Section 15 of such Act (2 U.S.C. 1610) is 
     amended--
       (A) in subsection (a)(1), by striking ``semiannual period'' 
     and inserting ``quarterly period''; and
       (B) in subsection (b)(1), by striking ``semiannual period'' 
     and inserting ``quarterly period''.
       (5) Dollar amounts.--
       (A) Section 4 of such Act (2 U.S.C. 1603) is further 
     amended--
       (i) in subsection (a)(3)(A)(i), by striking ``$5,000'' and 
     inserting ``$2,500'';
       (ii) in subsection (a)(3)(A)(ii), by striking ``$20,000'' 
     and inserting ``$10,000'';
       (iii) in subsection (b)(3)(A), by striking ``$10,000'' and 
     inserting ``$5,000''; and
       (iv) in subsection (b)(4), by striking ``$10,000'' and 
     inserting ``$5,000''.
       (B) Section 5 of such Act (2 U.S.C. 1604) is further 
     amended--
       (i) in subsection (c)(1), by striking ``$10,000'' and 
     ``$20,000'' and inserting ``$5,000'' and ``$10,000'', 
     respectively; and
       (ii) in subsection (c)(2), by striking ``$10,000'' both 
     places such term appears and inserting ``$5,000''.

     SEC. 102. ELECTRONIC FILING OF LOBBYING DISCLOSURE REPORTS.

       Section 5 of the Lobbying Disclosure Act of 1995 (2 U.S.C. 
     1604) is further amended by adding at the end the following 
     new subsection:
       ``(d) Electronic Filing Required.--A report required to be 
     filed under this section shall be filed in electronic form, 
     in addition to any other form that may be required by the 
     Secretary of the Senate or the Clerk of the House of 
     Representatives.''.

     SEC. 103. PUBLIC DATABASE OF LOBBYING DISCLOSURE INFORMATION.

       (a) Database Required.--Section 6 of the Lobbying 
     Disclosure Act of 1995 (2 U.S.C. 1605) is further amended--
       (1) in paragraph (7), by striking ``and'' at the end;
       (2) in paragraph (8), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(9) maintain, and make available to the public over the 
     Internet, without a fee or

[[Page S8307]]

     other access charge, in a searchable, sortable, and 
     downloadable manner, an electronic database that--
       ``(A) includes the information contained in registrations 
     and reports filed under this Act;
       ``(B) directly links the information it contains to the 
     information disclosed in reports filed with the Federal 
     Election Commission under section 304 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 434); and
       ``(C) is searchable and sortable, at a minimum, by each of 
     the categories of information described in section 4(b) or 
     5(b).''.
       (b) Availability of Reports.--Section 6 of such Act is 
     further amended in paragraph (4) by inserting before the 
     semicolon at the end the following: ``and, in the case of a 
     report filed in electronic form pursuant to section 5(d), 
     shall make such report available for public inspection over 
     the Internet not more than 48 hours after the report is so 
     filed''.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     paragraph (9) of section 6 of such Act, as added by 
     subsection (a).

     SEC. 104. IDENTIFICATION OF OFFICIALS WITH WHOM LOBBYING 
                   CONTACTS ARE MADE.

       Section 5 of the Lobbying Disclosure Act of 1995 (2 U.S.C. 
     1604) is further amended in subsection (b)(2)--
       (1) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (2) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) for each specific issue listed pursuant to 
     subparagraph (A), a list identifying each covered executive 
     branch official and each Member of Congress with whom a 
     lobbyist employed by the registrant engaged in a lobbying 
     contact through oral communication with respect to that issue 
     and the date on which each such contact occurred.''.

     SEC. 105. DISCLOSURE BY REGISTERED LOBBYISTS OF ALL PAST 
                   EXECUTIVE AND CONGRESSIONAL EMPLOYMENT.

       Section 4 of the Lobbying Disclosure Act of 1995 (2 U.S.C. 
     1603) is further amended in subsection (b)(6) by striking 
     ``or a covered legislative branch official'' and all that 
     follows through ``as a lobbyist on behalf of the client,'' 
     and inserting ``or a covered legislative branch official,''.

     SEC. 106. DISCLOSURE OF GRASSROOTS ACTIVITIES BY PAID 
                   LOBBYISTS.

       (a) Disclosure of Grassroots Activities.--Section 3 of the 
     Lobbying Disclosure Act of 1995 (2 U.S.C. 1602) is further 
     amended by adding at the end the following new paragraph:
       ``(17) Grassroots lobbying communication.--The term 
     `grassroots lobbying communication' means an attempt to 
     influence legislation or executive action through the use of 
     mass communications directed to the general public and 
     designed to encourage recipients to take specific action with 
     respect to legislation or executive action, except that such 
     term does not include any communications by an entity 
     directed to its members, employees, officers, or 
     shareholders. For purposes of this paragraph, a communication 
     is designed to encourage a recipient if any of the following 
     applies:
       ``(A) The communication states that the recipient should 
     contact a legislator, or should contact an officer or 
     employee of an executive agency.
       ``(B) The communication provides the address, phone number, 
     and contact information of a legislator or of an officer or 
     employee of an executive agency.
       ``(C) The communication provides a petition, tear-off 
     postcard, or similar material for the recipient to send to a 
     legislator or to an officer or employee of an executive 
     agency.
       ``(D)(i) Subject to clause (ii), the communication 
     specifically identifies an individual who--
       ``(I) is in a position to consider or vote on the 
     legislation;
       ``(II) represents the recipient in Congress; or
       ``(III) is an officer or employee of the executive agency 
     to which the legislation or executive action relates.
       ``(ii) A communication described in clause (i) is a 
     grassroots lobbying communication only if it is a 
     communication that cannot meet the `full and fair exposition' 
     test as nonpartisan analysis, study, or research.''.
       (b) Separate Itemization of Grassroots Expenses.--Section 5 
     of the Lobbying Disclosure Act of 1995 (2 U.S.C. 1604) is 
     further amended in subsection (b)--
       (1) in paragraph (3), by inserting after ``total amount of 
     all income'' the following: ``(including an itemization of 
     the total amount relating specifically to grassroots lobbying 
     communications and, within that amount, an itemization of the 
     total amount specifically relating to broadcast media 
     grassroots lobbying communications)''; and
       (2) in paragraph (4), by inserting after ``total expenses'' 
     the following: ``(including an itemization of the total 
     amount relating specifically to grassroots lobbying 
     communications and, within that total amount, an itemization 
     of the total amount specifically relating to broadcast media 
     grassroots lobbying communications)''.

     SEC. 107. DISCLOSURE OF LOBBYING ACTIVITIES BY CERTAIN 
                   COALITIONS AND ASSOCIATIONS.

       (a) In General.--Paragraph (2) of section 3 of the Lobbying 
     Disclosure Act of 1995 (2 U.S.C. 1602) is amended to read as 
     follows:
       ``(2) Client.--
       ``(A) In general.--The term `client' means any person or 
     entity that employs or retains another person for financial 
     or other compensation to conduct lobbying activities on 
     behalf of that person or entity. A person or entity whose 
     employees act as lobbyists on its own behalf is both a client 
     and an employer of such employees.
       ``(B) Treatment of coalitions and associations.--
       ``(i) In general.--Except as provided in clause (ii), in 
     the case of a coalition or association that employs or 
     retains persons to conduct lobbying activities, each person, 
     other than an individual who is a member of the coalition or 
     association, whose total contribution to the coalition or 
     association in connection with the lobbying activities 
     exceeds the $10,000 registration threshold described in 
     section 4(a)(3)(A)(ii) of this Act, is the client along with 
     the coalition or association.
       ``(ii) Exception for certain tax-exempt associations.--In 
     case of an association--

       ``(I) which is described in paragraph (3) of section 501(c) 
     of the Internal Revenue Code of 1986 and exempt from tax 
     under section 501(a) of such Code, or
       ``(II) which is described in any other paragraph of section 
     501(c) of the Internal Revenue Code of 1986 and exempt from 
     tax under section 501(a) of such Code and which has 
     substantial exempt activities other than lobbying,

     the association (and not its members) shall be treated as the 
     client.
       ``(iii) Look-thru rules.--A coalition or association and 
     its members, which would otherwise be treated as a client, 
     shall not avoid the registration and reporting requirements 
     of this Act by employing or retaining another coalition or 
     association to conduct lobbying activities.''.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to--
       (A) coalitions and associations listed on registration 
     statements filed under section 4 of the Lobbying Disclosure 
     Act of 1995 (2 U.S.C. 1603) after the date of the enactment 
     of this Act, and
       (B) coalitions and associations for whom any lobbying 
     contact is made after the date of the enactment of this Act.
       (2) Special rule.--In the case of any coalition or 
     association to which the amendments made by this Act apply by 
     reason of paragraph (1)(B), the person required by such 
     section 4 to file a registration statement with respect to 
     such coalition or association shall file a new registration 
     statement within 30 days after the date of the enactment of 
     this Act.

     SEC. 108. INCREASED PENALTY FOR FAILURE TO COMPLY WITH 
                   LOBBYING DISCLOSURE REQUIREMENTS.

       Section 7 of the Lobbying Disclosure Act of 1995 (2 U.S.C. 
     1606) is amended by striking ``$50,000'' and inserting 
     ``$100,000''.

                  TITLE II--SLOWING THE REVOLVING DOOR

     SEC. 201. AMENDMENTS TO RESTRICTIONS ON FORMER OFFICERS, 
                   EMPLOYEES, AND ELECTED OFFICIALS OF THE 
                   EXECUTIVE AND LEGISLATIVE BRANCHES.

       (a) Very Senior Executive Personnel.--
       (1) In general.--The matter after subparagraph (C) in 
     section 207(d)(1) of title 18, United States Code, is amended 
     to read as follows:

     ``and who, within 2 years after the termination of that 
     person's service in that position, engages in lobbying 
     activities directed at any person described in paragraph (2), 
     on behalf of any other person (except the United States), 
     shall be punished as provided in section 216 of this 
     title.''.
       (2) Conforming amendment.--The first sentence of section 
     207(h)(1) of title 18, United States Code, is amended by 
     inserting after ``subsection (c)'' the following: ``and 
     subsection (d)''.
       (b) Senior Executive Personnel.--Section 207(c)(1) of title 
     18, United States Code, is amended by striking ``within 1 
     year after'' and inserting ``within 2 years after''.
       (c) Former Members of Congress and Officers and Employees 
     of the Legislative Branch.--
       (1) In general.--Section 207(e) of title 18, United States 
     Code, is amended--
       (A) by striking paragraphs (1), (2), (3), and (4) and 
     inserting the following:
       ``(1) Members of congress and elected officers.--Any person 
     who is a Member of Congress or an elected officer of either 
     House of Congress and who, within 2 years after that person 
     leaves office, knowingly engages in lobbying activities on 
     behalf of any other person (except the United States) in 
     connection with any matter on which such former Member of 
     Congress or elected officer seeks action by a Member, 
     officer, or employee of either House of Congress shall be 
     punished as provided in section 216 of this title.
       ``(2) Congressional employees.--
       ``(A) In general.--Any person who is an employee of the 
     Senate or an employee of the House of Representatives, who, 
     for at least 60 days, in the aggregate, during the 1-year 
     period before the termination of employment of that person 
     with the Senate or House of Representatives, was paid a rate 
     of basic pay equal to or greater than an amount which is 75 
     percent of the basic rate of pay payable for a Member of the 
     House of Congress in which such employee was employed,

[[Page S8308]]

     within 2 years after termination of such employment, 
     knowingly makes, with the intent to influence, any 
     communication to or appearance before any of the persons 
     described in subparagraph (B), on behalf of any other person 
     (except the United States) in connection with any matter on 
     which such former employee seeks action by a Member, officer, 
     or employee of either House of Congress, in his or her 
     official capacity, shall be punished as provided in section 
     216 of this title.
       ``(B) Persons referred to.--The persons referred to under 
     subparagraph (A) with respect to appearances or 
     communications by a former employee are any Member, officer, 
     or employee of the House of Congress in which such former 
     employee served.''; and
       (B) in paragraph (6)--
       (i) in subparagraph (A), by striking ``paragraphs (2), (3), 
     and (4)'' and inserting ``paragraph (2)''; and
       (ii) in subparagraph (B), by striking ``paragraph (5)'' and 
     inserting ``paragraph (3)'';
       (C) in paragraph (7)(G), by striking ``, (2), (3), or (4)'' 
     and inserting ``or (2)''; and
       (D) by redesignating paragraphs (5), (6), and (7) as 
     paragraphs (3), (4), and (5), respectively.
       (2) Definition.--Section 207(i) of title 18, United States 
     Code, is amended--
       (A) in paragraph (2), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (3), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(4) the term `lobbying activities' has the same meaning 
     given such term in section 3(7) of the Lobbying Disclosure 
     Act (2 U.S.C. 1602(7)).''.

     SEC. 202. REFORM OF WAIVER PROCESS FOR ACTS AFFECTING A 
                   PERSONAL FINANCIAL INTEREST.

       Section 208 of title 18, United States Code, is amended--
       (1) in subsection (b)(1)--
       (A) by inserting after ``the Government official 
     responsible for appointment to his or her position'' the 
     following: ``and the Office of Government Ethics''; and
       (B) by striking ``a written determination made by such 
     official'' and inserting ``a written determination made by 
     the Office of Government Ethics, after consultation with such 
     official,''; and
       (2) in subsection (b)(3), by striking ``the official 
     responsible for the employee's appointment, after review of'' 
     and inserting ``the Office of Government Ethics, after 
     consultation with the official responsible for the employee's 
     appointment and after review of''; and
       (3) in subsection (d)(1)--
       (A) by striking ``Upon request'' and all that follows 
     through ``Ethics in Government Act of 1978.'' and inserting 
     ``In each case in which the Office of Government Ethics makes 
     a determination granting an exemption under subsection (b)(1) 
     or (b)(3) to a person, the Office shall, not later than 3 
     business days after making such determination, make available 
     to the public pursuant to the procedures set forth in section 
     105 of the Ethics in Government Act of 1978, and publish in 
     the Federal Register, such determination and the materials 
     submitted by such person in requesting such exemption.''; and
       (B) by striking ``the agency may withhold'' and inserting 
     ``the Office of Government Ethics may withhold''.

     SEC. 203. PUBLIC DISCLOSURE BY MEMBERS OF CONGRESS OF 
                   EMPLOYMENT NEGOTIATIONS.

       (a) House of Representatives.--The Code of Official Conduct 
     set forth in rule XXIII of the Rules of the House of 
     Representatives is amended by redesignating clause 14 as 
     clause 15 and by inserting after clause 13 the following new 
     clause:
       ``14. A Member, Delegate, or Resident Commissioner shall 
     publicly disclose the fact that he or she is negotiating or 
     has any arrangement concerning prospective employment if a 
     conflict of interest or the appearance of a conflict of 
     interest may exist. Such disclosure shall be made within 3 
     days after the commencement of such negotiation or 
     arrangement.''.
       (b) Senate.--Rule XXXVII of the Standing Rules of the 
     Senate is amended by adding at the end the following:
       ``13. A Member, or former employee of Congress who, for at 
     least 60 days, in the aggregate, during the 1-year period 
     before the former employer's service as such employee 
     terminated, was paid a rate of basic pay equal to or greater 
     than an amount which is 75 percent of the basic rate of pay 
     payable for a Member of the House of Congress in which such 
     employee was employed, shall publicly disclose the fact that 
     he or she is negotiating or has any arrangement concerning 
     prospective employment if a conflict of interest or the 
     appearance of a conflict of interest may exist. Such 
     disclosure shall be made within 3 days after the commencement 
     of such negotiation or arrangement.''.

     SEC. 204. WRONGFULLY INFLUENCING, ON A PARTISAN BASIS, AN 
                   ENTITY'S EMPLOYMENT DECISIONS OR PRACTICES.

       Whoever, being a Senator or Representative in, or a 
     Delegate or Resident Commissioner to, the Congress or an 
     employee of either House of Congress, with the intent to 
     influence on the basis of political party affiliation an 
     employment decision or employment practice of any private or 
     public entity (except for the Congress)--
       (1) takes or withholds, or offers or threatens to take or 
     withhold, an official act; or
       (2) influences, or offers or threatens to influence, the 
     official act of another,

     shall be fined under title 18, United States Code, or 
     imprisoned for not more than 15 years, or both, and may be 
     disqualified from holding any office of honor, trust, or 
     profit under the United States.

     SEC. 205. AMENDMENT TO CODE OF OFFICIAL CONDUCT TO PROHIBIT 
                   FAVORITISM.

       (a) House of Representatives.--Rule XXIII of the Rules of 
     the House of Representatives (known as the Code of Official 
     Conduct) is amended by redesignating clause 14 as clause 15 
     and by inserting after clause 13 the following new clause:
       ``14. A Member, Delegate, Resident Commissioner, officer, 
     or employee of the House may not take or withhold, or 
     threaten to take or withhold, any official action on the 
     basis of partisan affiliation (except as permitted by clause 
     9) or the campaign contributions or support of any person or 
     the prospect of personal gain either for oneself or any other 
     person.''.
       (b) Senate.--Rule XXXVII of the Standing Rules of the 
     Senate is amended by adding at the end the following:
       ``14. A Member, officer, or employee may not take or 
     withhold, or threaten to take or withhold, any official 
     action on the basis of partisan affiliation or the campaign 
     contributions or support of any person or the prospect of 
     personal gain either for oneself or any other person.''.

     SEC. 206. ELIMINATION OF FLOOR PRIVILEGES AND OTHER PERKS FOR 
                   FORMER MEMBER LOBBYISTS.

       Notwithstanding any other rule of the House of 
     Representatives or Senate, any benefit or privilege granted 
     by the House of Representatives or the Senate to all former 
     Members of that body, including floor privileges, may not be 
     received or exercised by a former Member who is a registered 
     lobbyist.

  TITLE III--CURBING EXCESSES IN PRIVATELY FUNDED TRAVEL AND LOBBYIST 
                                 GIFTS

     SEC. 301. REQUIRED CERTIFICATION THAT CONGRESSIONAL TRAVEL 
                   MEETS CERTAIN CONDITIONS.

       (a) House of Representatives.--Clause 5 of rule XXV of the 
     Rules of the House of Representatives is amended by 
     redesignating paragraphs (e) and (f) as paragraphs (f) and 
     (g), respectively, and by inserting after paragraph (d) the 
     following new paragraph:
       ``(e)(1) Except as provided by subparagraph (2), before a 
     Member, Delegate, Resident Commissioner, officer, or employee 
     of the House may accept a gift of transportation or lodging 
     otherwise permissible under this clause from any person, such 
     Member, Delegate, Resident Commissioner, officer, or employee 
     of the House, as applicable, shall obtain a written 
     certification from such person (and provide a copy of such 
     certification to the Clerk) that--
       ``(A) the trip was not planned, organized, arranged, or 
     financed by a registered lobbyist or foreign agent and was 
     not organized at the request of a registered lobbyist or 
     foreign agent; and
       ``(B) the person did not accept, from any source, funds 
     specifically earmarked for the purpose of financing the 
     travel expenses.
     The Clerk shall make public information received under this 
     subparagraph as soon as possible after it is received.
       ``(2) A Member, Delegate, or Resident Commissioner is not 
     required to obtain a written certification for a gift or 
     transportation or lodging described in subdivision (A), (B), 
     (C), (D), (F), or (G) of paragraph (a)(1).''.
       (b) Senate.--Paragraph 1 of rule XXXV of the Standing Rules 
     of the Senate is amended by adding at the end the following:
       ``(g) Before a Member, officer, or employee may accept a 
     gift of transportation or lodging otherwise permissible under 
     this rule from any person, such Member, officer, or employee 
     shall obtain a written certification from such person (and 
     provide a copy of such certification to the Select Committee 
     on Ethics) that--
       ``(1) the trip was not planned, organized, arranged, or 
     financed by a registered lobbyist or foreign agent and was 
     not organized at the request of a registered lobbyist or 
     foreign agent;
       ``(2) registered lobbyists will not participate in or 
     attend the trip; and
       ``(3) the person did not accept, from any source, funds 
     specifically earmarked for the purpose of financing the 
     travel expenses.

     The Select Committee on Ethics shall make public information 
     received under this subparagraph as soon as possible after it 
     is received.''.

     SEC. 302. REQUIREMENT OF FULL PAYMENT AND DISCLOSURE OF 
                   CHARTER FLIGHTS.

       (a) House of Representatives.--To be provided.
       (b) Senate.--
       (1) In general.--Paragraph 1(c)(1) of rule XXXV of the 
     Standing Rules of the Senate is amended by--
       (A) inserting ``(A)'' after ``(1)''; and
       (B) adding at the end the following:
       ``(B) Market value for a jet flight on an airplane that is 
     not licensed by the Federal Aviation Administration to 
     operate for compensation or hire shall be the fair market 
     value of a charter flight. The Select Committee on Ethics 
     shall make public information received under this 
     subparagraph as soon as possible after it is received.''.
       (2) Disclosure.--Paragraph 1 of rule XXXV of the Standing 
     Rules of the Senate is amended by adding at the end the 
     following:
       ``(h) A Member, officer, or employee who takes a flight 
     described in subparagraph

[[Page S8309]]

     (c)(1)(B) shall, with respect to the flight, cause to be 
     published in the Congressional Record within 10 days after 
     the flight--
       ``(1) the date of the flight;
       ``(2) the destination of the flight;
       ``(3) who else was on the flight, other than those 
     operating the plane;
       ``(4) the purpose of the trip; and
       ``(5) the reason that a commercial airline was not used.''.
       (c) Candidates.--Subparagraph (B) of section 301(8) of the 
     Federal Election Campaign Act of 1971 (42 U.S.C. 431(8)(B)) 
     is amended by striking ``and'' at the end of clause (xiii), 
     by striking the period at the end of clause (xiv) and 
     inserting ``; and'', and by adding at the end the following 
     new clause:
       ``(xv) any travel expense for a flight on an airplane that 
     is not licensed by the Federal Aviation Administration to 
     operate for compensation or hire, but only if the candidate 
     or the candidate's authorized committee or other political 
     committee pays within 7 days after the date of the flight to 
     the owner, lessee, or other person who provides the use of 
     the airplane an amount not less than the normal and usual 
     charter fare or rental charge for a comparable commercial 
     airplane of appropriate size.''.

     SEC. 303. FALSE CERTIFICATION IN CONNECTION WITH 
                   CONGRESSIONAL TRAVEL.

       (a) In General.--Whoever makes a false certification in 
     connection with the travel of a Member, officer, or employee 
     of either House of Congress (within the meaning given those 
     terms in section 207 of title 18, United States Code) shall, 
     upon proof of such offense by a preponderance of the 
     evidence, be subject to a civil fine depending on the extent 
     and gravity of the violation.
       (b) Maximum Fine.--The maximum fine per offense under this 
     section depends on the number of separate trips in connection 
     with which the person committed an offense under this 
     section, as follows:
       (1) First trip.--For each offense committed in connection 
     with the first such trip, the amount of the fine shall be not 
     more than $100,000 per offense.
       (2) Second trip.--For each offense committed in connection 
     with the second such trip, the amount of the fine shall be 
     not more than $300,000 per offense.
       (3) Any other trips.--For each offense committed in 
     connection with any such trip after the second, the amount of 
     the fine shall be not more than $500,000 per offense.

     SEC. 304. INCREASED DISCLOSURE OF TRAVEL BY MEMBERS.

       (a) House of Representatives.--Clause 5(b)(1)(A)(ii) of 
     rule XXV of the Rules of the House of Representatives is 
     amended by--
       (1) inserting ``a detailed description of each of'' before 
     ``the expenses''; and
       (2) inserting ``, including a description of all meetings, 
     tours, events, and outings during such travel'' before the 
     period at the end thereof.
       (b) Senate.--Paragraph 2(c) of rule XXXV of the Standing 
     Rules of the Senate is amended--
       (1) in subclause (5), by striking ``and'' after the 
     semicolon;
       (2) by redesignating subclause (6) as subclause (7); and
       (3) by adding after subclause (5) the following:
       ``(6) a detailed description of all meetings, tours, 
     events, and outings during such travel; and''.

     SEC. 305. GUIDELINES RESPECTING TRAVEL EXPENSES.

       (a) House of Representatives.--Clause 5(f) of rule XXV of 
     the Rules of the House of Representatives is amended by 
     inserting ``(1)'' after ``(f)'' and by adding at the end the 
     following new subparagraph:
       ``(2) Within 90 days after the date of adoption of this 
     subparagraph and at annual intervals thereafter, the 
     Committee on Standards of official Conduct shall develop and 
     revise, as necessary, guidelines on what constitutes 
     `reasonable expenses' or `reasonable expenditures' for 
     purposes of paragraph (b)(4). In developing and revising the 
     guidelines, the committee shall take into account the maximum 
     per diem rates for official Government travel published 
     annually by the General Services Administration, the 
     Department of State, and the Department of Defense.''.
       (b) Senate.--Rule XXXV of the Standing Rules of the Senate 
     is amended by adding at the end the following:
       ``(7) Not later than 90 days after the date of adoption of 
     this paragraph and at annual intervals thereafter, the Select 
     Committee on Ethics shall develop and revise, as necessary, 
     guidelines on what constitutes `reasonable expenses' or 
     `reasonable expenditures' for purposes of this rule. In 
     developing and revising the guidelines, the committee shall 
     take into account the maximum per diem rates for official 
     Government travel published annually by the General Services 
     Administration, the Department of State, and the Department 
     of Defense.''.

     SEC. 306. PROHIBITION ON GIFTS BY REGISTERED LOBBYISTS TO 
                   MEMBERS OF CONGRESS AND TO CONGRESSIONAL 
                   EMPLOYEES.

       (a) Prohibition.--
       (1) In general.--A registered lobbyist may not knowingly 
     make a gift to a Member, Delegate, Resident Commissioner, 
     officer, or employee of Congress except as provided in this 
     section.
       (2) Gift defined.--In this section, the term ``gift'' means 
     a gratuity, favor, discount, entertainment, hospitality, 
     loan, forbearance, or other item having monetary value. The 
     term includes gifts of services, training, transportation, 
     lodging, and meals, whether provided in kind, by purchase of 
     a ticket, payment in advance, or reimbursement after the 
     expense has been incurred.
       (3) Registered lobbyist defined.--In this section, the term 
     ``registered lobbyist'' means--
       (A) a lobbyist registered under the Lobbying Disclosure Act 
     of 1995 (2 U.S.C. 1601 et seq.);
       (B) a lobbyist who, as an employee of an organization, is 
     covered by the registration of that organization under that 
     Act; and
       (C) an organization registered under that Act.
       (4) Gifts to family members and other individuals.--For the 
     purposes of this section, a gift to a family member of a 
     Member, Delegate, Resident Commissioner, officer, or employee 
     of Congress, or a gift to any other individual based on that 
     individual's relationship with the Member, Delegate, Resident 
     Commissioner, officer, or employee, shall be considered a 
     gift to the Member, Delegate, Resident Commissioner, officer, 
     or employee if the gift was given because of the official 
     position of the Member, Delegate, Resident Commissioner, 
     officer, or employee.
       (5) Exceptions.--The restrictions in paragraph (1) do not 
     apply to the following:
       (A) Certain lawful political fundraising activities.--A 
     contribution, as defined in section 301(8) of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431) that is lawfully 
     made under that Act, a lawful contribution for election to a 
     State or local government office, or attendance at a 
     fundraising event sponsored by a political organization 
     described in section 527(e) of the Internal Revenue Code of 
     1986.
       (B) Gift from a relative.--A gift from a relative as 
     described in section 109(16) of title I of the Ethics in 
     Government Act of 1978 (2 U.S.C. App. 109(16)).
       (C) Employee benefits.--Pension and other benefits 
     resulting from continued participation in an employee welfare 
     and benefits plan maintained by a former employer.
       (D) Informational materials.--Informational materials that 
     are sent to the office of the Member, Delegate, Resident 
     Commissioner, officer, or employee in the form of books, 
     articles, periodicals, other written materials, audiotapes, 
     videotapes, or other forms of communication.
       (E) Items of nominal value.--An item of nominal value such 
     as a greeting card, baseball cap, or a T-shirt.
       (F) Personal friendship.--
       (i) In general.--Anything provided by an individual on the 
     basis of a personal friendship unless the gift was given 
     because of the official position of the Member, Delegate, 
     Resident Commissioner, officer, or employee.
       (ii) Circumstances.--In determining whether a gift is 
     provided on the basis of personal friendship, the following 
     shall be considered:

       (I) The history of the relationship between the Member, 
     Delegate, Resident Commissioner, officer, or employer and the 
     individual giving the gift, including any previous exchange 
     of gifts between them.
       (II) Whether the individual who gave the gift personally 
     paid for the gift or sought a tax deduction or business 
     reimbursement for the gift.
       (III) Whether the individual who gave the gift also gave 
     the same or similar gifts to other Members, Delegates, the 
     Resident Commissioners, officers, or employees of Congress.

       (G) Certain outside business or employment activities 
     provided to spouse.--Food, refreshments, lodging, 
     transportation, and other benefits provided to the spouse of 
     the Member, Delegate, Resident Commissioner, officer, or 
     employee, resulting from the outside business or employment 
     activities of the spouse or in connection with bona fide 
     employment discussions with respect to the spouse, if such 
     benefits have not been offered or enhanced because of the 
     official position of the Member, Delegate, Resident 
     Commissioner, officer, or employee and are customarily 
     provided to others in similar circumstances.
       (H) Opportunities and benefits unrelated to congressional 
     employment.--Opportunities and benefits that are offered to 
     members of a group or class in which membership is unrelated 
     to congressional employment.
       (I) Certain foods or refreshments.--Food or refreshments of 
     a nominal value offered other than as a part of a meal.
       (b) Penalty.--Any registered lobbyist who violates this 
     section shall be subject to a civil fine of not more than 
     $50,000, depending on the extent and gravity of the 
     violation.

     SEC. 307. PROHIBITION ON MEMBERS ACCEPTING GIFTS FROM 
                   LOBBYISTS.

       (a) House of Representatives.--Clause 5(a)(1)(A) of rule 
     XXV of the Rules of the House of Representatives is amended 
     by adding at the end the following new sentence: 
     ``Notwithstanding any other provision of this clause, in no 
     event may a Member, Delegate, or Resident Commissioner accept 
     a gift from a registered lobbyist prohibited by section 306 
     of the Lobbying and Ethics Reform Act of 2005.''.
       (b) Senate.--Paragraph 1 of rule XXXV of the Standing Rules 
     of the Senate is amended by adding at the end the following:
       ``(g) Notwithstanding any other provision of this rule, in 
     no event may a Member accept a gift from a registered 
     lobbyist prohibited by section 306 of the Lobbying and Ethics 
     Reform Act of 2005.''.

[[Page S8310]]

               TITLE IV--OVERSIGHT OF ETHICS AND LOBBYING

     SEC. 401. COMPTROLLER GENERAL REVIEW AND SEMIANNUAL REPORT ON 
                   ACTIVITIES CARRIED OUT BY CLERK OF THE HOUSE 
                   AND SECRETARY OF THE SENATE UNDER LOBBYING 
                   DISCLOSURE ACT OF 1995.

       (a) Ongoing Review Required.--The Comptroller General shall 
     review on an ongoing basis the activities carried out by the 
     Clerk of the House of Representatives and the Secretary of 
     the Senate under section 6 of the Lobbying Disclosure Act of 
     1995 (2 U.S.C. 1605). The review shall emphasize--
       (1) the effectiveness of those activities in securing the 
     compliance by lobbyists with the requirements of that Act; 
     and
       (2) whether the Clerk and the Secretary have the resources 
     and authorities needed for effective oversight and 
     enforcement of that Act.
       (b) Semiannual Reports.--Twice yearly, not later than 
     January 1 and not later than July 1 of each year, the 
     Comptroller General shall submit to Congress a report on the 
     review required by subsection (a). The report shall include 
     the Comptroller General's assessment of the matters required 
     to be emphasized by that subsection and any recommendations 
     of the Comptroller General to--
       (1) improve the compliance by lobbyists with the 
     requirements of that Act; and
       (2) provide the Clerk and the Secretary with the resources 
     and authorities needed for effective oversight and 
     enforcement of that Act.

  Mr FEINGOLD. Mr. President, today I will introduce the Lobbying and 
Ethics Reform Act of 2005. This bill builds on similar legislation that 
was introduced in the House by Representatives Marty Meehan and Rahm 
Emmanuel.
  I have long believed that to truly serve our constituents well, we 
must reduce the impact of big money on the legislative process. I have 
devoted a great deal of time over the years to reforming our campaign 
finance laws. With the enactment of the Bipartisan Campaign Reform Act 
in 2002, we took several important, and I believe successful, steps to 
reduce the influence of special interests and return some measure of 
power to the American people.
  But campaign contributions are only part of the story. In fact, 
during recent election cycles, the amount spent on lobbying members of 
Congress once they are elected has been more than double the amount 
spent on getting them elected in the first place. Yet lobbyists and the 
lobbying industry remain partly in the shadows, even after the 
significant improvements to the disclosure laws enacted in 1995. Ten 
years later, the weaknesses of that law have become apparent, as have 
the weaknesses in the congressional gift rules that we passed around 
the same time. Recent scandals involving lobbyists have made very clear 
that if this body is to be responsive to the people, not just a narrow 
set of special interests, we must strengthen the disclosure rules 
governing the lobbying industry and close loopholes in the gift rules.
  The lobbying industry continues to grow at a startling rate. 
According to the Center for Public Integrity, over three billion 
dollars were spent on lobbying in 2004, nearly double the amount spent 
just six years earlier. This dramatic increase in lobbying expenditures 
has led to an equally dramatic growth in the number of registered 
lobbyists. A story in the Washington Post from June of this year 
reports that there are currently more than 34,750 registered lobbyists, 
which represents a 100% increase from 2000. Not surprisingly, a few 
powerful industries account for much of this growth. In the last six 
years, the pharmaceutical industry alone has spent over three quarters 
of a billion dollars on lobbying, enough to finance over 3,000 
professional lobbyists. The insurance industry is not far behind. 
During this same period, insurance companies spent over 600 million 
dollars and employed over 2,000 lobbyists.
  Despite the growing presence of lobbyists on Capitol Hill, and 
despite the improvements made in the 1995 law, regulation of the 
lobbying industry remains inadequate. The Senate office in charge of 
overseeing lobbying disclosure reports employs fewer than 20 people, 
and the equivalent House office employs fewer than 35. Compare these 
numbers to the Federal Election Commission, which many people believe 
is itself understaffed, but which has a staff of nearly 400 to oversee 
and enforce campaign finance laws.
  Given these numbers, it should not come as a shock that oversight of 
the booming lobbying industry is not what we would like it to be. In 
the past six years alone, over 300 individuals and companies lobbied 
without registering first. One in five lobbying companies failed to 
file required disclosure forms. And the Center for Public Integrity 
reports that over 14,000 disclosure documents that should have been 
filed are not available, including documents relating to 49 of the top 
50 lobbying firms.
  When the disclosure requirements are not enforced, it can only be 
expected that they and other rules relating to lobbying will not be 
followed. In the last six months, we have seen a number of stories in 
the press detailing the increasingly cozy relationship between 
lobbyists and certain members of Congress. We have seen stories of 
lobbyists funding international junkets for members, their families, 
and their staff, which include days on famous golf courses and nights 
in luxurious resorts. We have seen stories of members and their staff 
accepting lavish gifts and expensive meals from lobbyists. And we haves 
seen stories of lobbyists providing members with free access to their 
companies' or clients' corporate jets so that they can fly in comfort 
from fundraiser to fundraiser.
  But the enticements offered by lobbyists are not all quite so exotic 
indeed, many lobbyists merely offer plum positions in their K Street 
offices. According to a 2005 report, more than 2200 former federal 
government employees were registered as federal lobbyists between 1998 
and 2004. Of those, more then 200 were former members of Congress. In 
fact, Public Citizen reports that nearly half of all members returning 
to the private sector accept positions in the lobbying industry. For 
congressional employees, the prospect of receiving lobbying positions, 
which often pay several times more than their current jobs, can easily 
create conflicts of interest and may affect the decisions they make in 
their official capacity.
  The problems with oversight of the lobbying industry are systemic and 
they are troubling. Even the minimal disclosure requirements of the 
Lobbying Disclosure Act are often ignored because lobbyists know they 
will not be penalized. The revolving door between the Hill and K Street 
spins faster than ever. And flaws in the gift rules are allowing 
handouts from lobbyists to rapidly increase the influence of special 
interests at the expense of the average citizen. I am told that it is 
not uncommon for lobbyists to perch themselves at the end of a bar and 
buy drinks for any congressional staffer who comes by. This is 
permissible under the Senate's current gift rules, and it shouldn't be. 
Lobbyists complain about pressure--if not outright blatant requests--
from Members and congressional staff to pay for their food and drinks. 
Clearly, there is plenty of blame to go around.
  My bill addresses these concerns in four ways. First, my bill makes 
the lobbying process more transparent by enhancing the specificity, 
frequency, and accessibility of lobbying disclosure reports. The bill 
would require these periodic reports filed by lobbyists to identify the 
members of Congress with whom they met, divulge all past senior-level 
legislative or executive branch employment, and separate out and report 
the amount of money spent on grassroots lobbying efforts. Lobbyists 
would have to file these reports on a quarterly, rather than a 
semiannual, basis. And the bill would require the Secretary of the 
Senate and the Clerk of the House to make these reports available in a 
searchable database that would allow the public to gather information 
on lobbyists quickly and efficiently. The bill also requires the 
disclosure of entities that contribute large sums of money to lobbying 
coalitions. And it doubles the civil penalty for knowingly failing to 
file lobbying reports or filing false information.

  Second, this bill should slow the revolving door between Congress and 
the lobbying industry. It establishes a two-year waiting period for 
members, senior staff, and senior executive personnel to participate in 
lobbying. During this cooling-off period, members and senior executive 
personnel would be prohibited from engaging in all lobbying activities, 
including developing strategy for or directing a lobbying campaign. 
Staff would be forbidden from making direct contact with any members or 
staff who work in the

[[Page S8311]]

House of Congress that used to employ them, rather than just the former 
employing office, as the law now requires.
  The revolving door provisions in my bill would also require members 
of Congress to publicly disclose their intent to seek outside 
employment if a conflict of interest exists. They prohibit members of 
Congress from taking official actions to influence the employment 
decisions of outside entities on the basis of partisan affiliation. And 
they affirm that no member should take official action based on the 
prospect for personal gain. The bill also prohibits registered 
lobbyists from taking advantage of special advantages such as gym 
membership, floor privileges, or access to certain areas of the Capitol 
that are offered to former Members of Congress.
  Third, my bill addresses the growing problem of privately funded 
travel and lobbyist gifts. Before sponsoring a trip for a member or 
staff, an organization must certify that the trip was not financed or 
organized by a registered lobbyist and that lobbyists will not 
participate in or attend the trip. After returning from the trip, the 
Member or staff must provide a detailed itinerary and description of 
expenses. My bill also creates a complete ban on lobbyists providing 
gifts to members and staff and on members accepting gifts from 
registered lobbyists. Those who file false certifications or fail to 
observe these rules will be subject to stiff penalties.
  Finally, the bill seeks to strengthen oversight of lobbying 
disclosure. A GAO report showing the old lobbying law passed in the 
1940s was largely ignored and rarely enforced was an important impetus 
to passing the Lobbying Disclosure Act in 1995. The bill requires the 
Comptroller General to report to Congress twice annually on the state 
of the enforcement of the rules. These reports will help us determine 
if further improvements in the laws are necessary.
  These measures are not crafted as a knee-jerk response to the recent 
spate of troubling revelations about the relationships between certain 
members of Congress and the lobbying industry. Instead, this bill 
addresses systemic problems with the rules governing lobbyists. It has 
been a decade since the Lobbying Disclosure Act and new gift rules were 
passed and we now know that some of these rules are no longer 
sufficient to regulate a growing and evolving lobbying industry. It is 
now time for us to act again. I urge my colleagues to support this 
bill.
  I ask unanimous consent that the text of the bill and a section by 
section analysis be printed in the Record.
                                 ______
                                 
      By Mr. CHAFEE (for himself, Mrs. Clinton, Mr. Inhofe, and Mr. 
        Jeffords):
  S. 1400. A bill to amend the Federal Water Pollution Control Act and 
the Safe Drinking Water Act to improve water and wastewater 
infrastructure in the United States; to the Committee on Environment 
and Public Works.
  Mr. CHAFEE. 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. 1400

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

                TITLE I--WATER POLLUTION INFRASTRUCTURE

Sec. 101. Technical assistance for rural and small treatment works.
Sec. 102. Projects eligible for assistance.
Sec. 103. Water pollution control revolving loan funds.
Sec. 104. Affordability.
Sec. 105. Transferability of funds.
Sec. 106. Costs of administering water pollution control revolving loan 
              funds.
Sec. 107. Water pollution control revolving loan funds.
Sec. 108. Noncompliance.
Sec. 109. Authorization of appropriations.
Sec. 110. Critical water infrastructure projects.

              TITLE II--SAFE DRINKING WATER INFRASTRUCTURE

Sec. 201. Preconstruction work.
Sec. 202. Affordability.
Sec. 203. Safe drinking water revolving loan funds.
Sec. 204. Other authorized activities.
Sec. 205. Priority system requirements.
Sec. 206. Authorization of appropriations.
Sec. 207. Critical drinking water infrastructure projects.
Sec. 208. Small system revolving loan funds.
Sec. 209. Study on lead contamination in drinking water.
Sec. 210. District of Columbia lead service line replacement.

                        TITLE III--MISCELLANEOUS

Sec. 301. Definitions.
Sec. 302. Demonstration grant program for water quality enhancement and 
              management.
Sec. 303. Agricultural pollution control technology grant program.
Sec. 304. State revolving fund review process.
Sec. 305. Cost of service study.
Sec. 306. Water resources study.

                TITLE I--WATER POLLUTION INFRASTRUCTURE

     SEC. 101. TECHNICAL ASSISTANCE FOR RURAL AND SMALL TREATMENT 
                   WORKS.

       (a) In General.--Title II of the Federal Water Pollution 
     Control Act (33 U.S.C. 1281 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 222. TECHNICAL ASSISTANCE FOR RURAL AND SMALL 
                   TREATMENT WORKS.

       ``(a) Definition of Qualified Nonprofit Technical 
     Assistance Provider.--In this section, the term `qualified 
     nonprofit technical assistance provider' means a qualified 
     nonprofit technical assistance provider of water and 
     wastewater services to small rural communities that provide 
     technical assistance to treatment works (including circuit 
     rider programs and training and preliminary engineering 
     evaluations) that--
       ``(1) serve not more than 10,000 users; and
       ``(2) may include a State agency.
       ``(b) Grant Program.--
       ``(1) In general.--The Administrator may make grants to 
     qualified nonprofit technical assistance providers that are 
     qualified to provide assistance on a broad range of 
     wastewater and stormwater approaches--
       ``(A) to assist small treatment works to plan, develop, and 
     obtain financing for eligible projects described in section 
     603(c);
       ``(B) to capitalize revolving loan funds to provide loans, 
     in consultation with the State in which the assistance is 
     provided, to rural and small municipalities for 
     predevelopment costs (including costs for planning, design, 
     associated preconstruction, and necessary activities for 
     siting the facility and related elements) associated with 
     wastewater infrastructure projects or short-term costs 
     incurred for equipment replacement that is not part of 
     regular operation and maintenance activities for existing 
     wastewater systems, if--
       ``(i) any loan from the fund is made at or below the market 
     interest rate, for a term not to exceed 10 years;
       ``(ii) the amount of any single loan does not exceed 
     $100,000; and
       ``(iii) all loan repayments are credited to the fund;
       ``(C) to provide technical assistance and training for 
     rural and small publicly owned treatment works and 
     decentralized wastewater treatment systems to enable those 
     treatment works and systems to protect water quality and 
     achieve and maintain compliance with this Act; and
       ``(D) to disseminate information to rural and small 
     municipalities with respect to planning, design, 
     construction, and operation of publicly owned treatment works 
     and decentralized wastewater treatment systems.
       ``(2) Distribution of grant.--In carrying out this 
     subsection, the Administrator shall ensure, to the maximum 
     extent practicable, that technical assistance provided using 
     funds from a grant under paragraph (1) is made available in 
     each State.
       ``(3) Consultation.--As a condition of receiving a grant 
     under this subsection, a qualified nonprofit technical 
     assistance provider shall consult with each State in which 
     grant funds are to be expended or otherwise made available 
     before the grant funds are expended or made available in the 
     State.
       ``(4) Annual report.--For each fiscal year, a qualified 
     nonprofit technical assistance provider that receives a grant 
     under this subsection shall submit to the Administrator a 
     report that--
       ``(A) describes the activities of the qualified nonprofit 
     technical assistance provider using grant funds received 
     under this subsection for the fiscal year; and
       ``(B) specifies--
       ``(i) the number of communities served;
       ``(ii) the sizes of those communities; and
       ``(iii) the type of financing provided by the qualified 
     nonprofit technical assistance provider.
       ``(c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $25,000,000 for 
     each of fiscal years 2006 through 2010.''.
       (b) Guidance for Small Systems.--Section 602 of the Federal 
     Water Pollution Control Act (33 U.S.C. 1382) is amended by 
     adding at the end the following:
       ``(c) Guidance for Small Systems.--
       ``(1) Definition of small system.--In this subsection, the 
     term `small system' means a system--
       ``(A) for which a municipality or intermunicipal, 
     interstate, or State agency seeks assistance under this 
     title; and
       ``(B) that serves a population of 10,000 or fewer 
     households.

[[Page S8312]]

       ``(2) Simplified procedures.--Not later than 1 year after 
     the date of enactment of this subsection, the Administrator 
     shall assist the States in establishing simplified procedures 
     for small systems to obtain assistance under this title.
       ``(3) Publication of manual.--Not later than 1 year after 
     the date of enactment of this subsection, after providing 
     notice and opportunity for public comment, the Administrator 
     shall publish--
       ``(A) a manual to assist small systems in obtaining 
     assistance under this title; and
       ``(B) in the Federal Register, notice of the availability 
     of the manual.''.

     SEC. 102. PROJECTS ELIGIBLE FOR ASSISTANCE.

       Section 603 of the Federal Water Pollution Control Act (33 
     U.S.C. 1383) is amended by striking subsection (c) and 
     inserting the following:
       ``(c) Projects Eligible for Assistance.--Funds in each 
     State water pollution control revolving fund shall be used 
     only for--
       ``(1) providing financial assistance to any municipality or 
     an intermunicipal, interstate, or State agency that 
     principally treats municipal wastewater or domestic sewage 
     for construction (including planning, design, associated 
     preconstruction, and activities relating to the siting of a 
     facility) of a treatment works (as defined in section 212);
       ``(2) implementation of a management program established 
     under section 319;
       ``(3) development and implementation of a conservation and 
     management plan under section 320;
       ``(4) providing financial assistance to a municipality or 
     an intermunicipal, interstate, or State agency for projects 
     to increase the security of wastewater treatment works 
     (excluding any expenditure for operations or maintenance);
       ``(5) providing financial assistance to a municipality or 
     an intermunicipal, interstate, or State agency for measures 
     to control municipal stormwater, the primary purpose of which 
     is the preservation, protection, or enhancement of water 
     quality;
       ``(6) water conservation projects, the primary purpose of 
     which is the protection, preservation, and enhancement of 
     water quality; or
       ``(7) reuse, reclamation, and recycling projects, the 
     primary purpose of which is the protection, preservation, and 
     enhancement of water quality.''.

     SEC. 103. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

       Section 603(d) of the Federal Water Pollution Control Act 
     (33 U.S.C. 1383(d)) is amended--
       (1) in paragraph (6), by striking ``and'' at the end;
       (2) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(8) to carry out a project under paragraph (2) or (3) of 
     section 601(a), which may be--
       ``(A) operated by a municipal, intermunicipal, or 
     interstate entity, State, public or private utility, 
     corporation, partnership, association, or nonprofit agency; 
     and
       ``(B) used to make loans that will be fully amortized not 
     later than 30 years after the date of the completion of the 
     project.''.

     SEC. 104. AFFORDABILITY.

       (a) In General.--Section 603 of the Federal Water Pollution 
     Control Act (33 U.S.C. 1383) is amended--
       (1) by redesignating subsections (e) through (h) as 
     subsections (f) through (i), respectively; and
       (2) by inserting after subsection (d) the following:
       ``(e) Types of Assistance for Disadvantaged Communities.--
       ``(1) Definition of disadvantaged community.--In this 
     subsection, the term `disadvantaged community' means the 
     service area, or portion of a service area, of a treatment 
     works that meets affordability criteria established after 
     public review and comment by the State in which the treatment 
     works is located.
       ``(2) Loan subsidy.--Notwithstanding any other provision of 
     this section, in a case in which the State makes a loan from 
     the water pollution control revolving loan fund in accordance 
     with subsection (c) to a disadvantaged community or a 
     community that the State expects to become a disadvantaged 
     community as the result of a proposed project, the State may 
     provide additional subsidization, including--
       ``(A) the forgiveness of the principal of the loan; and
       ``(B) an interest rate on the loan of zero percent.
       ``(3) Total amount of subsidies.--For each fiscal year, the 
     total amount of loan subsidies made by the State pursuant to 
     this subsection may not exceed 30 percent of the amount of 
     the capitalization grant received by the State for the fiscal 
     year.
       ``(4) Extended term.--A State may provide an extended term 
     for a loan if the extended term--
       ``(A) terminates not later than the date that is 30 years 
     after the date of completion of the project; and
       ``(B) does not exceed the expected design life of the 
     project.
       ``(5) Information.--The Administrator may publish 
     information to assist States in establishing affordability 
     criteria described in paragraph (1).''.
       (b) Conforming Amendment.--Section 221(d) of the Federal 
     Water Pollution Control Act (33 U.S.C. 1301(d)) is amended in 
     the second sentence by striking ``603(h)'' and inserting 
     ``603(i)''.

     SEC. 105. TRANSFERABILITY OF FUNDS.

       Section 603 of the Federal Water Pollution Control Act (33 
     U.S.C. 1383) (as amended by section 104(a)(1)) is amended by 
     adding at the end the following:
       ``(j) Transfer of Funds.--
       ``(1) In general.--The Governor of a State may--
       ``(A)(i) reserve not more than 33 percent of a 
     capitalization grant made under this title; and
       ``(ii) add the funds reserved to any funds provided to the 
     State under section 1452 of the Safe Drinking Water Act (42 
     U.S.C. 300j-12); and
       ``(B)(i) reserve for any year an amount that does not 
     exceed the amount that may be reserved under subparagraph (A) 
     for that year from capitalization grants made under section 
     1452 of that Act (42 U.S.C. 300j-12); and
       ``(ii) add the reserved funds to any funds provided to the 
     State under this title.
       ``(2) State match.--Funds reserved under this subsection 
     shall not be considered to be a State contribution for a 
     capitalization grant required under this title or section 
     1452(b) of the Safe Drinking Water Act (42 U.S.C. 300j-
     12(b)).''.

     SEC. 106. COSTS OF ADMINISTERING WATER POLLUTION CONTROL 
                   REVOLVING LOAN FUNDS.

       Section 603(d)(7) of the Federal Water Pollution Control 
     Act (33 U.S.C. 1383(d)(7)) is amended by striking ``4 
     percent'' and inserting ``6 percent''.

     SEC. 107. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

       Section 603 of the Federal Water Pollution Control Act (33 
     U.S.C. 1383) is amended by striking subsection (h) (as 
     redesignated by section 104) and inserting the following:
       ``(h) Priority System Requirement.--
       ``(1) Definitions.--In this subsection:
       ``(A) Restructuring.--The term `restructuring' means--
       ``(i) the consolidation of management functions or 
     ownership with another facility; or
       ``(ii) the formation of cooperative partnerships.
       ``(B) Traditional wastewater approach.--The term 
     `traditional wastewater approach' means a managed system used 
     to collect and treat wastewater from an entire service area 
     consisting of--
       ``(i) collection sewers;
       ``(ii) a centralized treatment plant using biological, 
     physical, or chemical treatment processes; and
       ``(iii) a direct point source discharge to surface water.
       ``(2) Priority system.--In providing financial assistance 
     from the water pollution control revolving fund of the State, 
     the State shall--
       ``(A) give greater weight to an application for assistance 
     by a treatment works if the application includes such other 
     information as the State determines to be appropriate and--
       ``(i) an inventory of assets, including a description of 
     the condition of those assets;
       ``(ii) a schedule for replacement of the assets;
       ``(iii) a financing plan indicating sources of revenue from 
     ratepayers, grants, bonds, other loans, and other sources;
       ``(iv) a review of options for restructuring the treatment 
     works;
       ``(v) a review of options for approaches other than a 
     traditional wastewater approach that may include actions or 
     projects that treat or minimize sewage or urban stormwater 
     discharges using--

       ``(I) decentralized or distributed stormwater controls;
       ``(II) decentralized wastewater treatment;
       ``(III) low impact development technologies;
       ``(IV) stream buffers;
       ``(V) wetland restoration; or
       ``(VI) actions to minimize the quantity of and direct 
     connections to impervious surfaces;

       ``(vi) demonstration of consistency with State, regional, 
     and municipal watershed plans;
       ``(vii) a review of options for urban waterfront 
     development or brownfields revitalization to be completed in 
     conjunction with the project; or
       ``(viii) provides the applicant the flexibility through 
     alternative means to carry out responsibilities under Federal 
     regulations, that may include watershed permitting and other 
     innovative management approaches, while achieving results 
     that--

       ``(I) the State, with the delegated authority under section 
     402(a)(5), determines meet permit requirements for permits 
     that have been issued in accordance with the national 
     pollution discharge elimination system under section 402; or
       ``(II) the Administrator determines are measurably superior 
     when compared to regulatory standards;

       ``(B) take into consideration appropriate chemical, 
     physical, and biological data that the State considers 
     reasonably available and of sufficient quality;
       ``(C) provide for public notice and opportunity to comment 
     on the establishment of the system and the summary under 
     subparagraph (D);
       ``(D) publish not less than biennially in summary form a 
     description of projects in the State that are eligible for 
     assistance under this title that indicates--
       ``(i) the priority assigned to each project under the 
     priority system of the State; and
       ``(ii) the funding schedule for each project, to that 
     extent the information is available; and

[[Page S8313]]

       ``(E) ensure that projects undertaken with assistance under 
     this title are designed to achieve, as determined by the 
     State, the optimum water quality management, consistent with 
     the public health and water quality goals and requirements of 
     this title.
       ``(3) Savings clause.--Nothing in paragraph (2)(A)(viii) 
     affects the authority of the Administrator under section 
     402(a)(5).''.

     SEC. 108. NONCOMPLIANCE.

       Section 603 of the Federal Water Pollution Control Act (33 
     U.S.C. 1383) (as amended by section 105) is amended by adding 
     at the end the following:
       ``(k) Noncompliance.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     assistance (other than assistance that is to be used by a 
     treatment works solely for planning, design, or security 
     purposes) shall be provided under this title to a treatment 
     works that has been in significant noncompliance with any 
     requirement of this Act for any of the 4 quarters in the 
     previous 8 quarters, unless the treatment works is in 
     compliance with, or has entered into, an enforceable 
     administrative order to effect compliance with the 
     requirement.
       ``(2) Exception.--A treatment works that is determined 
     under paragraph (1) to be in significant noncompliance with a 
     requirement described in that paragraph may receive 
     assistance under this title if the Administrator and the 
     State providing the assistance determine that--
       ``(A) the entity conducting the enforcement action on which 
     the determination of significant noncompliance is based has 
     determined that the use of assistance would enable the 
     treatment works to take corrective action toward resolving 
     the violations; or
       ``(B) the entity conducting the enforcement action on which 
     the determination of significant noncompliance is based has 
     determined that the assistance would be used on a portion of 
     the treatment works that is not directly related to the cause 
     of finding significant noncompliance.''.

     SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

       The Federal Water Pollution Control Act is amended by 
     striking section 607 (33 U.S.C. 1387) and inserting the 
     following:

     ``SEC. 607. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     to carry out this title--
       ``(1) $3,200,000,000 for each of fiscal years 2006 and 
     2007;
       ``(2) $3,600,000,000 for fiscal year 2008;
       ``(3) $4,000,000,000 for fiscal year 2009; and
       ``(4) $6,000,000,000 for fiscal year 2010.
       ``(b) Availability.--Amounts made available under this 
     section shall remain available until expended.
       ``(c) Reservation for Needs Surveys.--Of the amount made 
     available under subsection (a) to carry out this title for a 
     fiscal year, the Administrator may reserve not more than 
     $1,000,000 per year to pay the costs of conducting needs 
     surveys under section 516(2).''.

     SEC. 110. CRITICAL WATER INFRASTRUCTURE PROJECTS.

       (a) Establishment.--Not later than 180 days after the date 
     of enactment of this Act, the Administrator shall establish a 
     program under which grants are provided to eligible entities 
     for use in carrying out projects and activities the primary 
     purpose of which is watershed restoration through the 
     protection or improvement of water quality.
       (b) Project Selection.--
       (1) In general.--The Administrator may provide funds under 
     this section to an eligible entity to carry out an eligible 
     project described in paragraph (2).
       (2) Equitable distribution.--The Administrator shall ensure 
     an equitable distribution of projects under this section, 
     taking into account cost and number of requests for each 
     category listed in paragraph (3).
       (3) Eligible projects.--A project that is eligible to be 
     carried out using funds provided under this section may 
     include projects that--
       (A) are listed on the priority list of a State under 
     section 216 of the Federal Water Pollution Control Act (33 
     U.S.C. 1296);
       (B) mitigate wet weather flows, including combined sewer 
     overflows, sanitary sewer overflows, and stormwater 
     discharges;
       (C) upgrade publicly owned treatment works with a permitted 
     design capacity to treat an annual average of at least 
     500,000 gallons of wastewater per day, the upgrade of which 
     would produce the greatest nutrient load reductions at points 
     of discharge, or result in the greatest environmental 
     benefits, with nutrient removal technologies that are 
     designed to reduce total nitrogen in discharged wastewater to 
     an average annual concentration of 3 milligrams per liter;
       (D) implement locally based watershed protection plans 
     created by local nonprofit organizations that--
       (i) provide a coordinating framework for management that 
     focuses public and private efforts to address the highest 
     priority water-related problems within a geographic area, 
     considering both ground and surface water flow; and
       (ii) includes representatives from both point source and 
     nonpoint source contributors;
       (E) are contained in a State plan developed in accordance 
     with section 319 or 320 of the Federal Water Pollution 
     Control Act (33 U.S.C. 1329, 1330); or
       (F) include means to develop alternative water supplies.
       (c) Local Participation.--In prioritizing projects for 
     implementation under this section, the Administrator shall 
     consult with, and consider the priorities of--
       (1) affected State and local governments; and
       (2) public and private entities that are active in 
     watershed planning and restoration.
       (d) Cost Sharing.--Before carrying out any project under 
     this section, the Administrator shall enter into a binding 
     agreement with 1 or more non-Federal interests that shall 
     require the non-Federal interests--
       (1) to pay 45 percent of the total costs of the project, 
     which may include services, materials, supplies, or other in-
     kind contributions;
       (2) to provide any land, easements, rights-of-way, and 
     relocations necessary to carry out the project; and
       (3) to pay 100 percent of any operation, maintenance, 
     repair, replacement, and rehabilitation costs associated with 
     the project.
       (e) Waiver.--The Administrator may waive the requirement to 
     pay the non-Federal share of the cost of carrying out an 
     eligible activity using funds from a grant provided under 
     this section if the Administrator determines that an eligible 
     entity is unable to pay, or would experience significant 
     financial hardship if required to pay, the non-Federal share.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $300,000,000 for 
     each of fiscal years 2006 through 2010.

              TITLE II--SAFE DRINKING WATER INFRASTRUCTURE

     SEC. 201. PRECONSTRUCTION WORK.

       Section 1452(a)(2) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(a)(2)) is amended in the second sentence--
       (1) by striking ``(not'' and inserting ``(including 
     expenditures for planning, design, and associated 
     preconstruction and for recovery for siting of the facility 
     and related elements but not''; and
       (2) by inserting before the period at the end the 
     following: ``or to replace or rehabilitate aging collection, 
     treatment, storage (including reservoirs), or distribution 
     facilities of public water systems or provide for capital 
     projects to upgrade the security of public water systems''.

     SEC. 202. AFFORDABILITY.

       Section 1452(d)(3) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(d)(3)) is amended in the first sentence by 
     inserting ``, or portion of a service area,'' after ``service 
     area''.

     SEC. 203. SAFE DRINKING WATER REVOLVING LOAN FUNDS.

       Section 1452(g) of the Safe Drinking Water Act (42 U.S.C. 
     300j-12(g)) is amended--
       (1) paragraph (2)--
       (A) in the first sentence, by striking ``4'' and inserting 
     ``6''; and
       (B) by striking ``1419,'' and all that follows through 
     ``1933.'' and inserting ``1419.''; and
       (2) by adding at the end the following:
       ``(5) Transfer of funds.--
       ``(A) In general.--The Governor of a State may--
       ``(i)(I) reserve not more than 33 percent of a 
     capitalization grant made under this section; and
       ``(II) add the funds reserved to any funds provided to the 
     State under section 601 of the Federal Water Pollution 
     Control Act (33 U.S.C. 1381); and
       ``(ii)(I) reserve for any fiscal year an amount that does 
     not exceed the amount that may be reserved under clause 
     (i)(I) for that year from capitalization grants made under 
     section 601 of that Act (33 U.S.C. 1381); and
       ``(II) add the reserved funds to any funds provided to the 
     State under this section.
       ``(B) State match.--Funds reserved under this paragraph 
     shall not be considered to be a State match of a 
     capitalization grant required under this section or section 
     602(b) of the Federal Water Pollution Control Act (33 U.S.C. 
     1382(b)).''.

     SEC. 204. OTHER AUTHORIZED ACTIVITIES.

       Section 1452(k)(2)(D) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(k)(2)(D)) is amended by inserting before the 
     period at the end the following: ``(including implementation 
     of source water protection plans)''.

     SEC. 205. PRIORITY SYSTEM REQUIREMENTS.

       Section 1452(b)(3) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(b)(3)) is amended--
       (1) by redesignating subparagraph (B) as subparagraph (D);
       (2) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Definition of restructuring.--In this paragraph, the 
     term `restructuring' means changes in operations (including 
     ownership, accounting, rates, maintenance, consolidation, and 
     alternative water supply).
       ``(B) Priority system.--An intended use plan shall provide, 
     to the maximum extent practicable, that priority for the use 
     of funds be given to projects that--
       ``(i) address the most serious risk to human health;
       ``(ii) are necessary to ensure compliance with this title 
     (including requirements for filtration); and
       ``(iii) assist systems most in need on a per-household 
     basis according to State affordability criteria.
       ``(C) Weight given to applications.--After determining 
     project priorities under subparagraph (B), an intended use 
     plan shall further provide that the State shall give greater 
     weight to an application for assistance by a community water 
     system if the application includes such other information as 
     the State determines to be necessary and--

[[Page S8314]]

       ``(i) an inventory of assets, including a description of 
     the condition of the assets;
       ``(ii) a schedule for replacement of assets;
       ``(iii) a financing plan indicating sources of revenue from 
     ratepayers, grants, bonds, other loans, and other sources;
       ``(iv) a review of options for restructuring the public 
     water system;
       ``(v) demonstration of consistency with State, regional, 
     and municipal watershed plans; or
       ``(vi) a review of options for urban waterfront development 
     or brownfields revitalization to be completed in conjunction 
     with the project;''; and
       (3) in subparagraph (D) (as redesignated by paragraph (1)), 
     by striking ``periodically'' and inserting ``at least 
     biennially''.

     SEC. 206. AUTHORIZATION OF APPROPRIATIONS.

       Section 1452 of the Safe Drinking Water Act (42 U.S.C. 
     300j-12) is amended by striking subsection (m) and inserting 
     the following:
       ``(m) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section--
       ``(A) $1,500,000,000 for fiscal year 2006;
       ``(B) $2,000,000,000 for each of fiscal years 2007 and 
     2008;
       ``(C) $3,500,000,000 for fiscal year 2009; and
       ``(D) $6,000,000,000 for fiscal year 2010.
       ``(2) Availability.--Amounts made available under this 
     subsection shall remain available until expended.
       ``(3) Reservation for needs surveys.--Of the amount made 
     available under paragraph (1) to carry out this section for a 
     fiscal year, the Administrator may reserve not more than 
     $1,000,000 per year to pay the costs of conducting needs 
     surveys under subsection (h).''.

     SEC. 207. CRITICAL DRINKING WATER INFRASTRUCTURE PROJECTS.

       (a) Establishment.--Not later than 180 days after the date 
     of enactment of this Act, the Administrator of the 
     Environmental Protection Agency shall establish a program 
     under which grants are provided to eligible entities for use 
     in carrying out projects and activities the primary purpose 
     of which is to assist community water systems in meeting the 
     requirements of the Safe Drinking Water Act (42 U.S.C. 300f 
     et seq.).
       (b) Project Selection.--A project that is eligible to be 
     carried out using funds provided under this section may 
     include projects that--
       (1) develop alternative water sources;
       (2) provide assistance to small systems; or
       (3) assist a community water system--
       (A) to comply with a national primary drinking water 
     regulation; or
       (B) to mitigate groundwater contamination.
       (c) Eligible Entities.--An entity eligible to receive a 
     grant under this section is--
       (1) a community water system as defined in section 1401 of 
     the Safe Drinking Water Act (42 U.S.C. 300f); or
       (2) a system that is located in an area governed by an 
     Indian Tribe, as defined in section 1401 of the Safe Drinking 
     Water Act (42 U.S.C. 300f);
       (d) Priority.--In prioritizing projects for implementation 
     under this section, the Administrator shall give priority to 
     community water systems that--
       (1) serve a community that, under affordability criteria 
     established by the State under section 1452(d)(3) of the Safe 
     Drinking Water Act (42 U.S.C. 300j-12), is determined by the 
     State to be--
       (A) a disadvantaged community; or
       (B) a community that may become a disadvantaged community 
     as a result of carrying out an eligible activity; or
       (2) serve a community with a population of less than 10,000 
     households.
       (e) Local Participation.--In prioritizing projects for 
     implementation under this section, the Administrator shall 
     consult with, and consider the priorities of, affected 
     States, Tribes, and local governments.
       (f) Cost Sharing.--Before carrying out any project under 
     this section, the Administrator shall enter into a binding 
     agreement with 1 or more non-Federal interests that shall 
     require the non-Federal interests--
       (1) to pay 45 percent of the total costs of the project, 
     which may include services, materials, supplies, or other in-
     kind contributions;
       (2) to provide any land, easements, rights-of-way, and 
     relocations necessary to carry out the project; and
       (3) to pay 100 percent of any operation, maintenance, 
     repair, replacement, and rehabilitation costs associated with 
     the project.
       (g) Waiver.--The Administrator may waive the requirement to 
     pay the non-Federal share of the cost of carrying out an 
     eligible activity using funds from a grant provided under 
     this section if the Administrator determines that an eligible 
     entity is unable to pay, or would experience significant 
     financial hardship if required to pay, the non-Federal share.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $300,000,000 for 
     each of fiscal years 2006 through 2010.

     SEC. 208. SMALL SYSTEM REVOLVING LOAN FUNDS.

       Section 1442(e) of the Safe Drinking Water Act (42 U.S.C. 
     300j091(e)) is amended--
       (1) in the first sentence, by striking ``The Administrator 
     may provide'' and inserting the following:
       ``(1) In general.--The Administrator may provide''; and
       (2) by adding at the end the following:
       ``(2) Small system revolving loan fund.--
       ``(A) In general.--In addition to amounts provided under 
     this section, the Administrator may provide grants to 
     qualified private, nonprofit entities to capitalize revolving 
     funds to provide financing to eligible entities described in 
     subparagraph (B) for--
       ``(i) predevelopment costs (including costs for planning, 
     design, associated preconstruction, and necessary activities 
     for siting the facility and related elements) associated with 
     proposed water projects or with existing water systems; and
       ``(ii) short-term costs incurred for replacement equipment, 
     small-scale extension services, or other small capital 
     projects that are not part of the regular operations and 
     maintenance activities of existing water systems.
       ``(B) Eligible entities.--To be eligible for assistance 
     under this paragraph, an entity shall be a small water system 
     (as described in section 1412(b)(4)(E)(ii)).
       ``(C) Maximum amount of loans.--The amount of financing 
     made to an eligible entity under this paragraph shall not 
     exceed--
       ``(i) $100,000 for costs described in subparagraph (A)(i); 
     and
       ``(ii) $100,000 for costs described in subparagraph 
     (A)(ii).
       ``(D) Term.--The term of a loan made to an eligible entity 
     under this paragraph shall not exceed 10 years.
       ``(E) Annual report.--For each fiscal year, a qualified 
     private, nonprofit entity that receives a grant under 
     subparagraph (A) shall submit to the Administrator a report 
     that--
       ``(i) describes the activities of the qualified private, 
     nonprofit entity under this paragraph for the fiscal year; 
     and
       ``(ii) specifies--

       ``(I) the number of communities served;
       ``(II) the sizes of those communities; and
       ``(III) the type of financing provided by the qualified 
     private, nonprofit entity.

       ``(F) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $25,000,000 
     for each of fiscal years 2006 through 2010.''.

     SEC. 209. STUDY ON LEAD CONTAMINATION IN DRINKING WATER.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall enter into a cooperative agreement 
     with the National Academy of Sciences to carry out a study to 
     analyze existing market conditions for plumbing components, 
     including pipes, faucets, water meters, valves, household 
     valves, and any other plumbing components that come into 
     contact with water commonly used for human consumption.
       (b) Components.--In conducting the study under subsection 
     (a), the National Academy of Sciences shall evaluate for each 
     category of plumbing components described in subsection (a)--
       (1) the availability of plumbing components in each 
     category with lead content below 8 percent, including those 
     between 0 percent and 4 percent and those between 4 percent 
     and 8 percent;
       (2) the relative market share of the plumbing components;
       (3) the relative cost of the plumbing components;
       (4) the issues surrounding transition from current market 
     to plumbing components with not more than 0.2 percent lead;
       (5) the feasibility of manufacturing plumbing components 
     with lead levels below 8 percent; and
       (6) the use of lead alternatives in plumbing components 
     with lead levels below 8 percent.
       (c) Report.--Not late than 1 year after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to the Committee on Environment and Public Works of 
     the Senate and the Committee on Energy and Commerce of the 
     House of Representatives a report describing the findings of 
     the study under this section.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $500,000.

     SEC. 210. DISTRICT OF COLUMBIA LEAD SERVICE LINE REPLACEMENT.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out lead service line replacement 
     in the District of Columbia $30,000,000 for each of fiscal 
     years 2007 through 2011.
       (b) Lead Service Line Replacement Assistance Fund.--
       (1) In general.--Of the funds provided under subsection 
     (a), not more than $2,000,000 per year may be allocated for 
     water service line replacement grants to provide assistance 
     to low-income residents to replace the privately-owned 
     portion of lead service lines.
       (2) Limitation.--Individual grants shall be limited to not 
     more than $5,000.
       (3) Definition of low income.--For the purpose of this 
     subsection, the term ``low-income'' shall be defined by the 
     District of Columbia.

                        TITLE III--MISCELLANEOUS

     SEC. 301. DEFINITIONS.

       In this title:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Director of the United 
     States Geological Survey.

     SEC. 302. DEMONSTRATION GRANT PROGRAM FOR WATER QUALITY 
                   ENHANCEMENT AND MANAGEMENT.

       (a) Establishment.--

[[Page S8315]]

       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Administrator shall establish a 
     nationwide demonstration grant program to--
       (A) promote innovations in technology and alternative 
     approaches to water quality management or water supply; or
       (B) reduce costs to municipalities incurred in complying 
     with--
       (i) the Federal Water Pollution Control Act (33 U.S.C. 1251 
     et seq.); and
       (ii) the Safe Drinking Water Act (42 U.S.C. 300f et seq.).
       (2) Scope.--The demonstration grant program shall consist 
     of 10 projects each year, to be carried out in municipalities 
     selected by the Administrator under subsection (b).
       (b) Selection of Municipalities.--
       (1) Application.--A municipality that seeks to participate 
     in the demonstration grant program shall submit to the 
     Administrator a plan that--
       (A) is developed in coordination with--
       (i) the agency of the State having jurisdiction over water 
     quality or water supply matters; and
       (ii) interested stakeholders;
       (B) describes water impacts specific to urban or rural 
     areas;
       (C) includes a strategy under which the municipality, 
     through participation in the demonstration grant program, 
     could effectively--
       (i) address water quality or water supply problems; and
       (ii) achieve the water quality goals that--

       (I) could be achieved using more traditional methods; and
       (II) are required under--

       (aa) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.); or
       (bb) the Safe Drinking Water Act (42 U.S.C. 300f et seq.); 
     and
       (D) includes a schedule for achieving the water quality or 
     water supply goals of the municipality.
       (2) Types of projects.--In carrying out the demonstration 
     grant program, the Administrator shall provide grants for 
     projects relating to water supply or water quality matters 
     such as--
       (A) excessive nutrient growth;
       (B) urban or rural population pressure;
       (C) lack of an alternative water supply;
       (D) difficulties in water conservation and efficiency;
       (E) lack of support tools and technologies to rehabilitate 
     and replace water supplies;
       (F) lack of monitoring and data analysis for water 
     distribution systems;
       (G) nonpoint source water pollution (including stormwater);
       (H) sanitary overflows;
       (I) combined sewer overflows;
       (J) problems with naturally occurring constituents of 
     concern;
       (K) problems with erosion and excess sediment;
       (L) new approaches to water treatment, distribution, and 
     collection systems; and
       (M) new methods for collecting and treating wastewater 
     (including system design and nonstructural alternatives).
       (3) Responsibilities of administrator.--In providing grants 
     for projects under this subsection, the Administrator shall--
       (A) ensure, to the maximum extent practicable, that--
       (i) the demonstration program includes a variety of 
     projects with respect to--

       (I) geographic distribution;
       (II) innovative technologies used for the projects; and
       (III) nontraditional approaches (including low-impact 
     development technologies) used for the projects; and

       (ii) each category of project described in paragraph (2) is 
     adequately represented;
       (B) give higher priority to projects that--
       (i) address multiple problems; and
       (ii) are regionally applicable;
       (C) ensure, to the maximum extent practicable, that at 
     least 1 community having a population of 10,000 or fewer 
     individuals receives a grant for each fiscal year; and
       (D) ensure that, for each fiscal year, no municipality 
     receives more than 25 percent of the total amount of funds 
     made available for the fiscal year to provide grants under 
     this section.
       (4) Cost sharing.--
       (A) In general.--Except as provided in subparagraph (B), 
     the non-Federal share of the total cost of a project funded 
     by a grant under this section shall be not less than 20 
     percent.
       (B) Waiver.--The Administrator may reduce or eliminate the 
     non-Federal share of the cost of a project for reasons of 
     affordability.
       (c) Reports.--
       (1) Reports from grant recipients.--A recipient of a grant 
     under this section shall submit to the Administrator, on the 
     date of completion of a project of the recipient and on each 
     of the dates that is 1, 2, and 3 years after that date, a 
     report that describes the effectiveness of the project.
       (2) Reports to congress.--Not later than 2 years after the 
     date of enactment of this Act, and every 2 years thereafter, 
     the Administrator shall submit to the Committee on 
     Environment and Public Works of the Senate and the Committee 
     on Transportation and Infrastructure and the Committee on 
     Energy and Commerce of the House of Representatives a report 
     that describes the status and results of the demonstration 
     program.
       (d) Incorporation of Results and Information.--To the 
     maximum extent practicable, the Administrator shall 
     incorporate the results of, and information obtained from, 
     successful projects under this section into programs 
     administered by the Administrator.
       (e) Research and Development.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Administrator shall, through a 
     competitive process, award grants and enter into contracts 
     and cooperative agreements with research institutions, 
     educational institutions, and other appropriate entities 
     (including consortia of such institutions and entities) for 
     research and development on the use of innovative and 
     alternative technologies to improve water quality or drinking 
     water supply.
       (2) Types of projects.--In carrying out this subsection, 
     the Administrator may select projects relating to such 
     matters as innovative or alternative technologies, 
     approaches, practices, or methods--
       (A) to increase the effectiveness and efficiency of public 
     water supply systems, including--
       (i) source water protection;
       (ii) water use reduction;
       (iii) water reuse;
       (iv) water treatment;
       (v) water distribution and collection systems; and
       (vi) water security;
       (B) to encourage the use of innovative or alternative 
     technologies or approaches relating to water supply or 
     availability;
       (C) to increase the effectiveness and efficiency of new and 
     existing treatment works, including--
       (i) methods of collecting, treating, dispersing, reusing, 
     reclaiming, and recycling wastewater;
       (ii) system design;
       (iii) nonstructural alternatives;
       (iv) decentralized approaches;
       (v) assessment;
       (vi) water efficiency; and
       (vii) wastewater security;
       (D) to increase the effectiveness and efficiency of 
     municipal separate storm sewer systems;
       (E) to promote new water treatment technologies, including 
     commercialization and dissemination strategies for adoption 
     of innovative or alternative low impact development 
     technologies in the homebuilding industry; or
       (F) to maintain a clearinghouse of technologies developed 
     under this subsection and subsection (a) at a research 
     consortium or institute.
       (3) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $20,000,000 
     for each of fiscal years 2006 through 2010.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section (other than 
     subsection (e)) $20,000,000 for each of fiscal years 2006 
     through 2010.

     SEC. 303. AGRICULTURAL POLLUTION CONTROL TECHNOLOGY GRANT 
                   PROGRAM.

       (a) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Agricultural commodity.--The term ``agricultural 
     commodity'' means--
       (A) agricultural, horticultural, viticultural, and dairy 
     products;
       (B) livestock and the products of livestock;
       (C) the products of poultry and bee raising;
       (D) the products of forestry;
       (E) other commodities raised or produced on agricultural 
     sites, as determined to be appropriate by the Secretary; and
       (F) products processed or manufactured from products 
     specified in subparagraphs (A) through (E), as determined by 
     the Secretary.
       (3) Agricultural project.--The term ``agricultural 
     project'' means an agricultural pollution control technology 
     project that, as determined by the Administrator--
       (A) is carried out at an agricultural site; and
       (B) achieves demonstrable reductions in air and water 
     pollution.
       (4) Agricultural site.--The term ``agricultural site'' 
     means a farming or ranching operation of a producer.
       (5) Producer.--The term ``producer'' means any person who 
     is engaged in the production and sale of an agricultural 
     commodity in the United States and who owns, or shares the 
     ownership and risk of loss of, the agricultural commodity.
       (6) Revolving fund.--The term ``revolving fund'' means an 
     agricultural pollution control technology State revolving 
     fund established by a State using amounts provided under 
     subsection (b)(1).
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (b) Grants for Agricultural State Revolving Funds.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this section, the Administrator shall provide to 
     each eligible State described in paragraph (2) 1 or more 
     capitalization grants, that cumulatively equal no more than 
     $1,000,000 per State, for use in establishing, within an 
     agency of the State having jurisdiction over agriculture or 
     environmental quality, an agricultural pollution control 
     technology State revolving fund.
       (2) Eligible states.--An eligible State referred to in 
     paragraph (1) is a State that agrees, prior to receipt of a 
     capitalization grant under paragraph (1)--
       (A) to establish, and deposit the funds from the grant in, 
     a revolving fund;

[[Page S8316]]

       (B) to provide, at a minimum, a State share in an amount 
     equal to 20 percent of the capitalization grant;
       (C) to use amounts in the revolving fund to make loans to 
     producers in accordance with subsection (c); and
       (D) to return amounts in the revolving fund if no loan 
     applications are granted within 2 years of the receipt of the 
     initial capitalization grant.
       (c) Loans to Producers.--
       (1) Use of funds.--A State that establishes a revolving 
     fund under subsection (b)(2) shall use amounts in the 
     revolving fund to provide loans to producers for use in 
     designing and constructing agricultural projects.
       (2) Maximum amount of loan.--The amount of a loan made to a 
     producer using funds from a revolving fund shall not exceed 
     $250,000, in the aggregate, for all agricultural projects 
     serving an agricultural site of the producer.
       (3) Conditions on loans.--A loan made to a producer using 
     funds from a revolving fund shall--
       (A) have an interest rate that is not more than the market 
     interest rate, including an interest-free loan; and
       (B) be repaid to the revolving fund not later than 10 years 
     after the date on which the loan is made.
       (d) Requirements for Producers.--
       (1) In general.--A producer that seeks to receive a loan 
     from a revolving fund shall--
       (A) submit to the State in which the agricultural site of 
     the producer is located an application that--
       (i) contains such information as the State may require; and
       (ii) demonstrates, to the satisfaction of the State, that 
     each project proposed to be carried out with funds from the 
     loan is an agricultural project; and
       (B) agree to expend all funds from a loan in an expeditious 
     and timely manner, as determined by the State.
       (2) Maximum percentage of agricultural project cost.--
     Subject to subsection (c)(2), a producer that receives a loan 
     from a revolving fund may use funds from the loan to pay up 
     to 100 percent of the cost of carrying out an agricultural 
     project.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000.

     SEC. 304. STATE REVOLVING FUND REVIEW PROCESS.

       As soon as practicable after the date of enactment of this 
     Act, the Administrator shall--
       (1) consult with States, utilities, and other Federal 
     agencies providing financial assistance to identify ways to 
     expedite and improve the application and review process for 
     the provision of assistance from--
       (A) the State water pollution control revolving funds 
     established under title VI of the Federal Water Pollution 
     Control Act (33 U.S.C. 1381 et seq.); and
       (B) the State drinking water treatment revolving loan funds 
     established under section 1452 of the Safe Drinking Water Act 
     (42 U.S.C. 300-12);
       (2) take such administrative action as is necessary to 
     expedite and improve the process as the Administrator has 
     authority to take under existing law;
       (3) collect information relating to innovative approaches 
     taken by any State to simplify the application process of the 
     State, and provide the information to each State; and
       (4) submit to Congress a report that, based on the 
     information identified under paragraph (1), contains 
     recommendations for legislation to facilitate further 
     streamlining and improvement of the process.

     SEC. 305. COST OF SERVICE STUDY.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator shall enter into a 
     contract with the National Academy of Sciences for, and the 
     National Academy of Sciences shall complete and provide to 
     the Administrator the results of, a study of the means by 
     which public water systems and treatment works selected by 
     the Academy in accordance with subsection (c) meet the costs 
     associated with operations, maintenance, capital replacement, 
     and regulatory requirements.
       (b) Required Elements.--
       (1) Affordability.--The study shall, at a minimum--
       (A) determine whether the rates at public water systems and 
     treatment works for communities included in the study were 
     established using a full-cost pricing model;
       (B) if a full-cost pricing model was not used, identify any 
     incentive rate systems that have been successful in 
     significantly reducing--
       (i) per capita water demand;
       (ii) the volume of wastewater flows;
       (iii) the volume of stormwater runoff; or
       (iv) the quantity of pollution generated by stormwater;
       (C) identify a set of best industry practices that public 
     water systems and treatment works may use in establishing a 
     rate structure that--
       (i) adequately addresses the true cost of services provided 
     to consumers by public water systems and treatment works, 
     including infrastructure replacement;
       (ii) encourages water conservation; and
       (iii) takes into consideration the needs of disadvantaged 
     individuals and communities, as identified by the 
     Administrator;
       (D) identify existing standards for affordability;
       (E) determine the manner in which those standards are 
     determined and defined;
       (F) determine the manner in which affordability varies with 
     respect to communities of different sizes and in different 
     regions; and
       (G) determine the extent to which affordability affects the 
     decision of a community to increase public water system and 
     treatment works rates (including the decision relating to the 
     percentage by which those rates should be increased).
       (2) Disadvantaged communities.--The study shall, at a 
     minimum--
       (A) survey a cross-section of States representing different 
     sizes, demographics, and geographical regions;
       (B) describe, for each State described in subparagraph (A), 
     the definition of ``disadvantaged community'' used in the 
     State in carrying out projects and activities under the Safe 
     Drinking Water Act (42 U.S.C. 300f et seq.);
       (C) review other means of identifying the meaning of the 
     term ``disadvantaged'', as that term applies to communities;
       (D) determine which factors and characteristics are 
     required for a community to be considered ``disadvantaged''; 
     and
       (E) evaluate the degree to which factors such as a 
     reduction in the tax base over a period of time, a reduction 
     in population, the loss of an industrial base, and the 
     existence of areas of concentrated poverty are taken into 
     account in determining whether a community is a disadvantaged 
     community.
       (c) Selection of Communities.--The National Academy of 
     Sciences shall select communities, the public water system 
     and treatment works rate structures of which are to be 
     studied under this section, that include a cross-section of 
     communities representing various populations, income levels, 
     demographics, and geographical regions.
       (d) Use of Results of Study.--On receipt of the results of 
     the study, the Administrator shall--
       (1) submit to Congress a report that describes the results 
     of the study; and
       (2) make the results available to treatment works and 
     public water systems for use by the publicly owned treatment 
     works and public water systems, on a voluntary basis, in 
     determining whether 1 or more new approaches may be 
     implemented at facilities of the publicly owned treatment 
     works and public water systems.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,000,000 for 
     each of fiscal years 2006 and 2007.

     SEC. 306. WATER RESOURCES STUDY.

       (a) Assessment.--
       (1) In general .--The Secretary shall--
       (A) not later than 2 years after the date of enactment of 
     this Act, conduct an assessment of water resources in the 
     United States; and
       (B) update the assessment every 2 years thereafter.
       (2) Components.--The assessment shall, at a minimum--
       (A) measure the status and trends of--
       (i) fresh water in rivers and reservoirs;
       (ii) groundwater levels and volume of useable fresh water 
     stored in aquifers; and
       (iii) fresh water withdrawn from streams and aquifers in 
     the United States; and
       (B) provide those measurements for--
       (i) watersheds defined by the 352 hydrologic accounting 
     units of the United States; and
       (ii) major aquifers of the United States, as identified by 
     the Secretary.
       (3) Report.--Not later than 1 year after the date of 
     completion of the assessment and every 2 years thereafter, 
     the Secretary shall submit to Congress a report--
       (A) describing the results of the assessment; and
       (B) containing any recommendations of the Secretary 
     relating to the assessment that--
       (i) are consistent with existing laws, treaties, decrees, 
     and interstate compacts; and
       (ii) respect the primary role of States in adjudicating, 
     administering, and regulating water rights and uses.
       (b) Water Resource Research Priorities.--
       (1) In general.--The Secretary shall coordinate a process 
     among Federal agencies and appropriate State agencies to 
     develop and publish, not later than 1 year after the date of 
     enactment of this Act, a list of water resource research 
     priorities that focuses on--
       (A) water supply monitoring;
       (B) means of capturing excess water and flood water for 
     conservation and use in the event of a drought;
       (C) strategies to conserve existing water supplies, 
     including recommendations for repairing aging infrastructure;
       (D) identifying incentives to ensure an adequate and 
     dependable supply of water;
       (E) identifying available technologies and other methods to 
     optimize water supply reliability, availability, and quality, 
     while safeguarding the environment; and
       (F) improving the quality of water resource information 
     available to State, tribal, and local water resource 
     managers.
       (2) Use of list.--The list published under paragraph (1) 
     shall be used by Federal agencies as a guide in making 
     decisions on the allocation of water research funding.
       (c) Information Delivery System.--
       (1) In general.--The Secretary shall coordinate a process 
     to develop an effective information delivery system to 
     communicate information described in paragraph (2) to--
       (A) decisionmakers at the Federal, regional, State, tribal, 
     and local levels;

[[Page S8317]]

       (B) the private sector; and
       (C) the general public.
       (2) Types of information.--The information referred to in 
     paragraph (1) may include--
       (A) the results of the national water resource assessments 
     under subsection (a);
       (B) a summary of the Federal water research priorities 
     developed under subsection (b);
       (C) near real-time data and other information on water 
     shortages and surpluses;
       (D) planning models for water shortages or surpluses (at 
     various levels including State, river basin, and watershed 
     levels);
       (E) streamlined procedures for States and localities to 
     interact with and obtain assistance from Federal agencies 
     that perform water resource functions; and
       (F) other water resource materials, as the Secretary 
     determine appropriate.
       (d) Report to Congress.--Not later than 2 years after the 
     date of enactment of this Act, and every 2 years thereafter 
     through fiscal year 2009, the Secretary shall submit to 
     Congress a report on the implementation of this section.
       (e) Savings Clause.--Nothing in this section--
       (1) modifies, supercedes, abrogates, impairs, or otherwise 
     affects in any way--
       (A) any right or jurisdiction of any State with respect to 
     the water (including boundary water) of the State;
       (B) the authority of any State to allocate quantities of 
     water within areas under the jurisdiction of the State; or
       (C) any right or claim to any quantity or use of water that 
     has been adjudicated, allocated, or claimed--
       (i) in accordance with State law;
       (ii) in accordance with subsections (a) through (c) of 
     section 208 of the Department of Justice Appropriation Act, 
     1953 (43 U.S.C. 666);
       (iii) by or pursuant to an interstate compact; or
       (iv) by a decision of the United States Supreme Court;
       (2) requires a change in the nature of use or the transfer 
     of any right to use water or creates a limitation on the 
     exercise of any right to use water; or
       (3) requires modifying the delivery, diversion, non-
     diversion, allocation, storage, or release from storage of 
     any water to be delivered by contract.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated--
       (1) to carry out the report authorized by this section, 
     $3,000,000, to remain available until expended; and
       (2) to carry out the updates authorized by subsection 
     (a)(1)(B), such sums as are necessary.
  Mr. GREGG. Mr. President, sustained military operations in 
Afghanistan and Iraq have brought to light another example of how 
outdated and burdensome government policies can punish generous 
employers. Employers that continue to pay their employees now on active 
duty in the uniformed services are experiencing tax and pension 
difficulties that are discouraging this pro-worker, patriotic gesture. 
Apparently, when it comes to companies showing their respect for their 
employees called to serve, there is special meaning to the old cliche 
``no good deed goes unpunished.''
  The National Committee for Employer Support for the Guard and 
Reserve, a nationwide association, reports that thousands of employers 
across the country have signed a pledge of support and have gone above 
and beyond the requirements of the law in support of their National 
Guard and Reserve employees. This includes many of our Nation's largest 
and most reputable corporations, including 3M, McDonalds, Wal-Mart, 
Home Depot, Liberty Mutual and many others. These commendable companies 
provide reservist employees who are on active duty with ``differential 
pay'' that makes up the difference between their military stipend and 
civilian salary.
  In New Hampshire, some of the most remarkable stories of corporate 
patriotism can be found. BAE Systems of Nashua has 110 people serving 
in the Guard and Reserves, 11 of whom are currently deployed overseas. 
They provide differential pay to all their called-up employees and 
continuing access to benefits to family members. The company even 
provides a stipend to make up the lost pay of active duty spouses of 
company employees when the spouse's employer is not able to provide 
differential pay.
  Consider also the account of Mr. Marian Noronha, Chairman and Founder 
of Turbocam, a manufacturer based in Dover, New Hampshire. An immigrant 
from India, Mr. Noronha has not only provided his employees with 
differential pay and continued family health benefits, but has also 
extended to each of his activated employees a $10,000 line of credit. 
His active duty reservist and Guard employees have used this money to, 
among other things, purchase personal computers so their families can 
communicate with them while they are overseas. Several other New 
Hampshire private-sector companies, including Hitchiner Manufacturing 
Company in Milford, have exemplary records when it comes to dealing 
with reservist employees.
  Under current law, employers of reservists and guardsmen called up 
for active duty are required to treat them as if they are on a leave of 
absence under the Uniformed Services Employment and Reemployment Rights 
Act of 1994 (USERRA). The Act does not require employers to pay 
reservists who are on active duty. But as I have pointed out, many 
employers pay the reservists the difference between their military 
stipends and their regular salaries. Some employers provide this 
``differential pay'' for up to three years. For employee convenience, 
many of these companies also allow deductions from the differential 
payment for contributions to their 401(k) retirement plans.
  The conflict arises, however, because a 1969 IRS Revenue Ruling 
considers the employment relationship terminated when active duty 
begins. This ruling prevents employers from treating the differential 
pay as wages for income tax purposes, resulting in unexpected tax bills 
at the end of the year for these military personnel. Further, the 
contributions made to the worker's retirement account potentially 
invalidate, disqualify, the employer's entire retirement plan which 
could make all amounts immediately taxable to plan participants and the 
employer.
  The Uniformed Services Differential Pay Protection Act that I am 
introducing today clarifies that differential wage payments are to be 
treated as wages to current employees for income tax purposes and that 
retirement plan contributions are permissible. The bill does the 
following:
  Differential wage payments would be treated as wages for income tax 
withholding purposes and reported on the worker's W-2 form. This means 
that active duty personnel will not be hit with end-of-the-year tax 
bills.
  No New Taxes: The legislation does not change present law, and 
deferential wage payments will not be subject to Social Security and 
unemployment compensation taxes.
  Definition: ``Differential wage payments'' are defined to mean any 
payment which: 1. is made by an employer to an individual while he or 
she is on active duty for a period of more than 30 days, and 2. 
represents all or a portion of the wages the individual would have 
received from the employer if he or she were performing service for the 
employer.
  An individual receiving differential wage payments would continue to 
be treated as an employee for purposes of the rules applicable to 
qualified retirement plans, removing the threat that contributions on 
his or her behalf would invalidate the employer's entire plan.
  Distributions Protected: Clarifying language is included to ensure 
that individuals would continue to be permitted to take distributions 
from their accounts when they leave their jobs for active duty. Thus, 
the right to receive distributions will be preserved even though 
individuals are treated as current employees for contribution purposes. 
The bill includes a prohibition on making elective deferrals or 
employee contributions for six months after receiving a distribution.
  Satisfying Nondiscrimination Rules: In order to avoid disruptions in 
retirement savings plans and to remove disincentives, employers could 
disregard contributions to retirement savings accounts based on 
differential wage payments for nondiscrimination testing purposes, 
provided that such payments are available to all mobilized employees on 
reasonably equivalent terms.
  In summary, the Uniformed Services Differential Pay Protection Act 
upholds the principle that employers should not be penalized for their 
generosity towards our Nation's reservists and members of the National 
Guard.
                                 ______
                                 
      By Mr. WYDEN:
  S. 1403. A bill to amend title XVIII of the Social Security Act to 
extend reasonable cost contracts under medicare; to the Committee on 
Finance.
  Mr. WYDEN. Mr. President, when Congress passed the Medicare 
Modernization Act, Medicare cost contracts

[[Page S8318]]

were kept as a health plan option for seniors. However, Congress also 
limited the ability of cost contracts to operate in areas if a Medicare 
Advantage plan decided to offer service in that area and stayed for a 
year.
  Medicare cost contracts are plans that offer more benefits than basic 
Medicare and are often available in areas in which Medicare Advantage 
plans are not offered. Many of the thousands of Oregonians who have 
cost contract plans are in rural Oregon, where there are few options 
for care. The legislation I am introducing today, ``The Medicare Cost 
Contract Extension and Refinement Act of 2005'', would allow seniors to 
keep their cost contracts longer even if a Medicare Advantage plan is 
offered. The bill also adds more consumer protection provisions that 
are similar to those already in law for Medicare Advantage plans. I 
believe that it is not only important to ensure seniors have choices, 
but that they can keep the choice that works best for them as well. 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. 1403

       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 Cost Contract 
     Extension and Refinement Act of 2005''.

     SEC. 2. EXTENSION OF REASONABLE COST CONTRACTS.

       (a) Extension of Period Reasonable Cost Plans Can Remain in 
     the Market.--Section 1876(h)(5)(C)(ii) of the Social Security 
     Act (42 U.S.C. 1395mm(h)(5)(C)(ii) is amended--
       (1) in the matter preceding subclause (I)--
       (A) by striking ``January 1, 2008'' and inserting ``January 
     1, 2012'';
       (B) by striking ``year'' and inserting ``two years''; and
       (C) by inserting ``entirely'' after ``was'';
       (2) in subclause (I), by inserting ``, provided that all 
     such plans are not offered by the same Medicare Advantage 
     organization'' before the semicolon at the end; and
       (3) in subclause (II), by inserting ``, provided that all 
     such plans are not offered by the same Medicare Advantage 
     organization'' before the semicolon at the end.
       (b) Extension of Period Reasonable Cost Plans Can Expand 
     Their Service Area.--Section 1876(h)(5)(B)(i) of the Social 
     Security Act (42 U.S.C. 1395mm(h)(5)(B)(i)) is amended to 
     read as follows:
       ``(i) the conditions for prohibiting an extension or 
     renewal of a contract under subparagraph (C)(ii) are not 
     applicable to such service area at the time of the 
     application.''.

     SEC. 3. APPLICATION OF CERTAIN MEDICARE ADVANTAGE 
                   REQUIREMENTS TO COST CONTRACTS EXTENDED OR 
                   RENEWED AFTER 2003.

       Section 1876(h) of the Social Security Act (42 U.S.C. 
     1395mm(h)), as amended by section (2), is amended--
       (1) by redesignating paragraph (5) as paragraph (6); and
       (2) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5)(A) Any reasonable cost reimbursement contract with an 
     eligible organization under this subsection that is extended 
     or renewed on or after the date of enactment of the Medicare 
     Cost Contract Extension and Refinement Act of 2005 shall 
     provide that the provisions of the Medicare Advantage program 
     under part C described in subparagraph (B) shall apply to 
     such organization and such contract in a substantially 
     similar manner as such provisions apply to Medicare Advantage 
     organizations and Medicare Advantage plans under such part.
       ``(B) The provisions described in this subparagraph are as 
     follows:
       ``(i) Section 1851(d) (relating to the provision of 
     information to promote informed choice).
       ``(ii) Section 1851(h) (relating to the approval of 
     marketing material and application forms).
       ``(iii) Section 1852(a)(3)(A) (regarding the authority of 
     organizations to include mandatory supplemental health care 
     benefits under the plan subject to the approval of the 
     Secretary).
       ``(iv) Section 1852(e) (relating to the requirement of 
     having an ongoing quality improvement program and treatment 
     of accreditation in the same manner as such provisions apply 
     to Medicare Advantage local plans that are preferred provider 
     organization plans).
       ``(v) Section 1852(j)(4) (relating to limitations on 
     physician incentive plans).
       ``(vi) Section 1854(c) (relating to the requirement of 
     uniform premiums among individuals enrolled in the plan).
       ``(vii) Section 1854(g) (relating to restrictions on 
     imposition of premium taxes with respect to payments to 
     organizations).
       ``(viii) Section 1856(b)(3) (relating to relation to State 
     laws).
       ``(ix) Section 1857(i) (relating to Medicare Advantage 
     program compatibility with employer or union group health 
     plans).
       ``(x) The provisions of part C relating to timelines for 
     contract renewal and beneficiary notification.''.
                                 ______
                                 
      By Mr. BOND:
  S. 1404. A bill to clarify that terminal development grants remain in 
effect under certain conditions; to the Committee on Commerce, Science, 
and Transportation.
  Mr. BOND. Mr. President, I rise today to introduce legislation that 
will allow for the continued expansion of non-primary hub airports 
across the country.
  The simple fact of the matter is that demand for commercial air 
service in and out of many of these smaller non-primary hub airports is 
far exceeding the current operational capacity at these airports. 
Expanded airfield and terminal capacity at these airports are 
desperately needed to meet the growing demand for air service in these 
high growth communities.
  The Springfield/Branson Metropolitan Area in Southwest Missouri is a 
classic example of one of these high growth communities where demand 
for air service is exceeding the current operational capacity of area's 
primary regional airport.
  The city of Springfield is the economic hub for 26 Missouri Counties 
with a population of approximately 1 million people. Over the last 10 
years, the population of the Springfield area has increased by more 
than twice the annual growth rate experienced by the State of Missouri.
  The Springfield metropolitan workforce has grown by more than 27 
percent the past 10 years, and is projected to grow by 18 percent over 
the next ten years. Annual regional tourism accounts for over 2.2 
million visitors in Springfield and over 7 million annual visitors to 
the booming Branson area.
  Because of the tremendous growth in this region, demand for an air 
service in and out of the Springfield/Branson Regional Airport is 
soaring. The current airport is experiencing great difficulty in trying 
to keep up with the growing demand for air service in this region. The 
capacity at the current airport is virtually at its maximum.
  The FAA has already approved the Springfield Regional Airport Master 
Plan and completed an environmental assessment for this plan. So far, 
the FAA has invested over $7 million in the planning and design for 
this project. Further funding for this project will be needed to fund 
the expansion of air-side apron, runways, taxiways and limited eligible 
components of the terminal.
  In order to ensure that this essential project goes forward and that 
previous Federal tax dollars are not wasted, I am introducing 
legislation that will clarify the status of the Springfield Regional 
Airport as a non-hub primary airport.
  This legislation states that if the status of a non-hub primary 
airport changes to a small hub primary airport at a time when the 
airport has already received FAA discretionary funds for a terminal 
development project--and this project is not yet completed--then the 
project shall remain eligible for funding from the discretionary fund 
and the small airport fund to pay costs allowable under section 
47110(d) of Title 49. Such an airport project will remain eligible for 
these funds for three fiscal years after the start of construction of 
the project, or, if the Secretary determines that a further extension 
of eligibility is justified, until the project is completed.
  This legislation will ensure that the ongoing expansion projects of 
smaller airports across the country will continue in order to 
accommodate the growing demand for additional airfield and terminal 
capacity at these airports.
                                 ______
                                 
      By Mr. NELSON of Nebraska (for himself, Mr. Santorum, and Mr. 
        Corzine):
  S. 1405. A bill to extend the 50 percent compliance threshold used to 
determine whether a hospital or unit of a hospital is an inpatient 
rehabilitation facility and to establish the National Advisory Council 
on Medical Rehabilitation; to the Committee on Finance.
  Mr. NELSON of Nebraska. Mr. President, today I am introducing the 
``Preserving Patient Access to Inpatient Rehabilitation Hospitals Act 
of 2005'' to make changes to a rule issued by the Centers for Medicare 
and Medicaid Services, (CMS) that would threaten the ability of 
rehabilitation hospitals to continue to provide critical care.

[[Page S8319]]

  In my home State of Nebraska, Madonna Rehabilitation Hospital in 
Lincoln is a nationally-recognized premier rehabilitation facility that 
offers specialized programs and services for those who have suffered 
brain injuries, strokes, spinal cord injuries, and other rehabilitating 
injuries. If this rule is not updated, Madonna would not be able to 
offer the same critical care to its patients as it currently does.
  When CMS first looked at whether facilities would qualify as an 
inpatient rehabilitation facility (IRF), a list of criteria was created 
to determine eligibility. The criteria, generally referred to as the 
``75 Percent Rule,'' were first established in 1984. Initially ten 
categories were given. When the Rule was revised last year, three 
categories were added. To qualify as an IRF under the 75 Percent Rule, 
75 percent of a facility's patients must be receiving treatment in one 
of these specified conditions.
  On its face, it appeared that CMS expanded the Rule last year by 
increasing the number of conditions from 10 to 13 and giving facilities 
a phase-in period to adjust to the changes. Initially the threshold for 
compliance was set at 50 percent for the first year and continues to 
rise until it reaches 75 percent in July 2007.
  Facilities are struggling to even meet the 50 percent compliance rate 
in part because the expansion of categories is illusory. The rule will, 
by CMS' own estimate, shift thousands of patients--both Medicare and 
non-Medicare--into alternative care settings that may be inappropriate. 
CMS projected a patient loss of 1,170 admissions in FY 2005. A recent 
Moran Company report showed that in the first year alone, hospitals 
have been forced to deny care to between 25,000-40,000 patients to 
maintain compliance with the new 75 Percent Rule. By the fourth year of 
the Rule, IRFs will be forced to turn away one out of every three 
patients in order to operate as a rehabilitation hospital or unit.
  My legislation will ensure that patients across America will continue 
to have access to the rehabilitative care they need, and that experts 
in this community are organized to advise and make recommendations to 
Congress and the appropriate Federal agencies based on the realities 
and challenges facing the rehabilitative field today and in the future. 
The legislation provides an additional two years at the 50 percent 
threshold to give facilities additional time to adjust to the new 
categories and sets up a commission to advise Federal agencies on 
rehabilitative care and what categories are appropriate to be included 
in the 75 Percent Rule.
  I am pleased that many prestigious organizations have joined me in 
supporting the legislation. The American Hospital Association, the 
American Academy of Physical Medicine and Rehabilitation, the 
Federation of American Hospitals, the American Medical Rehabilitation 
Providers Association and numerous other associations and advocacy 
groups have endorsed the legislation. Just as I have heard from 
patients and medical providers who have experienced problems with this 
Rule, the members of these associations are also witnessing the 
devastating effect the Rule is having on those who need this critical 
care. In addition, Senator Santorum is co-sponsoring this bipartisan 
effort.
  I urge my colleagues to support this legislation, and I look forward 
to its passage.
  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. 1405

       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 ``Preserving Patient Access to 
     Inpatient Rehabilitation Hospitals Act of 2005''.

     SEC. 2. EFFECT ON ENFORCEMENT OF REGULATIONS.

       (a) In General.--Notwithstanding section 412.23(b)(2) of 
     title 42, Code of Federal Regulations, during the period 
     beginning on July 1, 2005, and ending on the date that is 2 
     years after the date of enactment of this Act, the Secretary 
     of Health and Human Services (referred to in this Act as the 
     ``Secretary'') shall not--
       (1) require a compliance rate, pursuant to the criterion 
     (commonly known as the ``75 percent rule'') that is used to 
     determine whether a hospital or unit of a hospital is an 
     inpatient rehabilitation facility (as defined in the rule 
     published in the Federal Register on May 7, 2004, entitled 
     ``Medicare Program; Final Rule; Changes to the Criteria for 
     Being Classified as an Inpatient Rehabilitation Facility'' 
     (69 Fed. Reg. 25752)), that is greater than the 50 percent 
     compliance threshold that became effective on July 1, 2004;
       (2) change the designation of an inpatient rehabilitation 
     facility in compliance with the 50 percent threshold; or
       (3) conduct medical necessity review of inpatient 
     rehabilitation facilities using any guidelines, such as 
     fiscal intermediary Local Coverage Determinations, other than 
     the national criteria established in chapter 1, section 110 
     of the Medicare Benefits Policy Manual.
       (b) Retroactive Status as an Inpatient Rehabilitation 
     Facility; Payments; Expedited Review.--The Secretary shall 
     establish procedures for--
       (1) making any necessary retroactive adjustment to restore 
     the status of a facility as an inpatient rehabilitation 
     facility as a result of subsection (a);
       (2) making any necessary payments to inpatient 
     rehabilitation facilities based on such adjustment for 
     discharges occurring on or after July 1, 2005 and before the 
     date of enactment of this Act; and
       (3) developing and implementing an appeals process that 
     provides for expedited review of any adjustment to the status 
     of a facility as an inpatient rehabilitation facility made 
     during the period beginning on July 1, 2005 and ending on the 
     date that is 2 years after the date of enactment of this Act.

     SEC. 3. NATIONAL ADVISORY COUNCIL ON MEDICAL REHABILITATION.

       (a) Definitions.--In this section:
       (1) Advisory council.--The term ``Advisory Council'' means 
     the National Advisory Council on Medical Rehabilitation 
     established under subsection (b).
       (2) Appropriate federal agencies.--The term ``appropriate 
     Federal agencies'' means--
       (A) the Agency for Healthcare Research and Quality;
       (B) the Centers for Medicare & Medicaid Services;
       (C) the National Institute on Disability and Rehabilitation 
     Research; and
       (D) the National Center for Medical Rehabilitation 
     Research.
       (b) Establishment.--Pursuant to section 222 of the Public 
     Health Service Act (42 U.S.C. 217a), the Secretary shall 
     establish an advisory panel to be known as the ``National 
     Advisory Council on Medical Rehabilitation''.
       (c) Membership.--
       (1) Appointment.--The Advisory Council shall be composed of 
     17 members, of whom--
       (A) 9 members shall be appointed by the Secretary, in 
     consultation with the medical rehabilitation community, from 
     a diversity of backgrounds, including--
       (i) physicians;
       (ii) medicare beneficiaries;
       (iii) representatives of inpatient rehabilitation 
     facilities; and
       (iv) other practitioners experienced in rehabilitative 
     care; and
       (B) 8 members, not more than 4 of whom are members of the 
     same political party, shall be appointed jointly by--
       (i) the Majority Leader of the Senate;
       (ii) the Minority Leader of the Senate;
       (iii) the Speaker of the House of Representatives;
       (iv) the Minority Leader of the House of Representatives;
       (v) the Chairman and the Ranking Member of the Committee on 
     Finance of the Senate; and
       (vi) the Chairman and the Ranking Member of the Committee 
     on Ways and Means of the House of Representatives.
       (2) Date.--Members of the Advisory Council shall be 
     appointed not later than 30 days after the date of enactment 
     of this Act.
       (3) Period of appointment; vacancies.--Members shall be 
     appointed for the life of the Council. A vacancy on the 
     Advisory Council shall be filled not later than 30 days after 
     the date on which the Advisory Council is given notice of the 
     vacancy, in the same manner as the original appointment.
       (4) Meetings.--
       (A) Initial meeting.--The Advisory Council shall conduct an 
     initial meeting not later than 120 days after the date of 
     enactment of this Act.
       (B) Meetings.--The Advisory Council shall conduct such 
     meetings as the Council determines to be necessary to carry 
     out its duties but shall meet not less frequently than 2 
     times during each calendar year.
       (d) Duties.--The duties of the Advisory Council shall 
     include the following:
       (1) Advice and recommendations.--Providing advice and 
     recommendations to--
       (A) Congress and the Secretary concerning the coverage of 
     rehabilitation services under the medicare program, 
     including--
       (i) policy issues related to rehabilitative treatment and 
     reimbursement for rehabilitative care, such as issues 
     relating to any rulemaking relating to, or impacting, 
     rehabilitation hospitals and units;
       (ii) the appropriate criteria for--

       (I) determining clinical appropriateness of inpatient 
     rehabilitation facility admissions; and
       (II) distinguishing an inpatient rehabilitation facility 
     from an acute care hospital and

[[Page S8320]]

     other providers of intensive medical rehabilitation;

       (iii) the efficacy of inpatient rehabilitation services, as 
     opposed to other post-acute inpatient settings, through a 
     comparison of quality and cost, controlling for patient 
     characteristics (such as medical severity and motor and 
     cognitive function) and discharge destination;
       (iv) the effect of any medicare regulations on access to 
     inpatient rehabilitation care by medicare beneficiaries and 
     the clinical effectiveness of care available to such 
     beneficiaries in other health care settings; and
       (v) any other topic or issue that the Secretary or Congress 
     requests the Advisory Council to provide advice and 
     recommendations on; and
       (B) appropriate Federal agencies (as defined in subsection 
     (a)(3)) on how to best utilize available research funds and 
     authorities focused on medical rehabilitation research, 
     including post-acute care site of service and outcomes 
     research.
       (e) Periodic Reports.--The Advisory Council shall provide 
     the Secretary with periodic reports that summarize--
       (1) the Council's activities; and
       (2) any recommendations for legislation or administrative 
     action the Council considers to be appropriate.
       (f) Termination.--The Advisory Council shall terminate on 
     September 30, 2010.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     the purposes of this section.
       (h) Effective Date.--This section shall take effect on the 
     date of enactment of this Act.
                                 ______
                                 
      By Mr. CORNYN:
  S. 1406. A bill to protect American workers and responders by 
ensuring the continued commercial availability of respirators and to 
establish rules governing product liability actions against 
manufacturers and sellers of respirators; to the Committee on the 
Judiciary.
  Mr. CORNYN. Mr. President, I rise today to introduce the ``Respirator 
Access Assurance Act of 2005.'' This legislation is not a complex or 
lengthy proposal, but it is critically important for our men and women 
in uniform, our first responders, and the American public as we 
continue to wage the war on terror. It is designed to protect the 
companies that manufacture respirators from abusive litigation--the 
very respirators that we need for protection against life-threatening 
environmental hazards and contaminates.
  Even as we continue today to debate important appropriations 
legislation for the Department of Homeland Security, the many American 
manufacturers and sellers of one of the types of equipment necessary in 
the war on terror and for our first responders generally--respirators--
are being forced by misdirected litigation to decide whether to abandon 
that market.
  Since the year 2000, American respirator manufacturers have 
experienced an avalanche of mass lawsuits in which thousands of 
plaintiffs claim they suffered lung damage from respirators because of 
defective designs and/or failure to provide adequate warnings. Between 
2000 and 2004, well over 300,000 individual claims have been filed 
against major respirator manufacturers. Many of these people show no 
symptoms of illness.
  Respirator manufacturers are included among dozens of defendants in 
these lawsuits, despite some very important facts. First, respirators 
don't cause lung disease--employers are legally responsible for 
providing the right respirator to an employee for the environment in 
which the employee will be working. Respirator manufacturers have no 
role in that decision. Second, respirators are 100 percent regulated by 
the U.S. Government. The National Institute for Occupational Safety and 
Health, or NIOSH, sets the design standards for respirators, tests 
every product in its own labs, approves all warning labels, and 
monitors the manufacturing process to be sure respirators meet the 
standards for which they were designed.
  Perhaps most troubling is the extent to which these claims track very 
closely with the recent explosion of asbestos and silicosis claims. 
Recently, a number of ethical questions surrounding many of these 
claims have come to light.
  In my home State of Texas, a Federal court in Corpus Christi under 
the watch of Judge Janis Graham Jack, has been trying to sort out a few 
thousand of these cases. That Multi-District Litigation has turned up 
evidence of fraud--in Judge Jack's words--``great red flags of fraud,'' 
and highlights attempts by some to recycle plaintiffs who have already 
recovered in asbestos litigation by claiming they also have silicosis, 
which is a virtual medical impossibility.
  Just today, the Wall Street Journal ran an editorial highlighting 
this ``tort scam.'' As it points out, ``Judge Jack not only blasted 
nearly everyone of the 10,000 silicosis claims in front of her court, 
she documented the fraudulent means by which lawyers, doctors, and 
screening companies had manufactured the claims.'' She said, ``These 
diagnoses were about litigation rather than health care . . . these 
diagnoses were manufactured for money.''
  I ask unanimous consent that the Wall Street Journal editorial be 
printed in the Record.
  There being no objection, the editorial was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, July 14, 2005]

                         The Silicosis Sheriff

       If the criminal investigation of class-action titan Milberg 
     Weiss is anything to go by, prosecutors may finally be 
     starting to hold the trial bar accountable for its legal 
     abuses. Another good sign is that a separate federal grand 
     jury, this one in New York, is investigating the ringleaders 
     of the latest tort scam, silicosis.
       Much of the credit for pointing the grand jury toward this 
     corruption goes to Texas federal Judge Janis Graham Jack, who 
     last month put the brakes on the silicosis machine with an 
     extraordinary 249-page decision. Judge Jack not only blasted 
     nearly every one of the 10,000 silicosis claims in front of 
     her court, she documented the fraudulent means by which 
     lawyers, doctors and screening companies had manufactured the 
     claims. ``These diagnoses were about litigation rather than 
     health care,'' wrote Judge Jack. ``These diagnoses were 
     manufactured for money.''
       Perfectly said, and we only wish the fearless, judge had 
     been around to render a similar verdict back when the 
     asbestos blob got rolling. It was that juggernaut, largely 
     blessed by the courts, that first allowed trial lawyers to 
     co-opt doctors to create millions of phony claims and extort 
     billions out of corporate defendants. Encouraged by this 
     success, the trial bar revved up the same machinery for 
     silicosis, an occupational lung disease that can be fatal but 
     has been in decline for decades.
       It was the fact of this decline that got Judge Jack's 
     attention. A former nurse, she couldn't understand how a 
     disease that causes on average fewer than 200 deaths annually 
     in the U.S. had suddenly resulted in more than 20,000 claims 
     from Mississippi and surrounding states. To get to the bottom 
     of the suits against some 250 companies, the Clinton 
     appointee held 20 months of pretrial proceedings. What she 
     found was a gigantic attempted swindle.
       Her first discovery was that, of the more than 9,000 
     plaintiffs who supplied more information about their 
     ``disease,'' 99% had been diagnosed with silicosis by the 
     same nine doctors. These physicians had been retained by law 
     firms or by ``screening companies'' that do mass X-rays on 
     behalf of law firms searching for plaintiffs. When these 
     physicians were deposed, they all but admitted they took 
     their orders from the lawyers and screening firms.
       Which explains why none of them took a medical history, 
     while others never even saw their patients. One doctor signed 
     blank forms for the screening company and let his secretary 
     fill out the diagnoses. Yet another performed 1,239 
     diagnostic evaluations in 72 hours--less than four minutes 
     apiece. Dr. George Martindale, who diagnosed 3,617 patients 
     with silicosis, admitted that he didn't even know the 
     criteria for diagnosing the disease and had simply included 
     in each of his reports a paragraph provided by the screening 
     company.
       Another shocker was that more than 65% of the silica 
     plaintiffs had previously been plaintiffs in an asbestos 
     suit, even though it is close to clinically impossible to 
     have both asbestosis and silicosis. Digging deeper, the judge 
     found that many of the same doctors had ginned up the same 
     patients for both asbestos and silicosis cases. One doctor, 
     Ray Harron, received nearly $5 million from 1996-2004 from a 
     leading screening company, N&M, and has supplied thousands of 
     silicosis diagnoses, and at least 52,000 asbestos-related 
     diagnoses.
       Representatives from N&M admitted in court that they had no 
     medical training and that their company has never had a 
     medical director. They confirmed that law firms often set the 
     criteria for the silicosis screening process, and that the 
     screening companies were paid by the volume of people who 
     ultimately joined a lawsuit. As N&M owner Heath Mason 
     testified, his business depended on doing ``large numbers.''
       Judge Jack reserved her most severe criticism for the 
     lawyers, noting that statistics alone should have shown that 
     their case defied ``all medical knowledge and logic,'' and 
     that by bringing it regardless they had exhibited a 
     ``reckless disregard of the duty owed to the court.'' She 
     required the Houston firm of O'Quinn, Laminack & Pirtle to 
     pay the defendants' $825,000 in legal fees, and ordered 
     sanctions. She also made clear she was on to the tort bar's 
     tactics, noting that the ``clear motivation'' was ``to 
     inflate the

[[Page S8321]]

     number of plaintiffs and overwhelm the defendants and the 
     judicial system.''
       Judge Jack did not shy away from the word ``fraud'' in her 
     courtroom, and clearly someone at the Justice Department has 
     been paying attention. A Manhattan grand jury is now 
     investigating at least one of the screening companies, and 
     subpoenas have gone out to at least two of the doctors 
     involved.
       Which shows how large a public service Judge Jack has 
     performed. She could easily have followed other judges and 
     accepted these mass claims at face value. Instead, she dug 
     into the individual claims and found the corruption 
     underneath. In doing so, she has not only stalled the entire 
     silicosis scam, she's opened the door to probing millions of 
     asbestos claims that have come before. The lawyers could 
     attempt to retry their dismissed claims in state court, 
     though amid a grand jury probe they might prefer that this 
     whole issue go away.
       Over the years, too many judges have allowed tort lawyers 
     to hijack their courtrooms to perpetrate legal fraud. Judge 
     Jack is showing what good comes when judges truly care about 
     justice.

  This level of fraud must be brought to the attention of the American 
people. The extent to which this type of behavior is the norm rather 
than the exception is troubling, to say the least. And the breadth of 
this abuse extends so far now that it endangers the manufacturing of 
masks for the American people--and people through the world for that 
matter--who need to protect themselves from airborne contaminants. 
Thousands of lawsuits have been directed toward these manufacturers--
largely indiscriminately.
  Many of these cases might someday be dismissed or settled for a few 
hundred dollars to avoid protracted litigation, but the costs of 
getting to that point are enormous. Respirator companies have already 
incurred millions of dollars in litigation and settlement costs, and 
even after years of arguing in multiple State and local courts they 
still face hundreds of thousands of individual claims. The costs of 
this litigation burden are both unjustified and destructive.
  Most of the net income these companies receive from respirator sales 
is being eaten up in litigation costs. Some respirator companies have 
already decided it is not worth it and have stopped selling in the 
commercial market, and others are contemplating the same thing. If U.S. 
manufacturers drop out of the market, those who need respirators will 
have to use imports, which may be of lower quality and less reliable, 
or use nothing at all. In either case we are letting this unfounded 
litigation burden pose additional risk to millions of Americans who 
need these devices to do their jobs and protect themselves, and all of 
us, from untold harm.
  That is why I am introducing this legislation today. The Act provides 
respirator manufacturers with protection from the legal costs 
associated with defending claims for which the manufacturers should 
bear no liability. It provides that a respirator manufacturer may not 
be subject to any claim for defective design or warning relating to a 
respirator or any claim based on such an allegation if the respirator 
has received NIOSH approval, and the respirator complied with the 
NIOSH-approved design and labeling in effect on the date of 
manufacture. This protection would continue notwithstanding a 
subsequent action by NIOSH to modify, supercede, or withdraw the 
approval. In addition, we have taken extra measures to clarify that 
there are exceptions in the Act that would permit liability to be 
imposed if the initial approval was obtained through fraud, 
misrepresentation, or bribery.
  This is a simple bill that will not cost the government a penny, will 
not deprive any deserving plaintiff of the right to sue those who may 
have caused him or her harm, and will assure that this vital industry 
continues to be an American industry for a long time to come.
  I look forward to working with my colleagues to move this proposal 
forward.
  Mr. President, I ask unanimous consent that an article from the 
Houston Chronicle be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the Houston Chronicle, July 1, 2005]

         Federal Judge Throws Out Thousands of Silica Diagnoses

       Corpus Christi.--A federal judge has recommended throwing 
     out all but one of about 10,000 diagnoses of the lung ailment 
     silicosis that were used in lawsuits against industrial 
     companies, ruling that doctors ``manufactured'' findings of 
     the disease in hundreds of cases.
       U.S. District Judge Janis Graham Jack's scathing 249-page 
     opinion, signed Thursday, finds that the diagnoses are 
     inadmissible in court. The bulk of the cases originate in 
     Mississippi, and Jack sent them back to the state courts 
     along with her report. She threw out the approximately 100 
     Texas cases that she felt she had jurisdiction over.
       Jack's ruling also orders sanctions against Houston law 
     firm O'Quinn, Laminack & Pirtle, which brought roughly 2,000 
     of the suits. Lawyers from the firm did not immediately 
     return a call for comment today.
       A doctor testifying before Jack in December withdrew 
     thousands of his diagnoses, saying he only briefly scanned X-
     rays to give what he thought was a second opinion on the 
     degenerative diseases caused by inhaling quartz dust.
       His withdrawal, made during consolidated pretrial 
     proceedings for lawsuits from several states, prompted Jack 
     to order every doctor and ``screening company'' to back up 
     the diagnoses in the lawsuits. More doctors withdrew their 
     diagnoses, and after hearings in February Jack said she 
     sensed ``red flags of fraud'' in the way plaintiffs were 
     recruited. ``These diagnoses were driven by neither health 
     nor justice,'' Jack wrote in her opinion Thursday. ``They 
     were manufactured for money.''
       Danny Mulholland, a Mississippi-based defense attorney for 
     Ingersoll-Rand Co. and other companies, said the opinion was 
     ``historic'' in an age where law firms recruit plaintiffs 
     with billboards and television ads.
       ``I think the way litigation has been done, and 
     particularly mass tort litigation, changed with the February 
     hearings which culminated in this order,'' he said. ``We'll 
     have to go back in state court and win there, but we expect 
     to, based on what Judge Jack has found.''
                                 ______
                                 
      By Mr. NELSON of Florida (for himself and Mrs. Clinton):
  S. 1407. A bill to provide grants to States and local governments to 
assess the effectiveness of sexual predator electronic monitoring 
programs; to the Committee on the Judiciary.
  Mr. NELSON of Florida. Mr. President, I rise today on behalf of 
myself and Senator Hillary Rodham Clinton of New York, to introduce the 
Jessica Lunsford and Sarah Lunde Act. This bill will provide grants for 
State and local governments to purchase the technology they need to 
enhance monitoring of sexual predators.
  This bill and the grants it provides are named after two young girls 
from Florida, Jessica Lunsford and Sarah Lunde, who were both murdered 
by convicted sex offenders. As the Lunsford and Lunde families mourned 
these two beautiful girls, the Nation grieved with them. We are all 
united in our desire to make sure that everything can be done to 
prevent this from ever happening again. I hope this bill will serve as 
a living memorial to Jessica Lunsford and Sarah Lunde, and serve as 
some comfort to their families, as the grants in their names provided 
in this bill will allow law enforcement to help prevent other families 
from suffering similar tragedies.
  Jessica Lunsford of Homosassa, FL, was a nine-year-old girl abducted 
from her home, raped, and then buried alive by a convicted sex offender 
who lived 150 feet from her home. Law enforcement had lost track of her 
confessed murderer and did not know that he worked at the nearby school 
that Jessica attended, despite his being a registered sex offender. A 
few weeks following the news of this tragedy, 13-year-old Sarah Lunde 
of Ruskin, FL, was murdered by her mother's ex-boyfriend. He is also a 
convicted sex offender.
  The Jessica Lunsford and Sarah Lunde grants provided for in this bill 
will allow States and local government to purchase electronic 
monitoring systems, like global positioning systems, that will provide 
law enforcement with real time information on the whereabouts of sex 
offenders released from prison to within 10 feet of their location. Law 
enforcement will be able to restrict the movements of sex offenders by 
programming these systems to alert authorities if a sex offender goes 
to a park, amusement park, elementary school or other areas determined 
to be off-limits. The ankle-bracelets used to monitor their movement 
are tamper proof and will alert law enforcement in the event that an 
offender has removed it so law enforcement can immediately act to 
apprehend the offender.
  In the United States there are an estimated 380,000 registered sex 
offenders, although thousands have disappeared, according to 
authorities. We have over

[[Page S8322]]

30,000 of these sex offenders in the State of Florida. In response to 
the recent tragedies in Florida, Idaho, and North Dakota, several 
States have enacted stronger laws to protect our children from sex 
predators. In Florida, for example, the legislature passed a law that 
will provide tougher sentences for child sex offenders, and aid law 
enforcement in effectively monitoring those sex offenders. This law 
will require sex offenders, released back into our communities, to wear 
a bracelet that will have a global positioning system track them.
  I applaud the initiative by Florida, and other States seeking to pass 
similar laws, and I believe that it is important that there is an 
appropriate Federal response that will be supportive of the States and 
local governments that are addressing this problem. To be effective, 
tough laws on these sexual predators of children must be properly 
funded, and I believe these tough laws being passed by state 
legislatures are worth properly funding when they will protect our 
children.
  The Jessica Lunsford and Sarah Lunde Act will support State and local 
governments that, like Florida, are attempting to protect their 
children by providing greater monitoring tools for law enforcement. 
This bill will provide a total of $30 million in grants to States to 
help implement State laws to get tougher on sex offenders released back 
into their communities with electronic monitoring technology. The bill 
will provide for $10 million in grants for fiscal years 2006 through 
2008. The bill then directs the Attorney General to provide a report to 
Congress assessing the effectiveness of the program and making 
recommendations as to future funding levels.
  There are no silver bullets to stop sexual predators from preying on 
our children, but I believe that tough laws, such as the new Florida 
statute, are going to go a long way in preventing sex offenders from 
re-offending.
  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. 1407

       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 ``Jessica Lunsford and Sarah 
     Lunde Act''.

     SEC. 2. SEXUAL PREDATOR MONITORING PROGRAM.

       (a) Grants Authorized.--
       (1) In general.--The Attorney General is authorized to 
     award grants (referred to as ``Jessica Lunsford and Sarah 
     Lunde Grants'') to State and local governments to assist such 
     States and local governments in--
       (A) carrying out programs to outfit sexual offenders with 
     electronic monitoring units; and
       (B) the employment of law enforcement officials necessary 
     to carry out such programs.
       (2) Duration.--The Secretary shall award grants under this 
     Act for a period not to exceed 3 years.
       (b) Application.--
       (1) In general.--Each State or local government desiring a 
     grant under this Act shall submit an application to the 
     Attorney General at such time, in such manner, and 
     accompanied by such information as the Attorney General may 
     reasonably require.
       (2) Contents.--Each application submitted pursuant to 
     paragraph (1) shall--
       (A) describe the activities for which assistance under this 
     Act is sought; and
       (B) provide such additional assurances as the Attorney 
     General determines to be essential to ensure compliance with 
     the requirements of this Act.

     SEC. 3. INNOVATION.

       In making grants under this Act, the Attorney General shall 
     ensure that different approaches to monitoring are funded to 
     allow an assessment of effectiveness.

     SEC. 4. DEFINITION.

       In this Act, the term ``sexual offender'' means an offender 
     18 years of age or older who commits a sexual offense against 
     a minor.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated 
     $10,000,000 for each of the fiscal years 2006 through 2008 to 
     carry out this Act.
       (b) Report.--Not later than April 1, 2008, the Attorney 
     General shall report to Congress--
       (1) assessing the effectiveness and value of programs 
     funded by this Act;
       (2) comparing the cost-effectiveness of the electronic 
     monitoring to reduce sex offenses compared to other 
     alternatives; and
       (3) making recommendations for continuing funding and the 
     appropriate levels for such funding.
                                 ______
                                 
      By Mr. SMITH (for himself, Mr. Nelson of Florida, Mr. Stevens, 
        Mr. Inouye, Mr. McCain, and Mr. Pryor):
  S. 1408. A bill to strengthen data protection and safeguards, require 
data breach notification, and further prevent identity theft; to the 
Committee on Commerce, Science, and Transportation.
  Mr. SMITH. Mr. President, I rise today with Senators Bill Nelson, 
Stevens, Inouye, McCain, and Pryor to introduce the Identity Theft 
Protection Act of 2005. The introduction of this bill has been a 
bipartisan effort and I thank my colleagues on the Senate Commerce 
Committee for helping to negotiate a fair and balanced bill.
  Identity theft is one of the fastest growing crimes in America. It is 
estimated that over 10 million Americans are victims of some form of 
identity theft each year. The total cost of this crime approaches $50 
billion per year, with the average loss from the misuse of a victim's 
personal information being almost $5,000. In 2004 alone, consumers who 
were victims of ID theft spent a total of 297 million hours resolving 
problems that arose from the crime.
  Every year, the FTC compiles a list of the top 10 categories of 
fraud-related complaints. Identity theft has topped that list of 
complaints each of the past 5 years. My own State of Oregon ranks ninth 
in the Nation for fraud complaints and identity theft.
  Data breaches are becoming an increasingly common type of identity 
theft that affects millions of consumers nationwide. Last year, there 
were at least 43 known incidents of security breaches, potentially 
affecting over 9 million individuals. These breaches range from sloppy 
record keeping and security procedures by companies to extremely 
sophisticated online thefts by computer hackers.
  Our bipartisan bill ensures that businesses and organizations have 
the proper security procedures in place to safeguard consumers' 
sensitive and personal information. This legislation requires any 
entity that acquires, maintains or utilizes sensitive personal 
information to have a security program to safeguard such data. 
Furthermore, we require these entities to verify the credentials of 
third parties seeking personal and sensitive information and require 
strict disposal and transfer procedures for such information.
  It is imperative that consumers be notified of any potential breach 
in the security of their personal information. The cost of an incident 
of identity theft, both in terms of out-of-pocket expense and time 
spent resolving problems, is significantly smaller if the misuse of the 
victim's personal information is discovered quickly.
  Our bill requires consumer notification if a data breach results in a 
significant risk of identity theft. Individuals will be notified 
immediately when any significant breach has occurred. Any breach 
affecting a minimum of 1,000 individuals also requires the entity to 
report the breach to the FTC and all the consumer reporting agencies.
  We realize that an individual's Social Security Number deserves the 
utmost security and protection against fraud, manipulation, and theft. 
To that end, this bill restricts the collection of and access to Social 
Security Numbers by limiting the solicitation of Social Security 
Numbers and prohibiting their display on employee and student 
identification cards.
  In addition, our bill will allow consumers to place, lift, and 
temporarily remove a security freeze on their credit, which would 
prevent credit from being extended to third parties without 
authorization from the consumer. We would also pre-empt state law to 
create uniformity and compliance by businesses and organizations.
  Protecting sensitive information is an issue of great importance for 
all Americans so we are requiring the FTC to establish an Information 
Working Group comprised of industry participants, consumer groups, and 
other interested parties to develop best practices to protect sensitive 
personal information.
  Consumers should have confidence when they share their information 
with others that their information will be protected. At the same time, 
the ability of legitimate companies to access personal information 
facilitates commerce and continues to have important benefits to 
consumers.
  We believe our legislation strikes the appropriate balance between 
ensuring

[[Page S8323]]

the continued existence of these critical services and guaranteeing the 
security of consumer's personal information. I urge my colleagues to 
co-sponsor this important legislation to protect consumers from future 
breaches of identity theft.
  I ask unanimous consent that the text of legislation be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1408

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Identity 
     Theft Protection Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Protection of sensitive personal information.
Sec. 3. Notification of security breach risk.
Sec. 4. Security freeze.
Sec. 5. Enforcement.
Sec. 6. Enforcement by State attorneys general.
Sec. 7. Preemption of State law.
Sec. 8. Social security and driver's license number protection.
Sec. 9. Information security working group.
Sec. 10. Definitions.
Sec. 11. Authorization of appropriations.
Sec. 12. Effective dates.

     SEC. 2. PROTECTION OF SENSITIVE PERSONAL INFORMATION.

       (a) In General.--In accordance with regulations prescribed 
     by the Federal Trade Commission under subsection (b), a 
     covered entity shall take reasonable steps to protect against 
     security breaches and to prevent unauthorized access to 
     sensitive personal information the covered entity sells, 
     maintains, collects, or transfers.
       (b) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall promulgate 
     regulations to implement subsection (a), including 
     regulations that--
       (1) require covered entities to develop, implement, and 
     maintain an effective information security program that 
     contains administrative, technical, and physical safeguards 
     for sensitive personal information, taking into account the 
     use of technological safeguards, including encryption, 
     truncation, and other safeguards available or being developed 
     for such purposes;
       (2) require procedures for verifying the credentials of any 
     third party seeking to obtain the sensitive personal 
     information of another person; and
       (3) require disposal procedures to be followed by covered 
     entities that--
       (A) dispose of sensitive personal information; or
       (B) transfer sensitive personal information to third 
     parties for disposal.

     SEC. 3. NOTIFICATION OF SECURITY BREACH RISK.

       (a) Security Breaches Affecting 1,000 or More 
     Individuals.--
       (1) In general.--If a covered entity discovers a breach of 
     security and determines that the breach of security affects 
     the sensitive personal information of 1,000 or more 
     individuals, then, before conducting the notification 
     required by subsection (b), it shall--
       (A) report the breach to the Commission (or other 
     appropriate Federal regulator under section 5); and
       (B) notify all consumer reporting agencies described in 
     section 603(p)(1) of the Fair Credit Reporting Act (15 U.S.C. 
     1681a(p)(1)) of the breach.
       (2) FTC Website Publications.--Whenever the Commission 
     receives a report under paragraph (1)(A), it shall post a 
     report of the breach of security on its website without 
     disclosing any sensitive personal information or the names of 
     the individuals affected.
       (b) Notification of Consumers.--Whenever a covered entity 
     discovers a breach of security and determines that the breach 
     of security has resulted in, or that there is a basis for 
     concluding that a reasonable risk of identity theft to 1 or 
     more individuals, the covered entity shall notify each such 
     individual.
       (c) Methods of Notification; Notice Content.--Within 1 year 
     after the date of enactment of this Act, the Commission shall 
     promulgate regulations that establish methods of notification 
     to be followed by covered entities in complying with the 
     requirements of this section and the content of the notices 
     required. In promulgating those regulations, the Commission 
     shall take into consideration the types of sensitive personal 
     information involved, the nature and scope of the security 
     breach, other appropriate factors, and the most effective 
     means of notifying affected individuals.
       (d) Timing of Notification.--
       (1) In general.--Except as provided in paragraph (2), 
     notice required by subsection (a) shall be given--
       (A) in the most expedient manner practicable;
       (B) without unreasonable delay, but not later than 90 days 
     after the date on which the breach of security was discovered 
     by the covered entity; and
       (C) in a manner that is consistent with any measures 
     necessary to determine the scope of the breach and restore 
     the security and integrity of the data system.
       (2) Law enforcement and homeland security related delays.--
     Notwithstanding paragraph (1), the giving of notice as 
     required by that paragraph may be delayed for a reasonable 
     period of time if--
       (A) a Federal law enforcement agency determines that the 
     timely giving of notice under subsections (a) and (b), as 
     required by paragraph (1), would materially impede a civil or 
     criminal investigation; or
       (B) a Federal national security or homeland security agency 
     determines that such timely giving of notice would threaten 
     national or homeland security.

     SEC. 4. SECURITY FREEZE.

       (a) In General.--
       (1) Emplacement.--A consumer may place a security freeze on 
     his or her credit report by making a request to a consumer 
     credit reporting agency in writing or by telephone.
       (2) Consumer disclosure.--If a consumer requests a security 
     freeze, the consumer credit reporting agency shall disclose 
     to the consumer the process of placing and removing the 
     security freeze and explain to the consumer the potential 
     consequences of the security freeze.
       (b) Effect of Security Freeze.--
       (1) Release of information blocked.--If a security freeze 
     is in place on a consumer's credit report, a consumer 
     reporting agency may not release information from the credit 
     report to a third party without prior express authorization 
     from the consumer.
       (2) Information provided to third parties.--Paragraph (2) 
     does not prevent a consumer credit reporting agency from 
     advising a third party that a security freeze is in effect 
     with respect to the consumer's credit report. If a third 
     party, in connection with an application for credit, requests 
     access to a consumer credit report on which a security freeze 
     is in place, the third party may treat the application as 
     incomplete.
       (c) Removal; Temporary Suspension.--
       (1) In general.--Except as provided in paragraph (4), a 
     security freeze shall remain in place until the consumer 
     requests that the security freeze be removed. A consumer may 
     remove a security freeze on his or her credit report by 
     making a request to a consumer credit reporting agency in 
     writing or by telephone.
       (2) Conditions.--A consumer credit reporting agency may 
     remove a security freeze placed on a consumer's credit report 
     only--
       (A) upon the consumer's request, pursuant to paragraph (1); 
     or
       (B) if the agency determines that the consumer's credit 
     report was frozen due to a material misrepresentation of fact 
     by the consumer.
       (3) Notification to consumer.--If a consumer credit 
     reporting agency intends to remove a freeze upon a consumer's 
     credit report pursuant to paragraph (2)(B), the consumer 
     credit reporting agency shall notify the consumer in writing 
     prior to removing the freeze on the consumer's credit report.
       (4) Temporary suspension.--A consumer may have a security 
     freeze on his or her credit report temporarily suspended by 
     making a request to a consumer credit reporting agency in 
     writing or by telephone and specifying beginning and ending 
     dates for the period during which the security freeze is not 
     to apply to that consumer's credit report.
       (d) Response Times; Notification of Other Entities.--
       (1) In general.--A consumer credit reporting agency shall--
       (A) place a security freeze on a consumer's credit report 
     under subsection (a) no later than 5 business days after 
     receiving a request from the consumer under subsection 
     (a)(1); and
       (B) remove, or temporarily suspend, a security freeze 
     within 3 business days after receiving a request for removal 
     or temporary suspension from the consumer under subsection 
     (c).
       (2) Notification of other covered entities.--If the 
     consumer requests in writing or by telephone that other 
     covered entities be notified of the request, the consumer 
     reporting agency shall notify all other consumer reporting 
     agencies described in section 603(p)(1) of the Fair Credit 
     Reporting Act (15 U.S.C. 1681a(p)(1)) of the request within 3 
     days after placing, removing, or temporarily suspending a 
     security freeze on the consumer's credit report under 
     subsection (a), (c)(2)(A), or subsection (c)(4), 
     respectively.
       (3) Implementation by other covered entities.--A consumer 
     reporting agency that is notified of a request under 
     paragraph (2) to place, remove, or temporarily suspend a 
     security freeze on a consumer's credit report shall place, 
     remove, or temporarily suspend the security freeze on that 
     credit report within 3 business days after receiving the 
     notification.
       (e) Confirmation.--Whenever a consumer credit reporting 
     agency places, removes, or temporarily suspends a security 
     freeze on a consumer's credit report at the request of that 
     consumer under subsection (a) or (c), respectively, it shall 
     send a written confirmation thereof to the consumer within 10 
     business days after placing, removing, or temporarily 
     suspending the security freeze on the credit report. This 
     subsection does not apply to the placement, removal, or 
     temporary suspension of a security freeze by a consumer 
     reporting agency because of a notification received under 
     subsection (d)(2).
       (f) ID Required.--A consumer credit reporting agency may 
     not place, remove, or temporarily suspend a security freeze 
     on a consumer's credit report at the consumer's request 
     unless the consumer provides proper identification (within 
     the meaning of section

[[Page S8324]]

     610(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681h) 
     and the regulations thereunder.
       (g) Exceptions.--This section does not apply to the use of 
     a consumer credit report by any of the following:
       (1) A person or entity, or a subsidiary, affiliate, or 
     agent of that person or entity, or an assignee of a financial 
     obligation owing by the consumer to that person or entity, or 
     a prospective assignee of a financial obligation owing by the 
     consumer to that person or entity in conjunction with the 
     proposed purchase of the financial obligation, with which the 
     consumer has or had prior to assignment an account or 
     contract, including a demand deposit account, or to whom the 
     consumer issued a negotiable instrument, for the purposes of 
     reviewing the account or collecting the financial obligation 
     owing for the account, contract, or negotiable instrument.
       (2) Any Federal, State or local agency, law enforcement 
     agency, trial court, or private collection agency acting 
     pursuant to a court order, warrant, or subpoena.
       (3) A child support agency or its agents or assigns acting 
     pursuant to subtitle D of title IV of the Social Security Act 
     (42 U.S.C. et seq.) or similar State law.
       (4) The Department of Health and Human Services, a similar 
     State agency, or the agents or assigns of the Federal or 
     State agency acting to investigate medicare or medicaid 
     fraud.
       (5) The Internal Revenue Service or a State or municipal 
     taxing authority, or a State department of motor vehicles, or 
     any of the agents or assigns of these Federal, State, or 
     municipal agencies acting to investigate or collect 
     delinquent taxes or unpaid court orders or to fulfill any of 
     their other statutory responsibilities.
       (6) The use of consumer credit information for the purposes 
     of prescreening as provided for by the Federal Fair Credit 
     Reporting Act (15 U.S.C. 1681 et seq.).
       (7) Any person or entity administering a credit file 
     monitoring subscription to which the consumer has subscribed.
       (8) Any person or entity for the purpose of providing a 
     consumer with a copy of his or her credit report or credit 
     score upon the consumer's request.
       (h) Fees.--
       (1) In general.--Except as provided in paragraph (2), a 
     consumer credit reporting agency may charge a reasonable fee, 
     as determined by the Commission, for placing, removing, or 
     temporarily suspending a security freeze on a consumer's 
     credit report.
       (2) ID theft victims.--A consumer credit reporting agency 
     may not charge a fee for placing, removing, or temporarily 
     suspending a security freeze on a consumer's credit report 
     if--
       (A) the consumer is a victim of identity theft; and
       (B) the consumer has filed a police report with respect to 
     the theft.
       (i) Limitation on Information Changes in Frozen Reports.--
       (1) In general.--If a security freeze is in place on a 
     consumer's credit report, a consumer credit reporting agency 
     may not change any of the following official information in 
     that credit report without sending a written confirmation of 
     the change to the consumer within 30 days after the change is 
     made:
       (A) Name.
       (B) Date of birth.
       (C) Social Security number.
       (D) Address.
       (2) Confirmation.--Paragraph (1) does not require written 
     confirmation for technical modifications of a consumer's 
     official information, including name and street 
     abbreviations, complete spellings, or transposition of 
     numbers or letters. In the case of an address change, the 
     written confirmation shall be sent to both the new address 
     and to the former address.
       (j) Certain Entity Exemptions.--
       (1) Agregators and other agencies.--The provisions of 
     subsections (a) through (h) do not apply to a consumer credit 
     reporting agency that acts only as a reseller of credit 
     information by assembling and merging information contained 
     in the data base of another consumer credit reporting agency 
     or multiple consumer credit reporting agencies, and does not 
     maintain a permanent data base of credit information from 
     which new consumer credit reports are produced.
       (2) Other exempted entities.--The following entities are 
     not required to place a security freeze in a credit report:
       (A) A check services or fraud prevention services company, 
     which issues reports on incidents of fraud or authorizations 
     for the purpose of approving or processing negotiable 
     instruments, electronic funds transfers, or similar methods 
     of payments.
       (B) A deposit account information service company, which 
     issues reports regarding account closures due to fraud, 
     substantial overdrafts, ATM abuse, or similar negative 
     information regarding a consumer, to inquiring banks or other 
     financial institutions for use only in reviewing a consumer 
     request for a deposit account at the inquiring bank or 
     financial institution.

     SEC. 5. ENFORCEMENT.

       (a) Enforcement by Commission.--Except as provided in 
     subsection (c), this Act shall be enforced by the Commission.
       (b) Violation is Unfair or Deceptive Act or Practice.--The 
     violation of any provision of this Act shall be treated as an 
     unfair or deceptive act or practice proscribed under a rule 
     issued under section 18(a)(1)(B) of the Federal Trade 
     Commission Act (15 U.S.C. 57a(a)(1)(B)).
       (c) Enforcement by Certain Other Agencies.--Compliance with 
     this Act shall be enforced under--
       (1) section 8 of the Federal Deposit Insurance Act (12 
     U.S.C. 1818), in the case of--
       (A) national banks, and Federal branches and Federal 
     agencies of foreign banks, by the Office of the Comptroller 
     of the Currency;
       (B) member banks of the Federal Reserve System (other than 
     national banks), branches and agencies of foreign banks 
     (other than Federal branches, Federal agencies, and insured 
     State branches of foreign banks), commercial lending 
     companies owned or controlled by foreign banks, and 
     organizations operating under section 25 or 25A of the 
     Federal Reserve Act (12 U.S.C. 601 and 611), by the Board; 
     and
       (C) banks insured by the Federal Deposit Insurance 
     Corporation (other than members of the Federal Reserve 
     System) and insured State branches of foreign banks, by the 
     Board of Directors of the Federal Deposit Insurance 
     Corporation;
       (2) section 8 of the Federal Deposit Insurance Act (12 
     U.S.C. 1818), by the Director of the Office of Thrift 
     Supervision, in the case of a savings association the 
     deposits of which are insured by the Federal Deposit 
     Insurance Corporation;
       (3) the Federal Credit Union Act (12 U.S.C. 1751 et seq.) 
     by the National Credit Union Administration Board with 
     respect to any Federal credit union; and
       (4) the Securities and Exchange Act of 1934 (15 U.S.C. 78a 
     et seq.) by the Securities and Exchange Commission with 
     respect to--
       (A) a broker or dealer subject to that Act;
       (B) an investment company subject to the Investment Company 
     Act of 1940 (15 U.S.C. 80a-1 et seq.); and
       (C) an investment advisor subject to the Investment 
     Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.).
       (d) Exercise of Certain Powers.--For the purpose of the 
     exercise by any agency referred to in subsection (c) of its 
     powers under any Act referred to in that subsection, a 
     violation of this Act is deemed to be a violation of a 
     requirement imposed under that Act. In addition to its powers 
     under any provision of law specifically referred to in 
     subsection (c), each of the agencies referred to in that 
     subsection may exercise, for the purpose of enforcing 
     compliance with any requirement imposed under this Act, any 
     other authority conferred on it by law.
       (e) Penalties.--
       (1) In general.--Notwithstanding section 5(m) of the 
     Federal Trade Commission Act (15 U.S.C. 45(m)), the 
     Commission may not obtain a civil penalty under that section 
     for a violation of this Act in excess of--
       (A) $11,000 for each such individual; and
       (B) $11,000,000 in the aggregate for all such individuals 
     with respect to the same violation.
       (2) Other authority not affected.--Nothing in this Act 
     shall be construed to limit or affect in any way the 
     Commission's authority to bring enforcement actions or take 
     any other measure under the Federal Trade Commission Act (15 
     U.S.C. 41 et seq.) or any other provision of law.
       (f) No Private Cause of Action.--Nothing in this Act 
     establishes a private cause of action against a covered 
     entity for the violation of any provision of this Act.
       (g) Compliance with Gramm-Leach-Bliley Act.--Any person to 
     which title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 
     et seq.) applies shall be deemed to be in compliance with the 
     notification requirements of this Act with respect to a 
     breach of security if that person is in compliance with the 
     notification requirements of that title with respect to that 
     breach of security.

     SEC. 6. ENFORCEMENT BY STATE ATTORNEYS GENERAL.

       (a) In General.--A State, as parens patriae, may bring a 
     civil action on behalf of its residents in an appropriate 
     district court of the United States to enforce the provisions 
     of this Act, or to impose the civil penalties authorized by 
     section 5, whenever the attorney general of the State has 
     reason to believe that the interests of the residents of the 
     State have been or are being threatened or adversely affected 
     by a covered entity that violates this Act or a regulation 
     under this Act.
       (b) Notice.--The State shall serve written notice to the 
     Commission (or other appropriate Federal regulator under 
     section 5) of any civil action under subsection (a) prior to 
     initiating such civil action. The notice shall include a copy 
     of the complaint to be filed to initiate such civil action, 
     except that if it is not feasible for the State to provide 
     such prior notice, the State shall provide such notice 
     immediately upon instituting such civil action.
       (c) Authority To Intervene.--Upon receiving the notice 
     required by subsection (b), the Commission (or other 
     appropriate Federal regulator under section 5) may intervene 
     in such civil action and upon intervening--
       (1) be heard on all matters arising in such civil action; 
     and
       (2) file petitions for appeal of a decision in such civil 
     action.
       (d) Construction.--For purposes of bringing any civil 
     action under subsection (a), nothing in this section shall 
     prevent the attorney general of a State from exercising the 
     powers conferred on the attorney general by the laws of such 
     State to conduct investigations or to administer oaths or 
     affirmations or to compel the attendance of witnesses or the 
     production of documentary and other evidence.

[[Page S8325]]

       (e) Venue; Service of Process.--In a civil action brought 
     under subsection (a)--
       (1) the venue shall be a judicial district in which--
       (A) the covered entity operates;
       (B) the covered entity was authorized to do business; or
       (C) where the defendant in the civil action is found;
       (2) process may be served without regard to the territorial 
     limits of the district or of the State in which the civil 
     action is instituted; and
       (3) a person who participated with a covered entity in an 
     alleged violation that is being litigated in the civil action 
     may be joined in the civil action without regard to the 
     residence of the person.
       (f) Limitation on State Action While Federal Action Is 
     Pending.--If the Commission (or other appropriate Federal 
     agency under section 5) has instituted a civil action or an 
     administrative action for violation of this Act, no State 
     attorney general, or official or agency of a State, may bring 
     an action under this subsection during the pendency of that 
     action against any defendant named in the complaint of the 
     Commission or the other agency for any violation of this Act 
     alleged in the complaint.
       (g) Enforcement of State Law.--Nothing contained in this 
     section shall prohibit an authorized State official from 
     proceeding in State court to enforce a civil or criminal 
     statute of such State.

     SEC. 7. PREEMPTION OF STATE LAW.

       (a) In General.--This Act preempts any State or local law, 
     regulation, or rule that requires a covered entity--
       (1) to develop, implement, or maintain information security 
     programs to which this Act applies; or
       (2) to notify individuals of breaches of security regarding 
     their sensitive personal information.
       (b) Liability.--This Act preempts any State or local law, 
     regulation, rule, administrative procedure, or judicial 
     precedent under which liability is imposed on a covered 
     entity for failure--
       (1) to implement and maintain an adequate information 
     security program; or
       (2) to notify an individual of any breach of security 
     pertaining to any sensitive personal information about that 
     individual.
       (c) Security Freeze.--This Act preempts any State or local 
     law, regulation, or rule that requires consumer reporting 
     agencies to impose a security freeze on consumer credit 
     reports at the request of a consumer.

     SEC. 8. SOCIAL SECURITY NUMBER PROTECTION.

       (a) Prohibition of Unnecessary Solicitation of Social 
     Security Numbers.--No covered entity may solicit any social 
     security number from an individual unless there is a specific 
     use of the social security number for which no other 
     identifier reasonably can be used.
       (b) Prohibition of the Display of Social Security Numbers 
     on Employee Identification Cards, Etc..--
       (1) In general.--No covered entity may display the social 
     security number (or any derivative of such number) of an 
     individual on any card or tag that is commonly provided to 
     employees (or to their family members), faculty, staff, or 
     students for purposes of identification.
       (2) Driver's Licenses.--A State may not display the social 
     security number of an individual on driver's licenses issued 
     by that State.
       (c) Prohibition of Inmate Access to Social Security Account 
     Numbers.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)), as amended by 
     subsection (b), is amended by adding at the end the following 
     new clause:
       ``(xi) No executive, legislative, or judicial agency or 
     instrumentality of the Federal Government or of a State or 
     political subdivision thereof (or person acting as an agent 
     of such an agency or instrumentality) may employ, or enter 
     into a contract for the use or employment of, prisoners in 
     any capacity that would allow such prisoners access to the 
     social security account numbers of other individuals. For 
     purposes of this clause, the term `prisoner' means an 
     individual confined in a jail, prison, or other penal 
     institution or correctional facility.''.
       (2) Treatment of current arrangements.--In the case of--
       (i) prisoners employed as described in clause (xi) of 
     section 205(c)(2)(C) of the Social Security Act (42 U.S.C. 
     405(c)(2)(C)), as added by paragraph (1), on the date of 
     enactment of this Act, and
       (ii) contracts described in such clause in effect on such 
     date,

     the amendment made by this section shall take effect 90 days 
     after the date of enactment of this Act.

     SEC. 9. INFORMATION SECURITY WORKING GROUP.

       (a) Information Security Working Group.--The Chairman of 
     the Commission shall establish an Information Security 
     Working Group to develop best practices to protect sensitive 
     personal information stored and transferred. The Working 
     Group shall be composed of industry participants, consumer 
     groups, and other interested parties.
       (b) Report.--Not later than 12 months after the date on 
     which the Working Group is established under subsection (a), 
     the Working Group shall submit to Congress a report on their 
     findings.

     SEC. 10. DEFINITIONS.

       In this Act:
       (1) Breach of security.--The term ``breach of security'' 
     means unauthorized access to and acquisition of data in any 
     form or format containing sensitive personal information that 
     compromises the security or confidentiality of such 
     information and establishes a basis to conclude that a 
     reasonable risk of identity theft to an individual exists.
       (2) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (3) Consumer credit reporting agency.--The term ``consumer 
     credit reporting agency'' means any person which, for 
     monetary fees, dues, or on a cooperative nonprofit basis, 
     regularly engages in whole or in part in the practice of 
     assembling or evaluating consumer credit information or other 
     information on consumers for the purpose of furnishing credit 
     reports to third parties, and which uses any means or 
     facility of interstate commerce for the purpose of preparing 
     or furnishing credit reports.
       (4) Covered entity.--The term ``covered entity'' means a 
     sole proprietorship, partnership, corporation, trust, estate, 
     cooperative, association, or other commercial entity, and any 
     charitable, educational, or nonprofit organization, that 
     acquires, maintains, or utilizes sensitive personal 
     information.
       (5) Credit report.--The term ``credit report'' means a 
     consumer report, as defined in section 603(d) of the Federal 
     Fair Credit Reporting Act (15 U.S.C. 1681a(p)), that is used 
     or expected to be used or collected in whole or in part for 
     the purpose of serving as a factor in establishing a 
     consumer's eligibility for credit for personal, family or 
     household purposes.
       (6) Identity theft.--The term ``identity theft'' means the 
     unauthorized acquisition, purchase, sale, or use by any 
     person of an individual's sensitive personal information 
     that--
       (A) violates section 1028 of title 18, United States Code, 
     or any provision of State law in pari materia; or
       (B) results in economic loss to the individual whose 
     sensitive personal information was used.
       (7) Reviewing the account.--The term ``reviewing the 
     account'' includes activities related to account maintenance, 
     monitoring, credit line increases, and account upgrades and 
     enhancements.
       (8) Sensitive personal information.--
       (A) In general.--Except as provided in subparagraphs (B) 
     and (C), the term ``sensitive personal information'' means an 
     individual's name, address, or telephone number combined with 
     1 or more of the following data elements related to that 
     individual:
       (i) Social security number, taxpayer identification number, 
     or employer identification number.
       (ii) Financial account number, or credit card or debit card 
     number of such individual, combined with any required 
     security code, access code, or password that would permit 
     access to such individual's account.
       (iii) State driver's license identification number or State 
     resident identification number.
       (iv) Consumer credit report.
       (v) Employee, faculty, student, or United States armed 
     forces serial number.
       (vi) Genetic or biometric information.
       (vii) Mother's maiden name.
       (B) FTC modifications.--The Commission may, through a 
     rulemaking proceeding, designate other identifying 
     information that may be used to effectuate identity theft as 
     sensitive personal information for purposes of this Act and 
     limit or exclude any information described in subparagraph 
     (A) from the definition of sensitive personal information for 
     purposes of this Act.
       (C) Public records.--Nothing in this Act prohibits a 
     covered entity from obtaining, aggregating, or using 
     sensitive personal information it lawfully obtains from 
     public records in a manner that does not violate this Act.

     SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Commission 
     $1,000,000 for each of fiscal years 2006 through 2010 to 
     carry out this Act.

     SEC. 12. EFFECTIVE DATES.

       (a) In General.--Except as provided in subsection (b), the 
     provisions of this Act take effect upon its enactment.
       (b) Provisions Requiring Rulemaking.--The Commission shall 
     initiate 1 or more rulemaking proceedings under sections 2, 
     3, and 4 within 45 days after the date of enactment of this 
     Act. The Commission shall promulgate all final rules pursuant 
     to those rulemaking proceedings within 1 year after the date 
     of enactment of this Act. The provisions of sections 2, 3, 
     and 4 shall take effect on the same date 6 months after the 
     date on which the Commission promulgates the last final rule 
     under the proceeding or proceedings commenced under the 
     preceding sentence.
       (c) Preemption.--Section 7 shall take effect at the same 
     time as sections 2, 3, and 4 take effect.

  Mr. STEVENS. Mr. President, I am pleased to join Senators Inouye, 
Smith, McCain, Nelson, and Pryor in introducing a bipartisan bill to 
address the growing perpetration of identity theft against American 
consumers. The bipartisan bill, the ``Identity Theft Protection Act,'' 
is the product of two Commerce Committee hearings that featured 
testimony from businesses that aggregate and sell consumer information 
as a commodity, and the full

[[Page S8326]]

Federal Trade Commission, FTC, which recommended much of what is 
contained in this legislation.
  The occurrence of identity theft in the United States has reached 
epidemic proportions. The incidence of this crime rose 15 percent in 
2002, and 80 percent in 2003. The FTC stated in February 2005 that each 
year nearly 10 million Americans--or roughly 4.6 percent of the 
domestic adult population--are victimized by identity thieves. The FTC 
indicates that physical and online identity theft accounted for 39 
percent of the more than 635,000 consumer fraud complaints filed last 
year with the agency. The costs associated with identity theft are 
enormous. In 2003, the FTC estimated that the losses to businesses and 
financial institutions due to identity theft totaled $48 billion, and 
the out-of-pocket losses to consumers totaled $5 billion, which does 
not take into account the average 300 hours spent by victims restoring 
their good names.
  This year alone, there have been at least 43 reported information 
breaches affecting potentially more than 9 million Americans. This 
string of data theft has focused the attention of Congress, consumers, 
and privacy proponents. It has raised questions concerning the business 
practices of data brokers and whether consumers' personal information 
is adequately protected from identity thieves. The difficulty of 
finding solutions to this and other types of identity theft is striking 
a balance between ensuring adequate security of sensitive personal 
information while not inhibiting the legitimate free flow of 
information that is vital to the domestic economy and law enforcement.
  The bill that we introduce today will not end all identity theft. No 
legislation can accomplish that objective. But this bill would require 
bolstered information safeguards and ensure notification of consumers 
whose sensitive personal information has been acquired without 
authorization. More specifically, the bill, among other things, would 
direct the FTC to develop rules that would require all covered entities 
that handle sensitive personal information to develop, implement, and 
maintain appropriate safeguards to protect such information, and 
provide effective notice to consumers in the event of a breach. The 
bill would limit the solicitation of Social Security numbers by covered 
entities, and restrict employers, State agencies, or educational 
institutions from displaying social security numbers on identification 
tags for employees and students, and for drivers licenses. The bill 
also would allow consumers to freeze their credit for a reasonable fee 
to protect themselves from identity theft, and preempt similar State or 
local law in an effort to provide a uniform Federal standard rather 
than a patchwork of widely varying State or local laws.
  I look forward to working with my colleagues on legislation that will 
mitigate to the greatest extent possible the occurrence of identity 
theft in this country, but without inhibiting an information sharing 
system that yields extraordinary benefits to every American.
                                 ______
                                 
      By Ms. MURKOWSKI:
  S. 1409. A bill to amend the Safe Drinking Water Act Amendments of 
1996 to modify the grant program to improve sanitation in rural and 
Native villages in the State of Alaska; to the Committee on Environment 
and Public Works.
  Ms. MURKOWSKI. Mr. President, I rise to introduce a bill that will 
allow the Environmental Protection Agency to continue to provide grant 
funding and technical assistance to small, rural communities in Alaska 
for critical water and sewer projects. These rural communities are only 
accessible by either aircraft or boat.
  This important funding was originally authorized as part of the Safe 
Drinking Water Act Amendments of 1996 and was reauthorized in 2000. The 
authorization for this program expires at the end of fiscal year 2005. 
Every fiscal year, the EPA transfers funding authorized by this program 
to the State of Alaska's Village Safe Water Program, which is managed 
by the Alaska Department of Environmental Conservation.
  The water and sewer conditions in the villages in Alaska that still 
need this critical funding rival the conditions in rural communities in 
third world countries. For example, residents in some villages in 
Alaska have to go to a central source in the community to get fresh 
water. This source is usually a well. Instead of flushing toilets, 
residents have to use a device called a ``honeybucket.'' This device is 
a large bucket with a toilet seat on top. When the honeybucket is full, 
it is usually dumped in a lagoon or on land. Sometimes, these dump 
locations are near sources of drinking water.
  The Village Safe Water program has been a success over the years. 
Many homes in Alaska's rural communities now have plumbing due to funds 
authorized by this program. However, thirty-three percent of homes in 
these communities still do not have in-house plumbing. It is 
unacceptable that the residents of these communities still do not have 
access to conventional plumbing in their homes in 2005.
  Earlier this year, the Office of Management and Budget published a 
Program Assessment Rating Tool report concerning this program. This 
report found several deficiencies concerning the administration of this 
program. However, I have been assured that the EPA and the Alaska 
Department of Environmental Conservation are working closely together 
to correct these deficiencies.
  It is imperative that we reauthorize this critically important 
program before the end of this fiscal year. The health and well-being 
of rural Alaskans is at stake.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1409

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

     SECTION 1. GRANTS TO ALASKA TO IMPROVE SANITATION IN RURAL 
                   AND NATIVE VILLAGES.

       Section 303 of the Safe Drinking Water Act Amendments of 
     1996 (33 U.S.C. 1263a) is amended--
       (1) in subsection (b), by striking ``50 percent'' and 
     inserting ``75 percent''; and
       (2) in subsection (e)--
       (A) by striking ``$40,000,000'' and inserting 
     ``$45,000,000''; and
       (B) by striking ``2005'' and inserting ``2010''.

                          ____________________