[Congressional Record Volume 155, Number 37 (Tuesday, March 3, 2009)]
[Senate]
[Pages S2692-S2716]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DURBIN (for himself, Mr. Gregg, Mr. Kennedy, Mr. Burr, Mr. 
        Dodd, Mr. Alexander, and Mr. Isakson):
  S. 510. A bill to amend the Federal Food, Drug, and Cosmetic Act with 
respect to the safety of the food supply; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. DURBIN. Mr. President, today I rise to introduce the FDA Food 
Safety Modernization Act.
  When I introduced this bill in the last Congress, we were in the 
middle of one of the largest food-borne illness outbreaks in the 
history of our country. Nearly 1500 people fell sick last spring and 
summer because of Salmonella Saintpaul, leading to a Government 
investigation that pointed the finger first at tomatoes and then at 
jalapeno peppers in Texas before settling on Serrano peppers in Mexico. 
In the meantime, more people got sick and the tomato industry lost up 
to hundreds of millions of dollars.
  Less than a year later, we find ourselves in the middle of yet 
another nationwide outbreak: peanut butter tainted with Salmonella, the 
second case of its kind in 2 years. There is not a day that goes by 
that we don't hear about another recalled peanut butter product or 
another person sick with Salmonella. More than 660 people have been 
sickened, half of them children. At least nine people are dead. Over 
2,600 products have been recalled, in a recall that goes back to March 
2005 and could continue for at least another couple of years, making 
this one of the biggest food recalls in our Nation's history.
  Unfortunately, these problems seem to be par for the course. In the 
last couple of years we have seen Salmonella in our peppers and peanut 
butter and E. coli in our spinach. Our food safety problems do not just 
start and stop at home: we have also seen chemically tainted pet food, 
milk products, and seafood from China.
  These problems are only the tip of the iceberg. Every year, more than 
76 million Americans become sick because of a food-borne illness, 
325,000 are hospitalized, and 5,000 die.
  It is clear that the Food and Drug Administration, who regulates 
these foods and 80 percent of our food supply, including virtually all 
food imports, can not keep up. The agency is underfunded and 
overwhelmed. It operates under an obsolete, largely reactive 1938 law. 
Its food safety program has not kept up with the dramatic changes in 
our food system, and it does a poor job of preventing and responding to 
food safety problems. As a result, consumers suffer and so do 
businesses something we can never afford, but especially in these 
trying economic times.
  Our food safety system is in crisis and it is time that we act. 
That's why Senator Gregg and I are introducing

[[Page S2693]]

the FDA Food Safety Modernization Act, a bipartisan bill that gives the 
FDA the new authorities and resources it needs to stop food safety 
problems before they start.
  For the first time in history, our bill gives the FDA a mandate to 
inspect: to increase the inspections at all food facilities, including 
annual inspections of high risk facilities. It requires the food 
industry to have in place plans that address identified hazards with 
the right preventive measures. It requires all testing and sampling for 
regulatory purposes to be done by labs accredited by the FDA, and 
requires those results to be sent to the agency. It also enables the 
FDA to more effectively respond to an outbreak by giving the agency new 
authorities to order recalls, shut down tainted facilities, and access 
records.
  This bill is proof that food safety is not a Democratic issue or a 
Republican one. Everyone eats. All Americans have a right to know that 
the food we buy for our families and our pets is safe. We should not 
have to worry about getting sick, or worse. If there's a problem, our 
Government should be able to catch it and fix it before people die.
  I thank Senators Kennedy, Dodd, Klobuchar, Burr, Alexander, and 
Chambliss for joining me in this effort. I also want to thank the 
consumer, public health, and industry groups who have helped us craft a 
strong bill for their support: Consumer Federation of America, Center 
for Science in the Public Interest, Consumers Union, Trust for 
America's Health, Grocery Manufacturers of America, American Feed 
Industry Association, American Frozen Food Institute, Food Marketing 
Institute, National Fisheries Institute, and American Spice Trade 
Association.
  This bill is a comprehensive, bipartisan effort that improves the 
FDA's ability to prevent, detect, and respond to food safety problems, 
whether this means Salmonella-tainted peanut butter from Georgia or 
melamine-spiked candy from China. It's the first step towards building 
a food safety system that is science and risk-based, accountable to 
consumers, more transparent, and focused on prevention. I urge my 
colleagues to support 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. 510

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

     SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``FDA Food 
     Safety Modernization Act''.
       (b) References.--Except as otherwise specified, whenever in 
     this Act an amendment is expressed in terms of an amendment 
     to a section or other provision, the reference shall be 
     considered to be made to a section or other provision of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.).
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; references; table of contents.

      TITLE I--IMPROVING CAPACITY TO PREVENT FOOD SAFETY PROBLEMS

Sec. 101. Inspections of records.
Sec. 102. Registration of food facilities.
Sec. 103. Hazard analysis and risk-based preventive controls.
Sec. 104. Performance standards.
Sec. 105. Standards for produce safety.
Sec. 106. Protection against intentional adulteration.
Sec. 107. Authority to collect fees.
Sec. 108. National agriculture and food defense strategy.
Sec. 109. Food and Agriculture Coordinating Councils.
Sec. 110. Building domestic capacity.
Sec. 111. Final rule for prevention of Salmonella Enteritidis in shell 
              eggs during production.
Sec. 112. Sanitary transportation of food.
Sec. 113. Food allergy and anaphylaxis management.

   TITLE II--IMPROVING CAPACITY TO DETECT AND RESPOND TO FOOD SAFETY 
                                PROBLEMS

Sec. 201. Targeting of inspection resources for domestic facilities, 
              foreign facilities, and ports of entry; annual report.
Sec. 202. Recognition of laboratory accreditation for analyses of 
              foods.
Sec. 203. Integrated consortium of laboratory networks.
Sec. 204. Enhancing traceback and recordkeeping.
Sec. 205. Surveillance.
Sec. 206. Mandatory recall authority.
Sec. 207. Administrative detention of food.
Sec. 208. Decontamination and disposal standards and plans.

            TITLE III--IMPROVING THE SAFETY OF IMPORTED FOOD

Sec. 301. Foreign supplier verification program.
Sec. 302. Voluntary qualified importer program.
Sec. 303. Authority to require import certifications for food.
Sec. 304. Prior notice of imported food shipments.
Sec. 305. Review of a regulatory authority of a foreign country.
Sec. 306. Building capacity of foreign governments with respect to 
              food.
Sec. 307. Inspection of foreign food facilities.
Sec. 308. Accreditation of qualified third-party auditors and audit 
              agents.
Sec. 309. Foreign offices of the Food and Drug Administration.

                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Funding for food safety.
Sec. 402. Jurisdiction; authorities.

      TITLE I--IMPROVING CAPACITY TO PREVENT FOOD SAFETY PROBLEMS

     SEC. 101. INSPECTIONS OF RECORDS.

       (a) In General.--Section 414(a) (21 U.S.C. 350c(a)) is 
     amended--
       (1) by striking the heading and all follows through ``of 
     food is'' and inserting the following: ``Records 
     Inspection.--
       ``(1) Adulterated food.--If the Secretary has a reasonable 
     belief that an article of food, and any other article of food 
     that the Secretary reasonably believes is likely to be 
     affected in a similar manner, is'';
       (2) by inserting ``, and to any other article of food that 
     the Secretary reasonably believes is likely to be affected in 
     a similar manner,'' after ``relating to such article'';
       (3) by striking the last sentence; and
       (4) by inserting at the end the following:
       ``(2) Use of or exposure to food of concern.--If the 
     Secretary believes that there is a reasonable probability 
     that the use of or exposure to an article of food, and any 
     other article of food that the Secretary reasonably believes 
     is likely to be affected in a similar manner, will cause 
     serious adverse health consequences or death to humans or 
     animals, each person (excluding farms and restaurants) who 
     manufactures, processes, packs, distributes, receives, holds, 
     or imports such article shall, at the request of an officer 
     or employee duly designated by the Secretary, permit such 
     officer or employee, upon presentation of appropriate 
     credentials and a written notice to such person, at 
     reasonable times and within reasonable limits and in a 
     reasonable manner, to have access to and copy all records 
     relating to such article and to any other article of food 
     that the Secretary reasonably believes is likely to be 
     affected in a similar manner, that are needed to assist the 
     Secretary in determining whether there is a reasonable 
     probability that the use of or exposure to the food will 
     cause serious adverse health consequences or death to humans 
     or animals.
       ``(3) Application.--The requirement under paragraphs (1) 
     and (2) applies to all records relating to the manufacture, 
     processing, packing, distribution, receipt, holding, or 
     importation of such article maintained by or on behalf of 
     such person in any format (including paper and electronic 
     formats) and at any location.''.
       (b) Conforming Amendment.--Section 704(a)(1)(B) (21 U.S.C. 
     374(a)(1)(B)) is amended by striking ``section 414 when'' and 
     all that follows through ``subject to'' and inserting 
     ``section 414, when the standard for record inspection under 
     paragraph (1) or (2) of section 414(a) applies, subject to''.

     SEC. 102. REGISTRATION OF FOOD FACILITIES.

       (a) Updating of Food Category Regulations; Biennial 
     Registration Renewal.--Section 415(a) (21 U.S.C. 350d(a)) is 
     amended--
       (1) in paragraph (2), by--
       (A) striking ``conducts business and'' and inserting 
     ``conducts business, the e-mail address for the contact 
     person of the facility or, in the case of a foreign facility, 
     the United States agent for the facility, and''; and
       (B) inserting ``, or any other food categories as 
     determined appropriate by the Secretary, including by 
     guidance)'' after ``Code of Federal Regulations'';
       (2) by redesignating paragraphs (3) and (4) as paragraphs 
     (4) and (5), respectively; and
       (3) by inserting after paragraph (2) the following:
       ``(3) Biennial registration renewal.--During the period 
     beginning on October 1 and ending on December 31 of each 
     even-numbered year, a registrant that has submitted a 
     registration under paragraph (1) shall submit to the 
     Secretary a renewal registration containing the information 
     described in paragraph (2). The Secretary shall provide for 
     an abbreviated registration renewal process for any 
     registrant that has not had any changes to such information 
     since the registrant submitted the preceding registration or 
     registration renewal for the facility involved.''.
       (b) Suspension of Registration.--
       (1) In general.--Section 415 (21 U.S.C. 350d) is amended--
       (A) in subsection (a)(2), by inserting after the first 
     sentence the following: ``The registration shall contain an 
     assurance that the Secretary will be permitted to inspect 
     such facility at the times and in the manner permitted by 
     this Act.'';
       (B) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively; and

[[Page S2694]]

       (C) by inserting after subsection (a) the following:
       ``(b) Suspension of Registration.--
       ``(1) In general.--If the Secretary determines that food 
     manufactured, processed, packed, or held by a facility 
     registered under this section has a reasonable probability of 
     causing serious adverse health consequences or death to 
     humans or animals, the Secretary may by order suspend the 
     registration of the facility under this section in accordance 
     with this subsection.
       ``(2) Hearing on suspension.--The Secretary shall provide 
     the registrant subject to an order under paragraph (1) with 
     an opportunity for an informal hearing, to be held as soon as 
     possible but not later than 2 days after the issuance of the 
     order, on the actions required for reinstatement of 
     registration and why the registration that is subject to 
     suspension should be reinstated. The Secretary shall 
     reinstate a registration if the Secretary determines, based 
     on evidence presented, that adequate grounds do not exist to 
     continue the suspension of the registration.
       ``(3) Post-hearing corrective action plan; vacating of 
     order.--
       ``(A) Corrective action plan.--If, after providing 
     opportunity for an informal hearing under paragraph (2), the 
     Secretary determines that the suspension of registration 
     remains necessary, the Secretary shall require the registrant 
     to submit a corrective action plan to demonstrate how the 
     registrant plans to correct the conditions found by the 
     Secretary. The Secretary shall review such plan in a timely 
     manner.
       ``(B) Vacating of order.--Upon a determination by the 
     Secretary that adequate grounds do not exist to continue the 
     suspension actions required by the order, or that such 
     actions should be modified, the Secretary shall vacate the 
     order or modify the order.
       ``(4) Effect of suspension.--If the registration of a 
     facility is suspended under this subsection, such facility 
     shall not import food or offer to import food into the United 
     States, or otherwise introduce food into interstate commerce 
     in the United States.
       ``(5) Regulations.--The Secretary shall promulgate 
     regulations that describe the standards officials will use in 
     making a determination to suspend a registration, and the 
     format such officials will use to explain to the registrant 
     the conditions found at the facility.
       ``(6) No delegation.--The authority conferred by this 
     subsection to issue an order to suspend a registration or 
     vacate an order of suspension shall not be delegated to any 
     officer or employee other than the Commissioner.''.
       (2) Imported food.--Section 801(l) (21 U.S.C. 381(l)) is 
     amended by inserting ``(or for which a registration has been 
     suspended under such section)'' after ``section 415''.
       (c) Conforming Amendments.--
       (1) Section 301(d) (21 U.S.C. 331(d)) is amended by 
     inserting ``415,'' after ``404,''.
       (2) Section 415(d), as redesignated by subsection (b), is 
     amended by adding at the end before the period ``for a 
     facility to be registered, except with respect to the 
     reinstatement of a registration that is suspended under 
     subsection (b)''.

     SEC. 103. HAZARD ANALYSIS AND RISK-BASED PREVENTIVE CONTROLS.

       (a) In General.--Chapter IV (21 U.S.C. 341 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 418. HAZARD ANALYSIS AND RISK-BASED PREVENTIVE 
                   CONTROLS.

       ``(a) In General.--Each owner, operator, or agent in charge 
     of a facility shall, in accordance with this section, 
     evaluate the hazards that could affect food manufactured, 
     processed, packed, or held by such facility, identify and 
     implement preventive controls to significantly minimize or 
     prevent their occurrence and provide assurances that such 
     food is not adulterated under section 402 or misbranded under 
     section 403(w), monitor the performance of those controls, 
     and maintain records of this monitoring as a matter of 
     routine practice.
       ``(b) Hazard Analysis.--The owner, operator, or agent in 
     charge of a facility shall--
       ``(1) identify and evaluate known or reasonably foreseeable 
     hazards that may be associated with the facility, including--
       ``(A) biological, chemical, physical, and radiological 
     hazards, natural toxins, pesticides, drug residues, 
     decomposition, parasites, allergens, and unapproved food and 
     color additives; and
       ``(B) hazards that occur naturally, may be unintentionally 
     introduced, or may be intentionally introduced, including by 
     acts of terrorism; and
       ``(2) develop a written analysis of the hazards.
       ``(c) Preventive Controls.--The owner, operator, or agent 
     in charge of a facility shall identify and implement 
     preventive controls, including at critical control points, if 
     any, to provide assurances that--
       ``(1) hazards identified in the hazard analysis conducted 
     under subsection (b) will be significantly minimized or 
     prevented; and
       ``(2) the food manufactured, processed, packed, or held by 
     such facility will not be adulterated under section 402 or 
     misbranded under section 403(w).
       ``(d) Monitoring of Effectiveness.--The owner, operator, or 
     agent in charge of a facility shall monitor the effectiveness 
     of the preventive controls implemented under subsection (c) 
     to provide assurances that the outcomes described in 
     subsection (c) shall be achieved.
       ``(e) Corrective Actions.--The owner, operator, or agent in 
     charge of a facility shall establish procedures that a 
     facility will implement if the preventive controls 
     implemented under subsection (c) are found to be ineffective 
     through monitoring under subsection (d).
       ``(f) Verification.--The owner, operator, or agent in 
     charge of a facility shall verify that--
       ``(1) the preventive controls implemented under subsection 
     (c) are adequate to control the hazards identified under 
     subsection (b);
       ``(2) the owner, operator, or agent is conducting 
     monitoring in accordance with subsection (d);
       ``(3) the owner, operator, or agent is making appropriate 
     decisions about corrective actions taken under subsection 
     (e); and
       ``(4) there is documented, periodic reanalysis of the plan 
     under subsection (i) to ensure that the plan is still 
     relevant to the raw materials, as well as to conditions and 
     processes in the facility, and to new and emerging threats.
       ``(g) Recordkeeping.--The owner, operator, or agent in 
     charge of a facility shall maintain, for not less than 2 
     years, records documenting the monitoring of the preventive 
     controls implemented under subsection (c), instances of 
     nonconformance material to food safety, instances when 
     corrective actions were implemented, and the efficacy of 
     preventive controls and corrective actions.
       ``(h) Written Plan and Documentation.--Each owner, 
     operator, or agent in charge of a facility shall prepare a 
     written plan that documents and describes the procedures used 
     by the facility to comply with the requirements of this 
     section, including analyzing the hazards under subsection (b) 
     and identifying the preventive controls adopted to address 
     those hazards under subsection (c). Such written plan, 
     together with documentation that the plan is being 
     implemented, shall be made promptly available to a duly 
     authorized representative of the Secretary upon oral or 
     written request.
       ``(i) Requirement To Reanalyze.--Each owner, operator, or 
     agent in charge of a facility shall conduct a reanalysis 
     under subsection (b) whenever a significant change is made in 
     the activities conducted at a facility operated by such 
     owner, operator, or agent if the change creates a reasonable 
     potential for a new hazard or a significant increase in a 
     previously identified hazard or not less frequently than once 
     every 3 years, whichever is earlier. Such reanalysis shall be 
     completed and additional preventive controls needed to 
     address the hazard identified, if any, shall be implemented 
     before the change in activities at the facility is commenced. 
     Such owner, operator, or agent shall revise the written plan 
     required under subsection (h) if such a significant change is 
     made or document the basis for the conclusion that no 
     additional or revised preventive controls are needed. The 
     Secretary may require a reanalysis under this section to 
     respond to new hazards and developments in scientific 
     understanding.
       ``(j) Deemed Compliance of Seafood, Juice, and Low-Acid 
     Canned Food Facilities in Compliance With HACCP.--An owner, 
     operator, or agent in charge of a facility required to comply 
     with 1 of the following standards and regulations with 
     respect to such facility shall be deemed to be in compliance 
     with this section, with respect to such facility:
       ``(1) The Seafood Hazard Analysis Critical Control Points 
     Program of the Food and Drug Administration.
       ``(2) The Juice Hazard Analysis Critical Control Points 
     Program of the Food and Drug Administration.
       ``(3) The Thermally Processed Low-Acid Foods Packaged in 
     Hermetically Sealed Containers standards of the Food and Drug 
     Administration (or any successor standards).
       ``(k) Exception for Facilities in Compliance With Section 
     419.--This section shall not apply to a facility that is 
     subject to section 419.
       ``(l) Authority With Respect to Certain Facilities.--The 
     Secretary may, by regulation, exempt or modify the 
     requirements for compliance under this section with respect 
     to facilities that are solely engaged in the production of 
     food for animals other than man or the storage of packaged 
     foods that are not exposed to the environment.
       ``(m) Definitions.--For purposes of this section:
       ``(1) Critical control point.--The term `critical control 
     point' means a point, step, or procedure in a food process at 
     which control can be applied and is essential to prevent or 
     eliminate a food safety hazard or reduce it to an acceptable 
     level.
       ``(2) Facility.--The term `facility' means a domestic 
     facility or a foreign facility that is required to register 
     under section 415.
       ``(3) Preventive controls.--The term `preventive controls' 
     means those risk-based, reasonably appropriate procedures, 
     practices, and processes that a person knowledgeable about 
     the safe manufacturing, processing, packing, or holding of 
     food would have employed to significantly minimize or prevent 
     the hazards identified under the hazard analysis conducted 
     under subsection (a) and that are consistent with the current 
     scientific understanding of safe food manufacturing, 
     processing, packing, or holding at the time of the analysis. 
     Those procedures, practices, and processes may include the 
     following:
       ``(A) Sanitation procedures for food contact surfaces and 
     utensils and food-contact surfaces of equipment.
       ``(B) Supervisor, manager, and employee hygiene training.

[[Page S2695]]

       ``(C) An environmental monitoring program to verify the 
     effectiveness of pathogen controls.
       ``(D) An allergen control program.
       ``(E) A recall contingency plan.
       ``(F) Good Manufacturing Practices (GMPs).
       ``(G) Supplier verification activities.''.
       (b) Regulations.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this Act as the ``Secretary'') shall 
     promulgate regulations to establish science-based minimum 
     standards for conducting a hazard analysis, documenting 
     hazards, implementing preventive controls, and documenting 
     the implementation of the preventive controls under section 
     418 of the Federal Food, Drug, and Cosmetic Act (as added by 
     subsection (a)).
       (2) Content.--The regulations promulgated under paragraph 
     (1) shall provide sufficient flexibility to be applicable in 
     all situations, including in the operations of small 
     businesses.
       (3) Rule of construction.--Nothing in this subsection shall 
     be construed to provide the Secretary with the authority to 
     apply specific technologies, practices, or critical controls 
     to an individual facility.
       (4) Review.--In promulgating the regulations under 
     paragraph (1), the Secretary shall review regulatory hazard 
     analysis and preventive control programs in existence on the 
     date of enactment of this Act to ensure that the program 
     under such section 418 is consistent, to the extent 
     practicable, with applicable internationally recognized 
     standards in existence on such date.
       (c) Guidance Document.--The Secretary shall issue a 
     guidance document related to hazard analysis and preventive 
     controls required under section 418 of the Federal Food, 
     Drug, and Cosmetic Act (as added by subsection (a)).
       (d) Prohibited Acts.--Section 301 (21 U.S.C. 331) is 
     amended by adding at the end the following:
       ``(oo) The operation of a facility that manufacturers, 
     processes, packs, or holds food for sale in the United States 
     if the owner, operator, or agent in charge of such facility 
     is not in compliance with section 418.''.
       (e) No Effect on HACCP Authorities.--Nothing in the 
     amendments made by this section limits the authority of the 
     Secretary under the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 301 et seq.) or the Public Health Service Act (42 
     U.S.C. 201 et seq.) to revise, issue, or enforce product and 
     category-specific regulations, such as the Seafood Hazard 
     Analysis Critical Controls Points Program, the Juice Hazard 
     Analysis Critical Control Program, and the Thermally 
     Processed Low-Acid Foods Packaged in Hermetically Sealed 
     Containers standards.
       (f) Effective Date.--
       (1) General rule.--The amendments made by this section 
     shall take effect 18 months after the date of enactment of 
     this Act.
       (2) Exceptions.--Notwithstanding paragraph (1)--
       (A) the amendments made by this section shall apply to a 
     small business (as defined by the Secretary) after the date 
     that is 2 years after the date of enactment of this Act; and
       (B) the amendments made by this section shall apply to a 
     very small business (as defined by the Secretary) after the 
     date that is 3 years after the date of enactment of this Act.

     SEC. 104. PERFORMANCE STANDARDS.

       The Secretary shall, not less frequently than every 2 
     years, review and evaluate relevant health data and other 
     relevant information, including from toxicological and 
     epidemiological studies and analyses, to determine the most 
     significant food-borne contaminants and, when appropriate to 
     reduce the risk of serious illness or death to humans or 
     animals or to prevent the adulteration of the food under 
     section 402 of the Federal Food, Drug, or Cosmetic Act, (21 
     U.S.C. 342) or to prevent the spread of communicable disease 
     under section 361 of the Public Health Service Act (42 U.S.C. 
     264), shall issue contaminant-specific and science-based 
     guidance documents, actions levels, or regulations. Such 
     guidance, action levels, or regulations shall apply to 
     products or product classes and shall not be written to be 
     facility-specific.

     SEC. 105. STANDARDS FOR PRODUCE SAFETY.

       (a) In General.--Chapter IV (21 U.S.C. 341 et seq.), as 
     amended by section 103, is amended by adding at the end the 
     following:

     ``SEC. 419. STANDARDS FOR PRODUCE SAFETY.

       ``(a) Proposed Rulemaking.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of the FDA Food Safety Modernization Act, the 
     Secretary, in consultation with the Secretary of Agriculture 
     and representatives of State departments of agriculture, 
     shall publish a notice of proposed rulemaking to establish 
     science-based minimum standards for the safe production and 
     harvesting of those types of fruits and vegetables that are 
     raw agricultural commodities for which the Secretary has 
     determined that such standards minimize the risk of serious 
     adverse health consequences or death.
       ``(2) Public input.--During the comment period on the 
     notice of proposed rulemaking under paragraph (1), the 
     Secretary shall conduct not less than 3 public meetings in 
     diverse geographical areas of the United States to provide 
     persons in different regions an opportunity to comment.
       ``(3) Content.--The proposed rulemaking under paragraph (1) 
     shall--
       ``(A) include, with respect to growing, harvesting, 
     sorting, and storage operations, minimum standards related to 
     soil amendments, hygiene, packaging, temperature controls, 
     animal encroachment, and water; and
       ``(B) consider hazards that occur naturally, may be 
     unintentionally introduced, or may be intentionally 
     introduced, including by acts of terrorism.
       ``(4) Prioritization.--The Secretary shall prioritize the 
     implementation of the regulations for specific fruits and 
     vegetables that are raw agricultural commodities that have 
     been associated with food-borne illness outbreaks.
       ``(b) Final Regulation.--
       ``(1) In general.--Not later than 1 year after the close of 
     the comment period for the proposed rulemaking under 
     subsection (a), the Secretary shall adopt a final regulation 
     to provide for minimum standards for those types of fruits 
     and vegetables that are raw agricultural commodities for 
     which the Secretary has determined that such standards 
     minimize the risk of serious adverse health consequences or 
     death.
       ``(2) Final regulation.--The final regulation shall--
       ``(A) provide a reasonable period of time for compliance, 
     taking into account the needs of small businesses for 
     additional time to comply;
       ``(B) provide for coordination of education and enforcement 
     activities by State and local officials, as designated by the 
     Governors of the respective States; and
       ``(C) include a description of the variance process under 
     subsection (c) and the types of permissible variances the 
     Secretary may grant.
       ``(c) Criteria.--
       ``(1) In general.--The regulations adopted under subsection 
     (b) shall--
       ``(A) set forth those procedures, processes, and practices 
     as the Secretary determines to be reasonably necessary to 
     prevent the introduction of known or reasonably foreseeable 
     biological, chemical, and physical hazards, including hazards 
     that occur naturally, may be unintentionally introduced, or 
     may be intentionally introduced, including by acts of 
     terrorism, into fruits and vegetables that are raw 
     agricultural commodities and to provide reasonable assurances 
     that the produce is not adulterated under section 402; and
       ``(B) permit States and foreign countries from which food 
     is imported into the United States, subject to paragraph (2), 
     to request from the Secretary variances from the requirements 
     of the regulations, where upon approval of the Secretary, the 
     variance is considered permissible under the requirements of 
     the regulations adopted under subsection (b)(2)(C) and where 
     the State or foreign country determines that the variance is 
     necessary in light of local growing conditions and that the 
     procedures, processes, and practices to be followed under the 
     variance are reasonably likely to ensure that the produce is 
     not adulterated under section 402 to the same extent as the 
     requirements of the regulation adopted under subsection (b).
       ``(2) Approval of variances.--A State or foreign country 
     from which food is imported into the United States shall 
     request a variance from the Secretary in writing. The 
     Secretary may deny such a request as not reasonably likely to 
     ensure that the produce is not adulterated under section 402 
     to the same extent as the requirements of the regulation 
     adopted under subsection (b).
       ``(d) Enforcement.--The Secretary may coordinate with the 
     Secretary of Agriculture and shall contract and coordinate 
     with the agency or department designated by the Governor of 
     each State to perform activities to ensure compliance with 
     this section.
       ``(e) Guidance.--Not later than 1 year after the date of 
     enactment of the FDA Food Safety Modernization Act, the 
     Secretary shall publish, after consultation with the 
     Secretary of Agriculture and representatives of State 
     departments of agriculture, updated good agricultural 
     practices and guidance for the safe production and harvesting 
     of specific types of fresh produce.
       ``(f) Exception for Facilities in Compliance With Section 
     418.--This section shall not apply to a facility that is 
     subject to section 418.''.
       (b) Prohibited Acts.--Section 301 (21 U.S.C. 331), as 
     amended by section 103, is amended by adding at the end the 
     following:
       ``(pp) The production or harvesting of produce not in 
     accordance with minimum standards as provided by regulation 
     under section 419(b) or a variance issued under section 
     419(c).''.
       (c) No Effect on HACCP Authorities.--Nothing in the 
     amendments made by this section limits the authority of the 
     Secretary under the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 301 et seq.) or the Public Health Service Act (42 
     U.S.C. 201 et seq.) to revise, issue, or enforce product and 
     category-specific regulations, such as the Seafood Hazard 
     Analysis Critical Controls Points Program, the Juice Hazard 
     Analysis Critical Control Program, and the Thermally 
     Processed Low-Acid Foods Packaged in Hermetically Sealed 
     Containers standards.

     SEC. 106. PROTECTION AGAINST INTENTIONAL ADULTERATION.

       (a) In General.--Chapter IV (21 U.S.C. 341 et seq.), as 
     amended by section 105, is amended by adding at the end the 
     following:

     ``SEC. 420. PROTECTION AGAINST INTENTIONAL ADULTERATION.

       ``(a) In General.--Not later than 24 months after the date 
     of enactment of the FDA Food Safety Modernization Act, the

[[Page S2696]]

     Secretary, in consultation with the Secretary of Homeland 
     Security and the Secretary of Agriculture, shall promulgate 
     regulations to protect against the intentional adulteration 
     of food subject to this Act.
       ``(b) Content of Regulations.--Regulations under subsection 
     (a) shall only apply to food--
       ``(1) for which the Secretary has identified clear 
     vulnerabilities (such as short shelf-life or susceptibility 
     to intentional contamination at critical control points);
       ``(2) in bulk or batch form, prior to being packaged for 
     the final consumer; and
       ``(3) for which there is a high risk of intentional 
     contamination, as determined by the Secretary, that could 
     cause serious adverse health consequences or death to humans 
     or animals.
       ``(c) Determinations.--In making the determination under 
     subsection (b)(3), the Secretary shall--
       ``(1) conduct vulnerability assessments of the food system;
       ``(2) consider the best available understanding of 
     uncertainties, risks, costs, and benefits associated with 
     guarding against intentional adulteration at vulnerable 
     points; and
       ``(3) determine the types of science-based mitigation 
     strategies or measures that are necessary to protect against 
     the intentional adulteration of food.
       ``(d) Exception.--This section shall not apply to food 
     produced on farms, except for milk.
       ``(e) Definition.--For purposes of this section, the term 
     `farm' has the meaning given that term in section 1.227 of 
     title 21, Code of Federal Regulations (or any successor 
     regulation).''.
       (b) Guidance Documents.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, in consultation with 
     the Secretary of Homeland Security and the Secretary of 
     Agriculture, shall issue guidance documents related to 
     protection against the intentional adulteration of food, 
     including mitigation strategies or measures to guard against 
     such adulteration as required under section 420 of the 
     Federal Food, Drug, and Cosmetic Act, as added by subsection 
     (a).
       (2) Content.--The guidance document issued under paragraph 
     (1) shall--
       (A) specify how a person shall assess whether the person is 
     required to implement mitigation strategies or measures 
     intended to protect against the intentional adulteration of 
     food;
       (B) specify appropriate science-based mitigation strategies 
     or measures to prepare and protect the food supply chain at 
     specific vulnerable points, as appropriate;
       (C) include a model assessment for a person to use under 
     subparagraph (A);
       (D) include examples of mitigation strategies or measures 
     described in subparagraph (B); and
       (E) specify situations in which the examples of mitigation 
     strategies or measures described in subparagraph (D) are 
     appropriate.
       (3) Limited distribution.--In the interest of national 
     security, the Secretary, in consultation with the Secretary 
     of Homeland Security, may determine the time and manner in 
     which the guidance documents issued under paragraph (1) are 
     made public, including by releasing such documents to 
     targeted audiences.
       (c) Periodic Review.--The Secretary shall periodically 
     review and, as appropriate, update the regulation under 
     subsection (a) and the guidance documents under subsection 
     (b).
       (d) Prohibited Acts.--Section 301 (21 U.S.C. 331 et seq.), 
     as amended by section 105, is amended by adding at the end 
     the following:
       ``(qq) The failure to comply with section 420.''.

     SEC. 107. AUTHORITY TO COLLECT FEES.

       (a) Fees for Reinspection, Recall, and Importation 
     Activities.--Subchapter C of chapter VII (21 U.S.C. 379f et 
     seq.) is amended by inserting after section 740 the 
     following:

                     ``PART 5--FEES RELATED TO FOOD

     ``SEC. 740A. AUTHORITY TO COLLECT AND USE FEES.

       ``(a) In General.--
       ``(1) Purpose and authority.--For fiscal year 2010 and each 
     subsequent fiscal year, the Secretary shall, in accordance 
     with this section, assess and collect fees from--
       ``(A) each domestic facility (as defined in section 415(b)) 
     subject to a reinspection in such fiscal year, to cover 
     reinspection-related costs for such year;
       ``(B) each domestic facility (as defined in section 415(b)) 
     and importer subject to a food recall in such fiscal year, to 
     cover food recall activities performed by the Secretary, 
     including technical assistance, follow-up effectiveness 
     checks, and public notifications, for such year;
       ``(C) each importer participating in the voluntary 
     qualified importer program under section 806 in such year, to 
     cover the administrative costs such program for such year; 
     and
       ``(D) each importer subject to a reinspection in such 
     fiscal year at a port of entry, to cover reinspection-related 
     costs at ports of entry for such year.
       ``(2) Definitions.--For purposes of this section--
       ``(A) the term `reinspection' means--
       ``(i) with respect to domestic facilities (as defined in 
     section 415(b)), 1 or more inspections conducted under 
     section 704 subsequent to an inspection conducted under such 
     provision which identified noncompliance materially related 
     to a food safety requirement of this Act, specifically to 
     determine whether compliance has been achieved to the 
     Secretary's satisfaction; and
       ``(ii) with respect to importers, 1 or more examinations 
     conducted under section 801 subsequent to an examination 
     conducted under such provision which identified noncompliance 
     materially related to a food safety requirement of this Act, 
     specifically to determine whether compliance has been 
     achieved to the Secretary's satisfaction; and
       ``(B) the term `reinspection-related costs' means all 
     expenses, including administrative expenses, incurred in 
     connection with--
       ``(i) arranging, conducting, and evaluating the results of 
     reinspections; and
       ``(ii) assessing and collecting reinspection fees under 
     this section.
       ``(b) Establishment of Fees.--
       ``(1) In general.--Subject to subsections (c) and (d), the 
     Secretary shall establish the fees to be collected under this 
     section for each fiscal year specified in subsection (a)(1), 
     based on the methodology described under paragraph (2), and 
     shall publish such fees in a Federal Register notice not 
     later than 60 days before the start of each such year.
       ``(2) Fee methodology.--
       ``(A) Fees.--Fees amounts established for collection--
       ``(i) under subparagraph (A) of subsection (a)(1) for a 
     fiscal year shall be based on the Secretary's estimate of 100 
     percent of the costs of the reinspection-related activities 
     (including by type or level of reinspection activity, as the 
     Secretary determines applicable) described in such 
     subparagraph (A) for such year;
       ``(ii) under subparagraph (B) of subsection (a)(1) for a 
     fiscal year shall be based on the Secretary's estimate of 100 
     percent of the costs of the activities described in such 
     subparagraph (B) for such year;
       ``(iii) under subparagraph (C) of subsection (a)(1) for a 
     fiscal year shall be based on the Secretary's estimate of 100 
     percent of the costs of the activities described in such 
     subparagraph (C) for such year; and
       ``(iv) under subparagraph (D) of subsection (a)(1) for a 
     fiscal year shall be based on the Secretary's estimate of 100 
     percent of the costs of the activities described in such 
     subparagraph (D) for such year.
       ``(B) Other considerations.--
       ``(i) Voluntary qualified importer program.--

       ``(I) Participation.--In establishing the fee amounts under 
     subparagraph (A)(iii) for a fiscal year, the Secretary shall 
     provide for the number of importers who have submitted to the 
     Secretary a notice under section 806(e) informing the 
     Secretary of the intent of such importer to participate in 
     the program under section 806 in such fiscal year.
       ``(II) Recoupment.--In establishing the fee amounts under 
     subparagraph (A)(iii) for the first 5 fiscal years after the 
     date of enactment of this section, the Secretary shall 
     include in such fee a reasonable surcharge that provides a 
     recoupment of the costs expended by the Secretary to 
     establish and implement the first year of the program under 
     section 806.

       ``(ii) Crediting of fees.--In establishing the fee amounts 
     under subparagraph (A) for a fiscal year, the Secretary shall 
     provide for the crediting of fees from the previous year to 
     the next year if the Secretary overestimated the amount of 
     fees needed to carry out such activities, and consider the 
     need to account for any adjustment of fees and such other 
     factors as the Secretary determines appropriate.
       ``(3) Use of fees.--The Secretary shall make all of the 
     fees collected pursuant to clause (i), (ii), (iii), and (iv) 
     of paragraph (2)(A) available solely to pay for the costs 
     referred to in such clause (i), (ii), (iii), and (iv) of 
     paragraph (2)(A), respectively.
       ``(4) Compliance with international agreements.--Nothing in 
     this section shall be construed to authorize the assessment 
     of any fee inconsistent with the agreement establishing the 
     World Trade Organization or any other treaty or international 
     agreement to which the United States is a party.
       ``(c) Limitations.--
       ``(1) In general.--Fees under subsection (a) shall be 
     refunded for a fiscal year beginning after fiscal year 2010 
     unless appropriations for the Center for Food Safety and 
     Applied Nutrition and the Center for Veterinary Medicine and 
     related activities of the Office of Regulatory Affairs at the 
     Food and Drug Administration for such fiscal year (excluding 
     the amount of fees appropriated for such fiscal year) are 
     equal to or greater than the amount of appropriations for the 
     Center for Food Safety and Applied Nutrition and the Center 
     for Veterinary Medicine and related activities of the Office 
     of Regulatory Affairs at the Food and Drug Administration for 
     the preceding fiscal year (excluding the amount of fees 
     appropriated for such fiscal year) multiplied by 1 plus 4.5 
     percent.
       ``(2) Authority.--If the Secretary does not assess fees 
     under subsection (a) during any portion of a fiscal year 
     because of paragraph (1) and if at a later date in such 
     fiscal year the Secretary may assess such fees, the Secretary 
     may assess and collect such fees, without any modification in 
     the rate, under subsection (a), notwithstanding the 
     provisions of subsection (a) relating to the date fees are to 
     be paid.
       ``(3) Limitation on amount of certain fees.--
       ``(A) In general.--Notwithstanding any other provision of 
     this section and subject to

[[Page S2697]]

     subparagraph (B), the Secretary may not collect fees in a 
     fiscal year such that the amount collected--
       ``(i) under subparagraph (B) of subsection (a)(1) exceeds 
     $20,000,000; and
       ``(ii) under subparagraphs (A) and (D) of subsection (a)(1) 
     exceeds $25,000,000 combined.
       ``(B) Exception.--If a domestic facility (as defined in 
     section 415(b)) or an importer becomes subject to a fee 
     described in subparagraph (A), (B), or (D) of subsection 
     (a)(1) after the maximum amount of fees has been collected by 
     the Secretary under subparagraph (A), the Secretary may 
     collect a fee from such facility or importer.
       ``(d) Crediting and Availability of Fees.--Fees authorized 
     under subsection (a) shall be collected and available for 
     obligation only to the extent and in the amount provided in 
     appropriations Acts. Such fees are authorized to remain 
     available until expended. Such sums as may be necessary may 
     be transferred from the Food and Drug Administration salaries 
     and expenses account without fiscal year limitation to such 
     appropriation account for salaries and expenses with such 
     fiscal year limitation. The sums transferred shall be 
     available solely for the purpose of paying the operating 
     expenses of the Food and Drug Administration employees and 
     contractors performing activities associated with these food 
     safety fees.
       ``(e) Collection of Fees.--
       ``(1) In general.--The Secretary shall specify in the 
     Federal Register notice described in subsection (b)(1) the 
     time and manner in which fees assessed under this section 
     shall be collected.
       ``(2) Collection of unpaid fees.--In any case where the 
     Secretary does not receive payment of a fee assessed under 
     this section within 30 days after it is due, such fee shall 
     be treated as a claim of the United States Government subject 
     to provisions of subchapter II of chapter 37 of title 31, 
     United States Code.
       ``(f) Annual Report to Congress.--Not later than 120 days 
     after each fiscal year for which fees are assessed under this 
     section, the Secretary shall submit a report to the Committee 
     on Health, Education, Labor, and Pensions of the United 
     States Senate and the Committee on Energy and Commerce of the 
     United States House of Representatives, to include a 
     description of fees assessed and collected for each such year 
     and a summary description of the entities paying such fees 
     and the types of business in which such entities engage.
       ``(g) Authorization of Appropriations.--For fiscal year 
     2010 and each fiscal year thereafter, there is authorized to 
     be appropriated for fees under this section an amount equal 
     to the total revenue amount determined under subsection (b) 
     for the fiscal year, as adjusted or otherwise affected under 
     the other provisions of this section.''.
       (b) Export Certification Fees for Foods and Animal Feed.--
       (1) Authority for export certifications for food, including 
     animal feed.--Section 801(e)(4)(A) (21 U.S.C. 381(e)(4)(A)) 
     is amended--
       (A) in the matter preceding clause (i), by striking ``a 
     drug'' and inserting ``a food, drug'';
       (B) in clause (i) by striking ``exported drug'' and 
     inserting ``exported food, drug''; and
       (C) in clause (ii) by striking ``the drug'' each place it 
     appears and inserting ``the food, drug''.
       (2) Clarification of certification.--Section 801(e)(4) (21 
     U.S.C. 381(e)(4)) is amended by inserting after subparagraph 
     (B) the following new subparagraph:
       ``(C) For purposes of this paragraph, a certification by 
     the Secretary shall be made on such basis, and in such form 
     (including a publicly available listing) as the Secretary 
     determines appropriate.''.

     SEC. 108. NATIONAL AGRICULTURE AND FOOD DEFENSE STRATEGY.

       (a) Development and Submission of Strategy.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services and the Secretary of Agriculture, in coordination 
     with the Secretary of Homeland Security, shall prepare and 
     submit to the relevant committees of Congress, and make 
     publicly available on the Internet Web site of the Department 
     of Health and Human Services and the Department of 
     Agriculture, the National Agriculture and Food Defense 
     Strategy.
       (2) Implementation plan.--The strategy shall include an 
     implementation plan for use by the Secretaries described 
     under paragraph (1) in carrying out the strategy.
       (3) Research.--The strategy shall include a coordinated 
     research agenda for use by the Secretaries described under 
     paragraph (1) in conducting research to support the goals and 
     activities described in paragraphs (1) and (2) of subsection 
     (b).
       (4) Revisions.--Not later than 4 years after the date on 
     which the strategy is submitted to the relevant committees of 
     Congress under paragraph (1), and not less frequently than 
     every 4 years thereafter, the Secretary of Health and Human 
     Services and the Secretary of Agriculture, in coordination 
     with the Secretary of Homeland Security, shall revise and 
     submit to the relevant committees of Congress the strategy.
       (5) Consistency with existing plans.--The strategy 
     described in paragraph (1) shall be consistent with--
       (A) the National Incident Management System;
       (B) the National Response Framework;
       (C) the National Infrastructure Protection Plan;
       (D) the National Preparedness Goals; and
       (E) other relevant national strategies.
       (b) Components.--
       (1) In general.--The strategy shall include a description 
     of the process to be used by the Department of Health and 
     Human Services, the Department of Agriculture, and the 
     Department of Homeland Security--
       (A) to achieve each goal described in paragraph (2); and
       (B) to evaluate the progress made by Federal, State, local, 
     and tribal governments towards the achievement of each goal 
     described in paragraph (2).
       (2) Goals.--The strategy shall include a description of the 
     process to be used by the Department of Health and Human 
     Services, the Department of Agriculture, and the Department 
     of Homeland Security to achieve the following goals:
       (A) Preparedness goal.--Enhance the preparedness of the 
     agriculture and food system by--
       (i) conducting vulnerability assessments of the agriculture 
     and food system;
       (ii) mitigating vulnerabilities of the system;
       (iii) improving communication and training relating to the 
     system;
       (iv) developing and conducting exercises to test 
     decontamination and disposal plans;
       (v) developing modeling tools to improve event consequence 
     assessment and decision support; and
       (vi) preparing risk communication tools and enhancing 
     public awareness through outreach.
       (B) Detection goal.--Improve agriculture and food system 
     detection capabilities by--
       (i) identifying contamination in food products at the 
     earliest possible time; and
       (ii) conducting surveillance to prevent the spread of 
     diseases.
       (C) Emergency response goal.--Ensure an efficient response 
     to agriculture and food emergencies by--
       (i) immediately investigating animal disease outbreaks and 
     suspected food contamination;
       (ii) preventing additional human illnesses;
       (iii) organizing, training, and equipping animal, plant, 
     and food emergency response teams of--

       (I) the Federal Government; and
       (II) State, local, and tribal governments;

       (iv) designing, developing, and evaluating training and 
     exercises carried out under agriculture and food defense 
     plans; and
       (v) ensuring consistent and organized risk communication to 
     the public by--

       (I) the Federal Government;
       (II) State, local, and tribal governments; and
       (III) the private sector.

       (D) Recovery goal.--Secure agriculture and food production 
     after an agriculture or food emergency by--
       (i) working with the private sector to develop business 
     recovery plans to rapidly resume agriculture and food 
     production;
       (ii) conducting exercises of the plans described in 
     subparagraph (C) with the goal of long-term recovery results;
       (iii) rapidly removing, and effectively disposing of--

       (I) contaminated agriculture and food products; and
       (II) infected plants and animals; and

       (iv) decontaminating and restoring areas affected by an 
     agriculture or food emergency.

     SEC. 109. FOOD AND AGRICULTURE COORDINATING COUNCILS.

       The Secretary of Homeland Security, in consultation with 
     the Secretary of Health and Human Services and the Secretary 
     of Agriculture, shall within 180 days of enactment of this 
     Act, and annually thereafter, submit to the relevant 
     committees of Congress, and make publicly available on the 
     Internet Web site of the Department of Homeland Security, a 
     report on the activities of the Food and Agriculture 
     Government Coordinating Council and the Food and Agriculture 
     Sector Coordinating Council, including the progress of such 
     Councils on--
       (1) facilitating partnerships between public and private 
     entities to help unify and enhance the protection of the 
     agriculture and food system of the United States;
       (2) providing for the regular and timely interchange of 
     information between each council relating to the security of 
     the agriculture and food system (including intelligence 
     information);
       (3) identifying best practices and methods for improving 
     the coordination among Federal, State, local, and private 
     sector preparedness and response plans for agriculture and 
     food defense; and
       (4) recommending methods by which to protect the economy 
     and the public health of the United States from the effects 
     of--
       (A) animal or plant disease outbreaks;
       (B) food contamination; and
       (C) natural disasters affecting agriculture and food.

     SEC. 110. BUILDING DOMESTIC CAPACITY.

       (a) In General.--
       (1) Initial report.--The Secretary shall, not later than 2 
     years after the date of enactment of this Act, submit to 
     Congress a comprehensive report that identifies programs and 
     practices that are intended to promote the safety and 
     security of food and to prevent outbreaks of food-borne 
     illness and other food-related hazards that can be addressed 
     through preventive activities. Such

[[Page S2698]]

     report shall include a description of the following:
       (A) Analysis of the need for regulations or guidance to 
     industry.
       (B) Outreach to food industry sectors, including through 
     the Food and Agriculture Coordinating Councils referred to in 
     section 109, to identify potential sources of emerging 
     threats to the safety and security of the food supply and 
     preventive strategies to address those threats.
       (C) Systems to ensure the prompt distribution to the food 
     industry of information and technical assistance concerning 
     preventive strategies.
       (D) Communication systems to ensure that information about 
     specific threats to the safety and security of the food 
     supply are rapidly and effectively disseminated.
       (E) Surveillance systems and laboratory networks to rapidly 
     detect and respond to food-borne illness outbreaks and other 
     food-related hazards, including how such systems and networks 
     are integrated.
       (F) Outreach, education, and training provided to States 
     and local governments to build State and local food safety 
     and food defense capabilities, including progress 
     implementing strategies developed under sections 108 and 205.
       (G) The estimated resources needed to effectively implement 
     the programs and practices identified in the report developed 
     in this section over a 5-year period.
       (2) Biennial reports.--On a biennial basis following the 
     submission of the report under paragraph (1), the Secretary 
     shall submit to Congress a report that--
       (A) reviews previous food safety programs and practices;
       (B) outlines the success of those programs and practices;
       (C) identifies future programs and practices; and
       (D) includes information related to any matter described in 
     subparagraphs (A) through (G) of paragraph (1), as necessary.
       (b) Risk-Based Activities.--The report developed under 
     subsection (a)(1) shall describe methods that seek to ensure 
     that resources available to the Secretary for food safety-
     related activities are directed at those actions most likely 
     to reduce risks from food, including the use of preventive 
     strategies and allocation of inspection resources. The 
     Secretary shall promptly undertake those risk-based actions 
     that are identified during the development of the report as 
     likely to contribute to the safety and security of the food 
     supply.
       (c) Capability for Laboratory Analyses; Research.--The 
     report developed under subsection (a)(1) shall provide a 
     description of methods to increase capacity to undertake 
     analyses of food samples promptly after collection, to 
     identify new and rapid analytical techniques, including 
     techniques that can be employed at ports of entry and through 
     Food Emergency Response Network laboratories, and to provide 
     for well-equipped and staffed laboratory facilities.
       (d) Information Technology.--The report developed under 
     subsection (a)(1) shall include a description of such 
     information technology systems as may be needed to identify 
     risks and receive data from multiple sources, including 
     foreign governments, State, local, and tribal governments, 
     other Federal agencies, the food industry, laboratories, 
     laboratory networks, and consumers. The information 
     technology systems that the Secretary describes shall also 
     provide for the integration of the facility registration 
     system under section 415 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 350d), and the prior notice system 
     under section 801(m) of such Act (21 U.S.C. 381(m)) with 
     other information technology systems that are used by the 
     Federal Government for the processing of food offered for 
     import into the United States.
       (e) Automated Risk Assessment.--The report developed under 
     subsection (a)(1) shall include a description of progress 
     toward developing and improving an automated risk assessment 
     system for food safety surveillance and allocation of 
     resources.
       (f) Traceback and Surveillance Report.--The Secretary shall 
     include in the report developed under subsection (a)(1) an 
     analysis of the Food and Drug Administration's performance in 
     food-borne illness outbreaks during the 5-year period 
     preceding the date of enactment of this Act involving fruits 
     and vegetables that are raw agricultural commodities (as 
     defined in section 201(r) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 321(r)) and recommendations for 
     enhanced surveillance, outbreak response, and traceability. 
     Such findings and recommendations shall address communication 
     and coordination with the public, industry, and State and 
     local governments, outbreak identification, and traceback.
       (g) Biennial Food Safety and Food Defense Research Plan.--
     The Secretary and the Secretary of Agriculture shall, on a 
     biennial basis, submit to Congress a joint food safety and 
     food defense research plan which may include studying the 
     long-term health effects of food-borne illness. Such biennial 
     plan shall include a list and description of projects 
     conducted during the previous 2-year period and the plan for 
     projects to be conducted during the following 2-year period.

     SEC. 111. FINAL RULE FOR PREVENTION OF SALMONELLA ENTERITIDIS 
                   IN SHELL EGGS DURING PRODUCTION.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall issue a final rule based on the 
     proposed rule issued by the Commissioner of Food and Drugs 
     entitled ``Prevention of Salmonella Enteritidis in Shell Eggs 
     During Production'', 69 Fed. Reg. 56824, (September 22, 
     2004).

     SEC. 112. SANITARY TRANSPORTATION OF FOOD.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall promulgate regulations described in 
     section 416(b) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 350e(b)).

     SEC. 113. FOOD ALLERGY AND ANAPHYLAXIS MANAGEMENT.

       (a) Definitions.--In this section:
       (1) Early childhood education program.--The term ``early 
     childhood education program'' means--
       (A) a Head Start program or an Early Head Start program 
     carried out under the Head Start Act (42 U.S.C. 9831 et 
     seq.);
       (B) a State licensed or regulated child care program or 
     school; or
       (C) a State prekindergarten program that serves children 
     from birth through kindergarten.
       (2) ESEA definitions.--The terms ``local educational 
     agency'', ``secondary school'', ``elementary school'', and 
     ``parent'' have the meanings given the terms in section 9101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 7801).
       (3) School.--The term ``school'' includes public--
       (A) kindergartens;
       (B) elementary schools; and
       (C) secondary schools.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (b) Establishment of Voluntary Food Allergy and Anaphylaxis 
     Management Guidelines.--
       (1) Establishment.--
       (A) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, in consultation with 
     the Secretary of Education, shall--
       (i) develop guidelines to be used on a voluntary basis to 
     develop plans for individuals to manage the risk of food 
     allergy and anaphylaxis in schools and early childhood 
     education programs; and
       (ii) make such guidelines available to local educational 
     agencies, schools, early childhood education programs, and 
     other interested entities and individuals to be implemented 
     on a voluntary basis only.
       (B) Applicability of ferpa.--Each plan described in 
     subparagraph (A) that is developed for an individual shall be 
     considered an education record for the purpose of the Family 
     Educational Rights and Privacy Act of 1974 (20 U.S.C. 1232g).
       (2) Contents.--The voluntary guidelines developed by the 
     Secretary under paragraph (1) shall address each of the 
     following, and may be updated as the Secretary determines 
     necessary:
       (A) Parental obligation to provide the school or early 
     childhood education program, prior to the start of every 
     school year, with--
       (i) documentation from their child's physician or nurse--

       (I) supporting a diagnosis of food allergy, and any risk of 
     anaphylaxis, if applicable;
       (II) identifying any food to which the child is allergic;
       (III) describing, if appropriate, any prior history of 
     anaphylaxis;
       (IV) listing any medication prescribed for the child for 
     the treatment of anaphylaxis;
       (V) detailing emergency treatment procedures in the event 
     of a reaction;
       (VI) listing the signs and symptoms of a reaction; and
       (VII) assessing the child's readiness for self-
     administration of prescription medication; and

       (ii) a list of substitute meals that may be offered to the 
     child by school or early childhood education program food 
     service personnel.
       (B) The creation and maintenance of an individual plan for 
     food allergy management, in consultation with the parent, 
     tailored to the needs of each child with a documented risk 
     for anaphylaxis, including any procedures for the self-
     administration of medication by such children in instances 
     where--
       (i) the children are capable of self-administering 
     medication; and
       (ii) such administration is not prohibited by State law.
       (C) Communication strategies between individual schools or 
     early childhood education programs and providers of emergency 
     medical services, including appropriate instructions for 
     emergency medical response.
       (D) Strategies to reduce the risk of exposure to 
     anaphylactic causative agents in classrooms and common school 
     or early childhood education program areas such as 
     cafeterias.
       (E) The dissemination of general information on life-
     threatening food allergies to school or early childhood 
     education program staff, parents, and children.
       (F) Food allergy management training of school or early 
     childhood education program personnel who regularly come into 
     contact with children with life-threatening food allergies.
       (G) The authorization and training of school or early 
     childhood education program personnel to administer 
     epinephrine when the nurse is not immediately available.
       (H) The timely accessibility of epinephrine by school or 
     early childhood education program personnel when the nurse is 
     not immediately available.
       (I) The creation of a plan contained in each individual 
     plan for food allergy management

[[Page S2699]]

     that addresses the appropriate response to an incident of 
     anaphylaxis of a child while such child is engaged in 
     extracurricular programs of a school or early childhood 
     education program, such as non-academic outings and field 
     trips, before- and after-school programs or before- and 
     after-early child education program programs, and school-
     sponsored or early childhood education program-sponsored 
     programs held on weekends.
       (J) Maintenance of information for each administration of 
     epinephrine to a child at risk for anaphylaxis and prompt 
     notification to parents.
       (K) Other elements the Secretary determines necessary for 
     the management of food allergies and anaphylaxis in schools 
     and early childhood education programs.
       (3) Relation to state law.--Nothing in this section or the 
     guidelines developed by the Secretary under paragraph (1) 
     shall be construed to preempt State law, including any State 
     law regarding whether students at risk for anaphylaxis may 
     self-administer medication.
       (c) School-Based Food Allergy Management Grants.--
       (1) In general.--The Secretary may award grants to local 
     educational agencies to assist such agencies with 
     implementing voluntary food allergy and anaphylaxis 
     management guidelines described in subsection (b).
       (2) Application.--
       (A) In general.--To be eligible to receive a grant under 
     this subsection, a local educational agency shall submit an 
     application to the Secretary at such time, in such manner, 
     and including such information as the Secretary may 
     reasonably require.
       (B) Contents.--Each application submitted under 
     subparagraph (A) shall include--
       (i) an assurance that the local educational agency has 
     developed plans in accordance with the food allergy and 
     anaphylaxis management guidelines described in subsection 
     (b);
       (ii) a description of the activities to be funded by the 
     grant in carrying out the food allergy and anaphylaxis 
     management guidelines, including--

       (I) how the guidelines will be carried out at individual 
     schools served by the local educational agency;
       (II) how the local educational agency will inform parents 
     and students of the guidelines in place;
       (III) how school nurses, teachers, administrators, and 
     other school-based staff will be made aware of, and given 
     training on, when applicable, the guidelines in place; and
       (IV) any other activities that the Secretary determines 
     appropriate;

       (iii) an itemization of how grant funds received under this 
     subsection will be expended;
       (iv) a description of how adoption of the guidelines and 
     implementation of grant activities will be monitored; and
       (v) an agreement by the local educational agency to report 
     information required by the Secretary to conduct evaluations 
     under this subsection.
       (3) Use of funds.--Each local educational agency that 
     receives a grant under this subsection may use the grant 
     funds for the following:
       (A) Purchase of materials and supplies, including limited 
     medical supplies such as epinephrine and disposable wet 
     wipes, to support carrying out the food allergy and 
     anaphylaxis management guidelines described in subsection 
     (b).
       (B) In partnership with local health departments, school 
     nurse, teacher, and personnel training for food allergy 
     management.
       (C) Programs that educate students as to the presence of, 
     and policies and procedures in place related to, food 
     allergies and anaphylactic shock.
       (D) Outreach to parents.
       (E) Any other activities consistent with the guidelines 
     described in subsection (b).
       (4) Duration of awards.--The Secretary may award grants 
     under this subsection for a period of not more than 2 years. 
     In the event the Secretary conducts a program evaluation 
     under this subsection, funding in the second year of the 
     grant, where applicable, shall be contingent on a successful 
     program evaluation by the Secretary after the first year.
       (5) Limitation on grant funding.--The Secretary may not 
     provide grant funding to a local educational agency under 
     this subsection after such local educational agency has 
     received 2 years of grant funding under this subsection.
       (6) Maximum amount of annual awards.--A grant awarded under 
     this subsection may not be made in an amount that is more 
     than $50,000 annually.
       (7) Priority.--In awarding grants under this subsection, 
     the Secretary shall give priority to local educational 
     agencies with the highest percentages of children who are 
     counted under section 1124(c) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6333(c)).
       (8) Matching funds.--
       (A) In general.--The Secretary may not award a grant under 
     this subsection unless the local educational agency agrees 
     that, with respect to the costs to be incurred by such local 
     educational agency in carrying out the grant activities, the 
     local educational agency shall make available (directly or 
     through donations from public or private entities) non-
     Federal funds toward such costs in an amount equal to not 
     less than 25 percent of the amount of the grant.
       (B) Determination of amount of non-federal contribution.--
     Non-Federal funds required under subparagraph (A) may be cash 
     or in kind, including plant, equipment, or services. Amounts 
     provided by the Federal Government, and any portion of any 
     service subsidized by the Federal Government, may not be 
     included in determining the amount of such non-Federal funds.
       (9) Administrative funds.--A local educational agency that 
     receives a grant under this subsection may use not more than 
     2 percent of the grant amount for administrative costs 
     related to carrying out this subsection.
       (10) Progress and evaluations.--At the completion of the 
     grant period referred to in paragraph (4), a local 
     educational agency shall provide the Secretary with 
     information on how grant funds were spent and the status of 
     implementation of the food allergy and anaphylaxis management 
     guidelines described in subsection (b).
       (11) Supplement, not supplant.--Grant funds received under 
     this subsection shall be used to supplement, and not 
     supplant, non-Federal funds and any other Federal funds 
     available to carry out the activities described in this 
     subsection.
       (12) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $30,000,000 
     for fiscal year 2010 and such sums as may be necessary for 
     each of the 4 succeeding fiscal years.
       (d) Voluntary Nature of Guidelines.--
       (1) In general.--The food allergy and anaphylaxis 
     management guidelines developed by the Secretary under 
     subsection (b) are voluntary. Nothing in this section or the 
     guidelines developed by the Secretary under subsection (b) 
     shall be construed to require a local educational agency to 
     implement such guidelines.
       (2) Exception.--Notwithstanding paragraph (1), the 
     Secretary may enforce an agreement by a local educational 
     agency to implement food allergy and anaphylaxis management 
     guidelines as a condition of the receipt of a grant under 
     subsection (c).

   TITLE II--IMPROVING CAPACITY TO DETECT AND RESPOND TO FOOD SAFETY 
                                PROBLEMS

     SEC. 201. TARGETING OF INSPECTION RESOURCES FOR DOMESTIC 
                   FACILITIES, FOREIGN FACILITIES, AND PORTS OF 
                   ENTRY; ANNUAL REPORT.

       (a) Targeting of Inspection Resources for Domestic 
     Facilities, Foreign Facilities, and Ports of Entry.--Chapter 
     IV (21 U.S.C. 341 et seq.), as amended by section 106, is 
     amended by adding at the end the following:

     ``SEC. 421. TARGETING OF INSPECTION RESOURCES FOR DOMESTIC 
                   FACILITIES, FOREIGN FACILITIES, AND PORTS OF 
                   ENTRY; ANNUAL REPORT.

       ``(a) Identification and Inspection of Facilities.--
       ``(1) Identification.--The Secretary shall allocate 
     resources to inspect facilities according to the risk profile 
     of the facilities, which shall be based on the following 
     factors:
       ``(A) The risk profile of the food manufactured, processed, 
     packed, or held at the facility.
       ``(B) The facility's history of food recalls, outbreaks, 
     and violations of food safety standards.
       ``(C) The rigor of the facility's hazard analysis and risk-
     based preventive controls.
       ``(D) Whether the food manufactured, processed, packed, 
     handled, prepared, treated, distributed, or stored at the 
     facility meets the criteria for priority under section 
     801(h)(1).
       ``(E) Whether the facility has received a certificate as 
     described in section 809(b).
       ``(F) Any other criteria deemed necessary and appropriate 
     by the Secretary for purposes of allocating inspection 
     resources.
       ``(2) Inspections.--
       ``(A) In general.--Beginning on the date of enactment of 
     the FDA Food Safety Modernization Act, the Secretary shall 
     increase the frequency of inspection of all facilities.
       ``(B) High-risk facilities.--The Secretary shall increase 
     the frequency of inspection of facilities identified under 
     paragraph (1) as high-risk facilities such that--
       ``(i) for the first 2 years after the date of enactment of 
     the FDA Food Safety Modernization Act, each high-risk 
     facility is inspected not less often than once every 2 years; 
     and
       ``(ii) for each succeeding year, each high-risk facility is 
     inspected not less often than once each year.
       ``(C) Non-high-risk facilities.--The Secretary shall ensure 
     that each facility that is not identified under paragraph (1) 
     as a high-risk facility is inspected not less often than once 
     every 4 years.
       ``(b) Identification and Inspection at Ports of Entry.--The 
     Secretary, in consultation with the Secretary of Homeland 
     Security, shall allocate resources to inspect articles of 
     food imported into the United States according to the risk 
     profile of the article of food, which shall be based on the 
     following factors:
       ``(1) The risk profile of the food imported.
       ``(2) The risk profile of the countries of origin and 
     countries of transport of the food imported.
       ``(3) The history of food recalls, outbreaks, and 
     violations of food safety standards of the food importer.
       ``(4) The rigor of the foreign supplier verification 
     program under section 805.
       ``(5) Whether the food importer participates in the 
     voluntary qualified importer program under section 806.
       ``(6) Whether the food meets the criteria for priority 
     under section 801(h)(1).

[[Page S2700]]

       ``(7) Whether the food is from a facility that has received 
     a certificate as described in section 809(b).
       ``(8) Any other criteria deemed appropriate by the 
     Secretary for purposes of allocating inspection resources.
       ``(c) Coordination.--The Secretary shall improve 
     coordination and cooperation with the Secretary of 
     Agriculture to target food inspection resources.
       ``(d) Facility.--For purposes of this section, the term 
     `facility' means a domestic facility or a foreign facility 
     that is required to register under section 415.''.
       (b) Annual Report.--Section 903 (21 U.S.C. 393) is amended 
     by adding at the end the following:
       ``(h) Annual Report Regarding Food.--Not later than 
     February 1 of each year, the Secretary shall submit to 
     Congress a report regarding--
       ``(1) information about food facilities including--
       ``(A) the appropriations used to inspect facilities 
     registered pursuant to section 415 in the previous fiscal 
     year;
       ``(B) the average cost of both a non-high-risk food 
     facility inspection and a high-risk food facility inspection, 
     if such a difference exists, in the previous fiscal year;
       ``(C) the number of domestic facilities and the number of 
     foreign facilities registered pursuant to section 415 that 
     the Secretary inspected in the previous fiscal year;
       ``(D) the number of domestic facilities and the number of 
     foreign facilities registered pursuant to section 415 that 
     the Secretary did not inspect in the previous fiscal year;
       ``(E) the number of high-risk facilities identified 
     pursuant to section 421 that the Secretary inspected in the 
     previous fiscal year; and
       ``(F) the number of high-risk facilities identified 
     pursuant to section 421 that the Secretary did not inspect in 
     the previous fiscal year;
       ``(2) information about food imports including--
       ``(A) the number of lines of food imported into the United 
     States that the Secretary physically inspected or sampled in 
     the previous fiscal year;
       ``(B) the number of lines of food imported into the United 
     States that the Secretary did not physically inspect or 
     sample in the previous fiscal year; and
       ``(C) the average cost of physically inspecting or sampling 
     a food line subject to this Act that is imported or offered 
     for import into the United States; and
       ``(3) information on the foreign offices established under 
     section 309 of the FDA Food Safety Modernization Act 
     including--
       ``(A) the number of foreign offices established; and
       ``(B) the number of personnel permanently stationed in each 
     foreign office.
       ``(i) Public Availability of Annual Food Reports.--The 
     Secretary shall make the reports required under subsection 
     (h) available to the public on the Internet Web site of the 
     Food and Drug Administration.''.

     SEC. 202. RECOGNITION OF LABORATORY ACCREDITATION FOR 
                   ANALYSES OF FOODS.

       (a) In General.--Chapter IV (21 U.S.C. 341 et seq.), as 
     amended by section 201, is amended by adding at the end the 
     following:

     ``SEC. 422. RECOGNITION OF LABORATORY ACCREDITATION FOR 
                   ANALYSES OF FOODS.

       ``(a) Recognition of Laboratory Accreditation.--
       ``(1) In general.--Not later than 2 years after the date of 
     enactment of the FDA Food Safety Modernization Act, the 
     Secretary shall--
       ``(A) provide for the recognition of accreditation bodies 
     that accredit laboratories, including laboratories run and 
     operated by a State or locality, with a demonstrated 
     capability to conduct analytical testing of food products; 
     and
       ``(B) establish a publicly available registry of 
     accreditation bodies, including the name of, contact 
     information for, and other information deemed necessary by 
     the Secretary about such bodies.
       ``(2) Foreign laboratories.--Accreditation bodies may 
     accredit laboratories that operate outside the United States, 
     so long as such laboratories meet the accreditation standards 
     applicable to domestic laboratories accredited under this 
     section.
       ``(3) Model accreditation standards.--The Secretary shall 
     develop model standards that an accreditation body shall 
     require laboratories to meet in order to be included in the 
     registry provided for under paragraph (1). In developing the 
     model standards, the Secretary shall look to existing 
     standards for guidance. The model standards shall include 
     methods to ensure that--
       ``(A) appropriate sampling and analytical procedures are 
     followed and reports of analyses are certified as true and 
     accurate;
       ``(B) internal quality systems are established and 
     maintained;
       ``(C) procedures exist to evaluate and respond promptly to 
     complaints regarding analyses and other activities for which 
     the laboratory is recognized;
       ``(D) individuals who conduct the analyses are qualified by 
     training and experience to do so; and
       ``(E) any other criteria determined appropriate by the 
     Secretary.
       ``(4) Review of accreditation.--To assure compliance with 
     the requirements of this section, the Secretary shall--
       ``(A) periodically, or at least every 5 years, reevaluate 
     accreditation bodies recognized under paragraph (1); and
       ``(B) promptly revoke the recognition of any accreditation 
     body found not to be in compliance with the requirements of 
     this section.
       ``(b) Testing Procedures.--
       ``(1) In general.--Food testing shall be conducted by 
     either Federal laboratories or non-Federal laboratories that 
     have been accredited by an accreditation body on the registry 
     established by the Secretary under subsection (a) whenever 
     such testing is either conducted by or on behalf of an owner 
     or consignee--
       ``(A) in support of admission of an article of food under 
     section 801(a);
       ``(B) due to a specific testing requirement in this Act or 
     implementing regulations, when applied to address an 
     identified or suspected food safety problem;
       ``(C) under an Import Alert that requires successful 
     consecutive tests; or
       ``(D) is so required by the Secretary as the Secretary 
     deems appropriate to address an identified or suspected food 
     safety problem.
       ``(2) Results of testing.--The results of any such testing 
     shall be sent directly to the Food and Drug Administration. 
     Such results may be submitted to the Food and Drug 
     Administration through electronic means.
       ``(c) Review by Secretary.--If food sampling and testing 
     performed by a laboratory run and operated by a State or 
     locality that is accredited by an accreditation body on the 
     registry established by the Secretary under subsection (a) 
     result in a State recalling a food, the Secretary shall 
     review the sampling and testing results for the purpose of 
     determining the need for a national recall or other 
     compliance and enforcement activities.
       ``(d) No Limit on Secretarial Authority.--Nothing in this 
     section shall be construed to limit the ability of the 
     Secretary to review and act upon information from food 
     testing, including determining the sufficiency of such 
     information and testing.''.
       (b) Food Emergency Response Network.--The Secretary, in 
     coordination with the Secretary of Agriculture, the Secretary 
     of Homeland Security, and State, local, and tribal 
     governments shall, not later than 180 days after the date of 
     enactment of this Act, and biennially thereafter, submit to 
     the relevant committees of Congress, and make publicly 
     available on the Internet Web site of the Department of 
     Health and Human Services, a report on the progress in 
     implementing a national food emergency response laboratory 
     network that--
       (1) provides ongoing surveillance, rapid detection, and 
     surge capacity for large-scale food-related emergencies, 
     including intentional adulteration of the food supply;
       (2) coordinates the food laboratory capacities of State 
     food laboratories, including the sharing of data between 
     State laboratories to develop national situational awareness;
       (3) provides accessible, timely, accurate, and consistent 
     food laboratory services throughout the United States;
       (4) develops and implements a methods repository for use by 
     Federal, State, and local officials;
       (5) responds to food-related emergencies; and
       (6) is integrated with relevant laboratory networks 
     administered by other Federal agencies.

     SEC. 203. INTEGRATED CONSORTIUM OF LABORATORY NETWORKS.

       (a) In General.--The Secretary of Homeland Security, in 
     consultation with the Secretary of Health and Human Services, 
     the Secretary of Agriculture, and the Administrator of the 
     Environmental Protection Agency, shall maintain an agreement 
     through which relevant laboratory network members, as 
     determined by the Secretary of Homeland Security, shall--
       (1) agree on common laboratory methods in order to 
     facilitate the sharing of knowledge and information relating 
     to animal health, agriculture, and human health;
       (2) identify the means by which each laboratory network 
     member could work cooperatively--
       (A) to optimize national laboratory preparedness; and
       (B) to provide surge capacity during emergencies; and
       (3) engage in ongoing dialogue and build relationships that 
     will support a more effective and integrated response during 
     emergencies.
       (b) Reporting Requirement.--The Secretary of Homeland 
     Security shall, on a biennial basis, submit to the relevant 
     committees of Congress, and make publicly available on the 
     Internet Web site of the Department of Homeland Security, a 
     report on the progress of the integrated consortium of 
     laboratory networks, as established under subsection (a), in 
     carrying out this section.

     SEC. 204. ENHANCING TRACEBACK AND RECORDKEEPING.

       (a) In General.--The Secretary, in consultation with the 
     Secretary of Agriculture and representatives of State 
     departments of health and agriculture, shall improve the 
     capacity of the Secretary to effectively and rapidly track 
     and trace, in the event of an outbreak, fruits and vegetables 
     that are raw agricultural commodities.
       (b) Pilot Project.--
       (1) In general.--Not later than 9 months after the date of 
     enactment of this Act, the Secretary shall establish a pilot 
     project in coordination with the produce industry to explore 
     and evaluate methods for rapidly and effectively tracking and 
     tracing fruits and

[[Page S2701]]

     vegetables that are raw agricultural commodities so that, if 
     an outbreak occurs involving such a fruit or vegetable, the 
     Secretary may quickly identify the source of the outbreak and 
     the recipients of the contaminated food.
       (2) Content.--The Secretary shall select participants from 
     the produce industry to run projects which overall shall 
     include at least 3 different types of fruits or vegetables 
     that have been the subject of outbreaks during the 5-year 
     period preceding the date of enactment of this Act, and shall 
     be selected in order to develop and demonstrate--
       (A) methods that are applicable and appropriate for small 
     businesses; and
       (B) technologies, including existing technologies, that 
     enhance traceback and trace forward.
       (c) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall report to Congress 
     on the findings of the pilot project under subsection (b) 
     together with recommendations for establishing more effective 
     traceback and trace forward procedures for fruits and 
     vegetables that are raw agricultural commodities.
       (d) Traceback Performance Requirements.--Not later than 24 
     months after the date of enactment of this Act, the Secretary 
     shall publish a notice of proposed rulemaking to establish 
     standards for the type of information, format, and timeframe 
     for persons to submit records to aid the Secretary in 
     effectively and rapidly tracking and tracing, in the event of 
     an outbreak, fruits and vegetables that are raw agricultural 
     commodities. Nothing in this section shall be construed as 
     giving the Secretary the authority to prescribe specific 
     technologies for the maintenance of records.
       (e) Public Input.--During the comment period in the notice 
     of proposed rulemaking under subsection (d), the Secretary 
     shall conduct not less than 3 public meetings in diverse 
     geographical areas of the United States to provide persons in 
     different regions an opportunity to comment.
       (f) Raw Agricultural Commodity.--In this section, the term 
     ``raw agricultural commodity'' has the meaning given that 
     term in section 201(r) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 321(r)).

     SEC. 205. SURVEILLANCE.

       (a) Definition of Food-Borne Illness Outbreak.--In this 
     section, the term ``food-borne illness outbreak'' means the 
     occurrence of 2 or more cases of a similar illness resulting 
     from the ingestion of a food.
       (b) Food-Borne Illness Surveillance Systems.--
       (1) In general.--The Secretary, acting through the Director 
     of the Centers for Disease Control and Prevention, shall 
     enhance food-borne illness surveillance systems to improve 
     the collection, analysis, reporting, and usefulness of data 
     on food-borne illnesses by--
       (A) coordinating Federal, State and local food-borne 
     illness surveillance systems, including complaint systems, 
     and increasing participation in national networks of public 
     health and food regulatory agencies and laboratories;
       (B) facilitating sharing of findings on a more timely basis 
     among governmental agencies, including the Food and Drug 
     Administration, the Department of Agriculture, and State and 
     local agencies, and with the public;
       (C) developing improved epidemiological tools for obtaining 
     quality exposure data, and microbiological methods for 
     classifying cases;
       (D) augmenting such systems to improve attribution of a 
     food-borne illness outbreak to a specific food;
       (E) expanding capacity of such systems, including working 
     toward automatic electronic searches, for implementation of 
     fingerprinting strategies for food-borne infectious agents, 
     in order to identify new or rarely documented causes of food-
     borne illness and submit standardized information to a 
     centralized database;
       (F) allowing timely public access to aggregated, de-
     identified surveillance data;
       (G) at least annually, publishing current reports on 
     findings from such systems;
       (H) establishing a flexible mechanism for rapidly 
     initiating scientific research by academic institutions;
       (I) integrating food-borne illness surveillance systems and 
     data with other biosurveillance and public health situational 
     awareness capabilities at the Federal, State, and local 
     levels; and
       (J) other activities as determined appropriate by the 
     Secretary.
       (2) Partnerships.--The Secretary shall support and maintain 
     a diverse working group of experts and stakeholders from 
     Federal, State, and local food safety and health agencies, 
     the food industry, consumer organizations, and academia. Such 
     working group shall provide the Secretary, through at least 
     annual meetings of the working group and an annual public 
     report, advice and recommendations on an ongoing and regular 
     basis regarding the improvement of food-borne illness 
     surveillance and implementation of this section, including 
     advice and recommendations on--
       (A) the priority needs of regulatory agencies, the food 
     industry, and consumers for information and analysis on food-
     borne illness and its causes;
       (B) opportunities to improve the effectiveness of 
     initiatives at the Federal, State, and local levels, 
     including coordination and integration of activities among 
     Federal agencies, and between the Federal, State, and local 
     levels of government;
       (C) improvement in the timeliness and depth of access by 
     regulatory and health agencies, the food industry, academic 
     researchers, and consumers to food-borne illness surveillance 
     data collected by government agencies at all levels, 
     including data compiled by the Centers for Disease Control 
     and Prevention;
       (D) key barriers to improvement in food-borne illness 
     surveillance and its utility for preventing food-borne 
     illness at Federal, State, and local levels;
       (E) the capabilities needed for establishing automatic 
     electronic searches of surveillance data; and
       (F) specific actions to reduce barriers to improvement, 
     implement the working group's recommendations, and achieve 
     the purposes of this section, with measurable objectives and 
     timelines, and identification of resource and staffing needs.
       (c) Improving Food Safety and Defense Capacity at the State 
     and Local Level.--
       (1) In general.--The Secretary shall develop and implement 
     strategies to leverage and enhance the food safety and 
     defense capacities of State and local agencies in order to 
     achieve the following goals:
       (A) Improve food-borne illness outbreak response and 
     containment.
       (B) Accelerate food-borne illness surveillance and outbreak 
     investigation, including rapid shipment of clinical isolates 
     from clinical laboratories to appropriate State laboratories, 
     and conducting more standardized illness outbreak interviews.
       (C) Strengthen the capacity of State and local agencies to 
     carry out inspections and enforce safety standards.
       (D) Improve the effectiveness of Federal, State, and local 
     partnerships to coordinate food safety and defense resources 
     and reduce the incidence of food-borne illness.
       (E) Share information on a timely basis among public health 
     and food regulatory agencies, with the food industry, with 
     health care providers, and with the public.
       (F) Strengthen the capacity of State and local agencies to 
     achieve the goals described in section 108.
       (2) Review.--In developing of the strategies required by 
     paragraph (1), the Secretary shall, not later than 1 year 
     after the date of enactment of the FDA Food Safety 
     Modernization Act, complete a review of State and local 
     capacities, and needs for enhancement, which may include a 
     survey with respect to--
       (A) staffing levels and expertise available to perform food 
     safety and defense functions;
       (B) laboratory capacity to support surveillance, outbreak 
     response, inspection, and enforcement activities;
       (C) information systems to support data management and 
     sharing of food safety and defense information among State 
     and local agencies and with counterparts at the Federal 
     level; and
       (D) other State and local activities and needs as 
     determined appropriate by the Secretary.
       (d) Food Safety Capacity Building Grants.--Section 317R(b) 
     of the Public Health Service Act (42 U.S.C. 247b-20(b)) is 
     amended--
       (1) by striking ``2002'' and inserting ``2010''; and
       (2) by striking ``2003 through 2006'' and inserting ``2011 
     through 2014''.

     SEC. 206. MANDATORY RECALL AUTHORITY.

       (a) In General.--Chapter IV (21 U.S.C. 341 et seq.), as 
     amended by section 202, is amended by adding at the end the 
     following:

     ``SEC. 423. MANDATORY RECALL AUTHORITY.

       ``(a) Voluntary Procedures.--If the Secretary determines, 
     based on information gathered through the reportable food 
     registry under section 417 or through any other means, that 
     there is a reasonable probability that an article of food 
     (other than infant formula) is adulterated under section 402 
     or misbranded under section 403(w) and the use of or exposure 
     to such article will cause serious adverse health 
     consequences or death to humans or animals, the Secretary 
     shall provide the responsible party (as defined in section 
     417) with an opportunity to cease distribution and recall 
     such article.
       ``(b) Prehearing Order To Cease Distribution and Give 
     Notice.--If the responsible party refuses to or does not 
     voluntarily cease distribution or recall such article within 
     the time and in the manner prescribed by the Secretary (if so 
     prescribed), the Secretary may, by order require, as the 
     Secretary deems necessary, such person to--
       ``(1) immediately cease distribution of such article; or
       ``(2) immediately notify all persons--
       ``(A) manufacturing, processing, packing, transporting, 
     distributing, receiving, holding, or importing and selling 
     such article; and
       ``(B) to which such article has been distributed, 
     transported, or sold, to immediately cease distribution of 
     such article.
       ``(c) Hearing on Order.--The Secretary shall provide the 
     responsible party subject to an order under subsection (b) 
     with an opportunity for an informal hearing, to be held as 
     soon as possible but not later than 2 days after the issuance 
     of the order, on the actions required by the order and on why 
     the article that is the subject of the order should not be 
     recalled.
       ``(d) Post-Hearing Recall Order and Modification of 
     Order.--
       ``(1) Amendment of order.--If, after providing opportunity 
     for an informal hearing

[[Page S2702]]

     under subsection (c), the Secretary determines that removal 
     of the article from commerce is necessary, the Secretary 
     shall, as appropriate--
       ``(A) amend the order to require recall of such article or 
     other appropriate action;
       ``(B) specify a timetable in which the recall shall occur;
       ``(C) require periodic reports to the Secretary describing 
     the progress of the recall; and
       ``(D) provide notice to consumers to whom such article was, 
     or may have been, distributed.
       ``(2) Vacating of order.--If, after such hearing, the 
     Secretary determines that adequate grounds do not exist to 
     continue the actions required by the order, or that such 
     actions should be modified, the Secretary shall vacate the 
     order or modify the order.
       ``(e) Cooperation and Consultation.--The Secretary shall 
     work with State and local public health officials in carrying 
     out this section, as appropriate.
       ``(f) Public Notification.--In conducting a recall under 
     this section, the Secretary shall--
       ``(1) ensure that a press release is published regarding 
     the recall, as well as alerts and public notices, as 
     appropriate, in order to provide notification--
       ``(A) of the recall to consumers and retailers to whom such 
     article was, or may have been, distributed; and
       ``(B) that includes, at a minimum--
       ``(i) the name of the article of food subject to the 
     recall; and
       ``(ii) a description of the risk associated with such 
     article; and
       ``(2) consult the policies of the Department of Agriculture 
     regarding providing to the public a list of retail consignees 
     receiving products involved in a Class I recall and shall 
     consider providing such a list to the public, as determined 
     appropriate by the Secretary.
       ``(g) No Delegation.--The authority conferred by this 
     section to order a recall or vacate a recall order shall not 
     be delegated to any officer or employee other than the 
     Commissioner.
       ``(h) Effect.--Nothing in this section shall affect the 
     authority of the Secretary to request or participate in a 
     voluntary recall.''.
       (b) Civil Penalty.--Section 303(f)(2)(A) (21 U.S.C. 
     333(f)(2)(A)) is amended by inserting ``or any person who 
     does not comply with a recall order under section 423'' after 
     ``section 402(a)(2)(B)''.
       (c) Prohibited Acts.--Section 301 (21 U.S.C. 331 et seq.), 
     as amended by section 106, is amended by adding at the end 
     the following:
       ``(rr) The refusal or failure to follow an order under 
     section 423.''.

     SEC. 207. ADMINISTRATIVE DETENTION OF FOOD.

       (a) In General.--Section 304(h)(1)(A) (21 U.S.C. 
     334(h)(1)(A)) is amended by--
       (1) striking ``credible evidence or information 
     indicating'' and inserting ``reason to believe''; and
       (2) striking ``presents a threat of serious adverse health 
     consequences or death to humans or animals'' and inserting 
     ``is adulterated or misbranded''.
       (b) Regulations.--Not later than 120 days after the date of 
     enactment of this Act, the Secretary shall issue an interim 
     final rule amending subpart K of part 1 of title 21, Code of 
     Federal Regulations, to implement the amendment made by this 
     section.
       (c) Effective Date.--The amendment made by this section 
     shall take effect 180 days after the date of enactment of 
     this Act.

     SEC. 208. DECONTAMINATION AND DISPOSAL STANDARDS AND PLANS.

       (a) In General.--The Administrator of the Environmental 
     Protection Agency (referred to in this section as the 
     ``Administrator''), in coordination with the Secretary of 
     Health and Human Services, Secretary of Homeland Security, 
     and Secretary of Agriculture, shall provide support for, and 
     technical assistance to, State, local, and tribal governments 
     in preparing for, assessing, decontaminating, and recovering 
     from an agriculture or food emergency.
       (b) Development of Standards.--In carrying out subsection 
     (a), the Administrator, in coordination with the Secretary of 
     Health and Human Services, Secretary of Homeland Security, 
     Secretary of Agriculture, and State, local, and tribal 
     governments, shall develop and disseminate specific standards 
     and protocols to undertake clean-up, clearance, and recovery 
     activities following the decontamination and disposal of 
     specific threat agents and foreign animal diseases.
       (c) Development of Model Plans.--In carrying out subsection 
     (a), the Administrator, the Secretary of Health and Human 
     Services, and the Secretary of Agriculture shall jointly 
     develop and disseminate model plans for--
       (1) the decontamination of individuals, equipment, and 
     facilities following an intentional contamination of 
     agriculture or food; and
       (2) the disposal of large quantities of animals, plants, or 
     food products that have been infected or contaminated by 
     specific threat agents and foreign animal diseases.
       (d) Exercises.--In carrying out subsection (a), the 
     Administrator, in coordination with the entities described 
     under subsection (b), shall conduct exercises at least 
     annually to evaluate and identify weaknesses in the 
     decontamination and disposal model plans described in 
     subsection (c). Such exercises shall be carried out, to the 
     maximum extent practicable, as part of the national exercise 
     program under section 648(b)(1) of the Post-Katrina Emergency 
     Management Reform Act of 2006 (6 U.S.C. 748(b)(1)).
       (e) Modifications.--Based on the exercises described in 
     subsection (d), the Administrator, in coordination with the 
     entities described in subsection (b), shall review and modify 
     as necessary the plans described in subsection (c) not less 
     frequently than biennially.
       (f) Prioritization.--The Administrator, in coordination 
     with the entities described in subsection (b), shall develop 
     standards and plans under subsections (b) and (c) in an 
     identified order of priority that takes into account--
       (1) highest-risk biological, chemical, and radiological 
     threat agents;
       (2) agents that could cause the greatest economic 
     devastation to the agriculture and food system; and
       (3) agents that are most difficult to clean or remediate.

            TITLE III--IMPROVING THE SAFETY OF IMPORTED FOOD

     SEC. 301. FOREIGN SUPPLIER VERIFICATION PROGRAM.

       (a) In General.--Chapter VIII (21 U.S.C. 381 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 805. FOREIGN SUPPLIER VERIFICATION PROGRAM.

       ``(a) In General.--
       ``(1) Verification requirement.--Each United States 
     importer shall perform risk-based foreign supplier 
     verification activities in accordance with regulations 
     promulgated under subsection (c) for the purpose of verifying 
     that the food imported by the importer or its agent is--
       ``(A) produced in compliance with the requirements of 
     section 418 or 419, as appropriate; and
       ``(B) is not adulterated under section 402 or misbranded 
     under section 403(w).
       ``(2) Importer defined.--For purposes of this section, the 
     term `importer' means, with respect to an article of food--
       ``(A) the United States owner or consignee of the article 
     of food at the time of entry of such article into the United 
     States; or
       ``(B) in the case when there is no United States owner or 
     consignee as described in subparagraph (A), the United States 
     agent or representative of a foreign owner or consignee of 
     the article of food at the time of entry of such article into 
     the United States.
       ``(b) Guidance.--Not later than 1 year after the date of 
     enactment of the FDA Food Safety Modernization Act, the 
     Secretary shall issue guidance to assist United States 
     importers in developing foreign supplier verification 
     programs.
       ``(c) Regulations.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of the FDA Food Safety Modernization Act, the 
     Secretary shall promulgate regulations to provide for the 
     content of the foreign supplier verification program 
     established under subsection (a). Such regulations shall, as 
     appropriate, include a process for verification by a United 
     States importer, with respect to each foreign supplier from 
     which it obtains food, that the imported food is produced in 
     compliance with the requirements of section 418 or 419, as 
     appropriate, and is not adulterated under section 402 or 
     misbranded under section 403(w).
       ``(2) Verification.--The regulations under paragraph (1) 
     shall require that the foreign supplier verification program 
     of each importer be adequate to provide assurances that each 
     foreign supplier to the importer produces the imported food 
     employing processes and procedures, including risk-based 
     reasonably appropriate preventive controls, equivalent in 
     preventing adulteration and reducing hazards as those 
     required by section 418 or section 419, as appropriate.
       ``(3) Activities.--Verification activities under a foreign 
     supplier verification program under this section may include 
     monitoring records for shipments, lot-by-lot certification of 
     compliance, annual on-site inspections, checking the hazard 
     analysis and risk-based preventive control plan of the 
     foreign supplier, and periodically testing and sampling 
     shipments.
       ``(d) Record Maintenance and Access.--Records of a United 
     States importer related to a foreign supplier verification 
     program shall be maintained for a period of not less than 2 
     years and shall be made available promptly to a duly 
     authorized representative of the Secretary upon request.
       ``(e) Deemed Compliance of Seafood, Juice, and Low-Acid 
     Canned Food Facilities in Compliance With HACCP.--An owner, 
     operator, or agent in charge of a facility required to comply 
     with 1 of the following standards and regulations with 
     respect to such facility shall be deemed to be in compliance 
     with this section with respect to such facility:
       ``(1) The Seafood Hazard Analysis Critical Control Points 
     Program of the Food and Drug Administration.
       ``(2) The Juice Hazard Analysis Critical Control Points 
     Program of the Food and Drug Administration.
       ``(3) The Thermally Processed Low-Acid Foods Packaged in 
     Hermetically Sealed Containers standards of the Food and Drug 
     Administration (or any successor standards).
       ``(f) Publication of List of Participants.--The Secretary 
     shall publish and maintain on the Internet Web site of the 
     Food and Drug Administration a current list that includes the 
     name of, location of, and other information deemed necessary 
     by the Secretary about, importers participating under this 
     section.''.

[[Page S2703]]

       (b) Prohibited Act.--Section 301 (21 U.S.C. 331), as 
     amended by section 206, is amended by adding at the end the 
     following:
       ``(ss) The importation or offering for importation of a 
     food if the importer (as defined in section 805) does not 
     have in place a foreign supplier verification program in 
     compliance with such section 805.''.
       (c) Imports.--Section 801(a) (21 U.S.C. 381(a)) is amended 
     by adding ``or the importer (as defined in section 805) is in 
     violation of such section 805'' after ``or in violation of 
     section 505''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect 2 years after the date of enactment of this 
     Act.

     SEC. 302. VOLUNTARY QUALIFIED IMPORTER PROGRAM.

       Chapter VIII (21 U.S.C. 381 et seq.), as amended by section 
     301, is amended by adding at the end the following:

     ``SEC. 806. VOLUNTARY QUALIFIED IMPORTER PROGRAM.

       ``(a) In General.--Beginning not later than 1 year after 
     the date of enactment of the FDA Food Safety Modernization 
     Act, the Secretary shall--
       ``(1) establish a program, in consultation with the 
     Department of Homeland Security, to provide for the expedited 
     review and importation of food offered for importation by 
     United States importers who have voluntarily agreed to 
     participate in such program; and
       ``(2) issue a guidance document related to participation 
     and compliance with such program.
       ``(b) Voluntary Participation.--An importer may request the 
     Secretary to provide for the expedited review and importation 
     of designated foods in accordance with the program procedures 
     established by the Secretary.
       ``(c) Eligibility.--In order to be eligible, an importer 
     shall be offering food for importation from a facility that 
     has a certification described in section 809(b). In reviewing 
     the applications and making determinations on such requests, 
     the Secretary shall consider the risk of the food to be 
     imported based on factors, such as the following:
       ``(1) The nature of the food to be imported.
       ``(2) The compliance history of the foreign supplier.
       ``(3) The capability of the regulatory system of the 
     country of export to ensure compliance with United States 
     food safety standards.
       ``(4) The compliance of the importer with the requirements 
     of section 805.
       ``(5) The recordkeeping, testing, inspections and audits of 
     facilities, traceability of articles of food, temperature 
     controls, and sourcing practices of the importer.
       ``(6) The potential risk for intentional adulteration of 
     the food.
       ``(7) Any other factor that the Secretary determines 
     appropriate.
       ``(d) Review and Revocation.--Any importer qualified by the 
     Secretary in accordance with the eligibility criteria set 
     forth in this section shall be reevaluated not less often 
     than once every 3 years and the Secretary shall promptly 
     revoke the qualified importer status of any importer found 
     not to be in compliance with such criteria.
       ``(e) Notice of Intent to Participate.--An importer that 
     intends to participate in the program under this section in a 
     fiscal year shall submit a notice to the Secretary of such 
     intent at time and in a manner established by the Secretary.
       ``(f) False Statements.--Any statement or representation 
     made by an importer to the Secretary shall be subject to 
     section 1001 of title 18, United States Code.
       ``(g) Definition.--For purposes of this section, the term 
     `importer' means the person that brings food, or causes food 
     to be brought, from a foreign country into the customs 
     territory of the United States.''.

     SEC. 303. AUTHORITY TO REQUIRE IMPORT CERTIFICATIONS FOR 
                   FOOD.

       (a) In General.--Section 801(a) (21 U.S.C. 381(a)) is 
     amended by inserting after the third sentence the following: 
     ``With respect to an article of food, if importation of such 
     food is subject to, but not compliant with, the requirement 
     under subsection (p) that such food be accompanied by a 
     certification or other assurance that the food meets some or 
     all applicable requirements of this Act, then such article 
     shall be refused admission.''.
       (b) Addition of Certification Requirement.--Section 801 (21 
     U.S.C. 381) is amended by adding at the end the following new 
     subsection:
       ``(p) Certifications Concerning Imported Foods.--
       ``(1) In general.--The Secretary, based on public health 
     considerations, including risks associated with the food or 
     its place of origin, may require as a condition of granting 
     admission to an article of food imported or offered for 
     import into the United States, that an entity specified in 
     paragraph (2) provide a certification or such other 
     assurances as the Secretary determines appropriate that the 
     article of food complies with some or all applicable 
     requirements of this Act, as specified by the Secretary. Such 
     certification or assurances may be provided in the form of 
     shipment-specific certificates, a listing of certified 
     entities, or in such other form as the Secretary may specify. 
     Such certification shall be used for designated food imported 
     from countries with which the Food and Drug Administration 
     has an agreement to establish a certification program.
       ``(2) Certifying entities.--For purposes of paragraph (1), 
     entities that shall provide the certification or assurances 
     described in such paragraph are--
       ``(A) an agency or a representative of the government of 
     the country from which the article of food at issue 
     originated, as designated by such government or the 
     Secretary; or
       ``(B) such other persons or entities accredited pursuant to 
     section 809 to provide such certification or assurance.
       ``(3) Renewal and refusal of certifications.--The Secretary 
     may--
       ``(A) require that any certification or other assurance 
     provided by an entity specified in paragraph (2) be renewed 
     by such entity at such times as the Secretary determines 
     appropriate; and
       ``(B) refuse to accept any certification or assurance if 
     the Secretary determines that such certification or assurance 
     is no longer valid or reliable.
       ``(4) Electronic submission.--The Secretary shall provide 
     for the electronic submission of certifications under this 
     subsection.
       ``(5) False statements.--Any statement or representation 
     made by an entity described in paragraph (2) to the Secretary 
     shall be subject to section 1001 of title 18, United States 
     Code.''.
       (c) Conforming Technical Amendment.--Section 801(b) (21 
     U.S.C. 381(b)) is amended in the second sentence by striking 
     ``with respect to an article included within the provision of 
     the fourth sentence of subsection (a)'' and inserting ``with 
     respect to an article described in subsection (a) relating to 
     the requirements of sections 760 or 761,''.
       (d) No Limit on Authority.--Nothing in the amendments made 
     by this section shall limit the authority of the Secretary to 
     conduct random inspections of imported food or to take such 
     other steps as the Secretary deems appropriate to determine 
     the admissibility of imported food.

     SEC. 304. PRIOR NOTICE OF IMPORTED FOOD SHIPMENTS.

       (a) In General.--Section 801(m)(1) (21 U.S.C. 381(m)(1)) is 
     amended by inserting ``any country to which the article has 
     been refused entry;'' after ``the country from which the 
     article is shipped;''.
       (b) Regulations.--Not later than 120 days after the date of 
     enactment of this Act, the Secretary shall issue an interim 
     final rule amending subpart I of part 1 of title 21, Code of 
     Federal Regulations, to implement the amendment made by this 
     section.
       (c) Effective Date.--The amendment made by this section 
     shall take effect 180 days after the date of enactment of 
     this Act.

     SEC. 305. REVIEW OF A REGULATORY AUTHORITY OF A FOREIGN 
                   COUNTRY.

       Chapter VIII (21 U.S.C. 381 et seq.), as amended by section 
     302, is amended by adding at the end the following:

     ``SEC. 807. REVIEW OF A REGULATORY AUTHORITY OF A FOREIGN 
                   COUNTRY.

       ``The Secretary may review information from a country 
     outlining the statutes, regulations, standards, and controls 
     of such country, and conduct on-site audits in such country 
     to verify the implementation of those statutes, regulations, 
     standards, and controls. Based on such review, the Secretary 
     shall determine whether such country can provide reasonable 
     assurances that the food supply of the country is equivalent 
     in safety to food manufactured, processed, packed, or held in 
     the United States.''.

     SEC. 306. BUILDING CAPACITY OF FOREIGN GOVERNMENTS WITH 
                   RESPECT TO FOOD.

       (a) In General.--The Secretary shall, not later than 2 
     years of the date of enactment of this Act, develop a 
     comprehensive plan to expand the technical, scientific, and 
     regulatory capacity of foreign governments, and their 
     respective food industries, from which foods are exported to 
     the United States.
       (b) Consultation.--In developing the plan under subsection 
     (a), the Secretary shall consult with the Secretary of 
     Agriculture, Secretary of State, Secretary of the Treasury, 
     and the Secretary of Commerce, representatives of the food 
     industry, appropriate foreign government officials, and 
     nongovernmental organizations that represent the interests of 
     consumers, and other stakeholders.
       (c) Plan.--The plan developed under subsection (a) shall 
     include, as appropriate, the following:
       (1) Recommendations for bilateral and multilateral 
     arrangements and agreements, including provisions to provide 
     for responsibility of exporting countries to ensure the 
     safety of food.
       (2) Provisions for electronic data sharing.
       (3) Provisions for mutual recognition of inspection 
     reports.
       (4) Training of foreign governments and food producers on 
     United States requirements for safe food.
       (5) Recommendations to harmonize requirements under the 
     Codex Alimentarius.
       (6) Provisions for the multilateral acceptance of 
     laboratory methods and detection techniques.

     SEC. 307. INSPECTION OF FOREIGN FOOD FACILITIES.

       Chapter VIII (21 U.S.C. 381 et seq.), as amended by section 
     305, is amended by inserting at the end the following:

     ``SEC. 808. INSPECTION OF FOREIGN FOOD FACILITIES.

       ``(a) Inspection.--The Secretary--
       ``(1) may enter into arrangements and agreements with 
     foreign governments to facilitate the inspection of foreign 
     facilities registered under section 415; and
       ``(2) shall direct resources to inspections of foreign 
     facilities, suppliers, and food types,

[[Page S2704]]

     especially such facilities, suppliers, and food types that 
     present a high risk (as identified by the Secretary), to help 
     ensure the safety and security of the food supply of the 
     United States.
       ``(b) Effect of Inability To Inspect.--Notwithstanding any 
     other provision of law, food shall be refused admission into 
     the United States if it is from a foreign facility registered 
     under section 415 of which the owner, operator, or agent in 
     charge of the facility, or the government of the foreign 
     country, refuses to permit entry of United States inspectors, 
     upon request, to inspect such facility. For purposes of this 
     subsection, such an owner, operator, or agent in charge shall 
     be considered to have refused an inspection if such owner, 
     operator, or agent in charge refuses such a request to 
     inspect a facility more than 48 hours after such request is 
     submitted.''.

     SEC. 308. ACCREDITATION OF THIRD-PARTY AUDITORS AND AUDIT 
                   AGENTS.

       Chapter VIII (21 U.S.C. 381 et seq.), as amended by section 
     307, is amended by adding at the end the following:

     ``SEC. 809. ACCREDITATION OF THIRD-PARTY AUDITORS AND AUDIT 
                   AGENTS.

       ``(a) Definitions.--In this section:
       ``(1) Accredited audit agent.--The term `accredited audit 
     agent' means an audit agent accredited by an accreditation 
     body under this section.
       ``(2) Audit agent.--The term `audit agent' means an 
     individual who is qualified to conduct food safety audits, 
     and who may be an employee or an agent of a third-party 
     auditor.
       ``(3) Accreditation body.--The term `accreditation body' 
     means a recognized authority that performs accreditation of 
     third-party auditors and audit agents.
       ``(4) Accredited third-party auditor.--The term `accredited 
     third-party auditor' means a third-party auditor accredited 
     by an accreditation body under this section.
       ``(5) Consultative audit.--The term `consultative audit' 
     means an audit of an eligible entity--
       ``(A) to determine whether such entity is in compliance 
     with the provisions of this Act and with applicable industry 
     standards and practices; and
       ``(B) the results of which are for internal facility 
     purposes only.
       ``(6) Eligible entity.--The term `eligible entity' means a 
     foreign entity, including foreign facilities registered under 
     section 415, in the food import supply chain that chooses to 
     be audited by an accredited third-party auditor or audit 
     agent.
       ``(7) Regulatory audit.--The term `regulatory audit' means 
     an audit of an eligible entity--
       ``(A) to determine whether such entity is in compliance 
     with the provisions of this Act; and
       ``(B) the results of which determine--
       ``(i) whether an entity is eligible to receive a 
     certification under section 801(p); and
       ``(ii) whether the entity is eligible to participate in the 
     voluntary qualified importer program under section 806.
       ``(8) Third-party auditor.--The term `third-party auditor' 
     means a foreign government, foreign cooperative, or any other 
     qualified third party, as the Secretary determines 
     appropriate, that conducts audits of eligible entities to 
     certify that such eligible entities meet the applicable 
     requirements of this section.
       ``(b) Accreditation System.--
       ``(1) Accreditation bodies.--
       ``(A) Recognition of accreditation bodies.--Beginning not 
     later than 2 years after the date of enactment of the FDA 
     Food Safety Modernization Act, the Secretary shall establish 
     a system for the recognition of accreditation bodies that 
     accredit third-party auditors and audit agents to certify 
     that eligible entities meet the applicable requirements of 
     this Act.
       ``(B) Notification.--Each accreditation body recognized by 
     the Secretary shall submit to the Secretary a list of all 
     accredited third-party auditors and audit agents accredited 
     by such body.
       ``(C) Revocation of recognition as an accreditation body.--
     The Secretary shall promptly revoke the recognition of any 
     accreditation body found not to be in compliance with the 
     requirements of this section.
       ``(2) Model accreditation standards.--The Secretary shall 
     develop model standards, including audit report requirements, 
     and each recognized accreditation body shall ensure that 
     third-party auditors and audit agents meet such standards in 
     order to qualify as an accredited third-party auditor or 
     audit agent under this section. In developing the model 
     standards, the Secretary shall look to standards in place on 
     the date of the enactment of this section for guidance, to 
     avoid unnecessary duplication of efforts and costs.
       ``(c) Third-Party Auditors and Audit Agencies.--
       ``(1) Requirements for accreditation as a third-party 
     auditor or audit agent.--
       ``(A) Foreign governments.--Prior to accrediting a foreign 
     government as an accredited third-party auditor, the 
     accreditation body shall perform such reviews and audits of 
     food safety programs, systems, and standards of the 
     government as the Secretary deems necessary to determine that 
     the foreign government is capable of adequately ensuring that 
     eligible entities certified by such government meet the 
     requirements of this Act with respect to food manufactured, 
     processed, packed, or held for import to the United States.
       ``(B) Foreign cooperatives and other third parties.--Prior 
     to accrediting a foreign cooperative that aggregates the 
     products of growers or processors, or any other third party 
     that the Secretary determines appropriate to be an accredited 
     third-party auditor or audit agent, the accreditation body 
     shall perform such reviews and audits of the training and 
     qualifications of auditors used by that cooperative or party 
     and conduct such reviews of internal systems and such other 
     investigation of the cooperative or party as the Secretary 
     deems necessary to determine that each eligible entity 
     certified by the cooperative or party has systems and 
     standards in use to ensure that such entity meets the 
     requirements of this Act.
       ``(2) Requirement to issue certification of eligible 
     entities.--
       ``(A) In general.--An accreditation body may not accredit a 
     third-party auditor or audit agent unless such third-party 
     auditor or audit agent agrees to issue a written and 
     electronic certification to accompany each food shipment for 
     import into the United States from an eligible entity 
     certified by the third-party auditor or audit agent, subject 
     to requirements set forth by the Secretary. The Secretary 
     shall consider such certificates when targeting inspection 
     resources under section 421.
       ``(B) Purpose of certification.--The Secretary shall use 
     evidence of certification provided by accredited third-party 
     auditors and audit agents--
       ``(i) to determined the eligibility of an importer to 
     receive a certification under section 801(p); and
       ``(ii) determine the eligibility of an importer to 
     participate in the voluntary qualified importer program under 
     section 806.
       ``(3) Audit report requirements.--
       ``(A) Requirements in general.--As a condition of 
     accreditation, an accredited third-party auditor or audit 
     agent shall prepare the audit report for an audit, in a form 
     and manner designated by the Secretary, which shall include--
       ``(i) the identity of the persons at the audited eligible 
     entity responsible for compliance with food safety 
     requirements;
       ``(ii) the dates of the audit;
       ``(iii) the scope of the audit; and
       ``(iv) any other info required by the Secretary that relate 
     to or may influence an assessment of compliance with this 
     Act.
       ``(B) Submission of reports to the secretary.--
       ``(i) In general.--Following any accreditation of a third-
     party auditor or audit agent, the Secretary may, at any time, 
     require the accredited third-party auditor or audit agent to 
     submit to the Secretary an onsite audit report and such other 
     reports or documents required as part of the audit process, 
     for any eligible entity certified by the third-party auditor 
     or audit agent. Such report may include documentation that 
     the eligible entity is in compliance with any applicable 
     registration requirements.
       ``(ii) Limitation.--The requirement under clause (i) shall 
     not include any report or other documents resulting from a 
     consultative audit by the accredited third-party auditor or 
     audit agent, except that the Secretary may access the results 
     of a consultative audit in accordance with section 414.
       ``(4) Requirements of audit agents.--
       ``(A) Risks to public health.--If, at any time during an 
     audit, an accredited audit agent discovers a condition that 
     could cause or contribute to a serious risk to the public 
     health, the audit agent shall immediately notify the 
     Secretary of--
       ``(i) the identification of the eligible entity subject to 
     the audit; and
       ``(ii) such condition.
       ``(B) Types of audits.--An accredited audit agent may 
     perform consultative and regulatory audits of eligible 
     entities.
       ``(C) Limitations.--An accredited audit agent may not 
     perform a regulatory audit of an eligible entity if such 
     agent has performed a consultative audit or a regulatory 
     audit of such eligible entity during the previous 24-month 
     period.
       ``(5) Conflicts of interest.--
       ``(A) Third-party auditors.--An accredited third-party 
     auditor shall--
       ``(i) not be owned, managed, or controlled by any person 
     that owns or operates an eligible entity to be certified by 
     such auditor;
       ``(ii) in carrying out audits of eligible entities under 
     this section, have procedures to ensure against the use of 
     any officer or employee of such auditor that has a financial 
     conflict of interest regarding an eligible entity to be 
     certified by such auditor; and
       ``(iii) annually make available to the Secretary 
     disclosures of the extent to which such auditor and the 
     officers and employees of such auditor have maintained 
     compliance with clauses (i) and (ii) relating to financial 
     conflicts of interest.
       ``(B) Audit agents.--An accredited audit agent shall--
       ``(i) not own or operate an eligible entity to be certified 
     by such agent;
       ``(ii) in carrying out audits of eligible entities under 
     this section, have procedures to ensure that such agent does 
     not have a financial conflict of interest regarding an 
     eligible entity to be certified by such agent; and
       ``(iii) annually make available to the Secretary 
     disclosures of the extent to which such agent has maintained 
     compliance with clauses (i) and (ii) relating to financial 
     conflicts of interest.

[[Page S2705]]

       ``(C) Regulations.--The Secretary shall promulgate 
     regulations not later than 18 months after the date of 
     enactment of the FDA Food Safety Modernization Act to ensure 
     that there are protections against conflicts of interest 
     between an accredited third-party auditor or audit agent and 
     the eligible entity to be certified by such auditor or audit 
     agent. Such regulations shall include--
       ``(i) requiring that audits performed under this section be 
     unannounced;
       ``(ii) a structure, including timing and public disclosure, 
     for fees paid by eligible entities to accredited third-party 
     auditors or audit agents to decrease the potential for 
     conflicts of interest; and
       ``(iii) appropriate limits on financial affiliations 
     between an accredited third-party auditor or audit agent and 
     any person that owns or operates an eligible entity to be 
     certified by such auditor or audit agent.
       ``(6) Withdrawal of accreditation.--The Secretary shall 
     withdraw accreditation from an accredited third-party auditor 
     or audit agent--
       ``(A) if food from an eligible entity certified by such 
     third-party auditor or audit agent is linked to an outbreak 
     of human or animal illness;
       ``(B) following a performance audit and finding by the 
     Secretary that the third-party auditor or audit agent no 
     longer meets the requirements for accreditation; or
       ``(C) following a refusal to allow United States officials 
     to conduct such audits and investigations as may be necessary 
     to ensure continued compliance with the requirements set 
     forth in this section.
       ``(7) Neutralizing costs.--The Secretary shall establish a 
     method, similar to the method used by the Department of 
     Agriculture, by which accredited third-party auditors and 
     audit agents reimburse the Food and Drug Administration for 
     the work performed to establish and administer the 
     accreditation system under this section. The Secretary shall 
     make operating this program revenue-neutral and shall not 
     generate surplus revenue from such a reimbursement mechanism.
       ``(d) Recertification of Eligible Entities.--An eligible 
     entity shall apply for annual recertification by an 
     accredited third-party auditor or audit agent if such 
     entity--
       ``(1) intends to participate in voluntary qualified 
     importer program under section 806; or
       ``(2) must provide to the Secretary a certification under 
     section 801(p) for any food from such entity.
       ``(e) False Statements.--Any statement or representation 
     made--
       ``(1) by an employee or agent of an eligible entity to an 
     accredited third-party auditor or audit agent; or
       ``(2) by an accredited third-party auditor or an audit 
     agent to the Secretary,
     shall be subject to section 1001 of title 18, United States 
     Code.
       ``(f) Monitoring.--To ensure compliance with the 
     requirements of this section, the Secretary shall--
       ``(1) periodically, or at least once every 4 years, 
     reevaluate the accreditation bodies described in subsection 
     (b)(1);
       ``(2) periodically, or at least once every 4 years, audit 
     the performance of each accredited third-party auditor and 
     audit agent, through the review of audit reports by such 
     auditors and audit agents, the compliance history as 
     available of eligible entities certified by such auditors and 
     audit agents, and any other measures deemed necessary by the 
     Secretary;
       ``(3) at any time, conduct an onsite audit of any eligible 
     entity certified by an accredited third-party auditor or 
     audit agent, with or without the auditor or audit agent 
     present; and
       ``(4) take any other measures deemed necessary by the 
     Secretary.
       ``(g) Publicly Available Registry.--The Secretary shall 
     establish a publicly available registry of accreditation 
     bodies and of accredited third-party auditors and audit 
     agents, including the name of, contact information for, and 
     other information deemed necessary by the Secretary about 
     such bodies, auditors, and agents.
       ``(h) Limitations.--
       ``(1) No effect on section 704 inspections.--The audits 
     performed under this section shall not be considered 
     inspections under section 704.
       ``(2) No effect on inspection authority.--Nothing in this 
     section affects the authority of the Secretary to inspect any 
     eligible entity pursuant to this Act.''.

     SEC. 309. FOREIGN OFFICES OF THE FOOD AND DRUG 
                   ADMINISTRATION.

       (a) In General.--The Secretary shall by October 1, 2010, 
     establish an office of the Food and Drug Administration in 
     not less than 5 foreign countries selected by the Secretary, 
     to provide assistance to the appropriate governmental 
     entities of such countries with respect to measures to 
     provide for the safety of articles of food and other products 
     regulated by the Food and Drug Administration exported by 
     such country to the United States, including by directly 
     conducting risk-based inspections of such articles and 
     supporting such inspections by such governmental entity.
       (b) Consultation.--In establishing the foreign offices 
     described in subsection (a), the Secretary shall consult with 
     the Secretary of State and the United States Trade 
     Representative.
       (c) Report.--Not later than October 1, 2011, the Secretary 
     shall submit to Congress a report on the basis for the 
     selection by the Secretary of the foreign countries in which 
     the Secretary established offices under subsection (a), the 
     progress which such offices have made with respect to 
     assisting the governments of such countries in providing for 
     the safety of articles of food and other products regulated 
     by the Food and Drug Administration exported to the United 
     States, and the plans of the Secretary for establishing 
     additional foreign offices of the Food and Drug 
     Administration, as appropriate.

                   TITLE IV--MISCELLANEOUS PROVISIONS

     SEC. 401. FUNDING FOR FOOD SAFETY.

       (a) In General.--There are authorized to be appropriated to 
     carry out the activities of the Center for Food Safety and 
     Applied Nutrition, the Center for Veterinary Medicine, and 
     related field activities in the Office of Regulatory Affairs 
     of the Food and Drug Administration--
       (1) $825,000,000 for fiscal year 2010; and
       (2) such sums as may be necessary for fiscal years 2011 
     through 2014.
       (b) Increased Number of Field Staff.--To carry out the 
     activities of the Center for Food Safety and Applied 
     Nutrition, the Center for Veterinary Medicine, and related 
     field activities of the Office of Regulatory Affairs of the 
     Food and Drug Administration, the Secretary of Health and 
     Human Services shall increase the field staff of such Centers 
     and Office with a goal of not fewer than--
       (1) 3,800 staff members in fiscal year 2010;
       (2) 4,000 staff members in fiscal year 2011;
       (3) 4,200 staff members in fiscal year 2012;
       (4) 4,600 staff members in fiscal year 2013; and
       (5) 5,000 staff members in fiscal year 2014.

     SEC. 402. JURISDICTION; AUTHORITIES.

       Nothing in this Act, or an amendment made by this Act, 
     shall be construed to--
       (1) alter the jurisdiction between the Secretary of 
     Agriculture and the Secretary of Health and Human Services, 
     under applicable statutes and regulations;
       (2) limit the authority of the Secretary of Health and 
     Human Services to issue regulations related to the safety of 
     food under--
       (A) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 
     et seq.) as in effect on the day before the date of enactment 
     of this Act; or
       (B) the Public Health Service Act (42 U.S.C. 301 et seq.) 
     as in effect on the day before the date of enactment of this 
     Act; or
       (3) impede, minimize, or affect the authority of the 
     Secretary of Agriculture to prevent, control, or mitigate a 
     plant or animal health emergency, or a food emergency 
     involving products regulated under the Federal Meat 
     Inspection Act, the Poultry Products Inspection Act, or the 
     Egg Products Inspection Act.
                                 ______
                                 
      By Mr. AKAKA:
  S. 514. A bill to amend title 38, United States Code, to enhance 
vocational rehabilitation benefits for veterans, and for other 
purposes; to the Committee on Veterans' Affairs.
  Mr. AKAKA. Mr. President, I am introducing today the proposed 
Veterans Rehabilitation and Training Improvements Act of 2009. This 
measure would improve the program of rehabilitation and training for 
veterans who suffer from service-connected disabilities by offering an 
increase in the amount of subsistence allowances, reimbursing certain 
incidental costs, and repealing the limit on the number of individuals 
who may be enrolled in a program of Independent Living services.
  Under current law, veterans who are enrolled in a program of 
rehabilitation under Chapter 31 receive a monthly subsistence 
allowance. This, in addition to the payment of the costs of the program 
of rehabilitation, is intended to offer the veteran a means of paying 
for basic living expenses while pursuing their training or education.
  With the enactment of the new Post 9-11 GI Bill last year, P.L. 110-
323, which adopted a tuition-and-fees plus a living allowance approach 
to the payment of benefits under the educational assistance program, I 
am concerned that there may be an inequity between the vocational 
rehabilitation and education programs and that individuals who would 
truly benefit from enrollment in a program of rehabilitation and 
employment under Chapter 31 will be tempted to enroll in the Chapter 33 
education program in order to take advantage of the higher living 
allowance. Those who would make such an election might forgo valuable 
counseling, employment and placement, and other assistance from which 
they might benefit.
  To address this concern, the measure I am introducing today would 
modify the Chapter 31 program by offering a subsistence allowance to 
enrollees equal to the national average for the Department of Defense's 
Basic Allowance for Housing, BAH, for members of the military at the E-
5 level, adjusted for marital status. This is similar, although not 
identical to, the approach of the new chapter 33 program which

[[Page S2706]]

adopted a regionalized BAH approach based on the address of the 
institution.
  This is intended to help ensure that individuals who could best 
benefit from enrollment in the Chapter 31 program are not faced with a 
disincentive to do so.
  With regard to the second issue, VA is permitted to pay certain costs 
associated with enrollment of an individual in a program of 
rehabilitation--for example, fees, equipment, and supplies. However, 
there are other costs that an individual might incur that are not 
covered by VA and these costs could represent a substantial barrier to 
the successful completion of a program. An example could be that of a 
single young mother with young children who--in order to attend 
classes--needs child care. Another example might be a veteran who lost 
both legs in service and needs a new suit in order to make the most 
favorable impression at the interview with a prospective employer.
  The legislation I am introducing today would require VA to issue 
regulations providing for the reimbursement of incidental costs 
associated with obstacles that pose substantial barriers to successful 
completion of a program. I believe that this will substantially 
increase the ability of many individuals to finish their rehabilitation 
programs and be placed in rewarding jobs.
  I also believe we need to repeal the cap on the number of individuals 
who may be enrolled in a program of Independent Living services under 
the Chapter 31 program. Current law provides that individuals for whom 
a determination is made that a program of rehabilitation leading to 
employment is not reasonably feasible may be eligible for enrollment in 
a program of independent living services which is designed to help the 
individual achieve a maximum level of independence in daily life. 
However, the number of veterans who in any one year may enroll in these 
programs is capped at 2,600.
  Even though the VA has testified in the past that this enrollment cap 
does not present any problem for the effective conduct of the program, 
I remain concerned--despite the fact that last year Congress raised the 
cap from 2,500 to 2,600 in P.L. 110-389--that the effect of the cap is 
to put downward pressure on VA's enrollment of eligible veterans in 
this very important program. This is of particular concern when so many 
of today's returning servicemembers suffer from disabilities that may 
require extensive periods of rehabilitation and assistance in achieving 
independence in their daily lives that can result from such conditions 
as traumatic brain injury or PTSD.
  Disabled veterans are transitioning from military service into an 
economy that is changing, challenging, and contracting at historic 
rates. My bill will give these veterans more of the help they need by 
increasing program flexibility and boosting the living stipend for 
disabled veterans undergoing rehabilitation.
  While there will be costs associated with this legislation, the 
veterans who are served by the chapter 31 rehabilitation and employment 
program are the highest priority for our Nation--individuals who have 
incurred service-connected disabilities in service to the country. This 
truly is one of the costs of war that must be borne.
  I look forward to working with my colleagues in moving this 
legislation through the Congress.
  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. 514

       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 ``Veterans Rehabilitation and 
     Training Improvements Act of 2009''

     SEC. 2. SUBSISTENCE ALLOWANCE FOR VETERANS PARTICIPATING IN A 
                   PROGRAM OF REHABILITATION.

       (a) Modification of Amount of Subsistence Allowance.--
     Subsection (b) of section 3108 of title 38, United States 
     Code, is amended to read as follows:
       ``(b) Except as otherwise provided in this section, the 
     amount of the subsistence allowance to be paid to a veteran 
     under this chapter for a month during which the veteran 
     participates in a rehabilitation program under this chapter 
     shall be the amount equal to the national average of the 
     amount of basic allowance for housing payable under section 
     403 of title 37 for that month for a member of the uniformed 
     services in pay grade E-5 with or without dependents, as 
     applicable.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2009, and shall apply with 
     respect to subsistence allowances payable under chapter 31 of 
     title 38, United States Code, for months beginning on or 
     after that date.

     SEC. 3. REIMBURSEMENT FOR COSTS OF PARTICIPATION IN A PROGRAM 
                   OF REHABILITATION FOLLOWING SUCCESSFUL 
                   COMPLETION OF PROGRAM OF REHABILITATION.

       Section 3108 of title 38, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(j)(1) The Secretary may, under such regulations as the 
     Secretary shall prescribe for purposes of this subsection, 
     pay to each veteran who successfully completes participation 
     in a rehabilitation program under this chapter an amount to 
     reimburse the veteran for costs incurred by veteran as a 
     direct consequence of participation in the program. The costs 
     for which payment may be made under this subsection may 
     include child care expenses, costs for clothing for 
     interviews for employment, and such other costs as the 
     Secretary may prescribe in such regulations. The amounts 
     payable in reimbursement for any such costs shall be the 
     amounts determined in accordance with such regulations.
       ``(2) Any payment of costs in reimbursement of a veteran 
     under this subsection is in addition to the subsistence 
     allowance payable to the veteran under this section.''.

     SEC. 4. REPEAL OF LIMITATION ON NUMBER OF VETERANS ENROLLED 
                   IN PROGRAMS OF INDEPENDENT LIVING SERVICES AND 
                   ASSISTANCE.

       Section 3120 of title 38, United States Code, is amended--
       (1) by striking subsection (e); and
       (2) by redesignating subsection (f) as subsection (e).
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Hatch, Mr. Schumer, Mr. Crapo, Mr. 
        Whitehouse, Mr. Risch, and Mrs. Gillibrand):
  S. 515. A bill to amend title 35, United States Code, to provide for 
patent reform; to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, ingenuity and innovation have been a 
cornerstone of the American economy from the time Thomas Jefferson 
issued the first patent to today.
  The Founding Fathers recognized the importance of promoting 
innovation, and the Constitution explicitly grants Congress the power 
to ``promote the progress and science and useful arts, by securing for 
limited times to . . . inventors the exclusive right to their 
respective . . . discoveries.'' The discoveries made by American 
inventors and research institutions, commercialized by our companies, 
and protected and promoted by our patent laws have made our system the 
envy of the world.
  The legislation I introduce today with Senator Hatch, and many others 
and from across the political spectrum, will keep America in its 
longstanding position at the pinnacle of innovation. This bill will 
establish a more efficient and streamlined patent system that will 
improve patent quality and limit unnecessary and counterproductive 
litigation costs, while making sure no party's access to court is 
denied.
  Innovation and economic development are not uniquely Democratic or 
Republican objectives. I have been working on the Patent Reform Act on 
a bipartisan basis with Senator Hatch and others for several years--and 
Senator Hatch and I worked on various patent issues for many years 
before that.
  Last Congress, I introduced, along with Senator Hatch, the Patent 
Reform Act of 2007, which is the precursor to the legislation we 
introduce today. That bill was the subject of consideration and 
amendments over four weeks of mark-up sessions in the Senate Judiciary 
Committee. After the Judiciary Committee voted to approve the bill in 
July 2007, we continued to hold numerous meetings, briefings, and 
stakeholder roundtables--again, on a bipartisan basis.
  The legislation we introduce today picks up where we left off in 
those discussions. We have made some changes from the Committee-
approved bill in response to concerns we heard from groups ranging from 
labor unions to small inventors to manufacturers. We have removed the 
requirement that all patent applications be published 18 months after 
they are filed and we have removed the requirement for Applicant 
Quality Submissions. We have also adopted the House approach to 
improving the current inter partes reexamination process, rather than 
creating a new second window post-grant review.

[[Page S2707]]

  Perhaps the most hotly debated topic in the patent reform debate last 
Congress was the damages provision. The reasonable royalty language in 
the bill we introduce today is identical to the language approved by 
the Judiciary Committee last Congress. While I strongly support this 
language, I am prepared to continue the conversation and debate from 
the last Congress in order to find the best language we can.
  There have been several positive developments since the Committee 
voted to report the legislation in July 2007. Senator Specter has made 
constructive suggestions about a ``gate keeping'' role for the court in 
damage calculations. The Supreme Court's Quanta decision may offer a 
useful way of describing the truly inventive feature of a patent. There 
is much work to do on this provision and I am optimistic that by 
continuing to work together, we will find the right language.
  During consideration of the Patent Reform Act of 2007 in Committee 
last Congress, I offered an amendment, which was adopted, to codify the 
inequitable conduct doctrine. Senator Hatch has asked that the 
provision be removed on introduction this year. I understand that the 
issue of inequitable conduct is very important to Senator Hatch, and I 
will work with him to address any statutory changes.
  It has been more than 50 years since Congress significantly updated 
the patent system. In the decades since, our economy has changed 
dramatically. No longer is the economy defined only by assembly lines 
and brick-and-mortar production. We are living in the Information Age, 
and the products and processes that are being patented are changing as 
quickly as the times themselves.
  A patent system developed for a 1952 economy, needs to be 
reconsidered in light of 21st century realities, while staying true to 
our constitutional imperative. The patent laws that were sufficiently 
robust for promoting innovation and economic development are now 
actually impeding growth, harming innovators and raising prices on 
consumers.
  The array of voices heard in this debate--representing virtually all 
sectors of the economy and all interests in the patent system--have 
certainly not been uniform, but three major areas of concern with the 
current patent system can be distilled from their discussions.
  First, there is significant concern that the U.S. Patent and 
Trademark Office, PTO, is issuing low quality patents. Patent examiners 
are facing a difficult task given the explosion in the number of 
applications and the increasing complexity of those applications. When 
Congress last overhauled the patent system in 1952, the PTO received 
approximately 60,000 patent applications; in 2006, it received 440,000. 
Clearly, this puts a strain on the system and understandably affects 
the quality of patents issued.
  Second, the costs and uncertainty associated with patent litigation 
have escalated in recent years, and are creating an unbearable drag on 
innovation. Damage awards are inconsistent and too often fail to focus 
on the value of the invention to the infringing product. This 
disconnect and uncertainty is a problem that also leads to unreasonable 
posturing during licensing negotiations.
  Third, as business and competition become more global, patent 
applicants are increasingly filing patent applications in other 
countries for protection of their inventions. The filing system in the 
United States, known as ``first-to-invent,'' differs from that in other 
patent-issuing jurisdictions, which have ``first-to-file'' systems. 
This causes confusion and inefficiencies for American companies and 
innovators.
  The Patent Reform Act of 2009 promotes innovation, and will improve 
our economy, by addressing these impediments to growth. As the 
administration endeavors to guide the economy out of the recession, as 
payrolls shrink and the jobless rate rises, Congress cannot afford to 
sit idly by while innovation--the engine of our economy--is impeded by 
outdated laws.
  Our legislation ensures that, in the Information Age, we have the 
legal landscape necessary for our innovators to flourish. It will 
improve the quality of patents and remove the ambiguity from the 
process of litigating patent claims, which will promote innovation 
stifled by the current system. As innovation is encouraged, and 
excessive litigation costs are removed, competition will increase and 
the consumer cost of products will fall. In this way, the bill directly 
benefits both creators and consumers of inventive products.
  Patent reform is ultimately about economic development. It is about 
jobs, it is about innovation, and it is about consumers. All benefit 
under a patent system that reduces unnecessary costs, removes 
inefficiencies, and holds true to the vision of our Founders that 
Congress should establish a national policy that promotes the progress 
of science and the useful arts.
  When Thomas Jefferson issued that first patent in 1790--a patent that 
went to a Vermonter--no one could have predicted how the American 
economy would develop and what changes would be needed for the law to 
keep pace, but the purpose then remains the purpose today--promoting 
progress.
  As I said when I introduced the Patent Reform Act last Congress: If 
we are to maintain our position at the forefront of the world's 
economy, if we are to continue to lead the world in innovation and 
production, if we are to continue to benefit from the ideas of the most 
creative citizens, then we must have a patent system that produces high 
quality patents, that limits counterproductive litigation over those 
patents, and that makes the entire system more streamlined and 
efficient.
  Now is the time to bolster our role as the world leader in 
innovation. Now is the time to create jobs at home. Now is the time for 
Congress to act on patent reform.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 515

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Patent 
     Reform Act of 2009''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Right of the first inventor to file.
Sec. 3. Inventor's oath or declaration.
Sec. 4. Right of the inventor to obtain damages.
Sec. 5. Post-grant procedures and other quality enhancements.
Sec. 6. Definitions; patent trial and appeal board.
Sec. 7. Preissuance submissions by third parties.
Sec. 8. Venue and jurisdiction.
Sec. 9. Patent and trademark office regulatory authority.
Sec. 10. Residency of Federal Circuit judges.
Sec. 11. Micro-entity defined.
Sec. 12. Technical amendments.
Sec. 13. Effective date; rule of construction.
Sec. 14. Severability.

     SEC. 2. RIGHT OF THE FIRST INVENTOR TO FILE.

       (a) Definitions.--Section 100 of title 35, United States 
     Code, is amended by adding at the end the following:
       ``(f) The term `inventor' means the individual or, if a 
     joint invention, the individuals collectively who invented or 
     discovered the subject matter of the invention.
       ``(g) The terms `joint inventor' and `coinventor' mean any 
     1 of the individuals who invented or discovered the subject 
     matter of a joint invention.
       ``(h) The `effective filing date of a claimed invention' 
     is--
       ``(1) the filing date of the patent or the application for 
     the patent containing the claim to the invention; or
       ``(2) if the patent or application for patent is entitled 
     to a right of priority of any other application under section 
     119, 365(a), or 365(b) or to the benefit of an earlier filing 
     date in the United States under section 120, 121, or 365(c), 
     the filing date of the earliest such application in which the 
     claimed invention is disclosed in the manner provided by the 
     first paragraph of section 112.
       ``(i) The term `claimed invention' means the subject matter 
     defined by a claim in a patent or an application for a 
     patent.
       ``(j) The term `joint invention' means an invention 
     resulting from the collaboration of inventive endeavors of 2 
     or more persons working toward the same end and producing an 
     invention by their collective efforts.''.
       (b) Conditions for Patentability.--
       (1) In general.--Section 102 of title 35, United States 
     Code, is amended to read as follows:

     ``Sec. 102. Conditions for patentability; novelty

       ``(a) Novelty; Prior Art.--A patent for a claimed invention 
     may not be obtained if--
       ``(1) the claimed invention was patented, described in a 
     printed publication, or in public use, on sale, or otherwise 
     available to the public--
       ``(A) more than 1 year before the effective filing date of 
     the claimed invention; or
       ``(B) 1 year or less before the effective filing date of 
     the claimed invention, other than

[[Page S2708]]

     through disclosures made by the inventor or a joint inventor 
     or by others who obtained the subject matter disclosed 
     directly or indirectly from the inventor or a joint inventor; 
     or
       ``(2) the claimed invention was described in a patent 
     issued under section 151, or in an application for patent 
     published or deemed published under section 122(b), in which 
     the patent or application, as the case may be, names another 
     inventor and was effectively filed before the effective 
     filing date of the claimed invention.
       ``(b) Exceptions.--
       ``(1) Prior inventor disclosure exception.--Subject matter 
     that would otherwise qualify as prior art based upon a 
     disclosure under subparagraph (B) of subsection (a)(1) shall 
     not be prior art to a claimed invention under that 
     subparagraph if the subject matter had, before such 
     disclosure, been publicly disclosed by the inventor or a 
     joint inventor or others who obtained the subject matter 
     disclosed directly or indirectly from the inventor or a joint 
     inventor.
       ``(2) Derivation, prior disclosure, and common assignment 
     exceptions.--Subject matter that would otherwise qualify as 
     prior art only under subsection (a)(2), after taking into 
     account the exception under paragraph (1), shall not be prior 
     art to a claimed invention if--
       ``(A) the subject matter was obtained directly or 
     indirectly from the inventor or a joint inventor;
       ``(B) the subject matter had been publicly disclosed by the 
     inventor or a joint inventor or others who obtained the 
     subject matter disclosed, directly or indirectly, from the 
     inventor or a joint inventor before the effective filing date 
     of the application or patent set forth under subsection 
     (a)(2); or
       ``(C) the subject matter and the claimed invention, not 
     later than the effective filing date of the claimed 
     invention, were owned by the same person or subject to an 
     obligation of assignment to the same person.
       ``(3) Joint research agreement exception.--
       ``(A) In general.--Subject matter and a claimed invention 
     shall be deemed to have been owned by the same person or 
     subject to an obligation of assignment to the same person in 
     applying the provisions of paragraph (2) if--
       ``(i) the claimed invention was made by or on behalf of 
     parties to a joint research agreement that was in effect on 
     or before the effective filing date of the claimed invention;
       ``(ii) the claimed invention was made as a result of 
     activities undertaken within the scope of the joint research 
     agreement; and
       ``(iii) the application for patent for the claimed 
     invention discloses or is amended to disclose the names of 
     the parties to the joint research agreement.
       ``(B) For purposes of subparagraph (A), the term `joint 
     research agreement' means a written contract, grant, or 
     cooperative agreement entered into by 2 or more persons or 
     entities for the performance of experimental, developmental, 
     or research work in the field of the claimed invention.
       ``(4) Patents and published applications effectively 
     filed.--A patent or application for patent is effectively 
     filed under subsection (a)(2) with respect to any subject 
     matter described in the patent or application--
       ``(A) as of the filing date of the patent or the 
     application for patent; or
       ``(B) if the patent or application for patent is entitled 
     to claim a right of priority under section 119, 365(a), or 
     365(b) or to claim the benefit of an earlier filing date 
     under section 120, 121, or 365(c), based upon 1 or more prior 
     filed applications for patent, as of the filing date of the 
     earliest such application that describes the subject 
     matter.''.
       (2) Conforming amendment.--The item relating to section 102 
     in the table of sections for chapter 10 of title 35, United 
     States Code, is amended to read as follows:

``102. Conditions for patentability; novelty.''.

       (c) Conditions for Patentability; Nonobvious Subject 
     Matter.--Section 103 of title 35, United States Code, is 
     amended to read as follows:

     ``Sec. 103. Conditions for patentability; nonobvious subject 
       matter

       ``A patent for a claimed invention may not be obtained 
     though the claimed invention is not identically disclosed as 
     set forth in section 102, if the differences between the 
     claimed invention and the prior art are such that the claimed 
     invention as a whole would have been obvious before the 
     effective filing date of the claimed invention to a person 
     having ordinary skill in the art to which the claimed 
     invention pertains. Patentability shall not be negated by the 
     manner in which the invention was made.''.
       (d) Repeal of Requirements for Inventions Made Abroad.--
     Section 104 of title 35, United States Code, and the item 
     relating to that section in the table of sections for chapter 
     10 of title 35, United States Code, are repealed.
       (e) Repeal of Statutory Invention Registration.--
       (1) In general.--Section 157 of title 35, United States 
     Code, and the item relating to that section in the table of 
     sections for chapter 14 of title 35, United States Code, are 
     repealed.
       (2) Removal of cross references.--Section 111(b)(8) of 
     title 35, United States Code, is amended by striking 
     ``sections 115, 131, 135, and 157'' and inserting ``sections 
     131 and 135''.
       (f) Earlier Filing Date for Inventor and Joint Inventor.--
     Section 120 of title 35, United States Code, is amended by 
     striking ``which is filed by an inventor or inventors named'' 
     and inserting ``which names an inventor or joint inventor''.
       (g) Conforming Amendments.--
       (1) Right of priority.--Section 172 of title 35, United 
     States Code, is amended by striking ``and the time specified 
     in section 102(d)''.
       (2) Limitation on remedies.--Section 287(c)(4) of title 35, 
     United States Code, is amended by striking ``the earliest 
     effective filing date of which is prior to'' and inserting 
     ``which has an effective filing date before''.
       (3) International application designating the united 
     states: effect.--Section 363 of title 35, United States Code, 
     is amended by striking ``except as otherwise provided in 
     section 102(e) of this title''.
       (4) Publication of international application: effect.--
     Section 374 of title 35, United States Code, is amended by 
     striking ``sections 102(e) and 154(d)'' and inserting 
     ``section 154(d)''.
       (5) Patent issued on international application: effect.--
     The second sentence of section 375(a) of title 35, United 
     States Code, is amended by striking ``Subject to section 
     102(e) of this title, such'' and inserting ``Such''.
       (6) Limit on right of priority.--Section 119(a) of title 
     35, United States Code, is amended by striking ``; but no 
     patent shall be granted'' and all that follows through ``one 
     year prior to such filing''.
       (7) Inventions made with federal assistance.--Section 
     202(c) of title 35, United States Code, is amended--
       (A) in paragraph (2)--
       (i) by striking ``publication, on sale, or public use,'' 
     and all that follows through ``obtained in the United 
     States'' and inserting ``the 1-year period referred to in 
     section 102(a) would end before the end of that 2-year 
     period''; and
       (ii) by striking ``the statutory'' and inserting ``that 1-
     year''; and
       (B) in paragraph (3), by striking ``any statutory bar date 
     that may occur under this title due to publication, on sale, 
     or public use'' and inserting ``the expiration of the 1-year 
     period referred to in section 102(a)''.
       (h) Repeal of Interfering Patent Remedies.--Section 291 of 
     title 35, United States Code, and the item relating to that 
     section in the table of sections for chapter 29 of title 35, 
     United States Code, are repealed.
       (i) Action for Claim to Patent on Derived Invention.--
     Section 135 of title 35, United States Code, is amended to 
     read as follows:
       ``(a) Dispute Over Right to Patent.--
       ``(1) Institution of derivation proceeding.--An applicant 
     may request initiation of a derivation proceeding to 
     determine the right of the applicant to a patent by filing a 
     request which sets forth with particularity the basis for 
     finding that an earlier applicant derived the claimed 
     invention from the applicant requesting the proceeding and, 
     without authorization, filed an application claiming such 
     invention. Any such request may only be made within 12 months 
     after the date of first publication of an application 
     containing a claim that is the same or is substantially the 
     same as the claimed invention, must be made under oath, and 
     must be supported by substantial evidence. Whenever the 
     Director determines that patents or applications for patent 
     naming different individuals as the inventor interfere with 
     one another because of a dispute over the right to patent 
     under section 101, the Director shall institute a derivation 
     proceeding for the purpose of determining which applicant is 
     entitled to a patent.
       ``(2) Determination by patent trial and appeal board.--In 
     any proceeding under this subsection, the Patent Trial and 
     Appeal Board--
       ``(A) shall determine the question of the right to patent;
       ``(B) in appropriate circumstances, may correct the naming 
     of the inventor in any application or patent at issue; and
       ``(C) shall issue a final decision on the right to patent.
       ``(3) Derivation proceeding.--The Board may defer action on 
     a request to initiate a derivation proceeding until 3 months 
     after the date on which the Director issues a patent to the 
     applicant that filed the earlier application.
       ``(4) Effect of final decision.--The final decision of the 
     Patent Trial and Appeal Board, if adverse to the claim of an 
     applicant, shall constitute the final refusal by the United 
     States Patent and Trademark Office on the claims involved. 
     The Director may issue a patent to an applicant who is 
     determined by the Patent Trial and Appeal Board to have the 
     right to patent. The final decision of the Board, if adverse 
     to a patentee, shall, if no appeal or other review of the 
     decision has been or can be taken or had, constitute 
     cancellation of the claims involved in the patent, and notice 
     of such cancellation shall be endorsed on copies of the 
     patent distributed after such cancellation by the United 
     States Patent and Trademark Office.
       ``(b) Settlement.--Parties to a derivation proceeding may 
     terminate the proceeding by filing a written statement 
     reflecting the agreement of the parties as to the correct 
     inventors of the claimed invention in dispute. Unless the 
     Patent Trial and Appeal Board finds the agreement to be 
     inconsistent with the evidence of record, it shall take 
     action consistent with the agreement. Any written settlement 
     or understanding of the parties

[[Page S2709]]

     shall be filed with the Director. At the request of a party 
     to the proceeding, the agreement or understanding shall be 
     treated as business confidential information, shall be kept 
     separate from the file of the involved patents or 
     applications, and shall be made available only to Government 
     agencies on written request, or to any person on a showing of 
     good cause.
       ``(c) Arbitration.--Parties to a derivation proceeding, 
     within such time as may be specified by the Director by 
     regulation, may determine such contest or any aspect thereof 
     by arbitration. Such arbitration shall be governed by the 
     provisions of title 9 to the extent such title is not 
     inconsistent with this section. The parties shall give notice 
     of any arbitration award to the Director, and such award 
     shall, as between the parties to the arbitration, be 
     dispositive of the issues to which it relates. The 
     arbitration award shall be unenforceable until such notice is 
     given. Nothing in this subsection shall preclude the Director 
     from determining patentability of the invention involved in 
     the derivation proceeding.''.
       (j) Elimination of References to Interferences.--(1) 
     Sections 6, 41, 134, 141, 145, 146, 154, 305, and 314 of 
     title 35, United States Code, are each amended by striking 
     ``Board of Patent Appeals and Interferences'' each place it 
     appears and inserting ``Patent Trial and Appeal Board''.
       (2) Sections 141, 146, and 154 of title 35, United States 
     Code, are each amended--
       (A) by striking ``an interference'' each place it appears 
     and inserting ``a derivation proceeding''; and
       (B) by striking ``interference'' each additional place it 
     appears and inserting ``derivation proceeding''.
       (3) The section heading for section 134 of title 35, United 
     States Code, is amended to read as follows:

     ``Sec. 134. Appeal to the Patent Trial and Appeal Board''.

       (4) The section heading for section 135 of title 35, United 
     States Code, is amended to read as follows:

     ``Sec. 135. Derivation proceedings''.

       (5) The section heading for section 146 of title 35, United 
     States Code, is amended to read as follows:

     ``Sec. 146. Civil action in case of derivation proceeding''.

       (6) Section 154(b)(1)(C) of title 35, United States Code, 
     is amended by striking ``interferences'' and inserting 
     ``derivation proceedings''.
       (7) The item relating to section 6 in the table of sections 
     for chapter 1 of title 35, United States Code, is amended to 
     read as follows:

``6. Patent Trial and Appeal Board.''.

       (8) The items relating to sections 134 and 135 in the table 
     of sections for chapter 12 of title 35, United States Code, 
     are amended to read as follows:

``134. Appeal to the Patent Trial and Appeal Board.
``135. Derivation proceedings.''.

       (9) The item relating to section 146 in the table of 
     sections for chapter 13 of title 35, United States Code, is 
     amended to read as follows:

``146. Civil action in case of derivation proceeding.''.

       (10) Certain Appeals.--Section 1295(a)(4)(A) of title 28, 
     United States Code, is amended to read as follows:
       ``(A) the Patent Trial and Appeal Board of the United 
     States Patent and Trademark Office with respect to patent 
     applications, interference proceedings (commenced before the 
     date of enactment of the Patent Reform Act of 2009), 
     derivation proceedings, and post-grant review proceedings, at 
     the instance of an applicant for a patent or any party to a 
     patent interference (commenced before the effective date of 
     the Patent Reform Act of 2009), derivation proceeding, or 
     post-grant review proceeding, and any such appeal shall waive 
     any right of such applicant or party to proceed under section 
     145 or 146 of title 35;''.
       (k) Search and Examination Functions.--Section 131 of title 
     35, United States Code, is amended by--
       (1) by striking ``The Director shall cause'' and inserting 
     ``(a) In General.--The Director shall cause''; and
       (2) by adding at the end the following:
       ``(b) Search and Examination Functions.--To the extent 
     consistent with United States obligations under international 
     agreements, examination and search duties for the grant of a 
     United States patent are sovereign functions which shall be 
     performed within the United States by United States citizens 
     who are employees of the United States Government.''.

     SEC. 3. INVENTOR'S OATH OR DECLARATION.

       (a) Inventor's Oath or Declaration.--
       (1) In general.--Section 115 of title 35, United States 
     Code, is amended to read as follows:

     ``Sec. 115. Inventor's oath or declaration

       ``(a) Naming the Inventor; Inventor's Oath or 
     Declaration.--An application for patent that is filed under 
     section 111(a), that commences the national stage under 
     section 363, or that is filed by an inventor for an invention 
     for which an application has previously been filed under this 
     title by that inventor shall include, or be amended to 
     include, the name of the inventor of any claimed invention in 
     the application. Except as otherwise provided in this 
     section, an individual who is the inventor or a joint 
     inventor of a claimed invention in an application for patent 
     shall execute an oath or declaration in connection with the 
     application.
       ``(b) Required Statements.--An oath or declaration under 
     subsection (a) shall contain statements that--
       ``(1) the application was made or was authorized to be made 
     by the affiant or declarant; and
       ``(2) such individual believes himself or herself to be the 
     original inventor or an original joint inventor of a claimed 
     invention in the application.
       ``(c) Additional Requirements.--The Director may specify 
     additional information relating to the inventor and the 
     invention that is required to be included in an oath or 
     declaration under subsection (a).
       ``(d) Substitute Statement.--
       ``(1) In general.--In lieu of executing an oath or 
     declaration under subsection (a), the applicant for patent 
     may provide a substitute statement under the circumstances 
     described in paragraph (2) and such additional circumstances 
     that the Director may specify by regulation.
       ``(2) Permitted circumstances.--A substitute statement 
     under paragraph (1) is permitted with respect to any 
     individual who--
       ``(A) is unable to file the oath or declaration under 
     subsection (a) because the individual--
       ``(i) is deceased;
       ``(ii) is under legal incapacity; or
       ``(iii) cannot be found or reached after diligent effort; 
     or
       ``(B) is under an obligation to assign the invention but 
     has refused to make the oath or declaration required under 
     subsection (a).
       ``(3) Contents.--A substitute statement under this 
     subsection shall--
       ``(A) identify the individual with respect to whom the 
     statement applies;
       ``(B) set forth the circumstances representing the 
     permitted basis for the filing of the substitute statement in 
     lieu of the oath or declaration under subsection (a); and
       ``(C) contain any additional information, including any 
     showing, required by the Director.
       ``(e) Making Required Statements in Assignment of Record.--
     An individual who is under an obligation of assignment of an 
     application for patent may include the required statements 
     under subsections (b) and (c) in the assignment executed by 
     the individual, in lieu of filing such statements separately.
       ``(f) Time for Filing.--A notice of allowance under section 
     151 may be provided to an applicant for patent only if the 
     applicant for patent has filed each required oath or 
     declaration under subsection (a) or has filed a substitute 
     statement under subsection (d) or recorded an assignment 
     meeting the requirements of subsection (e).
       ``(g) Earlier-Filed Application Containing Required 
     Statements or Substitute Statement.--The requirements under 
     this section shall not apply to an individual with respect to 
     an application for patent in which the individual is named as 
     the inventor or a joint inventor and that claims the benefit 
     under section 120 or 365(c) of the filing of an earlier-filed 
     application, if--
       ``(1) an oath or declaration meeting the requirements of 
     subsection (a) was executed by the individual and was filed 
     in connection with the earlier-filed application;
       ``(2) a substitute statement meeting the requirements of 
     subsection (d) was filed in the earlier filed application 
     with respect to the individual; or
       ``(3) an assignment meeting the requirements of subsection 
     (e) was executed with respect to the earlier-filed 
     application by the individual and was recorded in connection 
     with the earlier-filed application.
       ``(h) Supplemental and Corrected Statements; Filing 
     Additional Statements.--
       ``(1) In general.--Any person making a statement required 
     under this section may withdraw, replace, or otherwise 
     correct the statement at any time. If a change is made in the 
     naming of the inventor requiring the filing of 1 or more 
     additional statements under this section, the Director shall 
     establish regulations under which such additional statements 
     may be filed.
       ``(2) Supplemental statements not required.--If an 
     individual has executed an oath or declaration under 
     subsection (a) or an assignment meeting the requirements of 
     subsection (e) with respect to an application for patent, the 
     Director may not thereafter require that individual to make 
     any additional oath, declaration, or other statement 
     equivalent to those required by this section in connection 
     with the application for patent or any patent issuing 
     thereon.
       ``(3) Savings clause.--No patent shall be invalid or 
     unenforceable based upon the failure to comply with a 
     requirement under this section if the failure is remedied as 
     provided under paragraph (1).
       ``(i) Acknowledgment of Penalties.--Any declaration or 
     statement filed pursuant to this section shall contain an 
     acknowledgment that any willful false statement made in such 
     declaration or statement is punishable under section 1001 of 
     title 18 by fine or imprisonment of not more than 5 years, or 
     both.''.
       (2) Relationship to divisional applications.--Section 121 
     of title 35, United States Code, is amended by striking ``If 
     a divisional application'' and all that follows through 
     ``inventor.''.
       (3) Requirements for nonprovisional applications.--Section 
     111(a) of title 35, United States Code, is amended--

[[Page S2710]]

       (A) in paragraph (2)(C), by striking ``by the applicant'' 
     and inserting ``or declaration'';
       (B) in the heading for paragraph (3), by striking ``and 
     oath''; and
       (C) by striking ``and oath'' each place it appears.
       (4) Conforming amendment.--The item relating to section 115 
     in the table of sections for chapter 11 of title 35, United 
     States Code, is amended to read as follows:

``115. Inventor's oath or declaration.''.

       (b) Filing by Other Than Inventor.--Section 118 of title 
     35, United States Code, is amended to read as follows:

     ``Sec. 118. Filing by other than inventor

       ``A person to whom the inventor has assigned or is under an 
     obligation to assign the invention may make an application 
     for patent. A person who otherwise shows sufficient 
     proprietary interest in the matter may make an application 
     for patent on behalf of and as agent for the inventor on 
     proof of the pertinent facts and a showing that such action 
     is appropriate to preserve the rights of the parties. If the 
     Director grants a patent on an application filed under this 
     section by a person other than the inventor, the patent shall 
     be granted to the real party in interest and upon such notice 
     to the inventor as the Director considers to be 
     sufficient.''.
       (c) Specification.--Section 112 of title 35, United States 
     Code, is amended--
       (1) in the first paragraph--
       (A) by striking ``The specification'' and inserting ``(a) 
     In General.--The specification''; and
       (B) by striking ``of carrying out his invention'' and 
     inserting ``or joint inventor of carrying out the 
     invention''; and
       (2) in the second paragraph--
       (A) by striking ``The specifications'' and inserting ``(b) 
     Conclusion.--The specifications''; and
       (B) by striking ``applicant regards as his invention'' and 
     inserting ``inventor or a joint inventor regards as the 
     invention'';
       (3) in the third paragraph, by striking ``A claim'' and 
     inserting ``(c) Form.--A claim'';
       (4) in the fourth paragraph, by striking ``Subject to the 
     following paragraph,'' and inserting ``(d) Reference in 
     Dependent Forms.--Subject to subsection (e),'';
       (5) in the fifth paragraph, by striking ``A claim'' and 
     inserting ``(e) Reference in Multiple Dependent Form.--A 
     claim''; and
       (6) in the last paragraph, by striking ``An element'' and 
     inserting ``(f) Element in Claim for a Combination.--An 
     element''.

     SEC. 4. RIGHT OF THE INVENTOR TO OBTAIN DAMAGES.

       (a) Damages.--Section 284 of title 35, United States Code, 
     is amended to read as follows:

     ``Sec. 284. Damages

       ``(a) In General.--Upon finding for the claimant the court 
     shall award the claimant damages adequate to compensate for 
     the infringement but in no event less than a reasonable 
     royalty for the use made of the invention by the infringer, 
     together with interest and costs as fixed by the court, 
     subject to the provisions of this section.
       ``(b) Determination of Damages; Evidence Considered; 
     Procedure.--The court may receive expert testimony as an aid 
     to the determination of damages or of what royalty would be 
     reasonable under the circumstances. The admissibility of such 
     testimony shall be governed by the rules of evidence 
     governing expert testimony. When the damages are not found by 
     a jury, the court shall assess them.
       ``(c) Standard for Calculating Reasonable Royalty.--
       ``(1) In general.--The court shall determine, based on the 
     facts of the case and after adducing any further evidence the 
     court deems necessary, which of the following methods shall 
     be used by the court or the jury in calculating a reasonable 
     royalty pursuant to subsection (a). The court shall also 
     identify the factors that are relevant to the determination 
     of a reasonable royalty, and the court or jury, as the case 
     may be, shall consider only those factors in making such 
     determination.
       ``(A) Entire market value.--Upon a showing to the 
     satisfaction of the court that the claimed invention's 
     specific contribution over the prior art is the predominant 
     basis for market demand for an infringing product or process, 
     damages may be based upon the entire market value of that 
     infringing product or process.
       ``(B) Established royalty based on marketplace licensing.--
     Upon a showing to the satisfaction of the court that the 
     claimed invention has been the subject of a nonexclusive 
     license for the use made of the invention by the infringer, 
     to a number of persons sufficient to indicate a general 
     marketplace recognition of the reasonableness of the 
     licensing terms, if the license was secured prior to the 
     filing of the case before the court, and the court determines 
     that the infringer's use is of substantially the same scope, 
     volume, and benefit of the rights granted under such license, 
     damages may be determined on the basis of the terms of such 
     license. Upon a showing to the satisfaction of the court that 
     the claimed invention has sufficiently similar noninfringing 
     substitutes in the relevant market, which have themselves 
     been the subject of such nonexclusive licenses, and the court 
     determines that the infringer's use is of substantially the 
     same scope, volume, and benefit of the rights granted under 
     such licenses, damages may be determined on the basis of the 
     terms of such licenses.
       ``(C) Valuation calculation.--Upon a determination by the 
     court that the showings required under subparagraphs (A) and 
     (B) have not been made, the court shall conduct an analysis 
     to ensure that a reasonable royalty is applied only to the 
     portion of the economic value of the infringing product or 
     process properly attributable to the claimed invention's 
     specific contribution over the prior art. In the case of a 
     combination invention whose elements are present individually 
     in the prior art, the contribution over the prior art may 
     include the value of the additional function resulting from 
     the combination, as well as the enhanced value, if any, of 
     some or all of the prior art elements as part of the 
     combination, if the patentee demonstrates that value.
       ``(2) Additional factors.--Where the court determines it to 
     be appropriate in determining a reasonable royalty under 
     paragraph (1), the court may also consider, or direct the 
     jury to consider, any other relevant factors under applicable 
     law.
       ``(d) Inapplicability to Other Damages Analysis.--The 
     methods for calculating a reasonable royalty described in 
     subsection (c) shall have no application to the calculation 
     of an award of damages that does not necessitate the 
     determination of a reasonable royalty as a basis for monetary 
     relief sought by the claimant.
       ``(e) Willful Infringement.--
       ``(1) Increased damages.--A court that has determined that 
     an infringer has willfully infringed a patent or patents may 
     increase damages up to 3 times the amount of the damages 
     found or assessed under subsection (a), except that increased 
     damages under this paragraph shall not apply to provisional 
     rights under section 154(d).
       ``(2) Permitted grounds for willfulness.--A court may find 
     that an infringer has willfully infringed a patent only if 
     the patent owner presents clear and convincing evidence that 
     acting with objective recklessness--
       ``(A) after receiving written notice from the patentee--
       ``(i) alleging acts of infringement in a manner sufficient 
     to give the infringer an objectively reasonable apprehension 
     of suit on such patent, and
       ``(ii) identifying with particularity each claim of the 
     patent, each product or process that the patent owner alleges 
     infringes the patent, and the relationship of such product or 
     process to such claim,

     the infringer, after a reasonable opportunity to investigate, 
     thereafter performed 1 or more of the alleged acts of 
     infringement;
       ``(B) the infringer intentionally copied the patented 
     invention with knowledge that it was patented; or
       ``(C) after having been found by a court to have infringed 
     that patent, the infringer engaged in conduct that was not 
     colorably different from the conduct previously found to have 
     infringed the patent, and which resulted in a separate 
     finding of infringement of the same patent.
       ``(3) Limitations on willfulness.--
       ``(A) In general.--A court may not find that an infringer 
     has willfully infringed a patent under paragraph (2) for any 
     period of time during which the infringer had an informed 
     good faith belief that the patent was invalid or 
     unenforceable, or would not be infringed by the conduct later 
     shown to constitute infringement of the patent.
       ``(B) Good faith established.--An informed good faith 
     belief within the meaning of subparagraph (A) may be 
     established by--
       ``(i) reasonable reliance on advice of counsel;
       ``(ii) evidence that the infringer sought to modify its 
     conduct to avoid infringement once it had discovered the 
     patent; or
       ``(iii) other evidence a court may find sufficient to 
     establish such good faith belief.
       ``(C) Relevance of not presenting certain evidence.--The 
     decision of the infringer not to present evidence of advice 
     of counsel is not relevant to a determination of willful 
     infringement under paragraph (2).
       ``(4) Limitation on pleading.--Before the date on which a 
     court determines that the patent in suit is not invalid, is 
     enforceable, and has been infringed by the infringer, a 
     patentee may not plead and a court may not determine that an 
     infringer has willfully infringed a patent. The court's 
     determination of an infringer's willfulness shall be made 
     without a jury.''.
       (b) Report to Congressional Committees.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act, the Director shall report to the 
     Committee on the Judiciary of the Senate and the Committee on 
     the Judiciary of the House of Representatives, the findings 
     and recommendations of the Director on the operation of prior 
     user rights in selected countries in the industrialized 
     world. The report shall include the following:
       (A) A comparison between patent laws of the United States 
     and the laws of other industrialized countries, including the 
     European Union, Japan, Canada, and Australia.
       (B) An analysis of the effect of prior user rights on 
     innovation rates in the selected countries.
       (C) An analysis of the correlation, if any, between prior 
     user rights and start-up enterprises and the ability to 
     attract venture capital to start new companies.
       (D) An analysis of the effect of prior user rights, if any, 
     on small businesses, universities, and individual inventors.

[[Page S2711]]

       (E) An analysis of legal and constitutional issues, if any, 
     that arise from placing trade secret law in patent law.
       (2) Consultation with other agencies.--In preparing the 
     report required under paragraph (1), the Director shall 
     consult with the Secretary of State and the Attorney General.
       (c) Defense to Infringement Based on Earlier Inventor.--
     Section 273(b)(6) of title 35, United States Code, is amended 
     to read as follows:
       ``(6) Personal defense.--The defense under this section may 
     be asserted only by the person who performed or caused the 
     performance of the acts necessary to establish the defense as 
     well as any other entity that controls, is controlled by, or 
     is under common control with such person and, except for any 
     transfer to the patent owner, the right to assert the defense 
     shall not be licensed or assigned or transferred to another 
     person except as an ancillary and subordinate part of a good 
     faith assignment or transfer for other reasons of the entire 
     enterprise or line of business to which the defense relates. 
     Notwithstanding the preceding sentence, any person may, on 
     its own behalf, assert a defense based on the exhaustion of 
     rights provided under paragraph (3), including any necessary 
     elements thereof.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to any civil action commenced on or after the 
     date of enactment of this Act.

     SEC. 5. POST-GRANT PROCEDURES AND OTHER QUALITY ENHANCEMENTS.

       (a) Citation of Prior Art.--Section 301 of title 35, United 
     States Code, is amended to read as follows:

     ``Sec. 301. Citation of prior art

       ``(a) In General.--Any person at any time may cite to the 
     Office in writing--
       ``(1) prior art consisting of patents, printed 
     publications, or evidence that the claimed invention was in 
     public use or sale in the United States more than 1 year 
     prior to the date of the application for patent in the United 
     States, which that person believes to have a bearing on the 
     patentability of any claim of a particular patent; or
       ``(2) written statements of the patent owner filed in a 
     proceeding before a Federal court or the Patent and Trademark 
     Office in which the patent owner takes a position on the 
     scope of one or more patent claims.
       ``(b) Submissions Part of Official File.--If the person 
     citing prior art or written submissions under subsection (a) 
     explains in writing the pertinence and manner of applying the 
     prior art or written submission to at least one claim of the 
     patent, the citation of the prior art or documentary evidence 
     (as the case may be) and the explanation thereof shall become 
     a part of the official file of the patent.
       ``(c) Procedures for Written Statements.--
       ``(1) Submission of additional materials.--A party that 
     submits written statements under subsection (a)(2) in a 
     proceeding shall include any other documents, pleadings, or 
     evidence from the proceeding that address the patent owner's 
     statements or the claims addressed by the written statements.
       ``(2) Limitation on use of statements.--Written statements 
     submitted under subsection (a)(2) shall not be considered for 
     any purpose other than to determine the proper meaning of the 
     claims that are the subject of the request in a proceeding 
     ordered pursuant to section 304 or 313. Any such written 
     statements, and any materials submitted under paragraph (1), 
     that are subject to an applicable protective order shall be 
     redacted to exclude information subject to the order.
       ``(d) Identity Withheld.--Upon the written request of the 
     person making the citation under subsection (a), the person's 
     identity shall be excluded from the patent file and kept 
     confidential.''.
       (b) Request for Reexamination.--The first sentence of 
     section 302 of title 35, United States Code, is amended to 
     read as follows: ``Any person at any time may file a request 
     for reexamination by the Office of any claim on a patent on 
     the basis of any prior art or documentary evidence cited 
     under paragraph (1) or (3) of subsection (a) of section 301 
     of this title.''.
       (c) Reexamination.--Section 303(a) of title 35, United 
     States Code, is amended to read as follows:
       ``(a) Within three months following the filing of a request 
     for reexamination under section 302, the Director shall 
     determine whether a substantial new question of patentability 
     affecting any claim of the patent concerned is raised by the 
     request, with or without consideration of other patents or 
     printed publications. On the Director's own initiative, and 
     at any time, the Director may determine whether a substantial 
     new question of patentability is raised by patents, 
     publications, or other evidence discovered by the Director, 
     is cited under section 301, or is cited by any person other 
     than the owner of the patent under section 302 or section 
     311. The existence of a substantial new question of 
     patentability is not precluded by the fact that a patent, 
     printed publication, or other evidence was previously 
     considered by the Office.''.
       (d) Request for Inter Partes Reexamination.--Section 311(a) 
     of title 35, United States Code, is amended to read as 
     follows:
       ``(a) In General.--Any third-party requester at any time 
     may file a request for inter partes reexamination by the 
     Office of a patent on the basis of any prior art or 
     documentary evidence cited under paragraph (1) or (3) of 
     subsection (a) of section 301 of this title.''.
       (e) Conduct of Inter Partes Proceedings.--Section 314 of 
     title 35, United States Code, is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``conducted according to the procedures established for 
     initial examination under the provisions of sections 132 and 
     133'' and inserting ``heard by an administrative patent judge 
     in accordance with procedures which the Director shall 
     establish'';
       (2) in subsection (b), by striking paragraph (2) and 
     inserting the following:
       ``(2) The third-party requester shall have the opportunity 
     to file written comments on any action on the merits by the 
     Office in the inter partes reexamination proceeding, and on 
     any response that the patent owner files to such an action, 
     if those written comments are received by the Office within 
     60 days after the date of service on the third-party 
     requester of the Office action or patent owner response, as 
     the case may be.''; and
       (3) by adding at the end the following:
       ``(d) Oral Hearing.--At the request of a third party 
     requestor or the patent owner, the administrative patent 
     judge shall conduct an oral hearing, unless the judge finds 
     cause lacking for such hearing.''.
       (f) Estoppel.--Section 315(c) of title 35, United States 
     Code, is amended by striking ``or could have raised''.
       (g) Reexamination Prohibited After District Court 
     Decision.--Section 317(b) of title 35, United States Code, is 
     amended--
       (1) in the subsection heading, by striking ``Final 
     Decision'' and inserting ``District Court Decision''; and
       (2) by striking ``Once a final decision has been entered'' 
     and inserting ``Once the judgment of the district court has 
     been entered''.
       (h) Post-Grant Opposition Procedures.--
       (1) In general.--Part III of title 35, United States Code, 
     is amended by adding at the end the following new chapter:

               ``CHAPTER 32--POST-GRANT REVIEW PROCEDURES

``Sec.
``321. Petition for post-grant review.
``322. Timing and bases of petition.
``323. Requirements of petition.
``324. Prohibited filings.
``325. Submission of additional information; showing of sufficient 
              grounds.
``326. Conduct of post-grant review proceedings.
``327. Patent owner response.
``328. Proof and evidentiary standards.
``329. Amendment of the patent.
``330. Decision of the Board.
``331. Effect of decision.
``332. Settlement.
``333. Relationship to other pending proceedings.
``334. Effect of decisions rendered in civil action on post-grant 
              review proceedings.
``335. Effect of final decision on future proceedings.
``336. Appeal.

     ``Sec. 321. Petition for post-grant review

       ``Subject to sections 322, 324, 332, and 333, a person who 
     is not the patent owner may file with the Office a petition 
     for cancellation seeking to institute a post-grant review 
     proceeding to cancel as unpatentable any claim of a patent on 
     any ground that could be raised under paragraph (2) or (3) of 
     section 282(b) (relating to invalidity of the patent or any 
     claim). The Director shall establish, by regulation, fees to 
     be paid by the person requesting the proceeding, in such 
     amounts as the Director determines to be reasonable.

     ``Sec. 322. Timing and bases of petition

       ``A post-grant proceeding may be instituted under this 
     chapter pursuant to a cancellation petition filed under 
     section 321 only if--
       ``(1) the petition is filed not later than 12 months after 
     the issuance of the patent or a reissue patent, as the case 
     may be; or
       ``(2) the patent owner consents in writing to the 
     proceeding.

     ``Sec. 323. Requirements of petition

       ``A cancellation petition filed under section 321 may be 
     considered only if--
       ``(1) the petition is accompanied by payment of the fee 
     established by the Director under section 321;
       ``(2) the petition identifies the cancellation petitioner;
       ``(3) for each claim sought to be canceled, the petition 
     sets forth in writing the basis for cancellation and provides 
     the evidence in support thereof, including copies of patents 
     and printed publications, or written testimony of a witness 
     attested to under oath or declaration by the witness, or any 
     other information that the Director may require by 
     regulation; and
       ``(4) the petitioner provides copies of the petition, 
     including any evidence submitted with the petition and any 
     other information submitted under paragraph (3), to the 
     patent owner or, if applicable, the designated representative 
     of the patent owner.

     ``Sec. 324. Prohibited filings

       ``A post-grant review proceeding may not be instituted 
     under section 322 if the petition for cancellation requesting 
     the proceeding--
       ``(1) identifies the same cancellation petitioner and the 
     same patent as a previous petition for cancellation filed 
     under such section; or
       ``(2) is based on the best mode requirement contained in 
     section 112.

     ``Sec. 325. Submission of additional information; showing of 
       sufficient grounds

       ``(a) In General.--The cancellation petitioner shall file 
     such additional information

[[Page S2712]]

     with respect to the petition as the Director may require. For 
     each petition submitted under section 321, the Director shall 
     determine if the written statement, and any evidence 
     submitted with the request, establish that a substantial 
     question of patentability exists for at least one claim in 
     the patent. The Director may initiate a post-grant review 
     proceeding if the Director determines that the information 
     presented provides sufficient grounds to believe that there 
     is a substantial question of patentability concerning one or 
     more claims of the patent at issue.
       ``(b) Notification; Determinations Not Reviewable.--The 
     Director shall notify the patent owner and each petitioner in 
     writing of the Director's determination under subsection (a), 
     including a determination to deny the petition. The Director 
     shall make that determination in writing not later than 60 
     days after receiving the petition. Any determination made by 
     the Director under subsection (a), including whether or not 
     to institute a post-grant review proceeding or to deny the 
     petition, shall not be reviewable.

     ``Sec. 326. Conduct of post-grant review proceedings

       ``(a) In General.--The Director shall prescribe 
     regulations, in accordance with section 2(b)(2)--
       ``(1) establishing and governing post-grant review 
     proceedings under this chapter and their relationship to 
     other proceedings under this title;
       ``(2) establishing procedures for the submission of 
     supplemental information after the petition for cancellation 
     is filed; and
       ``(3) setting forth procedures for discovery of relevant 
     evidence, including that such discovery shall be limited to 
     evidence directly related to factual assertions advanced by 
     either party in the proceeding, and the procedures for 
     obtaining such evidence shall be consistent with the purpose 
     and nature of the proceeding.
     In carrying out paragraph (3), the Director shall bear in 
     mind that discovery must be in the interests of justice.
       ``(b) Post-Grant Regulations.--Regulations under subsection 
     (a)(1)--
       ``(1) shall require that the final determination in a post-
     grant proceeding issue not later than one year after the date 
     on which the post-grant review proceeding is instituted under 
     this chapter, except that, for good cause shown, the Director 
     may extend the 1-year period by not more than six months;
       ``(2) shall provide for discovery upon order of the 
     Director;
       ``(3) shall provide for publication of notice in the 
     Federal Register of the filing of a petition for post-grant 
     review under this chapter, for publication of the petition, 
     and documents, orders, and decisions relating to the 
     petition, on the website of the Patent and Trademark Office, 
     and for filings under seal exempt from publication 
     requirements;
       ``(4) shall prescribe sanctions for abuse of discovery, 
     abuse of process, or any other improper use of the 
     proceeding, such as to harass or to cause unnecessary delay 
     or unnecessary increase in the cost of the proceeding;
       ``(5) may provide for protective orders governing the 
     exchange and submission of confidential information; and
       ``(6) shall ensure that any information submitted by the 
     patent owner in support of any amendment entered under 
     section 329 is made available to the public as part of the 
     prosecution history of the patent.
       ``(c) Considerations.--In prescribing regulations under 
     this section, the Director shall consider the effect on the 
     economy, the integrity of the patent system, and the 
     efficient administration of the Office.
       ``(d) Conduct of Proceeding.--The Patent Trial and Appeal 
     Board shall, in accordance with section 6(b), conduct each 
     post-grant review proceeding authorized by the Director.

     ``Sec. 327. Patent owner response

       ``After a post-grant proceeding under this chapter has been 
     instituted with respect to a patent, the patent owner shall 
     have the right to file, within a time period set by the 
     Director, a response to the cancellation petition. The patent 
     owner shall file with the response, through affidavits or 
     declarations, any additional factual evidence and expert 
     opinions on which the patent owner relies in support of the 
     response.

     ``Sec. 328. Proof and evidentiary standards

       ``(a) In General.--The presumption of validity set forth in 
     section 282 shall not apply in a challenge to any patent 
     claim under this chapter.
       ``(b) Burden of Proof.--The party advancing a proposition 
     under this chapter shall have the burden of proving that 
     proposition by a preponderance of the evidence.

     ``Sec. 329. Amendment of the patent

       ``(a) In General.--In response to a challenge in a petition 
     for cancellation, the patent owner may file one motion to 
     amend the patent in one or more of the following ways:
       ``(1) Cancel any challenged patent claim.
       ``(2) For each challenged claim, propose a substitute 
     claim.
       ``(3) Amend the patent drawings or otherwise amend the 
     patent other than the claims.
       ``(b) Additional Motions.--Additional motions to amend may 
     be permitted only for good cause shown.
       ``(c) Scope of Claims.--An amendment under this section may 
     not enlarge the scope of the claims of the patent or 
     introduce new matter.

     ``Sec. 330. Decision of the Board

       ``If the post-grant review proceeding is instituted and not 
     dismissed under this chapter, the Patent Trial and Appeal 
     Board shall issue a final written decision addressing the 
     patentability of any patent claim challenged and any new 
     claim added under section 329.

     ``Sec. 331. Effect of decision

       ``(a) In General.--If the Patent Trial and Appeal Board 
     issues a final decision under section 330 and the time for 
     appeal has expired or any appeal proceeding has terminated, 
     the Director shall issue and publish a certificate canceling 
     any claim of the patent finally determined to be unpatentable 
     and incorporating in the patent by operation of the 
     certificate any new claim determined to be patentable.
       ``(b) New Claims.--Any new claim held to be patentable and 
     incorporated into a patent in a post-grant review proceeding 
     shall have the same effect as that specified in section 252 
     for reissued patents on the right of any person who made, 
     purchased, offered to sell, or used within the United States, 
     or imported into the United States, anything patented by such 
     new claim, or who made substantial preparations therefor, 
     before a certificate under subsection (a) of this section is 
     issued.

     ``Sec. 332. Settlement

       ``(a) In General.--A post-grant review proceeding shall be 
     terminated with respect to any petitioner upon the joint 
     request of the petitioner and the patent owner, unless the 
     Patent Trial and Appeal Board has issued a written decision 
     before the request for termination is filed. If the post-
     grant review proceeding is terminated with respect to a 
     petitioner under this paragraph, no estoppel shall apply to 
     that petitioner. If no petitioner remains in the proceeding, 
     the panel of administrative patent judges assigned to the 
     proceeding shall terminate the proceeding.
       ``(b) Agreement in Writing.--Any agreement or understanding 
     between the patent owner and a petitioner, including any 
     collateral agreements referred to in the agreement or 
     understanding, that is made in connection with or in 
     contemplation of the termination of a post-grant review 
     proceeding, must be in writing. A post-grant review 
     proceeding as between the parties to the agreement or 
     understanding may not be terminated until a copy of the 
     agreement or understanding, including any such collateral 
     agreements, has been filed in the Office. If any party filing 
     such an agreement or understanding requests, the agreement or 
     understanding shall be kept separate from the file of the 
     post-grant review proceeding, and shall be made available 
     only to Government agencies on written request, or to any 
     person on a showing of good cause.

     ``Sec. 333. Relationship to other proceedings

       ``(a) In General.--Notwithstanding subsection 135(a), 
     sections 251 and 252, and chapter 30, the Director may 
     determine the manner in which any reexamination proceeding, 
     reissue proceeding, interference proceeding (commenced with 
     respect to an application for patent filed before the 
     effective date provided in section 3(k) of the Patent Reform 
     Act of 2009), derivation proceeding, or post-grant review 
     proceeding, that is pending during a post-grant review 
     proceeding, may proceed, including providing for stay, 
     transfer, consolidation, or termination of any such 
     proceeding.
       ``(b) Stays.--The Director may stay a post-grant review 
     proceeding if a pending civil action for infringement of a 
     patent addresses the same or substantially the same questions 
     of patentability raised against the patent in a petition for 
     the post-grant review proceeding.
       ``(c) Effect of Commencement of Proceeding.--The 
     commencement of a post-grant review proceeding--
       ``(1) shall not limit in any way the right of the patent 
     owner to commence an action for infringement of the patent; 
     and
       ``(2) shall not be cited as evidence relating to the 
     validity of any claim of the patent in any proceeding before 
     a court or the International Trade Commission concerning the 
     patent.

     ``Sec. 334. Effect of decisions rendered in civil action on 
       post-grant review proceedings

       ``If a final decision is entered against a party in a civil 
     action arising in whole or in part under section 1338 of 
     title 28 establishing that the party has not sustained its 
     burden of proving the invalidity of any patent claim--
       ``(1) that party to the civil action and the privies of 
     that party may not thereafter request a post-grant review 
     proceeding on that patent claim on the basis of any grounds, 
     under the provisions of section 321, which that party or the 
     privies of that party raised or could have raised; and
       ``(2) the Director may not thereafter maintain a post-grant 
     review proceeding that was requested, before the final 
     decision was so entered, by that party or the privies of that 
     party on the basis of such grounds.

     ``Sec. 335. Effect of final decision on future proceedings

       ``If a final decision under section 330 is favorable to the 
     patentability of any original or new claim of the patent 
     challenged by the cancellation petitioner, the cancellation 
     petitioner may not thereafter, based on any ground that the 
     cancellation petitioner raised during the post-grant review 
     proceeding--
       ``(1) request or pursue a reexamination of such claim under 
     chapter 31;
       ``(2) request or pursue a derivation proceeding with 
     respect to such claim;

[[Page S2713]]

       ``(3) request or pursue a post-grant review proceeding 
     under this chapter with respect to such claim;
       ``(4) assert the invalidity of any such claim in any civil 
     action arising in whole or in part under section 1338 of 
     title 28; or
       ``(5) assert the invalidity of any such claim in defense to 
     an action brought under section 337 of the Tariff Act of 1930 
     (19 U.S.C. 1337).

     ``Sec. 336. Appeal

       ``A party dissatisfied with the final determination of the 
     Patent Trial and Appeal Board in a post-grant proceeding 
     under this chapter may appeal the determination under 
     sections 141 through 144. Any party to the post-grant 
     proceeding shall have the right to be a party to the 
     appeal.''.
       (i) Conforming Amendment.--The table of chapters for part 
     III of title 35, United States Code, is amended by adding at 
     the end the following:

``32. Post-Grant Review Proceedings..........................321''.....

       (j) Repeal.--Section 4607 of the Intellectual Property and 
     Communications Omnibus Reform Act of 1999, as enacted by 
     section 1000(a)(9) of Public Law 106-113, is repealed.
       (k) Effective Dates.--
       (1) In general.--The amendments and repeal made by this 
     section shall take effect at the end of the 1-year period 
     beginning on the date of the enactment of this Act.
       (2) Applicability to ex parte and inter partes 
     proceedings.--Notwithstanding any other provision of law, 
     sections 301 and 311 through 318 of title 35, United States 
     Code, as amended by this section, shall apply to any patent 
     that issues before, on, or after the effective date under 
     paragraph (1) from an original application filed on any date.
       (3) Applicability to post-grant proceedings.--The 
     amendments made by subsections (h) and (i) shall apply to 
     patents issued on or after the effective date under paragraph 
     (1).
       (l) Regulations.--The Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office (in this subsection referred to 
     as the ``Director'') shall, not later than the date that is 1 
     year after the date of the enactment of this Act, issue 
     regulations to carry out chapter 32 of title 35, United 
     States Code, as added by subsection (h) of this section.

     SEC. 6. DEFINITIONS; PATENT TRIAL AND APPEAL BOARD.

       (a) Definitions.--Section 100 of title 35, United States 
     Code, (as amended by section 2 of this Act) is further 
     amended--
       (1) in subsection (e), by striking ``or inter partes 
     reexamination under section 311''; and
       (2) by adding at the end the following:
       ``(k) The term `cancellation petitioner' means the real 
     party in interest requesting cancellation of any claim of a 
     patent under chapter 31 of this title and the privies of the 
     real party in interest.''.
       (b) Patent Trial and Appeal Board.--Section 6 of title 35, 
     United States Code, is amended to read as follows:

     ``Sec. 6. Patent Trial and Appeal Board

       ``(a) Establishment and Composition.--There shall be in the 
     Office a Patent Trial and Appeal Board. The Director, the 
     Deputy Director, the Commissioner for Patents, the 
     Commissioner for Trademarks, and the administrative patent 
     judges shall constitute the Patent Trial and Appeal Board. 
     The administrative patent judges shall be persons of 
     competent legal knowledge and scientific ability who are 
     appointed by the Secretary of Commerce. Any reference in any 
     Federal law, Executive order, rule, regulation, or delegation 
     of authority, or any document of or pertaining to the Board 
     of Patent Appeals and Interferences is deemed to refer to the 
     Patent Trial and Appeal Board.
       ``(b) Duties.--The Patent Trial and Appeal Board shall--
       ``(1) on written appeal of an applicant, review adverse 
     decisions of examiners upon application for patents;
       ``(2) on written appeal of a patent owner, review adverse 
     decisions of examiners upon patents in reexamination 
     proceedings under chapter 30;
       ``(3) conduct derivation proceedings under subsection 
     135(a); and
       ``(4) conduct post-grant opposition proceedings under 
     chapter 32.
     Each appeal and derivation proceeding shall be heard by at 
     least 3 members of the Patent Trial and Appeal Board, who 
     shall be designated by the Director. Only the Patent Trial 
     and Appeal Board may grant rehearings. The Director shall 
     assign each post-grant review proceeding to a panel of 3 
     administrative patent judges. Once assigned, each such panel 
     of administrative patent judges shall have the 
     responsibilities under chapter 32 in connection with post-
     grant review proceedings.''.

     SEC. 7. PREISSUANCE SUBMISSIONS BY THIRD PARTIES.

       Section 122 of title 35, United States Code, is amended by 
     adding at the end the following:
       ``(e) Preissuance Submissions by Third Parties.--
       ``(1) In general.--Any person may submit for consideration 
     and inclusion in the record of a patent application, any 
     patent, published patent application, or other publication of 
     potential relevance to the examination of the application, if 
     such submission is made in writing before the earlier of--
       ``(A) the date a notice of allowance under section 151 is 
     mailed in the application for patent; or
       ``(B) either--
       ``(i) 6 months after the date on which the application for 
     patent is published under section 122, or
       ``(ii) the date of the first rejection under section 132 of 
     any claim by the examiner during the examination of the 
     application for patent,
     whichever occurs later.
       ``(2) Other requirements.--Any submission under paragraph 
     (1) shall--
       ``(A) set forth a concise description of the asserted 
     relevance of each submitted document;
       ``(B) be accompanied by such fee as the Director may 
     prescribe; and
       ``(C) include a statement by the person making such 
     submission affirming that the submission was made in 
     compliance with this section.''.

     SEC. 8. VENUE AND JURISDICTION.

       (a) Venue for Patent Cases.--Section 1400 of title 28, 
     United States Code, is amended by striking subsection (b) and 
     inserting the following:
       ``(b) Notwithstanding section 1391 of this title, in any 
     civil action arising under any Act of Congress relating to 
     patents, a party shall not manufacture venue by assignment, 
     incorporation, or otherwise to invoke the venue of a specific 
     district court.
       ``(c) Notwithstanding section 1391 of this title, any civil 
     action for patent infringement or any action for declaratory 
     judgment may be brought only in a judicial district--
       ``(1) where the defendant has its principal place of 
     business or in the location or place in which the defendant 
     is incorporated or formed, or, for foreign corporations with 
     a United States subsidiary, where the defendant's primary 
     United States subsidiary has its principal place of business 
     or is incorporated or formed;
       ``(2) where the defendant has committed substantial acts of 
     infringement and has a regular and established physical 
     facility that the defendant controls and that constitutes a 
     substantial portion of the operations of the defendant;
       ``(3) where the primary plaintiff resides, if the primary 
     plaintiff in the action is--
       ``(A) an institution of higher education as defined under 
     section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1001(a)); or
       ``(B) a nonprofit organization that--
       ``(i) qualifies for treatment under section 501(c)(3) of 
     the Internal Revenue Code (26 U.S.C. 501(c)(3));
       ``(ii) is exempt from taxation under section 501(a) of such 
     Code; and
       ``(iii) serves as the patent and licensing organization for 
     an institution of higher education as defined under section 
     101(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1001(a)); or
       ``(4) where the plaintiff resides, if the sole plaintiff in 
     the action is an individual inventor who is a natural person 
     and who qualifies at the time such action is filed as a 
     micro-entity pursuant to section 123 of title 35.
       ``(d) If a plaintiff brings a civil action for patent 
     infringement or declaratory judgment relief under subsection 
     (c), then the defendant may request the district court to 
     transfer that action to another district or division where, 
     in the court's determination--
       ``(1) any of the parties has substantial evidence or 
     witnesses that otherwise would present considerable 
     evidentiary burdens to the defendant if such transfer were 
     not granted;
       ``(2) such transfer would not cause undue hardship to the 
     plaintiff; and
       ``(3) venue would be otherwise appropriate under section 
     1391 of this title.''.
       (b) Interlocutory Appeals.--Subsection (c)(2) of section 
     1292 of title 28, United States Code, is amended by adding at 
     the end the following:
       ``(3) of an appeal from an interlocutory order or decree 
     determining construction of claims in a civil action for 
     patent infringement under section 271 of title 35.
     Application for an appeal under paragraph (3) shall be made 
     to the court within 10 days after entry of the order or 
     decree. The district court shall have discretion whether to 
     approve the application and, if so, whether to stay 
     proceedings in the district court during the pendency of such 
     appeal.''.
       (c) Technical Amendments Relating to Venue.--Sections 32, 
     145, 146, 154(b)(4)(A), and 293 of title 35, United States 
     Code, and section 21(b)(4) of the Act entitled ``An Act to 
     provide for the registration and protection of trademarks 
     used in commerce, to carry out the provisions of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946 (commonly referred to as the ``Trademark Act of 
     1946'' or the ``Lanham Act''; 15 U.S.C. 1071(b)(4)), are each 
     amended by striking ``United States District Court for the 
     District of Columbia'' each place that term appears and 
     inserting ``United States District Court for the Eastern 
     District of Virginia''.

     SEC. 9. PATENT AND TRADEMARK OFFICE REGULATORY AUTHORITY.

       (a) Fee Setting.--
       (1) In general.--The Director shall have authority to set 
     or adjust by rule any fee established or charged by the 
     Office under sections 41 and 376 of title 35, United States 
     Code or under section 31 of the Trademark Act of 1946 (15 
     U.S.C. 1113) for the filing or processing of any submission 
     to, and for all other services performed by or materials 
     furnished by, the Office, provided that such fee amounts are 
     set to reasonably compensate the Office for the services 
     performed.
       (2) Reduction of fees in certain fiscal years.--In any 
     fiscal year, the Director--

[[Page S2714]]

       (A) shall consult with the Patent Public Advisory Committee 
     and the Trademark Public Advisory Committee on the 
     advisability of reducing any fees described in paragraph (1); 
     and
       (B) after that consultation may reduce such fees.
       (3) Role of the public advisory committee.--The Director 
     shall--
       (A) submit to the Patent or Trademark Public Advisory 
     Committee, or both, as appropriate, any proposed fee under 
     paragraph (1) not less than 45 days before publishing any 
     proposed fee in the Federal Register;
       (B) provide the relevant advisory committee described in 
     subparagraph (A) a 30-day period following the submission of 
     any proposed fee, on which to deliberate, consider, and 
     comment on such proposal, and require that--
       (i) during such 30-day period, the relevant advisory 
     committee hold a public hearing related to such proposal; and
       (ii) the Director shall assist the relevant advisory 
     committee in carrying out such public hearing, including by 
     offering the use of Office resources to notify and promote 
     the hearing to the public and interested stakeholders;
       (C) require the relevant advisory committee to make 
     available to the public a written report detailing the 
     comments, advice, and recommendations of the committee 
     regarding any proposed fee;
       (D) consider and analyze any comments, advice, or 
     recommendations received from the relevant advisory committee 
     before setting or adjusting any fee; and
       (E) notify, through the Chair and Ranking Member of the 
     Senate and House Judiciary Committees, the Congress of any 
     final decision regarding proposed fees.
       (4) Publication in the federal register.--
       (A) In general.--Any rules prescribed under this subsection 
     shall be published in the Federal Register.
       (B) Rationale.--Any proposal for a change in fees under 
     this section shall--
       (i) be published in the Federal Register; and
       (ii) include, in such publication, the specific rationale 
     and purpose for the proposal, including the possible 
     expectations or benefits resulting from the proposed change.
       (C) Public comment period.--Following the publication of 
     any proposed fee in the Federal Register pursuant to 
     subparagraph (A), the Director shall seek public comment for 
     a period of not less than 45 days.
       (5) Congressional comment period.--Following the 
     notification described in paragraph (3)(E), Congress shall 
     have not more than 45 days to consider and comment on any 
     proposed fee under paragraph (1). No proposed fee shall be 
     effective prior to the end of such 45-day comment period.
       (6) Rule of construction.--No rules prescribed under this 
     subsection may diminish--
       (A) an applicant's rights under this title or the Trademark 
     Act of 1946; or
       (B) any rights under a ratified treaty.
       (b) Fees for Patent Services.--Division B of Public Law 
     108-447 is amended in title VIII of the Departments of 
     Commerce, Justice and State, the Judiciary, and Related 
     Agencies Appropriations Act, 2005, in section 801(a) by 
     striking ``During fiscal years 2005, 2006 and 2007'', and 
     inserting ``Until such time as the Director sets or adjusts 
     the fees otherwise,''.
       (c) Adjustment of Trademark Fees.--Division B of Public Law 
     108-447 is amended in title VIII of the Departments of 
     Commerce, Justice and State, the Judiciary and Related 
     Agencies Appropriations Act, 2005, in section 802(a) by 
     striking ``During fiscal years 2005, 2006 and 2007'', and 
     inserting ``Until such time as the Director sets or adjusts 
     the fees otherwise,''.
       (d) Effective Date, Applicability, and Transitional 
     Provision.--Division B of Public Law 108-447 is amended in 
     title VIII of the Departments of Commerce, Justice and State, 
     the Judiciary and Related Agencies Appropriations Act, 2005, 
     in section 803(a) by striking ``and shall apply only with 
     respect to the remaining portion of fiscal year 2005, 2006 
     and 2007.''.
       (e) Rule of Construction.--Nothing in this section shall be 
     construed to affect any other provision of Division B of 
     Public Law 108-447, including section 801(c) of title VII of 
     the Departments of Commerce, Justice and State, the Judiciary 
     and Related Agencies Appropriations Act, 2005.
       (f) Definitions.--In this section:
       (1) Director.--The term ``Director'' means the Director of 
     the United States Patent and Trademark Office.
       (2) Office.--The term ``Office'' means the United States 
     Patent and Trademark Office.
       (3) Trademark act of 1946.--The term ``Trademark Act of 
     1946'' means an Act entitled ``Act to provide for the 
     registration and protection of trademarks used in commerce, 
     to carry out the provisions of certain international 
     conventions, and for other purposes'', approved July 5, 1946 
     (15 U.S.C. 1051 et seq.) (commonly referred to as the 
     Trademark Act of 1946 or the Lanham Act).

     SEC. 10. RESIDENCY OF FEDERAL CIRCUIT JUDGES.

       (a) Residency.--The second sentence of section 44(c) of 
     title 28, United States Code, is repealed.
       (b) Facilities.--Section 44 of title 28, United States 
     Code, is amended by adding at the end the following:
       ``(e)(1) The Director of the Administrative Office of the 
     United States Courts shall provide--
       ``(A) a judge of the Federal judicial circuit who lives 
     within 50 miles of the District of Columbia with appropriate 
     facilities and administrative support services in the 
     District of the District of Columbia; and
       ``(B) a judge of the Federal judicial circuit who does not 
     live within 50 miles of the District of Columbia with 
     appropriate facilities and administrative support services--
       ``(i) in the district and division in which that judge 
     resides; or
       ``(ii) if appropriate facilities are not available in the 
     district and division in which that judge resides, in the 
     district and division closest to the residence of that judge 
     in which such facilities are available, as determined by the 
     Director.
       ``(2) Nothing in this subsection may be construed to 
     authorize or require the construction of new facilities.''.

     SEC. 11. MICRO-ENTITY DEFINED.

       Chapter 11 of title 35, United States Code, is amended by 
     adding at the end the following new section:

     ``Sec. 123. Micro-entity defined

       ``(a) In General.--For purposes of this title, the term 
     `micro-entity' means an applicant who makes a certification 
     under either subsections (b) or (c).
       ``(b) Unassigned Application.--For an unassigned 
     application, each applicant shall certify that the 
     applicant--
       ``(1) qualifies as a small entity, as defined in 
     regulations issued by the Director;
       ``(2) has not been named on 5 or more previously filed 
     patent applications;
       ``(3) has not assigned, granted, or conveyed, and is not 
     under an obligation by contract or law to assign, grant, or 
     convey, a license or any other ownership interest in the 
     particular application; and
       ``(4) does not have a gross income, as defined in section 
     61(a) of the Internal Revenue Code (26 U.S.C. 61(a)), 
     exceeding 2.5 times the average gross income, as reported by 
     the Department of Labor, in the calendar year immediately 
     preceding the calendar year in which the examination fee is 
     being paid.
       ``(c) Assigned Application.--For an assigned application, 
     each applicant shall certify that the applicant--
       ``(1) qualifies as a small entity, as defined in 
     regulations issued by the Director, and meets the 
     requirements of subsection (b)(4);
       ``(2) has not been named on 5 or more previously filed 
     patent applications; and
       ``(3) has assigned, granted, conveyed, or is under an 
     obligation by contract or law to assign, grant, or convey, a 
     license or other ownership interest in the particular 
     application to an entity that has 5 or fewer employees and 
     that such entity has a gross income, as defined in section 
     61(a) of the Internal Revenue Code (26 U.S.C. 61(a)), that 
     does not exceed 2.5 times the average gross income, as 
     reported by the Department of Labor, in the calendar year 
     immediately preceding the calendar year in which the 
     examination fee is being paid.
       ``(d) Income Level Adjustment.--The gross income levels 
     established under subsections (b) and (c) shall be adjusted 
     by the Director on October 1, 2009, and every year 
     thereafter, to reflect any fluctuations occurring during the 
     previous 12 months in the Consumer Price Index, as determined 
     by the Secretary of Labor.''.

     SEC. 12. TECHNICAL AMENDMENTS.

       (a) Joint Inventions.--Section 116 of title 35, United 
     States Code, is amended--
       (1) in the first paragraph, by striking ``When'' and 
     inserting ``(a) Joint Inventions.--When'';
       (2) in the second paragraph, by striking ``If a joint 
     inventor'' and inserting ``(b) Omitted Inventor.--If a joint 
     inventor''; and
       (3) in the third paragraph, by striking ``Whenever'' and 
     inserting ``(c) Correction of Errors in Application.--
     Whenever''.
       (b) Filing of Application in Foreign Country.--Section 184 
     of title 35, United States Code, is amended--
       (1) in the first paragraph, by striking ``Except when'' and 
     inserting ``(a) Filing in Foreign Country.--Except when'';
       (2) in the second paragraph, by striking ``The term'' and 
     inserting ``(b) Application.--The term''; and
       (3) in the third paragraph, by striking ``The scope'' and 
     inserting ``(c) Subsequent Modifications, Amendments, and 
     Supplements.--The scope''.
       (c) Reissue of Defective Patents.--Section 251 of title 35, 
     United States Code, is amended--
       (1) in the first paragraph, by striking ``Whenever'' and 
     inserting ``(a) In General.--Whenever'';
       (2) in the second paragraph, by striking ``The Director'' 
     and inserting ``(b) Multiple Reissued Patents.--The 
     Director'';
       (3) in the third paragraph, by striking ``The provision'' 
     and inserting ``(c) Applicability of This Title.--The 
     provisions''; and
       (4) in the last paragraph, by striking ``No reissued 
     patent'' and inserting ``(d) Reissue Patent Enlarging Scope 
     of Claims.--No reissued patent''.
       (d) Effect of Reissue.--Section 253 of title 35, United 
     States Code, is amended--
       (1) in the first paragraph, by striking ``Whenever'' and 
     inserting ``(a) In General.--Whenever''; and
       (2) in the second paragraph, by striking ``in like manner'' 
     and inserting ``(b) Additional Disclaimer or Dedication.--In 
     the manner set forth in subsection (a),''.
       (e) Correction of Named Inventor.--Section 256 of title 35, 
     United States Code, is amended--

[[Page S2715]]

       (1) in the first paragraph, by striking ``Whenever'' and 
     inserting ``(a) Correction.--Whenever''; and
       (2) in the second paragraph, by striking ``The error'' and 
     inserting ``(b) Patent Valid if Error Corrected.--The 
     error''.
       (f) Presumption of Validity.--Section 282 of title 35, 
     United States Code, is amended--
       (1) in the first undesignated paragraph, by striking ``A 
     patent'' and inserting ``(a) In General.--A patent'';
       (2) in the second undesignated paragraph, by striking ``The 
     following'' and inserting ``(b) Defenses.--The following''; 
     and
       (3) in the third undesignated paragraph, by striking ``In 
     actions'' and inserting ``(c) Notice of Actions; Actions 
     During Extension of Patent Term.--In actions''.

     SEC. 13. EFFECTIVE DATE; RULE OF CONSTRUCTION.

       (a) Effective Date.--Except as otherwise provided in this 
     Act, the provisions of this Act shall take effect 12 months 
     after the date of the enactment of this Act and shall apply 
     to any patent issued on or after that effective date.
       (b) Continuity of Intent Under the Create Act.--The 
     enactment of section 102(b)(3) of title 35, United States 
     Code, under section (2)(b) of this Act is done with the same 
     intent to promote joint research activities that was 
     expressed, including in the legislative history, through the 
     enactment of the Cooperative Research and Technology 
     Enhancement Act of 2004 (Public Law 108-453; the ``CREATE 
     Act''), the amendments of which are stricken by section 2(c) 
     of this Act. The United States Patent and Trademark Office 
     shall administer section 102(b)(3) of title 35, United States 
     Code, in a manner consistent with the legislative history of 
     the CREATE Act that was relevant to its administration by the 
     United States Patent and Trademark Office.

     SEC. 14. SEVERABILITY.

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

  Mr. HATCH. Mr. President, I rise to introduce with Senate Judiciary 
Committee chairman Patrick Leahy the Patent Reform Act of 2009, S. 515. 
I consider introduction of this bill to be a milestone in the progress 
we have made so far in the effort to reform our patent system--a system 
that has not been updated significantly since 1952. There is no doubt 
we have come a long way in our pursuit to accomplish comprehensive 
patent law reform. Reform is so vitally necessary to keep our nation 
competitive in our technologically advanced global economy, especially 
during these difficult economic times.
  I have always believed that passing patent reform legislation would 
be a multi-Congress endeavor. The Hatch-Leahy patent bill, S. 3818, 
formally started the legislative process in 2006. We continued the 
momentum in the 110th Congress by introducing S. 1145, the Patent 
Reform Act of 2007. In June 2007, my colleagues and I on the Senate 
Judiciary Committee approved S. 1145 by a vote of 13-5. While I would 
have liked to see S. 1145 pass the full Senate, I believe the process 
already provided makes passage of the Patent Reform Act of 2009 even 
more likely this Congress.
  S. 515 represents a bipartisan and bicameral commitment to streamline 
our nation's patent system that will improve patent quality and limit 
unnecessary and counterproductive litigation costs.
  House Judiciary chairman John Conyers and ranking minority member 
Lamar Smith are true partners in this important legislation. For those 
who might say nothing has changed, I can attest that it has. Just look 
at the bill. We have listened to many of the concerns raised by 
stakeholders and have changed the legislative text accordingly.
  Let me highlight some of the significant changes we have made to the 
bill.
  For example, S. 515 does not contain an applicant quality submissions 
provision due to near uniform opposition we heard from the patent 
community about the burdens this would place on applicants.
  Additionally, the Patent Reform Act of 2007 would have eliminated the 
current opt-out provision for publication of patent applications. 
Current law permits applicants to request upon filing that their 
application not be published at 18 months if a certification is made 
that the invention disclosed in the application has not and will not be 
the subject of an application filed in another country. Because of 
serious concerns raised by independent inventors and small entities, we 
have removed this provision from S. 515.
  Patents may be challenged either in court or at the U.S. Patent and 
Trademark Office, USPTO. The current administrative review process at 
the USPTO is widely viewed as ineffective and inefficient. Accordingly, 
last year's bills proposed a process more like a court proceeding than 
the current re-examination process. Both bills had a 1-year window for 
challenges during which patents would not be presumed valid, and a 
patent could be invalidated by a ``preponderance of evidence'' against 
it. However, the Senate bill, S. 1145, added a second window during the 
life of the patent where only ``clear and convincing'' evidence could 
invalidate the patent. Most in the patent community prefer the post-
grant review language as passed in the House because, instead of 
creating a ``second window,'' it improved upon the existing inter-
partes reexamination. As such, S. 515 adopts the House approach to 
expanding interpartes, but includes ``public use or sale in the United 
States'' as a basis for challenging a patent. Further, our bill ensures 
that ex parte reexamination proceedings are maintained, which is an 
important tool for challenging patents that should not have issued.
  With patent litigation costs escalating, the threat of enhanced 
damages can be quite substantial. For this reason, the Senate and House 
bills introduced in the 110th Congress narrowed the circumstances under 
which treble damages could be awarded for willful infringement of a 
patent. After introduction of the Patent Reform Act of 2007, the 
Federal Circuit issued an in banc decision, In re Seagate, which 
instituted an objective recklessness standard to prove willfulness. 
After considerable discussion with stakeholders in the patent 
community, we believe the Seagate decision is a positive improvement to 
the law and, therefore, have sought to incorporate correlating language 
into S. 515.
  There are other changes we made to the Patent Reform Act of 2009, but 
I want to focus my remaining remarks on two key issues: how damages are 
awarded in infringement lawsuits and inequitable conduct reform.
  I am aware of the concerns that some have raised about the damages 
provision contained in S. 1145. I have heard from some who are 
concerned that courts have allowed damages for infringement to be based 
on the market for an entire product, when all that was infringed is a 
minor component of the product. I have also heard from some who argue 
that the current language will severely limit the amount of damages an 
infringer has to pay, thereby encouraging infringing behavior.
  The sponsors of the Patent Reform Act of 2009 all agree that we need 
to improve the damages provision. In crafting a fair damages provision, 
we can rely upon well-reasoned and persuasive case law, scholarship, 
and other texts. I am confident that we will achieve consensus language 
in this area, but make no mistake: it will take willing partners to 
craft a compromise that will not have deleterious affects on any one 
sector of our economy.
  For years I have been arguing if we are serious about enacting 
comprehensive patent law reform then we must take steps to ensure that 
the inequitable conduct doctrine is applied in a manner consistent with 
its original purpose: to sanction true misconduct and to do so in a 
proportional and fair manner. Inequitable conduct reform is core to 
this bill, as it dictates how patents are prosecuted years before 
litigation. The inequitable conduct defense is frequently pled, rarely 
proven, and always drives up the cost of litigation tremendously.
  Under current law, any perceived transgression of the patent owner is 
being painted as ``fraud.'' If an inequitable conduct claim wins, a 
valid patent will be held entirely void, and the infringer walks away 
without any liability. There is virtually no downside for the infringer 
to raise this type of attack. This is why inequitable conduct 
challenges are raised in nearly every patent case. It has become, in 
the words of the Federal Circuit, a ``plague'' on the patent system.
  The development of a more objective and clearer inequitable conduct 
standard will remove the uncertainty and confusion that defines current 
patent litigation. We cannot settle for mere

[[Page S2716]]

codification of current practices. Chairman Leahy and Chairman Conyers 
both know of my strong interest in this area and have agreed to 
incorporate changes to the law. There is no doubt that inequitable 
conduct reform has the potential to single-handedly revolutionize the 
manner in which patent applications are prosecuted. Arguably, reform in 
this area will have the most favorable impact on patent quality and the 
ability for the USPTO to reduce its pendency--thereby fostering a 
strong and vibrant environment for all innovation and entrepreneurship.
  Now more than ever, our industries need reassurance and 
predictability in order to move forward in these challenging times. I 
believe the Patent Reform Act of 2009 has the potential to complement 
all of the stimulatory efforts currently under way. Now is the time to 
act.
                                 ______
                                 
      By Mr. DODD:
  S. 517. A bill for the relief of Alejandro Gomez and Juan Sebastian 
Gomez; to the Committee on the Judiciary.
  Mr. DODD. Mr. President, today I send to the desk a private relief 
bill to provide permanent resident status to Juan and Alejandro Gomez, 
and ask that it be appropriately referred.
  Juan, 20, and Alejandro, 21, are natives of Colombia who came to the 
U.S. with their parents in August 1990 on B-2 visitors visas and reside 
in Miami, FL. Their parents were deported on October 30, 2007. Their 
initial departure date was September 14, 2007, but because of 
legislation introduced last Congress that date was extended. However, 
now they have been ordered to report for deportation on March 15, 2009. 
Juan and Alejandro have lived continuously in the U.S. for the last 18 
years. They have both graduated from Miami Killian High School. Juan is 
a student at Georgetown University in Washington, D.C. Alejandro is a 
student at Miami Dade Community College and works at the Biltmore Hotel 
in Miami. They have the strong support of their community. It would be 
an extreme hardship to uproot Juan and Alejandro from their community, 
which has wholeheartedly embraced them, to send them back to Colombia 
where there lives could be in serious danger.
  We all know that the circumstances of Juan and Alejandro are not 
unique. Just like many other children here illegally, they had no 
control over their parents' decision to overstay their visas a number 
of years ago. Most of these young people work hard to complete school 
and contribute to their communities. Cases like Juan's and Alejandro's 
are the reason why the so called DREAM Act was attached to the 
comprehensive immigration reform legislation that the Senate attempted 
to pass last Congress, only to face a filibuster from opponents of any 
comprehensive immigration reform proposal.
  The DREAM Act has broad partisan support and is not the reason that 
the immigration bill stalled in the Senate. I would hope that 
consideration could be given to delinking the DREAM Act from the larger 
bill so that we can put in place a legal framework for dealing with 
young people similar in circumstances to Juan and Alejandro who are 
caught in this unfortunate immigration status. But that is not likely 
to happen soon enough to address the problems confronting Juan and 
Alejandro.
  That is why I have decided to reintroduce a private bill on their 
behalf. I will also be writing to Senator Charles Schumer, Chairman of 
the Subcommittee on Immigration to request, pursuant to the 
Subcommittee's Rules of Procedure, that the Subcommittee formally 
request an expedited departmental report from the Bureau of Citizenship 
and Immigration Services regarding the Gomez brothers so that the 
Subcommittee can then move forward to give consideration to this bill 
as soon as possible.
  I have had the opportunity to meet Juan and Alejandro. They believe 
that America is their home. They love our country and want to have an 
opportunity to fulfill their dreams of becoming full participants in 
this country. Passage of the private bill would give them that 
opportunity. I look forward to working with the Subcommittee to 
facilitate its passage.
                                 ______
                                 
      By Mr. DURBIN:
  S. 520. A bill to designate the United States Courthouse under 
construction at 327 South Church Street, Rockford, Illinois, as the 
``Stanley J. Roszkowski United States Courthouse''; considered and 
passed.
  Mr. DURBIN. 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. 520

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

     SECTION 1. STANLEY J. ROSZKOWSKI UNITED STATES COURTHOUSE.

       (a) Designation.--The United States courthouse under 
     construction, as of the date of enactment of this Act, at 327 
     South Church Street, Rockford, Illinois, shall be known and 
     designated as the ``Stanley J. Roszkowski United States 
     Courthouse''.
       (b) References.--Any reference in a law, map, regulation, 
     document, paper, or other record of the United States to the 
     United States courthouse referred to in subsection (a) shall 
     be deemed to be a reference to the ``Stanley J. Roszkowski 
     United States Courthouse''.

                          ____________________