[Congressional Record (Bound Edition), Volume 145 (1999), Part 19]
[Senate]
[Pages 27592-27606]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. COVERDELL (for himself, Mr. Biden, Mr. Roth, Mr. Edwards, 
        Mr. Graham, Mr. Cleland, Mr. Sarbanes, Ms. Mikulski, and Mr. 
        Mack):
  S. 1830. A bill to provide for the appointment of additional 
temporary bankruptcy judges, and for other purposes; to the Committee 
on the Judiciary.


                        bankruptcy judgeship act

  Mr. COVERDELL. Mr. President, I rise today to introduce legislation 
that would address the growing bankruptcy caseload in our federal 
judiciary. Increased bankruptcy filings are placing a severe strain on 
our federal courts and on the judges who preside over these cases. The 
House and Senate bankruptcy reform bills seek to address this issue by 
authorizing eighteen new bankruptcy judges. While Congress recognizes 
the need for these judges, it has not yet taken the step it deems 
necessary to approve another needed group of bankruptcy judges 
identified by the U.S. Judicial Conference in March of this year. This 
legislation would authorize these six judgeships and help our federal 
judiciary address an overburdensome workload.
  My home state of Georgia is one of the states that the Judicial 
Conference has indicated needs another bankruptcy judge. The middle and 
southern districts in Georgia have, respectively, the eighth and ninth 
highest weighted caseloads in the country. The most recent data from 
the Administrative Office of the U.S. Courts indicates that the 
weighted bankruptcy filings per authorized judgeships is 1,907 for the 
middle district and 1,880 for the Southern district. Even with approval 
of a new judge for the southern district, the three full-time judges in 
that district would still carry a caseload that exceeds the threshold 
of 1,500 weighted hours that justifies the creation of another 
judgeship.
  The review undertaken by the Judicial Conference of the workload in 
these Georgia districts also found that caseloads are being managed in 
a highly efficient manner. The Judicial Conference had no suggestions 
to assist the court in expending its caseload. A new judgeship is the 
only solution to this caseload problem.
  I understand that the Judicial Conference used the same criteria to 
justify the 6 new judgeships in their March 1999 recommendation that 
they used to justify the 18 judgeships in the bankruptcy reform bills. 
Understanding the need for a new bankruptcy judge in my state, I 
support the Judicial Conference's recommendation, and other states' 
efforts to obtain an additional judge. I am pleased that Senator Biden, 
Edwards, Graham, Cleland, Sarbanes, Mikulski, and Mack, whose states 
were also included in the March 1999 Judicial Conference 
recommendation, have joined me on this bill. I believe this legislation 
will shed important light on caseloads and the need for new judges. The 
last time Congress approved new bankruptcy judgeships was seven years 
ago. These judges are needed now and I hope Congress will move forward 
in approving them.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Johnson):
  S. 1831. A bill to protect and provide resources for the Social 
Security System, to reserve surpluses to protect, strengthen and 
modernize the Medicare Program, and for other purposes; to the

[[Page 27593]]

Committee on the Budget and the Committee on Governmental Affairs, 
jointly, pursuant to the order of August 4, 1977, with instructions 
that if one committee reports, the other committee have 30 days to 
report or be discharged.


              medicaid eligibility restoration act of 1999

  Mr. DASCHLE. Mr. President, today I introduce the Medicaid 
Eligibility Restoration Act of 1999, which fixes a major problem 
recently created in the health care safety net.
  My bill addresses a Medicaid eligibility problem--lack of access to 
health insurance during the first, and often costliest, month of 
disability--that was inadvertently caused by a change to Supplemental 
Security Income (SSI) policy in the 1996 welfare reform law.
  Let me explain how this Medicaid ``gap month'' problem was created.
  In 1996, the effective date of application for Supplemental Security 
Income (SSI) was changed to the month following the date when an 
individual applies for SSI.
  Before the 1996 change, pro-rated payments began immediately. Since 
1996, payments do not begin until the month following original 
application.
  This SSI payment change generated a small cost savings for the SSI 
program and ended the administrative burden of calculating partial 
month payments, but it also created a problem--a gap month--for 
Medicaid eligibility that is linked to SSI.
  For most SSI and Medicaid recipients, this change has resulted in one 
lost month of Medicaid eligibility, which is a hardship in itself.
  But those who suddenly become disabled or who are born with a 
disability face more dire consequences.
  Because of the 1996 change, they now lose health insurance coverage 
for what is often their costliest month--their first month of 
disability. This policy shift has left families with enormous medical 
bills and hospitals with uncompensated care.
  The Medicaid Eligibility Restoration Act would end this gap month in 
Medicaid coverage and would restore the pre-1996 Medicaid eligibility 
criteria.
  This issue first came to my attention when I received a letter from 
Randall Connelly of Sioux Falls, South Dakota.
  His wife, Susan, had recently given birth to premature twins. 
Tragically, the twins died a few days later.
  Despite the fact that Randy had a good job, with good health 
insurance, he still faced unaffordable out-of-pocket medical expenses. 
Because of the twins' low birth weight, both children were 
automatically eligible for SSI and Medicaid--or they would have been, 
if the twins had been born before enactment of the welfare reform law 
of 1996.
  In fact, the Connellys were ineligible for any help with their 
medical bills because of the small 1996 technical change in SSI payment 
policy.
  The unfortunate result was that the Connellys were left to cope not 
only with the loss of their newborn twins, but also with unaffordable 
hospital bills.
  Since my communication with the Connellys, I have heard from hospital 
administrators who have expressed concern on behalf of patients and 
families who have suddenly found themselves with nowhere to turn during 
their first weeks of extreme financial hardship and emotional trauma 
due to disability.
  Sioux Valley Hospital in Sioux Falls, SD, has reported that 28 
newborns were affected during the past year in that one hospital alone. 
Hospital administrators report that:

       Delay in Medicaid coverage results in severe hardship for 
     many families. . . . The normal stresses of dealing with a 
     newborn with a serious disability are compounded by the 
     extensive financial demands attendant to medical services 
     provided for that child.

  I ask that a copy of Sioux Valley's letter of support for the bill be 
printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                      Sioux Valley


                                    Hospitals & Health System,

                                Sioux Falls, SD, October 27, 1999.
     Hon. Thomas Daschle,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Daschle: I am writing to express the support 
     of the Sioux Valley Hospitals & Health System for legislation 
     we understand you are planning to introduce which would 
     address an issue involving SSI eligibility, and therefore, 
     Medicaid eligibility. The issue, as we have experienced it, 
     involves the date on which Medicaid coverage would commence 
     for SSI eligible newborns. We understand that current law 
     results in a start date for Medicaid payment coverage on the 
     first of the month following SSI eligibility which for 
     disabled newborns is their date of birth.
       That delay in Medicaid coverage results in severe hardship 
     for many families who have had babies with medical conditions 
     requiring extremely expensive services in the Sioux Valley 
     Hospital Neonatal Intensive Care Unit. Some 28 families have 
     been affected at Sioux Valley alone over the course of the 
     last year. The normal stresses of dealing with a newborn with 
     a serious disability are compounded by the extensive 
     financial demands attendant to medical services required for 
     the child.
       While we understand that public programs cannot be expected 
     to address expenses associated with every catastrophic 
     medical situation, this delay in coverage for severely 
     disabled newborns seems particularly appropriate for a public 
     response. I wanted you to know, therefore, that we do support 
     your effects in this respect.
       Please let me know if any of our staff could provide 
     further information with respect to the importance and impact 
     of the legislation which you propose.
           Sincerely,
                                                    Frank M. Drew,
                           Senior Vice President of Public Policy.

  Mr. DASCHLE. I have also heard from public health officials who are 
concerned that public health funds may need to be diverted to address 
the needs of those who should have been covered by Medicaid--as they 
were in the past.
  Some states are able to cover the gap month through other Medicaid 
categories, such as the ``medically needy'' category and a category for 
those who meet all the SSI criteria but are not receiving benefits.
  There are several states, however, that still face the gap month 
problem.
  It is difficult for many of these states to address this problem, 
because, while covering only the gap month may be affordable, adding a 
whole new Medicaid category is seen as too expensive.
  There is a simpler, and less expensive way to address the problem: 
restore the pre-1996 Medicaid eligibility.
  We must restore health care benefits to those with disabilities who 
need them and should be eligible for them.
  The gap month is not a difficult problem to fix.
  A solution only requires our attention and our commitment to 
protecting the health care safety net. My bill does that by ensuring 
Medicaid helps cover those facing unexpected disability.
  I urge my colleagues to join me in support of this legislation.
  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. 1831

       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 ``Strengthen Social Security 
     and Medicare Act of 1999.''

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that:
       (1) The Social Security system is one of the cornerstones 
     of American national policy and has allowed a generation of 
     Americans to retire with dignity. For 30 percent of all 
     senior citizens, Social Security benefits provide almost 90 
     percent of their retirement income. For 66 percent of all 
     senior citizens, Social Security benefits provide over half 
     of their retirement income. Poverty rates among the elderly 
     are at the lowest level since the United States began to keep 
     poverty statistics, due in large part to the Special Security 
     system. The Social Security system, together with the 
     additional protections afforded by the Medicare system, have 
     been an outstanding success for past and current retirees and 
     must be preserved for future retirees.
       (2) The long-term solvency of the Social Security and 
     Medicare trust funds is not assured. There is an estimated 
     long-range actuarial deficit in the Social Security trust 
     funds. According to the 1999 report of the Board of Trustees 
     of the Social Security trust funds, the accumulated balances 
     in the Federal Old-Age and Survivors Insurance Trust Fund and 
     the Federal Disability Insurance Trust Fund are currently 
     projected to become unable to pay benefits in full on a 
     timely basis starting in 2034. The Medicare system faces more 
     immediate financial

[[Page 27594]]

     shortfalls, with the Hospital Insurance Trust Fund projected 
     to become exhausted in 2015.
       (3) In addition to preserving Social Security and Medicare, 
     the Congress and the President have a responsibility to 
     future generations to reduce the Federal debt held by the 
     public. Significant debt reduction will contribute to the 
     economy and improve the Government's ability to fulfill its 
     responsibilities and to face future challenges, including 
     preserving and strengthening Social Security and Medicare.
       (4) The Federal Government is now in sound financial 
     condition. The Federal budget is projected to generate 
     significant surpluses. In fiscal years 1998 and 1999, there 
     were unified budget surpluses--the first consecutive 
     surpluses in more than 40 years. Over the next 15 years, the 
     Government projects the on-budget surplus, which excludes 
     Social Security, to total $2.9 trillion. The unified budget 
     surplus (including Social Security) is projected by the 
     Government to total $5.9 trillion over the next 15 years.
       (5) The surplus, excluding Social Security, offers an 
     unparalleled opportunity to: preserve Social Security; 
     protect, strengthen, and modernize Medicare; and 
     significantly reduce the Federal debt held by the public, for 
     the future benefit of all Americans.
       (b) Purpose.--It is the purpose of this Act to protect the 
     Social Security surplus for debt reduction, to extend the 
     solvency of Social Security, and to set aside a reserve to be 
     used to protect, strengthen, and modernize Medicare.

     SEC. 3. ADDITIONAL APPROPRIATIONS TO FEDERAL OLD-AGE AND 
                   SURVIVORS INSURANCE TRUST FUND AND FEDERAL 
                   DISABILITY INSURANCE TRUST FUND.

       (a) Purpose.--The purpose of this section is to assure that 
     the interest savings on the debt held by the public achieved 
     as a result of Social Security surpluses from 2000 to 2015 
     are dedicated to Social Security solvency.
       (b) Additional Appropriation to Trust Funds.--Section 201 
     of the Social Security Act is amended by adding at the end 
     the following new subsection:
       ``(n) Additional Appropriation to Trust Funds.
       ``(1) In addition to the amounts appropriated to the Trust 
     Funds under subsections (a) and (b), there is hereby 
     appropriated to the Trust Funds, out of any moneys in the 
     Treasury not otherwise appropriated--
       ``(A) for the fiscal year ending September 30, 2011, and 
     for each fiscal year thereafter through the fiscal year 
     ending September 30, 2016, an amount equal to the prescribed 
     amount for the fiscal year; and
       ``(B) for the fiscal year ending September 30, 2017, and 
     for each fiscal year thereafter through the fiscal year 
     ending September 30, 2044, an amount equal to the prescribed 
     amount for the fiscal year ending September 30, 2016.
       ``(2) The amount appropriated by paragraph (1) in each 
     fiscal year shall be transferred in equal monthly 
     installments.
       ``(3) The amount appropriated by paragraph (1) in each 
     fiscal year shall be allocated between the Trust Funds in the 
     same proportion as the taxes imposed by chapter 21 (other 
     than sections 3101(b) and 3111(b)) of Title 26 with respect 
     to wages (as defined in section 3121 of Title 26) reported to 
     the Secretary of the Treasury or his delegate pursuant to 
     subtitle F of Title 26, and the taxes imposed by chapter 2 
     (other than section 1401(b)) of Title 26 with respect to 
     self-employment income (as defined in section 1402 of Title 
     26) reported to the Secretary of the Treasury or his delegate 
     pursuant to subtitle F of Title 26, are allocated between the 
     Trust Funds in the calendar year that begins in the fiscal 
     year.
       ``(4) For purposes of this subsection, the ``prescribed 
     amount'' for any fiscal year shall be determined by 
     multiplying:
       ``(A) the excess of:
       ``(i) the sum of:
       ``(I) the face amount of all obligations of the United 
     States held by the Trust Funds on the last day of the fiscal 
     year immediately preceding the fiscal year of determination 
     purchased with amounts appropriated or credited to the Trust 
     Funds other than any amount appropriated under paragraph (1); 
     and
       ``(II) the sum of the amounts appropriated under paragraph 
     (1) and transferred under paragraph (2) through the last day 
     of the fiscal year immediately preceding the fiscal year of 
     determination, and an amount equal to the interest that would 
     have been earned thereon had those amounts been invested in 
     obligations of the United States issued directly to the Trust 
     Funds under subsections (d) and (f),

     ``over--
       ``(ii) the face amount of all obligations of the United 
     States held by the Trust Funds on September 30, 1999,

     ``times--
       ``(B) a rate of interest determined by the Secretary of the 
     Treasury, at the beginning of the fiscal year of 
     determination, as follows:
       ``(i) if there are any marketable interest-bearing 
     obligations of the United States then forming a part of the 
     public debt, a rate of interest determined by taking into 
     consideration the average market yield (computed on the basis 
     of daily closing market bid quotations or prices during the 
     calendar month immediately preceding the determination of the 
     rate of interest) on such obligations; and
       ``(ii) if there are no marketable interest-bearing 
     obligations of the United States then forming in part of the 
     public debt, a rate of interest determined to be the best 
     approximation of the rate of interest described in clause 
     (i), taking into consideration the average market yield 
     (computed on the basis of daily closing market bid quotations 
     or prices during the calendar month immediately preceding the 
     determination of the rate of interest) on investment grade 
     corporate obligations selected by the Secretary of the 
     Treasury, less an adjustment made by the Secretary of the 
     Treasury to take into account the difference between the 
     yields on corporate obligations comparable to the obligations 
     selected by the Secretary of the Treasury and yields on 
     obligations of comparable maturities issued by risk-free 
     government issuers selected by the Secretary of the 
     Treasury.''.

     SEC. 4. PROTECTION OF SOCIAL SECURITY SURPLUSES.

       (a) Points of Order To Protect Social Security Surpluses.--
     Section 312 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following new subsection:
       ``(g) Points of Order To Protect Social Security 
     Surpluses.--
       ``(1) Concurrent resolutions on the budget.--It shall not 
     be in order in the House of Representatives or the Senate to 
     consider any concurrent resolution on the budget, or 
     conference report thereon or amendment thereto, that would 
     set forth an on-budget deficit for any fiscal year.
       ``(2) Subsequent legislation.--It shall not be in order in 
     the House of Representatives or the Senate to consider any 
     bill, joint resolution, amendment, motion, or conference 
     report if--
       ``(A) the enactment of the bill or resolution as reported;
       ``(B) the adoption and enactment of that amendment; or
       ``(C) the enactment of that bill or resolution in the form 
     recommended in that conference report,

     would cause or increase an on-budget deficit for any fiscal 
     year.
       ``(3) Budget resolution baseline.--(A) For purposes of this 
     section, ``set forth an on-budget deficit'', with respect to 
     a budget resolution, means the resolution sets forth an on-
     budget deficit for a fiscal year and the baseline budget 
     projection of the surplus or deficit for such fiscal year on 
     which such resolution is based projects an on-budget surplus, 
     on-budget balance, or an on-budget deficit that is less than 
     the deficit set forth in the resolution.
       ``(B) For purposes of this section, ``cause or increase an 
     on-budget deficit'' with respect to legislation means causes 
     or increases an on-budget deficit relative to the baseline 
     budget projection.
       ``(C) For purposes of this section, the term ``baseline 
     budget projection'' means the projection described in section 
     257 of the Balance Budget and Emergency Deficit Control Act 
     of 1985 of current year levels of outlays, receipts, and the 
     surplus or deficit into the budget year and future years, 
     except that--
       ``(i) if outlays for programs subject to discretionary 
     appropriations are subject to discretionary statutory 
     spending limits, such outlays shall be projected at the level 
     of any applicable current adjusted statutory discretionary 
     spending limits:
       ``(ii) if outlays for programs subject to discretionary 
     appropriations are not subject to discretionary spending 
     limits, such outlays shall be projected as required by 
     section 257 beginning in the first fiscal year following the 
     last fiscal year in which such limits applied; and
       ``(iii) with respect to direct spending or receipts 
     legislation previously enacted during the current calendar 
     year and after the most recent baseline estimate pursuant to 
     section 257 of the Balance Budget and Emergency Deficit 
     Control Act of 1995, the net extent (if any) by which all 
     such legislation is more than fully paid for in one of the 
     applicable time periods shall count as a credit for that time 
     period against increase in direct spending or reductions in 
     net revenue.''.
       (b) Content of Concurrent Resolution on the Budget.--
     Section 301(a) of the Congressional Budget Act of 1974 is 
     amended by redesignating paragraphs (6) and (7) as paragraphs 
     (7) and (8), respectively, and by inserting after paragraph 
     (5) the following new paragraph.
       ``(6) the receipts, outlays, and surplus or deficit in the 
     Federal Old-Age and Survivors Insurance Trust Fund and the 
     Federal Disability Insurance Trust Fund, combined, 
     established by title II of the Social Security Act;''.
       (c) Super Majority Requirement.--
       (1) Section 904(c)(1) of the Congressional Budget Act of 
     1974 is amended by inserting ``312(g),'' after 
     ``310(d)(2),''.
       (2) Section 904(d)(2) of the Congressional Budget Act of 
     1974 is amended by inserting ``312(g),'' after 
     ``310(d)(2),''.

     SEC. 5. PROTECTION OF MEDICARE.

       (a) Points or Order To Protect Medicare.--
       (1) Section 301 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:

[[Page 27595]]

       ``(j) Points or Order To Protect Medicare.--
       (1) In general.--It shall not be in order in the House of 
     Representatives or the Senate to consider any concurrent 
     resolution on the budget (or amendment, motion, or conference 
     report on the resolution) that would decrease the on-budget 
     surplus for the total of the period of fiscal years 2000 
     through 2009 below the level of the Medicare surplus reserve 
     for those fiscal years are calculated in accordance with 
     section 3(11).
       ``(2) Inapplicability.--This subsection shall not apply to 
     legislation that--
       ``(A) appropriates a portion of the Medicare reserve for 
     new amounts for prescription drug benefits under the Medicare 
     program as part of or subsequent to legislation extending the 
     solvency of the Medicare Hospital Insurance Trust Fund; or
       ``(B) appropriates new amounts from the general fund to the 
     Medicare Hospital Insurance Trust Fund.''.
       (2) Section 311(a) of the Congressional Budget Act of 1974 
     is amended by adding at the end the following:
       ``(4) Enforcement of the medicare surplus reserve.--
       ``(A) In general.--It shall not be in order in the House of 
     Representatives or the Senate to consider any bill, joint 
     resolution, amendment, motion, or conference report that 
     together with associated interest costs would decrease the 
     on-budget surplus for the total of the period of fiscal years 
     2000 through 2009 below the level of the Medicare surplus 
     reserve for those fiscal years as calculated in accordance 
     with section 3(11).''.
       ``(B) Inapplicability.--This paragraph shall not apply to 
     legislation that--
       ``(i) appropriates a portion of the Medicare reserve for 
     new amounts for prescription drug benefits under the Medicare 
     program as part of or subsequent to legislation extending the 
     solvency of the Medicare Hospital Insurance Trust Fund; or
       ``(ii) appropriates new amounts from the general fund to 
     the Medicare Hospital Insurance Trust Fund.
       (b) Definition.--Section 3 of the Congressional Budget Act 
     of 1974 is amended by adding at the end the following:
       ``(11) The term `Medicare surplus reserve' means one-third 
     of any on-budget surplus for the total of the period of the 
     fiscal years 2000 through 2009, an estimated by the 
     Congressional Budget Office in the most recent initial report 
     for a fiscal year pursuant to section 202(e).''.
       (c) Super Majority Requirement--
       (1) Section 904(c)(2) of the Congressional Budget Act of 
     1974 is amended by inserting ``301(j),'' after ``301(i),''.
       (2) Section 904(d)(3) of the Congressional Budget Act of 
     1974 is amended by inserting ``301(j),'' after ``301(i),''.

     SEC. 6. EXTENSION OF DISCRETIONARY SPENDING LIMITS.

       (a) Extension of Limits.--Section 251(b)(2) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is amended, 
     in the matter before paragraph (A), by deleting ``2002'', and 
     inserting ``2014''.
       (b) Extension of Amounts.--Section 251(c) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is amended 
     by striking paragraphs (4), (5), (6) and (7), and inserting 
     the following:
       ``(4) With respect to fiscal year 2000,
       ``(A) for the discretionary category: $535,368,000,000 in 
     new budget authority and $543,257,000,000 in outlays;
       ``(B) for the highway category: $24,574,000,000 in outlays;
       ``(C) for the mass transit category: $4,117,000,000 in 
     outlays; and
       ``(D) for the violent crime reduction category: 
     $4,500,000,000 in new budget authority and $5,564,000,000 in 
     outlays;
       ``(5) With respect to fiscal year 2001,
       ``(A) for the discretionary category: $573,004,000,000 in 
     new budget authority and $564,931,000,000 in outlays;
       ``(B) for the highway category: $26,234,000,000 in outlays; 
     and
       ``(C) for the mass transit category: $4,888,000,000 in 
     outlays;
       ``(6) With respect to fiscal year 2002,
       ``(A) for the discretionary category: $584,754,000,000 in 
     new budget authority and $582,516,000,000 in outlays;
       ``(B) for the highway category: $26,655,000,000 in outlays; 
     and
       ``(C) for the mass transit category: $5,384,000,000 in 
     outlays;
       ``(7) With respect to fiscal year 2003,
       ``(A) for the discretionary category: $590,800,000,000 in 
     new budget authority and $587,642,000,000 in outlays;
       ``(B) for the highway category: $27,041,000,000 in outlays; 
     and
       ``(C) for the mass transit category: $6,124,000,000 in 
     outlays;
       ``(8) With respect to fiscal year 2004, for the 
     discretionary category: $604,319,000,000 in new budget 
     authority and $634,039,000,000 in outlays;
       ``(9) With respect to fiscal year 2005, for the 
     discretionary category: $616,496,000,000 in new budget 
     authority and $653,530,000,000 in outlays;
       ``(10) With respect to fiscal year 2006, for the 
     discretionary category: $630,722,000,000 in new budget 
     authority and $671,530,000,000 in outlays;
       ``(11) With respect to fiscal year 2007, for the 
     discretionary category: $644,525,000,000 in new budget 
     authority and $687,532,000,000 in outlays;
       ``(12) With respect to fiscal year 2008, for the 
     discretionary category: $663,611,000,000 in new budget 
     authority and $704,534,000,000 in outlays; and
       ``(13) With respect to fiscal year 2009, for the 
     discretionary category: $678,019,000,000 in new budget 
     authority and $721,215,000,000 in outlays, ``as adjusted in 
     strict conformance with subsection (b).
       ``With respect to fiscal year 2010 and each fiscal year 
     thereafter, the term ``discretionary spending limit'' means, 
     for the discretionary category, the baseline amount 
     calculated pursuant to the requirements of Section 257(c), as 
     adjusted in strict conformance with subsection (b).''.

     SEC. 7. EXTENSION AND CLARIFICATION OF PAY-AS-YOU-GO 
                   REQUIREMENT.

       Section 252 of the Balanced Budget And Emergency Deficit 
     Control Act of 1985 is amended--
       (a) in subsection (a), by striking ``October 1, 2002'' and 
     inserting ``October 1, 2014'' and by adding ``or decreases 
     the surplus'' after ``increases the deficit''; (b)(1) in 
     paragraph (1) of subsection (b), by striking ``October 1, 
     2002'' and inserting ``October 1, 2014'' and by adding ``or 
     any net surplus decrease'' after ``any net deficit 
     increase'';
       (2) in paragraph (2) of subsection (b),
       (i) in the header by adding ``or surplus decrease'' after 
     ``deficit increase'';
       (ii) in the matter before subparagraph (A), by adding ``or 
     surplus'' after ``deficit''; and
       (iii) in subparagraph (C), by adding ``or surplus'' after 
     ``net deficit''; and
       (3) in the header of subsection (c), by adding ``or surplus 
     decrease'' after ``deficit increase''.

     SEC. 8. EXTENSION OF BALANCED BUDGET AND EMERGENCY DEFICIT 
                   CONTROL ACT.

       Section 275(b) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended by striking ``September 30, 
     2002'' and inserting ``September 30, 2104'' and by striking 
     ``September 30, 2006'' and inserting ``September 30, 2018''.

     SEC. 9. EXTENSION OF SOCIAL SECURITY FIREWALL IN 
                   CONGRESSIONAL BUDGET ACT.

       Section 904(e) of the Congressional Budget Act of 1974 is 
     amended by striking ``September 30, 2002'' and inserting 
     ``September 30, 2014''.

     SEC. 10. PROTECTION OF SOCIAL SECURITY INTEREST SAVINGS 
                   TRANSFERS.

       (a) Definition of Deficit and Surplus Under Budget 
     Enforcement Act.--Section 250(c) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended in paragraph 
     (1) by adding `` `surplus','' before ``and `deficit' ''.
       (b) Reduction or Reversal of Social Security Transfers Not 
     To Be Counted as Pay-As-You-Go Offset.--Any legislation that 
     would reduce, reverse or repeal the transfers to the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund made by Section 201(n) of the 
     Social Security Act, as added by Section 3 of this Act, shall 
     not be counted on the pay-as-you-go scorecard and shall not 
     be included in any pay-as-you-go estimates made by the 
     Congressional Budget Office or the Office of Management and 
     Budget under Section 252 of the Balanced Budget and Emergency 
     Deficit Control Act of 1985.
       (c) Conforming Change.--Section 252 of the Balanced Budget 
     and Emergency Deficit Control Act of 1985 is amended, in 
     paragraph (4) of subsection (d), by--
       (1) striking ``and'' after subparagraph (A),
       (2) striking the period after the subparagraph (B) and 
     inserting ``; and'', and
       (3) adding the following:
       ``(C) provisions that reduce, reverse or repeal transfers 
     under Section 201(n) of the Social Security Act.''.

     SEC. 11. CONFORMING CHANGES.

       (a) Reports.--Section 254 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended--
       (1) in paragraph (3) of subsection (c),
       (A) in subparagraph (A), by adding ``or surplus'' after 
     ``deficit'';
       (B) in subparagraph (B), by adding ``or surplus'' after 
     ``deficit''; and
       (C) in subparagraph (C), by adding ``or surplus decrease'' 
     after ``deficit increase'';
       (2) in paragraph (4) of subsection (f), by adding ``or 
     surplus'' after ``deficit''; and
       (3) in subparagraph A of paragraph (2) of subsection (f), 
     by striking ``2002'' and inserting ``2009''.
       (b) Orders.--Section 258A(a) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended in the first 
     sentence by adding ``or increase the surplus'' after 
     ``deficit''.
       (c) Process.--Section 258(C)(a) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended--
       (1) in paragraph (2), by adding ``or surplus increase'' 
     after ``deficit reduction'';
       (2) in paragraph (3), by adding ``or increase in the 
     surplus'' after ``reduction in the deficit''; and
       (3) in paragraph (4), by adding ``or surplus increase'' 
     after ``deficit reduction''.
                                 ______
                                 
      By Mr. LEAHY:
  S. 1835. A bill to restore Federal remedies for violations of 
intellectual

[[Page 27596]]

property rights by States, and for other purposes; to the Committee on 
the Judiciary.


        the intellectual property protection restoration of 1999

  Mr. LEAHY. Mr. President, today I am introducing the Intellectual 
Property Protection Restoration Act of 1999, a bill to restore federal 
remedies for violations of intellectual property rights of States.
  Innvoation and creativity have been the fuel of our national economic 
boom over the past decade. The United States now leads the world in 
computing, communications and biotechnologies, and American authors and 
brand names are recognized across the globe.
  Our national prosperity is, first and foremost, a tribute to American 
ingenuity. But it is also a tribute to the wisdom of our Founding 
Fathers, who made the promotion of what they called ``Science and the 
Useful Arts'' a national project, which they constitutionally assigned 
to Congress. And it is no less of a tribute to the successive 
Congresses and Administrations of both parties who have striven to 
provide real incentives and rewards for innovation and creativity by 
providing strong and even-handed protection to intellectual property 
rights. Congress passed the first federal patent law in 1790, and the 
U.S. Government issued its first patent the same year--to Samuel 
Hopkins of my home State of Vermont. The first federal copyright law 
was also enacted in 1790, and the first federal trademark laws date 
back to the 1870s.
  The Supreme Court has long recognized that intellectual property 
rights bear the hallmark of true constitutional property rights--the 
right of exclusion against the world--and are therefore protection 
against appropriation both by individuals and by government. Consistent 
with this understanding of intellectual property, Congress has long 
ensured that the rights secured by the federal intellectual property 
laws were enforceable against the federal governments by waiving the 
government's immunity in suits alleging infringements of those rights.
  No doubt Congress would have legislated similarly with respect to 
infringements by State entities and bureaucrats had there been any 
doubt that they were already fully subject to federal intellectual 
property laws. But there was no doubt. States had long enjoyed the 
benefits of the intellectual property laws on an equal footing with 
private parties. By the same token, and in accordance with the 
fundamental principles of equity on which our intellectual property 
laws are founded, the States bore the burdens of the intellectual 
property laws, being liable for infringements just like private 
parties. States were free to join intellectual property markets as 
participants, or to hold back from commerce and limit themselves to a 
narrower governmental role. The intellectual property right of 
exclusion meant what it said and was enforced evenhandley for public 
and private entities alike.
  This harmonious state of affairs ended in 1985, with the Supreme 
Court's announced of the so-called ``clear statement'' rule in 
Atascadero State Hospital v. Scanlon. The Court in Atascadero held that 
Congress must express its intention to abrogate the States' Eleventh 
Amendment immunity ``in unmistakable language in the statute itself.'' 
A few years later, in Pennsylvania v. Union Gas Co., the Supreme Court 
assured us that if the intent to abrogate were expressed clearly 
enough, it would be honored.
  Following Atascadero, some courts held that States and State entities 
and officials could escape liability for patent, copyright and 
trademark infringement because the patent, copyright and trademark laws 
lacked the clear statement of congressional intent that was now 
necessary to abrogate State sovereign immunity.
  To close this new loophole in the law, Congress promptly did 
precisely what the Supreme Court had told us was necessary. In 1990 and 
1992, Congress passed three laws--the Patent and Plant Variety 
Protection Remedy Clarification Act, the Copyright Remedy Clarification 
Act, and the Trademark Remedy Clarification Acts. The sole purpose of 
these Clarification Acts was to make it absolutely, unambiguously, 100 
percent clear that Congress intended the patent, copyright and 
trademark laws to apply to everyone, including the States, and that 
Congress did not intend the States to be immune from liability for 
money damages. Each of three Clarification Acts passed unanimously.
  In 1996, however, by a five-to-four-vote, the Supreme Court in 
Seminole Tribe of Florida v. Florida reversed its earlier decision in 
Union Gas and held that Congress lacked authority under article I of 
the Constitution to abrogate the States' Eleventh Amendment immunity 
from suit in federal court.
  Then, on June 23, by the same bare majority, the Supreme Court in 
Florida Prepaid Postsecondary Education Expense Board v. College 
Savings Bank told us that it did not really mean what it said in 
Atascadero and invalidated the Patent and Plant Variety Protection 
Remedy Clarification Act. In a companion case decided on the same day, 
the same five Justices held that the Trademark Remedy Clarification Act 
also failed to abrogate State sovereign immunity.
  The Court's latest decisions have been the subject of bipartism 
criticism. In a floor statement on July 1, I highlighted the anti-
democratic implications of the approach of the activist majority of the 
Supreme Court, who have left constitutional text behind, ripped up 
precedent, and treated Congress with less respect than that due to an 
administrative agency in their haste to impose their natural laws 
notions of sovereignty as a barrier to democratic regulations. I also 
noted that ``the Court's decisions will have far-reaching consequences 
about how . . . intellectual property rights may be protected against 
even egregious infringements and violation by the State.''
  One of my Republican colleagues on the Judicial Committee, Senator 
Specter, expressed similar concerns in a floor statement on August 5. 
He noted that the Court decisions ``leave us with an absurd and 
untenable state of affairs,'' where ``States will enjoy an enormous 
advantage over their private sector competitions.''
  Not surprisingly, alarm has also been expressed in the business 
community about the potential of the Court's recent decisions to harm 
intellectual property owners in a wide variety of ways. A commentary in 
Business Week on August 2, 1999, gave these examples:

       Watch out if you publish software that someone at a State 
     university wants to copy for free . . . Watch out if you own 
     a patent on a medical procedure that some doctor in a State 
     medical school wants to use. Watch out if you've invested 
     heavily in a great trademark, like Nike's Swoosh, and a 
     bureaucrat decides his State program would be wildly promoted 
     if it used the same mark.

  Charles Fried, a professor at Harvard Law School and former Solicitor 
General during the Reagan Administration, has called the Court's 
decisions in Florida Prepaid and College Savings Bank ``truly 
bizarre.'' He observed, in a July 6 opinion editorial in the New York 
Times:

       [The Court's decisions] did not question that States are 
     subject to the patent and trademark laws of the United 
     States. It's just that when a State violates those laws--as 
     when it uses a patented invention without permission and 
     without paying for it--the patent holder cannot sue the State 
     for infringement. So a State hospital can manufacture 
     medicines patented by others and sell or use them, and State 
     schools universities can pirate textbooks and software, and 
     the victims cannot sue for infringement.

  I believe that these concerns are very real. As Congress realized 
when it waived federal sovereign immunity in the area, it would be 
naive to imagine that reliance on the commercial decency of the 
government and its myriad agencies and officials would provide the 
security needed to promote investment in research and development and 
to facilitate negotiation in the exclusive licensing arrangements that 
are often necessary to bring valuable products and creations to market.
  The issue is not whether State infringement has been frequent in the 
past, but rather whether we can assure American inventors and investors 
and our design trading partners that, as State involvement in 
intellectual property becomes ever greater in the new

[[Page 27597]]

information economy, U.S. intellectual property rights are backed by 
guaranteed legal remedies. It is a question of economics: our national 
economy depends on real and effective intellectual property rights. It 
is also a question of justice: in conceding that the States are 
constitutionally bound to respect federal intellectual property rights 
but invalidating the remedies Congress has created to enforce those 
rights, the Court has jeopardized one of the key principles that 
distinguishes our Constitution from the Constitution of the old Soviet 
Union--the principle that where there is a right, there must also be a 
remedy.
  Some have suggested that a constitutional amendment may be the only 
way to restore protection to patent, copyright and trademark owners as 
against States. But even if Congress were to adopt such an amendment, I 
do not expect that we will see a lot of States rushing to ratify an 
amendment that forces them to pay for things that they can currently 
get for free.
  Fortunately, however, while the implications of the Court's decisions 
for our constitutional scheme are serious, we can restore the 
guarantees of our intellectual property laws without resorting to a 
constitutional amendment. After close consideration of Florida Prepaid 
and the other recent Supreme Court precedents, I have no doubt that 
they leave several constitutional mechanisms open to us to restore 
substantial protection for patents, copyrights and trademarks through 
ordinary legislation. The Supreme Court's hyper-technical 
constitutional interpretations require us to jump through some 
technical constitutional hoops of our own, but that the exercise is now 
not merely worthwhile, but essential to safeguard both U.S. prosperity 
and the continued authority of Congress.
  The Intellectual Property Protection Restoration Act is based on a 
simple supposition--that there is no inherent entitlement to federal 
intellectual property rights. In discussing the policies underlying the 
patent laws, the Supreme Court has emphasized that ``[t]he grant of a 
patent is the grant of a special privilege `to promote the Progress of 
Science and useful Arts,' '' and that ``[i]t is the public interest 
which is dominant in the patent system.'' Similarly, in discussing the 
copyright laws, the Court has underscored that ``the monopoly 
privileges that Congress has authorized, while `intended to motivate 
the creative activity of authors and inventors by the provision of a 
special reward,' are limited in nature and must ultimately serve the 
public good.''
  The Constitution empowers but does not require Congress to make 
intellectual property rights available, and Congress should do so on in 
a manner that encourages and protects innovation in the public and 
private sector alike.
  States and their institutions, especially State universities, benefit 
hugely from the federal intellectual property laws. All 50 States own 
or have obtained patents--some hold many hundreds of patents. States 
also hold other intellectual property rights secured by federal law, 
and the trend is toward increased participation by the States in 
commerce involving intellectual property rights.
  Principles of State sovereignty tell us that States are entitled to a 
free and informed choice of whether or not to participate in the 
federal intellectual property schemes, subject only to their 
constitutional obligations. Equity and common sense tell us that one 
who chooses to enjoy the benefits of a law--whether it be a federal 
grant or the multimillion-dollar benefits of intellectual property 
protections--should also bear its burdens. Sound economics and 
traditional notions of federalism tell us that it is appropriate for 
the federal government to assist and encourage the sovereign States in 
their sponsorship of whatever innovation and creation they freely 
choose to sponsor by giving them intellectual property protection and, 
on occasion, funding, so long as the States reciprocate by assisting 
the federal governments to keep its promise of guaranteed exclusive 
rights to intellectual property owners.
  The IPPRA builds on these principles. In order to promote cooperative 
federalism in the intellectual property arena, it provides a mechanism 
for States to affirm their willingness to participate in our national 
intellectual property project and so ``opt in'' as full and equal 
participants. A State would opt in to the federal intellectual property 
system every time it applied for protection under a federal 
intellectual property law, by promising to waive its sovereign immunity 
from any subsequent suit against the State arising under such a law.
  States take their commitments seriously. We can therefore expect that 
a State, having promised to waive its immunity if called upon to do so, 
would take whatever steps were necessary to fulfill that promise. At 
least in theory, however, a State could assert its immunity regardless 
of any assurance to the contrary.
  The IPPRA addresses this problem by conditioning a State's 
intellectual property rights on its adherence to its promise to waive 
immunity. Thus, a State's refusal to waive immunity in an intellectual 
property suit after it has accepted benefits under an intellectual 
property law would have a number of consequences. Most significantly, 
it would give private parties the right to assert an immunity-like 
defense to damages claims in any action to enforce an intellectual 
property right that is or has been owned by the State during the five 
years preceding the State's assertion of immunity. This quid pro quo 
provision restores the level playing field by putting States that 
assert immunity in essentially the same position as private parties who 
seek to endorse federal intellectual property rights against them.
  The IPPRA does this without coercing the State to waive by 
threatening pre-existing benefits. The quid pro quo provision only 
affects those intellectual property rights that the State acquired by 
virtue of its promise to waive immunity. To ensure that State waivers 
are voluntary, State intellectual property rights that pre-date the 
passage of the IPPRA are preserved regardless of waiver.
  This scheme is consistent with the spirit of federalism, as 
interpreted by the Supreme Court, because it gives the States a free, 
informed and meaningful choice to waive or not to waive immunity at any 
time. It is also plainly authorized by the letter of the Constitution. 
Article I empowers Congress to ``promote the Progress of Science and 
useful Arts, by securing for limited Times to Authors and Inventors the 
exclusive Right to their respective Writings and Discoveries.'' 
Incident to this power, Congress may attach conditions on the receipt 
of exclusive intellectual property rights. Indeed, we have always 
attached certain conditions, such as the requirements of public 
disclosure of an invention at the Patent and Trademark Office in order 
to obtain a patent.
  Congress may attach conditions on States' receipt of federal 
intellectual property protection under its Article I intellectual 
property power just as Congress may attach conditions on States' 
receipt of federal funds under its Article I spending power. Either 
way, the power to attach conditions to the federal benefit is an 
integral part of the greater power to deny the benefit altogether. 
Either way, States have a choice--to forgo the federal benefit and 
exercise their sovereign power however they wish subject to the 
Constitution, or to take the benefit and exercise their sovereign power 
in the manner requested by Congress. In South Dakota v. Dole, for 
example, the Supreme Court held that Congress may condition federal 
highway funds on a State's agreement to raise its minimum drinking age 
to 21. The condition imposed on receipt of federal benefits by the 
IPPRA--submitting to suit under laws that are already binding on the 
States--is not onerous, nor does it co-opt any State resources to the 
service of federal policy.
  Given the choice between opting in to the intellectual property laws 
and forgoing intellectual property protection under the federal laws, 
most States are likely to choose to former. The benefits secured by 
those laws far outweigh the burdens. Most States already respect 
intellectual property

[[Page 27598]]

rights and will seldom find themselves in infringement suits. To deny 
the States the choice that the IPPRA offers them would amount to 
penalizing States that play by the federal intellectual property rules 
for the free-riding violations of the minority of States that refuse to 
commit to do so. As is normally the case in a federal system, 
cooperation between the States and the federal government is likely to 
be beneficial to all concerned.
  However, some States and some State entities and officials have 
infringed patents and violated other intellectual property rights in 
the past, and the massive growth of both intellectual property and 
State participation in intellectual property that we are seeing as we 
move into the next century give ample cause for concern that such 
violations will continue. Now that the Supreme Court has seemingly 
given States and State entities carte blanche to violate intellectual 
property rights free from any adverse financial consequences so long as 
they stand on their newly augmented sovereign immunity, the prospect of 
States violating federal law and then asserting immunity is too serious 
to ignore.
  The IPPRA therefore also provides for the limited set of remedies 
that the Supreme Court's new jurisprudence leaves available to Congress 
to enforce a non-waiving State's obligations under federal law and the 
United States Constitution. The key point here is that, while the Court 
struck down our prior effort to enforce the intellectual property laws 
themselves by authorizing actions for damages against the States, it 
nonetheless acknowledged Congress' power to enforce constitutional 
rights related to intellectual property.
  First, for the avoidance of doubt, the IPPRA ensures the full 
availability of prospective equitable relief to prevent States from 
violating or exceeding their rights under federal intellectual property 
laws. As the Supreme Court expressly acknowledged in its Seminole Tribe 
decision in 1996, such relief is available, notwithstanding any 
assertion of State sovereign immunity, under what is generally known as 
the doctrine of Ex parte Young.
  Second, to address the harm done to the rights of intellectual 
property owners before they can secure an injunction, the IPPA also 
provides a damages remedy against non-consenting States, to the full 
extent of Congress' power to enforce the constitutional rights of 
intellectual property owners. Under the Supreme Court's recent 
decisions, this remedy is necessarily limited to the redress of 
constitutional violations, not violations of the federal intellectual 
property laws themselves. However, as I have already noted, the Supreme 
Court has reaffirmed on many occasions that the intellectual property 
owner's right of exclusion is a property right fully protected from 
governmental violation under the Fifth Amendment's Takings Clause and 
under the Fourteenth Amendment's Due Process Clause.
  Under the Fifth Amendment, a State can be sued for damages for taking 
an intellectual property right. Although States can normally take a 
property right constitutionally, so long as they do so for a ``public 
purpose'' and provide ``just compensation,'' the Supreme Court held in 
1984 that the ``public purpose'' requirement for a lawful taking means 
that the taking must be a valid exercise of the State's eminent domain 
powers. Because of the uniquely federal nature of federal intellectual 
property rights of exclusion, States have no eminent domain or other 
sovereign power over them. ``When Congress grants an exclusive right or 
monopoly, its effects are pervasive; no citizen or State may escape its 
reach.'' Therefore, every State taking of an intellectual property 
right, with or without some promise of subsequent compensation, is a 
constitutional violation ripe for congressional enforcement under 
section five of the Fourteenth Amendment.
  Stangely, and I think improperly, the Supreme Court declined to 
decide in Florida Prepaid whether our earlier Clarification Acts could 
be sustained as an enforcement of the Takings Clause. The Court also 
did not resolve when a violation of intellectual property rights 
amounts to an unconstitutional taking. Because the Court emphasized 
that the resolution of such constitutional questions is its job, and 
not ours, the IPPRA simply provides a federal cause of action for an 
unconstitutional taking of intellectual property rights, leaving the 
courts to make the final determination of what is a constitutional 
violation and what remedy is constitutionally authorized. The IPPRA 
does, however, instruct the courts to interpret both the right and the 
remedy as broadly as constitutionally permissible. At the same time, by 
excluding treble damages from the remedies provided and by adopting the 
same standard of compensation--``reasonable and entire compensation''--
that is currently available against the federal government for patient 
infringements, the bill respects the States' dignity and responds to 
the Court's objection that the Clarification Acts provided identical 
remedies against States and private parties.
  Finally, in order to ensure the full availability of constitutionally 
permissible remedies if the courts adopt a narrow view of the Takings 
Clause in this context, the IPPRA adopts a similar approach in 
providing the fullest remedies constitutionally available, up to and 
including ``reasonable and entire compensation'' but excluding treble 
damages, for State violations of a federal intellectual property 
owner's Fourteenth Amendment right not to be deprived of her property 
without due process of law.
  In sum, the constitutional remedy provided by the IPPRA closely 
resembles the remedy that Congress provided decades ago for 
deprivations of federal rights by persons acting under color of State 
law. The bill does not expand the property rights secured by the 
federal intellectual property laws--these laws are already binding on 
the States--nor does the bill interfere with any governmental authority 
to regulate businesses that own such rights. It simply restores the 
ability of private persons to sue in federal court to enforce such 
rights against the States.
  I view this bill as an exercise in cooperative federalism. Clear, 
certain and uniform national rules protecting federal intellectual 
property rights benefit everyone: consumers, businesses, the federal 
government and the States. The IPPRA preserves States' rights, and 
gives the States a free choice. At the same time, it ensures effective 
protection for individual constitutional rights, and fills the gap left 
by recent Supreme Court decisions in which there are federal rights 
unsupported by effective remedies.
  There are, to be sure, other approaches that Congress could take to 
address the problems created by the Court's decisions. For example, 
Congress could condition a State's receipt of federal funds--including 
federal research funds used to generate intellectual property--on the 
State's wavier of immunity from any suit arising under the federal 
intellectual property laws. As I previously discussed, this approach is 
squarely supported by the Court's decisions in the spending cases. In 
my view, however, such an approach would be less respectful of State 
sovereignty than the opt-in-scheme proposed by the IPPRA. It would also 
impede the States' ability to conduct research in a manner that the 
IPPRA would not.
  There is another approach that remains open to Congress that would 
provide a remedy for intellectual property owners against States, 
respect State sovereignty, and restore some degree of uniformity and 
consistency in the construction of the federal intellectual property 
laws. That is, Congress could give State courts jurisdiction over 
intellectual property suits or just compensation claims against the 
States, and then require the United States Supreme Court to exercise 
appellate review of the resulting State court judgment. There is no 
possible constitutional objection to this approach; the Eleventh 
Amendment does not defeat the Supreme Court's appellate jurisdiction 
over suits brought against the States. We should not, however, burden 
the Supreme Court in this manner when, as the IPPRA demonstrates, there 
are efficient and proper ways to

[[Page 27599]]

bring these claims into the lower federal courts in which intellectual 
property expertise resides.
  Intellectual property is the currency of the new global economy. As 
we move into the 21st century, we should not allow that currency to be 
devalued by abstruse 18th century legal formalities. For that reason, I 
believe that legislation is imperative to minimize the ill effects of 
the Supreme Court's latest attack on our ability to protect our 
national economic assets. The IPPRA restores protection for violations 
of intellectual property rights that may, under current law, go 
unremedied, and so provides the certainty and security necessary to 
foster innovation and creativity. We unanimously passed more sweeping 
legislation earlier this decade, but were thwarted by Supreme Court 
technicalities. The IPPRA is designed to restore the benefits we sought 
to provide intellectual property owners while meeting the Supreme 
Court's technical requirements. We should move to consider this 
legislation as soon as we return next year.
  I ask unanimous consent that the bill and a section-by-section 
summary 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. 1835

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

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

       (a) Short Title.--This Act may be cited as the 
     ``Intellectual Property Protection Restoration Act of 1999''.
       (b) References.--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.).
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; references; table of contents.
Sec. 2. Findings and purposes.

   TITLE I--STATE PARTICIPATION IN THE FEDERAL INTELLECTUAL PROPERTY 
                                 SYSTEM

                        Subtitle A--Definitions

Sec. 101. Definitions.

     Subtitle B--Procedures for State Participation in the Federal 
                      Intellectual Property System

Sec. 111. Opt-in procedure.
Sec. 112. Breach of assurance by a State.
Sec. 113. Consequences of breach of assurance by a State.

Subtitle C--Administration of Procedures for State Participation in the 
                  Federal Intellectual Property System

Sec. 121. Notification by court of State assertion of sovereign 
              immunity.
Sec. 122. Confirmation by Commissioner of Patents and Trademarks of 
              State assertion of sovereign immunity.
Sec. 123. Publication by Commissioner of Patents and Trademarks of 
              State assertion of sovereign immunity.
Sec. 124. Rulemaking authority.

    Subtitle D--Amendments to the Federal Intellectual Property Laws

Sec. 131. Conditions for State participation in the Federal patent 
              system.
Sec. 132. Conditions for State participation in the Federal plant 
              variety protection system.
Sec. 133. Conditions for State participation in the Federal copyright 
              system.
Sec. 134. Conditions for State participation in the Federal mask work 
              system.
Sec. 135. Conditions for State participation in the Federal original 
              design system.
Sec. 136. Conditions for State participation in the Federal trademark 
              system.
Sec. 137. No retroactive effect.

 TITLE II--RESTORATION OF PROTECTION FOR FEDERAL INTELLECTUAL PROPERTY 
                                 RIGHTS

Sec. 201. Liability of States for patent violations.
Sec. 202. Liability of States for violation of plant variety 
              protection.
Sec. 203. Liability of States for copyright violations.
Sec. 204. Liability of States for mask work violations.
Sec. 205. Liability of States for original design violations.
Sec. 206. Liability of States for trademark violations.
Sec. 207. Rules of construction.

                       TITLE III--EFFECTIVE DATES

Sec. 301. Effective dates.
Sec. 302. Severability.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The protection of Federal intellectual property rights 
     is of critical importance to the Nation's ability to compete 
     in the global market.
       (2) There is a strong Federal interest in the development 
     of uniform and consistent law regarding Federal intellectual 
     property rights, and in the fulfillment of international 
     treaty obligations that the Federal Government has 
     undertaken.
       (3) Prior to 1985 and the Supreme Court ruling in 
     Atascadero State Hospital v. Scanlon, 473 U.S. 234 (1985) (in 
     this section referred to as ``Atascadero''), owners of 
     Federal intellectual property rights could fully protect 
     their rights against infringement by States.
       (4) Following Atascadero, a number of courts held that 
     Federal patent, copyright and trademark laws failed to 
     contain the clear statement of intent to abrogate State 
     sovereign immunity necessary to permit owners of Federal 
     intellectual property rights to protect their rights against 
     infringement by States.
       (5) In 1990, Congress passed the Copyright Remedy 
     Clarification Act (Public Law 101-553), to clarify its intent 
     to abrogate State sovereign immunity from suits for 
     infringement of copyrights and exclusive rights in mask 
     works.
       (6) In 1992, Congress passed the Patent and Plant Variety 
     Protection Remedy Clarification Act (Public Law 102-206) and 
     the Trademark Remedy Clarification Act (Public Law 102-542) 
     to clarify its intent to abrogate State sovereign immunity 
     from suits for infringement of patents, protected plant 
     varieties and trademarks.
       (7) In 1996, the Supreme Court held in Seminole Tribe of 
     Florida v. Florida, 517 U.S. 44 (1996) (in this section 
     referred to as ``Seminole Tribe'') that Congress may not 
     abrogate State sovereign immunity under article I of the 
     United States Constitution. Under the Supreme Court decision 
     in Seminole Tribe, the Copyright Remedy Clarification Act, 
     the Patent and Plant Variety Protection Remedy Clarification 
     Act, and the Trademark Remedy Clarification Act could not be 
     sustained under clause 3 or 8 of section 8 of article I of 
     the United States Constitution.
       (8) In 1999, the Supreme Court held in Florida Prepaid 
     Postsecondary Education Expense Board v. College Savings 
     Bank, 119 S. Ct. 2199 (1999) (in this section referred to as 
     ``Florida Prepaid'') that the Patent and Plant Variety 
     Protection Remedy Clarification Act could not be sustained as 
     legislation enacted to enforce the guarantees of the due 
     process clause of the fourteenth amendment of the United 
     States Constitution.
       (9) As a result of the Supreme Court's decision in Florida 
     Prepaid, and absent remedial legislation, a patent owner's 
     only remedy under the Federal patent laws against a State 
     infringer of a patent is prospective relief under the 
     doctrine of Ex parte Young, 209 U.S. 123 (1908).
       (10) On the same day that it decided Florida Prepaid, the 
     Supreme Court in College Savings Bank v. Florida Prepaid 
     Postsecondary Education Expense Board, 119 S. Ct. 2219 (1999) 
     (in this section referred to as ``College Savings Bank'') 
     extended State sovereign immunity to purely commercial 
     activities of certain State entities.
       (11) The Seminole Tribe, Florida Prepaid and College 
     Savings Bank decisions have the potential to--
       (A) deprive private intellectual property owners of 
     effective protection for both their Federal intellectual 
     property rights and their constitutional rights under the 
     fifth and fourteenth amendments of the United States 
     Constitution; and
       (B) compromise the ability of the United States to fulfill 
     its obligations under a variety of international treaties.
       (12) Article I of the United States Constitution empowers, 
     but does not require, Congress to offer Federal intellectual 
     property protection to any person on such terms as appear 
     reasonable and appropriate to serve the public interest by 
     encouraging scientific and artistic innovation and promoting 
     commerce and fair competition.
       (13) Congress can best accomplish the public interests 
     described under paragraph (12) by providing clear and certain 
     national rules protecting Federal intellectual property 
     rights that establish a level playing field for everyone, 
     including States.
       (14) In recent years, States have increasingly elected to 
     avail themselves of the benefits of the Federal intellectual 
     property system by obtaining and enforcing Federal 
     intellectual property rights.
       (15) Any State should continue to enjoy the benefits of the 
     Federal intellectual property system, if that State accepts 
     the burdens with the benefits.
       (16) A State should not enjoy the benefits of the Federal 
     intellectual property laws unless it is prepared to have 
     those same laws enforced against that State.
       (17) Limiting the ability of a State to enjoy the benefits 
     of the Federal intellectual property system will neither 
     prevent the State from providing any services to citizens

[[Page 27600]]

     of that State, nor stop the State from engaging in any 
     commercial activity.
       (18) If a State waives its sovereign immunity from suit 
     under the Federal intellectual property laws, any 
     constitutional violation resulting from its infringement of a 
     Federal intellectual property right may be remedied in an 
     infringement suit in Federal court.
       (19) If a State does not waive sovereign immunity with 
     respect to Federal intellectual property laws, it is 
     necessary and appropriate for Congress to exercise its power 
     under section 5 of the fourteenth amendment to the United 
     States Constitution to protect the constitutional rights of 
     owners of Federal intellectual property rights, which are 
     property interests protected by the fifth and fourteenth 
     amendments of the United States Constitution.
       (20) According to the Supreme Court in College Savings 
     Bank, ``The hallmark of a protected property interest is the 
     right to exclude others.''. Patents, copyrights, and 
     trademarks are constitutionally cognizable species of 
     property because they secure for their owners rights of 
     exclusion against others.
       (21) A State may not exercise any of the rights conferred 
     by a Federal intellectual property law without the 
     authorization of the right holder, except in the manner and 
     to the extent authorized by such law. In Goldstein v. 
     California, 412 U.S. 546 (1973), the Supreme Court stated 
     ``When Congress grants an exclusive right or monopoly, its 
     effects are pervasive; no citizen or State may escape its 
     reach.''.
       (22) Because a State engaged in an infringing use of a 
     Federal intellectual property right is acting outside the 
     scope of its sovereign power, such State fails to meet the 
     public use requirement for a taking of property imposed by 
     the fifth amendment of the United States Constitution (made 
     applicable to the States through the fourteenth amendment).
       (23) According to the Supreme Court in Hawaii Housing 
     Authority v. Midkiff, 467 U.S. 229 (1984), a claim for the 
     taking of property in violation of the public use requirement 
     is ripe at the time of the taking.
       (24) A violation of the Federal intellectual property laws 
     by a State may also constitute an unconstitutional 
     deprivation of property under the due process clause of the 
     fourteenth amendment of the United States Constitution.
       (25) In order to enforce Federal intellectual property 
     rights against States under the fifth and fourteenth 
     amendments of the United States Constitution, it is 
     appropriate to provide a right to enjoin any continuing or 
     future constitutional violation and a right to recover 
     sufficient damages to make the injured party whole.
       (26) Violations of the Federal intellectual property laws 
     by States not only impair the constitutional rights of the 
     individual intellectual property owner, but also discourage 
     technological innovation and artistic creation. Moreover, the 
     potential for future violations to go unremedied as a result 
     of State sovereign immunity prevents intellectual property 
     owners from securing fair and efficient fees in licensing 
     negotiations.
       (27) States and instrumentalities of States have been 
     involved in many intellectual property cases. Some States 
     have violated Federal intellectual property rights and the 
     constitutional provisions which protect such rights and have 
     refused to waive their constitutional immunities, thereby 
     securing unfair economic advantages over other States and 
     private entities with whom such States may be in competition.
       (28) States and instrumentalities of States have become 
     increasingly involved in commerce involving intellectual 
     property rights in recent years, and this trend is likely to 
     continue. As a result, violations of Federal intellectual 
     property rights by States have become increasingly more 
     widespread.
       (29) It is not practical for Congress to engage in an 
     ongoing particularized inquiry as to which States are 
     violating the United States Constitution at any given time. 
     Accordingly, a national, uniform remedy for constitutional 
     violations is appropriate.
       (b) Purposes.--The purposes of this Act are to--
       (1) provide States an opportunity to participate in the 
     Federal intellectual property system on equal terms with 
     private entities;
       (2) reaffirm the availability of prospective relief to 
     prevent State officials from violating Federal intellectual 
     property laws, and to allow challenges to assertions by State 
     officials of rights secured under such laws, on the same 
     terms and in the same manner as if such State officials were 
     private parties;
       (3) provide other Federal remedies to owners of Federal 
     intellectual property rights as against the States, State 
     instrumentalities and State officials, to the maximum extent 
     permitted by the United States Constitution; and
       (4) abrogate State sovereign immunity in suits alleging 
     violations of Federal intellectual property laws or 
     challenging assertions of Federal intellectual property 
     rights by States to the maximum extent permitted by the 
     United States Constitution, pursuant to Congress's powers 
     under the fifth and fourteenth amendments of the United 
     States Constitution and any other applicable provisions.

   TITLE I--STATE PARTICIPATION IN THE FEDERAL INTELLECTUAL PROPERTY 
                                 SYSTEM

                        Subtitle A--Definitions

      SEC. 101. DEFINITIONS.

       In this title:
       (1) Federal intellectual property law.--The term ``Federal 
     intellectual property law'' means a statute or regulation of 
     the United States that governs the creation or protection of 
     any form of intellectual property, including a patent, 
     protected plant variety, copyright, mask work, original 
     design, trademark, or service mark.
       (2) Federal intellectual property right.--The term 
     ``Federal intellectual property right'' means any of the 
     rights secured under a Federal intellectual property law.
       (3) Federal intellectual property system.--The term 
     ``Federal intellectual property system'' means the system 
     established under the Federal intellectual property laws for 
     protecting and enforcing Federal intellectual property 
     rights, including through the award of damages, injunctions, 
     and declaratory relief.

     Subtitle B--Procedures for State Participation in the Federal 
                      Intellectual Property System

      SEC. 111. OPT-IN PROCEDURE.

       (a) In General.--No State or any instrumentality of that 
     State may acquire a Federal intellectual property right 
     unless the State opts into the Federal intellectual property 
     system.
       (b) Agreement To Waive Sovereign Immunity.--A State opts 
     into the Federal intellectual property system by providing an 
     assurance under the procedures established in subtitle D of 
     this title with respect to the State's agreement to waive 
     sovereign immunity from suit in Federal court in any action 
     against the State or any instrumentality or official of that 
     State--
       (1) arising under a Federal intellectual property law; or
       (2) seeking a declaration with respect to a Federal 
     intellectual property right.

      SEC. 112. BREACH OF ASSURANCE BY A STATE.

       (a) In General.--If a State asserts sovereign immunity 
     contrary to an assurance provided under the procedures 
     established in subtitle D of this title, such State shall be 
     deemed to have breached such assurance.
       (b) Assertion of Immunity.--A State asserts sovereign 
     immunity for purposes of subsection (a) if--
       (1) the State or any instrumentality or official of that 
     State is found to have asserted the State's sovereign 
     immunity in an action against the State or any 
     instrumentality or official of that State--
       (A) arising under a Federal intellectual property law; or
       (B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       (2) such State, instrumentality, or official does not, 
     within a period of 60 days after such finding, withdraw such 
     assertion of immunity and consent to the continuation or 
     refiling of the action in which the finding was made.
       (c) Effective Date of Breach of Assurance.--A State shall 
     be deemed to have breached an assurance on the day after the 
     end of the 60-day period provided in subsection (b)(2).

      SEC. 113. CONSEQUENCES OF BREACH OF ASSURANCE BY A STATE.

       (a) Abandonment of Pending Applications.--Any application 
     by or on behalf of a State or any instrumentality or official 
     of that State for protection arising under a Federal 
     intellectual property law shall be regarded as abandoned and 
     shall not be subject to revival after the date referred to 
     under paragraph (2), if that application--
       (1) contains an assurance provided under the procedures 
     established in subtitle D; and
       (2) is pending on the date upon which such State is deemed 
     to have breached an assurance under section 112.
       (b) Establishment of Defense to Liability.--
       (1) In general.--No damages or other monetary relief shall 
     be awarded in any action to enforce a Federal intellectual 
     property right that is or has been owned by or on behalf of a 
     State or any instrumentality of that State at any time during 
     the 5-year period preceding the date upon which such State is 
     deemed to have breached an assurance under section 122.
       (2) No retroactive effect.--The defense under paragraph (1) 
     shall not be available in any action to enforce a Federal 
     intellectual property right that was owned by or on behalf of 
     a State or an instrumentality of a State before the effective 
     date of this title.
       (c) One-Year Bar on Acquisition of New Rights.--
       (1) In general.--A State may not opt back into the Federal 
     intellectual property system under section 111 during the 1-
     year period following the date upon which that State was 
     deemed to have breached an assurance under section 112.
       (2) New rights unencumbered.--Federal intellectual property 
     rights acquired by or on behalf of a State or any 
     instrumentality or official of that State after the State has 
     opted back into the Federal intellectual property system 
     shall be unencumbered by any prior breach of an assurance.

[[Page 27601]]



Subtitle C--Administration of Procedures for State Participation in the 
                  Federal Intellectual Property System

      SEC. 121. NOTIFICATION BY COURT OF STATE ASSERTION OF 
                   SOVEREIGN IMMUNITY.

       Not later than 20 days after any finding by a Federal court 
     that a State or any instrumentality or official of that State 
     has asserted the State's sovereign immunity from suit in that 
     court in an action against the State or any instrumentality 
     or official of that State arising under a Federal 
     intellectual property law, or seeking a declaration with 
     respect to a Federal intellectual property right, the clerk 
     of the court shall notify the Commissioner of Patents and 
     Trademarks. The clerk shall send with the notification a copy 
     of any order, judgment, or written opinion of the court.

      SEC. 122. CONFIRMATION BY COMMISSIONER OF PATENTS AND 
                   TRADEMARKS OF STATE ASSERTION OF SOVEREIGN 
                   IMMUNITY.

       Not later than 20 days after receiving a notification under 
     section 121, the Commissioner of Patents and Trademarks 
     shall--
       (1) forward such notification to the attorney general of 
     the State whose sovereign immunity has been found to have 
     been asserted, together with a copy of this title; and
       (2) inquire of the attorney general whether the State 
     intends to withdraw such assertion of immunity and consent to 
     the continuation or refiling of the action in which the 
     finding was made within the 60-day period provided in section 
     112(b)(2).

      SEC. 123. PUBLICATION BY COMMISSIONER OF PATENTS AND 
                   TRADEMARKS OF STATE ASSERTION OF SOVEREIGN 
                   IMMUNITY.

       (a) In General.--The Commissioner of Patents and 
     Trademarks, in consultation with the Secretary of Agriculture 
     and the Register of Copyrights, shall publish in the Federal 
     Register and maintain on the Internet information concerning 
     the participation of each State in the Federal intellectual 
     property system.
       (b) Content of Information.--The information under 
     subsection (a) shall include, for each State--
       (1) whether the State's sovereign immunity from suit in 
     Federal court has been asserted under section 112(b); and
       (2) the name of the case and court in which such assertion 
     of immunity was made.

     SEC. 124. RULEMAKING AUTHORITY.

       The Commissioner of Patents and Trademarks may, pursuant to 
     section 6 of title 35, United States Code, promulgate such 
     rules as necessary to implement the provisions of this 
     subtitle.

    Subtitle D--Amendments to the Federal Intellectual Property Laws

      SEC. 131. CONDITIONS FOR STATE PARTICIPATION IN THE FEDERAL 
                   PATENT SYSTEM.

       (a) Application for Patent.--Section 111 of title 35, 
     United States Code, is amended by adding at the end the 
     following:
       ``(c) Application by or on Behalf of a State.--When an 
     application for patent or a provisional application for 
     patent is made by or on behalf of a State, an instrumentality 
     of a State, or a State official acting in an official 
     capacity, the Commissioner shall require--
       ``(1) an assurance that, during the pendency of the 
     application and the term of any patent resulting from that 
     application, the State's sovereign immunity from suit in 
     Federal court will be waived in any action against the State 
     or any instrumentality or official of that State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the application, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.
       (b) Assignment and Recordation.--Section 261 of title 35, 
     United States Code, is amended--
       (1) by striking ``Subject to the provisions of this title'' 
     in the first sentence and inserting ``(a) In General.--
     Subject to the provisions of this title''; and
       (2) by adding at the end the following:
       ``(b) Recordation by or on Behalf of a State.--When an 
     assignment, grant, or conveyance of an application for 
     patent, patent, or any interest in that patent, is recorded 
     in the Patent and Trademark Office by or on behalf of a 
     State, an instrumentality of a State, or a State official 
     acting in an official capacity, the Commissioner shall 
     require--
       ``(1) an assurance that, during the pendency of the 
     application and the term of any patent resulting from that 
     application, or during the remaining term of the patent or 
     any interest in that patent, the State's sovereign immunity 
     from suit in Federal court will be waived in any action 
     against the State or any instrumentality or official of that 
     State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the recordation, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.

      SEC. 132. CONDITIONS FOR STATE PARTICIPATION IN THE FEDERAL 
                   PLANT VARIETY PROTECTION SYSTEM.

       (a) Application for Certificate of Protection.--Section 52 
     of the Plant Variety Protection Act (7 U.S.C. 2422) is 
     amended--
       (1) by striking ``An application for a certificate'' in the 
     first sentence and inserting ``(a) An application for a 
     certificate''; and
       (2) by adding at the end the following:
       ``(b) When an application for plant variety protection is 
     made by or on behalf of a State, an instrumentality of a 
     State, or a State official acting in an official capacity, 
     the Secretary shall require--
       ``(1) an assurance that, during the pendency of the 
     application and the term of any plant variety protection 
     resulting from that application, the State's sovereign 
     immunity from suit in Federal court will be waived in any 
     action against the State or any instrumentality or official 
     of that State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the application, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.
       (b) Assignment and Recordation.--Section 101 of the Plant 
     Variety Protection Act (7 U.S.C. 2531) is amended by adding 
     at the end the following:
       ``(e) When an assignment, grant, conveyance, or license of 
     plant variety protection or application for plant variety 
     protection is filed for recording in the Plant Variety 
     Protection Office by or on behalf of a State, an 
     instrumentality of a State, or a State official acting in an 
     official capacity, the Secretary shall require--
       ``(1) an assurance that, during the remaining term of the 
     plant variety protection, or during the pendency of the 
     application and the term of any plant variety protection 
     resulting from that application, the State's sovereign 
     immunity from suit in Federal court will be waived in any 
     action against the State or any instrumentality or official 
     of that State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the recordation, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.

      SEC. 133. CONDITIONS FOR STATE PARTICIPATION IN THE FEDERAL 
                   COPYRIGHT SYSTEM.

       Section 409 of title 17, United States Code, is amended--
       (1) in paragraph (10), by striking ``and'' at the end;
       (2) by redesignating paragraph (11) as paragraph (12); and
       (3) by inserting after paragraph (10) the following:
       ``(11) if the application is by or on behalf of a State or 
     an instrumentality of a State--
       ``(A) an assurance that, during the pendency of the 
     application and the subsistence of any copyright identified 
     in that application, the State's sovereign immunity from suit 
     in Federal court will be waived in any action against the 
     State or any instrumentality or official of that State--
       ``(i) arising under a Federal intellectual property law; or
       ``(ii) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(B) a certification that, during the 1-year period 
     preceding the date of the application, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in subparagraph (A); and''.

      SEC. 134. CONDITIONS FOR STATE PARTICIPATION IN THE FEDERAL 
                   MASK WORK SYSTEM.

       Section 908 of title 17, United States Code, is amended by 
     adding at the end the following:
       ``(h) When an application for registration of a mask work 
     is made by or on behalf of a State or an instrumentality of a 
     State, the Register of Copyrights shall require--
       ``(1) an assurance that, during the pendency of the 
     application and any term of protection resulting from that 
     application, the State's sovereign immunity from suit in 
     Federal court will be waived in any action against the State 
     or any instrumentality or official of that State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the application, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.

      SEC. 135. CONDITIONS FOR STATE PARTICIPATION IN THE FEDERAL 
                   ORIGINAL DESIGN SYSTEM.

       Section 1310 of title 17, United States Code, is amended by 
     adding at the end the following:
       ``(k) Application by or on Behalf of a State or an 
     Instrumentality of a State.--When an application for 
     registration of a design is made by or on behalf of a State 
     or an

[[Page 27602]]

     instrumentality of a State, the Administrator shall require--
       ``(1) an assurance that, during the pendency of the 
     application and any term of protection resulting from that 
     application, the State's sovereign immunity from suit in 
     Federal court will be waived in any action against the State 
     or any instrumentality or official of that State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the application, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.

      SEC. 136. CONDITIONS FOR STATE PARTICIPATION IN THE FEDERAL 
                   TRADEMARK SYSTEM.

       (a) Application for Use of Trademark or Service Mark.--
     Section 1 of the Trademark Act of 1946 (15 U.S.C. 1051) is 
     amended by adding at the end the following:
       ``(f) When an application under subsection (a) or (b) of 
     this section is made by or on behalf of a State or an 
     instrumentality of a State, the Commissioner shall require--
       ``(1) an assurance that, during the pendency of the 
     application and for as long as the mark is registered, the 
     State's sovereign immunity from suit in Federal court will be 
     waived in any action against the State or any instrumentality 
     or official of that State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the application, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.
       (b) Assignment and Recordation.--Section 10 of the 
     Trademark Act of 1946 (15 U.S.C. 1060) is amended--
       (1) by inserting ``(a)'' before ``A registered mark'';
       (2) by inserting ``(b)'' before ``An assignee not 
     domiciled''; and
       (3) by adding at the end the following:
       ``(c) When an assignment of a registered mark or a mark for 
     which an application to register has been filed is recorded 
     in the Patent and Trademark Office by or on behalf of a State 
     or an instrumentality of a State, the Commissioner shall 
     require--
       ``(1) an assurance that, during the pendency of any 
     application and for as long as any mark is registered, the 
     State's sovereign immunity from suit in Federal court will be 
     waived in any action against the State or any instrumentality 
     or official of that State--
       ``(A) arising under a Federal intellectual property law; or
       ``(B) seeking a declaration with respect to a Federal 
     intellectual property right; and
       ``(2) a certification that, during the 1-year period 
     preceding the date of the recordation, the State's sovereign 
     immunity from suit in Federal court has not been asserted in 
     any action described in paragraph (1).''.

      SEC. 137. NO RETROACTIVE EFFECT.

       The amendments made by this subtitle shall not apply to--
       (1) any application pending before the effective date of 
     this title; or
       (2) any assertion of sovereign immunity made before the 
     effective date of this title.

 TITLE II--RESTORATION OF PROTECTION FOR FEDERAL INTELLECTUAL PROPERTY 
                                 RIGHTS

     SEC. 201. LIABILITY OF STATES FOR PATENT VIOLATIONS.

       Section 296 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 296. Liability of States, instrumentalities of States, 
       and State officials for infringement of patents

       ``(a) Remedy for Statutory Violation.--In any action 
     against an officer or employee of a State for infringement of 
     a patent under section 271, or for any other violation under 
     this title, prospective relief is available against the 
     officer or employee in the same manner and to the same extent 
     as such relief is available in an action against a private 
     individual under like circumstances. Prospective relief may 
     include injunctions under section 283, attorney fees under 
     section 285, and declaratory relief under section 2201 of 
     title 28.
       ``(b) Remedy for Constitutional Violation.--
       ``(1) Definition.--In this subsection, the term `State' 
     includes a State, an instrumentality of a State, and an 
     officer or employee of a State acting in an official 
     capacity.
       ``(2) In general.--
       ``(A) Remedies.--Any State that takes any of the rights of 
     exclusion secured under this chapter in violation of the 
     fifth amendment of the United States Constitution, or 
     deprives any person of any of the rights of exclusion secured 
     under this chapter without due process of law in violation of 
     the fourteenth amendment--
       ``(i) shall be liable to the party injured in a civil 
     action against the State for the recovery of that party's 
     reasonable and entire compensation; and
       ``(ii) may be enjoined from continuing or future 
     constitutional violations, in accordance with the principles 
     of equity and upon such terms as the court may determine 
     reasonable.
       ``(B) Compensation.--Reasonable and entire compensation may 
     include damages, interest, and costs under section 284, 
     attorney fees under section 285, and the additional remedy 
     for infringement of design patents under section 289.
       ``(3) Limitations.--
       ``(A) In general.--The remedy provided under paragraph (2) 
     is not available in an action against--
       ``(i) a State that has waived its sovereign immunity from 
     suit in Federal court for damages resulting from a violation 
     of this title; or
       ``(ii) a State official in an individual capacity.
       ``(B) Remedies.--Remedies (including remedies both at law 
     and in equity) are available against such State or State 
     official in the same manner and to the same extent as such 
     remedies are available in an action against a private entity 
     or individual under like circumstances.
       ``(4) Burden of proof.--If a claimant produces prima facie 
     evidence to support a claim under paragraph (2), the burden 
     of proof shall be on the State, except as to any elements of 
     the claim that would have to be proved if the action were 
     brought under another provision of this title. The burden of 
     proof shall be unaffected with respect to any such element.
       ``(c)  Preemption.--No State may use or manufacture the 
     invention described in or covered by a patent without the 
     authorization or consent of the patent owner, except in the 
     manner and to the extent authorized by Federal law.''.

     SEC. 202. LIABILITY OF STATES FOR VIOLATION OF PLANT VARIETY 
                   PROTECTION.

       Section 130 of the Plant Variety Protection Act (7 U.S.C. 
     2570) is amended to read as follows:

     ``SEC. 130. LIABILITY OF STATES, INSTRUMENTALITIES OF STATES, 
                   AND STATE OFFICIALS FOR INFRINGEMENT OF PLANT 
                   VARIETY PROTECTION.

       ``(a) In any action against an officer or employee of a 
     State for infringement of plant variety protection under 
     section 111, or for any other violation under this chapter, 
     prospective relief is available against the officer or 
     employee in the same manner and to the same extent as such 
     relief is available in an action against a private individual 
     under like circumstances. Prospective relief may include 
     injunctions under section 123, attorney fees under section 
     125, and declaratory relief under section 2201 of title 28, 
     United States Code.
       ``(b)(1) In this subsection, the term `State' includes a 
     State, an instrumentality of a State, and an officer or 
     employee of a State acting in an official capacity.
       ``(2)(A) Any State that takes any of the rights of 
     exclusion secured under this chapter in violation of the 
     fifth amendment of the United States Constitution, or 
     deprives any person of any of the rights of exclusion secured 
     under this chapter without due process of law in violation of 
     the fourteenth amendment--
       ``(i) shall be liable to the party injured in a civil 
     action against the State for the recovery of that party's 
     reasonable and entire compensation; and
       ``(ii) may be enjoined from continuing or future 
     constitutional violations, in accordance with the principles 
     of equity and upon such terms as the court may determine 
     reasonable.
       ``(B) Reasonable and entire compensation may include 
     damages, interest, and costs under section 124, and attorney 
     fees under section 125.
       ``(3)(A) The remedy provided under paragraph (2) is not 
     available in an action against--
       ``(i) a State that has waived its sovereign immunity from 
     suit in Federal court for damages resulting from a violation 
     of this chapter; or
       ``(ii) a State official in an individual capacity.
       ``(B) Remedies (including remedies both at law and in 
     equity) are available against such State or State official in 
     the same manner and to the same extent as such remedies are 
     available in an action against a private entity or individual 
     under like circumstances.
       ``(4) If a claimant produces prima facie evidence to 
     support a claim under paragraph (2), the burden of proof 
     shall be on the State, except as to any elements of the claim 
     that would have to be proved if the action were brought under 
     another provision of this chapter. The burden of proof shall 
     be unaffected with respect to any such element.
       ``(c) No State may exercise any rights of the owner of a 
     plant variety protected by a certificate of plant variety 
     protection under this chapter without the authorization or 
     consent of such owner, except in the manner and to the extent 
     authorized by Federal law.''.

     SEC. 203. LIABILITY OF STATES FOR COPYRIGHT VIOLATIONS.

       Section 511 of title 17, United States Code, is amended to 
     read as follows:

     ``Sec. 511. Liability of States, instrumentalities of States, 
       and State officials for infringement of copyright

       ``(a) Remedy for Statutory Violation.--In any action 
     against an officer or employee

[[Page 27603]]

     of a State for violation of any rights of a copyright owner 
     as provided in sections 106 through 121 or of an author as 
     provided in section 106A, or for any other violation under 
     this title, prospective relief is available against the 
     officer or employee in the same manner and to the same extent 
     as such relief is available in an action against a private 
     individual under like circumstances. Prospective relief may 
     include injunctions under section 502, impounding and 
     disposition of infringing articles under section 503, costs 
     and attorney fees under section 505, and declaratory relief 
     under section 2201 of title 28.
       ``(b) Remedy for Constitutional Violation.--
       ``(1) Definition.--In this subsection, the term `State' 
     includes a State, an instrumentality of a State, and an 
     officer or employee of a State acting in an official 
     capacity.
       ``(2) In general.--
       ``(A) Remedies.--Any State that takes any of the rights of 
     exclusion secured under this title in violation of the fifth 
     amendment of the United States Constitution, or deprives any 
     person of any of the rights of exclusion secured under this 
     title without due process of law in violation of the 
     fourteenth amendment--
       ``(i) shall be liable to the party injured in a civil 
     action against the State for the recovery of that party's 
     reasonable and entire compensation; and
       ``(ii) may be enjoined from continuing or future 
     constitutional violations, in accordance with the principles 
     of equity and upon such terms as the court may determine 
     reasonable.
       ``(B) Compensation.--Reasonable and entire compensation may 
     include actual damages and profits or statutory damages under 
     section 504, and costs and attorney fees under section 505.
       ``(3) Limitations.--
       ``(A) In general.--The remedy provided under paragraph (2) 
     is not available in an action against--
       ``(i) a State that has waived its sovereign immunity from 
     suit in Federal court for damages resulting from a violation 
     of this title; or
       ``(ii) a State official in an individual capacity.
       ``(B) Remedies.--Remedies (including remedies both at law 
     and in equity) are available against such State or State 
     official in the same manner and to the same extent as such 
     remedies are available in an action against a private entity 
     or individual under like circumstances.
       ``(4) Burden of proof.--If a claimant produces prima facie 
     evidence to support a claim under paragraph (2), the burden 
     of proof shall be on the State, except as to any elements of 
     the claim that would have to be proved if the action were 
     brought under another provision of this title. The burden of 
     proof shall be unaffected with respect to any such element.
       ``(c) Preemption.--No State may exercise any rights of a 
     copyright owner protected under this title without the 
     authorization or consent of such owner, except in the manner 
     and to the extent authorized by Federal law.''.

     SEC. 204. LIABILITY OF STATES FOR MASK WORK VIOLATIONS.

       (a) In General.--Chapter 9 of title 17, United States Code, 
     is amended--
       (1) in section 911, by striking subsection (g); and
       (2) by adding at the end the following:

     ``Sec. 915. Liability of States, instrumentalities of States, 
       and State officials for violation of mask works

       ``(a) Remedy for Statutory Violation.--In any action 
     against an officer or employee of a State for infringement of 
     any rights in a mask work protected under this chapter, or 
     for any other violation under this chapter, prospective 
     relief is available against the officer or employee in the 
     same manner and to the same extent as such relief is 
     available in an action against a private individual under 
     like circumstances. Prospective relief may include injunctive 
     relief under section 911(a), impounding and destruction of 
     infringing products under section 911(e), costs and attorney 
     fees under section 911(f), and declaratory relief under 
     section 2201 of title 28.
       ``(b) Remedy for Constitutional Violation.--
       ``(1) Definition.--In this subsection, the term `State' 
     includes a State, an instrumentality of a State, and an 
     officer or employee of a State acting in an official 
     capacity.
       ``(2) In general.--
       ``(A) Remedies.--Any State that takes any of the rights of 
     exclusion secured under this chapter in violation of the 
     fifth amendment of the United States Constitution, or 
     deprives any person of any of the rights of exclusion secured 
     under this chapter without due process of law in violation of 
     the fourteenth amendment--
       ``(i) shall be liable to the party injured in a civil 
     action against the State for the recovery of that party's 
     reasonable and entire compensation; and
       ``(ii) may be enjoined from continuing or future 
     constitutional violations, in accordance with the principles 
     of equity and upon such terms as the court may determine 
     reasonable.
       ``(B) Compensation.--Reasonable and entire compensation may 
     include actual damages and profits under section 911(b) or 
     statutory damages under section 911(c), and costs and 
     attorney fees under section 911(f).
       ``(3) Limitations.--
       ``(A) In general.--The remedy provided under paragraph (2) 
     is not available in an action against--
       ``(i) a State that has waived its sovereign immunity from 
     suit in Federal court for damages resulting from a violation 
     of this title; or
       ``(ii) a State official in an individual capacity.
       ``(B) Remedies.--Remedies (including remedies both at law 
     and in equity) are available against such State or State 
     official in the same manner and to the same extent as such 
     remedies are available in an action against a private entity 
     or individual under like circumstances.
       ``(4) Burden of proof.--If a claimant produces prima facie 
     evidence to support a claim under paragraph (2), the burden 
     of proof shall be on the State, except as to any elements of 
     the claim that would have to be proved if the action were 
     brought under another provision of this chapter. The burden 
     of proof shall be unaffected with respect to any such 
     element.
       ``(c) Preemption.--No State may exercise any rights of the 
     owner of a mask work protected under this chapter without the 
     authorization or consent of such owner, except in the manner 
     and to the extent authorized by Federal law.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 9 of title 17, United States Code, is amended by 
     adding at the end the following:

``915. Liability of States, instrumentalities of States, and State 
              officials for violation of mask works.''.

      SEC. 205. LIABILITY OF STATES FOR ORIGINAL DESIGN 
                   VIOLATIONS.

       (a) In General.--Chapter 13 of title 17, United States 
     Code, is amended--
       (1) in section 1309(a), by adding at the end the following: 
     ``In this subsection, the term `any person' includes any 
     State, any instrumentality of a State, and any officer or 
     employee of a State or instrumentality of a State acting in 
     an official capacity. Any State, and any such 
     instrumentality, officer, or employee, shall be subject to 
     the provisions of this chapter in the same manner and to the 
     same extent as any nongovernmental entity.''; and
       (2) by adding at the end the following:

     ``Sec. 1333. Liability of States, instrumentalities of 
       States, and State officials for violation of original 
       designs

       ``(a) Remedy for Statutory Violation.--In any action 
     against an officer or employee of a State for infringement of 
     any rights in a design protected under this chapter, or for 
     any other violation under this chapter, prospective relief is 
     available against the officer or employee in the same manner 
     and to the same extent as such relief is available in an 
     action against a private individual under like circumstances. 
     Prospective relief may include injunctions under section 
     1322, attorney fees under section 1323(d), disposition of 
     infringing and other articles under section 1323(e), and 
     declaratory relief under section 2201 of title 28.
       ``(b) Remedy for Constitutional Violation.--
       ``(1) Definition.--In this subsection, the term `State' 
     includes a State, an instrumentality of a State, and an 
     officer or employee of a State acting in an official 
     capacity.
       ``(2) In general.--
       ``(A) Remedies.--Any State that takes any of the rights of 
     exclusion secured under this chapter in violation of the 
     fifth amendment of the United States Constitution, or 
     deprives any person of any of the rights of exclusion secured 
     under this chapter without due process of law in violation of 
     the fourteenth amendment--
       ``(i) shall be liable to the party injured in a civil 
     action against the State for the recovery of that party's 
     reasonable and entire compensation; and
       ``(ii) may be enjoined from continuing or future 
     constitutional violations, in accordance with the principles 
     of equity and upon such terms as the court may determine 
     reasonable.
       ``(B) Compensation.--Reasonable and entire compensation may 
     include damages, profits, and attorney fees under section 
     1323.
       ``(3) Limitations.--
       ``(A) In general.--The remedy provided under paragraph (2) 
     is not available in an action against--
       ``(i) a State that has waived its sovereign immunity from 
     suit in Federal court for damages resulting from a violation 
     of this title; or
       ``(ii) a State official in an individual capacity.
       ``(B) Remedies.--Remedies (including remedies both at law 
     and in equity) are available against such State or State 
     official in the same manner and to the same extent as such 
     remedies are available in an action against a private entity 
     or individual under like circumstances.
       ``(4) Burden of proof.--If a claimant produces prima facie 
     evidence to support a claim under paragraph (2), the burden 
     of

[[Page 27604]]

     proof shall be on the State, except as to any elements of the 
     claim that would have to be proved if the action were brought 
     under another provision of this chapter. The burden of proof 
     shall be unaffected with respect to any such element.
       ``(c) Preemption.--No State may exercise any rights of the 
     owner of a design protected under this chapter without the 
     authorization or consent of such owner, except in the manner 
     and to the extent authorized by Federal law.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 13 of title 17, United States Code, is amended by 
     adding at the end the following:

``1333. Liability of States, instrumentalities of States, and State 
              officials for violation of original designs.''.

     SEC. 206. LIABILITY OF STATES FOR TRADEMARK VIOLATIONS.

       Section 40 of the Trademark Act of 1946 (15 U.S.C. 1122) is 
     amended to read as follows:

     ``SEC. 40. LIABILITY OF STATES, INSTRUMENTALITIES OF STATES, 
                   AND STATE OFFICIALS FOR INFRINGEMENT OF 
                   TRADEMARKS.

       ``(a) Remedy for Statutory Violation.--In any action 
     against an officer or employee of a State for infringement of 
     a trademark under section 32, or for any other violation 
     under this Act, prospective relief is available against the 
     officer or employee in the same manner and to the same extent 
     as such relief is available in an action against a private 
     individual under like circumstances. Prospective relief may 
     include injunctive relief under section 34, costs and 
     attorney fees under section 35, destruction of infringing 
     articles under section 36, and declaratory relief under 
     section 2201 of title 28, United States Code.
       ``(b) Remedy for Constitutional Violation.--
       ``(1) Definition.--In this subsection, the term `State' 
     includes a State, an instrumentality of a State, and an 
     officer or employee of a State acting in an official 
     capacity.
       ``(2) In general.--
       ``(A) Remedies.--Any State that takes any of the rights of 
     exclusion secured under this Act in violation of the fifth 
     amendment of the United States Constitution, or deprives any 
     person of any of the rights of exclusion secured under this 
     Act without due process of law in violation of the fourteenth 
     amendment--
       ``(i) shall be liable to the party injured in a civil 
     action against the State for the recovery of that party's 
     reasonable and entire compensation; and
       ``(ii) may be enjoined from continuing or future 
     constitutional violations, in accordance with the principles 
     of equity and upon such terms as the court may determine 
     reasonable.
       ``(B) Compensation.--Reasonable and entire compensation may 
     include actual damages and profits or statutory damages, and 
     costs and attorney fees under section 35.
       ``(3) Limitations.--
       ``(A) In general.--The remedy provided under paragraph (2) 
     is not available in an action against--
       ``(i) a State that has waived its sovereign immunity from 
     suit in Federal court for damages resulting from a violation 
     of this title; or
       ``(ii) a State official in an individual capacity.
       ``(B) Remedies.--Remedies (including remedies both at law 
     and in equity) are available against such State or State 
     official in the same manner and to the same extent as such 
     remedies are available in an action against a private entity 
     or individual under like circumstances.
       ``(4) Burden of proof.--If a claimant produces prima facie 
     evidence to support a claim under paragraph (2), the burden 
     of proof shall be on the State, except as to any elements of 
     the claim that would have to be proved if the action were 
     brought under another provision of this Act. The burden of 
     proof shall be unaffected with respect to any such element.
       ``(c) Preemption.--No State may use a federally registered 
     mark for the same or similar goods or service without the 
     authorization or consent of the owner of the mark, except in 
     the manner and to the extent authorized by Federal law.''.

     SEC. 207. RULES OF CONSTRUCTION.

       (a) Jurisdiction.--The district courts shall have original 
     jurisdiction of any action arising under this title and the 
     amendments made by this title under section 1338 of title 28, 
     United States Code.
       (b) Broad Construction.--This title and the amendments made 
     by this title shall be construed in favor of a broad 
     protection of Federal intellectual property rights, to the 
     maximum extent permitted by this title and the United States 
     Constitution.

                       TITLE III--EFFECTIVE DATES

     SEC. 301. EFFECTIVE DATES.

       (a) Title I.--Title I of this Act and the amendments made 
     by that title shall take effect 90 days after the date of 
     enactment of this Act.
       (b) Title II.--The amendments made by title II of this Act 
     shall take effect with respect to violations that occur on or 
     after the date of enactment of this Act.

     SEC. 302. SEVERABILITY.

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


 Intellectual Property Protection Restoration Act--Section-by-Section 
                                Summary


                                overview

       The purpose of the Intellectual Property Protection 
     Restoration Act of 1999 (``IPPRA'') is to restore protection 
     for owners of federal intellectual property rights against 
     infringement by States. Recent Supreme Court decisions 
     invalidated prior efforts by Congress to abrogate State 
     sovereign immunity in actions arising under the federal 
     intellectual property laws. The IPPRA encourages States to 
     participate in the federal intellectual property system on 
     equal terms with private entities, by conditioning a State's 
     receipt of future benefits under the federal intellectual 
     property laws on an unambiguous waiver of sovereign immunity. 
     As against States that choose not to participate, the bill 
     also provides new remedies for violations of federal 
     intellectual property rights, to the maximum extent permitted 
     by the Constitution.


                            detailed summary

   TITLE I--STATE PARTICIPATION IN THE FEDERAL INTELLECTUAL PROPERTY 
                                 SYSTEM

                        Subtitle A--Definitions

                         Sec. 101. Definitions

       Section 101 defines terms used in this title.

     Subtitle B--Procedures for State Participation in the Federal 
                      Intellectual Property System

                       Sec. 111. Opt-in procedure

       Section 111 provides that no State or State instrumentality 
     may acquire a federal intellectual property right unless the 
     State opts in to the federal intellectual property system by 
     agreeing to waive sovereign immunity in any subsequent action 
     that either arises under a federal intellectual property law 
     or seeks a declaration with respect to a federal intellectual 
     property right. Thus, if a State elects to receive the 
     benefits of a nationally recognized right governed by uniform 
     federal laws, then it must accept the obligation to defend 
     any suits arising under those laws in the federal courts.
       An assurance provided under section 111 is binding on the 
     State and fully enforceable. ``A State may effectuate a 
     waiver of its constitutional immunity . . . in the context of 
     a particular federal program,'' so long as the State's 
     intention to waive its immunity is unequivocal. Atascadero 
     State Hosp. v. Scanlon, 473 U.S. 234, 238 n.1 & 241 (1985). 
     See also Litman v. George Mason Univ., 186 F.3d 544 (4th Cir. 
     1999) (holding that a State's acceptance of federal education 
     funding resulted in a binding waiver of immunity in a 
     subsequent action against a State university under Title IX); 
     Innes v. Kansas State Univ., 184 F.3d 1275 (10th Cir. 1999) 
     (holding that a State university's agreement to participate 
     in a federal loan program acted as a binding waiver of 
     immunity).

                Sec. 112. Breach of assurance by a State

       Section 112 establishes procedures for determining whether 
     a State that has opted in to the federal intellectual 
     property system is in breach of its agreement to waive 
     sovereign immunity.

        Sec. 113. Consequences of breach of assurance by a State

       Section 113 sets forth three consequences of a breach of an 
     agreement to waive sovereign immunity.
       First, under subsection (a), any pending applications by or 
     on behalf of the State for federal intellectual property 
     rights shall be regarded as abandoned and shall not be 
     subject to revival thereafter.
       Second, under subsection (b), no damages or other monetary 
     relief shall be awarded in any action to enforce a federal 
     intellectual property right that is or has been owned by or 
     on behalf of the State during the preceding five years.
       Third, under subsection (c), the State is barred from 
     acquiring any new rights under the federal intellectual 
     property laws for a period of one year. If, however, the 
     State opts back in to the system after a year has passed, by 
     providing a new assurance that it will henceforth waive its 
     sovereign immunity in federal intellectual property 
     litigation, it can then acquire new rights that will be 
     enforceable by the full panoply of federal intellectual 
     property remedies.

Subtitle C--Administration of Procedures for State Participation in the 
                  Federal Intellectual Property System

    Sec. 121. Notification by court of State assertion of sovereign 
                                immunity

       Section 121 directs federal courts to notify the 
     Commissioner of Patents and Trademarks within 20 days of 
     finding that a State has asserted sovereign immunity in any 
     action to enforce or challenge a federal intellectual 
     property right.

[[Page 27605]]



  Sec. 122. Confirmation by Commissioner of Patents and Trademarks of 
                 State assertion of sovereign immunity

       Section 122 directs the Commissioner of Patents and 
     Trademarks, within 20 days of receiving a notification under 
     section 121, to forward such notification to the Attorney 
     General of the State, together with a copy of title I of the 
     IPPRA, and inquire whether the State intends to withdraw its 
     assertion of immunity and consent tot he continuation or 
     refiling of the action in which it was made within the 60-day 
     grace period provided in section 112(b)(2).

  Sec. 123. Publication by Commissioner of Patents and Trademarks of 
                 State assertion of sovereign immunity

       Section 123 directs the Commissioner of Patents and 
     Trademarks, in consultation with the Secretary of Agriculture 
     and the Register of Copyrights, to publish in the Federal 
     Register and maintain on the Internet information concerning 
     the participation of each State in the federal intellectual 
     property system. The information must include, for each 
     State, whether the State's sovereign immunity has been 
     asserted, and the name of the case and court in which any 
     such assertion of immunity was made.

                     Sec. 124. Rulemaking authority

       Section 124 authorizes the Commissioner of Patents and 
     Trademarks to promulgate such rules as necessary to implement 
     the provisions of this subtitle.

    Subtitle D--Amendments to the Federal Intellectual Property Laws

  Sec. 131. Conditions for State participation in the federal patent 
                                 system

       Section 131 amends the federal patent statute to require 
     any State that seeks to register for patent protection to 
     provide an unequivocal assurance of the State's intention to 
     waive sovereign immunity in any action to enforce or 
     challenge a federal intellectual property right. A State must 
     also certify that the State's sovereign immunity has not been 
     asserted in any such action during the past year.

   Sec. 132. Conditions for State participation in the federal plant 
                       variety protection system

       Section 132 amends the federal plant variety statute to 
     require any State that seeks to register for plant variety 
     protection to provide an unequivocal assurance of the State's 
     intention to waive sovereign immunity in any action to 
     enforce or challenge a federal intellectual property right. A 
     State must also certify that the State's sovereign immunity 
     has not been asserted in any such action during the past 
     year.

 Sec. 133. Conditions for State participation in the federal copyright 
                                 system

       Section 133 amends the federal copyright statute to require 
     any State that seeks to register for copyright protection to 
     provide an unequivocal assurance of the State's intention to 
     waive sovereign immunity in any action to enforce or 
     challenge a federal intellectual property right. A State must 
     also certify that the State's sovereign immunity has not been 
     asserted in any such action during the past year.

 Sec. 134. Conditions for State participation in the federal mask work 
                                 system

       Section 134 amends the federal mask work statute to require 
     any State that seeks to register for mask work protection to 
     provide an unequivocal assurance of the State's intention to 
     waive sovereign immunity in any action to enforce or 
     challenge a federal intellectual property right. A State must 
     also certify that the State's sovereign immunity has not been 
     asserted in any such action during the past year.

 Sec. 135. Conditions for State participation in the federal original 
                             design system

       Section 135 amends the federal original design statute to 
     require any State that seeks to register for design 
     protection to provide an unequivocal assurance of the State's 
     intention to waive sovereign immunity in any action to 
     enforce or challenge a federal intellectual property right. A 
     State must also certify that the State's sovereign immunity 
     has not been asserted in any such action during the past 
     year.

 Sec. 136. Conditions for State participation in the federal trademark 
                                 system

       Section 136 amends the federal trademark statute to require 
     any State that seeks to register for trademark protection to 
     provide an unequivocal assurance of the State's intention to 
     waive sovereign immunity in any action to enforce or 
     challenge a federal intellectual property right. A State must 
     also certify that the State's sovereign immunity has not been 
     asserted in any such action during the past year.

                    Sec. 137. No retroactive effect

       Section 137 ensures that the amendments made by this 
     subtitle are not given retroactive effect. Specifically, the 
     amendments do not apply to any application by a State that 
     was pending before the effective date of this subtitle, or to 
     any assertion of sovereign immunity by a State made before 
     the enactment of the IPPRA.

 TITLE II--RESTORATION OF PROTECTION FOR FEDERAL INTELLECTUAL PROPERTY 
                                 RIGHTS

          Sec. 201. Liability of States for patent violations

       Section 201 replaces section 296 of title 35, which was 
     enacted pursuant to the Patent and Plant Variety Remedy 
     Clarification Act of 1992 and invalidated by the Supreme 
     Court in Florida Prepaid Postsecondary Educ. Expense Bd. v. 
     College Savings Bank, 119 S. Ct. 2199 (1999).
       Subsection (a) ensures the full availability of prospective 
     relief to prevent State officials from violating the federal 
     patent laws, and to allow challenges to assertions by State 
     officials of rights secured under such laws, on the same 
     terms and in the same manner as if such State officials were 
     private individuals. Such relief is authorized under the 
     doctrine of Ex parte Young, 209 U.S. 123 (1908), which held 
     that an individual may sue a State official in an official 
     capacity for prospective relief requiring the State official 
     to cease violating federal law, even if the State itself is 
     immune from suit under the Eleventh Amendment.
       Subsection (b) provides a cause of action against States, 
     State instrumentalities, and State officials acting in an 
     official capacity for (1) taking a patent right in violation 
     of the Fifth Amendment or (2) depriving a person of a patent 
     right without due process of law in violation of the 
     Fourteenth Amendment. Damages are fixed at ``reasonable and 
     entire compensation,'' which is the measure of damages 
     available against the United States for infringement of a 
     patent (see 28 U.S.C. 1498); treble damages are not available 
     under this subsection. Injunctive relief is available to 
     prevent or deter constitutional violations.
       The remedy provided under subsection (b) is not available 
     against States that have waived their sovereign immunity from 
     suit in federal court, nor is it available against State 
     officials in their individual capacity, who do not partake of 
     the State's sovereign immunity. Such States and State 
     officials remain subject to the remedies provided by other 
     provisions of the federal patent laws, to the same extent as 
     such remedies are available in an action against any private 
     entity or individual. Thus, for example, a State official 
     sued in an individual capacity may not assert any defense or 
     claim of absolute or qualified immunity that would not be 
     available to a private individual under similar 
     circumstances.
       Subsection (b) abrogates State sovereign immunity to the 
     maximum extent permitted by the Constitution, pursuant to 
     Congress's powers under the Fifth and Fourteenth Amendments 
     and any other applicable provisions.
       A claim under subsection (b) for taking a patent right is 
     ripe at the time of the taking. In Hawaii Housing Authority 
     v. Midkiff, 467 U.S. 229 (1984), the Supreme Court held that 
     the Public Use Clause of the Fifth Amendment, made applicable 
     to the States through the Fourteenth Amendment, prohibits a 
     State from taking private property for a non-public use, even 
     with just compensation. The Court further stated that ``[t]he 
     `public use' requirement is . . . coterminous with the scope 
     of a sovereign's police powers.'' 457 U.S. at 240. Because 
     States making unauthorized uses of federal intellectual 
     property rights are acting outside the scope of their 
     sovereign powers, a State's infringement of a patent, even if 
     compensated, is an unconstitutional taking of property for a 
     non-public use; accordingly, the patent holder need not seek 
     a remedy in State proceedings before filing a claim under 
     subsection (b) in federal court.
       Subsection (b)(4) addresses the burden of proof when a 
     claimant produces prima facie evidence to support a claim 
     under this subsection. Under subsection (b)(4), the burden of 
     proof is on the State, except as to any elements of the claim 
     that would have to be proved if the action were brought under 
     another provision of this title. As to such elements, the 
     burden of proof is unaffected. Thus, for example, if the 
     adequacy of any State remedies became an issue, the State 
     would bear the burden of proof thereon.
       Subsection (c) clarifies that the federal patent laws and 
     treaties supersede and preempt any power of a State to 
     acquire or otherwise affect patent rights through the 
     exercise of eminent domain.

Sec. 202. Liability of States for violation of plant variety protection

       Section 202 establishes the same sorts of remedies for 
     violations of protected plant varieties as section 201 
     establishes with respect to patents.

         Sec. 203. Liability of States for copyright violations

       Section 203 establishes the same sorts of remedies for 
     violations of copyrights as section 201 establishes with 
     respect to patents.

         Sec. 204. Liability of States for mask work violations

       Section 204 establishes the same sorts of remedies for 
     violations of federally-protected rights in mask works as 
     section 201 establishes with respect to patents.

      Sec. 205. Liability of States for original design violations

       Section 205 establishes the same sorts of remedies for 
     violations of federally-protected rights in original designs 
     as section 201 establishes with respect to patents.

[[Page 27606]]



           Sec. 206. Liability of States trademark violations

       Section 206 establishes the same sorts of remedies for 
     violations of federally-registered trademarks and service 
     marks as section 201 establishes with respect to patents.

                    Sec. 207. Rules of construction

       Subsection (a) makes clear that the district courts shall 
     have original jurisdiction under 28 U.S.C. Sec. 1338 of any 
     action arising under this title. It follows that, pursuant to 
     28 U.S.C. Sec. 1295, the United States Court of Appeals for 
     the Federal Circuit shall have exclusive jurisdiction of any 
     appeal from a final decision of a district court in an action 
     arising under this title relating to patents, plant variety 
     protection, and exclusive rights in designs under chapter 13 
     of title 17.
       Subsection (b) provides that this title shall be construed 
     in favor of a broad protection of intellectual property 
     rights, to the maximum extent permitted by its terms and the 
     Constitution.

                       TITLE III--EFFECTIVE DATES

                       Sec. 301. Effective dates

       Subsection (a) provides that the opt-in procedures 
     established by title I of the IPPRA shall take effect 90 days 
     after the date of enactment of the IPPRA.
       Subsection (b) provides that the remedial provisions 
     established by title II of the IPPRA shall take effect with 
     respect to violations by States that occur on or after the 
     date of enactment of the IPPRA.

                         Sec. 302. Severability

       Section 302 contains a strong severability clause. If any 
     provision of the IPPRA or of any amendment made by the IPPRA, 
     or any application of such provision to any person or 
     circumstance, is held to be unconstitutional, the remainder 
     of the IPPRA, the amendments made by the IPPRA, and the 
     application of the provision to any other person or 
     circumstance shall not be affected.

                          ____________________