[Congressional Record (Bound Edition), Volume 145 (1999), Part 13]
[Senate]
[Pages 18460-18481]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. WYDEN (for himself and Mr. Craig):
  S. 1457. A bill to amend the Energy Policy Act of 1992 to assess 
opportunities to increase carbon storage on national forests derived 
from the public domain and to facilitate voluntary and accurate 
reporting of forest projects that reduce atmospheric carbon dioxide 
concentrations, and for other purposes; to the Committee on Energy and 
Natural Resources.


      THE FOREST RESOURCES FOR THE ENVIRONMENT AND THE ECONOMY ACT

  Mr. WYDEN. Mr. President, today Senator Craig and I are introducing a 
bill that will help protect the global climate system by improving 
local natural resource management and strengthening the economy in 
rural communities. The Forest Resources for the Environment and the 
Economy Act of 1999 will expand the nation's forested lands and provide 
effective tools for including forests in our national efforts to fight 
global warming. The bill focuses on forests because they are the lungs 
of our planet. Investing in healthy forests is an investment in the 
health of our environment today and the well-being of our planet for 
decades to come.
  In the Pacific Northwest, forests are more than critical 
environmental resources--they are also a cornerstone of our economy. In 
debates about forest policies, there are those who have advocated an 
exclusively environmental pathway, and others who have stressed an 
exclusively economic pathway. This bill is part of what I believe is a 
third pathway through the woods--a path to both stronger rural 
economies and healthier forests. It will reduce the buildup of 
greenhouse gases in the atmosphere and help protect our global climate 
for ourselves, our children and our grandchildren. It will provide 
improved wildlife and fish habitats and

[[Page 18461]]

protect our waterways. It will enhance our national forests by reducing 
water pollution within their watersheds. It will provide jobs in the 
forestry sector in areas that have been hard hit by declining timber 
harvests. And it will grow additional timber resources on 
underproductive private lands.
  The legislation does all of this through an entirely voluntary, 
incentive-based approach. The bill makes new resources available to 
private landowners through state-operated revolving loan programs that 
provide assistance for tree planting and other forest management 
actions. By quantifying forests' contribution to climate protection, 
the bill puts the free market to work at turning the initial Federal 
investment into a long-term source of non-federal funding for forestry 
projects. And the bill takes an important first step toward reducing 
greenhouse gases on Federal lands by directing the Forest Service to 
report to Congress on options to increase carbon storage in our 
national forests.
  I am deeply concerned about the risks that we are taking with our 
unprecedented experiment with the global climate system. Global climate 
change may jeopardize critical forest and other natural resources that 
are closely tied with Oregon's economy and our citizens' quality of 
life. Water managers in the Northwest may be faced with daunting 
challenges if the predicted climate changes, such as drier, hotter 
summers, complicate protection and management of water supplies. Over 
the last Century, the average temperature in Corvallis, Oregon has 
increased 2.5 degrees Fahrenheit, and average temperatures across 
Oregon could increase by 5 degrees or more over the next century, 
putting the elderly in Oregon especially at risk from more intense heat 
waves. And sea level rise resulting from global warming could eliminate 
the salt marshes along Tillamook and Coos Bay regions. Given these 
potential hazards of global warming, the challenge is to find 
strategies to protect our quality of life that won't cause an economic 
meltdown.
  One of the key strategies for meeting this challenge is something 
this planet has been doing for more than 300 million years--growing 
abundant and healthy forests. Forests are a critical part of our global 
climate system. The total amount of greenhouse gases in our atmosphere 
depends in part on the efficiency of forests and other natural 
``sinks'' that absorb carbon dioxide--the most significant greenhouse 
gas--from the atmosphere. In fact, the world's forests contain 200 
times as much carbon as is emitted to the atmosphere each year from 
burning fossil fuels. The implications are as simple as they are 
scientifically sound--if we grow more trees, bigger trees, and 
healthier trees, we will remove more greenhouse gases from the 
atmosphere and help protect the global climate. According to the 
Pacific Forest Trust, our forest lands in the United States are only 
storing one-quarter of the carbon they can ultimately store. Just 
tapping a portion of this potential by expanding and increasing the 
productivity of the nation's 737 million acres of forests is an 
important part of a win-win strategy to slow global warming.
  And here's the good news--an ounce of investment in our forests is 
worth not only a pound of global warming cure, but also two pounds of 
jobs and three pounds of protection for our waterways and wildlife. The 
bill that I am introducing today will not only protect our global 
environment, but also will provide immediate dividends in terms of 
watershed and habitat protection. It will provide jobs today for tree 
planting and forest management, and jobs tomorrow in carbon accounting 
and monitoring to ensure that greenhouse gas reductions are real and 
verifiable.
  I recognize that global warming is a large problem that cannot be 
solved by forestry actions alone. We need a portfolio of approaches, 
and I continue to strongly support research, development and deployment 
of energy efficient and renewable technologies that reduce greenhouse 
gas emissions. But increasing our nation's forest lands is a key part 
of the solution and something we can do immediately. Forests may not be 
a silver bullet that will solve the entire global warming problem, but 
they are a silver lining to the problem that can provide jobs around 
the country while taking a big step to reverse the buildup of 
greenhouse gas in the atmosphere.
  It is sometimes hard to believe that seven years ago Senators from 
both parties proclaimed their universal support for taking action to 
protect the climate system and reducing the buildup of greenhouse gases 
in the atmosphere. When the 1992 United Nations Framework Convention on 
Climate Change was ratified by the Senate, Senators from both parties 
came to the floor to applaud this commitment to begin reducing 
greenhouse gas emissions. We cannot afford to let the current debates 
about international treaties paralyze this Congress into inaction when 
there are opportunities here at home to protect our environment in ways 
that also provide jobs and economic growth.
  Forests are one of those opportunities. This bill will take the money 
that polluters pay when they are caught violating the Clean Air Act and 
Clean Water Act and use it to expand our forests, protect streams and 
rivers and help remove greenhouse gases from the air. In fiscal year 
1998, $45 million of these environmental penalties were assessed 
against polluters. There are currently no guarantees that these 
penalties, which revert to the General Fund, are used to improve our 
environment. This bill would make this money available as loans to 
small and medium landowners to cover the upfront costs of tree planting 
and other projects that grow healthy, productive forests and provide 
better wildlife habitats.
  This bill is supported by the National Association of State Foresters 
and the Society of American Foresters. It responds to recent 
recommendations of the National Academy of Sciences by providing 
assistance to overcome the capital constraints that prevent non-
industrial, private forest land owners from growing healthy forests. 
Almost 10 million landowners in the United States own 42 percent of 
non-industrial, private forest land in parcels of less than 100 acres. 
Access to these low-interest loans can empower these landowners to 
improve their lands while providing global environmental protection.
  Under the bill, State Foresters will be able to give loans for forest 
projects that remove greenhouse gases from the atmosphere while 
improving habitats and protecting waterways. For example, loans will be 
available for planting trees as buffer zones along salmon streams and 
rivers in areas that are currently being used by livestock or for crop 
production. Loans will be available to turn thin and poorly stocked 
forest lands into healthier and more productive lands that remove 
greater amounts of greenhouse gases from the atmosphere and provide 
additional timber resources on private lands. And loans will be 
available to grow trees for use in bioenergy facilities that can 
provide energy without increasing the greenhouse gases in our 
atmosphere.
  These loans must be repaid with interest--money that will be 
reinvested in additional loans to double and triple the impact of every 
federal dollar over time. Loans may not be provided for reforestation 
activities already required under any state or local laws. And the bill 
ensures that people aren't paid to cut their existing trees in order to 
receive funding for replanting afterwards.
  A critical element of the bill is that it harnesses the power of the 
free market to allow responsible businesses to invest in the nation's 
forests. Across the nation, companies are voluntarily seeking ways to 
reduce greenhouse gases. Some companies are going as far as sending 
money oversees to protect forests in other countries. Forests in Brazil 
are important, but forests in Bend, Oregon, can do just as good a job 
at fighting off global warming. In fact, our Northwest forests are some 
of the best carbon ``sinks'' in the world. This bill provides a way for 
companies to invest in American forests and know with accuracy the 
amount of greenhouse gases that are removed from the atmosphere due to 
their investments. Once businesses recognize that the nation's forests 
are an opportunity for

[[Page 18462]]

environmental investment, their entrepreneurial ingenuity will generate 
new opportunities for consumers and other businesses to tap into this 
win-win opportunity.
  We know that this approach works because of the leadership of my home 
State of Oregon. The loan program is modeled after the innovative 
Forest Resource Trust, which was established in Oregon in 1993, and is 
just one of the many ways Oregon continues to lead the nation in state 
actions to reduce greenhouse gas emissions. I am pleased to say that 
PacifiCorp announced last month that it is contributing $1.5 million to 
the Forest Resource Trust to support tree planting and reduce 
greenhouse gases in the atmosphere. This leadership by PacifiCorp will 
create forestry jobs in Oregon, protect salmon and fish habitat, create 
new wildlife habitats, and remove greenhouse gases from the atmosphere. 
I am introducing this bill to make sure that we take advantage of these 
opportunities across the country and encourage more businesses to 
invest in the nation's forests.
  In addition to establishing the state revolving loan programs, the 
bill makes important changes to the Energy Policy Act of 1992 to 
strengthen the voluntary accounting and verification of greenhouse gas 
reductions from forestry activities. The bill directs the Secretary of 
Agriculture to develop new guidelines on accurate and cost-effective 
methods to account for and report real and credible greenhouse gas 
reductions. These guidelines will be developed with the input of a new 
advisory board representing industry, foresters, states, and 
environmental groups.
  This bill is about taking advantage of a clear win-win opportunity. 
It's a win for the global environment. It's a win for sustainable 
forestry. It's a win for local water protection. And it's a win for 
rural communities.
  For these reasons, the bill is already supported by timber companies 
and environmental organizations alike. I have already received 
supportive letters from: American Forest and Paper Association, 
American Forests, Environmental Defense Fund, Governor John A. 
Kitzhaber of Oregon, National Association of State Foresters, 
PacifiCorp, Society of American Foresters, The Nature Conservancy, and 
The Pacific Forest Trust.
  I look forward to working with my colleagues to make sure that we 
pursue this common-sense good step toward protecting the environment 
and supporting our forest workers.
  I ask unanimous consent that the Section-by-Section Analysis of the 
Forest Resources for the Environment and the Economy Act be printed in 
the Record.
  There being no objection, the item was ordered to be printed in the 
Record as follows:

 The Forest Resources For The Environment And The Economy Act--Section-
                          by-Section Analysis


                                SUMMARY

       The purpose of the bill is to promote sustainable forestry 
     in the United States by increasing forest carbon 
     sequestration, improving forest health, enhancing wildlife 
     and fish habitats, improving water quality, providing 
     employment and income to rural communities, providing new 
     sources of forest products and increasing use of renewable 
     biomass energy that improves the energy security of the 
     United States. The bill achieves these purposes through four 
     major actions:
       (1) State Revolving Loan Programs. The bill provides 
     assistance to nonindustrial private forest landowners and 
     Indian tribes to grow new forests and increase the 
     productivity of existing forests in order to increase carbon 
     sequestration, protect watersheds and fish habitats and 
     improve wildlife diversity. Assistance to landowners will be 
     provided through State-based loan programs. The Federal share 
     of funding for these State loan programs will come from 
     penalties that are being assessed against violators of the 
     Clean Air Act and the Clean Water Act (civil penalties 
     assessed in FY 1998 totaled $45 million).
       (2) Guidelines for Accurate Carbon Accounting for Forests. 
     The bill directs the Secretary of Agriculture to establish 
     scientifically-based guidelines for accurate reporting, 
     monitoring and verification of carbon storage from forest 
     management actions. The bill establishes a multi-stakeholder 
     Carbon and Forestry Advisory Council to assist USDA in 
     developing the guidelines.
       (3) Report on Options to Increase Carbon Storage on Federal 
     Lands. The bill directs the Secretary of Agriculture to 
     report to Congress on forestry options to increase carbon 
     storage in National Forests.
       (4) National Forest Watershed Restoration Cooperative 
     Agreements. The bill allows the Secretary of Agriculture to 
     enter into cooperative agreements with willing State and 
     local governments, Indian tribes, private and nonprofit 
     entities, and landowners for protection, restoration and 
     enhancement of fish and wildlife habitat and other resources 
     on public land, Indian land or private land in a national 
     forest watershed.


                         SECTION 1. SHORT TITLE

       The title of the bill is the ``Forest Resources for the 
     Environment and the Economy Act''.


                    SECTION 2. FINDINGS AND PURPOSES

       This section states the purpose of the bill, which is to 
     promote sustainable forestry in the United States by 
     increasing forest carbon sequestration, improving forest 
     health, enhancing wildlife and fish habitats, improving water 
     quality, providing employment and income to rural 
     communities, providing new sources of forest products and 
     increasing use of renewable biomass energy that improves the 
     energy security of the United States.
       This section also states the findings of the bill, 
     including:
       The Federal Government should increase the forest carbon 
     storage on public land while pursuing existing statutory 
     objectives, but insufficient information exists on the 
     opportunities to increase carbon storage on public land 
     through improvements in forest land management;
       Important environmental benefits to national forests can be 
     achieved through cooperative forest projects that enhance 
     fish and wildlife habitats, water and other resources on 
     public or private land located in national forest watersheds;
       Forest projects also provide economic benefits, including 
     employment and income that contribute to the sustainability 
     of rural communities and future supplies of forest products;
       Monitoring and verification of forest carbon storage 
     provides an important opportunity to create employment in 
     rural communities and substantiate improvements in natural 
     habitats or watersheds due to forestry activities; and
       Sustainable production of biomass energy feedstocks 
     provides a renewable source of energy that can reduce carbon 
     dioxide emissions and improve the energy security of the 
     United States by diversifying energy fuels.


                         SECTION 3. DEFINITIONS

       This section defines terms used in the bill, including the 
     following:
       ``Forestry carbon activity'' is defined as a forest 
     management action that increases long-term carbon storage and 
     has a positive impact on watersheds, fish habitats and 
     wildlife diversity.
       ``Forest carbon reservoir'' is defined as trees, roots, 
     soils or other biomass associated with forest ecosystems or 
     products from the biomass that store carbon.
       ``Forest carbon storage'' is defined as the quantity of 
     carbon sequestered from the atmosphere and stored in forest 
     carbon reservoirs, including forest products.
       ``Forest land'' is defined as land that is, or has been, at 
     least 10 percent stocked by forest trees of any size, 
     including land that had such forest cover and that will be 
     naturally or artificially regenerated, and including a 
     transition zone between a forested and nonforested area that 
     is capable of sustaining forest cover.
       ``Forest management action'' is defined as the practical 
     application of forestry principles to the regeneration, 
     management, utilization and conservation of forests to meet 
     specific goals and objectives, while maintaining the 
     productivity of the forests. ``Forest management action'' 
     includes management of forests for aesthetics, fish, 
     recreation, urban values, water, wilderness, wildlife, wood 
     products and other forest values.
       ``National forest watershed'' is defined as a watershed 
     that contains national forest land, that consequently has 
     unique interest to Federal land managers, and in which all 
     landowners, including the Federal Government, share interest 
     and influence in the management and health of the watershed.
       ``Reforestation'' is defined as the reestablishment of 
     forest cover naturally or artificially, including planned 
     replanting, reseeding and managed natural regeneration.


  section 4. carbon management on federal land; carbon monitoring and 
                        verification guidelines.

       This section directs the Secretary of Agriculture to report 
     to Congress on carbon management on Federal land, and directs 
     the Secretary of Agriculture to develop guidelines for the 
     voluntary reporting, monitoring and verification of carbon 
     storage resulting from forest management actions. This 
     section is accomplished through amendment of Title XVI 
     (``Global Climate Change'') of the Energy Policy Act of 1992.
       (a) Definitions. This subsection amends the Energy Policy 
     Act to add the definitions for ``forest carbon storage,'' 
     ``carbon storage program,'' ``forest carbon reservoir,'' 
     ``forest management action'' and ``sequestration'' that were 
     specified in Section 3.

[[Page 18463]]

       (b) Carbon Management on Federal Land. This subsection 
     directs the Secretary of Agriculture to report to Congress 
     within one year on the quantity of carbon contained in the 
     forest carbon reservoir on Western national forests (i.e., 
     ``national forests derived from the public domain''). The 
     report will include an assessment of forest management 
     actions that can increase carbon storage on these national 
     forest lands while providing positive impacts on watersheds 
     and fish and wildlife habitats. Finally, the report will 
     include an assessment of the role of forests in the carbon 
     cycle and the contributions of forestry to the global carbon 
     budget. This subsection is accomplished by amendment to 
     section 1604 of the Energy Policy Act (``Assessment of 
     Alternative Policy Mechanisms for Addressing Greenhouse Gas 
     Emissions'').
       (c) Monitoring and Verification of Carbon Storage. This 
     subsection amends section 1605(b) of the Energy Policy Act 
     (``Voluntary Reporting'') by directing the Secretary of 
     Agriculture to review the existing Federal guidelines on 
     reporting, monitoring, and verification of carbon storage 
     from forest management actions. Within 18 months of enactment 
     and following an opportunity for public comment on the 
     existing guidelines, the Secretary of Agriculture will make 
     recommendations to the Secretary of Energy for amendment of 
     the guidelines.
       Carbon and Forestry Advisory Council: This subsection also 
     directs the Secretary of Agriculture to establish an 18-
     member, multi-stakeholder Carbon and Forestry Advisory 
     Council for the purpose of advising the Department of 
     Agriculture on: the development of the guidelines for 
     accurate voluntary reporting of greenhouse gas sequestration 
     from forest management actions; evaluating the potential 
     implementation of the guidelines; estimating the effect of 
     proposed implementation on atmospheric carbon mitigation; 
     reviewing and updating the guidelines; reporting to Congress 
     on the results of the carbon storage program established in 
     Section 5 of this bill; and assessing the vulnerability of 
     forests to climate change. The Advisory Council includes 
     experts on carbon sequestration representing Federal 
     agencies, the forestry industries, forestry workers and 
     professionals, States, environmental organizations and 
     landowners, as well as independent scientists. Terms of the 
     Advisory Council are staggered to ensure continuity from year 
     to year.
       Criteria: The guidelines developed by the Secretary of 
     Agriculture must be based on: (1) measuring increases in 
     carbon storage in excess of that which would have occurred in 
     the absence of the forest management actions; and (2) 
     comprehensive carbon accounting that reflects net increases 
     in the carbon reservoir and takes into account any carbon 
     emissions resulting from disturbance of carbon reservoirs 
     existing at the start of forest management actions. The 
     guidelines must include options for estimating possible 
     leakage of carbon emissions to other lands, and for 
     quantifying the expected carbon storage over various time 
     periods, taking into account the likely duration of carbon 
     stored in the carbon reservoir.
       Recommended practices: The guidelines must also include 
     recommended practices for monitoring, measurement and 
     verification of carbon storage from forest management actions 
     that, to the maximum extent practicable: are based on 
     statistically sound sampling strategies, are cost-effective 
     and allow pooled assessments across lands with multiple 
     owners.
       Guidance to States: The guidelines will include guidance to 
     States for reporting, monitoring and verifying carbon storage 
     achieved under the carbon storage program established in 
     Section 5 of the bill.
       Biomass energy projects: The guidelines will include 
     guidance on calculating net greenhouse gas reductions from 
     biomass energy projects, including net changes in carbon 
     storage resulting from changes in land use, and the effect 
     that using biomass to generate electricity (including 
     cofiring of biomass with fossil fuels) has on the 
     displacement of greenhouse gas emissions from fossil fuels.
       Adoption of recommendations by DOE: The subsection directs 
     the Secretary of Energy, acting through the Administrator of 
     the Energy Information Administration, to revise the existing 
     voluntary reporting guidelines to include the recommendations 
     provided by the Secretary of Agriculture.
       Periodic review of guidelines: At least every 24 months, 
     the Secretary of Agriculture must convene the Advisory 
     Council, review the guidelines and revise the guidelines as 
     necessary, including to ensure consistency with any future 
     Federal laws that provide recognition, credit or reward for 
     reductions of atmospheric greenhouse gas concentrations 
     resulting from forest management actions.
       Monitoring of State revolving loan programs: States 
     participating in the revolving loan program established in 
     Section 5 of the bill must report annually to the Secretary 
     of Agriculture on the results of the program. If a company or 
     non-governmental organization provides funding to the State 
     for specific projects, then the State shall report the carbon 
     achieved by those projects. The Secretary of Agriculture 
     shall review each of these reports, certify reports that are 
     in compliance with the guidelines established by USDA and 
     submit the certified report to the EIA Administrator for 
     inclusion in the 1605(b) voluntary reporting data base.


      SECTION 5. CARBON STORAGE AND WATERSHED RESTORATION PROGRAM

       This section directs the Secretary of Agriculture to 
     establish a program to provide assistance through State 
     revolving loan funds to Indian tribes and owners of 
     nonindustrial private forest land to undertake forestry 
     carbon activities. This section also allows the Secretary of 
     Agriculture to enter into cooperative agreements to protect 
     and enhance fish and wildlife habitat and other resources.
       (a) National Forest Watershed Restoration Cooperative 
     Agreements. This subsection allows the Secretary of 
     Agriculture to enter into cooperative agreements with willing 
     State and local governments, Indian tribes, private and 
     nonprofit entities and landowners for protection, restoration 
     and enhancement of fish and wildlife habitat and other 
     resources on public land, Indian land or private land in a 
     national forest watershed. Projects under such a cooperative 
     agreement are eligible for loans discussed in the next 
     subsection. This subsection extends appropriations 
     authorities that were first provided under Section 334 of the 
     Interior and Related Appropriation Act for FY 1998 (``the 
     Wyden Amendment'').
       (b) State Revolving Loan Funds. This subsection establishes 
     a program to provide assistance through State revolving loan 
     funds to Indian tribes and owners of not more than 5,000 
     acres of nonindustrial private forest land. The assistance is 
     in the form of loans to support forestry carbon activities 
     that increase long-term carbon storage or provide new sources 
     of biomass feedstocks for renewable energy generation, and 
     that have a positive impact on watersheds, fish habitats and 
     wildlife diversity. The program will be administered by the 
     Secretary of Agriculture.
       Guidance: USDA, in collaboration with States, will provide 
     guidance on eligible forestry carbon activities based on the 
     criteria of the bill, recognizing that States should have 
     maximum flexibility to achieve the purposes of the bill in 
     ways most appropriate for each State.
       Prohibitions: Loans will not be issued for activities 
     required under other applicable Federal, State or local laws, 
     nor for costs incurred before entering into a loan agreement 
     with the State.
       Limitation on land considered for funding: States shall not 
     enter into new loan agreements under the bill to fund 
     reforestation of land that has been harvested after enactment 
     if the landowner receives revenues from the harvest 
     sufficient to reforest the land.
       Native species: Funding of reforestation activities shall 
     be provided only for a species that is native to a region, 
     with preference given to species that formerly occupied the 
     land.
       Sustainable forest management plan: States must give 
     priority to projects on land under a sustainable forestry 
     management program or forest stewardship plan, if the 
     projects are consistent with the program or plan.
       Loan amount: Loans can cover up to 100 percent of total 
     project costs, not to exceed $100,000 during any 2-year 
     period.
       Repayment: Loans must be repaid to the State with interest 
     at a rate of at least 5 percent per annum. Loans are to be 
     repaid when the land is harvested, or in accordance with any 
     other repayment schedule determined by the State (for 
     example, a portion of proceeds from each timber sale to be 
     paid over more than one rotation).
       Risk: Landowners do not have to repay loans for timber that 
     is lost to natural catastrophes or that cannot be harvested 
     because of government-imposed restrictions on timber 
     harvesting.
       Lien: The loan terms will include a lien on all timber, 
     forest products and biomass grown on land covered by the 
     loan, with an assurance that the terms of the lien shall 
     transfer with the land on sale, lease or transfer of the 
     land.
       Buyout option: The loan terms will specify financial terms 
     allowing the owner to pay off the loan with interest prior to 
     harvesting the timber specified in the loan.
       Greenhouse gas reductions: A loan agreement must include 
     recognition that, until the loan is paid off or otherwise 
     terminated, all reductions in atmospheric greenhouse gases 
     achieved by projects funded by the loan are attributable to 
     the State that provides funding for the loan, or to any 
     company or NGO that provides funding for the loan via the 
     State program.
       Permanent conservation easements: Loan recipients can 
     cancel the loan by donating to the State or another 
     appropriate entity a permanent conservation easement that 
     permanently protects the land and resources at a level above 
     what is required under applicable Federal, State and local 
     law and furthers the purposes of the bill, including managing 
     the land in a manner that maximizes the forest carbon 
     reservoir of the land.
       Reinvestment of funds: All repayments collected by a State 
     must be reinvested in the program and used by the State to 
     make additional loans.
       Records: The State Forester shall maintain all loan records 
     and make them available to the public.

[[Page 18464]]

       Matching funds: A State must match Federal funding by at 
     least 25% beginning in the second year of participating in 
     the program.
       Funding Distribution: Not later than 180 days after 
     enactment, the Secretary will report to Congress on a formula 
     under which Federal funds will be distributed among eligible 
     States. The formula will be based on maximizing the potential 
     for meeting the objectives of the bill, and give appropriate 
     consideration to:
       The acreage of unstocked or underproducing private forest 
     land in each State within national forest watersheds; the 
     potential productivity of such land; the potential long-term 
     carbon storage of such land; the potential to achieve other 
     environmental benefits, such as restoration of native forest 
     communities in riparian areas; the number of owners eligible 
     for loans in each State; and the need for reforestation, 
     timber stand improvement, or other forestry investments 
     consistent with the objectives of the bill.
       The formula will give priority to States that have 
     experienced or are expected to experience significant 
     declines in employment levels in the forestry industries due 
     to declining timber harvests on Federal land.
       Private funding: A revolving loan fund may accept and 
     distribute as loans any funds provided by nongovernmental 
     organizations, businesses or persons in support of the 
     purposes of this Act.
       Bonneville Power Administration (BPA): States served by BPA 
     (Washington, Oregon, Idaho and Montana) may apply for funding 
     from BPA for purposes of funding loans that meet both the 
     objectives of this Act and the fish and wildlife objectives 
     of BPA under current law. Any such application will be 
     subject to the same rules and procedures as any other 
     application.
       Authorization of Appropriations: For the state revolving 
     loan program, this subsection authorizes funding from FY 2001 
     to FY 2010 at amounts equal to civil penalties collected 
     under the Clean Water Act and the Clean Air Act, which 
     currently revert to the Treasury as General Revenues. In 
     fiscal year 1998, $45 million in penalties were assessed. 
     Because penalty assessments can not be accurately predicted 
     in advance, authorization in any given year would be based on 
     the penalties assessed two years preceding.
                                 ______
                                 
      By Mr. REID:
  S. 1458. A bill to provide for a reduction in the rate of adolescent 
pregnancy through the evaluation of public and private prevention 
programs, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.


                     teen pregnancy reduction bill

  Mr. REID. Mr. President, despite the recent declines in teen birth 
rates in general, the overall teen birth rate for 1996 is still higher 
than it was in the early to mid-1980s, when the rate was at its lowest 
point. In fact, United States has the highest rates of teen pregnancy 
and births in the western industrialized world. More than 4 out of 10 
young women in the U.S. become pregnant at least once before they reach 
the age of 20--nearly one million a year.
  Unfortunately, my home state of Nevada has the highest teen pregnancy 
rate in the country--140 pregnancies per 1,000 girls aged 15-19 in 
1996.
  Teen pregnancy affects us all. Teen mothers are less likely to 
complete high school, and more likely to end up on welfare (nearly 80 
percent of unmarried teen mothers end up on welfare). Teen pregnancy 
costs the United States at least $7 billion annually. The children of 
teenage mothers have lower birth weights, are more likely to perform 
poorly in school, and are at greater risk of abuse and neglect. The 
sons of teen mothers are 13 percent more likely to end up in prison 
while teen daughters are 22 percent more likely to become teen mothers 
themselves.
  Teen pregnancy has become a significant problem in America's fastest 
growing ethnic group--the Hispanic community. Latinos currently 
constitute approximately 11 percent of the total U.S. population. By 
2010, Latinos will be the largest minority group, and by 2050 
approximately one-quarter of the U.S. population will be Latino.
  Latinas have the highest teen birth rate among the major racial/
ethnic groups in the United States. In 1997, the birth rate for Latina 
15- to 19-year-olds was 97.4 per 1,000, nearly double the national rate 
of 52.3 per 1,000. Approximately one-quarter of the births in 1997 to 
teens aged 15 to 19 were to Latinas. Further, the teen birth and 
pregnancy rates for Latinas have not decreased as much in recent years 
as have the overall U.S. teen birth and pregnancy rates.
  To combat the plague of teen pregnancy in this country, I am 
introducing the ``Teenage Pregnancy Reduction Act of 1999.'' In so 
doing, I join Congresswoman Lowey, who has introduced the House 
companion bill.
  The Teenage Pregnancy Reduction Act of 1999 will provide in-depth 
evaluation of promising teenage pregnancy prevention programs. Experts 
on teen pregnancy have informed us that such an evaluation is very 
needed. This three year evaluation will be funded at $3.5 million per 
year. The bill requires that a report of the evaluation's results be 
made to Congress, and the results be disseminated to the administrators 
of prevention programs, medical associations, public health services, 
school administrators and others. In addition, the bill provides for 
the establishment of a National Clearinghouse on Teenage Pregnancy 
Prevention Programs. Lastly, the bill provides $10 million for a one-
time incentive grant to programs that complete the evaluation and are 
found to be effective.
  Social problems like teen pregnancy are not happening in a vacuum, 
independent from other social problems. Nevada has the highest teen 
pregnancy rate, and it also has the highest high school dropout rate. 
Obviously, these two issues are related. Only one-third of teen mothers 
receive a high school diploma.
  Senator Bingaman and I have offered a dropout bill similar to the 
teen pregnancy bill I introduce today. Both bills look to what states 
and communities are doing now and focus on those programs that are 
working. We can then help states and communities replicate these 
successful programs. But we are not going to totally solve problems 
like teen pregnancy through programs and legislation--we need to talk 
to our children. Studies show that teenagers who have strong emotional 
attachments to their parents are much less likely to become sexually 
active at an early age. We cannot legislate parents talking to their 
children, but we can provide the information and programs that will 
help parents work with their teens.
  I would like to acknowledge the National Campaign to Prevent Teen 
Pregnancy, whose mission is to reduce the teen pregnancy rate by one-
third between 1996 and 2005. I think that we can accomplish this goal, 
and I will do all that I can to help.
                                 ______
                                 
      By Mr. MACK (for himself, Mrs. Feinstein, Mr. Helms, and Mr. 
        Robb):
  S. 1459. A bill to amend title XVIII of the Social Security Act to 
protect the right of a Medicare beneficiary enrolled in a 
Medicare+Choice plan to receive services at a skilled nursing facility 
selected by that individual; to the Committee on Finance.


                  MEDICARE RETURN TO HOME ACT OF 1999

  Mr. MACK. Mr. President, today I am pleased to join my colleagues, 
Mrs. Feinstein, Mr. Helms and Mr. Robb, in sponsoring the Medicare 
Return to Home Act of 1999.
  This legislation will ensure that senior citizens enrolled in 
Medicare+Choice health plans who normally reside in continuing care 
retirement communities or nursing homes have the opportunity to return 
to the same facility after a period of hospitalization. Many of the 
retirement communities contain fully licensed facilities established to 
provide skilled nursing services to their residents when required them. 
Often, people choose a continuing care retirement community because of 
the different levels of care that will be available to them as they age 
in that community. These living arrangements allow couples and 
individuals to maintain their independence by having the ability to 
move in and out of various levels of care according to their needs over 
time. People who are fully independent when they move into a 
residential community often require assisted living, skilled nursing 
care or some other assistance over the course of their lifetime in 
residence.
  An increasing number of seniors have chosen Medicare+Choice plans as 
the way that they wish to receive health care services under Medicare. 
These plans reduce the potential for substantial out-of-pocket costs 
for the very

[[Page 18465]]

sick which might be the experience with the traditional original 
Medicare plan.
  One unfortunate consequence of the Medicare+Choice option involves 
the inability of seniors to return to their chosen community or nursing 
home where they resided following a period of hospitalization. Some 
Medicare+Choice plans will only permit patients to be discharged from 
the hospital to a facility with which the Medicare+Choice plan has a 
contract. Then, patients cannot return to the residential community 
that they selected, which may have been chosen because it included a 
skilled nursing facility. Nor can they return to the nursing home in 
which they had previously resided. This can be traumatic for frail 
elderly patients and may contribute to their disorientation and impede 
their recovery. It places them in an unfamiliar setting away from home, 
possibly separating them from a spouse and friends. Staff at their 
chosen retirement community or nursing home may also be familiar with 
their individual needs and habits which could only assist in their 
return to wellness. It makes little sense for them to be sent elsewhere 
upon discharge from a hospital.
  Passage of this legislation ensures the ability of Medicare+Choice 
beneficiaries to return to the residential home facility of their 
choice or nursing home in which they previously resided following 
hospitalization under the following conditions:
  1. The enrollee chooses to return to the residential community 
facility where they had been living.
  2. The facility is licensed and qualified under state and federal law 
to provide the required services.
  3. The residential community or nursing home agrees to accept the 
managed care plan's payment which must be similar to the payment made 
to contracted facilities.
  This legislation provides for continuity in the lives of the elderly 
following a period of hospitalization. It does not increase costs to 
Medicare+Choice plans or to beneficiaries.
  It allows people to return to their loved ones in the facility where 
they have chosen to live.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1459

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare Return To Home Act 
     of 1999''.

     SEC. 2. ENSURING CHOICE FOR SKILLED NURSING FACILITY SERVICES 
                   UNDER THE MEDICARE+CHOICE PROGRAM.

       (a) In General.--Section 1852 of the Social Security Act 
     (42 U.S.C. 1395w-22) is amended by adding at the end the 
     following:
       ``(l) Ensuring Choice of Skilled Nursing Facility 
     Services.--
       ``(1) Coverage of services provided at a snf located in 
     enrollee's continuing care retirement community or at a snf 
     in which enrollee previously resided.--Subject to paragraph 
     (2), a Medicare+Choice organization may not deny coverage for 
     any service provided to an enrollee of a Medicare+Choice plan 
     (offered by such organization) by--
       ``(A) a skilled nursing facility located within the 
     continuing care retirement community in which the enrollee 
     resided prior to being admitted to a hospital; or
       ``(B) a skilled nursing facility in which the enrollee 
     resided immediately prior to being admitted to a hospital.
     The requirement described in the preceding sentence shall 
     apply whether or not the Medicare+Choice organization has a 
     contract with such skilled nursing facility to provide such 
     services.
       ``(2) Required factors.--Paragraph (1) shall not apply 
     unless the following factors exist:
       ``(A) The Medicare+Choice organization would be required to 
     provide reimbursement for the service under the 
     Medicare+Choice plan in which the individual is enrolled if 
     the skilled nursing facility was under contract with the 
     Medicare+Choice organization.
       ``(B) The individual--
       ``(i) had a contractual or other right to return, after 
     hospitalization, to the continuing care retirement community 
     described in paragraph (1)(A) or the skilled nursing facility 
     described in paragraph (1)(B); and
       ``(ii) elects to receive services from the skilled nursing 
     facility after the hospitalization, whether or not, in the 
     case of a skilled nursing facility described in paragraph 
     (1)(A), the individual resided in such facility before 
     entering the hospital.
       ``(C) The skilled nursing facility has the capacity to 
     provide the services the individual requires.
       ``(D) The skilled nursing facility agrees to accept 
     substantially similar payment under the same terms and 
     conditions that apply to similarly situated skilled nursing 
     facilities that are under contract with the Medicare+Choice 
     organization.
       ``(3) Coverage of snf services to prevent 
     hospitalization.--A Medicare+Choice organization may not deny 
     payment for services provided to an enrollee of a 
     Medicare+Choice plan (offered by such organization) by a 
     skilled nursing facility in which the enrollee resides, 
     without a preceding hospital stay, regardless of whether the 
     Medicare+Choice organization has a contract with such 
     facility to provide such services, if--
       ``(A) the Medicare+Choice organization has determined that 
     the service is necessary to prevent the hospitalization of 
     the enrollee; and
       ``(B) the factors specified in subparagraphs (A), (C), and 
     (D) of paragraph (2) exist.
       ``(4) Coverage of services provided in snf where spouse 
     resides.--A Medicare+Choice organization may not deny payment 
     for services provided to an enrollee of a Medicare+Choice 
     plan (offered by such organization) by a skilled nursing 
     facility in which the enrollee resides, regardless of whether 
     the Medicare+Choice organization has a contract with such 
     facility to provide such services, if the spouse of the 
     enrollee is a resident of such facility and the factors 
     specified in subparagraphs (A), (C), and (D) of paragraph (2) 
     exist.
       ``(5) Skilled nursing facility must meet medicare 
     participation requirements.--This subsection shall not apply 
     unless the skilled nursing facility involved meets all 
     applicable participation requirements under this title.
       ``(6) Prohibitions.--A Medicare+Choice organization 
     offering a Medicare+Choice plan may not--
       ``(A) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage under such plan, 
     solely for the purpose of avoiding the requirements of this 
     subsection;
       ``(B) provide monetary payments or rebates to enrollees to 
     encourage such enrollees to accept less than the minimum 
     protections available under this subsection;
       ``(C) penalize or otherwise reduce or limit the 
     reimbursement of a health care provider or organization 
     because such provider or organization provided services to 
     the individual in accordance with this subsection; or
       ``(D) provide incentives (monetary or otherwise) to a 
     health care provider or organization to induce such provider 
     or organization to provide care to a participant or 
     beneficiary in a manner inconsistent with this subsection.
       ``(7) Cost-sharing.--Nothing in this subsection shall be 
     construed as preventing a Medicare+Choice organization 
     offering a Medicare+Choice plan from imposing deductibles, 
     coinsurance, or other cost-sharing for services covered under 
     this subsection if such deductibles, coinsurance, or other 
     cost-sharing would have applied if the skilled nursing 
     facility in which the enrollee received such services was 
     under contract with the Medicare+Choice organization.
       ``(8) Nonpreemption of state law.--The provisions of this 
     subsection shall not be construed to preempt any provision of 
     State law that affords greater protections to beneficiaries 
     with regard to coverage of items and services provided by a 
     skilled nursing facility than is afforded by such provisions 
     of this subsection.
       ``(9) Definitions.--In this subsection:
       ``(A) Continuing care retirement community.--The term 
     `continuing care retirement community' means an organization 
     that provides or arranges for the provision of housing and 
     health-related services to an older person under an 
     agreement.
       ``(B) Skilled nursing facility.--The term `skilled nursing 
     facility' has the meaning given such term in section 
     1819(a).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to contracts entered into or renewed 
     on or after the date of enactment of this Act.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Leahy, Mr. Abraham, Mr. 
        Torricelli, Mr. DeWine, Mr. Kohl, and Mr. Schumer):
  S. 1461. A bill to amend the Trademark Act of 1946 (15 U.S.C. 1051 et 
seq.) to protect consumers and promote electronic commerce by 
prohibiting the bad-faith registration, trafficking or use of Internet 
domain names that are identical to, confusingly similar to, or dilutive 
of distinctive trademarks or service marks; to the Committee on the 
Judiciary.


               Domain Name Piracy Prevention Act of 1999

  Mr. HATCH. Mr. President, I am pleased to rise today, along with my 
colleague, the Ranking Member on the Judiciary Committee, Senator 
Leahy, to introduce legislation that will address a growing problem for 
consumers and American businesses online. At

[[Page 18466]]

issue is the deliberate, bad-faith, and abusive registration of 
Internet domain names in violation of the rights of trademark owners. 
for the Net-savy, this burgeoning form of cyber-abuse is known as 
``cybersquatting.'' for the average consumer, it is basically fraud, 
deception, and the bad-faith trading on the goodwill of others. 
Whatever you call it, it is an issue that has a great impact on 
American consumers and the brand names they rely on as indications of 
source, quality, and authenticity.
  As anyone who has walked down the aisle in the grocery store knows, 
trademarks serve as the primary indicators of source, quality, and 
authenticity in the minds of consumers. How else do you explain the 
price disparity between various brands of toothpaste, laundry 
detergent, or even canned beans. These brand names are valuable in that 
they convey to the consumer reliable information regarding the source 
and quality of goods and services, thereby facilitating commerce and 
spurring confidence in the marketplace. Unauthorized uses of others' 
marks undercuts the market by eroding consumer confidence and the 
communicative value of the brand names we all rely on. For that very 
reason, Congress has enacted a number of statutes addressing the 
problems of trademark infringement, false advertising and unfair 
competition, trademark dilution, and trademark counterfeiting. Doing so 
has helped protect American businesses and, more importantly perhaps, 
American consumers.
  As we are seeing with increased frequency, the problems of brand-name 
abuse and consumer confusion are particularly acute in the online 
environment. The fact is that a consumer in a ``brick and mortar'' 
world has the luxury of a variety of additional indicators of source 
and quality aside from a brand name. For example, when one walks in to 
the local consumer electronics retailer, he is fairly certain with whom 
he is dealing, and he can often tell by looking at the products and 
even the storefront itself whether or not he is dealing with a 
reputable establishment. These protections are largely absent in the 
electronic world, where anyone with Internet access and minimal 
computer knowledge can set up a storefront online.
  In many cases what consumers see when they log on to a site is their 
only indication of source and authenticity, and legitimate and 
illegitimate sites may be indistinguishable in cyberspace. In fact, a 
well-known trademark in a domain name may be the primary source 
indicator for the online consumer. So it a bad actor is using that 
name, rather than the trademark owner, an online consumer is at serious 
risk of being defrauded, or at the very least confused. The result, as 
with other forms of trademark violations, is the erosion of consumer 
confidence in brand name identifiers and in electronic commerce 
generally.
  Last week the Judiciary Committee heard testimony of a number of 
examples of consumer confusion on the Internet stemming from abusive 
domain name registrations. For example, Anne Chasser, President of the 
International Trademark Association, testified that a cybersquatter had 
registered the domain names ``attphonecard.com'' and 
``attcallingcard.com'' and used those names to establish sites 
purporting to sell calling cards and soliciting personally identifying 
information, including credit card numbers. Chris Young, President of 
Cyveillance, Inc.--a company founded specifically to assist trademark 
owners police their marks online--testified that a cybersquatter had 
registered the name ``dellspares.com'' and was purporting to sell Dell 
products online, when in fact Dell does not authorize online resellers 
to market its products. We heard similar testimony of an offshore 
cybersquatter selling web-hosting services under the name 
``bellatlantics.com''. And Greg Phillips, a Salt Lake City trademark 
practitioner that represents Porsche in protecting their famous 
trademark against what is now more than 300 instances of 
cybersquatting, testified of several examples where bad actors have 
registered Porsche marks to sell counterfeit goods and non-genuine 
Porsche parts.
  Consider also the child who in a ``hunt-and-peck'' manner mistakenly 
typed in the domain for ``dosney.com'', looking for the rich and 
family-friendly content of Disney's home page, only to wind up staring 
at a page of hard-core pornography because someone snatched up the 
``dosney'' domain in anticipation that just such a mistake would be 
made. In a similar case, a 12-year-old California boy was denied 
privileges at his school when he entered ``zelda.com'' in a web browser 
at his school library, looking for a site he expected to be affiliated 
with the computer game of the same name, but ended up at a pornography 
site.
  In addition to these types of direct harm to consumers, 
cybersquatting harms American businesses and the goodwill value 
associated with their names. In part this is a result of the fact that 
in each case of consumer confusion there is a case of brand-name 
misappropriation and an erosion of goodwill. But, even absent consumer 
confusion, there are many many cases of cybersquatters who appropriate 
brand names with the sole intent of extorting money from the lawful 
mark owner, of precluding evenhanded competition, or even very simply 
of harming the goodwill of the mark.
  For example, a couple of years ago a small Canadian company with a 
single shareholder and a couple of dozen domain names demanded that 
Umbro International, Inc., which markets and distributes soccer 
equipment, pay $50,000 to its sole shareholder, $50,000 to a charity, 
and provide a lifetime supply of soccer equipment in order for it to 
relinquish the ``umbro.com'' name. Warner Bros. was reportedly asked to 
pay $350,000 for the rights to the names ``warner-records.com'', 
``warner-bros-records.com'', ``warner-pictures.com'', ``warner-bros-
pictures'', and ``warnerpictures.com''. And Intel Corporation was 
forced to deal with a cybersquatter who registered the ``pentium3.com'' 
domain and used it to post pornographic images of celebrities.
  It is time for Congress to take a closer look at these abuses and to 
respond with appropriate legislation. In the 104th Congress, Senator 
Leahy and I sponsored the ``Federal Trademark Dilution Act,'' which has 
proved useful in assisting the owners of famous trademarks to police 
online uses of their marks that dilute their distinctive quality. 
Unfortunately, the economics of litigation have resulted in a situation 
where it is often more cost-effective to simply ``pay off'' a 
cybersquatter rather than pursue costly litigation with little hope of 
anything more than an injunction against the offender. And 
cybersquatters are becoming more sophisticated and more creative in 
evading what good case law has developed under the dilution statute.
  The bill I am introducing today with the Senator from Vermont is 
designed to address these problems head on by clarifying the rights of 
trademark owners online with respect to cybersquatting, by providing 
clear deterrence to prevent such bad faith and abusive conduct, and by 
providing adequate remedies for trademark owners in those cases where 
it does occur. While the bill shares the goals of, and has some 
similarity to, legislation introduced earlier by Senator Abraham, it 
differs in a number of substantial respects.
  First, like Senator Abraham's legislation, our bill allows trademark 
owners to recover statutory damages in cybersquatting cases, both to 
deter wrongful conduct and to provide adequate remedies for trademark 
owners who seek to enforce their rights in court. Our bill goes beyond 
simply stating the remedy, however, and sets forth a substantive cause 
of action, based in trademark law, to define the wrongful conduct 
sought to be deterred and to fill in the gaps and uncertainties of 
current trademark law with respect to cybersquatting.
  Under our bill, the abusive conduct that is made actionable is 
appropriately limited to bad faith registrations of others' marks by 
persons who seek to profit unfairly from the goodwill associated 
therewith. In addition,

[[Page 18467]]

the bill balances the property interests of trademark owners with the 
interests of Internet users who would make fair use of others' marks or 
otherwise engage in protected speech online. Our bill also limits the 
definition of domain name identifier to exclude such things as screen 
names, file names, and other identifiers not assigned by a domain name 
registrar or registry. it also omits criminal penalties found in 
Senator Abraham's earlier legislation.
  Second, our bill provides for in rem jurisdiction, which allows a 
mark owner to seek the forfeiture, cancellation, or transfer of an 
infringing domain name by filing an in rem action against the name 
itself, where the mark owner has satisfied the court that it has 
exercised due diligence in trying to locate the owner of the domain 
name but is unable to do so. A significant problem faced by trademark 
owners in the fight against cybersquatting is the fact that many 
cybersquatters register domain names under aliases or otherwise provide 
false information in their registration applications in order to avoid 
identification and service of process by the mark owner. Our bill will 
alleviate this difficulty, while protecting the notions of fair play 
and substantial justice, by enabling a mark owner to seek an injunction 
against the infringing property in those cases where, after due 
diligence, a mark owner is unable to proceed against the domain name 
registrant because the registrant has provided false contact 
information and is otherwise not to be found.
  Additionally, some have suggested that dissidents and others who are 
online incognito for legitimate reasons might give false information to 
protect themselves and have suggested the need to preserve a degree of 
anonymity on the Internet particularly for this reason. Allowing a 
trademark owner to proceed against the domain names themselves, 
provided they are, in fact, infringing or diluting under the Trademark 
Act, decreases the need for trademark owners to join the hunt to chase 
down and root out these dissidents or others seeking anonymity on the 
Net. The approach in our bill is a good compromise, which provides 
meaningful protection to trademark owners while balancing the interests 
of privacy and anonymity on the Internet.
  Third, like the Abraham bill, our bill encourages domain name 
registrars and registries to work with trademark owners to prevent 
cybersquatting by providing a limited exemption from liability for 
domain name registrars and registries that suspend, cancel, or transfer 
domain names pursuant to a court order or in the implementation of a 
reasonable policy prohibiting the registration of infringing domain 
names. Our bill goes further, however, in order to protect the rights 
of domain name registrants against overreaching trademark owners. Under 
our bill, a trademark owner who knowingly and materially misrepresents 
to the domain name registrar or registry that a domain name is 
infringing is liable to the domain name registrant for damages 
resulting from the suspension, cancellation, or transfer of the domain 
name. Our bill also promotes the continued ease and efficiency users of 
the current registration system enjoy by codifying current case law 
limiting the secondary liability of domain name registrars and 
registries for the act of registration of a domain name.
  Finally, our bill includes an explicit savings clause making clear 
that the bill does not affect traditional trademark defenses, such as 
fair use, or a person's first amendment rights, and it ensures that any 
new remedies created by the bill will apply prospectively only.
  Mr. President, this bill is an important piece of legislation that 
will promote the growth of online commerce by protecting consumers and 
providing clarity in the law for trademark owners in cyberspace. It is 
a balanced bill that protects the rights of Internet users and the 
interests of all Americans in free speech and protected uses of 
trademarked names for such things as parody, comment, criticism, 
comparative advertising, news reporting, etc. It reflects many hours of 
discussions with senators and affected parties on all sides. I want to 
thank Senator Leahy for his cooperation in crafting this particular 
measure, and also Senator Abraham for his cooperation in this effort. I 
expect that the substance of this bill will be offered as a Committee 
substitute to Senator Abraham's legislation when the Judiciary 
Committee turns to that bill tomorrow, and I look forward to broad 
bipartisan support at that time. I similarly look forward to working 
with my other colleagues here in the Senate to report this bill 
favorably to the House, and I urge their support in this regard.
  I ask unanimous consent that the text of the bill and a section-by-
section analysis of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1461

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

     SECTION 1. SHORT TITLE; REFERENCES.

       (a) Short Title.--This Act may be cited as the ``Domain 
     Name Piracy Prevention Act of 1999''.
       (b) References to the Trademark Act of 1946.--Any reference 
     in this Act to the Trademark Act of 1946 shall be a reference 
     to the Act entitled ``An Act to provide for the registration 
     and protection of trade-marks 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.).

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The registration, trafficking in, or use of a domain 
     name that is identical to, confusingly similar to, or 
     dilutive of a trademark or service mark of another that is 
     distinctive at the time of registration of the domain name, 
     without regard to the goods or services of the parties, with 
     the bad-faith intent to profit from the goodwill of another's 
     mark (commonly referred to as ``cyberpiracy'' and 
     ``cybersquatting'')--
       (A) results in consumer fraud and public confusion as to 
     the true source or sponsorship of goods and services;
       (B) impairs electronic commerce, which is important to 
     interstate commerce and the United States economy;
       (C) deprives legitimate trademark owners of substantial 
     revenues and consumer goodwill; and
       (D) places unreasonable, intolerable, and overwhelming 
     burdens on trademark owners in protecting their valuable 
     trademarks.
       (2) Amendments to the Trademark Act of 1946 would clarify 
     the rights of a trademark owner to provide for adequate 
     remedies and to deter cyberpiracy and cybersquatting.

     SEC. 3. CYBERPIRACY PREVENTION.

       (a) In General.--Section 43 of the Trademark Act of 1946 
     (15 U.S.C. 1125) is amended by inserting at the end the 
     following:
       ``(d)(1)(A) Any person who, with bad-faith intent to profit 
     from the goodwill of a trademark or service mark of another, 
     registers, traffics in, or uses a domain name that is 
     identical to, confusingly similar to, or dilutive of such 
     trademark or service mark, without regard to the goods or 
     services of the parties, shall be liable in a civil action by 
     the owner of the mark, if the mark is distinctive at the time 
     of the registration of the domain name.
       ``(B) In determining whether there is a bad-faith intent 
     described under subparagraph (A), a court may consider 
     factors such as, but not limited to--
       ``(i) the trademark or other intellectual property rights 
     of the person, if any, in the domain name;
       ``(ii) the extent to which the domain name consists of the 
     legal name of the person or a name that is otherwise commonly 
     used to identify that person;
       ``(iii) the person's prior use, if any, of the domain name 
     in connection with the bona fide offering of any goods or 
     services;
       ``(iv) the person's legitimate noncommercial or fair use of 
     the mark in a site accessible under the domain name;
       ``(v) the person's intent to divert consumers from the mark 
     owner's online location to a site accessible under the domain 
     name that could harm the goodwill represented by the mark, 
     either for commercial gain or with the intent to tarnish or 
     disparage the mark, by creating a likelihood of confusion as 
     to the source, sponsorship, affiliation, or endorsement of 
     the site;
       ``(vi) the person's offer to transfer, sell, or otherwise 
     assign the domain name to the mark owner or any third party 
     for substantial consideration without having used, or having 
     an intent to use, the domain name in the bona fide offering 
     of any goods or services;
       ``(vii) the person's intentional provision of material and 
     misleading false contact information when applying for the 
     registration of the domain name; and
       ``(viii) the person's registration or acquisition of 
     multiple domain names which are

[[Page 18468]]

     identical to, confusingly similar to, or dilutive of 
     trademarks or service marks of others that are distinctive at 
     the time of registration of such domain names, without regard 
     to the goods or services of such persons.
       ``(C) In any civil action involving the registration, 
     trafficking, or use of a domain name under this paragraph, a 
     court may order the forfeiture or cancellation of the domain 
     name or the transfer of the domain name to the owner of the 
     mark.
       ``(2)(A) The owner of a mark may file an in rem civil 
     action against a domain name if--
       ``(i) the domain name violates any right of the registrant 
     of a mark registered in the Patent and Trademark Office, or 
     section 43 (a) or (c); and
       ``(ii) the court finds that the owner has demonstrated due 
     diligence and was not able to find a person who would have 
     been a defendant in a civil action under paragraph (1).
       ``(B) The remedies of an in rem action under this paragraph 
     shall be limited to a court order for the forfeiture or 
     cancellation of the domain name or the transfer of the domain 
     name to the owner of the mark.''.
       (b) Additional Civil Action and Remedy.--The civil action 
     established under section 43(d)(1) of the Trademark Act of 
     1946 (as added by this section) and any remedy available 
     under such action shall be in addition to any other civil 
     action or remedy otherwise applicable.

     SEC. 4. DAMAGES AND REMEDIES.

       (a) Remedies In Cases of Domain Name Piracy.--
       (1) Injunctions.--Section 34(a) of the Trademark Act of 
     1946 (15 U.S.C. 1116(a)) is amended in the first sentence by 
     striking ``section 43(a)'' and inserting ``section 43 (a), 
     (c), or (d)''.
       (2) Damages.--Section 35(a) of the Trademark Act of 1946 
     (15 U.S.C. 1117(a)) is amended in the first sentence by 
     inserting ``, (c), or (d)'' after ``section 43 (a)''.
       (b) Statutory Damages.--Section 35 of the Trademark Act of 
     1946 (15 U.S.C. 1117) is amended by adding at the end the 
     following:
       ``(d) In a case involving a violation of section 43(d)(1), 
     the plaintiff may elect, at any time before final judgment is 
     rendered by the trial court, to recover, instead of actual 
     damages and profits, an award of statutory damages in the 
     amount of not less than $1,000 and not more than $100,000 per 
     domain name, as the court considers just. The court shall 
     remit statutory damages in any case in which an infringer 
     believed and had reasonable grounds to believe that use of 
     the domain name by the infringer was a fair or otherwise 
     lawful use.''.

     SEC. 5. LIMITATION ON LIABILITY.

       Section 32(2) of the Trademark Act of 1946 (15 U.S.C. 1114) 
     is amended--
       (1) in the matter preceding subparagraph (A) by striking 
     ``under section 43(a)'' and inserting ``under section 43 (a) 
     or (d)''; and
       (2) by redesignating subparagraph (D) as subparagraph (E) 
     and inserting after subparagraph (C) the following:
       ``(D)(i) A domain name registrar, a domain name registry, 
     or other domain name registration authority that takes any 
     action described under clause (ii) affecting a domain name 
     shall not be liable for monetary relief to any person for 
     such action, regardless of whether the domain name is finally 
     determined to infringe or dilute the mark.
       ``(ii) An action referred to under clause (i) is any action 
     of refusing to register, removing from registration, 
     transferring, temporarily disabling, or permanently canceling 
     a domain name--
       ``(I) in compliance with a court order under section 43(d); 
     or
       ``(II) in the implementation of a reasonable policy by such 
     registrar, registry, or authority prohibiting the 
     registration of a domain name that is identical to, 
     confusingly similar to, or dilutive of another's mark 
     registered on the Principal Register of the United States 
     Patent and Trademark Office.
       ``(iii) A domain name registrar, a domain name registry, or 
     other domain name registration authority shall not be liable 
     for damages under this section for the registration or 
     maintenance of a domain name for another absent a showing of 
     bad faith intent to profit from such registration or 
     maintenance of the domain name.
       ``(iv) If a registrar, registry, or other registration 
     authority takes an action described under clause (ii) based 
     on a knowing and material misrepresentation by any person 
     that a domain name is identical to, confusingly similar to, 
     or dilutive of a mark registered on the Principal Register of 
     the United States Patent and Trademark Office, such person 
     shall be liable for any damages, including costs and 
     attorney's fees, incurred by the domain name registrant as a 
     result of such action. The court may also grant injunctive 
     relief to the domain name registrant, including the 
     reactivation of the domain name or the transfer of the domain 
     name to the domain name registrant.''.

     SEC. 6. DEFINITIONS.

       Section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) is 
     amended by inserting after the undesignated paragraph 
     defining the term ``counterfeit'' the following:
       ``The term `Internet' has the meaning given that term in 
     section 230(f)(1) of the Communications Act of 1934 (47 
     U.S.C. 230(f)(1)).
       ``The term `domain name' means any alphanumeric designation 
     which is registered with or assigned by any domain name 
     registrar, domain name registry, or other domain name 
     registration authority as part of an electronic address on 
     the Internet.''.

     SEC. 7. SAVINGS CLAUSE.

       Nothing in this Act shall affect any defense available to a 
     defendant under the Trademark Act of 1946 (including any 
     defense under section 43(c)(4) of such Act or relating to 
     fair use) or a person's right of free speech or expression 
     under the first amendment of the United States Constitution.

     SEC. 8. SEVERABILITY.

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

     SEC. 9. EFFECTIVE DATE.

       This Act shall apply to all domain names registered before, 
     on, or after the date of enactment of this Act, except that 
     statutory damages under section 35(d) of the Trademark Act of 
     1946 (15 U.S.C. 1117), as added by section 4 of this Act, 
     shall not be available with respect to the registration, 
     trafficking, or use of a domain name that occurs before the 
     date of enactment of this Act.
                                  ____


    Section by Section Analysis--S. 1461, the ``Domain Name Piracy 
                       Prevention Act of 1999.''


                   section 1. short title; references

       This section provides that the Act may be cited as the 
     ``Domain Name Piracy Prevention Act of 1999'' and that any 
     references within the bill to the Trademark Act of 1946 shall 
     be a reference to 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 (15 U.S.C. 1051 et seq.), also commonly referred 
     to as the Lanham Act.


                          section 2. findings

       This section sets forth Congress' findings that 
     cybersquatting and cyberpiracy--defined as the registration, 
     trafficking in, or use of a domain name that is identical to, 
     confusingly similar to, or dilutive of a distinctive 
     trademark or service mark of another with the bad faith 
     intent to profit from the goodwill of that mark--harms the 
     public by causing consumer fraud and public confusion as to 
     the true source or sponsorship of goods and services, by 
     impairing electronic commerce, by depriving trademark owners 
     of substantial revenues and consumer goodwill, and by placing 
     unreasonable, intolerable, and overwhelming burdens on 
     trademark owners in protecting their own marks. Amendments to 
     the Trademark Act would clarify the rights of trademark 
     owners to provide for adequate remedies for the abusive and 
     bad faith registration of their marks as Internet domain 
     names and to deter cyberpiracy and cybersquatting.


                   section 3. cyberpiracy prevention

       Subsection (a). In General. This subsection amends section 
     the Trademark Act to provide an explicit trademark remedy for 
     cybersquatting under a new section 43(d). Under paragraph 
     (1)(A) of the new section 43(d), actionable conduct would 
     include the registration, trafficking in, or use of a domain 
     name that is identical to, confusingly similar to, or 
     dilutive of the trademark or service mark of another, 
     provided that the mark was distinctive (i.e., enjoyed 
     trademark status) at the time the domain name was registered. 
     The bill is carefully and narrowly tailored, however, to 
     extend only to cases where the plaintiff can demonstrate that 
     the defendant registered, trafficked in, or used the 
     offending domain name with bad-faith intent to profit from 
     the goodwill of a mark belonging to someone else. Thus, the 
     bill does not extend to innocent domain name registrations by 
     those who are unaware of another's use of the name, or even 
     to someone who is aware of the trademark status of the name 
     but registers a domain name containing the mark for any 
     reason other than with bad faith intent to profit from the 
     goodwill associated with that mark.
       Paragraph (1)(B) of the new section 43(d) sets forth a 
     number of nonexclusive, nonexhaustive factors to assist a 
     court in determining whether the required bad-faith element 
     exists in any given case. These factors are designed to 
     balance the property interests of trademark owners with the 
     legitimate interests of Internet users and others who seek to 
     make lawful uses of others' marks, including for purposes 
     such as comparative advertising, comment, criticism, parody, 
     news reporting, fair use, etc. The bill suggests a total of 
     eight factors a court may wish to consider. The first four 
     suggest circumstances that may tend to indicate an absence of 
     bad-faith intent to profit from the goodwill of a mark, and 
     the last four suggest circumstances that may tend to indicate 
     that such bad-faith intent exists.
       First, under paragraph (1)(B)(i), a court may consider 
     whether the domain name registrant has trademark or any other 
     intellectual property rights in the name. This factor 
     recognizes, as does trademark law in general,

[[Page 18469]]

     that there may be concurring uses of the same name that are 
     noninfringing, such as the use of the ``Delta'' mark for both 
     air travel and sink faucets. Similarly, the registration of 
     the domain name ``deltaforce.com'' by a movie studio would 
     not tend to indicate a bad faith intent on the part of the 
     registrant to trade on Delta Airlines or Delta Faucets' 
     trademarks.
       Second, under paragraph (1)(B)(ii), a court may consider 
     the extent to which the domain name is the same as the 
     registrant's own legal name or a nickname by which that 
     person is commonly identified. This factor recognizes, again 
     as does the concept of fair use in trademark law, that a 
     person should be able to be identified by their own name, 
     whether in their business or on a web site. Similarly, a 
     person may bear a legitimate nickname that is identical or 
     similar to a well-known trademark, such as in the well-
     publicized case of the parents who registered the domain name 
     ``pokey.org'' for their young daughter who goes by that name, 
     and these individuals should not be deterred by this bill 
     from using their name online. This factor is not intended to 
     suggest that domain name registrants may evade the 
     application of this act by merely adopting Exxon, Ford, or 
     other well-known marks as their nicknames. It merely provides 
     a court with the appropriate discretion to determine whether 
     or not the fact that a person bears a nickname similar to a 
     mark at issue is an indication of an absence of bad-faith on 
     the part of the registrant.
       Third, under paragraph (1)(B)(iii), a court may consider 
     the domain name registrant's prior use, if any, of the domain 
     name in connection with the bona fide offering of goods or 
     services. Again, this factor recognizes that the legitimate 
     use of the domain name in online commerce may be a good 
     indicator of the intent of the person registering that name. 
     Where the person has used the domain name in commerce without 
     creating a likelihood of confusion as to the source or origin 
     of the goods or services and has not otherwise attempted to 
     use the name in order to profit from the goodwill of the 
     trademark owner's name, a court may look to this as an 
     indication of the absence of bad faith on the part of the 
     registrant.
       Fourth, under paragraph (1)(B)(iv), a court may consider 
     the person's legitimate noncommercial or fair use of the mark 
     in a web site that is accessible under the domain name at 
     issue. This factor is intended to balance the interests of 
     trademark owners with the interests of those who would make 
     lawful noncommercial or fair uses of others' marks online, 
     such as in comparative advertising, comment, criticism, 
     parody, news reporting, etc. The fact that a person may use a 
     mark in a site in such a lawful manner may be an appropriate 
     indication that the person's registration or use of the 
     domain name lacked the required element of bad-faith. This 
     factor is not intended to create a loophole that otherwise 
     might swallow the bill by allowing a domain name registrant 
     to evade application of the Act by merely putting up a 
     noninfringing site under an infringing domain name. For 
     example, in the well known case of Panavision Int'l v. 
     Toeppenn, 141 F.3d 1316 (9th Cir. 1998), a well known 
     cybersquatter had registered a host of domain names mirroring 
     famous trademarks, including names for Panavision, Delta 
     Airlines, Neiman Marcus, Eddie Bauer, Lufthansa, and more 
     than 100 other marks, and had attempted to sell them to the 
     mark owners for amounts in the range of $10,000 to $15,000 
     each. His use of the ``panavision.com'' and ``panaflex.com'' 
     domain names was seemingly more innocuous, however, as they 
     served as addresses for sites that merely displayed pictures 
     of Pana Illinois and the word ``Hello'' respectively. This 
     bill would not allow a person to evade the holding of that 
     case--which found that Mr. Toeppen had made a commercial use 
     of the Panavision marks and that such uses were, in fact, 
     diluting under the Federal Trademark Dilution Act--merely by 
     posting noninfringing uses of the trademark on a site 
     accessible under the offending domain name, as Mr. Toeppen 
     did. Rather, the bill gives courts the flexibility to weigh 
     appropriate factors in determining whether the name was 
     registered or used in bad faith, and it recognizes that one 
     such factor may be the use the domain name registrant makes 
     of the mark.
       Fifth, under paragraph (1)(B)(v), a court may consider 
     whether, in registering or using the domain name, the 
     registrant intended to divert consumers away from the 
     trademark owner's website to a website that could harm the 
     goodwill of the mark, either for purposes of commercial gain 
     or with the intent to tarnish or disparage the mark, by 
     creating a likelihood of confusion as to the source, 
     sponsorship, affiliation, or endorsement of the site. This 
     factor recognizes that one of the main reasons cybersquatters 
     use other people's trademarks is to divert Internet users to 
     their own sites by creating confusion as to the source, 
     sponsorship, affiliation, or endorsement of the site. This is 
     done for a number of reasons, including to pass off inferior 
     goods under the name of a well-known mark holder, to defraud 
     consumers into providing personally identifiable information, 
     such as credit card numbers, to attract eyeballs to sites 
     that price online advertising according to the number of 
     ``hits'' the site receives, or even just to harm the value of 
     the mark. Under this provision, a court may give appropriate 
     weight to evidence that a domain name registrant intended to 
     confuse or deceive the public in this manner when making a 
     determination of bad-faith intent.
       Sixth, under paragraph (1)(B)(vi), a court may consider a 
     domain name registrant's offer to transfer, sell, or 
     otherwise assign the domain name to the mark owner or any 
     third party for substantial consideration, where the 
     registrant has not used, and did not have any intent to use, 
     the domain name in the bona fide offering of any goods or 
     services. This factor is consistent with the court cases, 
     like the Panavision case mentioned above, where courts have 
     found a defendant's offer to sell the domain name to the 
     legitimate mark owner as being indicative of the defendant's 
     intent to trade on the value of a trademark owner's marks by 
     engaging in the business of registering those marks and 
     selling them to the rightful trademark owners. It does not 
     suggest that a court should consider the mere offer to sell a 
     domain name to a mark owner or the failure to use a name in 
     the bona fide offering of goods or services is sufficient to 
     indicate bad faith. Indeed, there are cases in which a person 
     registers a name in anticipation of a business venture that 
     simply never pans out. And someone who has a legitimate 
     registration of a domain name that mirrors someone else's 
     domain name, such as a trademark owner that is a lawful 
     concurrent user of that name with another trademark owner, 
     may, in fact, wish to sell that name to the other trademark 
     owner. This bill does not imply that these facts are an 
     indication of bad-faith. It merely provides a court with the 
     necessary discretion to recognize the evidence of bad-faith 
     when it is present. In practice, the offer to sell domain 
     names for exorbitant amounts to the rightful mark owner has 
     been one of the most common threads in abusive domain name 
     registrations.
       Seventh, under paragraph (1)(B)(vii), a court may consider 
     the registrant's intentional provision of material and 
     misleading false contact information in an application for 
     the domain name registration. Falsification of contact 
     information with the intent to evade identification and 
     service of process by trademark owners is also a common 
     thread in cases of cybersquatting. This factor recognizes 
     that fact, while still recognizing that there may be 
     circumstances in which the provision of false information may 
     be due to other factors, such as mistake or, as some have 
     suggested in the case of political dissidents, for purposes 
     of anonymity. This bill balances those factors by limiting 
     consideration to the person's contact information, and even 
     then requiring that the provision of false information be 
     material and misleading. As with the other factors, this 
     factor is nonexclusive and a court is called upon to make a 
     determination based on the facts presented whether or not the 
     provision of false information does, in fact, indicate bad-
     faith.
       Eighth, under paragraph (1)(B)(viii), a court may consider 
     the domain name registrant's acquisition of multiple domain 
     names that are identical to, confusingly similar to, or 
     dilutive of others' marks. This factor recognizes the 
     increasingly common cybersquatting practice known as 
     ``warehousing'', in which a cybersquatter registers multiple 
     domain names--sometimes hundreds, even thousands--that mirror 
     the trademarks of others. By sitting on these marks and not 
     making the first move to offer to sell them to the mark 
     owner, these cybersquatters have been largely successful in 
     evading the case law developed under the Federal Trademark 
     Dilution Act. This bill does not suggest that the mere 
     registration of multiple domain names is an indication of bad 
     faith, but allows a court to weigh the fact that a person has 
     registered multiple domain names that infringe or dilute the 
     trademarks of others as part of its consideration of whether 
     the requisite bad-faith intent exists.
       Paragraph (1)(C) makes clear that in any civil brought 
     under the new section 43(d), a court may order the 
     forfeiture, cancellation, or transfer of a domain name to the 
     owner of the mark.
       Paragraph (2)(A) provides for in rem jurisdiction, which 
     allows a mark owner to seek the forfeiture, cancellation, or 
     transfer of an infringing domain name by filing an in rem 
     action against the name itself, where the mark owner has 
     satisfied the court that it has exercised due diligence in 
     trying to locate the owner of the domain name but is unable 
     to do so. As indicated above, a significant problem faced by 
     trademark owners in the fight against cybersquatting is the 
     fact that many cybersquatters register domain names under 
     aliases or otherwise provide false information in their 
     registration applications in order to avoid identification 
     and service of process by the mark owner. This bill will 
     alleviate this difficulty, while protecting the notions of 
     fair play and substantial justice, by enabling a mark owner 
     to seek an injunction against the infringing property in 
     those cases where, after due diligence, a mark owner is 
     unable to proceed against the domain name registrant because 
     the registrant has provided false contact information and is 
     otherwise not to be found,

[[Page 18470]]

     provided the mark owner can show that the domain name itself 
     violates substantive trademark law. Paragraph (2)(B) limits 
     the relief available in such an in rem action to an 
     injunction ordering the forfeiture, cancellation, or transfer 
     of the domain name.
       Subsection (b). Additional Civil Action and Remedy. This 
     subsection makes clear that the creation of a new section 
     43(d) in the Trademark Act does not in any way limit the 
     application of current provisions of trademark, unfair 
     competition and false advertising, or dilution law, or other 
     remedies under counterfeiting or other statutes, to 
     cybersquatting cases.


                    section 4. damages and remedies

       This section applies traditional trademark remedies, 
     including injunctive relief, recovery of defendant's profits, 
     actual damages, and costs, to cybersquatting cases under the 
     new section 43(d) of the Trademark Act. The bill also amends 
     section 35 of the Trademark Act to provide for statutory 
     damages in cybersquatting cases, in an amount of not less 
     than $1,000 and not more than $100,000 per domain name, as 
     the court considers just. The bill requires the court to 
     remit statutory damages in any case where the infringer 
     believed and had reasonable grounds to believe that the use 
     of the domain name was a fair or otherwise lawful use.


                   section 5. limitation on liability

       This section amends section 32(2) of the Trademark Act to 
     extend the Trademark Act's existing limitations on liability 
     to the cybersquatting context. This section also creates a 
     new subparagraph (D) in section 32(2) to encourage domain 
     name registrars and registries to work with trademark owners 
     to prevent cybersquatting through a limited exemption from 
     liability for domain name registrars and registries that 
     suspend, cancel, or transfer domain names pursuant to a court 
     order or in the implementation of a reasonable policy 
     prohibiting cybersquatting. This section also protects the 
     rights of domain name registrants against overreaching 
     trademark owners. Under a new section subparagraph (D)(iv) in 
     section 32(2), a trademark owner who knowingly and materially 
     misrepresents to the domain name registrar or registry that a 
     domain name is infringing shall be liable to the domain name 
     registrant for damages resulting from the suspension, 
     cancellation, or transfer of the domain name. In addition, 
     the court may grant injunctive relief to the domain name 
     registrant by ordering the reactivation of the domain name or 
     the transfer of the domain name back to the domain name 
     registrant. Finally, in creating a new subparagraph (D)(iii) 
     of section 32(2), this section codifies current case law 
     limiting the secondary liability of domain name registrars 
     and registries for the act of registration of a domain name, 
     absent bad-faith on the part of the registrar and registry.


                         section 6. definitions

       This section amends the Trademark Act's definitions section 
     (section 45) to add definitions for key terms used in this 
     Act. First, the term ``Internet'' is defined consistent with 
     the meaning given that term in the Communications Act (47 
     U.S.C. 230(f)(1)). Second, this section creates a narrow 
     definition of ``cybersquatting'' to target the specific bad 
     faith conduct sought to be addressed while excluding such 
     things as screen names, file names, and other identifiers not 
     assigned by a domain name registrar or registry.


                       section 7. savings clause

       This section provides an explicit savings clause making 
     clear that the bill does not affect traditional trademark 
     defenses, such as fair use, or a person's first amendment 
     rights.


                        section 8. severability

       This section provides a severability clause making clear 
     Congress' intent that if any provision of this Act, an 
     amendment made by the Act, or the application of such 
     provision or amendment to any person or circumstances is held 
     to be unconstitutional, the remainder of the Act, the 
     amendments made by the Act, and the application of the 
     provisions of such to any person or circumstance shall not be 
     affected by such determination.


                       section 9. effective date

       This section provides that new statutory damages provided 
     for under this bill shall not apply to any registration, 
     trafficking, or use of a domain name that took place prior to 
     the enactment of this Act.

  Mr. LEAHY. Mr. President, I am pleased to join Senator Hatch, and 
others, today in introducing the ``Domain Name Piracy Prevention Act of 
1999.'' We have worked hard to craft this legislation in a balanced 
fashion to protect trademark owners and consumers doing business 
online, and Internet users who want to participate in what the Supreme 
Court has described `` `a unique and wholly new medium of worldwide 
human communication.' '' Reno v. ACLU, 521 U.S. 844 (1997).
  Trademarks are important tools of commerce. The exclusive right to 
the use of a unique mark helps companies compete in the marketplace by 
distinguishing their goods and services from those of their 
competitors, and helps consumers identify the source of a product by 
linking it with a particular company. The use of trademarks by 
companies, and reliance on trademarks by consumers, will only become 
more important as the global marketplace becomes larger and more 
accessible with electronic commerce. The reason is simple: when a 
trademark name is used as a company's address in cyberspace, customers 
know where to go online to conduct business with that company.
  The growth of electronic commerce is having a positive effect on the 
economies of small rural states like mine. A Vermont Internet Commerce 
report I commissioned earlier this year found that Vermont gained more 
than 1,000 new jobs as a result of Internet commerce, with the 
potential that Vermont could add more than 24,000 jobs over the next 
two years. For a small state like ours, this is very good news.
  Along with the good news, this report identified a number of 
obstacles that stand in the way of Vermont reaching the full potential 
promised by Internet commerce. One obstacle is that ``merchants are 
anxious about not being able to control where their names and brands 
are being displayed.'' Another is the need to bolster consumers' 
confidence in online shopping.
  Cybersquatters hurt electronic commerce. Both merchant and consumer 
confidence in conducting business online are undermined by so-called 
``cybersquatters'' or ``cyberpirates,'' who abuse the rights of 
trademark holders by purposely and maliciously registering as a domain, 
name the trademarked name of another company to divert and confuse 
customers or to deny the company the ability to establish an easy-to-
find online location. A recent report by the World Intellectual 
Property Organization (WIPO) on the Internet domain name process has 
characterized cybersquatting as ``predatory and parasitical practices 
by a minority of domain registrants acting in bad faith'' to register 
famous or well-known marks of others--which can lead to consumer 
confusion or downright fraud.
  Enforcing trademarks in cyberspace will promote global electronic 
commerce. Enforcing trademark law in cyberspace can help bring consumer 
confidence to this new frontier. That is why I have long been concerned 
with protecting registered trademarks online. Indeed, when the Congress 
passed the Federal Trademark Dilution Act of 1995, I noted that:

       [A]lthough no one else has yet considered this application, 
     it is my hope that this antidilution statute can help stem 
     the use of deceptive Internet addresses taken by those who 
     are choosing marks that are associated with the products and 
     reputations of others. (Congressional Record, Dec. 29, 1995, 
     page S19312)

  In addition, last year I authored an amendment that was enacted as 
part of the Next Generation Internet Research Act authorizing the 
National Research Council of the National Academy of Sciences to study 
the effects on trademark holders of adding new top-level domain names 
and requesting recommendations on expensive and expeditious procedures 
for resolving trademark disputes over the assignment of domain names. 
Both the Internet Corporation for Assigned Names and Numbers (I-CANN) 
and WIPO are also making recommendations on these procedures. Adoption 
of a uniform trademark domain name dispute resolution policy will be of 
enormous benefit to American trademark owners.
  The ``Domain Name Piracy Prevention Act of 1999,'' which we introduce 
today, is not intended in any way to frustrate these global efforts 
already underway to develop inexpensive and expeditious procedures for 
resolving domain name disputes that avoid costly and time-consuming 
litigation in the court systems either here or abroad. In fact, the 
bill expressly provides liability limitations for domain name 
registrars, registries or other domain name registration authorities 
when they take actions pursuant to a reasonable policy prohibiting the 
registration of domain names that are identical, confusingly similar to 
or dilutive of another's trademark. The I-CANN and WIPO consideration 
of these

[[Page 18471]]

issues will inform the development by domain name registrars and 
registries of such reasonable policies.
  The Federal Trademark Dilution Act of 1995 has been used as I 
predicted to help stop misleading uses of trademarks as domain names. 
One court has described this exercise by saying that ``attempting to 
apply established trademark law in the fast-developing world of the 
Internet is somewhat like trying to board a moving bus . . . ``Bensusan 
Restaurant Corp. v. King, 126 F.3d 25 (2d Cir. 1997). Nevertheless, the 
courts appear to be handling ``cybersquatting'' cases well. As 
University of Miami Law Professor Michael Froomkin noted in testimony 
submitted at the Judiciary Committee's hearing on this issue on July 
22, 1999, ``[i]n every case involving a person who registered large 
numbers of domains for resale, the cybersquatter has lost.''
  For example, courts have had little trouble dealing with a notorious 
``cybersquatter,'' Dennis Toeppen from Illinois, who registered more 
than 100 trademarks--including ``yankeestadium.com,'' 
``deltaairlines.com,'' and ``neiman-marcus.com''--as domain names for 
the purpose of eventually selling the names back to the companies 
owning the trademarks. The various courts reviewing his activities have 
unanimously determined that he violated the Federal Trademark Dilution 
Act.
  Similarly, Wayne State University Law Professor Jessica Litman noted 
in testimony submitted at the Judiciary Committees hearing that those 
businesses which `'have registered domain names that are confusingly 
similar to trademarks or personal names in order to use them for 
pornographic web sites . . . have without exception lost suits brought 
against them.''
  Enforcing or even modifying our trademark laws will be only part of 
the solution to cybersquatting. Up to now, people have been able to 
register any number of domain names in the popular ``.com'' domain with 
no money down and no money due for 60 days. Network Solutions Inc. 
(NSI), the dominant Internet registrar, announced just last week that 
it was changing this policy, and requiring payment of the registration 
fee up front. In doing so, the NSI admitted that it was making this 
change to curb cybersquatting.
  In light of the developing case law, the ongoing efforts within WIPO 
and ICANN to build a consensus global mechanism for resolving online 
trademark disputes, and the implementation of domain name registration 
practices designed to discourage cybersquatting, the legislation we 
introduce today is intended to build is intended to build upon this 
progress and provide constructive guidance to trademark holders, domain 
name registrars and registries and Internet users registering domain 
names alike.
  Other Anti-cybersquatting Legislation Is Flawed. This is not the 
first bill to be introduced this session to address the problem of 
cybersquatting, and I appreciate the efforts of Senators Abraham, 
Toricelli, Hatch, and McCain, to focus our attention on this important 
matter. They introduced S. 1255, the ``Anticybersquatting Consumer 
Protection Act,'' which proposed making it illegal to register or use 
any ``Internet domain name or identifier of an online location'' that 
could be confused with the trademark of another person or cause 
dilution of a ``famous trademark.'' Violations were punishable by both 
civil and criminal penalties.
  I voiced concerns at a hearing before the Judiciary Committee last 
week that S. 1255 would have a number of unintended consequences that 
could hurt rather than promote electronic commerce, including the 
following specific problems:
  The definition in S. 1255 is overbroad. S. 1255 covers the use or 
registration of any ``identifier,'' which could cover not just second 
level domain names, but also e-mail addresses, screen names used in 
chat rooms, and even files accessible and readable on the Internet. As 
one witness pointed out, `` the definitions will make every fan a 
criminal.'' How? A file document about Batman, for example, that uses 
the trademark ``Batman'' in its name, which also identifies its online 
location, could land the writer in court under that bill. 
Cybersquatting is not about file names.
  S. 1255 threatens hypertext linking. The Web operates on hypertext 
linking, to facilitate jumping from one site to another. S. 1255 could 
disrupt this practice by imposing liability on operators of sites with 
links to other sites with trademark names in the address. One could 
imagine a trademark owner not wanting to be associated with or linked 
with certain sites, and threatening suit under this proposal unless the 
link were eliminated or payments were made for allowing the linking.
  S. 1255 would criminalize dissent and protest sites. A number of Web 
sites collect complaints about trademarked products or services, and 
sue the trademarked names to identify themselves. For example, there 
are protest sites named ``boycotts-cbs.com'' and 
``www.PepsiBloodbath.com.'' While the speech contained on those sites 
is clearly constitutionally protected, S. 1255 would criminalizes the 
use of the trademarked name to reach the site and make them difficult 
to search for and find online.
  S. 1255 would stifle legitimate warehousing of domain names. The bill 
would change current law and make liable persons who merely register 
domain names similar to other trademarked names, whether or not they 
actually set up a site and use the name. The courts have recognized 
that companies may have legitimate reason for registering domain names 
without using them and have declined to find trademark violations for 
mere registration of a trademarked name. For example, a company 
planning to acquire another company might register a domain name 
containing the target company's name in anticipation of the deal. S. 
1255 would make that company liable for trademark infringement.
  For these and other reasons, Professor Litman concluded that this 
``bill would in many ways be bad for electronic commerce, by making it 
hazardous to do business on the Internet without first retaining 
trademark counsel.'' Faced with the risk of criminal penalties, she 
stated that ``many start-up businesses may choose to abandon their 
goodwill and move to another Internet location, or even to fold, rather 
than risk liability.''
  The Hatch-Leahy Domain Name Piracy Prevention Act is a better 
solution. The legislation we introduce today addresses the 
cybersquatting problem without jeopardizing other important online 
rights and interests. This bill would amend section 43 of the Trademark 
Act (15 U.S.C. Sec. 11125) by adding a new section to make liable for 
actual or statutory damages any person, who with bad-faith intent to 
profit from the goodwill of another's trademark, registers or uses a 
domain name that is identical to, confusingly similar to or dilutive of 
such trademark, without regard to the goods or services of the parties. 
the fact that the domain name registrant did not compete with the 
trademark owner would not be a bar to recovery. Significant sections of 
this bill include:
  Definition. Domain names are narrowly defined to mean alphanumeric 
designations registered with or assigned by domain name registrars or 
registries, or other domain name registration authority as part of an 
electronic authority as part of an electronic address on the Internet. 
Since registrars only second level domain names this definition 
effectively excludes file names, screen names, and e-mail addresses 
and, under current registration practice, applies only to second level 
domain names.
  Scienter requirement. Good faith, innocent or negligent uses of 
domain names that are identical or similar to, or dilutive of, 
another's mark are not covered by the bill's prohibition. Thus, 
registering a domain name while unaware that the name is another's 
trademark would not be actionable. Nor would the use of a domain name 
that contains a trademark for purposes of protest, complaint, parody or 
commentary satisfy the requisite scienter requirement. Bad-faith intent 
to profit is required for a violation to occur.
  This requirement of bad-faith intent to profit is critical since, as 
Professor

[[Page 18472]]

Litman pointed out in her testimony, our trademark laws permit multiple 
businesses to register the same trademark for different classes of 
products. Thus, she explains:

       [a]lthough courts have been quick to impose liability for 
     bad faith registration, they have been far more cautious in 
     disputes involving a domain name registrant who has a 
     legitimate claim to use a domain name and registered it in 
     good faith. In a number of cases, courts have refused to 
     impose liability where there is no significant likelihood 
     that anyone will be misled, even if there is a significant 
     possibility of trademark dilution.

  The legislation outlines the following non-exclusive list of eight 
factors for courts to consider in determining whether such bad-faith 
intent to profit is proven: (i) the trademark rights of the domain name 
registrant in the domain name; (ii) whether the domain name is the 
legal or nickname of the registrant; (iii) the prior use by the 
registrant of the domain name in connection with the bona fide offering 
of any goods or services; (iv) the registrant's legitimate 
noncommercial or fair use of the mark at the site under the domain 
name; (v) the registrant's intent to divert consumers from the mark's 
owner's online location in a manner that could harm the mark's 
goodwill, either for commercial gain or with the intent to tarnish or 
disparage the mark, by creating a likelihood of confusion as to the 
source, sponsorship, affiliation or endorsement of the site; (vi) the 
registrant's offer to sell the domain name for substantial 
consideration without having or having an intent to use the domain name 
in the bona fide offering of goods or services; (vii) the registrant's 
international provision of material false and misleading contact 
information when applying for the registration of the domain name; and 
(viii) the registrant's registration of multiple domain names that are 
identical or similar to or dilutive of another's trademark.
  Damages. In civil actions against cybersquatters, the plaintiff is 
authorized to recover actual damages and profits, or may elect before 
final judgment to award of statutory damages of not less than $1,000 
and not more than $100,000 per domain name, as the court considers 
just. The court is directed to remit statutory damages in any case 
where the infringer reasonably believed that use of the domain name was 
a fair or otherwise lawful use.
  In Rem actions. The bill would also permit an in rem civil action 
filed by a trademark owner in circumstances where the domain name 
violates the owner's rights in the trademark and the court finds that 
the owner demonstrated due diligence and was not able to find the 
domain name holder to bring an in persona civil action. The remedies of 
an in rem action are limited to a court order for forfeiture or 
cancellation of the domain name or the transfer of the domain name to 
the trademark owner.
  Liability limitations. The bill would limit the liability for 
monetary damages of domain name registrars, registries or other domain 
name registration authorities for any action they take to refuse to 
register, remove from registration, transfer, temporarily disable or 
permanently cancel a domain name pursuant to a court order or in the 
implementation of reasonable policies prohibiting the registration of 
domain names that are identical or similar to, or dilutive of, anothers 
trademark.
  Prevention of reverse domain name hijacking. Reverse domain name 
hijacking is an effort by a trademark owner to take a domain name from 
a legitimate good faith domain name registrant. There have been some 
well-publicized cases of trademark owners demanding the take down of 
certain web sites set up by parents who have registered their 
children's names in the .org domain, such as two year old Veronica 
Sams's ``Little Veronica'' website and 12 year old Chris ``Pokey'' Van 
Allen's web page.
  In order to protect the rights of domain name registrants in their 
domain names the bill provides that registrants may recover damages, 
including costs and attorney's fees, incurred as a result of a knowing 
and material misrepresentation by a person that a domain name is 
identical or similar to, or dilutive of, a trademark. In addition, the 
domain name or the transfer or return of a domain name to the domain 
name registrant.
  Cybersquatting is an important issue both for trademark holders and 
for the future of electronic commerce on the Internet. Any legislative 
solution to cybersquatting must tread carefully to ensure that any 
remedies do not impede or stifle the free flow of information on the 
Internet. In many ways, the United States has been the incubator of the 
World Wide Web, and the world closely watches whenever we venture into 
laws, customs or standards that affect the Internet. We must only do so 
with great care and caution. Fair use principles are just as critical 
in cyberspace as in any other intellectual property arena.
  I am pleased that Chairman Hatch and I, along with Senators Abraham, 
Torricelli, and Kohl have worked together to find a legislative 
solution that respects these considerations. We also stand ready to 
make additional refinements to this legislation that prove necessary as 
this bill moves through the legislative process.
                                 ______
                                 
      By Mr. JEFFORDS:
  S. 1462. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
permit importation in personal baggage and through mail order of 
certain covered products for personal use from Canada, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.


         Personal Use Prescription Drug Importation Act of 1999

  Mr. JEFFORDS. Mr. President, today I am introducing legislation that 
takes another positive step toward the goal of providing access to 
affordable prescription drugs for patients in my state of Vermont, and 
many other patients across the United States.
  The high cost of prescription drugs is an issue that faces many 
Americans every single day, as they try to decide how to make ends 
meet, and whether they can afford to fill the prescription given to 
them by their doctor. Unfortunately, it is not uncommon to hear of 
patients who cut pills in half, or skip dosages in order to make 
prescriptions last longer. This is a serious health problem, and I am 
committed to legislative solutions that we can enact that provides 
immediate assistance to those who need it. I will soon introduce 
legislation that will provide prescription drug insurance for low-
income Medicare beneficiaries. And today I am introducing legislation 
that will allow Americans of all ages who do not have sufficient 
coverage for prescription drugs, to purchase the medicines they need at 
prices they can afford.
  Mr. President, it is well documented that the average price of 
prescription medicines is much lower in Canada than in the United 
States, with the price of some drugs in Vermont being twice that of the 
same drug available only a few miles away in a Canadian pharmacy. This 
is true even though many of the drugs sold in Canada are actually 
manufactured, packed, and distributed by American companies that sell 
the same products in both markets, but at drastically different prices. 
That is why many residents of my home state travel the short distance 
across the border into Canada to buy their prescription medicines at 
the lower price. Unfortunately, in most cases this is a violation of 
Federal law. This does not seem fair to many Vermonters, and it does 
not seem fair to me.
  The legislation I am introducing today will change that, so that 
Americans who want to buy prescription medicines in Canada can legally 
do so. This legislation will require the Food and Drug Administration 
(FDA) to promulgate new regulations permitting patients to import 
prescription medications purchased in Canada. Currently, it is illegal 
for Americans to go to Canada and purchase drugs to be brought back to 
the United States. But FDA and U.S. Customs employ a ``discretionary 
enforcement policy'', allowing some Americans to enter the U.S. with 
drugs that they bought in Canada.
  My legislation does a number of things. First, it requires the 
Secretary of Health and Human Services to promulgate regulations that 
will allow individuals to import prescription FDA-approved medicines 
from Canada in

[[Page 18473]]

personal baggage, so long as the appropriate use is identified and the 
product does not represent a significant health risk. Under this bill, 
patients could also be asked to identify the licensed U.S. health 
professional responsible for treatment, and to affirm that the product 
is for personal use, and provide other necessary information so that 
the FDA can continue to ensure the safety of the U.S. drug supply. All 
information collected under this provision will be subject to the 
Privacy Act of 1974.
  Under this proposal, the Secretary of Health and Human Services will 
also be required to promulgate regulations regarding importation of 
prescription drugs from Canada by mail order. The Secretary will 
establish criteria which will ensure the safety of patients in the 
United States that wish to purchase drugs by mail order from Canada.
  Finally, this legislation will require the Secretary of HHS to study 
the safety and purity of the prescription drug products that are 
imported under this Act.
  Mr. President, it has often been said that we have the international 
gold standard when it comes to drug safety. Well, we have the platinum 
standard when it comes to prices. I want to emphasize, again, my 
commitment to helping Vermonters and all Americans have access to the 
prescription drugs that they need at prices that they can afford. As 
Chairman of the Health, Education, Labor and Pensions Committee, the 
safety of American patients is always one of my top priorities, and I 
am committed to achieving the goal of affordable prescription drugs 
without putting patients' lives at risk. This is a responsible proposal 
to help Vermonters and all Americans with the high prices of drugs, and 
I hope my colleagues will support it.
                                 ______
                                 
      By Mr. DeWine (for himself, Ms. Snowe, Mr. Torricelli, Ms. 
        Collins, Mr. Durbin, Mrs. Feinstein, Ms. Mikulski, Mr. Schumer, 
        Mr. Bingaman, Mr. Chafee, and Mr. Kennedy):
  S. 1463. A bill to establish a program to provide assistance for 
programs of credit and other financial services for microenterprises in 
developing countries, and for other purposes; to the Committee on 
Foreign Relations.


             Micro-Enterprise for Self Reliance Act of 1999

  Mr. DeWINE. Mr. President, I rise today to introduce legislation that 
would ensure the future success of international micro-enterprise grant 
and loan programs. Many members of Congress have seen the success of 
micro-enterprise programs around the world. These programs reach the 
poorest of the poor with small loans to help them work their way out of 
poverty. These have proven to be very worthwhile and successful 
programs administered worldwide by the U.S. Agency for International 
Development (USAID).
  Unlike other assistance programs, we do not give funds away. Instead, 
we lend these funds to people once considered credit risks. The record 
of these programs boasts a client repayment rate of between 95% to 98%. 
Micro-enterprise programs are proof that with access to credit, the 
poor can and do better their lives while repaying their loans.
  To ensure the future of these programs and provide continued hope to 
others seeking to build out of poverty, I introduce today the Micro-
Enterprise for Self Reliance Act of 1999. I am pleased to be 
introducing the legislation along with Senators Snowe, Torricelli, 
Collins, Durbin, Feinstein, Mikulski, Schumer, Bingaman, Chafee and 
Kennedy. This bill would strengthen the foundations of these programs 
to ensure their survival and provide the mechanisms necessary for their 
continued success as financial institutions. First, it would provide 
grant assistance to micro-enterprise programs to increase availability 
of credit and other services. We also target half of all micro-
enterprise resources to support programs that serve the poorest of the 
poor with loans of $300 or less. This is a key provision of the bill 
and would give strong direction to USAID to work with sections of 
society that respond best to micro-lending programs.
  Second, this bill would authorize credits to micro-lending programs. 
These credits generally are used to expand already successful programs. 
Further, we seek to guarantee these programs' survival by establishing 
a facility to help rescue micro-lending institutions that are imperiled 
by war, currency movements or natural disasters. The facility would 
provide for loans to successful institutions to help them get back on 
their feet.
  Finally, we are interested in encouraging the future development and 
stability of these programs. Our bill calls for a report by USAID that 
would recommend other steps that could be taken to further the 
development of micro-lending institutions such as networks, 
regulations, a federal charter, financial instruments and coordination 
with multilateral institutions.
  We believe that this investment in micro-enterprise programs now will 
reduce the need for foreign assistance in the future. Congress now has 
the chance to ensure the future of these very successful programs, and 
help provide a sense of hope and a future of possibilities for the poor 
in developing countries. I thank my fellow cosponsors for their support 
for this legislation and look forward to working with them to gain 
congressional approval.
  Mr. President, I ask unanimous consent that the text of the Micro-
Enterprise for Self-Reliance Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1463

       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 ``Microenterprise for Self-
     Reliance Act of 1999''.

     SEC. 2. FINDINGS AND DECLARATIONS OF POLICY.

       The Congress makes the following findings and declarations:
       (1) According to the World Bank, more than 1,200,000,000 
     people in the developing world, or one-fifth of the world's 
     population, subsist on less than $1 a day.
       (2) Over 32,000 of their children die each day from largely 
     preventable malnutrition and disease.
       (3)(A) Women in poverty generally have larger work loads 
     and less access to educational and economic opportunities 
     than their male counterparts.
       (B) Directly aiding the poorest of the poor, especially 
     women, in the developing world has a positive effect not only 
     on family incomes, but also on child nutrition, health and 
     education, as women in particular reinvest income in their 
     families.
       (4)(A) The poor in the developing world, particularly 
     women, generally lack stable employment and social safety 
     nets.
       (B) Many turn to self-employment to generate a substantial 
     portion of their livelihood. In Africa, over 80 percent of 
     employment is generated in the informal sector of the self-
     employed poor.
       (C) These poor entrepreneurs are often trapped in poverty 
     because they cannot obtain credit at reasonable rates to 
     build their asset base or expand their otherwise viable self-
     employment activities.
       (D) Many of the poor are forced to pay interest rates as 
     high as 10 percent per day to money lenders.
       (5)(A) The poor are able to expand their incomes and their 
     businesses dramatically when they can access loans at 
     reasonable interest rates.
       (B) Through the development of self-sustaining microfinance 
     programs, poor people themselves can lead the fight against 
     hunger and poverty.
       (6)(A) On February 2-4, 1997, a global Microcredit Summit 
     was held in Washington, District of Columbia, to launch a 
     plan to expand access to credit for self-employment and other 
     financial and business services to 100,000,000 of the world's 
     poorest families, especially the women of those families, by 
     2005. While this scale of outreach may not be achievable in 
     this short-time frame, the realization of this goal could 
     dramatically alter the face of global poverty.
       (B) With an average family size of five, achieving this 
     goal will mean that the benefits of microfinance will thereby 
     reach nearly half of the world's more than 1,000,000,000 
     absolute poor people.
       (7)(A) Nongovernmental organizations, such as those that 
     comprise the Microenterprise Coalition (such as the Grameen 
     Bank (Bangladesh,) K-REP (Kenya), and networks such as Accion 
     International, the Foundation for International Community 
     Assistance (FINCA), and the credit union movement) are 
     successful in lending directly to the very poor.
       (B) Microfinance institutions such as BRAC (Bangladesh), 
     BancoSol (Bolivia), SEWA Bank (India), and ACEP (Senegal) are

[[Page 18474]]

     regulated financial institutions that can raise funds 
     directly from the local and international capital markets.
       (8)(A) Microenterprise institutions not only reduce 
     poverty, but also reduce the dependency on foreign 
     assistance.
       (B) Interest income on the credit portfolio is used to pay 
     recurring institutional costs, assuring the long-term 
     sustainability of development assistance.
       (9) Microfinance institutions leverage foreign assistance 
     resources because loans are recycled, generating new benefits 
     to program participants.
       (10)(A) The development of sustainable microfinance 
     institutions that provide credit and training, and mobilize 
     domestic savings, are critical components to a global 
     strategy of poverty reduction and broad-based economic 
     development.
       (B) In the efforts of the United States to lead the 
     development of a new global financial architecture, 
     microenterprise should play a vital role. The recent shocks 
     to international financial markets demonstrate how the 
     financial sector can shape the destiny of nations. 
     Microfinance can serve as a powerful tool for building a more 
     inclusive financial sector which serves the broad majority of 
     the world's population including the very poor and women and 
     thus generate more social stability and prosperity.
       (C) Over the last two decades, the United States has been a 
     global leader in promoting the global microenterprise sector, 
     primarily through its development assistance programs at the 
     United States Agency for International Development. 
     Additionally, the United States Department of the Treasury 
     and the Department of State have used their authority to 
     promote microenterprise in the development programs of 
     international financial institutions and the United Nations.
       (11)(A) In 1994, the United States Agency for International 
     Development launched the ``Microenterprise Initiative'' in 
     partnership with the Congress.
       (B) The initiative committed to expanding funding for the 
     microenterprise programs of the Agency, and set a goal that, 
     by the end of fiscal year 1996, half of all microenterprise 
     resources would support programs and institutions that 
     provide credit to the poorest, with loans under $300.
       (C) In order to achieve the goal of the microcredit summit, 
     increased investment in microcredit institutions serving the 
     poorest will be critical.
       (12) Providing the United States share of the global 
     investment needed to achieve the goal of the microcredit 
     summit will require only a small increase in United States 
     funding for international microcredit programs, with an 
     increased focus on institutions serving the poorest.
       (13)(A) In order to reach tens of millions of the poorest 
     with microcredit, it is crucial to expand and replicate 
     successful microcredit institutions.
       (B) These institutions need assistance in developing their 
     institutional capacity to expand their services and tap 
     commercial sources of capital.
       (14) Nongovernmental organizations have demonstrated 
     competence in developing networks of local microfinance 
     institutions and other assistance delivery mechanisms so that 
     they reach large numbers of the very poor, and achieve 
     financial sustainability.
       (15) Recognizing that the United States Agency for 
     International Development has developed very effective 
     partnerships with nongovernmental organizations, and that the 
     Agency will have fewer missions to carry out its work, the 
     Agency should place priority on investing in those 
     nongovernmental network institutions that meet performance 
     criteria through the central funding mechanisms of the 
     Agency.
       (16) By expanding and replicating successful microcredit 
     institutions, it should be possible to create a global 
     infrastructure to provide financial services to the world's 
     poorest families.
       (17)(A) The United States can provide leadership to other 
     bilateral and multilateral development agencies as such 
     agencies expand their support to the microenterprise sector.
       (B) The United States should seek to improve coordination 
     among G-7 countries in the support of the microenterprise 
     sector in order to leverage the investment of the United 
     States with that of other donor nations.
       (18) Through increased support for microenterprise, 
     especially credit for the poorest, the United States can 
     continue to play a leadership role in the global effort to 
     expand financial services and opportunity to 100,000,000 of 
     the poorest families on the planet.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to make microenterprise development an important 
     element of United States foreign economic policy and 
     assistance;
       (2) to provide for the continuation and expansion of the 
     commitment of the United States Agency for International 
     Development to the development of microenterprise 
     institutions as outlined in its 1994 Microenterprise 
     Initiative;
       (3) to support and develop the capacity of United States 
     and indigenous nongovernmental organization intermediaries to 
     provide credit, savings, training and technical services to 
     microentrepreneurs;
       (4) to increase the amount of assistance devoted to credit 
     activities designed to reach the poorest sector in developing 
     countries, and to improve the access of the poorest, 
     particularly women, to microenterprise credit in developing 
     countries; and
       (5) to encourage the United States Agency for International 
     Development to coordinate microfinance policy, in 
     consultation with the Department of the Treasury and the 
     Department of State, and to provide global leadership in 
     promoting microenterprise for the poorest among bilateral and 
     multilateral donors.

     SEC. 4. MICROENTERPRISE DEVELOPMENT GRANT ASSISTANCE.

       Chapter 1 of part I of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2151 et seq.) is amended--
       (1) by redesignating the second section 129 (as added by 
     section 4 of the Torture Victims Relief Act of 1998 (Public 
     Law 105-320)) as section 130; and
       (2) by adding at the end the following new section:

     ``SEC. 131. MICROENTERPRISE DEVELOPMENT GRANT ASSISTANCE.

       ``(a) Findings and Policy.--The Congress finds and declares 
     that--
       ``(1) the development of microenterprise is a vital factor 
     in the stable growth of developing countries and in the 
     development of free, open, and equitable international 
     economic systems;
       ``(2) it is therefore in the best interest of the United 
     States to assist the development of microenterprises in 
     developing countries; and
       ``(3) the support of microenterprise can be served by 
     programs providing credit, savings, training, and technical 
     assistance.
       ``(b) Authorization.--(1) In carrying out this part, the 
     President is authorized to provide grant assistance for 
     programs to increase the availability of credit and other 
     services to microenterprises lacking full access to capital 
     and training through--
       ``(A) grants to microfinance institutions for the purpose 
     of expanding the availability of credit, savings, and other 
     financial services to microentrepreneurs;
       ``(B) training, technical assistance, and other support for 
     microenterprises to enable them to make better use of credit, 
     to better manage their enterprises, and to increase their 
     income and build their assets;
       ``(C) capacity building for microfinance institutions in 
     order to enable them to better meet the credit and training 
     needs of microentrepreneurs; and
       ``(D) policy and regulatory programs at the country level 
     that improve the environment for microfinance institutions 
     that serve the poor and very poor.
       ``(2) Assistance authorized under paragraph (1) shall be 
     provided through organizations that have a capacity to 
     develop and implement microenterprise programs, including 
     particularly--
       ``(A) United States and indigenous private and voluntary 
     organizations;
       ``(B) United States and indigenous credit unions and 
     cooperative organizations;
       ``(C) other indigenous governmental and nongovernmental 
     organizations; or
       ``(D) business development services, including indigenous 
     craft programs.
       ``(3) In carrying out sustainable poverty-focused programs 
     under paragraph (1), 50 percent of all microenterprise 
     resources shall be used for direct support of programs under 
     this subsection through practitioner institutions that 
     provide credit and other financial services to the poorest 
     with loans of $300 or less in 1995 United States dollars and 
     can cover their costs of credit programs with revenue from 
     lending activities or that demonstrate the capacity to do so 
     in a reasonable time period.
       ``(4) The President should continue support for central 
     mechanisms and missions that--
       ``(A) provide technical support for field missions;
       ``(B) strengthen the institutional development of the 
     intermediary organizations described in paragraph (2);
       ``(C) share information relating to the provision of 
     assistance authorized under paragraph (1) between such field 
     missions and intermediary organizations; and
       ``(D) support the development of nonprofit global 
     microfinance networks, including credit union systems, that--
       ``(i) are able to deliver very small loans through a vast 
     grassroots infrastructure based on market principles; and
       ``(ii) act as wholesale intermediaries providing a range of 
     services to microfinance retail institutions, including 
     financing, technical assistance, capacity building and safety 
     and soundness accreditation.
       ``(5) Assistance provided under this subsection may only be 
     used to support microenterprise programs and may not be used 
     to support programs not directly related to the purposes 
     described in paragraph (1).
       ``(c) Monitoring System.--In order to maximize the 
     sustainable development impact of the assistance authorized 
     under subsection (a)(1), the Administrator of the United 
     States Agency for International Development shall establish a 
     monitoring system that--

[[Page 18475]]

       ``(1) establishes performance goals for such assistance and 
     expresses such goals in an objective and quantifiable form, 
     to the extent feasible;
       ``(2) establishes performance indicators to be used in 
     measuring or assessing the achievement of the goals and 
     objectives of such assistance;
       ``(3) provides a basis for recommendations for adjustments 
     to such assistance to enhance the sustainable development 
     impact of such assistance, particularly the impact of such 
     assistance on the very poor, particularly poor women; and
       ``(4) provides a basis for recommendations for adjustments 
     to measures for reaching the poorest of the poor, including 
     proposed legislation containing amendments to improve 
     paragraph (3).
       ``(d) Authorization of Appropriations.--
       ``(1) In general.--(A) There are authorized to be 
     appropriated $152,000,000 for fiscal year 2000 and 
     $167,000,000 for fiscal year 2001 to carry out this section.
       ``(B) Amounts appropriated pursuant to the authorization of 
     appropriations under subparagraph (A) are authorized to 
     remain available until expended.
       ``(2) Rule of construction.--Amounts authorized to be 
     appropriated under paragraph (1) are in addition to amounts 
     otherwise available to carry out this section.''.

     SEC. 5. MICRO- AND SMALL ENTERPRISE DEVELOPMENT CREDITS.

       Section 108 of the Foreign Assistance Act of 1961 (22 
     U.S.C. 2151f) is amended to read as follows:

     ``SEC. 108. MICRO- AND SMALL ENTERPRISE DEVELOPMENT CREDITS.

       ``(a) Findings and Policy.--The Congress finds and declares 
     that--
       ``(1) the development of micro- and small enterprises are a 
     vital factor in the stable growth of developing countries and 
     in the development and stability of a free, open, and 
     equitable international economic system; and
       ``(2) it is, therefore, in the best interests of the United 
     States to assist the development of the enterprises of the 
     poor in developing countries and to engage the United States 
     private sector in that process.
       ``(b) Program.--To carry out the policy set forth in 
     subsection (a), the President is authorized to provide 
     assistance to increase the availability of credit to micro- 
     and small enterprises lacking full access to credit, 
     including through--
       ``(1) loans and guarantees to credit institutions for the 
     purpose of expanding the availability of credit to micro- and 
     small enterprises;
       ``(2) training programs for lenders in order to enable them 
     to better meet the credit needs of microentrepreneurs; and
       ``(3) training programs for microentrepreneurs in order to 
     enable them to make better use of credit and to better manage 
     their enterprises.
       ``(c) Eligibility Criteria.--The Administrator of the 
     United States Agency for International Development shall 
     establish criteria for determining which entities described 
     in subsection (b) are eligible to carry out activities, with 
     respect to micro- and small enterprises, assisted under this 
     section. Such criteria may include the following:
       ``(1) The extent to which the recipients of credit from the 
     entity do not have access to the local formal financial 
     sector.
       ``(2) The extent to which the recipients of credit from the 
     entity are among the poorest people in the country.
       ``(3) The extent to which the entity is oriented toward 
     working directly with poor women.
       ``(4) The extent to which the entity recovers its cost of 
     lending to the poor.
       ``(5) The extent to which the entity implements a plan to 
     become financially sustainable.
       ``(d) Additional Requirement.--Assistance provided under 
     this section may only be used to support micro- and small 
     enterprise programs and may not be used to support programs 
     not directly related to the purposes described in subsection 
     (b).
       ``(e) Authorization of Appropriations.--
       ``(1) In general.--(A) There are authorized to be 
     appropriated $1,500,000 for each of the fiscal years 2000 and 
     2001 to carry out this section.
       ``(B) Amounts authorized to be appropriated under 
     subparagraph (A) shall be made available for the subsidy 
     cost, as defined in section 502(5) of the Federal Credit 
     Reform Act of 1990, for activities under this section.
       ``(2) Administrative expenses.--There are authorized to be 
     appropriated $500,000 for each of the fiscal years 2000 and 
     2001 for the cost of administrative expenses in carrying out 
     this section.
       ``(3) Rule of construction.--Amounts authorized to be 
     appropriated under this subsection are in addition to amounts 
     otherwise available to carry out this section.''.

     SEC. 6. MICROFINANCE LOAN FACILITY.

       Chapter 1 of part I of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2151 et seq.), as amended by this Act, is further 
     amended by adding the following new section:

     ``SEC. 132. UNITED STATES MICROFINANCE LOAN FACILITY.

       ``(a) Establishment.--The Administrator of the United 
     States Agency for International Development is authorized to 
     establish a United States Microfinance Loan Facility 
     (hereinafter in this section referred to as the `Facility') 
     to pool and manage the risk from natural disasters, war or 
     civil conflict, national financial crisis, or short-term 
     financial movements that threaten the long-term development 
     of United States-supported microfinance institutions.
       ``(b) Supervisory Board of the Facility.--(1) The Facility 
     shall be supervised by a board composed of the following 
     representatives appointed by the President not later than 180 
     days after the date of the enactment of Microenterprise for 
     Self-Reliance Act of 1999:
       ``(A) 1 representative from the Department of the Treasury.
       ``(B) 1 representative from the Department of State.
       ``(C) 1 representative from the United States Agency for 
     International Development.
       ``(D)(i) 2 United States citizens from United States 
     nongovernmental organizations that operate United States-
     sponsored microfinance activities.
       ``(ii) Individuals described in clause (i) shall be 
     appointed for a term of 2 years.
       ``(2) The Administrator of the United States Agency for 
     International Development or his designee shall serve as 
     Chairman and an additional voting member of the board.
       ``(c) Disbursements.--(1) The board shall make 
     disbursements from the Facility to United States-sponsored 
     microfinance institutions to prevent the bankruptcy of such 
     institutions caused by (A) natural disasters, (B) national 
     wars or civil conflict, or (C) national financial crisis or 
     other short term financial movements that threaten the long-
     term development of United States-supported microfinance 
     institutions. Such disbursements shall be made as 
     concessional loans that are repaid maintaining the real value 
     of the loan to microfinance institutions that demonstrate the 
     capacity to resume self-sustained operations within a 
     reasonable time period. The Facility shall provide for loan 
     losses with each loan disbursed.
       ``(2) During each of the fiscal years 2001 and 2002, funds 
     may not be made available from the Facility until 15 days 
     after notification of the availability has been provided to 
     the congressional committees specified in section 634A of 
     this Act in accordance with the procedures applicable to 
     reprogramming notifications under that section.
       ``(d) Report.--Not later than 60 days after the date on 
     which the last representative to the board is appointed 
     pursuant to subsection (b), the chairman of the board shall 
     prepare and submit to the appropriate congressional 
     committees a report on the policies, rules, and regulations 
     of the Facility.
       ``(e) Funding.--
       ``(1) Availability of funds to cover subsidy costs.--Of the 
     funds made available to carry out this part for fiscal years 
     2000 and 2001, up to $5,000,000 may be made available to 
     cover the subsidy cost (as defined in section 502(5) of the 
     Federal Credit Reform Act of 1990) to carry out this section 
     for each such fiscal year. In addition, of such amount for 
     each fiscal year, up to $_______ may be made available for 
     administrative expenses in carrying out this section.
       ``(2) Applicable authorities.--The provisions of section 
     107A(d) of the Foreign Assistance Act of 1961 (as contained 
     in section 306 of H.R. 1486, as reported to the House of 
     Representatives on May 9, 1997) shall be applicable to 
     assistance provided under this section, except that 
     paragraphs (5) through (8) thereof shall not apply.
       ``(3) Relation to other amounts available.--Amounts made 
     available under paragraph (1) are in addition to amounts 
     available to carry out this section under any other provision 
     of law.
       ``(f) Definitions.--In this section:
       ``(1) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means the Committee on 
     International Relations of the House of Representatives and 
     the Committee on Foreign Relations of the Senate.
       ``(2) United states-supported microfinance institution.--
     The term `United States-supported microfinance institution' 
     means a financial intermediary that has received funds made 
     available under this Act for fiscal year 1980 or any 
     subsequent fiscal year.''.

     SEC. 7. REPORT RELATING TO FUTURE DEVELOPMENT OF MICROFINANCE 
                   INSTITUTIONS.

       (a) Report.--Not later than 180 days after the date of the 
     enactment of this Act, the President, in consultation with 
     the Administrator of the United States Agency for 
     International Development, the Secretary of State, and the 
     Secretary of the Treasury, shall prepare and transmit to the 
     appropriate congressional committees a report on the most 
     cost-effective methods for increasing the access of poor 
     people to credit, other financial services, and related 
     training.
       (b) Contents.--The report described in subsection (a)--
       (1) should include how the President, in consultation with 
     the Administrator of the United States Agency for 
     International Development, the Secretary of State, and the

[[Page 18476]]

     Secretary of the Treasury, will jointly develop a 
     comprehensive strategy for advancing the global 
     microenterprise sector in a way that maintains market 
     principles while assuring that the very poor, particularly 
     women, obtain access to financial services; and
       (2) shall provide guidelines and recommendations for--
       (A) instruments to assist microenterprise networks to 
     develop multi-country and regional microlending programs;
       (B) technical assistance to foreign governments, foreign 
     central banks and regulatory entities to improve the policy 
     environment for microfinance institutions, and to strengthen 
     the capacity of supervisory bodies to supervise microcredit 
     institutions;
       (C) the potential for federal chartering of United States-
     based international microfinance network institutions, 
     including proposed legislation;
       (D) instruments to increase investor confidence in 
     microcredit institutions which would strengthen the long-term 
     financial position of the microcredit institutions and 
     attract capital from private sector entities and individuals, 
     such as a rating system for microcredit institutions and 
     local credit bureaus;
       (E) an agenda for integrating microfinance into United 
     States foreign policy initiatives seeking to develop and 
     strengthen the global finance sector; and
       (F) innovative instruments to attract funds from the 
     capital markets, such as instruments for leveraging funds 
     from the local commercial banking sector, and the 
     securitization of microloan portfolios.
       (c) Appropriate Congressional Committees Defined.--In this 
     section, the term ``appropriate congressional committees'' 
     means the Committee on International Relations of the House 
     of Representatives and the Committee on Foreign Relations of 
     the Senate.

     SEC. 8. UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT AS 
                   GLOBAL LEADER AND COORDINATOR OF BILATERAL AND 
                   MULTILATERAL MICROENTERPRISE ASSISTANCE 
                   ACTIVITIES.

       (a) Findings and Policy.--The Congress finds and declares 
     that--
       (1) the United States can provide leadership to other 
     bilateral and multilateral development agencies as such 
     agencies expand their support to the microenterprise sector; 
     and
       (2) the United States should seek to improve coordination 
     among G-7 countries in the support of the microenterprise 
     sector in order to leverage the investment of the United 
     States with that of other donor nations.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) the Administrator of the United States Agency for 
     International Development and the Secretary of State should 
     seek to support and strengthen the effectiveness of 
     microfinance activities in United Nations agencies, such as 
     the International Fund for Agricultural Development (IFAD) 
     and the United Nations Development Program (UNDP), which have 
     provided key leadership in developing the microenterprise 
     sector; and
       (2) the Secretary of the Treasury should instruct each 
     United States Executive Director of the Multilateral 
     Development Banks (MDBs) to advocate the development of a 
     coherent and coordinated strategy to support the 
     microenterprise sector and an increase of multilateral 
     resource flows for the purposes of building microenterprise 
     retail and wholesale intermediaries.
                                 ______
                                 

By Mr. HAGEL (for himself, Mrs. Lincoln, Mr. Roberts, Ms. Landrieu, Mr. 
 Hutchinson, Mr. Cochran, Mr. Grams, Mr. Abraham, Mr. Smith of Oregon, 
   Mr. Hollings, Mr. Craig, Mr. Gorton, Mr. Grassley, Mr. Crapo, Mr. 
 Burns, Mr. Frist, Mr. Breaux, Mr. Ashcroft, Mr. Coverdell, Mr. Helms, 
                             and Mr. Lott):

  S. 1464. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
establish certain requirements regarding the Food Quality Protection 
Act of 1996, and for other purposes; to the Committee on Agriculture, 
Nutrition, and Forestry.


              regulatory openness and fairness act of 1999

  Mr. HAGEL. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1464

       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 ``Regulatory 
     Openness and Fairness Act of 1999''.
       (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--ISSUANCE AND CONTINUATION OF TOLERANCES

Sec. 101. Transition analysis and description of basis for decisions 
              relating to tolerance reviews. 
Sec. 102. Interim procedures for reviews of tolerances.
Sec. 103. Implementation rules and guidance.
Sec. 104. Data in support of tolerances and registrations.
Sec. 105. Tolerances for emergency uses.

                     TITLE II--STUDIES AND REPORTS

Sec. 201. Definitions.
Sec. 202. Priorities and resources.
Sec. 203. International trade effects.
Sec. 204. Advisory committee.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The Food Quality Protection Act of 1996 (Public Law 
     104-170; 110 Stat. 1489), enacted on August 3, 1996, made 
     many major modifications to section 408 of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 346a) that require the 
     Administrator of the Environmental Protection Agency to 
     consider new kinds of information and use additional criteria 
     in regulating pesticide chemical residues and in reviewing 
     tolerances for pesticide chemical residues that had 
     previously been found to be adequate to protect the public 
     health.
       (2)(A) Amendments made by the Food Quality Protection Act 
     of 1996 prescribe the use of a number of new risk assessment 
     criteria that require the development of major modifications 
     to regulatory policies and procedures used by the 
     Administrator to regulate pesticide chemical residues.
       (B) Since the enactment of the Food Quality Protection Act 
     of 1996, it has become clear that several of the new concepts 
     embodied in that Act involve a high degree of complexity.
       (C) Practical implementation of the concepts demands new 
     scientific tools in addition to the tools that were available 
     when the Food Quality Protection Act of 1996 was enacted.
       (3)(A) To reach sound, suitably protective decisions on 
     tolerance reviews under the new criteria, the Administrator 
     also will need a great deal of new data, not only on the 
     newly considered nondietary routes of exposure, but also, in 
     some cases, on dietary exposure and toxicity, so that the 
     Administrator can determine whether pesticide chemicals 
     residues that were found safe under the former criteria 
     satisfy the new criteria as well.
       (B) Some data collection efforts are underway to obtain new 
     data for tolerance reviews, but will not yield results for 1 
     or more years.
       (C) In some areas, the need for new data depends on 
     decisions not yet made by the Administrator about what kinds 
     of tests should be conducted and which compounds should be 
     tested, for tolerance reviews.
       (4)(A) The Administrator has instituted public proceedings, 
     relating to the regulations and tolerance reviews, on such 
     topics as what new interpretations and policies are needed, 
     what new kinds of data are needed, how the new data would be 
     used, and how the needed regulatory transition can be 
     achieved.
       (B) These proceedings are not yet finished, and on some 
     issues public notice and comment proceedings have been 
     scheduled but have not yet begun.
       (5)(A) The Food Quality Protection Act of 1996 amended the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) 
     by adding several provisions that provide flexibility to the 
     Administrator in making the transition to the new approach to 
     regulating pesticide chemical residues.
       (B) The Federal Food, Drug, and Cosmetic Act allows a 
     continuing process of refinement and improvement in tolerance 
     decisionmaking, as additional information is collected and as 
     new policies and methods are developed and adopted for the 
     practical implementation of the new requirements in that Act.
       (C) The Federal Food, Drug, and Cosmetic Act provides that 
     the data requirements for tolerances must be set out clearly 
     in regulations and guidelines, so that the regulated 
     community will know what types of information the 
     Administrator requires and what testing procedures should be 
     used to develop the information.
       (D) Amendments made by the Food Quality Protection Act of 
     1996 relating to risk assessments affecting tolerances allow 
     only the use of reliable information regarding nondietary 
     exposure routes, which were not previously considered in risk 
     assessments affecting tolerances.
       (E) Congress did not anticipate that a tolerance would be 
     revoked because of reliance by the Administrator on estimates 
     or assumptions stemming from absence of that information, 
     without first providing notice of what information is needed 
     and a reasonable opportunity to collect the information.
       (F) When a tolerance is under review and the Administrator 
     determines that additional information is needed to support 
     the continuation of the tolerance, the Federal Food, Drug, 
     and Cosmetic Act authorizes the Administrator to postpone the 
     effective date

[[Page 18477]]

     of any tolerance rule resulting from the review, and this 
     authority can be utilized as appropriate in cases in which 
     additional information is pertinent to a tolerance review.
       (G) The Federal Food, Drug, and Cosmetic Act permits the 
     Administrator to conduct a tolerance review in stages, as 
     allowed by the available, reliable information.
       (6)(A) Although the authorities described in subparagraphs 
     (F) and (G) of paragraph (5) already are provided by law, it 
     appears that further congressional guidance is needed to 
     ensure that decisions of the Administrator relating to 
     tolerance reviews are reasonable, well supported, and 
     balanced, and to avoid disruptions in agriculture, other 
     sectors of the economy, and international trade.
       (B) During the transition to revised standards, procedures, 
     and requirements for the regulation of pesticide chemical 
     residues, the Administrator must ensure that decisions are 
     balanced, reasonable, and understandable, and are based on 
     and supported by sound information, in order to avoid 
     unnecessary disruptions in agriculture, the economy, and 
     international trade, and to maintain the public trust in the 
     food supply.
       (7) Unless the Administrator implements section 408 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 346a) 
     carefully and wisely, decisions made under that section could 
     cause great harm to--
       (A) the safe and affordable food supply of the United 
     States;
       (B) the agricultural system of the United States (including 
     food, fiber, nursery, and forestry production, food storage, 
     and transportation);
       (C) related industries; and
       (D) other private and public sector activities, such as--
       (i) public health protection against bacteria and other 
     microorganisms;
       (ii) control of insects and diseases; and
       (iii) residential and business pest control.

            TITLE I--ISSUANCE AND CONTINUATION OF TOLERANCES

     SEC. 101. TRANSITION ANALYSIS AND DESCRIPTION OF BASIS FOR 
                   DECISIONS RELATING TO TOLERANCE REVIEWS.

       Section 408 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 346a) is amended by adding at the end the following:
       ``(t) Transition Analysis and Descriptions of Basis for 
     Decisions Relating to Tolerance Reviews.--
       ``(1) Application of requirements to certain documents.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     this subsection applies to any proposed or final rule, order, 
     notice, report, guidance document, or risk assessment 
     (referred to in this subsection as a `document') that is--
       ``(i) based on, or results from, any review (including a 
     reassessment) by the Administrator of a tolerance or of the 
     uses of a pesticide chemical for which a tolerance is in 
     effect; and
       ``(ii) issued or disclosed as described in paragraph (2).
       ``(B) Exception.--This subsection does not apply to any 
     document in which the Administrator determines or recommends 
     that no revocation or denial of a tolerance, or other adverse 
     action regarding a tolerance, is required.
       ``(2) Period of applicability.--This subsection applies to 
     a document that the Administrator issues or otherwise 
     discloses to any member of the public during the period 
     beginning on January 1, 1999, and ending on the date of 
     completion of the process of reviewing tolerances under 
     subsection (q).
       ``(3) Transition analysis report.--
       ``(A) Transition analysis.--Before issuing any document to 
     which this subsection applies, the Administrator shall 
     conduct a transition analysis of the findings and regulatory 
     steps recommended by or set forth in the document.
       ``(B) Report.--The Administrator shall prepare a report, to 
     be issued with the document, that--
       ``(i) describes the results of the analysis;
       ``(ii) describes the extent to which the conclusions in the 
     document are tentative, preliminary, or subject to possible 
     modification because of policy reevaluation, correction of 
     data deficiencies, or use of new data to replace assumptions; 
     and
       ``(iii) contains the information described in subparagraphs 
     (C) and (D).
       ``(C) Contents of report relating to basis for findings and 
     regulatory steps.--A transition analysis report prepared 
     under this paragraph shall describe the extent to which any 
     finding or regulatory step recommended by or set forth in the 
     analyzed document is based in whole or in part on--
       ``(i) any assumption, if the Administrator is in possession 
     of data that would make use of the assumption unnecessary;
       ``(ii) any information about possible exposure from 
     drinking water, or another nonoccupational, nondietary 
     exposure route, that is derived from use of--

       ``(I) a worst-case assumption;
       ``(II) a computation or modeling result that is--

       ``(aa) based on a high-end or upper-bound input; or
       ``(bb) designed to be a worst-case, high-end, or upper-
     bound estimate; or

       ``(III) information that otherwise is not reasonably 
     representative of risks to consumers or to major identifiable 
     subgroups of consumers, on a national or regional basis;

       ``(iii) any assumption about exposure from drinking water, 
     or another nonoccupational, nondietary exposure route, if 
     data that would make use of the assumption unnecessary, and 
     would likely demonstrate a lower level of exposure than that 
     used in the assumption--

       ``(I) are being developed and will be submitted to the 
     Administrator within a reasonable period--

       ``(aa) in accordance with a request by the Administrator 
     under subsection (f) or any of the authorities referred to in 
     that subsection; or
       ``(bb) at the initiative of an interested person; or

       ``(II) could be obtained by the Administrator by an action 
     taken in accordance with subsection (f);

       ``(iv) any assumption regarding the method for determining 
     the aggregate exposure to a pesticide chemical or the 
     cumulative effect of exposure to 2 or more pesticide 
     chemicals having a common mechanism of toxicity, if the use 
     of the assumption is based in whole or in part on the absence 
     of data that could be obtained by the Administrator by an 
     action taken in accordance with subsection (f), unless the 
     data that would eliminate the need for use of the assumption 
     have been identified and made known by the Administrator to 
     interested persons and sufficient time has been provided to 
     allow the data to be developed, submitted, and subsequently 
     evaluated by the Administrator;
       ``(v) any calculation developed by use of the margin of 
     safety described in subsection (b)(2)(C), if the use of the 
     margin of safety is based in whole or in part on the absence 
     of data that could be obtained by the Administrator by an 
     action taken in accordance with subsection (f), unless the 
     data that would eliminate the need for use of the margin of 
     safety have been identified and made known by the 
     Administrator to interested persons and sufficient time has 
     been provided to allow the data to be developed, submitted, 
     and subsequently evaluated by the Administrator; or
       ``(vi) any information about an alleged adverse effect 
     relating to a pesticide chemical, if the information is 
     anecdotal, unverified, or scientifically implausible, or 
     comes from any study whose design and conduct has not been 
     found by the Administrator to be scientifically sound with 
     regard to design, conduct, reporting, and data availability.
       ``(D) Additional contents of report.--A transition analysis 
     report prepared under this paragraph shall contain 
     information--
       ``(i) summarizing and responding briefly to comments 
     received by the Administrator from any other person regarding 
     the applicability of any provision of subparagraph (C) to the 
     document analyzed under this subsection;
       ``(ii) describing briefly the availability and suitability 
     of pesticidal and nonpesticidal alternatives to the pesticide 
     chemical uses being reviewed, including a description of--

       ``(I) the extent to which (as determined by the 
     Administrator, in consultation with the Secretary of 
     Agriculture) an alternative to the use for which the 
     tolerance under review has been approved that is effective 
     and economical; and
       ``(II) whether revocation or modification of the tolerance 
     will result in--

       ``(aa) a significant regional shift of production of food 
     within the United States;
       ``(bb) an increase in imports of corresponding commodities;
       ``(cc) an increase in pest control costs;
       ``(dd) an increase in pest crop damage and yield loss, 
     including quality degradation, due to the lack of an 
     effective alternative; or
       ``(ee) a disruption of domestic production of an adequate, 
     wholesome, and economical food supply;
       ``(iii) identifying the data that, if available, would make 
     unnecessary any reliance on any information, assumption, or 
     calculation that is described in clause (ii), (iii), (iv), or 
     (v) of subparagraph (C) and identified in the report;
       ``(iv) describing the extent to which any finding or 
     regulatory step recommended by or set forth in the document 
     is based in whole or in part on any assumption about 
     toxicity, dietary exposure, or risk from dietary exposure, if 
     data that would make use of the assumption unnecessary--

       ``(I) are being developed and will be submitted to the 
     Administrator within a reasonable period--

       ``(aa) in accordance with a request by the Administrator 
     under subsection (f) or any of the authorities referred to in 
     that subsection; or
       ``(bb) at the initiative of an interested person; or

       ``(II) could be obtained by the Administrator by an action 
     taken in accordance with subsection (f); and

       ``(v) describing the extent to which any finding or 
     regulatory step recommended by or set forth in the document 
     is based in whole or in part on--

       ``(I) any use of data on the presence or absence of 
     nonadverse effects, rather than data on the presence or 
     absence of adverse effects, as the basis for calculation of 
     allowable exposure levels; or

[[Page 18478]]

       ``(II) any policy that the Administrator may revise after 
     completion of any reevaluation of that policy that is being 
     conducted or is scheduled to be conducted.

       ``(4) Definition.--In this subsection and subsection (u), 
     the term `tolerance' has the meaning given the term in 
     section 201 of the Regulatory Openness and Fairness Act of 
     1999.''.

     SEC. 102. INTERIM PROCEDURES FOR REVIEWS OF TOLERANCES.

       Section 408 of the Federal Food, Drug, and Cosmetic Act, as 
     amended by section 101, is further amended by adding at the 
     end the following:
       ``(u) Interim Procedures for Reviews of Tolerances.--
       ``(1) Application of requirements to certain actions.--This 
     subsection applies to--
       ``(A) any review (including a reassessment) by the 
     Administrator of a tolerance, whether initiated by the 
     Administrator or by petition by another person; and
       ``(B) any review (including a reassessment) by the 
     Administrator of any registration of a pesticide chemical 
     under the Federal Insecticide, Fungicide, and Rodenticide Act 
     (7 U.S.C. 136 et seq.) that is associated with or results 
     from such a tolerance review;
     that the Administrator issues during the period described in 
     paragraph (2).
       ``(2) Period of applicability.--The period referred to in 
     paragraph (1) is the period beginning on January 1, 1999, and 
     ending on the date of completion of the process of reviewing 
     tolerances under subsection (q).
       ``(3) Limitation.--Notwithstanding any other provision of 
     law--
       ``(A) in any tolerance review (including a reassessment) to 
     which this subsection applies, the Administrator may not base 
     the revocation or denial of, or other adverse action 
     regarding, a tolerance on any information, calculation, or 
     assumption described in subsection (t)(3)(C); and
       ``(B) in any review (including a reassessment) to which 
     this subsection applies of the registration of a pesticide 
     chemical under the Federal Insecticide, Fungicide, and 
     Rodenticide Act (7 U.S.C. 136 et seq.), the Administrator may 
     not base any adverse action regarding a registration on any 
     such information, calculation, or assumption.''.

     SEC. 103. IMPLEMENTATION RULES AND GUIDANCE.

       Section 408(e) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 346a(e)) is amended by adding at the end the 
     following:
       ``(3) Implementation rules and guidance.--
       ``(A) In general.--In establishing general procedures and 
     requirements to implement this section in accordance with 
     paragraph (1)(C), the Administrator shall issue rules and 
     guidance, including guidance regarding the provisions of this 
     Act regarding aggregate exposure to pesticide chemicals and 
     cumulative effects of exposure to 2 or more pesticide 
     chemicals having a common mechanism of toxicity. The 
     Administrator shall include in such rules and guidance 
     general procedures and requirements to implement the 
     provisions of this Act that were added by amendments made by 
     the Regulatory Openness and Fairness Act of 1999.
       ``(B) Issuance.--The Administrator shall issue--
       ``(i) proposed rules and guidance described in subparagraph 
     (A) not later than 180 days after the date of enactment of 
     the Regulatory Openness and Fairness Act of 1999;
       ``(ii) final rules and guidance described in subparagraph 
     (A) not later than 1 year after the date of enactment of the 
     Regulatory Openness and Fairness Act of 1999; and
       ``(iii) such revisions to the rules and guidance as the 
     Administrator determines to be necessary and appropriate.''.

     SEC. 104. DATA IN SUPPORT OF TOLERANCES AND REGISTRATIONS.

       (a) Federal Food, Drug, and Cosmetic Act.--Section 408(f) 
     of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     346a(f)) is amended by adding at the end the following:
       ``(3) Issuance of guidelines.--
       ``(A) In general.--The Administrator shall issue guidelines 
     specifying the kinds of information that will be required to 
     support the issuance or continuation of a tolerance for a 
     pesticide chemical residue or the exemption from the 
     requirement of such a tolerance, established under this 
     section. The Administrator shall revise the guidelines from 
     time to time. The guidelines shall specify the conditions 
     under which data requirements will apply to particular types 
     of pesticide chemical residues.
       ``(B) Procedures.--In issuing the guidelines described in 
     subparagraph (A), the Administrator shall provide notice and 
     an opportunity for comment, except for those guidelines that 
     already have been issued after notice and an opportunity for 
     comment under section 3(c)(2)(A) of the Federal Insecticide, 
     Fungicide, and Rodenticide Act (7 U.S.C. 136a(c)(2)(A)).''.
       (b) Federal Insecticide, Fungicide, and Rodenticide Act.--
     The first sentence of section 3(c)(2)(A) of the Federal 
     Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 
     136a(c)(2)(A)) is amended by striking the period and 
     inserting ``, after providing notice and an opportunity for 
     comment on the guidelines or revisions by interested 
     parties.''.

     SEC. 105. EXPEDITED ACTION.

       (a) Expedited Action to Provide Effective, Economic 
     Alternatives.--Section 3(c)(3) of the Federal Insecticide, 
     Fungicide, and Rodenticide Act (7 U.S.C. 136a(c)(3)) is 
     amended by adding at the end the following:
       ``(E) Expedited action to provide effective, economic 
     alternatives.--The Administrator shall expedite the review of 
     any complete application for registration or amended 
     registration of a pesticide under this section, for an 
     experimental use permit under section 5, or for an emergency 
     exemption under section 18, if the application seeks approval 
     for the registration or use of a pesticide--
       ``(i) that, in the opinion of the Administrator, is likely 
     to provide an effective and economic alternative to the use 
     of a pesticide that has been or is likely to be removed from 
     the market as a result of a review conducted under section 
     408 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     346a); and
       ``(ii) for which--

       ``(I) there is no registered effective and economical 
     alternative (as of the date of submission of the 
     application); or
       ``(II) the number of the alternatives is insufficient to 
     avoid problems such as pest resistance.''.

       (b) Coordination.--Section 408(d)(4)(B) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 346a(d)(4)(B)) is 
     amended--
       (1) by striking ``tolerance or exemption for'' and 
     inserting ``tolerance or exemption--
       ``(i) for'';
       (2) by striking the period at the end and inserting ``; 
     or''; and
       (3) by adding at the end the following:
       ``(ii) that is needed in connection with an application 
     under section 3(c)(3)(E) of the Federal Insecticide, 
     Fungicide, and Rodenticide Act (7 U.S.C. 136a(c)(3)(E)) for 
     approval of an effective and economic alternative.''.
       (c) Tolerances for Emergency Uses.--Section 408(l)(6) of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     346a(l)(6)) is amended--
       (1) by inserting before the first sentence the following:
       ``(A) In general.--'';
       (2) by inserting before the third sentence the following:
       ``(B) Procedure.--'';
       (3) by inserting before the fifth sentence the following:
       ``(C) Safety standard.--'';
       (4) in the fifth sentence, by striking the period and 
     inserting ``, except as described in subparagraph (D).''; and
       (5) by adding at the end the following:
       ``(D) Emergency exemptions.--The Administrator may 
     establish a tolerance for a pesticide chemical residue 
     associated with an emergency exemption without regard to 
     other tolerances for a pesticide chemical residue and before 
     reviewing those other tolerances, if the Administrator 
     determines that any incremental exposure that may result from 
     the tolerance associated with the emergency exemption will 
     not pose any significant risk to food consumers.''.

                     TITLE II--STUDIES AND REPORTS

     SEC. 201. DEFINITIONS.

       In this title:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Pesticide chemical; pesticide chemical residue.--The 
     terms ``pesticide chemical'' and ``pesticide chemical 
     residue'' have the meanings given the terms in section 201 of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (4) Tolerance.--The term ``tolerance'' means a tolerance 
     for a pesticide chemical residue or an exemption from the 
     requirement of such a tolerance, established under section 
     408 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     346a).

     SEC. 202. PRIORITIES AND RESOURCES.

       (a) Environmental Protection Agency Proposal.--The 
     Administrator shall prepare a proposal for revising the 
     priorities of and resources available to the Administrator 
     that will allow the Administrator--
       (1) to process promptly all--
       (A) applications for registration of pesticide chemicals 
     under the Federal Insecticide, Fungicide, and Rodenticide Act 
     (7 U.S.C. 136 et seq.);
       (B) petitions for tolerances (including exemptions) under 
     section 408 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 346a);
       (C) requests for experimental use permits, for approval of 
     new inert ingredients, and for emergency exemptions, relating 
     to pesticide chemicals under an Act described in subparagraph 
     (A) or (B); and
       (D) requests for decisions on the merits of the 
     applications, petitions, and requests described in 
     subparagraphs (A) through (C); and
       (2) to perform tolerance reviews (including reassessments) 
     and other duties relating to pesticide chemicals, as required 
     by the Federal Food, Drug, and Cosmetic Act or the Federal 
     Insecticide, Fungicide, and Rodenticide Act.

[[Page 18479]]

       (b) Department of Agriculture Proposal.--The Secretary 
     shall prepare a proposal for revising the priorities of and 
     resources available to the Secretary that will allow the 
     Secretary--
       (1) to obtain and provide to the Administrator adequate and 
     timely information on food consumption, pesticide chemical 
     residues in or on food and drinking water, and pesticide 
     chemical use;
       (2) to review actions proposed by the Administrator under 
     section 408 of the Federal Food, Drug, and Cosmetic Act and 
     the Federal Insecticide, Fungicide, and Rodenticide Act; and
       (3) to perform other duties related to the regulation of 
     pesticide chemicals (including pesticide chemical residues).
       (c) Report.--The Administrator and the Secretary shall 
     prepare and submit to Congress a report containing the 
     proposals described in subsections (a) and (b) not later than 
     180 days after the date of enactment of this Act.

     SEC. 203. INTERNATIONAL TRADE EFFECTS.

       (a) Assessment.--
       (1) Assessment program.--The Secretary shall establish and 
     administer a program to continuously assess the strength of 
     major United States agricultural commodities and products in 
     the international marketplace. The commodities and products 
     assessed shall include fruits and vegetables, corn, wheat, 
     cotton, rice, soybeans, and nursery and forest products.
       (2) Factors.--In carrying out paragraph (1), the Secretary 
     shall examine factors pertinent to assessing the 
     sustainability and competitive strength of each commodity and 
     product in the international marketplace and the relationship 
     of the factors to regulatory actions taken under the Federal 
     Food, Drug, and Cosmetic Act and the Federal Insecticide, 
     Fungicide, and Rodenticide Act. The factors examined for each 
     commodity and product shall include commodity changes, 
     regional changes, prices, quality, input costs and 
     availability, and the ratio of imports to exports.
       (b) Report.--The Secretary shall prepare periodic reports 
     describing the results obtained from the assessment program 
     conducted under subsection (a). The Secretary shall submit 
     the reports to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate. The Secretary shall submit the 
     reports not later than October 1, 2000, and October 1 of 
     every second year thereafter through 2010.

     SEC. 204. ADVISORY COMMITTEE.

       (a) Establishment.--There is established an advisory 
     committee to be known as the Pesticide Advisory Committee 
     (referred to in this section as the ``Advisory Committee'').
       (b) Membership.--
       (1) Composition.--The Advisory Committee shall be composed 
     of 20 members, appointed by the Administrator and the 
     Secretary. The members of the Advisory Committee shall 
     represent a wide variety of interests and viewpoints and 
     shall be appointed from among individuals who are 
     representatives of organizations who are interested in the 
     regulation of pesticide chemicals, including representatives 
     of--
       (A) organizations that represent--
       (i) food consumers;
       (ii) persons with a special interest in environmental 
     protection;
       (iii) farmworkers;
       (iv) agricultural producers (including persons engaged in 
     crop production, livestock and poultry production, or nursery 
     and forestry production);
       (v) nonagricultural pesticide chemical users;
       (vi) food manufacturers and processors;
       (vii) food distributors and marketers; and
       (viii) manufacturers of agricultural and nonagricultural 
     pesticide chemicals; and
       (B) Federal and State agencies.
       (2) Publication.--The Administrator shall publish in the 
     Federal Register the name, address, and professional 
     affiliation of each member of the Advisory Committee.
       (3) Terms of appointment.--Each member of the Advisory 
     Committee shall serve for a term of years determined by the 
     Administrator and the Secretary, except that--
       (A) the terms of service of the members initially appointed 
     shall be (as specified by the Administrator and the 
     Secretary) for such fewer number of years as will provide for 
     the expiration of terms on a staggered basis;
       (B) a member appointed to fill a vacancy occurring prior to 
     the expiration of the term for which a predecessor was 
     appointed, shall be appointed for the remainder of the term; 
     and
       (C) the Secretary and the Administrator may extend the term 
     of a member of the Advisory Committee until a new member is 
     appointed to fill the vacancy.
       (4) Vacancies.--Any vacancy occurring in the membership of 
     the Advisory Committee shall be filled in the same manner as 
     the original appointment. The vacancy shall not affect the 
     power of the remaining members to execute the duties of the 
     Advisory Committee.
       (c) Duties.--The Advisory Committee shall--
       (1) provide advice to the Administrator and the Secretary 
     on matters related to implementation of section 408 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 346a) and the 
     Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 
     136 et seq.), including proposed and final rules, policies, 
     procedures, and testing guidelines used to regulate 
     tolerances and pesticide chemical registrations;
       (2) foster communication between the Administrator, the 
     Secretary, and the various organizations who represent 
     persons having particular interest in the regulation of 
     pesticide chemicals under the Federal Food, Drug, and 
     Cosmetic Act and the Federal Insecticide, Fungicide, and 
     Rodenticide Act; and
       (3) carry out the functions performed by the Tolerance 
     Reassessment Advisory Committee.
       (d) Meetings.--
       (1) Frequency.--The Advisory Committee shall meet at least 
     2 times per year, at times determined jointly by the 
     Administrator and the Secretary. Not later than 14 days 
     before the date of each meeting, the Administrator shall 
     publish a notice regarding the meeting in the Federal 
     Register.
       (2) Open meetings.--The Advisory Committee shall conduct 
     its principal business--
       (A) in meetings that are--
       (i) open to the public; and
       (ii) in facilities that can accommodate the reasonably 
     foreseeable number of persons attending; or
       (B) by teleconference, with open access.
       (3) Facilities.--The Secretary shall be responsible for 
     providing or making arrangements for the meeting facilities 
     or teleconferences.
       (e) Communications.--The Administrator or the Secretary 
     shall ensure that written communications between the 
     Administrator or Secretary, respectively, and the Advisory 
     Committee, are recorded and made available to any person upon 
     request.
       (f) Chairperson.--The Advisory Committee shall select a 
     Chairperson from among its members.
       (g) Powers of the Advisory Committee.--
       (1) Hearings.--The Advisory Committee may hold such 
     hearings, sit and act at such times and places, take such 
     testimony, and receive such evidence as the Advisory 
     Committee considers advisable to carry out this section.
       (2) Information from federal agencies.--Except as otherwise 
     provided in Federal law, the Advisory Committee may secure 
     directly from any Federal department or agency such 
     information as the Advisory Committee considers necessary to 
     carry out this section. Upon request of the Chairperson of 
     the Advisory Committee, the head of the department or agency 
     shall furnish the information to the Advisory Committee.
       (3) Postal services.--The Advisory Committee may use the 
     United States mails in the same manner and under the same 
     conditions as other departments and agencies of the Federal 
     Government.
       (4) Gifts.--The Advisory Committee may accept, use, and 
     dispose of gifts or donations of services or property.
       (h) Advisory Committee Personnel Matters.--
       (1) Travel expenses.--
       (A) In general.--The members of the Advisory Committee 
     shall not receive compensation for the performance of 
     services for the Advisory Committee, but shall be allowed 
     travel expenses, including per diem in lieu of subsistence, 
     at rates authorized for employees of agencies under 
     subchapter I of chapter 57 of title 5, United States Code, 
     while away from their homes or regular places of business in 
     the performance of services for the Advisory Committee.
       (B) Funds.--Funds used to provide travel expenses under 
     subparagraph (A) shall be paid by the Administrator from 
     appropriations available for those purposes.
       (2) Detail of government employees.--Any employee of the 
     Department of Agriculture (and no other Federal employee) may 
     be detailed to the Advisory Committee without reimbursement, 
     and the detail shall be without interruption or loss of civil 
     service status or privilege.
       (i) Permanent Committee.--Section 14 of the Federal 
     Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
     Advisory Committee.
                                 ______
                                 
      By Mr. THOMPSON (for himself and Mr. Ashcroft):
  S. 1466. A bill to amend chapter 8 of title 5, United States Code, to 
provide for congressional review of rules establishing or increasing 
taxes; to the Committee on Governmental Affairs.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:


                     taxpayer's defense act of 1999

  Mr. THOMPSON. Mr. President, today I rise to introduce the Taxpayer's 
Defense Act of 1999. I am pleased to be working with my good friend 
from Missouri, John Ashcroft, who has been a leader on this issue in 
the Senate. I also want to thank Chairman George Gekas for all of his 
hard work and leadership in the House. Our objective is clear and 
simple: no federal agency should set or raise a tax without the 
approval of Congress.

[[Page 18480]]

  America was founded on the principle that there should be no taxation 
without representation. In The Second Treatise of Government, John 
Locke said, ``[I]f any one shall claim a power to lay and levy taxes on 
the people * * * without * * * consent of the people, he thereby * * * 
subverts the end of government.'' Consent, according to Locke, could 
only be given by a majority of the people, ``either by themselves or 
their representatives chosen by them.'' The Boston Tea Party celebrated 
Americans' opposition to taxation without representation. And the 
Declaration of Independence listed, among the despotic acts of King 
George, his ``imposing Taxes on us without our Consent.'' First among 
the powers that the Constitution gave to the Congress, our new 
government's representative branch, was the power to levy taxes.
  The logic of allowing only Congress to establish federal taxes is 
clear: Congress considers and weighs the economic and social issues 
that rise to national importance. While any agency or government office 
may view its own priorities as paramount, only Congress can decide 
which goals of the people merit spending hard-earned taxpayer dollars. 
Only Congress can determine how many taxpayer dollars should be spent. 
Congress' decisions are made through an open political process that the 
public can see and participate in. And if the public is unhappy with a 
tax, they can hold Congress and the President responsible on election 
day.
  The accountability of lawmakers is a core feature of our 
representative democracy. But over time, Congress has delegated more 
and more of its legislative authority to unaccountable federal 
agencies. The Taxpayer's Defense Act would help restore constitutional 
balance and authority by requiring congressional approval for a rule 
that sets or raises a tax before the rule could take effect. Unelected 
agency officials could not directly establish or raise a tax, but would 
still have a chance to advance their proposals through an open 
political process in Congress.
  Few would publicly dispute the American principle of no taxation 
without representation. But increasingly, in ways often subtle or 
hidden, federal agencies are taking on--or receiving from Congress--the 
power to tax. Federal agency taxes pass the costs of government 
programs on to American consumers in the form of higher prices. These 
secret taxes often are regressive--hitting many who struggle to get by. 
They also put a drag on the economy. These taxes take money from 
everyone, and they are imposed without accountability.
  One big example of agency taxation is the Federal Communications 
Commission's Universal Service Tax. ``Universal service'' is the idea 
that everyone should have access to affordable telecommunications 
services. It originated at the beginning of the century when the nation 
was still being strung with telephone wires. The Telecommunications Act 
of 1996 included provisions that allowed the FCC to extend universal 
service, ensuring that telecommunications are available to all areas of 
the country and to institutions that benefit the community, such as 
schools, libraries, and rural health care facilities.
  Most importantly, the Act gave the FCC the power to decide the level 
of ``contributions''--taxes--that telecommunications providers would 
have to pay to support universal service. The FCC must determines how 
much can be collected in taxes to subsidize a variety of ``universal 
service'' spending programs. It charges telecommunications providers, 
who pass the costs on to consumers in the form of higher telephone 
bills. The FCC recently nearly doubled the tax to $2.5 billion per 
year, and Administration's budget have projected a rise to $10 billion 
per year. This agency tax is already out of control.
  The FCC's provisions for universal service have many flaws. These 
include the three ``administrative corporations'' set by the FCC. The 
General Accounting Office determined that the establishment of these 
corporations was illegal, and the FCC has collapsed them into one, no 
less questionable corporation. The head of one of these corporations 
was originally paid $200,000 per year--as much as the President of the 
United States.
  It seems that the more you look, the more you find that a number of 
federal agencies have been given, or discovered on their own, the power 
of tax. Congress has given taxing authority to the Nuclear Regulatory 
Commission and the U.S. Department of Agriculture. Because these taxes 
are within statutory parameters, we have less concern with them than 
others, but they are still taxes. And an important principle is at 
stake: no taxation within representation. The Constitution gives the 
taxing power only to Congress. In practice, we often see a direct 
correlation between an agency taxing and the agency overspending 
taxpayer dollars. Congress must retain the power and accountability of 
the purse.
  More egregious examples are those where agencies have spontaneously 
discovered the power to tax. There's the FCC's telecommunications tax, 
and two new taxes, past and proposed, on Internet domain name 
registration. The first, sponsored by the National Science Foundation, 
collected more than $60 million before a federal judge put a stop to 
it. The second, under the aegis of the Commerce Department, proposes to 
charge $1 per Internet domain name per year. What Commerce Department 
official stands to be voted out of office if he or she sponsors an 
increase in this tax?
  The burden of this activity falls, of course, on the American 
taxpayer, whose money is being taken, laundered through the Washington 
bureaucracy, and returned (in dramatically reduced amounts) for 
purposes set by unelected agency staffers. This is why we must require 
the FCC, and all agencies, to get the approval of Congress before 
setting future tax rates.
  Some of my colleagues may question why Congress should shoulder the 
responsibility for taxes. Let me just note that in a recent fee-dispute 
case, the FCC argued, amazingly, that it had the unreviewable power to 
raise taxes. As the Court of Appeals put it:

       [A]ccording to counsel, the Commission could impose a tax 
     on an unregulated railroad or a tax on an individual for 
     eating ice cream . . . . This is a preposterous position, one 
     that we will not countenance. As this court [has] said . . . 
     ``it goes without saying that the bald assertion of power by 
     [an] agency cannot legitimize it. Unable to link its 
     assertion of authority to any statutory provision, the 
     [FCC's] position in this case amounts to be bare suggestion 
     that it possesses plenary authority to act within a given 
     area simply because Congress has endowed it with some 
     authority to act in that area. We categorically reject that 
     suggestion.''--Comsat Corporation v. FCC, 114 F. 3d 223, 227 
     (D.C. Cir. 1997) (citations omitted).

  Should tax dollars be used for federal programs? In what amounts? Or 
should Americans spend what they earn on their own, locally determined 
priorities? Requiring Congress to review agency taxes would answer this 
question.
  This legislation would create a new subchapter within the 
Congressional Review Act for mandatory review of certain rules. The 
portion of any agency rule that establishes or raises a tax would have 
to be submitted to Congress and receive the approval of Congress and 
the President before the agency could put it into effect. The Act would 
allow the agencies to formulate tax proposals for Congress to consider 
under existing rulemaking procedures. It is a version of a bill 
introduced last Congress by Chairman Gekas in the House and John 
Ashcroft in the Senate.
  Once submitted to Congress, a bill noting the taxing portion of a 
regulation would be introduced (by request) in each House of Congress 
by the Majority Leader. The bill would then be subject to expedited 
procedures, allowing a prompt decision on whether or not the agency may 
put the rule into effect. The rule could take effect once a bill 
approving it was passed by both Houses of Congress and signed by the 
President. If the rule were approved, the agency would retain power to 
reverse the regulation, lower the amount of the tax, or take any 
otherwise legal actions with respect to the rule.
  Mr. President, the rallying cry of ``no taxation without 
representation'' has been heard in America before, and now we are 
hearing it again. Congress must

[[Page 18481]]

not allow unelected bureaucrats determine the amount of taxes 
hardworking Americans must pay. While preserving needed flexibility, 
the Taxpayer's Defense Act will allow elected officials alone to decide 
whether to raise taxes, and where to direct precious tax dollars.
  I ask unanimous consent that a copy of the Taxpayer's Defense Act be 
printed in the Record.

                                 S. 1466

       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 ``Taxpayer's Defense Act''.

     SEC. 2. MANDATORY CONGRESSIONAL REVIEW.

       Chapter 8 of title 5, United States Code, is amended by 
     inserting after section 808 the following:

           ``SUBCHAPTER II--MANDATORY REVIEW OF CERTAIN RULES

     ``Sec. 815. Rules subject to mandatory congressional review

       ``(a) In this section, the term `tax' means a non-penal, 
     mandatory payment of money or its equivalent to the extent 
     such payment does not compensate the Federal Government or 
     other payee for a specific benefit conferred directly on the 
     payer.
       ``(b) A rule that establishes or increases a tax, however 
     denominated, shall not take effect before the date of the 
     enactment of a bill described in section 816 and is not 
     subject to review under subchapter I. This section does not 
     apply to a rule promulgated under the Internal Revenue Code 
     of 1986.

     ``Sec. 816. Agency submission

       ``Whenever an agency promulgates a rule subject to section 
     815, the agency shall submit to each House of Congress a 
     report containing the text of only the part of the rule that 
     causes the rule to be subject to section 815 and an 
     explanation of that part. An agency shall submit such a 
     report separately for each such rule the agency promulgates. 
     The explanation shall consist of the concise general 
     statement of the rule's basis and purpose required under 
     section 553 and such explanatory documents as are mandated by 
     other statutory requirements.

     ``Sec. 817. Approval bill

       ``(a)(1) Not later than 3 legislative days after the date 
     on which an agency submits a report under section 816, the 
     Majority Leader of each House of Congress shall introduce (by 
     request) a bill the matter after the enacting clause of which 
     is as follows: ``The following agency rule may take 
     effect:''. The text submitted under section 816 shall be set 
     forth after the colon. If such a bill is not introduced in a 
     House of Congress as provided in the first sentence of this 
     subsection, any Member of that House may introduce such a 
     bill not later than 7 legislative days after the period for 
     introduction by the Majority Leader.
       ``(2) A bill introduced under paragraph (1) shall be 
     referred to the Committees in each House of Congress with 
     jurisdiction over the subject matter of the rule involved.
       ``(b)(1)(A) Any committee of the House of Representatives 
     to which a bill is referred shall report the bill without 
     amendment, and with or without recommendation, not later than 
     the 30th calendar day of session after the date of its 
     introduction. If any committee fails to report the bill 
     within that period, it is in order to move that the House 
     discharge the committee from further consideration of the 
     bill. A motion to discharge may be made only by a Member 
     favoring the bill (but only at a time designated by the 
     Speaker on the legislative day after the calendar day on 
     which the Member offering the motion announces to the House 
     that Member's intention to do so and the form of the motion). 
     The motion is highly privileged. Debate thereon shall be 
     limited to not more than 1 hour, the time to be divided in 
     the House equally between the proponent and an opponent. The 
     previous question shall be considered as ordered on the 
     motion to its adoption without intervening motion. A motion 
     to reconsider the vote by which the motion is agreed to or 
     disagreed to shall not be in order.
       ``(B) After a bill is reported or a committee has been 
     discharged from further consideration, it is in order to move 
     that the House resolve into the Committee of the Whole House 
     on the State of the Union for consideration of the bill. If 
     reported and the report has been available for at least 1 
     calendar day, all points of order against the bill and 
     against consideration of the bill are waived. If discharged, 
     all points of order against the bill and against 
     consideration of the bill are waived. The motion is highly 
     privileged. A motion to reconsider the vote by which the 
     motion is agreed to or disagreed to shall not be in order. 
     During consideration of the bill in the Committee of the 
     Whole, the first reading of the bill shall be dispensed with. 
     General debate shall proceed, shall be confined to the bill, 
     and shall not exceed 1 hour equally divided and controlled by 
     a proponent and an opponent of the bill. After general 
     debate, the bill shall be considered as read for amendment 
     under the 5-minute rule. At the conclusion of the 
     consideration of the bill, the Committee shall rise and 
     report the bill to the House without intervening motion. The 
     previous question shall be considered as ordered on the bill 
     to final passage without intervening motion. A motion to 
     reconsider the vote on passage of the bill shall not be in 
     order.
       ``(C) Appeals from decisions of the Chair regarding 
     application of the rules of the House of Representatives to 
     the procedure relating to a bill shall be decided without 
     debate.
       ``(2)(A) Any bill introduced in the Senate shall be 
     referred to the appropriate committee or committees. A 
     committee to which a bill has been referred shall report the 
     bill without amendment not later than the 30th day of session 
     following the date of introduction of that bill. If any 
     committee fails to report the bill within that period, that 
     committee shall be automatically discharged from further 
     consideration of the bill and the bill shall be placed on the 
     calendar.
       ``(B) When the Senate receives from the House of 
     Representatives a bill, such bill shall not be referred to 
     committee and shall be placed on the calendar.
       ``(C) A motion to proceed to consideration of a bill under 
     this subsection shall not be debatable. It shall not be in 
     order to move to reconsider the vote by which the motion to 
     proceed was adopted or rejected, although subsequent motions 
     to proceed may be made under this paragraph.
       ``(D)(i) After no more than 10 hours of consideration of a 
     bill, the Senate shall proceed, without intervening action or 
     debate (except as permitted under subparagraph (F)), to vote 
     on the final disposition thereof to the exclusion of all 
     motions, except a motion to reconsider or to table.
       ``(ii) A single motion to extend the time for consideration 
     under clause (i) for no more than an additional 5 hours is in 
     order before the expiration of such time and shall be decided 
     without debate.
       ``(iii) The time for debate on the disapproval bill shall 
     be equally divided between the Majority Leader and the 
     Minority Leader or their designees.
       ``(E) A motion to recommit a bill shall not be in order.
       ``(F) If the Senate has read for the third time a bill that 
     originated in the Senate, then it shall be in order at any 
     time thereafter to move to proceed to the consideration of a 
     bill for the same special message received from the House of 
     Representatives and placed on the calendar under subparagraph 
     (B), strike all after the enacting clause, substitute the 
     text of the Senate bill, agree to the Senate amendment, and 
     vote on final disposition of the House bill, all without any 
     intervening action or debate.
       ``(G) Consideration in the Senate of all motions, 
     amendments, or appeals necessary to dispose of a message from 
     the House of Representatives on a bill shall be limited to 
     not more than 4 hours. Debate on each motion or amendment 
     shall be limited to 30 minutes. Debate on any appeal or point 
     of order that is submitted in connection with the disposition 
     of the House message shall be limited to 20 minutes. Any time 
     for debate shall be equally divided and controlled by the 
     proponent and the majority manager, unless the majority 
     manager is a proponent of the motion, amendment, appeal, or 
     point of order, in which case the minority manager shall be 
     in control of the time in opposition.''.

     SEC. 3. TECHNICAL AMENDMENTS.

       (a) Subchapter Heading.--Chapter 8 of title 5, United 
     States Code, is amended by inserting before section 801 the 
     following:

         ``SUBCHAPTER I--DISCRETIONARY CONGRESSIONAL REVIEW''.

       (b) Table of Sections.--The table of sections for chapter 8 
     of title 5, United States Code, is amended by inserting 
     before the reference to section 801 the following:

         ``SUBCHAPTER I--DISCRETIONARY CONGRESSIONAL REVIEW'';

     and by inserting after the reference to section 808 the 
     following:

           ``SUBCHAPTER II--MANDATORY REVIEW OF CERTAIN RULES

``815. Rules subject to mandatory congressional review.
``816. Agency submission.
``817. Approval bill.''.
       (c) Reference.--Section 804 of title 5, United States Code, 
     is amended by striking ``this chapter'' and inserting ``this 
     subchapter''.

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