Congressional Record, Volume 155 Issue 28 (Wednesday, February 11, 2009)

[Congressional Record Volume 155, Number 28 (Wednesday, February 11, 2009)]
[Senate]
[Pages S2144-S2160]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. KYL (for himself and Mr. McCain):
S. 409. A bill to secure Federal ownership and management of
significant natural, scenic, and recreational resources, to provide for
the protection of cultural resources, to facilitate the efficient
extraction of mineral resources by authorizing and directing an

[[Page S2145]]

exchange of Federal and non-Federal land, and for other purposes; to
the Committee on Energy and Natural Resources.
Mr. KYL. 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. 409

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 ``Southeast Arizona Land
Exchange and Conservation Act of 2009''.

SEC. 2. PURPOSES.

The purposes of this Act are--
(1) to authorize, direct, facilitate, and expedite the
conveyance and exchange of land between the United States and
Resolution Copper;
(2) to provide for the permanent protection of cultural
resources and uses of the Apache Leap escarpment located near
the town of Superior, Arizona; and
(3) to secure Federal ownership and protection of land with
significant natural, scenic, recreational, water, riparian,
cultural and other resources.

SEC. 3. DEFINITIONS.

In this Act:
(1) Apache leap.--The term ``Apache Leap'' means the
approximately 822 acres of land (including the approximately
110 acres of land of Resolution Copper described in section
4(c)(1)(G)), as depicted on the map entitled ``Apache Leap''
and dated January 2009.
(2) Federal land.--The term ``Federal land'' means the
approximately 2,406 acres of land located in Pinal County,
Arizona, depicted on the map entitled ``Southeast Arizona
Land Exchange and Conservation Act of 2009-Federal Parcel-Oak
Flat'' and dated January 2009.
(3) Non-federal land.--The term ``non-Federal land'' means
each parcel of land described in section 4(c).
(4) Oak flat campground.--The term ``Oak Flat Campground''
means the campground that is--
(A) comprised of approximately 16 developed campsites and
adjacent acreage at a total of approximately 50 acres; and
(B) depicted on the map entitled ``Oak Flat Campground''
and dated January 2009.
(5) Oak flat withdrawal area.--The term ``Oak Flat
Withdrawal Area'' means the approximately 760 acres of land
depicted on the map entitled ``Oak Flat Withdrawal Area'' and
dated January 2009.
(6) Resolution copper.--The term ``Resolution Copper''
means--
(A) Resolution Copper Mining, LLC, a Delaware limited
liability company; and
(B) any successor, assign, affiliate, member, or joint
venturer of Resolution Copper Mining, LLC.
(7) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(8) Secretary concerned.--The term ``Secretary concerned''
means the Secretary of Agriculture or the Secretary of the
Interior, as applicable.
(9) Town.--The term ``Town'' means the Town of Superior,
Arizona, an incorporated municipality.

SEC. 4. LAND CONVEYANCES AND EXCHANGES.

(a) Purposes.--The purposes of the land conveyances and
exchanges under this section are--
(1) to secure Federal ownership and protection of
significant natural, scenic, and recreational resources; and
(2) to facilitate efficient extraction of mineral
resources.
(b) Offer by Resolution Copper.--
(1) In general.--Subject to section 9(b)(1), if Resolution
Copper submits to the Secretary of Agriculture a written
offer, in accordance with paragraph (2), to convey to the
United States all right, title, and interest of Resolution
Copper in and to the non-Federal land, the Secretary shall--
(A) accept the offer; and
(B) convey to Resolution Copper all right, title, and
interest of the United States in and to the Federal land,
subject to--
(i) section 10(c); and
(ii) any valid existing right or title reservation,
easement, or other exception required by law or agreed to by
the Secretary concerned and Resolution Copper.
(2) Requirements.--Title to any non-Federal land conveyed
by Resolution Copper to the United States under paragraph (1)
shall--
(A) be in a form that is acceptable to the Secretary
concerned; and
(B) conform to the title approval standards of the Attorney
General of the United States applicable to land acquisitions
by the Federal Government.
(c) Resolution Copper Land Exchange.--On receipt of title
to the Federal land under subsection (b)(1)(B), Resolution
Copper shall simultaneously convey--
(1) to the Secretary of Agriculture, all right, title, and
interest that the Secretary determines to be acceptable in
and to--
(A) the approximately 147 acres of land located in Gila
County, Arizona, depicted on the map entitled ``Southeast
Arizona Land Exchange and Conservation Act of 2009-Non-
Federal Parcel-Turkey Creek'' and dated January 2009;
(B) the approximately 148 acres of land located in Yavapai
County Arizona, depicted on the map entitled ``Southeast
Arizona Land Exchange and Conservation Act of 2009-Non-
Federal Parcel-Tangle Creek'' and dated January 2009;
(C) the approximately 149 acres of land located in Maricopa
County, Arizona, depicted on the map entitled ``Southeast
Arizona Land Exchange and Conservation Act of 2009-Non-
Federal Parcel-Cave Creek'' and dated January 2009;
(D) the approximately 88 acres of land located in Pinal
County, Arizona, depicted on the map entitled ``Southeast
Arizona Land Exchange and Conservation Act of 2009-Non-
Federal Parcel-J-I Ranch'' and dated January 2009;
(E) the approximately 640 acres of land located in Coconino
County, Arizona, depicted on the map entitled ``Southeast
Arizona Land Exchange and Conservation Act of 2009-Non-
Federal Parcel-East Clear Creek'' and dated January 2009;
(F) the approximately 95 acres of land located in Pinal
County, Arizona, depicted on the map entitled ``Southeast
Arizona Land Exchange and Conservation Act of 2009-Non-
Federal Parcel-The Pond'' and dated January 2009; and
(G) subject to the retained rights under subsection (d)(2),
the approximately 110 acres of land located in Pinal County,
Arizona, depicted on the map entitled ``Southeast Arizona
Land Exchange and Conservation Act of 2009-Non-Federal
Parcel-Apache Leap South End'' and dated January 2009; and
(2) to the Secretary of the Interior, all right, title, and
interest that the Secretary of the Interior determines to be
acceptable in and to--
(A) the approximately 3,073 acres of land located in Pinal
County, Arizona, depicted on the map entitled ``Southeast
Arizona Land Exchange and Conservation Act of 2009-Non-
Federal Parcel-Lower San Pedro River'' and dated January
2009;
(B) the approximately 160 acres of land located in Gila and
Pinal Counties, Arizona, depicted on the map entitled
``Southeast Arizona Land Exchange and Conservation Act of
2009-Non-Federal Parcel-Dripping Springs'' and dated January
2009; and
(C) the approximately 956 acres of land located in Santa
Cruz County, Arizona, depicted on the map entitled
``Southeast Arizona Land Exchange and Conservation Act of
2009-Non-Federal Parcel-Appleton Ranch'' and dated January
2009.
(d) Additional Consideration to United States.--
(1) Surrender of rights.--Subject to paragraph (2), in
addition to the non-Federal land to be conveyed to the United
States under subsection (c), and as a condition of the land
exchange under this section, Resolution Copper shall
surrender to the United States, without compensation, the
rights held by Resolution Copper under mining and other laws
of the United States--
(A) to commercially extract minerals under--
(i) Apache Leap; or
(ii) the parcel identified in subsection (c)(1)(F); and
(B) to disturb the surface of Apache Leap, except with
respect to such fences, signs, monitoring wells, and other
devices, instruments, or improvements as are necessary to
monitor the public health and safety or achieve other
appropriate administrative purposes, as determined by the
Secretary, in consultation with Resolution Copper.
(2) Exploration activities.--Nothing in this Act prohibits
Resolution Copper from using any existing mining claim held
by Resolution Copper on Apache Leap, or from retaining any
right held by Resolution Copper to the parcel described in
subsection (c)(1)(G), to carry out any underground activities
under Apache Leap in a manner that the Secretary determines
will not adversely impact the surface of Apache Leap
(including drilling or locating any tunnels, shafts, or other
facilities relating to mining, monitoring, or collecting
geological or hydrological information) that do not involve
commercial mineral extraction under Apache Leap.
(e) Use of Equalization Payment.--
(1) Payment.--Resolution Copper shall pay into the Federal
Land Disposal Account established by section 206(a) of the
Federal Land Transaction Facilitation Act (43 U.S.C. 2305(a))
(or any successor account) any cash equalization funds owed
by Resolution Copper to the United States under section
7(b)(1), to remain available until expended, without further
appropriation, to the Secretary and the Secretary of the
Interior, as the Secretaries jointly determine to be
appropriate, for--
(A) the acquisition from willing sellers of land or
interests in land within the hydrographic boundary of the San
Pedro River and tributaries in the State of Arizona; and
(B) the management and protection of endangered species and
other sensitive environmental values and land within the San
Pedro Riparian National Conservation Area established by
section 101(a) of the Arizona-Idaho Conservation Act of 1988
(16 U.S.C. 460xx(a)) (including any additions to the area),
including management under any cooperative management
agreement entered into by the Secretary of the Interior and a
State or local agency under section 103(c) of that Act (16
U.S.C. 460xx-2(c)).
(2) Period of use.--To the maximum extent feasible, the
amount paid into the Federal Land Disposal Account by
Resolution Copper under paragraph (1) shall be used by

[[Page S2146]]

the Secretary and the Secretary of the Interior during the 2-
year period beginning on the date of payment.
(3) Cooperative management agreements.--The Secretary of
the Interior may enter into such cooperative management
agreements with qualified organizations (as defined in
section 170(h) of the Internal Revenue Code of 1986) as the
Secretary of the Interior determines to be appropriate to
administer portions of the San Pedro Riparian National
Conservation Area.

SEC. 5. TIMING AND PROCESSING OF EXCHANGE.

(a) Sense of Congress Regarding Timing of Exchange.--It is
the sense of Congress that the land exchange directed by
section 4 should be consummated by not later than 1 year
after the date of enactment of this Act.
(b) Exchange Processing.--Before the date of consummation
of the exchange under section 4, the Secretary concerned
shall complete any necessary land surveys and required
preexchange clearances, reviews, mitigation activities, and
approvals relating to--
(1) threatened or endangered species;
(2) cultural or historic resources;
(3) wetland or floodplains; or
(4) hazardous materials.
(c) Post-Exchange Processing.--Before commencing production
in commercial quantities of any valuable mineral from the
Federal land conveyed to Resolution Copper under section
4(b)(1)(B) (except for any such production from any
exploration and mine development shafts, adits, and tunnels
needed to determine feasibility and pilot plant testing of
commercial production or to access the ore body and tailings
deposition areas), the Secretary shall publish an
environmental impact statement in accordance with section
102(2)(C) of the National Environmental Policy Act of 1969
(42 U.S.C. 4322(2)(C)) regarding any Federal agency action
carried out relating to the commercial production, including
an analysis of the impacts of the production.
(d) Oak Flat Withdrawal Area Restriction.--
(1) Mineral exploration.--To ensure the collection and
consideration of adequate information to analyze possible
commercial production of minerals by Resolution Copper from
the Oak Flat Withdrawal Area, notwithstanding any other
provision of law, Resolution Copper may carry out mineral
exploration activities under the Oak Flat Withdrawal Area
during the period beginning on the date of enactment of this
Act and ending on the date of conveyance of the Oak Flat
Withdrawal Area to Resolution Copper under section 4(b)(1)(B)
by directional drilling or any other method that will not
disturb the surface of the land.
(2) Sense of congress regarding permit.--It is the sense of
Congress that the Secretary should issue to Resolution Copper
a permit to conduct appropriate directional drilling or other
nonsurface-disturbing exploration in the Oak Flat Withdrawal
Area as soon as practicable after the date of enactment of
this Act.
(e) Exchange and Post-Exchange Costs.--In accordance with
sections 254.4 and 254.7 of title 36, Code of Federal
Regulations (or successor regulations), Resolution Copper
shall assume responsibility for--
(1) hiring such contractors as are necessary for carrying
out any exchange or conveyance of land under this Act; and
(2) paying, without compensation under section 254.7 of
title 36, Code of Federal Regulations (or a successor
regulation)--
(A) the costs of any appraisal relating to an exchange or
conveyance under this Act, including any reasonable
reimbursements to the Secretary on request of the Secretary
for the cost of reviewing and approving an appraisal;
(B) the costs of any clearances, reviews, mitigation
activities, and approvals under subsection (b), including any
necessary land surveys conducted by the Bureau of Land
Management Cadastral Survey program;
(C) the costs of achieving compliance with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.)
under subsection (c); and
(D) any other cost agreed to by Resolution Copper and the
Secretary concerned.
(f) Contractor Work and Approvals.--
(1) In general.--Any work relating to the exchange or
conveyance of land under this Act that is performed by a
contractor shall be subject to the mutual agreement of the
Secretary concerned and Resolution Copper, including any
agreement with respect to--
(A) the selection of the contractor; and
(B) the scope of work performed by the contractor.
(2) Review and approval.--Any required review and approval
of work by a contractor shall be performed by the Secretary
concerned, in accordance with applicable law (including
regulations).
(3) Lead actor agreement.--The Secretary of Agriculture and
the Secretary of the Interior may mutually agree to designate
the Secretary of Agriculture as the lead actor for any action
under this subsection.

SEC. 6. CONVEYANCE OF LAND TO TOWN.

(a) Conveyance Requirements.--
(1) In general.--On receipt of a request from the Town
described in paragraph (2), the Secretary shall convey to the
Town each parcel requested.
(2) Description of request.--A request referred to in
paragraph (1) is a request by the Town--
(A) for the conveyance of 1 or more of the parcels
identified in subsection (b); and
(B) that is submitted to the Secretary by not later than 90
days after the date of consummation of the land exchange
under section 4.
(3) Price.--The Town shall pay to the Secretary a price
equal to the market value of any land conveyed under this
subsection, as appraised under section 7, less the amount of
any credit under section 7(b)(3).
(b) Identification of Parcels.--The Town may request
conveyance of any of--
(1) the approximately 30 acres of land located in Pinal
County, Arizona, occupied on the date of enactment of this
Act by the Fairview Cemetery and depicted on the map entitled
``Southeast Arizona Land Exchange and Conservation Act of
2009-Federal Parcel-Fairview Cemetery'' and dated January
2009;
(2) the reversionary interest, and any reserved mineral
interest, of the United States in the approximately 265 acres
of land located in Pinal County, Arizona, depicted on the map
entitled ``Southeast Arizona Land Exchange and Conservation
Act of 2009-Federal Reversionary Interest-Superior Airport''
and dated January 2009; and
(3) all or any portion of the approximately 250 acres of
land located in Pinal County, Arizona, depicted on the map
entitled ``Southeast Arizona Land Exchange and Conservation
Act of 2009-Federal Parcel-Superior Airport Contiguous
Parcels'' and dated January 2009.
(c) Condition of Conveyance.--A conveyance of land under
this section shall be carried out in a manner that provides
the United States manageable boundaries on any parcel
retained by the Secretary, to the maximum extent practicable.

SEC. 7. VALUATION OF LAND EXCHANGED OR CONVEYED.

(a) Exchange Valuation.--
(1) In general.--The value of the land to be exchanged
under section 4 or conveyed to the Town under section 6 shall
be determined by the Secretary through concurrent appraisals
conducted in accordance with paragraph (2).
(2) Appraisals.--
(A) In general.--An appraisal under this section shall be--
(i) performed by an appraiser mutually agreed to by the
Secretary and Resolution Copper;
(ii) performed in accordance with--

(I) the Uniform Appraisal Standards for Federal Land
Acquisitions (Department of Justice, 5th Edition, December
20, 2000);
(II) the Uniform Standards of Professional Appraisal
Practice; and
(III) Forest Service appraisal instructions; and

(iii) submitted to the Secretary for review and approval.
(B) Reappraisals and updated appraised values.--After the
final appraised value of a parcel is determined and approved
under subparagraph (A), the Secretary shall not be required
to reappraise or update the final appraised value--
(i) for a period of 3 years after the approval by the
Secretary of the final appraised value under subparagraph
(A)(iii); or
(ii) at all, in accordance with section 254.14 of title 36,
Code of Federal Regulations (or a successor regulation),
after an exchange agreement is entered into by Resolution
Copper and the Secretary.
(C) Public review.--Before consummating the land exchange
under section 4, the Secretary shall make available for
public review a summary of the appraisals of the land to be
exchanged.
(3) Failure to agree.--If the Secretary and Resolution
Copper fail to agree on the value of a parcel to be
exchanged, the final value of the parcel shall be determined
in accordance with section 206(d) of the Federal Land Policy
and Management Act of 1976 (43 U.S.C. 1716(d)).
(4) Federal land appraisal.--
(A) In general.--The Federal land shall be appraised in
accordance with the standards and instructions referred to in
paragraph (2)(A)(ii) and other applicable requirements of
this section.
(B) Treatment as unencumbered.--The value of the Federal
land outside the Oak Flat Withdrawal Area shall be determined
as if the land is unencumbered by any unpatented mining
claims of Resolution Copper.
(C) Effect.--Nothing in this Act affects the validity of
any unpatented mining claim or right of Resolution Copper.
(D) Additional appraisal information.--To provide
information necessary to calculate a value adjustment payment
for purposes of section 12, the appraiser under this
paragraph shall include in the appraisal report a detailed
royalty income approach analysis, in accordance with the
Uniform Appraisal Standards for Federal Land Acquisition, of
the market value of the Federal land, even if the royalty
income approach analysis is not the appraisal approach relied
on by the appraiser to determine the final market value of
the Federal land.
(b) Equalization of Value.--
(1) Surplus of federal land value.--
(A) In general.--If the final appraised value of the
Federal land exceeds the value of the non-Federal land
involved in the exchange under section 4, Resolution Copper
shall make a cash equalization payment into the Federal Land
Disposal Account (as provided in subsection (e)) to equalize
the values of the Federal land and non-Federal land.
(B) Amount of payment.--Notwithstanding section 206(b) of
the Federal Land Policy and

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Management Act of 1976 (43 U.S.C. 1716(b)), the United States
may accept a cash equalization payment under subparagraph (A)
in an amount that is greater than 25 percent of the value of
the Federal land.
(2) Surplus of non-federal land value.--If the final
appraised value of the non-Federal land exceeds the value of
the Federal land involved in the exchange under section 4--
(A) the United States shall not make a payment to
Resolution Copper to equalize the values of the land; and
(B) the surplus value of the non-Federal land shall be
considered to be a donation by Resolution Copper to the
United States.
(3) Payment for land conveyed to town.--
(A) In general.--The Town shall pay the Secretary market
value for any land acquired by the Town from the Secretary
under section 6, as determined by the Secretary through an
appraisal conducted in accordance with subsection (a)(2).
(B) Credit.--If the final appraised value of the non-
Federal land exceeds the value of the Federal land in the
exchange under section 4, the obligation of the Town to pay
the United States under subparagraph (A) shall be reduced by
an amount equal to the excess value of the non-Federal land
conveyed to the United States.
(4) Disposition and use of proceeds.--
(A) Cash equalization payments.--Any cash equalization
payment under paragraph (1)(A) shall be deposited, without
further appropriation, in the Federal Land Disposal Account
for use in accordance with section 4(e).
(B) Payment for land conveyed to town.--Any payment
received by the Secretary from the Town under paragraph
(3)(A) shall be--
(i) deposited in the fund established under Public Law 90-
171 (commonly known as the ``Sisk Act'') (16 U.S.C. 484a);
and
(ii) made available to the Secretary, without further
appropriation, for the acquisition of land for addition to
the National Forest System in the State of Arizona.

SEC. 8. APACHE LEAP PROTECTION AND MANAGEMENT.

(a) Apache Leap Protection and Management.--
(1) In general.--To permanently protect the cultural,
historic, educational, and natural resource values of Apache
Leap, effective beginning on the date of enactment of this
Act, the Secretary shall--
(A) manage Apache Leap in accordance with the laws
(including regulations) applicable to the National Forest
System; and
(B) place special emphasis on preserving the natural
character of Apache Leap.
(2) Withdrawal.--Subject to the valid existing rights of
Resolution Copper under section 4(d)(2), effective beginning
on the date of enactment of this Act, Apache Leap shall be
permanently withdrawn from all forms of entry and
appropriation under--
(A) the public land laws (including the mining and mineral
leasing laws); and
(B) the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et
seq.).
(b) Additional Protections, Analysis, and Plan.--
(1) Management plan.--Not later than 4 years after the date
of enactment of this Act, the Secretary, in consultation with
the Town, Resolution Copper, the Yavapai and Apache Indian
tribes, and other interested members of the public, shall
solicit public comment regarding, and initiate implementation
of, a management plan for Apache Leap.
(2) Planning considerations.--The plan described in
paragraph (1) shall examine, among other matters, whether
Apache Leap should be managed to establish--
(A) additional cultural and historical resource protections
or measures, including permanent or seasonal closures of any
portion of Apache Leap to protect cultural or archeological
resources;
(B) additional or alternative public access routes, trails,
and trailheads to Apache Leap; or
(C) additional opportunities (including appropriate access)
for rock climbing, with special emphasis on improved rock
climbing access to Apache Leap from the west.
(c) Mining Activities.--Nothing in this section imposes any
restriction on any exploration or mining activity carried out
by Resolution Copper outside of Apache Leap after the date of
enactment of this Act.

SEC. 9. INCORPORATION, MANAGEMENT, AND STATUS OF ACQUIRED
LAND.

(a) Land Acquired by Secretary.--
(1) In general.--Land acquired by the Secretary under this
Act shall--
(A) become part of the National Forest within which the
land is located; and
(B) be administered in accordance with the laws (including
regulations) applicable to the National Forest System.
(2) Boundaries.--For purposes of section 7 of the Land and
Water Conservation Fund Act of 1965 (16 U.S.C. 4601 et seq.),
the boundaries of a National Forest in which land acquired by
the Secretary is located shall be deemed to be the boundaries
of that forest as in existence on January 1, 1965.
(3) Management of j-i ranch.--
(A) In general.--On the date on which the Secretary
acquires the J-I Ranch parcel described in section
4(c)(1)(D), the Secretary shall manage the land to allow
Yavapai and Apache Indian tribes--
(i) to access the land; and
(ii) to undertake traditional activities relating to the
gathering of acorns.
(B) Authority of secretary.--On receipt of a request from
the Yavapai or Apache Indian tribe, the Secretary may
temporarily or seasonally close to the public any portion of
the J-I Ranch during the period in which the Yavapai or
Apache Indian tribe carries out any activity described in
subparagraph (A)(ii).
(b) Rock Climbing.--
(1) In general.--Before consummating the land exchange
under section 4, Resolution Copper shall pay to the Secretary
$1,250,000.
(2) Use of funds.--The Secretary shall use the amount
described in paragraph (1), without further appropriation, to
construct or improve road access, turnouts, trails, camping,
parking areas, or other facilities to promote and enhance
rock climbing, bouldering, and such other outdoor
recreational opportunities as the Secretary determines to be
appropriate--
(A) in the general area north of Arizona State Highway 60
encompassing the parcel described in section 4(c)(1)(F) and
adjacent National Forest land to the north of that parcel
(commonly known as the ``upper Pond area''); or
(B) in the areas commonly known as ``Inconceivables'' and
``Chill Hill'' located in or adjacent to secs. 26, 35, and
36, T. 2 S., R. 12 E. , Gila and Salt River Meridian.
(3) Timing.--To the maximum extent practicable, the
Secretary shall use the amount described in paragraph (1)
during the 2-year period beginning on the date of
consummation of the land exchange under section 4.
(4) The pond parcel work.--
(A) In general.--To improve rock climbing opportunities in
the parcel described in section 4(c)(1)(F) and the upper Pond
area, Resolution Copper, in consultation with the Secretary
and rock climbing interests, may construct roads or improve
road access to, construct trails, camping, parking areas, or
other facilities on, or provide other access to, the Pond
parcel described in section 4(c)(1)(F) before the date of the
conveyance under section 4(c).
(B) Costs.--Resolution Copper shall pay the cost of any
activity carried out under subparagraph (A), in addition to
the amount specified in paragraph (1).
(c) Land Acquired by Secretary of Interior.--
(1) In general.--Land acquired by the Secretary of the
Interior under this Act shall--
(A) become part of the Federal administrative area
(including the Las Cienegas National Conservation Area or
other national conservation area, if applicable) within which
the land is located or to which the land is adjacent; and
(B) be managed in accordance with the laws (including
regulations) applicable to the Federal administrative area or
national conservation area within which the land is located
or to which the land is adjacent.
(2) Lower san pedro river land.--To preserve and enhance
the natural character and conservation value of the lower San
Pedro River land described in section 4(c)(2)(A), on
acquisition of the land by the Secretary of the Interior, the
land shall be automatically incorporated in, and administered
as part of, the San Pedro Riparian National Conservation
Area.
(d) Withdrawal.--On acquisition by the United States of any
land under this Act, subject to valid existing rights and
without further action by the Secretary concerned, the
acquired land is permanently withdrawn from all forms of
entry and appropriation under--
(1) the public land laws (including the mining and mineral
leasing laws); and
(2) the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et
seq.).

SEC. 10. OAK FLAT CAMPGROUND.

(a) Replacement Campgrounds.--
(1) In general.--Not later than 4 years after the date of
enactment of this Act, the Secretary, in consultation with
Resolution Copper, the Town, and other interested parties,
shall design and construct in the Globe Ranger District of
the Tonto National Forest 1 or more replacement campgrounds
for the Oak Flat Campground (including appropriate access
routes to any replacement campgrounds).
(2) Public facilities.--Any replacement campgrounds under
this subsection shall be designed and constructed in a manner
that adequately (as determined in the sole discretion of the
Secretary) replaces, or improves on, the facilities,
functions, and amenities available to the public at the Oak
Flat Campground.
(b) Costs of Replacement.--Resolution Copper shall pay the
actual cost of designing, constructing, and providing access
to any replacement campgrounds under this subsection, not to
exceed $1,000,000.
(c) Interim Oak Flat Campground Access.--The document
conveying the Federal land to Resolution Copper under section
4(b) shall specify that--
(1) during the 4-year period beginning on the date of
enactment of this Act, the Secretary shall retain title to,
operate, and maintain the Oak Flat Campground; and
(2) at the end of that 4-year period--
(A) the withdrawal of the Oak Flat Campground shall be
revoked; and
(B) title to the Oak Flat Campground shall be
simultaneously conveyed to Resolution Copper.
(d) BoulderBlast Competition.--During the 5-year period
beginning on the date of enactment of this Act, the
Secretary, in consultation with Resolution Copper, may issue

[[Page S2148]]

not more than 1 special use permit per calendar year to
provide public access to the bouldering area on the Federal
land for purposes of the annual ``BoulderBlast'' competition.

SEC. 11. TRADITIONAL ACORN GATHERING AND RELATED ACTIVITIES
IN AND AROUND OAK FLAT CAMPGROUND.

(a) Sense of Congress Regarding Acorn Gathering.--In
addition to the acorn gathering opportunities described in
section 9(a)(3)(A)(ii), it is the sense of Congress that, on
receipt of a request from the Apache or Yavapai Indian tribe
or any other Indian tribe during the 180-day period beginning
on the date of conveyance of the Federal land to Resolution
Copper under section 4, Resolution Copper should endeavor to
negotiate and execute a revocable authorization to each
applicable Indian tribe to use an area in and around the Oak
Flat Campground for traditional acorn gathering and related
activities.
(b) Area and Terms.--The precise area and terms of use
described in subsection (a)--
(1) shall be agreed to by Resolution Copper and the
applicable Indian tribes; and
(2) may be modified or revoked by Resolution Copper if
Resolution Copper, in consultation with the Indian tribes,
determines that all or a portion of the authorized use area
needs to be closed on a temporary or permanent basis--
(A) to protect the health or safety of users; or
(B) to accommodate an exploration or mining plan of
Resolution Copper.

SEC. 12. VALUE ADJUSTMENT PAYMENT TO UNITED STATES.

(a) Annual Production Reporting.--
(1) In general.--Beginning on February 15 of the first
calendar year beginning after the date of commencement of
production of valuable locatable minerals in commercial
quantities (as defined by applicable Federal laws (including
regulations)) from the Federal land conveyed to Resolution
Copper under section 4(b), and annually thereafter,
Resolution Copper shall file with the Secretary of the
Interior a report indicating the quantity of locatable
minerals in commercial quantities produced from the Federal
land during the preceding calendar year.
(2) Report contents.--The reports under paragraph (1) shall
comply with all recordkeeping and reporting requirements of
applicable Federal laws (including regulations) in effect at
the time of production relating to the production of valuable
locatable minerals in commercial quantities on any federally
owned land.
(b) Payment on Production.--If the cumulative production of
valuable locatable minerals in commercial quantities produced
from the Federal land conveyed to Resolution Copper under
section 4(b) exceeds the quantity of production of locatable
minerals from the Federal land used in the royalty income
approach analysis under the Uniform Appraisal Standards for
Federal Land Acquisitions prepared under section 7(a)(4)(D),
Resolution Copper shall pay to the United States, by not
later than March 15 of each applicable calendar year, a value
adjustment payment for the quantity of excess production at a
rate equal to--
(1) the Federal royalty rate in effect for the production
of valuable locatable minerals from federally owned land, if
such a rate is enacted before December 31, 2012; or
(2) if no Federal royalty rate is enacted by the date
described in paragraph (1), the royalty rate used for
purposes of the royalty income approach analysis prepared
under section 7(a)(4)(D).
(c) State Law Unaffected.--Nothing in this Act modifies,
expands, diminishes, amends, or otherwise affects any State
law (including regulations) relating to the imposition,
application, timing, or collection of a State excise or
severance tax under Arizona Revised Statutes 42-5201-5206.
(d) Use of Funds.--The funds paid to the United States
under this section shall--
(1) be deposited in a special account of the Treasury; and
(2) remain available, without further appropriation, to the
Secretary and the Secretary of the Interior, as the
Secretaries jointly determine to be appropriate, for the
acquisition of land or interests in land from willing sellers
in the State of Arizona.

SEC. 13. MISCELLANEOUS PROVISIONS.

(a) Revocation of Orders; Withdrawal.--
(1) Revocation of orders.--Any public land order that
withdraws the Federal land from appropriation or disposal
under a public land law shall be revoked to the extent
necessary to permit disposal of the land.
(2) Withdrawal.--On the date of enactment of this Act, if
the Federal land or any Federal interest in the non-Federal
land to be exchanged under section 4 is not withdrawn or
segregated from entry and appropriation under a public land
law (including mining and mineral leasing laws and the
Geothermal Steam Act of l970 (30 U.S.C. 1001 et seq.)), the
land or interest shall be withdrawn, without further action
required by the Secretary concerned, from entry and
appropriation, subject to the valid existing rights of
Resolution Copper, until the date of the conveyance of
Federal land under section 4(b).
(b) Maps, Estimates, and Descriptions.--
(1) Minor errors.--The Secretary concerned and Resolution
Copper, may correct, by mutual agreement, any minor errors in
any map, acreage estimate, or description of any land
conveyed or exchanged under this Act.
(2) Conflict.--If there is a conflict between a map, an
acreage estimate, or a description of land under this Act,
the map shall control unless the Secretary concerned and
Resolution Copper mutually agree otherwise.
(3) Availability.--On the date of enactment of this Act,
the Secretary shall file and make available for public
inspection in the Office of the Supervisor, Tonto National
Forest, each map referred to in this Act.
______

By Mr. BENNETT (for himself and Mr. Hatch):
S. 411. A bill to authorize the Secretary of Transportation to
release restrictions on the use of certain property conveyed to the
City of St. George, Utah for airport purposes; to the Committee on
Commerce, Science, and Transportation.
Mr. BENNETT. Mr. President, I, along with the senior senator from
Utah, am introducing today legislation to authorize the Secretary of
Transportation to release restrictions on the use of certain property
conveyed to the city of St. George, Utah for airport purposes.
On October 17, 2008, the City of St. George, UT, and the Federal
Aviation Administration, FAA, broke ground on the construction of a new
replacement airport, which will provide enhanced air service to the
over 300,000 residents of southern Utah. The total project will cost
$168 million and the start of operations at the replacement airport is
scheduled for January 1, 2011.
The project is being funded largely through Federal grants covered by
a letter of intent from the FAA in the amount of $119 million.
The City of St. George is financing its $44 million local share of
the replacement airport through the sale of the existing airport
property totaling 274 acres to Anderson Development Services Inc.
Recently it was discovered that 40 acres of the existing airport site
was acquired by the City of St. George under Section 16 of the Federal
Airport Act of 1946 (60 Stat. 173; 49 U.S.C. 1115) and can only be used
for airport purposes.
The United States Secretary of the Interior issued a patent to the
city of St. George in 1951 for the 40 acres and the city signed a deed
to the land dated August 28, 1973, which contains a reverter deed
restriction that if the land ceased to be used for airport purposes,
the title would revert back to the United States Secretary of
Transportation.
Federal legislation is required to authorize the Secretary of
Transportation to release this reverter deed restriction on the use of
this 40 acre parcel so the sale of the entire 274 acre airport can go
through. A similar legislation (Public Law 94-244) releasing identical
deed restrictions was enacted for the City of Grand Junction, CO; in
1976.
The legislation requires that upon release from these restrictions,
the City of St. George, UT, must sell the 40 acre parcel for fair
market value, which is estimated at $5 million, and the proceeds must
be given to the FAA for the development, improvement, operation, or
maintenance of the replacement airport as part of St. George's local
contribution.
I urge my colleagues to support this straight-forward legislation.
All funds will still be directed to the FAA. However, this minor
correction will go a long way in assisting one of the fastest growing
counties in the United States.
______

By Mr. INHOFE:
S. 412. A bill to establish the Federal Emergency Management Agency
as an independent agency, and for other purposes; to the Committee on
Homeland Security and Governmental Affairs.
Mr. INHOFE. Mr. President, today I am reintroducing a bill I had
introduced with then-Senator Hillary Clinton on two previous occasions.
It is interesting, because this bill didn't have a lot of opposition in
the Senate. It did, however, have some opposition from the Bush
administration. What we were attempting to do was to take the Federal
Emergency Management Agency out from under where it was put, in the
Department of Homeland Security, by the previous administration and
give it independent status. This is something that has been talked
about for a long period of time.
We can draw from our experience in Oklahoma and the fact that we had
a devastating tornado go through--as we did last night, although it was
even worse--which killed many people. At that time, James Lee Witt was
the FEMA Director. He was President Clinton's appointee. I will always
remember when that happened. A matter of a

[[Page S2149]]

few short hours after it happened, I called Mr. Witt and he met me in
Oklahoma, and we got it done. At that time, FEMA was under the
Environment and Public Works Committee. It was under the Stafford Act
and virtually had independent status at that time.
Contrast that with only a few months ago when GEN Russel Honore, the
general placed in charge of the military's relief efforts following
Hurricane Katrina, said that FEMA and the Department of Homeland
Security should be separate agencies. In an interview reported in
Politico, General Honore said of FEMA:

I just think we've had some experience that demonstrates
that the best thing to do is separate it and make it a
separate agency.

Most importantly, President Obama said in remarks he delivered in New
Orleans in February of last year:

If catastrophe comes, the American people must be able to
call on a competent government . . . the Director of FEMA
will report to me . . . and as soon as we take office, my
FEMA director will work with emergency management officials
in all 50 States to create a National Response Plan. Because
we need to know--before disaster comes--who will be in
charge; and how the Federal, State and local governments will
work together to respond.

I talked to the President a few minutes ago. He still has these same
feelings. I think it is very appropriate now to bring up something we
had talked about before. I know the Democratic platform, for example,
has a provision which states that the FEMA Director will report
directly to the President, and I couldn't agree more. I don't agree
with a lot of things from the Democratic platform, but I do agree with
that.
Oklahoma has had more than its share of natural disasters. Only last
night, three confirmed tornadoes touched down throughout Oklahoma,
impacting the communities of Oklahoma City, Edmond, Pawnee, and a small
community called Lone Grove. In Lone Grove, this very tiny community,
eight people were killed. There are 35 still missing, so I think the
death toll, unfortunately, could rise above that. I had occasion to
talk to civic leaders there--Gary Hicks and city manager Marianne
Elfert--this morning, and the number of Lone Grove residents who are
missing right now is still not determined. So I think it is a real
disaster.
It wasn't that long ago that we had the Eagle Picher area of Oklahoma
hit by a tornado, and that was a very similar thing there, with seven
deaths in that case. On May 1 of last year, I surveyed other tornado
damage up there with Secretary Chertoff and FEMA Director Paulison,
Governor Henry, and Congressman Boren. As I said, seven people were
killed, but that didn't go quite as smoothly as we would have hoped.
FEMA's integration into the Department of Homeland Security in 2003
added an extra layer of bureaucracy and removed much of the autonomy
that once kept the agency operating efficiently. We learned in the
aftermath of Hurricane Katrina that the extra coordination required
between the Department of Homeland Security and the Federal Emergency
Management Agency was at least partly responsible for the shortcomings
of the Federal response. I visited the area right after Katrina, and I
think they did a much better job than the press portrayed, but I still
think that extra level of bureaucracy created a problem in getting
things done immediately.
My legislation takes the necessary steps in giving the Director of
FEMA Cabinet level status in the event of a natural disaster and acts
of terrorism and makes that person the principal adviser to the
President, Homeland Security Council, and the Secretary of Homeland
Security. So we are kind of reversing it, and he is going to be in a
Cabinet-level position. Obviously, things can then be done a lot faster
and a lot better. Perhaps most importantly, the legislation defines the
primary mission and specific activities of the Federal Emergency
Management Agency and its Director, and places directly upon them the
obligation to ensure FEMA's mission is carried out.
Now, that is exactly what President Obama said while he was
campaigning for President and what he reaffirmed to me today on the
telephone.
Let me explain some other events that originally led me to introduce
this legislation. Oklahoma first encountered significant problems with
FEMA when wildfires ravaged the State in 2005 and 2006. These
devastating wildfires swept through the entire State, leading to
declarations for public assistance, individual assistance, and hazard
mitigation funding. In January of 2007, Oklahoma encountered severe
winter storms with devastating results. These storms led to prolonged
loss of power and extensive building damage for many of my
constituents. One of my constituents happened to be my wife--we have
been married 49 years--and she was without electricity for 9 days, so
that does get your attention.
Later this year, Oklahoma was hit by heavy rain, tornadoes, and
flooding from May through September. The State made a number of
disaster declarations during each of these periods, but each and every
time, the process it took to obtain aid from FEMA became increasingly
difficult, wrought with indecisiveness and an inability of Homeland
Security to communicate with each other. Prior to the placement of FEMA
under DHS, my State had not encountered nearly the same level of
bureaucratic delays or communications as it has since that time.
Oklahoma has also struggled with FEMA regarding the determination of
dates of incident periods, which is why I put language in my bill to
give deference to the State's documentation regarding the dates of such
incidents. Now, some of you guys are not from States where you have the
number of disasters we have had, so it is something you are not as
familiar with. But we certainly are. I see the junior Senator from
Oklahoma on the floor here, and he knows too that we live through these
things on a regular basis. We have had tornadoes, ice storms,
windstorms, and other things people haven't had.
I think Senator Clinton and I were right when we introduced this the
first time, and I believe it is consistent with what President Obama
has reaffirmed to me as recently as today. It will be a better
arrangement and I will be looking for supporters.
We have introduced the bill. It is S. 412. Again, this bill takes
FEMA out from under DHS and gives it more of an independent status so
it can respond in a more rapid way as it did prior to 2003.
______

By Mr. DODD (for himself, Mr. Levin, Mr. Menendez, Mr. Reed, Mr.
Akaka, Mr. Schumer, Mr. Tester, Mr. Brown, Mr. Merkley, Mr.
Kerry, Mr. Leahy, Mr. Durbin, Mr. Harkin, Mrs. McCaskill, Mr.
Whitehouse, and Mr. Casey):
S. 414. A bill to amend the Consumer Credit Protection Act, to ban
abusive credit practices, enhance consumer disclosures, protect
underage consumers, and for other purposes; to the Committee on
Banking, Housing, and Urban Affairs.
Mr. DODD. Mr. President, I am pleased today to be reintroducing
comprehensive credit card legislation that would reform credit card
practices and prohibit card issuers from continuing policies that are
threatening the financial security of American consumers and their
families. The Credit Card Accountability, Responsibility and Disclosure
Act, Credit CARD Act, will help to end the practices that cost American
families billions of dollars each year.
This is a time of serious hardship for American families. As losses
mount as a result of the economic crisis, lenders are squeezing
consumers, often unfairly and without adequate notice, by raising
credit card rates and tightening repayment terms. Credit card
delinquency rates are inching higher, and repayment rates are dipping.
At a time when Americans are becoming increasingly reliant on credit
cards, credit card companies are being more aggressive about finding
ways to charge their customers. Over $17 billion in credit card penalty
fees were charged to Americans in 2006--a ten-fold increase from what
was charged just ten years ago. These penalties are contributing to the
avalanche of credit card debt under which many American consumers
increasingly find themselves buried.
In my travels around Connecticut, I hear frequently about the burden
of these credit card practices from constituents. Connecticut has the
third-

[[Page S2150]]

highest median amount of credit card debt in the country--$2,094 per
person. Non-business bankruptcy filings in the State are increasing,
and in the second quarter of last year, credit card delinquencies
increased in 7 of the 8 counties in the State.
In December, the Federal Reserve, Office of Thrift Supervision, and
National Credit Union Administration finalized unfair and deceptive
acts and practices rules aimed at curbing some of these practices. For
example, for customers in good standing the new rules will prevent
issuers from applying interest rate increases retroactively to credit
card debt incurred prior to the interest rate increase. They will also
help ensure that issuers apply payments fairly, and extend the time
that consumers have to make their credit card payments. The rules are a
good first step in providing needed consumer protections in some areas.
They fall short in other important areas, however, failing to address
issues including universal default, ``any time any reason'' repricing,
multiple overlimit fees, and youth marketing, which I'll explain in a
moment.
In anticipation of rules going into effect in July of 2010, issuers
are raising their interest rates and cutting lines of credit even on
consumers with a long and unblemished history of good payment, thereby
underscoring the need for this legislation.
That is why I am reintroducing the Credit CARD Act. This bill will
help to reform credit card practices that drag so many American
families further and further into debt, and prevent banks from taking
advantage of consumers through confusing, misleading, and unfair terms
and procedures. It strengthens regulation and oversight of the credit
card industry and prohibits the unfair and deceptive practices that in
far too many instances keep consumers mired in debt.

Among its other provisions, the CARD Act will eliminate imposition of
excessive fees and penalties; universal default provisions that permit
credit card issuers to increase interest rates on cardholders in good
standing for reasons unrelated to the cardholder's behavior with
respect to that card; ``Any time any reason'' changes to credit card
agreements--the bill prevents issuers from unilaterally changing the
terms of a credit card contract for the length of the card agreement;
and retroactive interest rate increases, unfair payment allocation
practices, and double-cycle billing.
The Credit Card Act also contains additional critical consumer
protections. Among other things, the bill would: allow customers who
close their accounts to pay under the terms existing at the time the
account is closed; ensure that cardholders receive sufficient
information about the terms of their account; require issuers to lower
penalty rates that have been imposed on a cardholder after 6 months if
the cardholder meets the obligations of the credit card terms; and
enhance regulators' ability to protect consumers against unfair credit
card practices by giving each federal banking agency the authority to
prescribe regulations governing unfair or deceptive practices by the
institutions they regulate.
The bill also reins in irresponsible lending through a number of
provisions aimed at protecting young consumers who lack the ability to
repay substantial credit card debt.
This legislation incorporates several key concepts included in the
legislative proposals put forth by some of my colleagues, notably
Senators Levin, Menendez, Akaka, and Tester. Each is a cosponsor of
this legislation, as are Senators Reed, Schumer, Brown, Merkley, Kerry,
Leahy, Durbin, Harkin, McCaskill, Whitehouse, and Casey.
This bill has the support of a wide array of consumer advocates and
labor organizations, including the Center for Responsible Lending,
Connecticut Public Interest Research Group, the Connecticut Association
for Human Services, Consumer Action, Consumer Federation of America,
Consumers Union, Demos, the Leadership Conference on Civil Rights, the
NAACP, the National Association of Consumer Advocates, the National
Consumer Law Center, the National Council of LaRaza, the Service
Employees International Union, and the U.S. Public Interest Research
Group. The bill also has the support of the National Small Business
Association.
As the U.S. economy tightens, financially vulnerable families need
the protections of the Credit CARD Act more than ever. That is what the
American people and the people of Connecticut are demanding. For this
reason, I urge my colleagues to join me in cosponsoring, and eventually
in enacting the Credit CARD Act.
Mr. LEVIN. Mr. President, I am pleased today to join my friend and
colleague Senator Dodd in reintroducing comprehensive legislation to
combat credit card abuses that have been hurting American consumers for
far too long. Our bill, which is supported and cosponsored by other
Senate colleagues as well, is called the Credit Card Accountability
Responsibility and Disclosure Act, or CARD Act of 2009. With the
economic hardships facing Americans today, from falling home prices to
rising unemployment, it is more important than ever for Congress to act
now to stop credit card abuses and protect American families and
businesses from unfair credit card practices.
Every day the taxpayer is being asked to foot the bill for our
biggest banks' irresponsible lending decisions. America's banking
giants can't be allowed to dig themselves out of the hole they are in
by loading up American families with unfair fees and interest charges.
Even as the prime rate has plummeted, some credit card companies are
hiking interest rates on millions of customers who play by the rules.
In other words, the banks are punishing the very taxpayers that they
have come to, hat in hand, for financial rescue. It can't be allowed to
continue.
Credit card companies regularly use a host of unfair practices. They
hike the interest rates of cardholders who pay on time and comply with
their credit card agreements. They impose interest rates as high as 32
percent, charge interest for debt that was paid on time, and, in some
cases, apply higher interest rates retroactively to existing credit
card debt. They pile on excessive fees and then charge interest on
those fees. And they engage in a number of other unfair practices that
are burying American consumers in a mountain of debt. It's long past
time to enact legislation to protect American consumers.
In December, the Federal Reserve and other bank regulators finally
issued a regulation to stop some of the most egregiously unfair
practices. For example, the new credit card regulation stops banks from
retroactively raising interest rates on cardholders who meet their
obligations, requires banks to mail credit card bills at least 21 days
before the payment due date, and forces banks to more fairly apply
consumer payments. It is a good first step, and long overdue. But the
regulation regrettably leaves in place many blatantly unfair credit
card practices that mire families in debt. It fails to stop, for
example, abuses such as charging interest on debt that was paid on
time, charging folks a fee simply to pay their bills, and hiking
interest rates on a credit card because of a misstep on another,
unrelated debt, a practice known as universal default. Legislation is
needed not only to end those abusive practices--which are not
prohibited by the Federal Reserve regulation--but also to provide a
statutory foundation for that new regulation so that it cannot be
weakened in the future.
The bill we are introducing today will not only help protect
consumers and ensure their fair treatment, but it will also make
certain that credit card companies willing to do the right thing are
not put at a competitive disadvantage by companies continuing unfair
practices.
Some argue that Congress doesn't need to ban unfair credit card
practices; they contend that improved disclosure alone will empower
consumers to seek out better deals. Sunlight can be a powerful
disinfectant, but credit cards have become such complex financial
products that even improved disclosure will frequently not be enough to
curb the abuses. Some practices are so confusing that consumers can't
easily understand them. Additionally, better disclosure does not always
lead to greater market competition, especially when essentially an
entire industry is using and benefiting from practices that unfairly
hurt consumers.
In 2006, Americans used 700 million credit cards to buy about $2
trillion in

[[Page S2151]]

goods and services. The average family now has 5 credit cards. Credit
cards are being used to pay for groceries, mortgage payments, even
taxes. And they are saddling U.S. consumers, from college students to
seniors, with a mountain of debt. The latest figures show that U.S.
credit card debt is now approaching $1 trillion. These consumers are
routinely being subjected to unfair practices that squeeze them for
ever more money, sinking them further and further into debt.
Congress acted boldly and quickly to bail out the banks; now is time
to do something for the consumer. Too many American families are being
hurt by too many unfair credit card practices to delay action any
longer. I commend Senator Dodd, Chairman of the Senate Banking
Committee, for tackling credit card reform, and look forward to
Congress promptly and urgently taking the steps needed to ban unfair
practices that are causing so much pain and financial damage to
American families.
Abusive credit card practices are a concern that I have been tracking
over the past several years through the Permanent Subcommittee on
Investigations, which I chair. The Subcommittee held two investigative
hearings in 2007, exposing those practices, and based on those
hearings, I introduced legislation--the Stop Unfair Practices in Credit
Cards Act, S. 1395--to ban the outrageous credit card abuses we
documented. I am pleased that Senators McCaskill, Leahy, Durbin,
Bingaman, Cantwell, Whitehouse, Kohl, Brown, Kennedy, and Sanders
joined as cosponsors. The Dodd-Levin bill we are introducing today
incorporates almost all of S. 1395, and adds other important
protections as well. It is the strongest credit card bill yet.
The Dodd-Levin bill includes, for example, the following provisions
that also appeared in the bill I introduced with Senator McCaskill and
others. It would:
No Interest on Debt Paid on Time. Prohibit interest charges on any
portion of a credit card debt which the card holder paid on time during
a grace period.
Prohibition on Universal Default. Prohibit credit card issuers from
increasing interest rates on cardholders in good standing for reasons
unrelated to the cardholder's behavior with respect to that card.
Apply Interest Rate Increases Only to Future Debt. Require increased
interest rates to apply only to future credit card debt, and not to
debt incurred prior to the increase.
No Interest on Fees. Prohibit the charging of interest on credit card
transaction fees, such as late fees and over-the-limit fees.
Restrictions on Over-Limit Fees. Prohibit the charging of repeated
over-limit fees for a single instance of exceeding a credit card limit.
Prompt and Fair Crediting of Card Holder Payments. Require payments
to be applied first to the credit card balance with the highest rate of
interest, and to minimize finance charges.
Fixed Credit Limits. Require card issuers to offer consumers the
option of operating under a fixed credit limit that cannot be exceeded.
No Pay-to-Pay Fees. Prohibit charging a fee to allow a credit card
holder to make a payment on a credit card debt, whether payment is by
mail, telephone, electronic transfer, or otherwise.
The Dodd-Levin bill also includes important additional protections.
It would:
Require issuers to lower penalty rates that have been imposed on a
cardholder after 6 months if the cardholder commits no further
violations.
Enhance protection against unfair and deceptive practices by giving
each federal banking agency the authority to prescribe regulations
governing unfair or deceptive practices by banks or savings and loan
institutions.
Improve disclosure requirements by, for example, requiring issuers to
provide individual consumer account information and to disclose the
period of time and total interest it will take to pay off the card
balance if only minimum monthly payments are made.
Protect young consumers from credit card solicitations.
To understand why these protections are needed, I would like to
provide a brief overview of some of the most prevalent credit card
abuses we uncovered and some of the stories that American consumers
shared with us during the course of the inquiries carried out by my
Permanent Subcommittee on Investigations.
The first case history we examined illustrates the fact that major
credit card issuers today impose a host of fees on their cardholders,
including late fees and over-the-limit fees that are not only
substantial in themselves but can contribute to years of debt for
families unable to immediately pay them.
Wesley Wannemacher of Lima, Ohio, testified at our March 2007
hearing. In 2001 and 2002, Mr. Wannemacher used a new credit card to
pay for expenses mostly related to his wedding. He charged a total of
about $3,200, which exceeded the card's credit limit by $200. He spent
the next six years trying to pay off the debt, averaging payments of
about $1,000 per year. As of February 2007, he'd paid about $6,300 on
his $3,200 debt, but his billing statement showed he still owed $4,400.
How is it possible that a man pays $6,300 on a $3,200 credit card
debt, but still owes $4,400? Here's how. On top of the $3,200 debt, Mr.
Wannemacher was charged by the credit card issuer about $4,900 in
interest, $1,100 in late fees, and $1,500 in over-the-limit fees. He
was hit 47 times with over-limit fees, even though he went over the
limit only 3 times and exceeded the limit by only $200. Altogether,
these fees and the interest charges added up to $7,500, which, on top
of the original $3,200 credit card debt, produced total charges to him
of $10,700.
In other words, the interest charges and fees more than tripled the
original $3,200 credit card debt, despite payments by the cardholder
averaging $1,000 per year. Unfair? Clearly, but our investigation has
shown that sky-high interest charges and fees are not uncommon in the
credit card industry. While the Wannemacher account happened to be at
Chase, penalty interest rates and fees are also employed by other major
credit card issuers.
The week before our March hearing, Chase decided to forgive the
remaining debt on the Wannemacher account, and while that was great
news for the Wannemacher family, that decision didn't begin to resolve
the problem of excessive credit card fees and sky-high interest rates
that trap too many hard-working families in a downward spiral of debt.
These high fees are made worse by the industry-wide practice of
including all fees in a consumer's outstanding balance so that they
also incur interest charges. Those interest charges magnify the cost of
the fees and can quickly drive a family's credit card debt far beyond
the cost of their initial purchases. It is one thing for a bank to
charge interest on funds lent to a consumer; charging interest on
penalty fees goes too far.
A second troubling case history involves Charles McClune, a 51-year-
old Michigan resident who is married with one child. Mr. McClune has a
credit card account which he closed in 1998, and has been trying to pay
off for more than 10 years. Due to excessive fees and interest rates,
and despite paying more than four times his original credit card debt
of less than $4,000, Mr. McClune still owes thousands on his credit
card, with no end in sight.
Mr. McClune first opened his credit card account while in college, in
1986, at Michigan National Bank through a student-targeted credit
promotion. After leaving college, the credit limit on his card was
increased to $4,000. By 1993, although he had not exceeded the credit
limit through purchases, Mr. McClune had missed some payments and was
assessed interest and fees that pushed his balance over the $4,000
limit. From 1993 to 1996, he exceeded his limit again, on several
occasions, due to interest and fee charges. He stopped making purchases
on the credit card in 1995.

In 1996, Mr. McClune's credit card account was purchased by Chase
Bank. In 1998, Mr. McClune asked Chase to close the account, and Chase
did so. Although he never made a single purchase on his credit card
while the account was with Chase, Chase repeatedly increased the
interest rate on his account, including after the account was closed.
In 2002, for example, his interest rate was about 21 percent; by
October 2005, it had climbed to 29.99 percent where it remained for
more than two years until March 2008; it then

[[Page S2152]]

dropped slightly to 29.24 percent. The higher interest rates were
applied retroactively to Mr. McClune's closed account balance,
increasing the size of his minimum payments and his overall debt.
Chase also assessed Mr. McClune repeated over-the-limit and late
fees, which began at $29 and increased over time to $39 per fee. Chase
cannot locate statements for Mr. McClune's account prior to February
2001, so there is no record of all the fees he has paid. The records in
existence show that, since February 2001, he has paid 64 over-the-limit
fees totaling $2,200. Those fees stopped after the March 2007 hearing
before my Subcommittee, in which Chase promised to stop charging more
than three over-the-limit fees for a single violation of a credit card
limit. In addition to the 64 over-the-limit fees, since February 2001,
Chase has charged Mr. McClune nearly $2,000 in late fees.
The records also show that since 2001, Mr. McClune was contacted by
telephone on several occasions by Chase representatives seeking payment
on his account. If he agreed to make a payment over the telephone,
Chase charged him--without notifying him at the time--a fee of $12 to
$15 per telephone payment. When asked about these fees, Chase told the
Subcommittee that the fees were imposed, because on each occasion Mr.
McClune had spoken with a ``live advisor.'' Since 2001, he has paid a
total of $160 in these pay-to-pay fees.
Altogether, since 2001, Mr. McClune has paid nearly $4,400 in fees on
a debt of less than $4,000. If the more than four years of missing
credit card bills were available from 1996 to 2000, this fee total
would be even higher. In addition, each fee was added to Mr. McClune's
outstanding credit card balance, and Chase charged him interest on the
fee amounts, thereby increasing his debt by thousands of additional
dollars.
In February 2001, Chase records show that Mr. McClune's credit card
debt totaled nearly $5,200. For the next 7 years, although he did not
pay every month, Mr. McClune paid nearly $2,000 per year toward his
credit card debt, but was unable to pay it off. At one time, he paid
$150 every two weeks for several weeks. Those payments did not bring
his debt under the $4,000 credit limit, or reduce his interest rate.
In January 2007, Mr. McClune received a letter from Chase stating
that if he made his next payment on time, he would receive a $50 credit
on his debt. Mr. McClune cashed out his IRA and paid $4,000 on his
credit card debt. Because he made this payment in February, however, he
did not receive the $50 credit for an on-time payment. Instead, he was
assessed a $39 late fee, a $39 over-the-limit fee, and a $14.95 payment
fee for making the $4,000 payment over the telephone.
Mr. McClune was never offered a payment plan or a reduced interest
rate by Chase to help him pay down his debt. His credit card bills show
that from February 2001 to June 2008, he paid Chase a total of $15,800.
If the four years of missing credit card bills from 1996 to 2000 were
available, his total payments would likely exceed $20,000. In June
2008, his credit card bill showed he was charged 29 percent interest
and a $39 late fee on a balance of $3,300.
How could Mr. McClune pay $15,000 to $20,000 on credit card purchases
of less than $4,000, and still owe $3,300? His credit card statements
since 2001 show that he was socked with over $9,700 in interest
charges, $2,200 in over-the-limit fees, $2,000 in late fees, and $160
in pay-to-pay fees. All of these interest charges and fees were
assessed by Chase while the account was closed and without a single
purchase having been made since 1995. Despite his lack of purchases and
payments totaling $15,800, Chase records show that, from February 2001
until June 2008, Mr. McClune was able to reduce his credit card balance
by only about $1,850.
Mr. McClune is not trying to avoid his debt. He has made years of
payments on a closed credit card account that he has not used to make a
purchase in 13 years. He has paid thousands and thousands of dollars--
four and possibly five times what he originally owed--in an attempt to
pay off his credit card account. He is still paying. But his thousands
of dollars in payments are not enough for his credit card issuer which
is squeezing him for every cent it can, fair or not, for years on end.
Tragically, Mr. McClune and Mr. Wannemacher have a lot of company in
their credit card experiences. The many case histories investigated by
the Subcommittee show that responsible cardholders across the country
are being squeezed by unfair credit card lending practices involving
excessive fee and interest charges. The current regulatory regime--even
with the new Federal Reserve regulation--is insufficient to prevent
these ongoing credit card abuses. Legislation is badly needed.
Another galling practice featured in our March hearing involves the
fact that credit card debt that is paid on time routinely accrues
interest charges, and credit card bills that are paid on time and in
full are routinely inflated with what I call ``trailing interest.''
Every single credit card issuer contacted by the Subcommittee engaged
in both of these unfair practices which squeeze additional interest
charges from responsible cardholders.
Here's how it works. Suppose a consumer who usually pays his account
in full, and owes no money on December 1st, makes a lot of purchases in
December, and gets a January 1 credit card bill for $5,020. That bill
is due January 15. Suppose the consumer pays that bill on time, but
pays $5,000 instead of the full amount owed. What do you think the
consumer owes on the next bill?
If you thought the bill would be the $20 past due plus interest on
the $20, you would be wrong. In fact, under industry practice today,
the bill would likely be twice as much. That's because the consumer
would have to pay interest, not just on the $20 that wasn't paid on
time, but also on the $5,000 that was paid on time. In other words, the
consumer would have to pay interest on the entire $5,020 from the first
day of the new billing month, January 1, until the day the bill was
paid on January 15, compounded daily. So much for a grace period! In
addition, the consumer would have to pay the $20 past due, plus
interest on the $20 from January 15 to January 31, again compounded
daily. In this example, using an interest rate of 17.99 percent (which
is the interest rate charged to Mr. Wannamacher), the $20 debt would,
in one month, rack up $35 in interest charges and balloon into a debt
of $55.21.
You might ask--hold on--why does the consumer have to pay any
interest at all on the $5,000 that was paid on time? Why does anyone
have to pay interest on the portion of a debt that was paid by the date
specified in the bill--in other words, on time? The answer is, because
that's how the credit card industry has operated for years, and they
have gotten away with it.
There's more. You might think that once the consumer gets gouged in
February, paying $55.21 on a $20 debt, and pays that bill on time and
in full, without making any new purchases, that would be the end of it.
But you would be wrong again. It's not over.
Even though, on February 15, the consumer paid the February bill in
full and on time--all $55.21--the next bill has an additional interest
charge on it, for what we call ``trailing interest.'' In this case, the
trailing interest is the interest that accumulated on the $55.21 from
February 1 to 15, which is the time period from the day when the bill
was sent to the day when it was paid. The total is 38 cents. While some
issuers will waive trailing interest if the next month's bill is less
than $1, if a consumer makes a new purchase, a common industry practice
is to fold the 38 cents into the end-of-month bill reflecting the new
purchase.
Now 38 cents isn't much in the big scheme of things. That may be why
many consumers don't notice these types of extra interest charges or
try to fight them. Even if someone had questions about the amount of
interest on a bill, most consumers would be hard pressed to understand
how the amount was calculated, much less whether it was incorrect. But
by nickel and diming tens of millions of consumer accounts, credit card
issuers reap large profits. I think it is indefensible to make
consumers pay interest on debt which they pay on time. It is also just
plain wrong to charge trailing interest when a bill is paid on time and
in full.
My Subcommittee's second hearing focused on another set of unfair
credit card practices involving unfair interest

[[Page S2153]]

rate increases. Cardholders who had years-long records of paying their
credit card bills on time, staying below their credit limits, and
paying at least the minimum amount due, were nevertheless socked with
substantial interest rate increases. Some saw their credit card
interest rates double or even triple. At the hearing, three consumers
described this experience.
Janet Hard of Freeland, Michigan, had accrued over $8,000 in debt on
her Discover card. Although she made payments on time and paid at least
the minimum due for over two years, Discover increased her interest
rate from 18 percent to 24 percent in 2006. At the same time, Discover
applied the 24 percent rate retroactively to her existing credit card
debt, increasing her minimum payments and increasing the amount that
went to finance charges instead of the principal debt. The result was
that, despite making steady payments totaling $2,400 in twelve months
and keeping her purchases to less than $100 during that same year,
Janet Hard's credit card debt went down by only $350. Sky-high interest
charges, inexplicably increased and unfairly applied, ate up most of
her payments.
Millard Glasshof of Milwaukee, Wisconsin, a retired senior citizen on
a fixed income, incurred a debt of about $5,000 on his Chase credit
card, closed the account, and faithfully paid down his debt with a
regular monthly payment of $119 for years. In December 2006, Chase
increased his interest rate from 15 percent to 17 percent, and in
February 2007, hiked it again to 27 percent. Retroactive application of
the 27 percent rate to Mr. Glasshof's existing debt meant that, out of
his $119 payment, about $114 went to pay finance charges and only $5
went to reducing his principal debt. Despite his making payments
totaling $1,300 over twelve months, Mr. Glasshof found that, due to
high interest rates and excessive fees, his credit card debt did not go
down at all. Later, after the Subcommittee asked about his account,
Chase suddenly lowered the interest rate to 6 percent. That meant, over
a one year period, Chase had applied four different interest rates to
his closed credit card account: 15 percent, 17 percent, 27 percent, and
6 percent, which shows how arbitrary those rates are.
Then there is Bonnie Rushing of Naples, Florida. For years, she had
paid her Bank of America credit card on time, providing at least the
minimum amount specified on her bills. Despite her record of on-time
payments, in 2007, Bank of America nearly tripled her interest rate
from 8 to 23 percent. The Bank said that it took this sudden action
because Ms. Rushing's FICO credit score had dropped. When we looked
into why it had dropped, it was apparently because she had opened
Macy's and J. Jill credit cards to get discounts on purchases. Despite
paying both bills on time and in full, the automated FICO system had
lowered her credit rating, and Bank of America had followed suit by
raising her interest rate by a factor of three. Ms. Rushing closed her
account and complained to the Florida Attorney General, my
Subcommittee, and her card sponsor, the American Automobile
Association. Bank of America eventually restored the 8 percent rate on
her closed account.
In addition to these three consumers who testified at the hearing,
the Subcommittee presented case histories for five other consumers who
experienced substantial interest rate increases despite complying with
their credit card agreements.
I'd also like to note that, in each of these cases, the credit card
issuer told our Subcommittee that the cardholder had been given a
chance to opt out of the increased interest rate by closing their
account and paying off their debt at the prior rate. But each of these
cardholders denied receiving an opt-out notice, and when several tried
to close their account and pay their debt at the prior rate, they were
told they had missed the opt-out deadline and had no choice but to pay
the higher rate. Our Subcommittee examined copies of the opt-out
notices and found that some were filled with legal jargon, were hard to
understand, and contained procedures that were hard to follow. When we
asked the major credit card issuers what percentage of persons offered
an opt-out actually took it, they told the Subcommittee that 90 percent
did not opt out of the higher interest rate--a percentage that is
contrary to all logic and strong evidence that current opt-out
procedures don't work.

The case histories presented at our hearings illustrate only a small
portion of the abusive credit card practices going on today. Since
early 2007, the Subcommittee has received letters and emails from
thousands of credit card cardholders describing unfair credit card
practices and asking for help to stop them, more complaints than I have
received in any investigation I've conducted in more than 25 years in
Congress. The complaints stretch across all income levels, all ages,
and all areas of the country. The bottom line is that these abuses have
gone on for too long. In fact, these practices have been around for so
many years that they have in many cases become the industry norm, and
our investigation has shown that many of the practices are too
entrenched, too profitable, and too immune to consumer pressure for the
companies to change them on their own.
For these reasons, I urge my colleagues to support enactment of the
Dodd-Levin Credit CARD Act this year. Congress has already gone to bat
for the banks that engage in abusive credit card practices; it's time
we go to bat for the American family.
______

By Mrs. FEINSTEIN (for herself, Mr. Leahy, Mr. Bingaman, Mrs.
Boxer, Mr. Brown, Mr. Cardin, Mr. Casey, Mr. Durbin, Mr.
Feingold, Mr. Kennedy, Ms. Mikulski, Mr. Menendez, Mr. Merkley,
Mr. Sanders, Ms. Stabenow, and Mr. Whitehouse):
S. 416. A bill to limit the use of cluster munitions; to the
Committee on Foreign Relations.
Mrs. FEINSTEIN. Mr. President, I rise today with my friend and
colleague from Vermont, Senator Leahy, to re-introduce the Cluster
Munitions Civilian Protection Act.
The bill is also co-sponsored by Senators Bingaman, Boxer, Brown,
Cardin, Casey, Durbin, Feingold, Kennedy, Mikulski, Menendez, Merkley,
Sanders, Stabenow, and Whitehouse.
Our legislation places common sense restrictions on the use of
cluster bombs. It prevents any funds from being spent to use cluster
munitions that have a failure rate of more than one percent; and unless
the rules of engagement specify: the cluster munitions will only be
used against clearly defined military targets and; will not be used
where civilians are known to be present or in areas normally inhabited
by civilians.
The bill also requires the President to submit a report to the
appropriate Congressional committees on the plan to clean up unexploded
cluster bombs.
Finally, the bill includes a national security waiver that allows the
President to waive the prohibition on the use of cluster bombs with a
failure rate of more than one percent, if he determines it is vital to
protect the security of the United States to do so.
Cluster munitions are large bombs, rockets, or artillery shells that
contain up to hundreds of small submunitions, or individual
``bomblets.''
They are intended for attacking enemy troop formations and armor
covering over a half mile radius.
Yet, in practice, they pose a real threat to the safety of civilians
when used in populated areas because they leave hundreds of unexploded
bombs over a very large area and they are often inaccurate.
Indeed, the human toll of these weapons has been terrible:
In Laos, approximately 11,000 people, 30 percent of them children,
have been killed or injured by U.S. cluster munitions since the Vietnam
War ended.
In Afghanistan, between October 2001 and November 2002, 127 civilians
lost their lives due to cluster munitions, 70 percent of them under the
age of 18.
An estimated 1,220 Kuwaitis and 400 Iraqi civilians have been killed
by cluster munitions since 1991.
In the 2006 war in Lebanon, Israeli cluster munitions, many of them
manufactured in the U.S., injured and killed 200 civilians.
During the 2003 invasion of Baghdad, the last time the U.S. used
cluster munitions, these weapons killed more civilians than any other
type of U.S. weapon.
The U.S. 3rd Infantry Division described cluster munitions as
``battlefield losers'' in Iraq, because they were often forced to
advance through areas contaminated with unexploded duds.
During the 1991 Gulf War, U.S. cluster munitions caused more U.S.
troop casualties than any single Iraqi weapon system, killing 22 U.S.
servicemen.

[[Page S2154]]

Yet we have seen significant progress in the effort to protect
innocent civilians from these deadly weapons since we first introduced
this legislation in the 110th Congress.
In December, 95 countries came together to sign the Oslo Convention
on Cluster Munitions which would prohibit the production, use, and
export of cluster bombs and requires signatories to eliminate their
arsenals within 8 years.
This group includes key NATO allies such as Canada, the United
Kingdom, France, and Germany, who are fighting alongside our troops in
Afghanistan.
In 2007, Congress passed and President Bush signed into law a
provision from our legislation contained in the fiscal year 2008
Consolidated Appropriations Act prohibiting the sale and transfer of
cluster bombs with a failure rate of more than one percent.
In addition, the Senate Appropriations Committee approved the fiscal
year 2009 State, Foreign Operations and Related Programs Appropriations
bill renewing the ban for another year.
I am confident this ban will be included in an fiscal year 2009
Omnibus appropriations bill.
These actions will help save lives. But much more work remains to be
done and significant obstacles remain.
For one, the United States chose not to participate in the Oslo
process or sign the treaty.
The Pentagon continues to believe that cluster munitions are
``legitimate weapons with clear military utility in combat.'' It would
prefer that the United States work within the Geneva-based Convention
on Certain Conventional Weapons, CCW, to negotiate limits on the use of
cluster munitions.
Yet these efforts have been going on since 2001 and it was the
inability of the CCW to come to any meaningful agreement which prompted
other countries, led by Norway, to pursue an alternative treaty through
the Oslo process.
A lack of U.S. leadership in this area has given cover to other major
cluster munitions producing nations--China, Russia, India, Pakistan,
Israel, and Egypt--who have refused to sign the Oslo Convention as
well.
Recognizing the United States could not remain silent in the face of
international efforts to restrict the use of cluster bombs, Secretary
of Defense Robert Gates issued a new policy on cluster munitions in
June 2008 stating that after 2018, the use, sale and transfer of
cluster munitions with a failure rate of more than 1 percent would be
prohibited.
The policy is a step in the right direction, but under the terms of
this new policy, the Pentagon will still have the authority to use
cluster bombs with high failure rates for the next ten years.
That is unacceptable and runs counter to our values.
The United States maintains an arsenal of an estimated 5.5 million
cluster munitions containing 728 million submunitions which have an
estimated failure rate of between 5 and 15 percent.
What does that say about us, that we are still prepared to use, sell
and transfer these weapons with well known failure rates?
The fact is, cluster munition technologies already exist, that meet
the one percent standard. Why do we need to wait ten years?
This delay is especially troubling given that in 2001, former
Secretary of Defense William Cohen issued his own policy on cluster
munitions stating that, beginning in fiscal year 2005, all new cluster
munitions must have a failure rate of less than one percent.
Unfortunately, the Pentagon was unable to meet this deadline and
Secretary Gates' new policy essentially postpones any meaningful action
for another ten years.
That means, if we do nothing, by 2018 close to twenty years will have
passed since the Pentagon first recognized the threat these deadly
weapons pose to innocent civilians.
We can do better.
Our legislation simply moves up the Gates policy by ten years. For
those of my colleagues who are concerned that it may be too soon to
enact a ban on the use of cluster bombs with failure rates of more than
one percent, I point out again that our bill allows the President to
waive this restriction if he determines it is vital to protect the
security of the United States to do so.
I would also remind my colleagues that the United States has not used
cluster bombs in Iraq since 2003 and has observed a moratorium on their
use in Afghanistan since 2002.
We introduced this legislation to make this moratorium permanent for
the entire U.S. arsenal of cluster munitions.
We introduced this legislation for children like Hassan Hammade.
A 13-year-old Lebanese boy, Hassan lost four fingers and sustained
injuries to his stomach and shoulder after he picked up an unexploded
cluster bomb in front of an orange tree.
He said:

I started playing with it and it blew up. I didn't know it
was a cluster bomb--it just looked like a burned out piece of
metal.
All the children are too scared to go out now, we just play
on the main roads or in our homes.

I urge my colleagues to support this legislation. We should do
whatever we can to protect more innocent children and other civilians
from these dangerous weapons.
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. 416

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 ``Cluster Munitions Civilian
Protection Act of 2009''.

SEC. 2. LIMITATION ON THE USE OF CLUSTER MUNITIONS.

No funds appropriated or otherwise available to any Federal
department or agency may be obligated or expended to use any
cluster munitions unless--
(1) the submunitions of the cluster munitions, after
arming, do not result in more than 1 percent unexploded
ordnance across the range of intended operational
environments; and
(2) the policy applicable to the use of such cluster
munitions specifies that the cluster munitions will only be
used against clearly defined military targets and will not be
used where civilians are known to be present or in areas
normally inhabited by civilians.

SEC. 3. PRESIDENTIAL WAIVER.

The President may waive the requirement under section 2(1)
if, prior to the use of cluster munitions, the President--
(1) certifies that it is vital to protect the security of
the United States; and
(2) not later than 30 days after making such certification,
submits to the appropriate congressional committees a report,
in classified form if necessary, describing in detail--
(A) the steps that will be taken to protect civilians; and
(B) the failure rate of the cluster munitions that will be
used and whether such munitions are fitted with self-destruct
or self-deactivation devices.

SEC. 4. CLEANUP PLAN.

Not later than 90 days after any cluster munitions are used
by a Federal department or agency, the President shall submit
to the appropriate congressional committees a plan, prepared
by such Federal department or agency, for cleaning up any
such cluster munitions and submunitions which fail to explode
and continue to pose a hazard to civilians.

SEC. 5. APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.

In this Act, the term ``appropriate congressional
committees'' means the Committee on Foreign Relations, the
Committee on Armed Services, and the Committee on
Appropriations of the Senate and the Committee on Foreign
Affairs, the Committee on Armed Services, and the Committee
on Appropriations of the House of Representatives.

Mr. LEAHY. Mr. President, I am pleased to join with my friend from
California, Senator Feinstein, in introducing the Cluster Munitions
Civilian Protection Act of 2009. This is a slightly revised version of
a bill of the same name which we introduced in 2007.
Since December 3, 2008, when the Convention on Cluster Munitions
opened for signature in Dublin, 96 countries have signed the treaty
including Great Britain, Germany, Canada, Norway, Australia and other
allies of the United States.
The treaty is the culmination of a year of negotiations, launched by
Norway, among 107 governments that came together to prohibit the use of
cluster munitions that cause unacceptable harm to civilians.
The Bush administration did not participate in the negotiations,
which I believe was a mistake. As the Nation with the world's most
powerful military we should not be on the sidelines while others are
trying to protect the

[[Page S2155]]

lives and limbs of civilians who comprise the vast majority of war
casualties today.
The Pentagon continues to insist that cluster munitions have military
utility, and that the U.S. should retain the ability to use millions of
cluster munitions in its arsenal which have estimated failure rates of
5 to 20 percent.
Of course, any weapon, whether cluster munitions, landmines, or even
poison gas, has some military utility. But anyone who has seen the
indiscriminate devastation cluster munitions cause over a wide area
understands the unacceptable threat they can pose to civilians. These
are not the laser guided weapons the Pentagon showed destroying their
targets during the invasion of Baghdad.
There is the insidious problem of cluster munitions that fail to
explode as designed and remain as active duds, like landmines, until
they are triggered by whoever comes into contact with them. Often it is
an unsuspecting child, or a farmer. We saw that recently in Lebanon,
and in Laos people are still being killed and maimed by U.S. cluster
munitions left from the Vietnam War.
Current law prohibits U.S. sales, exports and transfers of cluster
munitions that have a failure rate exceeding 1 percent. That law also
requires any sale, export or transfer agreement to include a
requirement that the cluster munitions will be used only against
military targets and not in areas where civilians are known to be
present.
Last year, the Pentagon announced that it would meet the failure rate
requirement for U.S. use of cluster munitions in 2018. While a step
forward, I do not believe we can justify continuing to use weapons that
so often fail, so often kill and injure civilians, and which many of
our allies have renounced. That is not the kind of leadership the world
needs and expects from the United States.
Senator Feinstein's and my bill would apply similar restrictions to
the use of cluster munitions beginning immediately on the date of
enactment. However, the bill does permit the President to waive the 1
percent requirement if he certifies that it is vital to protect the
security of the United States. I urge the Pentagon to work with us by
supporting this reasonable step.
I want to express my appreciation to all nations that have signed the
treaty, and urge the Obama administration to review its policy on
cluster munitions with a view toward putting the U.S. on a path to join
the treaty as soon as possible. In the meantime, our legislation would
go a long way toward putting the United States on that path.
There are some who dismissed the Cluster Munitions Convention as a
pointless exercise, since it does not yet have the support of the
United States and other major powers such as Russia, China, Pakistan,
India, and Israel. These are some of the same critics of the Ottawa
treaty banning antipersonnel landmines, which the U.S. and the other
countries I named have also refused to sign. But that treaty has
dramatically reduced the number of landmines produced, used, sold and
stockpiled, and the number of mine victims has fallen sharply. Any
government that contemplates using landmines today does so knowing that
it will be condemned by the international community. I suspect it is
only a matter of time before the same is true for cluster munitions.
It is important to note that the U.S. today has the technological
ability to produce cluster munitions that would not be prohibited by
the treaty. What is lacking is the political will to expend the
necessary resources. There is no other excuse for continuing to use
cluster munitions that cause unacceptable harm to civilians. I am
committed to working in the Defense Appropriations Subcommittee to help
secure the resources needed to make this new technology available.
I want to commend Senator Feinstein who has shown real passion and
persistence in raising this issue and seeking every opportunity to
protect civilians from these indiscriminate weapons.
______

By Mr. LEAHY (for himself, Mr. Specter, Mr. Kennedy, Mr.
Feingold, Mr. Whitehouse, and Mrs. McCaskill):
S. 417. A bill to enact a safe, fair, and responsible state secrets
privilege Act; to the Committee on the Judiciary.
Mr. LEAHY. Mr. President, today, I am introducing the bipartisan
State Secrets Protection Act. I am pleased that Senator Kennedy, who
had so much to do with developing this proposal last Congress is an
original cosponsor of the bill along with Senators Specter, Feingold,
Whitehouse and McCaskill. After a lengthy debate, this bill was
reported by the Judiciary Committee last April.
The State secrets privilege is a common law doctrine that the
Government can claim in court to prevent evidence that could harm
national security from being publicly revealed. During the Bush
administration, the State secrets privilege was used to avoid judicial
review and skirt accountability by ending cases without consideration
of the merits. It was used to stymie litigation at its very inception
in cases alleging egregious Government misconduct, such as
extraordinary rendition and warrantless eavesdropping on the
communications of Americans.
The 2006 case of Khaled El-Masri, who was kidnapped and transported
against his will to Afghanistan, where he was detained and tortured as
part of the Bush administration's extraordinary rendition program, is
one such example. He sued the government alleging unlawful detention
and treatment. A district court judge dismissed the entire lawsuit
after the Government invoked the State secrets privilege, solely on the
basis of an ex parte declaration from the Director of the Central
Intelligence Agency, and despite the fact that the Government had
admitted that the rendition program exists. Mr. El-Masri has no other
remedy. Our justice system is off limits to him, and no judge ever
reviewed any of the actual evidence.
The State secrets privilege serves important goals where properly
invoked. But there are serious consequences for litigants and for the
American public when the privilege is used to terminate litigation
alleging serious Government misconduct. For the aggrieved parties, it
means that the courthouse doors are closed forever regardless of the
severity of their injury. They will never have their day in court. For
the American public, it means less accountability, because there will
be no judicial scrutiny of improper actions of the executive, and no
check or balance.
The State Secrets Protection Act will help guide the courts to
balance the Government's interests in secrecy with accountability and
the rights of citizens to seek judicial redress. The bill does not
restrict the Government's ability to assert the privilege in
appropriate cases. Rather, the bill would allow judges to look at the
actual evidence the Government submits so that they, neutral judges,
rather than self-interested executive branch officials, would render
the ultimate decision whether the State secrets privilege should apply.
This is consistent with the procedure for other privileges recognized
in our courts.
We held a Committee hearing on this issue last year, and the
appropriate use of this privilege remains an area of concern for me and
for the cosponsors of this bill. In light of the pending cases where
this privilege has been invoked, involving issues including torture,
rendition and warrantless wiretapping, we can ill-afford to delay
consideration of this important legislation. I hope all Senators will
join us in supporting this bill.
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. 417

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 ``State Secrets Protection
Act''.

SEC. 2. STATE SECRETS PROTECTION.

(a) In General.--Title 28 of the United States Code is
amended by adding after chapter 180, the following:

``CHAPTER 181--STATE SECRETS PROTECTION

``Sec.
``4051. Definitions.
``4052. Rules governing procedures related to this chapter.
``4053. Procedures for answering a complaint.
``4054. Procedures for determining whether evidence is protected from
disclosure by the state secrets privilege.

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``4055. Procedures when evidence protected by the state secrets
privilege is necessary for adjudication of a claim or
counterclaim.
``4056. Interlocutory appeal.
``4057. Security procedures.
``4058. Reporting.
``4059. Rule of construction.

``Sec. 4051. Definitions

``In this chapter--
``(1) the term `evidence' means any document, witness
testimony, discovery response, affidavit, object, or other
material that could be admissible in court under the Federal
Rules of Evidence or discoverable under the Federal Rules of
Civil Procedure; and
``(2) the term `state secret' refers to any information
that, if disclosed publicly, would be reasonably likely to
cause significant harm to the national defense or foreign
relations of the United States.

``Sec. 4052. Rules governing procedures related to this
chapter

``(a) Documents.--A Federal court--
``(1) shall determine which filings, motions, and
affidavits, or portions thereof, submitted under this chapter
shall be submitted ex parte;
``(2) may order a party to provide a redacted,
unclassified, or summary substitute of a filing, motion, or
affidavit to other parties; and
``(3) shall make decisions under this subsection taking
into consideration the interests of justice and national
security.
``(b) Hearings.--
``(1) In camera hearings.--
``(A) In general.--Except as provided in subparagraph (B),
all hearings under this chapter shall be conducted in camera.
``(B) Exception.--A court may not conduct a hearing under
this chapter in camera based on the assertion of the state
secrets privilege if the court determines that the hearing
relates only to a question of law and does not present a risk
of revealing state secrets.
``(2) Ex parte hearings.--A Federal court may conduct
hearings or portions thereof ex parte if the court
determines, following in camera review of the evidence, that
the interests of justice and national security cannot
adequately be protected through the measures described in
subsections (c) and (d).
``(3) Record of hearings.--The court shall preserve the
record of all hearings conducted under this chapter for use
in the event of an appeal. The court shall seal all records
to the extent necessary to protect national security.
``(c) Attorney Security Clearances.--
``(1) In general.--A Federal court shall, at the request of
the United States, limit participation in hearings conducted
under this chapter, or access to motions or affidavits
submitted under this chapter, to attorneys with appropriate
security clearances, if the court determines that limiting
participation in that manner would serve the interests of
national security. The court may also appoint a guardian ad
litem with the necessary security clearances to represent any
party for the purposes of any hearing conducted under this
chapter.
``(2) Stays.--During the pendency of an application for
security clearance by an attorney representing a party in a
hearing conducted under this chapter, the court may suspend
proceedings if the court determines that such a suspension
would serve the interests of justice.
``(3) Court oversight.--If the United States fails to
provide a security clearance necessary to conduct a hearing
under this chapter in a reasonable period of time, the court
may review in camera and ex parte the reasons of the United
States for denying or delaying the clearance to ensure that
the United States is not withholding a security clearance
from a particular attorney or class of attorneys for any
reason other than protection of national security.
``(d) Protective Orders.--A Federal court may issue a
protective order governing any information or evidence
disclosed or discussed at any hearing conducted under this
chapter if the court determines that issuing such an order is
necessary to protect national security.
``(e) Opinions and Orders.--Any opinions or orders issued
under this chapter may be issued under seal or in redacted
versions if, and to the extent that, the court determines
that such measure is necessary to protect national security.
``(f) Special Masters.--A Federal court may appoint a
special master or other independent advisor who holds the
necessary security clearances to assist the court in handling
a matter subject to this chapter.

``Sec. 4053. Procedures for answering a complaint

``(a) Intervention.--The United States may intervene in any
civil action in order to protect information the Government
determines may be subject to the state secrets privilege.
``(b) Impermissible as Grounds for Dismissal Prior to
Hearings.--Except as provided in section 4055, the state
secrets privilege shall not constitute grounds for dismissal
of a case or claim. If a motion to dismiss or for summary
judgment is based in whole or in part on the state secrets
privilege, or may be affected by the assertion of the state
secrets privilege, a ruling on that motion shall be deferred
pending completion of the hearings provided under this
chapter, unless the motion can be granted on grounds
unrelated to, and unaffected by, the assertion of the state
secrets privilege.
``(c) Pleading State Secrets.--In answering a complaint, if
the United States or an officer or agency of the United
States is a party to the litigation, the United States may
plead the state secrets privilege in response to any
allegation in any individual claim or counterclaim if the
admission or denial of that allegation in that individual
claim or counterclaim would itself divulge a state secret to
another party or the public. If the United States has
intervened in a civil action, it may assert the state secrets
privilege in response to any allegation in any individual
claim or counterclaim if the admission or denial by a party
of that allegation in that individual claim or counterclaim
would itself divulge a state secret to another party or the
public. No adverse inference or admission shall be drawn from
a pleading of state secrets in an answer to an item in a
complaint.
``(d) Supporting Affidavit.--In each instance in which the
United States asserts the state secrets privilege in response
to 1 or more claims, it shall provide the court with an
affidavit signed by the head of the executive branch agency
with responsibility for, and control over, the asserted state
secrets explaining the factual basis for the assertion of the
privilege and attesting that personal consideration was given
to the assertion of the privilege. The duties of the head of
an executive branch agency under this subsection may not be
delegated.

``Sec. 4054. Procedures for determining whether evidence is
protected from disclosure by the state secrets privilege

``(a) Asserting the State Secrets Privilege.--The United
States may, in any civil action to which the United States is
a party or in any other civil action before a Federal or
State court, assert the state secrets privilege as a ground
for withholding information or evidence in discovery or for
preventing the disclosure of information through court
filings or through the introduction of evidence.
``(b) Supporting Affidavit.--In each instance in which the
United States asserts the state secrets privilege with
respect to an item of information or evidence, the United
States shall provide the court with an affidavit signed by
the head of the executive branch agency with responsibility
for, and control over, the state secrets involved explaining
the factual basis for the claim of privilege. The United
States shall make public an unclassified version of the
affidavit.
``(c) Hearing.--A Federal court shall conduct a hearing,
consistent with the requirements of section 4052, to examine
the items of evidence that the United States asserts are
subject to the state secrets privilege, as well as any
affidavit submitted by the United States in support of any
assertion of the state secrets privilege, and to determine
the validity of any assertion of the state secrets privilege
made by the United States.
``(d) Review of Evidence.--
``(1) Submission of evidence.--In addition to the affidavit
provided under subsection (b), and except as provided in
paragraph (2) of this subsection, the United States shall
make all evidence the United States claims is subject to the
state secrets privilege available for the court to review,
consistent with the requirements of section 4052, before any
hearing conducted under this section.
``(2) Sampling in certain cases.--If the volume of evidence
the United States asserts is protected by the state secrets
privilege precludes a timely review of each item of evidence,
or the court otherwise determines that a review of all of
that evidence is not feasible, the court may substitute a
sufficient sampling of the evidence if the court determines
that there is no reasonable possibility that review of the
additional evidence would change the determination on the
privilege claim and the evidence reviewed is sufficient to
enable to court to make the determination required under this
section.
``(3) Index of materials.--The United States shall provide
the court with a manageable index of evidence it contends is
subject to the state secrets privilege by formulating a
system of itemizing and indexing that would correlate
statements made in the affidavit provided under subsection
(b) with portions of the evidence the United States asserts
is subject to the state secrets privilege. The index shall be
specific enough to afford the court an adequate foundation to
review the basis of the invocation of the privilege by the
United States.
``(e) Determinations as to Applicability of State Secrets
Privilege.--
``(1) In general.--Except as provided in subsection (d)(2),
as to each item of evidence that the United States asserts is
protected by the state secrets privilege, the court shall
review, consistent with the requirements of section 4052, the
specific item of evidence to determine whether the claim of
the United States is valid. An item of evidence is subject to
the state secrets privilege if it contains a state secret, or
there is no possible means of effectively segregating it from
other evidence that contains a state secret.
``(2) Admissibility and disclosure.--
``(A) Privileged evidence.--If the court agrees that an
item of evidence is subject to the state secrets privilege,
that item shall not be disclosed or admissible as evidence.
``(B) Non-privileged evidence.--If the court determines
that an item of evidence is not subject to the state secrets
privilege, the state secrets privilege does not prohibit the
disclosure of that item to the opposing party or the
admission of that item at trial, subject to the Federal Rules
of Civil Procedure and the Federal Rules of Evidence.

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``(3) Standard of review.--The court shall give substantial
weight to an assertion by the United States relating to why
public disclosure of an item of evidence would be reasonably
likely to cause significant harm to the national defense or
foreign relations of the United States. The court shall weigh
the testimony of a Government expert in the same manner as
the court weighs, and along with, any other expert testimony
in the applicable case.
``(f) Non-Privileged Substitute.--If the court finds that
material evidence is subject to the state secrets privilege
and it is possible to craft a non-privileged substitute for
that privileged material evidence that provides a
substantially equivalent opportunity to litigate the claim or
defense as would that privileged material evidence, the court
shall order the United States to provide such a substitute,
which may consist of--
``(1) a summary of such privileged information;
``(2) a version of the evidence with privileged information
redacted;
``(3) a statement admitting relevant facts that the
privileged information would tend to prove; or
``(4) any other alternative as directed by the court in the
interests of justice and protecting national security.
``(g) Refusal To Provide Non-Privileged Substitute.--In a
suit against the United States or an officer or agent of the
Unites States acting in the official capacity of that officer
or agent, if the court orders the United States to provide a
non-privileged substitute for evidence in accordance with
this section, and the United States fails to comply, the
court shall resolve the disputed issue of fact or law to
which the evidence pertains in the non-government party's
favor.

``Sec. 4055. Procedures when evidence protected by the state
secrets privilege is necessary for adjudication of a claim
or counterclaim

``After reviewing all pertinent evidence, privileged and
non-privileged, a Federal court may dismiss a claim or
counterclaim on the basis of the state secrets privilege only
if the court determines that--
``(1) it is impossible to create for privileged material
evidence a non-privileged substitute under section 4054(f)
that provides a substantially equivalent opportunity to
litigate the claim or counterclaim as would that privileged
material evidence;
``(2) dismissal of the claim or counterclaim would not harm
national security; and
``(3) continuing with litigation of the claim or
counterclaim in the absence of the privileged material
evidence would substantially impair the ability of a party to
pursue a valid defense to the claim or counterclaim.

``Sec. 4056. Interlocutory appeal

``(a) In General.--The courts of appeal shall have
jurisdiction of an appeal by any party from any interlocutory
decision or order of a district court of the United States
under this chapter.
``(b) Appeal.--
``(1) In general.--An appeal taken under this section
either before or during trial shall be expedited by the court
of appeals.
``(2) During trial.--If an appeal is taken during trial,
the district court shall adjourn the trial until the appeal
is resolved and the court of appeals--
``(A) shall hear argument on appeal as expeditiously as
possible after adjournment of the trial by the district
court;
``(B) may dispense with written briefs other than the
supporting materials previously submitted to the trial court;
``(C) shall render its decision as expeditiously as
possible after argument on appeal; and
``(D) may dispense with the issuance of a written opinion
in rendering its decision.

``Sec. 4057. Security procedures

``(a) In General.--The security procedures established
under the Classified Information Procedures Act (18 U.S.C.
App.) by the Chief Justice of the United States for the
protection of classified information shall be used to protect
against unauthorized disclosure of evidence protected by the
state secrets privilege.
``(b) Rules.--The Chief Justice of the United States, in
consultation with the Attorney General, the Director of
National Intelligence, and the Secretary of Defense, may
create additional rules or amend the rules to implement this
chapter and shall submit any such additional rules or
amendments to the Permanent Select Committee on Intelligence
and the Committee on the Judiciary of the House of
Representatives and the Select Committee on Intelligence and
the Committee on the Judiciary of the Senate. Any such rules
or amendments shall become effective 90 days after such
submission, unless Congress provides otherwise. Rules and
amendments shall comply with the letter and spirit of this
chapter, and may include procedures concerning the role of
magistrate judges and special masters in assisting courts in
carrying out this chapter. The rules or amendments under this
subsection may include procedures to ensure that a sufficient
number of attorneys with appropriate security clearances are
available in each of the judicial districts of the United
States to serve as guardians ad litem under section
4052(c)(1).

``Sec. 4058. Reporting

``(a) Assertion of State Secrets Privilege.--
``(1) In general.--The Attorney General shall submit to the
Permanent Select Committee on Intelligence and the Committee
on the Judiciary of the House of Representatives and the
Select Committee on Intelligence and the Committee on the
Judiciary of the Senate a report on any case in which the
United States asserts the state secrets privilege, not later
than 30 calendar days after the date of such assertion.
``(2) Contents.--Each report submitted under this
subsection shall include any affidavit filed in support of
the assertion of the state secrets privilege and the index
required under section 4054(d)(2).
``(3) Evidence.--Upon a request by any member of the
Permanent Select Committee on Intelligence or the Committee
on the Judiciary of the House of Representatives or the
Select Committee on Intelligence or the Committee on the
Judiciary of the Senate, the Attorney General shall provide
to that member any item of evidence relating to which the
United States has asserted the state secrets privilege.
``(4) Protection of information.--An affidavit, index, or
item of evidence provided under this subsection may be
included in a classified annex or provided under any other
appropriate security measures.
``(b) Operation and Effectiveness.--
``(1) In general.--The Attorney General shall deliver to
the committees of Congress described in subsection (a) a
report concerning the operation and effectiveness of this
chapter and including suggested amendments to this chapter.
``(2) Deadline.--The Attorney General shall submit a report
under paragraph (1) not later than 1 year after the date of
enactment of this chapter, and every year there after until
the date that is 3 years after that date of enactment. After
the date that is 3 years after that date of enactment, the
Attorney General shall submit a report under paragraph (1) as
necessary.

``Sec. 4059. Rule of construction

``Nothing in this chapter--
``(1) is intended to supersede any further or additional
limit on the state secrets privilege under any other
provision of law; or
``(2) may be construed to preclude a court from dismissing
a claim or counterclaim or entering judgment on grounds
unrelated to, and unaffected by, the assertion of the state
secrets privilege.''.
(b) Technical and Conforming Amendment.--The table of
chapters for part VI of title 28, United States Code, is
amended by adding at the end the following:

181. State secrets protection..................................4051....

SEC. 3. SEVERABILITY.

If any provision of this Act, any amendment made by the
Act, or the application of such provision or amendment to any
person or circumstances is held to be invalid, the remainder
of this Act, the amendments made by the Act, and the
application of such provisions to persons or circumstances
other than those to which it is held invalid, shall not be
affected thereby.

SEC. 4. APPLICATION TO PENDING CASES.

The amendments made by this Act shall apply to any civil
case pending on or after the date of enactment of this Act.

Mr. FEINGOLD. Mr. President, I am proud to join Senators Leahy,
Specter, and Kennedy in introducing the State Secrets Protection Act of
2009. This bill establishes uniform procedures for courts to use when
evaluating governmental assertions of the state secrets privilege in
civil litigation. It takes an important step toward restoring the rule
of law by ensuring that the privilege will be used only to protect true
state secrets, and not as a means for the Government to avoid
accountability for its actions.
In a democracy, the public should have the right to know what its
government is doing. That should be the rule, and secrecy should be the
rare exception, reserved for the very few cases in which the national
security is truly at stake. Unfortunately, the Bush administration
stood that presumption on its head, cloaking its actions in secrecy
whenever possible and grudgingly submitting to public scrutiny only
when it couldn't be avoided. The ``state secrets'' privilege was a
favorite weapon in that administration's arsenal of secrecy.
None of us disputes that information may properly be withheld as a
``state secret'' when disclosing the information would cause grave
damage to national security. The problem arises when the privilege is
abused and invoked to shield Government wrongdoing. Indeed, that is
exactly what happened the first time the Supreme Court recognized the
privilege in 1953, in the case of United States v. Reynolds. The
Government had been sued after a military aircraft crash killed nine
people, and it invoked the ``state secrets'' privilege to shield an
internal investigative report. Decades later, when the report was
declassified, it revealed nothing that could fairly be characterized as
a ``state secret'' but it did reveal faulty maintenance of the
aircraft.
Abuses like these can be prevented, but only if the courts fulfill
their responsibility to carefully review claims

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of privilege. In the Reynolds case, no court actually looked at the
supposedly privileged report. That simple step would have prevented the
miscarriage of justice that ensued. Yet, despite the fact that courts
have the acknowledged authority to order in camera review of the
evidence, fewer than one third of courts have actually exercised that
option when the Government has asserted the ``state secrets''
privilege. And a host of other tools available to the courts to
evaluate and respond to claims of privilege have been employed
inconsistently at best, resulting in a confused body of case law that
preserves accountability in some cases while granting the government a
``get out of jail free'' card in others.
In the last Congress, Senators Kennedy, Specter, and Leahy introduced
the State Secrets Protection Act to standardize the procedures courts
use in cases where the Government asserts the ``state secrets''
privilege and to ensure adequate scrutiny of such claims. The bill was
reported by the Judiciary Committee last April after extensive debate.
Much of the credit for this legislation goes to Senator Kennedy, whose
unfailing commitment to the rule of law inspired both the concept and
the particulars of this bill. I had the honor of working with him to
develop this legislation, and it is a pleasure now to cosponsor its
reintroduction, with Senator Leahy as the lead sponsor.
The bill makes use of existing tools that are available to the courts
when handling national security information. Perhaps the most
fundamental of these is in camera review of the allegedly privileged
evidence, which the bill requires. The idea here is simple: Determining
what information the evidence contains is the threshold step in
determining whether that evidence is privileged. This step is far too
important to be left to a party with a built-in conflict of interest.
Just as a court would never accept a private litigant's description of
his or her evidence in lieu of the evidence itself, the court should
not rely solely on the Government's description of the evidence when
the Government has a clear interest in the outcome of the case.
That courts may examine sensitive national security information in
camera is beyond any serious dispute. Since 1974, the Freedom of
Information Act has allowed courts to engage in in camera review of any
records that the Government claims are exempt from disclosure under the
Act. Courts have also reviewed the most sensitive national security
information in criminal cases, pursuant to the Classified Information
Procedures Act. In fact, courts handle highly classified information on
a regular basis. There is no legitimate justification for skipping this
crucial step.
The bill also requires courts to hold in camera hearings on the
question of whether the evidence is privileged. Based on the court's
previous review of the evidence, the court may conduct the hearing ex
parte i.e., without any participation by the plaintiff or the
plaintiff's lawyers but only if the court finds that national security
cannot adequately be protected through other means. For example, the
court may limit attendance at the hearing to attorneys with the
requisite clearances, or the court may appoint a guardian ad litem to
represent the plaintiff's interests at the hearing. The bill thus
preserves the adversarial process to the maximum extent consistent with
protecting national security.
That's important, for at least two reasons. First, our justice system
is premised on the notion of fairness, and that principle of fairness
is undermined any time a party to litigation is excluded from the
proceedings. But fairness isn't the only principle at stake. For all
its complications and occasional inefficiencies, the adversarial
process remains the best system for getting to the truth. If only one
party is present at the hearing, the court is more likely to reach the
wrong result it's as simple as that.
Taken together, the requirements of in camera review of the evidence
and an in camera hearing ensure that the Government's claim of
privilege is evaluated fairly and thoroughly. A fair, thorough review
is necessary, because the bill makes absolutely clear that once
evidence is found to be privileged, it cannot be disclosed, however
great the plaintiff's need for the evidence may be. The interest of
national security, once the court determines that interest is truly at
stake, is given absolute protection.
That may mean the end of the lawsuit but it may not. As Congress
recognized when it passed the Classified Information Procedures Act,
courts have many tools at their disposal to move litigation forward
even when some of the evidence cannot be disclosed. For example, courts
can require the Government to submit non-privileged substitutes for the
privileged evidence, such as summaries of the evidence, redacted
versions, or admissions of certain facts. Under the bill, where the
court finds that it would be feasible for the Government to craft a
non-privileged substitute for privileged evidence, it may order the
Government to do so. Again, however, the court can never compel the
production of privileged evidence. If the Government refuses to craft a
non-privileged substitute, the remedy is the same one that exists in
the CIPA: the court may resolve the relevant issue of fact or law
against the Government.
The bill does not allow courts to dismiss lawsuits at the pleadings
stage based on a claim of ``subject matter privilege.'' As the Fourth
Circuit has explained, ``subject matter privilege'' applies if the case
is so pervaded with state secrets, it would be impossible to conduct
the lawsuit without revealing them. Such cases undoubtedly exist. But
until all of the relevant evidence is identified and the privilege
determinations are made, any conclusion that a case will be pervaded
with state secrets is simply a prediction. Only by proceeding through
discovery and pre-trial hearings can that prediction be replaced with
certainty. And this can be done without revealing a single state
secret, since the bill allows privilege determinations to be made in
camera and ex parte.
The bill does not change the ordinary rules of summary judgment. If a
court determines, after discovery and pre-trial hearings are completed,
that the key evidence is privileged and the plaintiff cannot prove his
or her case using non-privileged evidence, then the Government may move
for summary judgment and prevail. The bill thus retains the concept of
``subject matter privilege'' it simply requires a more thorough testing
of the claim.
Nor does the bill ever put the Government to the ``Hobson's choice''
of either revealing privileged evidence or conceding the lawsuit. Under
the bill, even if the plaintiff has made out a prima facie case, the
court can and must dismiss the lawsuit if the Government would need to
disclose privileged evidence in order to present a valid defense. The
Government's interests, as well as the national security, are thus
scrupulously protected.
Finally, the bill facilitates congressional oversight by requiring
the executive branch to share with the Judiciary and Intelligence
Committees the documents it makes available to the courts: the
Government affidavit explaining why the evidence is privileged, the
index of privileged evidence, and, where requested, the evidence
itself. This information will help Congress monitor the Government's
use of the privilege and assess the need for any further legislation.
Perhaps even more important, it will provide a means of
accountability in those cases where the privilege prevents a court from
ruling on allegations of Government wrongdoing. The idea of simply
letting such allegations go unaddressed should be profoundly troubling
to anyone who respects the rule of law yet for eight years, the
response of the Bush administration was little more than a shrug. This
bill rejects such a cavalier attitude toward the rule of law. The
citizens of this country should never again be told that there is
simply no remedy for wrongs their Government has committed. In cases
where the courts cannot provide that remedy, then Congress should step
in and providing the necessary information to the relevant committees
of Congress will enable that to happen.
I am pleased that both the new Attorney General, Eric Holder, and the
nominee for Associate Attorney General, Thomas Perrelli, have indicated
a willingness to review this bill and work with us on it. I hope that
it will be possible to fashion legislation that the Administration can
support. The public

[[Page S2159]]

deserves to have confidence that the state secrets privilege is not
going to be used to cover up Government misconduct. This bill provides
the courts a system for resolving claims of privilege that will inspire
that confidence.
A country where the Government need not answer to allegations of
wrongdoing is a country that has strayed dangerously far from the rule
of law. We must ensure that the ``state secrets'' privilege does not
become a license for the Government to evade the laws that we pass.
This bill accomplishes that goal, while simultaneously providing the
strongest of protections to those items of evidence that truly qualify
as state secrets. I urge all of my colleagues to support the rule of
law by supporting this legislation.
______

By Ms. KLOBUCHAR (for herself and Mr. Hatch):
S. 418. A bill to require secondary metal recycling agents to keep
records of their transactions in order to deter individuals and
enterprises engaged in the theft and interstate sale of stolen
secondary metal, and for other purposes; to the Committee on Commerce,
Science, and Transportation.
Mr. HATCH. Mr. President, I rise today to introduce with my friend
from Minnesota, Senator Amy Klobuchar, the Secondary Metal Theft
Prevention Act of 2009.
Once again, I am partnering with Senator Klobuchar to combat metal
theft in our country. Last Congress we introduced the Copper Theft
Prevention Act of 2008, S. 3666, which focused solely on copper theft.
Since then, after a series of meetings with industry stakeholders, we
concluded that the bill would be more effective if it were expanded to
address secondary metal thefts, including those involving copper.
There is no doubt that we are living in difficult economic times. As
we witness the unfortunate job losses spreading across the country, I
am mindful of those who are struggling to make ends meet. Unfortunately
some, motivated by quick profits and a variety of vulnerable targets,
are engaging in the fast-growing crime of metal theft.
On the surface, stealing precious metal, like copper, appears to be a
relatively small theft. However, metal thieves compromise U.S. critical
infrastructure by targeting electrical sub-stations, cellular towers,
telephone land lines, railroads, water wells, construction sites, and
vacant homes--all for fast cash.
Some argue that there is no need for this legislation because metal
is being traded at low prices. I disagree. As we know, the market
shifts and prices will eventually increase as demand surges. Moreover,
law enforcement officials confirm that thieves are only stealing more
metal to offset current metal prices.
On September 15, 2008, the Federal Bureau of Investigation released
an unclassified intelligence assessment entitled, Copper Thefts
Threaten U.S. Critical Infrastructure.
This assessment states that ``thieves are typically individuals or
organized groups who operate independently or in loose association with
each other and commit thefts in conjunction with fencing activities and
the sale of contraband. Organized groups of drug addicts, gang members,
and metal thieves are conducting large scale thefts from electric
utilities, warehouses, foreclosed and vacant properties, and oil well
sites for tens of thousands of dollars in illicit proceeds per month.''
I am mindful of the hardworking scrap metal dealers in my home state.
Recycling secondary metal not only generates revenue but is
environmentally friendly and saves energy, it takes a lot less energy
to melt down secondary metal and recycle it than it does to produce new
metal.
Take for example the City Creek project in downtown Salt Lake City,
Utah. It is my understanding that when the construction contractors
tore down the downtown malls to make way for the 20-acre retail-office-
residential complex, more than half of what came down was reused either
in the City Creek development or somewhere else. Steel frames were sold
as scrap metal, which was recycled and used for other purposes.
Utah metal recyclers deal with hundreds of people and thousands of
pounds of metal on a regular basis. I imagine in some cases it is
difficult to tell if the scrap metal is stolen, especially if a
customer has, what appears to be, a legitimate story. I know that many
of Utah's scrap metal dealers are not turning a blind eye to this
problem. In fact, several metal recycling companies have partnered with
local law enforcement and use a theft alert system to warn and watch
for reported stolen items. I commend them for their efforts and hope
that police, prosecutors, and members of the metal recycling industry
continue to communicate and work together to combat metal theft along
the Wasatch Front.
Yet on the Federal level, we need a baseline from which all states
must operate. This is important because many states in the Union do not
have metal theft laws and lure thieves across State lines. It should be
noted that the proposed bill does not preempt states from enacting
their own laws.
I believe the proposed legislation will help tighten-up how secondary
metal transactions are performed across the country and, in return,
send a clear message that metal theft will be met with serious
consequences. The bill calls for enforcement by the Federal Trade
Commission and gives state attorneys general the ability to bring a
civil action to enforce the provisions of the legislation.
This bill also contains a ``Do Not Buy'' provision wherein specific
items listed cannot be purchased by scrap metal dealers unless sellers
establish, by written documentation, that they are authorized to sell
the secondary metal in question.
Additionally, the bill requires scrap metal dealers to keep records
of secondary metal purchases, including the name and address of the
seller, the date of the transaction, the quantity and description of
the secondary metal being purchased, an identifying number from a
driver's license or other government-issued identification and, where
possible, the make, model and tag number of the vehicle used to deliver
the metal to the dealer.
Secondary metal dealers must maintain these records for a minimum of
two years from the date of the transaction and make them available to
law enforcement agencies for use in tracking down and prosecuting
secondary metal theft crimes.
There is real concern about how easy it is to access cash in scrap
metal transactions. For this reason, the bill requires that checks will
be the method of payment for transactions over $75. While that may
sound low for some, it is important to recognize that it takes a lot of
secondary metal to obtain even $75 in return.
To discourage multiple cash transactions from one seller, the bill
limits metal dealers from paying cash to the same seller within a 48-
hour period. The intent of this provision is not to be a hardship on
the honest seller. The purpose is to dissuade some sellers from going
around the bill's check payment requirement by making multiple cash
transactions. Again, we must remove the incentives for thieves to
access fast cash.
I am aware that some scrap metal dealers do not want to issue checks
for fear of check fraud or additional transactional costs. Senator
Klobuchar and I have given careful consideration to these concerns and
have consulted law enforcement officials to determine how best to
proceed. We believe that checks are a valuable benefit to law
enforcement because they provide trace evidence by creating a paper
trail, a signature, and possibly even a fingerprint.
Let me conclude my remarks by saying that considering our country's
serious economic situation, I believe we need to ensure that our
critical infrastructure is not viewed as a treasure trove for desperate
metal thieves.
I am committed to moving this bill forward and hope that my
colleagues will join me in perfecting this bill as it moves through the
legislative process.
Mr. President, I ask unanimous consent that the support material be
printed in the Record.
There being no objection, the material was ordered to be placed in
the Record, as follows:

Copper Thefts Threaten US Critical Infrastructure

Scope Note

The assessment highlights copper theft and its impact on US
critical infrastructure. Copper thefts are occurring
throughout the United States and are perpetrated by
individuals and organized groups motivated by

[[Page S2160]]

quick profits and a variety of vulnerable targets.
Information for the assessment was developed through May 2008
from the following sources: FBI and Open sources.

Source and Confidence Statement

Reporting relative to the impact of copper thefts on US
critical infrastructure was derived from the FBI and open
sources. The FBI has high confidence that the FBI source
reporting used to prepare the assessment is reliable. The FBI
also has high confidence in the reliability of information
derived from open-source reporting.

Key Judgments

Copper thieves are threatening US critical infrastructure
by targeting electrical substations, cellular towers,
telephone land lines, railroads, water wells, construction
sites, and vacant homes for lucrative profits. The theft of
copper from these targets disrupts the flow of electricity,
telecommunications, transportation, water supply, heating,
and security and emergency services and presents a risk to
both public safety and national security.
Copper thieves are typically individuals or organized
groups who operate independently or in loose association with
each other and commit thefts in conjunction with fencing
activities and the sale of contraband. Organized groups of
drug addicts, gang members, and metal thieves are conducting
large scale thefts from electric utilities. warehouses,
foreclosed or vacant properties, and oil well sites for tens
of thousands of dollars in illicit proceeds per month.
The demand for copper from developing nations such as China
and India is creating a robust international copper trade.
Copper thieves are exploiting this demand and the resulting
price surge by stealing and selling the metal for high
profits to recyclers across the United States. As the global
supply of copper continues to tighten, the market for illicit
copper will likely increase.

Copper Thefts Threaten US Critical Infrastructure

Copper thieves are threatening US critical infrastructure
by targeting electrical substations, cellular towers,
telephone land lines, railroads, water wells, construction
sites, and vacant homes for lucrative profits. Copper thefts
from these targets have increased since 2006; and they are
currently disrupting the flow of electricity,
telecommunications, transportation, water supply, heating,
and security and emergency services, and present a risk to
both public safety and national security.
According to open-source reporting, on 4 April 2008, five
tornado warning sirens in the Jackson, Mississippi, area did
not warn residents of an approaching tornado because copper
thieves had stripped the sirens of copper wiring, thus
rendering them inoperable.
According to open-source reporting, on 20 March 2008,
nearly 4,000 residents in Polk County, Florida, were left
without power after copper wire was stripped from an active
transformer at a Tampa Electric Company (TECO) power
facility. Monetary losses to TECO were approximately
$500,000.
According to agricultural industry reporting, as of March
2007, farmers in Pinal County, Arizona, were experiencing a
copper theft epidemic as perpetrators stripped copper from
their water irrigation wells and pumps resulting in the loss
of crops and high replacement costs. Pinal County's
infrastructure loss due to copper theft was $10 million.

Criminal Groups Involved in Copper Thefts

Copper thieves are typically individuals or organized
groups who operate independently or in loose association with
each other and commit thefts in conjunction with fencing
activities and the sale of contraband. Organized groups of
drug addicts, gang members, and metal thieves are conducting
large scale thefts from electric utilities, warehouses,
foreclosed and vacant properties, and oil well sites for tens
of thousands of dollars in illicit proceeds per month.
According to open sources, as recently as April 2008,
highly organized theft rings specializing in copper theft
from houses and warehouses were operating in Minneapolis,
Minnesota. These rings or gangs hit several houses per day,
yielding more than $20,000 in profits per month. The targets
were most often foreclosed homes.
Open-source reporting from March 2008 indicates that an
organized copper theft ring used the Cuyahoga County
Sheriff's foreclosure lists to pinpoint targets in Cleveland,
Ohio. Perpetrators had 200 pounds of stolen copper in their
van, road maps, and tools. Three additional perpetrators were
found to be using the US Department of Housing and Urban
Development's list of mortgage and bank foreclosures to
target residences in Cleveland, South Euclid, Cleveland
Heights, and other cities in Ohio.

Global Demand Increasing

China, India, and other developing nations are driving the
demand for raw materials such as copper and creating a robust
international trade. Copper thieves are receiving cash from
recyclers who often fill orders for commercial scrap dealers.
Recycled copper flows from these dealers to smelters, mills,
foundries, ingot makers, powder plants, and other industries
to be re-used in the United States or for supplying the
international raw materials demand. As the global supply of
copper continues to tighten, the market for illicit copper
will likely increase.
Open-source reporting from February 2007 indicates that the
global copper supply tightened due to a landslide at the
Freeport-McMoran Copper and Gold mine in Grasberg, Indonesia
in October 2003 and a worker's strike at the El Abra copper
mine in Clama, Chile in November 2004. These events
contributed to copper production shortfalls and led to an
increase in recycling, which in turn created a market for
copper.
Open-source reporting from October 2006 indicated that the
demand for copper from China increased substantially due to
the construction of facilities for the 2008 Olympics.
Open-source reporting indicated that from January 2001 to
March 2008, the price of copper increased more than 500
percent. This has prompted unscrupulous and sometimes
unwitting independent and commercial scrap metal dealers to
pay record prices for copper, regardless of its origin,
making the material a more attractive target for theft.

Outlook

The global demand for copper, combined with the economic
and home foreclosure crisis, is creating numerous
opportunities for copper-theft perpetrators to exploit
copper-rich targets. Organized copper theft rings may
increasingly target vacant or foreclosed homes as they are a
lucrative source of unattended copper inventory. Current
economic conditions, such as the rising cost of gasoline,
food, and consumer goods, the declining housing market, the
ease through which copper is exchanged for cash, and the lack
of a significant deterrent effect, make it likely that copper
thefts will remain a lucrative financial resource for
criminals.
Industry officials have taken some countermeasures to
address the copper theft problem. These include the
installment of physical and technological security measures,
increased collaboration among the various industry sectors,
and the development of law enforcement partnerships. Many
states are also taking countermeasures by enacting or
enhancing legislation regulating the scrap industry--to
include increased recordkeeping and penalties for copper
theft and noncompliant scrap dealers However, there are
limited resources available to enforce these laws, and a very
small percentage of perpetrators are arrested and convicted.
Additionally, as copper thefts are typically addressed as
misdemeanors, those individuals convicted pay relatively low
fines and serve short prison terms

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