[Congressional Record (Bound Edition), Volume 145 (1999), Part 21]
[Senate]
[Pages 29948-29993]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CRAIG (for himself, Mr. Thomas, Mr. Crapo, and Mr. Burns):
  S. 1938. A bill to provide for the return of fair and reasonable fees 
to the Federal Government for the use and occupancy of National Forest 
System land under the recreation residence program, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.


                  cabin user fee fairness act of 1999

  Mr. CRAIG. Mr. President, I am introducing legislation today that 
will set a new course for the Forest Service in determining fees for 
forest lots on which families and individuals have been authorized to 
build cabins for seasonal recreation since the early part of this 
century. I am pleased to have Senators Mike Crapo, Craig Thomas, and 
Conrad Burns joining me in sponsoring this legislation, which is a 
companion bill to H.R. 3327, introduced in the House of Representatives 
by Congressman George Nethercutt.
  In 1915, under the Term Permit Act, Congress set up a program to give 
families the opportunity to recreate on our public lands through the 
so-called recreation residence program. Today, 15,000 of these forest 
cabins remain, providing generation after generation of families and 
their friends a respite from urban living and an opportunity to use our 
public lands.
  These cabins stand in sharp contrast to many aspects of modern 
outdoor recreation, yet are an important aspect of the mix recreation 
opportunities for the American public. While many of us enjoy fast, 
off-road machines and watercraft or hiking to the backcountry with 
high-tech gear, others enjoy a relaxing weekend at their cabin in the 
woods with their family and friends.
  The recreation residence programs allows families all across the 
country an opportunity to use our national forests. This quiet, 
somewhat uneventful program continues to produce close bonds and 
remarkable memories for hundreds of thousands of Americans, but in 
order to secure the future of the cabin program, this Congress needs to 
reexamine the basis on which fees are now being determined.
  Roughly 20 years ago, the Forest Service saw the need to modernize 
the regulations under which the cabin program is administered. 
Acknowledging that the competition for access and use of forest 
resources has increased dramatically since 1915, both the cabin owners 
and the agency wanted a formal understanding about the rights and 
obligations of using and maintaining these structures.
  New rules that resulted nearly a decade later reaffirmed the cabins 
as a valid recreational use of forest land. At the same time, the new 
policy reflected numerous limitations on use that are felt to be 
appropriate in order to keep areas of the forest where cabins are 
located open for recreational use by other forest visitors. Commercial 
use of the cabins is prohibited, as is year-round occupancy by the 
owner. Owners are restricted in the size, shape, paint color and 
presence of other structures or installations on the cabin lot. The 
only portion of a lot that is controlled by the cabin owner is that 
portion of the lot that directly underlies the footprint of the cabin 
itself.
  At some locations, the agency has determined a need to remove cabins 
for a variety of reasons related to ``higher public purposes'' and 
cabin owners wanted to be certain in the writing of new regulations 
that a fair process would guide any future decisions about cabin 
removal. At other locations, some cabins have been destroyed by fire, 
avalanche or falling trees, and a more reliable process of determining 
whether such cabins might be rebuilt or relocated was needed. It was 
determined, therefore, that this recreational program would be tied 
more closely to the forest planning process.
  The question of an appropriate fee to be paid for the opportunity of 
constructing and maintaining a cabin in the woods was also addressed at 
that time. Although the agency's policies for administration of the 
cabin program have, overall, held up well over time, the portion 
dealing with periodic redetermination of fees proved in the last few 
years to be a failure.
  A base fee was determined 20 years ago by an appraisal of sales of 
comparable undeveloped lots in the real estate market adjacent to the 
national forest where a cabin was located. The new policy called for 
reappraisal of the value of the lot 20 years later--a trigger that led 
to initiation of the reappraisal process in 1995.
  In the meantime, according to the policy, annual adjustments to the 
base

[[Page 29949]]

fee would be tracked by the Implicit Price Deflator (IPD), which proved 
to be a faulty mechanism for this purpose. Annual adjustments to the 
fee based on movements of the IPD failed entirely to keep track of the 
booming land values associated with recreation development.
  As the results of actual reappraisals on the ground began reaching my 
office in 1997, it became clear that far more than the inoperative IPD 
was out of alignment in determining fees for the cabin owners.
  At the Pettit Lake tract in Idaho's Sawtooth National Recreation 
Area, the new base fees skyrocketed into alarming five-digit amounts--
so high that a single annual fee was nearly enough money to buy raw 
land outside the forest and construct a cabin. Meanwhile, the agency's 
appraisal methodology was resulting in new base fees in South Dakota, 
in Florida, and in some locations in Colorado that were actually lower 
than the previous fee.
  Very generally speaking, the value of the use of the forest lot is 
approximately the same for any cabin owner, whether they are tucked 
into what has become in recent years the Sawtooth National Recreation 
Area of Idaho, or high in the Sierra Mountain range of California, or 
in the lowland forests of the southeastern States. Yet Idaho cabin 
owners are now expected to pay a new average fee of $9,221 each year, 
while cabin owners in Kentucky will be paying a new average fee of 
$140.
  At the request of the chairman of the House Committee on Agriculture 
in 1998, the cabin owners named a coalition of leaders of their various 
national and State cabin owner associations to examine the methodology 
being used by the Forest Service to determine fees. It became obvious 
to these laymen that analysis of appraisal methodology and the 
determination of fees was beyond their grasp, and a prestigious 
consulting appraiser was retained to guide the cabin owners through 
their task. The report and recommendations of the coalition's 
consulting appraiser is available from my office for those who might 
wish to examine the details.
  At the bottom line, it was learned that the Forest Service--contrary 
to its own policy--was appraising and affixing value to the lots being 
provided to cabin owners as if this land were fully developed, legally 
subdivided, fee simple residential land.
  In other words, the agency has been capturing the values associated 
with a variety of structures and services that the homeowners 
themselves (not the agency) provide. The Forest Service, in setting 
fees on this basis, has been capturing incremental values assigned by a 
developer at various stages of development for risk, expectations of 
profit and other factors.
  My goal is to see that the cabin program remains affordable for 
American families. Consistent with the recommendations of the 
coalition's consulting appraiser, the methodology for determining fees 
is directed toward the value of the use to the cabin owner--not what 
the market would bear, should the Forest Service decide to sell off its 
assets.
  This is highly technical legislation. Its purpose is to send a clear 
set of instructions to appraisers in the field and a clear set of 
instructions to forest managers to respect the results of appraisals 
undertaken to place value on the raw land being offered cabin owners.
  I intend to hold hearings on this legislation early in the next 
session. I urge each of my colleagues to be in contact with cabin 
owners in their State during the congressional recess. There are more 
than 15,000 families out there who fear that the long tradition of 
cabin-based forest recreation is nearing an end because the agencies 
fee mechanism has made the program unaffordable for all but the 
wealthy. These cabin owners and I would wholeheartedly welcome the 
support and cosponsorship of all Senators for this important 
legislation.
  I ask unanimous consent that a copy of the legislation be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1938

       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 ``Fair Cabin User Fee Act of 
     1999''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the recreation residence program is--
       (A) a valid use of forest land and 1 of the multiple uses 
     of the National Forest System; and
       (B) an important component of the recreation program of the 
     Forest Service;
       (2) cabins located on forest land have provided a unique 
     recreation experience to a large number of cabin owners, 
     their families, and guests each year since Congress 
     authorized the recreation residence program in 1915;
       (3) tract associations, cabin owners, their extended 
     families, guests, and others that regularly use and enjoy 
     forest cabin tracts have contributed significantly toward 
     efficient management of the program and the stewardship of 
     forest land;
       (4) cabin user fees have traditionally generated income to 
     the Federal Government in amounts significantly greater than 
     the Federal cost of administering the program;
       (5) the rights and privileges granted to owners of cabins 
     authorized under the program have steadily diminished while 
     regulatory restrictions and fees charged under the program 
     have steadily increased; and
       (6) the current fee determination procedure has been shown 
     to incorrectly reflect market value and value of use.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to ensure, to the maximum extent practicable, that the 
     National Forest System recreation residence program is 
     managed to preserve the opportunity for individual and 
     family-oriented recreation at a reasonable cost; and
       (2) to develop and implement a more efficient, cost-
     effective procedure for determining cabin user fees that 
     better reflects the probable value of that use by the cabin 
     owner, taking into consideration the limitations of the 
     authorization and other relevant market factors.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Agency.--The term ``agency'' means the Forest Service.
       (2) Authorization.--The term ``authorization'' means a 
     special use permit for the use and occupancy of National 
     Forest System land by a cabin owner under the authority of 
     the program.
       (3) Base cabin user fee.--The term ``base cabin user fee'' 
     means the initial fee for an authorization that results from 
     the appraisal of a lot in accordance with sections 6 and 7.
       (4) Cabin.--The term ``cabin'' means a privately built and 
     owned structure authorized for use and occupancy on National 
     Forest System land.
       (5) Cabin user fee.--The term ``cabin user fee'' means a 
     special use fee paid annually by a cabin owner to the 
     Secretary in accordance with this Act.
       (6) Cabin owner.--The term ``cabin owner'' means--
       (A) a person authorized by the agency to use and to occupy 
     a cabin on National Forest System land; and
       (B) an heir or assign of such a person.
       (7) Caretaker cabin.--The term ``caretaker cabin'' means a 
     caretaker residence occupied in limited cases in which 
     caretaker services are necessary to maintain the security of 
     a tract.
       (8) Center.--The term ``Center'' means the Federal Center 
     for Dispute Resolution of the American Arbitration 
     Association.
       (9) Current cabin user fee.--The term ``current cabin user 
     fee'' means the most recent cabin user fee that results from 
     an annual adjustment to the base cabin user fee in accordance 
     with section 8.
       (10) Lot.--The term ``lot'' means a parcel of land of the 
     National Forest System on which a cabin owner is authorized 
     to build, use, occupy, and maintain a cabin and related 
     improvements.
       (11) Program.--The term ``program'' means the recreation 
     residence program established under the Act of March 4, 1915 
     (38 Stat. 1101, chapter 144).
       (12) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture, acting through the Chief of the Forest 
     Service.
       (13) Tract.--The term ``tract'' means an established 
     location within a National Forest containing 1 or more cabins 
     authorized in accordance with the program.
       (14) Tract association.--The term ``tract association'' 
     means a cabin owner association in which all cabin owners 
     within a tract are eligible for membership.

      SEC. 5. ADMINISTRATION OF RECREATION RESIDENCE PROGRAM.

       (a) In General.--The Secretary shall ensure, to the maximum 
     extent practicable, that the basis and procedure for 
     calculating cabin user fees results in a reasonable and fair 
     fee for an authorization that reflects the probable value of 
     the use and occupancy of a lot to the cabin owner in 
     accordance with subsection (b).
       (b) Determination of Value.--The value of the use and 
     occupancy of a lot referred to in subsection (a)--

[[Page 29950]]

       (1) shall not be equivalent to a rental fee of the lot; and
       (2) shall reflect regional economic influences, as 
     determined by an appraisal of the value of use of the 
     National Forest in which the lot is located.

      SEC. 6. APPRAISALS.

       (a) Requirements for Conducting Appraisals.--In 
     implementing and conducting an appraisal process for 
     determining cabin user fees, the Secretary shall--
       (1) establish an appraisal process to determine the value 
     of the fee simple estate of a typical lot or lots within a 
     tract, with adjustments to reflect limitations arising from 
     the authorization and special use permit;
       (2) enter into a contract with an appropriate professional 
     organization for the development of specific appraisal 
     guidelines in accordance with subsection (b), subject to 
     public comment and congressional review;
       (3) require that an appraisal be performed by a State-
     certified general real estate appraiser, selected by the 
     Secretary and licensed to practice in the State in which the 
     lot is located;
       (4) provide the appraiser with--
       (A) appraisal guidelines developed in accordance with this 
     Act; and
       (B) a copy of the special use permit associated with the 
     typical lot to be appraised, with an instruction to the 
     appraiser to consider any prohibitions or limitations 
     contained in the authorization;
       (5) notwithstanding any other provision of law, require the 
     appraiser to coordinate the assignment closely with affected 
     parties by seeking advice, cooperation, and information from 
     cabin owners and tract associations;
       (6) require that the appraiser perform the appraisal in 
     compliance with--
       (A) the most current edition of the Uniform Standards of 
     Professional Appraisal Practice on the date of the appraisal;
       (B) the most current edition of the Uniform Appraisal 
     Standards for Federal Land Acquisitions on the date of the 
     appraisal; and
       (C) the specific appraisal guidelines developed in 
     accordance with this Act;
       (7) require that the appraisal report be a self-contained 
     report (as defined by the Uniform Standards of Professional 
     Appraisal Practice);
       (8) require that the appraisal report comply with the 
     reporting guidelines established by the Uniform Appraisal 
     Standards for Federal Land Acquisitions; and
       (9) before accepting any appraisal, conduct a review of the 
     appraisal to ensure that the guidelines made available to the 
     appraiser have been followed and that the appraised values 
     are properly supported.
       (b) Specific Appraisal Guidelines.--In the development of 
     specific appraisal guidelines in accordance with paragraph 
     (a)(2), the instructions to an appraiser shall require, at a 
     minimum, the following:
       (1) Appraisal of a typical lot.--
       (A) In general.--In conducting an appraisal under this 
     paragraph, the appraiser shall appraise a typical lot or lots 
     within a tract that are selected by the cabin owners and the 
     agency in a manner consistent with the policy of the program.
       (B) Appraisal.--In appraising a typical lot or lots within 
     a tract, the appraiser shall--
       (i) consult with affected cabin owners; and
       (ii) appraise the typical lot or lots selected for purposes 
     of comparison with other lots or groups of lots in the tract 
     having similar value characteristics (rather than appraising 
     each individual lot).
       (B) Estimate of market value of typical lot.--
       (i) In general.--The appraiser shall estimate the market 
     value of a typical lot as a parcel of undeveloped, raw land 
     that has been made available for use and occupancy by the 
     cabin owner on a seasonal or periodic basis.
       (ii) No equivalence to legally subdivided lot.--The 
     appraiser shall not appraise the typical lot as being 
     equivalent to a legally subdivided lot.
       (2) Requirement for analysis of comparable sales.--The 
     appraisal shall be based on a prioritized analysis of 1 or 
     more categories of sales of comparable land as follows:
       (A) Larger parcels.--Sales of larger, privately-owned, and 
     preferably unimproved parcels of rural land, generally 
     similar in size to the tract being examined, shall be given 
     the most weight in the analysis.
       (B) Smaller parcels.--Sales of smaller, privately-owned, 
     and preferably unimproved parcels of rural land that are not 
     part of an established subdivision shall be given secondary 
     weight in the analysis.
       (C) Mapped and recorded parcels.--Sales of privately-owned 
     parcels in a mapped and recorded rural subdivision shall be 
     given the least weight in the analysis.
       (3) Exception for certain sales of land.--In conducting an 
     analysis under paragraph (2), the appraiser shall select 
     sales of comparable land that are outside the area of 
     influence of--
       (A) land affected by urban growth boundaries;
       (B) land for which a government or institution holds a 
     conservation or recreational easement; or
       (C) land designated for conservation or recreational 
     purposes by Congress, a State, or a political subdivision of 
     a State.
       (4) Adjustments for typical value influences.--
       (A) In general.--The appraiser shall consider and adjust 
     the price of sales of comparable land for all typical value 
     influences described in subparagraph (B).
       (B) Value influences.--The typical value influences 
     referred to in subparagraph (A) include--
       (i) differences in the locations of the parcels;
       (ii) accessibility, including limitations on access 
     attributable to--

       (I) weather;
       (II) the condition of roads or trails; or
       (III) other factors;

       (iii) the presence of marketable timber;
       (iv) limitations on, or the absence of, services such as 
     law enforcement, fire control, road maintenance, or snow 
     plowing;
       (v) the condition and regulatory compliance of any site 
     improvements; and
       (vi) any other typical value influences described in 
     standard appraisal literature.
       (5) Adjustments for restrictions on use.--In evaluating the 
     sale of a comparable fee simple parcel, an adjustment to the 
     sale price of the parcel shall be made to reflect the 
     influence of prohibitions or limitations on use or benefits 
     imposed by the agency that affect the value of the subject 
     cabin lot, including--
       (A) any prohibition against year-round use and occupancy or 
     any other restriction that limits or reduces the type or 
     amount of cabin use and occupancy;
       (B) any limitation on the right of the cabin owner to sell, 
     lease, or rent the cabin without restrictions imposed by the 
     Secretary;
       (C) any limitation on, or prohibition against, improvements 
     to the lot, such as remodeling or enlargement of the cabin, 
     construction of additional structures, landscaping, signs, 
     fencing, clothes drying lines, mail boxes, swimming pools, or 
     other recreational facilities; and
       (D) any limitation on, or prohibition against, use of the 
     lot for placement of amenities such as playground equipment, 
     domestic livestock, recreational vehicles, or boats.
       (6) Adjustments to sales of comparable parcels.--
       (A) In general.--
       (i) Utilities provided by agency.--Only utilities (such as 
     water, sewer, electricity, or telephone) or access roads or 
     trails that are clearly established as of the date of the 
     appraisal as having been provided and maintained by the 
     agency at a lot shall be included in the appraisal.
       (ii) Features provided by cabin owner.--All cabin 
     facilities, decks, docks, patios, and other nonnatural 
     features (including utilities or access)--

       (I) shall be presumed to have been provided by, or funded 
     by, the cabin owner; and
       (II) shall be excluded from the appraisal by adjusting any 
     comparable sales with the nonnatural features referred to in 
     subparagraph (B)(ii).

       (iii) Withdrawal of utility or access by agency.--If, 
     during the term of an authorization, the agency makes a 
     substantial and materially adverse change in the provision or 
     maintenance of any utility or access, the cabin owner shall 
     have the right to request and obtain a new determination of 
     the base cabin user fee at the expense of the agency.
       (B) Adjustment for improvements.--
       (i) In general.--The appraiser shall consider and adjust 
     the price of each sale of a comparable parcel for all 
     nonnatural features referred to in subparagraph (A)(ii) 
     that--

       (I) are present at, or add value to, the parcel; but
       (II) are not present at the lot being appraised or not 
     included in the appraisal under subparagraph (A).

       (ii) Adjustments.--An adjustment to the price of a parcel 
     sold under this subparagraph shall include allowances for 
     matters such as--

       (I) depreciated current replacement costs of installing 
     nonnatural features referred to in clause (i) at the typical 
     lot being appraised, including an allowance for 
     entrepreneurial profit and overhead;
       (II) likely construction difficulties for nonnatural 
     features referred to in clause (i) at the lot being 
     appraised; and
       (III) the deduction in price that would be taken in the 
     market as a risk allowance if--

       (aa) a parcel does not have adequate access or adequate 
     sewer or water systems; and
       (bb) there is a risk of failure or material cost overruns 
     in attempting to provide the systems referred to in item 
     (aa).
       (C) Reappraisal for and recalculation of base cabin user 
     fee.--Periodically, but not less often than once every 10 
     years, the Secretary shall recalculate the base cabin user 
     fee (including conducting any reappraisal required to 
     recalculate the base cabin user fee).

      SEC. 7. CABIN USER FEES.

       (a) In General.--The Secretary shall establish the cabin 
     user fee as the amount that is equal to 5 percent of the 
     value of the lot, as determined in accordance with section 6, 
     reflecting an adjustment to the market rate of return based 
     solely on--
       (1) the limited term of the authorization;
       (2) the absence of significant property rights normally 
     attached to fee simple ownership; and

[[Page 29951]]

       (3) the public right of access to, and use of, any open 
     portion of the lot on which the cabin or other enclosed 
     improvements are not located.
       (b) Fee for Caretaker Residences.--The base cabin user fee 
     for a lot on which a caretaker residence is located shall not 
     be greater than the base cabin user fee charged for the 
     authorized use of a similar typical lot in the tract.
       (c) Annual Cabin User Fee in the Event of Determination Not 
     To Reissue Authorization.--If the Secretary determines that 
     an authorization should not be reissued at the end of a term, 
     the Secretary shall--
       (1) establish as the new base cabin user fee for the 
     remaining term of the authorization the amount charged as the 
     cabin user fee in the year that was 10 years before the year 
     in which the authorization expires; and
       (2) calculate the current cabin user fee for each of the 
     remaining 9 years of the term of the authorization by 
     multiplying--
       (i) \1/10\ of the new base cabin user fee; by
       (ii) the number of years remaining in the term of the 
     authorization after the year for which the cabin user fee is 
     being calculated.
       (d) Annual Cabin User Fee in Event of Changed Conditions.--
     If a review of a decision to convert a lot to an alternative 
     public use indicates that the continuation of the 
     authorization for use and occupancy of the cabin by the cabin 
     owner is warranted, and the decision is subsequently 
     reversed, the Secretary may require the cabin owner to pay 
     any portion of annual cabin user fees, as calculated in 
     accordance with subsection (d), that were forgone as a result 
     of the expectation of termination of use and occupancy of the 
     cabin by the cabin owner.
       (e) Termination of Fee Obligation in Loss Resulting From 
     Acts of God or Catastrophic Events.--On a determination by 
     the agency that, due to an act of God or a catastrophic 
     event, a lot cannot be safely occupied and that the 
     authorization for the lot should accordingly be terminated, 
     the fee obligation of the cabin owner shall terminate 
     effective on the date of the occurrence of the act or event.

      SEC. 8. ANNUAL ADJUSTMENT OF CABIN USER FEE.

       (a) In General.--The Secretary shall adjust the cabin user 
     fee annually, using a rolling 5-year average of a published 
     price index in accordance with subsection (b) or (c) that 
     reports changes in rural or similar land values in the State, 
     county, or market area in which the lot is located.
       (b) Initial Index.--
       (1) In general.--For the period of 10 years beginning on 
     the date of enactment of this Act, the Secretary shall use 
     changes in agricultural land prices in the appropriate State 
     or county, as reported in the Index of Agricultural Land 
     Prices published by the Department of Agriculture, to 
     determine the annual adjustment to the cabin user fee in 
     accordance with subsections (a) and (d).
       (2) Statewide changes.--In determining the annual 
     adjustment to the cabin user fee for an authorization located 
     in a county in which agricultural land prices are influenced 
     by the factors described in section 6(b)(3), the Secretary 
     shall use average statewide changes in the State in which the 
     lot is located.
       (c) New Index.--
       (1) In general.--Not later than 10 years after the date of 
     enactment of this Act, the Secretary may select and use an 
     index other than the index described in subsection (b)(2) to 
     adjust a cabin user fee if the Secretary determines that a 
     different index better reflects change in the value of a lot 
     over time.
       (2) Selection process.--Before selecting a new index, the 
     Secretary shall--
       (A) solicit and consider comments from the public; and
       (B) not later than 60 days before the date on which the 
     Secretary makes a final index selection, submit any proposed 
     selection of a new index to--
       (i) the Committee on Resources of the House of 
     Representatives; and
       (ii) the Committee on Energy and Natural Resources of the 
     Senate.
       (d) Limitation.--In calculating an annual adjustment to the 
     base cabin user fee, the Secretary shall--
       (1) limit any annual fee adjustment to an amount that is 
     not more than 5 percent per year when the change in 
     agricultural land values exceeds 5 percent in any 1 year; and
       (2) apply the amount of any adjustment that exceeds 5 
     percent to the annual fee payment for the next year in which 
     the change in the index factor is less than 5 percent.

      SEC. 9. PAYMENT OF CABIN USER FEES.

       (a) Due Date for Payment of Fees.--A cabin user fee shall 
     be paid or prepaid annually by the cabin owner on a monthly, 
     quarterly, annual, or other schedule, as determined by the 
     Secretary.
       (b) Payment of Equal or Lesser Fee.--If, in accordance with 
     section 7, the Secretary determines that the amount of a new 
     base cabin user fee is equal to or less than the current base 
     cabin user fee, the Secretary shall require payment of the 
     new base cabin user fee by the cabin owner in accordance with 
     subsection (a).
       (c) Payment of Greater Fee.--If, in accordance with section 
     7, the Secretary determines that the amount of a new base 
     cabin user fee is greater than the current base cabin user 
     fee, the Secretary shall--
       (1) require full payment of the new base cabin user fee in 
     the first year following completion of the fee determination 
     procedure if the increase in the amount of the new base cabin 
     user fee is not more than 100 percent of the most recently 
     paid cabin user fee; or
       (2) phase in the increase over the current cabin user fee 
     in approximately equal increments over 3 years if the 
     increase in the amount of the new base cabin user fee is 
     greater than 100 percent of the most recently paid base cabin 
     user fee.
       (d) Requirement for Payment During Arbitration, Appeal, or 
     Judicial Review.--If arbitration, an appeal, or judicial 
     review concerning a cabin user fee is brought in accordance 
     with section 11 or 12, the Secretary shall--
       (1) suspend annual payment by the cabin owner of any 
     increase in the cabin user fee, pending completion of the 
     arbitration, appeal, or judicial review; and
       (2) make any adjustments, as necessary, that result from 
     the findings of the arbitration, appeal, or judicial review 
     by providing to the cabin owner--
       (A)(i) a credit toward future cabin user fee payments; or
       (ii) a refund for any overpayment of the cabin user fee; 
     and
       (B) a supplemental billing for any additional amount of the 
     cabin user fee that is due.

      SEC. 10. RIGHT OF SECOND APPRAISAL.

       (a) Right of Second Appraisal.--On receipt of notice from 
     the Secretary of the determination of a new base cabin user 
     fee, the cabin owner--
       (1) not later than 60 days after the date on which the 
     notice is received, shall notify the Secretary of the intent 
     of the cabin owner to obtain a second appraisal; and
       (2) may obtain, within 1 year following the date of receipt 
     of the notice under this subsection, at the expense of the 
     cabin owner, a second appraisal of the typical lot on which 
     the initial appraisal was conducted.
       (b) Conduct of Second Appraisal.--In conducting a second 
     appraisal, the appraiser selected by the cabin owner shall--
       (1) consider all relevant factors in accordance with this 
     Act (including guidelines developed under section 6(a)(2)); 
     and
       (2) notify the Secretary of any material differences of 
     fact or opinion between the initial appraisal conducted by 
     the agency and the second appraisal.
       (c) Request for Reconsideration of Base Cabin User Fee.--A 
     cabin owner shall submit to the Secretary any request for 
     reconsideration of the base cabin user fee, based on the 
     results of the second appraisal, not later than 60 days after 
     the receipt of the report for a second appraisal.
       (d) Reconsideration of Base Cabin User Fee.--On receipt of 
     a request from the cabin owner under subsection (c) for 
     reconsideration of a base cabin user fee, not later than 60 
     days after the date of receipt of the request, the Secretary 
     shall--
       (1) review the initial appraisal of the agency;
       (2) review the results and commentary from the second 
     appraisal;
       (3) determine a new base cabin user fee in an amount that 
     is--
       (A) equal to the fee determined by the initial or the 
     second appraisal; or
       (B) within the range of values, if any, between the initial 
     and second appraisals; and
       (4) notify the cabin owner of the amount of the new base 
     cabin fee.

      SEC. 11. RIGHT OF ARBITRATION.

       (a) In General.--
       (1) Request for arbitration.--Not later than 30 days after 
     the receipt of notice of a new base cabin fee under section 
     10(d)(4), the tract association may request arbitration if a 
     cabin owner in the tract and the Secretary are unable to 
     reach agreement on the amount of the base cabin user fee 
     determined in accordance with section 10.
       (2) Identification of Third-Party Neutrals.--If arbitration 
     is requested under paragraph (1), the Secretary shall 
     promptly request the Center to develop a list of the names of 
     not fewer than 20 appraisers and 10 attorneys who possess 
     appropriate training and experience in valuations of land and 
     interest in land to serve as qualified third-party neutrals.
       (b) Arbitration.--Not later than 30 days after the receipt 
     of a request from the tract association for arbitration, the 
     Secretary shall--
       (1) notify the Center of the request; and
       (2) request the Center to provide to the Secretary and the 
     tract association, within 15 days--
       (A) instructions related to arbitration procedures; and
       (B) the list of qualified third-party neutrals described in 
     subsection (a)(2).
       (c) Arbitration Panel.--
       (1) In general.--Not later than 15 days after the receipt 
     of the list described in subsection (a)(2), the Secretary and 
     the tract association may each recommend the names of 2 
     appraisers and 1 attorney from the list for consideration in 
     the selection of an arbitration panel by the Center.
       (2) Availability of list.--The Secretary and the tract 
     association shall disclose to each other the names of third-
     party neutrals recommended under paragraph (1).

[[Page 29952]]

       (3) Option to eliminate recommended neutrals.--The 
     Secretary and the tract association may each peremptorily 
     eliminate from consideration for the arbitration panel 1 
     third-party neutral recommended under paragraph (1).
       (4) Selection by center.--From the third-party neutrals 
     recommended to the Center under paragraph (1) that are not 
     eliminated from consideration under paragraph (3), the Center 
     shall select and retain an arbitration panel consisting of 2 
     appraisers and 1 attorney.
       (5) Notification of establishment.--Not later than 5 days 
     after the selection of members of the arbitration panel, the 
     Center shall notify the Secretary and the tract association 
     of the establishment of the arbitration panel.
       (d) Arbitration Procedure.--
       (1) Submission of information.--Not later than 30 days 
     after notification by the Center of the establishment of the 
     arbitration panel under subsection (c)(3), each party shall 
     submit to the arbitration panel--
       (A) the appraisal report of each party, including comments, 
     if any, of material differences of fact or opinion related to 
     the initial appraisal or the second appraisal;
       (B) a copy of the authorization associated with any typical 
     lot that was subject to appraisal;
       (C) a copy of this Act; and
       (D) a copy of appraisal guidelines developed in accordance 
     with section 6(a)(2).
       (2) Hearing or field inspection.--On agreement of both 
     parties, the arbitration may be conducted without a hearing 
     or a field inspection.
       (3) Schedule for decision.--
       (A) In general.--Except as provided in subparagraph (B), 
     not later than 60 days after the receipt of all materials 
     described in paragraph (1), the arbitration panel shall 
     prepare and forward to the Secretary a written advisory 
     decision on the appropriate amount of the base cabin user 
     fee.
       (B) Extension.--If the arbitration panel or the parties to 
     the arbitration determine that a hearing or field inspection 
     is necessary, the date for submission of the advisory 
     decision under subparagraph (A) shall be extended for--
       (i) not more than 30 days; or
       (ii) in the case of difficult or hazardous road or weather 
     conditions, such an additional period of time as is necessary 
     to complete the inspection.
       (4) Determination of recommended base cabin user fee.--The 
     base cabin user fee recommended by the arbitration panel 
     shall fall within the range of values, if any, between the 
     initial and second appraisals submitted to the arbitration 
     panel by the parties.
       (e) Adoption of Recommended Base Cabin User Fee.--
       (1) In general.--Not later than 45 days after the receipt 
     of the recommendation by the arbitration panel, the Secretary 
     shall make a determination to adopt or reject the recommended 
     base cabin user fee.
       (2) Notice to tract association.--Not later than 15 days 
     after making the determination under paragraph (1), the 
     Secretary shall provide notice of the determination to the 
     tract association.
       (f) No Admission of Fact or Recommendation.--Neither the 
     fact that arbitration in accordance with this section has 
     occurred, nor the recommendation of the arbitration panel, 
     shall be admissible in any court or administrative 
     proceeding.
       (g) Costs of Arbitration.--
       (1) Fees.--
       (A) In general.--In addition to amounts collected under 
     paragraph (2), the Center may charge a reasonable fee to each 
     party to an arbitration under this Act for the provision of 
     arbitration services.
       (B) Transfer.--Fees collected under this paragraph shall be 
     transferred to the Secretary for use in the administration of 
     the program without further Act of appropriation.
       (2) Cost sharing.--The agency and the tract association 
     shall each pay 50 percent of the costs incurred by the Center 
     in establishing and administering an arbitration in 
     accordance with this section, unless the arbitration panel 
     recommends that either the agency or the tract association 
     bear the entire cost of establishing and administering the 
     arbitration.
       (h) Funding.--
       (1) Authorization of appropriations for initial costs.--
     There is authorized to be appropriated to the agency for the 
     initial costs of establishing and administering the program 
     not to exceed $15,000.
       (2) Arbitration fees.--Any amounts exceeding the amount 
     authorized by paragraph (1) that are required for the 
     administration of the program shall be derived from 
     arbitration fees charged under subsection (g)(1).

      SEC. 12. RIGHT OF APPEAL AND JUDICIAL REVIEW.

       (a) Rights of Appeal.--Notwithstanding any action of a 
     cabin owner to exercise rights in accordance with section 10 
     or 11, the Secretary shall by regulation grant the cabin 
     owner the right to an administrative appeal of the 
     determination of a new base cabin user fee.
       (b) Judicial Review.--A cabin owner that is adversely 
     affected by a final decision of the Secretary under this Act 
     may commence a civil action in United States district court.

      SEC. 13. CONSISTENCY WITH OTHER LAW AND RIGHTS.

       (a) Consistency With Rights of the United States.--Nothing 
     in this Act limits or restricts any right, title, or interest 
     of the United States in or to any land or resource.
       (b) Special Rule for Alaska.--In determining a cabin user 
     fee in the State of Alaska, the Secretary shall not establish 
     or impose a cabin fee or a condition affecting a cabin fee 
     that is inconsistent with the requirements under section 
     1303(d) of the Alaska National Interest Lands Conservation 
     Act (16 U.S.C. 3193(d)).

      SEC. 14. REGULATIONS.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall promulgate regulations to implement 
     this Act.

      SEC. 15. TRANSITION PROVISIONS.

       (a) In General.--On enactment of this Act, the Secretary 
     shall--
       (1) suspend appraisal activities related to existing 
     authorizations until new rules, policies, and procedures are 
     promulgated in accordance with this Act; and
       (2) temporarily charge an annual cabin user fee for each 
     lot that is--
       (A) an amount equal to the cabin user fee for the lot that 
     was in effect on September 30, 1995, adjusted by application 
     of the Implicit Price Deflator-Gross National Product Index, 
     if no appraisal of the lot on which the cabin is located was 
     completed after that date and before the date of enactment of 
     this Act;
       (B) an amount that is not more than 100 percent greater 
     than the cabin user fee in effect on September 30, 1995, 
     adjusted by application of the Implicit Price Deflator-Gross 
     National Product Index prior to reappraisal, if an appraisal 
     conducted after that date but before the date of enactment of 
     this Act resulted in the increase; or
       (C) the cabin user fee in effect on the date of enactment 
     of this Act, if an appraisal conducted after September 30, 
     1995, including adjustments resulting from application of the 
     Implicit Price Deflator-Gross National Product Index before 
     the date of enactment of this Act, resulted a base cabin user 
     fee that is not greater than the fee in effect before the 
     appraisal.
       (b) Conduct of Appraisals Under New Law.--On publication of 
     new rules, policies, and procedures under this Act, the 
     Secretary shall carry out any appraisals of lots and 
     determinations of fees that were not completed between 
     September 30, 1995, and the date of enactment of this Act.
       (c) Request for New Appraisal Under New Law.--Not later 
     than 2 years after the promulgation of final regulations and 
     policies and the development of appraisal guidelines in 
     accordance with section 6(a)(2), a cabin owner whose base 
     cabin user fee was adjusted subject to an appraisal completed 
     after September 30, 1995, but before the date of enactment of 
     this Act, may request that the Secretary conduct a new 
     appraisal and determine a new fee in accordance with this 
     Act.
       (d) Conduct of New Appraisal.--On receiving a request under 
     subsection (c), the Secretary shall conduct, and bear all 
     costs incurred in conducting, a new appraisal and fee 
     determination in accordance with this Act.
       (e) Assumption of New Base Cabin User Fee.--In the absence 
     of a request under subsection (c) for a new appraisal and fee 
     determination from a cabin owner whose cabin user fee was 
     determined as a result of an appraisal conducted after 
     September 30, 1995, but before the date of enactment of this 
     Act, the Secretary may consider the base cabin user fee 
     resulting from the appraisal conducted between September 30, 
     1995, and the date of enactment of this Act to be the base 
     cabin user fee that complies with the transition provisions 
     of this Act.
       (f) Transitional Cabin User Fee Obligation.--
       (1) In general.--In determining the liability of the cabin 
     owner for payment of fees for the period of time between the 
     date of enactment of this Act and the determination of a base 
     cabin user fee in accordance with this Act, the Secretary 
     shall--
       (A) require the cabin owner to remit any balance owed for 
     any underpayment of an annual cabin user fee; or
       (B) if an overpayment of a cabin user fee has occurred, 
     credit the cabin owner, or an heir or assign of the cabin 
     owner, toward future cabin user fee obligations.
       (2) Billing.--The agency shall bill a cabin owner for 
     amounts determined to be owed under paragraph (1)(A) in 
     approximately equal increments over 3 years.
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Brownback, Mr. Feingold, Mr. 
        Kennedy, Mr. Kerry, Mr. Jeffords, and Mr. Lautenberg):
  S. 1940. A bill to amend the Immigration and Nationality Act to 
reaffirm the United States' historic commitment to protecting refugees 
who are fleeing persecution or torture; to the Committee on the 
Judiciary.


                       the refugee protection act

  Mr. LEAHY. Mr. President, today Senators Brownback, Feingold, 
Kennedy, Kerry, Jeffords, and I are introducing the Refugee Protection 
Act

[[Page 29953]]

of 1999, a bill to limit and reform the expedited removal system 
currently operating in our ports of entry.
  In 1996, I introduced an amendment that would have only authorized 
the use of expedited removal at times of immigration emergencies. The 
bill I introduce today--with the cosponsorship of two Republican and 
three Democratic Senators--is modeled on that proposal. That amendment 
passed the Senate with bipartisan support, but was omitted from the 
bill that was reported out of a partisan, closed conference. As a 
result, expedited removal took effect on April 1, 1997. America's 
historic reputation as a beacon for refugees has suffered as a 
consequence.
  Expedited removal allows INS inspections officers summarily to remove 
aliens who arrive in the United States without travel documents, or 
even with facially valid travel documents that the officers merely 
suspect are fraudulent, unless the aliens utter the magic words 
``political asylum'' upon their first meeting with American immigration 
authorities. This policy is fundamentally unwise and unfair, both in 
theory and in practice.
  First, this policy ignores the fact that many deserving asylum 
applicants are forced to travel without papers. For example, victims of 
repressive governments often find themselves forced to flee their 
homelands at a moment's notice, without time or means to acquire proper 
documentation. Or a government may systematically strip refugees of 
their documentation, as we saw Serb soldiers do in Kosovo earlier this 
year.
  Second, expedited removal places an undue burden on refugees, and 
places too much authority in the hands of low-level INS officers. 
Refugees typically arrive at our borders ragged and tired from their 
ordeals, and often with little or no knowledge of English. Our policy 
forces them to undergo a secondary inspection interview with a low-
level INS officer who can deport them on the spot, subject only to a 
supervisor's approval. By law, anyone who indicates a fear of 
persecution or requests asylum during this interview is to be referred 
for an interview with an asylum officer. But no safeguards exist to 
guarantee that this happens, and the secondary inspection interviews 
take place behind closed doors with no witnesses. Indeed, this 
interview often becomes unduly confrontation and intimidating. As the 
Lawyers Committee for Human Rights has documented, refugees are 
detained for as long as 36 hours, are deprived of food and water, and 
are often shackled. If they are lucky, they will be provided with an 
interpreter who speaks their language. If they are unlucky, they will 
receive no interpreter at all, or an interpreter who works for the 
airline owned by the government that they claim is persecuting them. 
Such a system is a betrayal of our ideals, and is already producing a 
human cost.
  Indeed, only a few years into this new regime, there are 
extraordinary troubling stories of bona fide refugees who were turned 
away unjustly at our borders. I will talk about two such refugees 
today.
  ``Dem'' (a pseudonym) was a 21-year-old ethnic Albanian student in 
Kosovo. In October 1998, Serbian police seized him and tortured him for 
10 days, accusing him of terrorism and threatening to kill his family. 
Immediately after this experience, Dem fled Kosovo, without travel 
documents. He traveled through Albania to Italy, where he purchased a 
Slovenian passport. In January of this year, he flew via Mexico City to 
California, hoping to find refuge in the United States.
  Dem's hopes were not realized. The INS referred him for a secondary 
inspection interview and provided for a Serbian translator to 
participate by telephone. Since Dem could speak only Albanian, the 
interpreter was useless. Instead of finding an interpreter who could 
speak Albanian, the INS officers simply closed Dem's case, handcuffed 
his hands behind his back and put him on a plane back to Mexico City. 
In other words, Dem--a victim of an ethnic conflict that was already 
front page news in America's newspapers--was removed from the United 
States without ever being asked in a language he could understand 
whether he was afraid to return to Kosovo. Luckily, Dem succeeded in a 
second attempt to enter the United States, has since been found to have 
a credible fear of persecution, and is now awaiting an asylum hearing. 
One can only wonder how many refugees in Dem's position never receive 
such a second chance.
  While Dem was arriving in Los Angeles this January, a Tamil from Sri 
Lanka named Arumugam Thevakumar arrived at JFK Airport in New York 
seeking asylum. Mr. Thevakumar had escaped from Sri Lanka and its 
bloody civil war, but only after being persecuted by the army because 
he is a Tamil. When he had his secondary inspection interview, he told 
the interpreter that he was a refugee and sought asylum. The translator 
laughed and said that he was unable to translate Mr. Thevakumar's 
request into English. In addition to battling a language barrier and an 
uncooperative translator, Mr. Thevakumar's ability to convince the INS 
of his sincerity was further handicapped by the fact that he was 
handcuffed and shackled for significant portions of the interview.
  Following his interview, Mr. Thevakumar was briefly detained and was 
allowed to telephone a cousin, who arranged for a lawyer. The lawyer 
contacted the INS to clarify that Mr. Thevakumar wanted to apply for 
asylum. But the INS sent Mr. Thevakumar back to Istanbul, where his 
flight to New York had originated, without affording him even the 
opportunity to show that he was deserving of asylum. Indeed, the INS 
faulted him for not making his intention to apply for asylum clear 
during his secondary inspection interview.
  Mr. Thevakumar's ordeal did not end there. When he landed in Turkey, 
he was jailed for four days by immigration officials, who beat and 
interrogated him before handing him over to regular police. When he was 
finally released by the police, he was referred to a United Nations 
office in Ankara, halfway across the country from Istanbul. After 15 
days of travel wearing clothes that were completely unsuitable for the 
Turkish winter, he finally arrived at the U.N. office and requested 
refugee status and asked not to be sent back to Sri Lanka. He is 
currently living in a Red Cross facility in Turkey.
  These stories--just two of the many stories demonstrating the human 
cost of expedited removal--go a long way toward showing the inhumanity 
of the new immigration regime that Congress imposed in 1996. But 
refugees are not the only people affected by expedited removal. Human 
rights groups have also documented numerous cases where people 
traveling to the United States on business, with proper travel 
documents, have been removed based on the so-called ``sixth sense'' of 
a low-level INS officer who suspected that their facially valid 
documents were fraudulent. In other words, the damage done by expedited 
removal also threatens the increasingly international American 
economy--if businesspeople from around the world are treated 
disrespectfully at our ports of entry, they are likely to take their 
business elsewhere.
  But perhaps the most distressing part of expedited removal is that 
there is no way for us to know how many deserving refugees have been 
excluded. Because secondary inspection interviews are conducted in 
secret, we typically only learn about mistakes when refugees manage to 
make it back to the U.S. a second time, like Dem, or when they are 
deported to a third country they passed through on their way to the 
U.S., like Mr. Thevakumar. This uncertainty should lead us to be 
especially wary of continuing this failed experiment.
  As I said, my bill would limit the use of expedited removal to times 
of immigration emergencies, defined as the arrival or imminent arrival 
of aliens that would substantially exceed the INS' ability to control 
our borders. The bill gives the Attorney General the discretion to 
declare an emergency migration situation, and the declaration is good 
for 90 days. During those 90 days, the INS would be authorized to use 
expedited removal. The Attorney General is given the power to extend 
the declaration for further periods of 90 days,

[[Page 29954]]

in consultation with the House and Senate Judiciary Committees. s
  This framework allows the government to take extraordinary steps when 
a true immigration emergency threatens our ability to patrol our 
borders. At the same time, it recognizes that expedited removal is an 
extraordinary step, and is not an appropriate measure under ordinary 
circumstances.
  This bill also provides safeguards that will ensure that refugees are 
assured of some due process rights, even during immigration 
emergencies. First, aliens would be given the right to have an 
immigration judge review a removal order, and would have the right both 
to speak before the immigration judge on their own behalf and to be 
represented at the hearing at their own expense. To make these rights 
meaningful, immigration officers would be required to inform aliens of 
their rights before they are removed or withdraw their application to 
enter the country. This provision takes away from low-level INS 
officers the unilateral power to remove an alien from the United 
States.
  Second, expedited removal will not apply to aliens who have fled from 
a country that engages in serious human rights violations. The Attorney 
General, in consultation with the Assistant Secretary of State for 
Democracy, Human Rights, and Labor, will develop and maintain a list of 
such countries. This will help ensure that even during an immigration 
emergency, we will provide added protection for many of our most 
vulnerable refugees.
  Third, this bill reforms the procedures used to determine whether an 
applicant who seeks asylum has a credible fear of persecution. If an 
asylum officer determines that an applicant does not have a credible 
fear of persecution, the applicant will now have a right to a prompt 
review by an immigration judge. The applicant will have the right to 
appear at that review hearing and to be represented, at the applicant's 
expense. In addition to providing procedural guarantees, the bill also 
redefines ``credible fear of persecution'' as a claim for asylum that 
is not clearly fraudulent and is related to the criteria for granting 
asylum. In combination, these changes will make it easier for aliens 
requesting asylum in the United States to receive an appropriate asylum 
hearing before an immigrant judge.
  Fourth, the bill clarifies that the Attorney General is not obligated 
to detain asylum applicants while their claims are pending. Asylum 
seekers are not criminals and they do not deserve to be imprisoned or 
detained against their will. There may be cases where detention is 
appropriate, and this bill allows for such cases, but I believe that 
that power should only be used in very rare cases. After all, these 
applicants have by definition demonstrated a credible fear of 
persecution. Moreover, detaining asylum applicants imposes a 
significant burden on the taxpayers, who of course must foot the bill 
for the detention. This bill also gives the Attorney General the 
ability to release an asylum applicant from detention pending a final 
determination of credible fear of persecution.
  Finally, this Refugee Protection Act also addresses a few other 
problems that have arisen under the restrictive immigration laws 
Congress passed in 1996. First, it gives aliens the opportunity to 
demonstrate good cause for filing for asylum after the one-year time 
limit for claims has expired. By definition, worthy asylum applicants 
have arrived in the United States following traumatic experiences 
abroad. They often must spend their first months here learning the 
language and adjusting to a culture that in many cases is 
extraordinarily different from the one they know. Therefore, although I 
can understand the desire to have asylum seekers submit timely 
applications, we must apply the one-year rule with some discretion and 
common sense. Indeed, when the Senate passed the 1996 immigration law, 
it contained a broad ``good cause'' exception that did not survive to 
become part of the final legislation. The Senate should take up this 
issue again; we were right in 1996, and the need is still there today.
  In a similar vein, the bill allows asylum applicants whose claims 
have been rejected to submit a second application where they can show 
good cause. No one wants to allow aliens to submit repeated 
applications and drain the resources of our INS officers and 
immigration courts. But there are exceptional cases where a second 
application is justified, beyond the ``changed circumstances'' 
exception that exists under current law. For example, extraordinarily 
worthy asylum applicants, unfamiliar with the United States and its 
legal system, might submit an application without the benefit of 
counsel and without an understanding of the legal requirements of a 
successful asylum claim. Such people deserve a second chance to 
demonstrate that they deserve to receive asylum.
  In conclusion, I point out that even in 1996, a year in which 
immigration was as unpopular in this Capitol as I can remember, this 
body agreed that expedited removal was inappropriate for a country of 
our ideals and our historic commitment to human rights. And that 
agreement cut across party lines, as many of my Republican colleagues 
voted to implement expedited removal only in times of immigration 
emergencies. I urge them, as well as my fellow Democrats, to support 
this legislation and to work for its passage before the end of the 
106th Congress.
  Mr. BROWNBACK. Mr. President, I join my distinguished colleagues from 
Vermont, Senator Leahy and Senator Jeffords, among others, to introduce 
this bill entitled The Refugee Protection Act of 1999, which restores 
fairness to our treatment of refugees who arrive at our shores seeking 
freedom from persecution and oppression. This bill should dramatically 
reduce incidences where refugees are wrongly returned to their 
countries to face imprisonment, torture, and even death.
  It was about 400 years when the refugee Pilgrims arrived in this new 
land seeking religious liberty. Defined by such events since the 
earliest days of the Republic, America has provided asylum to those 
fleeing tyranny and seeking liberty. George Washington urged his fellow 
citizens ``to render this country more and more a safe and propitious 
asylum for the unfortunates of other countries.'' In his 1801 First 
Annual Message, President Thomas Jefferson asked, ``Shall oppressed 
humanity find no asylum on this globe?''
  In 1996, Congress changed the procedures by which arriving asylum 
seekers ask for protection in the United States, which our legislation 
corrects. Previously, arriving asylum seekers presented their claims 
directly to an immigration judge at an evidentiary hearing. The 
applicant could present witnesses and documentation to support their 
claim. Decisions by the immigration judge were subject to 
administrative and judicial review.
  The new 1996 law did away with these fundamental due process 
protections, and instead, granted lower level INS officers the power to 
make life and death decisions that previously were entrusted to 
professional immigration judges. This new, unfortunate system of 
``expedited removal'' presently allows for the immediate deportation of 
individuals who arrive without valid travel documents, such as a 
passport and visa. It can even be used against an individual who has a 
facially valid visa that INS inspectors suspect was obtained under 
false pretenses. In short, the process is so expedited and summary that 
it has resulted in the improper deportation of refugees fleeing 
persecution and torture. Simply put, our legislation restores the pre-
1996 due process procedures, including a judicial review.
  Last year, Congress addressed the problems of religious persecution 
which continues to be a serious problem worldwide. Enactment of the 
International Religious Freedom Act was the first time in the history 
of democracy that any country had adopted comprehensive, national 
legislation on religious liberty. That legislation ensures that 
religious liberty will be an important factor in our nation's foreign 
policy considerations. In the May 17, 1999 final report to the 
Secretary of State and to President of the United States, the Advisory 
Committee on Religious Freedom Abroad said:


[[Page 29955]]

       Putting an end to such (religious) persecution cannot be 
     accomplished without providing meaningful protection to the 
     victims of religious persecution. We must upgrade domestic 
     procedures that identify and protect refugees and asylum 
     seekers fleeing religious persecution. We must strengthen our 
     overseas refugee processing mechanisms to reach those in need 
     of rescue. . . And, here at home we must eliminate processes 
     such as ``expedited removal'' that can make victims of those 
     fleeing religious persecution rather than providing access to 
     protection.

  Consistent with this commitment to protect international religious 
liberty, we must also ensure that persons fleeing religious persecution 
are not wrongly turned away at our shores because of unfair procedures. 
This will be accomplished through this Act.
  The Refugee Protection Act returns fairness to the system by limiting 
expedited removal procedures only to emergency situations. An 
``emergency'' must be declared as such by the Attorney General, and 
typically involves large numbers of immigrants arriving en masse, so as 
to overwhelm the INS review system. In the event that ``expedited 
removal'' is employed, the Act requires an immigration judge to review 
the summary deportation order. Also, it permits claims for asylum to be 
filed beyond the one-year deadline created by the 1996 legislation, if 
there is good cause for the delay or when consideration of the claims 
is clearly in the interest of justice.
  Our refugee asylum system reflects both the best and the worst 
policies, throughout our history as a nation. In 1939, more than 900 
Jews aboard the SS St. Louis, who were within sight of Miami, were 
rejected and forced to return to Europe where they were murdered in 
concentration camps. Yet when World War II ended, the United States led 
the effort to establish universally recognized fundamental rights. As a 
result of this advocacy, the General Assembly of the United Nations 
adopted the Universal Declaration of Human Rights on December 10, 1948 
which recognized a right of asylum.
  Over the next 30 years the United States provided refuge to numerous 
people fleeing communism, including to those involved in `underground' 
democracy movements in Hungary, Cuba, and Southeast Asia. Yet it was 
not until 1980 that Congress enacted a comprehensive asylum system 
using the criteria of the 1951 Convention Relating to the Status of 
Refugees. The Convention defines a refugee as someone with a ``well-
founded fear of being persecuted for reasons of race, religion, 
nationality, membership of a particular social group or political 
opinion.'' Under the procedures of this Refugee Act of 1980, requests 
for asylum were decided by an immigration judge, thus providing a 
fundamental due process protection. Notably, this judicial review was 
stripped in the 1996 legislation, and is a flaw which our legislation 
seeks to correct.
  Fair procedures are critically important in making life or death 
decisions, as asylum cases can be. At a June 24, 1999 hearing of the 
Senate Subcommittee on International Operations and Human Rights, Ms. 
Lavinia Limon, Director of the Office of Refugee Resettlement at the 
Department of Health and Human Services, noted:

       Once released, torture victims often attempt to flee to 
     countries such as the United States to become invisible and 
     safe, and to survive. But they retain the impact of torture: 
     they are not able to speak of their experiences for fear 
     officials will not believe them or understand them or will 
     regard them as criminals. They often cannot express 
     themselves effectively in asylum interviews because they 
     cannot speak articulately of their experiences and they feel 
     vulnerable to all officials. They have learned to fear 
     government and the police and they do not trust any 
     government officials and authorities to help them. They have 
     been weakened and disabled psychologically from the torture. 
     Many times the victims must flee alone, enduring long periods 
     of separation from their families who might otherwise provide 
     emotional support.

  Today the need for proper asylum reviews is greater than ever. 
Worldwide, religious intolerance and ethnic strife turn religious 
leaders and ordinary citizens into desperate asylum seekers. According 
to Amnesty International, government-sanctioned torture is practiced in 
125 countries.
  This legislation helps those fleeing intolerable injustices in the 
name of religious freedom and democracy. Placing the decision squarely 
in the hands of an immigration judge does not impose an unreasonable or 
impossible burden on the government. Congress should enact the Refugee 
Protection Act because it restores the fundamental due process 
protections needed to ensure that legitimate asylum seekers are not 
wrongly turned away.
  Mr. FEINGOLD. Mr. President, I rise today to join my distinguished 
colleagues, Senators Leahy, Brownback, and Jeffords, to introduce a 
bill that will reduce the likelihood that people fleeing genuine 
persecution in their homelands and seeking refuge in America will be 
unfairly returned to their countries.
  Mr. President, as you know, our nation has been built by people who 
arrived on our shores from all over the world. Immigrants have enriched 
our nation economically, culturally, and in so many other invaluable 
ways. I don't think anyone can dispute that, of all the countries in 
the world, our nation has the deepest, richest commitment to welcoming 
all people who want to make a new home and a new life.
  At the same time, Mr. President, our nation also has a deep tradition 
of welcoming those who are fleeing oppression in their native land. 
From the pilgrims who set foot in present day Massachusetts and 
Virginia, to the Kosovars who fled brutality in their homeland earlier 
this year, America has been a safe refuge for those fleeing 
persecution. Our nation's first president, George Washington, said: 
``America is open to receive not only the opulent and respectable 
stranger, but the oppressed and persecuted of all nations and 
religions.'' George Washington said those words in 1783. One hundred 
and one years later, France would present our country with a gift, a 
statue called ``Liberty Enlightening the World.'' In 1884, that title 
was a profound statement of our nation's past, our present and hope for 
the future. ``Liberty Enlightening the World'' later became known as 
the Statue of Liberty. The Statue of Liberty has these words inscribed 
on her:

     . . . Give me your tired, your poor,
     Your huddled masses yearning to breathe free,
     The wretched refuse of your teeming shore.
     Send these, the homeless, tempest-tost to me,
     I lift my lamp beside the golden door!

  Unfortunately, Mr. President, our current asylum and immigration laws 
have nearly slammed the door shut on victims of persecution, even those 
who are sure to suffer if returned to their home countries. Current law 
originates with the passage in 1996 of the Illegal Immigration Reform 
and Immigrant Responsibility Act. That law was an attempt to combat 
illegal immigration. But in the process, Congress denied victims of 
persecution the protection that our nation historically has offered. 
The current system provides for the immediate deportation of 
individuals who arrive without travel documents precisely in order. 
Now, Mr. President, it's appropriate that we require these documents, 
but people who have fled torture and great brutality may not have 
proper documentation because of the circumstances under which they fled 
their homelands. As a result, genuine victims of persecution face the 
risk of being turned away at our borders and put on the next plane back 
to face imprisonment, torture or death. The 1996 law effectively 
empowers low level INS officers to summarily make the life and death 
decision as to whether to deport an asylum seeker. Prior to 1996, those 
decisions were made by an immigration judge. We must return a judicial 
role to the review of asylum claims.
  As my colleagues who were here in 1995 and 1996 may recall, the 1996 
law was enacted in reaction to a flurry of concern that our border 
controls were too lax. The debate on the 1996 law was fueled by 
legitimate concern over criminals who managed to enter the country and 
commit acts of terrorism or other crimes. In response, the INS began a 
sensible tightening of the asylum process. In 1994 and 1995, the INS 
ceased issuing work authorizations at the border. Instead, asylum 
seekers

[[Page 29956]]

had to wait until an adjudication of their case before receiving work 
authorization. As a result, claims for asylum dropped dramatically--
those who were seeking work but did not have a legitimate fear of 
persecution were no longer claiming asylum. The INS reforms were 
effective. But the 1996 law went too far. In our rush to keep 
undesirable asylum applicants out, Congress created a system where 
those with bona fide asylum claims face the great risk of being 
immediately deported to face the wrath of oppressive home governments 
without a real chance to make their case.
  Because an INS officer has the authority to deport refugees 
immediately, with no record keeping requirement, it has been difficult 
to determine exactly how many genuine refugees with a valid fear of 
persecution in their home countries have been turned away at our 
airports and borders as a result of the 1996 law. Organizations like 
the Lawyers Committee for Human Rights, however, have been able to 
collect some data on the extent of the problem.
  One of the most troubling stories is the case of a 21-year-old 
Kosovar Albanian known as ``Dem.'' In October 1998, Serb police seized 
Dem at his home, beat him, and threatened to kill his family. This 
abuse occurred over a period of ten days. When the Serb police finally 
released Dem, he fled Kosovo. He eventually made his way to the United 
States in January of this year, landing in California via Mexico City. 
When he arrived, the INS arranged for a Serbian translator to assist by 
telephone with its questioning of Dem. But Dem, a Kosovar Albanian, 
could not speak Serbian. After the translator spoke with Dem, the 
translator said something to the INS officer. The INS officer promptly 
handcuffed and fingerprinted Dem and then put him on a plane back to 
Mexico City.
  Fortunately, Dem was not returned to Kosovo. Dem tried re-entering 
the United States and on this second attempt, he was allowed to apply 
for asylum. But the facts supporting Dem's asylum claim had not 
changed. We must fix a system that produces such arbitrary results 
where people's lives, and American ideals, are at stake.
  We don't know exactly how many victims of real persecution have been 
immediately deported, and we obviously don't know exactly what has 
happened to each victim since enactment of the 1996 law. What we do 
know is that an asylum seeker who is fleeing torture, abuse or death 
faces the risk of being kicked out of our country, without even 
obtaining a perfunctory hearing before an immigration judge.
  The Refugee Protection Act of 1999 will return fairness and due 
process to the treatment of asylum seekers. For non-emergency migration 
situations, the bill would restore the pre-1996 law, when immigration 
judges were involved in the decision to deport someone who claimed 
asylum. The current process will continue to apply in emergency 
migration situations and would designate the Attorney General as the 
official with authority to determine when an emergency migration 
situation exists. The bill also would provide that an emergency cannot 
exist for more than 90 days, unless the Attorney General, after 
consultation with the Senate and House Judiciary Committees, determines 
that the emergency situation continues to exist.
  Mr. President, this is a sensible bill that allows us to scrutinize 
those who come to our borders, but honors our best traditions and 
returns fairness and humanity to our treatment of those who are fleeing 
persecution. I urge my colleagues to join me and Senators Leahy, 
Brownback and Jeffords in fighting for basic human dignity, decency and 
justice. Let us lift the torch of ``Liberty Enlightening the World'' 
once again. Let us not reflexively turn away those whose very lives may 
depend on a fair hearing as they seek refuge in the United States.
                                 ______
                                 
      By Mr. DODD (for himself and Mr. DeWine):
  S. 1941. A bill to amend the Federal Fire Prevention and Control Act 
of 1974 to authorize the Director of the Federal Emergency Management 
Agency to provide assistance to fire departments and fire prevention 
organizations for the purpose of protecting the public and firefighting 
personnel against fire and fire-related hazards; to the Committee on 
Commerce, Science, and Transportation.


          Firefighter Investment and Response Enhancement Act

 Mr. DODD. Mr. President, I rise today with my colleague and 
friend, Senator DeWine of Ohio, to introduce legislation that would 
represent our nation's first comprehensive commitment to fire safety. 
The Firefighter Investment and Response Enhancement Act (the FIRE 
bill), will, for the first time, provide volunteer and professional 
firefighters with the resources they need to protect the people and 
property of their towns and cities.
  In communities throughout America, firefighters are almost always the 
first to respond to a call for help. They respond to a fire alarm. They 
are on the scene of traffic accidents and construction accidents. 
Emergency medical technicians, who often belong to fire departments, 
each day answer tens of thousands of calls for medical assistance. And, 
when a natural or manmade calamity strikes--from hurricanes to school 
shootings to bombings--firefighters are there without fail, restoring 
order and saving lives.
  Given all that they do, it should surprise no one that, across the 
Nation, fire departments struggle to find resources to help keep our 
communities safe. As the demands placed on fire departments have grown 
in volume and magnitude, the ability of local residents to support them 
has been put to a severe test. As a result, towns and cities throughout 
the country are struggling mightily to provide the fire departments 
with the resources they require.
  The FIRE Act will help localities meet that critical objective. It 
will provide grants to help localities hire more firefighters, train 
new and existing personnel to handle the volume and intensity of 
today's tragedies, and purchase badly needed equipment.
  This legislation will also provide critical resources to communities 
to fund fire prevention and education programs so that they can 
anticipate disasters and respond appropriately. Such programs are 
critical means of preventing tragedies from occurring in the first 
place. Eight out of ten fire deaths occur in a place where people feel 
the safest--their homes. Tragically, our children and the elderly 
account for a disproportionate number of these deaths. Indeed, 
preschool children face a risk of death from fire that is more than 
twice the risk for all age groups combined. While we can and should 
ensure that the fire equipment and personnel are available to respond 
to these tragedies, our best defense remains education and prevention. 
Yet, it is a painful irony that when resources are scarce, education 
and prevention efforts are often the first to be put on the budgetary 
chopping block. The legislation Senator DeWine and I are introducing 
will help ensure that no locality is put in the painful position of 
choosing between prevention and responding to emergencies.
  This legislation will enable our fire departments to worry more about 
saving lives and less about finding dollars. It will enable communities 
to better prevent disasters, and better train firefighters.
  I look forward to working with Senator DeWine to successfully advance 
this legislation in the Senate. It is our shared hope that our 
colleagues will come to realize that this bill is one whose time has 
come. Our Nation's firefighters deserve the support that this bill will 
provide, and I hope that we will give it to them before the end of this 
Congress.
 Mr. DeWINE. Mr. President, each day, we entrust our lives and 
the safety of our families, friends, and neighbors to the capable hands 
of the brave men and women in our local police and fire departments. 
These individuals have decided that they are willing to risk their 
lives and safety out of a dedication to their citizens and their 
commitment to public service.
  In Congress, we have recognized the dangers inherent in police work 
by dedicating federal resources to help

[[Page 29957]]

local police departments. In fact, this year, Fiscal Year (FY) 1999, 
the federal government spent $11 billion on law enforcement 
initiatives, such as the COPS program, to help local law enforcement 
face the daily challenges of their communities. In contrast, though, 
the federal government spent only $32 million on fire prevention and 
training.
  We ask local firefighters to risk no less than their lives every time 
they respond to a fire alarm. We ask them to risk their lives 
responding to the approximately two million reports of fire that they 
receive on an annual basis. We expect them to be willing to give their 
lives in exchange for the lives of our families, neighbors, and friends 
once every 71 seconds while responding to the 400,000 residential 
fires--fires which represent only about 22% of all fires reported. We 
count on them to protect our lives and the lives of our loved ones.
  I believe the Federal Government needs to show a greater commitment 
to the fire services. So, today, along with my colleague and friend 
from Connecticut, Senator Dodd, I rise to introduce the Firefighter 
Investment and Response Enhancement Act--or, FIRE bill. This bill is 
very simple. It authorizes, over five years, $5 billion in grants to 
local fire departments. These grants can be used for just about any 
purpose--training, equipment, hiring more firefighters, or education 
and prevention programs. A new office, established by this bill under 
the Federal Emergency Management Agency (FEMA), would be responsible 
for distributing grants to local departments based on a competitive 
process, involving needs assessment. To ensure that the funding is not 
spent solely on brand new state-of-the-art fire trucks, it mandates 
that no more than 25% of the grant funding can be used to purchase new 
fire vehicles. Finally, it requires that at least 10% of the funds are 
used for fire prevention programs.
  Our bill is supported by the National Safe Kids Campaign, the 
International Association of Fire Fighters, International Association 
of Fire Chiefs, national Volunteer Fire Council, International 
Association of Arson Investigators, International Society of Fire 
Service Instructors, and the National Fire Protection Association. It 
is also a companion measure to legislation introduced in the House by 
Congressmen Pascrell and Weldon, where almost 200 members of the House 
of Representatives have cosponsored it. I am proud to introduce this 
bill with my friend from Connecticut and look forward to working to 
ensure that the federal government increases its commitment to the men 
and women who make up our local fire departments. We owe it to 
them.
                                 ______
                                 
      By Mr. JEFFORDS:
  S. 1942. A bill to amend the Older Americans Act of 1965 to establish 
grant programs to provide State pharmacy assistance programs and 
medication management programs; to the Committee on Health, Education, 
Labor, and Pensions.


               PHARMACEUTICAL AID FOR OLDER AMERICANS ACT

  Mr. JEFFORDS. Mr. President, there has been considerable attention 
rightfully paid by our colleagues this year to the issue of providing 
prescription drug coverage for our older American citizens. Estimates 
of the number of older Americans without some form of added coverage 
for prescription drugs vary between a low of 16.7 percent to 50 
percent. About 7.7 million Medicare beneficiaries with annual incomes 
below 200 percent of poverty have no prescription drug coverage, 
despite some evidence indicating they are in poorer health than those 
beneficiaries with coverage. Those without added coverage for 
prescription benefits spend approximately 50 percent of their total 
income on out-of-pocket health care costs, and there are anecdotal 
reports that some elders forgo taking their prescribed medicines in 
order to have food to eat. Finally, there are econometric studies that 
conclude that a $1 increase in pharmaceutical expenditure is associated 
with a $3.65 reduction in hospital care expenditure.
  The problems posed by the lack of prescription drug coverage for the 
neediest elders is compounded by the well-documented effects of 
inappropriate drug use among the elderly. In 1995, the General 
Accounting Office (GAO) found that inappropriate drug use among elders 
is acute and that elders were particularly susceptible to unintended, 
adverse drug events (ADEs), due in part to the natural aging process 
and also to the likelihood that they are taking multiple medications. 
One study of drug use by the elderly, done by the Vermont Program for 
Quality in Health Care, found that it was not uncommon for elders to be 
taking more than a dozen drugs at one time. In fact, the Vermont study 
actually documented one case in which ``a single individual received 
prescriptions for 71 different drugs in a single year, several of which 
probably should not have been taken in combination.''
  The GAO report also cited studies showing that hospitalizations for 
elderly patients due to ADEs were six times greater than for the 
general population, with an estimated annual cost of $20 billion. 
However, a recent Journal of the American Medical Association article 
indicated that the level of ADEs could be reduced 66 percent, if a 
pharmacist participated in grand rounds. Clearly, more must be done to 
recognize the importance of medication management programs that ensure 
the quality of drug therapy, including patient evaluations, compliance 
assessments, and drug therapy reviews.
  We are all aware that prescription drug costs continue to grow at an 
alarming rate. Seniors are being forced to spend greater and greater 
portions of their fixed incomes on prescription drugs which they need 
to live. Research and development of prescription drugs have come a 
long way since Medicare was originally enacted in 1965. Today, drugs 
are just as important as hospital visits, and in many cases more 
important, and it just doesn't make sense for Medicare to reimburse 
hospitals for surgery but not to provide coverage for the drugs that 
might prevent surgery. We need to modernize the Medicare program so 
that it does not go bankrupt in the next 10 to 15 years, and at the 
same time we must ensure that any Medicare reform proposal we consider 
includes a prescription drug benefit that helps all seniors.
  Mr. President, I have already introduced two measures that will help 
our older citizens obtain the medicines they need and at prices they 
can afford. My first bill, S. 1462, the ``Personal Use Prescription 
Drug Importation Act of 1999,'' allows Americans of all ages to avail 
themselves of the lower prices for prescription medicines that are 
available in Canada. A second measure, S. 1725, the ``DrugGap Insurance 
for Seniors Act of 1999,'' would provide for a more comprehensive 
access to prescription drugs by Medicare beneficiaries through reform 
and modernization of the Medicare Supplemental, Medigap, program. Under 
this approach, all existing Medigap plans, and three new drug-only 
Medigap plans, would provide various levels of prescription drug 
benefits from which seniors could choose. And our neediest elders' 
needs would be supported through Federal contributions for the cost of 
their premiums.
  During the 1st Session of the 106th Congress, no fewer than eight 
bills have been introduced in the Senate to provide a prescription drug 
benefit for Medicare beneficiaries--with most proposals estimated to 
cost between $5 billion and $40 billion per year. While I'm hopeful 
that we will all work hard to include a prescription drug benefit for 
Medicare beneficiaries, I am also concerned that at the end of the 
Congress we may not be successful. That is why I am introducing a 
measure today, the ``Pharmaceutical Aid to Older Americans Act,'' which 
will serve as a backstop for our neediest elders. This program builds 
on State pharmacy assistance programs that are already in place, and it 
encourages States to begin them where they don't already exist.
  Fifteen States are cutting new and innovative paths for providing 
prescription drug coverage for their neediest citizens. Most of these 
programs

[[Page 29958]]

are for elder citizens (more than half also cover people with 
disabilities), and cover a wide variety of drugs--though some are 
limited to certain drugs or conditions, some require cost sharing for 
prescription medicines, and some have annual enrollment fees or monthly 
premiums. As of 1997, these programs aided over 700,000 people. The 
Pharmaceutical Aid to Older Americans Act is designed to assist States 
in their efforts to provide medicines and appropriate pharmacy 
counseling benefits for their neediest elders.
  This Act will strengthen the Older Americans Act by authorizing two 
discretionary grant programs, subject to appropriations, to fund State-
based pharmaceutical assistance and medication management programs. 
Under this measure, States would develop models that work best for them 
and would have the latitude to design and implement innovative 
approaches for providing benefits to their neediest elders. States 
awarded grant money would agree to: match Federal funds with 30 percent 
new or existing State funds or in-kind contributions and not supplant 
current State expenditures with Federal funds. In-kind contributions 
counting toward the match requirement could include assistance from 
pharmaceutical companies and organization- and community-based 
pharmacies, thereby making this approach a truly public-private 
partnership.
  Each application for pharmaceutical assistance funds must include a 
medication management program that ensures the quality of drug 
therapies through patient evaluations, compliance assessments, and drug 
therapy reviews. Federal funds could be used to provide drug coverage 
benefits only to eligible beneficiaries, defined as Medicare 
beneficiaries with incomes up to 200 percent of poverty but without any 
other coverage for prescription drug benefits (States could expand 
eligibility with State resources). All senior citizens could utilize 
the medication management portion of the program.
  This is not government control of drug prices or price-fixing. The 
States can purchase pharmaceuticals from any willing seller, including 
pharmaceutical manufacturers, pharmaceutical distributors, wholesalers, 
pharmacy benefit management firms (PBMs), and chain or local 
pharmacies, without any Federal requirement for wholesale prices or 
Medicaid-based rebates. In some instances, it's likely that States may 
be able to negotiate better purchasing prices than any of those set by 
some artificial, imposed ceiling. Finally, for those States that choose 
not to provide pharmaceutical benefits, the Act authorizes grants to 
States to create or support stand-alone Medication Management Programs 
that will involve the States in collaborative efforts with community, 
chain-based, and institutional pharmacists to implement medication 
management programs.
  As I mentioned earlier, Mr. President, I am fully committed to 
providing a prescription benefit for all our elders as we move forward 
on comprehensive reform of the Medicare program. I am equally committed 
to seeing that the Older Americans Act is reauthorized this Congress, 
and I will work diligently to get these jobs accomplished. However, if 
the latter effort succeeds and the former doesn't, then the 
Pharmaceutical Assistance for Older Americans Act will be in place to 
provide much-needed medicines for our neediest elders. I'm very pleased 
Mr. President, that this measure has received endorsement of two of the 
key advocacy organizations associated with the Older Americans Act, the 
National Association of Area Agencies on Aging and the National 
Association of State Units on Aging. Note that these guardians of the 
aged support this measure, like me, if and only if we are unsuccessful 
in passing a prescription drug benefit for the Medicare program.
  Mr. President, I ask unanimous consent that the bill and the text of 
these letters and this measure be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1942

       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 ``Pharmaceutical Aid to Older 
     Americans Act''.

     SEC. 2. AMENDMENT TO OLDER AMERICANS ACT OF 1965.

       Part B of title IV of the Older Americans Act of 1965 (42 
     U.S.C. 3034 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 429K. GRANTS FOR STATE PHARMACY ASSISTANCE PROGRAMS.

       ``(a) Program Authorized.--The Assistant Secretary may 
     award grants to States to provide and administer State 
     pharmacy assistance programs.
       ``(b) Preference.--In awarding grants under subsection (a), 
     the Assistant Secretary shall give preference to States that 
     propose to develop and implement State pharmacy assistance 
     programs, or to provide assistance to State pharmacy 
     assistance programs in existence on the date of enactment of 
     this section, that provide services for underserved 
     populations or for populations residing in rural areas.
       ``(c) Use of Funds.--A State that receives a grant under 
     subsection (a) shall use funds made available through the 
     grant to--
       ``(1) develop and implement a State pharmacy assistance 
     program, or to provide assistance to a State pharmacy 
     assistance program in existence on the date of enactment of 
     this section; and
       ``(2) prepare and submit an evaluation to the Assistant 
     Secretary on the implementation of, or provision of, or 
     assistance to a program described in paragraph (1).
       ``(d) Application.--To be eligible to receive a grant under 
     subsection (a), a State shall submit to the Assistant 
     Secretary an application at such time, in such manner, and 
     containing such information as the Assistant Secretary may 
     require, including--
       ``(1) a description of a State pharmacy assistance program 
     that such State plans to develop and implement, including 
     information on the anticipated number of individuals to be 
     served, eligibility criteria of individuals to be served, 
     such as the age and income level of such individuals, drugs 
     to be covered by the program, and performance measures to be 
     used to evaluate the program; or
       ``(2) a description of a State pharmacy assistance program 
     in existence on the date of enactment of this section that 
     such State plans to assist with funds received under 
     subsection (a), including information on the number of 
     individuals served, eligibility criteria of individuals 
     served, such as the age and income level of such individuals, 
     drugs covered by the program, and performance measures used 
     to evaluate the program.
       ``(e) Minimum Amount.--In awarding grants under subsection 
     (a), from the amount appropriated under subsection (l)(1) for 
     each fiscal year, the Assistant Secretary shall award, to 
     each eligible State, an amount that is not less than 
     $250,000.
       ``(f) Duration of Grant.--In awarding grants under 
     subsection (a), the Assistant Secretary shall award such 
     grants for periods of 2 years.
       ``(g) Matching Requirement.--The Assistant Secretary shall 
     not award a grant to a State under subsection (a) unless that 
     State agrees that, with respect to the costs to be incurred 
     by the State in carrying out the program for which the grant 
     was awarded, the State will make available (directly or 
     through donations from public or private entities) non-
     Federal contributions in an amount that is not less than 30 
     percent of Federal funds provided under the grant.
       ``(h) Supplement Not Supplant.--Funds made available under 
     this section shall be used to supplement, and not supplant, 
     any other Federal, State, or local funds expended by a State 
     to provide the services for programs described in this 
     section.
       ``(i) Evaluations and Report.--
       ``(1) Program evaluations.--Not later than 6 months after 
     the end of the period for which the grant is awarded under 
     subsection (a), the State shall prepare an evaluation of the 
     effectiveness of programs carried out with funds received 
     under this section. Not later than 6 months after the end of 
     such period, the State shall submit to the Assistant 
     Secretary a report containing the results of the evaluation, 
     in such form and containing such information as the Assistant 
     Secretary may require.
       ``(2) Report to congress.--Not later than 36 months after 
     the date of enactment of this section, the Assistant 
     Secretary shall prepare and submit to the Speaker of the 
     House of Representatives and the President pro tempore of the 
     Senate a report that describes the effectiveness of the 
     programs carried out with funds received under this section.
       ``(j) Sunset Provision.--This section shall not apply 
     beginning on the date of enactment of legislation that 
     provides comprehensive health care coverage for prescription 
     drugs under the medicare program under title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.) for all medicare 
     beneficiaries.
       ``(k) Definitions.--In this section:
       ``(1) Medication management.--The term `medication 
     management program' means a

[[Page 29959]]

     program of services for older individuals, including pharmacy 
     counseling, medicine screening, or patient and health care 
     provider education programs, that--
       ``(A) provides information and counseling on the 
     prescription drug purchases that are currently the most 
     economical, and safe and effective;
       ``(B) provides services to minimize unnecessary or 
     inappropriate use of prescription drugs; and
       ``(C) provides services to minimize adverse events due to 
     unintended prescription drug-to-drug interactions.
       ``(2) State pharmacy assistance programs.--The term `State 
     pharmacy assistance program' means a program that provides 
     coverage for prescription drugs and medication management 
     programs for individuals who--
       ``(A) are not less than 65 years of age;
       ``(B) are not eligible for medical assistance under title 
     XIX of the Social Security Act (42 U.S.C. 1396 et seq.);
       ``(C) are from families with incomes at or below 200 
     percent of the poverty line; and
       ``(D) have no coverage for prescription drugs other than 
     coverage provided by a State pharmacy assistance program.
       ``(l) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section, $25,000,000 for fiscal year 2001, 
     and such sums as may be necessary for each of fiscal years 
     2002 through 2005.
       ``(2) Reservation.--From the amount appropriated under 
     paragraph (1), for each fiscal year, the Assistant Secretary 
     shall reserve not less than 33.3 percent of such amount to 
     enable States to assist State pharmacy assistance programs in 
     existence on the date of enactment of this section.

     ``SEC. 429L. GRANTS FOR MEDICATION MANAGEMENT PROGRAMS.

       ``(a) Program Authorized.--The Assistant Secretary may 
     award grants to State agencies to assist such agencies or 
     area agencies on aging in providing and administering 
     medication management programs.
       ``(b) Use of Funds.--A State agency or area agency on aging 
     that receives funds through a grant awarded under subsection 
     (a) shall use such funds to--
       ``(1) develop and implement a medication management 
     program, or to provide assistance to a medication management 
     program in existence on the date of enactment of this 
     section; and
       ``(2) prepare an evaluation on the implementation of or 
     provision of assistance to a program described in paragraph 
     (1), and, in the case of an area agency on aging, submit the 
     evaluation to the appropriate State agency.
       ``(c) Application.--To be eligible to receive a grant under 
     subsection (a), a State agency shall submit to the Assistant 
     Secretary an application at such time, in such manner, and 
     containing such information as the Assistant Secretary may 
     require.
       ``(d) Minimum Amount.--In awarding grants under subsection 
     (a), from the amount appropriated under subsection (j) for 
     each fiscal year, the Assistant Secretary shall award, to 
     each eligible State agency, an amount that is not less than 
     $50,000.
       ``(e) Duration of Grant.--In awarding grants under 
     subsection (a), the Assistant Secretary shall award such 
     grants for a period of 2 years.
       ``(f) Matching Requirement.--The Assistant Secretary shall 
     not award a grant to a State agency under subsection (a) 
     unless that State agency agrees that, with respect to the 
     costs to be incurred in carrying out programs for which the 
     grant was awarded, the State agency will make available 
     (directly or through donations from public or private 
     entities) non-Federal contributions in an amount that is not 
     less than 30 percent of Federal funds provided under the 
     grant.
       ``(g) Supplement Not Supplant.--Funds made available under 
     this section shall be used to supplement, and not supplant, 
     any other Federal, State, or local funds expended by a State 
     agency or area agency on aging to provide the services for 
     programs described in this section.
       ``(h) Reports.--
       ``(1) Report to assistant secretary.--Not later than 24 
     months after receipt of a grant under subsection (a), a State 
     agency shall prepare and submit to the Assistant Secretary a 
     report on the medication management programs carried out by 
     the State agency or area agencies on aging in the State in 
     such form and containing such information as the Assistant 
     Secretary may require, including an analysis of the 
     effectiveness of the programs. Such report shall in part be 
     based on evaluations submitted under subsection (b)(2).
       ``(2) Report to congress.--Not later than 36 months after 
     grants have been awarded under subsection (a), the Assistant 
     Secretary shall prepare and submit to the Speaker of the 
     House of Representatives and the President pro tempore of the 
     Senate a report that describes the effectiveness of the 
     programs carried out with funds received under this section.
       ``(i) Medication Management Programs.--In this section, the 
     term `medication management program' means a program of 
     services for older individuals, including pharmacy 
     counseling, medicine screening, or patient and health care 
     provider education programs, that--
       ``(1) provides information and counseling on the 
     prescription drug purchases that are currently the most 
     economical, and safe and effective;
       ``(2) provides services to minimize unnecessary or 
     inappropriate use of prescription drugs; and
       ``(3) provides services to minimize adverse events due to 
     unintended prescription drug-to-drug interactions.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $15,000,000 for fiscal year 2001, and such sums as may be 
     necessary for each of fiscal years 2002 through 2005.''.
                                  ____

                                           National Association of


                                       Area Agencies on Aging,

                                 Washington, DC, November 9, 1999.
     Hon. James Jeffords,
     Chair, Committee on Health, Education, Labor & Pensions, U.S. 
         Senate, Washington, DC.
       Dear Senator Jeffords: The National Association of Area 
     Agencies on Aging (N4A) is pleased that you are introducing 
     the Pharmaceutical Aid to Older Americans Act. We believe 
     implementation of this Act could be an ideal interim measure 
     until a Medicare prescription drug benefit is enacted.
       As you know, a fast-growing aging population coupled with 
     escalating pharmaceutical costs makes the lack of 
     prescription drug coverage one of the most pressing problems 
     facing our nation's older Americans. The proposed State 
     Pharmacy Assistance Program would allow states with existing 
     benefit programs to expand services and provide a strong 
     incentive for other states to implement a prescription drug 
     program.
       Your legislative measure also goes far in addressing drug 
     misuse, which is another escalating and dangerous problem. 
     The proposed Medication Management Program would provide 
     states with a financial base to implement a statewide 
     information, education and counseling program that would 
     significantly benefit the health and welfare of older adults.
       While N4A supports your proposal in concept, we have some 
     specific questions about the implementation of these programs 
     and concerns about the roles and responsibilities of Area 
     Agencies on Aging (AAAs) and Title IV Native American 
     grantees. We welcome the opportunity to meet with you in the 
     near future to address these concerns.
       Again, we applaud your efforts and look forward to working 
     with you next session as you further define the proposal and 
     shepherd it through the legislative process.
           Sincerely,
                                                   Janice Jackson,
     Executive Director.
                                  ____

                                           National Association of


                                         State Units on Aging,

                                Washington, DC, November 10, 1999.
     Sean Donohue,
     U.S. Senate, Committee on Health, Education, Labor, and 
         Pensions, Washington, DC.
       Dear Sean: Dan Quirk and I reviewed the draft you sent last 
     week outlining Senator Jeffords' proposed Pharmaceutical Aid 
     to Older Americans Act. Overall, the proposal to provide 
     grants to states to support the development or expansion of 
     pharmaceutical assistance programs and medication management 
     programs is a good one, and using the existing infrastructure 
     of the Older Americans Act makes good sense. The aging 
     network is well suited to develop and administer these types 
     of programs. Your proposal was well developed and thoughtful.
       Both programs would provide valuable assistance to older 
     people who do not have any other prescription drug coverage 
     available. The requirement for a 30-percent state match seems 
     high, but allowing contributions to be ``in-kind'' will help 
     states in that regard. The income eligibility level of 200-
     percent of the federal poverty level may conflict with the 
     eligibility levels set by states in existing programs, though 
     I haven't done an analysis of this yet. As with other 
     programs under the Older Americans Act, if state-funded 
     programs already exist that provide the same services, and 
     eligibility or cost sharing requirements are at odds with the 
     federal program, it requires states essentially to manage two 
     different funding streams for the same program or set of 
     services. As always, giving states the flexibility to blend 
     federal funds with state funds to develop one program would 
     decrease administrative expenses for the states and allow the 
     money saved to be used for direct services.
       NASUA continues to support overall reform of the Medicare 
     program that would provide a comprehensive prescription drug 
     benefit to beneficiaries. In the meantime, state-funded 
     programs that are being developed and which would be 
     supported under this proposal continue to fill in the gaps 
     for people with no coverage for prescription drugs. This 
     proposal would strengthen the existing infrastructure, and 
     perhaps could serve to support a prescription program under 
     Medicare whenever it may be implemented in the future.
       We hope this proposal will generate some further interest 
     in reauthorizing the Older Americans Act as soon as possible, 
     hopefully before the end of the 106th Congress. We were very 
     disappointed that reauthorization was stalled over long-
     standing disagreements over the Title V program.

[[Page 29960]]

       If there is anything NASUA can do to support Senator 
     Jeffords proposal and reauthorization, please let me know.
       Thanks for the opportunity to review the Pharmaceutical Aid 
     to Older Americans Act.
           Sincerely,
                                                Kathleen C. Konka,
                                                 Policy Associate.
                                 ______
                                 
      By Mrs. MURRAY:
  S. 1943. A bill to provide for an inexpensive book distribution 
program; to the Committee on Health, Education, Labor, and Pensions.


                  first book distribution program act

 Mrs. MURRAY. Mr. President, today I introduce legislation on 
another topic I will be discussing with Chairman Jeffords as we move 
forward with reauthorization of the Elementary and Secondary Education 
Act in the Senate Health, Education, Labor, and Pensions Committee.
  I am introducing legislation today to fund an innovative book 
distribution program targeted at giving low-income students their own 
``first book.''
  The ``First Book'' program is a non-profit private organization that 
has been tremendously successful gathering and distibuting new 
children's books to needy children throughout the nation. Key to the 
success of ``First Book'' are local boards called ``First Book Local 
Advisory Boards.'' Under my legislation, which would provide $5 million 
a year federal investment to such boards, will help them leverage 
millions more in funds from other sources. ``First Book'' has been 
successful because it is locally-driven, and reflects private industry 
initiative. ``First Book'' provides new books, which the program 
purchases from publishers at discount rates, to disadvantaged children 
and families primarily through tutoring, mentoring, and family literacy 
programs.
  This bill builds on successful efforts underway in communities across 
the country. It takes what has been a successful but very targeted 
program, and will increase its reach and effect into many more American 
communities. ``First Book'' makes a very real difference for 
disadvantaged children and their families, and with this investment, it 
will make a difference for thousands more.
                                 ______
                                 
      By Mrs. MURRAY:
  S. 1944. A bill to provide national challenge grants for innovation 
in the education of homeless children and youth; to the Committee on 
Health, Education, Labor, and Pensions.


          stuart mc kinney homeless education improvement act

 Mrs. MURRAY. Mr. President, today I introduce legislation on 
another topic I will be discussing with Chairman Jeffords as we move 
forward with reauthorization of the Elementary and Secondary Education 
Act in the Senate Health, Education, Labor, and Pensions Committee.
  The bill deals with an improvement I hope we can make in the Stuart 
McKinney Homeless Education program. While the McKinney program is 
relatively small, my hope is that we can greatly improve its 
effectiveness by recognizing and funding innovative approaches for 
serving homeless students.
  Chairman Jeffords and others have recognized that keeping a homeless 
child in their school district of origin is vital to their success. 
Children, especially homeless children, need continuity in their lives. 
Yet as a nation, we have not yet focused on funding the innovative 
practices that will show how this can be done and done effectively.
  In addition, there are chronic problems facing homeless children, 
such as the problems of trying to reach out to unaccompanied homeless 
youth, those young people who do not have parents or guardians with 
them in their homeless situation. Homeless preschoolers present another 
whole range of issues that many schools struggle to overcome.
  My legislation will provide $2 million each year in national 
competitive challenge grants for innovation in the education of 
homeless children and youth. We follow this same approach in education 
technology and other areas, and challenge grants are remarkably 
successful in sparking innovation and dissemination of new methods of 
instruction.
  Homeless students face many challenges, and schools face challenges 
in serving them. Creating a small challenge grant for homeless 
education is one necessary step we can take to help schools help these 
students succeed and achieve.
                                 ______
                                 
      By Mr. LOTT:
  S. 1948. A bill to amend the provisions of title 17, United States 
Code, and the Communications Act of 1934, relating to copyright 
licensing and carriage of broadcast signals by satellite; to the 
Committee on the Judiciary.


  intellectual property and communications omnibus reform act of 1999

  Mr. LOTT: Mr. President, I ask unanimous consent that the following 
section-by-section analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  S. 1948--Section-by-Section Analysis

       Section 1. Short Title. This Act may be cited as the 
     ``Intellectual Property and Communications Omnibus Reform Act 
     of 1999.''

         TITLE I--SATELLITE HOME VIEWER IMPROVEMENT ACT OF 1999

       When Congress passed the Satellite Home Viewer Act in 1988, 
     few Americans were familiar with satellite television. They 
     typically resided in rural areas of the country where the 
     only means of receiving television programming was through 
     use of a large, backyard C-band satellite dish. Congress 
     recognized the importance of providing these people with 
     access to broadcast programming, and created a compulsory 
     copyright license in the Satellite Home Viewer Act that 
     enabled satellite carriers to easily license the copyrights 
     to the broadcast programming that they retransmitted to their 
     subscribers.
       The 1988 Act fostered a boom in the satellite television 
     industry. Coupled with the development of high-powered 
     satellite service, or DSS, which delivers programming to a 
     satellite dish as small as 18 inches in diameter, the 
     satellite industry now serves homes nationwide with a wide 
     range of high quality programming. Satellite is no longer 
     primarily a rural service, for it offers an attractive 
     alternative to other providers of multichannel video 
     programming; in particular, cable television. Because 
     satellite can provide direct competition with the cable 
     industry, it is in the public interest to ensure that 
     satellite operates under a copyright framework that permits 
     it to be an effective competitor.
       The compulsory copyright license created by the 1988 Act 
     was limited to a five year period to enable Congress to 
     consider its effectiveness and renew it where necessary. The 
     license was renewed in 1994 for an additional five years, and 
     amendments made that were intended to increase the 
     enforcement of the network territorial restrictions of the 
     compulsory license. Two-year transitional provisions were 
     created to enable local network broadcasters to challenge 
     satellite subscribers' receipt of satellite network service 
     where the local network broadcaster had reason to believe 
     that these subscribers received an adequate off-the-air 
     signal from the broadcaster. The transitional provisions were 
     minimally effective and caused much consumer confusion and 
     anger regarding receipt of television network stations.
       The satellite license is slated to expire at the end of 
     this year, requiring Congress to again consider the copyright 
     licensing regime for satellite retransmissions of over-the-
     air television broadcast stations. In passing this 
     legislation, the Conference Committee was guided by several 
     principles. First, the Conference Committee believes that 
     promotion of competition in the marketplace for delivery of 
     multichannel video programming is an effective policy to 
     reduce costs to consumers. To that end, it is important that 
     the satellite industry be afforded a statutory scheme for 
     licensing television broadcast programming similar to that of 
     the cable industry. At the same time, the practical 
     differences between the two industries must be recognized and 
     accounted for.
       Second, the Conference Committee reasserts the importance 
     of protecting and fostering the system of television networks 
     as they relate to the concept of localism. It is well 
     recognized that television broadcast stations provide 
     valuable programming tailored to local needs, such as news, 
     weather, special announcements and information related to 
     local activities. To that end, the Committee has structured 
     the copyright licensing regime for satellite to encourage and 
     promote retransmissions by satellite of local television 
     broadcast stations to subscribers who reside in the local 
     markets of those stations.
       Third, perhaps most importantly, the Conference Committee 
     is aware that in creating compulsory licenses, it is acting 
     in derogation of the exclusive property rights granted by the 
     Copyright Act to copyright holders, and that it therefore 
     needs to act as narrowly as possible to minimize the effects 
     of

[[Page 29961]]

     the government's intrusion on the broader market in which the 
     affected property rights and industries operate. In this 
     context, the broadcast television market has developed in 
     such a way that copyright licensing practices in this area 
     take into account the national network structure, which 
     grants exclusive territorial rights to programming in a local 
     market to local stations either directly or through 
     affiliation agreements. The licenses granted in this 
     legislation attempt to hew as closely to those arrangements 
     as possible. For example, these arrangements are mirrored in 
     the section 122 ``local-to-local'' license, which grants 
     satellite carriers the right to retransmit local stations 
     within the station's local market, and does not require a 
     separate copyright payment because the works have already 
     been licensed and paid for with respect to viewers in those 
     local markets. By contrast, allowing the importation of 
     distant or out-of-market network stations in derogation of 
     the local stations' exclusive right--bought and paid for in 
     market-negotiated arrangements--to show the works in question 
     undermines those market arrangements. Therefore, the specific 
     goal of the 119 license, which is to allow for a life-line 
     network television service to those homes beyond the reach of 
     their local television stations, must be met by only allowing 
     distant network service to those homes which cannot receive 
     the local network television stations. Hence, the ``unserved 
     household'' limitation that has been in the license since its 
     inception. The Committee is mindful and respectful of the 
     interrelationship between the communications policy of 
     ``localism'' outlined above and property rights 
     considerations in copyright law, and seeks a proper balance 
     between the two.
       Finally, although the legislation promotes satellite 
     retransmissions of local stations, the Conference Committee 
     recognizes the continued need to monitor the effects of 
     distant signal importation by satellite. To that end, the 
     compulsory license for retransmission of distant signals is 
     extended for a period of five years, to afford Congress the 
     opportunity to evaluate the effectiveness and continuing need 
     for that license at the end of the five-year period.
     Section 1001. Short Title
       This title may be cited as the ``Satellite Home Viewer 
     Improvement Act.''
     Section 1002. Limitations on Exclusive Rights; Secondary 
         Transmissions by Satellite Carriers Within Local Markets
       The House and the Senate provisions were in most respects 
     highly similar. The conference substitute generally follows 
     the House approach, with the differences described here.
       Section 1002 of this Act creates a new statutory license, 
     with no sunset provision, as a new section 122 of the 
     Copyright Act of 1976. The new license authorizes the 
     retransmission of television broadcast stations by satellite 
     carriers to subscribers located within the local markets of 
     those stations.
       Creation of a new statutory license for retransmission of 
     local signals is necessary because the current section 119 
     license is limited to the retransmission of distance signals 
     by satellite. The section 122 license allows satellite 
     carriers for the first time to provide their subscribers with 
     the television signals they want most: their local stations. 
     A carrier may retransmit the signal of a network station (or 
     superstation) to all subscribers who reside within the local 
     market of that station, without regard to whether the 
     subscriber resides in an ``unserved household.'' The term 
     ``local market'' is defined in Section 119(j)(2), and 
     generally refers to a station's Designated Market Area as 
     defined by Nielsen.
       Because the section 122 license is permanent, subscribers 
     may obtain their local television stations without fear that 
     their local broadcast service may be turned off at a future 
     date. In addition, satellite carriers may deliver local 
     stations to commercial establishments as well as homes, as 
     the cable industry does under its license. These amendments 
     create parity and enhanced competition between the satellite 
     and cable industries in the provision of local television 
     broadcast stations.
       For a satellite carrier to be eligible for this license, 
     this Act, following the House approach, provides both in new 
     section 122(a) and in new section 122(d) that a carrier may 
     use the new local-to-local license only if it is in full 
     compliance with all applicable rules and regulations of the 
     Federal Communications Commission, including any requirements 
     that the Commission may adopt by regulation concerning 
     carriage of stations or programming exclusivity. These 
     provisions are modeled on similar provisions in section 111, 
     the terrestrial compulsory license. Failure to fully comply 
     with Commission rules with respect to retransmission of one 
     or more stations in the local market precludes the carrier 
     from making use of the section 122 license. Put another way, 
     the statutory license overrides the normal copyright scheme 
     only to the extent that carriers strictly comply with the 
     limits Congress has put on that license.
       Because terrestrial systems, such as cable, as a general 
     rule do not pay any copyright royalty for local 
     retransmissions of broadcast stations, the section 122 
     license does not require payment of any copyright royalty by 
     satellite carriers for transmissions made in compliance with 
     the requirements of section 122. By contrast, the section 119 
     statutory license for distant signals does require payment of 
     royalties. In addition, the section 122 statutory license 
     contains no ``unserved household'' limitation, while the 
     section 119 license does contain that limitation.
       Satellite carriers are liable for copyright infringement, 
     and subject to the full remedies of the Copyright Act, if 
     they violate one or more of the following requirements of the 
     section 122 license. First, satellite carriers may not in any 
     way willfully alter the programming contained on a local 
     broadcast station.
       Second, satellite carriers may not use the section 122 
     license to retransmit a television broadcast station to a 
     subscriber located outside the local market of the station. 
     Retransmission of a station to a subscriber located outside 
     the station's local market is covered by section 119, and is 
     permitted only when all conditions of that license are 
     satisfied. Accordingly, satellite carriers are required to 
     provide local broadcasters with accurate lists of the street 
     addresses of their local-to-local subscribers so that 
     broadcasters may verify that satellite carriers are making 
     proper use of the license. The subscriber information 
     supplied to broadcasters is for verification purposes only, 
     and may not be used by broadcasters for any other reason. Any 
     knowing provision of false information by a satellite carrier 
     would, under section 122(d), bar use of the Section 122 
     license by the carrier engaging in such practices. The 
     section 122 license contains remedial provisions parallel to 
     those of Section 119, including a ``pattern or practice'' 
     provision that requires termination of the Section 122 
     statutory license as to a particular satellite carrier if it 
     engages in certain abuses of the license.
       Under this provision, just as in the statutory licenses 
     codified in sections 111 and 119, a violation may be proven 
     by showing willful activity, or simple delivery of the 
     secondary transmission over a certain period of time. In 
     addition to termination of service on a nationwide or local 
     or regional basis, statutory damages are available up to 
     $250,000 for each 6-month period during which the pattern or 
     practice of violations was carried out. Satellite carriers 
     have the burden of proving that they are not improperly 
     making use of the section 122 license to serve subscribers 
     outside the local markets of the television broadcast 
     stations they are providing. The penalties created under this 
     section parallel those under Section 119, and are to deter 
     satellite carriers from providing signals to subscribers in 
     violation of the licenses.
       The section 122 license is limited in geographic scope to 
     service to locations in the United States, including any 
     commonwealth, territory or possession of the United States. 
     In addition, section 122(j) makes clear that local 
     retransmission of television broadcast stations to 
     subscribers is governed solely by the section 122 license, 
     and that no provision of the section 111 cable compulsory 
     license should be interpreted to allow satellite carriers to 
     make local retransmissions of television broadcast stations 
     under that license. Likewise, no provision of the section 119 
     license (or any other law) should be interpreted as 
     authorizing local-to-local retransmissions. As with all 
     statutory licenses, these explicit limitations are consistent 
     with the general rule that, because statutory licenses are in 
     derogation of the exclusive rights granted under the 
     Copyright Act, they should be interpreted narrowly.
       Section 1002(a) of this Act contains new standing 
     provisions. Adopting the approach of the House bill, section 
     122(f)(1) of the Copyright Act is parallel to section 119(e), 
     and ensures that local stations, in addition to any other 
     parties that qualify under other standing provisions of the 
     Act, will have the ability to sue for violations of section 
     122. New section 122(f)(2) of the Copyright Act enables a 
     local television station that is not being carried by a 
     satellite carrier in violation of the license to file a 
     copyright infringement lawsuit in federal court to enforce 
     its rights.
     Section 1003. Extension of Effect of Amendments to Section 
         119 of Title 17, United States Code
       As in both the House bill and the Senate amendment, this 
     Act extends the section 119 satellite statutory license for a 
     period of five years by changing the expiration date of the 
     legislation from December 31, 1999, to December 31, 2004. The 
     procedural and remedial provisions of section 119, which have 
     already been interpreted by the courts, are being extended 
     without change. Should the section 119 license be allowed to 
     expire in 2004, it shall do so at midnight on December 31, 
     2004, so that the license will cover the entire second 
     accounting period of 2004.
       The advent of digital terrestrial broadcasting will 
     necessitate additional review and reform of the distant 
     signal statutory license. And responsibility to oversee the 
     development of the nascent local station satellite service 
     may also require for review of the distant signal statutory 
     license in the future. For each of these reasons, this Act 
     establishes a period for review in 5 years.
       Although the section 119 regime is largely being extended 
     in its current form, certain

[[Page 29962]]

     sections of the Act may have a near-term effect on pending 
     copyright infringement lawsuits brought by broadcasters 
     against satellite carriers. These changes are prospective 
     only; Congress does not intend to change the legality of any 
     conduct that occurred prior to the date of enactment. 
     Congress does intend, however, to benefit consumers where 
     possible and consistent with existing copyright law and 
     principles.
       This Act attempts to strike a balance among a variety of 
     public policy goals. While increasing the number of potential 
     subscribers to distant network signals, this Act clarifies 
     that satellite carriers may carry up to, but no more than, 
     two stations affiliated with the same network. The original 
     purpose of the Satellite Home Viewer Act was to ensure that 
     all Americans could receive network programming and other 
     television services provided they could not receive those 
     services over-the-air or in any other way. This bill reflects 
     the desire of the Conference to meet this requirement and 
     consumers' expectations to receive the traditional level of 
     satellite service that has built up over the years, while 
     avoiding an erosion of the programming market affected by the 
     statutory licenses.
     Section 1004. Computation of Royalty Fees for Satellite 
         Carriers
       Like both the House bill and the Senate amendment, this Act 
     reduces the royalty fees currently paid by satellite carriers 
     for the retransmission of network and superstations by 45 
     percent and 30 percent, respectively. These are reductions of 
     the 27-cent royalty fees made effective by the Librarian of 
     Congress on January 1, 1998. The reductions take effect on 
     July 1, 1999, which is the beginning of the second accounting 
     period for 1999, and apply to all accounting periods for the 
     five-year extension of the section 119 license. The Committee 
     has drafted this provision such that, if the section 119 
     license is renewed after 2004, the 45 percent and 30 percent 
     reductions of the 27-cent fee will remain in effect, unless 
     altered by legislative amendment.
       In addition, section 119(c) of title 17, United States 
     Code, is amended to clarify that in royalty distribution 
     proceedings conducted under section 802 of the Copyright Act, 
     the Public Broadcasting Service may act as agent for all 
     public television copyright claimants and all Public 
     Broadcasting Service member stations.
     Section 1005. Distant Signal Eligibility for Consumers
       The Senate bill contained provisions retaining the existing 
     Grade B intensity standard in the definition of ``unserved 
     household.'' The House agreed to the Senate provisions with 
     amendments, which extend the ``unserved household'' 
     definition of section 119 of title 17 intact in certain 
     respects and amend it in other respects. Consistent with the 
     approach of the Senate amendment, the central feature of the 
     existing definition of ``unserved household''--inability to 
     receive, through use of a conventional outdoor rooftop 
     receiving antenna, a signal of Grade B intensity from a 
     primary network station--remains intact. The legislation 
     directs the FCC, however, to examine the definition of 
     ``Grade B intensity,'' reflecting the dBu levels long set by 
     the Federal Communications Commission in 47 C.F.R. 
     Sec. 73.683(a), and issue a rulemaking within 6 months after 
     enactment to evaluate the standard and, if appropriate, make 
     recommendations to Congress about how to modify the analog 
     standard, and make a further recommendation about what an 
     appropriate standard would be for digital signals. In this 
     fashion, the Congress will have the best input and 
     recommendations from the Commission, allowing the Commission 
     wide latitude in its inquiry and recommendations, but reserve 
     for itself the final decision-making authority over the scope 
     of the copyright licenses in question, in light of all 
     relevant factors.
       The amended definition of ``unserved household'' makes 
     other consumer-friendly changes. It will eliminate the 
     requirement that a cable subscriber wait 90 days to be 
     eligible for satellite delivery of distant network signals. 
     After enactment, cable subscribers will be eligible to 
     receive distant network signals by satellite, upon choosing 
     to do so, if they satisfy the other requirements of section 
     119.
       In addition, this Act adds three new categories to the 
     definition of ``unserved household'' in section 119(d)(10): 
     (a) certain subscribers to network programming who are not 
     predicted to receive a signal of Grade A intensity from any 
     station of the relevant network, (b) operators of 
     recreational vehicles and commercial trucks who have complied 
     with certain documentation requirements, and (c) certain C-
     band subscribers to network programming. This Act also 
     confirms in new section 119(d)(10)(B) what has long been 
     understood by the parties and accepted by the courts, namely 
     that a subscriber may receive distant network service if all 
     network stations affiliated with the relevant network that 
     are predicted to serve that subscriber give their written 
     consent.
       Section 1005(a)(2) of the bill creates a new section 
     119(a)(2)(B)(i) of the Copyright Act to prohibit a satellite 
     carrier from delivering more than two distant TV stations 
     affiliated with a single network in a single day to a 
     particular customer. This clarifies that a satellite carrier 
     provides a signal of a television station throughout the 
     broadcast day, rather than switching between stations 
     throughout a day to pick the best programming among different 
     signals.
       Section 1005(a)(2) of this Act creates a new section 
     119(a)(2)(B)(ii)(I) of the Copyright Act to confirm that 
     courts should rely on the FCC's ILLR model to presumptively 
     determine whether a household is capable of receiving a 
     signal of Grade B intensity. The conferees understand that 
     the parties to copyright infringement litigation under the 
     Satellite Home Viewer Act have agreed on detailed procedures 
     for implementing the current version of ILLR, and nothing in 
     this Act requires any change in those procedures. In the 
     future, when the FCC amends the ILLR model to make it more 
     accurate pursuant to section 339(c)(3) of the Communications 
     Act of 1934, the amended model should be used in place of the 
     current version of ILLR. The new language also confirms in 
     new section 119(a)(2)(B)(ii)(II) that the ultimate 
     determination of eligibility to receive network signals shall 
     be a signal intensity test pursuant to 47 C.F.R. 
     Sec. 73.686(d), as reflected in new section 339(c)(5) of the 
     Communications Act of 1934. Again, the conferees understand 
     that existing Satellite Home Viewer Act court orders already 
     incorporate this FCC-approved measurement method, and nothing 
     in this Act requires any change in such orders. Such a signal 
     intensity test may be conducted by any party to resolve a 
     customer's eligibility in litigation under section 119.
       Section 1005(a)(2) of this Act creates a new section 
     119(a)(2)(B)(iii) of the Copyright Act to permit continued 
     delivery by means of C-band transmissions of network stations 
     to C-band dish owners who received signals of the pertinent 
     network on October 31, 1999, or were recently required to 
     have such service terminated pursuant to court orders or 
     settlements under section 119. This provision does not 
     authorize satellite delivery of network stations to such 
     persons by any technology other than C-band.
       Section 1005(b) also adds a new provision (E) to section 
     119(a)(5). The purpose of this provision is to allow certain 
     longstanding superstations to continue to be delivered to 
     satellite customers without regard to the ``unserved 
     household'' limitation, even if the station now technically 
     qualifies as a ``network station'' under the 15-hour-per-week 
     definition of the Act. This exception will cease to apply if 
     such a station in the future becomes affiliated with one of 
     the four networks (ABC, CBS, Fox, and NBC) that qualified as 
     networks as of January 1, 1995.
       Section 1005(c) of this Act adds a new section 119(e) of 
     the Copyright Act. This provision contains a moratorium on 
     terminations of network stations to certain otherwise 
     ineligible recent subscribers to network programming whose 
     service has been (or soon would have been) terminated and 
     allows them to continue to be eligible for distant signal 
     services. The subscribers affected are those predicted by the 
     current version of the ILLR model to receive a signal of less 
     than Grade A intensity from any network station of the 
     relevant network defined in section 73.683(a) of Commission 
     regulations (47 C.F.R. 73.683(a)) as in effect January 1, 
     1999. As the statutory language reflects, recent court orders 
     and settlements between the satellite and broadcasting 
     industries have required (or will in the near future require) 
     significant numbers of terminations of network stations to 
     ineligible subscribers in this category. Although the 
     conferees strongly condemn lawbreaking by satellite carriers, 
     and intend for satellite carriers to be subject to all other 
     available legal remedies for any infringements in which the 
     carriers have engaged, the conferees have concluded that the 
     public interest will be served by the grandfathering of this 
     limited category of subscribers whose service would otherwise 
     be terminated.
       The decision by the conferees to direct this limited 
     grandfathering should not be understood as condoning unlawful 
     conduct by satellite carriers, but rather reflects the 
     concern of the conference for those subscribers who would 
     otherwise be punished for the actions of the satellite 
     carriers. Note that in the previous 18 months, court 
     decisions have required the termination of some distant 
     network signals to some subscribers. However, the Conferees 
     are aware that in some cases satellite carriers terminated 
     distant network service that was not subject to the original 
     lawsuit. The Conferees intend that affected subscribers 
     remain eligible for such service.
       The words ``shall remain eligible'' in section 119(e) refer 
     to eligibility to receive stations affiliated with the same 
     network from the same satellite carrier through use of the 
     same transmission technology at the same location; in other 
     words, grandfathered status is not transferable to a 
     different carrier or a different type of dish or at a new 
     address. The provisions of new section 119(e) are 
     incorporated by reference in the definition of ``unserved 
     household'' as new section 119(d)(10)(C).
       Section 1005(d) of this Act creates a new section 
     119(a)(11), which contains provisions governing delivery of 
     network stations to recreational vehicles and commercial 
     trucks.

[[Page 29963]]

     This provision is, in turn, incorporated in the definition of 
     ``unserved household'' in new section 119(d)(10)(D). The 
     purpose of these amendments is to allow the operators of 
     recreational vehicles and commercial trucks to use satellite 
     dishes permanently attached to those vehicles to receive, on 
     television sets located inside those vehicles, distant 
     network signals pursuant to section 119. To prevent abuse of 
     this provision, the exception for recreational vehicles and 
     commercial trucks is limited to persons who have strictly 
     complied with the documentation requirements set forth in 
     section 119(a)(11). Among other things, the exception will 
     only become available as to a particular recreational vehicle 
     or commercial truck after the satellite carrier has provided 
     all affected networks with all documentation set forth in 
     section 119(a). The exception will apply only for reception 
     in that particular recreational vehicle or truck, and does 
     not authorize any delivery of network stations to any fixed 
     dwelling.
     Section 1006. Public Broadcasting Service Satellite Feed
       The conference agreement follows the Senate bill with an 
     amendment that applies the network copyright royalty rate to 
     the Public Broadcasting Service the satellite feed. The 
     conference agreement grants satellite carriers a section 119 
     compulsory license to retransmit a national satellite feed 
     distributed and designated by PBS. The license would apply to 
     educational and informational programming to which PBS 
     currently holds broadcast rights. The license, which would 
     extend to all households in the United States, would sunset 
     on January 1, 2002, the date when local-to-local must-carry 
     obligations become effective. Under the conference agreement, 
     PBS will designate the national satellite feed for purposes 
     of this section.
     Section 1007. Application of Federal Communications 
         Commission Regulations
       The section 119 license is amended to clarify that 
     satellite carriers must comply with all rules, regulations, 
     and authorizations of the Federal Communications Commission 
     in order to obtain the benefits of the section 119 license. 
     As provided in the House bill, this would include any 
     programming exclusivity provisions or carriage requirements 
     that the Commission may adopt. Violations of such rules, 
     regulations or authorizations would render a carrier 
     ineligible for the copyright statutory license with respect 
     to that retransmission.
     Section 1008. Rules for Satellite Carriers Retransmitting 
         Television Broadcast Signals
       The Senate agrees to the House bill provisions regarding 
     carriage of television broadcast signals, with certain 
     amendments, as discussed below. Section 108 creates new 
     sections 338 and 339 of the Communications Act of 1934. 
     Section 338 addresses carriage of local television signals, 
     while section 339 addresses distant television signals.
       New section 338 requires satellite carriers, by January 1, 
     2002, to carry upon request all local broadcast stations' 
     signals in local markets in which the satellite carriers 
     carry at least one signal pursuant to section 122 of title 
     17, United States Code. The conference report added the 
     cross-reference to section 122 to the House provision to 
     indicate the relationship between the benefits of the 
     statutory license and the carriage requirements imposed by 
     this Act. Thus, the conference report provides that, as of 
     January 1, 2002, royalty-free copyright licenses for 
     satellite carriers to retransmit broadcast signals to viewers 
     in the broadcasters' service areas will be available only on 
     a market-by-market basis.
       The procedural provisions applicable to section 338 
     (concerning costs, avoidance of duplication, channel 
     positioning, compensation for carriage, and complaints by 
     broadcast stations) are generally parallel to those 
     applicable to cable systems. Within one year after enactment, 
     the Federal Communications Commission is to issue 
     implementing regulations which are to impose obligations 
     comparable to those imposed on cable systems under paragraphs 
     (3) and (4) of section 614(b) and paragraphs (1) and (2) of 
     section 615(g), such as the requirement to carry a station's 
     entire signal without additions or deletions. The obligation 
     to carry local stations on contiguous channels is 
     illustrative of the general requirement to ensure that 
     satellite carriers position local stations in a way that is 
     convenient and practically accessible for consumers. By 
     directing the FCC to promulgate these must-carry rules, the 
     conferees do not take any position regarding the application 
     of must-carry rules to carriage of digital television signals 
     by either cable or satellite systems.
       To make use of the local license, satellite carriers must 
     provide the local broadcast station signal as part of their 
     satellite service, in a manner consistent with paragraphs 
     (b), (c), (d), and (e), FCC regulations, and retransmission 
     consent requirements. Until January 1, 2002, satellite 
     carriers are granted a royalty-free copyright license to 
     retransmit broadcast signals on a station-by-station basis, 
     consistent with retransmission consent requirements. The 
     transition period is intended to provide the satellite 
     industry with a transitional period to begin providing local-
     into-local satellite service to communities throughout the 
     country.
       The conferees believe that the must-carry provisions of 
     this Act neither implicate nor violate the First Amendment. 
     Rather than requiring carriage of stations in the manner of 
     cable's mandated duty, this Act allows a satellite carrier to 
     choose whether to incur the must-carry obligation in a 
     particular market in exchange for the benefits of the local 
     statutory license. It does not deprive any programmers of 
     potential access to carriage by satellite carriers. Satellite 
     carriers remain free to carry any programming for which they 
     are able to acquire the property rights. The provisions of 
     this Act allow carriers an easier and more inexpensive way to 
     obtain the right to use the property of copyright holders 
     when they retransmit signals from all of a market's broadcast 
     stations to subscribers in that market. The choice whether to 
     retransmit those signals is made by carriers, not by the 
     Congress. The proposed licenses are a matter of legislative 
     grace, in the nature of subsidies to satellite carriers, and 
     reviewable under the rational basis standard.\1\
---------------------------------------------------------------------------
     See footnotes at end of Analysis.
---------------------------------------------------------------------------
       In addition, the conferees are confident that the proposed 
     license provisions would pass constitutional muster even if 
     subjected to the O'Brien standard applied to the cable must-
     carry requirement.\2\ The proposed provisions are intended to 
     preserve free television for those not served by satellite or 
     cable systems and to promote widespread dissemination of 
     information from a multiplicity of sources. The Supreme Court 
     has found both to be substantial interests, unrelated to the 
     suppression of free expression.\3\ Providing the proposed 
     license on a market-by-market basis furthers both goals by 
     preventing satellite carriers from choosing to carry only 
     certain stations and effectively preventing many other local 
     broadcasters from reaching potential viewers in their service 
     areas. The Conference Committee is concerned that, absent 
     must-carry obligations, satellite carriers would carry the 
     major network affiliates and few other signals. Non-carried 
     stations would face the same loss of viewership Congress 
     previously found with respect to cable noncarriage.\4\
       The proposed licenses place satellite carrier in a 
     comparable position to cable systems, competing for the same 
     customers. Applying a must-carry rule in markets which 
     satellite carriers choose to serve benefits consumers and 
     enhances competition with cable by allowing consumers the 
     same range of choice in local programming they receive 
     through cable service. The conferees expect that, by January 
     1, 2002, satellite carriers' market share will have increased 
     and that the Congress' interest in maintaining free over-the-
     air television will be undermined if local broadcasters are 
     prevented from reaching viewers by either cable or satellite 
     distribution systems. The Congress' preference for must-carry 
     obligations has already been proven effective, as attested by 
     the appearance of several emerging networks, which often 
     serve underserved market segments. There are no narrower 
     alternatives that would achieve the Congress' goals. Although 
     the conferees expect that subscribers who receive no 
     broadcast signals at all from their satellite service may 
     install antennas or subscribe to cable service in addition to 
     satellite service, the Conference Committee is less sanguine 
     that subscribers who receive network signals and hundreds of 
     other programming choices from their satellite carrier will 
     undertake such trouble and expense to obtain over-the-air 
     signals from independent broadcast stations. National feeds 
     would also be counterproductive because they siphon potential 
     viewers from local over-the-air affiliates. In sum, the 
     Conference Committee finds that trading the benefits of the 
     copyright license for the must carry requirement is a fair 
     and reasonable way of helping viewers have access to all 
     local programming while benefitting satellite carriers and 
     their customers.
       Section 338(c) contains a limited exception to the general 
     must-carry requirements, stating that a satellite carrier 
     need not carry two local affiliates of the same network that 
     substantially duplicate each others' programming, unless the 
     duplicating stations are licensed to communities in different 
     states. The latter provisions address unique and limited 
     cases, including WMUR (Manchester, New Hampshire) / WCVB 
     (Boston, Massachusetts) and WPTZ (Plattsburg, New York)/ WNNE 
     (White River Junction, Vermont), in which mandatory carriage 
     of both duplicating local stations upon request assures that 
     satellite subscribers will not be precluded from receiving 
     the network affiliate that is licensed to the state in which 
     they reside.
       Because of unique technical challenges on satellite 
     technology and constraints on the use of satellite spectrum, 
     satellite carriers may initially be limited in their ability 
     to deliver must carry signals into multiple markets. New 
     compression technologies, such as video streaming, may help 
     overcome these barriers however, and, if deployed, could 
     enable satellite carriers to deliver must-carry signals into 
     many more markets than they could otherwise. Accordingly, the 
     conferees urge the FCC, pursuant to its obligations under 
     section 338, or in any other related proceedings, to not 
     prohibit satellite

[[Page 29964]]

     carriers from using reasonable compression, reformatting, or 
     similar technologies to meet their carriage obligations, 
     consistent with existing authority.

                           *   *   *   *   *

       New section 339 of the Communications Act contains 
     provisions concerning carriage of distant television stations 
     by satellite carriers. Section 339(a)(1) limits satellite 
     carriers to providing a subscriber with no more than two 
     stations affiliated with a given television network from 
     outside the local market. In addition, a satellite carrier 
     that provides two distant signals to eligible households may 
     also provide the local television signals pursuant to section 
     122 of title 17 if the subscriber offers local-to-local 
     service in the subscriber's market. This provision furthers 
     the congressional policy of localism and diversity of 
     broadcast programming, which provides locally-relevant news, 
     weather, and information, but also allows consumers in 
     unserved households to enjoy network programming obtained via 
     distant signals. Under new section 339(a)(2), which is based 
     on the Senate amendment, the knowing and willful provision of 
     distant television signals in violation of these restrictions 
     is subject to a forfeiture penalty under section 503 of the 
     Communications Act of $50,000 per violation or for each day 
     of a continuing violation.
       New section 339(b)(1)(A) requires the Commission to 
     commence within 45 days of enactment, and complete within one 
     year after the date of enactment, a rulemaking to develop 
     regulations to apply network nonduplication, syndicated 
     exclusivity and sports blackout rules to the transmission of 
     nationally distributed superstations by satellite carriers. 
     New section 339(b)(1)(B) requires the Commission to 
     promulgate regulations on the same schedule with regard to 
     the application of sports blackout rules to network stations. 
     These regulations under subparagraph (B) are to be imposed 
     ``to the extent technically feasible and not economically 
     prohibitive'' with respect to the affected parties. The 
     burden of showing that conforming to rules similar to cable 
     would be ``economically prohibitive'' is a heavy one. It 
     would entail a very serious economic threat to the health of 
     the carrier. Without that showing, the rules should be as 
     similar as possible to that applicable to cable services.
       Section 339(c) of the Communications Act of 1934 addresses 
     the three distinct areas discussed by the Commission in its 
     Report & Order in Docket No. 98-201: (i) the definition of 
     ``Grade B intensity,'' which is the substantive standard for 
     determining eligibility to receive distant network stations 
     by satellite, (ii) prediction of whether a signal of Grade B 
     intensity from a particular station is present at a 
     particular household, and (iii) measurement of whether a 
     signal of Grade B intensity from a particular station is 
     present at a particular household. Section 339(c) addresses 
     each of these topics.
       New section 339(c) addresses evaluation and possible 
     recommendations for modification by the Commission of the 
     definition of Grade B intensity, which is incorporated into 
     the definition of ``unserved household'' in section 119 of 
     the Copyright Act. Under section 339(c), the Commission is to 
     complete a rulemaking within 1 year after enactment to 
     evaluate, and if appropriate to recommend modifications to 
     the Grade B intensity standard for analog signals set forth 
     in 47 C.F.R. Sec. 73.683(a), for purposes of determining 
     eligibility for distant signal satellite service. In 
     addition, the Commission is to recommend a signal standard 
     for digital signals to prepare Congress to update the 
     statutory license for digital television broadcasting. The 
     Committee intends that this report would reflect the FCC's 
     best recommendations in light of all relevant considerations, 
     and be based on whatever factors and information the 
     Commission deems relevant to determining whether the signal 
     intensity standard should be modified and in what way. As 
     discussed above, the two-part process allows the Commission 
     to recommend modifications leaving to Congress the decision-
     making power on modifications of the copyright licenses at 
     issue.
       Section 339(c)(3) addresses requests to local television 
     stations by consumers for waivers of the eligibility 
     requirements under section 119 of title 17, United States 
     Code. If a satellite carrier is barred from delivering 
     distant network signals to a particular customer because the 
     ILLR model predicts the customer to be served by one or more 
     television stations affiliated with the relevant network, the 
     consumer may submit to those stations, through his or her 
     satellite carrier, a written request for a waiver. The 
     statutory phrase ``station asserting that the retransmission 
     is prohibited'' refers to a station that is predicted by the 
     ILLR model to serve the household. Each such station must 
     accept or reject the waiver request within 30 days after 
     receiving the request from the satellite carrier. If a 
     relevant network station grants the requested waiver, or 
     fails to act on the waiver within 30 days, the viewer shall 
     be deemed unserved with respect to the local network station 
     in question.
       Section 339(c)(4) addresses the ILLR predictive model 
     developed by the Commission in Docket No. 98-201. The 
     provision requires the Commission to attempt to increase its 
     accuracy further by taking into account not only terrain, as 
     the ILLR model does now, but also land cover variations such 
     as buildings and vegetation. If the Commission discovers 
     other practical ways to improve the accuracy of the ILLR 
     model still further, it shall implement those methods as 
     well. The linchpin of whether particular proposed refinements 
     to the ILLR model result in greater accuracy is whether the 
     revised model's predictions are closer to the results of 
     actual field testing in terms of predicting whether 
     households are served by a local affiliate of the relevant 
     network.
       The ILLR model of predicting subscribers' eligibility will 
     be of particular use in rural areas. To make the ILLR more 
     accurate and more useful to this group of Americans, the 
     Conference Committee believes the Commission should be 
     particularly careful to ensure that the ILLR is accurate in 
     areas that use star routes, postal routes, or other 
     addressing systems that may not indicate clearly the location 
     of the actual dwelling of a potential subscriber. The 
     Commission should to ensure the model accurately predicts the 
     signal strength at the viewers' actual location.
       New section 339(c)(5) addresses the third area discussed in 
     the Commission's Report & Order in Docket No. 98-201, namely 
     signal intensity testing. This provision permits satellite 
     carriers and broadcasters to carry out signal intensity 
     measurements, using the procedures set forth by the 
     Commission in 47 C.F.R. Sec. 73.686(d), to determine whether 
     particular households are unserved. Unless the parties 
     otherwise agree, any such tests shall be conducted on a 
     ``loser pays'' basis, with the network station bearing the 
     costs of tests showing the household to be unserved, and the 
     satellite carrier bearing the costs of tests showing the 
     household to be served. If the satellite carrier and station 
     is unable to agree on a qualified individual to perform the 
     test, the Commission is to designate an independent and 
     neutral entity by rule. The Commission is to promulgate rules 
     that avoid any undue burdens being imposed on any party.
     Section 1009. Retransmission Consent
       Section 1009 amends the provisions of section 325 of the 
     Communications Act governing retransmission consent. As 
     revised, section 325(b)(1) bars multichannel video 
     programming distributors from retransmitting the signals of 
     television broadcast stations, or any part thereof, without 
     the express authority of the originating station. Section 
     325(b)(2) contains several exceptions to this general 
     prohibition, including noncommercial stations, certain 
     superstations, and, until the end of 2004, retransmission of 
     not more than two distant signals by satellite carriers to 
     unserved households outside of the local market of the 
     retransmitted stations, and (E) for six months to the 
     retransmission of local stations pursuant to the statutory 
     license in section 122 of the title 17.
       Section 1009 also amends section 325(b) of the 
     Communications Act to require the Commission to issue 
     regulations concerning the exercise by television broadcast 
     stations of the right to grant retransmission consent. The 
     regulations would, until January 1, 2006, prohibit a 
     television broadcast station from entering into an exclusive 
     retransmission consent agreement with a multichannel video 
     programming distributor or refusing to negotiate in good 
     faith regarding retransmission consent agreements. A 
     television station may generally offer different 
     retransmission consent terms or conditions, including price 
     terms, to different distributors. The FCC may determine that 
     such different terms represent a failure to negotiate in good 
     faith only if they are not based on competitive marketplace 
     considerations.
       Section 1009 of the bill adds a new subsection (e) to 
     section 325 of the Communications Act. New subsection 325(e) 
     creates a set of expedited enforcement procedures for the 
     alleged retransmission of a television broadcast station in 
     its own local market without the station's consent. The 
     purpose of these expedited procedure is to ensure that delays 
     in obtaining relief from violations do not make the right to 
     retransmission consent an empty one. The new provision 
     requires 45-day processing of local-to-local retransmission 
     consent complaints at the Commission, followed by expedited 
     enforcement of any Commission orders in the United States 
     District Court for the Eastern District of Virginia. In 
     addition, a television broadcast station that has been 
     retransmitted in its local market without its consent will be 
     entitled to statutory damages of $25,000 per violation in an 
     action in federal district court. Such damages will be 
     awarded only if the television broadcast station agrees to 
     contribute any statutory damage award above $1,000 to the 
     United States Treasury for public purposes. The expedited 
     enforcement provision contains a sunset which prevents the 
     filing of any complaint with the Commission or any action in 
     federal district court to enforce any Commission order under 
     this section after December 31, 2001. The conferees believe 
     that these procedural provisions, which provide ample due 
     process protections while ensuring speedy enforcement, will 
     ensure that retransmission consent will be respected by all 
     parties and promote a smoothly functioning marketplace.

[[Page 29965]]


     Section 1010. Severability
       Section 1010 of the Act provides that if any provision of 
     section 325(b) of the Communications Act as amended by this 
     Act is declared unconstitutional, the remaining provisions of 
     that section will stand.
     Section 1011. Technical Amendments
       Section 1011 of this Act makes technical and conforming 
     amendments to sections 101, 111, 119, 501, and 510 of the 
     Copyright Act. Apart from these technical amendments, this 
     legislation makes no changes to section 111 of the Copyright 
     Act. In particular, nothing in this legislation makes any 
     changes concerning entitlement or eligibility for the 
     statutory licenses under sections 111 and 119, nor 
     specifically to the definitions of ``cable system'' under 
     section 111(f), and ``satellite carrier'' under section 
     119(d)(6). Certain technical amendments to these definitions 
     that were included in the Conference Report to the 
     Intellectual Property and Communications Omnibus Reform Act 
     (IPCORA) of 1999 are not included in this legislation. 
     Congress intends that neither the courts nor the Copyright 
     Office give any legal significance either to the inclusion of 
     the amendments in the IPCORA conference report or their 
     omission in this legislation. These statutory definitions are 
     to be interpreted in the same way after enactment of this 
     legislation as they were interpreted prior to enactment of 
     this legislation.
       Section 1011(b) makes a technical and clarifying change to 
     the definition of a ``work made for hire'' in section 101 of 
     the Copyright Act. Sound recordings have been registered in 
     the Copyright Office as works made for hire since being 
     protected in their own right. This clarifying amendment shall 
     not be deemed to imply that any sound recording or any other 
     work would not otherwise qualify as a work made for hire in 
     the absence of the amendment made by this subsection.
     Section 1012. Effective dates.
       Under section 1012 of this Act, sections 1001, 1003, 1005, 
     and 1007 through 1011 shall be effective on the date of 
     enactment. The amendments made by sections 1002, 1004, and 
     1006 shall be effective as of July 1, 1999.

                TITLE II--RURAL LOCAL TELEVISION SIGNALS

     Section 2001. Short Title
       This title may be referred to as the ``Rural Local 
     Broadcast Signal Act.''
     Section 2002. Local Television Service in Unserved and 
         Underserved Markets
       To encourage the FCC to approve needed licenses (or other 
     authorizations to use spectrum) to provide local TV service 
     in rural areas, the Commission is required to make 
     determinations regarding needed licenses within one year of 
     enactment.
       However, the FCC shall ensure that no license or 
     authorization provided under this section will cause 
     ``harmful interference'' to the primary users of the spectrum 
     or to public safety use. Subparagraph (2), states that the 
     Commission shall not license under subsection (a) any 
     facility that causes harmful interference to existing primary 
     users of spectrum or to public safety use. The Commission 
     typically categorizes a licensed service as primary or 
     secondary. Under Commission rules, a secondary service cannot 
     be authorized to operate in the same band as a primary user 
     of that band unless the proposed secondary user conclusively 
     demonstrates that the proposed secondary use will not cause 
     harmful interference to the primary service. The Commission 
     is to define ``harmful interference'' pursuant to the 
     definition at 47 C.F.R. section 2.1 and in accordance with 
     Commission rules and policies.
       For purposes of section 2005(b)(3) the FCC may consider a 
     compression, reformatting or other technology to be 
     unreasonable if the technology is incompatible with other 
     applicable FCC regulation or policy under the Communications 
     Act of 1934, as amended.
       The Commission also may not restrict any entity granted a 
     license or other authorization under this section, except as 
     otherwise specified, from using any reasonable compression, 
     reformatting, or other technology.

              TITLE III--TRADEMARK CYBERPIRACY PREVENTION

     Section 3001. Short Title; References
       This section provides that the Act may be cited as the 
     ``Anticybersquatting Consumer Protection Act'' and that any 
     references within the bill to the Trademark Act of 1946 shall 
     be a reference to the Act entitled ``An Act to provide for 
     the registration and protection of trademarks used in 
     commerce, to carry out the provisions of certain 
     international conventions, and for other purposes,'' approved 
     July 5, 1946 (15 U.S.C. 1051 et seq.), also commonly referred 
     to as the Lanham Act.
     Sec. 3002. Cyberpiracy Prevention
       Subsection (a). In General. This subsection amends the 
     Trademark Act to provide an explicit trademark remedy for 
     cybersquatting under a new section 43(d). Under paragraph 
     (1)(A) of the new section 43(d), actionable conduct would 
     include the registration, trafficking in, or use of a domain 
     name that is identical or confusingly similar to, or dilutive 
     of, the mark of another, including a personal name that is 
     protected as a mark under section 43 of the Lanham Act, 
     provided that the mark was distinctive (i.e., enjoyed 
     trademark status) at the time the domain name was registered, 
     or in the case of trademark dilution, was famous at the time 
     the domain name was registered. The bill is carefully and 
     narrowly tailored, however, to extend only to cases where the 
     plaintiff can demonstrate that the defendant registered, 
     trafficked in, or used the offending domain name with bad-
     faith intent to profit from the goodwill of a mark belonging 
     to someone else. Thus, the bill does not extend to innocent 
     domain name registrations by those who are unaware of 
     another's use of the name, or even to someone who is aware of 
     the trademark status of the name but registers a domain name 
     containing the mark for any reason other than with bad faith 
     intent to profit from the goodwill associated with that mark.
       The phrase ``including a personal name which is protected 
     as a mark under this section'' addresses situations in which 
     a person's name is protected under section 43 of the Lanham 
     Act and is used as a domain name. The Lanham Act prohibits 
     the use of false designations of origin and false or 
     misleading representations. Protection under 43 of the Lanham 
     Act has been applied by the courts to personal names which 
     function as marks, such as service marks, when such marks are 
     infringed. Infringement may occur when the endorsement of 
     products or services in interstate commerce is falsely 
     implied through the use of a personal name, or otherwise, 
     without regard to the goods or services of the parties. This 
     protection also applies to domain names on the Internet, 
     where falsely implied endorsements and other types of 
     infringement can cause greater harm to the owner and 
     confusion to a consumer in a shorter amount of time than is 
     the case with traditional media. The protection offered by 
     section 43 to a personal name which functions as a mark, as 
     applied to domain names, is subject to the same fair use and 
     first amendment protections as have been applied 
     traditionally under trademark law, and is not intended to 
     expand or limit any rights to publicity recognized by States 
     under State law.
       Paragraph (1)(B)(i) of the new section 43(d) sets forth a 
     number of nonexclusive, nonexhaustive factors to assist a 
     court in determining whether the required bad-faith element 
     exists in any given case. These factors are designed to 
     balance the property interests of trademark owners with the 
     legitimate interests of Internet users and others who seek to 
     make lawful uses of others' marks, including for purposes 
     such as comparative advertising, comment, criticism, parody, 
     news reporting, fair use, etc. The bill suggests a total of 
     nine factors a court may wish to consider. The first four 
     suggest circumstances that may tend to indicate an absence of 
     bad-faith intent to profit from the goodwill of a mark, and 
     the next four suggest circumstances that may tend to indicate 
     that such bad-faith intent exits. The last factor may suggest 
     either bad-faith or an absence thereof depending on the 
     circumstances.
       First, under paragraph (1)(B)(i)(I), a court may consider 
     whether the domain name registrant has trademark or any other 
     intellectual property rights in the name. This factor 
     recognizes, as does trademark law in general, that there may 
     be concurring uses of the same name that are noninfringing, 
     such as the use of the ``Delta'' mark for both air travel and 
     sink faucets. Similarly, the registration of the domain name 
     ``deltaforce.com'' by a movie studio would not tend to 
     indicate a bad faith intent on the part of the registrant to 
     trade on Delta Airlines or Delta Faucets' trademarks.
       Second, under paragraph (1)(B)(i)(II), a court may consider 
     the extent to which the domain name is the same as the 
     registrant's own legal name or a nickname by which that 
     person is commonly identified. This factor recognizes, again 
     as does the concept of fair use in trademark law, that a 
     person should be able to be identified by their own name, 
     whether in their business or on a web site. Similarly, a 
     person may bear a legitimate nickname that is identical or 
     similar to a well-known trademark, such as in the well-
     publicized case of the parents who registered the domain name 
     ``pokey.org'' for their young son who goes by that name, and 
     these individuals should not be deterred by this bill from 
     using their name online. This factor is not intended to 
     suggest that domain name registrants may evade the 
     application of this act by merely adopting Exxon, Ford, or 
     other well-known marks as their nicknames. It merely provides 
     a court with the appropriate discretion to determine whether 
     or not the fact that a person bears a nickname similar to a 
     mark at issue is an indication of an absence of bad-faith on 
     the part of the registrant.
       Third, under paragraph (1)(B)(i)(III), a court may consider 
     the domain name registrant's prior use, if any, of the domain 
     name in connection with the bona fide offering of goods or 
     services. Again, this factor recognizes that the legitimate 
     use of the domain name in online commerce may be a good 
     indicator of the intent of the person registering that name. 
     Where the person has used the domain name in commerce without 
     creating a likelihood of confusion as to the source or origin 
     of the goods or services and

[[Page 29966]]

     has not otherwise attempted to use the name in order to 
     profit from the goodwill of the trademark owner's name, a 
     court may look to this as an indication of the absence of bad 
     faith on the part of the registrant.
       Fourth, under paragraph (1)(B)(i)(IV), a court may consider 
     the person's bona fide noncommercial or fair use of the mark 
     in a web site that is accessible under the domain name at 
     issue. This factor is intended to balance the interests of 
     trademark owners with the interests of those who would make 
     lawful noncommercial or fair uses of others' marks online, 
     such as in comparative advertising, comment, criticism, 
     parody, news reporting, etc. Under the bill, the mere fact 
     that the domain name is used for purposes of comparative 
     advertising, comment, criticism, parody, news reporting, 
     etc., would not alone establish a lack of bad-faith intent. 
     The fact that a person uses a mark in a site in such a lawful 
     manner may be an appropriate indication that the person's 
     registration or use of the domain name lacked the required 
     element of bad-faith. This factor is not intended to create a 
     loophole that otherwise might swallow the bill, however, by 
     allowing a domain name registrant to evade application of the 
     Act by merely putting up a noninfringing site under an 
     infringing domain name. For example, in the well know case of 
     Panavision Int'l v. Toeppen, 141 F.3d 1316 (9th Cir. 1998), a 
     well known cybersquatter had registered a host of domain 
     names mirroring famous trademarks, including names for 
     Panavision, Delta Airlines, Neiman Marcus, Eddie Bauer, 
     Lufthansa, and more than 100 other marks, and had attempted 
     to sell them to the mark owners for amounts in the range of 
     $10,000 to $15,000 each. His use of the ``panavision.com'' 
     and ``panaflex.com'' domain names was seemingly more 
     innocuous, however, as they served as addresses for sites 
     that merely displayed pictures of Pana Illinois and the word 
     ``Hello'' respectively. This bill would not allow a person to 
     evade the holding of that case--which found that Mr. Toeppen 
     had made a commercial use of the Panavision marks and that 
     such uses were, in fact, diluting under the Federal Trademark 
     Dilution Act--merely by posting noninfringing uses of the 
     trademark on a site accessible under the offending domain 
     name, as Mr. Toeppen did. Similarly, the bill does not affect 
     existing trademark law to the extent it has addressed the 
     interplay between First Amendment protections and the rights 
     of trademark owners. Rather, the bill gives courts the 
     flexibility to weigh appropriate factors in determining 
     whether the name was registered or used in bad faith, and it 
     recognizes that one such factor may be the use the domain 
     name registrant makes of the mark.
       Fifth, under paragraph (1)(B)(i)(V), a court may consider 
     whether, in registering or using the domain name, the 
     registrant intended to divert consumers away from the 
     trademark owner's website to a website that could harm the 
     goodwill of the mark, either for purposes of commercial gain 
     or with the intent to tarnish or disparage the mark, by 
     creating a likelihood of confusion as to the source, 
     sponsorship, affiliation, or endorsement of the site. This 
     factor recognizes that one of the main reasons cybersquatters 
     use other people's trademarks is to divert Internet users to 
     their own sites by creating confusion as to the source, 
     sponsorship, affiliation, or endorsement of the site. This is 
     done for a number of reasons, including to pass off inferior 
     goods under the name of a well-known mark holder, to defraud 
     consumers into providing personally identifiable information, 
     such as credit card numbers, to attract ``eyeballs'' to sites 
     that price online advertising according to the number of 
     ``hits'' the site receives, or even just to harm the value of 
     the mark. Under this provision, a court may give appropriate 
     weight to evidence that a domain name registrant intended to 
     confuse or deceive the public in this manner when making a 
     determination of bad-faith intent.
       Sixth, under paragraph (1)(B)(i)(VI), a court may consider 
     a domain name registrant's offer to transfer, sell, or 
     otherwise assign the domain name to the mark owner or any 
     third party for financial gain, where the registrant has not 
     used, and did not have any intent to use, the domain name in 
     the bona fide offering of any goods or services. A court may 
     also consider a person's prior conduct indicating a pattern 
     of such conduct. This factor is consistent with the court 
     cases, like the Panavision case mentioned above, where courts 
     have found a defendant's offer to sell the domain name to the 
     legitimate mark owner as being indicative of the defendant's 
     intent to trade on the value of a trademark owner's marks by 
     engaging in the business of registering those marks and 
     selling them to the rightful trademark owners. It does not 
     suggest that a court should consider the mere offer to sell a 
     domain name to a mark owner or the failure to use a name in 
     the bona fide offering of goods or services as sufficient to 
     indicate bad faith. Indeed, there are cases in which a person 
     registers a name in anticipation of a business venture that 
     simply never pans out. And someone who has a legitimate 
     registration of a domain name that mirrors someone else's 
     domain name, such as a trademark owner that is a lawful 
     concurrent user of that name with another trademark owner, 
     may, in fact, wish to sell that name to the other trademark 
     owner. This bill does not imply that these facts are an 
     indication of bad-faith. It merely provides a court with the 
     necessary discretion to recognize the evidence of bad-faith 
     when it is present. In practice, the offer to sell domain 
     names for exorbitant amounts to the rightful mark owner has 
     been one of the most common threads in abusive domain name 
     registrations. Finally, by using the financial gain standard, 
     this paragraph allows a court to examine the motives of the 
     seller.
       Seventh, under paragraph (1)(B)(i)(VII), a court may 
     consider the registrant's intentional provision of material 
     and misleading false contact information in an application 
     for the domain name registration, the person's intentional 
     failure to maintain accurate contact information, and the 
     person's prior conduct indicating a pattern of such conduct. 
     Falsification of contact information with the intent to evade 
     identification and service of process by trademark owners is 
     also a common thread in cases of cybersquatting. This factor 
     recognizes that fact, while still recognizing that there may 
     be circumstances in which the provision of false information 
     may be due to other factors, such as mistake or, as some have 
     suggested in the case of political dissidents, for purposes 
     of anonymity. This bill balances those factors by limiting 
     consideration to the person's contact information, and even 
     then requiring that the provision of false information be 
     material and misleading. As with the other factors, this 
     factor is nonexclusive and a court is called upon to make a 
     determination based on the facts presented whether or not the 
     provision of false information does, in fact, indicate bad-
     faith.
       Eight, under paragraph (1)(B)(i)(VIII), a court may 
     consider the domain name registrant's acquisition of multiple 
     domain names which the person knows are identical or 
     confusingly similar to, or dilutive of, others' marks. This 
     factor recognizes the increasingly common cybersquatting 
     practice known as ``warehousing'', in which a cybersquatter 
     registers multiple domain names--sometimes hundreds, even 
     thousands--that mirror the trademarks of others. By sitting 
     on these marks and not making the first move to offer to sell 
     them to the mark owner, these cybersquatters have been 
     largely successful in evading the case law developed under 
     the Federal Trademark Dilution Act. This bill does not 
     suggest that the mere registration of multiple domain names 
     is an indication of bad faith, but it allows a court to weigh 
     the fact that a person has registered multiple domain names 
     that infringe or dilute the trademarks of others as part of 
     its consideration of whether the requisite bad-faith intent 
     exists.
       Lastly, under paragraph (1)(B)(i)(IX), a court may consider 
     the extent to which the mark incorporated in the person's 
     domain name registration is or is not distinctive and famous 
     within the meaning of subsection (c)(1) of section 43 of the 
     Trademark Act of 1946. The more distinctive or famous a mark 
     has become, the more likely the owner of that mark is 
     deserving of the relief available under this act. At the same 
     time, the fact that a mark is not well-known may also suggest 
     a lack of bad-faith.
       Paragraph (1)(B)(ii) underscores the bad-faith requirement 
     by making clear that bad-faith shall not be found in any case 
     in which the court determines that the person believed and 
     had reasonable grounds to believe that the use of the domain 
     name was a fair use or otherwise lawful.
       Paragraph (1)(C) makes clear that in any civil action 
     brought under the new section 43(d), a court may order the 
     forfeiture, cancellation, or transfer of a domain name to the 
     owner of the mark.
       Paragraph (1)(D) clarifies that a prohibited ``use'' of a 
     domain name under the bill applies only to a use by the 
     domain name registrant or that registrant's authorized 
     licensee.
       Paragraph (1)(E) defines what means to ``traffic in'' a 
     domain name. Under this Act, ``traffics in'' refers to 
     transactions that include, but are not limited to, sales, 
     purchases, loans, pledges, licenses, exchanges of currency, 
     and any other transfer for consideration or receipt in 
     exchange for consideration.
       Paragraph (2)(A) provides for in rem jurisdiction, which 
     allows a mark owner to seek the forfeiture, cancellation, or 
     transfer of an infringing domain name by filing an in rem 
     action against the name itself, where the mark owner has 
     satisfied the court that it has exercised due diligence in 
     trying to locate the owner of the domain name but is unable 
     to do so, or where the mark owner is otherwise unable to 
     obtain in personam jurisdiction over such person. As 
     indicated above, a significant problem faced by trademark 
     owners in the fight against cybersquatting is the fact that 
     many cybersquatters register domain names under aliases or 
     otherwise provide false information in their registration 
     applications in order to avoid identification and service of 
     process by the mark owner. This bill will alleviate this 
     difficulty, while protecting the notions of fair play and 
     substantial justice, by enabling a mark owner to seek an 
     injunction against the infringing property in those cases 
     where, after due diligence, a mark owner is unable to proceed 
     against the domain name registrant because the registrant

[[Page 29967]]

     has provided false contact information and is otherwise not 
     to be found, or where a court is unable to assert personal 
     jurisdiction over such person, provided the mark owner can 
     show that the domain name itself violates substantive federal 
     trademark law (i.e., that the domain name violates the rights 
     of the registrant of a mark registered in the Patent and 
     Trademark Office, or section 43(a) or (c) of the Trademark 
     Act). Under the bill, a mark owner will be deemed to have 
     exercised due diligence in trying to find a defendant if the 
     mark owner sends notice of the alleged violation and intent 
     to proceed to the domain name registrant at the postal and e-
     mail address provided by the registrant to the registrar and 
     publishes notice of the action as the court may direct 
     promptly after filing the action. Such acts are deemed to 
     constitute service of process by paragraph (2)(B).
       The concept of in rem jurisdiction has been with us since 
     well before the Supreme Court's landmark decision in Pennoyer 
     v. Neff, 95 U.S. 714 (1877). Although more recent decisions 
     have called into question the viability of quasi in rem 
     ``attachment'' jurisdiction, see Shaffer v. Heitner, 433 U.S. 
     186 (1977), the Court has expressly acknowledged the 
     propriety of true in rem proceedings (or even type I quasi in 
     rem proceedings \5\) where ``claims to the property itself 
     are the source of the underlying controversy between the 
     plaintiff and the defendant.'' Id. at 207-08. The Act 
     clarifies the availability of in rem jurisdiction in 
     appropriate cases involving claims by trademark holders 
     against cyberpirates. In so doing, the Act reinforces the 
     view that in rem jurisdiction has continuing constitutional 
     vitality, see R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 
     957-58 (4th Cir. 1999) (``In rem actions only require that a 
     party seeking an interest in a res bring the res into the 
     custody of the court and provide reasonable, public notice of 
     its intention to enable others to appear in the action to 
     claim an interest in the res.''); Chapman v. Vande Bunte, 604 
     F. Supp. 714, 716-17 (E.D. N.C. 1985) (``In a true in rem 
     proceeding, in order to subject property to a judgment in 
     rem, due process requires only that the property itself have 
     certain minimum contacts with the territory of the forum.'').
       By authorizing in rem jurisdiction, the Act also attempts 
     to respond to the problems faced by trademark holders in 
     attempting to effect personal service of process on 
     cyberpirates. In an effort to avoid being held accountable 
     for their infringement or dilution of famous trademarks, 
     cyberpirates often have registered domain names under 
     fictitious names and addresses or have used offshore 
     addresses or companies to register domain names. Even when 
     they actually do receive notice of a trademark holder's 
     claim, cyberpirates often either refuse to acknowledge 
     demands from a trademark holder altogether, or simply respond 
     to an initial demand and then ignore all further efforts by 
     the trademark holder to secure the cyberpirate's compliance. 
     The in rem provisions of the Act accordingly contemplate that 
     a trademark holder may initiate in rem proceedings in cases 
     where domain name registrants are not subject to personal 
     jurisdiction or cannot reasonably be found by the trademark 
     holder.
       Paragraph (2)(C) provides that in an in rem proceeding, a 
     domain name shall be deemed to have its situs in the judicial 
     district in which (1) the domain name registrar, registry, or 
     other domain name authority that registered or assigned the 
     domain name is located, or (2) documents sufficient to 
     establish control and authority regarding the disposition of 
     the registration and use of the domain name are deposited 
     with the court.
       Paragraph (2)(D) limits the relief available in such an in 
     rem action to an injunction ordering the forfeiture, 
     cancellation, or transfer of the domain name. Upon receipt of 
     a written notification of the complaint, the domain name 
     registrar, registry, or other authority is required to 
     deposit with the court documents sufficient to establish the 
     court's control and authority regarding the disposition of 
     the registration and use of the domain name to the court, and 
     may not transfer, suspend, or otherwise modify the domain 
     name during the pendency of the action, except upon order of 
     the court. Such domain name registrar, registry, or other 
     authority is immune from injunctive or monetary relief in 
     such an action, except in the case of bad faith or reckless 
     disregard, which would include a willful failure to comply 
     with any such court order.
       Paragraph (3) makes clear that the new civil action created 
     by this Act and the in rem action established therein, and 
     any remedies available under such actions, shall be in 
     addition to any other civil action or remedy otherwise 
     applicable. This paragraph thus makes clear that the creation 
     of a new section 43(d) in the Trademark Act does not in any 
     way limit the application of current provisions of trademark, 
     unfair competition and false advertising, or dilution law, or 
     other remedies under counterfeiting or other statutes, to 
     cybersquatting cases.
       Paragraph (4) makes clear that the in rem jurisdiction 
     established by the bill is in addition to any other 
     jurisdiction that otherwise exists, whether in rem or in 
     personam.
     Subsection (b). Cyberpiracy Protection for Individuals
       Subsection (b) prohibits the registration of a domain name 
     that is the name of another living person, or a name that is 
     substantially and confusingly similar thereto, without such 
     person's permission, if the registrant's specific intent is 
     to profit from the domain name by selling it for financial 
     gain to such person or a third party. While the provision is 
     broad enough to apply to the registration of full names 
     (e.g., johndoe.com), appellations (e.g., doe.com), and 
     variations thereon (e.g. john-doe.com or jondoe.com), the 
     provision is still very narrow in that it requires a showing 
     that the registrant of the domain name registered that name 
     with a specific intent to profit from the name by selling it 
     to that person or to a third party for financial gain. This 
     section authorizes the court to grant injunctive relief, 
     including ordering the forfeiture or cancellation of the 
     domain name or the transfer of the domain name to the 
     plaintiff. Although the subsection does not authorize a court 
     to grant monetary damages, the court may award costs and 
     attorneys' fees to the prevailing party in appropriate cases.
       This subsection does not prohibit the registration of a 
     domain name in good faith by an owner or licensee of a 
     copyrighted work, such as an audiovisual work, a sound 
     recording, a book, or other work of authorship, where the 
     personal name is used in, affiliated with, or related to that 
     work, where the person's intent in registering the domain is 
     not to sell the domain name other than in conjunction with 
     the lawful exploitation of the work, and where such 
     registration is not prohibited by a contract between the 
     domain name registered and the named person. This limited 
     exemption recognizes the First Amendment issues that may 
     arise in such cases and defers to existing bodies of law that 
     have developed under State and Federal law to address such 
     uses of personal names in conjunction with works of 
     expression. Such an exemption is not intended to provide a 
     loophole for those whose specific intent is to profit from 
     another's name by selling the domain name to that person or a 
     third party other than in conjunction with the bona fide 
     exploitation of a legitimate work of authorship. For example, 
     the registration of a domain name containing a personal name 
     by the author of a screenplay that bears the same name, with 
     the intent to sell the domain name in conjunction with the 
     sale or license of the screenplay to a production studio 
     would not be barred by this subsection, although other 
     provisions of State or Federal law may apply. On the other 
     hand, the exemption for good faith registrations of domain 
     names tied to legitimate works of authorship would not exempt 
     a person who registers a personal name as a domain name with 
     the intent to sell the domain name by itself, or in 
     conjunction with a work of authorship (e.g., a copyrighted 
     web page) where the real object of the sale is the domain 
     name, rather than the copyrighted work.
       In sum, this subsection is a narrow provision intended to 
     curtail one form of ``cybersquatting''--the act of 
     registering someone else's name as a domain name for the 
     purpose of demanding remuneration from the person in exchange 
     for the domain name. Neither this section nor any other 
     section in this bill is intended to create a right of 
     publicity of any kind with respect to domain names. Nor is it 
     intended to create any new property rights, intellectual or 
     otherwise, in a domain name that is the name of a person. 
     This subsection applies prospectively only, affecting only 
     those domain names registered on or after the date of 
     enactment of this Act.
     Sec. 3003. Damages and Remedies
       This section applies traditional trademark remedies, 
     including injunctive relief, recovery of defendant's profits, 
     actual damages, and costs, to cybersquatting cases under the 
     new section 43(d) of the Trademark Act. The bill also amends 
     section 35 of the Trademark Act to provide for statutory 
     damages in cybersquatting cases, in an amount of not less 
     than $1,000 and not more than $100,000 per domain name, as 
     the court considers just.
     Sec. 3004. Limitation on Liability
       This section amends section 32(2) of the Trademark Act to 
     extend the Trademark Act's existing limitations on liability 
     to the cybersquatting context. This section also creates a 
     new subparagraph (D) in section 32(2) to encourage domain 
     name registrars and registries to work with trademark owners 
     to prevent cybersquatting through a limited exemption from 
     liability for domain name registrars and registries that 
     suspend, cancel, or transfer domain names pursuant to a court 
     order or in the implementation of a reasonable policy 
     prohibiting cybersquatting. Under this exemption, a 
     registrar, registry, or other domain name registration 
     authority that suspends, cancels, or transfers a domain name 
     pursuant to a court order or a reasonable policy prohibiting 
     cybersquatting will not be held liable for monetary damages, 
     and will be not be subject to injunctive relief provided that 
     the registrar, registry, or other registration authority has 
     deposited control of the domain name with a court in which an 
     action has been filed regarding the disposition of the domain 
     name, it has not transferred, suspended, or otherwise 
     modified the domain

[[Page 29968]]

     name during the pendency of the action, other than in 
     response to a court order, and it has not willfully failed to 
     comply with any such court order. Thus, the exemption will 
     allow a domain name registrar, registry, or other 
     registration authority to avoid being joined in a civil 
     action regarding the disposition of a domain name that has 
     been taken down pursuant to a dispute resolution policy, 
     provided the court has obtained control over the name from 
     the registrar, registry, or other registration authority, but 
     such registrar, registry, or other registration authority 
     would not be immune from suit for injunctive relief where no 
     such action has been filed or where the registrar, registry, 
     or other registration authority has transferred, suspended, 
     or otherwise modified the domain name during the pendency of 
     the action or wilfully failed to comply with a court order.
       This section also protects the rights of domain name 
     registrants against overreaching trademark owners. Under a 
     new subparagraph (D)(iv) in section 32(2), a trademark owner 
     who knowingly and materially misrepresents to the domain name 
     registrar or registry that a domain name is infringing shall 
     be liable to the domain name registrant for damages resulting 
     from the suspension, cancellation, or transfer of the domain 
     name. In addition, the court may grant injunctive relief to 
     the domain name registrant by ordering the reactivation of 
     the domain name or the transfer of the domain name back to 
     the domain name registrant. In creating a new subparagraph 
     (D)(iii) of section 32(2), this section codifies current case 
     law limiting the secondary liability of domain name 
     registrars and registries for the act of registration of a 
     domain name, absent bad-faith on the part of the registrar 
     and registry.
       Finally, subparagraph (D)(v) provides additional 
     protections for domain name holders by allowing a domain name 
     registrant whose name has been suspended, disabled, or 
     transferred to file a civil action to establish that the 
     registration or use of the domain name by such registrant is 
     not a violation of the Lanham Act. In such cases, a court may 
     grant injunctive relief to the domain name registrant, 
     including the reactivation of the domain name or transfer of 
     the domain name to the domain name registrant.
     Sec. 3005. Definitions
       This section amends the Trademark Act's definitions section 
     (section 45) to add definitions for key terms used in this 
     Act. First, the term ``Internet'' is defined consistent with 
     the meaning given that term in the Communications Act (47 
     U.S.C. 230(f)(1)). Second, this section creates a narrow 
     definition of ``domain name'' to target the specific bad 
     faith conduct sought to be addressed while excluding such 
     things as screen names, file names, and other identifiers not 
     assigned by a domain name registrar or registry.
     Sec. 3006. Study on Abusive Domain Name Registrations 
         Involving Personal Names
       This section directs the Secretary of Commerce, in 
     consultation with the Patent and Trademark Office and the 
     Federal Election Commission, to conduct a study and report to 
     Congress with recommendations on guidelines and procedures 
     for resolving disputes involving the registration or use of 
     domain names that include personal names of others or names 
     that are confusingly similar thereto. This section further 
     directs the Secretary of Commerce to collaborate with the 
     Internet Corporation for Assigned Names and Numbers (ICANN) 
     to develop guidelines and procedures for resolving disputes 
     involving the registration or use of domain names that 
     include personal names of others or names that are 
     confusingly similar thereto.
     Sec. 3007. Historic Preservation
       This section provides a limited immunity from suit under 
     trademark law for historic buildings that are on or eligible 
     for inclusion on the National Register of Historic Places, or 
     that are designated as an individual landmark or as a 
     contributing building in a historic district.
     Sec. 3008. Savings Clause
       This section provides an explicit savings clause making 
     clear that the bill does not affect traditional trademark 
     defenses, such as fair use, or a person's first amendment 
     rights.
     Sec. 3009. Effective Date
       This section provides that damages provided for under this 
     bill shall not apply to the registration, trafficking, or use 
     of a domain name that took place prior to the enactment of 
     this Act.

                     TITLE VI--INVENTOR PROTECTION

     Sec. 4001. Short Title
       This title may be cited as the ``American Inventors 
     Protection Act of 1999.''
     Sec. 4002. Table of Contents
       Section 4002 enumerates the table of contents of this 
     title.

                     Subtitle A--Inventors' Rights

       Subtitle A creates a new section 297 in chapter 29 of title 
     35 of the United States Code, designed to curb the deceptive 
     practices of certain invention promotion companies. Many of 
     these companies advertise on television and in magazines that 
     inventors may call a toll-free number for assistance in 
     marketing their inventions. They are sent an invention 
     evaluation form, which they are asked to complete to allow 
     the promoter to provide expert analysis of the market 
     potential of their inventions. The inventors return the form 
     with descriptions of the inventions, which become the basis 
     for contacts by salespeople at the promotion companies. The 
     next step is usually a ``professional''-appearing product 
     research report which contains nothing more than boilerplate 
     information stating that the invention has outstanding market 
     potential and fills an important need in the field. The 
     promotion companies attempt to convince the inventor to buy 
     their marketing services, normally on a sliding scale in 
     which the promoter will ask for a front-end payment of up to 
     $10,000 and a percentage of resulting profits, or a reduced 
     front-end payment of $6,000 or $8,000 with commensurately 
     larger royalties on profits. Once paid under such a scenario, 
     a promoter will typically and only forward information to a 
     list of companies that never respond.
       This subtitle addresses these problems by (1) requiring an 
     invention promoter to disclose certain materially relevant 
     information to a customer in writing prior to entering into a 
     contract for invention promotion services; (2) establishing a 
     federal cause of action for inventors who are injured by 
     material false of fraudulent statements or representations, 
     or any omission of material fact, by an invention promoter, 
     or by the invention promoter's failure to make the required 
     written disclosures; and (3) requiring the Director of the 
     United States Patent and Trademark Office to make publicly 
     available complaints received involving invention promoters, 
     along with the response to such complaints, if any, from the 
     invention promoters.
     Sec. 4101. Short title
       This subtitle may be cited as the ``Inventors'' Rights Act 
     of 1999.''
     Sec. 4102. Integrity in invention promotion services
       This section adds a new section 297 to in chapter 29 of 
     title 35, United States Code, intended to promote integrity 
     in invention promotion services. Legitimate invention 
     assistance and development organizations can be of great 
     assistance to novice inventors by providing information on 
     how to protect an invention, how to develop it, how to obtain 
     financing to manufacture it, or how to license or sell the 
     invention. While many invention developers are legitimate, 
     the unscrupulous ones take advantage of untutored inventors, 
     asking for large sums of money up front for which they 
     provide no real service in return. This new section provides 
     a much needed safeguard to assist independent inventors in 
     avoiding becoming victims of the predatory practices of 
     unscrupulous invention promoters.
       New section 297(a) of title 35 requires an invention 
     promoter to disclose certain materially relevant information 
     to a customer in writing prior to entering into a contract 
     for invention promotion services. Such information includes: 
     (1) The number of inventions evaluated by the invention 
     promoter and stating the number of those evaluated positively 
     and the number negatively; (2) The number of customers who 
     have contracted for services with the invention promoter in 
     the prior five years; (3) The number of customers known by 
     the invention promoter to have received a net financial 
     profit as a direct result of the invention promoter's 
     services; (4) The number of customers known by the invention 
     promoter to have received license agreements for their 
     inventions as a direct result of the invention promoter's 
     services; and (5) the names and addresses of all previous 
     invention promotion companies with which the invention 
     promoter or its officers have collectively or individually 
     been affiliated in the previous 10 years to enable the 
     customer to evaluate the reputations of these companies.
       New section 297(b) of title 35 establishes a civil cause of 
     action against any invention promoter who injures a customer 
     through any material false or fraudulent statement, 
     representation, or omission of material fact by the invention 
     promoter, or any person acting on behalf of the invention 
     promoter, or through failure of the invention promoter to 
     make all the disclosures required under subsection (a). In 
     such a civil action, the customer may recover, in addition to 
     reasonable costs and attorneys' fees, the amount of actual 
     damages incurred by the customer or, at the customer's 
     election, statutory damages up to $5,000, as the court 
     considers just. Subsection (b)(2) authorizes the court to 
     increase damages to an amount not to exceed three times the 
     amount awarded as statutory or actual damages in a case where 
     the customer demonstrates, and the court finds, that the 
     invention promoter intentionally misrepresented or omitted a 
     material fact to such customer, or failed to make the 
     required disclosures under subsection (a), for the purpose of 
     deceiving the customer. In determining the amount of 
     increased damages, courts may take into account whether 
     regulatory sanctions or other corrective action has been 
     taken as a result of previous complaints against the 
     invention promoter.
       New section 297(c) defines the terms used in the section. 
     These definitions are carefully crafted to cover true 
     invention promoters without casting the net too broadly. 
     Paragraph (3) excepts from the definition of ``invention 
     promoter'' departments and

[[Page 29969]]

     agencies of the Federal, state, and local governments; any 
     nonprofit, charitable, scientific, or educational 
     organizations qualified under applicable State laws or 
     described under Sec. 170(b)(1)(A) of the Internal Revenue 
     Code of 1986; persons or entities involved in evaluating the 
     commercial potential of, or offering to license or sell, a 
     utility patent or a previously filed nonprovisional utility 
     patent application; any party participating in a transaction 
     involving the sale of the stock or assets of a business; or 
     any party who directly engages in the business of retail 
     sales or distribution of products. Paragraph (4) defines the 
     term ``invention promotion services'' to mean the procurement 
     or attempted procurement for a customer of a firm, 
     corporation, or other entity to develop and market products 
     or services that include the customer's invention.
       New section 297(d) requires the Director of the USPTO to 
     make publicly available all complaints submitted to the USPTO 
     regarding invention promoters, together with any responses by 
     invention promoters to those complaints. The Director is 
     required to notify the invention promoter of a complaint and 
     provide a reasonable opportunity to reply prior to making 
     such complaint public. Section 297(d)(2) authorizes the 
     Director to request from Federal and State agencies copies of 
     any complaints relating to invention promotion services they 
     have received and to include those complaints in the records 
     maintained by the USPTO regarding invention promotion 
     services. It is anticipated that the Director will use 
     appropriate discretion in making such complaints available to 
     the public for a reasonably sufficient, yet limited, length 
     of time, such as a period of three years from the date of 
     receipt, and that the Director will consult with the Federal 
     Trade Commission to determine whether the disclosure 
     requirements of the FTC and section 297(a) can be 
     coordinated.
     Sec. 4103. Effective date
       This section provides that the effective date of section 
     297 will be 60 days after the date of enactment of this Act.

             Subtitle B--Patent and Trademark Fee Fairness

       Subtitle B provides patent and trademark fee reform, by 
     lowering patent fees, by directing the Director of the USPTO 
     to study alternative fee structures to encourage full 
     participation in our patent system by all inventors, large 
     and small, and by strengthening the prohibition against the 
     use of trademark fees for non-trademark uses.
     Sec. 4201. Short title
       This subtitle may be cited as the ``Patent and Trademark 
     Fee Fairness Act of 1999.''
     Sec. 4202. Adjustment of patent fees.
       This section reduces patent filing an reissue fees by $50, 
     and reduces patent maintenance fees by $110. This would mark 
     only the second time in history that patent fees have been 
     reduced. Because trademark fees have not been increased since 
     1993 and because of the application of accounting based cost 
     principles and systems, patent fee income has been partially 
     offsetting the cost of trademark operations. This section 
     will restore fairness to patent and trademark fees by 
     reducing patent fees to better reflect the cost of services.
     Sec. 4203. Adjustment of trademark fees.
       This section will allow the Director of the USPTO to adjust 
     trademark fees in fiscal year 2000 without regard to 
     fluctuations in the Consumer Price Index in order to better 
     align those fees with the costs of services.
     Sec. 4204. Study on alternative fee structures
       This section directs the Director of the USPTO to conduct a 
     study and report to the Judiciary Committees of the House and 
     Senate within one year on alternative fee structures that 
     could be adopted by the USPTO to encourage maximum 
     participation in the patent system by the American inventor 
     community.
     Sec. 4205. Patent and Trademark Office funding
       Pursuant to section 42(c) of the Patent Act, fees available 
     to the Commissioner under section 31 of the Trademark Act of 
     1946 \6\ may be used only for the processing of trademark 
     registrations and for other trademark-related activities, and 
     to cover a proportionate share of the administrative costs of 
     the USPTO. In an effort to more tightly ``fence'' trademark 
     funds for trademark purposes, section 4205 amends this 
     language such that all (trademark) fees available to the 
     Commissioner shall be used for trademark registration and 
     other trademark-related purposes. In other words, the 
     Commissioner may exercise no discretion when spending funds; 
     they must be earmarked for trademark purposes.

                   Subtitle C--First Inventor Defense

       Subtitle C strikes an equitable balance between the 
     interests of U.S. inventors who have invented and 
     commercialized business methods and processes, many of which 
     until recently were thought not to be patentable, and U.S. or 
     foreign inventors who later patent the methods and processes. 
     The subtitle creates a defense for inventors who have reduced 
     an invention to practice in the U.S. at least one year before 
     the patent filing date of another, typically later, inventor 
     and commercially used the invention in the U.S. before the 
     filing date. A party entitled to the defense must not have 
     derived the invention from the patent owner. The bill 
     protects the patent owner by providing that the establishment 
     of the defense by such an inventor or entrepreneur does not 
     invalidate the patent.
       The subtitle clarifies the interface between two key 
     branches of intellectual property law--patents and trade 
     secrets. Patent law serves the public interest by encouraging 
     innovation and investment in new technology, and may be 
     thought of as providing a right to exclude other parties from 
     an invention in return for the inventor making a public 
     disclosure of the invention. Trade secret law, however, also 
     serves the public interest by protecting investments in new 
     technology. Trade secrets have taken on a new importance with 
     an increase in the ability to patent all business methods and 
     processes. It would be administratively and economically 
     impossible to expect any inventor to apply for a patent on 
     all methods and processes now deemed patentable. In order to 
     protect inventors and to encourage proper disclosure, this 
     subtitle focuses on methods for doing and conducting 
     business, including methods used in connection with internal 
     commercial operations as well as those used in connection 
     with the sale or transfer of useful end results--whether in 
     the form of physical products, or in the form of services, or 
     in the form of some other useful results; for example, 
     results produced through the manipulation of data or other 
     inputs to produce a useful result.
       The earlier-inventor defense is important to many small and 
     large businesses, including financial services, software 
     companies, and manufacturing firms--any business that relies 
     on innovative business processes and methods. The 1998 
     opinion by the U.S. Court of Appeals for the Federal Circuit 
     in State Street Bank and Trust Co. v. Signature Financial 
     Group,\7\ which held that methods of doing business are 
     patentable, has added to the urgency of the issue. As the 
     Court noted, the reference to the business method exception 
     had been improperly applied to a wide variety of processes, 
     blurring the essential question of whether the invention 
     produced a ``useful, concrete, and tangible result.'' In the 
     wake of State Street, thousands of methods and processes used 
     internally are now being patented. In the past, many 
     businesses that developed and used such methods and processes 
     thought secrecy was the only protection available. Under 
     established law, any of these inventions which have been in 
     commercial use--public or secret--for more than one year 
     cannot now be the subject of a valid U.S. patent.
     Sec. 4301. Short title
       This subtitle may be cited as the ``First Inventor Defense 
     Act of 1999.''
     Sec. 4302. Defense to patent infringement based on earlier 
         inventor
       In establishing the defense, subsection (a) of section 4302 
     creates a new section 273 of the Patent Act, which in 
     subsection (a) sets forth the following definitions:
       (1) ``Commercially used and commercial use'' mean use of 
     any method in the United States so long as the use is in 
     connection with an internal commercial use or an actual sale 
     or transfer of a useful end result;
       (2) ``Commercial use as applied to a nonprofit research 
     laboratory and nonprofit entities such as a university, 
     research center, or hospital intended to benefit the public'' 
     means that such entities may assert the defense only based on 
     continued use by and in the entities themselves, but that the 
     defense is inapplicable to subsequent commercialization or 
     use outside the entities;
       (3) ``Method'' means any method for doing or conducting an 
     entity's business; and (4) ``Effective filing date'' means 
     the earlier of the actual filing date of the application for 
     the patent or the filing date of any earlier US, foreign, or 
     international application to which the subject matter at 
     issue is entitled under the Patent Act.
       To be ``commercially used'' or in ``commercial use'' for 
     purposes of subsection (a), the use must be in connection 
     with either an internal commercial use or an actual arm's-
     length sale or other arm's-length commercial transfer of a 
     useful end result. The method that is the subject matter of 
     the defense may be an internal method for doing business, 
     such as an internal human resources management process, or a 
     method for conducting business such as a preliminary or 
     intermediate manufacturing procedure, which contributes to 
     the effectiveness of the business by producing a useful end 
     result for the internal operation of the business or for 
     external sale. Commercial use does not require the subject 
     matter at issue to be accessible to or otherwise known to the 
     public.
       Subject matter that must undergo a premarketing regulatory 
     review period during which safety or efficacy is established 
     before commercial marketing or use is considered to be 
     commercially used and in commercial use during the regulatory 
     review period.
       The issue of whether an invention is a method is to be 
     determined based on its underlying nature and not on the 
     technicality of the form of the claims in the patent. For 
     example, a method for doing or conducting business that has 
     been claimed in a patent as a programmed machine, as in the 
     State

[[Page 29970]]

     Street case, is a method for purposes of section 273 if the 
     invention could have as easily been claimed as a method. Form 
     should not rule substance.
       Subsection (b)(1) of section 273 establishes a general 
     defense against infringement under section 271 of the Patent 
     Act. Specifically, a person will not be held liable with 
     respect to any subject matter that would otherwise infringe 
     one or more claims to a method in another party's patent if 
     the person:
       (1) Acting in good faith, actually reduced the subject 
     matter to practice at least one year before the effective 
     filing date of the patent; and
       (2) Commercially used the subject matter before the 
     effective filing date of the patent.
       The first inventor defense is not limited to methods in any 
     particular industry such as the financial services industry, 
     but applies to any industry which relies on trade secrecy for 
     protecting methods for doing or conducting the operations of 
     their business.
       Subsection (b)(2) states that the sale or other lawful 
     disposition of a useful end result produced by a patented 
     method, by a person entitled to assert a section 273 defense, 
     exhausts the patent owner's rights with respect to that end 
     result to the same extent such rights would have been 
     exhausted had the sale or other disposition been made by the 
     patent owner. For example, if a purchaser would have had the 
     right to resell a product or other end result if bought from 
     the patent owner, the purchaser will have the same right if 
     the product is purchased from a person entitled to a section 
     273 defense.
       Subsection (b)(3) creates limitations and qualifications on 
     the use of the defense. First, a person may not assert the 
     defense unless the invention for which the defense is 
     asserted is for a commercial use of a method as defined in 
     section 273(a)(1) and (3). Second, a person may not assert 
     the defense if the subject matter was derived from the patent 
     owner or persons in privity with the patent owner. Third, 
     subsection (b)(3) makes clear that the application of the 
     defense does not create a general license under all claims of 
     the patent in question--it extends only to the specific 
     subject matter claimed in the patent with respect to which 
     the person can assert the defense. At the same time, however, 
     the defense does extend to variations in the quantity or 
     volume of use of the claimed subject matter, and to 
     improvements that do not infringe additional, specifically-
     claimed subject matter.
       Subsection (b)(4) requires that the person asserting the 
     defense has the burden of proof in establishing it by clear 
     and convincing evidence. Subsection (b)(5) establishes that 
     the person who abandons the commercial use of subject matter 
     may not rely on activities performed before the date of such 
     abandonment in establishing the defense with respect to 
     actions taken after the date of abandonment. Such a person 
     can rely only on the date when commercial use of the subject 
     matter was resumed.
       Subsection (b)(6) notes that the defense may only be 
     asserted by the person who performed the acts necessary to 
     establish the defense, and, except for transfer to the patent 
     owner, the right to assert the defense cannot be licensed, 
     assigned, or transferred to a third party except as an 
     ancillary and subordinate part of a good-faith assignment or 
     transfer for other reasons of the entire enterprise or line 
     of business to which the defense relates.
       When the defense has been transferred along with the 
     enterprise or line of business to which it relates as 
     permitted by subsection (b)(6), subsection (b)(7) limits the 
     sites for which the defense may be asserted. Specifically, 
     when the enterprise or line of business to which the defense 
     relates has been transferred, the defense may be asserted 
     only for uses at those sites where the subject matter was 
     used before the later of the patent filing date or the date 
     of transfer of the enterprise or line of business.
       Subsection (b)(8) states that a person who fails to 
     demonstrate a reasonable basis for asserting the defense may 
     be held liable for attorneys' fees under section 285 of the 
     Patent Act.
       Subsection (b)(9) specifies that the successful assertion 
     of the defense does not mean that the affected patent is 
     invalid. Paragraph (9) eliminates a point of uncertainty 
     under current law, and strikes a balance between the rights 
     of an inventor who obtains a patent after another inventor 
     has taken the steps to qualify for a prior use defense. The 
     bill provides that the commercial use of a method in 
     operating a business before the patentee's filing date, by an 
     individual or entity that can establish a section 273 
     defense, does not invalidate the patent. For example, under 
     current law, although the matter has seldom been litigated, a 
     party who commercially used an invention in secrecy before 
     the patent filing date and who also invented the subject 
     matter before the patent owner's invention may argue that the 
     patent is invalid under section 102 (g) of the Patent Act. 
     Arguably, commercial use of an invention in secrecy is not 
     suppression or concealment of the invention within the 
     meaning of section 102(g), and therefore the party's earlier 
     invention could invalidate the patent.\8\
     Sec. 4303. Effective date and applicability
       The effective date for subtitle C is the date of enactment, 
     except that the title does not apply to any infringement 
     action pending on the date of enactment or to any subject 
     matter for which an adjudication of infringement, including a 
     consent judgment, has been made before the date of enactment.

                   Subtitle D--Patent Term Guarantee

       Subtitle D amends the provisions in the Patent Act that 
     compensate patent applicants for certain reductions in patent 
     term that are not the fault of the applicant. The provisions 
     that were initially included in the term adjustment 
     provisions of patent bills in the 105th Congress only 
     provided adjustments for up to 10 years for secrecy orders, 
     interferences, and successful appeals. Not only are these 
     adjustments too short in some cases, but no adjustments were 
     provided for administrative delays caused by the USPTO that 
     were beyond the control of the applicant. Accordingly, 
     subtitle D removes the 10-year caps from the existing 
     provisions, adds a new provision to compensate applicants 
     fully for USPTO-caused administrative delays, and, for good 
     measure, includes a new provision guaranteeing diligent 
     applicants at least a 17-year term by extending the term of 
     any patent not granted within three years of filing. Thus, no 
     patent applicant diligently seeking to obtain a patent will 
     receive a term of less than the 17 years as provided under 
     the pre-GATT \9\ standard; in fact, most will receive 
     considerably more. Only those who purposely manipulate the 
     system to delay the issuance of their patents will be 
     penalized under subtitle D, a result that the Conferees 
     believe entirely appropriate.
     Sec. 4401. Short title
       This subtitle may be cited as the ``Patent Term Guarantee 
     Act of 1999.''
     Sec.4402. Patent term guarantee authority
       Section 4402 amends section 154(b) of the Patent Act 
     covering term. First, new subsection (b)(1)(A)(i)-(iv) 
     guarantees day-for-day restoration of term lost as a result 
     of delay created by the USPTO when the agency fails to:
       (1) Make a notification of the rejection of any claim for a 
     patent or any objection or argument under Sec. 132, or give 
     or mail a written notice of allowance under Sec. 151, within 
     14 months after the date on which a non-provisional 
     application was actually filed in the USPTO;
       (2) Respond to a reply under Sec. 132, or to an appeal 
     taken under Sec. 134, within four months after the date on 
     which the reply was filed or the appeal was taken;
       (3) Act on an application within four months after the date 
     of a decision by the Board of Patent Appeals and 
     Interferences under Sec. 134 or Sec. 135 or a decision by a 
     Federal court under Sec. Sec. 141, 145, or 146 in a case in 
     which allowable claims remain in the application; or (4) 
     Issue a patent within four months after the date on which the 
     issue fee was paid under Sec. 151 and all outstanding 
     requirements were satisfied.
       Further, subject to certain limitations, infra, section 
     154(b)(1)(B) guarantees a total application pendency of no 
     more than three years. Specifically, day-for-day restoration 
     of term is granted if the USPTO has not issued a patent 
     within three years after ``the actual date of the application 
     in the United States.'' This language was intentionally 
     selected to exclude the filing date of an application under 
     the Patent Cooperation Treaty (PCT).\10\ Otherwise, an 
     applicant could obtain up to a 30-month extension of a U.S. 
     patent merely by filing under PCT, rather than directly in 
     the USPTO, gaining an unfair advantage in contrast to 
     strictly domestic applicants. Any periods of time
       (1) consumed in the continued examination of the 
     application under Sec. 132(b) of the Patent Act as added by 
     section 4403 of this Act;
       (2) lost due to an interference under section135(a), a 
     secrecy order under section 181, or appellate review by the 
     Board of Patent Appeals and Interferences or by a Federal 
     court (irrespective of the outcome); and
       (3) incurred at the request of an applicant in excess of 
     the three months to respond to a notice from the Office 
     permitted by section 154(b)(2)(C)(ii) unless excused by a 
     showing by the applicant under section 154(b)(3)(C) that in 
     spite of all due care the applicant could not respond within 
     three months

     shall not be considered a delay by the USPTO and shall not be 
     counted for purposes of determining whether the patent issued 
     within three years from the actual filing date.
       Day-for-day restoration is also granted under new section 
     154(b)(1)(C) for delays resulting from interferences,\11\ 
     secrecy orders,\12\ and appeals by the Board of Patent 
     Appeals and Interferences or a Federal court in which a 
     patent was issued as a result of a decision reversing an 
     adverse determination of patentability.
       Section 4402 imposes limitations on restoration of term. In 
     general, pursuant to new Sec. 154(b)(2)(A)-(C) of the bill, 
     total adjustments granted for restorations under (b)(1) are 
     reduced as follows:
       (1) To the extent that there are multiple grounds for 
     extending the term of a patent that may exist simultaneously 
     (e.g., delay due to a secrecy order under section 181 and 
     administrative delay under section 154(b)(1)(A)), the term 
     should not be extended for each ground of delay but only for 
     the actual number of days that the issuance of a patent was 
     delayed;

[[Page 29971]]

       (2) The term of any patent which has been disclaimed beyond 
     a date certain may not receive an adjustment beyond the 
     expiration date specified in the disclaimer; and
       (3) Adjustments shall be reduced by a period equal to the 
     time in which the applicant failed to engage in reasonable 
     efforts to conclude prosecution of the application, based on 
     regulations developed by the Director, and an applicant shall 
     be deemed to have failed to engage in such reasonable efforts 
     for any periods of time in excess of three months that are 
     taken to respond to a notice from the Office making any 
     rejection or other request;
       New section 154(b)(3) sets forth the procedures for the 
     adjustment of patent terms. Paragraph (3)(A) empowers the 
     Director to establish regulations by which term extensions 
     are determined and contested. Paragraph (3)(B) requires the 
     Director to send a notice of any determination with the 
     notice of allowance and to give the applicant one opportunity 
     to request reconsideration of the determination. Paragraph 
     (3)(C) requires the Director to reinstate any time the 
     applicant takes to respond to a notice from the Office in 
     excess of three months that was deducted from any patent term 
     extension that would otherwise have been granted if the 
     applicant can show that he or she was, in spite of all due 
     care, unable to respond within three months. In no case shall 
     more than an additional three months be reinstated for each 
     response. Paragraph (3)(D) requires the Director to grant the 
     patent after completion of determining any patent term 
     extension irrespective of whether the applicant appeals.
       New section 154(b)(4) regulates appeals of term adjustment 
     determinations made by the Director. Paragraph (4)(A) 
     requires a dissatisfied applicant to seek remedy in the 
     District Court for the District of Columbia under the 
     Administrative Procedures Act \13\ within 180 days after the 
     grant of the patent. The Director shall alter the term of the 
     patent to reflect any final judgment. Paragraph (4)(B) 
     precludes a third party from challenging the determination of 
     a patent term prior to patent grant.
       Section 4402(b) makes certain conforming amendments to 
     section 282 of the Patent Act and the appellate jurisdiction 
     of the U.S. Court of Appeals for the Federal Circuit.\14\
     Sec. 4403. Continued examination of patent applications
       Section 4403 amends section 132 of the Patent Act to permit 
     an applicant to request that an examiner continue the 
     examination of an application following a notice of ``final'' 
     rejection by the examiner. New section 132(b) authorizes the 
     Director to prescribe regulations for the continued 
     examination of an application notwithstanding a final 
     rejection, at the request of the applicant. The Director may 
     also establish appropriate fees for continued examination 
     proceedings, and shall provide a 50% fee reduction for small 
     entities which qualify for such treatment under section 
     41(h)(1) of the Patent Act.
     Section 4404. Technical clarification
       Section 4404 of the bill coordinates technical term 
     adjustment provisions set forth in section 154(b) with those 
     in section 156(a) of the Patent Act.
     Section 4405. Effective date
       The effective date for the amendments in section 4402 and 
     4404 is six months after the date of enactment and, with the 
     exception of design applications (the terms of which are not 
     measured from filing), applies to any application filed on or 
     after such date. The amendments made by section 4403 take 
     effect six months after date of enactment to allow the USPTO 
     to prepare implementing regulations an apply to all national 
     and international (PCT) applications filed on or after June 
     8, 1995.

   Subtitle E--Domestic Publication of Patent Applications Published 
                                 Abroad

       Subtitle E provides for the publication of pending patent 
     applications which have a corresponding foreign counterpart. 
     Any pending U.S. application filed only in the United States 
     (e.g., one that does not have a foreign counterpart) will not 
     be published if the applicant so requests. Thus, an applicant 
     wishing to maintain her application in confidence may do so 
     merely by filing only in the United States and requesting 
     that the USPTO not publish the application. For those 
     applicants who do file abroad or who voluntarily publish 
     their applications, provisional rights will be available for 
     assertion against any third party who uses the claimed 
     invention between publication and grant provided that 
     substantially similar claims are contained in both the 
     published application and granted patent. This change will 
     ensure that American inventors will be able to see the 
     technology that our foreign competition is seeking to patent 
     much earlier than is possible today.
     Sec. 4501. Short title
       This subtitle may be cited as the ``Domestic Publication of 
     Foreign Filed Patent Applications Act of 1999.''
     Sec. 4502. Publication
       As provided in subsection (a) of section 4502, amended 
     section 122(a) of the Patent Act continues the general rule 
     that patent applications will be maintained in confidence. 
     Paragraph (1)(A) of new subsection (b) of section 122 creates 
     a new exception to this general rule by requiring publication 
     of certain applications promptly after the expiration of an 
     18-month period following the earliest claimed U.S. or 
     foreign filing date. The Director is authorized by 
     subparagraph (B) to determine what information concerning 
     published applications shall be made available to the public, 
     and, under subparagraph (C) any decision made in this regard 
     is final and not subject to review.
       Subsection (b)(2) enumerates exceptions to the general rule 
     requiring publication. Subparagraph (A) precludes publication 
     of any application that is: (1) no longer pending at the 18th 
     month from filing; (2) the subject of a secrecy order until 
     the secrecy order is rescinded; (3) a provisional 
     application;\15\ or (4) a design patent application.\16\
       Pursuant to subparagraph (B)(i), any applicant who is not 
     filing overseas and does not wish her application to be 
     published can simply make a request and state that her 
     invention has not and will not be the subject of an 
     application filed in a foreign country that requires 
     publication after 18 months. Subparagraph (B)(ii) clarifies 
     that an applicant may rescind this request at any time. 
     Moreover, if an applicant has requested that her application 
     not be published in a foreign country with a publication 
     requirement, subparagraph (B)(iii) imposes a duty on the 
     applicant to notify the Director of this fact. An unexcused 
     failure to notify the Director will result in the abandonment 
     of the application. If an applicant either rescinds a request 
     that her application not be published or notifies the 
     Director that an application has been filed in an early 
     publication country or through the PCT, the U.S. application 
     will be published at 18 months pursuant to subsection (b)(1).
       Finally, under subparagraph (B)(v), where an applicant has 
     filed an application in a foreign country, either directly or 
     through the PCT, so that the application will be published 18 
     months from its earliest effective filing date, the applicant 
     may limit the scope of the publication by the USPTO to the 
     total of the cumulative scope of the applications filed in 
     all foreign countries. Where the foreign application is 
     identical to the application filed in the United States or 
     where an application filed under the PCT is identical to the 
     application filed in the United States, the applicant may not 
     limit the extent to which the application filed in the United 
     States is published. However, where an applicant has limited 
     the description of an application filed in a foreign country, 
     either directly or through the PCT in comparison with the 
     application filed in the USPTO, the applicant may restrict 
     the publication by the USPTO to no more than the cumulative 
     details of what will be published in all of the foreign 
     applications and through the PCT. The applicant may restrict 
     the extent of publication of her U.S. application by 
     submitting a redacted copy of the application to the USPTO 
     eliminating only those details that will not be published in 
     any of the foreign applications. Any description contained in 
     at least one of the foreign national or PCT filings may not 
     be excluded from publication in the corresponding U.S. patent 
     application. To ensure that any redacted copy of the U.S. 
     application is published in place of the original U.S. 
     application, the redacted copy must be received within 16 
     months from the earliest effective filing date. Finally, if 
     the published U.S. application as redacted by the applicant 
     does not enable a person skilled in the art to make and use 
     the claimed invention, provisional rights under section 
     154(d) shall not be available.
       Subsection (c) requires the Director to establish 
     procedures to ensure that no protest or other form of pre-
     issuance opposition to the grant of a patent on an 
     application may be initiated after publication without the 
     express written consent of the applicant.
       Subsection (d) protects our national security by providing 
     that no application may be published under subsection (b)(1) 
     where the publication or disclosure of such invention would 
     be detrimental to the national security. In addition, the 
     Director of the USPTO is required to establish appropriate 
     procedures to ensure that such applications are promptly 
     identified and the secrecy of such inventions is maintained 
     in accordance with chapter 17 of the Patent Act, which 
     governs secrecy of inventions in the interest of national 
     security.
       Subsection (b) of section 4502 of subtitle E requires the 
     Government Accounting Office (GAO) to conduct a study of 
     applicants who file only in the United States during a three-
     year period beginning on the effective date of subtitle E. 
     The study will focus on the percentage of U.S. applicants who 
     file only in the United States versus those who file outside 
     the United States; how many domestic-only filers request not 
     to be published; how many who request not to be published 
     later rescind that request; and whether there is any 
     correlation between the type of applicant (e.g., small vs. 
     large entity) and publication. The Comptroller General must 
     submit the findings of the study, once completed, to the 
     Committees on the Judiciary of the House and Senate.
     Sec. 4503. Time for claiming benefit of earlier filing date
       Section 119 of the Patent Act prescribes procedures to 
     implement the right to claim

[[Page 29972]]

     priority under Article 4 of the Paris Convention for the 
     Protection of Industrial Property.\17\ Under that Article, an 
     applicant seeking protection in the United States may claim 
     the filing date of an application for the same invention 
     filed in another Convention country--provided the subsequent 
     application is filed in the United States within 12 months of 
     the earlier filing in the foreign country.
       Section 4503 of subtitle V amends section 119(b) of the 
     Patent Act to authorize the Director to establish a cut-off 
     date by which the applicant must claim priority. This is to 
     ensure that the claim will be made early enough--generally 
     not later than the 16th month from the earliest effective 
     filing date--so as to permit an orderly publication schedule 
     for pending applications. As the USPTO moves to electronic 
     filing, it is envisioned that this date could be moved closer 
     to the 18th month.
       The amendment to Sec. 119(b) also gives the Director the 
     discretion to consider the failure of the applicant to file a 
     timely claim for priority to be a waiver of any such priority 
     claim. The Director is also authorized to establish 
     procedures (including the payment of a surcharge) to accept 
     an unintentionally delayed priority claim.
       Section 4503(b) of subtitle E amends section 120 of the 
     Patent Act in a similar way. This provision empowers the 
     Director to: (1) establish a time by which the priority of an 
     earlier filed United States application must be claimed; (2) 
     consider the failure to meet that time limit to be a waiver 
     of the right to claim such priority; and (3) accept an 
     unintentionally late claim of priority subject to the payment 
     of a surcharge.
     Sec. 4504. Provisional rights
       Section 4504 amends section 154 of the Patent Act by adding 
     a new subsection (d) to accord provisional rights to obtain a 
     reasonable royalty for applicants whose applications are 
     published under amended section 122(b) of the Patent Act, 
     supra, or applications designating the United States filed 
     under the PCT. Generally, this provision establishes the 
     right of an applicant to obtain a reasonable royalty from any 
     person who, during the period beginning on the date that his 
     or her application is published and ending on the date a 
     patent is issued--
       (1) makes, uses, offers for sale, or sells the invention in 
     the United States, or imports such an invention into the 
     United States; or
       (2) if the invention claimed is a process, makes, uses, 
     offers for sale, sells, or imports a product made by that 
     process in the United States; and
       (3) had actual notice of the published application and, in 
     the case of an application filed under the PCT designating 
     the United States that is published in a language other than 
     English, a translation of the application into English.
       The requirement of actual notice is critical. The mere fact 
     that the published application is included in a commercial 
     database where it might be found is insufficient. The 
     published applicant must give actual notice of the published 
     application to the accused infringer and explain what acts 
     are regarded as giving rise to provisional rights.
       Another important limitation on the availability of 
     provisional royalties is that the claims in the published 
     application that are alleged to give rise to provisional 
     rights must also appear in the patent in substantially 
     identical form. To allow anything less than substantial 
     identity would impose an unacceptable burden on the public. 
     If provisional rights were available in the situation where 
     the only valid claim infringed first appeared in 
     substantially that form in the granted patent, the public 
     would have no guidance as to the specific behavior to avoid 
     between publication and grant. Every person or company that 
     might be operating within the scope of the disclosure of the 
     published application would have to conduct her own private 
     examination to determine whether a published application 
     contained patentable subject matter that she should avoid. 
     The burden should be on the applicant to initially draft a 
     schedule of claims that gives adequate notice to the public 
     of what she is seeking to patent.
       Amended section 154(d)(3) imposes a six-year statute of 
     limitations from grant in which an action for reasonable 
     royalties must be brought.
       Amended section 154(d)(4) sets forth some additional rules 
     qualifying when an international application under the PCT 
     will give rise to provisional rights. The date that will give 
     rise to provisional rights for international applications 
     will be the date on which the USPTO receives a copy of the 
     application published under the PCT in the English language; 
     if the application is published under the PCT in a language 
     other than English, then the date on which provisional rights 
     will arise will be the date on which the USPTO receives a 
     translation of the international application in the English 
     language. The Director is empowered to require an applicant 
     to provide a copy of the international application and a 
     translation of it.
     Sec. 4505. Prior art effect of published applications
       Section 4505 amends section 102(e) of the Patent Act to 
     treat an application published by the USPTO in the same 
     fashion as a patent published by the USPTO. Accordingly, a 
     published application is given prior art effect as of its 
     earliest effective U.S. filing date against any subsequently 
     filed U.S. applications. As with patents, any foreign filing 
     date to which the published application is entitled will not 
     be the effective filing date of the U.S. published 
     application for prior art purposes. An exception to this 
     general rule is made for international applications 
     designating the United States that are published under 
     Article 21(2)(a) of the PCT in the English language. Such 
     applications are given a prior art effect as of their 
     international filing date. The prior art effect accorded to 
     patents under section 4505 remains unchanged from present 
     section 102(e) of the Patent Act.
     Sec. 4506. Cost recovery for publications
       Section 4506 authorizes the Director to recover the costs 
     of early publication required by the amendment made by 
     section 4502 of this Act by charging a separate publication 
     fee after a notice of allowance is given pursuant to section 
     151 of the Patent Act.
     Sec. 4507. Conforming amendments
       Section 4507 consists of various technical and conforming 
     amendments to the Patent Act. These include amending section 
     181 of the Patent Act to clarify that publication of pending 
     applications does not apply to applications under secrecy 
     orders, and amending section 284 of the Patent Act to ensure 
     that increased damages authorized under section 284 shall not 
     apply to the reasonable royalties possible under amended 
     section 154(d). In addition, section 374 of the Patent Act is 
     amended to provide that the effect of the publication of an 
     international application designating the United States shall 
     be the same as the publication of an application published 
     under amended section 122(b), except as its effect as prior 
     art is modified by amended section 102(e) and its giving rise 
     to provisional rights is qualified by new section 154(d).
     Sec. 4508. Effective date
       Subtitle E shall take effect on the date that is one year 
     after the date of enactment and shall apply to all 
     applications filed under section 111 of the Patent Act on or 
     after that date; and to all applications complying with 
     section 371 of the Patent Act that resulted from 
     international applications filed on or after that date. The 
     provisional rights provided in amended section 154(d) and the 
     prior art effect provided in amended section 102(e) shall 
     apply to all applications pending on the date that is one 
     year after the date of enactment that are voluntarily 
     published by their applicants. Finally, section 404 
     (provisional rights) shall apply to international 
     applications designating the United States that are filed on 
     or after the date that is one year after the date of 
     enactment.

       Subtitle F--Optional Inter Partes Reexamination procedure

       Subtitle F is intended to reduce expensive patent 
     litigation in U.S. district courts by giving third-party 
     requesters, in addition to the existing ex parte 
     reexamination in Chapter 30 of title 35, the option of inter 
     partes reexamination proceedings in the USPTO. Congress 
     enacted legislation to authorize ex parte reexamination of 
     patents in the USPTO in 1980, but such reexamination has been 
     used infrequently since a third party who requests 
     reexamination cannot participate at all after initiating the 
     proceedings. Numerous witnesses have suggested that the 
     volume of lawsuits in district courts will be reduced if 
     third parties can be encouraged to use reexamination by 
     giving them an opportunity to argue their case for patent 
     invalidity in the USPTO. Subtitle F provides that opportunity 
     as an option to the existing ex parte reexamination 
     proceedings.
       Subtitle F leaves existing ex parte reexamination 
     procedures in Chapter 30 of title 35 intact, but establishes 
     an inter partes reexamination procedure which third-party 
     requesters can use at their option. Subtitle VI allows third 
     parties who request inter partes reexamination to submit one 
     written comment each time the patent owner files a response 
     to the USPTO. In addition, such third-party requesters can 
     appeal to the USPTO Board of Patent Appeals and Interferences 
     from an examiner's determination that the reexamined patent 
     is valid, but may not appeal to the Court of Appeals for the 
     Federal Circuit. To prevent harassment, anyone who requests 
     inter partes reexamination must identify the real party in 
     interest and third-party requesters who participate in an 
     inter partes reexamination proceeding are estopped from 
     raising in a subsequent court action or inter partes 
     reexamination any issue of patent validity that they raised 
     or could have raised during such inter partes reexamination.
       Subtitle F contains the important threshold safeguard (also 
     applied in ex parte reexamination) that an inter partes 
     reexamination cannot be commenced unless the USPTO makes a 
     determination that a ``substantial new question'' of 
     patentability is raised. Also, as under Chapter 30, this 
     determination cannot be appealed, and grounds for inter 
     partes reexamination are limited to earlier patents and 
     printed publications--grounds that USPTO examiners are well-
     suited to consider.

[[Page 29973]]


     Sec. 4601. Short title
       This subtitle may be cited as the ``Optional Inter Partes 
     Reexamination Procedure Act.''
     Sec. 4602. Clarification of Chapter 30
       This section distinguishes Chapter 31 from existing Chapter 
     30 by changing the title of Chapter 30 to ``Ex Parte 
     Reexamination of Patents.''
     Sec. 4603. Definitions
       This section amends section 100 of the Patent Act by 
     defining ``third-party requester'' as a person who is not the 
     patent owner requesting ex parte reexamination under section 
     302 or inter partes reexamination under section 311.
     Sec. 4604. Optional Inter Partes Reexamination Procedure
       Section 4604 amends Part III of title 35 by inserting a new 
     Chapter 31 setting forth optional inter partes reexamination 
     procedures.
       New section 311, as amended by this section, differs from 
     section 302 of existing law in Chapter 30 of the Patent Act 
     by requiring any person filing a written request for inter 
     partes reexamination to identify the real party in interest.
       Similar to section 303 of existing law, new section 312 of 
     the Patent Act confers upon the Director the authority and 
     responsibility to determine, within three months after the 
     filing of a request for inter partes reexamination, whether a 
     substantial new question affecting patentability of any claim 
     of the patent is raised by the request. Also, the decision in 
     this regard is final and not subject to judicial review.
       Proposed sections 313-14 under this subtitle are similarly 
     modeled after sections 304-305 of Chapter 30. Under proposed 
     section 313, if the Director determines that a substantial 
     new question of patentability affecting a claim is raised, 
     the determination shall include an order for inter partes 
     reexamination for resolution of the question. The order may 
     be accompanied by the initial USPTO action on the merits of 
     the inter partes reexamination conducted in accordance with 
     section 314. Generally, under proposed section 314, inter 
     partes reexamination shall be conducted according to the 
     procedures set forth in sections 132-133 of the Patent Act. 
     The patent owner will be permitted to propose any amendment 
     to the patent and a new claim or claims, with the same 
     exception contained in section 305: no proposed amended or 
     new claim enlarging the scope of the claims will be allowed.
       Proposed section 314 elaborates on procedure with regard to 
     third-party requesters who, for the first time, are given the 
     option to participate in inter partes reexamination 
     proceedings. With the exception of the inter partes 
     reexamination request, any document filed by either the 
     patent owner or the third-party requester shall be served on 
     the other party. In addition, the third party-requester in an 
     inter partes reexamination shall receive a copy of any 
     communication sent by the USPTO to the patent owner. After 
     each response by the patent owner to an action on the merits 
     by the USPTO, the third-party requester shall have one 
     opportunity to file written comments addressing issues raised 
     by the USPTO or raised in the patent owner's response. Unless 
     ordered by the Director for good cause, the agency must act 
     in an inter partes reexamination matter with special 
     dispatch.
       Proposed section 315 prescribes the procedures for appeal 
     of an adverse USPTO decision by the patent owner and the 
     third-party requester in an inter partes reexamination. Both 
     the patent owner and the third-party requester are entitled 
     to appeal to the Board of Patent Appeals and Interferences 
     (section 134 of the Patent Act), but only the patentee can 
     appeal to the U.S. Court of Appeals for the Federal Circuit 
     (Sec. Sec. 141-144); either may also be a party to any appeal 
     by the other to the Board of Patent Appeals and 
     Interferences. The patentee is not entitled to the 
     alternative of an appeal of an inter partes reexamination to 
     the U.S. District Court for the District of Columbia. Such 
     appeals are rarely taken from ex parte reexamination 
     proceedings under existing law and its removal should speed 
     up the process.
       To deter unnecessary litigation, proposed section 315 
     imposes constraints on the third-party requester. In general, 
     a third-party requester who is granted an inter partes 
     reexamination by the USPTO may not assert at a later time in 
     any civil action in U.S. district court \18\ the invalidity 
     of any claim finally determined to be patentable on any 
     ground that the third-party requester raised or could have 
     raised during the inter partes reexamination. However, the 
     third-party requester may assert invalidity based on newly 
     discovered prior art unavailable at the time of the 
     reexamination. Prior art was unavailable at the time of the 
     inter partes reexamination if it was not known to the 
     individuals who were involved in the reexamination proceeding 
     on behalf of the third-party requester and the USPTO.
       Section 316 provides for the Director to issue and publish 
     certificates canceling unpatentable claims, confirming 
     patentable claims, and incorporating any amended or new claim 
     determined to be patentable in an inter partes procedure.
       Subtitle F creates a new section 317 which sets forth 
     certain conditions by which inter partes reexamination is 
     prohibited to guard against harassment of a patent holder. In 
     general, once an order for inter partes reexamination has 
     been issued, neither a third-party requester nor the patent 
     owner may file a subsequent request for inter partes 
     reexamination until an inter partes reexamination certificate 
     is issued and published, unless authorized by the Director. 
     Further, if a third-party requester asserts patent invalidity 
     in a civil action and a final decision is entered that the 
     party failed to prove the assertion of invalidity, or if a 
     final decision in an inter partes reexamination instituted by 
     the requester is favorable to patentability, after any 
     appeals, that third-party requester cannot thereafter request 
     inter partes reexamination on the basis of issues which were 
     or which could have been raised. However, the third-party 
     requester may assert invalidity based on newly discovered 
     prior art unavailable at the time of the civil action or 
     inter partes reexamination. Prior art was unavailable at the 
     time if it was not known to the individuals who were involved 
     in the civil action or inter partes reexamination proceeding 
     on behalf of the third-party requester and the USPTO.
       Proposed section 318 gives a patent owner the right, once 
     an inter partes reexamination has been ordered, to obtain a 
     stay of any pending litigation involving an issue of 
     patentability of any claims of the patent that are the 
     subject of the inter partes reexamination, unless the court 
     determines that the stay would not serve the interests of 
     justice.
     Sec. 4605. Conforming amendments
       Section 4605 makes the following conforming amendments to 
     the Patent Act:
       A patent owner must pay a fee of $1,210 for each petition 
     in connection with an unintentionally abandoned application, 
     delayed payment, or delayed response by the patent owner 
     during any reexamination.
       A patent applicant, any of whose claims has been twice 
     rejected; a patent owner in a reexamination proceeding; and a 
     third-party requester in an inter partes reexamination 
     proceeding may all appeal final adverse decisions from a 
     primary examiner to the Board of Patent Appeals and 
     Interferences.
       Proposed section 141 states that a patent owner in a 
     reexamination proceeding may appeal an adverse decision by 
     the Board of Patent Appeals and Interferences only to the 
     U.S. Court of Appeals for the Federal Circuit as earlier 
     noted. A third-party requester in an inter partes 
     reexamination proceeding may not appeal beyond the Board of 
     Patent Appeals and Interferences.
       The Director is required pursuant to section 143 
     (proceedings on appeal to the Federal Circuit) to submit to 
     the court the grounds for the USPTO decision in any 
     reexamination addressing all the issues involved in the 
     appeal.
     Sec. 4606. Report to Congress
       Not later than five years after the effective date of 
     subtitle F, the Director must submit to Congress a report 
     evaluating whether the inter partes reexamination proceedings 
     set forth in the title are inequitable to any of the parties 
     in interest and, if so, the report shall contain 
     recommendations for change to eliminate the inequity.
     Sec. 4607. Estoppel Effect of Reexamination
       Section 4607 estops any party who requests inter partes 
     reexamination from challenging at a later time, in any civil 
     action, any fact determined during the process of the inter 
     partes reexamination, except with respect to a fact 
     determination later proved to be erroneous based on 
     information unavailable at the time of the inter partes 
     reexamination. The estoppel arises after a final decision in 
     the inter partes reexamination or a final decision in any 
     appeal of such reexamination. If section 4607 is held to be 
     unenforceable, the enforceability of the rest of subtitle F 
     or the Act is not affected.
     Sec. 4608. Effective date
       Subtitle F shall take effect on the date of the enactment 
     and shall apply to any patent that issues from an original 
     application filed in the United States on or after that date, 
     except that the amendments made by section 4605(a) shall take 
     effect one year from the date of enactment.

         Subtitle G--United States Patent and Trademark Office

       Subtitle G establishes the United States Patent and 
     Trademark Office (USPTO) as an agency of the United States 
     within the Department of Commerce. The Secretary of Commerce 
     gives policy direction to the agency, but the agency is 
     autonomous and responsible for the management and 
     administration of its operations and has independent control 
     of budget allocations and expenditures, personnel decisions 
     and processes, and procurement. The Committee intends that 
     the Office will conduct its patent and trademark operations 
     without micro-management by Department of Commerce officials, 
     with the exception of policy guidance of the Secretary. The 
     agency is headed by an Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office, a Deputy, and a Commissioner of 
     Patents and a Commissioner of Trademarks. The agency is 
     exempt from government-wide personnel ceilings. A patent 
     public advisory committee and a trademark public advisory 
     committee are established to advise the Director on agency

[[Page 29974]]

     policies, goals, performance, budget and user fees.
     Sec. 4701. Short title
       This subtitle may be cited as the ``Patent and Trademark 
     Office Efficiency Act.''

        Subchapter A--United States Patent and Trademark Office

     Sec. 4711. Establishment of Patent and Trademark Office
       Section 4711 establishes the USPTO as an agency of the 
     United States within the Department of Commerce and under the 
     policy direction of the Secretary of Commerce. The USPTO, as 
     an autonomous agency, is explicitly responsible for decisions 
     regarding the management and administration of its operations 
     and has independent control of budget allocations and 
     expenditures, personnel decisions and processes, 
     procurements, and other administrative and management 
     functions. Patent operations and trademark operations are to 
     be treated as separate operating units within the Office, 
     each under the direction of its respective Commissioner, as 
     supervised by the Director.
       The USPTO shall maintain its principal office in the 
     metropolitan Washington, D.C., area, for the service of 
     process and papers and for the purpose of discharging its 
     functions. For purposes of venue in civil actions, the agency 
     is deemed to be a resident of the district in which its 
     principal office is located, except where otherwise provided 
     by law. The USPTO is also permitted to establish satellite 
     offices in such other places in the United States as it 
     considers necessary and appropriate to conduct business. This 
     is intended to allow the USPTO, if appropriate, to serve 
     American applicants better.
     Sec. 4712. Powers and duties
       Subject to the policy direction of the Secretary of the 
     Commerce, in general the USPTO will be responsible for the 
     granting and issuing of patents, the registration of 
     trademarks, and the dissemination of patent and trademark 
     information to the public.
       The USPTO will also possess specific powers, which include:
       (1) a requirement to adopt and use an Office seal for 
     judicial notice purposes and for authenticating patents, 
     trademark certificates and papers issued by the Office;
       (2) the authority to establish regulations, not 
     inconsistent with law, that
       (A) govern the conduct of USPTO proceedings within the 
     Office,
       (B) are in accordance with Sec. 553 of title 5,
       (C) facilitate and expedite the processing of patent 
     applications, particularly those which can be processed 
     electronically,
       (D) govern the recognition, conduct, and qualifications of 
     agents, attorneys, or other persons representing applicants 
     or others before the USPTO,
       (E) recognize the public interest in ensuring that the 
     patent system retain a reduced fee structure for small 
     entities, and
       (F) provide for the development of a performance-based 
     process for managing that includes quantitative and 
     qualitative measures, standards for evaluating cost-
     effectiveness, and consistency with principles of 
     impartiality and competitiveness;
       (3) the authority to acquire, construct, purchase, lease, 
     hold, manage, operate, improve, alter and renovate any real, 
     personal, or mixed property as it considers necessary to 
     discharge its functions;
       (4) the authority to make purchases of property, contracts 
     for construction, maintenance, or management and operation of 
     facilities, as well as to contract for and purchase printing 
     services without regard to those federal laws which govern 
     such proceedings;
       (5) the authority to use services, equipment, personnel, 
     facilities and equipment of other federal entities, with 
     their consent and on a reimbursable basis;
       (6) the authority to use, with the consent of the United 
     States and the agency, government, or international 
     organization concerned, the services, records, facilities or 
     personnel of any State or local government agency or foreign 
     patent or trademark office or international organization to 
     perform functions on its behalf;
       (7) the authority to retain and use all of its revenues and 
     receipts;
       (8) a requirement to advise the President, through the 
     Secretary of Commerce, on national and certain international 
     intellectual property policy issues;
       (9) a requirement to advise Federal departments and 
     agencies of intellectual property policy in the United States 
     and intellectual property protection abroad;
       (10) a requirement to provide guidance regarding proposals 
     offered by agencies to assist foreign governments and 
     international intergovernmental organizations on matters of 
     intellectual property protection;
       (11) the authority to conduct programs, studies or 
     exchanges regarding domestic or international intellectual 
     property law and the effectiveness of intellectual property 
     protection domestically and abroad;
       (12) a requirement to advise the Secretary of Commerce on 
     any programs and studies relating to intellectual property 
     policy that the USPTO may conduct or is authorized to 
     conduct, cooperatively with foreign intellectual property 
     offices and international intergovernmental organizations; 
     and
       (13) the authority to (A) coordinate with the Department of 
     State in conducting programs and studies cooperatively with 
     foreign intellectual property offices and international 
     intergovernmental organizations, and (B) transfer, with the 
     concurrence of the Secretary of State, up to $100,000 in any 
     year to the Department of State to pay an international 
     intergovernmental organization for studies and programs 
     advancing international cooperation concerning patents, 
     trademarks, and other matters.
       The specific powers set forth in new subsection (b) are 
     clarified in new subsection (c). The special payments of 
     paragraph (14)(B) are additional to other payments or 
     contributions and are not subject to any limitation imposed 
     by law. Nothing in subsection (b) derogates from the duties 
     of the Secretary of State or the United States Trade 
     Representative as set forth in section 141 of the Trade Act 
     of 1974 \19\, nor derogates from the duties and functions of 
     the Register of Copyrights. The Director is required to 
     consult with the Administrator of General Services when 
     exercising authority under paragraphs (3) and (4)(A). Nothing 
     in section 4712 may be construed to nullify, void, cancel, or 
     interrupt any pending request-for-proposal let or contract 
     issued by the General Services Administration for the 
     specific purpose of relocating or leasing space to the USPTO. 
     Finally, in exercising the powers and duties under this 
     section, the Director shall consult with the Register of 
     Copyright on all Copyright and related matters.
     Sec. 4713. Organization and management
       Section 4713 details the organization and management of the 
     agency. The powers and duties of the USPTO shall be vested in 
     the Under Secretary and Director, who shall be appointed by 
     the President, by and with the consent of the Senate. The 
     Under Secretary and Director performs two main functions. As 
     Under Secretary of Commerce for Intellectual Property, she 
     serves as the policy advisor to the Secretary of Commerce and 
     the President on intellectual property issues. As Director, 
     she is responsible for supervising the management and 
     direction of the USPTO. She shall consult with the Public 
     Advisory Committees, infra, on a regular basis regarding 
     operations of the agency and before submitting budgetary 
     proposals and fee or regulation changes. The Director shall 
     take an oath of office. The President may remove the Director 
     from office, but must provide notification to both houses of 
     Congress.
       The Secretary of Commerce, upon nomination of the Director, 
     shall appoint a Deputy Director to act in the capacity of the 
     Director if the Director is absent or incapacitated. The 
     Secretary of Commerce shall also appoint two Commissioners, 
     one for Patents, the other for Trademarks, without regard to 
     chapters 33, 51, or 53 of title 5 of the U.S. Code. The 
     Commissioners will have five-year terms and may be 
     reappointed to new terms by the Secretary. Each Commissioner 
     shall possess a demonstrated experience in patent and 
     trademark law, respectively; and they shall be responsible 
     for the management and direction of the patent and trademark 
     operations, respectively. In addition to receiving a basic 
     rate of compensation under the Senior Executive Service \20\ 
     and a locality payment,\21\ the Commissioners may receive 
     bonuses of up to 50 percent of their annual basic rate of 
     compensation, not to exceed the salary of the Vice President, 
     based on a performance evaluation by the Secretary, acting 
     through the Director. The Secretary may remove Commissioners 
     for misconduct or unsatisfactory performance. It is intended 
     that the Commissioners will be non-political expert 
     appointees, independently responsible for operations, subject 
     to supervision by the Director.
       The Director may appoint all other officers, agents, and 
     employees as she sees fit, and define their responsibilities 
     with equal discretion. The USPTO is specifically not subject 
     to any administratively or statutorily imposed limits (full-
     time equivalents, or ``FTEs'') on positions or personnel.
       The USPTO is charged with developing and submitting to 
     Congress a proposal for an incentive program to retain senior 
     (of the primary examiner grade or higher) patent and 
     trademark examiners eligible for retirement for the sole 
     purpose of training patent and trademark examiners.
       The Director of the USPTO, in consultation with the 
     Director of the Office of Personnel Management, is required 
     to maintain a program for identifying national security 
     positions at the USPTO and for providing for appropriate 
     security clearances for USPTO employees in order to maintain 
     the secrecy of inventions as described in section 181 of the 
     Patent Act and to prevent disclosure of sensitive and 
     strategic information in the interest of national security.
       The USPTO will be subject to all provisions of title 5 of 
     the U.S. Code governing federal employees. All relevant labor 
     agreements which are in effect the day before enactment of 
     subtitle G shall be adopted by the agency. All USPTO 
     employees as of the day before the effective date of subtitle 
     G shall remain officers and employees of the agency without a 
     break in service. Other personnel of the Department of 
     Commerce shall be transferred to the USPTO only if necessary 
     to carry out purposes of subtitle G of the bill and if a 
     major function of their work is reimbursed by the USPTO, they 
     spend at least

[[Page 29975]]

     half of their work time in support of the USPTO, or a 
     transfer to the USPTO would be in the interest of the agency, 
     as determined by the Secretary of Commerce in consultation 
     with the Director.
       On or after the effective date of the Act, the President 
     shall appoint an individual to serve as Director until a 
     Director qualifies under subsection (a). The persons serving 
     as the Assistant Commissioner for Patents and the Assistant 
     Commissioner for Trademarks on the day before the effective 
     date of the Act may serve as the Commissioner for Patents and 
     the Commissioner for Trademarks, respectively, until a 
     respective Commissioner is appointed under subsection (b)(2).
     Sec. 4714. Public Advisory Committees
       Section 4714 provides a new section 5 of the Patent Act 
     which establishes a Patent Public Advisory Committee and a 
     Trademark Public Advisory Committee. Each Committee has nine 
     voting members with three-year terms appointed by and serving 
     at the pleasure of the Secretary of Commerce. Initial 
     appointments will be made within three months of the 
     effective date of the Act; and three of the initial 
     appointees will receive one-year terms, three will receive 
     two-year terms, and three will receive full terms. Vacancies 
     will be filled within three months. The Secretary will also 
     designate chairpersons for three-year terms.
       The members of the Committees will be U.S. citizens and 
     will be chosen to represent the interests of USPTO users. The 
     Patent Public Advisory Committee shall have members who 
     represent small and large entity applicants in the United 
     States in proportion to the number of applications filed by 
     the small and large entity applicants. In no case shall the 
     small entity applicants be represented by less than 25 
     percent of the members of the Patent Public Advisory 
     Committee, at least one of whom shall be an independent 
     inventor. The members of both Committees shall include 
     individuals with substantial background and achievement in 
     finance, management, labor relations, science, technology, 
     and office automation. The patent and trademark examiners' 
     unions are entitled to have one representative on their 
     respective Advisory Committee in a non-voting capacity.
       The Committees meet at the call of the chair to consider an 
     agenda established by the chair. Each Committee reviews the 
     policies, goals, performance, budget, and user fees that bear 
     on its area of concern and advises the Director on these 
     matters. Within 60 days of the end of a fiscal year, the 
     Committees prepare annual reports, transmit the reports to 
     the Secretary of Commerce, the President, and the Committees 
     on the Judiciary of the Congress, and publish the reports in 
     the Official Gazette of the USPTO.
       Members of the Committees are compensated at a defined 
     daily rate for meeting and travel days. Members are provided 
     access to USPTO records and information other than personnel 
     or other privileged information including that concerning 
     patent applications. Members are special Government employees 
     within the meaning of section 202 of title 18. The Federal 
     Advisory Committee Act shall not apply to the Committees. 
     Finally, section 4714 provides that Committee meetings shall 
     be open to the public unless by a majority vote the Committee 
     meets in executive session to consider personnel or other 
     confidential information.
     Sec. 4715. Conforming amendments
       Technical conforming amendments to the Patent Act are set 
     forth in section 4715.
     Sec. 4716. Trademark Trial and Appeal Board
       Section 4716 amends section 17 of the Trademark Act of 1946 
     by specifying that the Director shall give notice to all 
     affected parties and shall direct a Trademark Trial and 
     Appeal Board to determine the respective rights of those 
     parties before it in a relevant proceeding. The section also 
     invests the Director with the power of appointing 
     administrative trademark judges to the Board. The Director, 
     the Commissioner for Trademarks, the Commissioner for 
     Patents, and the administrative trademark judges shall serve 
     on the Board.
     Sec. 4717. Board of Patent Appeals and Interferences
       Under existing section 7 of the Patent Act, the 
     Commissioner, Deputy Commissioner, Assistant Commissioners, 
     and the examiners-in-chief constitute the Board of Patent 
     Appeals and Interferences. Pursuant to section 4717 of 
     subtitle G, the Board shall be comprised of the Director, the 
     Commissioner for Patents, the Commissioner for Trademarks, 
     and the administrative patent judges. In addition, the 
     existing statute allows each appellant a hearing before three 
     members of the Board who are designated by the Director. 
     Section 4717 empowers the Director with this authority.
     Sec. 4718. Annual report of Director
       No later than 180 days after the end of each fiscal year, 
     the Director must provide a report to Congress detailing 
     funds received and expended by the USPTO, the purposes for 
     which the funds were spent, the quality and quantity of USPTO 
     work, the nature of training provided to examiners, the 
     evaluations of the Commissioners by the Secretary of 
     Commerce, the Commissioners' compensation, and other 
     information relating to the agency.
     Sec. 4719. Suspension or exclusion from practice
       Under existing section 32 of the Patent Act, the 
     Commissioner (the Director pursuant to this Act) has the 
     authority, after notice and a hearing, to suspend or exclude 
     from further practice before the USPTO any person who is 
     incompetent, disreputable, indulges in gross misconduct or 
     fraud, or is noncompliant with USPTO regulations. Section 
     4719 permits the Director to designate an attorney who is an 
     officer or employee of the USPTO to conduct a hearing under 
     section 32.
     Sec. 4720. Pay of Director and Deputy Director
       Section 4720 replaces the Assistant Secretary of Commerce 
     and Commissioner of Patents and Trademarks with the Under 
     Secretary of Commerce for Intellectual Property and Director 
     of the United States Patent and Trademark Office to receive 
     pay at Level III of the Executive Schedule.\22\ Section 4720 
     also establishes the pay of the Deputy Director at Level IV 
     of the Executive Schedule.\23\

           Subchapter B--Effective Date; Technical Amendments

     Sec. 4731. Effective date
       The effective date of subtitle G is four months after the 
     date of enactment.
     Sec. 4732. Technical and conforming amendments
       Section 4732 sets forth numerous technical and conforming 
     amendments related to subtitle G.

                 Subchapter C--Miscellaneous Provisions

     Sec. 4741. References
       Section 4741 clarifies that any reference to the transfer 
     of a function from a department or office to the head of such 
     department or office means the head of such department or 
     office to which the function is transferred. In addition, 
     references in other federal materials to the current 
     Commissioner of Patents and Trademarks refer, upon enactment, 
     to the Under Secretary of Commerce for Intellectual Property 
     and Director of the United States Patent and Trademark 
     Office. Similarly, references to the Assistant Commissioner 
     for Patents are deemed to refer to the Commissioner for 
     Patents and references to the Assistant Commissioner for 
     Trademarks are deemed to refer to the Commissioner for 
     Trademarks.
     Sec. 4742. Exercise of authorities
       Under section 4742, except as otherwise provided by law, a 
     federal official to whom a function is transferred pursuant 
     to subtitle G may exercise all authorities under any other 
     provision of law that were available regarding the 
     performance of that function to the official empowered to 
     perform that function immediately before the date of the 
     transfer of the function.
     Sec. 4743. Savings provisions
       Relevant legal documents that relate to a function which is 
     transferred by subtitle G, and which are in effect on the 
     date of such transfer, shall continue in effect according to 
     their terms unless later modified or repealed in an 
     appropriate manner. Applications or proceedings concerning 
     any benefit, service, or license pending on the effective 
     date of subtitle G before an office transferred shall not be 
     affected, and shall continue thereafter, but may later be 
     modified or repealed in the appropriate manner.
       Subtitle G will not affect suits commenced before the 
     effective date of passage. Suits or actions by or against the 
     Department of Commerce, its employees, or the Secretary shall 
     not abate by reason of enactment of subtitle G. Suits against 
     a relevant government officer in her official capacity shall 
     continue post enactment, and if a function has transferred to 
     another officer by virtue of enactment, that other officer 
     shall substitute as the defendant. Finally, administrative 
     and judicial review procedures that apply to a function 
     transferred shall apply to the head of the relevant federal 
     agency and other officers to which the function is 
     transferred.
     Sec. 4744. Transfer of assets
       Section 4744 states that all available personnel, property, 
     records, and funds related to a function transferred pursuant 
     to subtitle G shall be made available to the relevant 
     official or head of the agency to which the function 
     transfers at such time or times as the Director of the Office 
     of Management and Budget (OMB) directs.
     Sec. 4745. Delegation and assignment
       Section 4745 allows an official to whom a function is 
     transferred under subtitle G to delegate that function to 
     another officer or employee. The official to whom the 
     function was originally transferred nonetheless remains 
     responsible for the administration of the function.
     Sec. 4746. Authority of Director of the Office of Management 
         and Budget with respect to functions transferred
       Pursuant to section 4746, if necessary the Director of OMB 
     shall make any determination of the functions transferred 
     pursuant to subtitle G.
     Sec. 4747. Certain vesting of functions considered transfers
       Section 4747 states that the vesting of a function in a 
     department or office pursuant

[[Page 29976]]

     to reestablishment of an office shall be considered to be the 
     transfer of that function.
     Sec. 4748. Availability of existing funds
       Under section 4748, existing appropriations and funds 
     available for the performance of functions and other 
     activities terminated pursuant to subtitle G shall remain 
     available (for the duration of their period of availability) 
     for necessary expenses in connection with the termination and 
     resolution of such functions and activities, subject to the 
     submission of a plan to House and Senate appropriators in 
     accordance with Public Law 105-277 (Departments of Commerce, 
     Justice, and State, the Judiciary and Related Agencies 
     Appropriations Act, Fiscal Year 1999).
     Sec. 4749. Definitions
       ``Function'' includes any duty, obligation, power, 
     authority, responsibility, right, privilege, activity, or 
     program.
       ``Office'' includes any office, administration, agency, 
     bureau, institute, council, unit, organizational entity, or 
     component thereof.

              Subtitle H--Miscellaneous Patent Provisions

       Subtitle H consists of seven largely-unrelated provisions 
     that make needed clarifying and technical changes to the 
     Patent Act . Subtitle H also authorizes a study. The 
     provisions in Subtitle H take effect on the date of enactment 
     except where stated otherwise in certain sections.
     Sec. 4801. Provisional applications
       Section 4801 amends section 111(b)(5) of the Patent Act by 
     permitting a provisional application to be converted into a 
     non-provisional application. The applicant must make a 
     request within 12 months after the filing date of the 
     provisional application for it to be converted into a non-
     provisional application.
       Section 4801 also amends section 119(e) of the Patent Act 
     by clarifying the treatment of a provisional application when 
     its last day of pendency falls on a weekend or a Federal 
     holiday, and by eliminating the requirement that a 
     provisional application must be co-pending with a non-
     provisional application if the provisional application is to 
     be relied on in any USPTO proceeding.
     Sec. 4802. International applications
       Section 4802 amends section 119(a) of the Patent Act to 
     permit persons who filed an application for patent first in a 
     WTO \24\ member country to claim the right of priority in a 
     subsequent patent application filed in the United States, 
     even if such country does not yet afford similar privileges 
     on the basis of applications filed in the United States. This 
     amendment was made in conformity with the requirements of 
     Articles 1 and 2 of the TRIPS Agreement.\25\ These Articles 
     require that WTO member countries apply the substantive 
     provisions of the Paris Convention for the Protection of 
     Industrial Property to other WTO member countries. As some 
     WTO member countries are not yet members of the Paris 
     Convention, and as developing countries are generally 
     permitted periods of up to 5 years before complying with all 
     provisions of the TRIPS Agreement, they are not required to 
     extend the right of priority to other WTO member countries 
     until such time.
       Section 4802 also adds subsection (f) to section 119 of the 
     Patent Act to provide for the right of priority in the United 
     States on the basis of an application for a plant breeder's 
     right first filed in a WTO member country or in a UPOV\26\ 
     Contracting Party. Many foreign countries provide only a sui 
     generis system of protection for plant varieties. Because 
     section 119 presently addresses only patents and inventors' 
     certificates, applicants from those countries are technically 
     unable to base a priority claim on a foreign application for 
     a plant breeder's right when seeking plant patent or utility 
     patent protection for a plant variety in this country.
       Subsection (g) is added to section 119 to define the terms 
     ``WTO member country'' and ``UPOV Contracting Party.''
     Sec. 4803. Certain limitations on remedies for patent 
         infringement not applicable
       Section 4803 amends section 287(c)(4) of the Patent Act, 
     which pertains to certain limitations on remedies for patent 
     infringement, to make it applicable only to applications 
     filed on or after September 30, 1996.
     Sec. 4804. Electronic filing and publications
       Section 4804 amends section 22 of the Patent Act to clarify 
     that the USPTO may receive, disseminate, and maintain 
     information in electronic form. Subsection (d)(2), however, 
     prohibits the Director from ceasing to maintain paper or 
     microform collections of U.S. patents, foreign patent 
     documents, and U.S. trademark registrations, except pursuant 
     to notice and opportunity for public comment and except the 
     Director shall first submit a report to Congress detailing 
     any such plan, including a description of the mechanisms in 
     place to ensure the integrity of such collections and the 
     data contained therein, as well as to ensure prompt public 
     access to the most current available information, and 
     certifying that the implementation of such plan will not 
     negatively impact the public.
       In addition, in the operation of its information 
     dissemination programs and as the sole source of patent data, 
     the USPTO should implement procedures that assure that bulk 
     patent data are provided in such a manner that subscribers 
     have the data in a manner that grants a sufficient amount of 
     time for such subscribers to make the data available through 
     their own systems at the same time the USPTO makes the data 
     publicly available through its own Internet system.
     Sec. 4805. Study and report on biologic deposits in support 
         of biotechnology patents
       Section 4805 charges the Comptroller General, in 
     consultation with the Director of the USPTO, with conducting 
     a study and submitting a report to Congress no later than six 
     months after the date of enactment on the potential risks to 
     the U.S. biotechnological industry regarding biological 
     deposits in support of biotechnology patents. The study shall 
     include: an examination of the risk of export and of 
     transfers to third parties of biological deposits, and the 
     risks posed by the 18-month publication requirement of 
     subtitle E; an analysis of comparative legal and regulatory 
     regimes; and any related recommendations. The USPTO is then 
     charged with considering these recommendations when drafting 
     regulations affecting biological deposits.
     Sec. 4806. Prior invention
       Section 4806 amends section 102(g) of the Patent Act to 
     make clear that an inventor who is involved in a USPTO 
     interference proceeding and establishes a date of invention 
     under section 104 is subject to the requirements of section 
     102(g), including the requirement that the invention was not 
     abandoned, suppressed, or concealed.
     Sec. 4807. Prior art exclusion for certain commonly assigned 
         patents
       Section 4807 amends section 103 of the Patent Act, which 
     sets forth patentability conditions related to the 
     nonobviousness of subject matter. Section 103(c) of the 
     current statute states that subject matter developed by 
     another person which qualifies as prior art only under 
     section 102(f) or (g) shall not preclude granting a patent on 
     an invention with only obvious differences where the subject 
     matter and claimed invention were, at the time the invention 
     was made, owned by the same person or subject to an 
     obligation of assignment to the same person. The bill amends 
     section 103(c) by adding a reference to section 102(e), which 
     currently bars the granting of a patent if the invention was 
     described in another patent granted on an application filed 
     before the applicant's date of invention. The effect of the 
     amendment is to allow an applicant to receive a patent when 
     an invention with only obvious differences from the 
     applicant's invention was described in a patent granted on an 
     application filed before the applicant's invention, provided 
     the inventions are commonly owned or subject to an obligation 
     of assignment to the same person.
     Sec. 4808. Exchange of copies of patents with foreign 
         countries
       Sec. 4808 amends section 12 of the Patent Act to prohibit 
     the Director of the USPTO from entering into an agreement to 
     exchange patent data with a foreign country that is not one 
     of our NAFTA \27\ or WTO trading partners, unless the 
     Secretary of Commerce explicitly authorizes such an exchange.

                   TITLE V--MISCELLANEOUS PROVISIONS

     Section 5001. Commission on Online Child Protection.
       Section 5001(a) provides that references contained in the 
     amendments made by this title are to section 1405 of the 
     Child Online Protection Act (47 U.S.C. 231 note).
       Section 5001(b) amends the membership of the Commission on 
     Online Child Protection to remove a requirement that a 
     specific number of representatives come from designated 
     sectors of private industry, as outlined in the Act. Section 
     5001(b) also provides that the members appointed to the 
     Commission as of October 31, 1999, shall remain as members. 
     Section 5001(b) also prevents the members of the Commission 
     from being paid for their work on the Commission. This 
     provision, however, does not preclude members from being 
     reimbursed for legitimate costs associated with participating 
     in the Commission (such as travel expenses).
       Section 5001(c) extends the due date for the report of the 
     Commission by one year.
       Section 5001(d) establishes that the Commission's statutory 
     authority will expire either (1) 30 days after the submission 
     of the report required by the Act, or (2) November 30, 2000, 
     whichever is earlier.
       Section 5001(e) requires the Commission to commence its 
     first meeting no later than March 31, 2000. Section 5001(e) 
     also requires that the Commission elect, by a majority vote, 
     a chairperson of the Commission not later than 30 days after 
     holding its first meeting.
       Section 5001(f) establishes minimum rules for the 
     operations of the Commission, and also allows the Commission 
     to adopt other rules as it deems necessary.
     Section 5002. Privacy Protection for Donors to Public 
         Broadcasting Entities.
       This provision, which was added in Conference, protects the 
     privacy of donors to public broadcasting entities.
     Section 5003. Completion of Biennial Regulatory Review.
       Section 5003 provides that, within 180 days after the date 
     of enactment, the FCC will

[[Page 29977]]

     complete the biennial review required by section 202(h) of 
     the Telecommunications Act of 1996. The Conferees expect that 
     if the Commission concludes that it should retain any of the 
     rules under the review unchanged, the Commission shall issue 
     a report that includes a full justification of the basis for 
     so finding.
     Section 5004. Broadcasting Entities.
       This provision, added in Conference, allows for a 
     remittance of copyright damages for public broadcasting 
     entities where they are not aware and have no reason to 
     believe that their activities constituted violations of 
     copyright law. This is currently the standard for nonprofit 
     libraries, archives and educational institutions.
     Section 5005. Technical Amendments Relating to Vessel Hull 
         Design Protection.
       This section makes several amendments to chapter 13 of the 
     Copyright Act regarding design protection for vessel hulls. 
     The sunset provision for chapter 13, enacted as part of the 
     Digital Millennium Copyright Act, is removed so that chapter 
     13 is now a permanent provision of the Copyright Act. The 
     timing and number of joint studies to be done by the 
     Copyright Office and the Patent and Trademark Offices of the 
     effectiveness of chapter 13 are also amended by reducing the 
     number of studies from two to one, and requiring that the one 
     study not be submitted until November 1, 2003. Current law 
     requires delivery of two studies within the first two years 
     of chapter 13, which is unnecessary and an insufficient 
     amount of time for the Copyright Office and the Patent and 
     Trademark Office to accurately measure and assess the 
     effectiveness of design protection within the marine 
     industry.
       The definition of a ``vessel'' in chapter 13 is amended to 
     provide that in addition to being able to navigate on or 
     through water, a vessel must be self-propelled and able to 
     steer, and must be designed to carry at least one passenger. 
     This clarifies Congress's intent not to allow design 
     protection for such craft as barges, toy and remote 
     controlled boas, inner tubes and surf boards.
     Section 5006. Informal Rulemaking of Copyright Determination.
       The Copyright Office has requested that Congress make a 
     technical correction to section 1201(a)(1)(C) of title 17 by 
     deleting the phrase ``on the record.'' The Copyright Office 
     believes that this correction is necessary to avoid any 
     misunderstanding regarding the intent of Congress that the 
     rulemaking proceeding which is the be conducted by the 
     Copyright Office under this provision shall be an informal, 
     rather than a formal, rulemaking proceeding. Accordingly, the 
     phrase ``on the record'' is deleted as a technical correction 
     to clarify the intent of Congress that the Copyright Office 
     shall conduct the rulemaking under section 1201(a)(1)(C) as 
     an informal rulemaking proceeding pursuant to section 553 of 
     Title 5. The intent is to permit interested persons an 
     opportunity to participate through the submission of written 
     statements, oral presentations at one or more of the public 
     hearings, and the submission of written responses to the 
     submissions or presentations of others.
     Section 5007. Service of Process for Surety Corporations
       This section allows surety corporations, like other 
     corporations, to utilize approved state officials to receive 
     service of process in any legal proceeding as an alternative 
     to having a separate agent for service of process in each of 
     the 94 federal judicial districts.
     Section 5008. Low-Power Television.
       Section 5008, which can be cited as the Community 
     Broadcasters Protection Act of 1999, will ensure that many 
     communities across the nation will continue to have access to 
     free, over-the-air low-power television (LPTV) stations, even 
     as full-service television stations proceed with their 
     conversion to digital format. In particular, Section 5008 
     requires the Federal Communications Commission (FCC) to 
     provide certain qualifying LPTV stations with ``primary'' 
     regulatory status, which in turn will enable these LPTV 
     stations to attract the financing that is necessary to 
     provide consumers with critical information and programming. 
     At the same time, recognizing the importance of, and the 
     engineering complexity in, the FCC's plan to convert full-
     service television stations to digital format, Section 5009 
     protects the ability of these stations to provide both 
     digital and analog service throughout their existing service 
     areas.
       The FCC began awarding licenses for low-power television 
     service in 1982. Low-power television service is a relatively 
     inexpensive and flexible means of delivering programming 
     tailored to the interests of viewers in small localized 
     areas. It also ensures that spectrum allocated for broadcast 
     television service is more efficiently used and promotes 
     opportunities for entering the television broadcast business.
       The FCC estimates that there are more than 2,000 licensed 
     and operational LPTV stations, about 1,500 of which are 
     operated in the continental United States by 700 different 
     licensees in nearly 750 towns and cities.\28\ LPTV stations 
     serve rural and urban communities alike, although about two-
     thirds of all LPTV stations serve rural communities. LPTV 
     stations in urban markets typically provide niche programming 
     (e.g., bilingual or non-English programming) to under-served 
     communities in large cities. In many rural markets, LPTV 
     stations are consumers' only source of local, over-the-air 
     programming. Owners of LPTV stations are diverse, including 
     high school and college student populations, churches and 
     religious groups, local governments, large and small 
     businesses, and even individual citizens.
       From an engineering standpoint, the term ``low-power 
     television service'' means precisely what it implies, i.e., 
     broadcast television service that operates at a lower level 
     of power than full-service stations. Specifically, LPTV 
     stations radiate 3 kilowatts of power for stations operating 
     on the VHF band (i.e., channels 2 through 13), and 150 
     kilowatts of power for stations operating on the UHF band 
     (i.e., channels 14 through 69). By comparison, full-service 
     stations on VHF channels radiate up to 316 kilowatts of 
     power, and stations on UHF channels radiate up to 5,000 
     kilowatts of power. The reduced power levels that govern LPTV 
     stations mean these stations serve a much smaller geographic 
     region than do full-service stations. LPTV signals typically 
     extend to a range of approximately 12 to 15 miles, whereas 
     the originating signal of full-service stations often reach 
     households 60 or 80 miles away.
       Compared to its rules for full-service television station 
     licensees, the FCC's rules for obtaining and operating an 
     LPTV license are minimal. But in return for ease of 
     licensing, LPTV stations must operate not only at reduced 
     power levels but also as ``secondary'' licensees. This means 
     LPTV stations are strictly prohibited from interfering with, 
     and must accept signal interference from, ``primary'' 
     licensees, such as full-service television stations. 
     Moreover, LPTV stations must yield at any point in time to 
     full-service stations that increase their power levels, as 
     well as to new full-service stations.
       The video programming marketplace is intensely competitive. 
     The three largest broadcast networks that once dominated the 
     market now face competition from several emerging broadcast 
     and cable networks, cable systems, satellite television 
     operators, wireless cable, and even the Internet. Low-power 
     television plays a valuable, albeit modest, role in this 
     market because it is capable of providing locally-originated 
     programming to rural and urban communities that have either 
     no access to local programming, or an over-abundance of 
     national programming.
       Low-power television's future, however, is uncertain. To 
     begin with, LPTV's secondary regulatory status means a 
     licensee can be summarily displaced by a full-service station 
     that seeks to expand its own service area, or by a new full-
     service station seeking to enter the same market. This cloud 
     of regulatory uncertainty necessarily affects the ability of 
     LPTV stations to raise capital over the long-term, 
     irrespective of an LPTV station's popularity among consumers.
       The FCC's plan to convert full-service stations to digital 
     substantially complicates LPTV stations' already uncertain 
     future. In its digital television (DTV) proceeding, the FCC 
     adopted a table of allotments for DTV service that provided a 
     second channel for each existing full-service station to use 
     for DTV service in making the transition from the existing 
     analog technology to the new DTV technology. These second 
     channels were provided to broadcasters on a temporary basis. 
     At the end of the DTV transition, which is currently 
     scheduled for December 31, 2006, they must relinquish one of 
     their two channels.
       In assigning DTV channels, the FCC maintained the secondary 
     status of LPTV stations (as well as translators). In order to 
     provide all full-service television stations with a second 
     channel, the FCC was compelled to establish DTV allotments 
     that will displace a number of LPTV stations, particularly in 
     the larger urban market areas where the available spectrum is 
     most congested.
       The FCC's plan also provides for the recovery of a portion 
     of the existing broadcast television spectrum so that it can 
     be reallocated to new uses. Specifically, the FCC provided 
     for immediate recovery of broadcast channels 60 through 69, 
     and for recovery of broadcast channels 52 through 59 at the 
     end of the DTV transition. As further required by Congress 
     under the Balanced Budget Act of 1997,\29\ the FCC has 
     completed the reallocation of broadcast channels 60 through 
     69. Existing analog stations, including LPTV stations and a 
     few DTV stations, are permitted to operate on these channels 
     during the DTV transition. But at the end of the transition, 
     all analog broadcast TV stations will have to cease 
     operation, and the DTV stations on broadcast channels 52 
     through 69 will be relocated to new channels in the DTV core 
     spectrum. As a result, the FCC estimates that the DTV 
     transition will require about 35 to 45 percent of all LPTV 
     stations to either change their operation or cease operation. 
     Indeed, some full-service stations have already ``bumped'' 
     several LPTV stations a number of times, at substantial cost 
     to the LPTV station, with no guarantee that the LPTV station 
     will be permitted to remain on its new channel in the long 
     term.
       The conferees, therefore, seek to provide some regulatory 
     certainty for low-power television service. The conferees 
     recognize that,

[[Page 29978]]

     because of emerging DTV service, not all LPTV stations can be 
     guaranteed a certain future. Moreover, it is not clear that 
     all LPTV stations should be given such a guarantee in light 
     of the fact that many existing LPTV stations provide little 
     or no original programming service.
       Instead, the conferees seek to buttress the commercial 
     viability of those LPTV stations which can demonstrate that 
     they provide valuable programming to their communities. The 
     House Committee on Commerce's record in considering this 
     legislation reflects that there are a significant number of 
     LPTV stations which broadcast programming--including locally 
     originated programming--for a substantial portion of each 
     day. From the consumers' perspective, these stations provide 
     video programming that is functionally equivalent to the 
     programming they view on full-service stations, as well as 
     national and local cable networks. Consequently, these 
     stations should be afforded roughly similar regulatory 
     status. Section 5008, the Community Broadcasters Protection 
     Act of 1999, will achieve that objective, and at the same 
     time, protect the transition to digital.
       Section 5008(a) provides that the short title of this 
     section is the ``Community Broadcasters Protection Act of 
     1999.''
       Section 5008(b) describes the Congress' findings on the 
     importance of low-power television service. The Congress 
     finds that LPTV stations have operated in a manner beneficial 
     to the public, and in many instances, provide worthwhile and 
     diverse services to communities that lack access to over-the-
     air programming. The Congress also finds, however, that LPTV 
     stations' secondary regulatory status effectively blocks 
     access to capital.
       Section 5008(c) amends section 336 of the Communications 
     Act of 1934 \30\ to require the FCC to create a new ``Class 
     A'' license for certain qualifying LPTV stations. New 
     paragraph (1)(A) in particular directs the FCC to prescribe 
     rules within 120 days of enactment for the establishment of a 
     new Class A television license that will be available to 
     qualifying LPTV stations. The FCC's rules must ensure that a 
     Class A licensee receives the same license terms and renewal 
     standards as any full-service licensee, and that each Class A 
     licensee is accorded primary regulatory status. Subparagraph 
     (B) further requires the FCC, within 30 days of enactment, to 
     send to each existing LPTV licensee a notice that describes 
     the requirements for Class A designation. Within 60 days of 
     enactment (or within 30 days of the FCC's notice), LPTV 
     stations intending to seek Class A designation must submit a 
     certification of eligibility to the FCC. Absent a material 
     deficiency in an LPTV station's certification materials, the 
     FCC is required under subparagraph (B) to grant a 
     certification of eligibility.
       Subparagraph (C) permits an LPTV station, within 30 days of 
     the issuance of the rules required under subparagraph (A), to 
     submit an application for Class A designation. The FCC must 
     award a Class A license to a qualifying LPTV station within 
     30 days of receiving such application. Subparagraph (D) 
     mandates that the FCC must act to preserve the signal 
     contours of an LPTV station pending the final resolution of 
     its application for a Class A license. In the event technical 
     problems arise that require an engineering solution to a 
     full-service station's allotted parameters or channel 
     assignment in the DTV table of allotments, subparagraph (D) 
     requires the FCC to make the necessary modifications to 
     ensure that such full-service station can replicate or 
     maximize its service area, as provided for in the FCC's 
     rules.
       With regard to maximization, a full-service digital 
     television station must file an application for maximization 
     or a notice of intent to seek such maximization by December 
     31, 1999, file a bona fide application for maximization by 
     May 1, 2000, and also comply with all applicable FCC rules 
     regarding the construction of digital television facilities. 
     The term ``maximization'' is defined in paragraph 31 of the 
     FCC's Sixth Report and Order as the process by which stations 
     increase their service areas by operating with additional 
     power or higher antennae than specified in the FCC's digital 
     television table of allotments. Subparagraph(E) requires that 
     a station must reduce the protected contour of its digital 
     television service area in accordance with any modifications 
     requested in future change applications. This provision is 
     intended to ensure that stations indeed utilize the full 
     amount of maximized spectrum for which they originally apply 
     by the aforementioned deadlines.
       Paragraph (2) lists the criteria an LPTV station must meet 
     to qualify for a Class A license. Specifically, the LPTV 
     station must: during the 90 days preceding the date of 
     enactment, broadcast a minimum of 18 hours per day--including 
     at least 3 hours per week of locally-originated programming--
     and also be in compliance with the FCC's rules on low-power 
     television service; and from and after the date of its 
     application for a Class A license, be in compliance with the 
     FCC's rules for full-service television stations. In the 
     alternative, the FCC may qualify an LPTV station as a Class A 
     licensee if it determines that such qualification would serve 
     the public interest, convenience, and necessity or for other 
     reasons determined by the FCC.
       Paragraph (3) provides that no LPTV station authorized as 
     of the date of enactment may be disqualified for a Class A 
     license based on common ownership with any other medium of 
     mass communication.
       Paragraph (4) makes clear that the FCC is not required to 
     issue Class A LPTV stations (or translators) an additional 
     license for advanced television services. The FCC, however, 
     must accept applications for such services, provided the 
     station will not cause interference to any other broadcast 
     facility applied for, protected, permitted or authorized on 
     the date of the filing of the application for advanced 
     television services. Either the new license for advanced 
     services or the original license must be forfeited at the end 
     of the DTV transition. The licensee may elect to convert to 
     advanced television services on its analog channel, but is 
     not required to convert to digital format until the end of 
     the DTV transition.
       Paragraph (5) clarifies that nothing in new subsection 
     336(f) preempts, or otherwise affects, section 337 of the 
     Communications Act of 1934.\31\
       Paragraph (6) precludes the FCC from granting Class A 
     licenses to LPTV stations operating between 698 megahertz 
     (MHz) and 806 MHz (i.e., television broadcast channels 52 
     through 69). However, the FCC shall provide to LPTV stations 
     assigned to, and temporarily operating on, those channels the 
     opportunity to qualify for a Class A license. If a qualifying 
     LPTV station is ultimately assigned a channel within the band 
     of frequencies that will eventually comprise the ``core 
     spectrum'' (i.e., television broadcast channels 2 through 
     51), then the FCC is required to issue a Class A license 
     simultaneously. However, the FCC may not grant a Class A 
     license to an LPTV station operating on a channel within the 
     core spectrum that the FCC will identify within 180 days of 
     enactment.
       Finally, paragraph (7) provides that the FCC may not grant 
     a Class A license (or a modification thereto) unless the 
     requesting LPTV station demonstrates that it will not 
     interfere with one of three types of radio-based services. 
     First, under subparagraph (A), the LPTV station must show 
     that it will not interfere with: (i) the predicted Grade B 
     contour of any station transmitting in analog format; or (ii) 
     the digital television service areas provided in the DTV 
     table of allotments; or the digital television areas 
     explicitly protected (as opposed to those areas that may be 
     permitted) in the Commission's digital television 
     regulations; or the digital television service areas of 
     stations subsequently granted by the FCC prior to the filing 
     of a Class A application; or lastly, stations seeking to 
     maximize power under the FCC's rules (provided such stations 
     are in compliance with the notification requirements under 
     paragraph (1)).
       Second, under subparagraph (B), the LPTV station must show 
     that it will not interfere with any licensed, authorized or 
     pending LPTV station or translator. And third, under 
     subparagraph (C), the LPTV station must show that it will not 
     interfere with other services (e.g., land mobile services) 
     that also operate on television broadcast channels 14 through 
     20.
       Finally, paragraph (8) establishes priority for those LPTVs 
     that are displaced by an application filed under this 
     section, in that these LPTVs have priority over other LPTVs 
     in the assignment of available channels.


                               FOOTNOTES

     \1\ See Rust v. Sullivan, 500 U.S. 173 (1991) (grants); 
     Indopco, Inc. v. Commissioner, 503 U.S. 79, 84 (1992) (tax 
     benefits). The First Amendment requires only that Congress 
     not aim at ``the suppression of dangerous ideas.'' NEA v. 
     Finley, 118 S. Ct. 2168, 2178-79 (1998).
     \2\ See United States v. O'Brien, 391 U.S. 367 (1968).
     \3\ See Turner Broadcasting Sys., Inc. v. FCC, 512 U.S. 622, 
     663 (1994).
     \4\ See, e.g., H.R. Rep. No. 102-628, p. 51 (1992); S. Rep. 
     No. 102-92, p. 62 (1991); see also Feb. 24 Hearing (Al 
     DeVaney).
     \5\ The Supreme Court has described the ``two types'' of 
     quasi in rem proceedings: a type I proceeding, in which ``the 
     plaintiff is seeking to secure a pre-existing claim in the 
     subject property and to extinguish or establish the 
     nonexistence of similar interests of particular persons,'' 
     and a type II action, in which ``the plaintiff seeks to apply 
     what he concedes to be the property of the defendant to the 
     satisfaction of a claim against him.'' Hanson v. Denckla, 357 
     U.S. 235, 246 n.12 (1958).
     \6\ 15 U.S.C. Sec. 1051, et seq.
     \7\ 149 F.3d 1368 (Fed. Cir. 1998) [hereinafter State 
     Street].
     \8\ See Dunlop Holdings v. Ram Golf Corp., 524 F.2d 33 (7th 
     Cir. 1975), cert. denied, 424 US 985 (1976).
     \9\ General Agreement on Tariffs and Trade, Pub. L. No. 103-
     465. The framework for international trade since its 
     inception in 1948, GATT is now administered under the 
     auspices of the World Trade Organization (WTO) (see note 19, 
     infra).
     \10\ See Herbert F. Schwartz, Patent Law & Practice (2d ed., 
     Federal Judicial Center, 1995), note 72 at 22. The PCT is a 
     multilateral treaty among more than 50 nations that is 
     designed to simplify the patenting process when an applicant 
     seeks a patent on the same invention in more than one nation. 
     See also 35 U.S.C.A. chs. 35-37 and PCT Applicant's Guide 
     (1992, rev. 1994).
     \11\ 35 U.S.C. Sec. 135(a).
     \12\ 35 U.S.C. Sec. 181.
     \13\ 5 U.S.C. Sec. Sec. 551-559, 701-706, 1305, 3105, 3344, 
     5372, 7521.
     \14\ 28 U.S.C. Sec. 1295.
     \15\ 35 U.S.C. Sec. 111(b). Pursuant to 35 U.S.C. 
     Sec. 111(b)(5), all provisional applications are abandoned 12 
     months after the date of their filing; accordingly,

[[Page 29979]]

     they are not subject to the 18-month publication requirement.
     \16\ 35 U.S.C. Sec. 171. Since design applications do not 
     disclose technology, inventors do not have a particular 
     interest in having them published. The bill as written 
     therefore simplifies the proposed system of publication to 
     confine the requirement to those applications for which there 
     is a need for publication.
     \17\ Mar. 20, 1883, as revised at Brussels, Dec. 14, 1900, 25 
     Stat. 1645, T.S. No. 579, and subsequently through 1967. The 
     Convention has 156 member nations, including the United 
     States.
     \18\ See 28 U.S.C. Sec. 1338.
     \19\ 19 U.S.C. Sec. 2171.
     \20\ 28 U.S.C. Sec. 5382.
     \21\ 5 U.S.C. Sec. 5304(h)(2)(C).
     \22\ 5 U.S.C. Sec. 5314.
     \23\ 5 U.S.C. Sec. 5315.
     \24\ World Trade Organization. The agreement establishing the 
     WTO is a multilateral instrument which creates a permanent 
     organization to oversee the implementation of the Uruguay 
     Round Agreements, including the GATT 1994, to provide a forum 
     for multilateral trade negotiations and to administer dispute 
     settlements (see note 3, supra). Staff of the House Comm. on 
     Ways and Means, 104th Cong., 1st Sess., Overview and 
     Compilation of U.S. Trade Statutes 1040 (Comm. Print 1995) 
     [hereinafter, Overview and Compilation of U.S. Trade 
     Statutes].
     \25\ Trade-Related Aspects of Intellectual Property Rights 
     Agreement; i.e., that component of GATT which addresses 
     intellectual property rights among the signatory members.
     \26\ International Convention for the Protection of New 
     Varieties of Plants. UPOV is administered by the World 
     Intellectual Property Organization (WIPO), which is charged 
     with the administration of, and activities concerning 
     revisions to, the international intellectual property 
     treaties. UPOV has 40 members, and guarantees plant breeders 
     national treatment and right of priority in other countries 
     that are members of the treaty, along with certain other 
     benefits. See M.A. Leaffer, International Treaties on 
     Intellectual Property at 47 (BNA, 2d ed. 1997).
     \27\ North American Free Trade Agreement, Pub. L. No. 103-
     182. The cornerstone of NAFTA is the phased-out elimination 
     of all tariffs on trade between the U.S., Canada, and Mexico. 
     Overview and Compilation of U.S. Trade Statutes 1999.
     \28\ LPTV stations are distinct from so called 
     ``translators.'' Whereas LPTV stations typically offer 
     original programming, translators merely amplify or ``boost'' 
     a full-service television station's signal into rural and 
     mountainous regions adjacent to the station's market.
     \29\  See 47 U.S.C. Sec. 337.
     \30\  47 U.S.C. Sec. 336.
     \31\  47 U.S.C. Sec. 337.
                                 ______
                                 
      By Mr. LEAHY:
  S. 1949. A bill to promote economically sound modernization of 
electric power generation capacity in the United States, to establish 
requirements to improve the combustion heat rate efficiency of fossil 
fuel-fired electric utility generating units, to reduce emissions of 
mercury, carbon dioxide, nitrogen oxides, and sulfur dioxide, to 
require that all fossil fuel-fired electric utility generating units 
operating in the United States meet new review requirements, to promote 
the use of clean coal technologies, and to promote alternative energy 
and clean energy sources such as solar, wind, biomass, and fuel cells; 
to the Committee on Finance.


            clean power plant and modernization act of 1999

  Mr. LEAHY. Mr. President, Vermonters have a proud tradition of 
protecting our environment. We have some of the strongest environmental 
laws in the country. Yet despite this proud tradition of environmental 
stewardship, we have seen how pollution from outside our state has 
affected our mountains, lakes and streams. Acid rain caused from sulfur 
dioxide emissions outside Vermont has drifted through the atmosphere 
and scarred our mountains and poisoned our streams. Mercury has quietly 
made its deadly poisonous presence into the food chain of our fish to 
the point where health advisories have been posted for the consumption 
of several species. And, despite our own tough air laws and small 
population, the EPA has considered air quality warnings in Vermont that 
are comparable to emissions consistent for much larger cities. Silently 
each night, pollution from outside Vermont seeps into our state, and 
our exemplary and forward-looking environmental laws are powerless to 
stop or even limit the encroachment.
  The Clean Air Act of 1970 was a milestone law which established 
national air quality standards for the first time and attempted to 
provide protection for populations who are affected by emissions 
outside their own local and state control. That bill did much to halt 
declining air quality around the country and improve it in some areas. 
It also acknowledged that fossil fuel utility plants contribute a 
significant amount of air pollution not only in the area immediately 
around the plant but can affect air quality hundreds of miles away.
  While the bill has improved air quality, changes in the utility 
market since passage of the Clean Air Act make it necessary to consider 
important updates to the legislation. States throughout the country are 
deregulating utilities and soon Congress may consider federal 
legislation on this issue. I support these economic changes but 
Congress and the Administration should keep pace with this changing 
market. Breaking down the barriers of a regulated utility market can 
have important economic consequences for utility customers. More 
competition will drive down prices. But these lower costs will come 
with a price--the cheapest power is unfortunately produced by some of 
the dirtiest power plants. Most of these power plants were 
grandfathered under the Clean Air Act.
  So today I am introducing the ``Clean Power Plant and Modernization 
Act'' to address the local, regional, and global air pollution problems 
that are posed by fossil-fired power plants under a deregulated market.
  In the last few weeks, the EPA and the Administration have taken some 
important steps to address the power plant loophole in the Clean Air 
Act that allows hundreds of old, mostly coal-fired power plants to 
continue to pollute at levels much higher than new plants. Closing this 
loophole is critical to protecting the health of our environment and 
the health of our children.
  Last week the Justice Department and the Environmental Protection 
Agency filed suit against 32 coal-fired power plants who had made major 
changes to their plants without also installing new equipment to 
control smog, acid rain and soot. This is illegal, even under the Clean 
Air Act, and it spotlights the glaring need to level the playing field 
for all power plants. This is particularly as our country moves toward 
a deregulated electricity industry.
  Unfortunately, some of our colleagues decided that this move unfairly 
targeted some of their utilities that have benefitted from this 
loophole for almost thirty years. I would point out that many of us 
from New England and New York believe it is unfair that our states have 
been the dumping ground for the pollution coming out of these plants 
for the past thirty years. My colleagues have heard me speak on the 
floor about how this pollution is contaminating our fish with mercury, 
damaging our lakes and forests with acid rain, and causing respiratory 
problems and obscuring the view of Vermont's mountains with summertime 
ozone pollution from nitrogen oxide emissions.
  Now, added to these concerns is the growing body of knowledge showing 
that carbon dioxide emissions are having an impact on the global 
climate. More than a decade of record heat, reports from around the 
globe of dying coral reefs, and melting glaciers should be warning 
signals to all of us.
  In Vermont, one of our warning signals is the impact to sugar maples. 
Sugar maple now range naturally as far south as Tennessee and west of 
the Mississippi River from Minnesota to Missouri. Given the current 
predictions for climate changes, by the end of the next century the 
range of sugar maples in North America will be limited the state of 
Maine and portions of eastern Canada. Vermont's climate may not change 
so much that palm trees will line the streets of Burlington and 
Montpelier, but the impact on the character and economy of Vermont and 
many other states will be profound.
  It is hard to imagine a Vermont hillside in the fall without the 
brilliant reds of the sugar maples, and it is hard to imagine a stack 
of pancakes without Vermont maple syrup. And it is unlikely that sugar 
maples will be the only species or crop that will be affected by 
climate change, or that the effects will be limited to Vermont. Many 
like to dismiss concerns about pollution from power plants as a 
``Northeastern issue.'' It is not; it affects all of us, perhaps in 
ways that we have not even begun to imagine.
  I can show you maps that mark the deposition ``hot spots'' for these 
pollutants in the Everglades, the Upper Midwest, New England, Long 
Island Sound, Chesapeake Bay and the West Coast. This clearly is not a 
regional issue. Collectively, fossil fuel-fired power

[[Page 29980]]

plants constitute the largest source of air pollution in the United 
States, annually emitting more than 2 billion tons of carbon dioxide, 
more than 12 million tons of acid rain producing sulfur dioxide, nearly 
6 million tons of smog producing nitrogen oxides, and more than 50 tons 
of highly toxic mercury.
  These are staggering sums. Consider the fact that it would take 
nearly 25,000 Washington Monuments, weighing 81,120 tons apiece, to add 
up to 2 billion tons. And that is just one year.
  Why are we continuing to allow pollutants on that enormous scale to 
be dumped on some of our most fragile ecosystems, much less into our 
lungs through the air we breathe? It is because Congress assumed when 
it passed the 1970 Clean Air Act that these old pollution-prone plants 
would be retired over time and replaced by newer, cleaner plants. It 
has not worked out that way, and it is time for the Congress to rethink 
our strategy.
  More than 75 percent of the fossil-fuel fired plants in the United 
States began operation before the 1970 Clean Air Act was passed. As a 
result, they are ``grandfathered'' out from under the full force of its 
regulations. Many of the environmental problems posed by this industry 
are linked to the antiquated and inefficient technologies at these 
plants. The average fossil-fuel fired power plant uses combustion 
technology devised in the 1950's or before. Would any of us buy a car 
today that was still using 1950s technology? Of course not. So why are 
we still going out of our way to preserve 1950s technology for power 
plants?
  As long as we allow these plants to operate inefficiently they will 
produce enormous amounts of air pollution. My bill takes a new approach 
to reducing this pollution by retiring the inefficient 
``grandfathered'' power plants and bring new, clean, and efficient 
technologies for the 21st Century on line.
  Obviously, major changes in this industry will not occur over night. 
The ``continue-business-as-usual'' inertia is enormous. The old, 
inefficient, pollution-prone power plants will operate until they fall 
down because they are paid for, burn the cheapest fuel, and are subject 
to much less stringent environmental requirements. ``Grandfathered'' 
plants have the statutory equivalent of an eternal lifetime under the 
Clean Air Act loophole.
  Mr. President, this article in Forbes Magazine describes how valuable 
the old ``grandfathered'' power plants are. The article cites the 
example of the ``grandfathered'' Homer City generating station outside 
of Pittsburgh. Until last year, the utility valued this plant at $540 
million. According to the Forbes article, last year the utility sold 
the plant for $1.8 billion. That works out to $955 per kilowatt of 
generating capacity, or about the cost of building a new plant. Why are 
these old pollution-prone plants suddenly so valuable? Maybe their 
``grandfathered'' status has something to do with it.
  What does my bill propose to do? First, it closes the ``grandfather'' 
loophole. Second, it lays out an aggressive but achievable set of air 
pollution and efficiency requirements for fossil-fired power plants. 
Third, the emissions standards will allow clean coal technologies to 
have a fair chance to compete in the future mix of electrical power 
generation. Fourth, it provides industry decision-makers with a 
comprehensive and predictable set of regulatory requirements and tax 
code changes so they can see up-front what the playing field is going 
to look like in the future. This will allow them to make informed, 
comprehensive, and economically efficient business decisions. Public 
health and the environment will benefit, consumers will benefit, and 
the utility companies will benefit from this approach.
  As U.S. power plants become more efficient and more power is produced 
by renewable technologies, less fossil fuel will be consumed. This will 
have an impact on the workers and communities that produce fossil 
fuels. These effects are likely to be greatest for coal, even with 
significant deployment of clean coal technology. The bill provides 
funding for programs to help workers and communities during the period 
of transition. I am eager to work with organized labor to ensure that 
these provisions address the needs of workers, particularly those who 
may not fully benefit from retraining programs.
  The bill provides substantial additional funding for research, 
development, and commercial demonstrations of renewable and clean 
energy technologies such as solar, wind, biomass, and fuel cells. As 
utilities retire their ``grandfathered'' plants and plan for future 
generating capacity, renewable and clean technologies need to be part 
of the equation. My bill also authorizes expenditures for implementing 
known ways of biologically sequestering carbon dioxide from the 
atmosphere such as planting trees, preserving wetlands, and soil 
restoration.
  How will the environment benefit from the emission and efficiency 
standards in my bill? Mercury emissions will be cut from more than 50 
tons per year to no more than 5 tons per year. Annual emissions of 
sulfur dioxide that causes acid rain will be cut by more than 6 million 
tons beyond the requirements in Phase II of the Clean Air Act of 1990. 
Nitrogen oxide emissions that result in summertime ozone pollution will 
be cut by more than 3 million tons per year beyond Phase II 
requirements. And the bill would prevent at least 650 million tons of 
carbon dioxide emissions per year.
  Of course, this discussion should not just be about the impact to our 
environment. This debate should equally be focused on public health. 
There is mounting evidence of the health effects of these pollutants. 
The Washington Post Magazine ran an alarming article that documented 
the escalating number of children with asthma, jumping to 17.3 million 
in 1998 from 6.8 million in 1980. Asthma may not be caused directly by 
air pollution, but it certainly aggravates it and can lead to premature 
deaths.
  The American public still overwhelmingly supports the commitment to 
the environment that we made in the early 1970s. As stewards of the 
environment for our children and our grandchildren, we need to act 
without delay to ensure that in the new millennium the United States 
produces electricity more efficiently and with much less environmental 
and public health impact. There is no reason why we should go into the 
next century still using technology from the era of Ozzie and Harriet.
  Mr. President, I ask unanimous consent that the bill, a section-by-
section overview of the bill, and an article entitled ``Poor Me'' from 
the May 31, 1999, edition of Forbes Magazine, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1949

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Clean 
     Power Plant and Modernization Act of 1999''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Combustion heat rate efficiency standards for fossil fuel-fired 
              generating units.
Sec. 5. Air emission standards for fossil fuel-fired generating units.
Sec. 6. Extension of renewable energy production credit.
Sec. 7. Megawatt hour generation fees.
Sec. 8. Clean Air Trust Fund.
Sec. 9. Accelerated depreciation for investor-owned generating units.
Sec. 10. Grants for publicly owned generating units.
Sec. 11. Recognition of permanent emission reductions in future climate 
              change implementation programs.
Sec. 12. Renewable and clean power generation technologies.
Sec. 13. Clean coal, advanced gas turbine, and combined heat and power 
              demonstration program.
Sec. 14. Evaluation of implementation of this Act and other statutes.
Sec. 15. Assistance for workers adversely affected by reduced 
              consumption of coal.
Sec. 16. Community economic development incentives for communities 
              adversely affected by reduced consumption of coal.

[[Page 29981]]

Sec. 17. Carbon sequestration.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the United States is relying increasingly on old, 
     needlessly inefficient, and highly polluting powerplants to 
     provide electricity;
       (2) the pollution from those powerplants causes a wide 
     range of health and environmental damage, including--
       (A) fine particulate matter that is associated with the 
     deaths of approximately 50,000 Americans annually;
       (B) urban ozone, commonly known as ``smog'', that impairs 
     normal respiratory functions and is of special concern to 
     individuals afflicted with asthma, emphysema, and other 
     respiratory ailments;
       (C) rural ozone that obscures visibility and damages 
     forests and wildlife;
       (D) acid deposition that damages estuaries, lakes, rivers, 
     and streams (and the plants and animals that depend on them 
     for survival) and leaches heavy metals from the soil;
       (E) mercury and heavy metal contamination that renders fish 
     unsafe to eat, with especially serious consequences for 
     pregnant women and their fetuses;
       (F) eutrophication of estuaries, lakes, rivers, and 
     streams; and
       (G) global climate change that may fundamentally and 
     irreversibly alter human, animal, and plant life;
       (3) tax laws and environmental laws--
       (A) provide a very strong incentive for electric utilities 
     to keep old, dirty, and inefficient generating units in 
     operation; and
       (B) provide a strong disincentive to investing in new, 
     clean, and efficient generating technologies;
       (4) fossil fuel-fired power plants, consisting of plants 
     fueled by coal, fuel oil, and natural gas, produce nearly 
     two-thirds of the electricity generated in the United States;
       (5) since, according to the Department of Energy, the 
     average combustion heat rate efficiency of fossil fuel-fired 
     power plants in the United States is 33 percent, 67 percent 
     of the heat generated by burning the fuel is wasted;
       (6) technology exists to increase the combustion heat rate 
     efficiency of coal combustion from 35 percent to 50 percent 
     above current levels, and technological advances are possible 
     that would boost the net combustion heat rate efficiency even 
     more;
       (7) coal-fired power plants are the leading source of 
     mercury emissions in the United States, releasing an 
     estimated 52 tons of this potent neurotoxin each year;
       (8) in 1996, fossil fuel-fired power plants in the United 
     States produced over 2,000,000,000 tons of carbon dioxide, 
     the primary greenhouse gas;
       (9) on average--
       (A) fossil fuel-fired power plants emit 1,999 pounds of 
     carbon dioxide for every megawatt hour of electricity 
     produced;
       (B) coal-fired power plants emit 2,110 pounds of carbon 
     dioxide for every megawatt hour of electricity produced; and
       (C) coal-fired power plants emit 205 pounds of carbon 
     dioxide for every million British thermal units of fuel 
     consumed;
       (10) the average fossil fuel-fired generating unit in the 
     United States commenced operation in 1964, 6 years before the 
     Clean Air Act (42 U.S.C. 7401 et seq.) was amended to 
     establish requirements for stationary sources;
       (11)(A) according to the Department of Energy, only 23 
     percent of the 1,000 largest emitting units are subject to 
     stringent new source performance standards under section 111 
     of the Clean Air Act (42 U.S.C. 7411); and
       (B) the remaining 77 percent, commonly referred to as 
     ``grandfathered'' power plants, are subject to much less 
     stringent requirements;
       (12) on the basis of scientific and medical evidence, 
     exposure to mercury and mercury compounds is of concern to 
     human health and the environment;
       (13) pregnant women and their developing fetuses, women of 
     childbearing age, and children are most at risk for mercury-
     related health impacts such as neurotoxicity;
       (14) although exposure to mercury and mercury compounds 
     occurs most frequently through consumption of mercury-
     contaminated fish, such exposure can also occur through--
       (A) ingestion of breast milk;
       (B) ingestion of drinking water, and foods other than fish, 
     that are contaminated with methyl mercury; and
       (C) dermal uptake through contact with soil and water;
       (15) the report entitled ``Mercury Study Report to 
     Congress'' and submitted by the Environmental Protection 
     Agency under section 112(n)(1)(B) of the Clean Air Act (42 
     U.S.C. 7412(n)(1)(B)), in conjunction with other scientific 
     knowledge, supports a plausible link between mercury 
     emissions from combustion of coal and other fossil fuels and 
     mercury concentrations in air, soil, water, and sediments;
       (16)(A) the Environmental Protection Agency report 
     described in paragraph (15) supports a plausible link between 
     mercury emissions from combustion of coal and other fossil 
     fuels and methyl mercury concentrations in freshwater fish;
       (B) in 1997, 39 States issued health advisories that warned 
     the public about consuming mercury-tainted fish, as compared 
     to 27 States that issued such advisories in 1993; and
       (C) the number of mercury advisories nationwide increased 
     from 899 in 1993 to 1,675 in 1996, an increase of 86 percent;
       (17) pollution from powerplants can be reduced through 
     adoption of modern technologies and practices, including--
       (A) methods of combusting coal that are intrinsically more 
     efficient and less polluting, such as pressurized fluidized 
     bed combustion and an integrated gasification combined cycle 
     system;
       (B) methods of combusting cleaner fuels, such as gases from 
     fossil and biological resources and combined cycle turbines;
       (C) treating flue gases through application of pollution 
     controls;
       (D) methods of extracting energy from natural, renewable 
     resources of energy, such as solar and wind sources;
       (E) methods of producing electricity and thermal energy 
     from fuels without conventional combustion, such as fuel 
     cells; and
       (F) combined heat and power methods of extracting and using 
     heat that would otherwise be wasted, for the purpose of 
     heating or cooling office buildings, providing steam to 
     processing facilities, or otherwise increasing total 
     efficiency; and
       (18) adopting the technologies and practices described in 
     paragraph (17) would increase competitiveness and 
     productivity, secure employment, save lives, and preserve the 
     future.
       (b) Purposes.--The purposes of this Act are--
       (1) to protect and preserve the environment while 
     safeguarding health by ensuring that each fossil fuel-fired 
     generating unit minimizes air pollution to levels that are 
     technologically feasible through modernization and 
     application of pollution controls;
       (2) to greatly reduce the quantities of mercury, carbon 
     dioxide, sulfur dioxide, and nitrogen oxides entering the 
     environment from combustion of fossil fuels;
       (3) to permanently reduce emissions of those pollutants by 
     increasing the combustion heat rate efficiency of fossil 
     fuel-fired generating units to levels achievable through--
       (A) use of commercially available combustion technology, 
     including clean coal technologies such as pressurized 
     fluidized bed combustion and an integrated gasification 
     combined cycle system;
       (B) installation of pollution controls;
       (C) expanded use of renewable and clean energy sources such 
     as biomass, geothermal, solar, wind, and fuel cells; and
       (D) promotion of application of combined heat and power 
     technologies;
       (4)(A) to create financial and regulatory incentives to 
     retire thermally inefficient generating units and replace 
     them with new units that employ high-thermal-efficiency 
     combustion technology; and
       (B) to increase use of renewable and clean energy sources 
     such as biomass, geothermal, solar, wind, and fuel cells;
       (5) to establish the Clean Air Trust Fund to fund the 
     training, economic development, carbon sequestration, and 
     research, development, and demonstration programs established 
     under this Act;
       (6) to eliminate the ``grandfather'' loophole in the Clean 
     Air Act relating to sources in operation before the 
     promulgation of standards under section 111 of that Act (42 
     U.S.C. 7411);
       (7) to express the sense of Congress that permanent 
     reductions in emissions of greenhouse gases that are 
     accomplished through the retirement of old units and 
     replacement by new units that meet the combustion heat rate 
     efficiency and emission standards specified in this Act 
     should be credited to the utility sector and the owner or 
     operator in any climate change implementation program;
       (8) to promote permanent and safe disposal of mercury 
     recovered through coal cleaning, flue gas control systems, 
     and other methods of mercury pollution control;
       (9) to increase public knowledge of the sources of mercury 
     exposure and the threat to public health from mercury, 
     particularly the threat to the health of pregnant women and 
     their fetuses, women of childbearing age, and children;
       (10) to decrease significantly the threat to human health 
     and the environment posed by mercury;
       (11) to provide worker retraining for workers adversely 
     affected by reduced consumption of coal; and
       (12) to provide economic development incentives for 
     communities adversely affected by reduced consumption of 
     coal.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Generating unit.--The term ``generating unit'' means an 
     electric utility generating unit.

     SEC. 4. COMBUSTION HEAT RATE EFFICIENCY STANDARDS FOR FOSSIL 
                   FUEL-FIRED GENERATING UNITS.

       (a) Standards.--
       (1) In general.--Not later than the day that is 10 years 
     after the date of enactment

[[Page 29982]]

     of this Act, each fossil fuel-fired generating unit that 
     commences operation on or before that day shall achieve and 
     maintain, at all operating levels, a combustion heat rate 
     efficiency of not less than 45 percent (based on the higher 
     heating value of the fuel).
       (2) Future generating units.--Each fossil fuel-fired 
     generating unit that commences operation more than 10 years 
     after the date of enactment of this Act shall achieve and 
     maintain, at all operating levels, a combustion heat rate 
     efficiency of not less than 50 percent (based on the higher 
     heating value of the fuel), unless granted a waiver under 
     subsection (d).
       (b) Test Methods.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator, in consultation 
     with the Secretary of Energy, shall promulgate methods for 
     determining initial and continuing compliance with this 
     section.
       (c) Permit Requirement.--Not later than 10 years after the 
     date of enactment of this Act, each generating unit shall 
     have a permit issued under title V of the Clean Air Act (42 
     U.S.C. 7661 et seq.) that requires compliance with this 
     section.
       (d) Waiver of Combustion Heat Rate Efficiency Standard.--
       (1) Application.--The owner or operator of a generating 
     unit that commences operation more than 10 years after the 
     date of enactment of this Act may apply to the Administrator 
     for a waiver of the combustion heat rate efficiency standard 
     specified in subsection (a)(2) that is applicable to that 
     type of generating unit.
       (2) Issuance.--The Administrator may grant the waiver only 
     if--
       (A)(i) the owner or operator of the generating unit 
     demonstrates that the technology to meet the combustion heat 
     rate efficiency standard is not commercially available; or
       (ii) the owner or operator of the generating unit 
     demonstrates that, despite best technical efforts and 
     willingness to make the necessary level of financial 
     commitment, the combustion heat rate efficiency standard is 
     not achievable at the generating unit; and
       (B) the owner or operator of the generating unit enters 
     into an agreement with the Administrator to offset by a 
     factor of 1.5 to 1, using a method approved by the 
     Administrator, the emission reductions that the generating 
     unit does not achieve because of the failure to achieve the 
     combustion heat rate efficiency standard specified in 
     subsection (a)(2).
       (3) Effect of waiver.--If the Administrator grants a waiver 
     under paragraph (1), the generating unit shall be required to 
     achieve and maintain, at all operating levels, the combustion 
     heat rate efficiency standard specified in subsection (a)(1).

     SEC. 5. AIR EMISSION STANDARDS FOR FOSSIL FUEL-FIRED 
                   GENERATING UNITS.

       (a) All Fossil Fuel-Fired Generating Units.--Not later than 
     10 years after the date of enactment of this Act, each fossil 
     fuel-fired generating unit, regardless of its date of 
     construction or commencement of operation, shall be subject 
     to, and operating in physical and operational compliance 
     with, the new source review requirements under section 111 of 
     the Clean Air Act (42 U.S.C. 7411).
       (b) Emission Rates for Sources Required To Maintain 45 
     Percent Efficiency.--Not later than 10 years after the date 
     of enactment of this Act, each fossil fuel-fired generating 
     unit subject to section 4(a)(1) shall be in compliance with 
     the following emission limitations:
       (1) Mercury.--Each coal-fired or fuel oil-fired generating 
     unit shall be required to remove 90 percent of the mercury 
     contained in the fuel, calculated in accordance with 
     subsection (e).
       (2) Carbon dioxide.--
       (A) Natural gas-fired generating units.--Each natural gas-
     fired generating unit shall be required to achieve an 
     emission rate of not more than 0.9 pounds of carbon dioxide 
     per kilowatt hour of net electric power output.
       (B) Fuel oil-fired generating units.--Each fuel oil-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.3 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (C) Coal-fired generating units.--Each coal-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.55 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (3) Sulfur dioxide.--Each fossil fuel-fired generating unit 
     shall be required--
       (A) to remove 95 percent of the sulfur dioxide that would 
     otherwise be present in the flue gas; and
       (B) to achieve an emission rate of not more than 0.3 pounds 
     of sulfur dioxide per million British thermal units of fuel 
     consumed.
       (4) Nitrogen oxides.--Each fossil fuel-fired generating 
     unit shall be required--
       (A) to remove 90 percent of nitrogen oxides that would 
     otherwise be present in the flue gas; and
       (B) to achieve an emission rate of not more than 0.15 
     pounds of nitrogen oxides per million British thermal units 
     of fuel consumed.
       (c) Emission Rates for Sources Required To Maintain 50 
     Percent Efficiency.--Each fossil fuel-fired generating unit 
     subject to section 4(a)(2) shall be in compliance with the 
     following emission limitations:
       (1) Mercury.--Each coal-fired or fuel oil-fired generating 
     unit shall be required to remove 90 percent of the mercury 
     contained in the fuel, calculated in accordance with 
     subsection (e).
       (2) Carbon dioxide.--
       (A) Natural gas-fired generating units.--Each natural gas-
     fired generating unit shall be required to achieve an 
     emission rate of not more than 0.8 pounds of carbon dioxide 
     per kilowatt hour of net electric power output.
       (B) Fuel oil-fired generating units.--Each fuel oil-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.2 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (C) Coal-fired generating units.--Each coal-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.4 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (3) Sulfur dioxide.--Each fossil fuel-fired generating unit 
     shall be required--
       (A) to remove 95 percent of the sulfur dioxide that would 
     otherwise be present in the flue gas; and
       (B) to achieve an emission rate of not more than 0.3 pounds 
     of sulfur dioxide per million British thermal units of fuel 
     consumed.
       (4) Nitrogen oxides.--Each fossil fuel-fired generating 
     unit shall be required--
       (A) to remove 90 percent of nitrogen oxides that would 
     otherwise be present in the flue gas; and
       (B) to achieve an emission rate of not more than 0.15 
     pounds of nitrogen oxides per million British thermal units 
     of fuel consumed.
       (d) Permit Requirement.--Not later than 10 years after the 
     date of enactment of this Act, each generating unit shall 
     have a permit issued under title V of the Clean Air Act (42 
     U.S.C. 7661 et seq.) that requires compliance with this 
     section.
       (e) Compliance Determination and Monitoring.--
       (1) Regulations.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator, in consultation 
     with the Secretary of Energy, shall promulgate methods for 
     determining initial and continuing compliance with this 
     section.
       (2) Calculation of mercury emission reductions.--Not later 
     than 2 years after the date of enactment of this Act, the 
     Administrator shall promulgate fuel sampling techniques and 
     emission monitoring techniques for use by generating units in 
     calculating mercury emission reductions for the purposes of 
     this section.
       (3) Reporting.--
       (A) In general.--Not less than often than quarterly, the 
     owner or operator of a generating unit shall submit a 
     pollutant-specific emission report for each pollutant covered 
     by this section.
       (B) Signature.--Each report required under subparagraph (A) 
     shall be signed by a responsible official of the generating 
     unit, who shall certify the accuracy of the report.
       (C) Public reporting.--The Administrator shall annually 
     make available to the public, through 1 or more published 
     reports and 1 or more forms of electronic media, facility-
     specific emission data for each generating unit and pollutant 
     covered by this section.
       (D) Consumer disclosure.--Not later than 2 years after the 
     date of enactment of this Act, the Administrator shall 
     promulgate regulations requiring each owner or operator of a 
     generating unit to disclose to residential consumers of 
     electricity generated by the unit, on a regular basis (but 
     not less often than annually) and in a manner convenient to 
     the consumers, data concerning the level of emissions by the 
     generating unit of each pollutant covered by this section and 
     each air pollutant covered by section 111 of the Clean Air 
     Act (42 U.S.C. 7411).
       (f) Disposal of Mercury Captured or Recovered Through 
     Emission Controls.--
       (1) Captured or recovered mercury.--Not later than 2 years 
     after the date of enactment of this Act, the Administrator 
     shall promulgate regulations to ensure that mercury that is 
     captured or recovered through the use of an emission control, 
     coal cleaning, or another method is disposed of in a manner 
     that ensures that--
       (A) the hazards from mercury are not transferred from 1 
     environmental medium to another; and
       (B) there is no release of mercury into the environment.
       (2) Mercury-containing sludges and wastes.--The regulations 
     promulgated by the Administrator under paragraph (1) shall 
     ensure that mercury-containing sludges and wastes are handled 
     and disposed of in accordance with all applicable Federal and 
     State laws (including regulations).
       (g) Public Reporting of Facility-Specific Emission Data.--
       (1) In general.--The Administrator shall annually make 
     available to the public, through 1 or more published reports 
     and the Internet, facility-specific emission data for each 
     generating unit and for each pollutant covered by this 
     section.
       (2) Source of data.--The emission data shall be taken from 
     the emission reports submitted under subsection (e)(3).

     SEC. 6. EXTENSION OF RENEWABLE ENERGY PRODUCTION CREDIT.

       Section 45(c) of the Internal Revenue Code of 1986 
     (relating to definitions) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``and'';

[[Page 29983]]

       (B) in subparagraph (B), by striking the period and 
     inserting ``, and''; and
       (C) by adding at the end the following:
       ``(C) solar power.'';
       (2) in paragraph (3)--
       (A) by inserting ``, and December 31, 1998, in the case of 
     a facility using solar power to produce electricity'' after 
     ``electricity''; and
       (B) by striking ``1999'' and inserting ``2010''; and
       (3) by adding at the end the following:
       ``(4) Solar power.--The term `solar power' means solar 
     power harnessed through--
       ``(A) photovoltaic systems,
       ``(B) solar boilers that provide process heat, and
       ``(C) any other means.''.

     SEC. 7. MEGAWATT HOUR GENERATION FEES.

       (a) In General.--Chapter 38 of the Internal Revenue Code of 
     1986 (relating to miscellaneous excise taxes) is amended by 
     inserting after subchapter D the following:

             ``Subchapter E--Megawatt Hour Generation Fees

``Sec. 4691. Imposition of fees.

     ``SEC. 4691. IMPOSITION OF FEES.

       ``(a) Tax Imposed.--There is hereby imposed on each covered 
     fossil fuel-fired generating unit a tax equal to 30 cents per 
     megawatt hour of electricity produced by the covered fossil 
     fuel-fired generating unit.
       ``(b) Adjustment of Rates.--Not less often than once every 
     2 years beginning after 2002, the Secretary, in consultation 
     with the Administrator of the Environmental Protection 
     Agency, shall evaluate the rate of the tax imposed by 
     subsection (a) and increase the rate if necessary for any 
     succeeding calendar year to ensure that the Clean Air Trust 
     Fund established by section 9511 has sufficient amounts to 
     fully fund the activities described in section 9511(c).
       ``(c) Payment of Tax.--The tax imposed by this section 
     shall be paid quarterly by the owner or operator of each 
     covered fossil fuel-fired generating unit.
       ``(d) Covered Fossil Fuel-Fired Generating Unit.--The term 
     `covered fossil fuel-fired generating unit' means an electric 
     utility generating unit that--
       ``(1) is powered by fossil fuels;
       ``(2) has a generating capacity of 5 or more megawatts; and
       ``(3) because of the date on which the generating unit 
     commenced commercial operation, is not subject to all 
     regulations promulgated under section 111 of the Clean Air 
     Act (42 U.S.C. 7411).''.
       (b) Conforming Amendment.--The table of subchapters for 
     such chapter 38 is amended by inserting after the item 
     relating to subchapter D the following:

``Subchapter E. Megawatt hour generation fees.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to electricity produced in calendar years 
     beginning after December 31, 2000.

     SEC. 8. CLEAN AIR TRUST FUND.

       (a) In General.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 (relating to trust fund code) is amended 
     by adding at the end the following:

     ``SEC. 9511. CLEAN AIR TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Clean Air Trust Fund' (hereafter referred to in this section 
     as the `Trust Fund'), consisting of such amounts as may be 
     appropriated or credited to the Trust Fund as provided in 
     this section or section 9602(b).
       ``(b) Transfers to Trust Fund.--There are hereby 
     appropriated to the Trust Fund amounts equivalent to the 
     taxes received in the Treasury under section 4691.
       ``(c) Expenditures From Trust Fund.--Amounts in the Trust 
     Fund shall be available, without further Act of 
     appropriation, upon request by the head of the appropriate 
     Federal agency in such amounts as the agency head determines 
     are necessary--
       ``(1) to provide funding under section 12 of the Clean 
     Power Plant and Modernization Act of 1999, as in effect on 
     the date of enactment of this section;
       ``(2) to provide funding for the demonstration program 
     under section 13 of such Act, as so in effect;
       ``(3) to provide assistance under section 15 of such Act, 
     as so in effect;
       ``(4) to provide assistance under section 16 of such Act, 
     as so in effect; and
       ``(5) to provide funding under section 17 of such Act, as 
     so in effect.''.
       (b) Conforming Amendment.--The table of sections for such 
     subchapter A is amended by adding at the end the following:

``Sec. 9511. Clean Air Trust Fund.''.

     SEC. 9. ACCELERATED DEPRECIATION FOR INVESTOR-OWNED 
                   GENERATING UNITS.

       (a) In General.--Section 168(e)(3) of the Internal Revenue 
     Code of 1986 (relating to classification of certain property) 
     is amended--
       (1) in subparagraph (E) (relating to 15-year property), by 
     striking ``and'' at the end of clause (ii), by striking the 
     period at the end of clause (iii) and inserting ``, and'', 
     and by adding at the end the following:
       ``(iv) any 45-percent efficient fossil fuel-fired 
     generating unit.''; and
       (2) by adding at the end the following:
       ``(F) 12-year property.--The term `12-year property' 
     includes any 50-percent efficient fossil fuel-fired 
     generating unit.''.
       (b) Definitions.--Section 168(i) of the Internal Revenue 
     Code of 1986 (relating to definitions and special rules) is 
     amended by adding at the end the following:
       ``(15) Fossil fuel-fired generating units.--
       ``(A) 50-percent efficient fossil fuel-fired generating 
     unit.--The term `50-percent efficient fossil fuel-fired 
     generating unit' means any property used in an investor-owned 
     fossil fuel-fired generating unit pursuant to a plan approved 
     by the Secretary, in consultation with the Administrator of 
     the Environmental Protection Agency, to place into service 
     such a unit that is in compliance with sections 4(a)(2) and 
     5(c) of the Clean Power Plant and Modernization Act of 1999, 
     as in effect on the date of enactment of this paragraph.
       ``(B) 45-percent efficient fossil fuel-fired generating 
     unit.--The term `45-percent efficient fossil fuel-fired 
     generating unit' means any property used in an investor-owned 
     fossil fuel-fired generating unit pursuant to a plan so 
     approved to place into service such a unit that is in 
     compliance with sections 4(a)(1) and 5(b) of such Act, as so 
     in effect.''.
       (c) Conforming Amendment.--The table contained in section 
     168(c) of the Internal Revenue Code of 1986 (relating to 
     applicable recovery period) is amended by inserting after the 
     item relating to 10-year property the following:

  ``12-year property...................................12 years''. ....

       (d) Effective Date.--The amendments made by this section 
     shall apply to property used after the date of enactment of 
     this Act.

     SEC. 10. GRANTS FOR PUBLICLY OWNED GENERATING UNITS.

       Any capital expenditure made after the date of enactment of 
     this Act to purchase, install, and bring into commercial 
     operation any new publicly owned generating unit that--
       (1) is in compliance with sections 4(a)(1) and 5(b) shall, 
     for a 15-year period, be eligible for partial reimbursement 
     through annual grants made by the Secretary of the Treasury, 
     in consultation with the Administrator, in an amount equal to 
     the monetary value of the depreciation deduction that would 
     be realized by reason of section 168(c)(3)(E) of the Internal 
     Revenue Code of 1986 by a similarly-situated investor-owned 
     generating unit over that period; and
       (2) is in compliance with sections 4(a)(2) and 5(c) shall, 
     over a 12-year period, be eligible for partial reimbursement 
     through annual grants made by the Secretary of the Treasury, 
     in consultation with the Administrator, in an amount equal to 
     the monetary value of the depreciation deduction that would 
     be realized by reason of section 168(c)(3)(D) of such Code by 
     a similarly-situated investor-owned generating unit over that 
     period.

     SEC. 11. RECOGNITION OF PERMANENT EMISSION REDUCTIONS IN 
                   FUTURE CLIMATE CHANGE IMPLEMENTATION PROGRAMS.

       It is the sense of Congress that--
       (1) permanent reductions in emissions of carbon dioxide and 
     nitrogen oxides that are accomplished through the retirement 
     of old generating units and replacement by new generating 
     units that meet the combustion heat rate efficiency and 
     emission standards specified in this Act, or through 
     replacement of old generating units with nonpolluting 
     renewable power generation technologies, should be credited 
     to the utility sector, and to the owner or operator that 
     retires or replaces the old generating unit, in any climate 
     change implementation program enacted by Congress;
       (2) the base year for calculating reductions under a 
     program described in paragraph (1) should be the calendar 
     year preceding the calendar year in which this Act is 
     enacted; and
       (3) a reasonable portion of any monetary value that may 
     accrue from the crediting described in paragraph (1) should 
     be passed on to utility customers.

     SEC. 12. RENEWABLE AND CLEAN POWER GENERATION TECHNOLOGIES.

       (a) In General.--Under the Renewable Energy and Energy 
     Efficiency Technology Act of 1989 (42 U.S.C. 12001 et seq.), 
     the Secretary of Energy shall fund research and development 
     programs and commercial demonstration projects and 
     partnerships to demonstrate the commercial viability and 
     environmental benefits of electric power generation from--
       (1) biomass (excluding unseparated municipal solid waste), 
     geothermal, solar, and wind technologies; and
       (2) fuel cells.
       (b) Types of Projects.--Demonstration projects may include 
     solar power tower plants, solar dishes and engines, co-firing 
     of biomass with coal, biomass modular systems, next-
     generation wind turbines and wind turbine verification 
     projects, geothermal energy conversion, and fuel cells.
       (c) Authorization of Appropriations.--In addition to 
     amounts made available under any other law, there is 
     authorized to be appropriated to carry out this section 
     $75,000,000 for each of fiscal years 2001 through 2010.

[[Page 29984]]



     SEC. 13. CLEAN COAL, ADVANCED GAS TURBINE, AND COMBINED HEAT 
                   AND POWER DEMONSTRATION PROGRAM.

       (a) In General.--Under subtitle B of title XXI of the 
     Energy Policy Act of 1992 (42 U.S.C. 13471 et seq.), the 
     Secretary of Energy shall establish a program to fund 
     projects and partnerships designed to demonstrate the 
     efficiency and environmental benefits of electric power 
     generation from--
       (1) clean coal technologies, such as pressurized fluidized 
     bed combustion and an integrated gasification combined cycle 
     system;
       (2) advanced gas turbine technologies, such as flexible 
     midsized gas turbines and baseload utility scale 
     applications; and
       (3) combined heat and power technologies.
       (b) Selection Criteria.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Energy shall 
     promulgate criteria and procedures for selection of 
     demonstration projects and partnerships to be funded under 
     subsection (a).
       (2) Required criteria.--At a minimum, the selection 
     criteria shall include--
       (A) the potential of a proposed demonstration project or 
     partnership to reduce or avoid emissions of pollutants 
     covered by section 5 and air pollutants covered by section 
     111 of the Clean Air Act (42 U.S.C. 7411); and
       (B) the potential commercial viability of the proposed 
     demonstration project or partnership.
       (c) Authorization of Appropriations.--
       (1) In general.--In addition to amounts made available 
     under any other law, there is authorized to be appropriated 
     to carry out this section $75,000,000 for each of fiscal 
     years 2001 through 2010.
       (2) Distribution.--The Secretary shall make reasonable 
     efforts to ensure that, under the program established under 
     this section, the same amount of funding is provided for 
     demonstration projects and partnerships under each of 
     paragraphs (1), (2), and (3) of subsection (a).

     SEC. 14. EVALUATION OF IMPLEMENTATION OF THIS ACT AND OTHER 
                   STATUTES.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary of Energy, in 
     consultation with the Chairman of the Federal Energy 
     Regulatory Commission and the Administrator, shall submit to 
     Congress a report on the implementation of this Act.
       (b) Identification of Conflicting Law.--The report shall 
     identify any provision of the Energy Policy Act of 1992 
     (Public Law 102-486), the Energy Supply and Environmental 
     Coordination Act of 1974 (15 U.S.C. 791 et seq.), the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et 
     seq.), or the Powerplant and Industrial Fuel Use Act of 1978 
     (42 U.S.C. 8301 et seq.), or the amendments made by those 
     Acts, that conflicts with the intent or efficient 
     implementation of this Act.
       (c) Recommendations.--The report shall include 
     recommendations from the Secretary of Energy, the Chairman of 
     the Federal Energy Regulatory Commission, and the 
     Administrator for legislative or administrative measures to 
     harmonize and streamline the statutes specified in subsection 
     (b) and the regulations implementing those statutes.

     SEC. 15. ASSISTANCE FOR WORKERS ADVERSELY AFFECTED BY REDUCED 
                   CONSUMPTION OF COAL.

       In addition to amounts made available under any other law, 
     there is authorized to be appropriated $75,000,000 for each 
     of fiscal years 2001 through 2015 to provide assistance, 
     under the economic dislocation and worker adjustment 
     assistance program of the Department of Labor authorized by 
     title III of the Job Training Partnership Act (29 U.S.C. 1651 
     et seq.), to coal industry workers who are terminated from 
     employment as a result of reduced consumption of coal by the 
     electric power generation industry.

     SEC. 16. COMMUNITY ECONOMIC DEVELOPMENT INCENTIVES FOR 
                   COMMUNITIES ADVERSELY AFFECTED BY REDUCED 
                   CONSUMPTION OF COAL.

       In addition to amounts made available under any other law, 
     there is authorized to be appropriated $75,000,000 for each 
     of fiscal years 2001 through 2015 to provide assistance, 
     under the economic adjustment program of the Department of 
     Commerce authorized by the Public Works and Economic 
     Development Act of 1965 (42 U.S.C. 3121 et seq.), to assist 
     communities adversely affected by reduced consumption of coal 
     by the electric power generation industry.

     SEC. 17. CARBON SEQUESTRATION.

       (a) Carbon Sequestration Strategy.--In addition to amounts 
     made available under any other law, there is authorized to be 
     appropriated to the Environmental Protection Agency and the 
     Department of Energy for each of fiscal years 2001 through 
     2003 a total of $15,000,000 to conduct research and 
     development activities in basic and applied science in 
     support of development by September 30, 2003, of a carbon 
     sequestration strategy that is designed to offset all growth 
     in carbon dioxide emissions in the United States after 2010.
       (b) Methods for Biologically Sequestering Carbon Dioxide.--
     In addition to amounts made available under any other law, 
     there is authorized to be appropriated to the Environmental 
     Protection Agency and the Department of Agriculture for each 
     of fiscal years 2001 through 2010 a total of $30,000,000 to 
     carry out soil restoration, tree planting, wetland 
     protection, and other methods of biologically sequestering 
     carbon dioxide.
       (c) Limitation.--A project carried out using funds made 
     available under this section shall not be used to offset any 
     emission reduction required under any other provision of this 
     Act.
                                  ____


      Section-by-Section Overview of ``The Clean Power Plant and 
                      Modernization Act of 1999''


 What will the ``Clean Power Plant and Modernization Act of 1999'' do?

       The ``Clean Power Plant and Modernization Act of 1999'' 
     lays out an ambitious, achievable, and balanced set of 
     financial incentives and regulatory requirements designed to 
     increase power plant efficiency, reduce emissions, and 
     encourage use of renewable power generation methods. The bill 
     encourages innovation, entrepreneurship, and risk-taking.
       The bill encourages ``retirement and replacement'' of old, 
     pollution-prone, and inefficient generating capacity with 
     new, clean, and efficient capacity. The bill does not utilize 
     a ``cap and trade'' approach. Many believe that the 
     ``retirement and replacement'' approach does a superior job 
     at the local and regional levels of protecting public health 
     and the environment from mercury pollution, ozone pollution, 
     and acid deposition. On a global level, the ``retirement and 
     replacement'' also does a far superior job of permanently 
     reducing the volume of carbon dioxide emitted.


               What will the bill do for the environment?

       The bill would prevent at least 650 million tons of carbon 
     dioxide emissions per year. Over time, even more greenhouse 
     gas emissions will be avoided annually as increases in power 
     plant efficiencies exceed 50%, more combined heat and power 
     systems are installed, and use of renewable energy sources 
     increases. Prevention of greenhouse gas emissions of up to 1 
     billion tons per year may be possible. Mercury emissions will 
     be cut from more than 50 tons per year to no more than 5 tons 
     per year. Annual emissions of acid rain producing sulfur 
     dioxide emissions will be cut by more than 6 million tons 
     beyond Phase II Clean Air Act of 1990 requirements. Nitrogen 
     oxide emissions that result in summertime ozone pollution 
     will be cut by 3.2 million tons per year beyond Phase II 
     requirements.
       Over a 50 year period, the proposal laid out in the bill 
     will prevent more than 30 billion tons in carbon dioxide 
     emissions, and maybe as high as 50 billion tons. Carbon 
     dioxide is further addressed in the bill by authorizing 
     expenditures for implementing known ways of biologically 
     sequestering carbon dioxide from the atmosphere such as 
     planting trees, preserving wetlands, and soil restoration.
       Over a 50 year period, more than 2,200 tons of mercury 
     emissions would be avoided. While this might not sound like a 
     lot in relation to the other pollutants, consider that a 
     teaspoon of mercury is enough to contaminate several millions 
     of gallons of water. And over a 50 year period more than 300 
     million tons of sulfur dioxide and 160 million tons of 
     nitrogen oxides will be prevented beyond the Phase II 
     emission limits specified in the Clean Air Act of 1990.
     Section 1. Title; table of contents
     Section 2. Findings and purposes
     Section 3. Definitions
     Section 4. Heat rate efficiency standards for fossil fuel-
         fired generating units
       On average, fossil fuel-fired power plants in the United 
     States operate at a thermal efficiency rate of 33%, 
     converting just one-third of the energy in the fuel to 
     electricity, and wasting 67% of the heat generated by burning 
     the fuel. Increasing efficiency in converting the energy in 
     the fuel into electricity is really the only way to reduce 
     carbon dioxide ``greenhouse'' emissions from these 
     facilities. According to the Energy Information 
     Administration, fossil-fired power plants in the United 
     States emit more the 2 billion tons of carbon dioxide per 
     year (or the weight equivalent of nearly 25,000 Washington 
     Monuments every year). This is approximately 40% of annual 
     domestic carbon dioxide emissions.
       Section 4 lays out a phased two-stage process for 
     increasing efficiency. In the first stage, by 10 years after 
     enactment, all units in operation must achieve a heat rate 
     efficiency (at the higher heating value) of not less than 
     45%. In the second stage, with expected advances in 
     combustion technology, units commencing operation more than 
     10 years after enactment must achieve a heat rate efficiency 
     (at the higher heating value) of not less than 50%.
       If, for some unforeseen reason, technological advances do 
     not achieve the 50% efficiency level, Section 4 contains a 
     waiver provision that allows owners of new units to offset 
     any shortfall in carbon dioxide emissions through 
     implementation of carbon sequestration projects.
     Section 5. Air emission standards for fossil fuel-fired 
         generating units
       Subsection (a) eliminates the ``grandfather'' loophole in 
     the Clean Air Act and requires all units, regardless of when 
     they were constructed or began operation, to comply

[[Page 29985]]

     with existing new source review requirements under Section 
     111 of the Clean Air Act. The average ``in service'' date for 
     fossil-fired generating units in the United States is 1964--
     six years before passage of the Clean Air Act. More than 75% 
     of operating fossil-fired generating units came into service 
     before implementation of the 1970 Clean Air Act and are 
     subject to much less stringent requirements than newer units.
       Subsection (b) sets mercury, carbon dioxide, sulfur 
     dioxide, and nitrogen oxide emission standards for units that 
     are subject to the 45% thermal efficiency standards set forth 
     in Section 4. For mercury, 90% removal of mercury contained 
     in the fuel is required. For carbon dioxide, the emission 
     limits are set by fuel type (i.e., natural gas = 0.9 pounds 
     per kilowatt hour of output; fuel oil = 1.3 pounds per 
     kilowatt hour of output; coal = 1.55 pounds per kilowatt hour 
     of output). Ninety-five percent of sulfur dioxide emissions 
     (and not more than 0.3 pounds per million Btus of fuel 
     consumed), and 90 percent of nitrogen oxides (and not more 
     than 0.15 pounds per million Btus of fuel consumed) are to be 
     removed.
       Subsection (c) contains the same emission standards for 
     mercury, sulfur dioxide, and nitrogen oxides as those in 
     Subsection (b). Increased thermal efficiency will result in 
     lower emissions of carbon dioxide, and the fuel specific 
     emission limits at the 50% efficiency level are lowered 
     accordingly (i.e., natural gas = 0.8 pounds per kilowatt hour 
     of output; fuel oil = 1.2 pounds per kilowatt hour of output; 
     coal = 1.4 pounds per kilowatt hour of output).
       Furthering the public's right-to-know information on 
     emission volumes, Subsection (e) requires EPA to annually 
     publish pollutant-specific emissions data for each generating 
     unit covered by the ``Clean Power Plant and Modernization Act 
     of 1999.'' In addition, at least once per year residential 
     consumers will receive information from their electricity 
     supplier on the emission volumes.
     Section 6. Extension of renewable energy production credit
       Section 45(c) of the Internal Revenue Code of 1986 is 
     amended to include solar power, and to extend renewable 
     energy production credit to 2010 (it is currently set to 
     expire in 1999).
     Section 7. Mega watt hour generation fee, and
     Section 8. Clean air trust fund
       The Clean Air Trust Fund is similar to the Highway Trust 
     Fund and the Superfund. Revenue for the Clean Air Trust Fund 
     will be provided through implementation of a fee on 
     electricity produced by fossil-fired generating units that 
     are ``grandfathered'' from the Clean Air Act's Section 111 
     new source requirements. Utilities will be assessed at the 
     rate of 30 cents per megawatt hour of electricity that they 
     produce from ``grandfathered'' units. For residential 
     consumers receiving power from ``grandfathered'' plants, the 
     cost of the fee would average 25 cents per month. Income from 
     the fee will be placed in the Clean Air Trust Fund to pay 
     for: a.) assistance to workers and communities adversely 
     affected by reduced consumption of coal; b.) research and 
     development and demonstration programs for renewable and 
     clean power generation technologies (e.g., wind, solar, 
     biomass, and fuel cells); c) demonstrations of the 
     efficiency, environmental benefits, and commercial viability 
     of electrical power generation from clean coal, advanced gas, 
     and combined heat and power technologies; and d.) carbon 
     sequestration projects.
     Section 9. Accelerated depreciation for investor-owned 
         generating units.
       Under the Internal Revenue Code of 1986, utilities can 
     depreciate their generating equipment over a 20-year period. 
     New, cleaner and efficient generating technologies will 
     experience shorter physical lifetimes compared to their 
     dirtier, less efficient, but more durable predecessors. Over 
     a 20-year timeframe, most components of new generating units 
     will need to be replaced; some components will be replaced 
     several times. To update the Internal Revenue Code of 1986 to 
     reflect this change in the expected physical lifetimes of 
     generating equipment, Section 9 amends Section 168 of the 
     Code to allow depreciation over a 15-year period for units 
     meeting the 45% efficiency level and the emission standards 
     in Section 5(b) above. Section 168 is further amended to 
     allow for deprecation over a 12-year period for units meeting 
     the 50% efficiency level and the emission standards in 
     Section 5(c).
     Section 10. Grants for publicly-owned generating units.
       No federal taxes are paid on publicly-owned generating 
     units. Section 10 provides for annual grants in an amount 
     equal to the monetary value of the depreciation deduction 
     that would be realized by a similarly-situated investor owned 
     generating unit under Section 9. Units meeting the 45% 
     efficiency level and the emission standards in Section 5(b) 
     above would receive annual grants over a 15-year period, and 
     units meeting the 50% efficiency level and the emission 
     standards in Section 5(c) would receive annual grants over a 
     12-year period.
     Section 11. Recognition of permanent emission reductions in 
         future climate change implementation programs.
       This section expresses the sense of Congress that permanent 
     reductions in emissions of carbon dioxide and nitrogen oxides 
     that are accomplished through the retirement of old 
     generating units and replacement by new generating units that 
     meet the efficiency and emissions standards in the bill, or 
     through replacement with non polluting renewable power 
     generation technologies, should be credited to the utility 
     sector and to the owner/operator in any climate change 
     implementation program enacted by Congress. The base year for 
     calculating reductions will be the year preceding enactment 
     of the ``Clean Power Plant and Modernization Act of 1999.'' 
     The bill stipulates that a portion of any monetary value that 
     may accrue from credits under this section should be passed 
     on to utility customers.
     Section 12. Renewable and clean power generation 
         technologies.
  This section provides a total of $750 million over 10 years to fund 
research and development programs and commercial demonstration projects 
and partnerships to demonstrate the commercial viability and 
environmental benefits of electric power generation from biomass, 
geothermal, solar, wind, and fuel cell technologies. Types of projects 
may include solar power tower plants, solar dishes and engines, co-
firing biomass with coal, biomass modular systems, next-generation wind 
turbines and wind verification projects, geothermal energy conversion, 
and fuel cells.
     Section 13. Clean coal, advanced gas turbine, and combined 
         heat and power generation demonstration program.
       This section provides a total of $750 million over 10 years 
     to fund projects and partnerships that demonstrate the 
     efficiency and environmental benefits and commercial 
     viability of electric power generation from clean coal 
     technologies (including, but not limited to, pressurized 
     fluidized bed combustion and integrated gasification combined 
     cycle systems), advanced gas turbine technologies (including, 
     but not limited to, flexible mid-sized gas turbines and 
     baseload utility scale applications), and combined heat and 
     power technologies.
     Section 14. Evaluation of implementation of this act and 
         other statutes
       Not later than 2 years after enactment, DOE, in 
     consultation with EPA and FERC, shall report to Congress on 
     the implementation of the ``Clean Power Plant and 
     Modernization Act of 1999.'' The report shall identify any 
     provision of the Energy Policy Act of 1992, the Energy Supply 
     and Environmental Coordination Act of 1974, the Public 
     Utilities Regulatory Policies Act of 1978, or the Powerplant 
     and Industrial Fuel Use Act of 1978 that conflicts with the 
     efficient implementation of the ``Clean Power Plant and 
     Modernization Act of 1999.'' The report shall include 
     recommendations for legislative or administrative measures to 
     harmonize and streamline these other statutes.
     Section 15. Assistance for workers adversely affected by 
         reduced consumption of coal
       With increased power plant efficiency, less fuel will need 
     to be burned to produce a given quantity of electricity. This 
     section provides a total of $1.125 billion over 15 years ($75 
     million per year) to provide assistance to workers who are 
     adversely affected as a result of reduced consumption of coal 
     by the electric power generation industry. The funds will be 
     administered under the economic dislocation and workers' 
     adjustment assistance program of the Department of Labor 
     authorized by Title III of the Job Training Partnership Act.
     Section 16. Community economic development incentives for 
         communities adversely affected by reduced consumption of 
         coal
       With increased power plant efficiency, less fuel will need 
     to be burned to produce a given quantity of electricity. This 
     section provides a total of $1.125 billion over 15 years ($75 
     million per year) to provide assistance to communities 
     adversely affected as a result of reduced consumption of coal 
     by the electric power generation industry. The funds will be 
     administered under the economic adjustment program of the 
     Department of Commerce authorized by the Public Works and 
     Economic Development Act of 1965.
     Section 17. Carbon sequestration
       This section authorizes expenditure of $345 million over 10 
     years for development of a long-term carbon sequestration 
     strategy ($45 million) for the United States, and authorizes 
     EPA and USDA to fund carbon sequestration projects including 
     soil restoration, tree planting, wetland's protection, and 
     other ways of biologically sequestering carbon dioxide ($300 
     million). Projects funded under this section may not be used 
     to offset emissions otherwise mandated by the ``Clean Power 
     Plant and Modernization Act of 1999.''
                                  ____


                                Poor Me

                        (By Christopher Palmeri)

       Utilities are telling the rate regulators that their old 
     power plants are practically

[[Page 29986]]

     worthless. But they're selling them for fancy prices.
       The Homer City Generation Station is a 34-year-old, coal-
     fired power plant near Pittsburgh. What's it worth? Until 
     last year it was carried on the books of two utilities for 
     $540 million. Then the companies sold it for $1.8 billion, or 
     $955 per kilowatt--about what it would cost to build a brand-
     spanking-new electric plant.
       Are old plants a millstone for utilities as they enter the 
     deregulated future? That's what the utilities are telling 
     rate regulators. We built all these plants over the years 
     because you told us to, they are saying--and now that 
     newcomers are about to undercut us, we need compensation for 
     the ``stranded costs.'' The logic of compensation for 
     stranded costs is unassailable. The only debate is over the 
     amount. Is the average power plant indeed a white elephant?
       According to data collected by Cambridge Energy Research 
     Associates, the average nonnuclear power plant put up for 
     sale in the last year sold for nearly twice its book value. 
     Granted, the plants being sold tend to be the more desirable 
     ones, by dint of their location or their fuel efficiency. 
     Still, the pricing makes one wonder whether the power 
     industry should be entitled to much of anything for stranded 
     costs.
       Some states--California, Maine, Connecticut and New York, 
     for example--have ordered utilities to sell all or part of 
     their generation capacity. That should set an arm's length 
     fair price. Thanks largely to the fat prices received for its 
     power plants, Sempra Energy, the parent of San Diego Gas & 
     Electric, says that its stranded-cost charges related to 
     generation--about 12% of a typical customer's bill--will be 
     paid off by July. That is two and a half years ahead of 
     schedule, a savings of $400 million for southern 
     Californians.
       Not every state legislature or utility commission has the 
     political will to force divestiture, however. If a utility 
     does not want to sell, the utility and the regulators have to 
     estimate the fair market value for a plant and then see if 
     that is a lot less than book value.
       This is tricky business. Last year Allegheny Energy, parent 
     of West Penn Power Co., estimated the value of its power 
     plant at $148 a kilowatt, half of their book value. An expert 
     hired by a number of industrial energy users suggested the 
     value should be $409. A hearing revealed that Allegheny had 
     bought back a half-interest in one of its plants two years 
     earlier at a price of $612 a kilowatt. Allegheny settled with 
     the Pennsylvania Public Utility Commission for a valuation of 
     $225 a kilowatt, half again the original estimate. At that 
     price, Allegheny's 700,000 customers in western Pennsylvania 
     are stuck paying $670 million in stranded costs.
       What happens if the utility doesn't get the compensation it 
     wants? Litigation. In New Hampshire the state legislature 
     passed a law designed to open up the power market in 1996. 
     New Hampshire's power companies and utility commission have 
     been tied up in court ever since over the issue of stranded 
     costs.
       For this reason, legislators and regulators sometimes feel 
     like they need to cut some deal, any deal, just to get a 
     competitive market moving forward. The state of Virginia, for 
     example, dodged any stranded cost calculation. In a move 
     supported by local utilities, the legislature delayed true 
     competition and simply froze electric rates until 2007. 
     Utilities had donated more than $1 million to Virginia 
     politicians in the last two election cycles.
       Last year Ohio legislators proposed a bill to open up the 
     power market. They figured stranded costs at $6 billion, 
     spread among Ohio's eight big utilities. Not liking that 
     number, the utilities came up with an $18 billion figure. The 
     latest compromise is $11 billion. This number represents, in 
     effect, the excess of the plants' book value over their 
     market value.
       Wait a minute, says Samuel Randazzo, an attorney for some 
     industrial power users. That $11 billion number is more than 
     the book value of all the plants. Can the utilities lose more 
     than their investment? Negotiations are to continue.
       ``We are applying a political solution to an economic 
     problem,'' shrugs Ohio utility commissioner Craig Glazer. 
     ``All intellectual arguments have been thrown out the window. 
     Now it comes down to who screams the loudest.
       Expect further screaming as utilities enter the deregulated 
     market.
                                 ______
                                 
      By Mr. ENZI (for himself and Mr. Thomas):
  S. 1950. A bill to amend the Mineral Leasing Act of 1920 to ensure 
the orderly development of coal, coalbed methane, natural gas, and oil 
in the Powder River Basin, Wyoming and Montana, and for other purposes; 
to the Committee on Energy and Natural Resources.


            the powder river basin resource development act

  Mr. ENZI. Mr. President, I rise today to introduce the ``Powder River 
Basin Resource Development Act of 1999.'' This legislation is designed 
to provide a procedure for the orderly and timely resolution of 
disputes between coal producers and oil and gas operators in the Powder 
River Basin in north-central Wyoming and southern Montana. This 
legislation is cosponsored by my colleague from Wyoming, Senator 
Thomas.
  Mr. President, the Powder River Basin in Wyoming and southern Montana 
is one of the richest energy resource regions in the world. This area 
contains the largest coal reserves in the United States, providing 
nearly thirty percent of America's total coal production. This region 
also contains rich reserves of oil and gas, including coalbed methane. 
Wyoming is the fifth largest producer of natural gas in the county and 
the sixth largest producer of crude oil. The Powder River Basin plays 
an important role in the Wyoming's oil and gas production, and this 
role promises to grow as the exploration and production of coalbed 
methane increases over the next several years. This region, and the 
State of Wyoming as a whole, provides many of the resources that heat 
our homes, fuel our cans, generate electricity for our computers, 
microwaves, and televisions. In short, there is very little that any of 
us do in a day that is not affected by the resources of coal, oil, and 
natural gas.
  The production of these natural resources is a vital part of the 
economy of my home state of Wyoming. The production of coal and oil and 
gas employs more than 21,000 people in Wyoming. The property taxes, 
severance taxes, and state and federal royalties fund our schools, our 
roads, and many of the other services that are essential for the 
functioning of our state. Since Wyoming has no state income tax, our 
State relies heavily on the minerals industry for our tax base.
  Given the great importance both the coal and oil and gas industries 
have to Wyoming's economy, the State of Wyoming and the Federal 
Government have tried to encourage concurrent development in areas 
where it is feasible and safe to do so. Unfortunately, this is not 
always possible. This legislation is designed to provide a procedure 
for the fair and expeditious resolution of conflicts between oil and 
gas producers and coal producers who have interests on federal land in 
the Powder River Basin in Wyoming and southern Montana.
  Mr. President, this legislation sets forth a reasonable procedure to 
resolve conflicts between coal producers and oil and gas producers when 
their mineral rights come into conflict because of overlapping federal 
leasing. First, this proposal requires that once a potential conflict 
is identified, the parties must attempt to negotiate an agreement 
between themselves to resolve this conflict. Second, if the parties are 
unable to come to an agreement between themselves, either of the 
parties may file a petition for relief in U.S. district court in the 
district in which the conflict is located. Third, after such a petition 
is filed, the court would determine whether an actual conflict exists. 
Fourth, if the court determines that a conflict does in fact exist, the 
court would determine whether the public interest, as determined by the 
greater economic benefit of each mineral, is best served by suspension 
of the federal coal lease or suspension or termination of all or part 
of the oil and gas lease. Fifth, a panel of three experts would be 
assembled to determine the value of the mineral of lesser economic 
value. Each party to the action; the oil and gas interest, the coal 
interest, and the federal government, would each appoint one of the 
three experts. Finally, after the panel issues its final valuation 
report, the court would enter an order setting the compensation that is 
due the developer who had to temporarily or permanently forgo his 
development rights. This compensation would be paid by the owner of the 
mineral of greater economic value. A credit against federal royalties 
would also be available against the compensation price in a limited 
number of situations where the value of such compensation was not 
foreseen in the original federal lease bid.
  Mr. President, the ``Powder River Basin Resource Development Act of

[[Page 29987]]

1999'' has several benefits over the present system. First, it requires 
parties whose mineral interests may come into conflict to attempt to 
negotiate an agreement among themselves before either one of them may 
avail themselves of the expedited resolution mechanism. No such 
requirement exists today. Second, it directs the Secretary of the 
Interior to encourage expedited development of federal minerals and 
that are leased pursuant to the federal Mineral Leasing Act, that exist 
in conflict areas, and which may otherwise be lossed or bypassed. As 
such, this legislation encourages full and expeditious development of 
federal resources in this narrow conflict area where it is economically 
feasible and safe to do so. Third and finally, this bill provides an 
expeditious procedure to resolve conflicts that cannot be solved by the 
two parties alone, and it does so in a manner that ensures that any 
mineral owner will be fairly compensated for any suspension or loss of 
his mineral rights. In turn, this proposal will prevent the serious 
economic hardship to hundreds of families and the State treasury that 
could occur if mineral development is stalled for an indefinite amount 
of time due to protracted litigation under the current system.
  Mr. President, this legislation builds on legislation I introduced 
last year with Senators Thomas and Bingaman, which passed Congress and 
was signed into law last November. That bill, S. 2500, ensured that 
existing lease and contract rights to coalbed methane would not be 
terminated by a decision from the 10th Circuit Court of Appeals which 
concluded that coalbed methane gas was reserved to the federal 
government under earlier coal reservation Acts. As it turned out, the 
Supreme Court earlier this year realized we got in right in our bill 
and held that the coalbed methane was in fact a gas and not a solid, 
and therefore was not reserved to the government under earlier coal 
reservation Acts. As such, the protections we provided in S. 2500 were 
guaranteed to future as well as past oil and gas leaseholders.
  Mr. President, S. 2500 was an important step in providing certainty 
and resolution to the question of mineral ownership in Wyoming, and 
throughout the country. This bill, builds on last year's work by 
providing a means to resolve ongoing development conflicts between 
owners of coal and oil and gas in the Powder River Basin. It represents 
the result of nearly a year of negotiations between the coal and 
coalbed producers, as well as the deep oil and gas interests, on a 
method to fairly reconcile mineral development disputes when they occur 
because of multiple leasing by the federal government. This bill has 
also incorporated recommendations made by the Bureau of Land 
Management. I look forward to working with all the affected parties 
during the second session of the 106th Congress to pass legislation 
that will put into place a reasonable, balanced method to ensure that 
we receive the best return on our valuable natural resources in the 
Powder River Basin.
                                 ______
                                 
      By Mr. SCHUMER (for himself and Ms. Collins):
  S. 1951. A bill to provide the Secretary of Energy with authority to 
draw down the Strategic Petroleum Reserve when oil and gas prices in 
the United States rise sharply because of anticompetitive activity, and 
to require the President, through the Secretary of Energy, to consult 
with Congress regarding the sale of oil from the Strategic Petroleum 
Reserve; to the Committee on Energy and Natural Resources.


                        oil price safeguard act

  Ms. COLLINS. Mr. President, I rise this afternoon to join my 
distinguished colleague, Senator Schumer, in introducing legislation 
that provides an effective option to the President and the Secretary of 
Energy to address the unfair, harmful manipulation in the global oil 
market. The Oil Price Safeguard Act would help to moderate sharp spikes 
in oil and gas prices caused by price fixing and production quotas 
through the judicious use of our enormous petroleum reserves.
  The global oil market is dominated by an international cartel with 
the ability to dramatically affect the price of oil. The eleven member 
countries of the Organization of Petroleum Exporting Countries known as 
OPEC supply over 40 percent of the world's oil and possess 78 percent 
of the world's total proven crude oil reserves. Their control of the 
world's oil supply allows these countries to collude to drive up the 
price of oil. OPEC has power to dominate the market and when it wields 
this power, consumers lose. Mr. President, if OPEC operated in the 
United States, the Department of Justice would undoubtedly prosecute 
the cartel for violation of U.S. anti-trust laws, but the cartel is 
beyond the reach of our antitrust enforcement.
  To appreciate how much economic power OPEC wields, it is helpful to 
review the historical relationship between world oil prices and the 
U.S. Gross Domestic Product. When OPEC cuts production to increase 
profits, the American consumer suffers, as does our economy. Rising oil 
prices increase transportation and manufacturing costs, dampening 
economic growth.
  The chart behind me entitled, ``Oil is a Vital Resource for the U.S. 
Economy,'' was prepared by the Energy Information Administration of the 
Department of Energy. On this chart, world oil prices are represented 
by the blue line, and U.S. Gross Domestic Product is represented by the 
red line. It is easy to see the inverse relationship between the two. 
When world oil prices are high, U.S. Gross Domestic Product drops. For 
example, in the late 1970s and early 1980s, as the price of oil 
climbed, the U.S. economy slumped into a deep recession. Conversely, 
the strength currently enjoyed by the U.S. economy was until recently 
accompanied by low oil prices.
  If these historical trends hold, the current rise in crude oil prices 
is a serious threat to our economic prosperity. This second chart 
entitled ``EIA Crude Oil Price Outlook,'' shows that crude oil prices 
have risen since January 1999 and are expected to continue rising this 
winter. To a large extent, this chart demonstrates the ability of OPEC 
to drive the price of oil up. It is chilling, that the Federal agency 
responsible for projecting energy prices for the government is 
predicting that the price of oil will be above $25 a barrel into 
January of next year. This prediction underscores the need for the 
legislation Senator Schumer and I introduce today.
  The bottom line is that consumers, as well as businesses, are hurt by 
expensive petroleum products. A rise in crude oil prices increases the 
price of home heating oil and gasoline. Northern states like Maine are 
particularly hard hit by increased oil prices because of the need to 
heat homes through long cold winters. Since about 6 out of 10 Maine 
homes burn oil and the average household uses 800 gallons annually 
increases in oil prices have a dramatic impact on the state's 
population and particularly on low-income families and seniors.
  A rural state like Maine is also hard hit by increased gasoline 
prices at the pump since rural residents often travel further distances 
than those living in urban or suburban areas. For example, my 
constituents in Aroostook County are currently paying close to $1.50 a 
gallon for regular octane gasoline. At the same time, higher petroleum 
prices increase the cost of transporting oil and gasoline to rural 
areas, like Northern Maine.
  At a recent OPEC meeting, the member nations reasserted their resolve 
to maintain high crude oil prices through production quotas. This is 
particularly troubling considering that the Energy Information 
Administration has projected that if New England experiences a 
particularly cold winter, the price of home heating oil could reach as 
high as $1.20 per gallon. This is 50 percent higher than what New 
Englanders paid for oil last year. Even if this winter has normal 
weather, the Energy Information Administration predicts significantly 
increased oil prices due in large measure to the OPEC production 
reductions. This chart, ``Crude and Distillate Price Outlook Higher 
than Last Winter'' shows projections for steeply increased prices in 
crude oil and, consequently, home heating oil. As you

[[Page 29988]]

can see, prices have risen already and are expected to reach levels 
higher than those experienced during the winter of 1996-97.
  Even if our diplomatic efforts fail to break OPEC's choke-hold on the 
world oil supply, we need not sit idly as oil and gas prices rise well-
beyond where they would be in a normally-functioning market.
  The United States has a tool available to ease the sting of this 
unfair market manipulation. The United States owns the largest 
strategic reserve of crude oil in the world. The Strategic Petroleum 
Reserve (SPR) consists of roughly 571 million barrels of crude oil held 
in salt caverns in Texas and Louisiana. The Energy Policy and 
Conservation Act allows the Secretary of Energy to sell oil from the 
reserve if the President makes certain findings set forth in the law. 
In order to tap into the Reserve, the President must determine that an 
emergency situation exists causing significant and lasting reductions 
in the supply of oil and severe price increases likely to cause a major 
adverse impact on the national economy. In the history of the Reserve, 
the President has only made this declaration once, during the Gulf War.
  The legislation I am proud to sponsor with Senator Schumer today, who 
has been a leader on this issue, will give the President more 
flexibility in using the Strategic Petroleum Reserve to protect 
American consumers. Specifically, this measure will amend the Energy 
Policy and Conservation Act to authorize a draw down of the reserve 
when the President finds that a significant reduction in the supply of 
oil has been caused by anti-competitive conduct. While many, myself 
included, believe that the President currently should consider ordering 
a draw down to counteract OPEC's latest market-distorting production 
quotas, this legislation will make it clear that he has the power to do 
so. It will also ensure that the proceeds from a draw-down of the 
Reserve are used to replenish its oil. The bill does by mandating that 
the proceeds are deposited in a special account designed for that 
purpose. We want to give the President the authority to use the SPR to 
restore market discipline, but not to permanently deplete the reserve 
in the process.
  To further encourage the use of the SPR to offset harmful and 
uncompetitive activities of foreign pricing cartels, the Oil Price 
Safeguard Act will require the Secretary of Energy to consult with 
Congress regarding the sale of oil from the Reserve. If the price of a 
barrel of crude exceeds 25 dollars for a period greater than 14 days, 
the President, through the Secretary of Energy, will be required to 
submit to Congress a report within thirty days. This report will have 
four parts. First, it will detail the causes and potential consequences 
of the price increase. Second, it will provide an estimate of the 
likely duration of the price increase, based on analyses and forecasts 
of the Energy Information Administration. Third, it will provide an 
analysis of the effects of the price increase on the cost of home 
heating oil. And fourth, the report will provide a specific rationale 
for why the President does or does not support a draw down and 
distribution of oil from the SPR to counteract anti-competitive 
behavior in the oil market.
  The bill we are introducing today will grant important new authority 
to the President to protect consumers from the market-distorting 
behavior of foreign cartels. It will require the President to explain 
to Congress and the American people why actions available to the 
President have not been exercised to protect consumers. I urge my 
colleagues to join Senator Schumer and me in working for expeditious 
passage of this important measure.
  I yield to my colleague, the distinguished Senator from New York, so 
he may provide further explanation of our legislation. I commend him 
for his leadership on this issue.
  Mr. SCHUMER. I thank Senator Collins from Maine for her leadership on 
this issue. She has well represented her constituents on an issue of 
great concern. Like Maine, northern New York--much of New York--is very 
concerned with the prices of oil; not only gasoline but some heating 
oil, which--just as it is in Maine--is going through the roof in New 
York as we come into this winter season, which, thus far anyway, has 
been colder than people have predicted. I thank the Senator for 
garnering time to talk about our legislation, and I look forward to 
working with her on this issue.
  Two months ago, I wrote President Clinton and Energy Secretary 
Richardson requesting that they look into the possibility of releasing 
a modest amount of oil from our Nation's well-stocked Strategic 
Petroleum Reserve. I made this request not because the price of crude 
oil was rising, but rather because global oil prices had recently more 
than doubled, primarily due to the new-found unity between OPEC members 
and allies to uphold rigid supply quotas--not free market but rigid 
supply quotas.
  OPEC's decision in September to maintain the supply quotas meant the 
daily global oil supply would remain millions of barrels below last 
year's levels--and millions of barrels per day below global demand. The 
effects this decision would have on oil prices were clear. Yesterday, 
my colleagues--listen to this--oil closed at nearly $26 a barrel, and 
many industry experts now believe it will go to $30 or even $35 a 
barrel this winter.
  Most industry and financial experts believe oil prices above $25 per 
barrel for an extended period will adversely affect economic growth, 
even if you come from Arizona; not only will it raise your gasoline 
prices--you don't have to worry about home heating oil, but $35 per 
barrel is clearly recessionary.
  The effects will be felt most among the poor and elderly, both at the 
gas pump and in a sharp increase in the cost of home heating oil. It 
will effect our manufacturing, transportation, as well as other 
businesses that rely on oil.
  I don't believe in interfering with free markets. But these OPEC 
decisions are not examples of fair economic play. In fact, OPEC 
recently announced that it would not even revisit the supply until 
March of 2000. With American and global oil demand increasing, and a 
cold winter forecast for North America, OPEC's continued supply quota 
could have a severely detrimental effect on the U.S. economy over the 
coming months, and may very well throw sand in the gears of the global 
economy.
  Unfortunately, OPEC, with more than 40 percent market share in the 
global oil market, can have inordinate power over the global economy.
  So the question is, Should we rely on the judgment of OPEC ministers 
to make the right decision when it comes to the American and the world 
economy? The answer is clearly no.
  The next question is, What can we do about it?
  My colleague from Maine, Senator Collins, and I have worked together 
to formulate what we believe is a reasonable response policy by the 
U.S. Government to instances when foreign oil producers collude to 
manipulate oil prices to a level that will likely cause a significant 
adverse impact on our economy, not to mention gasoline, which could go 
to a $1.60, $1.70, or even higher a gallon, and home heating oil that 
could go, in my part of the country, from $1 to $1.25 a gallon.
  Here is how our legislation works. It works within the parameters of 
the 1975 Energy Policy and Conservation Act, which set up the U.S. 
Strategic Petroleum Reserve and the Energy Policy Act of 1992, which 
described oil supply reductions leading to severe price increases as a 
potential national emergency.
  We simply add a provision that allows the Energy Secretary to order a 
drawdown of the SPR when oil and gas prices in the U.S. rise sharply 
because of anticompetitive conduct of foreign oil producers.
  Oil supply can fall short for many natural, market-based reasons. But 
when the shortfall is due to opportunistic manipulations by foreign 
producers, especially to the degree that it will harm our economic 
well-being, we have the right to act in our own defense.
  That is why our bill also requires the administration to report to 
Congress

[[Page 29989]]

within 30 days after the price of oil sustains a price higher than $25 
for more than 2 weeks. This reporting requirement--which will get 
Congress more involved in SPR policies--simply calls for a 
comprehensive review of the causes and likely consequences of the price 
increase. It also requires the President to explain why the 
administration does or does not --we don't force his hand--support the 
drawdown and distribution of oil from the SPR.
  Before concluding, I want to make a few things clear about this 
legislation. First, it doesn't attempt in any way to bring oil prices 
down to what some would call unreasonable levels. Most of us believe 
oil prices were unrealistically low last winter, and that OPEC's 
initial supply cuts were an understandable strategy to achieve a better 
balance between global supply and demand.
  But to maintain the cuts despite the price recovery and the projected 
growth in demand amounts to nothing less than price gouging.
  OPEC is currently enjoying unity as a cartel not seen since the early 
1980s.
  The bill also protects our national security by requiring that 
proceeds from the sale of oil from the SPR be used only to resupply the 
SPR, with profits from sales remaining in the SPR account. Therefore, 
in the long run, we are not going to deplete the oil reserve. We are 
just going to use it to try to bring oil prices to a reasonable level.
  And with the SPR currently stocked at 570 million barrels, we have 
more than enough oil to release several hundred thousand barrels a day 
in the event of a supply crisis without undercutting our stockpile. 
This should be more than sufficient to pressure oil producers to 
increase their supply to more realistically meet demand.
  The bottom line is this legislation would show foreign producers the 
U.S. can and may well intervene when unfair markets threaten our 
domestic economy. We will say loud and clear our national economic 
health is a national security issue. That knowledge may be sufficient 
to prevent OPEC from extensive oil market manipulations in the first 
place.
  A signal to OPEC that we are willing to use some of our strategic 
reserves to stabilize oil prices is consistent with the prudent long-
term approach toward maintaining a stable economy.
  Mr. President, this legislation is a measured, bipartisan response to 
a vital economic issue. I look forward to debating and passing this 
legislation next year.
  With that, I yield back my time to the good Senator from Maine and 
thank her for her leadership.
  Ms. COLLINS. Mr. President, it has been a pleasure to work with the 
Senator from New York on this issue.
                                 ______
                                 
      By Mr. BINGAMAN (for himself, Mr. Thompson, and Mr. Kennedy):
  S. 1954. A bill to establish a compensation program for employees of 
the Department of Energy, its contractors, subcontractors, and 
beryllium vendors, who sustained beryllium-related illness due to the 
performance of their duty; to establish a compensation program for 
certain workers at the Paducah, Kentucky, gaseous diffusion plant; to 
establish a pilot program for examining the possible relationship 
between workplace exposure to radiation and hazardous materials and 
illnesses or health conditions; and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.


                   energy employees' compensation act

  Mr. BINGAMAN. Mr. President, I am pleased to introduce today, along 
with my colleagues, Senators Thompson and Kennedy, a bill to establish 
compensation programs for workers at Department of Energy sites, 
contractors, and vendors who are ill because they were exposed to 
severe chemical and radioactive hazards while on the job. This bill, 
the Energy Employees' Compensation Act, will recognize three of the 
more egregious workplace hazards that were allowed to exist over the 
years at DOE facilities.
  The first of these situations was the exposure of workers at DOE 
sites and vendors to beryllium, a metal that has been used for the past 
50 years in the production of nuclear weapons. Even very small amounts 
of exposure to beryllium can result in the onset of Chronic Beryllium 
Disease (CBD), an allergic lung reaction resulting in lung scarring and 
loss of lung function. The only treatment is the use of steroids to 
control the inflammation. There is no cure. Once a person has been 
exposed to beryllium, he or she has a lifelong risk of developing CBD. 
While only 1 to 6 percent of exposed people will generally develop CBD, 
some work tasks are associated with disease rates as high as 16 
percent. Beryllium was used at 20 DOE sites, including sites in my 
state of New Mexico. An estimated 20,000 workers may have been exposed, 
including 1,000-1,500 in New Mexico. To date, DOE screening programs 
have identified 146 cases of CBD among current and former workers, 
although the number can be expected to grow. The people who are 
affected by this disease were typically blue-collar workers at these 
facilities. They are not covered by the federal workers' compensation 
system, and the various state workers' compensation programs are not 
well geared to deal with chronic occupational illnesses like CBD. I 
believe that, since these workers became exposed to beryllium while 
working in the defense of their country, the country owes them 
something in return, should they come down with Chronic Beryllium 
Disease. That is why I will fight to help the workers and their 
families in New Mexico and elsewhere through this part of the bill.
  The second situation which this bill seeks to remedy occurred at the 
DOE Paducah Gaseous Diffusion Plant in Kentucky. Here, workers were 
unknowingly exposed to plutonium and other highly radioactive materials 
that were present in recycled uranium sent to the plant by the former 
Atomic Energy Commission. The AEC and the managers of the plant knew 
about this hazard in the 1950s, but enhanced protection for workers at 
Paducah was not implemented until 1992. This is an unbelievable and 
outrageous error. These workers deserve full compensation for the 
health effects of exposures that they were subject to without their 
knowledge.
  The third situation that this bill addresses occurred to 55 workers 
at the DOE's East Tennessee Technology Park, who also suffered 
exposures to radiation and hazardous materials that have resulted in 
occupational illness. Through this provision, DOE can make a grant of 
$100,000 to each worker, if medical experts find that it is 
appropriate.
  The Department of Energy, under Secretary Richardson's leadership, is 
facing up to some of its past failures to properly oversee worker 
health and safety at its facilities. It is a tragedy that we have to 
introduce and pass bills like this one, particularly in cases where it 
seems so clear that the problems could have been prevented. But this 
bill is the right thing to do for workers who served their country and 
expected that they would be kept safe from occupational injury. As the 
Congress considers this bill, I hope that we also remain vigilant to 
the ongoing challenges to worker safety and health at DOE facilities, 
particularly in the parts of the Department that are being reorganized 
as a result of legislation we passed earlier this year.
  I ask unanimous consent that a section-by-section analysis be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Section-by-Section Analysis

         TITLE I--ENERGY EMPLOYEES' BERYLLIUM COMPENSATION ACT


                        SECTION 101. SHORT TITLE

       This section designates this title as the ``Energy 
     Employees' Beryllium Compensation Act.''


                         SECTION 102. FINDINGS

       Employees of the Department of Energy, and employees of the 
     Department's contractors and vendors, have been, and 
     currently may be, exposed to harmful substances, including 
     dust particles or vapor of beryllium, while performing duties 
     uniquely related to the Department of Energy's nuclear 
     weapons production program. Exposure to dust particles or 
     vapor of beryllium in this situation may cause beryllium 
     sensitivity and chronic beryllium disease, and those who 
     suffer beryllium-related health conditions should have 
     uniform and adequate compensation.


                        SECTION 103. DEFINITIONS

       This section provides the definitions of a number of terms 
     necessary to implement

[[Page 29990]]

     this legislation. It also incorporates the definitions of 
     multiple terms from the Federal Employees' Compensation Act, 
     section 8101 of title, United States Code.
       A beryllium vendor is defined as those vendors known to 
     have produced or provided beryllium for the Department of 
     Energy. The definition allows the Secretary of Energy to add 
     other vendors by regulation.
       A covered employee is defined as an employee of entities 
     that contracted with the Department of Energy to perform 
     certain services at a Department of Energy facility and an 
     employee of a subcontractor. The definition also includes an 
     employee of a beryllium vendor during a time when beryllium 
     was being processed and sold to the Department of Energy. An 
     employee of the federal government is also a covered employee 
     if the employee may have been exposed to beryllium at a 
     Department of Energy facility or that of a beryllium vendor.
       Covered illness is defined as Beryllium Sensitivity and 
     Chronic Beryllium Disease. The statute sets forth criteria by 
     which the existence of these conditions may be established. 
     Consequential injuries arising from these conditions are also 
     covered illnesses.


        SECTION 104. REGULATORY AUTHORITY TO REVISE DEFINITIONS

       This section provides specific authority for the Secretary 
     of Energy to designate by regulation additional entities as 
     beryllium vendors for the purposes of this title. This 
     section also authorizes the Secretary of Energy to provide by 
     regulation additional criteria through which a claimant may 
     establish the existence of a covered illness.
       With regard to proposed subsection (a), it is possible that 
     new vendors of beryllium or beryllium-related products will 
     develop contractual relationships with the Department of 
     Energy in the future; as these contractual relationships 
     develop, it will become necessary to designate these vendors 
     as ``beryllium vendors'' for the purposes of this title.
       With respect to subsection (b), advances in medical science 
     and testing, and in the medical field's understanding of the 
     harmful effects of exposure to beryllium, are expected to 
     occur. The definition of ``covered illness'' in section 
     103(4) of this title represents the understanding of the 
     Department of Energy of the current state of medical 
     knowledge on the demonstrated methods of establishing 
     beryllium sensitivity or chronic beryllium disease. This 
     subsection would allow the Secretary of Energy to specify 
     additional criteria by which a claimant may establish 
     existence of a covered illness.


                      section 105. administration

       This section provides that the Secretary of Energy may 
     administer the program or may enter into an agreement with 
     another agency of the United States, such as the Department 
     of Labor, to administer the program. The Department of Energy 
     would reimburse the other agency for its administrative 
     services.


     section 106. exposure to beryllium in the performance of duty

       In order to receive compensation under the Energy 
     Employees' Beryllium Compensation Act (EEBCA) for any 
     condition related to exposure to beryllium, a covered 
     employee must be determined to have been exposed to beryllium 
     in the performance of duty.
       Subsection (a) of this section provides a rebuttable 
     presumption that employees of DOE contractors (section 
     103(3)(A)) and federal employees (section 103(3)(C)) who were 
     employed at a DOE facility, or whose employment caused them 
     to be present at a DOE or a beryllium vendor's facility, when 
     beryllium was present, were exposed to beryllium in the 
     performance of duty. To rebut the presumptions, substantial 
     evidence would have to be introduced into the record 
     establishing that the covered employee was not exposed to 
     beryllium or beryllium dust during the employee's presence at 
     the facility.
       With respect to employees of beryllium vendors (section 
     103(3)(B)), subsection (b) of this section provides that 
     these employees have the burden of establishing by 
     substantial evidence exposure to beryllium that was intended 
     for sale to, or to be used by, the DOE. Thus, to the extent 
     that employees of beryllium vendors adduce evidence of 
     exposure to beryllium or beryllium dust solely in 
     circumstances where the eventual product was not intended for 
     sale to, or use by, the DOE, this evidence would not support 
     a finding that the employees were exposed to beryllium in the 
     performance of duty.


 section 107. compensation for disability or death, medical services, 
                     and vocational rehabilitation

       This section incorporates into this statute the relevant 
     provisions of the FECA regarding payment of compensation and 
     other benefits for covered illnesses. Provisions incorporated 
     by reference include FECA sections regarding medical services 
     and benefits (5 U.S.C. Sec. 8103); vocational rehabilitation 
     (Sec. Sec. 8104 and 8111(b)); total (Sec. 8105) and partial 
     (Sec. 8106) disability; schedule awards for permanent 
     impairment (Sec. Sec. 8107-8109); augmented compensation for 
     dependents (Sec. 8110); additional compensation for services 
     of attendants (Sec. 8111(a)); maximum and minimum monthly 
     payments (Sec. 8112); increase or decrease of basic 
     compensation (Sec. 8113); wage-earning capacity (Sec. 8115); 
     three-day waiting period (Sec. 8117); compensation in case of 
     death (Sec. 8133); funeral expenses (Sec. 8134); lump-sum 
     payment (Sec. 8135); and cost-of-living adjustment 
     (Sec. 8146a (a) and (b)).
       Subsection (b) of this section provides that all of the 
     compensation under this title will come out of the Energy 
     Employees' Beryllium Compensation Fund established pursuant 
     to section 120 of this title and is limited to amounts 
     available in that fund.
       Subsection (c) of this section prohibits any payment of 
     compensation for any period prior to the effective date of 
     the title, except for the retroactive lump-sum compensation 
     payment specified in section 111 of this title.


                    section 108. computation of pay

       This section incorporates 5 U.S.C. Sec. 8114 regarding 
     computation of pay into this title. Subsection (b) of this 
     section contains slight wording changes from 5 U.S.C. 
     Sec. 8114(d)(3) necessitated by the fact that not all covered 
     employees under this title are federal employees within the 
     meaning of the FECA.


           section 109. limitations on receiving compensation

       This section parallels, with some modifications, the 
     restrictions on receipt of compensation simultaneously with 
     receipt of other benefits for the same covered illness set 
     forth in 5 U.S.C. Sec. 8116. Subsections (a) and (b) of 
     section 109 contain the same prohibitions against dual 
     benefits sete forth in 5 U.S.C. Sec. 8116(a) and (b), and 
     apply to federal employees and beneficiaries whose benefit 
     derives from federal employees. Thus, individuals who are 
     eligible to receive benefits under this title may not 
     simultaneously receive those benefits and an annuity from the 
     Office of Personnel Management, whether such annuity is based 
     on length of service or disability. The election required by 
     subsection (b) is not subject to the provisions of section 
     110 regarding coordination of benefits.
       Subsection (c) applies only to federal employees awarded 
     benefits under this title and under FECA for the same covered 
     illness or death, and requires an election between the two 
     systems.
       Once an informed election has been made, the election is 
     irrevocable.
       Subsections (d) and (e) require an individual eligible to 
     receive benefits under this title, and also eligible to 
     receive benefits under a state worker's compensation system 
     based on the same covered illness or death, to elect either 
     benefits under this title (subject to the reduction in 
     benefits set forth in section 110) or under the applicable 
     state workers' compensation system, unless the state workers' 
     compensation coverage was secured by an insurance policy or 
     contract, and the Secretary of Energy specifically waives the 
     requirement to make an election. An informed election under 
     these two subsections, once made, is irrevocable.
       Subsection (f) requires a widow or widower who would 
     theoretically be eligible for benefits derived from more than 
     one husband or wife to make an election of one benefit. The 
     provision prevents a potential duplication of compensation 
     benefits in unusual, but predictable, circumstances. An 
     informed election under this subsection, once made, is 
     irrevocable.


                 section 110. coordination of benefits

       This section provides for reduction of benefits under this 
     title if the claimant is awarded benefits under any state or 
     federal workers' compensation system for the same covered 
     illness or death. This section is intended to prevent a 
     double recovery by individuals who have already received 
     compensation for illnesses covered by this title. Subsection 
     (a) of this section provides for a dollar-for-dollar 
     reduction of benefits under this title by the amount of 
     benefits received under this state or federal workers' 
     compensation system, less than reasonable costs of obtaining 
     such benefits. The determination of the reasonable costs 
     obtaining such benefits is a matter reserved to the Secretary 
     of Energy.
       Subsection (b) of this section provides that, if the 
     Secretary of Energy has granted a waiver of the election 
     requirement under section 109(d)(2) of this title, the amount 
     of compensation benefits is reduced by eighty percent of the 
     net amount of any state workers' compensation benefits 
     actually received or entitled to be received in the future, 
     after deducting the claimant's reasonable costs (as 
     determined by the Secretary of Energy) of obtaining such 
     benefits. Permitting an employee whose state workers' 
     compensation remedy is secured by insurance to retain an 
     additional twenty percent of state benefits provides an 
     incentive for the employee to seek such benefits in 
     situations where the Secretary of Energy has determined that 
     it is appropriate to waive the election requirement. In these 
     circumstances; value may be obtained for insurance policies 
     purchased prior to the enactment of this title.


                 section 111. retroactive compensation

       This section allows an eligible covered employee to elect 
     to receive retroactive compensation of $100,000, in lieu of 
     any other compensation under this title, if the employee was 
     diagnosed, prior to October 1, 1999, as having a beryllium-
     related pulmonary condition consistent with Chronic Beryllium 
     Disease and if the employee demonstrates the existence of 
     such diagnosis and condition by medical documentation created 
     during the employee's lifetime, at the time of death, or 
     autopsy.

[[Page 29991]]

       When an employee who would have been eligible to elect to 
     receive retroatice compensation dies prior to making the 
     election, of any cause, the employee's survivors may make the 
     election. The right to make an election shall be afforded to 
     survivors in the order of precedence set forth in section 
     8109 of title 5, United States Code, which is based, in 
     essence, on proximity of family relationship to the covered 
     employee.
       The employee or survivor must make the election within 30 
     days after the date the Secretary of Energy determined to 
     award compensation for total or partial disability or within 
     30 days after the date that the Secretary informs the 
     employee or the employee's survivor of the right to make the 
     election, whichever is later, unless the Secretary extends 
     the time. Informed elections are irrevocable and binding on 
     all survivors.
       When an employee or a survivor has made an election, no 
     other payment of compensation may be made on account of any 
     other beryllium-releated illness.
       A determination that the covered employee had ``beryllium-
     related pulmonary condition'' does not constitute a 
     determination that he or she had a covered illness.
       Retroactive compensation is not subject to a cost of living 
     adjustment.


     SECTION 112. EXCLUSIVITY OF REMEDY AGAINST THE UNITED STATES, 
                    CONTRACTORS, AND SUBCONTRACTORS

       This section provides that the benefits authorized under 
     this title are an exclusive remedy for individuals against 
     the United States, DOE, and DOE contractors and 
     subcontractors, except for proceedings under a state or 
     federal workers compensation statute, subject to sections 109 
     and 110 of this title.


       SECTION 113. ELECTION OF REMEDY AGAINST BERYLLIUM VENDORS

       This section provides that if an individual elects to 
     accept payment under this title, acceptance also will be an 
     exclusive remedy against beryllium vendors who have supplied 
     DOE with beryllium products, except for proceedings under a 
     state or federal workers compensation statute, subject to 
     sections 109 and 110.


                           SECTION 114. CLAIM

       This section adopts the requirements of a claim in section 
     8121, title 5, United States Code, which requires a claim to 
     be in writing and delivered or properly mailed to the 
     Secretary of Energy. The claim must be on an approved form, 
     contain all required information, sworn, and accompanied by a 
     physician's certificate stating the nature of the injury and 
     the nature and probable extent of the disability, although 
     the Secretary may waive these latter four requirements for 
     reasonable cause.


             section 115. time limitation on filing a claim

       This section limits the time for fling a claim under this 
     title.


                      section 116. review of award

       This section provides that the decisions of the Secretary 
     of Energy in allowing or denying any payment under this title 
     are final, and are not subject to judicial review or review 
     by another official of the United States. For purposes of 
     this section, decisions issued by the Beryllium Compensation 
     Appeals Panel (to be established under regulations authorized 
     by section 122 of this title) are decisions of the designee 
     of the Secretary of Energy, in the same way that the 
     decisions of the Employees' Compensation Appeals Board 
     established under 5 U.S.C. Sec. 8149 are decisions of the 
     designee of the Secretary of Labor.


                    section 117. assignment of claim

       This section is identical to 5 U.S.C. Sec. 8130.


                       section 118. adjudication

       Subsection (a) provides that, if the Secretary of Energy 
     establishes new criteria for establishing coverage of a 
     covered illness by specifically promulgating a regulation 
     pursuant to the authority granted by section 104(b) of this 
     title, a claimant has the right to request reconsideration of 
     a decision awarding or denying coverage. This provision is 
     intended to permit a claimant whose claim was properly denied 
     under the criteria in effect at the time of the initial 
     denial to seek and obtain reconsideration based on the new 
     criteria, notwithstanding the fact that, under the 
     administrative appeal rights contained in this title, the 
     claimant would not be entitled to reconsideration.
       Subsection (b) incorporates into this title FECA provisions 
     regarding physical examinations (Sec. 123); findings and 
     awards (Sec. 8124); misbehavior at proceedings (Sec. 8125); 
     subpoenas, oaths, and examination of witnesses (Sec. 8126); 
     representation and attorney's fees (Sec. 8127); 
     reconsideration (Sec. 8128); and recovery of overpayments 
     (Sec. 8129).


             section 119. subrogation of the united states

       This section incorporates the provisions of 5 U.S.C. 
     Sec. Sec. 8131 and 8132 into this title. Based on these 
     provisions, the United States has the same statutory right of 
     reimbursement of the compensation payable under this title 
     against the proceeds of any recovery from a responsible third 
     party tortfeasor as that set forth in the FECA.
       Subsection (c) notes that, for purposes of this title, the 
     last sentence of 5 U.S.C. Sec. 8131(a) that an ``employee 
     required to appear as a party or witness in the prosecution 
     of such an action [against a third party] is in an active 
     duty status while so engaged'' applies only to federal 
     employees covered under this title, as defined in section 
     103(3)(C).


       SECTION 120. ENERGY EMPLOYEES BERYLLIUM COMPENSATION FUND

       This section creates in the U.S. Treasury the Energy 
     Employees' Beryllium Compensation Fund, which consists of 
     amounts appropriated to it or transferred to it from other 
     DOE accounts and amounts that otherwise accrue to it under 
     this title. Amounts in the Fund may be used for the payment 
     of compensation and other benefits and expenses authorized by 
     this title and for payment of administrative expenses.


        SECTION 121. FORFEITURE OF BENEFITS BY CONVICTED FELONS

       Any individual convicted of violating section 1920 of title 
     18, United States Code, which prohibits false statements to 
     obtain federal employees' compensation, or any other federal 
     or state criminal statute relating to fraud in the 
     application or receipt of any benefits under the title, or 
     any other workers' compensation Act, shall forfeit (as of the 
     date of conviction) any benefits for any injury occurring on 
     or before the date of the conviction. This forfeiture is in 
     addition to any action of the Secretary of Energy under two 
     other provisions of the FECA that have been incorporated into 
     this title. Section 8106 of title 5, United States Code, 
     provides that an employee who fails to make a required report 
     or knowingly understates earnings forfeits compensation for 
     any period for which the report was required. Section 8129 
     provides for the recovery of overpayments made to an 
     individual due to a mistake in fact or law by decreasing 
     later payments.
       Except for payments to dependents as calculated under 
     section 8133 of title 5, United States Code, an individual 
     confined for the commission of a felony may not receive 
     benefits during the period of incarceration or retroactively 
     after release.
       State and federal governments must make available to the 
     Secretary of Energy, upon written request, the names and 
     social security numbers of individuals who are incarcerated 
     for felony offenses.


     SECTION 122. REGULATIONS--BERYLLIUM COMPENSATION APPEALS PANEL

       This section, modeled after 5 U.S.C. Sec. 8149, authorizes 
     the Secretary of Energy to provide by regulation for the 
     creation of the Beryllium Compensation Appeals Panel. This 
     panel is intended to have the same adjudicatory authority 
     over appeals from adverse determinations of claims under this 
     title that the Employees' Compensation Appeals Board 
     exercises over appeals from adverse determinations of claims 
     under the FECA.


              SECTION 123. CIVIL SERVICE RETENTION RIGHTS

       This section provides that a federal employee who meets the 
     definition of a covered employee within the meaning of 
     section 103(3)(C) of this title has the same civil service 
     retention rights as are applicable to federal employees by 
     virtue of the provisions of 5 U.S.C. Sec. 8151. Civil Service 
     retention rights are administered by the Office of Personnel 
     Management; as with 5 U.S.C. Sec. 8151, see Charles J. 
     McQuistion, 37 ECAB 193 (1985), this section is intended to 
     be administered, enforced, and interpreted by OPM.


                       SECTION 124. ANNUAL REPORT

       This section provides that the Secretary of Energy will 
     prepare a report with respect to the administration of this 
     title on a fiscal year basis, and will submit this report to 
     Congress.


              SECTION 125. AUTHORIZATION OF APPROPRIATIONS

       This section authorizes appropriations and authorizes 
     transfers from other DOE accounts, to the extent provided in 
     advance in appropriations Acts, to carry out the purposes of 
     this title. This section also provides that the Secretary 
     limit the amount for the payment of compensation and other 
     benefits to an amount not in excess of the sum of the 
     appropriations to the Fund and amounts made available by 
     transfer to the Fund.


                       SECTION 126. CONSTRUCTION

       This section provides that any amendments to provisions of 
     the Federal Employees' Compensation Act, 5 U.S.C. 
     Sec. Sec. 8101-8151, which have been incorporated by 
     reference into this title, will also be effective to 
     proceedings under this title.


                   SECTION 127. CONFORMING AMENDMENTS

       This section makes conforming amendments to criminal 
     provisions of the United States Code (18 U.S.C. 
     Sec. Sec. 1920, 1921, and 1922).


                      SECTION 128. EFFECTIVE DATE

       This section provides that the title is effective upon 
     enactment, and applies to all claims, civil actions, and 
     proceedings ``pending on, or filed on or after, the date of 
     the enactment'' of this title. Because compensation under 
     this title constitutes a covered employee's exclusive remedy 
     against the United States, and DOE's contractors and 
     subcontractors, any claim against the United States (under 
     the Federal Tort Claims Act) or against any of the other 
     above-referenced entities that has not been

[[Page 29992]]

     reduced to a final judgment before the date is barred by this 
     title.

              TITLE II--ENERGY EMPLOYEES PILOT PROJECT ACT


                        section 201. short title

       This section designates this Act as the ``Energy Employees 
     Pilot Project Act.''


                       section 202. pilot project

       This section directs the Secretary of Energy to conduct a 
     pilot program to examine the possible relationship between 
     workplace exposures to radiation, hazardous materials, or 
     both and occupational illness or other adverse health 
     conditions.


                     section 203. physicians panel

       This section requires a panel of physicians who specialize 
     in health conditions related to occupational exposure to 
     radiation and hazardous materials to issue a report which 
     examines whether 55 current and former employees of the 
     Department of Energy's East Tennessee Technology Park may 
     have sustained any illness or health condition as a result of 
     their employment.


                section 204. secretary of energy finding

       The contractor is required by this section to provide the 
     report of the panel to the Secretary of Energy, who will 
     determine whether any of the employees who are covered by the 
     report may have sustained an adverse health condition from 
     their employment.


                           section 205. award

       If the Secretary of Energy makes a positive finding under 
     section 204 concerning an employee, the employee may receive 
     an award of $100,000. If the employee is eligible for an 
     award under title I, the employee may elect to receive 
     payment under this title in place of compensation under title 
     I.


                         section 206. election

       This section provides that the employee is to make the 
     election under section 205 within a certain period of time. 
     Informed elections are irrevocable and binding on all 
     survivors.


                    section 207. survivor's election

       If an individual dies before making the election, the 
     employee's survivor may make the election. The right to make 
     an election shall be afforded to survivors in the order of 
     precedence set forth in section 8109 of title 5, United 
     States Code, which is based, in essence, on proximity of 
     family relationship to the covered employee.


                      section 208. status of award

       An award is not income under the Internal Revenue Code.


 section 209. payment in full settlement of claims against the united 
                states, contractors, and subcontractors

       This section provides that employees at the facility 
     eligible for benefits under this title can elect which remedy 
     to pursue. If they elect to proceed under this title, then 
     acceptance of payment under this title will be in full 
     settlement of all claims against the United States, DOE, a 
     DOE contractor, a DOE subcontractor, or an employee, agent, 
     or assign of one of them arising out of the condition for 
     which the payment was made, except that the employee would 
     retain the right to proceed under a state workers 
     compensation statute, subject to the reduction-of-benefits 
     provision of subsection (c). Under that subsection, the 
     benefits awarded to a claimant under this title would be 
     reduced by the amount of any other payments received by that 
     claimant because of the same illness or adverse health 
     condition, excluding payments for medical expenses under a 
     workers' compensation system.


                        section 210. subrogation

       This section sets out the conditions under which the United 
     States is subrogated to a claim.


              section 211. authorization of appropriation

       This section authorizes appropriations for the program and 
     provides that authority under this title to make payments is 
     effective in any fiscal year only to the extent, or in the 
     amounts, provided in advance in an appropriation Act

        TITLE III--PADUCAH EMPLOYEES' EXPOSURE COMPENSATION ACT


                        section 301. short title

       This section designates this Act as the ``Paducah 
     Employees' Exposure Compensation Act.''


                        section 302. definitions

       This section defines a number of terms necessary to 
     implement this legislation, including ``Paducah employee'' 
     and ``specified disease''


       section 303. paducah employees' exposure compensation fund

       This section establishes in the Treasury of the United 
     States the Paducah Employee's Exposure Compensation Fund. The 
     amounts in the fund are available for expenditure by the 
     Attorney General under section 305, and the Fund terminates 
     22 years after the date of enactment of this title. This 
     section also authorizes appropriations to the Fund in the 
     sums necessary to carry out the purposes of the title and 
     provides that authority under this Act to enter into 
     contracts or to make payments is not effective in any fiscal 
     year except to the extent, or in the amounts, provided in 
     advance in appropriations Acts.


                    section 304. eligible employees

       This section sets forth who is eligible to receive 
     compensation under this title and provides that an eligible 
     employee who files a claim that the Attorney General 
     determines meets the requirements of this title, receives 
     $100,000 as compensation.
       A person eligible for compensation is a Paducah employee 
     (as defined under section 302(2)) who was employed at the 
     Paducah, Kentucky, gaseous diffusion plant for at least one 
     year during the period beginning on January 1, 1953, and 
     ending on February 1, 1992, who during that period was 
     monitored through the use of dosimetry badges for exposure at 
     the plant to radiation from gamma rays or who worked in a job 
     that, as determined by regulation, led to exposure at the 
     plant to radioactive contaminants, including plutonium 
     contaminants; and who submits written medical documentation 
     as to having contracted a specified disease after beginning 
     employment at the plant during the indicated period and after 
     being monitored or beginning work at a job that could have 
     led to exposure as specified.


            section 305. determination and payment of claims

       Generally, this section sets forth the procedures for 
     filing claims, authority for the Attorney General to consider 
     claims and make compensation payments, consequences of 
     payment of a claim, cost of administering the program, and 
     appeals procedures.
       Subsection (a) provides that the Attorney General establish 
     procedures whereby individuals may submit claims for payment 
     under this title.
       Subsection (b) provides that the Attorney General determine 
     whether a claim filed under this title meets the requirements 
     of the title. It also provides for consultation with the 
     Surgeon General and the Secretary of Energy in certain 
     instances.
       Subsection (c) provides that the Attorney General pay, from 
     amounts available in the Fund, claims filed under this title 
     that the Attorney General determines meet the requirements of 
     this title. This subsection also sets out the conditions 
     under which payments are offset and the United States is 
     subrogated to a claim. It also provides for payment to the 
     survivor of a Paducah employee who is deceased at the time of 
     payment under this section.
       Subsection (d) provides that the Attorney General complete 
     the determination on each claim not later than twelve months 
     after the claim is so filed. The Attorney General may request 
     from any claimant, or from any individual or entity on behalf 
     of any claimant, additional information or documentation 
     necessary to complete the determination.
       Subsection (e) provides that employees at the Paducah 
     facility eligible for benefits under this title can elect 
     which remedy to pursue. If they elect to proceed under this 
     title, then acceptance of payment under this title will be in 
     full settlement of all claims against the United States, DOE, 
     a DOE contractor, a DOE subcontractor, or an employee, agent, 
     or assign of one of them arising out of the illness for which 
     the payment was made, except for claims in an administrative 
     or judicial proceeding under a state workers' compensation 
     statute, subject to the reduction-of-benefits provision of 
     subparagraph (3). Under that subparagraph, the benefits 
     awarded to a claimant under this title would be reduced by 
     the amount of any other payments received by that claimant 
     because of the same specified illness, excluding payments for 
     medical expenses under a workers' compensation system.
       Subsection (f) sets forth how costs of administering the 
     title are paid.
       Subsection (g) provides that the duties of the Attorney 
     General under this section cease when the Fund terminates.
       Subsection (h) provides that amounts paid to an individual 
     under this section are not subject to federal income tax 
     under the internal revenue laws of the United States; are not 
     included as income or resources for purposes of determining 
     eligibility to receive benefits described in section 
     3803(c)(2)(C) of title 31, United States Code or the amount 
     of these benefits; and are not subject to offset under 
     section 3701 et seq. of title 31, United States Code.
       Subsection (i) provides that the Attorney General may issue 
     the regulations necessary to carry out this title.
       Subsection (j) provides that regulations, guidelines, and 
     procedures to carry out this title shall be issued not later 
     than 270 days after the date of enactment of this title.
       Subsection (k) sets forth administrative appeals procedures 
     and procedures for judicial review.


           SECTION 306. CLAIMS NOT ASSIGNABLE OR TRANSFERABLE

       This section provides that a claim cognizable under this 
     title is not assignable or transferable.


                   SECTION 307. LIMITATIONS ON CLAIMS

       This section provides that claim to which this title 
     applies shall be barred unless the claim is filed within 20 
     years after the date of the enactment of this title.


                       SECTION 308. ATTORNEY FEES

       This section limits the amount of attorney fees for 
     services rendered in connection with a claim under this title 
     to no more than 10 percent of a payment made on the claim. An 
     attorney who violates this section shall be fined not more 
     than $5,000.

[[Page 29993]]




     SECTION 309. CERTAIN CLAIMS NOT AFFECTED BY AWARDS OF DAMAGES

       This section provides that a payment made under this title 
     shall not be considered as any form of compensation or 
     reimbursement for a loss for purposes of imposing liability 
     on the individual receiving the payment, on the basis of this 
     receipt; to repay any insurance carrier for insurance 
     payments. A payment under this title does not affect any 
     claim against an insurance carrier with respect to insurance.

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