Congressional Record, Volume 153 Issue 168 (Thursday, November 1, 2007)

[Congressional Record Volume 153, Number 168 (Thursday, November 1, 2007)]
[Senate]
[Pages S13686-S13711]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. COLEMAN (for himself and Ms. Klobuchar):
S. 2280. A bill to amend the Deficit Reduction Act of 2005; to the
Committee on Finance.
Mr. COLEMAN. 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. 2280

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

SECTION 1. REGULATIONS.

Section 6052(b) of the Deficit Reduction Act of 2005 (42
U.S.C. 1396n note) is amended to read as follows:
``(b) Final Regulations.--The Secretary shall promulgate
final regulations to carry out the amendment made by
subsection (a) consistent with the notice and comment
requirements in section 553 of title 5, United States Code,
except that the period of public comment on the proposed
regulations shall be not less than 180 days. Consistent with
the requirements of section 801(a)(1)(A) of title 5, United
States Code, the final regulations shall take effect not less
than 90 days after publication in the Federal Register or
presentation to each House of the Congress or the Comptroller
General, whichever occurs later.''.
______

By Mr. LEVIN (for himself and Ms. Stabenow):
S. 2281. A bill to expand the boundaries of the Thunder Bay National
Marine Sanctuary and Underwater Preserve and for other purposes; to the
Committee on Commerce, Science, and Transportation.
Mr. LEVIN. Mr. President, today, I am introducing the Thunder Bay
National Marine Sanctuary and Underwater Preserve Boundary Modification
Act to expand the boundaries of the existing sanctuary.
Created as a unique Federal-State partnership in October 2000, the
Thunder Bay National Marine Sanctuary has been a resounding success. It
has preserved the proud maritime history of the Great Lakes, offered
educational opportunities to children and researchers, and provided a
fascinating site for divers and snorklers to explore. Expanding the
sanctuary will bring even greater benefits.
When the National Oceanic and Atmospheric Administration originally
considered the Sanctuary, it recommended an area that was twice as big
as what was eventually established. That proposal was scaled back to
address concerns raised by some state and local communities who wanted
to begin cautiously. Some of the doubters and most cautious at the
beginning have now become the biggest supporters of the sanctuary.
Today, the expansion has broad support throughout the area.
Specifically, this bill would extend the sanctuary's boundaries to
include the waters off Alcona, Alpena and Presque Isle Counties in
Michigan and

[[Page S13687]]

would extend the sanctuary east to the International boundary. This
would be a significant increase in total area. The current sanctuary
includes 448 square miles of water and 115 miles of shoreline, and the
expansion would include 3,722 square miles and include 226 miles of
shoreline.
This expansion is needed to protect the maritime history of Michigan
and the Great Lakes. Historically, this region was influenced by the
demand for natural resources. Because local roads were so inadequate,
the Great Lakes became an important passageway and trading route for
settlement and industrialization. The geography of Thunder Bay and the
weather patterns in the lakes, however, caused dozens of ships to
perish in what mariners call ``Shipwreck Alley.'' Many of these
shipwrecks are well-preserved because they are in freshwater and of
great interest to researchers and students.
The current sanctuary holds 116 shipwrecks though many, many more
shipwrecks in this area have been mentioned in historical records. In
addition to shipwrecks, the sanctuary protects and interprets the
remains of commercial fishing sites, historic docks, and other
underwater archaeological sites.
Expanding the boundaries as provided for in this bill will protect an
estimated 178 additional shipwrecks. For example, it would protect the
Cornelia B. Windiate, which is a three-mast wooden schooner and one of
the Great Lakes' most intact shipwrecks. The ship sank in December 1875
when bound from Milwaukee to Buffalo with a cargo of wheat, and was
featured in an episode of Deep Sea Detectives on the History Channel.
Expansion would also cover the H.P. Bridge, a three-mast wooden
barkentine, containing many artifacts such as pottery, clothing, and
ship tackle and hardware.
These shipwrecks are not only historically important, they are very
popular with divers. Deep water wrecks are popular for technical
divers, and because the sites are often well preserved in the cold
freshwater, they contain many artifacts and provide a treasure of
information about the past. Many of the shallow water wrecks are
accessible by snorkelers, boaters and kayakers. These sites offer a
tremendous amount of archaeological data on ship architecture and are
generally easier to document.
The sanctuary is also making important contributions to research and
education. Using real-time video links, students in Alpena interact
with divers exploring underwater worlds with people who are thousands
of miles away. In the near future, students from around the country
will be able to control remote submarines that allow them to explore
the E.B. Allen or the steamship Montana. Visitors to Thunder Bay can
also view artifacts and interpretive exhibits and watch films about
Thunder Bay and all of our Nation's Maritime Sanctuaries. Scientists
from around the world dock their vessels in the Thunder Bay River as
they use the facility for their research.
The sanctuary has also been a real asset for the local community, and
the community has responded in kind. Since the establishment of the
sanctuary, the community has worked with it to improve the Alpena
County George N. Fletcher Library, to provide volunteers at festivals
and outreach events, and to help digitize the Thunder Bay Sanctuary
Research Collection.
The Thunder Bay National Marine Sanctuary deserves to be expanded.
Doing so will preserve important maritime history and will continue the
success of the current Sanctuary. It is a unique treasure that needs
our support. I hope my colleagues will join me in supporting this bill.
______

By Ms. SNOWE:
S. 2282. A bill to increase the number of full-time personnel of the
Consumer Product Safety Commission assigned to duty stations at United
States ports of entry or to inspect overseas production facilities, and
for other purposes; to the Committee on Commerce, Science, and
Transportation.
Ms. SNOWE. Mr. President, today I am introducing a bill to increase
the number of full-time personnel of the Consumer Product U.S. Safety
Commission assigned to duty stations at U.S. ports of entry or to
inspect overseas production facilities to ensure that the Consumer
Product Safety Commission has the personnel necessary to adequately
address the growing problem of import safety. This bill would more than
triple the current number of commission staff assigned to U.S. ports of
entry, by requiring that no less than 50 full-time import inspectors be
in place at the beginning of the next fiscal year. Additionally, it
would expressly authorize the CPSC to send such inspectors to examine
the operations at overseas factories which manufacture consumer
products destined for the U.S.
This legislation is critically necessary, given that an ever-
increasing number of the consumer products now sold on our shelves are
manufactured in countries with appalling safety and quality control
standards, such as China. Sine the year 2000, foreign imports to the
U.S. have increased 67 percent by value, with imports from China nearly
tripling, growing from $100 billion in 2000 to $288 billion last year.
Almost 20 percent of consumer products sold in the U.S. today were made
in China. Particularly troubling is that Chinese manufacturers have
cornered the U.S. market on toys, with over 80 percent of all toys sold
in the U.S. coming from China. Since March 2007, over 8 million pieces
of these Chinese-made toys have been recalled due to lead contamination
alone.
Outrageously, the number of CPSC personnel dedicated to monitoring
import compliance with U.S. health and safety requirements has been
slashed along with other Commission resources during the very period in
which trade liberalization has allowed foreign producers greater access
to our markets. With over 60 percent of CPSC staff having been cut over
the past 27 years--from almost 1,000 employees in 1980 to a record low
of 420 employees in 2007--there remain only 15 full-time Commission
personnel assigned to inspect imports at U.S. ports. According to a
September 2, 2007, New York Times article, this handful of import
inspectors ``are hard pressed to find dangerous cargo before it enters
the country; instead, they rely on other Federal agents, who mostly act
as trademark enforcers.'' Similarly unacceptable is the fact that the
CPSC lacks the staff to send a single inspector to the foreign
factories making the goods that we put on our kitchen counters and in
the hands of our children.
These facts unquestionably reveal, as a Consumers Union official told
the Senate Committee on Finance earlier this month, that the CPSC has
not kept up with the globalization of the marketplace. That is why I
have proposed this bill, which would rapidly shore-up the commission's
import inspection staff, who are so critical to protecting us from
dangerous foreign products. I urge my colleagues to support this
common-sense solution to an urgent problem.
______

By Mr. FEINGOLD (for himself, Ms. Cantwell, and Mrs. Feinstein):
S. 2287. A bill to amend the Internal Revenue Code of 1986 to repeal
the percentage depletion allowance for certain hardrock mines, and for
other purposes; to the Committee on Finance.
Mr. FEINGOLD. Mr. President, today I am very pleased to be joined by
Senators Cantwell and Feinstein in introducing legislation to eliminate
from the Federal tax code the ``Percentage Depletion Allowance'' for
hardrock minerals mined on Federal public lands. Elimination of this
double subsidy will produce estimated savings of at least $500 million
over 5 years, based on the most recent year for which figures are
available from the Joint Committee on Taxation and the Clinton
administration's fiscal year 2001 budget proposal. These savings will
help fund the reclamation and restoration of abandoned mines through an
Abandoned Mine Reclamation Fund, that my bill creates, and the
remaining \3/4\ of savings will be returned to the Federal treasury.
Percentage depletion allowances were initiated by the Corporation
Excise Act of 1909. That is right, these allowances were initiated
nearly 100 years ago. Provisions for a depletion allowance based on the
value of the mine were made under a 1912 Treasury Department
regulation, but difficulty in applying this accounting principle to
mineral production led to the initial codification of the mineral
depletion allowance in the Tariff Act of 1913. The

[[Page S13688]]

Revenue Act of 1926 established percentage depletion much in its
present form for oil and gas. The percentage depletion allowance was
then extended to metal mines, coal, and other hardrock minerals by the
Revenue Act of 1932, and has been adjusted several times since.
Percentage depletion allowances were historically placed in the tax
code to reduce the effective tax rates in the mineral and extraction
industries far below tax rates on other industries, providing
incentives to increase investment, exploration, and output. The
problem, however, is that percentage depletion also makes it possible
to recover many times the amount of the original investment.
There are two methods of calculating a deduction to allow a firm to
recover the costs of its capital investment: cost depletion and
percentage depletion. Cost depletion allows for the recovery of the
actual capital investment--the costs of discovering, purchasing, and
developing a mineral reserve--over the period during which the reserve
produces income. Under the cost depletion method, the total deductions
cannot exceed the original capital investment.
Under percentage depletion, however, the deduction for recovery of a
company's investment is a fixed percentage of ``gross income,'' namely,
sales revenue from the sale of the mineral. Under this method, total
deductions typically exceed the capital that the company invested. The
set rates for percentage depletion are quite significant. Section 613
of the Internal Revenue Code contains depletion allowances for more
than 70 metals and minerals, at rates ranging from 10 to 22 percent.
There is no restriction in the tax code to ensure that over time
companies do not deduct more than the capital that a company has
invested. Furthermore, a Percentage Deduction Allowance makes sense
only so long as the deducting company actually pays for the investment
for which it claims the deduction.
The result is a double subsidy for hardrock mining companies: first
they can mine on public lands for free under the General Mining Law of
1872, and then they are allowed to take a deduction for capital
investment that they have not made for the privilege to mine on public
lands. My legislation would eliminate the use of the Percentage
Depletion Allowance for mining on public lands, resulting in an
estimated savings of $450 million over 5 years, while continuing to
allow companies to recover reasonable cost depletion.
My bill would also create a new fund, called the Abandoned Mine
Reclamation Fund. One-fourth of the revenue raised by the bill, or
approximately $110 million, would be deposited into an interest-bearing
fund in the Treasury to be used to clean up abandoned hardrock mines in
states that are subject to the 1872 Mining Law. Though there is no
comprehensive inventory of abandoned mines, estimates put the figure at
upwards of 100,000 abandoned mines on public lands.
There are currently no comprehensive federal or state programs to
address the need to clean up old mine sites. Reclaiming these sites
requires the enactment of a program with explicit authority to clean up
abandoned mine sites and the resources to do it. My legislation is a
first step toward providing the needed authority and resources.
In today's budget climate, we are faced with the question of who
should bear the costs of exploration, development, and production of
natural resources: the taxpayers, or the users and producers of the
resource? For more than a century, the mining industry has been paying
next to nothing for the privilege of extracting minerals from public
lands and then abandoning its mines. Now those mines are adding to the
nation's environmental and financial burdens. We face serious budget
choices this fiscal year, and one of those choices is whether to
continue the special tax breaks provided to the mining industry.
The measure I am introducing is straightforward. It eliminates the
Percentage Depletion Allowance for hardrock minerals mined on public
lands while continuing to allow companies to recover reasonable cost
depletion.
Though at one time there may have been an appropriate role for a
government-driven incentive for enhanced mineral production, there is
now sufficient reason to adopt a more reasonable depletion allowance
that is consistent with depreciation rates given to other businesses.
This corporate subsidy is simply not justified.
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. 2287

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 ``Elimination of Double
Subsidies for the Hardrock Mining Industry Act of 2007''.

SEC. 2. REPEAL OF PERCENTAGE DEPLETION ALLOWANCE FOR CERTAIN
HARDROCK MINES.

(a) In General.--Section 613(a) of the Internal Revenue
Code of 1986 (relating to percentage depletion) is amended by
inserting ``(other than hardrock mines located on lands
subject to the general mining laws or on land patented under
the general mining laws)'' after ``In the case of the
mines''.
(b) General Mining Laws Defined.--Section 613 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``(f) General Mining Laws.--For purposes of subsection (a),
the term `general mining laws' means those Acts which
generally comprise chapters 2, 12A, and 16, and sections 161
and 162 of title 30 of the United States Code.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.

SEC. 3. ABANDONED MINE RECLAMATION FUND.

(a) In General.--Subchapter A of chapter 98 of the Internal
Revenue Code of 1986 (relating to establishment of trust
funds) is amended by adding at the end the following:

``SEC. 9511. ABANDONED MINE RECLAMATION FUND.

``(a) Creation of Trust Fund.--There is established in the
Treasury of the United States a trust fund to be known as the
`Abandoned Mine Reclamation Trust Fund' (in this section
referred to as `Trust Fund'), consisting of such amounts as
may be appropriated or credited to the Trust Fund as provided
in this section or section 9602(b).
``(b) Transfers to Trust Fund.--There are hereby
appropriated to the Trust Fund amounts equivalent to 25
percent of the additional revenues received in the Treasury
by reason of the amendments made by section 2 of the
Elimination of Double Subsidies for the Hardrock Mining
Industry Act of 2007.
``(c) Expenditures From Trust Fund.--
``(1) In general.--Amounts in the Trust Fund shall be
available, as provided in appropriation Acts, to the
Secretary of the Interior for--
``(A) the reclamation and restoration of lands and water
resources described in paragraph (2) adversely affected by
mineral (other than coal and fluid minerals) and mineral
material mining, including--
``(i) reclamation and restoration of abandoned surface mine
areas and abandoned milling and processing areas,
``(ii) sealing, filling, and grading abandoned deep mine
entries,
``(iii) planting on lands adversely affected by mining to
prevent erosion and sedimentation,
``(iv) prevention, abatement, treatment, and control of
water pollution created by abandoned mine drainage, and
``(v) control of surface subsidence due to abandoned deep
mines, and
``(B) the expenses necessary to accomplish the purposes of
this section.
``(2) Lands and water resources.--
``(A) In general.--The lands and water resources described
in this paragraph are lands within States that have land and
water resources subject to the general mining laws or lands
patented under the general mining laws--
``(i) which were mined or processed for minerals and
mineral materials or which were affected by such mining or
processing, and abandoned or left in an inadequate
reclamation status before the date of the enactment of this
section,
``(ii) for which the Secretary of the Interior makes a
determination that there is no continuing reclamation
responsibility under State or Federal law, and
``(iii) for which it can be established to the satisfaction
of the Secretary of the Interior that such lands or resources
do not contain minerals which could economically be extracted
through remining of such lands or resources.
``(B) Certain sites and areas excluded.--The lands and
water resources described in this paragraph shall not include
sites and areas which are designated for remedial action
under the Uranium Mill Tailings Radiation Control Act of 1978
(42 U.S.C. 7901 et seq.) or which are listed for remedial
action under the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. 9601 et
seq.).
``(3) General mining laws.--For purposes of paragraph (2),
the term `general mining laws' means those Acts which
generally comprise chapters 2, 12A, and 16, and sections 161

[[Page S13689]]

and 162 of title 30 of the United States Code.''.
(b) Conforming Amendment.--The table of sections for
subchapter A of chapter 98 of the Internal Revenue Code of
1986 is amended by adding at the end the following:

``Sec. 9511. Abandoned Mine Reclamation Trust Fund.''.
______

By Ms. SNOWE (for herself and Mr. Kerry):
S. 2288. A bill to establish portfolio quality standards, improve
lender oversight by the Small Business Administration, create economic
outcome and performance measurements, strengthen the loan programs
under section 7(a) of the Small Business Act and title V of the Small
Business Investment Act of 1958, and for other purposes; to the
Committee on Small Business and Entrepreneurship.
Ms. SNOWE. Mr. President, I rise today with Senator Kerry to
introduce the Small Business Lending Oversight and Program Performance
Improvements Act of 2007. I truly appreciate Senator Kerry's leadership
on small business issues and his bipartisan work with me on this bill.
Small businesses have propelled our Nation's economic growth,
producing more than 50 percent of our Gross Domestic Product, GDP, and
creating between 60 to 80 percent of all new jobs annually. The Small
Business Administration's loan guarantee programs are a vital source of
financing for many of these small start-up firms, entrepreneurs seeking
working capital, and small businesses that must purchase larger office
space or secure factory equipment so they can continue to expand.
At the same time, the SBA's 7(a) and 504 lending programs will not
endure if careless oversight, and a lack of standards, allow scandal to
tarnish the good names of these programs. The 7(a) and 504 lending
programs will not survive if we cannot prove to taxpayers that the
money spent to guarantee small business loans actually produces
economic vitality, opportunity, and new jobs, for our Nation. Make no
mistake, the only way to protect these integral programs and
demonstrate their effectiveness and economic growth capacity is through
the use of concrete measurements.
In order for the SBA's lending portfolios to grow and allow more
small firms to secure the capital they require, the SBA must quantify
both quality and performance by establishing the specific criteria it
will examine and then assess changes in these factors over time.
Additionally, these benchmarks must be codified and transparent so that
lenders and small businesses understand what is being measured.

The problem is this: although the SBA evaluates portfolio quality,
and uses these assessments to conduct lender oversight, the SBA has
failed to provide participating lenders with some of the criteria or
formulas the Agency uses to determine if their portfolios are sound or
substandard. This lack of transparency not only hinders the SBA's
lender oversight capabilities, it causes participating 7(a) and 504
lenders to be critical of the SBA's ability to accurately assess
portfolio quality. Regrettably, the SBA's current oversight and
portfolio quality assessment methods have not prevented recent high-
profile scandals from occurring.
Currently, the SBA has roughly $60 billion in outstanding loans
issued to small businesses. Yet incredulously it does not track these
businesses' economic performance. While the SBA's total loan volume has
increased substantially over the last 10 years, the agency has no way
to show how these loans benefitted the U.S. economy. Ultimately, the
SBA is unaware of how many jobs these loans have created, whether
company net-sales or revenues have increased after securing capital, or
how many of these companies prepay, default, or go out of business.
Though the purpose of these loans is to spur economic growth, the SBA
does not assess the actual economic outcomes these loans help make
possible. Without these measurements, how can the SBA attest to the
incredible economic lift and vitality these loans help generate?
Two recent Government Accountability Office reports, one from July of
this year and one from June of 2004, recommended that the SBA improve
its economic performance and portfolio quality measurements. Our bill
would implement the GAO's recommendations and improve the performance
measures for 7(a) and 504 loans. Among other things, the bill would
require the SBA to: create standards for lenders' portfolio quality;
increase the transparency of the SBA's lender oversight evaluation
measures; report on borrowers' economic performance; and create a 7(a)
and 504 portfolio default rate that can be compared directly to
commercial lenders' default rates.
We have an obligation not only to maintain, but to strengthen and
improve the SBA's key loan programs that I have heard time and again
are a critical lifeline to the job generators we call small businesses.
The remedies that Senator Kerry and I are proposing today are necessary
for the SBA's lending programs to expand, and reach all of the small
businesses that must have access to capital.
I urge my colleagues to strongly support the Small Business Lending
Oversight and Program Performance Improvements Act.
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. 2228

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Small Business Lending
Oversight and Program Performance Improvement Act of 2007''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) Recent reports by the Government Accountability Office
have recommended that the Small Business Administration
develop better measurements and methods for measuring the
performance of lending programs and the effectiveness of
lender oversight.
(2) A July 2007 report by the Government Accountability
Office entitled ``Small Business Administration: Additional
Measures Needed to Assess 7(a) Loan Program's Performance''
found the following:
(A) Determining the success of the loan programs under
section 7(a) of the Small Business Act (15 U.S.C. 636(a))
``is difficult as the performance measures show only outputs
- the number of loans provided - and not outcomes, or the
fate of the businesses borrowing with the guarantee.''.
(B) ``The current measures do not indicate how well the
agency is meeting its strategic goal of helping small
businesses.''.
(C) ``To better ensure that the 7(a) program is meeting its
mission responsibility of helping small firms succeed through
guaranteed loans, we recommend that the SBA administrator
complete and expand the SBA's current work on evaluating the
program's performance measures. As part of that effort, at a
minimum, the SBA should further utilize the loan performance
information it already collects, including but not limited to
defaults, prepayments, and number of loans in good standing,
to better report how small businesses fare after they
participate in the 7(a) program.''.
(3) A June 2004 report by the Government Accountability
Office entitled ``Small Business Administration: New Services
for Lender Oversight Reflect Some Best Practices but Strategy
for Use Lags Behind'' found that ``Best practices dictate the
need for a clear and transparent understanding of how a risk
management service and the tools it provides will be used.''.

SEC. 3. DEFINITIONS.

In this Act--
(1) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof, respectively;
(2) the term ``base year'' means the year in which a
covered loan recipient receives a loan under section 7(a) of
the Small Business Act (15 U.S.C. 636(a)) or the 504 Loan
Program;
(3) the term ``covered lender'' means--
(A) a lender participating in the guarantee loan program
under section 7(a) of the Small Business Act (15 U.S.C.
636(a)); and
(B) a State or local development company participating in
the 504 Loan Program;
(4) the term ``covered loan recipient'' means a person that
receives a loan under section 7(a) of the Small Business Act
(15 U.S.C. 636(a)) or the 504 Loan Program;
(5) the term ``economic performance evaluation
measurements'' means the economic performance evaluation
measurements established under section 8(a);
(6) the term ``504 Loan Program'' means the program to
provide financing to small business concerns by guarantees of
loans under title V of the Small Business Investment Act of
1958 (15 U.S.C. 695 et seq.), which are funded by debentures
guaranteed by the Administrator;
(7) the term ``portfolio quality evaluation standards''
means the portfolio quality evaluation standards established
under section 5(a)(1); and

[[Page S13690]]

(8) the term ``small business concern'' has the same
meaning as in section 3 of the Small Business Act (15 U.S.C.
632).

SEC. 4. AUTHORITY.

Section 5 of the Small Business Act (15 U.S.C. 634) is
amended--
(1) in subsection (b)(14), by striking ``other lender
oversight activities'' and inserting ``used to improve
portfolio performance and lender oversight through technology
and software programs designed to increase program loan
quality, management, accuracy, and efficiency and program
underwriting accuracy and efficiency''; and
(2) by adding at the end the following:
``(i) In establishing lender oversight review fees
described in subsection (b)(14), the Administrator shall
follow cost containment and cost control best practices that
ensure that such fees are reasonable and do not become
burdensome or excessive.''.

SEC. 5. PORTFOLIO QUALITY EVALUATION STANDARDS.

(a) Standards.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall develop and
publish in the Federal Register portfolio quality evaluation
standards for covered lenders, which shall include portfolio
quality criteria, including--
(A) a liquidation rate;
(B) a currency rate;
(C) a recovery rate;
(D) a delinquency rate; and
(E) other portfolio risk indicators.
(2) Use.--The Administration shall use the portfolio
quality evaluation standards--
(A) to determine the portfolio quality of a covered lender,
in comparison to the portfolio quality of all covered
lenders; and
(B) for conducting lender oversight of covered lenders.
(b) Implementation.--The Administrator shall--
(1) rank and determine a separate score for each covered
lender, on each of the portfolio quality evaluation
standards;
(2) combine the portfolio quality rankings described in
paragraph (1) to establish the overall lender portfolio
quality score for each covered lender, based on the
compliance of that covered lender with the portfolio quality
evaluation standards;
(3) provide a covered lender access to--
(A) the score of that covered lender for each of the
portfolio quality evaluation standards; and
(B) the overall portfolio quality score for that covered
lender; and
(4) provide a written explanation of the factors affecting
the score described in paragraph (3)(A) for a covered lender
to that covered lender.
(c) Quarterly Evaluations.--Not less frequently than once
each quarter, the Administrator shall evaluate each covered
lender to determine whether--
(1) there has been a statistically significant adverse
change in the criteria evaluated under the portfolio quality
evaluation standards relating to a covered lender; and
(2) the portfolio of that covered lender has a higher
concentration of loans made to businesses in a specific North
American Industry Classification System code (or any
successor thereto) than is typical for businesses in that
code, as determined by the Administrator.
(d) Additional Onsite Review.--
(1) Deterioration in loan portfolio.--If the Administrator
determines that there is significant and sustained
statistically adverse change in the loan portfolio of a
covered lender, based on the quarterly evaluation of that
covered lender under subsection (c), the Administrator
shall--
(A) determine the reason for such deterioration;
(B) determine if the deterioration should lead to an onsite
review of the loan portfolio of that covered lender;
(C) taking into consideration the opinion of the relevant
district director of the Administration, determine whether it
is appropriate for the Administrator to adjust the preferred
lender or other loan making status of that covered lender;
(D) document the decision by the Administrator regarding
whether to conduct an onsite review or adjust the loan making
status of that covered lender; and
(E) inform that covered lender of any statistically adverse
change in loan quality of the portfolio of that covered
lender.
(2) Adverse changes.--If the Administrator determines there
has been a statistically significant adverse change in the
criteria evaluated under the portfolio quality evaluation
standards relating to a covered lender, the Administrator
shall determine whether it is necessary to conduct an onsite
review of that covered lender.
(3) Scope of review.--Any onsite review of a covered lender
under this subsection shall focus on--
(A) the credit quality of the loans within the portfolio of
that covered lender;
(B) the soundness of the credit evaluation and underwriting
processes and procedures of that covered lender;
(C) the adherence by that covered lender to the policies
and procedures of the Administration; and
(D) any other measures that the Administrator determines
appropriate.
(e) Defaults.--The Administrator shall provide to a covered
lender information relating to any indicator under the
portfolio quality evaluation standards that indicate an
increased risk of default for specific loans.
(f) Document Retention.--The Administrator shall maintain
an electronic copy of any document relating to any portfolio
quality evaluation or onsite review under this section
(including documents relating to any determination regarding
whether to conduct such a review).
(g) Data Collection.--The Administrator shall enter into a
contract with a fiscal and transfer agent of the
Administration under which that fiscal and transfer agent
shall provide to the Administrator the data necessary to
conduct the quarterly evaluation of covered lenders using the
portfolio quality evaluation standards under this section.

SEC. 6. DEFAULT RATE.

(a) In General.--Using established industry standards for
calculating loan default rates, and not later than 1 year
after the date of enactment of this Act, and every year
thereafter, the Administrator shall calculate a loan default
rate for--
(1) loans under section 7(a) of the Small Business Act (15
U.S.C. 636(a));
(2) loans under the 504 Loan Program; and
(3) specialty loan programs under section 7(a) of the Small
Business Act or the 504 Loan Program, including the Express
Loan program under section 7(a)(31) of the Small Business Act
and the Export Working Capital Program under section 7(a)(14)
of the Small Business Act.
(b) Methodology.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall publish in the
Federal Register the methodology the Administrator will use
to calculate default rates under subsection (a).
(c) Purpose.--The purpose of the default rates calculated
under subsection (a) is to provide a cumulative default rate
for loans under section 7(a) of the Small Business Act (15
U.S.C. 636(a)) and loans under the 504 Loan Program that may
be compared directly to the default rates of other commercial
loans.

SEC. 7. COMPUTER MODELING.

(a) Transparency in Ranking Criteria.--The Administrator--
(1) shall provide each covered lender with the data,
factors, statistical methods, ranking criteria, indicators,
and other measures used to make the ranking described in
section 5(b); and
(2) may not charge a fee for providing the information
described in paragraph (1).
(b) Failure to Provide.--In ranking a covered lender under
section 5(b), the Administrator may not use any data, factor,
statistical method, ranking criteria, indicator, or other
measure that the Administrator has not provided to that
covered lender.
(c) Contracts.--Before establishing or modifying any system
or mechanism for evaluating the making of loans, the
accounting for loans, the underwriting of loans, or otherwise
overseeing loans made by covered lenders, the Administrator
shall consult with relevant covered lenders.

SEC. 8. ECONOMIC PERFORMANCE EVALUATION MEASUREMENTS.

(a) Measurements.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall develop and
publish in the Federal Register economic performance
evaluation measurements for evaluating the economic
performance and economic outcomes of each covered loan
recipient, which shall include--
(1) number of individuals employed by that covered loan
recipient;
(2) the annual sales receipts of that covered loan
recipient;
(3) an estimate of the total annual Federal income tax paid
by that covered loan recipient;
(4) whether the covered loan recipient prepaid the covered
loan;
(5) whether the covered loan recipient defaulted on the
covered loan;
(6) the number of businesses operated by covered loan
recipients that cease operations; and
(7) the number of covered loan recipients that establish a
new business relating to the business for which that covered
loan recipient received a loan under section 7(a) of the
Small Business Act (15 U.S.C. 636(a)) or the 504 Loan
Program.
(b) Collection of Information.--
(1) In general.--On and after the date that is 2 years
after the date of enactment of this Act, the Administrator
shall electronically collect, as part of the loan application
process, from the person applying for a loan under section
7(a) of the Small Business Act (15 U.S.C. 636(a)) or the 504
Loan Program--
(A) the number of individuals employed by the applicant;
(B) the annual sales receipts of the applicant for the year
before the date of the application; and
(C) an estimate of the total annual Federal income tax paid
by that covered loan recipient.
(2) Base year.--The Administrator shall use the information
collected under paragraph (1) to establish the base year
statistics for the applicant.
(3) Information compliance.--
(A) In general.--During the 12-year period beginning on the
date that a covered loan recipient receives a loan under
section 7(a) of the Small Business Act or the 504 Loan
Program, as the case may be, the covered loan recipient shall
provide to the Administrator information relating to the
economic performance evaluation measurements upon requested.

[[Page S13691]]

(B) Frequency.--The Administrator shall request information
from a covered loan recipient under subparagraph (A) not less
frequently than once every 4 years.
(c) Reporting.--
(1) In general.--Not later than 6 years after the date of
enactment of this Act, and every 4 years thereafter, the
Administrator shall publish a report assessing the
information relating to the economic performance evaluation
measurements submitted by covered loan recipients during the
period described in paragraph (2), including an evaluation of
the aggregate changes, if any, in the economic performance
evaluation measurements since the relevant base years for
such covered loan recipients.
(2) Period.--The period described in this paragraph is--
(A) for the first report submitted under this subsection,
not shorter than the 4-year period before the date of that
report;
(B) for the second report submitted under this subsection,
not shorter than the 8-year period before the date of that
report; and
(C) for the third report submitted under this subsection,
and each report submitted thereafter, not shorter than the
12-year period before the date of that report.

SEC. 9. PRIVACY.

In collecting data and preparing reports under this Act,
the Administrator shall ensure that the privacy and
information of covered loan recipients is protected.

SEC. 10. EXECUTIVE COMPENSATION.

Section 503 of the Small Business Investment Act of 1958
(15 U.S.C. 697) is amended by adding at the end the
following:
``(j) Executive Compensation.--
``(1) In general.--Except as provided in paragraph (4), a
State or local development company shall have a written
contract with each executive or highly paid employee of that
development company relating to the employment of that
executive or highly paid employee, which shall include, for
that executive or employee, the amount of compensation,
benefits, and any transfer of anything of value to that
executive or highly paid employee, including any rental or
sale.
``(2) Approval by board of directors.--
``(A) In general.--A written contract described in
paragraph (1) shall be approved by the board of directors of
the State or local development company.
``(B) Evaluation.--In evaluating a contract described in
paragraph (1), the members of the board of directors of a
State or local development company shall--
``(i) determine the fair market value of the benefits
received by an executive or highly paid employee from that
development company; and
``(ii) evaluate the amount paid by other State or local
development companies and commercial lenders for comparable
services, including, if a rental of property for that
executive or highly paid employee is part of that contract,
the amount of annual rent paid locally for comparable
property.
``(C) Distribution of evaluation.--The board of directors
of a State or local development company shall ensure that the
information described in subparagraph (B) is made available
to each member of that board of directors before the date of
the meeting at which the board of directors will determine
whether to approve the relevant contract and include the
information described in subparagraph (B) in the minutes of
that meeting.
``(D) Participation.--An executive or highly paid official,
and any other party with personal interest in a contract,
shall not attend a meeting of the board of directors to
determine whether to approve the contract with that executive
or highly paid official, unless the members of the board of
directors request that executive or highly paid official
respond to questions.
``(E) Voting.--An executive or highly paid official, and
any other party with personal interest in a contract, shall
not be present during, and shall not vote on, whether to
approve the contract with that executive or highly paid
official.
``(3) Annual reports.--A State or local development company
shall report annually to the Administration regarding the
terms of each contract with each executive or highly paid
official of that development company.
``(4) Exception.--This subsection shall not apply to--
``(A) a small State or local development company;
``(B) a State or local development company that makes a low
number of loans under the 504 Loan Program; or
``(C) a State or local development company regulated by a
State or local government.
``(5) Regulations.--The Administrator shall promulgate
regulations to carry out this subsection, including defining
the terms `executive', `highly paid', `small State or local
development company', and `low number of loans'.''.

SEC. 11. STUDY AND REPORT ON EXAMINATION AND REVIEW FEES.

(a) Study.--The Comptroller General of the United States
shall conduct a study of the loan guaranty program under
section 7(a) of the Small Business Act to determine--
(1) the scope of lender oversight needed by the
Administration;
(2) what other entities regulate the lenders that
participate in that loan guaranty program, what activities
are being reviewed, and the scope of such reviews;
(3) how the amounts of examination and review fees are
determined by such other regulatory entities, who pays for
such fees, and how they compare with examination and review
fees proposed in regulations issued by the Administration on
May 4, 2007;
(4) how examination and review fees factor into the risk-
adjusted return on capital (or ``RAROC'') ratings of lenders;
(5) what would be reasonable fees to be charged for
Administration lender oversight;
(6) whether Administration lender oversight functions can
be executed in conjunction with other lender reviews
currently required by other regulatory entities, including
those that review Federal banks, credit unions, or entities
reviewed by the Farm Credit Administration; and
(7) the impact of lender oversight fees proposed by the
Administration on lending to borrowers, including cost
changes, availability of credit, and increased or decreased
lender participation.
(b) Report.--The Comptroller General shall submit to
Congress a report on the results of the study required by
subsection (a) not later than 1 year after the date of
enactment of this Act.
______

By Mrs. BOXER (for herself and Mrs. Feinstein):
S. 2290. A bill to designate the facility of the United States Postal
Service located at 16731 Santa Ana Avenue in Fontana, California, as
the ``Beatrice E. Watson Post Office Building''; to the Committee on
Homeland Security and Governmental Affairs.
Mrs. BOXER. Mr. President, today I am joined by my colleague, Senator
Feinstein in introducing legislation to designate the facility of the
U.S. Postal Service located at 16731 Santa Ana Avenue in Fontana,
California, as the ``Beatrice E. Watson Post Office Building.''
Beatrice ``Bea'' Watson was a former city clerk and councilwoman of
Fontana who volunteered tirelessly for her community. In an Inland
Valley Daily Bulletin profile last year, fellow Fontana residents
described Bea as a generous person who was devoted to her city, her
friends, and the many organizations with which she worked.
Over the 40 years of her residence in Fontana, Bea was involved with
numerous civic and community service organizations, including the
Fontana Woman's Club, the Fontana Historical Society, Chamber of
Commerce, the Fontana Exchange Club, Parks and Recreation and the
Fontana Parent Teacher Association.
Bea also was responsible for the continued existence of the Fontana
Days Parade, the annual summer celebration of the city's 1913 founding
by A.B. Miller, even dipping into her own pocket at times to keep the
parade going.
This August, Bea Watson, ``Mrs. Fontana,'' passed away, and I know
her loss has been deeply felt by her family and the community. The
Fontana City Council asked Congress to honor Bea for bringing the whole
community together for the betterment of Fontana. I am proud to
introduce this bill, and encourage my colleagues to join me in
recognizing Bea Watson's example of dedicated service.
______

By Mr. AKAKA (for himself, Mrs. McCaskill, Mr. Carper, and Mr.
Levin):
S. 2291. A bill to enhance citizen access to Government information
and services by establishing plain language as the standard style of
Government documents issued to the public, and for other purposes; to
the Committee on Homeland Security and Governmental Affairs.
Mr. AKAKA. Mr. President, I rise today to introduce the Plain
Language in Government Communications Act of 2007. I am pleased that
Senators Claire McCaskill, Tom Carper, and Carl Levin have joined me as
original co-sponsors of this bill.
Our bill is very similar to H.R. 3548, introduced by Representative
Bruce Braley in September, along with original co-sponsors
Representatives Todd Akin, Dan Burton, James McGovern, and Nancy Boyda.
This bill would establish plain language as the standard writing
style for Government documents issued to the public. Plain language is
language that the intended audience can readily understand and use
because it is clear, concise, well-organized, and follows other best
practices of plain language writing.
This bill would extend an initiative that President Bill Clinton and
Vice President Al Gore started nearly a decade ago as part of the
Reinventing Government initiative. In 1998 President Clinton directed
agencies to write in plain language. Although many agencies have made
progress in writing

[[Page S13692]]

more clearly, the requirement never was fully implemented, and in
recent years, the focus on writing in plain language has flagged. This
legislation will renew that focus.
The benefits of requiring the Government to write in plain language
are numerous.
For example, using plain language improves customer service.
Veterans, taxpayers, senior citizens, and others who need to understand
Government instructions and fill out Government forms should not have
to wade through complicated, bureaucratic language. Needlessly
complicated Government documents waste countless hours of taxpayers'
time and cause unnecessary errors. The Federal Government works best
for the American people if Government documents are clear and
straightforward. Filling out Government forms should not be like
solving a complex crossword puzzle.
Writing in plain language also will make the Government more
efficient and cost effective. Agencies that write in plain language
spend less time answering customer service questions, and they obtain
better compliance because people make fewer mistakes.
Furthermore, using plain language makes Government more transparent.
The American people cannot hold their Government accountable if no one
can understand the information that the Government provides about its
actions and its requirements.
Numerous organizations have called on Congress to require the Federal
Government to use plain language. For example, the AARP wrote a letter
in support of this legislation stating that every day AARP members
contact AARP staff because they do not understand letters that they
received from the Federal Government. The confusion is not the readers'
fault. It is because many Federal Government letters are written in
dense, complicated language that few people who are not lawyers could
be expected to understand. Certainly, anyone who has ever filled out
their own tax forms can sympathize.

Additionally, several small business organizations--including the
National Small Business Association, the Small Business Legislative
Council, and Women Impacting Public Policy--support the need for plain
language. The reason is simple. Small businesses waste considerable
time, effort, and money trying to decipher what the Federal Government
requires of them.
This bill addresses two important elements for ensuring that use of
plain language becomes standard in Federal agencies: training and
oversight.
Each agency will report their plans to train employees to write in
plain language. Writing in plain, clear, concise, and easily
understandable language is a skill that Congress and Federal agencies
must foster. As Thomas Jefferson once said, ``The most valuable of all
talents is that of never using two words when one will do.'' As a
former teacher and principal, I understand that even very smart people
must be trained to write plainly.
Additionally, strong congressional oversight will ensure that
agencies implement the plain language requirements. Agencies will be
required to designate a senior official responsible for implementing
plain language requirements. Each agency will be required to report to
Congress how it will ensure compliance with the plain language
requirement and on its progress.
A few examples of the documents that will be covered by the plain
language requirement are Federal tax forms; veterans' benefit forms;
information for workers about Federal health, safety, overtime pay, and
medical leave laws; Social Security and Medicare benefit forms; and
Federal college aid applications. These documents help the American
people obtain important Government benefits and improve their quality
of life.
To avoid imposing an unmanageable burden on agencies, agencies will
not be required to re-write existing documents in plain language. Only
new or substantially revised documents will be covered. Similarly, this
bill does not cover regulations, so that agencies can focus first on
improving their every day communications with the American people. We
recognize that it will be more challenging to write regulations--which
by their nature often will be complex and technical--in plain language.
Requiring agencies to write in plain language is an important step in
improving the way the Federal Government communicates with the American
people.
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. 2291

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 ``Plain Language in Government
Communications Act of 2007''.

SEC. 2. PURPOSE.

The purpose of this Act is to improve the effectiveness and
accountability of Federal agencies to the public by promoting
clear Government communication that the public can understand
and use.

SEC. 3. DEFINITIONS.

In this Act:
(1) Agency.--The term ``agency'' means an Executive agency,
as defined under section 105 of title 5, United States Code.
(2) Covered document.--The term ``covered document''--
(A) means any document (other than a regulation) issued by
an agency to the public that--
(i) provides information about any Federal Government
requirement or program; or
(ii) is relevant to obtaining any Federal Government
benefit or service; and
(B) includes a letter, publication, form, notice, or
instruction.
(3) Plain language.--The term ``plain language'' means
language that the intended audience can readily understand
and use because that language is clear, concise, well-
organized, and follows other best practices of plain language
writing.

SEC. 4. RESPONSIBILITIES OF FEDERAL AGENCIES.

(a) Requirement to Use Plain Language in New Documents.--
Not later than 1 year after the date of enactment of this
Act, each agency shall use plain language in any covered
document of the agency issued or substantially revised after
the date of enactment of this Act.
(b) Guidance.--
(1) In general.--
(A) Development.--Not later than 6 months after the date of
enactment of this Act, the Office of Management and Budget
shall develop guidance on implementing the requirements of
subsection (a).
(B) Issuance.--The Office of Management and Budget shall
issue the guidance developed under subpargraph (A) to
agencies as a circular.
(2) Interim guidance.--Before the issuance of guidance
under paragraph (1), agencies may follow the guidance of--
(A) the Plain English Handbook published by the Securities
and Exchange Commission;
(B) the plain language guidelines developed by the Plain
Language Action and Information Network; or
(C) guidance provided by the head of the agency that is
consistent with the guidelines referred to under subparagraph
(B).

SEC. 5. REPORTS TO CONGRESS.

(a) Initial Report.--Not later than 6 months after the date
of enactment of this Act, the head of each agency shall
submit to the Committee on Homeland Security and Governmental
Affairs of the Senate and the Committee on Oversight and
Government Reform of the House of Representatives a report
that describes how the agency intends to meet the following
objectives:
(1) Communicating the requirements of this Act to agency
employees.
(2) Training agency employees to write in plain language.
(3) Meeting the requirement under section 4(a).
(4) Ensuring ongoing compliance with the requirements of
this Act.
(5) Designating a senior official to be responsible for
implementing the requirements of this Act.
(b) Annual and Other Reports.--
(1) Agency reports.--
(A) In general.--The head of each agency shall submit
reports on compliance with this Act to the Office of
Management and Budget.
(B) Submission dates.--The Office of Management and Budget
shall notify each agency of the date each report under
subparagraph (A) is required for submission to enable the
Office of Management and Budget to meet the requirements of
paragraph (2).
(2) Reports to congress.--The Office of Management and
Budget shall review agency reports submitted under paragraph
(1) using the guidance issued under section 4(b)(1)(B) and
submit a report on the progress of agencies to the Committee
on Homeland Security and Governmental Affairs of the Senate
and the Committee on Oversight and Government Reform of
Representatives--
(A) annually for the first 2 years after the date of
enactment of this Act; and
(B) once every 3 years thereafter.
______

By Ms. COLLINS (for herself and Mr. Lieberman):
S. 2292. A bill to amend the Homeland Security Act of 2002, to
establish the Office for Bombing Prevention, to address terrorist
explosive threats, and

[[Page S13693]]

for other purposes; to the Committee on Homeland Security and
Governmental Affairs.
Ms. COLLINS. Mr. President. I rise to introduce the National Bombing
Prevention Act of 2007, an important measure to strengthen our domestic
defenses against terrorist attacks using explosives.
Terror bombings have a long and bloody history around the world and
here in the United States. In 1920, for example, an anarchist bombing
in front of the New York Stock Exchange killed 38 people and wounded
hundreds more. More recently, the 1990s bombings of the World Trade
Center and the Murrah Federal Building in Oklahoma City, and attacks in
Indonesia, Spain, and Great Britain remind us of the vicious and
indiscriminate threat posed by bombs. As Secretary of Homeland Security
Michael Chertoff has noted, they are the weapon of choice for
terrorists.
The FBI and the Department of Homeland Security tell us that threat
from these devices is not only real, but growing. Furthermore, the
National Intelligence Estimate has identified improvised explosive
devices or IEDs as a significant homeland-security threat.
As recent years' bombings demonstrate, the costs of inadequate
precautions can be horrendous. And as the threat of bomb attacks by
home-grown terrorist rises--witness the plot to bomb the JFK airport in
New York--we must be increasingly on guard. Much effort and much
funding has been directed to train and equip law-enforcement and other
personnel to detect and disrupt bomb plots, yet we still lack a formal,
full-fledged national strategy to coordinate and improve the
effectiveness of those efforts.
The legislation I introduce today will improve our defenses against
these weapons. I am proud to be working again with the bill's chief co-
sponsor, Senator Joe Lieberman, on this new effort to protect our
nation.
The bill has also won the support of people directly involved in the
fight against the threat of terrorist bombings. They include the U.S.
Department of Homeland Security; the National Bomb Squad Commanders
Advisory Board; the National Tactical Officers Association; the
International Association of Bomb Technicians and Investigators; the
Maine Emergency Management Agency; and the police departments of Bangor
and Portland, Maine.
The National Bombing Prevention Act of 2007 has three main elements:
First, the bill will clarify the responsibilities of the DHS Office of
Bombing Prevention and authorize $25 million funding in both FY 2009
and 2010, up from the current Senate-passed funding level of $10
million in the Homeland Security Appropriations bill now pending at
conference.
Our national fight against terrorist bombings is a large and multi-
faceted undertaking. It includes screening airline passengers, checking
cargo, securing dangerous chemicals, protecting critical
infrastructure, promoting research and development of anti-IED
technology, and sharing information among Government and private-sector
partners. The DHS Office of Bombing Prevention is a leader in this
fight.
The Collins-Lieberman bill builds on the Office's past efforts. Among
other things, the bill designates the Office of Bombing Protection as
the lead agency in DHS for combating terrorist explosive attacks; tasks
OBP with coordinating national and intergovernmental bombing-prevention
activities; and assigns it responsibility for assisting state and local
governments and cooperating with the private sector.
A key element of Federal assistance is training. Last week, for
example, members of several Maine and Connecticut police departments
received DHS training and briefings here in Washington, as well as an
FBI update, and fresh information on improvised explosive devices. My
bill will bring more of that training to the States and make it more
accessible to local law-enforcement officers.
Second, the bill directs the President to accelerate the release of
the National Strategy for Bombing Prevention and to update it every
four years. As terrorists' tactics change, we must review and adjust
our counter-measures to defeat them.
Third, the bill will promote more research and development of
counter-explosive technologies and facilitate the transfer of military
technologies for domestic anti-terror use.
My legislation is badly needed. We need to make sure that bomb squads
have the latest and most accurate information on bombing threats. We
need to raise awareness of the signs of possible threats, including
purchases of pre-cursor materials and other suspicious activities. We
need to improve information sharing and coordination of activities
among all levels of government as well as the private sector.
Under my legislation, the Department of Homeland Security will have
the legal authority, the responsibility, and the resources to ensure
that state and local law-enforcement personnel receive the training and
information they need to protect us.
The National Bombing Prevention Act of 2007 will give our country
important new protections. The need for that protection has been amply
demonstrated by repeated acts of savagery, and the threat of terrorist
bombs continues to grow. I urge my colleagues to support this measure.
Mr. LIEBERMAN. Mr. President, I rise today to join my Ranking Member
on the Homeland Security and Governmental Affairs Committee, Senator
Collins, in introducing bipartisan legislation to strengthen our
Nation's ability to deter, detect, prevent, and respond to attacks
using improvised explosive devices, IED, in the U.S.
As we have seen in Iraq, London, and Germany, IEDs are a weapon of
choice for terrorists. The reality is that an IED is relatively easy
and inexpensive to make and can cause mass casualties, even to armored
military personnel. IEDs are a global threat, and the American public,
here at home, is not immune.
Federal efforts to address this threat, however, have not been
adequate. The Department of Homeland Security, Office of Bombing
Prevention, which is the Department's lead agent for IED countermeasure
coordination, is currently operating with a substantially reduced
budget of $5 million, down from the $14 million it received in fiscal
years 2005 and 2006. Only $6 million has been requested for 2008. By
contrast, the DHS Office of Health Affairs, which has a similar
coordination responsibility for biosecurity and medical preparedness,
has a proposed budget for personnel and coordination activities of $28
million for 2008. Given the likelihood of an IED attack, we need to
make a comparable commitment in this area. As Secretary Chertoff said
in an October 19 speech, ``although we can conceive of a terrorist
attack that would be focused on a biological infection or some kind of
a chemical spray, the reality is the vast majority of terrorist attacks
are conducted with bombs. And of those, the vast majority are
improvised explosive devices.''
The National Bombing Prevention Act of 2007, NBPA, would formally
authorize the Office of Bombing Prevention, OBP, and increase its
budget to $25 million. In addition to leading bombing prevention
activities within DHS, OBP would be directed to coordinate with other
Federal, State, and local agencies and fill the existing gaps that are
not covered by another Federal agency's current bombing prevention
efforts. For example, OBP would work with state and local officials to
conduct a national analysis of bomb squad capabilities. This type of
comprehensive assessment does not currently exist at any level of
government, yet it is integral to understanding what resources are
available in the event of an explosion and where we should invest in
order to better prepare the Nation as a whole. OBP would also improve
information sharing with state and local bomb squads by providing
regular updates on terrorist tactics, techniques, and procedures.
The NBPA would require the President to deliver a long awaited
National Strategy for Improvised Explosive Devices. This Strategy was
supposed to be delivered to Congress by DHS in January 2007 but was
then reassigned to the Department of Justice by presidential directive.
Turf battles have caused further delay. This is simply unacceptable.
Regardless of who takes the lead, the Nation must have a coherent
strategy guiding its counter IED efforts that will clarify the roles
and responsibilities of all Federal agencies.
Finally, our legislation would require DHS to establish a program
expediting

[[Page S13694]]

the transfer of counter IED technology to first responders. Under this
program, the Department would work with other Federal agencies,
including the Department of Defense, the private sector, and state and
local bomb experts to identify existing technologies that could help
deter, detect, prevent, or respond to an explosive attack. Often, there
is a significant lag time between the research and development of such
technologies and deployment by the end user. This bill would hold DHS
accountable for seeing products through to the deployment phase.
Specifically, DHS would be required to develop an electronic
countermeasures capability to disable radio controlled bombs. Radio
``jammers'' have been developed by DoD for Iraq and Afghanistan, but
that technology needs to be significantly modified for the civilian
environment.
Improvised explosive devices are one of the most popular weapons
terrorists are using today. They can be easily assembled from
instructions available on the Internet with readily available chemicals
such as peroxide or ammonium nitrate. And, most importantly, terrorists
all over the world have demonstrated their intent and ability to use
these weapons to kill and maim large numbers of people. If DHS is to
plan effectively for future attacks here at home, it must have a
cohesive and robust defense against the most likely threats. I ask my
colleagues to join us in ensuring DHS and its partners have the
necessary tools to protect the U.S. from an improvised explosive
device.
______

By Mr. LOTT (for himself, Mr. Grassley, Mr. Kyl, Mr. Smith, Mr.
Bunning, Mr. Crapo, Mr. Roberts, Mr. Hatch, Ms. Snowe, and Mr.
Ensign):
S. 2293. A bill to amend the Internal Revenue Code of 1986 to repeal
the individual alternative minimum tax, and for other purposes; read
the first time.
Mr. LOTT. 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
placed in the Record, as follows:

S. 2293

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 ``Individual Alternative
Minimum Tax Repeal Act of 2007''.

SEC. 2. REPEAL OF INDIVIDUAL ALTERNATIVE MINIMUM TAX.

(a) In General.--Section 55(a) of the Internal Revenue Code
of 1986 (relating to alternative minimum tax imposed) is
amended by adding at the end the following new flush
sentence:

``For purposes of this title, the tentative minimum tax on
any taxpayer other than a corporation for any taxable year
beginning after December 31, 2006, shall be zero.''.
(b) Modification of Limitation on Use of Credit for Prior
Year Minimum Tax Liability.--Subsection (c) of section 53 of
the Internal Revenue Code of 1986 (relating to credit for
prior year minimum tax liability) is amended to read as
follows:
``(c) Limitation.--
``(1) In general.--Except as provided in paragraph (2), the
credit allowable under subsection (a) for any taxable year
shall not exceed the excess (if any) of--
``(A) the regular tax liability of the taxpayer for such
taxable year reduced by the sum of the credits allowable
under subparts A, B, D, E, and F of this part, over
``(B) the tentative minimum tax for the taxable year.
``(2) Taxable years beginning after 2006.--In the case of
any taxable year beginning after 2006, the credit allowable
under subsection (a) to a taxpayer other than a corporation
for any taxable year shall not exceed 90 percent of the
regular tax liability of the taxpayer for such taxable year
reduced by the sum of the credits allowable under subparts A,
B, D, E, and F of this part.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.

SEC. 3. ONE-TIME ESTIMATED TAX SAFE HARBOR FOR ALTERNATIVE
MINIMUM TAX LIABILITY.

For purposes of any taxable year beginning in 2006, in the
case of any individual with respect to whom there was no
liability for the tax imposed under section 55 of the
Internal Revenue Code of 1986 for the preceding taxable
year--
(1) the tax shown on the return under section
6654(d)(1)(B)(i) of such Code shall be reduced (but not below
zero) by the amount of tax imposed by such section 55 shown
on the return,
(2) the tax for the taxable year under section
6654(d)(2)(B)(i) of such Code (before multiplication by the
applicable percentage) shall be reduced (but not below zero)
by the tax imposed by such section 55, and
(3) the amount of tax for the taxable year for purposes of
section 6654(e)(1) of such Code shall be reduced (but not
below zero) by the amount of tax imposed by such section 55.
______

By Mr. NELSON of Florida (for himself and Mr. Whitehouse):
S. 2295. A bill to amend the Help America Vote Act of 2002 to require
a voter-verified permanent paper ballot under title III of such Act,
and for other purposes; to the Committee on Rules and Administration.
Mr. NELSON of Florida. Mr. President, today, joined by Senator
Whitehouse, I am introducing the Voter Confidence and Increased
Accessibility Act of 2007. As we enter the month of November, next
year's national election is just one year away, and we must act now to
ensure that the next time Americans go to the polls nationwide, they
have the chance to cast their vote and have their vote counted as
intended.
Our bill will require all voting machines--beginning in the 2008
election--to produce a paper record of each ballot that can be verified
by the voter before a ballot is submitted to be counted. This also is
the first bill to propose a nationwide ban, by 2012, on the use of
touch-screen voting machines in Federal elections.
We are introducing this bill to address the problems that have
plagued the accuracy and integrity of our voting systems. We know all
too well the problems that have occurred in Florida--in the 2000
election and, most recently in the 2006 congressional election in the
13th Congressional District--but my State is not alone. Recent studies
in California and elsewhere have demonstrated that touch-screen voting
machines are unreliable and vulnerable to error.
The bottom line is we have to ensure that every vote is counted--and
counted properly. Citizens must have confidence in the integrity of
their elections.
Florida, under the leadership of Governor Charlie Crist and Secretary
of State Kurt Browning, has acted decisively, and on a bipartisan
basis, to require the replacement of paperless touch-screen voting
machines throughout the State with optical scan equipment. By using op-
scan machines, voters will have the opportunity to complete a paper
ballot that will be verified by the voter before it is electronically
counted. By 2012, touchscreen voting machines will be a thing of the
past in Florida. Using Florida's model, the bill I am filing today will
phase out touch-screen voting machines in Federal elections nationwide
by 2012.
This morning I met with Secretary Browning to discuss my intent to
file legislation modeled on Florida's initiative. Secretary Browning
indicated his support for a ban on touch-screen voting machines.
In addition to banning touch-screen machines by 2012, and requiring a
voter-verified paper ballot for every vote that is cast, beginning in
November 2008, other highlights of the bill are as follows.
It will require and fund routine random audits to be conducted by
hand count in 3 percent of precincts in all Federal elections. If the
vote is very close, that percentage goes up to 5 or 10 percent. On the
other hand, if the winning candidate received more than 80 percent of
the vote, no audit of that race will be necessary.
The bill will authorize adequate funding--$1 billion--for replacing
and upgrading voting equipment.
Our legislation will require that every voter has the opportunity to
vote by paper ballot if the voting machine in their precinct is broken,
and beginning in 2012, for any reason.
Finally, the bill will establish an arms-length relationship between
test labs and voting machine vendors, to prevent any efforts, malicious
or otherwise, to compromise the accuracy and integrity of voting
machines.
A companion version of our bill was introduced in the House by
Representative Rush Holt of New Jersey, and was passed out of
Committee. The bill now awaits a vote by the full Chamber. I hope my
colleagues in the House will act to pass this important legislation,
and I invite my colleagues in the Senate to join me by co-sponsoring
our bill in the Senate. Florida not only provides a model for what can
be done to increase our confidence in the integrity of elections, it
provides a model for

[[Page S13695]]

how to do it--on a bipartisan basis, with the support of election
officials, voting integrity groups and, most importantly, the millions
of voters in my state who have a constitutional right to vote and want
to be sure that their votes are counted--and counted accurately.
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
placed in the Record, as follows:

S. 2295

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 ``Voter Confidence and
Increased Accessibility Act of 2007''.

SEC. 2. PROMOTING ACCURACY, INTEGRITY, AND SECURITY THROUGH
VOTER-VERIFIED PERMANENT PAPER BALLOT.

(a) Ballot Verification and Audit Capacity.--
(1) In general.--Section 301(a)(2) of the Help America Vote
Act of 2002 (42 U.S.C. 15481(a)(2)) is amended to read as
follows:
``(2) Ballot verification and audit capacity.--
``(A) Voter-verified paper ballots.--
``(i) Verification.--(I) The voting system shall require
the use of or produce an individual, durable, voter-verified,
paper ballot of the voter's vote that shall be created by or
made available for inspection and verification by the voter
before the voter's vote is cast and counted. For purposes of
this subclause, the term `individual, durable, voter-
verified, paper ballot' includes (but is not limited to) a
paper ballot marked by the voter for the purpose of being
counted by hand or read by an optical scanner or other
similar device, a paper ballot prepared by the voter to be
mailed to an election official (whether from a domestic or
overseas location), a paper ballot created through the use of
a nontabulating ballot marking device or system, or, in the
case of an election held before 2012, a paper ballot produced
by a direct recording electronic voting machine, so long as
in each case the voter is permitted to verify the ballot in a
paper form in accordance with this subparagraph.
``(II) The voting system shall provide the voter with an
opportunity to correct any error made by the system in the
voter-verified paper ballot before the permanent voter-
verified paper ballot is preserved in accordance with clause
(ii).
``(III) The voting system shall not preserve the voter-
verified paper ballots in any manner that makes it possible,
at any time after the ballot has been cast, to associate a
voter with the record of the voter's vote.
``(ii) Preservation.--The individual, durable, voter-
verified, paper ballot produced in accordance with clause (i)
shall be used as the official ballot for purposes of any
recount or audit conducted with respect to any election for
Federal office in which the voting system is used, and shall
be preserved--

``(I) in the case of votes cast at the polling place on the
date of the election, within the polling place in a secure
manner; or
``(II) in any other case, in a secure manner which is
consistent with the manner employed by the jurisdiction for
preserving paper ballots in general.

``(iii) Manual audit capacity.--(I) Each paper ballot
produced pursuant to clause (i) shall be suitable for a
manual audit equivalent to that of a paper ballot voting
system, and shall be counted by hand in any recount or audit
conducted with respect to any election for Federal office.
``(II) In the event of any inconsistencies or
irregularities between any electronic vote tallies and the
vote tallies determined by counting by hand the individual,
durable, voter-verified, paper ballots produced pursuant to
clause (i), and subject to subparagraph (B), the individual,
durable, voter-verified, paper ballots shall be the true and
correct record of the votes cast.
``(B) Special rule for treatment of disputes when paper
ballots have been shown to be compromised.--
``(i) In general.--In the event that--

``(I) there is any inconsistency between any electronic
vote tallies and the vote tallies determined by counting by
hand the individual, durable, voter-verified, paper ballots
produced pursuant to subparagraph (A)(i) with respect to any
election for Federal office; and
``(II) it is demonstrated by clear and convincing evidence
(as determined in accordance with the applicable standards in
the jurisdiction involved) in any recount, audit, or contest
of the result of the election that the paper ballots have
been compromised (by damage or mischief or otherwise) and
that a sufficient number of the ballots have been so
compromised that the result of the election could be changed,

the determination of the appropriate remedy with respect to
the election shall be made in accordance with applicable
State law, except that the electronic tally shall not be used
as the exclusive basis for determining the official certified
vote tally.
``(ii) Rule for consideration of ballots associated with
each voting machine.--For purposes of clause (i), only the
paper ballots deemed compromised, if any, shall be considered
in the calculation of whether or not the result of the
election could be changed due to the compromised paper
ballots.''.
(2) Conforming amendment clarifying applicability of
alternative language accessibility.--Section 301(a)(4) of
such Act (42 U.S.C. 15481(a)(4)) is amended by inserting
``(including the paper ballots required to be produced under
paragraph (2) and the notices required under paragraphs (7)
and (13)(C)'' after ``voting system''.
(3) Other conforming amendments.--Section 301(a)(1) of such
Act (42 U.S.C. 15481(a)(1)) is amended--
(A) in subparagraph (A)(i), by striking ``counted'' and
inserting ``counted, in accordance with paragraphs (2) and
(3)'';
(B) in subparagraph (A)(ii), by striking ``counted'' and
inserting ``counted, in accordance with paragraphs (2) and
(3)'';
(C) in subparagraph (A)(iii), by striking ``counted'' each
place it appears and inserting ``counted, in accordance with
paragraphs (2) and (3)''; and
(D) in subparagraph (B)(ii), by striking ``counted'' and
inserting ``counted, in accordance with paragraphs (2) and
(3)''.
(b) Accessibility and Ballot Verification for Individuals
With Disabilities.--
(1) In general.--Section 301(a)(3)(B) of such Act (42
U.S.C. 15481(a)(3)(B)) is amended to read as follows:
``(B)(i) satisfy the requirement of subparagraph (A)
through the use of at least one voting system equipped for
individuals with disabilities, including nonvisual and
enhanced visual accessibility for the blind and visually
impaired, at each polling place; and
``(ii) meet the requirements of subparagraph (A) and
paragraph (2)(A) by using a system that--
``(I) allows the voter to privately and independently
verify the permanent paper ballot through the presentation,
in accessible form, of the printed or marked vote selections
from the same printed or marked information that would be
used for any vote counting or auditing;
``(II) ensures that the entire process of ballot
verification and vote casting is equipped for individuals
with disabilities, including nonvisual and enhanced visual
accessibility for the blind and visually impaired; and
``(III) does not preclude the supplementary use of Braille
or tactile ballots; and''.
(2) Specific requirement of study, testing, and development
of accessible ballot verification mechanisms.--
(A) Study and reporting.--Subtitle C of title II of such
Act (42 U.S.C. 15381 et seq.) is amended--
(i) by redesignating section 247 as section 248; and
(ii) by inserting after section 246 the following new
section:

``SEC. 247. STUDY AND REPORT ON ACCESSIBLE BALLOT
VERIFICATION MECHANISMS.

``(a) Study and Report.--The Director of the National
Institute of Standards and Technology shall study, test, and
develop best practices to enhance the accessibility of ballot
verification mechanisms for individuals with disabilities,
for voters whose primary language is not English, and for
voters with difficulties in literacy, including best
practices for the mechanisms themselves and the processes
through which the mechanisms are used. In carrying out this
section, the Director shall specifically investigate existing
and potential methods or devices, including non-electronic
devices, that will assist such individuals and voters in
creating voter-verified paper ballots and presenting or
transmitting the information printed or marked on such
ballots back to such individuals and voters.
``(b) Coordination With Grants for Technology
Improvements.--The Director shall coordinate the activities
carried out under subsection (a) with the research conducted
under the grant program carried out by the Commission under
section 271, to the extent that the Director and Commission
determine necessary to provide for the advancement of
accessible voting technology.
``(c) Deadline.--The Director shall complete the
requirements of subsection (a) not later than December 31,
2008.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out subsection (a)
$3,000,000, to remain available until expended.''.
(B) Clerical amendment.--The table of contents of such Act
is amended--
(i) by redesignating the item relating to section 247 as
relating to section 248; and
(ii) by inserting after the item relating to section 246
the following new item:

``Sec. 247. Study and report on accessible ballot verification
mechanisms.''.

(3) Clarification of accessibility standards under
voluntary voting system guidance.--In adopting any voluntary
guidance under subtitle B of title III of the Help America
Vote Act with respect to the accessibility of the paper
ballot verification requirements for individuals with
disabilities, the Election Assistance Commission shall
include and apply the same accessibility standards applicable
under the voluntary guidance adopted for accessible voting
systems under such subtitle.
(c) Additional Voting System Requirements.--
(1) Requirements described.--Section 301(a) of such Act (42
U.S.C. 15481(a)) is amended by adding at the end the
following new paragraphs:

[[Page S13696]]

``(7) Instruction reminding voters of importance of
verifying paper ballot.--
``(A) In general.--The appropriate election official at
each polling place shall cause to be placed in a prominent
location in the polling place which is clearly visible from
the voting booths a notice, in large font print accessible to
the visually impaired, advising voters that the paper ballots
representing their votes shall serve as the vote of record in
all audits and recounts in elections for Federal office, and
that they should not leave the voting booth until confirming
that such paper ballots accurately record their vote.
``(B) Systems for individuals with disabilities.--All
voting systems equipped for individuals with disabilities
shall present or transmit in accessible form the statement
referred to in subparagraph (A), as well as an explanation of
the verification process described in paragraph (3)(B)(ii).
``(8) Prohibiting use of uncertified election-dedicated
voting system technologies; disclosure requirements.--
``(A) In general.--A voting system used in an election for
Federal office in a State may not at any time during the
election contain or use any election-dedicated voting system
technology--
``(i) which has not been certified by the State for use in
the election; and
``(ii) which has not been deposited with an accredited
laboratory described in section 231 to be held in escrow and
disclosed in accordance with this section.
``(B) Requirement for and restrictions on disclosure.--An
accredited laboratory under section 231 with whom an
election-dedicated voting system technology has been
deposited shall--
``(i) hold the technology in escrow; and
``(ii) disclose technology and information regarding the
technology to another person if--

``(I) the person is a qualified person described in
subparagraph (C) who has entered into a nondisclosure
agreement with respect to the technology which meets the
requirements of subparagraph (D); or
``(II) the laboratory is required to disclose the
technology to the person under State law, in accordance with
the terms and conditions applicable under such law.

``(C) Qualified persons described.--With respect to the
disclosure of election-dedicated voting system technology by
a laboratory under subparagraph (B)(ii)(I), a `qualified
person' is any of the following:
``(i) A governmental entity with responsibility for the
administration of voting and election-related matters for
purposes of reviewing, analyzing, or reporting on the
technology.
``(ii) A party to pre- or post-election litigation
challenging the result of an election or the administration
or use of the technology used in an election, including but
not limited to election contests or challenges to the
certification of the technology, or an expert for a party to
such litigation, for purposes of reviewing or analyzing the
technology to support or oppose the litigation, and all
parties to the litigation shall have access to the technology
for such purposes.
``(iii) A person not described in clause (i) or (ii) who
reviews, analyzes, or reports on the technology solely for an
academic, scientific, technological, or other investigation
or inquiry concerning the accuracy or integrity of the
technology.
``(D) Requirements for nondisclosure agreements.--A
nondisclosure agreement entered into with respect to an
election-dedicated voting system technology meets the
requirements of this subparagraph if the agreement--
``(i) is limited in scope to coverage of the technology
disclosed under subparagraph (B) and any trade secrets and
intellectual property rights related thereto;
``(ii) does not prohibit a signatory from entering into
other nondisclosure agreements to review other technologies
under this paragraph;
``(iii) exempts from coverage any information the signatory
lawfully obtained from another source or any information in
the public domain;
``(iv) remains in effect for not longer than the life of
any trade secret or other intellectual property right related
thereto;
``(v) prohibits the use of injunctions barring a signatory
from carrying out any activity authorized under subparagraph
(C), including injunctions limited to the period prior to a
trial involving the technology;
``(vi) is silent as to damages awarded for breach of the
agreement, other than a reference to damages available under
applicable law;
``(vii) allows disclosure of evidence of crime, including
in response to a subpoena or warrant;
``(viii) allows the signatory to perform analyses on the
technology (including by executing the technology), disclose
reports and analyses that describe operational issues
pertaining to the technology (including vulnerabilities to
tampering, errors, risks associated with use, failures as a
result of use, and other problems), and describe or explain
why or how a voting system failed or otherwise did not
perform as intended; and
``(ix) provides that the agreement shall be governed by the
trade secret laws of the applicable State.
``(E) Election-dedicated voting system technology
defined.--For purposes of this paragraph:
``(i) In general.--The term `election-dedicated voting
system technology' means the following:

``(I) The source code used for the trusted build and its
file signatures.
``(II) A complete disk image of the pre-build, build
environment, and any file signatures to validate that it is
unmodified.
``(III) A complete disk image of the post-build, build
environment, and any file signatures to validate that it is
unmodified.
``(IV) All executable code produced by the trusted build
and any file signatures to validate that it is unmodified.
``(V) Installation devices and software file signatures.

``(ii) Exclusion.--Such term does not include `commercial-
off-the-shelf' software and hardware defined under under the
2005 voluntary voting system guidelines adopted by the
Commission under section 222.
``(9) Prohibition of use of wireless communications devices
in voting systems.--No voting device upon which ballots are
programmed or votes are cast or tabulated shall contain, use,
or be accessible by any wireless, power-line, or concealed
communication device, except that enclosed infrared
communications devices which are certified for use in such
device by the State and which cannot be used for any remote
or wide area communications or used without the knowledge of
poll workers shall be permitted.
``(10) Prohibiting connection of system or transmission of
system information over the internet.--
``(A) In general.--No voting device upon which ballots are
programmed or votes are cast or tabulated shall be connected
to the Internet at any time.
``(B) Rule of construction.--Nothing contained in this
paragraph shall be deemed to prohibit the Commission from
conducting the studies under section 242 or to conduct other
similar studies under any other provision of law in a manner
consistent with this paragraph.
``(11) Security standards for voting systems used in
federal elections.--
``(A) In general.--No voting system may be used in an
election for Federal office unless the manufacturer of such
system and the election officials using such system meet the
applicable requirements described in subparagraph (B).
``(B) Requirements described.--The requirements described
in this subparagraph are as follows:
``(i) The manufacturer and the election officials shall
document the secure chain of custody for the handling of all
software, hardware, vote storage media, ballots, and voter-
verified ballots used in connection with voting systems, and
shall make the information available upon request to the
Commission.
``(ii) The manufacturer shall disclose to an accredited
laboratory under section 231 and to the appropriate election
official any information required to be disclosed under
paragraph (8).
``(iii) After the appropriate election official has
certified the election-dedicated and other voting system
software for use in an election, the manufacturer may not--

``(I) alter such software; or
``(II) insert or use in the voting system any software not
certified by the State for use in the election.

``(iv) At the request of the Commission--

``(I) the appropriate election official shall submit
information to the Commission regarding the State's
compliance with this subparagraph; and
``(II) the manufacturer shall submit information to the
Commission regarding the manufacturer's compliance with this
subparagraph.

``(C) Development and publication of best practices on
documentation of secure chain of custody.--Not later than
August 1, 2008, the Commission shall develop and make
publicly available best practices regarding the requirement
of subparagraph (B)(i).
``(D) Disclosure of secure chain of custody.--The
Commission shall make information provided to the Commission
under subparagraph (B)(i) available to any person upon
request.
``(12) Durability and readability requirements for
ballots.--
``(A) Durability requirements for paper ballots.--
``(i) In general.--All voter-verified paper ballots
required to be used under this Act (including the paper
ballots provided to voters under paragraph (13)) shall be
marked, printed, or recorded on durable paper.
``(ii) Definition.--For purposes of this Act, paper is
`durable' if it is capable of withstanding multiple counts
and recounts by hand without compromising the fundamental
integrity of the ballots, and capable of retaining the
information marked, printed, or recorded on them for the full
duration of a retention and preservation period of 22 months.
``(B) Readability requirements for machine-marked or
printed paper ballots.--All voter-verified paper ballots
completed by the voter through the use of a marking or
printing device shall be clearly readable by the voter
without assistance (other than eyeglasses or other personal
vision enhancing devices) and by a scanner or other device
equipped for individuals with disabilities.
``(13) Mandatory availability of paper ballots at polling
places.--
``(A) Requiring ballots to be offered and provided.--
``(i) In general.--The appropriate election official at
each polling place in any election for Federal office shall
offer each individual

[[Page S13697]]

who is eligible to cast a vote in the election at the polling
place the opportunity to cast the vote using a blank pre-
printed paper ballot which the individual may mark by hand
and which is not produced by the direct recording electronic
voting machine. The official shall provide the individual
with the ballot and the supplies necessary to mark the
ballot.
``(ii) Special rule for locations using dre voting
systems.--In the case of a polling place that uses a direct
recording electronic voting device, if the individual accepts
the offer to cast the vote using a paper ballot, the official
shall ensure (to the greatest extent practicable) that the
waiting period for the individual to cast a vote is not
greater than the waiting period for an individual who does
not agree to cast the vote using such a paper ballot under
this paragraph.
``(B) Treatment of ballot.--Any paper ballot which is cast
by an individual under this paragraph shall be counted and
otherwise treated as a regular ballot for all purposes
(including by incorporating it into the final unofficial vote
count (as defined by the State) for the precinct) and not as
a provisional ballot, unless the individual casting the
ballot would have otherwise been required to cast a
provisional ballot.
``(C) Posting of notice.--The appropriate election official
shall ensure there is prominently displayed at each polling
place a notice that describes the obligation of the official
to offer individuals the opportunity to cast votes using a
pre-printed blank paper ballot.
``(D) Training of election officials.--The chief State
election official shall ensure that election officials at
polling places in the State are aware of the requirements of
this paragraph, including the requirement to display a notice
under subparagraph (C), and are aware that it is a violation
of the requirements of this title for an election official to
fail to offer an individual the opportunity to cast a vote
using a blank pre-printed paper ballot.''.
(2) Requiring laboratories to meet standards prohibiting
conflicts of interest as condition of accreditation for
testing of voting system hardware and software.--
(A) In general.--Section 231(b) of such Act (42 U.S.C.
15371(b)) is amended by adding at the end the following new
paragraphs:
``(3) Prohibiting conflicts of interest; ensuring
availability of results.--
``(A) In general.--A laboratory may not be accredited by
the Commission for purposes of this section unless--
``(i) the laboratory certifies that the only compensation
it receives for the testing carried out in connection with
the certification, decertification, and recertification of
the manufacturer's voting system hardware and software is the
payment made from the Testing Escrow Account under paragraph
(4);
``(ii) the laboratory meets such standards as the
Commission shall establish (after notice and opportunity for
public comment) to prevent the existence or appearance of any
conflict of interest in the testing carried out by the
laboratory under this section, including standards to ensure
that the laboratory does not have a financial interest in the
manufacture, sale, and distribution of voting system hardware
and software, and is sufficiently independent from other
persons with such an interest;
``(iii) the laboratory certifies that it will permit an
expert designated by the Commission to observe any testing
the laboratory carries out under this section; and
``(iv) the laboratory, upon completion of any testing
carried out under this section, discloses the test protocols,
results, and all communication between the laboratory and the
manufacturer to the Commission.
``(B) Availability of results.--Upon receipt of information
under subparagraph (A), the Commission shall make the
information available promptly to election officials and the
public.
``(4) Procedures for conducting testing; payment of user
fees for compensation of accredited laboratories.--
``(A) Establishment of escrow account.--The Commission
shall establish an escrow account (to be known as the
`Testing Escrow Account') for making payments to accredited
laboratories for the costs of the testing carried out in
connection with the certification, decertification, and
recertification of voting system hardware and software.
``(B) Schedule of fees.--In consultation with the
accredited laboratories, the Commission shall establish and
regularly update a schedule of fees for the testing carried
out in connection with the certification, decertification,
and recertification of voting system hardware and software,
based on the reasonable costs expected to be incurred by the
accredited laboratories in carrying out the testing for
various types of hardware and software.
``(C) Requests and payments by manufacturers.--A
manufacturer of voting system hardware and software may not
have the hardware or software tested by an accredited
laboratory under this section unless--
``(i) the manufacturer submits a detailed request for the
testing to the Commission; and
``(ii) the manufacturer pays to the Commission, for deposit
into the Testing Escrow Account established under
subparagraph (A), the applicable fee under the schedule
established and in effect under subparagraph (B).
``(D) Selection of laboratory.--Upon receiving a request
for testing and the payment from a manufacturer required
under subparagraph (C), the Commission shall select at random
(to the greatest extent practicable), from all laboratories
which are accredited under this section to carry out the
specific testing requested by the manufacturer, an accredited
laboratory to carry out the testing.
``(E) Payments to laboratories.--Upon receiving a
certification from a laboratory selected to carry out testing
pursuant to subparagraph (D) that the testing is completed,
along with a copy of the results of the test as required
under paragraph (3)(A)(iv), the Commission shall make a
payment to the laboratory from the Testing Escrow Account
established under subparagraph (A) in an amount equal to the
applicable fee paid by the manufacturer under subparagraph
(C)(ii).
``(5) Dissemination of additional information on accredited
laboratories.--
``(A) Information on testing.--Upon completion of the
testing of a voting system under this section, the Commission
shall promptly disseminate to the public the identification
of the laboratory which carried out the testing.
``(B) Information on status of laboratories.--The
Commission shall promptly notify Congress, the chief State
election official of each State, and the public whenever--
``(i) the Commission revokes, terminates, or suspends the
accreditation of a laboratory under this section;
``(ii) the Commission restores the accreditation of a
laboratory under this section which has been revoked,
terminated, or suspended; or
``(iii) the Commission has credible evidence of significant
security failure at an accredited laboratory.''.
(B) Conforming amendments.--Section 231 of such Act (42
U.S.C. 15371) is further amended--
(i) in subsection (a)(1), by striking ``testing,
certification,'' and all that follows and inserting the
following: ``testing of voting system hardware and software
by accredited laboratories in connection with the
certification, decertification, and recertification of the
hardware and software for purposes of this Act.'';
(ii) in subsection (a)(2), by striking ``testing,
certification,'' and all that follows and inserting the
following: ``testing of its voting system hardware and
software by the laboratories accredited by the Commission
under this section in connection with certifying,
decertifying, and recertifying the hardware and software.'';
(iii) in subsection (b)(1), by striking ``testing,
certification, decertification, and recertification'' and
inserting ``testing''; and
(iv) in subsection (d), by striking ``testing,
certification, decertification, and recertification'' each
place it appears and inserting ``testing''.
(C) Deadline for establishment of standards, escrow
account, and schedule of fees.--The Election Assistance
Commission shall establish the standards described in section
231(b)(3) of the Help America Vote Act of 2002 and the
Testing Escrow Account and schedule of fees described in
section 231(b)(4) of such Act (as added by subparagraph (A))
not later than January 1, 2008.
(D) Authorization of appropriations.--There are authorized
to be appropriated to the Election Assistance Commission such
sums as may be necessary to carry out the Commission's duties
under paragraphs (3) and (4) of section 231 of the Help
America Vote Act of 2002 (as added by subparagraph (A)).
(3) Special certification of ballot durability and
readability requirements for states not currently using
durable paper ballots.--
(A) In general.--If any of the voting systems used in a
State for the regularly scheduled 2006 general elections for
Federal office did not require the use of or produce durable
paper ballots, the State shall certify to the Election
Assistance Commission not later than 90 days after the date
of the enactment of this Act that the State will be in
compliance with the requirements of sections 301(a)(2) and
301(a)(12) of the Help America Vote of 2002, as added or
amended by this subsection, in accordance with the deadlines
established under this Act, and shall include in the
certification the methods by which the State will meet the
requirements.
(B) Certifications by states that require changes to state
law.--In the case of a State that requires State legislation
to carry out an activity covered by any certification
submitted under this paragraph, the State shall be permitted
to make the certification notwithstanding that the
legislation has not been enacted at the time the
certification is submitted and such State shall submit an
additional certification once such legislation is enacted.
(4) Grants for research on development of election-
dedicated voting system software.--
(A) In general.--Subtitle D of title II of the Help America
Vote Act of 2002 (42 U.S.C. 15401 et seq.) is amended by
adding at the end the following new part:

``PART 7--GRANTS FOR RESEARCH ON DEVELOPMENT OF ELECTION-DEDICATED
VOTING SYSTEM SOFTWARE

``SEC. 297. GRANTS FOR RESEARCH ON DEVELOPMENT OF ELECTION-
DEDICATED VOTING SYSTEM SOFTWARE.

``(a) In General.--The Director of the National Science
Foundation (hereafter in this

[[Page S13698]]

part referred to as the `Director') shall make grants to not
fewer than 3 eligible entities to conduct research on the
development of election-dedicated voting system software.
``(b) Eligibility.--An entity is eligible to receive a
grant under this part if it submits to the Director (at such
time and in such form as the Director may require) an
application containing--
``(1) certifications regarding the benefits of operating
voting systems on election-dedicated software which is easily
understandable and which is written exclusively for the
purpose of conducting elections;
``(2) certifications that the entity will use the funds
provided under the grant to carry out research on how to
develop voting systems that run on election-dedicated
software and that will meet the applicable requirements for
voting systems under title III; and
``(3) such other information and certifications as the
Director may require.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated for grants under this section
$1,500,000 for each of fiscal years 2008 and 2009, to remain
available until expended.''.
(B) Clerical amendment.--The table of contents of such Act
is amended by adding at the end of the items relating to
subtitle D of title II the following:

``Part 7--Grants for Research on Development of Election-Dedicated
Voting System Software

``Sec. 297. Grants for research on development of election-dedicated
voting system software.''.

(d) Availability of Additional Funding To Enable States To
Meet Costs of Revised Requirements.--
(1) Extension of requirements payments for meeting revised
requirements.--Section 257(a) of the Help America Vote Act of
2002 (42 U.S.C. 15407(a)) is amended by adding at the end the
following new paragraph:
``(4) For fiscal year 2008, $1,000,000,000, except that any
funds provided under the authorization made by this paragraph
shall be used by a State only to meet the requirements of
title III which are first imposed on the State pursuant to
the amendments made by section 2 of the Voter Confidence and
Increased Accessibility Act of 2007, or to otherwise modify
or replace its voting systems in response to such
amendments.''.
(2) Use of revised formula for allocation of funds.--
Section 252(b) of such Act (42 U.S.C. 15402(b)) is amended to
read as follows:
``(b) State Allocation Percentage Defined.--
``(1) In general.--Except as provided in paragraph (2), the
`State allocation percentage' for a State is the amount
(expressed as a percentage) equal to the quotient of--
``(A) the voting age population of the State (as reported
in the most recent decennial census); and
``(B) the total voting age population of all States (as
reported in the most recent decennial census).
``(2) Special rule for payments for fiscal year 2008.--
``(A) In general.--In the case of the requirements payment
made to a State for fiscal year 2008, the `State allocation
percentage' for a State is the amount (expressed as a
percentage) equal to the quotient of--
``(i) the sum of the number of noncompliant precincts in
the State and 50% of the number of partially noncompliant
precincts in the State; and
``(ii) the sum of the number of noncompliant precincts in
all States and 50% of the number of partially noncompliant
precincts in all States.
``(B) Noncompliant precinct defined.--In this paragraph, a
`noncompliant precinct' means any precinct (or equivalent
location) within a State for which the voting system used to
administer the regularly scheduled general election for
Federal office held in November 2006 did not meet either of
the requirements described in subparagraph (D).
``(C) Partially noncompliant precinct defined.--In this
paragraph, a `partially noncompliant precinct' means any
precinct (or equivalent location) within a State for which
the voting system used to administer the regularly scheduled
general election for Federal office held in November 2006 met
only one of the requirements described in subparagraph (D).
``(D) Requirements described.--The requirements described
in this subparagraph with respect to a voting system are as
follows:
``(i) The primary voting system required the use of or
produced durable paper ballots (as described in section
301(a)(12)(A)) for every vote cast.
``(ii) The voting system provided that the entire process
of paper ballot verification was equipped for individuals
with disabilities.''.
(3) Revised conditions for receipt of funds.--Section 253
of such Act (42 U.S.C. 15403) is amended--
(A) in subsection (a), by striking ``A State is eligible''
and inserting ``Except as provided in subsection (f), a State
is eligible''; and
(B) by adding at the end the following new subsection:
``(f) Special Rule for Fiscal Year 2008.--
``(1) In general.--Notwithstanding any other provision of
this part, a State is eligible to receive a requirements
payment for fiscal year 2008 if, not later than 90 days after
the date of the enactment of the Voter Confidence and
Increased Accessibility Act of 2007, the chief executive
officer of the State, or designee, in consultation and
coordination with the chief State election official--
``(A) certifies to the Commission the number of
noncompliant and partially noncompliant precincts in the
State (as defined in section 252(b)(2)); and
``(B) files a statement with the Commission describing the
State's need for the payment and how the State will use the
payment to meet the requirements of title III (in accordance
with the limitations applicable to the use of the payment
under section 257(a)(4)).
``(2) Certifications by states that require changes to
state law.--In the case of a State that requires State
legislation to carry out any activity covered by any
certification submitted under this subsection, the State
shall be permitted to make the certification notwithstanding
that the legislation has not been enacted at the time the
certification is submitted and such State shall submit an
additional certification once such legislation is enacted.''.
(4) Permitting use of funds for reimbursement for costs
previously incurred.--Section 251(c)(1) of such Act (42
U.S.C. 15401(c)(1)) is amended by striking the period at the
end and inserting the following: ``, or as a reimbursement
for any costs incurred after November 2004 in meeting the
requirements of title III which are imposed pursuant to the
amendments made by section 2 of the Voter Confidence and
Increased Accessibility Act of 2007 or in otherwise upgrading
or replacing voting systems in a manner consistent with such
amendments (so long as the voting systems meet any of the
requirements that apply with respect to elections for Federal
office held in 2012 and each succeeding year).''.
(5) Rule of construction regarding states receiving other
funds for replacing punch card, lever, or other voting
machines.--Nothing in the amendments made by this subsection
or in any other provision of the Help America Vote Act of
2002 may be construed to prohibit a State which received or
was authorized to receive a payment under title I or II of
such Act for replacing punch card, lever, or other voting
machines from receiving or using any funds which are made
available under the amendments made by this subsection.
(6) Rule of construction regarding use of funds received in
prior years.--
(A) In general.--Nothing contained in this Act or the Help
America Vote Act of 2002 may be construed to prohibit a State
from using funds received under title I or II of the Help
America Vote Act of 2002--
(i) to purchase or acquire by other means a voting system
that meets the requirements of paragraphs (2) and (3) of
section 301 of the Help America Vote Act of 2002 (as amended
by this Act); or
(ii) to retrofit a voting system so that it will meet such
requirements,
in order to replace or upgrade (as the case may be) voting
systems purchased with funds received under the Help America
Vote Act of 2002 that do not require the use of or produce
paper ballots.
(B) Waiver of notice and comment requirements.--The
requirements of subparagraphs (A), (B), and (C) of section
254(a)(11) of the Help America Vote Act of 2002 shall not
apply to any State using funds received under such Act for
the purposes described in clause (i) or (ii) of subparagraph
(A).
(7) Effective date.--The amendments made by this subsection
shall apply with respect to fiscal years beginning with
fiscal year 2008.
(e) Restriction on Use of Direct Recording Electronic
Voting Systems.--Section 301 of such Act (42 U.S.C. 15481),
as amended by this section, is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) through (d), respectively; and
(2) by inserting after subsection (a) the following new
subsection:
``(b) Restriction on Use of Direct Recording Electronic
Voting Systems.--A direct recording electronic voting system
may not be used to administer any election for Federal office
held in 2012 or any subsequent year.''
(f) Effective Date For New Requirements.--Section 301(d) of
such Act (42 U.S.C. 15481(d)), as redesignated by subsection
(e), is amended to read as follows:
``(d) Effective Date.--
``(1) In general.--Except as provided in paragraph (2),
each State and jurisdiction shall be required to comply with
the requirements of this section on and after January 1,
2006.
``(2) Special rule for certain requirements.--
``(A) In general.--Except as provided in subparagraph (B),
the requirements of this section which are first imposed on a
State and jurisdiction pursuant to the amendments made by
section 2 of the Voter Confidence and Increased Accessibility
Act of 2007 shall apply with respect to the regularly
scheduled general election for Federal office held in
November 2008 and each succeeding election for Federal
office.
``(B) Delay for jurisdictions using certain paper ballot
printers or certain paper ballot-equipped accessible machines
in 2006.--
``(i) Delay.--In the case of a jurisdiction described in
clause (ii), subparagraph (A) shall apply to the jurisdiction
as if the reference in such subparagraph to `the regularly
scheduled general election for Federal

[[Page S13699]]

office held in November 2008 and each succeeding election for
Federal office' were a reference to `elections for Federal
office occurring during 2012 and each succeeding year', but
only with respect to the following requirements of this
section:

``(I) Paragraph (3)(B)(ii)(I) and (II) of subsection (a)
(relating to access to verification from the durable paper
ballot).
``(II) Paragraph (12) of subsection (a) (relating to
durability and readability requirements for ballots).

``(ii) Jurisdictions described.--A jurisdiction described
in this clause is--

``(I) a jurisdiction which used thermal reel-to-reel voter
verified paper ballot printers attached to direct recording
electronic voting machines for the administration of the
regularly scheduled general election for Federal office held
in November 2006 and which will continue to use such printers
(or other printers which meet the requirements of paragraph
(3)(B)(ii)(I) and (II) of subsection (a)) attached to such
voting machines for the administration of elections for
Federal office held in years before 2012; or
``(II) a jurisdiction which used voting machines which met
the accessibility requirements of paragraph (3) of subsection
(a) (as in effect with respect to such election) for the
administration of the regularly scheduled general election
for Federal office held in November 2006 and which used or
produced a paper ballot, and which will continue to use such
voting machines (or other voting machines which meet the
requirements of this section) for the administration of
elections for Federal office held in years before 2012.''.

SEC. 3. ENHANCEMENT OF ENFORCEMENT OF HELP AMERICA VOTE ACT
OF 2002.

Section 401 of such Act (42 U.S.C. 15511) is amended--
(1) by striking ``The Attorney General'' and inserting
``(a) In General.--The Attorney General''; and
(2) by adding at the end the following new subsections:
``(b) Filing of Complaints by Aggrieved Persons.--
``(1) In general.--A person who is aggrieved by a violation
of section 301, 302, or 303 which has occurred, is occurring,
or is about to occur may file a written, signed, notarized
complaint with the Attorney General describing the violation
and requesting the Attorney General to take appropriate
action under this section. The Attorney General shall
immediately provide a copy of a complaint filed under the
previous sentence to the entity responsible for administering
the State-based administrative complaint procedures described
in section 402(a) for the State involved.
``(2) Response by attorney general.--The Attorney General
shall respond to each complaint filed under paragraph (1), in
accordance with procedures established by the Attorney
General that require responses and determinations to be made
within the same (or shorter) deadlines which apply to a State
under the State-based administrative complaint procedures
described in section 402(a)(2). The Attorney General shall
immediately provide a copy of the response made under the
previous sentence to the entity responsible for administering
the State-based administrative complaint procedures described
in section 402(a) for the State involved.
``(c) Clarification of Availability of Private Right of
Action.--Nothing in this section may be construed to prohibit
any person from bringing an action under section 1979 of the
Revised Statutes of the United States (42 U.S.C. 1983)
(including any individual who seeks to enforce the
individual's right to a voter-verified paper ballot, the
right to have the voter-verified paper ballot counted in
accordance with this Act, or any other right under subtitle A
of title III) to enforce the uniform and nondiscriminatory
election technology and administration requirements under
sections 301, 302, and 303.
``(d) No Effect on State Procedures.--Nothing in this
section may be construed to affect the availability of the
State-based administrative complaint procedures required
under section 402 to any person filing a complaint under this
subsection.''.

SEC. 4. REQUIREMENT FOR MANDATORY MANUAL AUDITS BY HAND
COUNT.

(a) Mandatory Manual Audits.--Title III of the Help America
Vote Act of 2002 (42 U.S.C. 15481 et seq.) is amended by
adding at the end the following new subtitle:

``Subtitle C--Mandatory Manual Audits

``SEC. 321. REQUIRING AUDITS OF RESULTS OF ELECTIONS.

``(a) Requiring Audits.--
``(1) In general.--In accordance with this subtitle, each
State shall administer, without advance notice to the
precincts selected, audits of the results of elections for
Federal office held in the State (and, at the option of the
State or jurisdiction involved, of elections for State and
local office held at the same time as such election)
consisting of random hand counts of the voter-verified paper
ballots required to be produced and preserved pursuant to
section 301(a)(2).
``(2) Exception for certain elections.--A State shall not
be required to administer an audit of the results of an
election for Federal office under this subtitle if the
winning candidate in the election--
``(A) had no opposition on the ballot; or
``(B) received 80% or more of the total number of votes
cast in the election, as determined on the basis of the final
unofficial vote count.
``(b) Determination of Entity Conducting Audits;
Application of GAO Independence Standards.--The State shall
administer audits under this subtitle through an entity
selected for such purpose by the State in accordance with
such criteria as the State considers appropriate consistent
with the requirements of this subtitle, except that the
entity must meet the general standards established by the
Comptroller General and as set forth in the Comptroller
General's Government Auditing Standards to ensure the
independence (including the organizational independence) of
entities performing financial audits, attestation
engagements, and performance audits.
``(c) References to Election Auditor.--In this subtitle,
the term `Election Auditor' means, with respect to a State,
the entity selected by the State under subsection (b).

``SEC. 322. NUMBER OF BALLOTS COUNTED UNDER AUDIT.

``(a) In General.--Except as provided in subsection (b),
the number of voter-verified paper ballots which will be
subject to a hand count administered by the Election Auditor
of a State under this subtitle with respect to an election
shall be determined as follows:
``(1) In the event that the unofficial count as described
in section 323(a)(1) reveals that the margin of victory
between the two candidates receiving the largest number of
votes in the election is less than 1 percent of the total
votes cast in that election, the hand counts of the voter-
verified paper ballots shall occur in at least 10 percent of
all precincts or equivalent locations (or alternative audit
units used in accordance with the method provided for under
subsection (b)) in the Congressional district involved (in
the case of an election for the House of Representatives) or
the State (in the case of any other election for Federal
office).
``(2) In the event that the unofficial count as described
in section 323(a)(1) reveals that the margin of victory
between the two candidates receiving the largest number of
votes in the election is greater than or equal to 1 percent
but less than 2 percent of the total votes cast in that
election, the hand counts of the voter-verified paper ballots
shall occur in at least 5 percent of all precincts or
equivalent locations (or alternative audit units used in
accordance with the method provided for under subsection (b))
in the Congressional district involved (in the case of an
election for the House of Representatives) or the State (in
the case of any other election for Federal office).
``(3) In the event that the unofficial count as described
in section 323(a)(1) reveals that the margin of victory
between the two candidates receiving the largest number of
votes in the election is equal to or greater than 2 percent
of the total votes cast in that election, the hand counts of
the voter-verified paper ballots shall occur in at least 3
percent of all precincts or equivalent locations (or
alternative audit units used in accordance with the method
provided for under subsection (b)) in the Congressional
district involved (in the case of an election for the House
of Representatives) or the State (in the case of any other
election for Federal office).
``(b) Use of Alternative Mechanism.--Notwithstanding
subsection (a), a State may adopt and apply an alternative
mechanism to determine the number of voter-verified paper
ballots which will be subject to the hand counts required
under this subtitle with respect to an election, so long as
the alternative mechanism uses the voter-verified paper
ballots to conduct the audit and the National Institute of
Standards and Technology determines that the alternative
mechanism will be at least as statistically effective in
ensuring the accuracy of the election results as the
procedure under this subtitle.

``SEC. 323. PROCESS FOR ADMINISTERING AUDITS.

``(a) In General.--The Election Auditor of a State shall
administer an audit under this section of the results of an
election in accordance with the following procedures:
``(1) Within 24 hours after the State announces the final
unofficial vote count (as defined by the State) in each
precinct in the State, the Election Auditor shall determine
and then announce the precincts or equivalent locations (or
alternative audit units used in accordance with the method
provided under section 322(b)) in the State in which it will
administer the audits.
``(2) With respect to votes cast at the precinct or
equivalent location on or before the date of the election
(other than provisional ballots described in paragraph (3)),
the Election Auditor shall administer the hand count of the
votes on the voter-verified paper ballots required to be
produced and preserved under section 301(a)(2)(A) and the
comparison of the count of the votes on those ballots with
the final unofficial count of such votes as announced by the
State.
``(3) With respect to votes cast other than at the precinct
on the date of the election (other than votes cast before the
date of the election described in paragraph (2)) or votes
cast by provisional ballot on the date of the election which
are certified and counted by the State on or after the date
of the election, including votes cast by absent uniformed
services voters and overseas voters under the Uniformed and
Overseas Citizens Absentee Voting Act, the Election Auditor
shall administer the hand count of the votes on the
applicable voter-verified paper ballots required to be
produced and preserved under section 301(a)(2)(A) and the
comparison of the count of the votes on those ballots with

[[Page S13700]]

the final unofficial count of such votes as announced by the
State.
``(b) Use of Personnel.--In administering the audits, the
Election Auditor may utilize the services of the personnel of
the State or jurisdiction, including election administration
personnel and poll workers, without regard to whether or not
the personnel have professional auditing experience.
``(c) Location.--The Election Auditor shall administer an
audit of an election--
``(1) at the location where the ballots cast in the
election are stored and counted after the date of the
election or such other appropriate and secure location agreed
upon by the Election Auditor and the individual that is
responsible under State law for the custody of the ballots;
and
``(2) in the presence of the personnel who under State law
are responsible for the custody of the ballots.
``(d) Special Rule in Case of Delay in Reporting Absentee
Vote Count.--In the case of a State in which the final count
of absentee and provisional votes is not announced until
after the expiration of the 7-day period which begins on the
date of the election, the Election Auditor shall initiate the
process described in subsection (a) for administering the
audit not later than 24 hours after the State announces the
final unofficial vote count for the votes cast at the
precinct or equivalent location on or before the date of the
election, and shall initiate the administration of the audit
of the absentee and provisional votes pursuant to subsection
(a)(3) not later than 24 hours after the State announces the
final unofficial count of such votes.
``(e) Additional Audits if Cause Shown.--
``(1) In general.--If the Election Auditor finds that any
of the hand counts administered under this section do not
match the final unofficial tally of the results of an
election, the Election Auditor shall administer hand counts
under this section of such additional precincts (or
equivalent jurisdictions) as the Election Auditor considers
appropriate to resolve any concerns resulting from the audit
and ensure the accuracy of the results.
``(2) Establishment and publication of procedures governing
additional audits.--Not later than August 1, 2008, each State
shall establish and publish procedures for carrying out the
additional audits under this subsection, including the means
by which the State shall resolve any concerns resulting from
the audit with finality and ensure the accuracy of the
results.
``(f) Public Observation of Audits.--Each audit conducted
under this section shall be conducted in a manner that allows
public observation of the entire process.

``SEC. 324. SELECTION OF PRECINCTS.

``(a) In General.--Except as provided in subsection (c),
the selection of the precincts in the State in which the
Election Auditor of the State shall administer the hand
counts under this subtitle shall be made by the Election
Auditor on an entirely random basis using a uniform
distribution in which all precincts in a Congressional
district have an equal chance of being selected, in
accordance with procedures adopted by the National Institute
of Standards and Technology, except that at least one
precinct shall be selected at random in each county.
``(b) Public Selection.--The random selection of precincts
under subsection (a) shall be conducted in public, at a time
and place announced in advance.
``(c) Mandatory Selection of Precincts Established
Specifically For Absentee Ballots.--If a State establishes a
separate precinct for purposes of counting the absentee
ballots cast in an election and treats all absentee ballots
as having been cast in that precinct, and if the state does
not make absentee ballots sortable by precinct and include
those ballots in the hand count administered with respect to
that precinct, the State shall include that precinct among
the precincts in the State in which the Election Auditor
shall administer the hand counts under this subtitle.
``(d) Deadline for Adoption of Procedures by Commission.--
The National Institute of Standards and Technology shall
adopt the procedures described in subsection (a) not later
than March 31, 2008, and shall publish them in the Federal
Register upon adoption.

``SEC. 325. PUBLICATION OF RESULTS.

``(a) Submission to Commission.--As soon as practicable
after the completion of an audit under this subtitle, the
Election Auditor of a State shall-- submit to the Commission
the results of the audit, and shall include in the submission
a comparison of the results of the election in the precinct
as determined by the Election Auditor under the audit and the
final unofficial vote count in the precinct as announced by
the State and all undervotes, overvotes, blank ballots, and
spoiled, voided, or cancelled ballots, as well as a list of
any discrepancies discovered between the initial, subsequent,
and final hand counts administered by the Election Auditor
and such final unofficial vote count and any explanation for
such discrepancies, broken down by the categories of votes
described in paragraphs (2) and (3) of section 323(a).
``(b) Publication by Commission.--Immediately after
receiving the submission of the results of an audit from the
Election Auditor of a State under subsection (a), the
Commission shall publicly announce and publish the
information contained in the submission.
``(c) Delay in Certification of Results by State.--
``(1) Prohibiting certification until completion of
audits.--No State may certify the results of any election
which is subject to an audit under this subtitle prior to--
``(A) to the completion of the audit (and, if required, any
additional audit conducted under section 323(e)(1)) and the
announcement and submission of the results of each such audit
to the Commission for publication of the information required
under this section; and
``(B) the completion of any procedure established by the
State pursuant to section 323(e)(2) to resolve discrepancies
and ensure the accuracy of results.
``(2) Deadline for completion of audits of presidential
elections.--In the case of an election for electors for
President and Vice President which is subject to an audit
under this subtitle, the State shall complete the audits and
announce and submit the results to the Commission for
publication of the information required under this section in
time for the State to certify the results of the election and
provide for the final determination of any controversy or
contest concerning the appointment of such electors prior to
the deadline described in section 6 of title 3, United States
Code.

``SEC. 326. PAYMENTS TO STATES.

``(a) Payments For Costs of Conducting Audits.--In
accordance with the requirements and procedures of this
section, the Commission shall make a payment to a State to
cover the costs incurred by the State in carrying out this
subtitle with respect to the elections that are the subject
of the audits conducted under this subtitle.
``(b) Certification of Compliance and Anticipated Costs.--
``(1) Certification required.--In order to receive a
payment under this section, a State shall submit to the
Commission, in such form as the Commission may require, a
statement containing--
``(A) a certification that the State will conduct the
audits required under this subtitle in accordance with all of
the requirements of this subtitle;
``(B) a notice of the reasonable costs incurred or the
reasonable costs anticipated to be incurred by the State in
carrying out this subtitle with respect to the elections
involved; and
``(C) such other information and assurances as the
Commission may require.
``(2) Amount of payment.--The amount of a payment made to a
State under this section shall be equal to the reasonable
costs incurred or the reasonable costs anticipated to be
incurred by the State in carrying out this subtitle with
respect to the elections involved, as set forth in the
statement submitted under paragraph (1).
``(3) Timing of notice.--The State may not submit a notice
under paragraph (1) until candidates have been selected to
appear on the ballot for all of the elections for Federal
office which will be the subject of the audits involved.
``(c) Timing of Payments.--The Commission shall make the
payment required under this section to a State not later than
30 days after receiving the notice submitted by the State
under subsection (b).
``(d) Recoupment of Overpayments.--No payment may be made
to a State under this section unless the State agrees to
repay to the Commission the excess (if any) of--
``(1) the amount of the payment received by the State under
this section with respect to the elections involved; over
``(2) the actual costs incurred by the State in carrying
out this subtitle with respect to the elections involved.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to the Commission for fiscal
year 2008 and each succeeding fiscal year $100,000,000 for
payments under this section.

``SEC. 327. EXCEPTION FOR ELECTIONS SUBJECT TO RECOUNT UNDER
STATE LAW PRIOR TO CERTIFICATION.

``(a) Exception.--This subtitle does not apply to any
election for which a recount under State law will commence
prior to the certification of the results of the election,
including but not limited to a recount required automatically
because of the margin of victory between the 2 candidates
receiving the largest number of votes in the election, but
only if each of the following applies to the recount:
``(1) The recount commences prior to the determination and
announcement by the Election Auditor under section 323(a)(1)
of the precincts in the State in which it will administer the
audits under this subtitle.
``(2) If the recount would apply to fewer than 100% of the
ballots cast in the election--
``(A) the number of ballots counted will be at least as
many as would be counted if an audit were conducted with
respect to the election in accordance with this subtitle; and
``(B) the selection of the precincts in which the recount
will be conducted will be made in accordance with the random
selection procedures applicable under section 324.
``(3) The recount for the election meets the requirements
of section 323(f) (relating to public observation).
``(4) The State meets the requirements of section 325
(relating to the publication of results and the delay in the
certification of results) with respect to the recount.
``(b) Clarification of Effect on Other Requirements.--
Nothing in this section may be construed to waive the
application of any other provision of this Act to any
election (including the requirement set forth in section
301(a)(2) that the voter verified paper

[[Page S13701]]

ballots serve as the vote of record and shall be counted by
hand in all audits and recounts, including audits and
recounts described in this subtitle).

``SEC. 328. EFFECTIVE DATE.

``This subtitle shall apply with respect to elections for
Federal office beginning with the regularly scheduled general
elections held in November 2008.''.
(b) Availability of Enforcement Under Help America Vote Act
of 2002.--Section 401 of such Act (42 U.S.C. 15511), as
amended by section 3, is amended--
(1) in subsection (a), by striking the period at the end
and inserting the following: ``, or the requirements of
subtitle C of title III.'';
(2) in subsection (b)(1), by striking ``303'' and inserting
``303, or subtitle C of title III,''; and
(3) in subsection (c)--
(A) by striking ``subtitle A'' and inserting ``subtitles A
or C'', and
(B) by striking the period at the end and inserting the
following: ``, or the requirements of subtitle C of title
III.''.
(c) Guidance on Best Practices for Alternative Audit
Mechanisms.--
(1) In general.--Not later than May 1, 2008, the Director
of the National Institute for Standards and Technology shall
establish guidance for States that wish to establish
alternative audit mechanisms under section 322(b) of the Help
America Vote Act of 2002 (as added by subsection (a)). Such
guidance shall be based upon scientifically and statistically
reasonable assumptions for the purpose of creating an
alternative audit mechanism that will be at least as
effective in ensuring the accuracy of election results and as
transparent as the procedure under subtitle C of title III of
such Act (as so added).
(2) Authorization of appropriations.--There are authorized
to be appropriated to carry out paragraph (1) $100,000, to
remain available until expended.
(d) Clerical Amendment.--The table of contents of such Act
is amended by adding at the end of the items relating to
title III the following:

``Subtitle C--Mandatory Manual Audits

``Sec. 321. Requiring audits of results of elections.
``Sec. 322. Number of ballots counted under audit.
``Sec. 323. Process for administering audits.
``Sec. 324. Selection of precincts.
``Sec. 325. Publication of results.
``Sec. 326. Payments to States.
``Sec. 327. Exception for elections subject to recount under State law
prior to certification.
``Sec. 328. Effective date.''.

SEC. 5. REPEAL OF EXEMPTION OF ELECTION ASSISTANCE COMMISSION
FROM CERTAIN GOVERNMENT CONTRACTING
REQUIREMENTS.

(a) In General.--Section 205 of the Help America Vote Act
of 2002 (42 U.S.C. 15325) is amended by striking subsection
(e).
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to contracts entered into by the
Election Assistance Commission on or after the date of the
enactment of this Act.

SEC. 6. EFFECTIVE DATE.

Except as otherwise provided, this Act and the amendments
made by this Act shall apply with respect to the regularly
scheduled general election for Federal office in November
2008 and each succeeding election for Federal office.
______

By Ms. SNOWE:
S. 2297. A bill to require the FCC to conduct an economic study on
the impact that low-power FM stations will have on full-power
commercial FM stations; to the Committee on Commerce, Science, and
Transportation.
Ms. SNOWE. Mr. President, I rise today to introduce legislation that
would require the Federal Communications Commission to fulfill its
obligation of conducting an economic study on the impact low-power FM
stations have on full-power commercial stations. The reason it is
imperative the FCC perform this study is because we don't have a
comprehensive understanding as to the effect that low-power FM stations
have on their full-power counterparts.
When Congress imposed the three-adjacent-channel restriction on low-
power licensees in 2001, we tasked the FCC with conducting two studies
because we were concerned about the interference LPFM stations could
cause with being too close in frequency to full-power commercial
stations. The two studies were to determine the impact that the
presence of a low-power channel would have with respect to interference
with a nearby full-power station and the economic impact the presence
of low power stations would bring to the commercial licensees. However,
the FCC completed only one study--the interference analysis.
My legislation calls for the FCC to complete an economic study on the
impact LPFM stations have on full-power commercial radio stations
within 18 months and report its findings to Congress.
Volunteer, non-profit LPFM stations have found a niche but they also
provide competition to full-power stations without having to incur the
same costs as those commercial stations, particularly with the absence
of licensing fees and employees' salaries. Most of us have raised
serious concerns about the continued media consolidation that is
occurring and negatively affecting localism and diversity.
Part of the reason for this consolidation is because local,
independently owned stations are seeing lower profit margins, which are
making it more and more difficult to continue broadcasting. Due to
shrinking profit, these stations either go out of business or are sold
out to larger, nationwide companies. The buy-out of local stations by
out-of-town firms does more to harm diverse and locally oriented
broadcasting than anything else. So we must actively investigate this
trend and determine what is contributing to the diminishing returns of
independently owned stations.
Some may question why perform this study since Mitre Corporation, the
company that performed the initial interference study, recommended the
FCC should not undertake the additional expense of a formal listener
test program or a Phase II economic analysis. The reason is because the
Phase II economic analysis was only on the potential radio interference
impact of LPFM on incumbent full-power stations and did not take into
account other economic impacts that were outside the scope of that
effort. The Government must ensure that by opening up low-power FM
broadcast opportunities we are not causing any undue harm to the full-
power radio stations, which we have obligations to as the issuer of
their licenses.
I hope my colleagues join me in supporting the critical legislation.
______

By Ms. SNOWE:
S. 2298. A bill to prohibit an applicant from obtaining a low-power
FM license if an applicant has engaged in any manner in the unlicensed
operation of any station in violation of section 301 of the
Communications Act of 1934; to the Committee on Commerce, Science, and
Transportation.
Ms. SNOWE. Mr. President, I rise today to introduce legislation that
would preserve the Federal Communications Commission's right to deny a
low-power FM license if the applicant has run afoul of basic,
longstanding Federal restrictions on the transmission of radio waves,
such as if the applicant has been previously fined for running an
unlicensed ``pirate'' radio station.
Before the issuance of low-power licenses, numerous individuals and
entities operated low-power FM stations without a broadcast license.
These ``pirate'' stations many times broadcasted in open defiance of
the Commission's initial ban on LPFM broadcasts. From January 1998 to
February 2000, the Commission shut down, on average, more than a dozen
unlicensed radio stations each month. On several separate occasions,
these unlicensed radio stations actually disrupted air traffic control
communications.
Congress, through the enactment of the Radio Broadcast Preservation
Act of 2000, directed the FCC to modify its low-power FM rules to
``prohibit any applicant from obtaining a low-power FM license if the
applicant has engaged in any manner in the unlicensed operation of any
station in violation of section 301 of the Communications Act of 1934''
so the Commission could curtail these pirate stations and disruption
occurrence.
My concern is by completely repealing section 632, which pending
legislation proposes, it hinders the ability of the FCC to prohibit
applicants from receiving low-power FM licenses. The Commission is
responsible for making sure broadcasters follow the basic rules and
regulations that are inherently essential to having a broadcast service
that serves public interest since broadcasters are utilizing public
spectrum. This legislation retains a targeted response to the problem
of pirate broadcasting.
The commission is to grant a broadcast license only if the ``public
interest, convenience, and necessity would be served.'' Completely
repealing Section 632 could hinder the FCC from upholding this
responsibility with respect to low-power FM broadcasters. For this

[[Page S13702]]

reason, we must act to preserve the FCC's authority to be able to
prohibit low-power FM licenses to applicants that have violated basic
tenets of broadcast policy--it is only logical that we do this to
ensure businesses that use the public spectrum, in any capacity,
adhered to laws government has put in place to serve and protect the
public interest.
I hope my colleagues join me in supporting the critical legislation.
______

By Ms. SNOWE:
S. 2299. A bill to require the Secretary of Agriculture to establish
an advisory committee to develop recommendations regarding the national
aquatic animal health plan developed by the National Aquatic Animal
Health Task Force, and for other purposes; to the Committee on
Agriculture, Nutrition, and Forestry.
Ms. SNOWE. Mr. President, I rise today to introduce legislation that
I believe is vital to the prosperity and competitiveness of an element
of agriculture that is often overlooked: American aquaculture. Some
experts estimate that to meet the demand for healthy, fresh
aquacultural products, global production will have to double in the
next 40 years. Yet in spite of this skyrocketing demand, America is at
risk of being left behind by other nations who have thus far exhibited
greater foresight than we have; putting into place a comprehensive
infrastructure for sustainable seafood. While it is true that American
aquaculture sales exceeded an impressive one billion dollars in 2005,
this was a pittance when compared to the $70 billion market worldwide.
In fact, in 2006 the U.S. had a trade deficit in seafood production of
$9.1 billion. With demand rising so dramatically globally and, in
particular, here at home, we cannot afford to fall behind any further.
That is why I have taken this opportunity to introduce the National
Aquatic Animal Health Act. This legislation will begin the process of
creating a national infrastructure that will attract investment,
protect the valuable stocks of our aquaculture farmers from disease,
and create a unique, flexible partnership between the Federal
Government, State agencies, and industry groups. Dedicated to
proactively monitoring seafood stocks for disease, this program will
employ the resources and vast field experience of the Animal and Plant
Health Inspection Service, or APHIS, coupled with experts on disease at
various State agriculture and marine agencies and industry
professionals to certify the health of all participating aquaculture
species.
Modeled after similar animal monitoring programs already in place at
APHIS, this program will provide a nationwide set of standards, the
kind of uniformity that is currently absent in the aquaculture
community. Instead, a myriad of jurisdictional conflicts and competing
regulations among various states creates uncertainty and erects
impediments to interstate commerce. But this bill is not a set of
onerous regulations imposed upon the private sector by a federal
agency; under the legislation, states are required to opt-in to the
program. They must choose to utilize the assets available in this
legislation to assist in preserving that state's particular aquaculture
products.
My home State of Maine has tremendously benefited from aquaculture.
There are nearly three dozen hatcheries in the State, handling both
finfish and shellfish. Our 3,500 miles of coastline has served as an
ideal incubator for the expansion of the aquaculture industry. The
total economic activity generated from the industry State-wide was over
$130 million last year, providing jobs for over 1,000 hard-working
Mainers. This sort of productivity was not always the case. In 2001,
nearly all the salmon stocks in Maine had to be eliminated due to an
outbreak of a crippling, infectious disease known as ISA. It took the
industry years to recover. Now, the Great Lakes face the threat of the
virulent pathogen known as VHS. It is my hope that with swift passage
of this legislation, we will no longer have to fear this kind of
widespread disease and the subsequent containment costs that could
cause inestimable damage to an industry that is struggling to catch up
to its global competitors. I urge my colleagues to support this
legislation as we move forward on debating Federal farm policy.
______

By Mr. KERRY (for himself and Ms. Snowe):
S. 2300. A bill to improve the Small Business Act, and for other
purposes; to the Committee on Small Business and Entrepreneurship.
Mr. KERRY. Mr. President, I am pleased today to be introducing
legislation, the Small Business Contracting Revitalization Act of 2007,
designed to protect the interests of small businesses in the Federal
marketplace.
As the Chairman of the Senate Committee on Small Business and
Entrepreneurship, I have focused a considerable amount of energy
promoting the interests of small businesses in the Federal marketplace.
The legislation that we are introducing today marks a critical step
forward in this process.
It is no secret that the Committee on Small Business and
Entrepreneurship places a great deal of importance on moving
legislation forward in a bipartisan manner, the members of my Committee
understand we represent the interests of all of our Nation's small
businesses, the most important and dynamic segment of our economy. And
nowhere is the bipartisan consensus stronger than in the area of
Federal procurement and ensuring that our Nation's small businesses
receive their fair share of procurement opportunities. I am pleased to
once again be introducing bipartisan legislation with the Committee's
ranking member, Senator Olympia Snowe. Regardless of who has chaired
the Committee during our tenure together, we have both worked hard to
improve small business Federal procurement opportunities.
The legislation we are introducing today has one ultimate purpose, to
expand opportunities for small businesses to contract with the Federal
government. And the reality is that small businesses need all the help
they can get with respect to accessing the Federal marketplace. In
fiscal year 2006 according to Eagle Eye Publishing, the Federal
Government missed its 23 percent contracting goal by 3 percent. That 3
percent represents more than $12 billion in lost contracting dollars
for small businesses. Service-disabled veterans fared the worst when it
came to Federal contracting with only 0.87 percent of Federal dollars
going to their firms. Women-owned firms only took in 2.57 percent of
Federal dollars while they make up more than 30 percent of all
privately held firms. Minority-owned firms continue to face barriers to
Federal contracting. The SDB and 8(a) program only accounted for 6.75
percent of Federal contracting. These numbers tell the stark story of
why this legislation is so important. If small business is the engine
that drives our economy when it comes to Federal procurement that
engine needs an overhaul. Our bill looks to make that overhaul as we
look at making improvements in five key areas.
The first area we attempt to make improvements in is the area of
contract bundling. Although contracting bundling may have started out
as a good idea it has now become the prime example of the old saying
that too much of a good thing can be very, very bad. The proliferation
of bundled contracts coupled with a decimation of contracting
professionals within the Government threatens to kill small businesses'
ability to compete for Federal contracts. In our hearing on July 18,
2007, on contracting, we heard testimony about the damage to
opportunities for small businesses because of the lack of oversight and
contract bundling.
Our bill looks to address those issues by ensuring: accountability of
senior agency management for all incidents of bundling; timely and
accurate reporting of contract bundling information by all Federal
agencies; and improved oversight of bundling regulation compliance by
the Small Business Administration.
The bill also ensures that contract consolidation decisions made by a
department or agency, other than the Defense Department and its
agencies, provide small businesses with appropriate opportunities to
participate as prime contractors and subcontractors.
The second area that this bill attempts to address is subcontracting.
The Committee heard in the July 18 hearing and in a May 22, 2007,
hearing on minority business about the challenges that many small
business subcontractors face when dealing with

[[Page S13703]]

prime contractors. Witnesses related that the way subcontracting
compliance is calculated creates opportunity for abuse. They also
related that many small businesses will spend time, money and effort
preparing bid proposals to be a part of a bid team and that once the
contract is won they never hear from the prime contractor again. Many
also complain about lack of timely payments after they have completed
work.
This bill attempts to deal with some of these issues by including
provisions designed to prevent misrepresentations in subcontracting by
prime contractors. To accomplish this, the bill: provides guidelines
and procedures for reviewing and evaluating subcontractor participation
in prime contracts; authorizes agency pilot programs that will grant
contractual incentives to prime contractors who exceed their small
business goals; and requires prime contractors who fail to comply with
subcontracting plans to fund mentor-protege assistance programs for
small businesses.
The third area that our legislation attempts to address is the
updating of the socioeconomic programs administered by the SBA. In our
first hearing of the year on January 31, 2007, we heard veterans with
service connected disabilities speak about the difficulty that they are
having accessing the Federal marketplace. It is clear that the
Government is not doing enough. In fiscal year 2006, service-disabled
veteran-owned businesses only got 0.87 percent of all Federal
procurement--well short of the 3 percent statutory goal.
Our bill will assist service-disabled veteran-owned small businesses
in obtaining Government contract and subcontract opportunities by
expanding the authority for sole-source awards to SDV firms. In
addition, the bill will allow: the surviving spouse of a service-
disabled veteran to retain the business's SDV designation for up to 10
years following the veteran's death; the SBA to accept SDV firm
certifications from the Department of Veterans Affairs; and the
establishment of an SDV mentor-protege program by the SBA. Our veterans
are returning from Iraq and Afghanistan, and we owe it to them to give
them every opportunity at fulfilling the dream of entrepreneurship.
We heard from women business owners in our September 20, 2007,
hearing, on women's entrepreneurship that the time has come to
implement the women's procurement program. The administration has
continually postponed implementing a women's procurement program that
became law 7 years ago. This bill tells SBA to get it done within 90
days.
Another program sorely needing our attention is the 8(a) program.
This program was created to assist socially and economically
disadvantaged small businesses, but, as we heard during the May 22,
2007, hearing, the financial threshold for inclusion in the program is
out-dated and too restrictive. The net-worth thresholds have not been
updated since 1989. This bill allows for an inflationary adjustment to
be made to the threshold and it excludes qualified retirement accounts
from consideration while calculating the threshold so that businesses
that belong in this program won't be shut out.
This bill also makes a number of changes to the HUBZone program. The
bill would expand HUBZones to areas adjacent to military installations
affected by BRAC. It will also make other changes that will expand the
HUBZone program to subcontracting as well as creating a mentor protege
program. I understand the stated goal of this program is to develop
areas of poverty through government contracting. And while I agree that
this is a laudable goal I also remember the controversy that surrounded
the creation of this program in 1996. I am keenly aware that the
HUBZone program was created to supplant race-conscious programs like
8(a) and the small disadvantaged business program. I fought hard to
preserve those programs then and I will continue to preserve and
strengthen those programs in the future. In the interests of moving
this bill forward and improving all of the programs I have agreed to
include these priorities for Ranking Member Snowe. I look forward to
working with her to move the priorities that are important to all of
the socio-economic groups in this legislation.
The fourth area that we intend to update is the acquisition process.
This bill aims to increase the number of small business contracting
opportunities by including additional provisions to reduce bundled
contracts and by reserving more contracts for small business concerns.
The bill accomplishes this by: authorizing small business set-asides in
multiple-award, multi-agency contracting vehicles; and requiring that
agencies include advance plans on small business spending in their
budgets and submit a report describing the impact of each bundled
contract awarded by an agency. The bill also directs the SBA to
annually report to Congress on small business participation in overseas
Government contracts.
The last area that we tackle in this legislation is small business
size and status integrity. The Committee has heard from a number of
small businesses about large businesses parading as small businesses.
During our July hearing we looked at the list of the top 25 small
businesses doing Federal contracting. On that list at least six clearly
recognizable multi-billion dollar corporations were among the top 25
small businesses listed including SAIC at number two. I have been
adamant that small business contracts must go to small businesses.
Small businesses are losing billions of dollars in opportunities
because of these size standard loopholes.
This bill attempts to address these issues by adding a new section,
Sec. 38, to the Small Business Act that is designed to strengthen the
Government's ability to enforce the size and status standards for small
business certification. To achieve this, the new section establishes
procedures for protests, through the SBA, of small business set-aside
awards made to large businesses; requires the development of training
programs for small business size standards; requires a government-wide
policy on prosecutions of size and status fraud; and requires a
detailed review of the size standards for small businesses by the SBA
within 1 year.
In closing, I want to reiterate that this has been a truly bi-
partisan effort and we look forward to working with the rest of the
Senate as we move this legislation forward. It is well past time to
provide greater opportunities for the thousands of small business
owners who wish to do business with the Federal government. I believe
that this legislation is a good step toward opening those doors of
opportunity.
I hope all of my colleagues will join us in supporting this bill Mr.
President, 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. 2300

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 ``Small
Business Contracting Revitalization 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. Definitions.

TITLE I--CONTRACT BUNDLING

Sec. 101. Leadership and oversight.
Sec. 102. Removal of impediments to contract bundling database
implementation.
Sec. 103. Contract consolidation.
Sec. 104. Small business teams.

TITLE II--SUBCONTRACTING INTEGRITY

Sec. 201. GAO recommendations on subcontracting misrepresentations.
Sec. 202. Small business subcontracting improvements.
Sec. 203. Evaluating subcontracting participation.
Sec. 204. Pilot program.

TITLE III--SMALL BUSINESS PROCUREMENT PROGRAMS IMPROVEMENT

Subtitle A--Service-Disabled Veteran-Owned Small Business Program

Sec. 321. Certification.
Sec. 322. Transition period for surviving spouses or permanent care
givers.
Sec. 323. Mentor-protege program.
Sec. 324. Improving opportunities for service disabled veterans.

Subtitle B--Women-Owned Small Business Program

Sec. 341. Implementation deadline.
Sec. 342. Certification.

Subtitle C--Small Disadvantaged Business Program

Sec. 361. Certification.
Sec. 362. Net worth threshold.

[[Page S13704]]

Sec. 363. Extension of socially and economically disadvantaged business
program.

Subtitle D--Historically Underutilized Business Zones Programs

Sec. 381. HUBZone small business concerns.
Sec. 382. Military base closings.

Subtitle E--BusinessLINC Program

Sec. 391. BusinessLINC Program.

TITLE IV--ACQUISITION PROCESS

Sec. 401. Procurement improvements.
Sec. 402. Reservation of prime contract awards for small businesses.
Sec. 403. GAO study of reporting systems.
Sec. 404. Micropurchase guidelines.
Sec. 405. Reporting on overseas contracts.
Sec. 406. Agency accountability.

TITLE V--SMALL BUSINESS SIZE AND STATUS INTEGRITY

Sec. 501. Policy and presumptions.
Sec. 502. Annual certification.
Sec. 503. Meaningful protests of small business size and status.
Sec. 504. Training for contracting and enforcement personnel.
Sec. 505. Updated size standards.
Sec. 506. Small business size and status for purpose of multiple award
contracts.

SEC. 2. DEFINITIONS.

In this Act--
(1) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof, respectively;
(2) the terms ``service-disabled veteran'', ``small
business concern'', and ``small business concern owned and
controlled by service-disabled veterans'' have the same
meanings as in section 3 of the Small Business Act (15 U.S.C.
632); and
(3) the terms ``small business concern owned and controlled
by socially and economically disadvantaged individuals'' and
``small business concern owned and controlled by women'' have
the same meanings as in section 8(d) of the Small Business
Act (15 U.S.C. 637(d)).

TITLE I--CONTRACT BUNDLING

SEC. 101. LEADERSHIP AND OVERSIGHT.

(a) In General.--Section 15 of the Small Business Act (15
U.S.C. 644) is amended by adding at the end the following:
``(q) Bundling Accountability Measures.--
``(1) Governmentwide accountability on bundling.--
``(A) Reinstatement of reporting requirements.--In addition
to submitting such annual reports on all incidents of
bundling to the Administrator as may be required under
Federal law, the head of each Federal agency shall submit an
annual report on all incidents of bundling to the
Administrator for Federal Procurement Policy.
``(B) Report to congress.--The Administrator shall promptly
review and annually report to Congress information on any
discrepancies between the reports on bundled contracts from
Federal agencies to the Administration, the Office of Federal
Procurement Policy, and the Federal procurement data system
described in subsection (c)(5).
``(2) Teaming requirements.--Each Federal agency shall
include in each solicitation for any contract award above the
substantial bundling threshold of such agency a provision
soliciting small business teams and joint ventures.
``(3) Implementation of comptroller general's
recommendations.--Not later than 270 days after the date of
enactment of this subsection, the Administrator, with the
concurrence of the Administrator for Federal Procurement
Policy, shall ensure that, in response to the recommendations
of the Comptroller General of the United States contained in
Report No. GAO-04-454, titled `Contract Management: Impact of
Strategy to Mitigate Effects of Contract Bundling Is
Uncertain'--
``(A) modifications are made to the Federal procurement
data system described in subsection (c)(5) to capture
information concerning the impact of bundling on small
business concerns;
``(B) the Administrator receives from each Federal agency
an annual report containing information concerning--
``(i) the number and dollar value of bundled contract
actions and contracts;
``(ii) benefit analyses (including the total dollars saved)
to justify why contracts are bundled;
``(iii) the number of small business concerns losing
Federal contracts because of bundling;
``(iv) how contractors awarded bundled contracts complied
with the agencies subcontracting plans; and
``(v) how mitigating actions, such as teaming arrangements,
provided increased contracting opportunities to small
business concerns.
``(4) Governmentwide review of bundling interpretations.--
``(A) In general.--The Administrator, with the concurrence
of the Chief Counsel for Advocacy and the Inspector General,
shall conduct a governmentwide review of the Federal agencies
legal interpretations of antibundling statutory and
regulatory requirements.
``(B) Report.--Not later than 1 year after the date of
enactment of this subsection, the Administrator shall submit
to Congress a report containing the findings of the review
conducted under subparagraph (A).
``(5) Agency policies on reduction of contract bundling.--
Not later than 180 days after the date of enactment of this
subsection, the head of each Federal agency shall, with
concurrence of the Administrator, issue a policy on the
reduction of contract bundling.
``(6) Best practices on contract bundling reduction and
mitigation.--Not later than 60 days after the date of the
enactment of this subsection, the Administrator shall publish
a guide on best practices to reduce contract bundling, as
directed by the Strategy and Report on Contract Bundling
issued by the Office of Management and Budget on October 29,
2002.
``(7) Contract bundling mitigation through
subcontracting.--
``(A) In general.--The Administrator shall ensure that each
State is assigned a commercial market representative to
provide services for that State.
``(B) Assignment.--A commercial market representative may
not be assigned by the Administrator to provide services for
more than 2 States.
``(8) Contract bundling oversight.--
``(A) Policy.--It is the policy of Congress that the
Administrator shall take appropriate actions to remedy
contract bundling oversight problems identified by the
Inspector General of the Administration in Report No. 5-14,
titled `Audit of the Contract Bundling Program'.
``(B) Corrective action.--
``(i) Assignment of procurement center representatives.--

``(I) In general.--The Administrator shall assign not fewer
than 1 procurement center representative to each major
procurement center, as designated by the Administrator under
section 8(l)(6).
``(II) Reporting.--The Administrator shall annually submit
to Congress a report--

``(aa) containing a list of designations of major
procurement centers in effect during the relevant fiscal
year;
``(bb) detailing the criteria for designations; and
``(cc) including a trend analysis concerning the impact of
reviews and placements of procurement center representatives
and breakout procurement center representatives.
``(ii) Timely review of bundled contracts.--Not later than
30 days after receiving a submission from a Federal agency,
the Administrator shall review any potential bundled contract
submitted to the Administrator for review by any Federal
agency.''.
(b) Technical Correction.--Section 15(g) of the Small
Business Act (15 U.S.C. 644(g)) is amended by striking
``Administrator of the Office of Federal Procurement Policy''
each place such term appears and inserting ``Administrator
for Federal Procurement Policy''.
(c) Procurement Center Representatives.--Section 15(l) of
the Small Business Act (15 U.S.C. 644(l)) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1)(A) A procurement center representative shall carry
out the activities described in paragraph (2), and shall be
an advocate for the maximum practicable utilization of small
business concerns, whenever appropriate.
``(B) A procurement center representative is authorized to
assist contracting officers in the performance of market
research in order to locate small business concerns, small
business concerns owned and controlled by socially and
economically disadvantaged individuals, small business
concerns owned and controlled by women, small business
concerns owned and controlled by service-disabled veterans,
small business concerns owned and controlled by veterans, and
HUBZone small business concerns capable of satisfying agency
needs.
``(C) Any procurement center representative assigned under
this paragraph shall be in addition to the representative
referred to in subsection (k).'';
(2) in paragraph (2)--
(A) by striking ``breakout'' each place that term appears;
(B) in subparagraph (F), by striking ``and'' at the end;
(C) in subparagraph (G), by striking the period at the end
and inserting a semicolon; and
(D) by adding at the end the following:
``(H)(i) identify and review solicitations that involve
contract consolidations for potential bundling of contract
requirements; and
``(ii) recommend small business concern participation as
contractors, including small business concern teams, whenever
appropriate, prior to the issuance of a solicitation
described in clause (i);
``(I) manage the activities of the breakout procurement
center representative, commercial marketing representative,
and technical assistant; and
``(J) submit an annual report to the Administrator
containing--
``(i) the number of proposed solicitations reviewed;
``(ii) the contract recommendations made on behalf of small
business concerns;
``(iii) the number and total amount of contracts broken out
from bundled or consolidated contracts for full and open
competition or small business concern set-aside; and
``(iv) the number and total amount of contract dollars
awarded to small business concerns as a result of actions
taken by the procurement center office.'';
(3) by redesignating paragraphs (4) through (7) as
paragraphs (5) through (8), respectively;

[[Page S13705]]

(4) by striking paragraph (3) and inserting the following:
``(3)(A) The Administrator may assign a breakout
procurement center representative, which shall be in addition
to any representative assigned under paragraph (1).
``(B) A breakout procurement center representative--
``(i) shall be an advocate for the breakout of items for
procurement through full and open competition or small
business concern set-aside, whenever appropriate, from new,
existing, bundled, or consolidated contracts; and
``(ii) is authorized--
``(I) to recommend small business concern participation in
existing contracts that were previously not reviewed for
small business concern participation;
``(II) to perform the duties described in paragraph (2), as
necessary to perform the due diligence required for a
breakout recommendation; and
``(III) to appeal the failure to act favorably on any
recommendation made under subclause (I).
``(C) Any appeal under subparagraph (B)(ii)(III) shall be
filed and processed in the same manner and subject to the
same conditions and limitations as an appeal filed by the
Administrator under subsection (a).
``(4)(A) The Administrator may assign a commercial
marketing representative to identify and market small
business concerns to large prime contractors and assist small
business concerns in identifying and obtaining subcontracts.
``(B) A commercial marketing representative assigned under
this paragraph shall--
``(i) conduct compliance reviews of prime contractors;
``(ii) counsel small business concerns on how to obtain
subcontracts;
``(iii) conduct matchmaking activities to facilitate
subcontracting to small business concerns;
``(iv) work in coordination with local small business
development centers, technical assistance centers, and other
regional economic development entities to identify small
business concerns capable of competing for Federal contracts;
and
``(v) provide orientation and training on the
subcontracting assistance program under section 8(d)(4)(E)
for both large and small business concerns.
``(C) Any commercial marketing representative assigned
under this paragraph shall be in addition to any procurement
center representative assigned under paragraph (1) or (3).'';
(5) in paragraph (5), as so designated by this section--
(A) in the second sentence, by inserting ``the procurement
center representative and'' before ``the breakout
procurement''; and
(B) in the third sentence, by striking ``(6)'';
(6) in paragraph (6), as so designated by this section--
(A) in subparagraph (A), by striking ``The breakout
procurement center representative'' and inserting the
following: ``The procurement center representative, breakout
procurement center representative, commercial marketing
representative,'';
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as subparagraph (B);
(7) in paragraph (7), as so designated by this section, by
striking ``other than commercial items'' and all that follows
through the end of the paragraph and inserting the following:
``commercial items for authorized resale, or other than
commercial items, and which has the potential to incur
significant savings or create significant procurement
opportunities for small business concerns as the result of
the placement of a breakout procurement center
representative.''; and
(8) in paragraph (8), as so designated by this section--
(A) by striking ``breakout'' each place the term appears;
and
(B) by adding at the end the following:
``(C) The procurement center representative shall conduct
training sessions to inform procurement staff at Federal
agencies about the reporting requirements for bundled
contracts and potentially bundled contracts, and how to work
effectively with the procurement center representative
assigned to such agencies to locate capable small business
concerns to meet the needs of the agencies.''.

SEC. 102. REMOVAL OF IMPEDIMENTS TO CONTRACT BUNDLING
DATABASE IMPLEMENTATION.

Section 15(p)(5)(B) of the Small Business Act (15 U.S.C.
644(p)(5)(B) is amended by striking ``procurement
information'' and all that follows through the end of the
subparagraph and inserting the following: ``any relevant
procurement information as may be required to implement this
section, and shall perform, at the request of the
Administrator, any other action necessary to enable
completion of the contract bundling database authorized by
this section by not later than 270 days after the date of
enactment of the Small Business Contracting Revitalization
Act of 2007.''.

SEC. 103. CONTRACT CONSOLIDATION.

The Small Business Act (15 U.S.C. 631 et seq.) is amended--
(1) by redesignating section 37 as section 39; and
(2) by inserting after section 36 the following:

``SEC. 37. CONTRACT CONSOLIDATION.

``(a) Policy.--Except for the Department of Defense and any
agency of that department, the head of each Federal
department or agency shall ensure that the decisions made by
that department or agency regarding consolidation of contract
requirements of that department or agency are made with a
view to providing small business concerns with appropriate
opportunities to participate in the procurements of that
department or agency as prime contractors and appropriate
opportunities to participate in such procurements as
subcontractors.
``(b) Limitation on Use of Acquisition Strategies Involving
Consolidation.--
``(1) In general.--Except for the Department of Defense and
any agency of that department, the head of a Federal
department or agency may not execute an acquisition strategy
that includes a consolidation of contract requirements of
that department or agency with a total value in excess of
$2,000,000, unless the senior procurement executive concerned
first--
``(A) conducts market research;
``(B) identifies any alternative contracting approaches
that would involve a lesser degree of consolidation of
contract requirements; and
``(C) determines that the consolidation is necessary and
justified.
``(2) Determination that consolidation is necessary and
justified.--A senior procurement executive may determine that
an acquisition strategy involving a consolidation of contract
requirements is necessary and justified for the purposes of
paragraph (1) if the benefits of the acquisition strategy
substantially exceed the benefits of each of the possible
alternative contracting approaches identified under
subparagraph (B) of that paragraph. However, savings in
administrative or personnel costs alone do not constitute,
for such purposes, a sufficient justification for a
consolidation of contract requirements in a procurement
unless the total amount of the cost savings is expected to be
substantial in relation to the total cost of the procurement.
``(3) Benefits to be considered.--Benefits considered for
the purposes of paragraphs (1) and (2) may include cost and,
regardless of whether quantifiable in dollar amounts--
``(A) quality;
``(B) acquisition cycle;
``(C) terms and conditions; and
``(D) any other benefit.
``(c) Definitions.--In this section--
``(1) the terms `consolidation of contract requirements'
and `consolidation', with respect to contract requirements of
a Federal department or agency, mean a use of a solicitation
to obtain offers for a single contract or a multiple award
contract to satisfy 2 or more requirements of that department
or agency for goods or services that have previously been
provided to, or performed for, that department or agency
under 2 or more separate contracts smaller in cost than the
total cost of the contract for which the offers are
solicited;
``(2) the term `multiple award contract' means--
``(A) a multiple award task order contract or delivery
order contract that is entered into under the authority of
sections 303H through 303K of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 253h through
253k); and
``(B) any other indeterminate delivery, indeterminate
quantity contract that is entered into by the head of a
Federal department or agency with 2 or more sources pursuant
to the same solicitation; and
``(3) the term `senior procurement executive concerned'
means, with respect to a Federal department or agency, the
official designated under section 16(c) of the Office of
Federal Procurement Policy Act (41 U.S.C. 414(c)) as the
senior procurement executive for that department or
agency.''.

SEC. 104. SMALL BUSINESS TEAMS.

If more than 1 business concern that is a small business
concern based on the size standards established under section
3(a) of the Small Business Act (15 U.S.C. 632(a)) is
participating in a contract that is subject to section 125.6
of title 13, Code of Federal Regulations (or any successor
thereto), the portion of that contract performed by each such
small business concern may be aggregated in determining
whether the performance of that contract is in compliance
with that section if--
(1) the head of the Federal department or agency concerned
makes a determination in the solicitation that such
aggregation will improve contracting opportunities for such
small business concerns; and
(2) the Administrator does not object to such aggregation.

TITLE II--SUBCONTRACTING INTEGRITY

SEC. 201. GAO RECOMMENDATIONS ON SUBCONTRACTING
MISREPRESENTATIONS.

Section 8 of the Small Business Act (15 U.S.C. 637) is
amended by adding at the end the following:
``(o) Prevention of Misrepresentations in Subcontracting;
Implementation of Comptroller General's Recommendations.--
``(1) Statement of policy.--It is the policy of Congress
that the recommendations of the Comptroller General of the
United States in Report No. 05-459, concerning oversight
improvements necessary to ensure maximum practicable
participation by small business concerns in subcontracting,
shall be implemented governmentwide, to the maximum extent
possible.
``(2) Contractor compliance.--Compliance of Federal prime
contractors with small

[[Page S13706]]

business subcontracting plans shall be evaluated as a
percentage of obligated prime contract dollars, as well as a
percentage of subcontracts awarded.
``(3) Issuance of agency policies.--Not later than 180 days
after the date of enactment of this subsection, the head of
each Federal agency shall issue a policy on small business
subcontracting compliance, including assignment of compliance
responsibilities between contracting, small business, and
program offices and periodic oversight and review
activities.''.

SEC. 202. SMALL BUSINESS SUBCONTRACTING IMPROVEMENTS.

(a) Certifications Required.--Section 8(d)(6) of the Small
Business Act (15 U.S.C. 637(d)(6)) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end, the following:
``(G) certification that the offeror or bidder will acquire
articles, equipment, supplies, services, or materials, or
obtain the performance of construction work from small
business concerns in the amount and quality used in preparing
and submitting to the contracting agency the bid or proposal,
unless such small business concerns are no longer in business
or can no longer meet the quality, quantity, or delivery
date.''.
(b) Penalties for False Certifications.--Section 16(f) of
the Small Business Act (15 U.S.C. 645(f)) is amended by
striking ``of this Act'' and inserting ``or the reporting
requirements of section 8(d)(11)''.

SEC. 203. EVALUATING SUBCONTRACTING PARTICIPATION.

(a) Significant Factors.--Section 8(d)(4)(G) of the Small
Business Act (15 U.S.C. 637(d)(4)(G)) is amended by striking
``a bundled'' and inserting ``any''.
(b) Evaluation Reports.--Section 8(d)(10) of the Small
Business Act (15 U.S.C. 637(d)(10)) is amended--
(1) by striking ``is authorized to'' and inserting
``shall'';
(2) in subparagraph (B), by striking ``and'' at the end;
(3) in subparagraph (C), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(D) report the results of each evaluation under
subparagraph (C) to the appropriate contracting officers.''.
(c) Centralized Database; Payments Pending Reports.--
Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is
amended--
(1) by redesignating paragraph (11) as paragraph (14); and
(2) by inserting after paragraph (10) the following:
``(11) Certification.--A report submitted by the prime
contractor under paragraph (6)(E) to determine the attainment
of a subcontract utilization goal under any subcontracting
plan entered into with a Federal agency under this subsection
shall contain the name and signature of the president or
chief executive officer of the contractor, certifying that
the subcontracting data provided in the report are accurate
and complete.
``(12) Centralized database.--The results of an evaluation
under paragraph (10)(C) shall be included in a national
centralized governmentwide database.
``(13) Payments pending reports.--Each Federal agency
having contracting authority shall ensure that the terms of
each contract for goods and services includes a provision
allowing the contracting officer of an agency to withhold an
appropriate amount of payment with respect to a contract
(depending on the size of the contract) until the date of
receipt of complete, accurate, and timely subcontracting
reports in accordance with paragraph (11).''.

SEC. 204. PILOT PROGRAM.

Section 8 of the Small Business Act (15 U.S.C. 637), as
amended by this Act, is amended by adding at the end the
following:
``(p) Subcontracting Incentives and Remedial Assistance.--
``(1) Pilot program on incentives and mentor-protege
remedial assistance.--
``(A) In general.--Each Federal agency is authorized to
operate a pilot program to provide contractual incentives to
prime contractors that exceed their small business
subcontracting goals and to direct prime contractors that
fail to comply with their small business subcontracting plans
to fund mentor-protege assistance for small business concerns
(in this subsection referred to as the `program').
``(B) Termination.--The authority under this paragraph
shall terminate on September 30, 2010.
``(2) Assessment of mentor-protege assistance funding.--The
mentor-protege assistance funding assessed by an agency under
the terms of the program shall be determined in relation to
the dollar amount by which the prime contractor failed its
small business subcontracting goals.
``(3) Expenditure of mentor-protege assistance funding.--
The prime contractor shall expend the mentor-protege
assistance funding assessed by the agency under the terms of
the program on mentor-protege assistance to small business
concerns, as provided by a mentor-protege agreement approved
by the relevant Federal agency.
``(4) Annual report required.--Each Federal agency
described in paragraph (1) shall submit an annual report to
the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives containing a detailed description of the
pilot program, as carried out by that agency, including the
number of participating companies, any incentives provided to
prime contractors, as appropriate, and the amounts and types
of mentor-protege assistance provided to small business
concerns.''.

TITLE III--SMALL BUSINESS PROCUREMENT PROGRAMS IMPROVEMENT

Subtitle A--Service-Disabled Veteran-Owned Small Business Program

SEC. 321. CERTIFICATION.

(a) Congressional Intent.--It is the intent of Congress
that the Administrator should accept certifications by the
Department of Veterans Affairs, under such criteria as the
Administrator may prescribe, by regulation or order, in
certifying small business concerns owned and controlled by
service-disabled veterans
(b) Regulations.--Before implementing subsection (a), the
Administrator shall promulgate regulations or orders ensuring
appropriate certification safeguards to be implemented by the
Administration and the Department of Veterans Affairs.
(c) Registration Portal.--The Administrator and the
Secretary of Veterans Affairs shall ensure that small
business concerns owned and controlled by service-disabled
veterans may apply to participate in all programs for such
small business concerns of the Administrator or the Secretary
through a single process.

SEC. 322. TRANSITION PERIOD FOR SURVIVING SPOUSES OR
PERMANENT CARE GIVERS.

Section 3(q)(2) of the Small Business Act (15 U.S.C.
632(q)(2)) is amended by striking subparagraph (B) and
inserting the following:
``(B) the management and daily business operations of which
are controlled--
``(i) by 1 or more service-disabled veterans or, in the
case of a veteran with permanent and severe disability, the
spouse or permanent care giver of such veteran; or
``(ii) for a period of not longer than 10 years after the
death of a service-disabled veteran, by a surviving spouse or
permanent caregiver thereof.''.

SEC. 323. MENTOR-PROTEGE PROGRAM.

The Administrator may establish a mentor-protege program
for small business concerns owned and controlled by service-
disabled veterans, modeled on the mentor-protege program of
the Administration for small businesses participating in
programs under section 8(a) of the Small Business Act (15
U.S.C. 637(a)).

SEC. 324. IMPROVING OPPORTUNITIES FOR SERVICE DISABLED
VETERANS.

Section 36(a) of the Small Business Act (15 U.S.C. 657f(a))
is amended--
(1) in the matter preceding paragraph (1), by striking
``may'' and inserting ``shall''; and
(2) in paragraph (1), by striking ``and the contracting
officer'' and all that follows through ``contracting
opportunity''.

Subtitle B--Women-Owned Small Business Program

SEC. 341. IMPLEMENTATION DEADLINE.

Not later than 90 days after the date of enactment of this
Act, the Administrator shall implement the procurement
program for small business concerns owned and controlled by
women under section 8(m) of the Small Business Act (15 U.S.C.
637(m)).

SEC. 342. CERTIFICATION.

(a) Congressional Intent.--It is the intent of Congress
that the Administrator should accept certifications by other
Federal agencies and State and local governments and
certifications from responsible national certifying entities,
under such criteria as the Administrator may prescribe, by
regulation or order, in certifying small business concerns
owned and controlled by women for purposes of the program
under section 8(m) of the Small Business Act (15 U.S.C.
637(m)).
(b) Regulations.--Prior to implementing subsection (a), the
Administrator shall promulgate regulations ensuring
appropriate certification safeguards to be implemented by the
Administration and the agencies and entities described in
subsection (a).

Subtitle C--Small Disadvantaged Business Program

SEC. 361. CERTIFICATION.

(a) Congressional Intent.--It is the intent of Congress
that the Administrator should accept certifications by other
Federal agencies and State and local governments and
certifications from responsible national certifying entities,
under such criteria as the Administrator may prescribe, by
regulation or order, in certifying small business concerns
owned and controlled by socially and economically
disadvantaged individuals.
(b) Regulations.--Prior to implementing subsection (a), the
Administrator shall promulgate regulations or orders ensuring
appropriate certification safeguards to be implemented by the
Administration and the agencies and entities described in
subsection (a).

SEC. 362. NET WORTH THRESHOLD.

Section 8(a)(6)(A) of the Small Business Act (15 U.S.C.
637(a)(6)(A)) is amended--
(1) by inserting ``(i)'' after ``(6)(A)'';
(2) by striking ``In determining the degree of diminished
credit'' and inserting the following:
``(ii)(I) In determining the degree of diminished credit'';
(3) by striking ``In determining the economic
disadvantage'' and inserting the following:

[[Page S13707]]

``(iii) In determining the economic disadvantage''; and
(4) by inserting after clause (ii)(I), as so designated by
this section, the following:
``(II) In determining the assets and net worth of a
socially disadvantaged individual under this subparagraph,
the Administrator shall not consider any assets of such
individual in a qualified retirement plan, as that term is
defined in section 4974(c) of the Internal Revenue Code of
1986.
``(III) The Administrator shall establish procedures that--
``(aa) account for inflationary adjustments to, and include
a reasonable assumption of, the average income and net worth
of market dominant competitors; and
``(bb) require an annual inflationary adjustment to the
average income and net worth requirements under this
subsection.''.

SEC. 363. EXTENSION OF SOCIALLY AND ECONOMICALLY
DISADVANTAGED BUSINESS PROGRAM.

(a) In General.--Section 7102(c) of the Federal Acquisition
Streamlining Act of 1994 (15 U.S.C. 644 note) is amended by
striking ``September 30, 2003'' and inserting ``September 30,
2012''.
(b) Effective Date.--The amendment made by this section
shall take effect 30 days after the date of enactment of this
Act.

Subtitle D--Historically Underutilized Business Zones Programs

SEC. 381. HUBZONE SMALL BUSINESS CONCERNS.

Section 3(p)(3) of the Small Business Act (15 U.S.C.
632(p)(3) is amended--
(1) in subparagraph (D), by striking ``or'' at the end;
(2) in subparagraph (E), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(F) a small business concern owned and controlled by an
organization described in section 8(a)(15).''.

SEC. 382. MILITARY BASE CLOSINGS.

(a) HUBZone Status.--
(1) In general.--Section 3(p)(4)(D) of the Small Business
Act (15 U.S.C. 632(p)(4)(D)) is amended--
(A) by redesignating clauses (i), (ii), (iii), and (iv) as
subclauses (I), (II), (III), and (IV), respectively, and
adjusting the margin accordingly;
(B) by striking ``means lands'' and inserting the following
``means--
``(i) lands''; and
(C) by striking the period at the end and inserting the
following: ``; and
``(ii) during the 5-year period beginning on the date that
a military installation is closed or leased space is vacated
under an authority described in clause (i), areas adjacent to
or within a reasonable commuting distance of lands described
in clause (i) (which shall not include any area that is more
than 15 miles from the exterior boundary of that military
installation) that are detrimentally, substantially, and
directly economically affected by the closing of that
military installation, as determined by the Secretary of
Housing and Urban Development.''.
(2) Feasibility study.--Not later than 6 months after the
date of enactment of this Act, the Secretary of Housing and
Urban Development shall conduct a study of the feasibility
of, and submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report regarding,
designating as a HUBZone (as that term is defined in section
3 of the Small Business Act (15 U.S.C. 632), as amended by
this Act) any area that does not qualify as a HUBZone solely
because that area is located within a county located within a
metropolitan statistical area (as defined by the Office of
Management and Budget). The report submitted under this
paragraph shall include any legislative recommendations
relating to the findings of the feasibility study conducted
under this paragraph.
(b) Subcontracting Goal.--Section 15(g)(1) of the Small
Business Act (15 U.S.C. 644(g)(1)) is amended by inserting
``and subcontract'' after ``not less than 3 percent of the
total value of all prime contract''.
(c) Mentor-Protege Program.--The Administrator may
establish a mentor-protege program for HUBZone small business
concerns (as that term is defined in section 3 of the Small
Business Act (15 U.S.C. 632)) and small business concerns
owned and controlled by women, modeled on the mentor-protege
program of the Administration for small business concerns
participating in programs under section 8(a) of the Small
Business Act (15 U.S.C. 637(a)).

Subtitle E--BusinessLINC Program

SEC. 391. BUSINESSLINC PROGRAM.

Section 8(n) of the Small Business Act (15 U.S.C. 637(n))
is amended to read as follows:
``(n) Business Grants and Cooperative Agreements.--
``(1) In general.--In accordance with this subsection, the
Administrator shall make grants available to enter into
cooperative agreements with any coalition of private
entities, not-for-profit entities, public entities, or any
combination of private, not-for-profit, and public entities--
``(A) to expand business-to-business relationships between
large and small business concerns; and
``(B) to provide, directly or indirectly, with online
information and a database of companies that are interested
in mentor-protege programs or community-based, statewide, or
local business development programs.
``(2) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $3,000,000
for each of fiscal years 2008 through 2010, to remain
available until expended.
``(3) Reports to congress.--
``(A) In general.--Not later than April 30, 2009, and
annually thereafter, the Associate Administrator of Business
Development of the Administration shall collect data on the
BusinessLINC Program and submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives, a report
on the effectiveness of the BusinessLINC Program.
``(B) Contents.--Each report submitted under subparagraph
(A) shall include, for the year covered by the report--
``(i) the number of programs administered in each State
under the BusinessLINC Program;
``(ii) the number of grant awards under each program
described in clause (i) and the date of each such award;
``(iii) the number of participating large businesses and
participating small business concerns;
``(iv) the number and dollar amount of the contracts in
effect in each State as a result of the programs run by each
grant recipient under the BusinessLINC Program; and
``(v) the number of mentor-protege, teaming relationships,
or partnerships created as a result of the BusinessLINC
Program.
``(4) Definition.--In this subsection, the term
`BusinessLINC Program' means the grant program authorized
under paragraph (1).''.

TITLE IV--ACQUISITION PROCESS

SEC. 401. PROCUREMENT IMPROVEMENTS.

Section 15 of the Small Business Act (15 U.S.C. 644), as
amended by this Act, is amended by adding at the end the
following:
``(r) Bundling Data Fields.--For each contract (including
task or delivery orders against governmentwide or other
multiple award contracts, indefinite quantity or indefinite
delivery contracts, and blanket purchase agreements) that is
bundled or consolidated, an agency shall report publicly, not
later than 7 days after the date of the award, by means of
the Federal governmentwide procurement data system described
in subsection (c)(5)--
``(1) the number of contracts involving small business
concerns that were displaced by the bundled or consolidated
action;
``(2) the number of small business concerns that the
contracting officer identified as able to bid on all or part
of requirements; and
``(3) the projected cost savings anticipated as a result of
bundling or consolidating the requirements.
``(s) Governmentwide Small Business Training.--The
Administrator, in conjunction with the head of any other
appropriate Federal agency, shall coordinate the development
of governmentwide training courses on small business
contracting and subcontracting with small business concerns,
with special focus on the role of the small business
specialist as a vital part of the acquisition team.''.

SEC. 402. RESERVATION OF PRIME CONTRACT AWARDS FOR SMALL
BUSINESSES.

Section 15 of the Small Business Act (15 U.S.C. 644), as
amended by this Act, is amended by adding at the end the
following:
``(t) Multiple Award Contracts.--Not later than 180 days
after the date of enactment of this subsection, the head of
each Federal agency, with the concurrence of the
Administrator, shall, by regulation, establish criteria for
such agency--
``(1) setting aside part or parts of a multiple award
contract for small business concerns, including the
subcategories of small business concerns identified in
subsection (g)(2);
``(2) setting aside multiple award contracts for small
business concerns, including the subcategories of small
business concerns identified in subsection (g)(2); and
``(3) reserving 1 or more contract awards for small
business concerns under full and open multiple award
procurements, including the subcategories of small business
concerns identified in subsection (g)(2).''.

SEC. 403. GAO STUDY OF REPORTING SYSTEMS.

(a) Study Required.--The Comptroller General of the United
States shall conduct a study of--
(1) the accuracy and timeliness of data collected under the
Small Business Act (15 U.S.C. 631 et seq.) in the CCR
database of the Administration, or any successor database,
the Federal procurement data system described in section
15(c)(5) of the Small Business Act (15 U.S.C. 644(c)(5)), and
the Subcontracting Reporting System; and
(2) the availability of small business information in these
computer-based systems to Congress, Federal agencies, and the
public.
(b) Matters Covered.--The study conducted under subsection
(a) shall include--
(1) an assessment of the accuracy and timeliness of the
information provided by the data collection systems described
in subsection (a)(1) and recommendations as to how any
deficiencies in such systems can be eliminated;
(2) a review of the system manuals for such systems and a
determination of the adequacy of such manuals in assisting
proper operation and administration of the systems;
(3) a review of the user manuals for such systems and a
determination of the clarity and ease of use of such manuals
in assisting those reporting into such systems and those
obtaining information from such systems;

[[Page S13708]]

(4) the adequacy of the training given to individuals
responsible for reporting into such systems and
recommendations for any necessary improvements;
(5) an assessment of the adequacy of any safeguards in such
systems against the reporting of inaccurate and untimely data
and the need for any additional safeguards; and
(6) the system architecture, Internet access, user-friendly
characteristics, flexibility to add new data fields, ability
to provide structured and unstructured reports, range of
information necessary to meet user needs, and adequacy of
system and user manuals and instructions of such systems.
(c) Report.--Not later than November 30, 2008, the
Comptroller General shall submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives a report
containing the results of the study under this section.

SEC. 404. MICROPURCHASE GUIDELINES.

Not later than 180 days after the date of enactment of this
Act, the Director of the Office of Federal Procurement Policy
shall issue guidelines regarding the analysis of purchase
card expenditures to identify opportunities for achieving and
accurately measuring fair participation of small business
concerns in micropurchases, consistent with the national
policy on small business participation in Federal
procurements set forth in sections 2(a) and 15(g) of the
Small Business Act (15 U.S.C. 631(a) and 644(g)), and
dissemination of best practices for participation of small
business concerns in micropurchases.

SEC. 405. REPORTING ON OVERSEAS CONTRACTS.

Not later than 180 days after the end of each fiscal year,
the Administrator shall submit to Congress a report
identifying what portion of contracts and subcontracts
awarded for performance outside of the United States were
awarded to small business concerns.

SEC. 406. AGENCY ACCOUNTABILITY.

(a) In General.--Section 15(g)(2) of the Small Business Act
(15 U.S.C. 644(g)(2)) is amended--
(1) by inserting ``(A)'' after ``(2)'';
(2) in the first sentence, by striking ``shall, after
consultation'' and inserting the following: ``shall--
``(i) after consultation'';
(3) by striking ``agency. Goals established'' and inserting
the following: ``agency;
``(ii) identify a percentage of the procurement budget of
the agency to be awarded to small business concerns, in
consultation with the Office of Small and Disadvantaged
Business Utilization of the agency, which information shall
be included in the strategic plan required under section 306
of title 5, United States Code, and the annual budget
submission to Congress by that agency, and, upon request, in
any testimony provided by that agency before Congress in
connection with the budget process; and
``(iii) report, as part of its annual performance plan, the
extent to which the agency achieved the goals referred to in
clause (ii), and appropriate justification for any failure to
do so.
``(B) Goals established'';
(4) by striking ``Whenever'' and inserting the following:
``(C) Whenever'';
(5) by striking ``For the purpose of'' and inserting the
following:
``(D) For the purpose of'';
(6) in the last sentence--
(A) by striking ``(A) contracts'' and inserting ``(i)
contracts''; and
(B) by striking ``(B) contracts'' and inserting ``(ii)
contracts''; and
(7) by adding at the end the following:
``(E)(i) Each procurement employee described in clause
(ii)--
``(I) shall communicate to their subordinates the
importance of achieving small business goals; and
``(II) shall have as a significant factor in the annual
performance evaluation of that procurement employee, where
appropriate, the success of that procurement employee in
small business utilization, in accordance with the goals
established under this subsection.
``(ii) A procurement employee described in this clause is a
senior procurement executive, senior program manager, or
small and disadvantaged business utilization manager of a
Federal agency having contracting authority.''.
(b) Annual Reports.--Section 10(d) of the Small Business
Act (15 U.S.C. 639(d)) is amended--
(1) by inserting ``and each agency that is a member of the
President's Management Council (or any successor thereto)''
after ``Department of Defense'' the first place that term
appears; and
(2) by inserting ``or that agency'' after ``Department of
Defense'' the second place that term appears.

TITLE V--SMALL BUSINESS SIZE AND STATUS INTEGRITY

SEC. 501. POLICY AND PRESUMPTIONS.

Section 3 of the Small Business Act (15 U.S.C. 632) is
amended by adding at the end the following:
``(s) Presumption.--
``(1) In general.--In every contract, subcontract,
cooperative agreement, cooperative research and development
agreement, or grant which is set aside, reserved, or
otherwise classified as intended for award to small business
concerns, there shall be a presumption of loss to the United
States based on the total dollars expended on such contract,
subcontract, cooperative agreement, cooperative research and
development agreement, or grant whenever it is established
that a business concern other than a small business concern
willfully sought and received the award by misrepresentation.
``(2) Deemed certifications.--The following actions shall
be deemed affirmative, willful, and intentional
certifications of small business size and status:
``(A) Submission of a bid or proposal for a Federal grant,
contract, subcontract, cooperative agreement, or cooperative
research and development agreement reserved, set aside, or
otherwise classified as intended for award to small business
concerns.
``(B) Submission of a bid or proposal for a Federal grant,
contract, subcontract, cooperative agreement, or cooperative
research and development agreement which in any way
encourages a Federal agency to classify such bid or proposal,
if awarded, as an award to a small business concern.
``(C) Registration on any Federal electronic database for
the purpose of being considered for award of a Federal grant,
contract, subcontract, cooperative agreement, or cooperative
research agreement, as a small business concern.
``(3) Paper-based certification by signature of responsible
official.--
``(A) In general.--Each solicitation, bid, or application
for a Federal contract, subcontract, or grant shall contain a
certification concerning the small business size and status
of a business concern seeking such Federal contract,
subcontract, or grant.
``(B) Content of certifications.--A certification that a
business concern qualifies as a small business concern of the
exact size and status claimed by such business concern for
purposes of bidding on a Federal contract or subcontract, or
applying for a Federal grant, shall contain the signature of
a director, officer, or counsel on the same page on which the
certification is contained.
``(4) Regulations.--The Administrator shall promulgate
regulations to provide adequate protections to individuals
and business concerns from liability under this subsection in
cases of unintentional errors, technical malfunctions, and
other similar situations.''.

SEC. 502. ANNUAL CERTIFICATION.

Section 3 of the Small Business Act (15 U.S.C. 632), as
amended by this Act, is amended by adding at the end the
following:
``(t) Annual Certification.--
``(1) In general.--Each business certified as a small
business concern under this Act shall annually certify its
small business size and, if appropriate, its small business
status, by means of a confirming entry on the CCR database of
the Administration, or any successor thereto.
``(2) Regulations.--Not later than 120 days after the date
of enactment of this subsection, the Administrator, in
consultation with the Inspector General and the Chief Counsel
for Advocacy of the Administration, shall promulgate
regulations to ensure that--
``(A) no business concern continues to be certified as a
small business concern on the CCR database of the
Administration, or any successor thereto, without fulfilling
the requirements for annual certification under this
subsection; and
``(B) the requirements of this subsection are implemented
in a manner presenting the least possible regulatory burden
on small business concerns.
``(3) Determination of size status.--Small business size or
status for purposes of this Act shall be determined at the
time of the award of a Federal--
``(A) contract, provided that, in the case of interagency
multiple award contracts, small business size, or status
shall be determined annually, except for purposes of the
award of each task or delivery order set aside or reserved
for small business concerns;
``(B) subcontract;
``(C) grant;
``(D) cooperative agreement; or
``(E) cooperative research and development agreement.''.

SEC. 503. MEANINGFUL PROTESTS OF SMALL BUSINESS SIZE AND
STATUS.

The Small Business Act (15 U.S.C. 631 et seq.) is amended
by inserting after section 37, as added by this Act, the
following:

``SEC. 38. SMALL BUSINESS SIZE AND STATUS PROTEST SYSTEM.

``(a) Definitions.--In this section:
``(1) Protest.--The term `protest' means a written
objection by an interested party to a violation of any small
business size or status requirement established under any
provision of law, including section 3, in connection with--
``(A) a solicitation or other request by a Federal agency
for offers for a contract for the procurement of property or
services;
``(B) the cancellation of such a solicitation or other
request;
``(C) an award or proposed award of such a contract; or
``(D) a termination or cancellation of an award of such a
contract, if the written objection contains an allegation
that the termination or cancellation is based in whole or in
part on improprieties concerning the award of the contract.
``(2) Interested party.--
``(A) In general.--The term `interested party', with
respect to a contract or a solicitation or other request for
offers described in paragraph (1), means an actual or
prospective bidder or offeror whose direct economic interest
would be affected by the award of

[[Page S13709]]

the contract or by failure to award the contract.
``(B) Inclusions.--The term `interested party' includes the
official responsible for submitting the Federal agency tender
in a public-private competition conducted under Office of
Management and Budget Circular A-76 (or any successor
thereto) regarding an activity or function of a Federal
agency performed by more than 65 full-time equivalent
employees of the Federal agency.
``(3) Federal agency.--The term `Federal agency' has the
same meaning as in section 102 of title 40, United States
Code.
``(b) Review of Protests; Effect on Contracts Pending
Decision.--
``(1) In general.--Under procedures established under
subsection (d), the Administrator shall decide a protest
submitted to the Administrator by an interested party.
``(2) Receipts of protests.--
``(A) In general.--Not later than 1 day after the receipt
of a protest, the Administrator shall notify the Federal
agency involved of the protest.
``(B) Agencies.--Except as provided in subparagraph (C), a
Federal agency receiving a notice of a protested procurement
under subparagraph (A) shall submit to the Administrator a
complete report (including all relevant documents) on the
small business size or status aspects of the protested
procurement--
``(i) not later than 30 days after the date of the receipt
of that notice by the agency;
``(ii) if the Administrator, upon a showing by the Federal
agency, determines (and states the reasons in writing) that
the specific circumstances of the protest require a longer
period, within the longer period determined by the
Administrator; or
``(iii) in a case determined by the Administrator to be
suitable for the express option under subsection (c)(1)(B),
not later than 20 days after the date of the receipt of that
determination by the agency.
``(C) Exceptions.--A Federal agency need not submit a
report to the Administrator under subparagraph (B) if the
agency is notified by the Administrator before the date on
which such report is to be submitted that the protest
concerned has been dismissed under subsection (c)(1)(D).
``(3) Award of contracts.--
``(A) In general.--Except as provided in subparagraph (B),
a contract may not be awarded in any procurement after the
Federal agency has received notice of a protest with respect
to such procurement from the Administrator and while the
protest is pending.
``(B) Exceptions.--The head of the procuring activity
responsible for award of a contract may authorize the award
of the contract (notwithstanding a protest of which the
Federal agency has notice under this section)--
``(i) upon a written finding that urgent and compelling
circumstances which significantly affect interests of the
United States will not permit waiting for the decision of the
Administrator under this section; and
``(ii) after the Administrator is advised of that finding.
``(C) Urgent and compelling circumstances.--A finding may
not be made under subparagraph (B)(i), unless the award of
the contract is otherwise likely to occur within 30 days
after the making of such finding.
``(4) Performance.--
``(A) In general.--A contractor awarded a Federal agency
contract may, during the period described in subparagraph
(D), begin performance of the contract and engage in any
related activities that result in obligations being incurred
by the United States under the contract, unless the
contracting officer responsible for the award of the contract
withholds authorization to proceed with performance of the
contract.
``(B) Authorization withheld.--The contracting officer may
withhold an authorization to proceed with performance of the
contract during the period described in subparagraph (D) if
the contracting officer determines in writing that--
``(i) a protest is likely to be filed with the
Administrator alleging a violation of a small business size
or status requirement; and
``(ii) the immediate performance of the contract is not in
the best interests of the United States.
``(C) Notice of protest.--
``(i) In general.--If the Federal agency awarding the
contract receives notice of a protest in accordance with this
subsection during the period described in subparagraph (D)--

``(I) the contracting officer may not authorize performance
of the contract to begin while the protest is pending; or
``(II) if authorization for contract performance to proceed
was not withheld in accordance with subparagraph (B) before
receipt of the notice, the contracting officer shall
immediately direct the contractor to cease performance under
the contract and to suspend any related activities that may
result in additional obligations being incurred by the United
States under that contract.

``(ii) Performance.--Performance and related activities
suspended under clause (i)(II) by reason of a protest may not
be resumed while the protest is pending.
``(iii) Exceptions.--The head of the procuring activity may
authorize the performance of the contract (notwithstanding a
protest of which the Federal agency has notice under this
section)--

``(I) upon a written finding that--

``(aa) performance of the contract is in the best interests
of the United States; or
``(bb) urgent and compelling circumstances that
significantly affect interests of the United States will not
permit waiting for the decision of the Administrator
concerning the protest; and

``(II) after the Administrator is notified of that finding.

``(D) Time period.--The period described in this
subparagraph, with respect to a contract, is the period
beginning on the date of the contract award and ending on the
later of--
``(i) the date that is 10 days after the date of the
contract award; or
``(ii) the date that is 5 days after the debriefing date
offered to an unsuccessful offeror for any debriefing that is
requested and, when requested, is required.
``(5) Nondelegation.--The authority of the head of the
procuring activity to make findings and to authorize the
award and performance of contracts under paragraphs (3) and
(4) may not be delegated.
``(6) Provision of documents.--
``(A) In general.--Within such deadlines as the
Administrator prescribes, and upon request, each Federal
agency shall provide to an interested party any document
relevant to a protested procurement action (including the
report required by paragraph (2)(B)) that would not give that
party a competitive advantage and that the party is otherwise
authorized by law to receive.
``(B) Protective orders.--
``(i) In general.--The Administrator may issue protective
orders which establish terms, conditions, and restrictions
for the provision of any document to a party under
subparagraph (A), that prohibit or restrict the disclosure by
the party of information described in clause (ii) that is
contained in such a document.
``(ii) Types of information.--Information referred to in
clause (i) is procurement sensitive information, trade
secrets, or other proprietary or confidential research,
development, or commercial information.
``(iii) Information to the federal government.--A
protective order under this subparagraph shall not be
considered to authorize the withholding of any document or
information from Congress or an executive agency.
``(7) Interested parties.--If an interested party files a
protest in connection with a public-private competition
described in subsection (a)(2)(B), a person representing a
majority of the employees of the Federal agency who are
engaged in the performance of the activity or function
subject to the public-private competition may intervene in
protest.
``(c) Decisions on Protests.--
``(1) In general.--
``(A) Inexpensive and expeditious resolution.--To the
maximum extent practicable, the Administrator shall provide
for the inexpensive and expeditious resolution of protests
under this section. Except as provided under subparagraph
(B), the Administrator shall issue a final decision
concerning a protest not later than 100 days after the date
on which the protest is submitted to the Administration.
``(B) Express option.--The Administrator shall, by
regulation established under subsection (d), establish an
express option for deciding those protests which the
Administrator determines suitable for resolution, not later
than 65 days after the date on which the protest is
submitted.
``(C) Amendments.--An amendment to a protest that adds a
new ground of protest, if timely made, should be resolved, to
the maximum extent practicable, within the time limit
established under subparagraph (A) for final decision of the
initial protest. If an amended protest cannot be resolved
within such time limit, the Administrator may resolve the
amended protest through the express option under subparagraph
(B).
``(D) Frivolous protests.--The Administrator may dismiss a
protest that the Administrator determines is frivolous or
which, on its face, does not state a valid basis for protest.
``(2) Compliance with law.--
``(A) In general.--With respect to a solicitation for a
contract, or a proposed award or the award of a contract,
protested under this section, the Administrator may determine
whether the solicitation, proposed award, or award complies
with statutes and regulations regarding small business size
or status. If the Administrator determines that the
solicitation, proposed award, or award does not comply with a
statute or regulation, the Administrator shall recommend that
the Federal agency--
``(i) refrain from exercising any of its options under the
contract;
``(ii) recompete the contract immediately;
``(iii) issue a new solicitation;
``(iv) terminate the contract;
``(v) award a contract consistent with the requirements of
such statutes and regulations; or
``(vi) implement such other recommendations as the
Administrator determines to be necessary in order to promote
compliance with procurement statutes and regulations.
``(B) Best interests of united states.--If the head of the
procuring activity responsible for a contract makes a finding
described in subsection (b)(4)(C)(iii)(I)(aa), the
Administrator shall make recommendations under this paragraph
without regard to any cost or disruption from terminating,
recompeting, or reawarding the contract.

[[Page S13710]]

``(C) Implementation.--If the Federal agency fails to
implement fully the recommendations of the Administrator
under this paragraph with respect to a solicitation for a
contract or an award or proposed award of a contract by the
date that is 60 days after the date on which the agency
received the recommendations, the head of the procuring
activity responsible for that contract shall report such
failure to the Administrator not later than 5 days after the
end of such 60-day period.
``(3) Payment of costs.--
``(A) In general.--If the Administrator determines that a
solicitation for a contract or a proposed award or the award
of a contract does not comply with a statute or regulation,
the Administrator may recommend that the Federal agency
conducting the procurement pay to an appropriate interested
party the costs of--
``(i) filing and pursuing the protest, including reasonable
attorney's fees and consultant and expert witness fees; and
``(ii) bid and proposal preparation.
``(B) Costs not included.--No party (other than a small
business concern) may be paid, under a recommendation made
under the authority of subparagraph (A)--
``(i) costs for consultant and expert witness fees that
exceed the highest rate of compensation for expert witnesses
paid by the Federal Government; or
``(ii) costs for attorney's fees that exceed $300 per hour,
unless the agency determines, based on the recommendation of
the Administrator on a case by case basis, that an increase
in the cost of living or a special factor, such as the
limited availability of qualified attorneys for the
proceedings involved, justifies a higher fee.
``(C) Recommendation to pay costs.--If the Administrator
recommends under subparagraph (A) that a Federal agency pay
costs to an interested party, the Federal agency shall--
``(i) pay the costs promptly; or
``(ii) if the Federal agency does not make such payment,
promptly report to the Administrator the reasons for the
failure to follow the Administrator's recommendation.
``(D) Agreement on amount.--If the Administrator recommends
under subparagraph (A) that a Federal agency pay costs to an
interested party, the Federal agency and the interested party
shall attempt to reach an agreement on the amount of the
costs to be paid. If the Federal agency and the interested
party are unable to agree on the amount to be paid, the
Administrator may, upon the request of the interested party,
recommend to the Federal agency the amount of the costs that
the Federal agency should pay.
``(4) Decisions.--Each decision of the Administrator under
this section shall be signed by the Administrator or a
designee for that purpose. A copy of the decision shall be
made available to the interested parties, the head of the
procuring activity responsible for the solicitation, proposed
award, or award of the contract, and the senior procurement
executive of the Federal agency involved.
``(5) Reports.--
``(A) Failure to implement recommendations.--
``(i) In general.--The Administrator shall report promptly
to the Committee on Small Business and Entrepreneurship of
the Senate and to the Committee on Small Business of the
House of Representatives any case in which a Federal agency
fails to implement fully a recommendation of the
Administrator under paragraph (2) or (3).
``(ii) Contents.--Each report under clause (i) shall
include--

``(I) a comprehensive review of the pertinent procurement,
including the circumstances of the failure of the Federal
agency to implement a recommendation of the Administrator;
and
``(II) a recommendation regarding whether, in order to
correct an inequity or to preserve the integrity of the
procurement process, Congress should consider--

``(aa) private relief legislation;
``(bb) legislative rescission or cancellation of funds;
``(cc) further investigation by Congress; or
``(dd) other action.
``(B) Annual reports.--Not later than January 31 of each
year, the Administrator shall transmit to Congress a report
containing a summary of each instance in which a Federal
agency did not fully implement a recommendation of the
Administrator under subsection (b) or this subsection during
the preceding year. The report shall also describe each
instance in which a final decision in a protest was not
rendered within 100 days after the date on which the protest
was submitted to the Administrator.
``(d) Regulations; Authority of Administrator to Verify
Assertions.--
``(1) In general.--The Administrator shall establish such
procedures as may be necessary for the expeditious decision
of protests under this section, including procedures for
accelerated resolution of protests under the express option
authorized by subsection (c)(1)(B). Such procedures shall
provide that the protest process may not be delayed by the
failure of a party to make a filing within the time provided
for the filing.
``(2) Computation of time.--The procedures established
under paragraph (1) shall provide that, in the computation of
any period described in this section--
``(A) the day of the act, event, or default from which the
designated period of time begins to run not be included; and
``(B) the last day after such act, event, or default be
included, unless--
``(i) such last day is a Saturday, a Sunday, or a legal
holiday; or
``(ii) in the case of a filing of a paper at the
Administration or another Federal agency, such last day is a
day on which weather or other conditions cause the closing of
the Administration or other Federal agency, in which event
the next day that is not a Saturday, Sunday, or legal holiday
shall be included.
``(3) Electronic filing.--The Administrator may prescribe
procedures for the electronic filing and dissemination of
documents and information required under this section. In
prescribing such procedures, the Administrator shall consider
the ability of all parties to achieve electronic access to
such documents and records.
``(e) Enforcement.--The Administrator may use any authority
available under this Act or any other provision of law to
verify assertions made by parties in protests under this
section.
``(f) Regulations.--The Administrator may issue regulations
regarding the use of the protest authority to consider small
business size or status challenges under this section in
matters involving any other program for small business
concerns.''.

SEC. 504. TRAINING FOR CONTRACTING AND ENFORCEMENT PERSONNEL.

(a) In General.--Not later than 270 days after the date of
enactment of this Act, the head of each appropriate Federal
agency or entity shall, in consultation with the
Administrator or the Inspector General of the Administration,
as appropriate, develop courses concerning proper
classification of business concerns and small business size
and status for purposes of Federal contracts, subcontracts,
grants, cooperative agreements, and cooperative research and
development agreements.
(b) Policy on Prosecutions of Small Business Size and
Status Fraud.--Section 3 of the Small Business Act (15 U.S.C.
632), as amended by this Act, is amended by adding at the end
the following:
``(u) Policy on Prosecutions of Small Business Size and
Status Fraud.--Not later than 180 days after the date of
enactment of this subsection, the head of each relevant
Federal agency and the Inspector General of the
Administration shall issue a Governmentwide policy on
prosecution of small business size and status fraud.''.

SEC. 505. UPDATED SIZE STANDARDS.

(a) In General.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall--
(1) conduct a detailed review of the size standards for
small business concerns established under section 3(a)(2) of
the Small Business Act (15 U.S.C. 632(a)(2)); and
(2) if determined appropriate by the Administrator,
promulgate revised size standards under that section.
(b) Publication.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall make
publically available information regarding--
(1) the factors evaluated as part of the review conducted
under subsection (a)(1); and
(2) the criteria used for any revised size standards
promulgated under subsection (a)(2).

SEC. 506. SMALL BUSINESS SIZE AND STATUS FOR PURPOSE OF
MULTIPLE AWARD CONTRACTS.

Section 3 of the Small Business Act (15 U.S.C. 632), as
amended by this Act, is amended by adding at the end the
following:
``(w) Small Business Size and Status for Purpose of
Multiple Award Contracts.--
``(1) In general.--A business concern that enters a
multiple award contract of any kind with the Federal
Government shall in any year in which such a contract is in
effect, submit an annual statement at the end of its fiscal
year recertifying its small business size and status to the
Federal agency which awarded the contract.
``(2) Relation to other laws.--Compliance with paragraph
(1) shall not affect the obligation of a business concern to
comply with other provisions of law concerning small business
size or status.''.
Ms. SNOWE. Mr. President, as Ranking Member of the Senate Committee
on Small Business and Entrepreneurship, I rise today to introduce, with
Chairman Kerry, the Small Business Contracting Revitalization Act of
2007. This critical legislation is a product of consensus-building and
compromise over the past few years and truly reflects the bipartisan
nature of our Committee. Thank you, Chairman Kerry, for working to make
this a truly bipartisan bill.
This legislation addresses the numerous barriers facing small
businesses in securing their fair share of Federal contracting dollars.
Currently, small businesses are eligible for $340 billion in Federal
contracting dollars, yet receive only $77 billion. Regrettably, the
Federal Government consistently fails to satisfy its 23 percent small
business goal resulting in small businesses losing billions of dollars
in contracting opportunities.
I am dismayed by the myriad ways that Government agencies have time
and again egregiously failed to achieve

[[Page S13711]]

most of their small business statutory ``goaling'' requirements. For
example, in fiscal year 2006, the Historically Underutilized Business
Zone, HUBZone, program met only 2.1 percent of its three percent goal,
while our Nation's service-disabled, veteran-owned small businesses
received a Government-wide, paltry total of only 0.9 percent of its
three percent small business goal. This longstanding area of concern is
coupled with a litany of deficiencies that include ``contract
bundling,'' sub-contracting misrepresentations, inaccurate small
business size determinations, flawed reporting data, and under-
utilization of key small business contracting programs.
As the Chairman is well aware, these problems are not new, and our
Committee has held countless hearings on various contracting concerns
throughout the years. Business opportunities through Federal contracts
provide vital economic benefits for small businesses, which is why last
year, my Small Business Administration Reauthorization Bill, which
passed our Committee unanimously, contained a robust package of small
business contracting initiatives.
Our legislation builds on the contracting provisions of that bill, by
improving all of the small business contracting programs--including the
HUBZone, small disadvantaged business, women-owned small business, and
service-disabled veteran-owned small business programs. It equips the
SBA with additional tools to meet the demands of an ever-changing 21st
century contracting environment.
This bipartisan measure also includes several other priorities that I
have long championed--most notably, enhancing the HUBZone program. In
my home state of Maine, only 118 of 41,026 small businesses are
qualified HUBZone businesses. HUBZones represent a tremendous tool for
replacing lost jobs for our Nation's declining manufacturing and
industrial sectors--clearly, this program should be better utilized.
I look forward to working with my colleagues in the Senate to pass
this bipartisan small business contracting legislation to ensure that
all small business ``goals'' are not only met--but exceeded.

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