Congressional Record, Volume 158 Issue 104 (Thursday, July 12, 2012)

[Congressional Record Volume 158, Number 104 (Thursday, July 12, 2012)]
[Senate]
[Pages S4952-S4960]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. ROCKEFELLER:
S. 3378. A bill to establish scientific standards and protocols
across forensic disciplines, and for other purposes; to the Committee
on Commerce, Science, and Transportation.
Mr. ROCKEFELLER. Mr. President, the criminal justice system relies on
forensic science to identify and prosecute criminals and exonerate the
falsely accused. But in a pathbreaking 2009 report to Congress, the
National Academy of Sciences found that the interpretation of forensic
evidence is severely compromised by the lack of supporting science and
standards. They concluded, ``The bottom line is simple: In a number of
forensic science disciplines, forensic science professionals have yet
to establish either the validity of their approach or the accuracy of
their conclusions, and the courts have been utterly ineffective in
addressing this problem.''
In a series of recent articles, the Washington Post reported on
flawed forensic work that may be responsible for the wrongful
convictions in thousands of criminal cases. An April Post editorial
urged the Justice Department to conduct a full review of all cases that
ended in conviction, and a July 11 story reports that the Justice
Department and the FBI have now launched such a review. The National
Academy of Sciences, the Washington Post, the Innocence Project, and
the National Association of Criminal Defense Lawyers, among others,
have all called for strengthened forensic science and standards.
The Forensic Science and Standards Act of 2012 responds to this call
by promoting research. The bill would establish a National Forensic
Science Coordinating Office, housed at the National Science Foundation,
NSF, to develop a research strategy and roadmap and to support the
implementation of that roadmap across relevant Federal agencies.
NSF would establish a forensic science grant program to award funding
in areas specifically identified by the research strategy. NSF would be
directed to award two grants to create forensic science research
centers to conduct research, build relationships with forensic
practitioners, and educate students. All agencies with equities in
forensic science would be encouraged to use prizes and challenges to
stimulate innovative and creative solutions to satisfy the research
needs and priorities identified in the research strategy.
The bill requires standard development. The National Institute of
Standards and Technology, NIST, would be directed to develop forensic
science standards, in consultation with standards development
organizations and other stakeholders. NIST could establish and solicit
advice from discipline-specific expert working groups to identify
standards development priorities and opportunities.
The bill requires implementing uniform standards. To advise on the
application of the new standards, a Forensic Science Advisory Committee
chaired by the Director of NIST and the Attorney General would be
established. The Advisory Committee, composed of research scientists,
forensic science practitioners, and users from the legal and law
enforcement communities, would make recommendations to the Attorney
General on adoption of standards. The Attorney General would direct the
standards' implementation in Federal forensic science laboratories and
would encourage adoption in non-Federal laboratories as a condition of
Federal funding or for inclusion in national databases.
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. 3378

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 ``Forensic
Science and Standards Act of 2012''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. National forensic science research program.
Sec. 5. Forensic science research grants program.
Sec. 6. Forensic science research challenges.
Sec. 7. Forensic science standards.
Sec. 8. Forensic science advisory committee.
Sec. 9. Adoption, accreditation, and certification.
Sec. 10. National Institute of Standards and Technology functions.

SEC. 2. FINDINGS.

Congress finds that--
(1) at the direction of Congress, the National Academy of
Sciences led a comprehensive review of the state of forensic
science and issued its findings in a 2009 report,
``Strengthening Forensic Science in the United States: A Path
Forward'';
(2) the report's findings indicate the need for independent
scientific research to support the foundation of forensic
disciplines;
(3) the report stresses the need for standards in methods,
data interpretation, and reporting, and the importance of
preventing cognitive bias and mitigating human factors; and
(4) according to the report, forensic science research is
not financially well supported, and there is a need for a
unified strategy for developing a forensic science research
plan across Federal agencies.

SEC. 3. DEFINITIONS.

In this Act:
(1) Advisory committee.--The term ``Advisory Committee''
means the Forensic Science Advisory Committee established
under section 8.
(2) Coordinating office.--The term ``Coordinating Office''
means the National Forensic Science Coordinating Office
established under section 4.
(3) Forensic science.--
(A) In general.--The term ``forensic science'' means the
basic and applied scientific research applicable to the
collection, evaluation, and analysis of physical evidence,
including digital evidence, for use in investigations and
legal proceedings, including all tests, methods,
measurements, and procedures.
(B) Applied scientific research.--In subparagraph (A), the
term ``applied scientific research'' means a systematic study
to gain knowledge or understanding necessary to determine the
means by which a recognized and specific need may be met.
(C) Basic scientific research.--In subparagraph (A), the
term ``basic scientific research'' means a systematic study
directed toward fuller knowledge or understanding of the
fundamental aspects of phenomena and of observable facts
without specific applications towards processes or products.
(4) Standards development organization.--The term
``standards development organization'' means a domestic or an
international organization that plans, develops, establishes,
or coordinates voluntary consensus standards using procedures
that incorporate openness, a balance of interests, consensus,
due process, and an appeals process.

SEC. 4. NATIONAL FORENSIC SCIENCE RESEARCH PROGRAM.

(a) Establishment.--There shall be a national forensic
science research program to improve, expand, and coordinate
Federal research in the forensic sciences.
(b) National Academy of Sciences Report on Forensic
Science.--The Director of the National Science Foundation
shall contract

[[Page S4953]]

with the National Academy of Sciences to develop, not later
than 180 days after the date of enactment of this Act, a
report that--
(1) identifies the most critical forensic science
disciplines, which may include forensic pathology and digital
forensics, that require further research to strengthen the
scientific foundation in those disciplines; and
(2) makes recommendations regarding research that will help
strengthen the scientific foundation in the forensic science
disciplines identified under paragraph (1).
(c) National Forensic Science Coordinating Office.--
(1) Establishment.--There is established a National
Forensic Science Coordinating Office, with a director and
full time staff, to be located at the National Science
Foundation. The Director of the Coordinating Office shall be
responsible for carrying out the provisions of this
subsection.
(2) Unified federal research strategy.--The Coordinating
Office established under paragraph (1) shall coordinate among
relevant Federal departments, agencies, or offices--
(A) the development of a unified Federal research strategy
that--
(i) specifies and prioritizes the research necessary to
enhance the validity and reliability of the forensic science
disciplines; and
(ii) is consistent with the recommendations in the National
Academy of Sciences report on forensic science under
subsection (b);
(B) the development of a 5-year roadmap, updated
triennially thereafter, for the unified Federal research
strategy under subparagraph (A) that includes a description
of--
(i) which department, agency, or office will carry out each
specific element of the unified Federal research strategy;
(ii) short-term and long-term priorities and objectives;
and
(iii) common metrics and other evaluation criteria that
will be used to assess progress toward achieving the
priorities and objectives under clause (ii); and
(C) any necessary programs, policies, and budgets to
support the implementation of the roadmap under subparagraph
(B).
(3) Additional duties.--The Coordinating Office shall--
(A) evaluate annually the national forensic science
research program to determine whether it is achieving its
objectives; and
(B) report annually to Congress the findings under
subparagraph (A).
(4) Deadlines.--The Coordinating Office shall submit to
Congress--
(A) not later than 1 year after the date of enactment of
this Act, the unified Federal research strategy under
paragraph (2)(A);
(B) not later than 1 year after the date of enactment of
this Act, the initial 5-year roadmap under paragraph (2)(B);
and
(C) not later than 1 month after the date it is updated,
each updated 5-year roadmap under paragraph (2)(B).

SEC. 5. FORENSIC SCIENCE RESEARCH GRANTS PROGRAM.

(a) Establishment.--Not later than 1 year after the date of
enactment of this Act, the National Science Foundation shall
establish a forensic science research grants program to
improve the foundation and practice of forensic science in
the United States based on the recommendations in the unified
Federal research strategy under section 4.
(b) Merit Review.--Each grant under this section shall be
awarded on a merit-reviewed, competitive basis.
(c) Publication.--The National Science Foundation shall
support, as appropriate, the publication of research results
under this section in scholarly, peer-reviewed scientific
journals.
(d) Forensic Science Research Centers.--
(1) In general.--As part of the forensic science research
grants program under subsection (a), the Director of the
National Science Foundation shall establish 2 forensic
science research centers--
(A) to conduct research consistent with the unified Federal
research strategy under section 4;
(B) to build relationships between forensic science
practitioners and members of the research community;
(C) to encourage and promote the education and training of
a diverse group of people to be leaders in the
interdisciplinary field of forensic science; and
(D) to broadly disseminate the results of the research
under subparagraph (A).
(2) Terms of designation.--
(A) In general.--The Director shall designate each forensic
science research center for a 4-year term.
(B) Revocation.--The Director may revoke a designation
under subparagraph (A) if the Director determines that the
forensic science research center is not demonstrating
adequate performance.
(C) Amount of award.--Subject to subsection (f), the
Director shall award a grant up to $10,000,000 to each
forensic science research center. A grant awarded under this
subparagraph shall be for a period of 4 years.
(D) Limitation on use of funds.--No funds authorized under
this section may be used to construct or renovate a building
or structure.
(3) Reports.--Each forensic science research center shall
submit an annual report to the Director, at such time and in
such manner as the Director may require, that contains a
description of the activities the center carried out with the
funds received under this subsection, including a description
of how those activities satisfy the requirement under
paragraph (2)(D).
(e) Evaluation.--
(1) In general.--The Director of the National Science
Foundation shall conduct a comprehensive evaluation of the
forensic science research grants program every 4 years--
(A) to determine whether the program is achieving the
objectives of improving the foundation and practice of
forensic science in the United States; and
(B) to evaluate the extent to which the program is
contributing toward the priorities and objectives described
in the roadmap under section 4(c)(2)(B).
(2) Report to congress.--The Director of the National
Science Foundation shall report to Congress the results of
each comprehensive evaluation under paragraph (1).
(f) Authorization of Appropriations.--There are authorized
to be appropriated to the National Science Foundation to
carry out this section--
(1) $34,000,000 for fiscal year 2013;
(2) $37,000,000 for fiscal year 2014;
(3) $40,000,000 for fiscal year 2015;
(4) $43,000,000 for fiscal year 2016; and
(5) $46,000,000 for fiscal year 2017.

SEC. 6. FORENSIC SCIENCE RESEARCH CHALLENGES.

(a) Prizes and Challenges.--
(1) In general.--A Federal department, agency, or office
may assist in satisfying the research needs and priorities
identified in the unified Federal research strategy under
section 4 by using prizes and challenges under the America
COMPETES Reauthorization Act (124 Stat. 3982) or under any
other provision of law, as appropriate.
(2) Purposes.--The purpose of a prize or challenge under
this section, among other possible purposes, may be--
(A) to determine or develop the best data collection
practices or analytical methods to evaluate a specific type
of forensic data; or
(B) to determine the accuracy of an analytical method.
(b) Forensic Evidence Prizes and Challenges.--
(1) In general.--A Federal department, agency, or office,
or multiple Federal departments, agencies, or offices in
cooperation, carrying out a prize or challenge under this
section--
(A) may establish a prize advisory board; and
(B) shall select each member of the prize advisory board
with input from relevant Federal departments, agencies, or
offices.
(2) Prize advisory board.--The prize advisory board shall--
(A) identify 1 or more types of forensic evidence for
purposes of a prize or challenge;
(B) using the samples under paragraph (3), recommend how to
structure a prize or challenge that requires a competitor to
develop a forensic data collection practice, an analytical
method, or a relevant approach or technology to be tested
relative to a known outcome or other proposed judging
methodology; and
(C) through the Coordinating Office, advise relevant
Federal departments, agencies, or offices in designing prizes
or challenges that satisfy the research needs and priorities
identified in the unified Federal research strategy under
section 4.
(3) Samples.--The National Institute of Standards and
Technology or the Department of Justice shall provide or
contract with a non-Federal party to prepare, for each type
of forensic evidence under paragraph (2)(A), a sufficient set
of samples, including associated digital data that could be
shared without limitation and physical specimens that could
be shared with qualified parties, for purposes of a prize or
challenge.
(4) Fingerprint data interoperability.--At least 1 prize or
challenge under this section shall be focused on achieving
nationwide fingerprint data interoperability if the prize
advisory board, the Coordinating Office, or a Federal
department, agency, or office identifies an area where a
prize or challenge will assist in satisfying a strategy
related to this issue.

SEC. 7. FORENSIC SCIENCE STANDARDS.

(a) Establishment.--
(1) In general.--The National Institute of Standards and
Technology shall--
(A) identify or coordinate the development of forensic
science standards to enhance the validity and reliability of
forensic science activities, including--
(i) authoritative methods, standards, and technical
guidance, including protocols and best practices, for
forensic measurements, analysis, and interpretation;
(ii) technical standards for products and services used by
forensic science practitioners;
(iii) standard content, terminology, and parameters to be
used in reporting and testifying on the results and
interpretation of forensic science measurements, tests, and
procedures; and
(iv) standards to provide for the interoperability of
forensic science-related technology and databases;
(B) test and validate existing forensics standards, as
appropriate; and
(C) provide independent validation of forensic science
measurements and methods.
(2) Consultation.--
(A) In general.--In carrying out its responsibilities under
paragraph (1), the National Institute of Standards and
Technology shall consult with--
(i) standards development organizations and other
stakeholders, including relevant

[[Page S4954]]

Federal departments, agencies, and offices; and
(ii) testing laboratories and accreditation bodies to
ensure that products and services meet necessary performance
levels.
(3) Prioritization.--When prioritizing its responsibilities
under paragraph (1), the National Institute of Standards and
Technology shall consider--
(A) the unified Federal research strategy under section 4;
and
(B) the recommendations of any expert working group under
subsection (b).
(4) Report to congress.--The Director of the National
Institute of Standards and Technology shall report annually,
with the President's budget request, to Congress on the
progress in carrying out the National Institute of Standards
and Technology's responsibilities under paragraph (1).
(b) Expert Working Groups.--
(1) In general.--The Director of the National Institute of
Standards and Technology may establish 1 or more discipline-
specific expert working groups to identify gaps, areas of
need, and opportunities for standards development with
respect to forensic science.
(2) Members.--A member of an expert working group shall--
(A) be appointed by the Director of the National Institute
of Standards and Technology;
(B) have significant academic, research, or practical
expertise in a discipline of forensic science or in another
area relevant to the purpose of the expert working group; and
(C) balance scientific rigor with practical and regulatory
constraints.
(3) Federal advisory committee act.--An expert working
group established under this subsection shall not be subject
to the Federal Advisory Committee Act (5 U.S.C. App.).
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the National Institute of Standards and
Technology to carry out this section--
(1) $5,000,000 for fiscal year 2013;
(2) $12,000,000 for fiscal year 2014;
(3) $20,000,000 for fiscal year 2015;
(4) $27,000,000 for fiscal year 2016; and
(5) $35,000,000 for fiscal year 2017.

SEC. 8. FORENSIC SCIENCE ADVISORY COMMITTEE.

(a) Establishment.--The Director of the National Institute
of Standards and Technology and the Attorney General, in
collaboration with the Director of the National Science
Foundation, shall establish a Forensic Science Advisory
Committee.
(b) Duties.--The Advisory Committee shall provide advice
to--
(1) the Federal departments, agencies, and offices
implementing the unified Federal research strategy under
section 4;
(2) the National Institute of Standards and Technology,
including recommendations regarding the National Institute of
Standards and Technology's responsibilities under section 7;
and
(3) the Department of Justice, including recommendations
regarding the Department of Justice's responsibilities under
section 9.
(c) Subcommittees.--The Advisory Committee may form
subcommittees related to specific disciplines in forensic
science or as necessary to further its duties under
subsection (b). A subcommittee may include an individual who
is not a member of the Advisory Committee.
(d) Chairs.--The Director of the National Institute of
Standards and Technology and the Attorney General, or their
designees, shall co-chair the Advisory Committee.
(e) Membership.--The Director of the National Institute of
Standards and Technology and the Attorney General, in
consultation with the Director of the National Science
Foundation, shall appoint each member of the Advisory
Committee. The Advisory Committee shall include balanced
representation between forensic science disciplines
(including academic scientists, statisticians, social
scientists, engineers, and representatives of other related
scientific disciplines) and relevant forensic science
applications (including Federal, State, and local
representatives of the forensic science community, the legal
community, victim advocate organizations, and law
enforcement).
(f) Administration.--The Attorney General shall provide
administrative support to the Advisory Committee.
(g) Federal Advisory Committee Act.--The Advisory Committee
established under this section shall not be subject to
section 14 of the Federal Advisory Committee Act (5 U.S.C.
App.).

SEC. 9. ADOPTION, ACCREDITATION, AND CERTIFICATION.

The Attorney General--
(1) shall promote the adoption of forensic science
standards developed under section 7, including--
(A) by requiring each Federal forensic laboratory to adopt
the forensic science standards;
(B) by encouraging each non-Federal forensic laboratory to
adopt the forensic science standards;
(C) by promoting accreditation and certification
requirements based on the forensic science standards; and
(D) by promoting any recommendations made by the Advisory
Committee for adoption and implementation of forensic science
standards; and
(2) may promote the adoption of the forensic science
standards as a condition of Federal funding or for inclusion
in national data sets.

SEC. 10. NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY
FUNCTIONS.

Section 2(b) of the National Institute of Standards and
Technology Act (15 U.S.C. 272(b)) is amended--
(1) in paragraph (12), by striking ``and'' after the
semicolon;
(2) in paragraph (13), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(14) to identify and coordinate the development of
forensic science standards to enhance the validity and
reliability of forensic science activities.''.
______

By Mr. DURBIN (for himself, Mr. Franken, Mr. Harkin, Mr.
Whitehouse, and Mr. Brown of Ohio):
S. 3381. A bill to amend title 11, United States Code, to improve
protections for employees and retirees in business bankruptcies; to the
Committee on the Judiciary.
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
printed in the Record as follows:

S. 3381

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 ``Protecting
Employees and Retirees in Business Bankruptcies Act of
2012''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.

TITLE I--IMPROVING RECOVERIES FOR EMPLOYEES AND RETIREES

Sec. 101. Increased wage priority.
Sec. 102. Claim for stock value losses in defined contribution plans.
Sec. 103. Priority for severance pay.
Sec. 104. Financial returns for employees and retirees.
Sec. 105. Priority for WARN Act damages.

TITLE II--REDUCING EMPLOYEES' AND RETIREES' LOSSES

Sec. 201. Rejection of collective bargaining agreements.
Sec. 202. Payment of insurance benefits to retired employees.
Sec. 203. Protection of employee benefits in a sale of assets.
Sec. 204. Claim for pension losses.
Sec. 205. Payments by secured lender.
Sec. 206. Preservation of jobs and benefits.
Sec. 207. Termination of exclusivity.
Sec. 208. Claim for withdrawal liability.

TITLE III--RESTRICTING EXECUTIVE COMPENSATION PROGRAMS

Sec. 301. Executive compensation upon exit from bankruptcy.
Sec. 302. Limitations on executive compensation enhancements.
Sec. 303. Assumption of executive benefit plans.
Sec. 304. Recovery of executive compensation.
Sec. 305. Preferential compensation transfer.

TITLE IV--OTHER PROVISIONS

Sec. 401. Union proof of claim.
Sec. 402. Exception from automatic stay.

SEC. 2. FINDINGS.

The Congress finds the following:
(1) Business bankruptcies have increased sharply in recent
years and remain at high levels. These bankruptcies include
several of the largest business bankruptcy filings in
history. As the use of bankruptcy has expanded, job
preservation and retirement security are placed at greater
risk.
(2) Laws enacted to improve recoveries for employees and
retirees and limit their losses in bankruptcy cases have not
kept pace with the increasing and broader use of bankruptcy
by businesses in all sectors of the economy. However, while
protections for employees and retirees in bankruptcy cases
have eroded, management compensation plans devised for those
in charge of troubled businesses have become more prevalent
and are escaping adequate scrutiny.
(3) Changes in the law regarding these matters are urgently
needed as bankruptcy is used to address increasingly more
complex and diverse conditions affecting troubled businesses
and industries.

TITLE I--IMPROVING RECOVERIES FOR EMPLOYEES AND RETIREES

SEC. 101. INCREASED WAGE PRIORITY.

Section 507(a) of title 11, United States Code, is
amended--
(1) in paragraph (4)--
(A) by striking ``$10,000'' and inserting ``$20,000'';
(B) by striking ``within 180 days''; and
(C) by striking ``or the date of the cessation of the
debtor's business, whichever occurs first,'';
(2) in paragraph (5)(A), by striking--
(A) ``within 180 days''; and
(B) ``or the date of the cessation of the debtor's
business, whichever occurs first''; and
(3) in paragraph (5), by striking subparagraph (B) and
inserting the following:
``(B) for each such plan, to the extent of the number of
employees covered by each such plan, multiplied by
$20,000.''.

SEC. 102. CLAIM FOR STOCK VALUE LOSSES IN DEFINED
CONTRIBUTION PLANS.

Section 101(5) of title 11, United States Code, is
amended--

[[Page S4955]]

(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by inserting ``or'' after the
semicolon; and
(3) by adding at the end the following:
``(C) right or interest in equity securities of the debtor,
or an affiliate of the debtor, held in a defined contribution
plan (within the meaning of section 3(34) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002(34)))
for the benefit of an individual who is not an insider, a
senior executive officer, or any of the 20 next most highly
compensated employees of the debtor (if 1 or more are not
insiders), if such securities were attributable to either
employer contributions by the debtor or an affiliate of the
debtor, or elective deferrals (within the meaning of section
402(g) of the Internal Revenue Code of 1986), and any
earnings thereon, if an employer or plan sponsor who has
commenced a case under this title has committed fraud with
respect to such plan or has otherwise breached a duty to the
participant that has proximately caused the loss of value.''.

SEC. 103. PRIORITY FOR SEVERANCE PAY.

Section 503(b) of title 11, United States Code, is
amended--
(1) in paragraph (8), by striking ``and'' at the end;
(2) in paragraph (9), by striking the period and inserting
a semicolon; and
(3) by adding at the end the following:
``(10) severance pay owed to employees of the debtor (other
than to an insider, other senior management, or a consultant
retained to provide services to the debtor), under a plan,
program, or policy generally applicable to employees of the
debtor (but not under an individual contract of employment),
or owed pursuant to a collective bargaining agreement, for
layoff or termination on or after the date of the filing of
the petition, which pay shall be deemed earned in full upon
such layoff or termination of employment; and''.

SEC. 104. FINANCIAL RETURNS FOR EMPLOYEES AND RETIREES.

Section 1129(a) of title 11, United States Code is
amended--
(1) by adding at the end the following:
``(17) The plan provides for recovery of damages payable
for the rejection of a collective bargaining agreement, or
for other financial returns as negotiated by the debtor and
the authorized representative under section 1113 (to the
extent that such returns are paid under, rather than outside
of, a plan).''; and
(2) by striking paragraph (13) and inserting the following:
``(13) With respect to retiree benefits, as that term is
defined in section 1114(a), the plan--
``(A) provides for the continuation after its effective
date of payment of all retiree benefits at the level
established pursuant to subsection (e)(1)(B) or (g) of
section 1114 at any time before the date of confirmation of
the plan, for the duration of the period for which the debtor
has obligated itself to provide such benefits, or if no
modifications are made before confirmation of the plan, the
continuation of all such retiree benefits maintained or
established in whole or in part by the debtor before the date
of the filing of the petition; and
``(B) provides for recovery of claims arising from the
modification of retiree benefits or for other financial
returns, as negotiated by the debtor and the authorized
representative (to the extent that such returns are paid
under, rather than outside of, a plan).''.

SEC. 105. PRIORITY FOR WARN ACT DAMAGES.

Section 503(b)(1)(A)(ii) of title 11, United States Code is
amended to read as follows:
``(ii) wages and benefits awarded pursuant to a judicial
proceeding or a proceeding of the National Labor Relations
Board as back pay or damages attributable to any period of
time occurring after the date of commencement of the case
under this title, as a result of a violation of Federal or
State law by the debtor, without regard to the time of the
occurrence of unlawful conduct on which the award is based or
to whether any services were rendered on or after the
commencement of the case, including an award by a court under
section 2901 of title 29, United States Code, of up to 60
days' pay and benefits following a layoff that occurred or
commenced at a time when such award period includes a period
on or after the commencement of the case, if the court
determines that payment of wages and benefits by reason of
the operation of this clause will not substantially increase
the probability of layoff or termination of current employees
or of nonpayment of domestic support obligations during the
case under this title.''.

TITLE II--REDUCING EMPLOYEES' AND RETIREES' LOSSES

SEC. 201. REJECTION OF COLLECTIVE BARGAINING AGREEMENTS.

Section 1113 of title 11, United States Code, is amended by
striking subsections (a) through (f) and inserting the
following:
``(a) The debtor in possession, or the trustee if one has
been appointed under this chapter, other than a trustee in a
case covered by subchapter IV of this chapter and by title I
of the Railway Labor Act, may reject a collective bargaining
agreement only in accordance with this section. Hereinafter
in this section, a reference to the trustee includes a
reference to the debtor in possession.
``(b) No provision of this title shall be construed to
permit the trustee to unilaterally terminate or alter any
provision of a collective bargaining agreement before
complying with this section. The trustee shall timely pay all
monetary obligations arising under the terms of the
collective bargaining agreement. Any such payment required to
be made before a plan confirmed under section 1129 is
effective has the status of an allowed administrative expense
under section 503.
``(c)(1) If the trustee seeks modification of a collective
bargaining agreement, then the trustee shall provide notice
to the labor organization representing the employees covered
by the agreement that modifications are being proposed under
this section, and shall promptly provide an initial proposal
for modifications to the agreement. Thereafter, the trustee
shall confer in good faith with the labor organization, at
reasonable times and for a reasonable period in light of the
complexity of the case, in attempting to reach mutually
acceptable modifications of such agreement.
``(2) The initial proposal and subsequent proposals by the
trustee for modification of a collective bargaining agreement
shall be based upon a business plan for the reorganization of
the debtor, and shall reflect the most complete and reliable
information available. The trustee shall provide to the labor
organization all information that is relevant for
negotiations. The court may enter a protective order to
prevent the disclosure of information if disclosure could
compromise the debtor's position with respect to its
competitors in the industry, subject to the needs of the
labor organization to evaluate the trustee's proposals and
any application for rejection of the agreement or for interim
relief pursuant to this section.
``(3) In consideration of Federal policy encouraging the
practice and process of collective bargaining and in
recognition of the bargained-for expectations of the
employees covered by the agreement, modifications proposed by
the trustee--
``(A) shall be proposed only as part of a program of
workforce and nonworkforce cost savings devised for the
reorganization of the debtor, including savings in management
personnel costs;
``(B) shall be limited to modifications designed to achieve
a specified aggregate financial contribution for the
employees covered by the agreement (taking into consideration
any labor cost savings negotiated within the 12-month period
before the filing of the petition), and shall be not more
than the minimum savings essential to permit the debtor to
exit bankruptcy, such that confirmation of a plan of
reorganization is not likely to be followed by the
liquidation, or the need for further financial
reorganization, of the debtor (or any successor to the
debtor) in the short term; and
``(C) shall not be disproportionate or overly burden the
employees covered by the agreement, either in the amount of
the cost savings sought from such employees or the nature of
the modifications.
``(d)(1) If, after a period of negotiations, the trustee
and the labor organization have not reached an agreement over
mutually satisfactory modifications, and further negotiations
are not likely to produce mutually satisfactory
modifications, the trustee may file a motion seeking
rejection of the collective bargaining agreement after notice
and a hearing. Absent agreement of the parties, no such
hearing shall be held before the expiration of the 21-day
period beginning on the date on which notice of the hearing
is provided to the labor organization representing the
employees covered by the agreement. Only the debtor and the
labor organization may appear and be heard at such hearing.
An application for rejection shall seek rejection effective
upon the entry of an order granting the relief.
``(2) In consideration of Federal policy encouraging the
practice and process of collective bargaining and in
recognition of the bargained-for expectations of the
employees covered by the agreement, the court may grant a
motion seeking rejection of a collective bargaining agreement
only if, based on clear and convincing evidence--
``(A) the court finds that the trustee has complied with
the requirements of subsection (c);
``(B) the court has considered alternative proposals by the
labor organization and has concluded that such proposals do
not meet the requirements of paragraph (3)(B) of subsection
(c);
``(C) the court finds that further negotiations regarding
the trustee's proposal or an alternative proposal by the
labor organization are not likely to produce an agreement;
``(D) the court finds that implementation of the trustee's
proposal shall not--
``(i) cause a material diminution in the purchasing power
of the employees covered by the agreement;
``(ii) adversely affect the ability of the debtor to retain
an experienced and qualified workforce; or
``(iii) impair the debtor's labor relations such that the
ability to achieve a feasible reorganization would be
compromised; and
``(E) the court concludes that rejection of the agreement
and immediate implementation of the trustee's proposal is
essential to permit the debtor to exit bankruptcy, such that
confirmation of a plan of reorganization is not likely to be
followed by liquidation, or the need for further financial
reorganization, of the debtor (or any successor to the
debtor) in the short term.
``(3) If the trustee has implemented a program of incentive
pay, bonuses, or other financial returns for insiders, senior
executive officers, or the 20 next most highly compensated
employees or consultants providing services to the debtor
during the bankruptcy, or such a program was implemented

[[Page S4956]]

within 180 days before the date of the filing of the
petition, the court shall presume that the trustee has failed
to satisfy the requirements of subsection (c)(3)(C).
``(4) In no case shall the court enter an order rejecting a
collective bargaining agreement that would result in
modifications to a level lower than the level proposed by the
trustee in the proposal found by the court to have complied
with the requirements of this section.
``(5) At any time after the date on which an order
rejecting a collective bargaining agreement is entered, or in
the case of an agreement entered into between the trustee and
the labor organization providing mutually satisfactory
modifications, at any time after such agreement has been
entered into, the labor organization may apply to the court
for an order seeking an increase in the level of wages or
benefits, or relief from working conditions, based upon
changed circumstances. The court shall grant the request only
if the increase or other relief is not inconsistent with the
standard set forth in paragraph (2)(E).
``(e) During a period in which a collective bargaining
agreement at issue under this section continues in effect,
and if essential to the continuation of the debtor's business
or in order to avoid irreparable damage to the estate, the
court, after notice and a hearing, may authorize the trustee
to implement interim changes in the terms, conditions, wages,
benefits, or work rules provided by the collective bargaining
agreement. Any hearing under this subsection shall be
scheduled in accordance with the needs of the trustee. The
implementation of such interim changes shall not render the
application for rejection moot.
``(f) Rejection of a collective bargaining agreement
constitutes a breach of the agreement, and shall be effective
no earlier than the entry of an order granting such relief.
Notwithstanding the foregoing, solely for purposes of
determining and allowing a claim arising from the rejection
of a collective bargaining agreement, rejection shall be
treated as rejection of an executory contract under section
365(g) and shall be allowed or disallowed in accordance with
section 502(g)(1). No claim for rejection damages shall be
limited by section 502(b)(7). Economic self-help by a labor
organization shall be permitted upon a court order granting a
motion to reject a collective bargaining agreement under
subsection (d) or pursuant to subsection (e), and no
provision of this title or of any other provision of Federal
or State law may be construed to the contrary.
``(g) The trustee shall provide for the reasonable fees and
costs incurred by a labor organization under this section,
upon request and after notice and a hearing.
``(h) A collective bargaining agreement that is assumed
shall be assumed in accordance with section 365.''.

SEC. 202. PAYMENT OF INSURANCE BENEFITS TO RETIRED EMPLOYEES.

Section 1114 of title 11, United States Code, is amended--
(1) in subsection (a), by inserting ``, whether or not the
debtor asserts a right to unilaterally modify such payments
under such plan, fund, or program'' before the period at the
end;
(2) in subsection (b)(2), by inserting after ``section''
the following: ``, and a labor organization serving as the
authorized representative under subsection (c)(1),'';
(3) in subsection (f), by striking ``(f)'' and all that
follows through paragraph (2) and inserting the following:
``(f)(1) If a trustee seeks modification of retiree
benefits, then the trustee shall provide a notice to the
authorized representative that modifications are being
proposed pursuant to this section, and shall promptly provide
an initial proposal. Thereafter, the trustee shall confer in
good faith with the authorized representative at reasonable
times and for a reasonable period in light of the complexity
of the case in attempting to reach mutually satisfactory
modifications.
``(2) The initial proposal and subsequent proposals by the
trustee shall be based upon a business plan for the
reorganization of the debtor and shall reflect the most
complete and reliable information available. The trustee
shall provide to the authorized representative all
information that is relevant for the negotiations. The court
may enter a protective order to prevent the disclosure of
information if disclosure could compromise the debtor's
position with respect to its competitors in the industry,
subject to the needs of the authorized representative to
evaluate the trustee's proposals and an application pursuant
to subsection (g) or (h).
``(3) Modifications proposed by the trustee--
``(A) shall be proposed only as part of a program of
workforce and nonworkforce cost savings devised for the
reorganization of the debtor, including savings in management
personnel costs;
``(B) shall be limited to modifications that are designed
to achieve a specified aggregate financial contribution for
the retiree group represented by the authorized
representative (taking into consideration any cost savings
implemented within the 12-month period before the date of
filing of the petition with respect to the retiree group),
and shall be no more than the minimum savings essential to
permit the debtor to exit bankruptcy, such that confirmation
of a plan of reorganization is not likely to be followed by
the liquidation, or the need for further financial
reorganization, of the debtor (or any successor to the
debtor) in the short term; and
``(C) shall not be disproportionate or overly burden the
retiree group, either in the amount of the cost savings
sought from such group or the nature of the modifications.'';
(4) in subsection (g)--
(A) by striking ``(g)'' and all that follows through the
semicolon at the end of paragraph (3) and inserting the
following:
``(g)(1) If, after a period of negotiations, the trustee
and the authorized representative have not reached agreement
over mutually satisfactory modifications and further
negotiations are not likely to produce mutually satisfactory
modifications, then the trustee may file a motion seeking
modifications in the payment of retiree benefits after notice
and a hearing. Absent agreement of the parties, no such
hearing shall be held before the expiration of the 21-day
period beginning on the date on which notice of the hearing
is provided to the authorized representative. Only the debtor
and the authorized representative may appear and be heard at
such hearing.
``(2) The court may grant a motion to modify the payment of
retiree benefits only if, based on clear and convincing
evidence--
``(A) the court finds that the trustee has complied with
the requirements of subsection (f);
``(B) the court has considered alternative proposals by the
authorized representative and has determined that such
proposals do not meet the requirements of subsection
(f)(3)(B);
``(C) the court finds that further negotiations regarding
the trustee's proposal or an alternative proposal by the
authorized representative are not likely to produce a
mutually satisfactory agreement;
``(D) the court finds that implementation of the proposal
shall not cause irreparable harm to the affected retirees;
and
``(E) the court concludes that an order granting the motion
and immediate implementation of the trustee's proposal is
essential to permit the debtor to exit bankruptcy, such that
confirmation of a plan of reorganization is not likely to be
followed by liquidation, or the need for further financial
reorganization, of the debtor (or a successor to the debtor)
in the short term.
``(3) If a trustee has implemented a program of incentive
pay, bonuses, or other financial returns for insiders, senior
executive officers, or the 20 next most highly-compensated
employees or consultants providing services to the debtor
during the bankruptcy, or such a program was implemented
within 180 days before the date of the filing of the
petition, the court shall presume that the trustee has failed
to satisfy the requirements of subparagraph (f)(3)(C).''; and
(B) by striking ``except that in no case'' and inserting
the following:
``(4) In no case''; and
(5) by striking subsection (k) and redesignating
subsections (l) and (m) as subsections (k) and (l),
respectively.

SEC. 203. PROTECTION OF EMPLOYEE BENEFITS IN A SALE OF
ASSETS.

Section 363(b) of title 11, United States Code, is amended
by adding at the end the following:
``(3) In approving a sale under this subsection, the court
shall consider the extent to which a bidder has offered to
maintain existing jobs, preserve terms and conditions of
employment, and assume or match pension and retiree health
benefit obligations in determining whether an offer
constitutes the highest or best offer for such property.''.

SEC. 204. CLAIM FOR PENSION LOSSES.

Section 502 of title 11, United States Code, is amended by
adding at the end the following:
``(l) The court shall allow a claim asserted by an active
or retired participant, or by a labor organization
representing such participants, in a defined benefit plan
terminated under section 4041 or 4042 of the Employee
Retirement Income Security Act of 1974, for any shortfall in
pension benefits accrued as of the effective date of the
termination of such pension plan as a result of the
termination of the plan and limitations upon the payment of
benefits imposed pursuant to section 4022 of such Act,
notwithstanding any claim asserted and collected by the
Pension Benefit Guaranty Corporation with respect to such
termination.
``(m) The court shall allow a claim of a kind described in
section 101(5)(C) by an active or retired participant in a
defined contribution plan (within the meaning of section
3(34) of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1002(34))), or by a labor organization
representing such participants. The amount of such claim
shall be measured by the market value of the stock at the
time of contribution to, or purchase by, the plan and the
value as of the commencement of the case.''.

SEC. 205. PAYMENTS BY SECURED LENDER.

Section 506(c) of title 11, United States Code, is amended
by adding at the end the following: ``If employees have not
received wages, accrued vacation, severance, or other
benefits owed under the policies and practices of the debtor,
or pursuant to the terms of a collective bargaining
agreement, for services rendered on and after the date of the
commencement of the case, then such unpaid obligations shall
be deemed necessary costs and expenses of preserving, or
disposing of, property securing an allowed secured claim and
shall be recovered even if the trustee has otherwise waived
the provisions of this subsection under an agreement with the
holder of the allowed secured claim or a successor or
predecessor in interest.''.

SEC. 206. PRESERVATION OF JOBS AND BENEFITS.

Title 11, United States Code, is amended--

[[Page S4957]]

(1) by inserting before section 1101 the following:

``SEC. 1100. STATEMENT OF PURPOSE.

``A debtor commencing a case under this chapter shall have
as its principal purpose the reorganization of its business
to preserve going concern value to the maximum extent
possible through the productive use of its assets and the
preservation of jobs that will sustain productive economic
activity.'';
(2) in section 1129(a), as amended by section 104, by
adding at the end the following:
``(18) The debtor has demonstrated that the reorganization
preserves going concern value to the maximum extent possible
through the productive use of the debtor's assets and
preserves jobs that sustain productive economic activity.'';
(3) in section 1129(c), by striking the last sentence and
inserting the following: ``If the requirements of subsections
(a) and (b) are met with respect to more than 1 plan, the
court shall, in determining which plan to confirm--
``(1) consider the extent to which each plan would preserve
going concern value through the productive use of the
debtor's assets and the preservation of jobs that sustain
productive economic activity; and
``(2) confirm the plan that better serves such interests.

A plan that incorporates the terms of a settlement with a
labor organization representing employees of the debtor shall
presumptively constitute the plan that satisfies this
subsection.''; and
(4) in the table of sections for chapter 11, by inserting
the following before the item relating to section 1101:

``1100. Statement of purpose.''.

SEC. 207. TERMINATION OF EXCLUSIVITY.

Section 1121(d) of title 11, United States Code, is amended
by adding at the end the following:
``(3) For purposes of this subsection, cause for reducing
the 120-day period or the 180-day period includes the
following:
``(A) The filing of a motion pursuant to section 1113
seeking rejection of a collective bargaining agreement if a
plan based upon an alternative proposal by the labor
organization is reasonably likely to be confirmed within a
reasonable time.
``(B) The proposed filing of a plan by a proponent other
than the debtor, which incorporates the terms of a settlement
with a labor organization if such plan is reasonably likely
to be confirmed within a reasonable time.''.

SEC. 208. CLAIM FOR WITHDRAWAL LIABILITY.

Section 503(b) of title 11, United States Code, as amended
by section 103 of this Act, is amended by adding at the end
the following:
``(11) with respect to withdrawal liability owed to a
multiemployer pension plan for a complete or partial
withdrawal pursuant to section 4201 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1381) where
such withdrawal occurs on or after the commencement of the
case, an amount equal to the amount of vested benefits
payable from such pension plan that accrued as a result of
employees' services rendered to the debtor during the period
beginning on the date of commencement of the case and ending
on the date of the withdrawal from the plan.''.

TITLE III--RESTRICTING EXECUTIVE COMPENSATION PROGRAMS

SEC. 301. EXECUTIVE COMPENSATION UPON EXIT FROM BANKRUPTCY.

Section 1129(a) of title 11, United States Code, is
amended--
(1) in paragraph (4), by adding at the end the following:
``Except for compensation subject to review under paragraph
(5), payments or other distributions under the plan to or for
the benefit of insiders, senior executive officers, and any
of the 20 next most highly compensated employees or
consultants providing services to the debtor, shall not be
approved except as part of a program of payments or
distributions generally applicable to employees of the
debtor, and only to the extent that the court determines that
such payments are not excessive or disproportionate compared
to distributions to the debtor's nonmanagement workforce.'';
and
(2) in paragraph (5)--
(A) in subparagraph (A)(ii), by striking ``and'' at the
end; and
(B) in subparagraph (B), by striking the period at the end
and inserting the following: ``; and
``(C) the compensation disclosed pursuant to subparagraph
(B) has been approved by, or is subject to the approval of,
the court as reasonable when compared to individuals holding
comparable positions at comparable companies in the same
industry and not disproportionate in light of economic
concessions by the debtor's nonmanagement workforce during
the case.''.

SEC. 302. LIMITATIONS ON EXECUTIVE COMPENSATION ENHANCEMENTS.

Section 503(c) of title 11, United States Code, is
amended--
(1) in paragraph (1)--
(A) by inserting ``, a senior executive officer, or any of
the 20 next most highly compensated employees or
consultants'' after ``an insider'';
(B) by inserting ``or for the payment of performance or
incentive compensation, or a bonus of any kind, or other
financial returns designed to replace or enhance incentive,
stock, or other compensation in effect before the date of the
commencement of the case,'' after ``remain with the debtor's
business,''; and
(C) by inserting ``clear and convincing'' before ``evidence
in the record''; and
(2) by amending paragraph (3) to read as follows:
``(3) other transfers or obligations, to or for the benefit
of insiders, senior executive officers, managers, or
consultants providing services to the debtor, in the absence
of a finding by the court, based upon clear and convincing
evidence, and without deference to the debtor's request for
such payments, that such transfers or obligations are
essential to the survival of the debtor's business or (in the
case of a liquidation of some or all of the debtor's assets)
essential to the orderly liquidation and maximization of
value of the assets of the debtor, in either case, because of
the essential nature of the services provided, and then only
to the extent that the court finds such transfers or
obligations are reasonable compared to individuals holding
comparable positions at comparable companies in the same
industry and not disproportionate in light of economic
concessions by the debtor's nonmanagement workforce during
the case.''.

SEC. 303. ASSUMPTION OF EXECUTIVE BENEFIT PLANS.

Section 365 of title 11, United States Code, is amended--
(1) in subsection (a), by striking ``and (d)'' and
inserting ``(d), (q), and (r)''; and
(2) by adding at the end the following:
``(q) No deferred compensation arrangement for the benefit
of insiders, senior executive officers, or any of the 20 next
most highly compensated employees of the debtor shall be
assumed if a defined benefit plan for employees of the debtor
has been terminated pursuant to section 4041 or 4042 of the
Employee Retirement Income Security Act of 1974, on or after
the date of the commencement of the case or within 180 days
before the date of the commencement of the case.
``(r) No plan, fund, program, or contract to provide
retiree benefits for insiders, senior executive officers, or
any of the 20 next most highly compensated employees of the
debtor shall be assumed if the debtor has obtained relief
under subsection (g) or (h) of section 1114 to impose
reductions in retiree benefits or under subsection (d) or (e)
of section 1113 to impose reductions in the health benefits
of active employees of the debtor, or reduced or eliminated
health benefits for active or retired employees within 180
days before the date of the commencement of the case.''.

SEC. 304. RECOVERY OF EXECUTIVE COMPENSATION.

Title 11, United States Code, is amended by inserting after
section 562 the following:

``SEC. 563. RECOVERY OF EXECUTIVE COMPENSATION.

``(a) If a debtor has obtained relief under subsection (d)
of section 1113, or subsection (g) of section 1114, by which
the debtor reduces the cost of its obligations under a
collective bargaining agreement or a plan, fund, or program
for retiree benefits as defined in section 1114(a), the
court, in granting relief, shall determine the percentage
diminution in the value of the obligations when compared to
the debtor's obligations under the collective bargaining
agreement, or with respect to retiree benefits, as of the
date of the commencement of the case under this title before
granting such relief. In making its determination, the court
shall include reductions in benefits, if any, as a result of
the termination pursuant to section 4041 or 4042 of the
Employee Retirement Income Security Act of 1974, of a defined
benefit plan administered by the debtor, or for which the
debtor is a contributing employer, effective at any time on
or after 180 days before the date of the commencement of a
case under this title. The court shall not take into account
pension benefits paid or payable under of such Act as a
result of any such termination.
``(b) If a defined benefit pension plan administered by the
debtor, or for which the debtor is a contributing employer,
has been terminated pursuant to section 4041 or 4042 of the
Employee Retirement Income Security Act of 1974, effective at
any time on or after 180 days before the date of the
commencement of a case under this title, but a debtor has not
obtained relief under subsection (d) of section 1113, or
subsection (g) of section 1114, then the court, upon motion
of a party in interest, shall determine the percentage
diminution in the value of benefit obligations when compared
to the total benefit liabilities before such termination. The
court shall not take into account pension benefits paid or
payable under title IV of the Employee Retirement Income
Security Act of 1974 as a result of any such termination.
``(c) Upon the determination of the percentage diminution
in value under subsection (a) or (b), the estate shall have a
claim for the return of the same percentage of the
compensation paid, directly or indirectly (including any
transfer to a self-settled trust or similar device, or to a
nonqualified deferred compensation plan under section
409A(d)(1) of the Internal Revenue Code of 1986) to any
officer of the debtor serving as member of the board of
directors of the debtor within the year before the date of
the commencement of the case, and any individual serving as
chairman or lead director of the board of directors at the
time of the granting of relief under section 1113 or 1114 or,
if no such relief has been granted, the termination of the
defined benefit plan.
``(d) The trustee or a committee appointed pursuant to
section 1102 may commence an

[[Page S4958]]

action to recover such claims, except that if neither the
trustee nor such committee commences an action to recover
such claim by the first date set for the hearing on the
confirmation of plan under section 1129, any party in
interest may apply to the court for authority to recover such
claim for the benefit of the estate. The costs of recovery
shall be borne by the estate.
``(e) The court shall not award postpetition compensation
under section 503(c) or otherwise to any person subject to
subsection (c) if there is a reasonable likelihood that such
compensation is intended to reimburse or replace compensation
recovered by the estate under this section.''.

SEC. 305. PREFERENTIAL COMPENSATION TRANSFER.

Section 547 of title 11, United States Code, is amended by
adding at the end the following:
``(j) The trustee may avoid a transfer to or for the
benefit of an insider (including an obligation incurred for
the benefit of an insider under an employment contract) made
in anticipation of bankruptcy, or a transfer made in
anticipation of bankruptcy to a consultant who is formerly an
insider and who is retained to provide services to an entity
that becomes a debtor (including an obligation under a
contract to provide services to such entity or to a debtor)
made or incurred on or within 1 year before the filing of the
petition. No provision of subsection (c) shall constitute a
defense against the recovery of such transfer. The trustee or
a committee appointed pursuant to section 1102 may commence
an action to recover such transfer, except that, if neither
the trustee nor such committee commences an action to recover
such transfer by the time of the commencement of a hearing on
the confirmation of a plan under section 1129, any party in
interest may apply to the court for authority to recover the
claims for the benefit of the estate. The costs of recovery
shall be borne by the estate.''.

TITLE IV--OTHER PROVISIONS

SEC. 401. UNION PROOF OF CLAIM.

Section 501(a) of title 11, United States Code, is amended
by inserting ``, including a labor organization,'' after ``A
creditor''.

SEC. 402. EXCEPTION FROM AUTOMATIC STAY.

Section 362(b) of title 11, United States Code, is
amended--
(1) in paragraph (27), by striking ``and'' at the end;
(2) in paragraph (28), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(29) of the commencement or continuation of a grievance,
arbitration, or similar dispute resolution proceeding
established by a collective bargaining agreement that was or
could have been commenced against the debtor before the
filing of a case under this title, or the payment or
enforcement of an award or settlement under such
proceeding.''.
______

By Mr. GRASSLEY (for himself, Mr. Kyl, Mr. Cornyn, Mr. Lee, Mr.
Paul, and Mr. Coburn):
S. 3382. A bill to impose certain limitations on consent decrees and
settlement agreements by agencies that require the agencies to take
regulatory action in accordance with the terms thereof, and for other
purposes; to the Committee on the Judiciary.
Mr. GRASSLEY. Mr. President, I rise today to introduce important
regulatory reform legislation.
Recently, when describing the state of our economy, President Obama
said that the private sector was ``doing fine.''
I disagree. I think that the American people disagree with the
President's statement.
There are 12.7 million Americans unemployed and another 8.2 million
underemployed. 5.4 million Americans have been unemployed for 27 weeks
or more.
That's not ``doing fine.''
The Federal Government needs to do everything possible to create an
environment that will allow private sector employers to create jobs. To
accomplish that, common sense would tell us that the government needs
to remove barriers to job creation rather than erect new ones. The
Federal Government needs to listen to employers so it can learn from
them exactly what it can do to help.
Unfortunately, the Obama administration hasn't listened. In fact,
unbelievably it is actually doing the opposite of what employers are
saying they need.
Employers are saying that they need relief from job killing
regulations.
For example, according to a Gallup survey, small-business owners in
the United States are most likely to say that complying with government
regulations is the biggest problem facing them today.
Indeed, the burden of regulations is overwhelming. Recently, the
Small Business Administration estimated that the Federal regulatory
burden has reached $1.75 trillion per year.
So what has the Obama administration's response been?
It is planning to increase the number of regulations.
The Obama administration's regulatory agenda has thousands of
regulations in its production line, more than a hundred of which will
have a major impact on the economy. Those are on top of more than one
thousand regulations already completed.
I am sorry to say that the news gets even worse. On top of the
thousands of new regulations it to impose, it appears that the
administration is trying to get around the procedures governing how
regulations are enacted.
In recent years, consent decrees and settlement agreements have been
used to circumvent the laws and procedures that govern how regulations
are enacted and to speed up the process in ways that limit the public's
ability to fully participate and to exercise the rights guaranteed by
our laws.
These consent decrees or settlement agreements may come as a surprise
to the regulated industry and the public. They usually establish
truncated deadlines for the agency to promulgate a regulation.
The lack of advance notice and the expedited schedule for the
proposal and promulgation of regulations allows an agency to avoid the
input that comes with meaningful public participation. It may also
allow agencies to short-circuit the analytical requirements of
regulatory process statutes, such as the Administrative Procedure Act.
Expedited deadlines further allow agencies to undercut the review of
proposed regulations by the Office of Management and Budget's Office of
Information and Regulatory Affairs OIRA.
The practice of using consent decrees and settlement agreements to
enact regulations has become known as ``sue-and-settle'' litigation.
The dangers of sue-and-settle litigation and of government by consent
decree are not a new problem.
Nearly 30 years ago, Judge Malcom Wilkey of the D.C. Circuit warned
about the dangers of collusive consent decrees. In his dissenting
opinion in Citizens for a Better Environment v. Gorsuch, Judge Wilkey
explained:

Government by consent decree enshrines at its very center
those special interest groups who are party to the decree.
They stand in a strong tactical position to oppose changing
the decree, and so likely will enjoy material influence on
proposed changes in agency policy.
As a policy device, then, government by consent decree
serves no necessary end. It opens the door to unforeseeable
mischief; it degrades the institutions of representative
democracy and augments the power of special interest groups.
It does all of this in a society that hardly needs new
devices that emasculate representative democracy and
strengthen the power of special interests.

Because the Obama administration is trying to dramatically increase
the number of regulations, we must make sure that the laws and
procedures governing rulemaking are followed and followed in a
meaningful way.
The debate about sue-and-settle litigation is important because it
raises questions about fairness, transparency and public participation
in administrative rulemaking. It also raises the issue of whether
meaningful judicial review is taking place.
Under the Administrative Procedure Act and other laws, the public and
affected persons, in particular, have a right to adequate notice and an
opportunity to comment on a proposed regulation. They also have a right
to have their comments fully considered.
However, when sue-and-settle litigation is used real, public
participation is effectively eliminated.
Generally speaking, the agreement on how to regulate is reached
without the full input of the people and businesses that are affected.
Discussions are held and agreements may be reached between government
officials and special interest groups outside the public process. This
is particularly true where career employees and political appointees at
agencies share the agenda of the special interest group suing the
agency and use the lawsuit as an opportunity to implement their common
goals.
Also, the negotiated deadlines for creating the new regulation can be
so accelerated that the public's comments might receive little or no
true consideration.
Keep in mind that these regulations often involve complex scientific
and

[[Page S4959]]

economic issues. Those issues cannot generally be fully and properly
considered under a truncated time frame.
Another fundamental aspect of rulemaking is the opportunity to
challenge a decision by participating as an intervenor. However, with
sue-and-settle litigation, special interest groups and the government
may reach an agreement before a lawsuit is even filed. This eliminates
the opportunity for members of the public to intervene in the case to
protect their interests.
Even where a settlement occurs after affected parties may have been
granted intervention, these parties have little or no chance to
participate in settlement discussions because they are not invited by
the government and the special interest groups.
Moreover, when an agency creates a regulation through sue-and-settle
litigation, it reorganizes its work by promising to take specific
actions at specific times, before or instead of other projects that may
be of greater benefit to the public.
Also, sue-and-settle litigation helps officials and administrations
to avoid accountability. Instead of having to answer to the public for
controversial regulations and policy decisions, officials are able to
point to a court order and maintain that they were required or forced
to promulgate a controversial regulation.
The case of American Nurses Association v. Jackson is an example of
the sue-and-settle phenomenon.
In that case, a group of environmental organizations sued the
Environmental Protection Agency, EPA, in December 2008, challenging the
agency's failure to create emissions standards for pollutants from
power plants under the Clean Air Act. Subsequently, the Utility Air
Regulatory Group, UARG, representing the utility industry, intervened
as a defendant in the case.
On October 22, 2009, the plaintiffs and the EPA filed a proposed
consent decree. It was the result of a deal struck exclusively between
them. They did not include the UARG in their discussions. Although the
judge expressed concerns about the exclusion of the UARG from the
settlement discussions, she was satisfied when the plaintiffs and the
EPA informed her that this practice was the ``norm.''
Under the consent decree, the EPA conceded that it had failed to
perform a mandatory duty under the Clean Air Act by failing to issue a
``maximum achievable control technology'', MACT, regulation for power
plants. The EPA pledged that it would issue a proposed regulation by
March 16, 2011 and a final regulation by November 16, 2011.
The UARG objected to the consent decree. It argued that the proposed
decree improperly limited the government's discretion because it
required the EPA to find that standards under 112(d) of the Clean Air
Act were required. Consequently, the decree prevented the agency from
either declining to issue standards or adopting other standards instead
of the more burdensome MACT standard.
Although acknowledging the significance of the UARG's arguments, the
judge nevertheless rejected them in its short opinion approving the
consent decree.
As to the language limiting the EPA's discretion in the rulemaking,
the judge stated that the EPA believed itself to be obligated to
promulgate 112(d) standards and, ``and by entering this consent decree
the Court [wa]s only accepting the parties' agreement to settle, not
adjudicating whether EPA's legal position [wa]s correct.'' The judge
simply believed that ``[i]f necessary, [the] UARG c[ould] challenge
[the] EPA's final rule and its legal position.''
With regard to the UARG's argument that the time frame within which
the EPA proposed to carry out the rulemaking was insufficient, the
judge noted that she ``appreciate[d]'' the concern that the schedule
was too short for the critical and expensive regulatory decisions that
would be made. Nevertheless, she held that it was enough that the
proposed consent decree allowed for a change of the schedule if needed.
The judge's reasoning on this point was interesting given that she
acknowledged in a footnote that under the consent decree, the UARG
could not petition for an extension of the deadlines.
In the end, the judge acknowledged that the concerns raised by the
UARG were not insubstantial. However, she did not believe that she
could gauge the adequacy, or lack thereof, of the schedule.
Consequently, in a somewhat cavalier manner the judge concluded that:
``[s]hould haste make waste, the resulting regulations will be subject
to successful challenge''. . . . If EPA needs more time to get it
right, it can seek more time.''
Unfortunately, it appears that the EPA's proposed regulation
contained significant errors. Indeed, the EPA did not analyze the
impact of its regulation on electric reliability or provide sufficient
time for industry to do so.
In November of 2011, the UARG brought its concerns to the judge,
asking for relief from the consent decree.
In particular, it argued that more time was needed to respond to the
voluminous comments submitted during the rulemaking process, to fix the
serious flaws, and to then more carefully consider the promulgation of
a rule with such serious and far-reaching consequences. For example,
the schedule under the consent decree only allowed 104 days for the EPA
to consider and respond to 20,000 unique, public comments received
before it published the final rule. In total, there were 960,000
comments submitted.
The UARG's motion was supported by twenty-four states and Governor
Terry Branstad on behalf of the people of Iowa. As part of their amicus
brief, they pointed out that the American Coalition for Clean Coal
Electricity, ACCCE, had estimated that the rule promulgated under the
consent decree would result in the loss of 1.44 million jobs in the
United States between 2013 and 2020. Because of the rule, the ACCCE
also predicts national electricity price increases in 2016 to average
11.5 percent, with an increase of 23.5 percent in some regions.
The EPA issued a final rule on December 21, 2011, and has argued that
the UARG's motion is moot.
As it stands, the rule is among the most costly of rules ever
promulgated by the EPA with the agency estimating that the annualized
cost at $9.6 billion in 2015. Industry estimates are even higher.
Petitions for reconsideration of the rule are pending and more lawsuits
are likely.
The EPA could have done it right the first time by crafting a
sensible, workable rule that both protects the environment and can be
implemented without causing unnecessary job losses or higher
electricity prices for hard-working families. Instead, we have flawed,
controversial regulation that may have to be rewritten.
Although we don't know how this will all turn out, we have to
remember that the process by which this rule was created was the
product of a consent decree.
In sum, when special interest groups and agencies engage in sue-and-
settle litigation, the end product is a regulation that implements the
priorities of the special interest groups. Moreover, these regulations
are created under schedules that render notice-and-comment rights a
mere formality, eliminating the opportunities for regulated entities,
the public and the OIRA to have any input on the content of final
regulations.
That is why I'm introducing the Sunshine for Regulatory Decrees and
Settlements Act of 2012. Senators Kyl, Cornyn, Coburn, Lee and Paul are
cosponsors of the bill.
Representative Benjamin Quayle of Arizona has introduced a companion
bill in the House.
The Sunshine bill endeavors to solve the problems I have outlined. It
does this by enacting reasonable pro-transparency measures. I'll just
outline a few of those measures.
First, the Sunshine bill provides for greater transparency, requiring
agencies publicly to post and report to Congress information on sue-
and-settle complaints, decrees and settlements.
Second, the bill prohibits same-day filing of complaints and pre-
negotiated consent decrees and settlement agreements in cases seeking
to compel agency action. Instead, it requires that consent decrees and
settlement agreements be filed only after interested parties have been
able to intervene in the litigation and join settlement negotiations
and only after any proposed decree or settlement has been published for
notice and comment.

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Third, the Sunshine bill requires courts considering whether to
approve proposed consent decrees and settlement agreements to account
for public comments and compliance with regulatory process statutes and
executive orders. This bill would facilitate public participation by
allowing comment on any issue related to the matters alleged in the
complaint or addressed in the proposed agreement. Government agencies
would be required to respond to comments, and the court would assess
whether the proposed schedule allows sufficient time for real and
meaningful, public comment on the regulation.
Fourth, the bill requires the Attorney General or, where appropriate,
the defendant agency's head, to certify to the court that he or she has
approved any proposed consent decree or settlement agreement that
includes terms that: convert into a duty a discretionary authority of
an agency to propose, promulgate, revise, or amend regulations, commit
an agency to expend funds that have not been appropriated and budgeted,
commit an agency to seek a particular appropriation or budget
authorization, divest an agency of discretion committed to it by
statute or the Constitution, or otherwise afford any relief that the
court could not enter under its own authority.
Finally, the Sunshine bill makes it easier for succeeding
administrations to successfully move the courts for modifications of a
prior administration's consent decrees by providing for de novo review
of motions to modify if the circumstances have changed.
Sue-and-settle litigation damages the transparency, public
participation and judicial review protections Congress has guaranteed
for all of our citizens in the rulemaking process.
Regulations are laws. The procedure and process used to create them
are important. They are part of our system. The American system of
lawmaking and judicial review is a model for the world. Our system
should not be distorted or manipulated.
Regulations must be made in the open, through the procedures and
processes established under our laws.
The Sunshine for Regulatory Decrees and Settlements Act will help to
ensure that established and well-grounded protections remain in place,
while maintaining the government's ability to enter into consent
decrees and settlement agreements, when appropriate.
I urge all of my colleagues to work with me and to support this
legislation.

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