[Congressional Record Volume 153, Number 48 (Tuesday, March 20, 2007)]
[Senate]
[Pages S3354-S3394]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

  By Mr. MENENDEZ (for himself, Mrs. Boxer, Mr. Kerry, Mr. Cardin, and 
Mr. Lautenberg):
  S. 919. A bill to reauthorize Department of Agriculture conservation 
and energy programs and certain other programs of the Department, to 
modify the operation and administration of these programs, and for 
other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. MENENDEZ. Mr. President, I rise today along with several of my 
colleagues to introduce the Healthy Farms, Foods, and Fuels Act of 
2007. I am also proud to be joined in this effort by my friend and 
former colleague, Representative Ron Kind of Wisconsin, who is 
introducing this legislation today in the House of Representatives.
  This legislation is crucial because we have a tremendous opportunity 
this year to set a healthier course for American agriculture. To allow 
our farmers, ranchers, and foresters to thrive while giving them the 
tools they need to meet our environmental and energy challenges; to 
open up new markets and opportunities for our small farmers; and to 
provide consumers and schoolchildren with more fresh fruits and 
vegetables, and make it easier for low-income Americans and the elderly 
to have access to healthier foods.
  Like all legislation, a Farm Bill is a statement of priorities and of 
values. And the Healthy Farms, Foods, and Fuels Act embodies many of 
the priorities and values that I believe we as a nation should be 
focused on.
  Although many people are not aware of New Jersey's thriving 
agricultural sector, the fact is that we are the Garden State, and a 
healthy agricultural sector nationwide--one that addresses the needs of 
all of our farmers, whether

[[Page S3355]]

they grow corn in the Midwest or blueberries in the Mid-Atlantic--is 
essential for New Jersey to remain the Garden State.
  However, New Jersey's farmers are under a tremendous amount of 
pressure. They operate in a very high-cost environment and see 
development encroaching on their farms from all sides. Conservation 
programs are crucial to the survival of agriculture in the Garden 
State, as well as for the protection of sensitive wetlands and animal 
habitats, which is why the Healthy Farms bill increases funding and 
expands eligibility for the Environment Quality Incentives Program, 
Conservation Reserve Program, Conservation Security Program, Farmland 
and Ranchland Protection Program, Wetlands Reserve Program, and 
Wildlife Habitat Incentive Program.
  New Jersey's farmers are also among the most prolific in the country 
in growing fruits and vegetables, yet they are often just a few miles 
from distressed communities where children struggle for access to 
nutritious food. That's why the Healthy Farms bill expands the Fresh 
Fruit and Vegetable Program to schools in all states, giving more 
children access to healthy snacks. The bill also expands the Farmers 
Market Promotion Program, and provides additional funding for programs 
that allow seniors and low-income families to obtain food at farmers 
markets. Not only do these programs help people eat healthier, they 
provide an additional market for local farmers.
  This bill is, of course, just the start of this conversation. As we 
move forward this year, we must work together on issues of farm 
profitability, entrepreneurship and innovation, toward a Farm Bill that 
emphasizes flexibility, efficiency and equitable distribution of 
government programs. This will help to ensure success for our farm 
family enterprises and the wider community of Farm Bill beneficiaries, 
both large and small, near urbanized areas and in more rural settings, 
throughout all regions of the country.
  Ideally, an emphasis on the diversity of agricultural and related 
businesses, their interaction with the citizens who are their ultimate 
customers, and the role these enterprises play in addressing issues of 
nutrition, hunger and economic growth throughout our nation will join 
with conservation and environmental issues to form a comprehensive Farm 
Bill that will serve the nation well for the next five years and 
beyond.
                                 ______
                                 
      By Mr. REED (for himself and Mr. Whitehouse):
  S. 920. A bill to provide wage parity for certain prevailing rate 
employees in Rhode Island; to the Committee on Homeland Security and 
Governmental Affairs.
  Mr. REED. Mr. President, today I address an issue of critical 
importance to Rhode Island's Federal Wage System employees.
  Federal Wage System (FWS) employees are the Federal Government's 
blue-collar employees. In Rhode Island, these workers include janitors, 
mechanics, machine tool operators, munitions and explosive operators, 
electricians, and engineers. The majority of FWS employees in the 
United States work in the Department of Defense or the Department of 
Veterans Affairs. Indeed, Naval Station Newport employs the most FWS 
workers in the Narragansett Bay area. These workers are essential to 
the government's daily operation, and the work that they perform is 
important to our national security.
  Regrettably, in the Narragansett Bay wage area, Federal blue-collar 
workers are faced with one of the lowest FWS pay scales, while residing 
in an area with one of the highest costs of living. The significant 
disparities between wages in the Narragansett Bay wage area and the 
proximate Boston and Hartford wage areas raise serious questions about 
the fairness and equity of these pay scales. In Rhode Island, an 
average wage grade worker earns $18.47 per hour, whereas the same 
worker in Boston earns $20.77 per hour and an employee in Hartford 
earns $19.99 per hour. Competitive compensation is the best way to 
ensure the retention of qualified and effective workers. Rhode Island 
should not suffer the loss of experienced Federal employees to the same 
jobs, at the same grade levels, just miles away because of better pay.
  The chair of the Federal Prevailing Rate Advisory Committee (FPRAC), 
which advises the Office of Personnel Management on decisions dealing 
with the FWS pay scales, has been left vacant, leaving the FPRAC unable 
to make needed decisions regarding these wage areas.
  Due to the lack of a chair and any action by FPRAC or OPM, which I 
have long urged to resolve this matter, I am reintroducing the Rhode 
Island Federal Worker Fairness Act, and I am pleased that Senator 
Whitehouse is joining me as a cosponsor. This bill will merge the 
Narragansett Bay wage area with the Boston, MA, wage area to provide 
regional pay equity to Rhode Island Federal blue-collar workers. 
Merging these two wage areas will keep Federal workers in Rhode Island 
from abandoning their government jobs for higher paying positions 
elsewhere in southern New England, and help the approximately 500 wage 
rate workers in Rhode Island better provide for their families. I urge 
that this long pending inequality be addressed.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 920

       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 ``Rhode Island Federal Worker 
     Fairness Act of 2007''.

     SEC. 2. WAGE PARITY FOR CERTAIN PREVAILING RATE EMPLOYEES IN 
                   RHODE ISLAND.

       The wage schedules and rates applicable to prevailing rate 
     employees (as defined in section 5342 of title 5, United 
     States Code) in the Narragansett Bay, Rhode Island, wage area 
     shall be the same as the wage schedules and rates applicable 
     to prevailing rate employees in the Boston, Massachusetts, 
     wage area.

     SEC. 3. EFFECTIVE DATE.

       Section 2 shall take effect beginning with the first pay 
     period beginning on or after the date of enactment of this 
     Act.
                                 ______
                                 
      By Mr. THOMAS (for himself and Mrs. Lincoln):
  S. 921. A bill to amend title XVIII of the Social Security Act to 
provide for the coverage of marriage and family therapist services and 
mental health counselor services under part B of the Medicare program, 
and for other purposes; to the Committee on Finance.
  Mr. THOMAS. Mr. President, I am pleased to rise today to introduce 
the ``Seniors Mental Health Access Improvement Act of 2007'' with my 
distinguished colleague from Arkansas, Mrs. Lincoln. Specifically, the 
``Seniors Mental Health Access Improvement Act of 2007'' permits mental 
health counselors and marriage and family therapists to bill Medicare 
for services provided to seniors. This will result in an increased 
choice of mental health providers for seniors and enhance their ability 
to access mental health services in their communities.
  This legislation is especially crucial to rural seniors who are often 
forced to travel long distances to utilize the services of mental 
health providers currently recognized by the Medicare program. Rural 
communities have difficulty recruiting and retaining providers, 
especially mental health providers. In many small towns, a mental 
health counselor or a marriage and family therapist is the only mental 
health care provider in the area. Medicare law--as it exists today--
compounds the situation because only psychiatrists, clinical 
psychologists, clinical social workers and clinical nurse specialists 
are able to bill Medicare for their services.
  It is time the Medicare program recognized the qualifications of 
mental health counselors and marriage and family therapists as well as 
the critical role they play in the mental health care infrastructure. 
These providers go through rigorous training, similar to the curriculum 
of masters level social workers, and yet are excluded from the Medicare 
program.
  Particularly troubling to me is the fact that seniors have 
disproportionally higher rates of depression and suicide than other 
populations. Additionally, 75 percent of the 518 nationally designated 
Mental Health Professional Shortage Areas are located in rural areas 
and one-fifth of all rural counties have no mental health services of 
any kind. Frontier counties have even more drastic numbers as 95 
percent do not have a psychiatrist, 68

[[Page S3356]]

percent do not have a psychologist and 78 percent do not have a social 
worker. It is quite obvious we have an enormous task ahead of us to 
reduce these staggering statistics. Providing mental health counselors 
and marriage and family therapists the ability to bill Medicare for 
their services is a key part of the solution.
  Virtually all of Wyoming is designated a mental health professional 
shortage area and will greatly benefit from this legislation. Wyoming 
has 174 psychologists, 37 psychiatrists and 263 clinical social workers 
for a total of 474 Medicare eligible mental health providers. Enactment 
of the ``Seniors Mental Health Access Improvement Act of 2007'' will 
more than double the number of mental health providers available to 
seniors in my State with the addition of 528 mental health counselors 
and 61 marriage and family therapists currently licensed in the State.
  I believe this legislation is critically important to the health and 
well-being of our Nation's seniors and I strongly urge all my 
colleagues to become a cosponsor.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 921

       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 ``Seniors Mental Health Access 
     Improvement Act of 2007''.

     SEC. 2. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES 
                   AND MENTAL HEALTH COUNSELOR SERVICES UNDER PART 
                   B OF THE MEDICARE PROGRAM.

       (a) Coverage of Services.--
       (1) In general.--Section 1861(s)(2) of the Social Security 
     Act (42 U.S.C. 1395x(s)(2)) is amended--
       (A) in subparagraph (Z), by striking ``and'' after the 
     semicolon at the end;
       (B) in subparagraph (AA), by inserting ``and'' after the 
     semicolon at the end; and
       (C) by adding at the end the following new subparagraph:
       ``(BB) marriage and family therapist services (as defined 
     in subsection (ccc)(1)) and mental health counselor services 
     (as defined in subsection (ccc)(3));''.
       (2) Definitions.--Section 1861 of the Social Security Act 
     (42 U.S.C. 1395x) is amended by adding at the end the 
     following new subsection:

     ``Marriage and Family Therapist Services; Marriage and Family 
  Therapist; Mental Health Counselor Services; Mental Health Counselor

       ``(ccc)(1) The term `marriage and family therapist 
     services' means services performed by a marriage and family 
     therapist (as defined in paragraph (2)) for the diagnosis and 
     treatment of mental illnesses, which the marriage and family 
     therapist is legally authorized to perform under State law 
     (or the State regulatory mechanism provided by State law) of 
     the State in which such services are performed, as would 
     otherwise be covered if furnished by a physician or as an 
     incident to a physician's professional service, but only if 
     no facility or other provider charges or is paid any amounts 
     with respect to the furnishing of such services.
       ``(2) The term `marriage and family therapist' means an 
     individual who--
       ``(A) possesses a master's or doctoral degree which 
     qualifies for licensure or certification as a marriage and 
     family therapist pursuant to State law;
       ``(B) after obtaining such degree has performed at least 2 
     years of clinical supervised experience in marriage and 
     family therapy; and
       ``(C) in the case of an individual performing services in a 
     State that provides for licensure or certification of 
     marriage and family therapists, is licensed or certified as a 
     marriage and family therapist in such State.
       ``(3) The term `mental health counselor services' means 
     services performed by a mental health counselor (as defined 
     in paragraph (4)) for the diagnosis and treatment of mental 
     illnesses which the mental health counselor is legally 
     authorized to perform under State law (or the State 
     regulatory mechanism provided by the State law) of the State 
     in which such services are performed, as would otherwise be 
     covered if furnished by a physician or as incident to a 
     physician's professional service, but only if no facility or 
     other provider charges or is paid any amounts with respect to 
     the furnishing of such services.
       ``(4) The term `mental health counselor' means an 
     individual who--
       ``(A) possesses a master's or doctor's degree in mental 
     health counseling or a related field;
       ``(B) after obtaining such a degree has performed at least 
     2 years of supervised mental health counselor practice; and
       ``(C) in the case of an individual performing services in a 
     State that provides for licensure or certification of mental 
     health counselors or professional counselors, is licensed or 
     certified as a mental health counselor or professional 
     counselor in such State.''.
       (3) Provision for payment under part b.--Section 
     1832(a)(2)(B) of the Social Security Act (42 U.S.C. 
     1395k(a)(2)(B)) is amended by adding at the end the following 
     new clause:
       ``(v) marriage and family therapist services (as defined in 
     section 1861(ccc)(1)) and mental health counselor services 
     (as defined in section 1861(ccc)(3));''.
       (4) Amount of payment.--Section 1833(a)(1) of the Social 
     Security Act (42 U.S.C. 1395l(a)(1)) is amended--
       (A) by striking ``and (V)'' and inserting ``(V)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``, and (W) with respect to marriage and family 
     therapist services and mental health counselor services under 
     section 1861(s)(2)(BB), the amounts paid shall be 80 percent 
     of the lesser of the actual charge for the services or 75 
     percent of the amount determined for payment of a 
     psychologist under subparagraph (L)''.
       (5) Exclusion of marriage and family therapist services and 
     mental health counselor services from skilled nursing 
     facility prospective payment system.--Section 
     1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
     1395yy(e)(2)(A)(ii)) is amended by inserting ``marriage and 
     family therapist services (as defined in section 
     1861(ccc)(1)), mental health counselor services (as defined 
     in section 1861(ccc)(3)),'' after ``qualified psychologist 
     services,''.
       (6) Inclusion of marriage and family therapists and mental 
     health counselors as practitioners for assignment of 
     claims.--Section 1842(b)(18)(C) of the Social Security Act 
     (42 U.S.C. 1395u(b)(18)(C)) is amended by adding at the end 
     the following new clauses:
       ``(vii) A marriage and family therapist (as defined in 
     section 1861(ccc)(2)).
       ``(viii) A mental health counselor (as defined in section 
     1861(ccc)(4)).''.
       (b) Coverage of Certain Mental Health Services Provided in 
     Certain Settings.--
       (1) Rural health clinics and federally qualified health 
     centers.--Section 1861(aa)(1)(B) of the Social Security Act 
     (42 U.S.C. 1395x(aa)(1)(B)) is amended by striking ``or by a 
     clinical social worker (as defined in subsection (hh)(1))'' 
     and inserting ``, by a clinical social worker (as defined in 
     subsection (hh)(1)), by a marriage and family therapist (as 
     defined in subsection (ccc)(2)), or by a mental health 
     counselor (as defined in subsection (ccc)(4))''.
       (2) Hospice programs.--Section 1861(dd)(2)(B)(i)(III) of 
     the Social Security Act (42 U.S.C. 1395x(dd)(2)(B)(i)(III)) 
     is amended by inserting ``or one marriage and family 
     therapist (as defined in subsection (ccc)(2))'' after 
     ``social worker''.
       (c) Authorization of Marriage and Family Therapists to 
     Develop Discharge Plans for Post-Hospital Services.--Section 
     1861(ee)(2)(G) of the Social Security Act (42 U.S.C. 
     1395x(ee)(2)(G)) is amended by inserting ``marriage and 
     family therapist (as defined in subsection (ccc)(2)),'' after 
     ``social worker,''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to services furnished on or after 
     January 1, 2008.
                                 ______
                                 
      By Mr. THUNE (for himself, Mr. Johnson, Mr. Specter, and Mr. 
        Casey):
  S. 922. A bill to extend the existing provisions regarding the 
eligibility for essential air service subsidies through fiscal year 
2012; to the Committee on Commerce, Science, and Transportation.
  Mr. THUNE. Mr. President, I rise today to introduce a bill that will 
sustain important air service--in South Dakota and other rural States 
across the country. The Airline Deregulation Act of 1978 allowed 
airlines to provide air service to domestic markets as they saw fit. 
But Congress had the foresight to create the Essential Air Service 
(EAS) Program to ensure a minimal level of scheduled air service in 
small communities. Without the EAS program, these small communities 
might have otherwise seen the airlines pull up stakes and only focus on 
larger, more profitable markets.
  Essential Air Service is especially important to rural States like my 
home State of South Dakota. We have four communities that participate 
in the EAS program: Brookings, Huron, Pierre, and Watertown. Ensuring 
air passengers have access in and out of these smaller communities 
makes our entire commercial airline network more valuable.
  The bill I am introducing today is very simple. It extends a 
provision, Section 409, passed by Congress and signed into law by the 
President in the 2002 Federal Aviation Administration Reauthorization, 
commonly referred to as Vision 100. This provision ensures that certain 
mileage calculations that determine EAS program eligibility are

[[Page S3357]]

not simply measured by some bureaucrat in Washington, but are in fact 
certified by States' Governors. There are, of course, budgetary strains 
on the EAS program. Congress and the Administration should focus on 
strengthening the program and examine the air service it is supporting 
to make sure it is truly essential, but we should not allow bureaucrats 
behind a desk in Washington to surreptitiously use mileage 
determinations to cut the costs of the program and reduce air service 
in the process.
  Brookings is a community in my home State that would have more than 
likely lost its commercial air service if this provision was not in 
place five years ago. We should keep it in place for the next five 
years to make sure Brookings and other communities like it do not end 
up the cutting room floor of the EAS program.
  I look forward to working with my colleagues on the Commerce 
Committee to begin the process of reauthorizing FAA programs again this 
year. Aviation is a crucial element of our economy. I hope that this 
legislation, or at least the concept behind it, is considered during 
the reauthorization debate.
                                 ______
                                 
  By Ms. CANTWELL (for herself and Ms. Snowe):
  S. 924. A bill to strengthen the United States Coast Guard's 
Integrated Deepwater Program; to the Committee on Commerce, Science, 
and Transportation.
  Ms. CANTWELL. Mr. President, I think we all agree that the United 
States Coast Guard plays a critical role in keeping our oceans, coasts, 
and waterways safe, secure, and free from environmental harm. Following 
the events of September 11 and, more recently, Hurricane Katrina the 
Coast Guard has served as a source of strength for this Nation. And, in 
the face of increasing marine traffic, security threats at our Nation's 
ports, and climate change increasing the odds of another Katrina, the 
responsibilities of the Coast Guard continue to increase.
  The Coast Guard is struggling right now to replace their rapidly 
aging fleet of ships, aircraft, and facilities. At a cost of $24 
billion, the Deepwater program is the largest and most complex 
acquisition program in the history of the Coast Guard. We have a 
responsibility to ensure there is transparency and oversight so this 
program is as efficient and effective as possible.
  The Deepwater program utilizes a private sector lead systems 
integrator, LSI, know as Integrated Coast Guard Systems, ICGS, to 
oversee acquisition of a ``system of systems.'' When the Deepwater 
contract was originally awarded in 2002, the Coast Guard did not have 
the personnel within their acquisition department to manage such a 
large contract. We were told that outsourcing that role to industry 
would save the Coast Guard time and money over the long run.
  The approach, which may have seemed innovative at the time, has not 
produced the promised results. Instead of cost and time savings, we've 
seen less competition, inadequate technical oversight and a lack of 
transparency. Over the last year, these problems have caused major 
blunders in the Deepwater program.
  The Department of Homeland Security Inspector General, IG, has 
released three recent reports detailing some of the problems with 
Deepwater.
  In an August 11, 2006 report titled Major Improvements Needed in the 
U.S. Coast Guard's Implementation of Deepwater Information Technology 
System, the IG described problems with Deepwater's C41SR electronics 
equipment, which is to be the integrating technology linking 
Deepwater's aircraft and ships.
  On January 29, 2007, the IG released a scathing report on Deepwater's 
flagship National Security Cutter, NSC, documenting crucial design 
flaws and cost overruns created by a faulty contract structure and lack 
of Coast Guard oversight.
  Finally, on February 9, 2007, the IG released another report, this 
one detailing serious issues with Deepwater's 123-foot cutter 
conversion project.
  These reports, along with others by the Government Accountability 
Office about problems with the stalled Fast Response Cutter, FRC, 
program and the Deepwater contract structure, have prompted a 
resounding cry for Deepwater reform, transparency, and oversight.
  On February 14, 2007, I chaired a hearing in the Commerce Committee's 
Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard to 
better understand these issues and seek solutions. From that hearing it 
was clear that the Coast Guard was working hard to make internal 
reforms. It was also clear that we needed to do more to protect the 
American taxpayer.
  Today, I'm pleased to introduce, along with Senator Snowe, the 
Integrated Deepwater Program Reform Act, a comprehensive bill which 
makes fundamental changes to the Coast Guard's Deepwater acquisition 
program.
  My bill requires the Coast Guard to move away from the industry-led 
Lead Systems Integrator and have full and open competition for future 
Deepwater assets.
  It requires a completely new ``analysis of alternatives'' of all 
future Deepwater assets to ensure that the Coast Guard is getting the 
assets best-suited for their needs.
  It requires the Commandant of the Coast Guard to certify to Congress 
that specific assets to be procured are mature and cost-effective 
technologies, a requirement already applied to Department of Defense 
contracts.
  And, it gives the Coast Guard the tools they need to manage this 
contract and future contracts effectively, including requiring the 
Coast Guard to make internal management changes to ensure open 
competition, increase technical oversight and improve reporting to 
Congress.
  I'm pleased to say that I have worked closely with Senator Snowe and 
the Coast Guard in crafting this bill and I'm confident that this will 
fix many of the problems that have plagued the Deepwater program.
  This legislation takes a big step towards getting the Coast Guard the 
assets they need to meet the pressing needs of our Nation and ensuring 
responsible management of taxpayer dollars. I look forward to working 
with my colleagues to enact the changes we propose today so we can get 
this program back on track.
  I ask unanimous consent that a summary of the bill and the text of 
the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

           Summary of Integrated Deepwater Program Reform Act


                    Use of a Lead Systems Integrator

       Would direct the Coast Guard to stop using a Lead Systems 
     Integrator (LSI) on future Deepwater acquisitions.
       Would allow the Coast Guard to use the LSI to complete any 
     specific work for which a contract or order had already been 
     issued.
       Would allow the Coast Guard to use the LSI to complete the 
     C130-J modifications, the C4ISR program, and also to complete 
     procurements of the National Security Cutters (NSCs) and 
     Maritime Patrol Aircraft (MPA) already under contract for 
     construction. However, the LSI must have no financial 
     interest in subcontracts or have competed the subcontracts.
       Would allow the Coast Guard to use the LSI to complete all 
     of the remaining NSCs and MPAs only after an analysis of 
     alternatives has been conducted and, if the Coast Guard 
     concludes that these procurements and use of an LSI are in 
     the best interests of the federal government, that 
     justifications for not competing assets under the Federal 
     Acquisition Regulations are met, and that the LSI has no 
     financial interest in subcontracts or has competed the 
     subcontracts.
       All other Deepwater assets would be done as a traditional 
     procurement.


                              Competition

       Would require that the Coast Guard have a full and open 
     competition of all Deepwater assets that have not yet gone 
     under contract, other than those that the LSI can complete.
       Would require that the LSI have no financial interest in 
     subcontracts for assets managed by the LSI, or that 
     subcontracts be fully competed. A similar provision was 
     included in the 2006 Defense Authorization Act.


                        Analysis of Alternatives

       Would require an analysis of alternatives of all of the 
     proposed Deepwater assets not currently under contract and 
     whether other alternatives are preferable. Such review would 
     be conducted by an independent third party entity with 
     expertise in major acquisitions, and no financial conflict of 
     interest.
       Would require the Coast Guard to provide a plan to Congress 
     for how to move forward with Deepwater procurements based on 
     this review.
       Would require a similar review for any major changes to the 
     agreed plan in the future.


                             Certification

       Would require the Commandant to certify to Congress, prior 
     to issuing new contracts

[[Page S3358]]

     for specific proposed acquisitions, that the proposed asset 
     meets objective criteria for feasibility, maturity of design, 
     and costs. A similar requirement applies to Department of 
     Defense contracts.


                            Contract changes

       Would require improvements to any contract entered into by 
     the Coast Guard for Deepwater assets, including changes to 
     award term and award fee criteria as recommended by the 
     Government Accountability Office (GAO).
       Would end the practice of allowing the private contractor 
     to self-certify the design and performance of assets being 
     delivered. This will ensure adherence to accepted industry-
     wide standards and procedures.


                    Internal Coast Guard Management

       Would require improvements to Coast Guard's management of 
     Deepwater, including implementation of the Coast Guard's 
     Blueprint for Acquisition Reform as well as recommendations 
     for improved management included in a February 5, 2007 
     Defense Acquisition University (DAU) report and by GAO.
       Would ensure better technical oversight by the Coast 
     Guard's engineering staff.
       Would allow the Coast Guard to shift personnel to support 
     acquisitions projects.


                         Reporting to Congress

       Would require Coast Guard to provide significant additional 
     information to Congress regarding the status of the Deepwater 
     program, similar to what the Department of Defense provides.


                               GAO Review

       Would require GAO to monitor closely the Coast Guard's 
     implementation of improvements to its management of the 
     Deepwater program.
                                  ____


                                 S. 924

       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 ``Integrated 
     Deepwater Program Reform Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Procurement structure.
Sec. 3. Analysis of alternatives.
Sec. 4. Certification.
Sec. 5. Contract requirements.
Sec. 6. Improvements in Coast Guard management.
Sec. 7. Procurement and report requirements.
Sec. 8. GAO review and recommendations.
Sec. 9. Definitions.

     SEC. 2. PROCUREMENT STRUCTURE.

       (a) In General.--
       (1) Use of lead systems integrator.--Except as provided in 
     subsection (b), the United States Coast Guard may not use a 
     private sector entity as a lead systems integrator for 
     procurements under, or in support of, the Integrated 
     Deepwater Program after the date of enactment of this Act.
       (2) Full and open competition.--The United States Coast 
     Guard shall utilize full and open competition for any other 
     procurement for which an outside contractor is used under, or 
     in support of, the Integrated Deepwater Program after the 
     date of enactment of this Act.
       (b) Exceptions.--
       (1) Completion of procurement by lead systems integrator.--
     Notwithstanding subsection (a), the Coast Guard may use a 
     private sector entity as a lead systems integrator--
       (A) to complete, without modification, any delivery order 
     or task order that was issued to the lead systems integrator 
     on or before the date of enactment of this Act;
       (B) for procurements of--
       (i) the HC-130J and the C41SR, and
       (ii) National Security Cutters or Maritime Patrol Aircraft 
     under contract or order for construction as of the date of 
     enactment of this Act,
     if the requirements of subsection (c) are met with respect to 
     such procurements; and
       (C) for the procurement of additional National Security 
     Cutters or Maritime Patrol Aircraft if the Commandant 
     determines, after conducting the analysis of alternatives 
     required by section 3, that--
       (i) the justifications of FAR 6.3 are met;
       (ii) the procurement and the use of a private sector entity 
     as a lead systems integrator for the procurement is in the 
     best interest of the Federal government; and
       (iii) the requirements of subsection (c) are met with 
     respect to such procurement.
       (2) Report on decision-making process.--If the Coast Guard 
     determines under paragraph (1) that it will use a private 
     sector lead systems integrator for a procurement, the 
     Commandant shall transmit a report to the Senate Committee on 
     Commerce, Science, and Transportation and the House of 
     Representatives Committee on Transportation and 
     Infrastructure notifying the Committees of its determination 
     and explaining the rationale for the determination.
       (c) Limitation on Lead Systems Integrators.--Neither an 
     entity performing lead systems integrator functions for a 
     procurement under, or in support of, the Integrated Deepwater 
     Program, nor a Tier 1 subcontractor, for any procurement 
     described in subparagraph (B) or (C) of subsection (b)(1) may 
     have a financial interest below the tier 1 subcontractor 
     level unless--
       (1) the entity was selected by the Coast Guard through full 
     and open competition for such procurement;
       (2) the procurement was awarded by the lead systems 
     integrator or a subcontractor through full and open 
     competition; or
       (3) the procurement was awarded by a subcontractor through 
     a process over which the lead systems integrator or a Tier 1 
     subcontractor exercised no control.

     SEC. 3. ANALYSIS OF ALTERNATIVES.

       (a) In General.--Except with respect to a procurement 
     described in subparagraph (A) or (B) of section 2(b)(1) of 
     this Act, no procurement may be awarded under the Integrated 
     Deepwater Program until an analysis of alternatives has been 
     conducted under this section.
       (b) Independent Analysis.--Within 30 days after the date of 
     enactment of this Act, the Commandant shall execute a 
     contract for an analysis of alternatives with a Federally 
     Funded Research and Development Center, an appropriate entity 
     of the Department of Defense, or a similar independent third 
     party entity that has appropriate acquisition expertise for 
     independent analysis of all of the proposed procurements 
     under, or in support of, the Integrated Deepwater Program, 
     including procurements described in section 2(b)(1)(B), and 
     for any future major changes of such procurements. The 
     Commandant may not contract under this subsection for such an 
     analysis with any entity that has a substantial financial 
     interest in any part of the Integrated Deepwater Program as 
     of the date of enactment of this Act or in any alternative 
     being considered.
       (c) Analysis.--The analysis of alternatives provided 
     pursuant to the contract under subsection (b) shall include--
       (1) a discussion of capability, interoperability, and other 
     advantages and disadvantages of the proposed procurements;
       (2) an examination of feasible alternatives;
       (3) a discussion of key assumptions and variables, and 
     sensitivity to changes in such assumptions and variables;
       (4) an assessment of technology risk and maturity; and
       (5) a calculation of costs, including life-cycle costs.
       (d) Report to Congress.--As soon as possible after an 
     analysis of alternatives has been completed, the Commandant 
     shall develop a plan for the procurements addressed in the 
     analysis and shall transmit a report describing the plan to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House of Representatives Committee on Transportation 
     and Infrastructure.

     SEC. 4. CERTIFICATION.

       (a) In General.--A contract, delivery order, or task order 
     for procurement under, or in support of, the Coast Guard's 
     Integrated Deepwater Program may not be executed by the Coast 
     Guard until the Commandant certifies that--
       (1) appropriate market research has been conducted prior to 
     technology development to reduce duplication of existing 
     technology and products;
       (2) the technology has been demonstrated in a relevant 
     environment;
       (3) the technology demonstrates a high likelihood of 
     accomplishing its intended mission;
       (4) the technology is affordable when considering the per 
     unit cost and the total procurement cost in the context of 
     the total resources available during the period covered by 
     the Integrated Deepwater Program;
       (5) the technology is affordable when considering the 
     ability of the Coast Guard to accomplish its missions using 
     alternatives, based on demonstrated technology, design, and 
     knowledge;
       (6) reasonable cost and schedule estimates have been 
     developed to execute the product development and production 
     plan for the technology;
       (7) funding is available to execute the product development 
     and production plan for the technology; and
       (8) the technology complies with all relevant policies, 
     regulations, and directives of the Coast Guard.
       (b) Report to Congress.--The Commandant shall transmit a 
     copy of each certification required under subsection (a) to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House of Representatives Committee on Transportation 
     and Infrastructure within 30 days after the completion of the 
     certification.

     SEC. 5. CONTRACT REQUIREMENTS.

       The Commandant shall ensure that any contract, delivery 
     order, or task order for procurement under, or in support of, 
     the Integrated Deepwater Program executed by the Coast 
     Guard--
       (1) incorporates provisions that address the 
     recommendations related to award fee determination and award 
     term evaluation made by the Government Accountability Office 
     in its March, 2004, report entitled Coast Guard's Deepwater 
     Program Needs Increased Attention to Management and 
     Contractor Oversight, GAO-04-380, and any subsequent 
     Government Accountability Office recommendations relevant to 
     the contract terms issued before the date of enactment of 
     this Act, including that any award or incentive fee is tied 
     to program outcomes;
       (2) provides that certification of any Integrated Deepwater 
     Program procurement for performance, safety, and any other 
     relevant factor will be conducted by an independent third 
     party;
       (3) does not include--
       (A) for any contract extending the existing Integrated 
     Deepwater Program contract

[[Page S3359]]

     term, minimum requirements for the purchase of a given or 
     determinable number of specific assets;
       (B) provisions that commit the Coast Guard without express 
     written approval by the Coast Guard;
       (C) any provision allowing for equitable adjustment that 
     differs from the Federal Acquisition Regulations; and
       (4) for any contract extending the existing Integrated 
     Deepwater Program contract term, is reviewed by, and 
     addresses recommendations made by, the Under Secretary of 
     Defense for Acquisition, Technology, and Logistics through 
     the Defense Acquisition University.

     SEC. 6. IMPROVEMENTS IN COAST GUARD MANAGEMENT.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Commandant shall take action to 
     ensure that--
       (1) the measures contained in the Coast Guard's report 
     entitled Coast Guard: Blue Print for Acquisition Reform are 
     implemented fully;
       (2) any additional measures for improved management 
     recommended by the Defense Acquisition University in its 
     Quick Look Study of the United States Coast Guard Deepwater 
     Program, dated February 5, 2007, are implemented;
       (3) integrated product teams, and all higher-level teams 
     that oversee integrated product teams, are chaired by Coast 
     Guard personnel; and
       (4) the Assistant Commandant for Engineering and Logistics 
     is designated as the Technical Authority for all design, 
     engineering, and technical decisions for the Integrated 
     Deepwater Program.
       (b) Transfer.--
       (1) In general.--Section 93(a) of title 14, United States 
     Code, is amended--
       (A) by striking ``and'' after the semicolon in paragraph 
     (23);
       (B) by striking ``appropriate.'' in paragraph (24) and 
     inserting ``appropriate; and''; and
       (C) by adding at the end thereof the following:
       ``(25) notwithstanding any other provision of law, in any 
     fiscal year transfer funds made available for personnel, 
     compensation, and benefits from the appropriation account 
     `Acquisition, Construction, and Improvement' to the 
     appropriation account `Operating Expenses' for personnel 
     compensation and benefits and related costs necessary to 
     execute new or existing procurements of the Coast Guard.''.
       (2) Notification.--Within 30 days after making a transfer 
     under section 93(a)(25) of title 14, United States Code, the 
     Commandant shall notify the Senate Committee on Commerce, 
     Science, Transportation and Infrastructure, the Senate 
     Committee on Appropriations, the House Committee on 
     Transportation and Infrastructure, and the House Committee on 
     Appropriations.

     SEC. 7. PROCUREMENT AND REPORT REQUIREMENTS.

       (a) Selected Acquisition Reports.--The Commandant shall 
     submit to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure reports on the Integrated 
     Deepwater Program that contain the same type of information 
     with respect to that Program, to the greatest extent 
     practicable, as the Secretary of Defense is required to 
     provide to the Congress under section 2432 of title 10, 
     United States Code, with respect to major defense procurement 
     programs.
       (b) Unit Cost Reports.--Each Coast Guard program manager 
     under the Coast Guard's Integrated Deepwater Program shall 
     provide to the Commandant, or the Commandant's designee, 
     reports on the unit cost of assets acquired or modified that 
     are under the management or control of the Coast Guard 
     program manager on the same basis and containing the same 
     information, to the greatest extent practicable, as is 
     required to be included in the reports a program manager is 
     required to provide to the service procurement executive 
     designated by the Secretary of Defense under section 2433 of 
     title 10, United States Code, with respect to a major defense 
     procurement program.
       (c) Reporting on Cost Overruns and Delays.--Within 30 days 
     after the Commandant becomes aware of a likely cost overrun 
     or scheduled delay, the Commandant shall transmit a report to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House of Representatives Committee on Transportation 
     and Infrastructure that includes--
       (1) a description of the known or anticipated cost overrun;
       (2) a detailed explanation for such overruns;
       (3) a detailed description of the Coast Guard's plans for 
     responding to such overrun and preventing additional 
     overruns; and
       (4) a description of any significant delays in procurement 
     schedules.

     SEC. 8. GAO REVIEW AND RECOMMENDATIONS.

       (a) Award Fee and Award Term Criteria.--The Coast Guard may 
     not execute a new contract, delivery order, or task order, 
     nor agree to extend the term of an existing contract, with a 
     prime contractor for procurement under, or in support of, the 
     Integrated Deepwater Program until the Commandant has 
     consulted with the Comptroller General to ensure that the 
     Government Accountability Office's recommendations, in its 
     March, 2004, report entitled Coast Guard's Deepwater Program 
     Needs Increased Attention to Management and Contractor 
     Oversight, GAO-04-380, and any subsequent Government 
     Accountability Office recommendations issued before the date 
     of enactment of this Act, with respect to award fee and award 
     term criteria have been fully addressed.
       (b) Other Recommendations.--The Commandant shall ensure 
     that all other recommendations in that report, and any 
     subsequent recommendations issued before the date of 
     enactment of this Act, are implemented to the maximum extent 
     practicable by the Coast Guard within 1 year after the date 
     of enactment of this Act. The Commandant shall report to the 
     Senate Committee on Commerce, Science, and Transportation and 
     the House of Representatives Committee on Transportation and 
     Infrastructure on the Coast Guard's progress in implementing 
     such recommendations.
       (c) GAO Reports on Implementation.--Beginning 6 months 
     after the date of enactment of this Act, the Comptroller 
     General shall submit an annual report to the Senate Committee 
     on Commerce, Science, and Transportation and the House of 
     Representatives Committee on Transportation and 
     Infrastructure on the Coast Guard's progress in implementing 
     the Government Accountability Office's recommendations, in 
     its March, 2004, report entitled Coast Guard's Deepwater 
     Program Needs Increased Attention to Management and 
     Contractor Oversight, GAO-04-380, and any subsequent 
     Government Accountability Office recommendations issued 
     before the date of enactment of this Act, in carrying out 
     this Act.

     SEC. 9. DEFINITIONS.

       In this Act:
       (1) Commandant.--The term ``Commandant'' means the 
     Commandant of the United States Coast Guard.
       (2) Integrated deepwater program.--The term ``Integrated 
     Deepwater Program'' means the Integrated Deepwater Systems 
     Program described by the Coast Guard in its Report to 
     Congress on Revised Deepwater Implementation Plan, dated 
     March 25, 2005, including any subsequent modifications, 
     revisions, or restatements of the Program.
       (3) Procurement.--The term ``procurement'' includes 
     development, production, sustainment, modification, 
     conversion, and missionization.

  Ms. SNOWE. Mr. President, today I rise to support introduction of the 
Integrated Deepwater Reform Act.
  Since 1790, the United States Coast Guard has served as the guardian 
of our shores. It began its service to the Nation as a lifesaving 
organization, protecting our mariners from the perils of the sea. Over 
time, its missions have come to encompass additional responsibilities 
including performing drug and migrant interdiction, enforcing fisheries 
regulations, and maintaining our Nation's waterways and aids to 
navigation. Following the tragic events of September 11th, 2001, the 
Coast Guard expanded its role in homeland security operations, becoming 
the agency charged with protecting our Nation from maritime threats.
  Though we have expanded the role of this valiant service, we have not 
upgraded its equipment to the degree necessary to carry out the tasks 
it has been assigned. Current Coast Guard vessels comprise the third 
oldest naval fleet in the world. Some of its cutters still in service 
are over sixty years old. Recognizing the looming obsolescence of its 
legacy fleet, in the mid 1990s the Coast Guard embarked on an effort to 
create a wholly integrated system of ships, aircraft, sensors, and 
communications systems and called the effort Deepwater. Recapitalizing 
the Coast Guard remains one of this Nation's most important National 
Security initiatives.
  However, recent events have made it clear that additional 
Congressional oversight is warranted for this major acquisitions 
program. Failure of the 123-foot patrol boat conversion program, and 
questions about the fatigue life of the hull of the National Security 
Cutter under the purview of Integrated Coast Guard Systems have called 
into question the value of this ``lead systems integrator.'' The 
contract as written has given the contractor too much autonomy and not 
enough focus on actual performance.
  By placing restrictions on the structure of any agreements between 
the Coast Guard and its contractors, this bill will ensure that future 
Deepwater contracts protect the American taxpayer while allowing the 
Coast Guard to acquire the assets necessary to carry out its critical 
responsibilities. We cannot change the simple fact that in order to 
protect our Nation, the Coast Guard must be able to upgrade its 
existing assets. The safety of the brave men and women who serve in the 
Coast Guard, and the security of every American depends on the success 
of this program.

[[Page S3360]]

  I remain convinced that the Integrated Deepwater Program is the 
appropriate vehicle for the Coast Guard's modernization. However, in 
order for the Coast Guard to receive the best assets at the best value 
for the American taxpayer, Congress must ensure that the service and 
the contractors recognizes their joint commitment to both excellence 
and fiscal responsibility. By limiting the use of a lead systems 
integrator, increasing requirements for open competition, requiring 
additional internal Coast Guard management, and increasing reporting 
requirements to Congress, this bill provides that assurance.
  I am proud to add this bill to my record of Coast Guard oversight. I 
also would like to take this opportunity to thank Senator Cantwell for 
all her hard work on this legislation.
                                 ______
                                 
      By Mr. NELSON of Florida (for himself and Mr. Martinez):
  S. 926. A bill to amend the Internal Revenue Code of 1986 to provide 
for the creation of disaster protection funds By property and casualty 
insurance companies for the payment of policyholders' claims arising 
from future catastrophic events; to the Committee on Finance.
                                 ______
                                 
      By Mr. NELSON of Florida (for himself and Mr. Martinez):
  S. 927. A bill to amend the Internal Revenue Code of 1986 to create 
Catastrophe Savings Accounts; to the Committee on Finance.
                                 ______
                                 
      By Mr. NELSON of Florida (for himself and Mr. Martinez):
  S. 928. A bill to establish a program to provide more protection at 
lower cost through a national backstop for State natural catastrophe 
insurance programs to help the United States better prepare for and 
protect its citizens against the ravages of natural catastrophes, to 
encourage and promote mitigation and prevention for, and recovery and 
rebuilding from such catastrophes, to better assist in the financial 
recovery from such catastrophes, and to develop a rigorous process of 
continuous improvement; to the Committee on Banking, Housing, and Urban 
Affairs.
                                 ______
                                 
      By Mr. MARTINEZ (for himself, Mr. Nelson of Florida):
  S. 929. A bill to streamline the regulation of nonadmitted insurance 
and reinsurance, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.
                                 ______
                                 
      By Mr. MARTINEZ (for himself and Mr. Nelson of Florida):
  S. 930. A bill to amend the Internal Revenue Code of 1986 to provide 
a credit against tax for hurricane and tornado mitigation expenditures; 
to the Committee on Finance.
                                 ______
                                 
      By Mr. MARTINEZ (for himself, Mr. Nelson of Florida, Mrs. Dole, 
        and Ms. Landrieu):
  S. 931. bill to establish the National Hurricane Research Initiative 
to improve hurricane preparedness, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.
  Mr. NELSON of Florida. Mr. President, I am pleased to be joined by my 
colleague Senator Mel Martinez as we introduce a package of bills aimed 
at providing a comprehensive solution to strengthen our Nation's 
property and casualty insurance market. Without serious reform, the 
Federal Government will be forced to continue to spend billions of 
dollars of taxpayer money to cover the costs of natural disasters in 
the United States. Worse, without Federal action, property insurance 
soon will become more expensive and hard to find, preventing some 
consumers from insuring their homes and businesses.
  As we know all too well, the last few years have brought a 
devastating cycle of natural catastrophes in the United States. In 2004 
and 2005, we witnessed a series of powerful hurricanes that caused 
unthinkable human tragedy and property loss. Hurricanes Katrina and 
Rita alone caused over $200 billion in total economic losses, including 
insured and uninsured losses.
  In my own home State of Florida, eight catastrophic storms in fifteen 
months caused more than $31 billion in insured damages. Now Florida is 
witnessing skyrocketing insurance rates, insurance companies are 
canceling hundreds of thousands of policies, and Florida's State 
catastrophe fund is depleted.
  In short, the inability of our private markets to fully handle the 
fallout from natural disasters has made our Nation's property and 
casualty insurance marketplace unstable. This market instability 
repeatedly has forced the Federal Government to absorb billions of 
dollars in uninsured losses. This is a waste of taxpayer money, 
especially when we know there are ways to design the system to 
anticipate and plan for the financial impacts of catastrophes.
  As insurance companies struggle to maintain their businesses, costs 
are passed on to homeowners and small businesses in Florida and in 
other States. In essence, the people who can least afford it are being 
forced to bear the disproportionate share of the billions of dollars of 
losses caused by natural catastrophes.
  Many Floridians have seen their insurance bills double in the last 
few years. As I travel around Florida, I hear repeatedly from my 
constituents that they may soon be unable to afford property and 
casualty insurance. That is a frightening proposition for people living 
in a State where increasingly vicious hurricane seasons are predicted. 
I am sure we all agree--consumers never should be put in the untenable 
position of having to choose between purchasing insurance and 
purchasing other necessities.
  While our Nation's property and casualty insurance system is not yet 
broken, it's clear that Congress needs to act now to shore up the 
system. Private sector insurance is currently available to spread some 
catastrophe-related losses throughout the Nation and internationally, 
but most experts believe that there will be significant insurance and 
reinsurance shortages. These shortages could result in future dramatic 
rate increases for consumers and businesses and the unavailability of 
catastrophe insurance.
  Let me be clear: these issues will not just affect Florida or the 
coastal States. Natural catastrophes can strike anywhere in the 
country. For example, a major earthquake fault line runs through 
several of our Midwestern States. We also saw firsthand the devastating 
effects of a volcano eruption at Mount Saint Helens in Washington 
State.
  In the past few decades, major disasters have been declared in almost 
every State. As I mentioned earlier, the Federal Government has 
provided and will continue to provide billions of dollars and resources 
to pay for these catastrophic losses, at huge costs to all American 
taxpayers.
  Congress has struggled with these issues for decades. Although we 
have talked about these issues time and time again, nothing much has 
gotten accomplished. The most notable step Congress did take was to 
create a National Flood Insurance Program. But Congress needs to do 
much more. It's time for a comprehensive approach to solving our 
Nation's property and casualty insurance issues.
  These matters are usually within the purview of the States, and I 
cannot understate the importance of State-based solutions to these 
insurance issues. Nonetheless, the Federal Government also has a 
critical interest in ensuring appropriate and fiscally responsible risk 
management of catastrophes.
  For example, mortgages require reliable property insurance, and the 
unavailability of reliable property insurance would make most real 
estate transactions impossible. Moreover, the public health, safety, 
and welfare demand that structures damaged or destroyed in catastrophes 
be reconstructed as soon as possible.
  In order to help protect consumers and small businesses, today I join 
Senator Martinez to introduce this package of bills as part of a 
comprehensive approach to fixing our troubled insurance system. Let me 
summarize each of the bills and tell you how this integrated approach 
makes good policy sense.
  The first piece of legislation Senator Martinez and I are introducing 
today is the Homeowners Protection Act of 2007. This bill is a 
companion bill to legislation introduced by Florida Representatives 
Brown-Waite, Buchanan, and others.

[[Page S3361]]

  This bill would establish a Fund within the U.S. Department of 
Treasury, which would sell Federal catastrophe insurance to State 
catastrophe funds; like the fund I helped to set up in Florida. State 
catastrophe funds essentially act as reinsurance mechanisms for 
insurance companies who lack resources to compensate homeowners for 
their losses.

  Under this bill, State catastrophe funds would be eligible to 
purchase reinsurance from the Federal fund at sound rates. However, a 
State catastrophe fund would be prohibited from gaining access to the 
Federal fund until private insurance companies and the State 
catastrophe fund met their financial obligations.
  Why is this good for homeowners? Because this back-up mechanism will 
improve the solvency and capacity of homeowners' insurance markets, 
which will reduce the chance that consumers will lose their insurance 
coverage or be hit by huge premium increases.
  Importantly, the Homeowners Protection Act of 2007 also recognizes 
that part of the problem with our broken property and casualty 
insurance system lies with outdated building codes and mitigation 
techniques. Noted insurance experts and consumer groups have been 
pointing out this problem for many years. So, under the bill, the 
Secretary of the Treasury would establish an expert commission to 
assist States in developing mitigation, prevention, recovery, and 
rebuilding programs that would reduce the types of enormous damage we 
have seen caused by past hurricanes.
  I note that this bill covers not just hurricanes, but catastrophes 
such as tornados, earthquakes, cyclones, catastrophic winter storms, 
and volcanic eruptions. These are disasters that can--and do--occur in 
many different States. Again, every State and every taxpayer is 
affected by this problem, not just Florida.
  This bill has widespread support from a broad range of stakeholders, 
including ProtectingAmerica.org, a national coalition of first 
responders, businesses, and emergency managers. This organization is 
co-chaired by former FEMA director James Lee Witt, one of the most 
respected names in disaster prevention and preparedness.
  The second bill that Senator Martinez and I are introducing today is 
the Catastrophic Savings Accounts Act of 2007. This bill proposes 
changing the Federal tax code to allow homeowners to put money aside--
on a tax-free basis--to grow over time. If and when a catastrophe hits, 
a homeowner could take the accumulated savings out of the account to 
cover uninsured losses, deductible expenses, and building upgrades to 
mitigate damage that could be caused in future disasters. Homeowners 
could even reduce their insurance premiums because their tax-free 
savings would allow them to choose higher deductibles.
  The benefits of this approach are pretty straightforward and very 
consumer friendly. Homeowners would be encouraged to plan in advance 
for future disasters, and they wouldn't be taxed to do it. Moreover, 
homeowners wouldn't be as dependent on insurance companies to help them 
out immediately after a disaster. As one expert has noted, why should a 
consumer continue to give insurance companies thousands of dollars each 
year when the consumer could deposit the same amount of money annually 
in a tax-free, interest-bearing savings account controlled by the 
consumer?

  The third bill that Senator Martinez and I are introducing today is 
the Policyholder Disaster Protection Act of 2007. Under this bill, 
insurance companies would be permitted to accumulate tax-deferred 
catastrophic reserves, much like the way that homeowners would be 
permitted under the bill I just discussed. Depending on their size, 
insurance companies could save up to a certain capped amount, which 
would grow over time.
  Our current Federal tax code actually provides a disincentive for 
insurance companies to accumulate reserve funds for catastrophes. Under 
the current system, insurance companies can only reserve against losses 
that have already occurred, instead of future losses. The United States 
is the only industrialized nation that actually taxes reserves in this 
way. It's time for reform, so that consumers are better protected.
  Make no mistake, though--this bill is not a give-away to the 
insurance companies. Instead, the Policyholder Disaster Protection Act 
of 2007 would strictly regulate when and how insurance companies could 
access their reserves, to make sure the money is used only for its 
intended purposes.
  If implemented correctly, this bill could result in approximately $15 
billion worth of reserves being saved up by insurance companies, which 
later could be spent to pay for policyholder claims and to keep 
insurance policies available and affordable. Consumers could feel more 
protected knowing that their insurance company would have the money 
saved to help them out after a major disaster. Moreover, this approach 
should help make the insurance market more stable and less prone to 
insurers going bankrupt.
  The fourth bill that Senator Martinez and I are introducing is the 
Hurricane and Tornado Mitigation Investment Act of 2007. A similar bill 
was introduced in the House of Representatives by Gus Bilirakis and has 
eight cosponsors.
  We have learned through experience that steps taken to fortify and 
strengthen homes and businesses can prevent damage in the event of a 
catastrophe. This bill would allow a tax credit of 25 percent not to 
exceed $5,000 for the costs of building upgrades to mitigate damage 
caused by hurricanes or tornados.
  Updates and improvements to roofs, exterior doors and garages would 
be covered under this bill. To ensure that these measures are 
adequately constructed, a state-certified inspector must examine the 
home or business. The benefits of this approach are straightforward--
home and business owners would be encouraged to plan in advance for 
future disasters and take steps to mitigate damage caused by 
catastrophic events.
  The fifth bill that Senator Martinez and I are introducing is the 
Nonadmitted and Reinsurance Reform Act of 2007. Last year, a similar 
bill, introduced by Ginny Brown-Waite passed unanimously in the House 
of Representatives.
  Currently, a small percentage of consumers may be unable to find 
insurance from a licensed insurer, and may be able to purchase 
insurance from non-licensed insurers, called nonadmitted or surplus 
lines insurers. These surplus lines insurers often function as a 
``safety valve'' for the insurance market. Florida has more individuals 
in the surplus lines market than any other State.
  Virtually every sector--insurers, producers, consumers--has voiced 
concern with the inefficient patchwork of different laws and 
regulations that characterize the surplus lines regulatory system. This 
bill aims to streamline regulations in the surplus lines marketplace 
through a mix of national standards with State enforcement and 
uniformity achieved through both incentives and preemption of certain 
State laws. This bill would create a more efficient and streamlined 
regulatory system and promote competition in the nonadmitted 
marketplace.
  The sixth bill that Senator Martinez and I are introducing is the 
National Hurricane Research Initiative Act of 2007. From the storms of 
2004 and 2005 we learned the importance of accurate hurricane tracking 
and prediction. Accurate prediction provides residents of coastal 
communities more time to find safe and sound shelter.
  The objective of this bill is to enhance and improve knowledge of 
hurricanes by harnessing the expertise of the Federal Government's 
science professionals to better understand hurricane prediction, 
intensity, and mitigation on coastal populations and infrastructure.
  Let me emphasize again what we need to accomplish to reform our 
current insurance system and to effectively plan for catastrophic 
losses.
  We need a comprehensive approach that will make sure the United 
States is truly prepared for the financial fallout from natural 
disasters. We need a property and casualty insurance system that is not 
forced to spread valuable taxpayer dollars after a catastrophe strikes. 
We need a system that protects consumers and small businesses from 
losing their insurance policies or being forced to pay exorbitant 
insurance rates. We need ways to encourage responsible construction and 
mitigation techniques. And we need a

[[Page S3362]]

system that helps insurance companies use their resources in cost-
effective ways so that they will not go insolvent after major 
disasters.
  Our American economy depends on a health property and casualty 
insurance system. By enacting meaningful reforms, we can ensure that 
our economy remains protected and remains the most resilient economy in 
the world. I know this complicated process won't be easy for us--but 
let's roll up our shirtsleeves and get it done.
  I request that the text of the Homeowners Protection Act of 2007, the 
Catastrophe Savings Accounts Act and the Policyholder Disaster 
Protection Act of 2007 be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 926

       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 ``Policyholder Disaster 
     Protection Act of 2007''.

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) Rising costs resulting from natural disasters are 
     placing an increasing strain on the ability of property and 
     casualty insurance companies to assure payment of homeowners' 
     claims and other insurance claims arising from major natural 
     disasters now and in the future.
       (2) Present tax laws do not provide adequate incentives to 
     assure that natural disaster insurance is provided or, where 
     such insurance is provided, that funds are available for 
     payment of insurance claims in the event of future 
     catastrophic losses from major natural disasters, as present 
     law requires an insurer wishing to accumulate surplus assets 
     for this purpose to do so entirely from its after-tax 
     retained earnings.
       (3) Revising the tax laws applicable to the property and 
     casualty insurance industry to permit carefully controlled 
     accumulation of pretax dollars in separate reserve funds 
     devoted solely to the payment of claims arising from future 
     major natural disasters will provide incentives for property 
     and casualty insurers to make natural disaster insurance 
     available, will give greater protection to the Nation's 
     homeowners, small businesses, and other insurance consumers, 
     and will help assure the future financial health of the 
     Nation's insurance system as a whole.
       (4) Implementing these changes will reduce the possibility 
     that a significant portion of the private insurance system 
     would fail in the wake of a major natural disaster and that 
     governmental entities would be required to step in to provide 
     relief at taxpayer expense.

     SEC. 3. CREATION OF POLICYHOLDER DISASTER PROTECTION FUNDS; 
                   CONTRIBUTIONS TO AND DISTRIBUTIONS FROM FUNDS; 
                   OTHER RULES.

       (a) Contributions to Policyholder Disaster Protection 
     Funds.--Subsection (c) of section 832 of the Internal Revenue 
     Code of 1986 (relating to the taxable income of insurance 
     companies other than life insurance companies) is amended by 
     striking ``and'' at the end of paragraph (12), by striking 
     the period at the end of paragraph (13) and inserting ``; 
     and'', and by adding at the end the following new paragraph:
       ``(14) the qualified contributions to a policyholder 
     disaster protection fund during the taxable year.''.
       (b) Distributions From Policyholder Disaster Protection 
     Funds.--Paragraph (1) of section 832(b) of such Code is 
     amended by striking ``and'' at the end of subparagraph (D), 
     by striking the period at the end of subparagraph (E) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(F) the amount of any distributions from a policyholder 
     disaster protection fund during the taxable year, except that 
     a distribution made to return to the qualified insurance 
     company any contribution which is not a qualified 
     contribution (as defined in subsection (h)) for a taxable 
     year shall not be included in gross income if such 
     distribution is made prior to the filing of the tax return 
     for such taxable year.''.
       (c) Definitions and Other Rules Relating to Policyholder 
     Disaster Protection Funds.--Section 832 of such Code 
     (relating to insurance company taxable income) is amended by 
     adding at the end the following new subsection:
       ``(h) Definitions and Other Rules Relating to Policyholder 
     Disaster Protection Funds.--For purposes of this section--
       ``(1) Policyholder disaster protection fund.--The term 
     `policyholder disaster protection fund' (hereafter in this 
     subsection referred to as the `fund') means any custodial 
     account, trust, or any other arrangement or account--
       ``(A) which is established to hold assets that are set 
     aside solely for the payment of qualified losses, and
       ``(B) under the terms of which--
       ``(i) the assets in the fund are required to be invested in 
     a manner consistent with the investment requirements 
     applicable to the qualified insurance company under the laws 
     of its jurisdiction of domicile,
       ``(ii) the net income for the taxable year derived from the 
     assets in the fund is required to be distributed no less 
     frequently than annually,
       ``(iii) an excess balance drawdown amount is required to be 
     distributed to the qualified insurance company no later than 
     the close of the taxable year following the taxable year for 
     which such amount is determined,
       ``(iv) a catastrophe drawdown amount may be distributed to 
     the qualified insurance company if distributed prior to the 
     close of the taxable year following the year for which such 
     amount is determined,
       ``(v) a State required drawdown amount may be distributed, 
     and
       ``(vi) no distributions from the fund are required or 
     permitted other than the distributions described in clauses 
     (ii) through (v) and the return to the qualified insurance 
     company of contributions that are not qualified 
     contributions.
       ``(2) Qualified insurance company.--The term `qualified 
     insurance company' means any insurance company subject to tax 
     under section 831(a).
       ``(3) Qualified contribution.--The term `qualified 
     contribution' means a contribution to a fund for a taxable 
     year to the extent that the amount of such contribution, when 
     added to the previous contributions to the fund for such 
     taxable year, does not exceed the excess of--
       ``(A) the fund cap for the taxable year, over
       ``(B) the fund balance determined as of the close of the 
     preceding taxable year.
       ``(4) Excess balance drawdown amounts.--The term `excess 
     balance drawdown amount' means the excess (if any) of--
       ``(A) the fund balance as of the close of the taxable year, 
     over
       ``(B) the fund cap for the following taxable year.
       ``(5) Catastrophe drawdown amount.--
       ``(A) In general.--The term `catastrophe drawdown amount' 
     means an amount that does not exceed the lesser of the amount 
     determined under subparagraph (B) or (C).
       ``(B) Net losses from qualifying events.--The amount 
     determined under this subparagraph shall be equal to the 
     qualified losses for the taxable year determined without 
     regard to clause (ii) of paragraph (8)(A).
       ``(C) Gross losses in excess of threshold.--The amount 
     determined under this subparagraph shall be equal to the 
     excess (if any) of--
       ``(i) the qualified losses for the taxable year, over
       ``(ii) the lesser of--

       ``(I) the fund cap for the taxable year (determined without 
     regard to paragraph (9)(E)), or
       ``(II) 30 percent of the qualified insurance company's 
     surplus as regards policyholders as shown on the company's 
     annual statement for the calendar year preceding the taxable 
     year.

       ``(D) Special drawdown amount following a recent 
     catastrophe loss year.--If for any taxable year included in 
     the reference period the qualified losses exceed the amount 
     determined under subparagraph (C)(ii), the `catastrophe 
     drawdown amount' shall be an amount that does not exceed the 
     lesser of the amount determined under subparagraph (B) or the 
     amount determined under this subparagraph. The amount 
     determined under this subparagraph shall be an amount equal 
     to the excess (if any) of--
       ``(i) the qualified losses for the taxable year, over
       ``(ii) the lesser of--

       ``(I) \1/3\ of the fund cap for the taxable year 
     (determined without regard to paragraph (9)(E)), or
       ``(II) 10 percent of the qualified insurance company's 
     surplus as regards policyholders as shown on the company's 
     annual statement for the calendar year preceding the taxable 
     year.

       ``(E) Reference period.--For purposes of subparagraph (D), 
     the reference period shall be determined under the following 
     table:

The reference period shall be--in--
The 3 preceding taxable years. ........................................
The 2 preceding taxable years. ........................................
The preceding taxable year. ...........................................
No reference period applies............................................
       ``(6) State required drawdown amount.--The term `State 
     required drawdown amount' means any amount that the 
     department of insurance for the qualified insurance company's 
     jurisdiction of domicile requires to be distributed from the 
     fund, to the extent such amount is not otherwise described in 
     paragraph (4) or (5).
       ``(7) Fund balance.--The term `fund balance' means--
       ``(A) the sum of all qualified contributions to the fund,
       ``(B) less any net investment loss of the fund for any 
     taxable year or years, and
       ``(C) less the sum of all distributions under clauses (iii) 
     through (v) of paragraph (1)(B).
       ``(8) Qualified losses.--
       ``(A) In general.--The term `qualified losses' means, with 
     respect to a taxable year--
       ``(i) the amount of losses and loss adjustment expenses 
     incurred in the qualified lines of business specified in 
     paragraph (9), net of reinsurance, as reported in the 
     qualified insurance company's annual statement for the 
     taxable year, that are attributable to one or more qualifying 
     events (regardless of when such qualifying events occurred),
       ``(ii) the amount by which such losses and loss adjustment 
     expenses attributable to

[[Page S3363]]

     such qualifying events have been reduced for reinsurance 
     received and recoverable, plus
       ``(iii) any nonrecoverable assessments, surcharges, or 
     other liabilities that are borne by the qualified insurance 
     company and are attributable to such qualifying events.
       ``(B) Qualifying event.--For purposes of subparagraph (A), 
     the term `qualifying event' means any event that satisfies 
     clauses (i) and (ii).
       ``(i) Event.--An event satisfies this clause if the event 
     is 1 or more of the following:

       ``(I) Windstorm (hurricane, cyclone, or tornado).
       ``(II) Earthquake (including any fire following).
       ``(III) Winter catastrophe (snow, ice, or freezing).
       ``(IV) Fire.
       ``(V) Tsunami.
       ``(VI) Flood.
       ``(VII) Volcanic eruption.
       ``(VIII) Hail.

       ``(ii) Catastrophe designation.--An event satisfies this 
     clause if the event--

       ``(I) is designated a catastrophe by Property Claim 
     Services or its successor organization,
       ``(II) is declared by the President to be an emergency or 
     disaster, or
       ``(III) is declared to be an emergency or disaster in a 
     similar declaration by the chief executive official of a 
     State, possession, or territory of the United States, or the 
     District of Columbia.

       ``(9) Fund cap.--
       ``(A) In general.--The term `fund cap' for a taxable year 
     is the sum of the separate lines of business caps for each of 
     the qualified lines of business specified in the table 
     contained in subparagraph (C) (as modified under 
     subparagraphs (D) and (E)).
       ``(B) Separate lines of business cap.--For purposes of 
     subparagraph (A), the separate lines of business cap, with 
     respect to a qualified line of business specified in the 
     table contained in subparagraph (C), is the product of--
       ``(i) net written premiums reported in the annual statement 
     for the calendar year preceding the taxable year in such line 
     of business, multiplied by
       ``(ii) the fund cap multiplier applicable to such qualified 
     line of business.
       ``(C) Qualified lines of business and their respective fund 
     cap multipliers.--For purposes of this paragraph, the 
     qualified lines of business and fund cap multipliers 
     specified in this subparagraph are those specified in the 
     following table:

    ``Line of Business on Annual                               Fund Cap
        Statement Blank:                                    Multiplier:
      Fire...................................................... 0.25  
      Allied.................................................... 1.25  
      Farmowners Multiple Peril................................. 0.25  
      Homeowners Multiple Peril................................. 0.75  
      Commercial Multi Peril (non-liability portion)............ 0.50  
      Earthquake................................................13.00  
      Inland Marine.............................................. 0.25.
       ``(D) Subsequent modifications of the annual statement 
     blank.--If, with respect to any taxable year beginning after 
     the effective date of this subsection, the annual statement 
     blank required to be filed is amended to replace, combine, or 
     otherwise modify any of the qualified lines of business 
     specified in subparagraph (C), then for such taxable year 
     subparagraph (C) shall be applied in a manner such that the 
     fund cap shall be the same amount as if such reporting 
     modification had not been made.
       ``(E) 20-year phase-in.--Notwithstanding subparagraph (C), 
     the fund cap for a taxable year shall be the amount 
     determined under subparagraph (C), as adjusted pursuant to 
     subparagraph (D) (if applicable), multiplied by the phase-in 
     percentage indicated in the following table:


------------------------------------------------------------------------
                                                            Phase-in
                                                        percentage to be
                                                        applied to fund
              Taxable year beginning in:                  cap computed
                                                             under
                                                       subparagraphs (A)
                                                            and (B):
------------------------------------------------------------------------
2007.................................................          5 percent
2008.................................................         10 percent
2009.................................................         15 percent
2010.................................................         20 percent
2011.................................................         25 percent
2012.................................................         30 percent
2013.................................................         35 percent
2014.................................................         40 percent
2015.................................................         45 percent
2016.................................................         50 percent
2017.................................................         55 percent
2018.................................................         60 percent
2019.................................................         65 percent
2020.................................................         70 percent
2021.................................................         75 percent
2022.................................................         80 percent
2023.................................................         85 percent
2024.................................................         90 percent
2025.................................................         95 percent
2026 and later.......................................        100 percent
------------------------------------------------------------------------

       ``(10) Treatment of investment income and gain or loss.--
       ``(A) Contributions in kind.--A transfer of property other 
     than money to a fund shall be treated as a sale or exchange 
     of such property for an amount equal to its fair market value 
     as of the date of transfer, and appropriate adjustment shall 
     be made to the basis of such property. Section 267 shall 
     apply to any loss realized upon such a transfer.
       ``(B) Distributions in kind.--A transfer of property other 
     than money by a fund to the qualified insurance company shall 
     not be treated as a sale or exchange or other disposition of 
     such property. The basis of such property immediately after 
     such transfer shall be the greater of the basis of such 
     property immediately before such transfer or the fair market 
     value of such property on the date of such transfer.
       ``(C) Income with respect to fund assets.--Items of income 
     of the type described in paragraphs (1)(B), (1)(C), and (2) 
     of subsection (b) that are derived from the assets held in a 
     fund, as well as losses from the sale or other disposition of 
     such assets, shall be considered items of income, gain, or 
     loss of the qualified insurance company. Notwithstanding 
     paragraph (1)(F) of subsection (b), distributions of net 
     income to the qualified insurance company pursuant to 
     paragraph (1)(B)(ii) of this subsection shall not cause such 
     income to be taken into account a second time.
       ``(11) Net income; net investment loss.--For purposes of 
     paragraph (1)(B)(ii), the net income derived from the assets 
     in the fund for the taxable year shall be the items of income 
     and gain for the taxable year, less the items of loss for the 
     taxable year, derived from such assets, as described in 
     paragraph (10)(C). For purposes of paragraph (7), there is a 
     net investment loss for the taxable year to the extent that 
     the items of loss described in the preceding sentence exceed 
     the items of income and gain described in the preceding 
     sentence.
       ``(12) Annual statement.--For purposes of this subsection, 
     the term `annual statement' shall have the meaning set forth 
     in section 846(f)(3).
       ``(13) Exclusion of premiums and losses on certain puerto 
     rican risks.--Notwithstanding any other provision of this 
     subsection, premiums and losses with respect to risks covered 
     by a catastrophe reserve established under the laws or 
     regulations of the Commonwealth of Puerto Rico shall not be 
     taken into account under this subsection in determining the 
     amount of the fund cap or the amount of qualified losses.
       ``(14) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this subsection, including regulations--
       ``(A) which govern the application of this subsection to a 
     qualified insurance company having a taxable year other than 
     the calendar year or a taxable year less than 12 months,
       ``(B) which govern a fund maintained by a qualified 
     insurance company that ceases to be subject to this part, and
       ``(C) which govern the application of paragraph (9)(D).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.
                                  ____


                                 S. 927

       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 ``Catastrophe Savings Accounts 
     Act of 2007''.

     SEC. 2. CATASTROPHE SAVINGS ACCOUNTS.

       (a) In General.--Subchapter F of Chapter 1 of the Internal 
     Revenue Code of 1986 (relating to exempt organizations) is 
     amended by adding at the end the following new part:

                ``PART IX--CATASTROPHE SAVINGS ACCOUNTS

     ``SEC. 530A. CATASTROPHE SAVINGS ACCOUNTS.

       ``(a) General Rule.--A Catastrophe Savings Account shall be 
     exempt from taxation under this subtitle. Notwithstanding the 
     preceding sentence, such account shall be subject to the 
     taxes imposed by section 511 (relating to imposition of tax 
     on unrelated business income of charitable organizations).
       ``(b) Catastrophe Savings Account.--For purposes of this 
     section, the term `Catastrophe Savings Account' means a trust 
     created or organized in the United States for the exclusive 
     benefit of an individual or his beneficiaries and which is 
     designated (in such manner as the Secretary shall prescribe) 
     at the time of the establishment of the trust as a 
     Catastrophe Savings Account, but only if the written 
     governing instrument creating the trust meets the following 
     requirements:
       ``(1) Except in the case of a qualified rollover 
     contribution--
       ``(A) no contribution will be accepted unless it is in 
     cash, and
       ``(B) contributions will not be accepted in excess of the 
     account balance limit specified in subsection (c).
       ``(2) The trustee is a bank (as defined in section 408(n)) 
     or another person who demonstrates to the satisfaction of the 
     Secretary that the manner in which that person will 
     administer the trust will be consistent with the requirements 
     of this section.
       ``(3) The interest of an individual in the balance of his 
     account is nonforfeitable.
       ``(4) The assets of the trust shall not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       ``(c) Account Balance Limit.--The aggregate account balance 
     for all Catastrophe Savings Accounts maintained for the 
     benefit of an individual (including qualified rollover 
     contributions) shall not exceed--
       ``(1) in the case of an individual whose qualified 
     deductible is not more than $1,000, $2,000, and

[[Page S3364]]

       ``(2) in the case of an individual whose qualified 
     deductible is more than $1,000, the amount equal to the 
     lesser of--
       ``(A) $15,000, or
       ``(B) twice the amount of the individual's qualified 
     deductible.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified catastrophe expenses.--The term `qualified 
     catastrophe expenses' means expenses paid or incurred by 
     reason of a major disaster that has been declared by the 
     President under section 401 of the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act.
       ``(2) Qualified deductible.--With respect to an individual, 
     the term `qualified deductible' means the annual deductible 
     for the individual's homeowners' insurance policy.
       ``(3) Qualified rollover contribution.--The term `qualified 
     rollover contribution' means a contribution to a Catastrophe 
     Savings Account--
       ``(A) from another such account of the same beneficiary, 
     but only if such amount is contributed not later than the 
     60th day after the distribution from such other account, and
       ``(B) from a Catastrophe Savings Account of a spouse of the 
     beneficiary of the account to which the contribution is made, 
     but only if such amount is contributed not later than the 
     60th day after the distribution from such other account.
       ``(e) Tax Treatment of Distributions.--
       ``(1) In general.--Any distribution from a Catastrophe 
     Savings Account shall be includible in the gross income of 
     the distributee in the manner as provided in section 72.
       ``(2) Distributions for qualified catastrophe expenses.--
       ``(A) In general.--No amount shall be includible in gross 
     income under paragraph (1) if the qualified catastrophe 
     expenses of the distributee during the taxable year are not 
     less than the aggregate distributions during the taxable 
     year.
       ``(B) Distributions in excess of expenses.--If such 
     aggregate distributions exceed such expenses during the 
     taxable year, the amount otherwise includible in gross income 
     under paragraph (1) shall be reduced by the amount which 
     bears the same ratio to the amount which would be includible 
     in gross income under paragraph (1) (without regard to this 
     subparagraph) as the qualified catastrophe expenses bear to 
     such aggregate distributions.
       ``(3) Additional tax for distributions not used for 
     qualified catastrophe expenses.--The tax imposed by this 
     chapter for any taxable year on any taxpayer who receives a 
     payment or distribution from a Catastrophe Savings Account 
     which is includible in gross income shall be increased by 10 
     percent of the amount which is so includible.
       ``(4) Retirement distributions.--No amount shall be 
     includible in gross income under paragraph (1) (or subject to 
     an additional tax under paragraph (3)) if the payment or 
     distribution is made on or after the date on which the 
     distributee attains age 62.
       ``(f) Tax Treatment of Accounts.--Rules similar to the 
     rules of paragraphs (2) and (4) of section 408(e) shall apply 
     to any Catastrophe Savings Account.''.
       (b) Tax on Excess Contributions.--
       (1) In general.--Subsection (a) of section 4973 of the 
     Internal Revenue Code of 1986 (relating to tax on excess 
     contributions to certain tax-favored accounts and annuities) 
     is amended by striking ``or'' at the end of paragraph (4), by 
     inserting ``or'' at the end of paragraph (5), and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) a Catastrophe Savings Account (as defined in section 
     530A),''.
       (2) Excess contribution.--Section 4973 of such Code is 
     amended by adding at the end the following new subsection:
       ``(h) Excess Contributions to Catastrophe Savings 
     Accounts.--For purposes of this section, in the case of 
     Catastrophe Savings Accounts (within the meaning of section 
     530A), the term `excess contributions' means the amount by 
     which the aggregate account balance for all Catastrophe 
     Savings Accounts maintained for the benefit of an individual 
     exceeds the account balance limit defined in section 
     530A(c)(1).''.
       (c) Conforming Amendment.--The table of parts for 
     subchapter F of chapter 1 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new item:

               ``Part IX. Catastrophe Savings Accounts''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.
                                  ____


                                 S. 928

       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 ``Homeowners 
     Protection Act of 2007''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Congressional findings.
Sec. 3. National Commission on Catastrophe Preparation and Protection.
Sec. 4. Program authority.
Sec. 5. Qualified lines of coverage.
Sec. 6. Covered perils.
Sec. 7. Contracts for reinsurance coverage for eligible State programs.
Sec. 8. Minimum level of retained losses and maximum Federal liability.
Sec. 9. Consumer Hurricane, Earthquake, Loss Protection (HELP) Fund.
Sec. 10. Regulations.
Sec. 11. Termination.
Sec. 12. Annual study concerning benefits of the Act.
Sec. 13. GAO study of the National Flood Insurance Program and 
              hurricane-related flooding.
Sec. 14. Definitions.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) America needs to take steps to be better prepared for 
     and better protected from catastrophes;
       (2) the hurricane seasons of 2004 and 2005 are startling 
     reminders of both the human and economic devastation that 
     hurricanes, flooding, and other natural disasters can cause;
       (3) if a repeat of the deadly 1900 Galveston hurricane 
     occurred again it could cause thousands of deaths and over 
     $36,000,000,000 in loss;
       (4) if the 1906 San Francisco earthquake occurred again it 
     could cause thousands of deaths, displace millions of 
     residents, destroy thousands of businesses, and cause over 
     $400,000,000,000 in loss;
       (5) if a Category 5 hurricane were to hit Miami it could 
     cause thousands of deaths and over $50,000,000,000 in loss 
     and devastate the local and national economy;
       (6) if a repeat of the 1938 ``Long Island Express'' were to 
     occur again it could cause thousands of deaths and over 
     $30,000,000,000 in damage, and if a hurricane that strong 
     were to directly hit Manhattan it could cause over 
     $150,000,000,000 in damage and cause irreparable harm to our 
     Nation's economy;
       (7) a more comprehensive and integrated approach to dealing 
     with catastrophes is needed;
       (8) using history as a guide, natural catastrophes will 
     inevitably place a tremendous strain on homeowners' insurance 
     markets in many areas, will raise costs for consumers, and 
     will jeopardize the ability of many consumers to adequately 
     insure their homes and possessions;
       (9) the lack of sufficient insurance capacity and the 
     inability of private insurers to build enough capital, in a 
     short amount of time, threatens to increase the number of 
     uninsured homeowners, which, in turn, increases the risk of 
     mortgage defaults and the strain on the Nation's banking 
     system;
       (10) some States have exercised leadership through 
     reasonable action to ensure the continued availability and 
     affordability of homeowners' insurance for all residents;
       (11) it is appropriate that efforts to improve insurance 
     availability be designed and implemented at the State level;
       (12) while State insurance programs may be adequate to 
     cover losses from most natural disasters, a small percentage 
     of events is likely to exceed the financial capacity of these 
     programs and the local insurance markets;
       (13) a limited national insurance backstop will improve the 
     effectiveness of State insurance programs and private 
     insurance markets and will increase the likelihood that 
     homeowners' insurance claims will be fully paid in the event 
     of a large natural catastrophe and that routine claims that 
     occur after a mega-catastrophe will also continue to be paid;
       (14) it is necessary to provide a national insurance 
     backstop program that will provide more protection at an 
     overall lower cost and that will promote stability in the 
     homeowners' insurance market;
       (15) it is the proper role of the Federal Government to 
     prepare for and protect its citizens from catastrophes and to 
     facilitate consumer protection, victim assistance, and 
     recovery, including financial recovery; and
       (16) any Federal reinsurance program must be founded upon 
     sound actuarial principles and priced in a manner that 
     encourages the creation of State funds and maximizes the 
     buying potential of these State funds and encourages and 
     promotes prevention and mitigation, recovery and rebuilding, 
     and consumer education, and emphasizes continuous analysis 
     and improvement.

     SEC. 3. NATIONAL COMMISSION ON CATASTROPHE PREPARATION AND 
                   PROTECTION.

       (a) Establishment.--The Secretary of the Treasury shall 
     establish a commission to be known as the National Commission 
     on Catastrophe Preparation and Protection.
       (b) Duties.--The Commission shall meet for the purpose of 
     advising the Secretary regarding the estimated loss costs 
     associated with the contracts for reinsurance coverage 
     available under this Act and carrying out the functions 
     specified in this Act, including--
       (1) the development and implementation of public education 
     concerning the risks posed by natural catastrophes;
       (2) the development and implementation of prevention, 
     mitigation, recovery, and rebuilding standards that better 
     prepare and protect the United States from catastrophes; and
       (3) conducting continuous analysis of the effectiveness of 
     this Act and recommending improvements to the Congress so 
     that--
       (A) the costs of providing catastrophe protection are 
     decreased; and
       (B) the United States is better prepared.
       (c) Members.--
       (1) Appointment and qualification.--The Commission shall 
     consist of 9 members, as follows:

[[Page S3365]]

       (A) Homeland security member.--The Secretary of Homeland 
     Security or the Secretary's designee.
       (B) Appointed members.--8 members appointed by the 
     Secretary, who shall consist of--
       (i) 1 individual who is an actuary;
       (ii) 1 individual who is employed in engineering;
       (iii) 1 individual representing the scientific community;
       (iv) 1 individual representing property and casualty 
     insurers;
       (v) 1 individual representing reinsurers;
       (vi) 1 individual who is a member or former member of the 
     National Association of Insurance Commissioners; and
       (vii) 2 individuals who are consumers.
       (2) Prevention of conflicts of interest.--Members shall 
     have no personal or financial interest at stake in the 
     deliberations of the Commission.
       (d) Treatment of Non-Federal Members.--Each member of the 
     Commission who is not otherwise employed by the Federal 
     Government shall be considered a special Government employee 
     for purposes of sections 202 and 208 of title 18, United 
     States Code.
       (e) Experts and Consultants.--
       (1) In general.--The Commission may procure temporary and 
     intermittent services from individuals or groups recognized 
     as experts in the fields of meteorology, seismology, 
     vulcanlogy, geology, structural engineering, wind 
     engineering, and hydrology, and other fields, under section 
     3109(b) of title 5, United States Code, but at a rate not in 
     excess of the daily equivalent of the annual rate of basic 
     pay payable for level V of the Executive Schedule, for each 
     day during which the individual procured is performing such 
     services for the Commission.
       (2) Other experts.--The Commission may also procure, and 
     the Congress encourages the Commission to procure, experts 
     from universities, research centers, foundations, and other 
     appropriate organizations who could study, research, and 
     develop methods and mechanisms that could be utilized to 
     strengthen structures to better withstand the perils covered 
     by this Act.
       (f) Compensation.--
       (1) In general.--Each member of the Commission who is not 
     an officer or employee of the Federal Government shall be 
     compensated at a rate of basic pay payable for level V of the 
     Executive Schedule, for each day (including travel time) 
     during which such member is engaged in the performance of the 
     duties of the Commission.
       (2) Federal employees.--All members of the Commission who 
     are officers or employees of the United States shall serve 
     without compensation in addition to that received for their 
     services as officers or employees of the United States.
       (g) Obtaining Data.--
       (1) In general.--The Commission and the Secretary may 
     solicit loss exposure data and such other information as 
     either the Commission or the Secretary deems necessary to 
     carry out its responsibilities from governmental agencies and 
     bodies and organizations that act as statistical agents for 
     the insurance industry.
       (2) Obligation to keep confidential.--The Commission and 
     the Secretary shall take such actions as are necessary to 
     ensure that information that either deems confidential or 
     proprietary is disclosed only to authorized individuals 
     working for the Commission or the Secretary.
       (3) Failure to comply.--No State insurance or reinsurance 
     program may participate if any governmental agency within 
     that State has refused to provide information requested by 
     the Commission or the Secretary.
       (h) Funding.--
       (1) Authorization of appropriations.--There is authorized 
     to be appropriated--
       (A) $10,000,000 for fiscal year 2008 for the--
       (i) initial expenses in establishing the Commission; and
       (ii) initial activities of the Commission that cannot 
     timely be covered by amounts obtained pursuant to section 
     7(b)(6)(B)(iii), as determined by the Secretary;
       (B) such additional sums as may be necessary to carry out 
     subsequent activities of the Commission;
       (C) $10,000,000 for fiscal year 2008 for the initial 
     expenses of the Secretary in carrying out the program 
     authorized under section 4; and
       (D) such additional sums as may be necessary to carry out 
     subsequent activities of the Secretary under this Act.
       (2) Offset.--
       (A) Obtained from purchasers.--The Secretary shall provide, 
     to the maximum extent practicable, that an amount equal to 
     any amount appropriated under paragraph (1) is obtained from 
     purchasers of reinsurance coverage under this Act and 
     deposited in the Fund established under section 9.
       (B) Inclusion in pricing contracts.--Any offset obtained 
     under subparagraph (A) shall be obtained by inclusion of a 
     provision for the Secretary's and the Commission's expenses 
     incorporated into the pricing of the contracts for such 
     reinsurance coverage, pursuant to section 7(b)(6)(B)(iii).
       (i) Termination.--The Commission shall terminate upon the 
     effective date of the repeal under section 11(c).

     SEC. 4. PROGRAM AUTHORITY.

       (a) In General.--The Secretary, in consultation with the 
     Secretary of Homeland Security, shall carry out a program 
     under this Act to make homeowners protection coverage 
     available through contracts for reinsurance coverage under 
     section 7, which shall be made available for purchase only by 
     eligible State programs.
       (b) Purpose.--The program shall be designed to make 
     reinsurance coverage under this Act available--
       (1) to improve the availability and affordability of 
     homeowners' insurance for the purpose of facilitating the 
     pooling, and spreading the risk, of catastrophic financial 
     losses from natural catastrophes;
       (2) to improve the solvency and capacity of homeowners' 
     insurance markets;
       (3) to encourage the development and implementation of 
     mitigation, prevention, recovery, and rebuilding standards; 
     and
       (4) to recommend methods to continuously improve the way 
     the United States reacts and responds to catastrophes, 
     including improvements to the HELP Fund established under 
     section 9.
       (c) Contract Principles.--Under the program established 
     under this Act, the Secretary shall offer reinsurance 
     coverage through contracts with covered purchasers, which 
     contracts shall--
       (1) minimize the administrative costs of the Federal 
     Government; and
       (2) provide coverage based solely on insured losses within 
     a State for the eligible State program purchasing the 
     contract.

     SEC. 5. QUALIFIED LINES OF COVERAGE.

       Each contract for reinsurance coverage made available under 
     this Act shall provide insurance coverage against residential 
     property losses to--
       (1) homes (including dwellings owned under condominium and 
     cooperative ownership arrangements); and
       (2) the contents of apartment buildings.

     SEC. 6. COVERED PERILS.

       (a) In General.--Each contract for reinsurance coverage 
     made available under this Act shall cover losses insured or 
     reinsured by an eligible State program purchasing the 
     contract that are proximately caused by--
       (1) earthquakes;
       (2) perils ensuing from earthquakes, including fire and 
     tsunamis;
       (3) tropical cyclones having maximum sustained winds of at 
     least 74 miles per hour, including hurricanes and typhoons;
       (4) tornadoes;
       (5) volcanic eruptions;
       (6) catastrophic winter storms; and
       (7) any other natural catastrophe peril (not including any 
     flood) insured or reinsured under the eligible State program 
     for which reinsurance coverage under section 7 is provided.
       (b) Rulemaking.--The Secretary shall, by regulation, define 
     the natural catastrophe perils described in subsection 
     (a)(7).

     SEC. 7. CONTRACTS FOR REINSURANCE COVERAGE FOR ELIGIBLE STATE 
                   PROGRAMS.

       (a) Eligible State Programs.--A program shall be eligible 
     to purchase a contract under this section for reinsurance 
     coverage under this Act only if the State entity authorized 
     to make such determinations certifies to the Secretary that 
     the program complies with the following requirements:
       (1) Program design.--The program shall be a State-
     operated--
       (A) insurance program that--
       (i) offers coverage for--

       (I) homes (which may include dwellings owned under 
     condominium and cooperative ownership arrangements); and
       (II) the contents of apartments to State residents; and

       (ii) is authorized by State law; or
       (B) reinsurance program that is designed to improve private 
     insurance markets that offer coverage for--
       (i) homes (which may include dwellings owned under 
     condominium and cooperative ownership arrangements); and
       (ii) the contents of apartments.
       (2) Operation.--
       (A) In general.--The program shall meet the following 
     requirements:
       (i) A majority of the members of the governing body of the 
     program shall be public officials.
       (ii) The State shall have a financial interest in the 
     program, which shall not include a program authorized by 
     State law or regulation that requires insurers to pool 
     resources to provide property insurance coverage for covered 
     perils.
       (iii) The State shall not be eligible for Consumer HELP 
     Fund assistance under section 9 if a State has appropriated 
     money from the State fund and not paid it back to the State 
     fund, with interest.
       (iv) Upon receipt of assistance from the Consumer HELP 
     Fund, each reimbursement contract sold by a State shall 
     provide for reimbursements at 100 percent of eligible losses.
       (v) A State shall be required to utilize either--

       (I) an open rating system that permits insurers to set 
     homeowners' insurance rates without prior approval of the 
     State; or
       (II) a rate approval process that requires actuarially 
     sound, risk-based, self-sufficient homeowners' insurance 
     rates.

       (B) Certification.--A State shall not be eligible for 
     Consumer HELP Fund assistance unless the Secretary can 
     certify that such State is in compliance with the requirement 
     described in clause (v).
       (3) Tax status.--The program shall be structured and 
     carried out in a manner so that the program is exempt from 
     all Federal taxation.
       (4) Coverage.--The program shall cover perils enumerated in 
     section 6.

[[Page S3366]]

       (5) Earnings.--The program may not provide for, nor shall 
     have ever made, any redistribution of any part of any net 
     profits of the program to any insurer that participates in 
     the program.
       (6) Prevention and mitigation.--
       (A) In general.--The program shall include prevention and 
     mitigation provisions that require that not less $10,000,000 
     and not more than 35 percent of the net investment income of 
     the State insurance or reinsurance program be used for 
     programs to mitigate losses from natural catastrophes for 
     which the State insurance or reinsurance program was 
     established.
       (B) Rule of construction.--For purposes of this paragraph, 
     prevention and mitigation shall include methods to reduce 
     losses of life and property, including appropriate measures 
     to adequately reflect--
       (i) encouragement of awareness about the risk factors and 
     what can be done to eliminate or reduce them;
       (ii) location of the risk, by giving careful consideration 
     of the natural risks for the location of the property before 
     allowing building and considerations if structures are 
     allowed; and
       (iii) construction relative to the risk and hazards, which 
     act upon--

       (I) State mandated building codes appropriate for the risk;
       (II) adequate enforcement of the risk-appropriate building 
     codes;
       (III) building materials that prevent or significantly 
     lessen potential damage from the natural catastrophes;
       (IV) building methods that prevent or significantly lessen 
     potential damage from the natural catastrophes; and
       (V) a focus on prevention and mitigation for any 
     substantially damaged structure, with an emphasis on how 
     structures can be retrofitted so as to make them building 
     code compliant.

       (7) Requirements regarding coverage.--
       (A) In general.--The program--
       (i) may not, except for charges or assessments related to 
     post-event financing or bonding, involve cross-subsidization 
     between any separate property and casualty lines covered 
     under the program unless the elimination of such activity in 
     an existing program would negatively impact the eligibility 
     of the program to purchase a contract for reinsurance 
     coverage under this Act pursuant to paragraph (3);
       (ii) shall include provisions that authorize the State 
     insurance commissioner or other State entity authorized to 
     make such a determination to terminate the program if the 
     insurance commissioner or other such entity determines that 
     the program is no longer necessary to ensure the availability 
     of homeowners' insurance for all residents of the State; and
       (iii) shall provide that, for any insurance coverage for 
     homes (which may include dwellings owned under condominium 
     and cooperative ownership arrangements) and the contents of 
     apartments that is made available under the State insurance 
     program and for any reinsurance coverage for such insurance 
     coverage made available under the State reinsurance program, 
     the premium rates charged shall be amounts that, at a 
     minimum, are sufficient to cover the full actuarial costs of 
     such coverage, based on consideration of the risks involved 
     and accepted actuarial and rate making principles, 
     anticipated administrative expenses, and loss and loss-
     adjustment expenses.
       (B) Applicability.--This paragraph shall apply--
       (i) before the expiration of the 2-year period beginning on 
     the date of the enactment of this Act, only to State programs 
     which, after January 1, 2008, commence offering insurance or 
     reinsurance coverage described in subparagraph (A) or (B), 
     respectively, of paragraph (1); and
       (ii) after the expiration of such period, to all State 
     programs.
       (8) Other qualifications.--
       (A) Regulations.--
       (i) Compliance.--The State program shall (for the year for 
     which the coverage is in effect) comply with regulations that 
     shall be issued under this paragraph by the Secretary, in 
     consultation with the National Commission on Catastrophe 
     Preparation and Protection established under section 3.
       (ii) Criteria.--The regulations issued under clause (i) 
     shall establish criteria for State programs to qualify to 
     purchase reinsurance under this section, which are in 
     addition to the requirements under the other paragraphs of 
     this subsection.
       (B) Contents.--The regulations issued under subparagraph 
     (A)(i) shall include requirements that--
       (i) the State program shall have public members on its 
     board of directors or have an advisory board with public 
     members;
       (ii) the State program provide adequate insurance or 
     reinsurance protection, as applicable, for the peril covered, 
     which shall include a range of deductibles and premium costs 
     that reflect the applicable risk to eligible properties;
       (iii) insurance or reinsurance coverage, as applicable, 
     provided by the State program is made available on a 
     nondiscriminatory basis to all qualifying residents;
       (iv) any new construction, substantial rehabilitation, and 
     renovation insured or reinsured by the program complies with 
     applicable State or local government building, fire, and 
     safety codes;
       (v) the State, or appropriate local governments within the 
     State, have in effect and enforce nationally recognized model 
     building, fire, and safety codes and consensus-based 
     standards that offer risk responsive resistance that is 
     substantially equivalent or greater than the resistance to 
     earthquakes or high winds;
       (vi) the State has taken actions to establish an insurance 
     rate structure that takes into account measures to mitigate 
     insurance losses;
       (vii) there are in effect, in such State, laws or 
     regulations sufficient to prohibit price gouging, during the 
     term of reinsurance coverage under this Act for the State 
     program in any disaster area located within the State; and
       (viii) the State program complies with such other 
     requirements that the Secretary considers necessary to carry 
     out the purposes of this Act.
       (b) Terms of Contracts.--Each contract under this section 
     for reinsurance coverage under this Act shall be subject to 
     the following terms and conditions:
       (1) Maturity.--The term of the contract shall not exceed 1 
     year or such longer term as the Secretary may determine.
       (2) Payment condition.--The contract shall authorize claims 
     payments for eligible losses only to the eligible State 
     program purchasing the coverage.
       (3) Retained losses requirement.--For each event of a 
     covered peril, the contract shall make a payment for the 
     event only if the total amount of insurance claims for 
     losses, which are covered by qualified lines, occur to 
     properties located within the State covered by the contract, 
     and that result from events, exceeds the amount of retained 
     losses provided under the contract (pursuant to section 8(a)) 
     purchased by the eligible State program.
       (4) Multiple events.--The contract shall--
       (A) cover any eligible losses from 1 or more covered events 
     that may occur during the term of the contract; and
       (B) provide that if multiple events occur, the retained 
     losses requirement under paragraph (3) shall apply on a 
     calendar year basis, in the aggregate and not separately to 
     each individual event.
       (5) Timing of eligible losses.--Eligible losses under the 
     contract shall include only insurance claims for property 
     covered by qualified lines that are reported to the eligible 
     State program within the 3-year period beginning upon the 
     event or events for which payment under the contract is 
     provided.
       (6) Pricing.--
       (A) Determination.--The price of reinsurance coverage under 
     the contract shall be an amount established by the Secretary 
     as follows:
       (i) Recommendations.--The Secretary shall take into 
     consideration the recommendations of the Commission in 
     establishing the price, but the price may not be less than 
     the amount recommended by the Commission.
       (ii) Fairness to taxpayers.--The price shall be established 
     at a level that--

       (I) is designed to reflect the risks and costs being borne 
     under each reinsurance contract issued under this Act; and
       (II) takes into consideration empirical models of natural 
     disasters and the capacity of private markets to absorb 
     insured losses from natural disasters.

       (iii) Self-sufficiency.--The rates for reinsurance coverage 
     shall be established at a level that annually produces 
     expected premiums that shall be sufficient to pay the 
     expected annualized cost of all claims, loss adjustment 
     expenses, and all administrative costs of reinsurance 
     coverage offered under this section.
       (B) Components.--The price shall consist of the following 
     components:
       (i) Risk-based price.--A risk-based price, which shall 
     reflect the anticipated annualized payout of the contract 
     according to the actuarial analysis and recommendations of 
     the Commission.
       (ii) Administrative costs.--A sum sufficient to provide for 
     the operation of the Commission and the administrative 
     expenses incurred by the Secretary in carrying out this Act.
       (7) Information.--The contract shall contain a condition 
     providing that the Commission may require a State program 
     that is covered under the contract to submit to the 
     Commission all information on the State program relevant to 
     the duties of the Commission, as determined by the Secretary.
       (8) Additional contract option.--
       (A) In general.--The contract shall provide that the 
     purchaser of the contract may, during a term of such original 
     contract, purchase additional contracts from among those 
     offered by the Secretary at the beginning of the term, 
     subject to the limitations under section 8, at the prices at 
     which such contracts were offered at the beginning of the 
     term, prorated based upon the remaining term as determined by 
     the Secretary.
       (B) Timing.--An additional contract purchased under 
     subparagraph (A) shall provide coverage beginning on a date 
     15 days after the date of purchase but shall not provide 
     coverage for losses for an event that has already occurred.
       (9) Others.--The contract shall contain such other terms as 
     the Secretary considers necessary--
       (A) to carry out this Act; and
       (B) to ensure the long-term financial integrity of the 
     program under this Act.
       (c) Participation by Multi-State Catastrophe Fund 
     Programs.--

[[Page S3367]]

       (1) In general.--Nothing in this Act shall prohibit, and 
     this Act shall be construed to facilitate and encourage, the 
     creation of multi-State catastrophe insurance or reinsurance 
     programs, or the participation by such programs in the 
     program established pursuant to section 4.
       (2) Regulations.--The Secretary shall, by regulation, apply 
     the provisions of this Act to multi-State catastrophe 
     insurance and reinsurance programs.

     SEC. 8. MINIMUM LEVEL OF RETAINED LOSSES AND MAXIMUM FEDERAL 
                   LIABILITY.

       (a) Available Levels of Retained Losses.--In making 
     reinsurance coverage available under this Act, the Secretary 
     shall make available for purchase contracts for such coverage 
     that require the sustainment of retained losses from covered 
     perils (as required under section 7(b)(3) for payment of 
     eligible losses) in various amounts, as the Secretary, in 
     consultation with the Commission, determines appropriate and 
     subject to the requirements under subsection (b).
       (b) Minimum Level of Retained Losses.--
       (1) Contracts for state programs.--Subject to paragraphs 
     (3) and (4) and notwithstanding any other provision of this 
     Act, a contract for reinsurance coverage under section 7 for 
     an eligible State program that offers insurance or 
     reinsurance coverage described in subparagraph (A) or (B), 
     respectively, of section 7(a)(1), may not be made available 
     or sold unless the contract requires retained losses from 
     covered perils in the following amount:
       (A) In general.--The State program shall sustain an amount 
     of retained losses of not less than--
       (i) the claims-paying capacity of the eligible State 
     program, as determined by the Secretary; and
       (ii) an amount, determined by the Secretary in consultation 
     with the Commission, that is the amount equal to the eligible 
     losses projected to be incurred at least once every 50 years 
     on an annual basis from covered perils.
       (B) Transition rule for existing programs.--
       (i) Claims-paying capacity.--Subject to clause (ii), in the 
     case of any eligible State program that was offering 
     insurance or reinsurance coverage on the date of the 
     enactment of this Act and the claims-paying capacity of which 
     is greater than the amount determined under subparagraph 
     (A)(i) but less than an amount determined for the program 
     under subparagraph (A)(ii), the minimum level of retained 
     losses applicable under this paragraph shall be the claims-
     paying capacity of such State program.
       (ii) Agreement.--

       (I) In general.--Clause (i) shall apply to a State program 
     only if the program enters into a written agreement with the 
     Secretary providing a schedule for increasing the claims-
     paying capacity of the program to the amount determined for 
     the program under subparagraph (A)(ii) over a period not to 
     exceed 5 years.
       (II) Extension.--The Secretary may extend the 5-year period 
     under subclause (I) for not more than 5 additional 1-year 
     periods if the Secretary determines that losses incurred by 
     the State program as a result of covered perils create 
     excessive hardship on the State program.
       (III) Consultation.--The Secretary shall consult with the 
     appropriate officials of the State program regarding the 
     required schedule and any potential 1-year extensions.

       (C) Transition rule for new programs.--
       (i) 50-year event.--The Secretary may provide that, in the 
     case of an eligible State program that, after January 1, 
     2008, commences offering insurance or reinsurance coverage, 
     during the 7-year period beginning on the date that 
     reinsurance coverage under section 7 is first made available, 
     the minimum level of retained losses applicable under this 
     paragraph shall be the amount determined for the State under 
     subparagraph (A)(i), except that such minimum level shall be 
     adjusted annually as provided in clause (ii) of this 
     subparagraph.
       (ii) Annual adjustment.--Each annual adjustment under this 
     clause shall increase the minimum level of retained losses 
     applicable under this subparagraph to an eligible State 
     program described in clause (i) in a manner such that--

       (I) during the course of such 7-year period, the applicable 
     minimum level of retained losses approaches the minimum level 
     that, under subparagraph (A)(ii), will apply to the eligible 
     State program upon the expiration of such period; and
       (II) each such annual increase is a substantially similar 
     amount, to the extent practicable.

       (D) Reduction because of reduced claims-paying capacity.--
       (i) Authority.--Notwithstanding subparagraphs (A), (B), and 
     (C) or the terms contained in a contract for reinsurance 
     pursuant to such subparagraphs, if the Secretary determines 
     that the claims-paying capacity of an eligible State program 
     has been reduced because of payment for losses due to an 
     event, the Secretary may reduce the minimum level of retained 
     losses.
       (ii) Term of reduction.--

       (I) Extension.--The Secretary may extend the 5-year period 
     for not more than 5 additional 1-year periods if the 
     Secretary determines that losses incurred by the State 
     program as a result of covered perils create excessive 
     hardship on the State program.
       (II) Consultation.--The Secretary shall consult with the 
     appropriate officials of the State program regarding the 
     required schedule and any potential 1-year extensions.

       (E) Claims-paying capacity.--For purposes of this 
     paragraph, the claims-paying capacity of a State-operated 
     insurance or reinsurance program under section 7(a)(1) shall 
     be determined by the Secretary, in consultation with the 
     Commission, taking into consideration the claims-paying 
     capacity as determined by the State program, retained losses 
     to private insurers in the State in an amount assigned by the 
     State insurance commissioner, the cash surplus of the 
     program, and the lines of credit, reinsurance, and other 
     financing mechanisms of the program established by law.
       (c) Maximum Federal Liability.--
       (1) In general.--Notwithstanding any other provision of 
     law, the Secretary may sell only contracts for reinsurance 
     coverage under this Act in various amounts that comply with 
     the following requirements:
       (A) Estimate of aggregate liability.--The aggregate 
     liability for payment of claims under all such contracts in 
     any single year is unlikely to exceed $200,000,000,000 (as 
     such amount is adjusted under paragraph (2)).
       (B) Eligible loss coverage sold.--Eligible losses covered 
     by all contracts sold within a State during a 12-month period 
     do not exceed the difference between the following amounts 
     (each of which shall be determined by the Secretary in 
     consultation with the Commission):
       (i) The amount equal to the eligible loss projected to be 
     incurred once every 500 years from a single event in the 
     State.
       (ii) The amount equal to the eligible loss projected to be 
     incurred once every 50 years from a single event in the 
     State.
       (2) Annual adjustments.--The Secretary shall annually 
     adjust the amount under paragraph (1)(A) (as it may have been 
     previously adjusted) to provide for inflation in accordance 
     with an inflation index that the Secretary determines to be 
     appropriate.
       (d) Limitation on Percentage of Risk in Excess of Retained 
     Losses.--
       (1) In general.--The Secretary may not make available for 
     purchase contracts for reinsurance coverage under this Act 
     that would pay out more than 100 percent of eligible losses 
     in excess of retained losses in the case of a contract under 
     section 7 for an eligible State program, for such State.
       (2) Payout.--For purposes of this subsection, the amount of 
     payout from a reinsurance contract shall be the amount of 
     eligible losses in excess of retained losses multiplied by 
     the percentage under paragraph (1).

     SEC. 9. CONSUMER HURRICANE, EARTHQUAKE, LOSS PROTECTION 
                   (HELP) FUND.

       (a) Establishment.--There is established within the 
     Treasury of the United States a fund to be known as the 
     Consumer HELP Fund (in this section referred to as the 
     ``Fund'').
       (b) Credits.--The Fund shall be credited with--
       (1) amounts received annually from the sale of contracts 
     for reinsurance coverage under this Act;
       (2) any amounts borrowed under subsection (d);
       (3) any amounts earned on investments of the Fund pursuant 
     to subsection (e); and
       (4) such other amounts as may be credited to the Fund.
       (c) Uses.--Amounts in the Fund shall be available to the 
     Secretary only for the following purposes:
       (1) Contract payments.--For payments to covered purchasers 
     under contracts for reinsurance coverage for eligible losses 
     under such contracts.
       (2) Commission costs.--To pay for the operating costs of 
     the Commission.
       (3) Administrative expenses.--To pay for the administrative 
     expenses incurred by the Secretary in carrying out the 
     reinsurance program under this Act.
       (4) Termination.--Upon termination under section 11, as 
     provided in such section.
       (d) Borrowing.--
       (1) Authority.--To the extent that the amounts in the Fund 
     are insufficient to pay claims and expenses under subsection 
     (c), the Secretary--
       (A) may issue such obligations of the Fund as may be 
     necessary to cover the insufficiency; and
       (B) shall purchase any such obligations issued.
       (2) Public debt transaction.--For the purpose of purchasing 
     any such obligations under paragraph (1)--
       (A) the Secretary may use as a public debt transaction the 
     proceeds from the sale of any securities issued under chapter 
     31 of title 31, United States Code; and
       (B) the purposes for which such securities are issued under 
     such chapter are hereby extended to include any purchase by 
     the Secretary of such obligations under this subsection.
       (3) Characteristics of obligations.--Obligations issued 
     under this subsection shall be in such forms and 
     denominations, bear such maturities, bear interest at such 
     rate, and be subject to such other terms and conditions, as 
     the Secretary shall determine.
       (4) Treatment.--All redemptions, purchases, and sales by 
     the Secretary of obligations under this subsection shall be 
     treated as public debt transactions of the United States.
       (5) Repayment.--Any obligations issued under this 
     subsection shall be--
       (A) repaid including interest, from the Fund; and

[[Page S3368]]

       (B) recouped from premiums charged for reinsurance coverage 
     provided under this Act.
       (e) Investment.--If the Secretary determines that the 
     amounts in the Fund are in excess of current needs, the 
     Secretary may invest such amounts as the Secretary considers 
     advisable in obligations issued or guaranteed by the United 
     States.
       (f) Prohibition of Federal Funds.--Except for amounts made 
     available pursuant to subsection (d) and section 3(h), no 
     further Federal funds shall be authorized or appropriated for 
     the Fund or for carrying out the reinsurance program under 
     this Act.

     SEC. 10. REGULATIONS.

       The Secretary, in consultation with the Secretary of the 
     Department of Homeland Security, shall issue any regulations 
     necessary to carry out the program for reinsurance coverage 
     under this Act.

     SEC. 11. TERMINATION.

       (a) In General.--Except as provided in subsection (b), the 
     Secretary may not provide any reinsurance coverage under this 
     Act covering any period after the expiration of the 20-year 
     period beginning on the date of the enactment of this Act.
       (b) Extension.--If upon the expiration of the period under 
     subsection (a) the Secretary, in consultation with the 
     Commission, determines that continuation of the program for 
     reinsurance coverage under this Act is necessary or 
     appropriate to carry out the purpose of this Act under 
     section 4(b) because of insufficient growth of capacity in 
     the private homeowners' insurance market, the Secretary shall 
     continue to provide reinsurance coverage under this Act until 
     the expiration of the 5-year period beginning upon the 
     expiration of the period under subsection (a).
       (c) Repeal.--Effective upon the date that reinsurance 
     coverage under this Act is no longer available or in force 
     pursuant to subsection (a) or (b), this Act (except for this 
     section) is repealed.
       (d) Deficit Reduction.--The Secretary shall cover into the 
     General Fund of the Treasury any amounts remaining in the 
     Fund under section 9 upon the repeal of this Act.

     SEC. 12. ANNUAL STUDY CONCERNING BENEFITS OF THE ACT.

       (a) In General.--The Secretary shall, on an annual basis, 
     conduct a study and submit to the Congress a report that--
       (1) analyzes the cost and availability of homeowners' 
     insurance for losses resulting from catastrophic natural 
     disasters covered by the reinsurance program under this Act;
       (2) describes the efforts of the participating States in--
       (A) enacting preparedness, prevention, mitigation, 
     recovery, and rebuilding standards; and
       (B) educating the public on the risks associated with 
     natural catastrophe; and
       (3) makes recommendations regarding ways to improve the 
     program under this Act and its administration.
       (b) Contents.--Each annual study under this section shall 
     also determine and identify, on an aggregate basis--
       (1) for each State or region, the capacity of the private 
     homeowners' insurance market with respect to coverage for 
     losses from catastrophic natural disasters;
       (2) for each State or region, the percentage of homeowners 
     who have such coverage, the catastrophes covered, and the 
     average cost of such coverage; and
       (3) for each State or region, the effects this Act is 
     having on the availability and affordability of such 
     insurance.
       (c) Timing.--Each annual report under this section shall be 
     submitted not later than March 30 of the year after the year 
     for which the study was conducted.
       (d) Commencement of Reporting Requirement.--The Secretary 
     shall first submit an annual report under this section not 
     later than 2 years after the date of the enactment of this 
     Act.

     SEC. 13. GAO STUDY OF THE NATIONAL FLOOD INSURANCE PROGRAM 
                   AND HURRICANE-RELATED FLOODING.

       (a) In General.--In light of the flooding associated with 
     Hurricane Katrina, the Comptroller General of the United 
     States shall conduct a study of the availability and adequacy 
     of flood insurance coverage for losses to residences and 
     other properties caused by hurricane-related flooding.
       (b) Contents.--The study under this section shall determine 
     and analyze--
       (1) the frequency and severity of hurricane-related 
     flooding during the last 20 years in comparison with flooding 
     that is not hurricane-related;
       (2) the differences between the risks of flood-related 
     losses to properties located within the 100-year floodplain 
     and those located outside of such floodplain;
       (3) the extent to which insurance coverage referred to in 
     subsection (a) is available for properties not located within 
     the 100-year floodplain;
       (4) the advantages and disadvantages of making such 
     coverage for such properties available under the national 
     flood insurance program;
       (5) appropriate methods for establishing premiums for 
     insurance coverage under such program for such properties 
     that, based on accepted actuarial and rate making principles, 
     cover the full costs of providing such coverage;
       (6) appropriate eligibility criteria for making flood 
     insurance coverage under such program available for 
     properties that are not located within the 100-year 
     floodplain or within a community participating in the 
     national flood insurance program;
       (7) the appropriateness of the existing deductibles for all 
     properties eligible for insurance coverage under the national 
     flood insurance program, including the standard and variable 
     deductibles for pre-FIRM and post-FIRM properties, and 
     whether a broader range of deductibles should be established;
       (8) income levels of policyholders of insurance made 
     available under the national flood insurance program whose 
     properties are pre-FIRM subsidized properties;
       (9) how the national flood program is marketed, if changes 
     can be made so that more people are aware of flood coverage, 
     and how take-up rates may be improved;
       (10) the number of homes that are not primary residences 
     that are insured under the national flood insurance program 
     and are pre-FIRM subsidized properties; and
       (11) suggestions and means on how the program under this 
     Act can better meet its stated goals as well as the 
     feasibility of expanding the national flood insurance program 
     to cover the perils covered by this Act.
       (c) Consultation With FEMA.--In conducting the study under 
     this section, the Comptroller General shall consult with the 
     Administrator of the Federal Emergency Management Agency.
       (d) Report.--The Comptroller General shall complete the 
     study under this section and submit a report to the Congress 
     regarding the findings of the study not later than 5 months 
     after the date of the enactment of this Act.

     SEC. 14. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Commission.--The term ``Commission'' means the National 
     Commission on Catastrophe Preparation and Protection 
     established under section 3.
       (2) Covered perils.--The term ``covered perils'' means the 
     natural disaster perils under section 6.
       (3) Covered purchaser.--The term ``covered purchaser'' 
     means an eligible State-operated insurance or reinsurance 
     program that purchases reinsurance coverage made available 
     under a contract under section 7.
       (4) Disaster area.--The term ``disaster area'' means a 
     geographical area, with respect to which--
       (A) a covered peril specified in section 6 has occurred; 
     and
       (B) a declaration that a major disaster exists, as a result 
     of the occurrence of such peril--
       (i) has been made by the President of the United States; 
     and
       (ii) is in effect.
       (5) Eligible losses.--The term ``eligible losses'' means 
     losses in excess of the sustained and retained losses, as 
     defined by the Secretary after consultation with the 
     Commission.
       (6) Eligible state program.--The term ``eligible State 
     program'' means--
       (A) a State program that, pursuant to section 7(a), is 
     eligible to purchase reinsurance coverage made available 
     through contracts under section 7; or
       (B) a multi-State program that is eligible to purchase such 
     coverage pursuant to section 7(c).
       (7) Price gouging.--The term ``price gouging'' means the 
     providing of any consumer good or service by a supplier 
     related to repair or restoration of property damaged from a 
     catastrophe for a price that the supplier knows or has reason 
     to know is greater, by at least the percentage set forth in a 
     State law or regulation prohibiting such act (notwithstanding 
     any real cost increase due to any attendant business risk and 
     other reasonable expenses that result from the major 
     catastrophe involved), than the price charged by the supplier 
     for such consumer good or service immediately before the 
     disaster.
       (8) Qualified lines.--The term ``qualified lines'' means 
     lines of insurance coverage for which losses are covered 
     under section 5 by reinsurance coverage under this Act.
       (9) Reinsurance coverage.--The term ``reinsurance coverage 
     under this Act'' means coverage under contracts made 
     available under section 7.
       (10) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (11) State.--The term ``State'' means the States of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, Guam, the Virgin Islands, American Samoa, and any 
     other territory or possession of the United States.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 933. A bill for the relief of Joseph Gabra and Sharon Kamel; to 
the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I am offering today private relief 
legislation to provide lawful permanent residence status to Joseph 
Gabra and his wife, Sharon Kamel, Egyptian nationals currently living 
with their children in Camarillo, CA.
  Joseph Gabra and Sharon Kamel entered the United States legally on 
November 1, 1998, on tourist visas. They immediately filed for 
political asylum based on religious persecution.

[[Page S3369]]

  The couple fled Egypt because they had been targeted for their active 
involvement in the Coptic Christian Church in Egypt. Mr. Gabra was 
repeatedly jailed by Egyptian authorities because of his work for the 
church. In addition, Ms. Kamel's cousin was murdered and her brother's 
business was fire-bombed.
  When Ms. Kamel became pregnant with their first child, the family was 
warned by a member of the Muslim brotherhood that if they did not raise 
their child as a Muslim, the child would be kidnapped and taken from 
them.
  Frightened by these threats, the young family sought refuge in the 
United States. Unfortunately, when they sought asylum here, Mr. Gabra, 
who has a speech impediment, had difficulty communicating his fear of 
persecution to the immigration judge.
  The judge denied their petition, telling the family that he did not 
see why they could not just move to another city in Egypt to avoid the 
abuse they were suffering. Since the time that they were denied asylum, 
Ms. Kamel's brother, who lived in the same town and suffered similar 
abuse, was granted asylum.
  I have decided to offer legislation on their behalf because I believe 
that, without it, this hardworking couple and their four United States 
citizen children would endure immense and unfair hardship.
  First, in the nine years that Mr. Gabra and Ms. Kamel have lived 
here, they have worked to adjust their status through the appropriate 
legal channels. They came to the United States on a lawful visa and 
immediately notified authorities of their intent to seek asylum here. 
They have played by the rules and followed our laws.
  In addition, during those nine years, the couple has had four U.S. 
citizen children who do not speak Arabic and are unfamiliar with 
Egyptian culture. If the family is deported, the children would have to 
acclimate to a different culture, language and way of life.
  Jessica, 8, is the Gabra's oldest child, and in the Gifted and 
Talented Education program in Ventura County. Rebecca, age 7, and 
Rafael, age 6, are old enough to understand that they would be leaving 
their schools, their teachers, their friends and their home. Veronica, 
the Gabra's youngest child, is just 18 months old.
  More troubling is the very real possibility that if sent to Egypt, 
these four American children would suffer discrimination and 
persecution because of their religion, just as the rest of their family 
reports.
  Mr. Gabra and Ms. Kamel have made a positive life for themselves and 
their family in the United States. Both have earned college degrees in 
Egypt and once in the United States, Mr. Gabra passed the Certified 
Public Accountant Examination on August 4, 2003. Since arriving here, 
Mr. Gabra has consistently worked to support his family.
  The positive impact they have made on their community is highlighted 
by the fact that I received a letter of support on their behalf signed 
by 160 members of their church and community. From everything I have 
learned about the family, we can expect that they will continue to 
contribute to their community in productive ways.
  Given these extraordinary and unique facts, I ask my colleagues to 
support this private relief bill on behalf of Joseph Gabra and Sharon 
Kamel.
  In addition, I ask unanimous consent that the text of the private 
relief bill and the numerous letters of support my office has received 
from members of the Camarillo community be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 933

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

     SECTION 1. ADJUSTMENT OF STATUS.

       (a) In General.--Notwithstanding any other provision of 
     law, for the purposes of the Immigration and Nationality Act 
     (8 U.S.C. 1101 et seq.), Joseph Gabra and Sharon Kamel shall 
     each be deemed to have been lawfully admitted to, and 
     remained in, the United States, and shall be eligible for 
     adjustment of status to that of an alien lawfully admitted 
     for permanent residence under section 245 of the Immigration 
     and Nationality Act (8 U.S.C. 1255) upon filing an 
     application for such adjustment of status.
       (b) Application and Payment of Fees.--Subsection (a) shall 
     apply only if the application for adjustment of status is 
     filed with appropriate fees not later than 2 years after the 
     date of the enactment of this Act.
       (c) Reduction of Immigrant Visa Numbers.--Upon the granting 
     of permanent resident status to Joseph Gabra and Sharon 
     Kamel, the Secretary of State shall instruct the proper 
     officer to reduce by 2, during the current or subsequent 
     fiscal year, the total number of immigrant visas that are 
     made available to natives of the country of Joseph Gabra and 
     Sharon Kamel's birth under section 202(e) or 203(a) of the 
     Immigration and Nationality Act (8 U.S.C. 1152(e), 1153(a)), 
     as applicable.
                                  ____

                                                February 14, 2007.
       Dear Mrs. Feinstein: I am writing you today to beg you for 
     help. A friend and fellow parent is scheduled for deportation 
     on Monday 2/19 at 10:00 a.m. Her name is Sharon Malak Kamel 
     Hendy (alien # A75-647-452). I was horrified to hear this 
     information. Sharon is a wonderful person and mother. She has 
     4 children: Jessica (8) who is in my son's class, Rebecca. 
     (7), Rafael (6) who is in Kindergarten with my daughter and 
     Veronica (18 months). All of the children are American 
     citizens.
       Sharon and her husband, Joseph Ayad Gabra Youssef (alien # 
     A75-647-253) came to the United States in 1998. They fled 
     their country of Egypt from terrorist threats on their lives 
     and the life of their unborn child (Jessica) due to the fact 
     that they are Christians. They have pursued all legal 
     avenues, to become citizens. Due to time lines being moved 
     up, both have been notified that deportation will occur. 
     Sharon is the first to receive the notice.
       I am mortified that the United States would deport hard 
     working people that try to stay the legal way. To top that 
     off, they parents of 4 beautiful American citizen children.
       Please help Sharon and Joseph with extensions and a way for 
     them to obtain green cards.
       Thank you for your time and consideration and May God bless 
     you.
           Sincerely,
     Sharon D. Vopat-Mitchell.
                                  ____

                                                February 14, 2007.
       Dear Senator Feinstein: I am on staff at Camarillo 
     Community Church as director of Adult Education and Family 
     Ministry and am a licensed minister. I am also a California 
     resident and a navy veteran. I am writing on behalf of the 
     Gabra family who has been a member of this congregation for 
     many years.
       Joseph and Sharon Gabra fled Egypt seeking asylum because 
     of the growing persecution of people who identify themselves 
     with Jesus Christ (Christians). This persecution historically 
     included job and housing discrimination but now is becoming 
     more detrimental to the health and safety of Christians. 
     Kidnapping, rape and murder are common responses against 
     Christians by radical, extremists Muslims in Egypt.
       Sharon Malak Kamel Hendy (Gabra) has received deportation 
     orders and is scheduled to leave Monday, February 19, 2007. 
     She would leave behind four children, all American citizens. 
     Should she take them to Egypt it would be very likely they 
     would be kidnapped or outright murdered. Joseph's case is 
     still pending but the same logic used to send Sharon back 
     would still be expected in his case.
       I see, on a daily basis, the devastating consequences of 
     raising children without a mother or father in the home. I 
     ask you to intervene on behalf of this family, particularly 
     the American raised children. Please use your influence as a 
     Senator and a spokesperson for the people of California to 
     keep Sharon in the United States and eventually giving the 
     Gabra family permanent status.
       Thank you for your consideration.
           Very respectfully,
     William J. Moyer.
                                  ____

     Re political asylum applications of Joseph Ayad Gabra Youssef 
         and Sharon Malak Kamel Hendy.

                                                Camarillo, CA,

                                                February 14, 2007.
     Senator Dianne Feinstein,
     U.S. Senate,
     Washington, DC.
       Dear Senator Feinstein: I am asking your immediate 
     attention to a bureaucratic problem which may put one fine 
     Christian family in terrorist hands. Time is of the essence 
     as one family member (the mother of their 4 children--ages 8, 
     7, 6 and 18 mos.), who is scheduled for deportation on 2-19-
     2007. They only received the notice on 2-6-2007; our church 
     family became aware of this problem on 2-11-2007. For your 
     information other family members have already been granted 
     political asylum in the United States. They have complied 
     with all of the laws. Again, this is a problem of 
     bureaucratic overload and we need real human intervention 
     from your office to prevent unnecessary family separation, 
     let alone possible death due to their religion convictions.
       I plead with your office to grant an extension as they have 
     been working since November 1, 1998 on this goal to become 
     citizens of the United States; from my perspective, their 
     arrival occurred three years before 9-11-2001 and they knew 
     their danger. I already call them citizens of America from my 
     heart as they have shown by their actions and

[[Page S3370]]

     commitment to be such with pride and honor.
       Thank you for your immediate attention on behalf of this 
     beautiful family as your action would show the real intent of 
     the Lady of Liberty in New York Harbor as our country is a 
     land of laws and integrity.
           Most sincerely,
     Toni Webster.
                                  ____



                                   Camarillo Community Church,

                                                February 12, 2007.
       To Whom It May Concern: Please review this deportation 
     possibility and if possible please help us with a reprieve.
       Sharon Malak Kamel Hendy (A75 647 452) has four small 
     children all born in America and is being asked to leave our 
     country back to Egypt. This seems so unreasonable to send a 
     mother of four children to a country that is unfriendly to 
     her religious preference. To separate her from her husband 
     and children seems so un-American.
       Attached is a Summary of the political asylum for you to 
     review. She has a deportation date of the 19th of February.
       Thank you for any help you can give this family. They have 
     become a part of our church family at Camarillo Community 
     Church, 1322 Las Posas Road, Camarillo, CA 93010.
                                                   Daryl Lundberg,
     Pastor of Membership Care.
                                  ____



                                                  Keith James,

                                 Camarillo, CA, February 15, 2007.
     Re Joseph & Sharon Gabra.
     Senator Diane Feinstein,
     U.S. Senate,
     San Francisco, CA.
       Dear Ms. Feinstein, I'm writing to you on behalf of Joseph 
     and Sharon Gabra, who are good friends of mine and fellow 
     members of Camarillo Community Church. The Gabras are 
     Egyptian nationals who fled Egypt in 1998 due to religious 
     persecution. As Christians in a Muslim society, they 
     experienced terrible persecution; they were threatened by 
     government officials to recant their beliefs and embrace 
     Islam, or suffer the consequences, which meant their child 
     would be taken from them and placed in a home where the child 
     would be raised in Islam. They came to the United States to 
     raise their family and begin a new life. Sharon was pregnant 
     with their first child when they arrived here on a visitor's 
     permit.
       Since coming to our country they have had four children, 
     one of whom is a good friend of my daughter, McKenna. The 
     Gabras are very involved in our church community, always 
     willing to lend a hand in the children's ministries. Joseph 
     is a college-educated accountant and one of the hardest 
     working men I know, and Sharon has a degree in social work. 
     Both are very well regarded by the people of our church.
       For several years the Gabras have worked diligently to 
     become U.S. citizens, and have done so in all the right ways, 
     but it appears they are finally out of options. Sharon 
     received a notice last week that she will be deported on 
     February 19, at which time she will be forced to leave her 
     family behind. This means four children under the age of 
     eight, including an 18-month-old, will be left in the care of 
     their father, who must continue to work full-time to support 
     his family.
       With less than a week before Sharon's deportation, I'm 
     writing to ask that you please stand for this family, that 
     you would intercede on behalf of Sharon Gabra give her family 
     a real chance at achieving their dream of a home in the 
     United States. They are the kind of people we hope will 
     become American citizens--good, honest, moral, and hard-
     working. Thank you for your consideration.
           Best regards,
     Keith James.
                                  ____



                                   Camarillo Community Church,

                                                    Camarillo, CA.
       To the Hon. Senator Dianne Feinstein: I am writing in 
     regard to Joseph Ayad Gabra Youssef (A 75 647 253) and his 
     wife Sharon Malak Kamel Hendy (A 75 647 452). This Christian 
     couple has applied for asylum in the United States because 
     their lives were threatened by Moslem terrorists in their 
     home country of Egypt. They fled Egypt in 1998 when Sharon 
     was pregnant with their first child, hoping to find a safe 
     place to raise their children. They have been seeking asylum 
     here in the U.S, but the process has been slow and difficult. 
     They now have four children and the children are all citizens 
     of the United States, having been born here. This is a 
     wonderful young family that has become a valued part of our 
     church and community, but they are now being threatened with 
     immediate deportation. Our entire church congregation is very 
     concerned for the welfare of this family and fearful of the 
     consequence of their return to Egypt. Please, we earnestly 
     request your help in assisting this family.
           Sincerely,
                                                Ralph Rittenhouse,
     Senior Pastor.
                                  ____



                                   Camarillo Community Church,

                                                February 14, 2007.
       Senator Barbara Feinstein: I faxed a note to you yesterday 
     and apparently the bottom portion of the note was cut off in 
     the fax so I am resending the fax with this, a more detailed 
     letter. Yesterday's note was written in a hurry because of 
     the urgent nature of this request.
       I am a Licensed Minister, Pastor of Children's Ministries 
     at Camarillo Community Church in Camarillo, California. I 
     have held this position for two years and prior to that I was 
     the director of a Preschool and After School Program at 
     Trinity Presbyterian Church in Camarillo, California. I have 
     a true love and desire to see young children grow to become 
     confident, successful adults and know that it is only in 
     building up the child that we avoid the difficult task of 
     rebuilding the broken man. The issue I am bringing to your 
     attention deals with the brokenness of man which is now 
     impacting the lives of four children and their parents who 
     have become very precious to me and the community of 
     Camarillo.
       It is hard for me, as an American, to truly grasp the 
     dangers Christians face in the Muslim world; however, the 
     threats that caused Sharon Malak Kamel Hendy (A 75 647 253) 
     and Joseph Ayad Gabra Youssef (A 75 647 452) to flee Egypt 
     were real and continue to be present for them should they be 
     forced to leave our country. The evil caused by children who 
     have been raised in hatred, towards Americans and/or non 
     Muslims, who have now become adults in leadership--
     terrorists--is REAL. Until we can break the cycle of hatred 
     and replace it with love and respect one for another 
     regardless of birth place or faith we will continue to 
     struggle with adults filled with evil. In the meantime we 
     must do all we can to protect those in our area from the 
     evils of terrorism.
       Although the Gabra family has been active within our 
     church, it was not until Sunday, February 11, 2007 that we 
     became aware of the gravity of their situation. They have 
     been trying to handle the issue on their own so as not to be 
     a burden to anyone. They came to America for Safety rather 
     than financial gain and do not wish to be a burden on our 
     society. I do not understand the legal hoops that have to be 
     jumped to keep Sharon from deportation on February 19, 2007--
     but I do know that the family has been attempting to meet the 
     requirements and jump through the hoops ever since their 
     arrival in 1999. It seems that they have, up to this point, 
     received less than appropriate or fair treatment in our court 
     system.
       The children, Jessica, age 8, Rebecca, age 7, Raphael, age 
     6 and Veronica, 18 months are all American born, English 
     speaking children. They fit the profile of typical American 
     children, attending public school, active in our children's 
     ministries programs on Sundays and weekdays for AWANA and 
     other children's events. Without knowledge of their parent's 
     birthplace, one would never know there was a difference 
     between them and their American born peers. They are a family 
     who treasures one another and desires to be a blessing to 
     those around them in a safe society. The deportation of their 
     mother to Egypt--a place where her, her husband's, and the 
     life of their unborn first child were threatened unless they 
     turn from Christianity and return to Islam--would be 
     devastating.
       It is my hope that you will be able to use your legal 
     authority to stop the deportation scheduled for February 19, 
     2007. Know that there are many in Camarillo depending on your 
     leadership to help in this matter. We commit to follow the 
     laws of our country in order to bring this family to safety. 
     We are asking for the time to help them fulfill the 
     requirements.
           Sincerely,
                                                 Elaine Francisco,
     Pastor of Children's Ministries.
                                  ____

                                                February 12, 2007.
       Dear Senator Feinstein: I hope that you will please take 
     the time to read this letter for immediate help to the Gabra 
     family. The mother of this family is scheduled to be deported 
     on 2/19/2007 and the father fears the same. The big problem 
     is that the family has four children between the ages of 8 
     years and 18 months and are all American Citizens. This 
     family fled Egypt in 1998 because they were pregnant with 
     their first child and were threatened to have their child 
     taken from them because of their Christian beliefs. They came 
     on a visitor's visa and did all the required steps to become 
     legal. After 9/11/2001 they thought they would have a better 
     chance, but by then they were allowing only one Judge to 
     review the cases instead of 3 which shortened the time for 
     accomplishing the same number of cases. By the law they 
     became illegal and were subject to deportation.
       Only the Mother, Sharon Malak Kamel Hendy (Alien Number: A 
     75-647-452) received notice of deportation. She is to be 
     deported 2/19/2007. This would leave her husband Joseph Ayad 
     Gabra Youssef (Alien Number: A 75-647-253) here to work and 
     care for 4 children from age 8 yrs. to 18 months. His 
     deportation notice will probably come next and this will lead 
     to danger for the children. If this happens, the children 
     would suffer the most in Egypt from the Terrorists because 
     they only speak English.
       I have taught Sunday school to 3 of their children and they 
     are a lovely, hard working, honest family and want to become 
     citizens. If they are deported their lives are in danger. 
     Also, as Christians, they will not be able to find 
     employment. The children are as follows: Jessica Gabra--8 
     years; Rebecca Gabra--7 years; Rafael Gabra--6 years; 
     Veronica Gabra--18 months.
       Please help us to get an extension for Sharon and a way for 
     them to get green cards. They are the kind of people our 
     country would be proud to have as citizens.
       I'm pleading with you to help us. I know the time is short, 
     but they just received the

[[Page S3371]]

     deportation notice 6 days ago. We would be forever in your 
     debt if you can help the Gabra Family. This family is fearing 
     for their lives and safety right now.
           Sincerely,
     Linda Davis.
                                  ____

                                                John F. Laubacher,


                                  Certified Public Accountant,

                                     Camarillo, CA, Feb. 11, 2007.
     Senator Dianne Feinstein.
       Dear Senator Feinstein: I am writing this on behalf of my 
     friend and fellow CPA Joseph Gabra and his family. His wife 
     has been ordered to appear on Feb. 19th for deportation. I 
     have known the Gabra family for a number of years and am 
     writing in hopes that you will intervenue on his wife's 
     behalf and either: a. Seek a stay of execution of the order 
     to deport Mrs. Gabra; or b. Help them to arrange a green card 
     to allow her to remain in the U.S.
       Mr. Gabra is a great asset to our community. He is employed 
     by a client of mine as an accountant and I have seen 
     firsthand the tremendous integrity and thoroughness that he 
     brings to his job each day. He is a wonderful example to his 
     co-workers and the general public.
       Joseph was not always working as an accountant here even 
     though he is a CPA in his native country. Finding work as an 
     accountant was difficult due to a speech impediment. But he 
     has always been a hard worker, taking manual labor jobs to 
     stay off any public assistance. He has now been working in 
     his field and my client is thrilled with the job he is doing. 
     In addition, he travels to Cal State Northridge to get help 
     with his speech problem.
       Mrs. Gabra is a homemaker and takes care of their four 
     children that range from 8 years old to 18 months. She is 
     involved at our church as well in a number of programs. The 
     family has been a great addition to my church and the 
     Camarillo community in general.
       But if Mrs. Gabra is deported, the damage will not just be 
     to the community. There is danger that faces the family if 
     they are returned to Egypt. Mr. Gabra will not be able to 
     find work there because he is a Christian. The family will 
     face incredible persecution. The kids are U.S. citizens who 
     will suffer if they are sent to Egypt because they do not 
     speake the language and they are Christians, not Muslim. They 
     could be forced to convert to Islam or be killed. The girls 
     face a barbaric ritual of female circumcision. They are 
     dedicated to each other as a family. So, while Mrs. Gabra is 
     the only one being forced to leave at this time, splitting up 
     the family into two countries is simply not an option.
       Senator, Mr. Gabra is a man of faith. He is confident that 
     God will provide a rcsolution to this problem. I, too, am a 
     man of faith. But I believe that perhaps God will use you to 
     provide the miracle that the Gabra family needs now in order 
     to stay together. I am asking you to intercede on their 
     behalf.
       Thank you and your staff for taking the time to read this 
     and consider my request. He's a good man. They are a good 
     family. And they deserve better than the death sentence the 
     U.S. Government is giving them. His letter follows along with 
     the order from the Dept. of Homeland Security. Please help.
           Very truly yours,
                                           John F. Laubacher, CPA.
                                 ______
                                 
      By Mr. NELSON of Florida (for himself and Mr. Martinez):
  S. 934. A bill to amend the Florida National Forest Land Management 
Act of 2003 to authorize the conveyance of an additional tract of 
National Forest System land under that Act, and for other purposes; to 
the Committee on Energy and Natural Resources.
  Mr. NELSON of Florida. Mr. President, I rise today to introduce 
legislation that helps the U.S. Forest Service to protect sensitive and 
precious forest by selling developed land in Leon County, FL, in order 
to purchase at-risk land in the heart of our national forests.
  Specifically, this bill allows for the sale of tract W-1979, which is 
114 acres in Tallahassee, the proceeds of which are specifically 
designated to purchase private inholdings in the Apalachicola National 
Forest. The Forest Service believes that W-1979 has lost its national 
forest character and is unmanageable; the land will be sold to Leon 
County, where it will help the continued advancement of Blueprint 2000, 
a series of community initiatives to improve Tallahassee and Leon 
County. By selling this land on the outskirt of the Apalachicola 
National Forest, the Forest Service can acquire precious land in the 
heart of the forest that could be lost to development.
  This legislation also gives the U.S. Forest Service in Florida the 
same flexibility to manage lands and capital that many other states 
have. Previously, whenever National Forest land was sold, the funds 
could only be used to purchase more land, while many important 
infrastructure projects went undone. With passage of this bill, 
proceeds only from the sale of ``non-green'' lands can go towards 
capitol improvements, such as administrative facilities that help the 
Forest Service manage the Ocala, Apalachicola, and Osceola National 
Forests. These non-green lands have already been developed with urban 
improvements, and no longer align with the goals of the U.S. Forest 
Service.
  Congressman Crenshaw and Boyd have introduced similar legislation in 
the House of Representatives. I hope that we can quickly pass these 
bills and help Leon County and the Forest Service.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 934

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

     SECTION 1. CONVEYANCES UNDER FLORIDA NATIONAL FOREST LAND 
                   MANAGEMENT ACT OF 2003.

       (a) Additional Conveyance Authorized.--Subsection (b) of 
     section 3 of the Florida National Forest Land Management Act 
     of 2003 (Public Law 108-152; 117 Stat. 1919) is amended--
       (1) by striking ``and'' at the end of paragraph (17);
       (2) by redesignating paragraph (18) as paragraph (19);
       (3) by inserting after paragraph (17) the following new 
     paragraph:
       ``(18) tract W-1979, located in Leon County consisting of 
     approximately 114 acres, within T. 1 S., R. 1 W., sec. 25; 
     and''; and
       (4) in paragraph (19) (as redesignated by paragraph (2)), 
     by striking ``(17)'' and inserting ``(18)''.
       (b) Additional Use of Proceeds.--Paragraph (2) of 
     subsection (i) of such section (117 Stat. 1921) is amended--
       (1) by striking ``and'' at the end of subparagraph (A);
       (2) by striking the period at the end of subparagraph (B) 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(C) acquisition, construction, or maintenance of 
     administrative improvements for units of the National Forest 
     System in the State.''.
       (c) Limitations on Use of Proceeds.--Subsection (i) of such 
     section is further amended by adding at the end the following 
     new paragraphs:
       ``(3) Geographical and use restriction for certain 
     conveyance.--Notwithstanding paragraph (2), proceeds from the 
     sale or exchange of the tract described in subsection (b)(18) 
     shall be used exclusively for the purchase of inholdings in 
     the Apalachicola National Forest.
       ``(4) Restriction on use of proceeds for administrative 
     improvements.--Proceeds from any sale or exchange of land 
     under this Act may be used for administrative improvements, 
     as authorized by paragraph (2)(C), only if the land 
     generating the proceeds was improved with infrastructure.''.
                                 ______
                                 
      By Mr. NELSON of Florida (for himself, Mr. Hagel, Mr. Bingaman, 
        Ms. Mikulski, Mrs. Lincoln, Mr. Biden, Mr. Vitter, Mr. 
        Domenici, Mr. Kerry, Mr. Martinez, Mr. Salazar, Ms. Snowe, Mr. 
        Brown, Mrs. Feinstein, Mrs. Murray, and Mrs. Clinton):
  S. 935. A bill to repeal the requirement for reduction of survivor 
annuities under the Survivor Benefit Plan by veterans' dependency and 
indemnity compensation, and for other purposes; to the Committee on 
Armed Services.
  Mr. NELSON of Florida. Mr. President, on behalf of myself and 
Senators Hagel, Bingaman, Kerry, Mikulski, Lincoln, Biden, Vitter, 
Domenici, Martinez, Salazar, Snowe, Brown, Feinstein, Murray, and 
Clinton, I am honored to introduce legislation today that we are 
convinced is necessary to fix a long-standing problem in our military 
survivors benefits system.
  President Lincoln's words are as relevant and moving today as they 
were during the Civil War: ``as God gives us to see the right, let us 
strive on to finish the work we are in; to bind up the nation's wounds; 
to care for him who shall have borne the battle, and for his widow, and 
his orphan.''
  Our Nation continues to be engaged in a violent struggle against 
brutal and vicious enemies around the world. Sadly, Americans are lost 
every day. We must never forget that the families left behind by our 
courageous men and women in uniform bear the greatest pain. Their 
survivors face a life forever altered, and a future left unclear. They 
suffer the greatest cost of the ultimate sacrifice, and the nation that 
asked for that sacrifice must honor it.
  Back in 1972, Congress established the military survivors' benefits 
plan--

[[Page S3372]]

or SBP--to provide retirees' survivors an annuity to protect their 
income. This benefit plan is a voluntary program purchased by the 
retiree or issued automatically in the case of servicemembers who die 
while on active duty. Retired servicemembers pay for this benefit from 
their retired pay. Upon their death, their spouse or dependent children 
can receive up to 55 percent of their retired pay as an annuity.
  For over five years, I've been talking about the unfair and painful 
offset between SBP and the Department of Veterans Affairs' Dependency 
and Indemnity Compensation, or DIC, which is received by the surviving 
spouse of an active duty or retired military member who dies from a 
service-connected cause. Under current law, even if the surviving 
spouse of such a servicemember is eligible for SBP, that purchased 
annuity is reduced by the amount of DIC received. Another inequity in 
the current system is the delayed effective date for ``paid-up status'' 
under SBP. We should act to correct these injustices this year.
  We have made progress, but even with the important changes made over 
the last few years, the offset still fails to take care of our military 
widows and surviving children the way it should. We have considered and 
adopted increased death gratuity benefits for the survivors of our 
troops lost in this war, and we have changed the law to enable these 
survivors to automatically enroll in SBP. However, now we see the pain 
caused when at the same moment a widow is enrolled in SBP she is hit 
with the DIC offset.
  The SBP offset is no less painful for the survivors of our 100 
percent disabled military retirees. SBP is a purchased annuity plan. 
Before coming to the U.S. Senate, I served as Insurance Commissioner 
for the State of Florida, and I know of no other purchased annuity 
program that can then turn around and refuse to pay you the benefits 
you purchased on the grounds that you are getting a different benefit 
from somewhere else.
  Our Federal civil servants receive both their purchased survivor 
income protection annuity and any disability compensation for which 
they may be entitled--without offset. Why on earth would we treat our 
100 percent disabled military retirees any differently, especially 
after they have given the best years of their lives and their health in 
service to the Nation?
  Let me be clear about this: survivors of servicemembers are entitled 
in law to automatic enrollment in SBP; 100 percent disabled military 
retirees purchase SBP. Survivors stand to lose most or even all of the 
benefits under SBP only because they are also entitled to DIC.
  This legislation also accelerates an improvement we made earlier to 
the SBP program. We have already agreed that military retirees who have 
reached the age of 70 and paid their SBP premiums for thirty years 
should stop paying a premium, but we delayed the effective date for 
this relief until 2008. We should not delay their relief any further.
  The United States owes its very existence to generations of soldiers, 
sailors, airmen, and marines who have sacrificed throughout our history 
to keep us free. The sacrifices of today are no less important to 
American liberty or tragic when a life is lost in the defense of 
liberty everywhere.
  We owe them and their surviving family members a great debt.
  Unfortunately, it is too often that we fall short on this care. We 
must meet this obligation with the same sense of honor as was the 
service they and their families have rendered.
  We will continue to work to do right by those who have given this 
Nation their all, and especially for the loved ones they may leave to 
our care.
  I appreciate the co-sponsorship of my colleagues--Senators Hagel, 
Bingaman, Kerry, Mikulski, Lincoln, Biden, Vitter, Domenici, Martinez, 
Salazar, Snowe, Brown, Feinstein, Murray, and Clinton--and look forward 
to working with my colleagues in the days ahead.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 935

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

     SECTION 1. REPEAL OF REQUIREMENT OF REDUCTION OF SBP SURVIVOR 
                   ANNUITIES BY DEPENDENCY AND INDEMNITY 
                   COMPENSATION.

       (a) Repeal.--
       (1) In general.--Subchapter II of chapter 73 of title 10, 
     United States Code, is amended as follows:
       (A) In section 1450, by striking subsection (c).
       (B) In section 1451(c)--
       (i) by striking paragraph (2); and
       (ii) by redesignating paragraphs (3) and (4) as paragraphs 
     (2) and (3), respectively.
       (2) Conforming amendments.--Such subchapter is further 
     amended as follows:
       (A) In section 1450--
       (i) by striking subsection (e); and
       (ii) by striking subsection (k).
       (B) In section 1451(g)(1), by striking subparagraph (C).
       (C) In section 1452--
       (i) in subsection (f)(2), by striking ``does not apply--'' 
     and all that follows and inserting ``does not apply in the 
     case of a deduction made through administrative error.''; and
       (ii) by striking subsection (g).
       (D) In section 1455(c), by striking ``, 1450(k)(2),''.
       (b) Prohibition on Retroactive Benefits.--No benefits may 
     be paid to any person for any period before the effective 
     date provided under subsection (f) by reason of the 
     amendments made by subsection (a).
       (c) Prohibition on Recoupment of Certain Amounts Previously 
     Refunded to SBP Recipients.--A surviving spouse who is or has 
     been in receipt of an annuity under the Survivor Benefit Plan 
     under subchapter II of chapter 73 of title 10, United States 
     Code, that is in effect before the effective date provided 
     under subsection (f) and that is adjusted by reason of the 
     amendments made by subsection (a) and who has received a 
     refund of retired pay under section 1450(e) of title 10, 
     United States Code, shall not be required to repay such 
     refund to the United States.
       (d) Repeal of Authority for Optional Annuity for Dependent 
     Children.--Section 1448(d)(2) of such title is amended--
       (1) by striking ``Dependent children.--'' and all that 
     follows through ``In the case of a member described in 
     paragraph (1),'' and inserting ``Dependent children.--In the 
     case of a member described in paragraph (1),''; and
       (2) by striking subparagraph (B).
       (e) Restoration of Eligibility for Previously Eligible 
     Spouses.--The Secretary of the military department concerned 
     shall restore annuity eligibility to any eligible surviving 
     spouse who, in consultation with the Secretary, previously 
     elected to transfer payment of such annuity to a surviving 
     child or children under the provisions of section 
     1448(d)(2)(B) of title 10, United States Code, as in effect 
     on the day before the effective date provided under 
     subsection (f). Such eligibility shall be restored whether or 
     not payment to such child or children subsequently was 
     terminated due to loss of dependent status or death. For the 
     purposes of this subsection, an eligible spouse includes a 
     spouse who was previously eligible for payment of such 
     annuity and is not remarried, or remarried after having 
     attained age 55, or whose second or subsequent marriage has 
     been terminated by death, divorce or annulment.
       (f) Effective Date.--The sections and the amendments made 
     by this section shall take effect on the later of--
       (1) the first day of the first month that begins after the 
     date of the enactment of this Act; or
       (2) the first day of the fiscal year that begins in the 
     calendar year in which this Act is enacted.

     SEC. 2. EFFECTIVE DATE OF PAID-UP COVERAGE UNDER SURVIVOR 
                   BENEFIT PLAN.

       (a) Survivor Benefit Plan.--Section 1452(j) of title 10, 
     United States Code, is amended by striking ``October 1, 
     2008'' and inserting ``October 1, 2007''.
       (b) Retired Serviceman's Family Protection Plan.--Section 
     1436a of such title is amended by striking ``October 1, 
     2008'' and inserting ``October 1, 2007''.
                                 ______
                                 
      By Mr. DURBIN (for himself and Mr. Specter):
  S. 936. A bill to reform the financing of Senate elections, and for 
other purposes; to the Committee on Finance.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       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 ``Fair 
     Elections Now Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

     TITLE I--FAIR ELECTIONS FINANCING OF SENATE ELECTION CAMPAIGNS

              Subtitle A--Fair Elections Financing Program

Sec. 101. Findings and declarations.
Sec. 102. Eligibility requirements and benefits of fair elections 
              financing of Senate election campaigns.

[[Page S3373]]

    ``TITLE V--FAIR ELECTIONS FINANCING OF SENATE ELECTION CAMPAIGNS

``Sec. 501. Definitions.
``Sec. 502. Senate Fair Elections Fund.
``Sec. 503. Eligibility for allocations from the Fund.
``Sec. 504. Seed money contribution requirement.
``Sec. 505. Qualifying contribution requirement.
``Sec. 506. Contribution and expenditure requirements.
``Sec. 507. Debate requirement.
``Sec. 508. Certification by Commission.
``Sec. 509. Benefits for participating candidates.
``Sec. 510. Allocations from the Fund.
``Sec. 511. Payment of fair fight funds.
``Sec. 512. Administration of the Senate fair elections system.
``Sec. 513. Violations and penalties.
Sec. 103. Reporting requirements for nonparticipating candidates.
Sec. 104. Modification of electioneering communication reporting 
              requirements.
Sec. 105. Limitation on coordinated expenditures by political party 
              committees with participating candidates.
Sec. 106. Audits.

            Subtitle B--Senate Fair Elections Fund Revenues

Sec. 111. Deposit of proceeds from recovered spectrum auctions.
Sec. 112. Tax credit for voluntary donations to Senate Fair Elections 
              Fund.

              Subtitle C--Fair Elections Review Commission

Sec. 121. Establishment of Commission.
Sec. 122. Structure and membership of the commission.
Sec. 123. Powers of the Commission.
Sec. 124. Administration.
Sec. 125. Authorization of appropriations.
Sec. 126. Expedited consideration of Commission recommendations.

                      TITLE II--VOTER INFORMATION

Sec. 201. Broadcasts relating to candidates.
Sec. 202. Political advertisement vouchers for participating 
              candidates.
Sec. 203. FCC to prescribe standardized form for reporting candidate 
              campaign ads.
Sec. 204. Limit on Congressional use of the franking privilege.

     TITLE III--RESPONSIBILITIES OF THE FEDERAL ELECTION COMMISSION

Sec. 301. Petition for certiorari.
Sec. 302. Filing by Senate candidates with Commission.
Sec. 303. Electronic filing of FEC reports.

                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Severability.
Sec. 402. Review of constitutional issues.
Sec. 403. Effective date.

     TITLE I--FAIR ELECTIONS FINANCING OF SENATE ELECTION CAMPAIGNS

              Subtitle A--Fair Elections Financing Program

     SEC. 101. FINDINGS AND DECLARATIONS.

       (a) Undermining of Democracy by Campaign Contributions From 
     Private Sources.--The Senate finds and declares that the 
     current system of privately financed campaigns for election 
     to the United States Senate has the capacity, and is often 
     perceived by the public, to undermine democracy in the United 
     States by--
       (1) creating a conflict of interest, perceived or real, by 
     encouraging Senators to accept large campaign contributions 
     from private interests that are directly affected by Federal 
     legislation;
       (2) diminishing or giving the appearance of diminishing a 
     Senator's accountability to constituents by compelling 
     legislators to be accountable to the major contributors who 
     finance their election campaigns;
       (3) violating the democratic principle of ``one person, one 
     vote'' and diminishing the meaning of the right to vote by 
     allowing monied interests to have a disproportionate and 
     unfair influence within the political process;
       (4) imposing large, unwarranted costs on taxpayers through 
     legislative and regulatory outcomes shaped by unequal access 
     to lawmakers for campaign contributors;
       (5) driving up the cost of election campaigns, making it 
     difficult for qualified candidates without personal wealth or 
     access to campaign contributions from monied individuals and 
     interest groups to mount competitive Senate election 
     campaigns;
       (6) disadvantaging challengers, because large campaign 
     contributors tend to donate their money to incumbent 
     Senators, thus causing Senate elections to be less 
     competitive; and
       (7) burdening incumbents with a preoccupation with 
     fundraising and thus decreasing the time available to carry 
     out their public responsibilities.
       (b) Enhancement of Democracy by Providing Allocations From 
     the Senate Fair Elections Fund.--The Senate finds and 
     declares that providing the option of the replacement of 
     private campaign contributions with allocations from the 
     Senate Fair Elections Fund for all primary, runoff, and 
     general elections to the Senate would enhance American 
     democracy by--
       (1) eliminating the potentially inherent conflict of 
     interest created by the private financing of the election 
     campaigns of public officials, thus restoring public 
     confidence in the integrity and fairness of the electoral and 
     legislative processes;
       (2) increasing the public's confidence in the 
     accountability of Senators to the constituents who elect 
     them;
       (3) helping to eliminate access to wealth as a determinant 
     of a citizen's influence within the political process and to 
     restore meaning to the principle of ``one person, one vote'';
       (4) reversing the escalating cost of elections and saving 
     taxpayers billions of dollars that are (or that are perceived 
     to be) currently allocated based upon legislative and 
     regulatory agendas skewed by the influence of campaign 
     contributions;
       (5) creating a more level playing field for incumbents and 
     challengers by creating genuine opportunities for all 
     Americans to run for the Senate and by encouraging more 
     competitive elections; and
       (6) freeing Senators from the incessant preoccupation with 
     raising money, and allowing them more time to carry out their 
     public responsibilities.

     SEC. 102. ELIGIBILITY REQUIREMENTS AND BENEFITS OF FAIR 
                   ELECTIONS FINANCING OF SENATE ELECTION 
                   CAMPAIGNS.

       The Federal Election Campaign Act of 1971 (2 U.S.C. 431 et 
     seq.) is amended by adding at the end the following:

    ``TITLE V--FAIR ELECTIONS FINANCING OF SENATE ELECTION CAMPAIGNS

     ``SEC. 501. DEFINITIONS.

       ``In this title:
       ``(1) Allocation from the fund.--The term `allocation from 
     the Fund' means an allocation of money from the Senate Fair 
     Elections Fund to a participating candidate pursuant to 
     sections 510 and 511.
       ``(2) Fair elections qualifying period.--The term `fair 
     elections qualifying period' means, with respect to any 
     candidate for Senator, the period--
       ``(A) beginning on the date on which the candidate files a 
     statement of intent under section 503(a)(1); and
       ``(B) ending on the date that is 30 days before--
       ``(i) the date of the primary election; or
       ``(ii) in the case of a State that does not hold a primary 
     election, the date prescribed by State law as the last day to 
     qualify for a position on the general election ballot.
       ``(3) Fair elections start date.--The term `fair elections 
     start date' means, with respect to any candidate, the date 
     that is 180 days before--
       ``(A) the date of the primary election; or
       ``(B) in the case of a State that does not hold a primary 
     election, the date prescribed by State law as the last day to 
     qualify for a position on the general election ballot.
       ``(4) Fund.--The term `Fund' means the Senate Fair 
     Elections Fund established by section 502.
       ``(5) Immediate family.--The term `immediate family' means, 
     with respect to any candidate--
       ``(A) the candidate's spouse;
       ``(B) a child, stepchild, parent, grandparent, brother, 
     half-brother, sister, or half-sister of the candidate or the 
     candidate's spouse; and
       ``(C) the spouse of any person described in subparagraph 
     (B).
       ``(6) Independent candidate.--The term `independent 
     candidate' means a candidate for Senator who is--
       ``(A) not affiliated with any political party; or
       ``(B) affiliated with a political party that--
       ``(i) in the case of a candidate in a State that holds a 
     primary election for Senator, does not hold a primary 
     election for Senator; or
       ``(ii) in the case of a candidate in a State that does not 
     hold primary election for Senator, does not have ballot 
     status in such State.
       ``(7) Major party candidate.--
       ``(A) In general.--The term `major party candidate' means a 
     candidate for Senator who is affiliated with a major 
     political party.
       ``(B) Major political party.--The term `major political 
     party' means, with respect to any State, a political party of 
     which a candidate for the office of Senator, President, or 
     Governor in the preceding 5 years, received, as a candidate 
     of that party in such State, 25 percent or more of the total 
     number of popular votes cast for such office in such State.
       ``(8) Minor party candidate.--The term `minor party 
     candidate' means a candidate for Senator who is affiliated 
     with a political party that--
       ``(A) holds a primary for Senate nominations; and
       ``(B) is not a major political party.
       ``(9) Nonparticipating candidate.--The term 
     `nonparticipating candidate' means a candidate for Senator 
     who is not a participating candidate.
       ``(10) Participating candidate.--The term `participating 
     candidate' means a candidate for Senator who is certified 
     under section 508 as being eligible to receive an allocation 
     from the Fund.
       ``(11) Qualifying contribution.--The term `qualifying 
     contribution' means, with respect to a candidate, a 
     contribution that--
       ``(A) is in the amount of $5 exactly;
       ``(B) is made by an individual who--
       ``(i) is a resident of the State with respect to which the 
     candidate is seeking election; and
       ``(ii) is not prohibited from making a contribution under 
     this Act;
       ``(C) is made during the fair elections qualifying period; 
     and

[[Page S3374]]

       ``(D) meets the requirements of section 505(c).
       ``(12) Seed money contribution.--The term `seed money 
     contribution' means a contribution or contributions by any 1 
     individual--
       ``(A) aggregating not more than $100; and
       ``(B) made to a candidate after the date of the most recent 
     previous election for the office which the candidate is 
     seeking and before the date the candidate has been certified 
     as a participating candidate under section 508(a).

     ``SEC. 502. SENATE FAIR ELECTIONS FUND.

       ``(a) Establishment.--There is established in the Treasury 
     a fund to be known as the `Senate Fair Elections Fund'.
       ``(b) Amounts Held by Fund.--The Fund shall consist of the 
     following amounts:
       ``(1) Proceeds from recovered spectrum.--Proceeds deposited 
     into the Fund under section 309(j)(8)(E)(ii)(II) of the 
     Communications Act of 1934.
       ``(2) Excess spectrum user fees.--Amounts deposited in the 
     Fund under section 315A(f)(2)(B)(ii) of the Communications 
     Act of 1934.
       ``(3) Voluntary contributions.--Voluntary contributions to 
     the fund.
       ``(4) Qualifying contributions, penalties, and other 
     deposits.--Amounts deposited into the Fund under--
       ``(A) section 504(2) (relating to limitation on amount of 
     seed money);
       ``(B) section 505(d) (relating to deposit of qualifying 
     contributions);
       ``(C) section 506(c) (relating to exceptions to 
     contribution requirements);
       ``(D) section 509(c) (relating to remittance of allocations 
     from the Fund);
       ``(E) section 513 (relating to violations); and
       ``(F) any other section of this Act.
       ``(5) Investment returns.--Interest on, and the proceeds 
     from, the sale or redemption of, any obligations held by the 
     Fund under subsection (c).
       ``(c) Investment.--The Commission shall invest portions of 
     the Fund in obligations of the United States in the same 
     manner as provided under section 9602(b) of the Internal 
     Revenue Code of 1986.
       ``(d) Use of Fund.--
       ``(1) In general.--The sums in the Senate Fair Elections 
     Fund shall be used to make allocations to participating 
     candidates in accordance with sections 510 and 511.
       ``(2) Insufficient amounts.--Under regulations established 
     by the Commission, rules similar to the rules of section 
     9006(c) of the Internal Revenue Code shall apply.

     ``SEC. 503. ELIGIBILITY FOR ALLOCATIONS FROM THE FUND.

       ``(a) In General.--A candidate for Senator is eligible to 
     receive an allocation from the Fund for any election if the 
     candidate meets the following requirements:
       ``(1) The candidate files with the Commission a statement 
     of intent to seek certification as a participating candidate 
     under this title during the period beginning on the fair 
     elections start date and ending on the last day of the fair 
     elections qualifying period.
       ``(2) The candidate has complied with the seed money 
     contribution requirements of section 504.
       ``(3) The candidate meets the qualifying contribution 
     requirements of section 505.
       ``(4) Not later than the last day of the fair elections 
     qualifying period, the candidate files with the Commission an 
     affidavit signed by the candidate and the treasurer of the 
     candidate's principal campaign committee declaring that the 
     candidate--
       ``(A) has complied and, if certified, will comply with the 
     contribution and expenditure requirements of section 506;
       ``(B) if certified, will comply with the debate 
     requirements of section 507;
       ``(C) if certified, will not run as a nonparticipating 
     candidate during such year in any election for the office 
     that such candidate is seeking; and
       ``(D) has either qualified or will take steps to qualify 
     under State law to be on the ballot.
       ``(b) General Election.--Notwithstanding subsection (a), a 
     candidate shall not be eligible to receive an allocation from 
     the Fund for a general election or a general run off election 
     unless the candidate's party nominated the candidate to be 
     placed on the ballot for the general election or the 
     candidate qualified to be placed on the ballot as an 
     independent candidate, and the candidate is qualified under 
     State law to be on the ballot.

     ``SEC. 504. SEED MONEY CONTRIBUTION REQUIREMENT.

       ``A candidate for Senator meets the seed money contribution 
     requirements of this section if the candidate meets the 
     following requirements:
       ``(1) Separate accounting.--The candidate maintains seed 
     money contributions in a separate account.
       ``(2) Limitation on amount.--The candidate deposits into 
     the Senate Fair Elections Fund or returns to donors an amount 
     equal to the amount of any seed money contributions which, in 
     the aggregate, exceed the sum of--
       ``(A) in the case of an independent candidate, the amount 
     which the candidate would be entitled to under section 
     510(c)(3); and
       ``(B) in the case of any other candidate, the amount which 
     the candidate would be entitled to under section 510(c)(1).
       ``(3) Use of seed money.--The candidate makes expenditures 
     from seed money contributions only for campaign-related 
     costs.
       ``(4) Records.--The candidate maintains a record of the 
     name and street address of any contributor of a seed money 
     contribution and the amount of any such contribution.
       ``(5) Report.--Unless a seed money contribution or an 
     expenditure made with a seed money contribution has been 
     reported previously under section 304, the candidate files 
     with the Commission a report disclosing all seed money 
     contributions and expenditures not later than 48 hours after 
     receiving notification of the determination with respect to 
     the certification of the candidate under section 508.

     ``SEC. 505. QUALIFYING CONTRIBUTION REQUIREMENT.

       ``(a) In General.--A candidate for Senator meets the 
     requirement of this section if, during the fair elections 
     qualifying period, the candidate obtains a number of 
     qualifying contributions equal to the sum of--
       ``(1) 2,000; plus
       ``(2) 500 for each congressional district in excess of 1 in 
     the State with respect to which the candidate is seeking 
     election.
       ``(b) Special Rule for Certain Candidates.--
       ``(1) In general.--Notwithstanding subsection (a), in the 
     case of a candidate described in paragraph (2), the 
     requirement of this section is met if, during the fair 
     elections qualifying period, the candidate obtains a number 
     of qualifying contributions equal to 150 percent of the 
     number of qualifying contributions that such candidate would 
     be required to obtain without regard to this subsection.
       ``(2) Candidate described.--A candidate is described in 
     this paragraph if--
       ``(A) the candidate is a minor party candidate or an 
     independent candidate; and
       ``(B) in the most recent general election involving the 
     office of Senator, President, or Governor in the State in 
     which the candidate is seeking office, the candidate and all 
     candidates of the same political party as such candidate 
     received less than 5 percent of the total number of votes 
     cast for each such office.
       ``(c) Requirements Relating to Receipt of Qualifying 
     Contribution.--Each qualifying contribution--
       ``(1) may be made by means of a personal check, money 
     order, debit card, or credit card;
       ``(2) shall be payable to the Senate Fair Elections Fund;
       ``(3) shall be accompanied by a signed statement 
     containing--
       ``(A) the contributor's name and home address;
       ``(B) an oath declaring that the contributor--
       ``(i) is a resident of the State in which the candidate 
     with respect to whom the contribution is made is running for 
     election;
       ``(ii) understands that the purpose of the qualifying 
     contribution is to show support for the candidate so that the 
     candidate may qualify for public financing;
       ``(iii) is making the contribution in his or her own name 
     and from his or her own funds;
       ``(iv) has made the contribution willingly; and
       ``(v) has not received any thing of value in return for the 
     contribution; and
       ``(4) shall be acknowledged by a receipt that is sent to 
     the contributor with a copy kept by the candidate for the 
     Commission and a copy kept by the candidate for the election 
     authorities in the State with respect to which the candidate 
     is seeking election.
       ``(d) Deposit of Qualifying Contributions.--
       ``(1) In general.--Not later than 21 days after obtaining a 
     qualifying contribution, a candidate shall--
       ``(A) deposit such contribution into the Senate Fair 
     Elections Fund, and
       ``(B) remit to the Commission a copy of the receipt for 
     such contribution.
       ``(2) Deposit of contributions after certification.--
     Notwithstanding paragraph (1), all qualifying contributions 
     obtained by a candidate shall be deposited into the Senate 
     Fair Elections Fund and all copies of receipts for such 
     contributions shall be remitted to the Commission not later 
     than--
       ``(A) in the case of a candidate who is denied 
     certification under section 508, 3 days after receiving a 
     notice of denial of certification under section 508(a)(2); 
     and
       ``(B) in any other case, not later than the last day of the 
     fair elections qualifying period.
       ``(e) Verification of Qualifying Contributions.--The 
     Commission shall establish procedures for the auditing and 
     verification of qualifying contributions to ensure that such 
     contributions meet the requirements of this section. Such 
     procedures may provide for verification through the means of 
     a postcard or other method, as determined by the Commission.

     ``SEC. 506. CONTRIBUTION AND EXPENDITURE REQUIREMENTS.

       ``(a) General Rule.--A candidate for Senator meets the 
     requirements of this section if, during the election cycle of 
     the candidate, the candidate--
       ``(1) except as provided in subsection (b), accepts no 
     contributions other than--
       ``(A) seed money contributions;
       ``(B) qualifying contributions made payable to the Senate 
     Fair Elections Fund;
       ``(C) allocations from the Senate Fair Elections Fund under 
     sections 510 and 511; and
       ``(D) vouchers provided to the candidate under section 315A 
     of the Communications Act of 1934;

[[Page S3375]]

       ``(2) makes no expenditures from any amounts other than 
     from--
       ``(A) amounts received from seed money contributions;
       ``(B) amounts received from the Senate Fair Elections Fund; 
     and
       ``(C) vouchers provided to the candidate under section 315A 
     of the Communications Act of 1934; and
       ``(3) makes no expenditures from personal funds or the 
     funds of any immediate family member (other than funds 
     received through seed money contributions).
     For purposes of this subsection, a payment made by a 
     political party in coordination with a participating 
     candidate shall not be treated as a contribution to or as an 
     expenditure made by the participating candidate.
       ``(b) Contributions for Leadership PACs, etc.--A political 
     committee of a participating candidate which is not an 
     authorized committee of such candidate may accept 
     contributions other than contributions described in 
     subsection (a)(1) from any person if--
       ``(1) the aggregate contributions from such person for any 
     for a calendar year do not exceed $100; and
       ``(2) no portion of such contributions is disbursed in 
     connection with the campaign of the participating candidate.
       ``(c) Exception.--
       ``(1) In general.--Notwithstanding subsection (a), a 
     candidate shall not be treated as having failed to meet the 
     requirements of this section if any contributions accepted 
     before the date the candidate files a statement of intent 
     under section 503(a)(1) are not expended and are--
       ``(A) returned to the contributor; or
       ``(B) submitted to the Federal Election Commission for 
     deposit in the Senate Fair Elections Fund.
       ``(2) Special rule for seed money contributions and 
     contributions for leadership pacs.--For purposes of paragraph 
     (1), a candidate shall not be required to return, donate, or 
     submit any portion of the aggregate amount of contributions 
     from any person which is $100 or less to the extent that such 
     contribution--
       ``(A) otherwise qualifies as a seed money contribution; or
       ``(B) otherwise meets the requirements of subsection (b).
       ``(3) Special rule for contributions before the date of 
     enactment of this title.--Notwithstanding subsection (a), a 
     candidate shall not be treated as having failed to meet the 
     requirements of this section if any contributions accepted 
     before the date of the enactment of this title are not 
     expended and are--
       ``(A) returned to the contributor;
       ``(B) donated to an organization described in section 
     170(c) of the Internal Revenue Code of 1986;
       ``(C) donated to a political party;
       ``(D) used to retire campaign debt; or
       ``(E) submitted to the Federal Election Commission for 
     deposit in the Senate Fair Elections Fund.

     ``SEC. 507. DEBATE REQUIREMENT.

       ``A candidate for Senator meets the requirements of this 
     section if the candidate participates in at least--
       ``(1) 1 public debate before the primary election with 
     other participating candidates and other willing candidates 
     from the same party and seeking the same nomination as such 
     candidate; and
       ``(2) 2 public debates before the general election with 
     other participating candidates and other willing candidates 
     seeking the same office as such candidate.

     ``SEC. 508. CERTIFICATION BY COMMISSION.

       ``(a) In General.--Not later than 5 days after a candidate 
     for Senator files an affidavit under section 503(a)(4), the 
     Commission shall--
       ``(1) certify whether or not the candidate is a 
     participating candidate; and
       ``(2) notify the candidate of the Commission's 
     determination.
       ``(b) Revocation of Certification.--
       ``(1) In general.--The Commission may revoke a 
     certification under subsection (a) if--
       ``(A) a candidate fails to qualify to appear on the ballot 
     at any time after the date of certification; or
       ``(B) a candidate otherwise fails to comply with the 
     requirements of this title.
       ``(2) Repayment of benefits.--If certification is revoked 
     under paragraph (1), the candidate shall repay--
       ``(A) to the Senate Fair Elections Fund an amount equal to 
     the value of benefits received under this title plus interest 
     (at a rate determined by the Commission) on any such amount 
     received; and
       ``(B) to Federal Communications Commission an amount equal 
     to the amount of the dollar value of vouchers which were 
     received from the Federal Communications Commission under 
     section 315A of the Communications Act of 1934 and used by 
     the candidate.

     ``SEC. 509. BENEFITS FOR PARTICIPATING CANDIDATES.

       ``(a) In General.--A participating candidate shall be 
     entitled to--
       ``(1) for each election with respect to which a candidate 
     is certified as a participating candidate--
       ``(A) an allocation from the Fund to make or obligate to 
     make expenditures with respect to such election, as provided 
     in section 510;
       ``(B) fair fight funds, as provided in section 511; and
       ``(2) for the general election, vouchers for broadcasts of 
     political advertisements, as provided in section 315A of the 
     Communications Act of 1934 (47 U.S.C. 315A).
       ``(b) Restriction on Uses of Allocations From the Fund.--
     Allocations from the Fund received by a participating 
     candidate under sections 510 and 511 may only be used for 
     campaign-related costs.
       ``(c) Remitting Allocations From the Fund.--Not later than 
     the date that is 45 days after the date of the election, a 
     participating candidate shall remit to the Commission for 
     deposit in the Senate Fair Elections Fund any unspent amounts 
     paid to such candidate under this title for such election.

     ``SEC. 510. ALLOCATIONS FROM THE FUND.

       ``(a) In General.--The Commission shall make allocations 
     from the Fund under section 509(a)(1)(A) to a participating 
     candidate--
       ``(1) in the case of amounts provided under subsection 
     (c)(1), not later than 48 hours after the date on which such 
     candidate is certified as a participating candidate under 
     section 508;
       ``(2) in the case of a general election, not later than 48 
     hours after--
       ``(A) the date the certification of the results of the 
     primary election or the primary runoff election; or
       ``(B) in any case in which there is no primary election, 
     the date the candidate qualifies to be placed on the ballot; 
     and
       ``(3) in the case of a primary runoff election or a general 
     runoff election, not later than 48 hours after the 
     certification of the results of the primary election or the 
     general election, as the case may be.
       ``(b) Method of Payment.--The Commission shall distribute 
     funds available to participating candidates under this 
     section through the use of an electronic funds exchange or a 
     debit card.
       ``(c) Amounts.--
       ``(1) Primary election allocation; initial allocation.--
       ``(A) In general.--Except as provided in subparagraphs (B), 
     the Commission shall make an allocation from the Fund for a 
     primary election to a participating candidate in an amount 
     equal to 67 percent of the base amount with respect to such 
     participating candidate.
       ``(B) Independent candidates.--In the case of a 
     participating candidate who is an independent candidate, the 
     Commission shall make an initial allocation from the Fund in 
     an amount equal to 25 percent of the base amount with respect 
     to such candidate.
       ``(C) Reduction for excess seed money.--An allocation from 
     the Fund for any candidate under this paragraph shall be 
     reduced by an amount equal to the aggregate amount of seed 
     money contributions received by the candidate in excess of 
     the sum of--
       ``(i) $75,000; plus
       ``(ii) $7,500 for each congressional district in excess of 
     1 in the State with respect to which the candidate is seeking 
     election.
       ``(2) Primary runoff election allocation.--The Commission 
     shall make an allocation from the Fund for a primary runoff 
     election to a participating candidate in an amount equal to 
     25 percent of the amount the participating candidate was 
     eligible to receive under this section for the primary 
     election.
       ``(3) General election allocation.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Commission shall make an allocation from the Fund for a 
     general election to a participating candidate in an amount 
     equal to the base amount with respect to such candidate.
       ``(B) Uncontested elections.--
       ``(i) In general.--The Commission shall make an allocation 
     from the Fund to a participating candidate for a general 
     election that is uncontested in an amount equal to 25 percent 
     of the base amount with respect to such candidate.
       ``(ii) Uncontested elections.--For purposes of this 
     subparagraph, an election is uncontested if not more than 1 
     candidate has received contributions (including payments from 
     the Senate Fair Elections Fund) in an amount equal to or 
     greater than the lesser of--

       ``(I) the amount in effect for a candidate in such election 
     under paragraph (1)(C), or
       ``(II) an amount equal to 50 percent of the base amount 
     with respect to such candidate.

       ``(C) Reduction for excess seed money.--The allocation from 
     the Fund for the general election for any participating 
     candidate in a State that does not hold a primary election 
     shall be reduced by an amount equal to the aggregate amount 
     of seed money contributions received by the candidate in 
     excess of the sum of--
       ``(i) $75,000; plus
       ``(ii) $7,500 for each congressional district in excess of 
     1 in the State with respect to which the candidate is seeking 
     election.
       ``(4) General runoff election allocation.--The Commission 
     shall make an allocation from the Fund for a general runoff 
     election to a participating candidate in an amount equal to 
     25 percent of the base amount with respect to such candidate.
       ``(d) Base Amount.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, the base amount for any candidate is an amount 
     equal to the sum of--
       ``(A) $750,000; plus
       ``(B) $150,000 for each congressional district in excess of 
     1 in the State with respect to which the candidate is seeking 
     election.
       ``(2) Minor party and independent candidates.--
       ``(A) Reduced amount for certain candidates.--

[[Page S3376]]

       ``(i) In general.--In the case of a minor party candidate 
     or independent candidate described clause (ii), the base 
     amount is an amount equal to the product of--

       ``(I) a fraction the numerator of which is the highest 
     percentage of the vote received by the candidate or a 
     candidate of the same political party as such candidate in 
     the election described in clause (ii) and the denominator of 
     which is 25 percent; and
       ``(II) the amount that would (but for this paragraph) be 
     the base amount for the candidate under paragraph (1).

       ``(ii) Candidate described.--A candidate is described in 
     this clause if, in the most recent general election involving 
     the office of Senator, President, or Governor in the State in 
     which the candidate is seeking office--

       ``(I) such candidate, or any candidate of the same 
     political party as such candidate, received 5 percent or more 
     of the total number of votes cast for any such office; and
       ``(II) such candidate and all candidates of the same 
     political party as such candidate received less than 25 
     percent of the total number of votes cast for each such 
     office.

       ``(B) Exception.--Subparagraph (A) shall not apply to any 
     candidate if such candidate receives a number of qualifying 
     contributions which is greater than 150 percent of the number 
     of qualifying contributions such candidate is required to 
     receive in order to meet the requirements of section 505(a).
       ``(3) Indexing.--In each odd-numbered year after 2010--
       ``(A) each dollar amount under paragraph (1) shall be 
     increased by the percent difference between the price index 
     (as defined in section 315(c)(2)(A)) for the 12 months 
     preceding the beginning of such calendar year and the price 
     index for calendar year 2008;
       ``(B) each dollar amount so increased shall remain in 
     effect for the 2-year period beginning on the first day 
     following the date of the last general election in the year 
     preceding the year in which the amount is increased and 
     ending on the date of the next general election; and
       ``(C) if any amount after adjustment under subparagraph (A) 
     is not a multiple of $100, such amount shall be rounded to 
     the nearest multiple of $100.
       ``(4) Adjustment by media market.--
       ``(A) In general.--The Commission, in consultation with the 
     Federal Communications Commission, shall establish an index 
     reflecting the costs of the media markets in each State.
       ``(B) Adjustment.--At the beginning of each year, the 
     Commission shall increase the amount under paragraph (1) 
     (after application of paragraph (3)) based on the index 
     established under subparagraph (A).

     ``SEC. 511. PAYMENT OF FAIR FIGHT FUNDS.

       ``(a) Determination of Right to Payment.--
       ``(1) In general.--The Commission shall, on a regular 
     basis, make a determination on--
       ``(A) the amount of opposing funds with respect to each 
     participating candidate, and
       ``(B) the applicable amount with respect to each 
     participating candidate.
       ``(2) Basis of determinations.--The Commission shall make 
     determinations under paragraph (1) based on--
       ``(A) reports filed by the relevant opposing candidate 
     under section 304(a) with respect to amounts described in 
     subsection (c)(1)(A)(i)(I); and
       ``(B) reports filed by political committees under section 
     304(a) and by other persons under section 304(c) with respect 
     to--
       ``(i) opposing funds described in clauses (ii)(I) and 
     (iii)(I) of subsection (c)(1)(A); and
       ``(ii) applicable amounts described in subparagraphs (B)(i) 
     and (C)(i) of subsection (b)(2).
       ``(3) Requests for determination relating to certain 
     electioneering communications.--
       ``(A) In general.--A participating candidate may request to 
     the Commission to make a determination under paragraph (1) 
     with respect to any relevant opposing candidate with respect 
     to--
       ``(i) opposing funds described in clauses (ii)(II) and 
     (iii)(II) of subsection (c)(1)(A); and
       ``(ii) applicable amounts described in subparagraphs 
     (B)(ii) and (C)(ii) of subsection (b)(2).
       ``(B) Time for making determination.--In the case of any 
     such request, the Commission shall make such determination 
     and notify the participating candidate of such determination 
     not later than--
       ``(i) 24 hours after receiving such request during the 3-
     week period ending on the date of the election, and
       ``(ii) 48 hours after receiving such request at any other 
     time.
       ``(b) Payments.--
       ``(1) In general.--The Commission shall make available to 
     the participating candidate fair fight funds in an amount 
     equal to the amount of opposing funds that is in excess of 
     the applicable amount--
       ``(A) immediately after making any determination under 
     subsection (a) with respect to any participating candidate 
     during the 3-week period ending on the date of the election, 
     and
       ``(B) not later than 24 hours after making such 
     determination at any other time.
       ``(2) Applicable amount.--For purposes of this section, the 
     applicable amount is an amount equal to the sum of--
       ``(A) the sum of--
       ``(i) the amount of seed money contribution received by the 
     participating candidate;
       ``(ii) in the case of a general election, the value of any 
     vouchers received by the candidate under section 315A of the 
     Communications Act of 1934; plus
       ``(iii)(I) in the case of a participating candidate who is 
     a minor party candidate running in a general election or an 
     independent candidate, the allocation from the Fund which 
     would have been provided to such candidate for such election 
     if such candidate were a major party candidate; or
       ``(II) in the case of any other participating candidate, an 
     amount equal to the allocation from the Fund to such 
     candidate for such election under section 510(c);
       ``(B) the sum of--
       ``(i) the amount of independent expenditures made 
     advocating the election of the participating candidate; plus
       ``(ii) the amount of disbursements for electioneering 
     communications which promote or support such participating 
     candidate;
       ``(C) the sum of--
       ``(i) the amount of independent expenditures made 
     advocating the defeat of the relevant opposing candidate; 
     plus
       ``(ii) the amount of disbursements for electioneering 
     communications which attack or oppose the relevant opposing 
     candidate; plus
       ``(D) the amount of fair fight funds previously provided to 
     the participating candidate under this subsection for the 
     election.
       ``(3) Limits on amount of payment.--The aggregate of fair 
     fight funds that a participating candidate receives under 
     this subsection for any election shall not exceed 200 percent 
     of the allocation from the Fund that the participating 
     candidate receives for such election under section 510(c).
       ``(c) Definitions.--For purposes of this section--
       ``(1) Opposing funds.--
       ``(A) In general.--The term `opposing funds' means, with 
     respect to any participating candidate for any election, the 
     sum of--
       ``(i)(I) the greater of the total contributions received by 
     the relevant opposing candidate or the total expenditures 
     made by such relevant opposing candidate; or
       ``(II) in the case of a relevant opposing candidate who is 
     a participating candidate, an amount equal to the sum of the 
     amount of seed money contributions received by the relevant 
     opposing candidate, the value of any vouchers received by the 
     relevant opposing candidate for the general election under 
     section 315A of the Communications Act of 1934, and the 
     allocation from the Fund under section 510(c) for the 
     relevant opposing candidate for such election;
       ``(ii) the sum of--

       ``(I) the amount of independent expenditures made 
     advocating the election of such relevant opposing candidate; 
     plus
       ``(II) the amount of disbursements for electioneering 
     communications which promote or support such relevant 
     opposing candidate; plus

       ``(iii) the sum of--

       ``(I) the amount of independent expenditures made 
     advocating the defeat of such participating candidate; plus
       ``(II) the amount of disbursements for electioneering 
     communications which attack or oppose such participating 
     candidate.

       ``(2) Relevant opposing candidate.--The term `relevant 
     opposing candidate' means, with respect to any participating 
     candidate, the opposing candidate of such participating 
     candidate with respect to whom the amount under paragraph (1) 
     is the greatest.
       ``(3) Electioneering communication.--The term 
     `electioneering communication' has the meaning given such 
     term under section 304(f)(3), except that subparagraph 
     (A)(i)(II)(aa) thereof shall be applied by substituting `30' 
     for `60'.

     ``SEC. 512. ADMINISTRATION OF THE SENATE FAIR ELECTIONS 
                   SYSTEM.

       ``(a) Regulations.--The Commission shall prescribe 
     regulations to carry out the purposes of this title, 
     including regulations--
       ``(1) to establish procedures for--
       ``(A) verifying the amount of valid qualifying 
     contributions with respect to a candidate;
       ``(B) effectively and efficiently monitoring and enforcing 
     the limits on the use of personal funds by participating 
     candidates;
       ``(C) the expedited payment of fair fight funds during the 
     3-week period ending on the date of the election;
       ``(D) monitoring the use of allocations from the Fund under 
     this title through audits or other mechanisms; and
       ``(E) returning unspent disbursements and disposing of 
     assets purchased with allocations from the Fund;
       ``(2) providing for the administration of the provisions of 
     this title with respect to special elections;
       ``(3) pertaining to the replacement of candidates;
       ``(4) regarding the conduct of debates in a manner 
     consistent with the best practices of States that provide 
     public financing for elections; and
       ``(5) for attributing expenditures to specific elections 
     for the purposes of calculating opposing funds.
       ``(b) Operation of Commission.--The Commission shall 
     maintain normal business hours during the weekend immediately 
     before any general election for the purposes of administering 
     the provisions of this title, including the distribution of 
     fair fight funds under section 511.
       ``(c) Reports.--Not later than April 1, 2009, and every 2 
     years thereafter, the Commission shall submit to the Senate 
     Committee on

[[Page S3377]]

     Rules and Administration a report documenting, evaluating, 
     and making recommendations relating to the administrative 
     implementation and enforcement of the provisions of this 
     title.

     ``SEC. 513. VIOLATIONS AND PENALTIES.

       ``(a) Civil Penalty for Violation of Contribution and 
     Expenditure Requirements.--If a candidate who has been 
     certified as a participating candidate under section 508(a) 
     accepts a contribution or makes an expenditure that is 
     prohibited under section 506, the Commission shall assess a 
     civil penalty against the candidate in an amount that is not 
     more than 3 times the amount of the contribution or 
     expenditure. Any amounts collected under this subsection 
     shall be deposited into the Senate Fair Elections Fund.
       ``(b) Repayment for Improper Use of Fair Elections Fund.--
       ``(1) In general.--If the Commission determines that any 
     benefit made available to a participating candidate under 
     this title was not used as provided for in this title or that 
     a participating candidate has violated any of the dates for 
     remission of funds contained in this title, the Commission 
     shall so notify the candidate and the candidate shall pay to 
     the Senate Fair Elections Fund an amount equal to--
       ``(A) the amount of benefits so used or not remitted, as 
     appropriate, and
       ``(B) interest on any such amounts (at a rate determined by 
     the Commission).
       ``(2) Other action not precluded.--Any action by the 
     Commission in accordance with this subsection shall not 
     preclude enforcement proceedings by the Commission in 
     accordance with section 309(a), including a referral by the 
     Commission to the Attorney General in the case of an apparent 
     knowing and willful violation of this title.''.

     SEC. 103. REPORTING REQUIREMENTS FOR NONPARTICIPATING 
                   CANDIDATES.

       (a) In General.--Section 304 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 434) is amended by adding at 
     the end the following:
       ``(i) Nonparticipating Candidates.--
       ``(1) Initial report.--
       ``(A) In general.--Each nonparticipating candidate who is 
     opposed to a participating candidate and who receives 
     contributions or makes expenditures aggregating more than the 
     threshold amount shall, within 48 hours of the date such 
     aggregate contributions or expenditures exceed the threshold 
     amount, file with the Commission a report stating the total 
     amount of contributions received and expenditures made or 
     obligated by such candidate.
       ``(B) Threshold amount.--For purposes of this paragraph, 
     the term `threshold amount' means 75 percent of the 
     allocation from the Fund that a participating candidate would 
     be entitled to receive in such election under section 510 if 
     the participating candidate were a major party candidate.
       ``(2) Periodic reports.--
       ``(A) In general.--In addition to any reports required 
     under subsection (a), each nonparticipating candidate who is 
     required to make a report under paragraph (1) shall make the 
     following reports:
       ``(i) A report which shall be filed not later than 5 P.M. 
     on the forty-second day before the date on which the election 
     involving such candidate is held and which shall be complete 
     through the forty-fourth day before such date.
       ``(ii) A report which shall be filed not later than 5 P.M. 
     on the twenty-first day before the date on which the election 
     involving such candidate is held and which shall be complete 
     through the twenty-third day before such date.
       ``(iii) A report which shall be filed not later than 5 P.M. 
     on the twelfth day before the date on which the election 
     involving such candidate is held and which shall be complete 
     through the fourteenth day before such date.
       ``(B) Additional reporting within 2 weeks of election.--
     Each nonparticipating candidate who is required to make a 
     report under paragraph (1) and who receives contributions or 
     makes expenditures aggregating more than $1,000 at any time 
     after the fourteenth day before the date of the election 
     involving such candidate shall make a report to the 
     Commission not later than 24 hours after such contributions 
     are received or such expenditures are made.
       ``(C) Contents of report.--Each report required under this 
     paragraph shall state the total amount of contributions 
     received and expenditures made or obligated to be made during 
     the period covered by the report.
       ``(3) Definitions.--For purposes of this subsection and 
     section 309(a)(13), the terms `nonparticipating candidate', 
     `participating candidate', and `allocation from the Fund' 
     have the respective meanings given to such terms under 
     section 501.''.
       (b) Increased Penalty for Failure to File.--Section 309(a) 
     of the Federal Election Campaign Act of 1971 (2 U.S.C. 
     437(g)) is amended by adding at the end the following new 
     paragraph:
       ``(13) Increased civil penalties with respect to reporting 
     by nonparticipating candidates.--For purposes of paragraphs 
     (5) and (6), any civil penalty with respect to a violation of 
     section 304(i) shall not exceed the greater of--
       ``(A) the amount otherwise applicable without regard to 
     this paragraph; or
       ``(B) for each day of the violation, 3 times the amount of 
     the fair fight funds under section 511 that otherwise would 
     have been allocated to the participating candidate but for 
     such violation.''.

     SEC. 104. MODIFICATION OF ELECTIONEERING COMMUNICATION 
                   REPORTING REQUIREMENTS.

       Paragraph (2) of section 304(f) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 434(f)(2)) is amended by 
     redesignating subparagraphs (E) and (F) as subparagraphs (F) 
     and (G), respectively, and by inserting after subparagraph 
     (D) the following new subparagraph:
       ``(E) in the case of a communication referring to any 
     candidate in an election involving a participating candidate 
     (as defined under section 501(9)), a transcript of the 
     electioneering communication.''.

     SEC. 105. LIMITATION ON COORDINATED EXPENDITURES BY POLITICAL 
                   PARTY COMMITTEES WITH PARTICIPATING CANDIDATES.

       (a) In General.--Section 315(d)(3) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441a(d)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as 
     subparagraphs (B) and (C), respectively; and
       (2) by inserting before subparagraph (B), as redesignated 
     by paragraph (1), the following new subparagraph:
       ``(A) in the case of a candidate for election to the office 
     of Senator who is a participating candidate (as defined in 
     section 501), the lesser of--
       ``(i) 10 percent of the allocation from the Senate 
     Elections Fund that the participating candidate is eligible 
     to receive for the general election under section 510(c)(3); 
     or
       ``(ii) the amount which would (but for this subparagraph) 
     apply with respect to such candidate under subparagraph 
     (B);''.
       (b) Conforming Amendment.--Subparagraph (B) of section 
     315(d)(3) of such Act, as redesignated by subsection (a), is 
     amended by inserting ``who is not a participating candidate 
     (as so defined)'' after ``office of Senator''.

     SEC. 106. AUDITS.

       Section 311(b) of the Federal Election Campaign Act of 1971 
     (2 U.S.C. 438(b)) is amended--
       (1) by inserting ``(1)'' before ``The Commission''; and
       (2) by adding at the end the following:
       ``(2) Audits of participating candidates.--
       ``(A) In general.--Notwithstanding paragraph (1), after 
     every primary, general, and runoff election, the Commission 
     shall conduct random audits and investigations of not less 
     than 30 percent of the authorized committees of candidates 
     who are participating candidates (as defined in section 501).
       ``(B) Selection of subjects.--The subjects of audits and 
     investigations under this paragraph shall be selected on the 
     basis of impartial criteria established by a vote of at least 
     4 members of the Commission.''.

            Subtitle B--Senate Fair Elections Fund Revenues

     SEC. 111. DEPOSIT OF PROCEEDS FROM RECOVERED SPECTRUM 
                   AUCTIONS.

       Section 309(j)(8)(E)(ii) of the Communications Act of 1934 
     (47 U.S.C. 309(j)(8)(E)(ii)) is amended--
       (1) by striking ``deposited in'' and inserting the 
     following: ``deposited as follows:

       ``(I) 90 percent of such proceeds deposited in''; and

       (2) by adding at the end the following:

       ``(II) 10 percent of such proceeds deposited in the Senate 
     Fair Elections Fund established under section 502 of the 
     Federal Election Campaign Act of 1972.''.

     SEC. 112. TAX CREDIT FOR VOLUNTARY DONATIONS TO SENATE FAIR 
                   ELECTIONS FUND.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new section:

     ``SEC. 30D. CREDIT FOR CONTRIBUTIONS TO SENATE FAIR ELECTIONS 
                   FUND.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the lesser of--
       ``(1) the amount contributed to the Senate Fair Elections 
     Fund by the taxpayer during such taxable year, or
       ``(2) $500.
       ``(b) Limitations.--
       ``(1) No credit for qualifying contributions.--No credit 
     shall be allowed under subsection (a) for any contribution 
     which is a qualifying contribution (as defined under section 
     501(11) of the Federal Election Campaign Act of 1971).
       ``(2) No credit for designations under section 6097.--No 
     credit shall be allowed with respect to any amount designated 
     under section 6097.
       ``(3) Application with other credits.--The credit allowed 
     by subsection (a) for any taxable year shall not exceed the 
     excess (if any) of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) reduced by the sum of the credits allowable under 
     subpart A and sections 27, 30, 30B, and 30C, over
       ``(B) the tentative minimum tax for the taxable year.
       ``(c) Senate Fair Elections Fund.--For purposes of this 
     section, the term `Senate Fair Elections Fund' means the fund 
     established under section 502 of the Federal Election 
     Campaign Act of 1971.
       ``(d) Denial of Double Benefit.--No deduction shall be 
     allowed under this chapter for any amount for which a credit 
     is allowed under subsection (a).''.

[[Page S3378]]

       (b) Clerical Amendment.--The table of section for subpart B 
     of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 30C the following new item:

``Sec. 30D. Credit for contributions to Senate Fair Elections Fund.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

              Subtitle C--Fair Elections Review Commission

     SEC. 121. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the ``Fair Elections Review Commission'' (hereafter 
     in this subtitle referred to as the ``Commission'').
       (b) Duties.--
       (1) Review of fair elections financing.--
       (A) In general.--After each general election for Federal 
     office, the Commission shall conduct a comprehensive review 
     of the Senate fair elections financing program under title V 
     of the Federal Election Campaign Act of 1974, including--
       (i) the number and value of qualifying contributions a 
     candidate is required to obtain under section 505 of such Act 
     to qualify for allocations from the Fund;
       (ii) the amount of allocations from the Senate Fair 
     Elections Fund that candidates may receive under sections 510 
     and 511 of such Act;
       (iii) the overall satisfaction of participating candidates 
     with the program; and
       (iv) such other matters relating to financing of Senate 
     campaigns as the Commission determines are appropriate.
       (B) Criteria for review.--In conducting the review under 
     subparagraph (A), the Commission shall consider the 
     following:
       (i) Review of qualifying contribution requirements.--The 
     Commission shall consider whether the number and value of 
     qualifying contributions required strikes a balance between 
     the importance of voter choice and fiscal responsibility, 
     taking into consideration the number of primary and general 
     election participating candidates, the electoral performance 
     of those candidates, program cost, and any other information 
     the Commission determines is appropriate.
       (ii) Review of program allocations.--The Commission shall 
     consider whether allocations from the Senate Elections Fund 
     under sections 510 ad 511 of the Federal Election Campaign 
     Act of 1974 are sufficient for voters in each State to learn 
     about the candidates to cast an informed vote, taking into 
     account the historic amount of spending by winning 
     candidates, media costs, primary election dates, and any 
     other information the Commission determines is appropriate.
       (2) Report, recommendations, and proposed legislative 
     language.--
       (A) Report.--Not later than March 30 following any general 
     election for Federal office, the Commission shall submit a 
     report to Congress on the review conducted under paragraph 
     (1). Such report shall contain a detailed statement of the 
     findings, conclusions, and recommendations of the Commission 
     based on such review, and shall contain any proposed 
     legislative language (as required under subparagraph (C)) of 
     the Commission.
       (B) Findings, conclusions, and recommendations.--A finding, 
     conclusion, or recommendation of the Commission shall be 
     included in the report under subparagraph (A) only if not 
     less than 3 members of the Commission voted for such finding, 
     conclusion, or recommendation.
       (C) Legislative language.--
       (i) In general.--The report under subparagraph (A) shall 
     include legislative language with respect to any 
     recommendation involving--

       (I) an increase in the number or value of qualifying 
     contributions; or
       (II) an increase in the amount of allocations from the 
     Senate Elections Fund.

       (ii) Form.--The legislative language shall be in the form 
     of a proposed bill for introduction in Congress and shall not 
     include any recommendation not related to matter described 
     subclause (I) or (II) of clause (i)

     SEC. 122. STRUCTURE AND MEMBERSHIP OF THE COMMISSION.

       (a) Appointment.--
       (1) In general.--The Commission shall be composed of 5 
     members, of whom--
       (A) 1 shall be appointed by the President pro tempore of 
     the Senate;
       (B) 1 shall be appointed by the Minority Leader of the 
     Senate; and
       (C) 3 shall be appointed jointly by the members appointed 
     under subparagraphs (A) and (B).
       (2) Qualifications.--
       (A) In general.--The members shall be individuals who are 
     nonpartisan and, by reason of their education, experience, 
     and attainments, exceptionally qualified to perform the 
     duties of members of the Commission.
       (B) Prohibition.--No member of the Commission may be--
       (i) a member of Congress;
       (ii) an employee of the Federal government;
       (iii) a registered lobbyist; or
       (iv) an officer or employee of a political party or 
     political campaign.
       (3) Date.--Members of the Commission shall be appointed not 
     later than 60 days after the date of the enactment of this 
     Act.
       (4) Terms.--A member of the Commission shall be appointed 
     for a term of 5 years.
       (b) Vacancies.--A vacancy on the Commission shall be filled 
     not later than 30 calendar days after the date on which the 
     Commission is given notice of the vacancy, in the same manner 
     as the original appointment. The individual appointed to fill 
     the vacancy shall serve only for the unexpired portion of the 
     term for which the individual's predecessor was appointed.
       (c) Chairperson.--The Commission shall designate a 
     Chairperson from among the members of the Commission.

     SEC. 123. POWERS OF THE COMMISSION.

       (a) Meetings and Hearings.--
       (1) Meetings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this Act.
       (2) Quorum.--Four members of the Commission shall 
     constitute a quorum for purposes of voting, but a quorum is 
     not required for members to meet and hold hearings.
       (b) Information From Federal Agencies.--The Commission may 
     secure directly from any Federal department or agency such 
     information as the Commission considers necessary to carry 
     out the provisions of this Act. Upon request of the 
     Chairperson of the Commission, the head of such department or 
     agency shall furnish such information to the Commission.
       (c) Postal Services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (d) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.

     SEC. 124. ADMINISTRATION.

       (a) Compensation of Members.--
       (1) In general.--
       (A) In general.--Each member, other than the Chairperson, 
     shall be paid at a rate equal to the daily equivalent of the 
     minimum annual rate of basic pay prescribed for level IV of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Commission.
       (B) Chairperson.--The Chairperson shall be paid at a rate 
     equal to the daily equivalent of the minimum annual rate of 
     basic pay prescribed for level III of the Executive Schedule 
     under section 5314 of title 5, United States Code, for each 
     day (including travel time) during which such member is 
     engaged in the performance of the duties of the Commission.
       (2) Travel expenses.--Members shall receive travel 
     expenses, including per diem in lieu of subsistence, in 
     accordance with sections 5702 and 5703 of title 5, United 
     States Code, while away from their homes or regular places of 
     business in performance of services for the Commission.
       (b) Personnel.--
       (1) Director.--The Commission shall have a staff headed by 
     an Executive Director. The Executive Director shall be paid 
     at a rate equivalent to a rate established for the Senior 
     Executive Service under section 5382 of title 5, United 
     States Code.
       (2) Staff appointment.--With the approval of the 
     Chairperson, the Executive Director may appoint such 
     personnel as the Executive Director and the Commission 
     determines to be appropriate.
       (3) Actuarial experts and consultants.--With the approval 
     of the Chairperson, the Executive Director may procure 
     temporary and intermittent services under section 3109(b) of 
     title 5, United States Code.
       (4) Detail of government employees.--Upon the request of 
     the Chairperson, the head of any Federal agency may detail, 
     without reimbursement, any of the personnel of such agency to 
     the Commission to assist in carrying out the duties of the 
     Commission. Any such detail shall not interrupt or otherwise 
     affect the civil service status or privileges of the Federal 
     employee.
       (5) Other resources.--The Commission shall have reasonable 
     access to materials, resources, statistical data, and other 
     information from the Library of Congress and other agencies 
     and elected representatives of the executive and legislative 
     branches of the Federal Government. The Chairperson of the 
     Commission shall make requests for such access in writing 
     when necessary.

     SEC. 125. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out the purposes of this subtitle.

     SEC. 126. EXPEDITED CONSIDERATION OF COMMISSION 
                   RECOMMENDATIONS.

       (a) Introduction and Committee Consideration.--
       (1) Introduction.--Not later than 60 days after the 
     Commission files a report under section 121(b), the Majority 
     Leader of the Senate, or the Majority Leader's designee, 
     shall introduce any proposed legislative language submitted 
     by the Commission under section 121(b)(2)(C) in the Senate 
     (hereafter in this section referred to as a ``Commission 
     bill'').
       (2) Committee consideration.--
       (A) Referral.--A Commission bill introduced in the Senate 
     shall be referred to the Committee on Rules and 
     Administration of the Senate.
       (B) Reporting.--Not later than 60 calendar days after the 
     introduction of the Commission bill, the Committee on Rules 
     and Administration shall hold a hearing on the bill and 
     report the bill to the Senate. No amendment shall be in order 
     to the bill in the Committee.
       (C) Discharge of committee.--If the Committee on Rules and 
     Administration has not

[[Page S3379]]

     reported a Commission bill at the end of 60 calendar days 
     after its introduction, such committee shall be automatically 
     discharged from further consideration of the Commission bill 
     and it shall be placed on the appropriate calendar.
       (b) Expedited Procedure.--
       (1) Floor consideration in the senate.--
       (A) In general.--Not later than 60 calendar days after the 
     date on which a committee has reported or has been discharged 
     from consideration of a Commission bill, the Majority Leader 
     of the Senate, or the Majority Leader's designee shall move 
     to proceed to the consideration of the Commission bill. It 
     shall also be in order for any member of the Senate to move 
     to proceed to the consideration of the bill at any time after 
     the conclusion of such 60-day period.
       (B) Motion to proceed.--A motion to proceed to the 
     consideration of a Commission bill is privileged in the 
     Senate. The motion is not debatable and is not subject to a 
     motion to postpone consideration of the Commission bill or to 
     proceed to the consideration of other business. A motion to 
     reconsider the vote by which the motion to proceed is agreed 
     to or not agreed to shall not be in order. If the motion to 
     proceed is agreed to, the Senate shall immediately proceed to 
     consideration of the Commission bill without intervening 
     motion, order, action, or other business, and the Commission 
     bill shall remain the unfinished business of the Senate until 
     disposed of.
       (C) Amendments, motions, and appeals.--No amendment shall 
     be in order in the Senate, and any debatable motion or appeal 
     is debatable for not to exceed 5 hours to be divided equally 
     between those favoring and those opposing the motion or 
     appeal.
       (D) Limited debate.--Consideration in the Senate of the 
     Commission bill and on all debatable motions and appeals in 
     connection therewith, shall be limited to not more than 40 
     hours, which shall be equally divided between, and controlled 
     by, the Majority Leader and the Minority Leader of the Senate 
     or their designees. A motion further to limit debate on the 
     Commission bill is in order and is not debatable. All time 
     used for consideration of the Commission bill, including time 
     used for quorum calls (except quorum calls immediately 
     preceding a vote), shall come from the 40 hours of 
     consideration.
       (E) Vote on passage.--
       (i) In general.--The vote on passage in the Senate of the 
     Commission bill shall occur immediately following the 
     conclusion of the 40-hour period for consideration of the 
     Commission bill under subparagraph (D) and a request to 
     establish the presence of a quorum.
       (ii) Other motions not in order.--A motion in the Senate to 
     postpone consideration of the Commission bill, a motion to 
     proceed to the consideration of other business, or a motion 
     to recommit the Commission bill is not in order. A motion in 
     the Senate to reconsider the vote by which the Commission 
     bill is agreed to or not agreed to is not in order.
       (2) Floor consideration in the house.--
       (A) In general.--If a Commission bill is agreed to in the 
     Senate, the Majority Leader of the House of Representatives, 
     or the Majority Leader's designee shall move to proceed to 
     the consideration of the Commission bill not later than 30 
     days after the date the House or Representatives receives 
     notice of such agreement. It shall also be in order for any 
     member of the House of Representatives to move to proceed to 
     the consideration of the bill at any time after the 
     conclusion of such 30-day period.
       (B) Motion to proceed.--A motion to proceed to the 
     consideration of a Commission bill is privileged in the House 
     of Representatives. The motion is not debatable and is not 
     subject to a motion to postpone consideration of the 
     Commission bill or to proceed to the consideration of other 
     business. A motion to reconsider the vote by which the motion 
     to proceed is agreed to or not agreed to shall not be in 
     order. If the motion to proceed is agreed to, the House of 
     Representatives shall immediately proceed to consideration of 
     the Commission bill without intervening motion, order, 
     action, or other business, and the Commission bill shall 
     remain the unfinished business of the House of 
     Representatives until disposed of.
       (C) Amendments, motions, and appeals.--No amendment shall 
     be in order in the House of Representatives, and any 
     debatable motion or appeal is debatable for not to exceed 5 
     hours to be divided equally between those favoring and those 
     opposing the motion or appeal.
       (D) Limited debate.--Consideration in the House of 
     Representatives of the Commission bill and on all debatable 
     motions and appeals in connection therewith, shall be limited 
     to not more than 40 hours, which shall be equally divided 
     between, and controlled by, the Majority Leader and the 
     Minority Leader of the House of Representatives or their 
     designees. A motion further to limit debate on the Commission 
     bill is in order and is not debatable. All time used for 
     consideration of the Commission bill, including time used for 
     quorum calls (except quorum calls immediately preceding a 
     vote), shall come from the 40 hours of consideration.
       (E) Vote on passage.--
       (i) In general.--The vote on passage in the House of 
     Representatives of the Commission bill shall occur 
     immediately following the conclusion of the 40-hour period 
     for consideration of the Commission bill under subparagraph 
     (D) and a request to establish the presence of a quorum.
       (ii) Other motions not in order.--A motion in the House of 
     Representatives to postpone consideration of the Commission 
     bill, a motion to proceed to the consideration of other 
     business, or a motion to recommit the Commission bill is not 
     in order. A motion in the House of Representatives to 
     reconsider the vote by which the Commission bill is agreed to 
     or not agreed to is not in order.
       (c) Rules of Senate and House of Representatives.--This 
     section is enacted by Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a Commission bill, and it 
     supersedes other rules only to the extent that it is 
     inconsistent with such rules, and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

                      TITLE II--VOTER INFORMATION

     SEC. 201. BROADCASTS RELATING TO CANDIDATES.

       (a) Lowest Unit Charge; National Committees.--Section 
     315(b) of the Communications Act of 1934 (47 U.S.C. 315(b)) 
     is amended--
       (1) by striking ``to such office'' in paragraph (1) and 
     inserting ``to such office, or by a national committee of a 
     political party on behalf of such candidate in connection 
     with such campaign,''; and
       (2) by inserting ``for pre-emptible use thereof'' after 
     ``station'' in subparagraph (A) of paragraph (1).
       (b) Broadcast Rates.--Section 315(b) of the Communications 
     Act of 1934 (47 U.S.C. 315(b)), as amended by subsection (a), 
     is amended--
       (1) in paragraph (1)(A), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (3)''; and
       (2) by adding at the end the following:
       ``(3) Participating candidates.--In the case of a 
     participating candidate (as defined under section 501(10) of 
     the Federal Election Campaign Act of 1971), the charges made 
     for the use any broadcasting station for a television 
     broadcast shall not exceed 80 percent of the lowest charge 
     described in paragraph (1)(A) during--
       ``(A) the 45 days preceding the date of a primary or 
     primary runoff election in which the candidate is opposed; 
     and
       ``(B) the 60 days preceding the date of a general or 
     special election in which the candidate is opposed.
       ``(4) Rate cards.--A licensee shall provide to a candidate 
     for Senate a rate card that discloses--
       ``(A) the rate charged under this subsection; and
       ``(B) the method that the licensee uses to determine the 
     rate charged under this subsection.''.
       (c) Preemption; Audits.--Section 315 of such Act (47 U.S.C. 
     315) is amended--
       (1) by redesignating subsections (f) and (g) as subsections 
     (e) and (f), respectively and moving them to follow the 
     existing subsection (e);
       (2) by redesignating the existing subsection (e) as 
     subsection (c); and
       (3) by inserting after subsection (c) (as redesignated by 
     paragraph (2)) the following:
       ``(d) Preemption.--
       ``(1) In general.--Except as provided in paragraph (2), and 
     notwithstanding the requirements of subsection (b)(1)(A), a 
     licensee shall not preempt the use of a broadcasting station 
     by a legally qualified candidate for Senate who has purchased 
     and paid for such use.
       ``(2) Circumstances beyond control of licensee.--If a 
     program to be broadcast by a broadcasting station is 
     preempted because of circumstances beyond the control of the 
     station, any candidate or party advertising spot scheduled to 
     be broadcast during that program shall be treated in the same 
     fashion as a comparable commercial advertising spot.
       ``(e) Audits.--During the 45-day period preceding a primary 
     election and the 60-day period preceding a general election, 
     the Commission shall conduct such audits as it deems 
     necessary to ensure that each broadcaster to which this 
     section applies is allocating television broadcast 
     advertising time in accordance with this section and section 
     312.''.
       (d) Revocation of License for Failure to Permit Access.--
     Section 312(a)(7) of the Communications Act of 1934 (47 
     U.S.C. 312(a)(7)) is amended--
       (1) by striking ``or repeated'';
       (2) by inserting ``or cable system'' after ``broadcasting 
     station''; and
       (3) by striking ``his candidacy'' and inserting ``the 
     candidacy of the candidate, under the same terms, conditions, 
     and business practices as apply to the most favored 
     advertiser of the licensee''.
       (e) Stylistic Amendments.--Section 315 of such Act (47 
     U.S.C. 315) is amended--
       (1) by striking ``the'' in subsection (f)(1), as 
     redesignated by subsection (b)(1), and inserting 
     ``Broadcasting station.--'';
       (2) by striking ``the'' in subsection (f)(2), as 
     redesignated by subsection (b)(1), and inserting ``Licensee; 
     station licensee.--''; and
       (3) by inserting ``Regulations.--'' in subsection (g), as 
     redesignated by subsection (b)(1), before ``The Commission''.

[[Page S3380]]

     SEC. 202. POLITICAL ADVERTISEMENT VOUCHERS FOR PARTICIPATING 
                   CANDIDATES.

       (a) In General.--Title III of the Communications Act of 
     1934 (47 U.S.C. 301 et seq.) is amended by inserting after 
     section 315 the following:

     ``SEC. 315A. POLITICAL ADVERTISEMENT VOUCHER PROGRAM.

       ``(a) In General.--The Commission shall establish and 
     administer a voucher program for the purchase of airtime on 
     broadcasting stations for political advertisements in 
     accordance with the provisions of this section.
       ``(b) Candidates.--The Commission shall only disburse 
     vouchers under the program established under subsection (a) 
     to individuals who meet the following requirements:
       ``(1) Qualification.--The individual is certified by the 
     Federal Election Commission as a participating candidate (as 
     defined under section 501(10) of the Federal Election 
     Campaign Act of 1971) with respect to a general election for 
     Federal office under section 508 of the Federal Election 
     Campaign Act of 1971.
       ``(2) Agreement.--The individual has agreed in writing--
       ``(A) to keep and furnish to the Federal Election 
     Commission such records, books, and other information as it 
     may require; and
       ``(B) to repay to the Federal Communications Commission, if 
     the Federal Election Commission revokes the certification of 
     the individual as a participating candidate (as so defined), 
     an amount equal to the dollar value of vouchers which were 
     received from the Commission and used by the candidate.
       ``(c) Amounts.--The Commission shall disburse vouchers to 
     each candidate certified under subsection (b) in an aggregate 
     amount equal to $100,000 multiplied by the number of 
     congressional districts in the State with respect to which 
     such candidate is running for office.
       ``(d) Use.--
       ``(1) Exclusive use.--Vouchers disbursed by the Commission 
     under this section may be used only for the purchase of 
     broadcast airtime for political advertisements relating to a 
     general election for the office of Senate by the 
     participating candidate to which the vouchers were disbursed, 
     except that--
       ``(A) a candidate may exchange vouchers with a political 
     party under paragraph (2); and
       ``(B) a political party may use vouchers only to purchase 
     broadcast airtime for political advertisements for generic 
     party advertising, to support candidates for State or local 
     office in a general election, or to support participating 
     candidates of the party in a general election for Federal 
     office, but only if it discloses the value of the voucher 
     used as an expenditure under section 315(d) of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 441(d)).
       ``(2) Exchange with political party committee.--
       ``(A) In general.--An individual who receives a voucher 
     under this section may transfer the right to use all or a 
     portion of the value of the voucher to a committee of the 
     political party of which the individual is a candidate in 
     exchange for money in an amount equal to the cash value of 
     the voucher or portion exchanged.
       ``(B) Continuation of candidate obligations.--The transfer 
     of a voucher, in whole or in part, to a political party 
     committee under this paragraph does not release the candidate 
     from any obligation under the agreement made under subsection 
     (b)(2) or otherwise modify that agreement or its application 
     to that candidate.
       ``(C) Party committee obligations.--Any political party 
     committee to which a voucher or portion thereof is 
     transferred under subparagraph (A)--
       ``(i) shall account fully, in accordance with such 
     requirements as the Commission may establish, for the receipt 
     of the voucher; and
       ``(ii) may not use the transferred voucher or portion 
     thereof for any purpose other than a purpose described in 
     paragraph (1)(B).
       ``(D) Voucher as a contribution under feca.--If a candidate 
     transfers a voucher or any portion thereof to a political 
     party committee under subparagraph (A)--
       ``(i) the value of the voucher or portion thereof 
     transferred shall be treated as a contribution from the 
     candidate to the committee, and from the committee to the 
     candidate, for purposes of sections 302 and 304 of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 432 and 434);
       ``(ii) the committee may, in exchange, provide to the 
     candidate only funds subject to the prohibitions, 
     limitations, and reporting requirements of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431 et seq.); and
       ``(iii) the amount, if identified as a `voucher exchange' 
     shall not be considered a contribution for the purposes of 
     sections 315 or 506 of that Act.
       ``(e) Value; Acceptance; Redemption.--
       ``(1) Voucher.--Each voucher disbursed by the Commission 
     under this section shall have a value in dollars, redeemable 
     upon presentation to the Commission, together with such 
     documentation and other information as the Commission may 
     require, for the purchase of broadcast airtime for political 
     advertisements in accordance with this section.
       ``(2) Acceptance.--A broadcasting station shall accept 
     vouchers in payment for the purchase of broadcast airtime for 
     political advertisements in accordance with this section.
       ``(3) Redemption.--The Commission shall redeem vouchers 
     accepted by broadcasting stations under paragraph (2) upon 
     presentation, subject to such documentation, verification, 
     accounting, and application requirements as the Commission 
     may impose to ensure the accuracy and integrity of the 
     voucher redemption system. The Commission shall use amounts 
     in the Political Advertising Voucher Account established 
     under subsection (f) to redeem vouchers presented under this 
     subsection.
       ``(4) Expiration.--
       ``(A) Candidates.--A voucher may only be used to pay for 
     broadcast airtime for political advertisements to be 
     broadcast before midnight on the day before the date of the 
     Federal election in connection with which it was issued and 
     shall be null and void for any other use or purpose.
       ``(B) Exception for political party committees.--A voucher 
     held by a political party committee may be used to pay for 
     broadcast airtime for political advertisements to be 
     broadcast before midnight on December 31st of the odd-
     numbered year following the year in which the voucher was 
     issued by the Commission.
       ``(5) Voucher as expenditure under feca.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     for purposes of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 431 et seq.), the use of a voucher to purchase 
     broadcast airtime constitutes an expenditure as defined in 
     section 301(9)(A) of that Act (2 U.S.C. 431(9)(A)).
       ``(B) Participating candidates.--The use of a voucher to 
     purchase broadcast airtime by a participating candidate shall 
     not constitute an expenditure for purposes of section 506 of 
     such Act.
       ``(f) Political Advertising Voucher Account.--
       ``(1) In general.--The Commission shall establish an 
     account to be known as the Political Advertising Voucher 
     Account, which shall be credited with commercial television 
     and radio spectrum use fees assessed under this subsection, 
     together with any amounts repaid or otherwise reimbursed 
     under this section or section 508(b)(2)(B) of the Federal 
     Election Campaign Act of 1971.
       ``(2) Spectrum use fee.--
       ``(A) In general.--The Commission shall assess, and collect 
     annually, from each broadcast station, a spectrum use fee in 
     an amount equal to 2 percent of each broadcasting station's 
     gross advertising revenues for such year.
       ``(B) Availability.--
       ``(i) In general.--Any amount assessed and collected under 
     this paragraph shall be used by the Commission as an 
     offsetting collection for the purposes of making 
     disbursements under this section, except that--

       ``(I) the salaries and expenses account of the Commission 
     shall be credited with such sums as are necessary from those 
     amounts for the costs of developing and implementing the 
     program established by this section; and
       ``(II) the Commission may reimburse the Federal Election 
     Commission for any expenses incurred by the Commission under 
     this section.

       ``(ii) Deposit of excess fees into senate fair elections 
     fund.--If the amount assessed and collected under this 
     paragraph for years in any election period exceeds the amount 
     necessary for making disbursements under this section for 
     such election period, the Commission shall deposit such 
     excess in the Senate Fair Elections Fund.
       ``(C) Fee does not apply to public broadcasting stations.--
     Subparagraph (A) does not apply to a public 
     telecommunications entity (as defined in section 397(12) of 
     this Act).
       ``(3) Administrative provisions.--Except as otherwise 
     provided in this subsection, section 9 of this Act applies to 
     the assessment and collection of fees under this subsection 
     to the same extent as if those fees were regulatory fees 
     imposed under section 9.
       ``(g) Definitions.--In this section:
       ``(1) Broadcasting station.--The term `broadcasting 
     station' has the meaning given that term by section 315(f)(1) 
     of this Act.
       ``(2) Federal election.--The term `Federal election' means 
     any regularly-scheduled, primary, runoff, or special election 
     held to nominate or elect a candidate to Federal office.
       ``(3) Federal office.--The term `Federal office' has the 
     meaning given that term by section 301(3) of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431(3)).
       ``(4) Political party.--The term `political party' means a 
     major party or a minor party as defined in section 9002(3) or 
     (4) of the Internal Revenue Code of 1986 (26 U.S.C. 9002(3) 
     or (4)).
       ``(5) Other terms.--Except as otherwise provided in this 
     section, any term used in this section that is defined in 
     section 301 or 501 of the Federal Election Campaign of 1971 
     (2 U.S.C. 431) has the meaning given that term by either such 
     section of that Act.
       ``(h) Regulations.--The Commission shall prescribe such 
     regulations as may be necessary to carry out the provisions 
     of this section. In developing the regulations, the 
     Commission shall consult with the Federal Election 
     Commission.''.

     SEC. 203. FCC TO PRESCRIBE STANDARDIZED FORM FOR REPORTING 
                   CANDIDATE CAMPAIGN ADS.

       (a) In General.--Within 90 days after the date of enactment 
     of this Act, the Federal Communications Commission shall 
     initiate a rulemaking proceeding to establish a standardized 
     form to be used by broadcasting stations, as defined in 
     section 315(f)(1) of the Communications Act of 1934 (47 
     U.S.C. 315(f)(1)), to record and report the purchase

[[Page S3381]]

     of advertising time by or on behalf of a candidate for 
     nomination for election, or for election, to Federal elective 
     office.
       (b) Contents.--The form prescribed by the Commission under 
     subsection (a) shall require, broadcasting stations to 
     report, at a minimum--
       (1) the station call letters and mailing address;
       (2) the name and telephone number of the station's sales 
     manager (or individual with responsibility for advertising 
     sales);
       (3) the name of the candidate who purchased the advertising 
     time, or on whose behalf the advertising time was purchased, 
     and the Federal elective office for which he or she is a 
     candidate;
       (4) the name, mailing address, and telephone number of the 
     person responsible for purchasing broadcast political 
     advertising for the candidate;
       (5) notation as to whether the purchase agreement for which 
     the information is being reported is a draft or final 
     version; and
       (6) the following information about the advertisement:
       (A) The date and time of the broadcast.
       (B) The program in which the advertisement was broadcast.
       (C) The length of the broadcast airtime.
       (c) Internet Access.--In its rulemaking under subsection 
     (a), the Commission shall require any broadcasting station 
     required to file a report under this section that maintains 
     an Internet website to make available a link to such reports 
     on that website.

     SEC. 204. LIMIT ON CONGRESSIONAL USE OF THE FRANKING 
                   PRIVILEGE.

       (a) In General.--Section 3210(a)(6) of title 39, United 
     States Code, is amended by striking subparagraph (A) and 
     inserting the following:
       ``(A)(i) Except as provided in clause (ii), Member of 
     Congress or a Congressional Committee or Subcommittee of 
     which such Member is Chairman or Ranking Member shall not 
     mail any mass mailing as franked mail during the period which 
     begins 90 days before date of the primary election and ends 
     on the date of the general election with respect to any 
     Federal office which such Member holds, unless the Member has 
     made a public announcement that the Member will not be a 
     candidate for reelection to such office in that year.
       ``(ii) A Member of Congress or a Congressional Committee or 
     Subcommittee of which such Member is Chairman or Ranking 
     Member may mail a mass mailing as franked mail if--
       ``(I) the purpose of the mailing is to communicate 
     information about a public meeting; and
       ``(II) the content of the mailed matter includes only the 
     name of the Member, Committee, or Subcommittee, as 
     appropriate, and the date, time, and place of the public 
     meeting.''.
       (b) Conforming Amendments.--
       (1) Section 3210(a)(6) of title 39, United States Code, is 
     amended by striking subparagraph (B) and by redesignating 
     subparagraphs (C) through (F) as subparagraphs (B) through 
     (E), respectively.
       (2) Section 3210(a)(6)(E) of title 39, United States Code, 
     as redesignated by paragraph (1), is amended by striking 
     ``subparagraphs (A) and (C)'' and inserting ``subparagraphs 
     (A) and (B)''.

     TITLE III--RESPONSIBILITIES OF THE FEDERAL ELECTION COMMISSION

     SEC. 301. PETITION FOR CERTIORARI.

       Section 307(a)(6) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 437d(a)(6)) is amended by inserting 
     ``(including a proceeding before the Supreme Court on 
     certiorari)'' after ``appeal''.

     SEC. 302. FILING BY SENATE CANDIDATES WITH COMMISSION.

       Section 302(g) of the Federal Election Campaign Act of 1971 
     (2 U.S.C. 432(g)) is amended to read as follows:
       ``(g) Filing With the Commission.--All designations, 
     statements, and reports required to be filed under this Act 
     shall be filed with the Commission.''.

     SEC. 303. ELECTRONIC FILING OF FEC REPORTS.

       Section 304(a)(11) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 434(a)(11)) is amended--
       (1) in subparagraph (A), by striking ``under this Act--'' 
     and all that follows and inserting ``under this Act shall be 
     required to maintain and file such designation, statement, or 
     report in electronic form accessible by computers.'';
       (2) in subparagraph (B), by striking ``48 hours'' and all 
     that follows through ``filed electronically)'' and inserting 
     ``24 hours''; and
       (3) by striking subparagraph (D).

                   TITLE IV--MISCELLANEOUS PROVISIONS

     SEC. 401. SEVERABILITY.

       If any provision of this Act or amendment made by this Act, 
     or the application of a provision or amendment to any person 
     or circumstance, is held to be unconstitutional, the 
     remainder of this Act and amendments made by this Act, and 
     the application of the provisions and amendment to any person 
     or circumstance, shall not be affected by the holding.

     SEC. 402. REVIEW OF CONSTITUTIONAL ISSUES.

       An appeal may be taken directly to the Supreme Court of the 
     United States from any final judgment, decree, or order 
     issued by any court ruling on the constitutionality of any 
     provision of this Act or amendment made by this Act.

     SEC. 403. EFFECTIVE DATE.

       Except as otherwise provided for in this Act, this Act and 
     the amendments made by this Act shall take effect on January 
     1, 2008.
                                 ______
                                 
      By Mrs. CLINTON (for herself and Mr. Allard):
  S. 937. A bill to improve support and services for individuals with 
autism and their families; to the Committee on Health, Education, 
Labor, and Pensions.
  Mrs. CLINTON. Mr. President, today, I, along with my colleague 
Senator Allard, am proud to introduce the Expanding the Promise for 
Individuals with Autism Act (EPIAA.) This legislation will help to 
increase the availability of treatments, services, and interventions 
for both children and adults with autism.
  Last year, I worked with my colleagues on the HELP Committee to pass 
the Combating Autism Act into law. This important bill will increase 
the amount and type of research we are doing to understand the origins 
of this disease, and help us develop new treatments--and eventually--a 
cure. It will also help to increase the ability of our health 
professionals to screen and diagnose autism as early as possible in 
children, so as to improve our ability to treat this disease.
  But while we are carrying out the research that will lead us to gain 
a better understanding of this disorder, we cannot forget those who are 
and who have been living with this disease today--the families who are 
desperate for assistance and help with a disorder that so often shuts 
off individuals from the world around them.
  The need for this legislation is evident--we continue to see an 
increasing number of individuals with autism. Last month, the Centers 
for Disease Control and Prevention released numbers that estimate that 
one in every 150 children are living with an autism spectrum disorder, 
numbers that are higher than those released even just a few short years 
ago. And our service delivery system for individuals with autism is 
being overwhelmed by this increase. The care involved in treating these 
symptoms often requires hours of intensive therapy every week--regimens 
that are often inaccessible to many families.
  While we do not know what causes autism, we do know that with early 
intervention and concentrated treatment, the symptoms of autism 
spectrum disorder can be mitigated, enabling individuals with autism 
and their families to live less isolated lives. Our legislation will 
provide additional treatment and support resources, increasing access 
to effective therapies and essential support services for people with 
autism.
  This legislation will do the following: Establish a Demonstration 
Grant Program to Assist States with Service Provision. While the 
Interagency Autism Coordinating Committee (IACC) is developing a long-
term strategy for providing autism care and treatment services, there 
is currently no effort to plan for improved access to services in the 
immediate future. The EPIAA would establish a Treatment, Interventions 
and Services Evaluation Task Force to evaluate evidence-based services 
that could be implemented by States in the years immediately following 
enactment. The Secretary would then provide grants to states to help 
provide the services identified by the Task Force to individuals with 
autism.
  Develop a Demonstration Grant Program for Adult Autism Services. 
While early diagnosis and treatment are critical for children with 
autism, the need for intervention and services continues across the 
lifespan. In order to help address the needs of adults living with 
autism, the EPIAA would establish a grant program for states to provide 
appropriate interventions and services, such as housing or vocational 
training, to adults with autism.
  Increase Access to Services Following Diagnosis. After receiving a 
diagnosis of autism, many children and families must wait months before 
gaining access to appropriate treatment. In order to improve the 
ability to access a minimum level of services during this post-
diagnosis period, the EPIAA would mandate that the Secretary develop 
guidance and provide funding to eliminate delays in access to 
supplementary health care, behavioral support services, and individual 
and family-support services.

[[Page S3382]]

  Increase Support for Developmental Disabilities Centers of 
Excellence. Many families report difficulties in accessing services 
because of the limited number of health and education professionals who 
are trained to provide autism-specific services. In order to increase 
the number of individuals across sectors that can provide adequate care 
and treatment services for individuals living with autism, the EPIAA 
would increase the capacity of University Centers for Excellence in 
Developmental Disabilities Education, Research and Service (UCEDDS) to 
train professionals in meeting the treatment, interventions and service 
needs of both children and adults living with autism.
  Improve Protection and Advocacy Services. Early statistics from 2006 
indicate that a quarter of individuals served under already-existing 
protection and advocacy programs are individuals with autism, a 6 
percent increase from the previous year, yet thousands of individuals 
with autism are unable to access these services due to a lack of 
resources. The EPIAA will create a program to expand currently existing 
protection and advocacy services to assist individuals with autism and 
other emerging populations of individuals with disabilities.
  Improves Technical Assistance and Evaluation. The EPIAA would 
establish a National Technical Assistance Center for Autism Treatments, 
Interventions and Services to act as a clearinghouse for information 
about evidence-based treatments, interventions and services, and 
analyze the grant programs under this Act.
  The organizations supporting this legislation include Autism Speaks, 
the Autism Society of America, Easter Seals, the Association of 
University Centers for Disability, the Disability Policy Collaboration, 
and the National Disability Rights Network, and I have included their 
letters of support to be printed in the Record.
  I look forward to working with Senator Allard and all of our 
colleagues to pass this legislation and help people with autism get the 
services they need.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                                Autism Speaks,

                                     New York, NY, March 19, 2007.
     Hon. Hillary Rodham Clinton,
     U.S. Senator,
     Washington, DC.
       Dear Senator Clinton: I write to offer the enthusiastic 
     endorsement of Autism Speaks for your proposed legislation, 
     ``The Expanding the Promise for Individuals with Autism Act 
     of 2007'' (``EPIAA'') and to thank you for your ongoing 
     leadership in providing an appropriate and necessary federal 
     response to the urgent national public health issue of 
     autism.
       Your bill is the logical next step for Congress to take in 
     creating a national battle plan against autism, following the 
     passage last year, with your significant support, of the 
     Combating Autism Act.
       The CAA deals primarily with biomedical research and with 
     systems for the early identification of children with autism. 
     The EPIAA will expand and intensify the federal commitment to 
     the provision of services to persons with autism, from the 
     immediate period following their diagnosis, throughout their 
     lifespan.
       In addition to the authorization of critical new resources 
     for important initiatives related to treatments, 
     interventions and services for both children and adults with 
     autism, Autism Speaks applauds the Congressional finding you 
     have drafted into the EPIAA that--``Individuals living with 
     autism have the same rights as other individuals to exert 
     control and choice over their own lives, to live 
     independently, and to fully participate in and contribute to 
     their communities . . .''

       The range of grant programs authorized by the EPIAA will 
     demonstrate mechanisms to fill large gaps in the present 
     system for the delivery of autism treatments, interventions 
     and services. The task force to be created by your 
     legislation--including vital input from the autism 
     community--will facilitate consensus on the state of 
     evidence-based treatments and services. And the GAO study, 
     which your legislation requires, will provide the basis for 
     dramatically improved service provision and financing.
       Once again, please accept the support and gratitude of 
     Autism Speaks for the EPIAA. We look forward to working with 
     you and your fine staff to enact these essential policies 
     into law.
           Sincerely,
     Robert C. Wright.
                                  ____



                                    Autism Society of America,

                                     Bethesda, MD, March 20, 2007.
     Hon. Hillary Rodham Clinton,
     U.S. Senate,
     Washington, DC.
     Hon. Wayne Allard,
     U.S. Senate,
     Washington, DC.
       Dear Senator Clinton and Senator Allard: On behalf of the 
     1.5 million Americans with autism and their families, we at 
     the Autism Society of America (ASA) write in strong support 
     of the Expanding the Promise for Individuals with Autism Act 
     of 2007.
       Autism is a complex developmental disability that affects 
     the normal functioning of the brain, impacting development in 
     the areas of social interaction and communication skills. 
     Both children and adults with autism typically show 
     difficulties in verbal and non-verbal communication, social 
     interactions, and sensory processing. Research has 
     demonstrated that with early diagnosis, treatment, and 
     intervention, however, individuals with autism can experience 
     positive change in the language, social, or cognitive 
     outcomes. Unfortunately, as the Centers for Disease Control 
     and Prevention's autism prevalence study of 2007 showed, far 
     too many children with autism are not accessing the early 
     interventions, treatments, and services that they need.
       Just as critical, our current system for providing 
     community based services does not meet the complex needs of 
     adults with autism. Frequently, staff is not trained and 
     experienced in autism and is often at a loss when trying to 
     handle the unusual language, cognitive, behavioral and social 
     deficits of autism. As a result, adults with autism are not 
     able to access employment, health care, housing, and 
     community support services.
       The Expanding the Promise for Individuals with Autism Act 
     addresses these problems in many ways. This critical 
     legislation provides approximately $350 million to improve 
     access to comprehensive treatments, interventions, and 
     services for individuals with autism and their families. The 
     Expanding the Promise for Individuals with Autism Act comes 
     at a time when autism prevalence is increasing to more than 1 
     in 150 children in America today. As our Nation faces the 
     epidemic of autism, we must take steps now to strengthen our 
     services infrastructure to meet the needs of individuals with 
     autism and their families so that they too can lead happy and 
     productive lives throughout their lives.
       ASA strongly supports the Expanding the Promise for 
     Individuals With Autism Act of 2007, and applauds you for 
     your leadership on this important issue. We urge all Senators 
     to join you in cosponsoring this important legislation.
       Thank you, again, for your support of people with autism 
     and their families.
           Sincerely,
                                                     Lee Grossman,
     President and CEO.
                                  ____



                              Disability Policy Collaboration,

                                   Washington, DC, March 20, 2007.
     Hon. Hillary Rodham Clinton,
     U.S. Senate,
     Washington, DC.
       Dear Senator Clinton: The Disability Policy Collaboration 
     (DPC), a partnership of The Arc of the United States and 
     United Cerebral Palsy, appreciates your leadership on behalf 
     of children and adults with autism spectrum disorders and 
     related developmental disabilities. The DPC is pleased to 
     support the ``Expanding the Promise for Individuals with 
     Autism Act of 2007'' and its emphasis on developing and 
     providing effective interventions, supports and services to 
     individuals with autism spectrum disorders and their 
     families.
       Most individuals with autism spectrum disorder and related 
     developmental disabilities need major assistance in the areas 
     of early intervention, education, employment, transportation, 
     housing and health. Expanding the capacity of the service 
     delivery system to meet these needs and providing better 
     coordination of services will enable the individuals and 
     families to access appropriate assistance to live 
     independently and fully participate in their communities.
       The Disability Policy Collaboration applauds your 
     commitment to individuals with autism spectrum disorders and 
     related developmental disabilities and their families and 
     looks forward to working with you on speedy passage of this 
     bill in the 110th Congress.
           Sincerely,
                                                    Paul Marchand,
     Staff Director.
                                  ____

                Association of University Centers on Disabilities,
                                Silver Spring, MD, March 19, 2007.
     Hon. Hillary Rodham Clinton,
     U.S. Senate,
     Washington, DC.
       Dear Senator Clinton: On behalf of the Association of 
     University Centers on Disabilities (AUCD), this letter is to 
     thank you for your outstanding work and leadership on behalf 
     of children and adults with autism spectrum disorders and 
     related developmental disabilities. AUCD is in strong support 
     of your legislation to develop and provide effective 
     treatments, interventions, supports and services to 
     individuals with autism spectrum disorders and their 
     families.
       The prevalence of autism appears to be growing. According 
     to a recent report by the Centers for Disease Control and 
     Prevention, the prevalence of autism has reached epidemic 
     proportions, now affecting one in every 150 children. Clearly 
     from the information we get from our Centers and families, 
     our current service system is unprepared to meet the growing 
     needs of individuals with autism and their families. There 
     are pressing needs for trained professionals and providers

[[Page S3383]]

     to better serve children and adults with autism with the 
     latest evidence based information and effective practices. 
     Furthermore, while early detection and treatment are 
     essential, families of children with autism often face 
     numerous obstacles for obtaining high quality services for 
     their children. Similarly, adults with autism face long 
     waiting lists and many barriers in obtaining appropriate 
     community-based supports and services to enable them to 
     participate fully in society. The Expanding the Promise to 
     Individuals with Autism Act that you have developed greatly 
     helps to address these issues by providing demonstration 
     grants to states to provide immediate assistance to 
     individuals and their families.
       The membership of AUCD includes a network of 67 University 
     Centers for Excellence in Developmental Disabilities located 
     in every U.S. state and territory. These University Centers 
     provide research, education, and service to further 
     independence, productivity, and quality of life for 
     individuals with developmental disabilities, including 
     autism. University Centers collaborate with stakeholders in 
     states to identify and address training needs in creative and 
     effective ways. As the prevalence of autism has risen, 
     University Centers have initiated many activities to help 
     meet the growing need for children, adults, and families. 
     This bill builds upon these efforts by expanding the capacity 
     of University Centers to focus on interdisciplinary training 
     of professionals and providers in the area of autism, provide 
     technical assistance, and disseminate information on 
     effective community-based treatment, interventions and 
     services.
       AUCD applauds your commitment to individuals with autism 
     and their families and looks forward to working with you on 
     speedy passage of this bill in the 110th Congress.
       Sincerely,
     Royal Walker,
       Board President & Associate Director, Institute for 
     Disability Studies, University of Southern Mississippi.
     George Jesien,
       Executive Director, AUCD.
                                  ____



                                                 Easter Seals,

                                   Washington, DC, March 20, 2007.
     Hon. Hillary Rodham Clinton,
     U.S. Senate,
     Washington, DC.
       Dear Senator Clinton: Easter Seals is pleased to support 
     the Expanding the Promise for Individuals with Autism Act of 
     2007. This legislation will go a long way to help children 
     and adults with autism spectrum disorders and other 
     developmental disabilities live, learn, work and play in 
     their communities.
       The Expanding the Promise for Individuals with Autism Act 
     of 2007 (EPIAA) is necessary legislation that must become 
     law. Research has demonstrated that children who are 
     diagnosed by age 2 and who receive appropriate services can 
     live with greater independence. Yet, too many children are 
     not diagnosed until age 5. The EPIAA will allow us to do 
     better for these children. Parents and young adults with 
     autism across the country report that too many youth exit the 
     school system, needing housing and job training opportunities 
     that are in short supply. The EPIAA will allow us to do 
     better. Finally, parents, schools, and communities are 
     struggling to find the answers of how to provide appropriate 
     services and supports to individuals with autism. The EPIAA 
     will allow us to do better in this area as well.
       Over the last 20 years, Easter Seals has seen a dramatic 
     increase in the number of people we serve who live with 
     autism. More than a generation ago, Easter Seals was front 
     and center during the polio epidemic, working tirelessly to 
     help children and adults with polio gain the skills they need 
     to live independently. Today, we are the country's leading 
     provider of services for people with autism.
       Thank you for sponsoring this important legislation. We 
     look forward to working with you on the enactment of the 
     Expanding the Promise for Individuals with Autism Act of 
     2007.
           Sincerely,
                                               Katherine Beh Neas,
     Director, Congressional Affairs.
                                  ____

                                               National Disability


                                               Rights Network,

                                   Washington, DC, March 20, 2007.
     Hon. Hillary Clinton,
     Russell Senate Office Building,
     Washington, DC.
     Hon. Wayne Allard,
     Dirksen Senate Office Building,
     Washington, DC.
       Dear Senators Clinton and Allard: The National Disability 
     Rights Network (NDRN) is pleased with your introduction of 
     the Expanding the Promise for Individuals with Autism Act of 
     2007. NDRN is the nonprofit membership organization for the 
     federally mandated Protection and Advocacy (P&A) Systems and 
     Client Assistance Programs (CAP). The P&A/CAP network 
     operates in every state and territory in the United States. 
     Collectively, the P&A/CAP network is the largest provider of 
     legally based advocacy services to people with disabilities 
     in the United States.
       Currently, the P&A network is on the front-line of work 
     with individuals with autism and their families. Early 
     statistics from FY 2006 indicate that 25 percent of the 
     people served by the Protection and Advocacy for 
     Developmental Disabilities program (PADD) were individuals 
     with autism. This is an increase of 6 percent from the 
     previous year. Unfortunately, due to the high demand for P&A 
     services from children and adults with all types of 
     disabilities and their families--and the concomitant 
     inadequate funding for the P&A programs--thousands of 
     individuals with autism were unable to access critical P&A 
     services.
       Key components of the P&A network's legally based advocacy 
     include investigating abuse and neglect; seeking systemic 
     change to prevent harm to children and adults with 
     disabilities; advocating for basic human and civil rights; 
     and ensuring accountability in education, employment, 
     housing, public services, transportation, and health care. 
     Each of these components is critical to ensuring that 
     individuals with autism--no matter their age--get access to 
     the supports and services they need to live as successfully 
     and as safely as possible in the community.
       Parents of children with autism--both young children and 
     adult children--know the important role that P&A services can 
     play in their lives. They have advocated for the inclusion of 
     a P&A component in this legislation in order to increase the 
     ability to serve this vulnerable population. These families 
     know that once this program is authorized and funded, the P&A 
     in their state will be mandated to make autism a priority for 
     services, providing individuals and their families with the 
     help needed to live full and successful lives.
       NDRN is pleased to work with you on the passage of this 
     legislation, and to ensure that critical services and 
     supports are available to both children and adults with 
     autism. For more information, please contact Kathy McGinley, 
     Deputy Executive Director for Public Policy.
           Sincerely,
                                                      Curt Decker,
                                               Executive Director.
                                 ______
                                 
      By Mr. REED (for himself, Ms. Collins, Mr. Kennedy, Mrs. Murray, 
        Mr. Dodd, and Mr. Sanders):
  S. 938. A bill to amend the Higher Education Act of 1965 to expand 
college access and increase college persistence, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.
                                 ______
                                 
      By Mr. REED (for himself, Ms. Collins, Mr. Kennedy, Mrs. Murray, 
        and Mr. Sanders):
  S. 939. A bill to amend the Higher Education Act of 1965 to simplify 
and improve the process of applying for student assistance, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. REED. Mr. President, today I introduce two bipartisan bills to 
expand access to college for students and their families.
  We are slated to reauthorize the Higher Education Act this Congress 
for the first time since 1998. The key to this reauthorization will be 
ensuring that we make a substantial Federal investment in need-based 
grant aid. I am pleased we took a significant first step down this path 
last month by increasing the maximum Pell Grant, the Federal 
Government's primary source of need-based financial aid, for the first 
time in four years. However, we are still far from the robust lift 
Congress provided students and their families in the mid-1970s, when 
the maximum Pell Grant covered 84 percent of costs at a public 4-year 
institution. Today, it covers only 32 percent.
  There has also been a concurrent increase in college costs. According 
to a recent report by the College Board, for the 2006-07 school year, 
tuition rose 6.3 percent at 4-year public colleges and 5.9 percent for 
4-year private institutions. The combination of declining Federal 
investments in need-based aid and sharp increases in college costs has 
priced more and more qualified individuals out of college.
  This is particularly troubling, given the strong correlation between 
educational attainment, employment, and wages. A college education has 
now increasingly become a necessary requirement for upward income 
mobility. College graduates, on average, earn 62 percent more than high 
school graduates. Over a lifetime, the gap in earnings between those 
with a high school diploma and a bachelor's or higher degree exceeds $1 
million.
  To help increase the amount of need-based grant aid to low-income 
students and fulfill their unmet financial aid need, today I introduce 
the ACCESS, Accessing College through Comprehensive Early Outreach and 
State Partnerships, Act, cosponsored by Senators Collins, Kennedy, 
Murray, Dodd, and

[[Page S3384]]

Sanders. This legislation improves the Leveraging Educational 
Assistance Partnership or LEAP program by forging a new Federal 
incentive for States to form partnerships with businesses, colleges, 
and private or philanthropic organizations to provide low-income 
students with increased need-based grant aid, early information and 
assurance of aid eligibility (beginning in middle school), and early 
intervention, mentoring, and outreach services. Research has shown that 
college access programs that combine these elements are successful in 
making the dream of higher education a reality. Students participating 
in such programs are more financially and academically prepared, and 
thus, more likely to enroll in college and persist to degree 
completion.
  Since 1972, the Federal-State partnership embodied by LEAP, with 
modest Federal support, has helped leverage State grant aid to low-and 
moderate-income students. Without this important Federal incentive, 
many States would never have established need-based financial aid 
programs, and many States would not continue to maintain such programs. 
Last year, States matched approximately $65 million in Federal LEAP 
funds with over $840 million in supplemental need-based aid. By way of 
example, in my home State of Rhode Island, the Federal investment of 
approximately $350,000 in LEAP funds spurred the State to expend over 
$13 million in need-based aid.
  The second bill I introduce today, the FAFSA Financial Aid Form 
Simplification and Access Act, cosponsored by Senators Collins, 
Kennedy, Murray, and Sanders, has several key components to make the 
college financial aid application process both simple and certain. 
First, our legislation would allow more students to qualify for an 
automatic-zero expected family contribution, or auto-zero, and align 
the auto-zero eligibility levels, income of $30,000 or less, with the 
standards of other Federal means-tested programs like school lunch, 
SSI, and food stamps. Second, the FAFSA Act would establish a short 
paper FAFSA or EZ-FAFSA for students who qualify for the auto-zero. 
Third, the bill phases out the long form, using the savings to utilize 
``smart'' technology to create a tailored web-based application form 
and ensure that students answer only the questions needed to determine 
financial aid eligibility in the state in which they reside. For those 
students who do not have access to the Internet, we propose creating a 
free telefile system for filing by phone.
  The FAFSA Act would also emphasize providing students with the 
opportunity to complete financial applications earlier in order to 
receive early estimates of aid eligibility. This legislation would 
create a pilot program to test an early application system under which 
dependent students would apply for an aid estimate in their junior 
year, using the student's prior/prior year income (PPY). The pilot 
program also includes a requirement that the Secretary study the 
feasibility, benefits, and adverse effects of utilizing information 
from the IRS in order to simplify the financial aid process.
  I was pleased to work with the Advisory Committee on Student 
Financial Assistance and a host of other higher education organizations 
and charitable foundations on these bills. I am also pleased that both 
bills are supported by a range of higher education and student groups, 
including the American Association of Community Colleges, the American 
Council on Education, the Association of American Universities, the 
Association of Jesuit Colleges and Universities, the Center for Law and 
Social Policy, the National Association of College Admission 
Counseling, the National Association of Independent Colleges and 
Universities, the National Association of State Student Grant and Aid 
Programs, the National Association of Student Financial Aid 
Administrators, the United States Student Association, and the College 
Parents of America. The FAFSA Act is supported by the Council of 
Graduate Schools as well.
  We must act on these bills and continue to push for increased Federal 
investment in need-based aid to middle- and low-income students and 
their families. All too often successful students give up on a college 
education because they think there is no way they can ever afford it. 
We must ensure that every student who works hard and plays by the rules 
gets the opportunity to live the American Dream.
  I urge my colleagues to cosponsor these bills and work for their 
inclusion in the upcoming reauthorization of the Higher Education Act.
  I ask unanimous consent that the text of these bills be printed in 
the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 938

       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 ``Accessing College through 
     Comprehensive Early Outreach and State Partnerships Act''.

     SEC. 2. GRANTS FOR ACCESS AND PERSISTENCE.

       (a) Authorization of Appropriations.--Section 415A(b) of 
     the Higher Education Act of 1965 (20 U.S.C. 1070c(b)) is 
     amended by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this subpart $500,000,000 for fiscal year 2008, 
     and such sums as may be necessary for each of the 5 
     succeeding fiscal years.
       ``(2) Reservation.--For any fiscal year for which the 
     amount appropriated under paragraph (1) exceeds $30,000,000, 
     the excess amount shall be available to carry out section 
     415E.''.
       (b) Applications for Leveraging Educational Assistance 
     Partnership Programs.--Section 415C(b) of the Higher 
     Education Act of 1965 (20 U.S.C. 1070c-2(b)) is amended--
       (1) in paragraph (2), by striking ``$5,000'' and inserting 
     ``$12,500'';
       (2) in paragraph (9), by striking ``and'' after the 
     semicolon;
       (3) in paragraph (10), by striking the period at the end 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(11) provides notification to eligible students that such 
     grants are--
       ``(A) Leveraging Educational Assistance Partnership Grants; 
     and
       ``(B) funded by the Federal Government and the State.''.
       (c) Grants for Access and Persistence.--Section 415E of the 
     Higher Education Act of 1965 (20 U.S.C. 1070c-3a) is amended 
     to read as follows:

     ``SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE.

       ``(a) Purpose.--It is the purpose of this section to expand 
     college access and increase college persistence by making 
     allotments to States to enable the States to--
       ``(1) expand and enhance partnerships with institutions of 
     higher education, early information and intervention, 
     mentoring, or outreach programs, private corporations, 
     philanthropic organizations, and other interested parties to 
     carry out activities under this section and to provide 
     coordination and cohesion among Federal, State, and local 
     governmental and private efforts that provide financial 
     assistance to help low-income students attend college;
       ``(2) provide need-based access and persistence grants to 
     eligible low-income students;
       ``(3) provide early notification to low-income students of 
     their eligibility for financial aid; and
       ``(4) encourage increased participation in early 
     information and intervention, mentoring, or outreach 
     programs.
       ``(b) Allotments to States.--
       ``(1) In general.--
       ``(A) Authorization.--From sums reserved under section 
     415A(b)(2) for each fiscal year, the Secretary shall make an 
     allotment to each State that submits an application for an 
     allotment in accordance with subsection (c) to enable the 
     State to pay the Federal share of the cost of carrying out 
     the activities under subsection (d).
       ``(B) Determination of allotment.--In making allotments 
     under subparagraph (A), the Secretary shall consider the 
     following:
       ``(i) Continuation of award.--If a State continues to meet 
     the specifications established in its application under 
     subsection (c), the Secretary shall make an allotment to such 
     State that is not less than the allotment made to such State 
     for the previous fiscal year.
       ``(ii) Priority.--The Secretary shall give priority in 
     making allotments to States that meet the requirements under 
     paragraph (2)(B)(ii).
       ``(2) Federal share.--
       ``(A) In general.--The Federal share of the cost of 
     carrying out the activities under subsection (d) for any 
     fiscal year shall not exceed 66.66 percent.
       ``(B) Different percentages.--The Federal share under this 
     section shall be determined in accordance with the following:
       ``(i) If a State applies for an allotment under this 
     section in partnership with any number of degree granting 
     institutions of higher education in the State whose combined 
     full-time enrollment represents less than a majority of all 
     students attending institutions of higher education in the 
     State, and philanthropic organizations that are located in, 
     or that provide funding in, the State or private corporations 
     that are located in, or that do business in, the State,

[[Page S3385]]

     then the Federal share of the cost of carrying out the 
     activities under subsection (d) shall be equal to 57 percent.
       ``(ii) If a State applies for an allotment under this 
     section in partnership with any number of degree granting 
     institutions of higher education in the State whose combined 
     full-time enrollment represents a majority of all students 
     attending institutions of higher education in the State, 
     philanthropic organizations that are located in, or that 
     provide funding in, the State, and private corporations that 
     are located in, or that do business in, the State, then the 
     Federal share of the cost of carrying out the activities 
     under subsection (d) shall be equal to 66.66 percent.
       ``(C) Non-federal share.--
       ``(i) In general.--The non-Federal share under this section 
     may be provided in cash or in kind, fairly evaluated.
       ``(ii) In kind contribution.--For the purpose of 
     calculating the non-Federal share under this subparagraph, an 
     in kind contribution is a non-cash contribution that--

       ``(I) has monetary value, such as the provision of--

       ``(aa) room and board; or
       ``(bb) transportation passes; and

       ``(II) helps a student meet the cost of attendance at an 
     institution of higher education.

       ``(iii) Effect on needs analysis.--For the purpose of 
     calculating a student's need in accordance with part F, an in 
     kind contribution described in clause (ii) shall not be 
     considered an asset or income of the student or the student's 
     parent.
       ``(c) Application for Allotment.--
       ``(1) In general.--
       ``(A) Submission.--A State that desires to receive an 
     allotment under this section shall submit an application to 
     the Secretary at such time, in such manner, and containing 
     such information as the Secretary may require.
       ``(B) Content.--An application submitted under subparagraph 
     (A) shall include the following:
       ``(i) A description of the State's plan for using the 
     allotted funds.
       ``(ii) Assurances that the State will provide matching 
     funds, from State, institutional, philanthropic, or private 
     funds, of not less than 33.33 percent of the cost of carrying 
     out the activities under subsection (d). Matching funds from 
     philanthropic organizations used to provide early information 
     and intervention, mentoring, or outreach programs may be in 
     cash or in kind. The State shall specify the methods by which 
     matching funds will be paid and include provisions designed 
     to ensure that funds provided under this section will be used 
     to supplement, and not supplant, Federal and non-Federal 
     funds available for carrying out the activities under this 
     title. A State that uses non-Federal funds to create or 
     expand existing partnerships with nonprofit organizations or 
     community-based organizations in which such organizations 
     match State funds for student scholarships, may apply such 
     matching funds from such organizations toward fulfilling the 
     State's matching obligation under this clause.
       ``(iii) Assurances that early information and intervention, 
     mentoring, or outreach programs exist within the State or 
     that there is a plan to make such programs widely available.
       ``(iv) A description of the organizational structure that 
     the State has in place to administer the activities under 
     subsection (d).
       ``(v) A description of the steps the State will take to 
     ensure students who receive grants under this section persist 
     to degree completion.
       ``(vi) Assurances that the State has a method in place, 
     such as acceptance of the automatic zero expected family 
     contribution determination described in section 479(c), to 
     identify eligible low-income students and award State grant 
     aid to such students.
       ``(vii) Assurances that the State will provide notification 
     to eligible low-income students that grants under this 
     section are--

       ``(I) Leveraging Educational Assistance Partnership Grants; 
     and
       ``(II) funded by the Federal Government and the State.

       ``(2) State agency.--The State agency that submits an 
     application for a State under section 415C(a) shall be the 
     same State agency that submits an application under paragraph 
     (1) for such State.
       ``(3) Partnership.--In applying for an allotment under this 
     section, the State agency shall apply for the allotment in 
     partnership with--
       ``(A) not less than 1 public and 1 private degree granting 
     institution of higher education that are located in the 
     State;
       ``(B) new or existing early information and intervention, 
     mentoring, or outreach programs located in the State; and
       ``(C) not less than 1--
       ``(i) philanthropic organization located in, or that 
     provides funding in, the State; or
       ``(ii) private corporation located in, or that does 
     business in, the State.
       ``(4) Roles of partners.--
       ``(A) State agency.--A State agency that is in a 
     partnership receiving an allotment under this section--
       ``(i) shall--

       ``(I) serve as the primary administrative unit for the 
     partnership;
       ``(II) provide or coordinate matching funds, and coordinate 
     activities among partners;
       ``(III) encourage each institution of higher education in 
     the State to participate in the partnership;
       ``(IV) make determinations and early notifications of 
     assistance as described under subsection (d)(2); and
       ``(V) annually report to the Secretary on the partnership's 
     progress in meeting the purpose of this section; and

       ``(ii) may provide early information and intervention, 
     mentoring, or outreach programs.
       ``(B) Degree granting institutions of higher education.--A 
     degree granting institution of higher education that is in a 
     partnership receiving an allotment under this section--
       ``(i) shall--

       ``(I) recruit and admit participating qualified students 
     and provide such additional institutional grant aid to 
     participating students as agreed to with the State agency;
       ``(II) provide support services to students who receive an 
     access and persistence grant under this section and are 
     enrolled at such institution; and
       ``(III) assist the State in the identification of eligible 
     students and the dissemination of early notifications of 
     assistance as agreed to with the State agency; and

       ``(ii) may provide funding for early information and 
     intervention, mentoring, or outreach programs or provide such 
     services directly.
       ``(C) Programs.--An early information and intervention, 
     mentoring, or outreach program that is in a partnership 
     receiving an allotment under this section shall provide 
     direct services, support, and information to participating 
     students.
       ``(D) Philanthropic organization or private corporation.--A 
     philanthropic organization or private corporation that is in 
     a partnership receiving an allotment under this section shall 
     provide funds for access and persistence grants for 
     participating students, or provide funds or support for early 
     information and intervention, mentoring, or outreach 
     programs.
       ``(d) Authorized Activities.--
       ``(1) In general.--
       ``(A) Establishment of partnership.--Each State receiving 
     an allotment under this section shall use the funds to 
     establish a partnership to award access and persistence 
     grants to eligible low-income students in order to increase 
     the amount of financial assistance such students receive 
     under this subpart for undergraduate education expenses.
       ``(B) Amount.--
       ``(i) Partnerships with institutions serving less than a 
     majority of students in the state.--

       ``(I) In general.--In the case where a State receiving an 
     allotment under this section is in a partnership described in 
     subsection (b)(2)(B)(i), the amount of an access and 
     persistence grant awarded by such State shall be not less 
     than the amount that is equal to the average undergraduate 
     tuition and mandatory fees at 4-year public institutions of 
     higher education in the State where the student resides (less 
     any other Federal or State sponsored grant amount, college 
     work study amount, and scholarship amount received by the 
     student) and such amount shall be used toward the cost of 
     attendance at an institution of higher education, located in 
     the State, that is a partner in the partnership.
       ``(II) Cost of attendance.--A State that has a program, 
     apart from the partnership under this section, of providing 
     eligible low-income students with grants that are equal to 
     the average undergraduate tuition and mandatory fees at 4-
     year public institutions of higher education in the State, 
     may increase the amount of access and persistence grants 
     awarded by such State up to an amount that is equal to the 
     average cost of attendance at 4-year public institutions of 
     higher education in the State (less any other Federal or 
     State sponsored grant amount, college work study amount, and 
     scholarship amount received by the student).

       ``(ii) Partnership with institutions serving the majority 
     of students in the state.--In the case where a State 
     receiving an allotment under this section is in a partnership 
     described in subsection (b)(2)(B)(ii), the amount of an 
     access and persistence grant awarded by such State shall be 
     not less than the average cost of attendance at 4-year public 
     institutions of higher education in the State where the 
     student resides (less any other Federal or State sponsored 
     grant amount, college work study amount, and scholarship 
     amount received by the student) and such amount shall be used 
     by the student to attend an institution of higher education, 
     located in the State, that is a partner in the partnership.
       ``(2) Early notification.--
       ``(A) In general.--Each State receiving an allotment under 
     this section shall annually notify low-income students, such 
     as students who are eligible to receive a free lunch under 
     the school lunch program established under the Richard B. 
     Russell National School Lunch Act (42 U.S.C. 1751 et seq.), 
     in grade 7 through grade 12 in the State of their potential 
     eligibility for student financial assistance, including an 
     access and persistence grant, to attend an institution of 
     higher education.
       ``(B) Content of notice.--The notification under 
     subparagraph (A)--
       ``(i) shall include--

       ``(I) information about early information and intervention, 
     mentoring, or outreach programs available to the student;
       ``(II) information that a student's candidacy for an access 
     and persistence grant is enhanced through participation in an 
     early

[[Page S3386]]

     information and intervention, mentoring, or outreach program;
       ``(III) an explanation that student and family eligibility 
     and participation in other Federal means-tested programs may 
     indicate eligibility for an access and persistence grant and 
     other student aid programs;
       ``(IV) a nonbinding estimation of the total amount of 
     financial aid a low-income student with a similar income 
     level may expect to receive, including an estimation of the 
     amount of an access and persistence grant and an estimation 
     of the amount of grants, loans, and all other available types 
     of aid from the major Federal and State financial aid 
     programs;
       ``(V) an explanation that in order to be eligible for an 
     access and persistence grant, at a minimum, a student shall 
     meet the requirement under paragraph (3), graduate from 
     secondary school, and enroll at an institution of higher 
     education that is a partner in the partnership;
       ``(VI) information on any additional requirements (such as 
     a student pledge detailing student responsibilities) that the 
     State may impose for receipt of an access and persistence 
     grant under this section; and
       ``(VII) instructions on how to apply for an access and 
     persistence grant and an explanation that a student is 
     required to file a Free Application for Federal Student Aid 
     authorized under section 483(a) to be eligible for such grant 
     and assistance from other Federal and State financial aid 
     programs; and

       ``(ii) may include a disclaimer that access and persistence 
     grant awards are contingent upon--

       ``(I) a determination of the student's financial 
     eligibility at the time of the student's enrollment at an 
     institution of higher education that is a partner in the 
     partnership;
       ``(II) annual Federal and State appropriations; and
       ``(III) other aid received by the student at the time of 
     the student's enrollment at an institution of higher 
     education that is a partner in the partnership.

       ``(3) Eligibility.--In determining which students are 
     eligible to receive access and persistence grants, the State 
     shall ensure that each such student meets not less than 1 of 
     the following:
       ``(A) Meets not less than 2 of the following criteria, with 
     priority given to students meeting all of the following 
     criteria:
       ``(i) Has an expected family contribution equal to zero (as 
     described in section 479) or a comparable alternative based 
     upon the State's approved criteria in section 415C(b)(4).
       ``(ii) Has qualified for a free lunch, or at the State's 
     discretion a reduced price lunch, under the school lunch 
     program established under the Richard B. Russell National 
     School Lunch Act.
       ``(iii) Qualifies for the State's maximum undergraduate 
     award, as authorized under section 415C(b).
       ``(iv) Is participating in, or has participated in, a 
     Federal, State, institutional, or community early information 
     and intervention, mentoring, or outreach program, as 
     recognized by the State agency administering activities under 
     this section.
       ``(B) Is receiving, or has received, an access and 
     persistence grant under this section, in accordance with 
     paragraph (5).
       ``(4) Grant award.--Once a student, including those 
     students who have received early notification under paragraph 
     (2) from the State, applies for admission to an institution 
     that is a partner in the partnership, files a Free 
     Application for Federal Student Aid and any related existing 
     State form, and is determined eligible by the State under 
     paragraph (3), the State shall--
       ``(A) issue the student a preliminary access and 
     persistence grant award certificate with tentative award 
     amounts; and
       ``(B) inform the student that payment of the access and 
     persistence grant award amounts is subject to certification 
     of enrollment and award eligibility by the institution of 
     higher education.
       ``(5) Duration of award.--An eligible student that receives 
     an access and persistence grant under this section shall 
     receive such grant award for each year of such student's 
     undergraduate education in which the student remains eligible 
     for assistance under this title, including pursuant to 
     section 484(c), and remains financially eligible as 
     determined by the State, except that the State may impose 
     reasonable time limits to baccalaureate degree completion.
       ``(e) Administrative Cost Allowance.--A State that receives 
     an allotment under this section may reserve not more than 3.5 
     percent of the funds made available annually through the 
     allotment for State administrative functions required to 
     carry out this section.
       ``(f) Statutory and Regulatory Relief for Institutions of 
     Higher Education.--The Secretary may grant, upon the request 
     of an institution of higher education that is in a 
     partnership described in subsection (b)(2)(B)(ii) and that 
     receives an allotment under this section, a waiver for such 
     institution from statutory or regulatory requirements that 
     inhibit the ability of the institution to successfully and 
     efficiently participate in the activities of the partnership.
       ``(g) Applicability Rule.--The provisions of this subpart 
     which are not inconsistent with this section shall apply to 
     the program authorized by this section.
       ``(h) Maintenance of Effort Requirement.--Each State 
     receiving an allotment under this section for a fiscal year 
     shall provide the Secretary an assurance that the aggregate 
     amount expended per student or the aggregate expenditures by 
     the State, from funds derived from non-Federal sources, for 
     the authorized activities described in subsection (d) for the 
     preceding fiscal year were not less than the amount expended 
     per student or the aggregate expenditure by the State for the 
     activities for the second preceding fiscal year.
       ``(i) Special Rule.--Notwithstanding subsection (h), for 
     purposes of determining a State's share of the cost of the 
     authorized activities described in subsection (d), the State 
     shall consider only those expenditures from non-Federal 
     sources that exceed its total expenditures for need-based 
     grants, scholarships, and work-study assistance for fiscal 
     year 1999 (including any such assistance provided under this 
     subpart).
       ``(j) Reports.--Not later than 3 years after the date of 
     enactment of the Accessing College through Comprehensive 
     Early Outreach and State Partnerships Act, and annually 
     thereafter, the Secretary shall submit a report describing 
     the activities and the impact of the partnerships under this 
     section to the Committee on Health, Education, Labor, and 
     Pensions of the Senate and the Committee on Education and 
     Labor of the House of Representatives.''.
       (d) Continuation and Transition.--During the 2-year period 
     commencing on the date of enactment of this Act, the 
     Secretary shall continue to award grants under section 415E 
     of the Higher Education Act of 1965 (20 U.S.C. 1070c-3a), as 
     such section existed on the day before the date of enactment 
     of this Act, to States that choose to apply for grants under 
     such predecessor section.
       (e) Implementation and Evaluation.--Section 491(j) of the 
     Higher Education Act of 1965 (20 U.S.C. 1098(j)) is amended--
       (1) in paragraph (4), by striking ``and'' after the 
     semicolon;
       (2) by redesignating paragraph (5) as paragraph (6); and
       (3) by inserting after paragraph (4) (as amended by 
     paragraph (1)) the following:
       ``(5) not later than 6 months after the date of enactment 
     of the Accessing College through Comprehensive Early Outreach 
     and State Partnerships Act, advise the Secretary on means to 
     implement the activities under section 415E, and the Advisory 
     Committee shall continue to monitor, evaluate, and make 
     recommendations on the progress of partnerships that receive 
     allotments under such section; and''.
                                  ____


                                 S. 939

       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 ``Financial 
     Aid Form Simplification and Access Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Simplified needs test and automatic zero improvements.
Sec. 3. Improving paper and electronic forms.
Sec. 4. Support for working students.
Sec. 5. Simplification for students with special circumstances.
Sec. 6. Definitions.
Sec. 7. Advisory Committee on Student Financial Assistance.

     SEC. 2. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO 
                   IMPROVEMENTS.

       (a) Simplified Needs Test.--Section 479 of the Higher 
     Education Act of 1965 (20 U.S.C. 1087ss) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)(A)(i)--
       (i) in subclause (II), by striking ``or'' after the 
     semicolon;
       (ii) by redesignating subclause (III) as subclause (IV);
       (iii) by inserting after subclause (II) the following:

       ``(III) 1 of whom is a dislocated worker; or''; and

       (iv) in subclause (IV) (as redesignated by clause (ii), by 
     striking ``12-month'' and inserting ``24-month''; and
       (B) in subparagraph (B)(i)--
       (i) in subclause (II), by striking ``or'' after the 
     semicolon;
       (ii) by redesignating subclause (III) as subclause (IV);
       (iii) by inserting after subclause (II) the following:

       ``(III) 1 of whom is a dislocated worker; or''; and

       (iv) in subclause (IV) (as redesignated by clause (ii), by 
     striking ``12-month'' and inserting ``24-month'';
       (2) in subsection (c)--
       (A) in paragraph (1)--
       (i) in subparagraph (A)--

       (I) in clause (ii), by striking ``or'' after the semicolon;
       (II) by redesignating clause (iii) as clause (iv);
       (III) by inserting after clause (ii) the following:

       ``(iii) 1 of whom is a dislocated worker; or''; and

       (IV) in clause (iv) (as redesignated by subclause (II), by 
     striking ``12-month'' and inserting ``24-month''; and

       (ii) in subparagraph (B), by striking ``20,000'' and 
     inserting ``$30,000''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) in clause (ii), by striking ``or'' after the semicolon;
       (II) by redesignating clause (iii) as clause (iv);

[[Page S3387]]

       (III) by inserting after clause (ii) the following:

       ``(iii) is a dislocated worker; or''; and

       (IV) in clause (iv) (as redesignated by subclause (II), by 
     striking ``12-month'' and inserting ``24-month''; and

       (ii) in subparagraph (B), by striking ``$20,000'' and 
     inserting ``$30,000''; and
       (C) in the flush matter following paragraph (2)(B), by 
     adding at the end the following: ``The Secretary shall 
     annually adjust the income level necessary to qualify an 
     applicant for the zero expected family contribution. The 
     income level shall be adjusted according to increases in the 
     Consumer Price Index, as defined in section 478(f).''; and
       (3) in subsection (d)--
       (A) by redesignating paragraphs (1) through (6) as 
     subparagraphs (A) through (F), respectively;
       (B) by striking ``(d) Definition'' and all that follows 
     through ``the term'' and inserting the following:
       ``(d) Definitions.--In this section:
       ``(1) Dislocated worker.--The term `dislocated worker' has 
     the meaning given the term in section 101 of the Workforce 
     Investment Act of 1998 (29 U.S.C. 2801).
       ``(2) Means-tested federal benefit program.--The term''.
       (b) Discretion of Student Financial Aid Administrators.--
     Section 479A(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1087tt(a)) is amended in the third sentence by 
     inserting ``a family member who is a dislocated worker (as 
     defined in section 101 of the Workforce Investment Act of 
     1998 (29 U.S.C. 2801)),'' after ``recent unemployment of a 
     family member,''.
       (c) Reporting Requirements.--
       (1) Eligibility guidelines.--The Secretary of Education 
     shall regularly evaluate the impact of the eligibility 
     guidelines in subsections (b)(1)(A)(i), (b)(1)(B)(i), 
     (c)(1)(A), and (c)(2)(A) of section 479 of the Higher 
     Education Act of 1965 (20 U.S.C. 1087ss(b)(1)(A)(i), 
     (b)(1)(B)(i), (c)(1)(A), and (c)(2)(A)).
       (2) Means-tested federal benefit program.--The Secretary 
     shall evaluate every 3 years the impact of including whether 
     a student or parent received benefits under a means-tested 
     Federal benefit program (as defined in section 479(d) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087ss(d)) as a 
     factor in determining eligibility under subsections (b) and 
     (c) of section 479 of the Higher Education Act of 1965 (20 
     U.S.C. 1087ss(b) and (c)).

     SEC. 3. IMPROVING PAPER AND ELECTRONIC FORMS.

       (a) Simplified Needs Test.--Section 479(a) of the Higher 
     Education Act of 1965 (20 U.S.C. 1087ss(a)) is amended by 
     adding at the end the following:
       ``(3) Simplified forms.--The Secretary shall make special 
     efforts to notify families meeting the requirements of 
     subsection (c) that such families may use the EZ FAFSA 
     described in section 483(a)(2)(B) and notify families meeting 
     the requirements of subsection (b) that such families may use 
     the simplified electronic application form described in 
     section 483(a)(3)(B).''.
       (b) Common Financial Aid Form Development and Processing.--
     Section 483 of the Higher Education Act of 1965 (20 U.S.C. 
     1090) is amended--
       (1) in subsection (a)--
       (A) by striking paragraphs (1), (2), and (5);
       (B) by redesignating paragraphs (3), (4), (6), and (7), as 
     paragraphs (8), (9), (10), and (11), respectively;
       (C) by inserting before paragraph (8), as redesignated by 
     subparagraph (B), the following:
       ``(1) In general.--
       ``(A) Common financial reporting forms.--The Secretary, in 
     cooperation with representatives of agencies and 
     organizations involved in student financial assistance, shall 
     produce, distribute, and process free of charge common 
     financial reporting forms as described in this subsection to 
     be used for application and reapplication to determine the 
     need and eligibility of a student for financial assistance 
     under parts A through E (other than subpart 4 of part A). 
     These forms shall be made available to applicants in both 
     paper and electronic formats and shall be referred to (except 
     as otherwise provided in this subsection) as the `Free 
     Application for Federal Student Aid' or `FAFSA'.
       ``(B) Early analysis.--The Secretary shall permit an 
     applicant to complete a form described in this subsection 
     prior to enrollment in order to obtain an estimate from the 
     Secretary of the applicant's expected family contribution. 
     Such applicant shall be permitted to update the information 
     contained on a form submitted pursuant to the preceding 
     sentence, using the process described in paragraph (4), for 
     purposes of applying for assistance under this title for the 
     first academic year for which the applicant applies for 
     financial assistance under this title.
       ``(2) Paper format.--
       ``(A) In general.--Subject to subparagraph (C), the 
     Secretary shall produce, distribute, and process common forms 
     in paper format to meet the requirements of paragraph (1). 
     The Secretary shall develop a common paper form for 
     applicants who do not meet the requirements of section 
     479(c).
       ``(B) EZ fafsa.--
       ``(i) In general.--The Secretary shall develop and use a 
     simplified paper application form, to be known as the `EZ 
     FAFSA', to be used for applicants meeting the requirements of 
     section 479(c).
       ``(ii) Reduced data requirements.--The EZ FAFSA shall 
     permit an applicant to submit for financial assistance 
     purposes, only the data elements required to make a 
     determination of whether the applicant meets the requirements 
     under section 479(c).
       ``(iii) State data.--The Secretary shall include on the EZ 
     FAFSA space for information that is required of an applicant 
     to be eligible for State financial assistance, as provided 
     under paragraph (5), except the Secretary shall not include a 
     State's data if that State does not permit its applicants for 
     State assistance to use the EZ FAFSA.
       ``(iv) Free availability and processing.--The provisions of 
     paragraph (6) shall apply to the EZ FAFSA, and the data 
     collected by means of the EZ FAFSA shall be available to 
     institutions of higher education, guaranty agencies, and 
     States in accordance with paragraph (8).
       ``(v) Testing.--The Secretary shall conduct appropriate 
     field testing on the EZ FAFSA.
       ``(C) Phasing out the paper form for students who do not 
     meet the requirements of the automatic zero expected family 
     contribution.--
       ``(i) In general.--The Secretary shall make all efforts to 
     encourage all applicants to utilize the electronic forms 
     described in paragraph (3).
       ``(ii) Phaseout of full paper fafsa.--Not later than 5 
     years after the date of enactment of the Financial Aid Form 
     Simplification and Access Act, to the extent practicable, the 
     Secretary shall phaseout the printing of the full paper Free 
     Application for Federal Student Aid described in subparagraph 
     (A) and used by applicants who do not meet the requirements 
     of the EZ FAFSA described in subparagraph (B).
       ``(iii) Availability of full paper fafsa.--

       ``(I) In general.--Prior to and after the phaseout 
     described in clause (ii), the Secretary shall maintain an 
     online printable version of the paper forms described in 
     subparagraphs (A) and (B).
       ``(II) Accessibility.--The online printable version 
     described in subclause (I) shall be made easily accessible 
     and downloadable to students on the same website used to 
     provide students with the electronic application forms 
     described in paragraph (3).
       ``(III) Submission of forms.--The Secretary shall enable, 
     to the extent practicable, students to submit a form 
     described in this clause that is downloaded and printed in 
     order to meet the filing requirements of this section and to 
     receive aid from programs established under this title.

       ``(iv) Use of savings to address the digital divide.--

       ``(I) In general.--The Secretary shall utilize savings 
     accrued by phasing out the full paper Free Application for 
     Federal Student Aid and moving more applicants to the 
     electronic forms, to improve access to the electronic forms 
     for applicants meeting the requirements of section 479(c).
       ``(II) Report.--The Secretary shall report annually to the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate and the Committee on Education and Labor of the House 
     of Representatives on steps taken to eliminate the digital 
     divide and on the phaseout of the full paper Free Application 
     for Federal Student Aid described in subparagraph (A). The 
     report shall specifically address the impact of the digital 
     divide on independent students, adults, and dependent 
     students, including students completing applications 
     described in this paragraph and paragraphs (3) and (4).

       ``(3) Electronic format.--
       ``(A) In general.--
       ``(i) Establishment.--The Secretary shall produce, 
     distribute, and process common financial reporting forms in 
     electronic format (such as through a website called `FAFSA on 
     the Web') to meet the requirements of paragraph (1). The 
     Secretary shall include an electronic version of the EZ FAFSA 
     form for applicants who meet the requirements of section 
     479(c) and develop common electronic forms for applicants who 
     meet the requirements of section 479(b) and common electronic 
     forms for applicants who do not meet the requirements of 
     section 479(b).
       ``(ii) State data.--The Secretary shall include on the 
     common electronic forms described in clause (i) space for 
     information that is required of an applicant to be eligible 
     for State financial assistance, as provided under paragraph 
     (5). The Secretary may not require an applicant to complete 
     data required by any State other than the applicant's State 
     of residence.
       ``(iii) Streamlined format.--The Secretary shall use, to 
     the fullest extent practicable, all available technology to 
     ensure that a student answers only the minimum number of 
     questions necessary.
       ``(B) Simplified application.--
       ``(i) In general.--The Secretary shall develop and use a 
     simplified electronic application form to be used by 
     applicants meeting the requirements under section 479(b).
       ``(ii) Reduced data requirements.--The simplified 
     electronic application form shall permit an applicant to 
     submit for financial assistance purposes, only the data 
     elements required to make a determination of whether the 
     applicant meets the requirements under section 479(b).
       ``(iii) State data.--The Secretary shall include on the 
     simplified electronic application form space for information 
     that is required of an applicant to be eligible for State 
     financial assistance, as provided under paragraph (5), except 
     the Secretary shall not include a State's data if that State 
     does not permit its applicants for State assistance to

[[Page S3388]]

     use the simplified electronic application form.
       ``(iv) Free availability and processing.--The provisions of 
     paragraph (6) shall apply to the simplified electronic 
     application form, and the data collected by means of the 
     simplified electronic application form shall be available to 
     institutions of higher education, guaranty agencies, and 
     States in accordance with paragraph (8).
       ``(v) Testing.--The Secretary shall conduct appropriate 
     field testing on the form developed under this subparagraph.
       ``(C) Rule of construction.--Nothing in this subsection 
     shall be construed to prohibit the use of the form developed 
     by the Secretary pursuant to this paragraph by an eligible 
     institution, eligible lender, guaranty agency, State grant 
     agency, private computer software provider, a consortium of 
     such entities, or such other entities as the Secretary may 
     designate.
       ``(D) Privacy.--The Secretary shall ensure that data 
     collection under this paragraph complies with section 552a of 
     title 5, United States Code, and that any entity using the 
     electronic version of the forms developed by the Secretary 
     pursuant to this paragraph shall maintain reasonable and 
     appropriate administrative, technical, and physical 
     safeguards to ensure the integrity and confidentiality of the 
     information, and to protect against security threats, or 
     unauthorized uses or disclosures of the information provided 
     on the electronic version of the form. Data collected by such 
     electronic version of the form shall be used only for the 
     application, award, and administration of aid awarded under 
     this title, State aid, or aid awarded by eligible 
     institutions or such entities as the Secretary may designate. 
     No data collected by such electronic version of the form 
     shall be used for making final aid awards under this title 
     until such data have been processed by the Secretary or a 
     contractor or designee of the Secretary, except as may be 
     permitted under this title.
       ``(E) Signature.--Notwithstanding any other provision of 
     this Act, the Secretary may permit an electronic form to be 
     submitted without a signature, if a signature is subsequently 
     submitted by the applicant.
       ``(F) Personal identification numbers authorized.--The 
     Secretary is authorized to assign to applicants personal 
     identification numbers--
       ``(i) to enable the applicants to use such numbers in lieu 
     of a signature for purposes of completing a form under this 
     paragraph; and
       ``(ii) for any purpose determined by the Secretary to 
     enable the Secretary to carry out this title.
       ``(G) Personal identification number improvement assessment 
     and report.--
       ``(i) Assessment.--The Secretary shall conduct an 
     assessment of the feasibility of minimizing, and of 
     eliminating, the time required for applicants to obtain a 
     Personal Identification Number when applying for aid under 
     this title through an electronic format (such as through a 
     website called `FAFSA on the Web') including an examination 
     of the feasibility of implementing a real-time data match 
     between the Social Security Administration and the 
     Department.
       ``(ii) Report.--The Secretary shall report the findings of 
     the assessment described in clause (i) to Congress not later 
     than 6 months after the date of enactment of the Financial 
     Aid Form Simplification and Access Act, including the next 
     steps that may be taken to minimize the time required for 
     applicants to obtain a Personal Identification Number when 
     applying for aid under this title through an electronic 
     format.
       ``(4) Reapplication.--
       ``(A) In general.--The Secretary shall develop streamlined 
     reapplication forms and processes, including both paper and 
     electronic reapplication processes, consistent with the 
     requirements of this subsection, for an applicant who applies 
     for financial assistance under this title in the next 
     succeeding academic year subsequent to the year in which such 
     applicant first applied for financial assistance under this 
     title.
       ``(B) Updated.--The Secretary shall determine, in 
     cooperation with States, institutions of higher education, 
     and agencies and organizations involved in student financial 
     assistance, the data elements that can be updated from the 
     previous academic year's application.
       ``(C) Zero family contribution.--Applicants determined to 
     have a zero family contribution pursuant to section 479(c) 
     shall not be required to provide any financial data in a 
     reapplication form, except that which is necessary to 
     determine eligibility under such section.
       ``(5) State requirements.--
       ``(A) In general.--The Secretary shall include on the forms 
     developed under this subsection, such State-specific data 
     items as the Secretary determines are necessary to meet State 
     requirements for need-based State aid. Such items shall be 
     selected in consultation with States to assist in the 
     awarding of State financial assistance in accordance with the 
     terms of this subsection. The number of such data items shall 
     not be less than the number included on the form on October 
     7, 1998, unless States notify the Secretary that they no 
     longer require those data items for the distribution of State 
     need-based aid.
       ``(B) Annual review.--The Secretary shall conduct an annual 
     review process to determine which forms and data items the 
     States require to award need-based State aid and other 
     application requirements that the States may impose.
       ``(C) Federal register notice.--The Secretary shall publish 
     on an annual basis a notice in the Federal Register requiring 
     each State agency to inform the Secretary--
       ``(i) if the agency is unable to permit applicants to 
     utilize the forms described in paragraphs (2)(B) and (3)(B); 
     and
       ``(ii) of the State-specific data that the agency requires 
     for delivery of State need-based financial aid.
       ``(D) State notification to the secretary.--
       ``(i) In general.--Each State shall notify the Secretary--

       ``(I) whether the State permits an applicant to file a form 
     described in paragraph (2)(B) or (3)(B) for purposes of 
     determining eligibility for State need-based grant aid; and
       ``(II) of the State-specific data that the State requires 
     for delivery of State need-based financial aid.

       ``(ii) No permission.--In the event that a State does not 
     permit an applicant to file a form described in paragraph 
     (2)(B) or (3)(B) for purposes of determining eligibility for 
     State need-based grant aid--

       ``(I) the State shall notify the Secretary if it is not 
     permitted to do so because of State law or because of agency 
     policy; and
       ``(II) the notification under subclause (I) shall include 
     an estimate of the program cost to permit applicants to 
     complete the forms described in paragraphs (2)(B) and (3)(B).

       ``(iii) Lack of notification by the state.--If a State does 
     not notify the Secretary pursuant to clause (i), the 
     Secretary shall--

       ``(I) permit residents of that State to complete the forms 
     described in paragraphs (2)(B) and (3)(B); and
       ``(II) not require any resident of that State to complete 
     any data previously required by that State.

       ``(E) Restriction.--The Secretary shall not require 
     applicants to complete any nonfinancial data or financial 
     data that are not required by the applicant's State agency, 
     except as may be required for applicants who use the paper 
     forms described in subparagraphs (A) and (B) of paragraph 
     (2).
       ``(6) Charges to students and parents for use of forms 
     prohibited.--The common financial reporting forms prescribed 
     by the Secretary under this subsection shall be produced, 
     distributed, and processed by the Secretary and no parent or 
     student shall be charged a fee by the Secretary, a 
     contractor, a third party servicer or private software 
     provider, or any other public or private entity for the 
     collection, processing, or delivery of financial aid through 
     the use of such forms. The need and eligibility of a student 
     for financial assistance under parts A through E (other than 
     under subpart 4 of part A) may only be determined by using a 
     form developed by the Secretary pursuant to this subsection. 
     No student may receive assistance under parts A through E 
     (other than under subpart 4 of part A), except by use of a 
     form developed by the Secretary pursuant to this subsection. 
     No data collected on a paper or electronic form or other 
     document, which the Secretary determines was created to 
     replace a form prescribed under this subsection and therefore 
     violates the integrity of a simplified and free financial aid 
     application process, for which a fee is charged shall be used 
     to complete the form prescribed under this subsection. No 
     person, commercial entity, or other entity shall request, 
     obtain, or utilize an applicant's Personal Identification 
     Number for purposes of submitting an application on an 
     applicant's behalf, other than a State agency, an eligible 
     institution, or a program under this title that the Secretary 
     permits to so request, obtain, or utilize an applicant's 
     Personal Identification Number in order to streamline the 
     application.
       ``(7) Application processing cycle.--The Secretary shall, 
     prior to January 1 of a student's planned year of enrollment 
     to the extent practicable--
       ``(A) enable the student to submit a form described under 
     this subsection in order to meet the filing requirements of 
     this section and receive aid from programs under this title; 
     and
       ``(B) initiate the processing of a form under this 
     subsection submitted by the student.''; and
       (D) by adding at the end the following:
       ``(12) Early application and award demonstration program.--
       ``(A) In general.--Not later than 2 years after the date of 
     enactment of the Financial Aid Form Simplification and Access 
     Act, the Secretary shall implement an early application 
     demonstration program enabling dependent students to--
       ``(i) complete applications under this subsection in such 
     students' junior year of secondary school, or in the academic 
     year that is 2 years prior to such students' intended year of 
     enrollment at an institution of higher education (as early as 
     the Secretary determines practicable after January 1st of 
     such junior year or academic year, respectively);
       ``(ii) receive an estimate of such students' final 
     financial aid awards in such junior year or academic year, 
     respectively;
       ``(iii) update, in the year prior to such students' planned 
     year of enrollment (before January 1st of the planned year of 
     enrollment to the extent practicable), the information 
     contained in an application submitted under clause (i), using 
     the process described in paragraph (4) to determine such 
     students' final financial aid awards; and

[[Page S3389]]

       ``(iv) receive final financial aid awards based on updated 
     information described in clause (iii).
       ``(B) Purpose.--The purpose of the demonstration program 
     under this paragraph is to measure the benefits, in terms of 
     student aspirations and plans to attend college, and the 
     adverse effects, in terms of program costs, integrity, 
     distribution, and delivery of aid under this title, of 
     implementing an early application system for all dependent 
     students that allows dependent students to apply for 
     financial aid using information from the year prior to the 
     year prior to enrollment at an institution of higher 
     education. Additional objectives associated with 
     implementation of the demonstration program are the 
     following:
       ``(i) Measure the feasibility of enabling dependent 
     students to apply for Federal, State, and institutional 
     financial aid in such students' junior year of secondary 
     school, or in the academic year that is 2 years prior to such 
     students' intended year of enrollment at an institution of 
     higher education, using information from the year prior to 
     the year prior to enrollment, by completing any of the 
     application forms under this subsection.
       ``(ii) Determine the feasibility, benefits, and adverse 
     effects of utilizing information from the Internal Revenue 
     Service in order to simplify the Federal student aid 
     application process.
       ``(iii) Identify whether receiving estimates of final 
     financial aid awards not later than a student's junior year, 
     or the academic year that is 2 years prior to such students' 
     intended year of enrollment at an institution of higher 
     education, positively impacts the college aspirations and 
     plans of such student.
       ``(iv) Measure the impact of using income information from 
     the year prior to the year prior to enrollment on--

       ``(I) eligibility for financial aid under this title and 
     for other institutional aid; and
       ``(II) the cost of financial aid programs under this title.

       ``(v) Effectively evaluate the benefits and adverse effects 
     of the demonstration program on program costs, integrity, 
     distribution, and delivery of aid.
       ``(C) Participants.--The Secretary shall select, in 
     consultation with States and institutions of higher 
     education, States and institutions of higher education within 
     the States interested in participating in the demonstration 
     program under this paragraph. The States and institutions of 
     higher education shall participate in programs under this 
     title and be willing to make estimates of final financial aid 
     awards to students based on such students' application 
     information from the year prior to the year prior to 
     enrollment. The Secretary shall also select as participants 
     in the demonstration program secondary schools that are 
     located in the participating States and dependent students 
     who reside in the participating States.
       ``(D) Application process.--The Secretary shall ensure that 
     the following provisions are included in the demonstration 
     program:
       ``(i) Participating States and institutions of higher 
     education shall--

       ``(I) encourage participating students to apply for 
     estimates of final financial aid awards as provided under 
     this title in such students' junior year of secondary school, 
     or in the academic year that is 2 years prior to such 
     students' intended year of enrollment at an institution of 
     higher education, using information from the year prior to 
     the year prior to enrollment;
       ``(II) provide estimates of final financial aid awards to 
     participating students based on the students' application 
     information from the year prior to the year of enrollment; 
     and
       ``(III) make final financial aid awards to participating 
     students based on the updated information contained on a form 
     submitted using the process described in paragraph (4).

       ``(ii) Financial aid administrators at participating 
     institutions of higher education shall be allowed to use such 
     administrators' discretion in awarding financial aid to 
     participating students, as outlined under section 479A.
       ``(E) Feasibility study.--The Secretary shall include in 
     the demonstration program a study of the feasibility of 
     utilizing data from the Internal Revenue Service in order 
     to--
       ``(i) pre-populate electronic application forms for 
     financial aid under this title (such as through a website 
     called `FAFSA on the Web') with applicant information from 
     the Internal Revenue Service;
       ``(ii) verify data provided by students participating in 
     the demonstration program, including the feasibility of a 
     data match; and
       ``(iii) award and deliver financial aid under this title.
       ``(F) Evaluation.--The Secretary shall conduct a rigorous 
     evaluation of the demonstration program in order to measure 
     the program's benefits and adverse effects as the benefits 
     and affects relate to the purpose and objectives described in 
     subparagraph (B).
       ``(G) Outreach.--The Secretary shall make appropriate 
     efforts in order to notify States of the demonstration 
     program. Upon determination of which States will be 
     participating in the demonstration program, the Secretary 
     shall continue to make efforts to notify institutions of 
     higher education and dependent students within such 
     participating States of the opportunity to participate in the 
     demonstration program and of the participation requirements.
       ``(H) Consultation.--The Secretary shall consult with the 
     Advisory Committee on Student Financial Assistance, 
     established under section 491, on the design and 
     implementation of the demonstration program and on the 
     evaluation described in paragraph (F).'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Early Awareness of Aid Eligibility.--
       ``(1) In general.--The Secretary shall make every effort to 
     provide students with early information about potential 
     financial aid eligibility.
       ``(2) Availability of means to determine eligibility.--
       ``(A) In general.--The Secretary shall provide, in 
     cooperation with States, institutions of higher education, 
     agencies, and organizations involved in student financial 
     assistance, through a widely disseminated printed form and 
     through the Internet or other electronic means, a system for 
     individuals to determine easily, by entering relevant data, 
     approximately the amount of grant, work-study, and loan 
     assistance for which an individual would be eligible under 
     this title upon completion and verification of a form under 
     subsection (a).
       ``(B) Determination of whether to use simplified 
     application.--The system established under this paragraph 
     shall also permit an individual to determine whether or not 
     the individual may apply for aid using an EZ FAFSA described 
     in subsection (a)(2)(B) or a simplified electronic 
     application form described in subsection (a)(3)(B).
       ``(3) Availability of means to communicate eligibility.--
       ``(A) Lower-income students.--The Secretary shall--
       ``(i) make special efforts to notify students who qualify 
     for a free or reduced price lunch under the school lunch 
     program established under the Richard B. Russell National 
     School Lunch Act (42 U.S.C. 1751 et seq.), benefits under the 
     food stamp program under the Food Stamp Act of 1977 (7 U.S.C. 
     2011 et seq.), or benefits under such programs as the 
     Secretary shall determine, of such students' potential 
     eligibility for a maximum Federal Pell Grant under subpart 1 
     of part A; and
       ``(ii) disseminate informational materials regarding the 
     linkage between eligibility for means-tested Federal benefit 
     programs and eligibility for a Federal Pell Grant, as 
     determined necessary by the Secretary.
       ``(B) Middle school students.--The Secretary shall, in 
     cooperation with States, middle schools, programs under this 
     title that serve middle school students, and other 
     cooperating independent outreach programs, make special 
     efforts to notify middle school students of the availability 
     of financial assistance under this title and of the 
     approximate amounts of grant, work-study, and loan assistance 
     an individual would be eligible for under this title.
       ``(C) Secondary school students.--The Secretary, in 
     cooperation with States, secondary schools, programs under 
     this title that serve secondary school students, and 
     cooperating independent outreach programs, shall make special 
     efforts to notify students in their junior year of secondary 
     school, or in the academic year that is 2 years prior to such 
     students' intended year of enrollment at an institution of 
     higher education, of the approximate amounts of grant, work-
     study, and loan assistance an individual would be eligible 
     for under this title upon completion and verification of an 
     application form under subsection (a).'';
       (3) in subsection (c)--
       (A) by striking ``Labor and Human Resources'' and inserting 
     ``Health, Education, Labor, and Pensions''; and
       (B) by striking ``the Workforce'' and inserting ``Labor''; 
     and
       (4) by striking subsections (d) and (e), and inserting the 
     following:
       ``(d) Assistance in Preparation of Financial Aid 
     Application.--
       ``(1) Preparation authorized.--Nothing in this Act shall be 
     construed to limit an applicant from using a preparer for 
     consultative or preparation services for the completion of 
     the common financial reporting forms described in subsection 
     (a).
       ``(2) Preparer identification.--Any common financial 
     reporting form required to be made under this title shall 
     include the name, signature, address or employer's address, 
     social security number or employer identification number, and 
     organizational affiliation of the preparer of such common 
     financial reporting form.
       ``(3) Special rule.--Nothing in this Act shall be construed 
     to limit preparers of common financial reporting forms 
     required to be made under this title from collecting source 
     information, including Internal Revenue Service tax forms, in 
     providing consultative and preparation services in completing 
     the forms.
       ``(4) Additional requirements.--A preparer that provides 
     consultative or preparation services pursuant to this 
     subsection shall--
       ``(A) clearly inform individuals upon initial contact 
     (including advertising in clear and conspicuous language on 
     the website of the preparer, including by providing a link 
     directly to the website described in subsection (a)(3), if 
     the preparer provides such services through a website) that 
     the common financial reporting forms that are required to 
     determine eligibility for financial assistance under parts A 
     through E (other than subpart 4 of part A) may be completed 
     for

[[Page S3390]]

     free via paper or electronic forms provided by the Secretary;
       ``(B) refrain from producing or disseminating any form 
     other than the forms produced by the Secretary under 
     subsection (a); and
       ``(C) not charge any fee to any individual seeking such 
     services who meets the requirements under subsection (b) or 
     (c) of section 479.''.
       (c) Toll-Free Application and Information.--Section 479 of 
     the Higher Education Act of 1965 (20 U.S.C. 1087ss), as 
     amended by subsection (b)(4), is further amended by adding at 
     the end the following:
       ``(e) Toll-Free Application and Information.--The Secretary 
     shall contract for, or establish, and publicize a toll-free 
     telephone service to provide an application mechanism and 
     timely and accurate information to the general public. The 
     information provided shall include specific instructions on 
     completing the application form for assistance under this 
     title. Such service shall also include a service accessible 
     by telecommunications devices for the deaf (TDD's) and shall, 
     in addition to the services provided for in the previous 
     sentence, refer such students to the national clearinghouse 
     on postsecondary education or another appropriate provider of 
     technical assistance and information on postsecondary 
     educational services, that is supported under section 663 of 
     the Individuals with Disabilities Education Act (20 U.S.C. 
     1463). Not later than 2 years after the date of enactment of 
     the Financial Aid Form Simplification and Access Act, the 
     Secretary shall test and implement, to the extent 
     practicable, a toll-free telephone-based application system 
     to permit applicants who are eligible to utilize the EZ FAFSA 
     described in section 483(a) over such system.''.
       (d) Master Calendar.--Section 482(a)(1)(B) of the Higher 
     Education Act of 1965 (20 U.S.C. 1089(a)(1)(B)) is amended to 
     read as follows:
       ``(B) by March 1: proposed modifications and updates 
     pursuant to sections 478, 479(c), and 483(a)(5) published in 
     the Federal Register;''.
       (e) Simplifying the Verification Process.--Section 484 of 
     the Higher Education Act of 1965 (20 U.S.C. 1091) is amended 
     by adding at the end the following:
       ``(s) Verification of Student Eligibility.--
       ``(1) Regulatory review.--The Secretary shall review all 
     regulations of the Department related to verifying the 
     information provided on a student's financial aid application 
     in order to simplify the verification process for students 
     and institutions.
       ``(2) Report.--Not later than 2 years after the date of 
     enactment of the Financial Aid Form Simplification and Access 
     Act, the Secretary shall prepare and submit a final report to 
     the Committee on Health, Education, Labor, and Pensions of 
     the Senate and the Committee on Education and Labor of the 
     House of Representatives on steps taken, to the extent 
     practicable, to simplify the verification process. The report 
     shall specifically address steps taken to--
       ``(A) reduce the burden of verification on students who are 
     selected for verification at multiple institutions;
       ``(B) reduce the number of data elements that are required 
     to be verified for applicants meeting the requirements of 
     subsection (b) or (c) of section 479, so that only those data 
     elements required to determine eligibility under subsection 
     (b) or (c) of section 479 are subject to verification;
       ``(C) reduce the burden and costs associated with 
     verification for institutions that are eligible to 
     participate in Federal student aid programs under this title; 
     and
       ``(D) increase the use of technology in the verification 
     process.''.

     SEC. 4. SUPPORT FOR WORKING STUDENTS.

       (a) Dependent Students.--Section 475(g)(2)(D) of the Higher 
     Education Act of 1965 (20 U.S.C. 1087oo(g)(2)(D)) is amended 
     to read as follows:
       ``(D) $9,000;''.
       (b) Independent Students Without Dependents Other Than a 
     Spouse.--Section 476(b)(1)(A)(iv) of the Higher Education Act 
     of 1965 (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended to read as 
     follows:
       ``(iv) an income protection allowance of the following 
     amount (or a successor amount prescribed by the Secretary 
     under section 478)--

       ``(I) $10,000 for single or separated students;
       ``(II) $10,000 for married students where both are enrolled 
     pursuant to subsection (a)(2); and
       ``(III) $13,000 for married students where 1 is enrolled 
     pursuant to subsection (a)(2);''.

       (c) Independent Students With Dependents Other Than a 
     Spouse.--Section 477(b)(4) of the Higher Education Act of 
     1965 (20 U.S.C. 1087qq(b)(4)) is amended to read as follows:
       ``(4) Income protection allowance.--The income protection 
     allowance is determined by the following table (or a 
     successor table prescribed by the Secretary under section 
     478):


                      ``Income Protection Allowance
------------------------------------------------------------------------
                                   Number in College
 Family Size  ----------------------------------------------------------
                    1           2           3           4          5
------------------------------------------------------------------------
           2      $17,580     $15,230
           3       20,940      17,610     $16,260
           4       24,950      22,600      20,270     $17,930
           5       28,740      26,390      24,060      21,720    $19,390
           6       32,950      30,610      28,280      25,940     23,610
------------------------------------------------------------------------
NOTE: For each additional family member, add $3,280. For each additional
  college student, subtract $2,330.''.

     SEC. 5. SIMPLIFICATION FOR STUDENTS WITH SPECIAL 
                   CIRCUMSTANCES.

       (a) Independent Student.--Section 480(d) of the Higher 
     Education Act of 1965 (20 U.S.C. 1087vv(d)) is amended to 
     read as follows:
       ``(d) Independent Student.--
       ``(1) Definition.--The term `independent', when used with 
     respect to a student, means any individual who--
       ``(A) is 24 years of age or older by December 31 of the 
     award year;
       ``(B) is an orphan, in foster care, or a ward of the court, 
     or was in foster care or a ward of the court until the 
     individual reached the age of 18;
       ``(C) is an emancipated minor or is in legal guardianship 
     as determined by a court of competent jurisdiction in the 
     individual's State of legal residence;
       ``(D) is a veteran of the Armed Forces of the United States 
     (as defined in subsection (c)(1)) or is currently serving on 
     active duty in the Armed Forces;
       ``(E) is a graduate or professional student;
       ``(F) is a married individual;
       ``(G) has legal dependents other than a spouse; or
       ``(H) is a student for whom a financial aid administrator 
     makes a documented determination of independence by reason of 
     other unusual circumstances.
       ``(2) Simplifying the dependency override process.--Nothing 
     in this section shall be construed to prohibit a financial 
     aid administrator from making a determination of 
     independence, as described in paragraph (1)(H), based upon a 
     determination of independence previously made by another 
     financial aid administrator in the same application year.''.
       (b) Tailoring Electronic Applications for Students With 
     Special Circumstances.--Section 483(a) of the Higher 
     Education Act of 1965 (20 U.S.C. 1090(a)), as amended by 
     section 3(b)(1)(D), is further amended by adding at the end 
     the following:
       ``(13) Applications for students seeking a documented 
     determination of independence.--In the case of a dependent 
     student seeking a documented determination of independence by 
     a financial aid administrator, as described in section 
     480(d), nothing in this section shall prohibit the Secretary 
     from--
       ``(A) allowing such student to--
       ``(i) indicate the student's request for a documented 
     determination of independence on an electronic form developed 
     pursuant to this subsection; and
       ``(ii) submit such form for preliminary processing that 
     only contains those data elements required of independent 
     students, as defined in section 480(d);
       ``(B) collecting and processing on a preliminary basis data 
     provided by such a student using the electronic forms 
     developed pursuant to this subsection; and
       ``(C) distributing such data to institutions of higher 
     education, guaranty agencies, and States for the purposes of 
     processing loan applications and determining need and 
     eligibility for institutional and State financial aid awards 
     on a preliminary basis, pending a documented determination of 
     independence by a financial aid administrator.''.

     SEC. 6. DEFINITIONS.

       (a) Total Income.--Section 480(a)(2) of the Higher 
     Education Act of (20 U.S.C. 1087vv(a)(2)) is amended--
       (1) by striking ``and no portion'' and inserting ``no 
     portion''; and

[[Page S3391]]

       (2) by inserting ``and no distribution from any qualified 
     education benefit described in subsection (f)(3) that is not 
     subject to Federal income tax,'' after ``1986,''.
       (b) Assets.--Section 480(f) of the Higher Education Act of 
     1965 (20 U.S.C. 1087vv(f)) is amended--
       (1) in paragraph (3), by striking ``shall not be considered 
     an asset of a student for purposes of section 475'' and 
     inserting ``shall be considered an asset of the parent for 
     purposes of section 475'';
       (2) by redesignating paragraphs (4) and (5) as paragraphs 
     (5) and (6), respectively; and
       (3) by inserting after paragraph (3) the following:
       ``(4) A qualified education benefit shall be considered an 
     asset of the student for purposes of section 476 and 477.''.
       (c) Other Financial Assistance.--Section 480(j)(2) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087vv(j)(2)) is 
     amended by inserting ``, or a distribution that is not 
     includable in gross income under section 529 of such Code, 
     under another prepaid tuition plan offered by a State, or 
     under a Coverdell education savings account under section 530 
     of such Code,'' after ``1986''.

     SEC. 7. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

       Section 491 of the Higher Education Act of 1965 (20 U.S.C. 
     1098) is further amended--
       (1) in subsection (a)(2)--
       (A) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (C), by striking the period at the end 
     and inserting a semicolon; and
       (C) by adding at the end the following:
       ``(D) to provide knowledge and understanding of early 
     intervention programs and make recommendations that will 
     result in early awareness by low- and moderate-income 
     students and families of their eligibility for assistance 
     under this title, and, to the extent practicable, their 
     eligibility for other forms of State and institutional need-
     based student assistance; and
       ``(E) to make recommendations that will expand and improve 
     partnerships among the Federal Government, States, 
     institutions, and private entities to increase the awareness 
     and total amount of need-based student assistance available 
     to low- and moderate-income students.'';
       (2) in subsection (d)--
       (A) in paragraph (6), by striking ``, but nothing in this 
     section shall authorize the committee to perform such 
     studies, surveys, or analyses'';
       (B) in paragraph (8), by striking ``and'' after the 
     semicolon;
       (C) by redesignating paragraph (9) as paragraph (10); and
       (D) by inserting after paragraph (8) the following:
       ``(9) monitor the adequacy of total need-based aid 
     available to low- and moderate-income students from all 
     sources, assess the implications for access and persistence, 
     and report those implications annually to Congress and the 
     Secretary; and'';
       (3) in subsection (j)--
       (A) in paragraph (4), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(6) monitor and assess implementation of improvements 
     called for under this title, make recommendations to the 
     Secretary that ensure the timely design, testing, and 
     implementation of the improvements, and report annually to 
     Congress and the Secretary on progress made toward 
     simplifying overall delivery, reducing data elements and 
     questions, incorporating the latest technology, aligning 
     Federal, State, and institutional eligibility, enhancing 
     partnerships, and improving early awareness of total student 
     aid eligibility for low- and moderate-income students and 
     families.''; and
       (4) in subsection (k), by striking ``2004'' and inserting 
     ``2011''.
                                 ______
                                 
      By Mr. BAUCUS (for himself, Mr. Hatch, and Mr. Crapo):
  S. 940. A bill to amend the Internal Revenue Code of 1986 to 
permanently extend the subpart F exemption for active financing income; 
to the Committee on Finance.
  Mr. BAUCUS. Mr. President, I am pleased to join my friends and 
Colleagues, Senator Hatch and Senator Crapo in introducing legislation 
to make permanent the tax treatment in Subpart F for active financial 
services income earned abroad.
  The legislation that we are introducing today is identical to a bill 
we introduced in the 109th Congress. Since then, this exemption has 
been temporarily extended. But that extension will expire at the end of 
next year. This exemption ensures that the active financial services 
income earned abroad by American financial services companies, or 
American manufacturing firms with a financial services operation, is 
not subject to U.S. tax until that income is brought home to the U.S. 
parent company.
  By making this provision permanent, our legislation will put the 
American financial services industry on an equal footing with its 
foreign-based competitors. Those competitors do not face current home 
country taxation on active financial services income.
  This bill is about jobs in Montana. And it is about jobs in each of 
our States. One of these competitive American financial services 
companies employs hundreds of Montanans in Great Falls alone. So the 
health of that company is critically important to my State.
  American financial services companies successfully compete in world 
financial markets. We need to make sure, however, that the U.S. tax 
rules do not change that situation and make them less competitive in 
the world arena. This legislation will extend a provision that I 
believe preserves the international competitiveness of American-based 
financial services companies, including finance and credit companies, 
commercial banks, securities firms, and insurance companies. This 
provision also contains appropriate safeguards to ensure that only 
truly active businesses benefit.
  The active financial services provision is critically important in 
today's global economy. America's financial services industry is a 
global leader. It plays a pivotal role in maintaining confidence in the 
international marketplace. This is a fiercely competitive business. And 
American-based companies would surely be disadvantaged with an 
additional tax burden if we allow this exemption to lapse. Through our 
network of trade agreements, we have made tremendous progress in 
gaining access to new foreign markets for this industry in recent 
years. Our tax laws should complement, and not undermine, this effort.
  The temporary nature of the active financial services provision, like 
other expiring provisions, denies American companies the stability 
enjoyed by their foreign competitors. It is time to make permanent this 
subpart F active financial services provision. We need to allow 
American companies to make business decisions on a long-term basis.
  I invite my Colleagues to join us in supporting this legislation to 
provide consistent, equitable, and stable tax treatment for the U.S. 
financial services industry.
                                 ______
                                 
      By Ms. SNOWE (for herself and Ms. Collins):
  S. 942. A bill to modify the boundaries for a certain empowerment 
zone designation; to the Committee on Finance.
                                 ______
                                 
      By Ms. SNOWE (for herself and Ms. Collins):
  S. 943. A bill to amend the Internal Revenue Code of 1986 to extend 
the period for which the designation of an area as an empowerment zone 
is in effect; to the Committee on Finance.
  Ms. SNOWE. Mr. President, I rise today with Senator Collins to 
introduce two pieces of legislation to help reverse the devastating 
population decline and economic distress that have plagued individuals 
and businesses in Aroostook County, the northernmost county in Maine, 
as well as in other parts of the country. What the first bill does is 
simple, it will bring all of Aroostook County under the Empowerment 
Zone (EZ) program. The legislation is identical to a bill that we 
introduced in the 108th Congress and was included in the FY 2004 
Agriculture Appropriations bill in 2003 as passed by the Senate. The 
second piece of legislation would enable those economically depressed 
communities, already taking advantage of these incentives, to secure 
the full 15 years of targeted growth originally granted to the areas 
first designated as Empowerment Zones.
  To fully grasp the importance of the former legislation, it is 
necessary to understand the unique situation facing the residents of 
Aroostook County. ``The County,'' as it is called by Mainers, is a vast 
and remote region of Maine. It shares more of its border with Canada 
than its neighboring Maine counties. It has the distinction of being 
the largest county east of the Mississippi River. Its geographic 
isolation is even more acute when considering that the county's 
relatively small population of 73,000 people are scattered throughout 
6,672 square miles of rural countryside. Aroostook County is home to 71 
organized townships, as well as 125 unorganized townships much of which 
is forest land and wilderness.
  As profoundly remote as this geographic isolation may seem, it is the

[[Page S3392]]

economic isolation and the recent out-migration that has had the most 
devastating effect on the region. The economy of northern Maine has a 
historical dependence upon its natural resources, particularly forestry 
and agriculture. While these industries served the region well in 
previous decades, and continue to form the underpinnings of the local 
economy, many of these sectors have experienced decline and can no 
longer provide the number of quality jobs that residents require and 
deserve.

  While officials in the region have put forward a herculean effort to 
redevelop the region, with nearly 1,000 new jobs at the Loring Commerce 
Center alone, Aroostook County is still experiencing a significant 
``job deficit'', and as a result continues to lose population at an 
alarming rate. Since its peak in 1960, northern Maine's population has 
declined by 30 percent. Unfortunately, the Maine State Planning Office 
predicts that Aroostook County will continue losing population as more 
workers leave the area to seek opportunities and higher wages in 
southern Maine and the rest of New England.
  In January 2002, a portion of Aroostook County was one of two regions 
that received Empowerment Zone status from the USDA for out-migration. 
The entire county experienced an out-migration of 15 percent from 
86,936 in 1990 to 73,938 in 2000. Moreover, a staggering 40 percent of 
15- to 29-year-olds left during the last decade.
  The current zone boundaries were chosen based on the criteria that 
Empowerment Zones be no larger than 1,000 square miles, and have a 
maximum population of 30,000 for rural areas. The lines drawn for the 
Aroostook County Empowerment Zone were considered to be the most 
inclusive and reasonable given the constraints of the program. It 
should be noted as well that the boundaries were drawn based on the 
1990 census, making the data significantly outdated at the start, and 
included the former Loring Air Force Base and its population of nearly 
8,000 people, which had closed nearly 8 years before the designation, 
taking its military and much of its civilian workforces with it. The 
Maine State Planning Office estimated that the base closure resulted in 
the loss of 3,494 jobs directly related to the base and another 1,751 
in associated industry sectors for a total loss of $106.9 million 
annual payroll dollars.
  Some of the most distressed communities that have lost substantial 
population are not in the Empowerment Zone, and other communities, such 
as Houlton, literally are divided simply by a road, having one business 
on one side of the street with no Empowerment Zone designation across 
from a neighboring business on the other side of the street with full 
Empowerment Zone benefits. The economic factors for these communities 
and for these neighbors are the same as those areas within the 
Empowerment Zone. This designation is not meant to cause divisiveness 
within communities, it is created to augment a partnership for growth 
and to level the playing field for all Aroostook County communities who 
have equally suffered through continuing out-migration whether it be in 
Madawaska or Island Falls.
  The legislation I am introducing would provide economic development 
opportunities to all reaches of Aroostook County by extending 
Empowerment Zone status to the entire county. This inclusive approach 
recognizes that the economic hardship and population out-migration are 
issues that the entire region must confront, and, as evidenced by their 
successful Round III EZ application, they are attempting to confront. I 
believe the challenges faced by Aroostook County are significant, but 
not insurmountable. This legislation would make great strides in 
improving the communities and business in northern Maine, and I urge my 
colleagues to support this bill.
  With regards to the latter bill that I am offering today, I believe 
all Empowerment Zone communities need 15 years to reverse years of 
downward spiraling that originally effected their economies. I have 
long supported Empowerment Zone incentives and I believe that these 
targeted tax incentives provide struggling communities the best chance 
for sustained, long lasting economic renewal.
  In 1994, Congress designated the first Empowerment Zones setting 
2009, a 15-year time frame, as the date that these tax incentives would 
expire. The 2009 expiration date of Empowerment Zone status was held 
firm for Round II communities designated in 1997, and the Round III 
communities designated in 2002. As a result of the expiration date some 
communities such as Aroostook County, which was designated in 2002, are 
granted as few as 7 years to use tax incentives to overturn decades of 
decline and economic neglect.
  Unfortunately, Aroostook's economic problems will not be fixed within 
the 7 short years this area qualifies for Empowerment Zone tax 
incentives. Instead a long-term and lasting commitment of at least 15 
years is necessary to help Aroostook communities work their way to 
stronger economic prosperity. Many communities, such as Aroostook 
County, that were unable to qualify for Empowerment Zone status until 
2002, are in dire need of the long-term 15-year window in which to 
address their stubborn causes of poverty.
  Businesses operating within Empowerment Zones receive a 20 percent 
wage credit for the first $15,000 they pay in wages to local residents. 
Other tax incentives encourage businesses and industries to further 
commit to these communities. Companies with businesses in Empowerment 
Zones are eligible for an additional $35,000 worth of 179 business 
expensing--making these long-term business obligations more attractive, 
affordable and likely. Empowerment Zones are also eligible for expanded 
tax exempt financing for building the infrastructure communities need 
to attract long-term developers and business partners.
  To qualify for Empowerment Zone status, communities develop 
comprehensive strategic plans that depend on these tax incentives to 
help them transform their economies. Each community's plan focuses on 
establishing long-term partnerships among private businesses, non 
profits, state, local, and federal government agencies to help develop 
the local economy. Together these parties use the community's strategic 
blue print to implement interconnected projects that address the 
factors creating the area's economic sickness. These types of projects 
concentrate on building much-needed business and industrial 
infrastructure, developing an educated workforce, and diversifying 
local economies away from a reliance on one employer or industry.
  Through the Aroostook Partnership for Progress, and the businesses 
working in the Empowerment Zone, the County is making significant 
progress--the factors causing poverty in this rural part of Maine 
cannot be eradicated quickly. Aroostook County's strategic plan will 
take time to implement as infrastructure, industry and other 
initiatives produce greater economic capabilities and diversification. 
Though Aroostook County is working valiantly to overcome the factors 
causing their economic plight, they will need more than seven years to 
overcome 40 years of difficulties. I know that there are many other 
struggling Round II and Round III Empowerment Zone communities, such as 
Aroostook, who need the maximum, in order to reverse the poverty and 
underdevelopment also plaguing those areas.
  I urge my colleagues to recognize the urgency of making a long-term 
pledge to communities using Empowerment Zone incentives to work its way 
out of long-term poverty. I hope that each Senator will support the 
communities in their states, currently undertaking the painful process 
of economic transformation, by supporting passage of this economic 
development bill.
  I ask unanimous consent that the text of each bill be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 942

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

     SECTION 1. MODIFICATION OF BOUNDARY OF AROOSTOOK COUNTY 
                   EMPOWERMENT ZONE.

       (a) In General.--The Aroostook County empowerment zone 
     shall include, in addition to the area designated as of the 
     date of the enactment of this Act, the remaining area of the 
     county not included in such designation, notwithstanding the 
     size requirement of section 1392(a)(3)(A) of the Internal 
     Revenue Code of 1986 and the population requirements of 
     section 1392(a)(1)(B) of such Code.

[[Page S3393]]

       (b) Effective Date.--Subsection (a) shall take effect as of 
     the effective date of the designation of the Aroostook County 
     empowerment zone by the Secretary of Agriculture.
                                  ____


                                 S. 943

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

     SECTION 1. EXTENSION OF ROUND II AND ROUND III EMPOWERMENT 
                   ZONES.

       (a) In General.--Clause (i) of section 1391(d)(1)(A) of the 
     Internal Revenue Code of 1986 (relating to period for which 
     designation is in effect) is amended by inserting ``(December 
     31, 2016, in the case of any empowerment zone designated 
     under subsection (g) or (h))'' after ``2009''.
       (b) Conforming Amendment.--Paragraph (2) of section 1391(h) 
     of the Internal Revenue Code of 1986 (relating to additional 
     designations permitted) is amended by striking ``2009'' and 
     inserting ``2016''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

  Ms. COLLINS. Mr. President, I am pleased to join my colleague, 
Senator Olympia Snowe, in introducing legislation that will expand the 
borders of the Aroostook County Empowerment Zone to include the entire 
County so that the benefits of Empowerment Zone designation can be 
fully realized in northern Maine.
  The Department of Agriculture's Empowerment Zone program addresses a 
comprehensive range of community challenges, including many that have 
traditionally received little federal assistance, reflecting the fact 
that rural problems do not come in standardized packages but can vary 
widely from one place to another. The Empowerment Zone program 
represents a long-term partnership between the federal government and 
rural communities so that communities have enough time to implement 
projects to build the capacity to sustain their development beyond the 
term of the partnership. An Empowerment Zone designation gives 
designated regions potential access to federal grants for social 
services and community redevelopment as well as tax incentives to 
encourage economic growth.
  Aroostook County is the largest county east of the Mississippi River. 
Yet, despite the impressive character and work ethic of its citizens, 
the County has fallen on hard times. The 2000 Census indicated a 15 
percent loss in population since 1990. Loring Air Force Base, which was 
closed in 1994, also caused an immediate out-migration of 8,500 people 
and a further out-migration of families and businesses that depended on 
Loring for their customer base.
  In response to these developments, the Northern Maine Development 
Commission and other economic development organizations, the private 
business sector, and community leaders in Aroostook have joined forces 
to stabilize, diversify, and grow the area's economy. They have 
attracted some new industries and jobs. As a native of Aroostook 
County, I can attest to the strong community support that will ensure a 
continued successful partnership with the U.S. Department of 
Agriculture.
  Designating this region of the United States as an Empowerment Zone 
will help build its future economic prosperity. However, the 
restriction that the Empowerment Zone be limited to 1,000 square miles 
prevents all of Aroostook's small rural communities from benefitting 
from this program. Aroostook covers some 6,672 square miles but has a 
population of only 74,000. Including all of the County in the 
Empowerment Zone will guarantee that parts of the County will not be 
left behind in the quest for economic prosperity. It does little good 
to have a company move from one community to another within the County 
simply to take advantage of Empowerment Zone benefits.
  Senator Snowe and I introduced this legislation in both the 108th and 
109th Congresses. In fact, we were successful in getting this 
legislation passed in the Senate by attaching it to the fiscal year 
2004 Agriculture Appropriations bill. Unfortunately, this language was 
removed during conference negotiations with the House. Senator Snowe 
and I remain committed to bringing the benefits of the Empowerment Zone 
designation to all of Aroostook County's residents and will work to 
pass this legislation in both chambers during this Congress.
                                 ______
                                 
      By Mr. DURBIN (for himself and Mr. Coleman):
  S. 945. A bill to ensure that college textbooks and supplemental 
materials are available and affordable; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. DURBIN. Mr. President, when we talk about college affordability, 
the discussion typically focuses on tuition costs, Pell grants and 
student loans. But we cannot talk about college affordability without 
also including college textbook costs in the same conversation.
  Picture a bright, hard-working college student at the beginning of a 
new term. The student, who comes from a family of modest means, has 
managed to pay for tuition through a combination of grants, 
scholarships, student loans and part-time work. The student goes to her 
college bookstore to buy her textbooks. She walks out of the bookstore 
with her textbooks and wonders how she will be able to pay the $500 
charge she just put on her credit card to buy the required books for 
her classes.
  According to GAO, college textbook prices have risen an average of 
six percent each year since 1987 and at twice the rate of annual 
inflation over the last two decades. Textbook prices have been 
following increases in tuition and fees. Since December of 1986, 
textbook prices have increased by 186 percent and tuition and fees grew 
by 240 percent. GAO found that the primary contributing factor is the 
investment publishers have made to develop and produce supplemental 
materials such as CDs and Web-based tutorials.
  The cost of textbooks and supplies as a percentage of tuition and 
fees depends on the type of institution the student is attending. GAO 
determined that the average estimated cost of books and supplies for 
full-time freshman students at four-year public schools was $898 in 
2003, or about 26 percent of the cost of tuition and fees. At two-year 
public institutions, where the average student is more likely to be 
low-income, the average estimated cost was even higher due to lower 
tuition and fees at these schools. A first-year student at a two-year 
school spent a comparable amount--$886 on average, but that is nearly 
three-quarters of the cost of tuition and fees. Students at public two-
year schools are trying to find an economical way to pursue higher 
education, but could easily be sidelined by high textbook costs.
  What can be done to keep textbooks affordable for college students? 
Publishers, schools and bookstores can take any number of steps to help 
keep the cost of textbooks down. Schools, and in particular, 
professors, have tremendous power to help cut down the overall cost of 
textbooks. I was shocked to learn that many professors do not know the 
retail price of the textbook they are choosing for their class. The 
earlier a bookstore receives textbook information from a professor, the 
greater the ability of the bookstore to obtain cheaper used versions of 
the required text.
  There are other actions that publishers and professors can take to 
help keep down the cost of textbooks, and that is why I am introducing 
the bipartisan College Textbook Affordability Act, cosponsored by 
Senator Coleman.
  First, the bill requires transparency. Publishers must provide the 
price of a textbook in writing whenever a publisher's representative 
provides information on a textbook to a professor. The professor must 
also be provided the history of revisions for a textbook or 
supplemental material and whether the textbook or supplement is 
available in an alternative format, such as paperback, one- or two-
colored editions, and loose-leaf editions. Publishers insist that 
access to such information is readily available to professors. If this 
is truly the case, then this bill will simply codify what publishers 
claim is already their industry's normal practice and would not be an 
undue burden placed on the industry.
  Under the bill, textbooks and supplemental materials that are sold as 
a bundle must also be sold separately. The GAO report found that 
instructors are often unaware that the course materials they have 
chosen will be sold as a bundle.
  The legislation also requires schools to do their part in managing 
textbook costs for students. Schools are required to include the 
international standard

[[Page S3394]]

book number, or ISBN number and the retail price of all required and 
optional materials in the course schedule for the upcoming term. This 
requirement would help ensure that bookstores receive book orders in 
time to stock up on any available used books and would provide students 
with plenty of time to search for lower-priced textbooks via 
alternative sources such as online booksellers or other students.
  When asked, schools must also provide bookstores with access to the 
course schedule, ISBN numbers for required and optional course 
material, the maximum student enrollment for a course and the current 
enrollment numbers. Access to this information would allow bookstores 
to better estimate the amount of inventory they should maintain for 
each course. A school in my home state, Illinois State University, 
recognized the importance of giving students and bookstores early 
access to such information. ISU's online course schedule provides 
students with ISBN numbers, and bookstores are given access to course 
enrollment numbers as well as required and optional course materials.
  Combined, these actions can help drive down the cost of textbooks and 
help make college more affordable for students. The college 
affordability conversation cannot focus only on raising federal grants 
and lowering student loan interest rates. There is no question that 
federal aid has not kept up with rising college costs. However, we must 
also look at why college costs, including textbook costs, continue to 
increase year after year.
  I have heard stories of students, especially community college 
students, who decide to drop a semester or a year because they simply 
cannot afford the textbooks. This is just unacceptable. Textbook costs 
are a part, and in some cases a large part of college costs, and we 
must do what is within our power to ensure that students do not put 
their education on hold just because they cannot afford to buy the 
textbooks.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 945

       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 ``College Textbook 
     Affordability Act of 2007''.

     SEC. 2. PURPOSE AND INTENT.

       The purpose of this Act is to ensure that every student in 
     higher education is offered better and more timely access to 
     affordable course materials by educating and informing 
     faculty, students, administrators, institutions of higher 
     education, bookstores, and publishers on all aspects of the 
     selection, purchase, sale, and use of the course materials. 
     It is the intent of this Act to have all involved parties 
     work together to identify ways to decrease the cost of 
     college textbooks and supplemental materials for students 
     while protecting the academic freedom of faculty members to 
     provide high quality course materials for students.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) College textbook.--The term ``college textbook'' means 
     a textbook, or a set of textbooks, used for a course in 
     postsecondary education at an institution of higher 
     education.
       (2) Course schedule.--The term ``course schedule'' means a 
     listing of the courses or classes offered by an institution 
     of higher education for an academic period.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in section 102 of the Higher Education Act of 1965 (20 
     U.S.C. 1002).
       (4) Publisher.--The term ``publisher'' means a publisher of 
     college textbooks or supplemental materials involved in or 
     affecting interstate commerce.
       (5) Supplemental material.--The term ``supplemental 
     material'' means educational material published or produced 
     to accompany a college textbook.

     SEC. 4. PUBLISHER REQUIREMENTS.

       (a) College Textbook Pricing Information.--When a publisher 
     provides a faculty member of an institution of higher 
     education with information regarding a college textbook or 
     supplemental material available in the subject area in which 
     the faculty member teaches, the publisher shall include, with 
     any such information and in writing, the following:
       (1) The price at which the publisher would make the college 
     textbook or supplemental material available to the bookstore 
     on the campus of, or otherwise associated with, such 
     institution of higher education.
       (2) Any history of revisions for the college textbook or 
     supplemental material.
       (3) Whether the college textbook or supplemental material 
     is available in any other format, including paperback and 
     unbound, and the price at which the publisher would make the 
     college textbook or supplemental material in the other format 
     available to the bookstore on the campus of, or otherwise 
     associated with, such institution of higher education.
       (b) Unbundling of Supplemental Materials.--A publisher that 
     sells a college textbook and any supplemental material 
     accompanying such college textbook as a single bundled item 
     shall also sell the college textbook and each supplemental 
     material as separate and unbundled items.

     SEC. 5. PROVISION OF ISBN COLLEGE TEXTBOOK INFORMATION IN 
                   COURSE SCHEDULES.

       (a) Internet Course Schedules.--Each institution of higher 
     education that receives Federal assistance and that publishes 
     the institution's course schedule for the subsequent academic 
     period on the Internet shall--
       (1) include, in the course schedule, the International 
     Standard Book Number (ISBN) and the retail price for each 
     college textbook or supplemental material required or 
     recommended for a course or class listed on the course 
     schedule that has been assigned such a number; and
       (2) update the information required under paragraph (1) as 
     necessary.
       (b) Written Course Schedules.--In the case of an 
     institution of higher education that receives Federal 
     assistance and that does not publish the institution's course 
     schedule for the subsequent academic period on the Internet, 
     the institution of higher education shall include the 
     information required under subsection (a)(1) in any printed 
     version of the institution's course schedule and shall 
     provide students with updates to such information as 
     necessary.

     SEC. 6. AVAILABILITY OF INFORMATION FOR COLLEGE TEXTBOOK 
                   SELLERS.

       An institution of higher education that receives Federal 
     assistance shall make available, as soon as is practicable, 
     upon the request of any seller of college textbooks (other 
     than a publisher) that meets the requirements established by 
     the institution, the most accurate information available 
     regarding--
       (1) the institution's course schedule for the subsequent 
     academic period; and
       (2) for each course or class offered by the institution for 
     the subsequent academic period--
       (A) the International Standard Book Number (ISBN) for each 
     college textbook or supplemental material required or 
     recommended for such course or class that has been assigned 
     such a number;
       (B) the number of students enrolled in such course or 
     class; and
       (C) the maximum student enrollment for such course or 
     class.

                          ____________________